Q3 2025 Vestas Wind Systems AS Earnings Call

November 5, 2025

Speaker #3: 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 the opportunity to extend a big thank you to our customers , colleagues , and not least our external stakeholders .

Speaker #3: Great support and commitment through the current environment and through the first nine months of the year to the execution. We are talking and going to talk much more about it today.

Speaker #3: So with that, I could go here to the key highlights. Key highlights: revenue of €5.3 billion, which is an increase of 3% year on year, driven by higher deliveries despite negative foreign exchange developments.

Speaker #3: And 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 .

Henrik Andersen: 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 4.6GW, 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 that drive cost and also investments, the onshore and offshore ramp-up is progressing as we focused on delivering a very busy Q4, but also as importantly, getting a strong start of 2026.

Speaker #3: But also progressing well. When we look at the order intake of 4.6 GW, up 4% year on year, driven by the U.S. and Germany, and onshore is up more than 60% quarter on quarter compared to last year.

Speaker #3: When we look at the manufacturing ramp up , the drive cost and also investments , the onshore and offshore ramp up is progressing as we focused on delivering a very busy fourth quarter .

Speaker #3: But also , as importantly , getting a strong start of 2026 . By this , we also decided to return value to our shareholders .

Henrik Andersen: 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 EUR 150 million will be initiated and will be starting as of tomorrow morning. On the outlook, we narrowed the outlook in terms of turnover EBIT, reflecting the lower service EBIT, but also the stronger off-onshore execution. That, I will talk about the market environment we are in. Here, wind energy is key to affordability, security, and sustainability. That is our narrative, and we can see it actually working in across many of our markets, as you also seen in our order intake and not least also in our delivery table.

Speaker #3: I think most importantly , in line with our capital structure strategy and also solid liquidity position as buyback of 150 million will be initiated .

Speaker #3: 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 onshore execution .

Speaker #3: That I will talk about the market environment we are in . And again , here , wind energy is key to affordability , security and sustainability .

Speaker #3: That is our narrative . And we can see it actually working in across many of our markets . As you also see 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 .

Henrik Andersen: 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 regionalization, we have spoken about that, in now many of the previous quarters, and I will also say the previous years, and we are seeing it's continuing and we are dealing and planning and executing well in it. When we look at the market environment, there is an 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 numbers of others.

Speaker #3: But tariffs will increase costs 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 .

Speaker #3: And we are seeing it's continuing and we are dealing and planning and executing well in it . When we look at the market environment , there is and heightened focus on energy security and affordability across many of our main markets .

Speaker #3: The grid investment is prioritized in our key markets and we can see it's progressing in a in a number of markets , but also probably have status quo in a number of others on a permitting side , it is improving in some markets , but overall permitting auctions and market design is still challenging .

Henrik Andersen: On the permitting side, it is improving in some markets. 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. 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. Of course, that's then leading to the result we're also seeing in Power Solutions today, which I'm sure Jacob will talk us much more in details about. When we look at the Power Solutions in Q3 2025, strong quarter across all key markets.

Speaker #3: 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.

Speaker #3: 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 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 .

Speaker #3: And of course , that's then leading to the result . We also seeing in power solutions today , which I'm sure Jacob will talk us much more in details about when we look at the power solutions in Q3 2025 , strong quarter across all key markets .

Speaker #3: So when we look at the Q3 order intake of 4.6GW , 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 .

Henrik Andersen: When we look at the Q3 order intake of 4.6 GW, 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 EUR 101 million per MW in Q3, compared to EUR 111 MW in the prior quarter. The decline was driven by a change in the order mix, with higher share of supply-only orders in the US. Generally, we are very pleased with the positive continuing price and price discipline we are showing, and our customers support and understands it. When we look at the order backlog and Power Solutions, it increased to EUR 31.6 billion.

Speaker #3: 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 one 11 megawatt in the prior quarter .

Speaker #3: The decline was driven by a change in the order mix , with higher share of supply only orders in the US . Generally , we're very pleased with the positive continuing price and price discipline we are showing and our customers support and understands it .

Speaker #3: When we look at the order backlog in Power Solutions, it increased to $31.6 billion. That's up $3.3 billion compared to one year ago.

Henrik Andersen: That's up EUR 3.3 billion compared to one year ago, as our Power Solutions continued to have good traction with customers across our core markets. You can see more of the details in the charts to the right. With that, on to service. Service outlook revised and also the recovery plan is progressing as we go through, and we are now three quarters in. The service order backlog increased to EUR 36.6 billion from EUR 35.1 billion a year ago, despite EUR 1.5 billion headwind from foreign exchange rate movements year to date. When we see a service, it reached 159 GW 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.

Speaker #3: 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 .

Speaker #3: With that , onto to service . So service outlook revised and also the recovery plan is progressing as we go through . And we are now three quarters in .

Speaker #3: So, the service order backlog increased to $36.6 billion from $35.1 billion a year ago, despite a $1.5 billion headwind from foreign exchange rate movements year to date.

Speaker #3: When we see service , it reads 159GW under service . It's flat compared to Q2 as additions were offset by a higher level of Expiries and also Deselecting in the quarter .

Speaker #3: 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 service .

Henrik Andersen: This is some of the consequences we have spoken about in the previous quarters as part of our service turnaround. I think we can now start seeing that some of it also shows, at least in the service under 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. Of course, we'll continue working with that, and we look forward to talk more in details over the coming days.

Speaker #3: Under the gigawatt , under service , 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 .

Speaker #3: 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.

Speaker #3: And of course, we will continue working with that. We look forward to talking more in detail over the coming days.

Speaker #3: 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 .

Henrik Andersen: However, earnings and 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, EUR 36.6 billion overall, of which EUR 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. 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. With that, take you through development. Development, not a lot, so I'll have that pretty quickly. Discipline the same.

Speaker #3: You will see here to the right , the breakdown of the service order backlog . $36.6 billion overall , of which 31 billion is onshore , 159GW under active service contracts , and then an average duration of 11 years .

Speaker #3: 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 on the service .

Speaker #3: With 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 .

Henrik Andersen: We also focus very much about finding projects and advancing projects. 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. 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 were stable around 27 GW, 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. I'll go to sustainability in Q3.

Speaker #3: But as you can also see, the environment right now is a lot of focus on the key markets to progress projects.

Speaker #3: 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 .

Speaker #3: 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 .

Speaker #3: You can see the regional breakdown below . And I'll 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 .

Henrik Andersen: Vestas is the most sustainable energy company in the world. 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 tons of greenhouse gas emissions over the course of their lifetime. You will see that here to the right. 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. Therefore, keeping Scope 1 and 2 at the current level is a testament to the focus and execution of our operations across.

Speaker #3: When we look at the turbines produced and shipped in the last 12 months, they are expected to avoid 461 million tons of greenhouse gas emissions over the course of their lifetime.

Speaker #3: 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 .

Speaker #3: So therefore, keeping Scope 1 and 2 at the current level is a testament to the focus and execution of our operations. It is also saying that when we ramp up offshore, it is a significant change in business mix.

Henrik Andersen: It's also saying when we ramp our 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 would 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.

Speaker #3: 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 .

Speaker #3: 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 .

Speaker #3: 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 will say this is not good enough.

Speaker #3: When we see overall the year we have less serious injuries and we have no fatalities . That's positive . But the higher frequencies in specially 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 .

Henrik Andersen: 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. Therefore, we have highlighted that. Talk directly to our colleagues. How do we see our colleagues and our family members remain safe on sites in this? 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.

Speaker #3: So therefore, we have highlighted that we talked directly to our colleagues. How do we see our colleagues and our family members remain safe on sites in this?

Speaker #3: So therefore, we are taking it extremely seriously that it has not gone down, but actually gone up in the last 12 months after Q3.

Speaker #3: With that , I will hand over to the financials . Jacob , take it away . Thank you .

[Company Representative] (Vestas Wind Systems): Thank you, Henrik. Let me take us through details. I'll just flip the slides. Let me take through the details of the income statement and the highest ever Q3 gross profit. Revenue increased 3% year-over-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 EUR 772 million in the quarter, the highest ever in the Q3. The record was achieved by improved profitability in onshore, lower warranty cost, partly offset by manufacturing ramp-up costs. Earned EBIT margin before special item was 7.8% in the Q3. As mentioned throughout the year, 2025 is a back-end loaded year.

Jakob Wegge-Larsen: Thank you, Henrik. Let me take us through details. I'll just flip the slides. Let me take through the details of the income statement and the highest ever Q3 gross profit. Revenue increased 3% year-over-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 EUR 772 million in the quarter, the highest ever in the Q3. The record was achieved by improved profitability in onshore, lower warranty cost, partly offset by manufacturing ramp-up costs. Earned EBIT margin before special item was 7.8% in the Q3. As mentioned throughout the year, 2025 is a back-end loaded year.

Speaker #4: Henrik , and let me take us through details . I'll just flip the slides . Let us 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 .

Speaker #4: Gross profit that I just spoke to increased to a record-breaking $772 million in the quarter, the highest ever in the third quarter.

Speaker #4: The record was achieved by improved profitability in onshore lower warranty costs , partly offset by manufacturing ramp up costs , earn Ebit margin before special items was 7.8% in the third quarter , as mentioned throughout the year , 25 is a back end loaded year .

Speaker #4: 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 .

[Company Representative] (Vestas Wind Systems): The Q3 that we are just going out of was a strong start to a busy second half. We expect a better balance between earnings in Q3 and Q4 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 US. Moving into the service segment.

Jakob Wegge-Larsen: The Q3 that we are just going out of was a strong start to a busy second half. We expect a better balance between earnings in Q3 and Q4 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 US. Moving into the service segment.

Speaker #4: 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 megawatts delivered at stable average selling prices.

Speaker #4: EBIT margin before special items improved by 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 operations in Europe and onshore in the US.

Speaker #4: 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 a 3% currency headwind.

[Company Representative] (Vestas Wind Systems): 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 EUR 153 million, corresponding to an EBIT margin of 17%. The profit levels is in line with recent quarters. We expect additional cost in Q4 related to some specific offshore sites. The service recovery plan continues and 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 EUR 1.4 billion improvement in the net working capital.

Jakob Wegge-Larsen: 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 EUR 153 million, corresponding to an EBIT margin of 17%. The profit levels is in line with recent quarters. We expect additional cost in Q4 related to some specific offshore sites. The service recovery plan continues and 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 EUR 1.4 billion improvement in the net working capital.

Speaker #4: 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 costs in Q4 related to some to some specific offshore sites .

Speaker #4: 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.

Speaker #4: As a result of higher project deliveries in the quarter and continued focus on working capital management, it is important to note that compared to Q3 last year, we have seen a €1.4 billion improvement in net working capital.

Speaker #4: 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 .

[Company Representative] (Vestas Wind Systems): 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 EUR 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 EUR 508 million, also substantial improvement, driven by the same reasons as mentioned in above. Finally, we ended the quarter with a net cash position of EUR 0.5 billion, EUR 500 million. Total investments in the quarter amounted to EUR 274 million in Q3.

Jakob Wegge-Larsen: 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 EUR 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 EUR 508 million, also substantial improvement, driven by the same reasons as mentioned in above. Finally, we ended the quarter with a net cash position of EUR 0.5 billion, EUR 500 million. Total investments in the quarter amounted to EUR 274 million in Q3.

Speaker #4: The improvement was driven by better profitability and a favorable development in working capital. As you just saw, adjusted free cash flow in the quarter amounted to $508 million.

Speaker #4: Also substantially 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 .

Speaker #4: The spending is primarily related to tangible investments such as transport equipment and tools , as well as property , plant and equipment across our turbine portfolio , such as the offshore 15 megawatt and and our four megawatt platform in the US .

[Company Representative] (Vestas Wind Systems): 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 MW EnVentus and our 4 MW platform in the US. 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 EnVentus platform and expand our industrial competitiveness in Europe. Looking at provisions and our loss 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.

Jakob Wegge-Larsen: 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 MW EnVentus and our 4 MW platform in the US. 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 EnVentus platform and expand our industrial competitiveness in Europe. Looking at provisions and our loss 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.

Speaker #4: 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.

Speaker #4: 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.

Speaker #4: Disregarding these sites , the underlying LPF has trended down during 25 warranty costs amounted to 160 million in the quarter , corresponding to 3% of the revenue .

[Company Representative] (Vestas Wind Systems): Warranty costs amounted to EUR 160 million in the quarter, corresponding to 3% of the revenue. That is a significant improvement from the 6% we saw in Q3 last year. Warranty consumption was EUR 206 million for the quarter. The higher consumption level in the quarter is related to the above-mentioned repairs. Finally, ending on a high, we can report our best EPS and ROCE in 5 years. Net debt to EBITDA ended the quarter at -0.2x compared to 0.9x a year ago. Investment grade rating from Moody's, we still have with a stable outlook. Earnings per share measured on a 12-month rolling basis improved to EUR 0.9, driven by the better profitability.

Jakob Wegge-Larsen: Warranty costs amounted to EUR 160 million in the quarter, corresponding to 3% of the revenue. That is a significant improvement from the 6% we saw in Q3 last year. Warranty consumption was EUR 206 million for the quarter. The higher consumption level in the quarter is related to the above-mentioned repairs. Finally, ending on a high, we can report our best EPS and ROCE in 5 years. Net debt to EBITDA ended the quarter at -0.2x compared to 0.9x a year ago. Investment grade rating from Moody's, we still have with a stable outlook. Earnings per share measured on a 12-month rolling basis improved to EUR 0.9, driven by the better profitability.

Speaker #4: And that is a significant improvement from the 6% we saw in Q3 last year. Warranty consumption was $206 million for the quarter.

Speaker #4: The higher consumption level in the quarter is related to the above-mentioned repairs. And finally, we are ending on a high. We can report our best EPS and ROS in five years.

Speaker #4: Net debt to EBITDA ended the quarter at -0.2 times , compared to 0.9 a year ago . Investment grade rating from 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 .

Speaker #4: Our return on capital employed, which broke the 10% barrier last quarter, improved again. And now it stands at 13.6% as the earnings recovery continues.

[Company Representative] (Vestas Wind Systems): Our return on capital employed, which, broke the 10% barrier, last quarter, improved again and now to 13.6% as the earnings recovery continues. Finally, our strong financial position and improved key metrics allows us to return cash to shareholders. Thus, we are initiating a share buyback of EUR 150 million starting tomorrow. Now back to Henrik to take us to the outlook.

Jakob Wegge-Larsen: Our return on capital employed, which, broke the 10% barrier, last quarter, improved again and now to 13.6% as the earnings recovery continues. Finally, our strong financial position and improved key metrics allows us to return cash to shareholders. Thus, we are initiating a share buyback of EUR 150 million starting tomorrow. Now back to Henrik to take us to the outlook.

Speaker #4: And finally , our strong financial position and improved key metrics allows us to to return cash to shareholders . Thus , we are initiating a share buyback of 150 million starting tomorrow .

Speaker #4: And now, back to Henrik to take us to the outlook.

Speaker #3: Thank you . Thank you so much . So thank you . Jakob . 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 .

Henrik Andersen: Thank you. Thank you so much. Thank you, Jacob, and thanks. Very nice slide to finish with. If we were a bit out of sync, I have to catch up with that change of your slides in the future. We will, we will, we will rehearse that. When we look at the outlook, the outlook for the year, revenue narrowed EUR eighteen and a half to nineteen and a half billion from previous EUR 18 to 20 billion. Of course, there are some negative foreign exchanges you picked up. On the EBIT margin before special items, 5% to 6% narrowed from 4% to 7%. Services is expected to generate an EBIT before special items of around EUR 625 million.

Speaker #3: But we will rehearse that when we look at the outlook for the year. Revenue is now narrowed to between $18.5 billion and $19.5 billion, from the previous range of $18 billion to $20 billion.

Speaker #3: Of course, there are some negative foreign exchange impacts, as you picked up on the EBIT margin before special items, which narrowed from 4% to 7%, now standing at 5% to 6%.

Speaker #3: Service is expected to generate an EBIT before special items of around $625 million, and total investments are expected to remain stable at $1.2 billion, as we also indicated in our previous outlook.

Henrik Andersen: Total investments remain stable at EUR 1.2 billion, as we also had in our previous outlook. With that, I will just say thank you for listening in. I'll pass to the operator, and we will go to the Q&A. Also in that slide, you will be able to see the financial calendar for 2026. Over to you, operator.

Speaker #3: 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 .

Speaker #3: Over to you, Operator.

Speaker #5: We will now begin the question and answer session . Anyone who wishes to ask a question may press star and one on their telephone .

Operator: We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioner on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Sean McLoughlin from HSBC. Please go ahead.

Speaker #5: You will hear a tone to confirm that you have entered the queue . If you wish to remove yourself from the question queue , you may press star and two questioner on the phone I requested to disable the loudspeaker mode while asking a question .

Speaker #5: Anyone who has a question may press star and one at this time. The first question comes from the line of Sean McLoughlin from HSBC.

Speaker #5: Please go ahead .

Speaker #6: Thank you for taking my question . I let me just come to offshore the the ramp looks to be progressing as expected , but you've postponed the investment in the blade plant in Poland .

Sean McLoughlin: Thank you for taking my question. Let me just come to offshore. The ramp looks to be progressing as expected, but you've postponed the investment in the blade plant in Poland. I wanted to understand just what is your latest view here on the market and what is the risk that we might see an early peak of deliveries in '26 and '27 and potential underutilization thereafter? Ultimately, what would it take in your mind to kind of put that blade expansion back on track? Thank you.

Speaker #6: I wanted to understand just what your latest view is on the market and what the risk is that we might see an early peak of deliveries in 2026 and 2027, leading to potential underutilization thereafter?

Speaker #6: And ultimately , what would it take in your mind to kind of put that blade expansion back on , back on track ? Thank you .

Speaker #3: Thank you Sean . And with a little bit of risk of of using an expression here and throwing a good colleague under the bus , I will I will sort of say here that blade factory that is so-called stopped in Poland was never built in Poland either .

Henrik Andersen: Thank you, Sean. With a little bit of risk of using an expression here and throwing a good colleague under the bus, I will sort of say here, that blade factory that is so-called stopped in Poland was never built in Poland either. It's actually an old decision that was paused 18 months ago. It got interpreted a bit and probably got its own life. That I will use a bit also to say to everyone here on the call and others listening in, it seems like offshore is getting an unreasonable bashing everywhere in the day-to-day press or among analysts. Yes, there have been headwinds and others, from us, we don't see that.

Speaker #3: It's actually an old decision that was paused 18 months ago . It got interpreted a bit and probably got its own life , and that I will use a bit also to say to everyone here on the call and others listening in , it seems like offshore is getting an unreasonable bashing everywhere in in the day to day press or among analysts .

Speaker #3: Yes, there have been headwinds and others, but from us, we don't see that it is a piece of land. We have.

Henrik Andersen: It is a piece of land we have, so if we, at some point in time, wanted to do a further capacity expansion, then it's an opportunity and option for us. Right now, we are working well, we are progressing well with our own capacity plant upgrade, and that we will just wait and see. This is a dependency on what happens in the backlog when we look four years plus ahead. That's where we will adjust the capacity. Currently, we don't see any reason for raising the question or question 2, if we need to adjust capacity downwards, that's for sure, Sean. We are ramping up and therefore, in a call like this, start talking about capacity downwards.

Speaker #3: So if we at some point in time wanted to do a further capacity expansion , then it's an opportunity , an option for us .

Speaker #3: And right now we are working well . We are progressing well with our own capacity planned upgrade and that we will just wait and see .

Speaker #3: This is a dependency on what happens in the backlog when we look four years plus ahead . That's where we will adjust capacity .

Speaker #3: Currently , we don't see any reason for raising the question or question two if we need to adjust capacity downwards , that's for sure .

Speaker #3: Sean . So we are we are we are ramping up and therefore in in a call like this , start talking about capacity downwards .

Speaker #3: That's not all; we have a backlog of more than €10 billion of projects. We will be throughout this year, next year, and into 2027 at what we will call a more stable full capacity utilization.

Henrik Andersen: We have a backlog of more than EUR 10 billion of projects. We will be throughout this year, next year, and into '27, reach what we will call a more stable, full capacity utilization.

Speaker #6: Thank you. And if I could just follow up on offshore, is looking at the moving parts for you not lifting the midpoint of the guidance after this strong Q3 surprise?

Sean McLoughlin: Thank you. If I could just follow up on offshore as, you know, looking at the moving parts for you effectively not lifting the midpoint of the guidance after this strong Q3 surprise. I mean, is offshore a component of that, or is that really driven by service? Thank you.

Speaker #6: I mean, is offshore a component of that, or is that really driven by service? Thank you.

Speaker #3: I don't . As I said here , if we look at if we look at midpoint here , you can you can sort of see if you have three quarters .

Henrik Andersen: No, I don't. As I said here, if we look at, if we look at a midpoint, here, you can sort of see if you have 3 quarters now, you can see we struggle to absorb the offshore ramp and the ramp-up cost. Generally, if we are laying around EUR 2.5 billion in turnover, now we are above EUR 5 billion. We have a very good quarter. Again, there, it's a lot easier to absorb it when we have a higher turnover. We are pleased with where we are. Probably is around the maximum of the ramp we are seeing here in the second half of the year. Therefore coming into 2026, we should start seeing also it's reducing and disappearing over time.

Speaker #3: Now you can see we struggle to absorb the offshore ramp and the ramp up costs . And generally if we if we are laying around 2.5 billion in , in , in turnover now , we are above five .

Speaker #3: We had a very good quarter. But again, it's a lot easier to absorb it when we have a higher turnover.

Speaker #3: So we are pleased with where we are. We probably are around the maximum of the ramp we are seeing here in the second half of the year.

Speaker #3: So therefore , coming into 26 , we should start seeing also it's it's reducing and disappearing over time . So that is that is sort of the in our heads .

Henrik Andersen: That is, that is sort of the, in our heads, the timing of it. As I said, in the, in the mid-range, also here, Sean, of course, we still have, also the business absorbing, for instance, tariff and other exchanges that happens in the world. We're actually very pleased with what is in here, and we are also very pleased with what onshore execution is supporting our continued investment into offshore.

Speaker #3: The , the timing of it . And then as I said in the in the mid-range also here , Sean , of course we still have also the business absorbing for instance tariff and other exchanges that happens in the world .

Speaker #3: So, we are actually very pleased with what is in here. And we are also very pleased with what onshore execution is supporting our continued investment into offshore.

Speaker #6: Thank you .

John Kim: Thank you.

Sean McLoughlin: Thank you.

Operator: The next question come from the line of John Kim from Deutsche Bank. Please go ahead.

Speaker #5: The next question comes from the line of John Kim from Deutsche Bank. Please go ahead.

Speaker #7: Hi . Good morning everybody . Thanks for the opportunity . Two questions , if I may . If we think about the updated guidance here and include the headwinds in service , I believe it's still implies a sequential a weaker margin in Q4 for power solutions .

John Kim: Hi, good morning, everybody. Thanks for the opportunity. Two questions, if I may. If we think about the updated guidance here and include the headwinds in service, I believe it still implies a sequential a weaker margin in Q4 for Power Solutions. I'm just wondering if you could give us a bit of color here, whether it's more about the cadence of the onshore deliveries or potentially a bigger drag in Q4 from offshore. How should we think about that?

Speaker #7: I'm just wondering if you could give us a bit of color here, whether it's more about the cadence of the onshore deliveries or potentially a bigger drag in Q4 from offshore.

Speaker #7: How should we think about that?

Speaker #3: I think here it's a it's the busiest quarter . Again , in Q4 . We we we walk into a Q4 , you will have seen it .

Henrik Andersen: I think here it's the busiest quarter again, in Q4. We walk into a Q4, you will have seen it. We always said when we started the year back-end loaded, but it's second half of the year. I will sort of say here, when you look at that, John, I will much rather see it in a, that we have managed to equalize Q3 and Q4 much better. Last year we didn't. Therefore, compared to last year, we're looking into a Q4 that looks fairly much as execution of Q3. Then there can be a variation to the theme of what do we have in the backlog in there. You shouldn't read more into that. It is a busy quarter.

Speaker #3: We always said when we started the year back end loaded , but it's second half of the year , I will sort of say here when you when you look at that , John , I will much rather see it in a that we have managed to equalise Q3 and Q4 much better last year .

Speaker #3: We didn't. So therefore, compared to last year, we are looking into Q4. That looks fairly much like the execution of Q3.

Speaker #3: And then there can be a variation to the theme of what do we have in the backlog in there? You shouldn't read more into that than it is a busy quarter.

Speaker #3: We got 56 days to go and and we will always be subject to the normal variables in in Q4 . So that's yeah , we won't try to to make it worse .

Henrik Andersen: We got 56 days to go, and we will always be subject to the normal variables in Q4. Yeah, we won't try to make it worse, that's for sure, in the onshore execution, which we so far have had a really good run at this year.

Speaker #3: That's for sure. In the onshore execution, which we so far have had a really good run at this year.

Speaker #7: Okay, helpful. Thank you. And on the service guidance, $625 million as the updated guide. I want to say there's a little bit under $20 million in FX headwind. Is the remainder of the difference from $700 million to $625 million due to the offshore that you had mentioned in the commentary?

John Kim: Okay, helpful. Thank you. On the service guidance, EUR 625 as the updated guide, I wanna say there's a little bit under EUR 20 million in FX headwind. Is the remainder of the difference from EUR 700 to EUR 625 due to the offshore that you had mentioned in the commentary?

Speaker #3: I won't comment on your FX calculation . I think we we probably will see it a slightly a bit more than that . But but as I said , let's not let's not do that .

Henrik Andersen: On comment on your FX calculation, I think we probably will see it as slightly a bit more than that. as I said, let's not do that. What we are just saying here, if we have a couple of things where we put a lot of vessels and a lot of people at sea in a Q4, it will drag something. When we see that in a Q4 for service, which, let's just say between us, we maybe end up around EUR 1 billion in journal, then you can easily invest EUR 20 million in some of these offshore sites in a quarter, and that's why we are guiding towards EUR 625.

Speaker #3: What we are just saying here , if we have a couple of things where we put a lot of vessels and a lot of people at sea in a , in a Q4 , it will drag something .

Speaker #3: So when we see that in a , in a Q4 of a service , which let's just say between between us , we we maybe end up around a billion in in journal , then you can easily invest 20 million in some of these offshore sites in a quarter .

Speaker #3: And that's why we are guiding towards the towards the six , the 625 .

Speaker #7: Okay . Thank you .

John Kim: Okay. Thank you.

Speaker #5: The next question comes from the line of Christian Thorne from Seb. Please go ahead.

Operator: The next question come from the line of Christian Tuun from SEB. Please go ahead.

Speaker #8: Yes . Thank you . I have two questions . First , one is about the production ramp up in offshore and onshore as well .

Christian Tuun: Yes, thank you. I have two questions. First one is about the production ramp up in offshore and onshore as well. You've been fairly clear stating that it has a material earnings dilution impact this year. Considering the progress you've done so far, how confident are you that this will have a materially lower dilution next year?

Christian Torn: Yes, thank you. I have two questions. First one is about the production ramp up in offshore and onshore as well. You've been fairly clear stating that it has a material earnings dilution impact this year. Considering the progress you've done so far, how confident are you that this will have a materially lower dilution next year?

Speaker #8: So you've been been fairly clear stating that it has a material earnings dilution impact this year . Considering the progress you've done so far , how confident are you that that this will have a materially lower dilution next year ?

Henrik Andersen: How material are we? At least we know that it's ordinary ramp. That means the longer you get in, the better we get at it, Christian. It's also here for both the onshore US and offshore. We see a tendency too, that we are further into the onshore US, so that should be definitely disappearing over the coming, 2026. As I said, in the offshore ramp, listen, we opened the Stathelle factory less than 6 months ago, therefore we are at a maximum of both onboarding and running the education and training there.

Speaker #3: How material are we with? At least we know that it's an ordinary ramp. So that means the longer you get in, the better we get at it.

Speaker #3: Christian . But it's also here for both the onshore us and and offshore . We see a tendency to that . We are further into the onshore us .

Speaker #3: So that should be definitely disappearing over the over the coming 2026 . And then as I said in the offshore ramp , listen , we open these 13 factory less than six months ago .

Speaker #3: So therefore we are we are at a maximum of both onboarding and running the the education and training there . So it I can't give you a date where it maxed out and then it starts coming down .

Henrik Andersen: I can't give you a date where it maxed out and then it starts coming down, we do everything we can to actually have it coming out gradually over 2026. Will it be totally done in 2026? I don't know, because there'll always be things, we will talk more about when we get to 2026 outlook in February. We are comfortable with it, and that's probably the main reason here. We have more than half a gigawatt at sea now in the Baltic Sea and then North Sea, we see that progressing. Of course, we are into the winter season where it's a slightly different environment to construct and install offshore.

Speaker #3: But we do everything we can to actually have it coming out gradually over over 26 . Will it be totally done in 26 ?

Speaker #3: I don't know , because there'll always be things so that we will talk more about when we get to 2026 . Outlook in in February .

Speaker #3: But but we are we are comfortable with it and that's probably the main reason here . We have more than half a gigawatt at sea now in the Baltic Sea .

Speaker #3: And in the North Sea . So we see that progressing . But of course we're into the to the winter season where it's slightly different environment to construct and install offshore .

Speaker #8: Understood . Fair enough . And then my second question is on your order intake in the APAC region , which again this quarter was was fairly low .

Christian Tuun: Understood. Fair enough. My second question is on your order intake in the APAC region, which again, this quarter was fairly low. Just any commentary on the outlook and your optimism for actually seeing APAC orders pick up?

Christian Torn: Understood. Fair enough. My second question is on your order intake in the APAC region, which again, this quarter was fairly low. Just any commentary on the outlook and your optimism for actually seeing APAC orders pick up?

Speaker #8: So, is there commentary on the outlook and your optimism for actually seeing APAC orders pick up?

Speaker #3: I will just say nothing more than he should be doing better as a whole region out there in Asia Pacific. So that we are encouraging them to do.

Henrik Andersen: I will just say nothing more than he should be doing better as a whole region out there in Asia Pacific, so that we are encouraging him to do. I think it's lumpy when you are in markets of the nature of what they have in Asia Pacific. They are a bit more depending on when does it come over the finish line. I'm pretty sure this is a whole region and not wanting to show us and you that they are good, they're doing 0 in Q4 because that's not the intention. We'll see where they end in 31 December. Game on for the region to build a proper FOI in Q4.

Speaker #3: I think it's lumpy when you are in markets of the nature of what they have in Asia Pacific. They are a bit more dependent on when does it come over the finish line?

Speaker #3: I'm pretty sure there's it's the whole region and not wanting to show us . And and you that they are good at doing zero in fourth quarter because that's not the intention .

Speaker #3: So we'll see where they end in 31st of December . But game on for for the region to to build a proper for in fourth quarter .

Speaker #8: Understood . Thank you .

Christian Tuun: Understood. Thank you.

Christian Torn: Understood. Thank you.

Speaker #5: The next question comes from the line of Dan Jansen from DNB . Carnage . Please go ahead . Mr. Jansen , your line is open .

Operator: The next question come from the line of Dan Togo-Jensen from DNB Carnegie. Please go ahead. Mr. Jensen, your line is open. You can go ahead.

Speaker #5: You can go ahead .

Speaker #6: Sorry. Can you hear?

Dan Togo-Jensen: Sorry, can you hear me now?

Speaker #9: Me now ?

Speaker #10: Yes .

Henrik Andersen: Yes.

Speaker #9: Okay, good. Thanks. I have a couple of questions from my side as well. On warranty provisions, they are low this quarter here.

Dan Togo-Jensen: Okay, good, thanks. A couple of my questions from my side as well, on warranty provisions. Low this quarter here, but how should we think of this level, both absolutely and also relative, of course, as you put on more on your offshore side? Can you maintain this level here, or is there a risk that we will start to see level or an increase in that ratio? Then a question on share buyback, the EUR 150 million. Can you elaborate a bit about the math behind reaching the EUR 150 million? I mean, cash flow, free cash flow generation was more than half a billion EUR, and you have almost half a billion EUR in cash by end Q3.

Speaker #9: But how should we think of this level both . Absolutely . And also relative . Of course , as you put on more on the offshore side , can you maintain this level here or is there a risk that we will start to see level or an increase in in that ratio .

Speaker #9: And then then a question on the on the 150 million . Can you elaborate a bit about the math behind reaching the 150 million ?

Speaker #9: I mean , cash flow , free cash flow generation was more than half a billion . And and you have almost half a billion in cash by in Q3 .

Speaker #9: And , and how should we think of it by end Q4 ? Will you again be , you know , possibly in a position where share buybacks could could roll ?

Dan Togo-Jensen: How should we think of it by end Q4? Will you again be, you know, possibly in a position where share buybacks could roll into or the current program be released by a new program? Thanks.

Speaker #9: Into the current program, will a new program be released? Thanks.

Speaker #4: And this Jacob , here , let me take the first part and then Henrik will comment on on the latter warranty . What we what we should remember .

Henrik Andersen: This is Jacob here. Let me take the first part, then Henrik will comment on the latter. Warranty, what we should remember, and I'm sure that's also the numbers you're looking at. 2023 we had more than 5%. 2024 we were down to 4.3%. This year we are hovering around the 3%. It's something we're really proud of. It's an outcome of our focus on quality. We also see the underlying LPF reducing, as we say, except for these couple of sites. Our ambition is to continue that journey down. Again, looking at next year, we'll talk about after Q4, but it's certainly our ambition.

Speaker #4: And I'm sure that all those also the numbers you're looking at 23 . We had more than 5% . 24 we were down to 4.3% .

Speaker #4: And then this year we are we are hovering around the 3% . So it's it's something we're really proud of . And it's an outcome of our focus on on quality .

Speaker #4: We also see the underlying LPF reducing , as we say , except for these couple of sites and and our ambition is to continue that journey down .

Speaker #4: And again , looking at next year , we'll talk about after Q4 . But it's certainly our ambition . We are not satisfied with the with the current level of 3% .

Henrik Andersen: We are not satisfied with the current level of 3%. We see further potential, and we have higher ambitions.

Speaker #4: We see further potential, and we have higher ambitions.

Speaker #9: Okay. Sounds good. And.

Dan Togo-Jensen: Okay, sounds good. you know, share buyback?

Speaker #3: And is hereby back . I think always when we do these things , we look at it in a in a bigger , bigger scheme of things .

Henrik Andersen: The share buyback, I think, always when we do these things, we look at it in a bigger scheme of things. We have had a highest EPS, as Jacob mentioned, highest EPS and highest return on capital employed for five years. As you know, our chairman very well, it's probably also the highest EPS for most of the 10 years. Therefore, when we look into this, we think it's fairly reasonable that we also say to shareholders, you will get cash back. Could we have done more? Yes. Could we have done less? Yes. We ended at EUR 150 million because it's also the time of the year where we can get this done until 17 December.

Speaker #3: We have had a highest EPs , as Jakob mentioned , highest EPs and highest return on capital employed for five years . You know , our chairman very well .

Speaker #3: It's probably also the highest EPs for for most of the ten years . So therefore when we look into this , we think it's , it's fairly reasonable that we also say to shareholders , you will get cash back .

Speaker #3: Could we have done more . Yes . Could we have done less ? Yes . But we ended 150 million because it's also the time of the year where we can get this done until the 17th of December , and then of course , we get together again in the beginning of February .

Henrik Andersen: Of course, we get together again in beginning of February. As you're rightly saying, we are not, we're not about piling up cash here in an environment where we feel very comfortable of the investments we have been doing and still are doing in offshore. That is also to say if people have struggled to see the value in the Vestas shares, then share buyback is the best way we can also say we at least trust in the Vestas share.

Speaker #3: And as you rightly saying , we are not we're not about piling up cash here in an environment where we feel very comfortable of the investments we have been doing and still are doing in offshore , but that is also to say if , if , if people have struggled to see the value in the Vestas shares , then share buyback is the best way .

Speaker #3: We can also say we at least we trust in the Vestas year .

Dan Togo-Jensen: That's good. Thank you.

Speaker #9: Thank you .

Speaker #5: The next question comes from the line of Akash Gupta from JP Morgan. Please go ahead.

Operator: The next question comes from the line of Akash Gupta from J.P. Morgan. Please go ahead.

Speaker #11: Yes . Hi . Good morning and thanks for your time . My first one is is on service . So I think when we look at your Q4 implied Q4 , it's slightly over 140 million adjusted Ebit , which is a smallest since 2020 .

Akash Gupta: Yes. Hi, good morning, and thanks for your time. My first one is on services. I think when we look at your Q4, implied Q4, it's slightly over EUR 140 million adjusted EBIT, which is smallest since 2020. Can you tell us maybe how much of this is structural and how much of this is temporary figures? Can you also talk about growth rates for services in Q4, given last year we had 30% year-on-year growth in service top line? That's first one.

Speaker #11: Can you tell us maybe how much of this is structural and how much of this is like temporary figures ? And can you also talk about growth rates for service in Q4 , given last year ?

Speaker #11: We had 30% year-on-year growth in service, top line. So that's the first one.

Speaker #3: Thanks , Akash . I will say sort of the top line first , when you see the service top line , that can be and there was also last year some repowering there .

Henrik Andersen: Thanks, Akash. I will say sort of the top line first. When you see the service top line, there can be, and there was also last year, some repowerings. If Q and Q, there are differences in the top line that can relate to special things like that. You will also appreciate we do have transactional sales as part of it, which can variate. We don't comment much about that and don't want to comment much about it. As we also discussed over the last quarters when we have embarked into this service reset, it is important for us that also we get better in saying, in this quarter, we already know this is what we are going to do in the quarter, in especially some of these offshore sites.

Speaker #3: If Q3 and Q2 there are differences in the top line that can relate to special things like that. And you will also appreciate we do have transactional sales as part of it, which can vary.

Speaker #3: We don't we don't comment much about that and don't want to comment much about it . But as we also discussed over the last quarters , when we when we embarked into this service reset , it is important for us to also we get better in saying in this quarter , we already know this is what we are going to do in the quarter in especially some of these offshore sites .

Speaker #3: So therefore , we have to give you a bit more guidance on some of these . That is not a recurring thing . So therefore when you are into next year , you should see probably year to date and what we have done in the previous quarters is the underlying run rate of the business .

Henrik Andersen: We have to give you a bit more guidance on some of these. That is not a recurring thing. When you're into next year, you should see probably year to date. What we have done in the previous quarters is the underlying run rate of the business. I'm not so nervous of that, but we got to pick it up with you when we have already now a month into Q4. That's the reason why we are seeing it. As I said, it relates to something specifically in offshore that is in the quarter, dragging it down.

Speaker #3: So I'm not so , so nervous of that . But we got to pick it up with you when we have already . Now a month into to Q4 .

Speaker #3: So that's that's the reason why we are seeing it . And as I said , it relates to something specifically in in offshore that is in the quarter , dragging it down .

Speaker #3: .

Speaker #11: Are these offshore sites the same as where you were fixing some quality issues, where you took provisions, or are they different?

Akash Gupta: Are these offshore sites are same as where you were fixing some quality issues where you took provisions, or they are different?

Speaker #3: Hey , they are they are partly , partly , partly different . So therefore it's not related to any of that . And it's not related to the 236 either .

Henrik Andersen: They are partly different. Therefore, it's not related to any of that, and it's not related to the V236-15.0 MW either. This is something where we just know that when you're in this season and you got to have it, then it's a focus from us and it's a focus from the customers, and it is very few customers involved as well.

Speaker #3: So , so this is something where we just know that when you're in this season and you got to have it , then it's it's a focus from us and it's a focus from the customers .

Speaker #3: And it is very few customers involved as well.

Speaker #11: Thank you . And my second one is on produced and shipped turbine in the quarter you had slightly over three gigawatt which is down 17% year on year .

Akash Gupta: Thank you. My second one is on produced and shipped turbine in the quarter. You had slightly over 3 GW, which is down 17% year-on-year, and we had growth here in first half, and now we are flat on a year-to-date basis. Can you tell us what is driving it? Are there any supply chain issues, like probably sourcing of magnets, or any retooling of facilities? Can you elaborate what's driving this Q3, produced and shipped turbines and expectations for Q4? Thank you.

Speaker #11: And we had growth here in first half . And now we are flat on a year to date basis . Can you tell us what is driving it and are there any supply chain issues like probably sourcing of magnets or any retooling of facilities ?

Speaker #11: So yeah . Can you elaborate ? What's driving this ? Q3 produced and shipped turbines and expectations for Q4 . Thank you .

Speaker #3: Nope . I will say here and I think Jacob spoke to that . If I can point to a positive here , we get better and better together with our partners in in having a straight through on the production and also the supply chain .

Henrik Andersen: No, I will say here. I think Jacob spoke to that. If I can point to a positive here, we get better and better together with our partners in having a straight-through on the production and also the supply chain. We've been better able to control inventory, and therefore, if we do that, then we also, to some extent, in some quarters, you can't adjust it completely from what is going to be delivered and constructed next quarter. We have been better at that, and we haven't yet seen any influence of any supply chain shortages. We wouldn't have used the expression of very good execution in onshore.

Speaker #3: So, we've been better able to control inventory. And therefore, if we do that, then we are also to some extent in some quarters.

Speaker #3: You can't adjust it completely from what is going to be delivered and constructed next quarter . So we have been better at that and there are no we we haven't yet seen any influence of any any supply chain shortages .

Speaker #3: Then we wouldn't have used the expression of very good execution in onshore . So we actually again , coming into Q4 , we won't be many weeks away from when we have all what we need on site .

Henrik Andersen: We actually, again, coming into Q4, we won't be many weeks away from when we have all what we need on-site. Therefore, Akash, We see good traction on execution towards the end of 2025 as well.

Speaker #3: So therefore a we are we see , we see , we see good traction on execution towards the end of 25 as well .

Speaker #11: Thank you . Henrik .

Akash Gupta: Thank you, Henrik.

Speaker #5: The next question comes from the line of Colin Moodie from RBC . Please go ahead .

Operator: The next question comes from the line of Colin Moody from RBC. Please go ahead.

Speaker #12: Hi there . Thanks for taking my question . Just focusing on the very strong margin performance in power solutions this quarter . Well understood on the drivers regarding warranties and volumes , but maybe just on that project execution point , am I right in thinking this is essentially a contingencies release ?

Colin Moody: Hi there. Thanks for taking my question. Just focusing on the very strong margin performance in Power Solutions this quarter, well understood on the drivers, regarding warranties and volumes, but maybe just on that project execution point, am I right in thinking this is essentially a contingencies release? Could you help us understand how much of contributor this was? Generally, should there be some more in Q4 to come? Generally on contingencies, do you recognize the benefits of that release every quarter as projects approach the end or more kind of towards the back end of the year? Thank you.

Speaker #12: And could you help us understand how much of contributor this was ? And generally , should there be some more in Q4 to come ?

Speaker #12: And generally on contingencies , do you recognize the benefits of that release ? Every quarter as you as projects approach the end or more kind of towards the back end of the year ?

Speaker #12: Thank you .

Speaker #3: I don't know if I'm commenting on something in you special way of of doing . We do exactly what we always done . If we have a project , we do a pre and post gap .

Henrik Andersen: I don't know if I'm commenting on something, a new special way of doing. We do exactly what we always done. If we have a project, we do a pre- and post-construction energy estimate. When we get the final payment from the customer, we put it into our P&L. Therefore, I can't comment on what others are doing in contingencies or whatever. We run whatever we do when we have a project, as you would expect us to do. There's always something in a project where you have what if something goes wrong, and of course, that gets released when you also have the project completed. It's a quarter where onshore execution has been and delivered this.

Speaker #3: When we get the final payment from the customer , we put it into to our PNL . So therefore I can't comment on , on on what others are doing in contingencies or whatever we run , whatever we do when we have a a project , as you would expect us to do , there's always something in a project where you have what if something goes wrong ?

Speaker #3: And of course, that gets released when you also have the project completed. So it's a quarter where onshore execution has been and delivered.

Speaker #3: This . And of course , even in this quarter in power Solutions , we have also spent quite a lot of amounts in in ramping .

Henrik Andersen: Of course, even in this quarter, in Power Solutions, we have also spent quite a lot of amounts in ramping still and investing in the offshore and onshore ramp. For us, this is a normal quarter, but I think you should read back to what I started saying by it is difficult to absorb our investments in ramp when you have a much lower turnover on top line as you saw in Q1 and Q2. That's what you should read into it. There's nothing else. It's just a clean execution and profitability, and that's also what we are looking in for the full year.

Speaker #3: Still investing in the offshore and onshore ramp. So for us, this is a normal quarter. But I think you should read back to what I started saying by stating that it is difficult to absorb our investments in ramp.

Speaker #3: When you have a much lower turnover and top line, as you saw in Q1 and Q2, that's what you should read into it.

Speaker #3: There's nothing else then it's just a clean execution and profitability . And that's also what we are looking in for the full year .

Speaker #12: Well understood . And let me just a second question . If I could , on US market trends , clearly very strong US orders intake year to date .

Colin Moody: Well understood. Then maybe just a second question, if I could. On US market trends, clearly very strong US orders, intake year to date. Just thinking about the, you know, July safe harbor coming up in 2026, how do you think about order developments going forwards? Am I right in thinking that you shouldn't necessarily expect a big peak or ramp ahead of that deadline, but actually you could continue to see very strong order momentum even beyond 2026 into 2027 and beyond? Thank you.

Speaker #12: Just thinking about the, you know, July safe harbor coming up in 2026. How do you think about order developments going forward?

Speaker #12: And am I right in thinking that you shouldn't necessarily expect a big peak or ramp ahead of that deadline , but actually you could continue to see very strong order momentum even beyond 2026 into 2027 and beyond .

Speaker #12: Thank you .

Speaker #3: Yeah . Thank you . As I said , it's always difficult to predict in in in individual quarters . I , you know , my my statistics in that that has been relatively poor as Klaus Elmer will remind me of .

Henrik Andersen: Yeah, thank you. As I said, it's always difficult to predict in individual quarters. You know, my statistics in that has been relatively poor, as Claus Almer will remind me of. I think here we are also saying we take the orders we can get too. I think it's also fair saying we are pleased with what we are seeing. We are having a well-covered order backlog in the US, and people are building out and planning for building out. What is that based on? That's based on that the winds, also in the US, has a very attractive Levelized Cost of Energy. It goes well in combining up against gas and others.

Speaker #3: So, I think here we are also saying we take the orders. We can get to... I think it's also fair to say we are pleased with what we are seeing.

Speaker #3: We are having a well-covered order backlog in the US, and people are building out and planning for building out. What is that based on?

Speaker #3: That's based on that . The winds also in the US has a very attractive levelized cost of energy . It goes well in combining of against gas and others .

Speaker #3: So therefore it's a build out . Ross , that we will continue to see in the US . Also beyond whenever PTC is expiring or not .

Henrik Andersen: Therefore, it's a build-out rush that we will continue to see in the US, also beyond whenever PTC is expiring or not. I think we would probably have had more orders if we haven't had some uncertainties around the tariff side. Outside that, no, we love getting close to our customers in the US and keep developing that plan for the coming years. We in good state. I won't comment on when orders are coming because that's simply too difficult to predict. Don't forget, when we talk about tariff, we have a very, very large local supply chain that has been there for more than 2 decades.

Speaker #3: I think we will probably have had more orders if we hadn't had some uncertainties around the tariff side. But outside that, no, we are.

Speaker #3: We love getting close to our customers in the US and keep developing that . That plan for the coming years . So . So we're we're in good shape .

Speaker #3: I , I won't comment on when orders are coming because that's simply too , too difficult to predict . But don't forget when we talk about tariff , we have a very , very large local supply chain that has been there for more than two decades .

Speaker #3: And of course , that we are supported well for and customers can come and see both the sourcing of the components and supply chain into the US factories , which gives a very , a very comforting situation , confidence situation between us and customers in the US .

Henrik Andersen: Of course, that we are supported well for, and customers can come and see both the sourcing of the components and supply chain into the US factories, which gives a very comfort situation, confidence situation between us and customers in the US.

Speaker #12: Well , thank you .

Colin Moody: Well understood. Thank you.

Speaker #5: The next question comes from the line of Klaus Hollmer from Nordia . Please go ahead .

Operator: The next question comes from the line of Claus Almer from Nordea. Please go ahead.

Speaker #8: Thank you . And first of all , congratulations with a solid Q3 , I will not ask about the orders , but about the tariffs .

Akash Gupta: Thank you. First of all, congratulations with a solid Q3. I will not ask about the orders, but about the tariffs. First of all, what did tariffs in Q3 have an impact on the profitability and power? That would be the first one.

Claus Almer: Thank you. First of all, congratulations with a solid Q3. I will not ask about the orders, but about the tariffs. First of all, what did tariffs in Q3 have an impact on the profitability and power? That would be the first one.

Speaker #8: So first of all , what did tariffs in Q3 had an impact on on the profitability in power . That would be the first one .

Speaker #3: Yes, it will. It will always have. Now, because if you are paying and you're sourcing and you're constructing clouds, you can see the deliveries in the table.

Henrik Andersen: Yes, it will always have now, because if you're paying and you're sourcing and you're constructing clouds, you can see the deliveries in the table we have in the interim report. Therefore, of course, part of that is already under influence of tariff, and of those, that is, that will be fully booked under it, and also split in the ratio between the customer and us.

Speaker #3: We have in the in the interim report . So therefore of course , part of that is already under influence of of tariff and of those that is that will be fully , fully booked under and also splits in the ratio between customer and us .

Claus Almer: It's been quoted that you're expecting to be able to mitigate some of these effects. Could you maybe quantify what was the headwind in Q3 that maybe will vanish over the coming quarters or years?

Speaker #8: So, it's been quoted that you're expecting to be able to mitigate some of these effects. So, could you maybe quantify what was the headwind in Q3 that maybe will vanish over the coming quarters or years?

Speaker #3: Are that that goes a little tight in what we are sitting with . So so we have a we have a PNL to optimize in and for our , our customers and that we do very well .

Henrik Andersen: That goes a little tight in what we are sitting with. We have a P&L to optimize in and for our customers, and that we do very well. We can't mitigate 100% of tariffs because there is not an opportunity to be 100% local sourcing in the US. Therefore, there will be tariff, and they will come on either products or components and therefore be booked up against the products when we execute on them. We don't have an interest in sharing that. Why is that? It's not a market for many, therefore we keep that execution with us and our customers. They understand what we are doing, and they support what we are doing.

Speaker #3: We can't mitigate 100% of tariffs because there is not an opportunity to be 100% local sourcing in the US . So therefore there will be tariffs and they will come on either projects or components , and therefore be booked up against the products .

Speaker #3: When we when we execute on them , we don't have an interest in in sharing that . Why is that ? It's not a market for many .

Speaker #3: So therefore we we keep that execution with us and our customers . They understand what we are doing and they support what we are doing .

Speaker #3: And I think we are in best possible way , trying to mitigate what we can mitigate . But mitigate all of it . Not possible .

Henrik Andersen: I think we are in best possible way trying to mitigate what we can mitigate, but mitigate all of it, not possible.

Speaker #8: Fair enough . Then my second question , which is also tariffs . So there's been some quotes out today from you , Jacob , that US customers are holding back due to tariffs uncertainty , which also was mentioned on this call .

Claus Almer: Fair enough. My second question, which is also tariffs. There's been some quotes out today from you, Jacob, that US customers are holding back due to the tariffs uncertainty, which also was mentioned on this call. I guess this is mainly, you know, the ongoing US-China situation, which may last for quite a while. Is any way that you can reduce this uncertainty and thereby unlocking some of these projects in the pipeline?

Speaker #8: I guess this is mainly , you know , the ongoing US-China situation which may last for for quite a while . So is there any way that you can reduce this uncertainty and thereby unlocking some of these projects in the pipeline .

Speaker #3: You just say maybe Jacob , a better comment on his own . We fully agree on that . Of course , as I also said to the to the previous one , we would probably have taken more if it wasn't for the tariff .

Henrik Andersen: Just say, maybe Jacob better comment on his himself. We fully agree on that. Of course, as I also said to the previous one, we would probably have taken more if it wasn't for the tariff. That's absolutely right. There is also a probably a contingent backlog sitting and waiting for clearance on a few of these things. Therefore, let's see what happens there. As I said, I'm not trying to predict sort of macroeconomics and geopolitics these days because it's simply not predictable. Therefore, we do what we do.

Speaker #3: And that's absolutely right . And there is also a probably a contingent backlog sitting and waiting for clearance on on a few of these things .

Speaker #3: So therefore let's see what happens there . But but as I said , I'm not I'm not trying to predict . Sort of macroeconomics and geopolitics these days because it's simply not predictable .

Speaker #3: So therefore we do what we do whenever there is clarity and whenever the off take is there , they are also cases now where the offtake is so much in demand that you actually will execute on it , whether there is a small , low or even high tariffs on it , because that's what you need to get to get to your electricity and your energy supply .

Henrik Andersen: Whenever there is clarity and wherever the offtake is there are also cases now where the offtake is so much in demand that you actually will execute on it, whether there is small, low, or even high tariffs on it, because that's what you need to get to your electricity and your energy supply. Year to date, we have more than 2GW of orders, and our US team are doing a cracking job in doing that. We do what we can to support them, Claus. I think here really, really good progress.

Speaker #3: So here today we have more than two gigawatts of of orders . And our US team are doing a cracking job in , in doing that .

Speaker #3: So we do what we can to support them, Klaus. I think here we have really good progress.

Speaker #8: Yes . No doubt in 1.8GW from the US from from from the US was quite amazing in the quarter . That was all for me .

Claus Almer: There's no doubt 1.8 GW from the US, from the US was quite amazing in the quarter. That was also me. Thanks so much.

Speaker #8: Thanks so much .

Speaker #3: Thanks , Lois .

Henrik Andersen: Thanks, Claus.

Speaker #5: The next question comes from the line of AJ Patil from Goldman Sachs. Please go ahead.

Operator: The next question comes from the line of Ajay Patel from Goldman Sachs. Please go ahead.

Speaker #13: Good morning and thank you for the presentation . A couple of questions , please . Firstly , on offshore where largely through this year and just thinking about the offshore business where that has been hampered by a number of issues this year , fixed cost absorption ramp up costs maybe lower margins on the contracts .

Ajay Patel: Good morning, and thank you for the presentation. Couple of questions, please. Firstly, on offshore, we're largely through this year, I'm just thinking about the offshore business where that has been hampered by a number of issues this year, fixed cost absorption, ramp-up costs, maybe lower margins on the contracts. I'm thinking beyond, because that's a slight sizable portion of the reflection on this, on the profitability of Vestas. Is there any sort of guide you can give on the ramp-up costs this year so that we can have better modeling of how that profitability may turn? Then the second question I had was, you know, you're, you're performing really well on the onshore side. You can see the green shoots of offshore turning around sizably. You talk to service margins improving by the end of the service plan.

Speaker #13: And I'm thinking beyond because that's a sizeable proportion of the reflection on the on the profitability of Vestas . Is there any sort of guide you can give on the ramp up costs this year so that we can have better modeling of how that profitability may turn ?

Speaker #13: And then the second question I had was , you know , your you're performing really well on the onshore side . You can see the green shoots of offshore turning around Sizably you talk to service margins improving by the end of the service plan , it looks like the significant profit improvement to happen over the next 2 to 3 years .

Ajay Patel: It looks like there's significant profit improvement to happen over the next 2 to 3 years. I'm just thinking, today's buyback, can we infer that sizable amount of cash flow, that buybacks will be very much a part of that debate, and that really, we're really looking at a picture that's got returns of value as a sizable proportion of the investment case?

Speaker #13: I'm just thinking today's buyback , can we infer that that sizable amount of cash flow that buybacks will be very much a part of that debate and that really we're really looking at a picture that's got returns , a value as a sizable proportion of the investment case .

Speaker #3: You are you're asking me a quite a number of questions in the question . So I'll , will I will try to to sort of we believe very much in our free business business areas onshore , very mature , very well developed .

Henrik Andersen: You are, you're asking me, quite a number of questions in the question. I will try to sort of, we believe very much in our free business areas. Onshore, very mature, very well developed, and you can say the onshore has been, if I was an inside business colleague, has been paying a lot for some of the investments we have continued doing in the offshore. We are absolutely convinced, and we're adamant that offshore will be a really great business area, not only for Vestas, but for a few around, and also for our customers. We are not being caught by the same, I call it a bit, the frustration or depression over offshore.

Speaker #3: And you can say the onshore has been if I was an inside Vestas colleague has been paying a lot for some of the investments we have continued doing in the offshore , we are absolutely convinced and we adamant that offshore will be a really great business area , not only for Vestas but for a few around and also for our customers .

Speaker #3: So we are we are not being caught by the same . I call it a bit the frustration or depression or offshore , but the great days of offshore in a PNL for Vestas will rightly so , come when you look beyond the further ramp up in terms of projects in 26 .

Henrik Andersen: The great days of offshore in the P&L for Vestas will rightly so come when you look beyond the further ramp up in terms of projects in 2026. Therefore, second half 2026 into 2027, you're right, offshore would start looking much more like what we're also seeing in the offshore profitability. That comes together with we are doing the right things in service. So yeah, you can definitely come to a higher EBIT margin. When you do the future years. It's not why we are looking at a share buyback in an individual quarter. I think it's a testament from the board and also from management here to see we feel confident of what we are doing and where we are, and that confidence you need to see.

Speaker #3: So therefore, second half 2026 into 2027, you're right. Offshore would start looking much more like what we are also seeing in the offshore profitability that comes together with that.

Speaker #3: We are doing the right things in service . So yeah , you can you can , definitely you can definitely come to a higher Ebit margin when you when you do the future years .

Speaker #3: It's it's not why we are looking at a share buyback in an individual quarter . But I think it's a it's a testament from the board .

Speaker #3: And also from management here to see we feel confident of what we are doing and where we are , and that confidence you need to see , because if there's something we probably discussed in the last four quarters , which is when the the business turn around , when was it we were comfortable off the turnaround .

Henrik Andersen: If there's something we probably discussed in the last four quarters, which is: When did the business turn around? When was it we were comfortable of the turnaround we had done, and is it working? I think today we can definitely say to people, this is the first sign of it's working, and then, of course, everyone can do their predictions. The more cash we get available, the more we will probably redistribute back. The biggest part of the investment we needed to get done in offshore is actually behind us.

Speaker #3: We are done . And is it working ? And I think today we can definitely say to people , this is the first sign of it's working .

Speaker #3: And then, of course, everyone can do their predictions. The more cash we have available, the more we will probably redistribute back because the biggest part of the investment we needed to get done in offshore is actually behind us.

Ajay Patel: Thank you very much. Very, very kind.

Speaker #13: Thank you very much. Very kind.

Speaker #5: The next question comes from the line of Alex Jones from Bank of America. Please go ahead.

Operator: The next question comes from the line of Alex Jones from Bank of America. Please go ahead.

Speaker #14: Great . Thank you . Two if I can . First , just to follow up on tariff costs , to what extent were those already hitting the PNL ?

Alex Jones: Great. Thank you. Two, if I can. First, just to follow up on tariff costs. To what extent were those already hitting the P&L this quarter? Are there still further sort of incremental increases in tariff costs ahead as you work through inventory imported before the various tariff measures were put in place? Second question, if I can, on offshore, and sorry if I missed it. Could you explain exactly what is happening at the offshore sites, either because of technology or because of your customers' demands that is driving the additional costs in service in Q4? Thank you.

Speaker #14: This quarter or are there still further sort of incremental increases in tariff costs ahead as you work through inventory , imported before the various tariff measures were put in place , and then second question , if I can , on offshore and sorry if I missed it , but could you explain exactly what is happening at the offshore sites , either because of technology or because of your customers demands ?

Speaker #14: What is driving the additional costs in service in Q4? Thank you.

Speaker #3: I take the offshore first, and I can leave the tariff a bit more on the onshore to Jakob. I think we've spoken a lot about the tariff already, but on the offshore, it is specific sites.

Henrik Andersen: I take the offshore first, and I can leave the tariff a bit more on the, onto Jacob. I think we've spoken about the tariff already. On the offshore, it is specific sites. It is where we are manning up. It is not related to our V236-15.0 MW, and it's not related to the sort of back in Q3 and Q4 last year, where we had a component failure in one of the platforms. This is about that we have a, what I would probably more call a hypercare in a couple of offshore sites where we agreed that with the customer, and therefore, of course, we are also investing in that.

Speaker #3: It is where we are manning up . It is not related to our 236 and is not related to the sort of back in Q3 and Q4 last year where we had a component failure in in one of the in one of the in one of the platforms .

Speaker #3: So this is about that . We have a what I would probably call a hyper care in a couple of offshore sites where we agreed that with the with the customer and therefore , of course , we also investing in that .

Speaker #3: So that is in a winter and a and a high season for offshore is a way of also us saying we are we are investing with in also prioritizing costs here .

Henrik Andersen: That is in a winter and a high season for offshore is a way of also us saying we are investing with, in also prioritizing cost here. That's what we have done, and that's what we are sort of pre-guiding you on for Q4.

Speaker #3: So that's what we have done and that's what we are sort of pre pre guiding you on for Q4 .

Speaker #4: And on the on the question around tariffs , it is hitting our books right now as Henrik also answered in the in the previous question , continue hitting in in Q4 .

[Company Representative] (Vestas Wind Systems): On the question around tariffs, it is hitting our books right now, as Henrik also answered in the previous question, continue hitting in Q4. What is important is, and that's what we are also saying with our narrowed guidance, we can keep that within the narrowed guidance, and you will see during the math that we have the same midpoint as we had basically since the beginning of the year. In that sense, yes, it's in there, and it will continue to be in there.

Jakob Wegge-Larsen: On the question around tariffs, it is hitting our books right now, as Henrik also answered in the previous question, continue hitting in Q4. What is important is, and that's what we are also saying with our narrowed guidance, we can keep that within the narrowed guidance, and you will see during the math that we have the same midpoint as we had basically since the beginning of the year. In that sense, yes, it's in there, and it will continue to be in there.

Speaker #4: But what is important is and that's what we also saying with our narrowed guidance , we can keep that within the narrowed guidance .

Speaker #4: And you will see during the math that we have the same midpoint as we had basically since the beginning of the year. So in that sense, yes, it's in there, and it will continue to be in there.

Speaker #14: Thank you .

Alex Jones: Thank you.

Speaker #5: The next question comes from the line of Max Yates from Morgan Stanley. Please go ahead.

Operator: The next question comes from the line of Max Yates from Morgan Stanley. Please go ahead.

Max Yates: Thank you. Just one question from me. Just on the services business, could you give us an update on, you know, how the turnaround program is going? Are customers kind of accepting the renegotiated terms? I guess maybe if you could just help us with the kind of how long we will actually, how long it will take to actually see this in numbers. I guess you're kind of operating in a 16% to 18% margin. I appreciate you won't wanna give guidance for 2026. Do we still see sort of 2026 as a year, you know, where the groundwork is being laid for future margin improvements?

Speaker #15: Thank you . Just just one question from me . Just on just on the services business . Could could you give us an update on , you know , how the turnaround program is going are customers kind of accepting the renegotiated terms ?

Speaker #15: And I guess maybe if you could just help us with the kind of how long we will . Actually how long it will take to actually see this in numbers , I guess you're kind of operating in a 16 to 18% margin .

Speaker #15: I appreciate you won't want to give guidance for 26 , but do we still see sort of 26 as a year ? You know , where the groundwork is being laid for future margin improvement ?

Speaker #15: Or do you really see it as we'll start to see some of the, you know, the improvements actually coming through in kind of growth and margins in the service business as we go into 2026.

Max Yates: Or do you really see it as we'll start to see some of the, you know, the improvements actually coming through in kind of growth and margins in the service business as we go into 2026? Just trying to get a sense of, you know, we don't anticipate it happening sooner than we actually see it in numbers. Thank you.

Speaker #15: Just trying to get a sense of, you know, so we don't anticipate it happening sooner than we actually see it in numbers.

Speaker #15: Thank you .

Henrik Andersen: Max, I really, really appreciate your comment in that way, because couldn't agree with you more. This is a global business. It has 159 GW under service, and we have more than 15,000 employees. When you do a reset and a turnaround of the business, it will take longer time. Please don't start making things in 22% or 25% service margin in 2026. We've said it takes the 2 years. We are 5 quarters away from finishing this work because it does take some time. I'm really pleased with where we are, and the service team and Christian Romer, who heads it, have done a really good job.

Speaker #3: So, really, really appreciate your comment in that way because I couldn't agree with you more. This is a global business that has 159 GW under service.

Speaker #3: And we have more than 15,000 employees. So when you do a reset and a turnaround of the business, it will take a longer time.

Speaker #3: So, please don't start making things in 22% or 25% service margin in 26. We've said it takes the two years. We are five quarters away from finishing this work because it does take some time.

Speaker #3: I'm really pleased with where we are, and the service team and Christian, who heads it, have done a really good job.

Speaker #3: We know the details of what we are going through , but I think also as we are hinting here , when we looked and talked about this 2 or 3 quarters ago where we said we probably would foresee that we will have some flat gigawatt under service , then surprisingly , it didn't happen in the first 1 or 2 quarters .

Henrik Andersen: We know the details of what we are going through. I think also, as we are hinting here, when we looked and talked about this 2 or 3 quarters ago where we said we probably would foresee that we will have some flat gigawatt under service, surprisingly it didn't happen in the first 1 or 2 quarters. It does happen because we are getting to some of the gigawatts where, as I think we also spoke about, that for instance, something like multibrand, it doesn't make an awful lot of value for shareholders, it doesn't make an awful lot of sense for us unless we have customers that ask us specifically to do it more on a cost plus basis.

Speaker #3: Now it does happen because we are getting to some of the gigawatts where , as I think we also spoke about that . For instance , something like multi-brand , it doesn't make an awful lot of value for shareholders , and it doesn't make a lot of awful lot of sense for us .

Speaker #3: Unless we have customers that ask us specifically to do it . More on a , on a , on a cost plus basis .

Speaker #3: So therefore you will see now that we actually having a real firm grip of what is happening from quarter to quarter . So we're in good momentum , we're in good momentum of addressing where we wanted to have a better operational environment .

Henrik Andersen: Therefore, you will see now that we're actually having a real firm grip of what is happening from quarter to quarter. We're in good momentum. We're in good momentum of addressing where we wanted to have a better operational environment. Then we have a good momentum in also talking to customers straight, and that includes even escalations to me as well. We are actually pretty pleased of where we are with the commercial reset, and we are not done with it. That would be wrong, but that's because you cannot fix that much in one or two quarters. Run rate up until Q3 is the run rate. I will say, that's for me, the middle of the road we are going with.

Speaker #3: And then we have a good momentum in also talking to customers straight . And that includes escalations to to me as well . So we are actually pretty pleased of where we are with the commercial reset .

Speaker #3: And we're not done with it . That will be that will be wrong . But that's because you cannot fix that much in 1 or 2 quarters .

Speaker #3: But run rate up until third quarter is the runway . I will I will say , and that's for me , the middle of the road .

Speaker #3: We are going with .

Speaker #15: Understood . Thank you very much .

Operator: Understood. Thank you very much.

Max Yates: Understood. Thank you very much.

Speaker #5: The next question comes from the line of Lucas Ferrari from Jefferies . Please go ahead .

Operator: The next questions comes from the line of Lucas Ferhani from Jefferies. Please go ahead.

Speaker #16: Good morning . Just to follow up on on offshore . When are you kind of booked out to ? I know you said you've €10 billion of projects in the backlog .

Lucas Ferhani: Good morning. Just to follow up on offshore. When are you kind of booked out to? I know you said you've EUR 10 billion of projects in the backlog that will kind of last you until 2027, even into 2028. When you look at the, kind of the recent failed auction in several countries in Europe and maybe the AR7 in the UK, that was maybe slightly below expectations, it depends on who you ask to. How do you feel about kind of the ability to kind of get those redone and then rebid, and then the orders coming through to the turbine suppliers kind of roughly on time? Thank you.

Speaker #16: Does that kind of last you until 2027 ? Even into 2028 ? And then when you look at the kind of the recent sell doctrine in several countries in Europe , and maybe the R7 in the UK , that was maybe slightly below expectations , it depends on who you ask to .

Speaker #16: How do you feel about kind of the ability to kind of get those redone and then rebuild and then the orders coming through to the turbine suppliers kind of roughly on time .

Speaker #16: Thank you .

Speaker #17: Yeah. No, as I said.

Henrik Andersen: Yeah, no, as I said, it's a good 10 GW. We are sitting and muscling around. We have more PSAs, but there are also more PSAs in discussion, so I'm not so worried about that. When you look at the near term right now, we have a lot to do in the coming three to four years. That is also the cycle of it. Where you come from, and I keep encouraging, stay away. Don't compare. Compare, but don't compare between the backlog and the process we're running between offshore and onshore. Offshore processes are longer, and therefore, not so nervous about that.

Speaker #3: It's it's it's a good it's a good ten gigawatt . We are sitting we are sitting and muscling around . We have we have more say .

Speaker #3: But there are also more say in , in discussion . So I'm not . So I'm not so worried about that . And then when you look at the near term right now we have we have a lot to do in in the coming 3 to 4 years .

Speaker #3: So that is also the cycle of it. So where do you come from? I keep encouraging you to stay. Don't compare, but don't compare between the backlog and the process we're running between offshore and onshore.

Speaker #3: Because offshore processes are longer and therefore not not so . So nervous about that . If there's one thing that concerns me and I hinted that a bit here , is that we in at least in Europe , where offshore should be one of the biggest solutions to get our , I will call it less energy dependence on friends outside Europe .

Henrik Andersen: If there's one thing that concerns me, I hinted that a bit here, is that we in, at least in Europe, where offshore should be one of the biggest solutions to get our less energy dependence on friends outside Europe. We are 50% dependent on energy import, offshore should be one of the things we scale faster. It seems like every country in Europe choose to go through a failed auction before they get it right. Of course, that takes time. We've seen a number of countries, including the Danish government, went through a thing last year. That also means now you have a CFD backed. Even with the CFDs, that will significantly improve the Danish electricity price as well. Therefore, it works, and it works across.

Speaker #3: We are 50% dependent on energy imports, and offshore should be one of the things we scale faster. However, it seems like every country in Europe chooses to go through a failed auction before they get it right.

Speaker #3: And of course , that takes time . And we've seen a number of countries , including the Danish government , went through a thing last year , but that also means now you have a CFD backed and even with the CFDs that will significantly improve the Danish electricity price as well .

Speaker #3: So therefore it works and it works across . So we are not so nervous about that . And when we look at at a R7 in the UK , I can only give praise .

Henrik Andersen: We are not so nervous about that. When we look at AR7 in the UK, I can only give praise. Maybe I will also have one of the ones that would like to have a bit larger budget committed. On the other hand, the government and the Secretary of State that knows a lot about it at Miliband, yeah, he has conditioned himself that he can take individual projects out and also potentially progress that. I think we got to work through this, and if somebody wants to characterize it as an offshore crisis, I'm not in that category. I think it's a proven technology. It's a proven market access that works, and therefore, now is the time to show leadership, both from developers and OEMs to get it built out. We are more positive on that.

Speaker #3: Maybe I will also have one of the ones that would like to have a bit larger budget committed, but on the other hand, the government and the Secretary of State that knows a lot about it.

Speaker #3: Ed Miliband, yeah, he is. Conditioned himself that he can take individual projects out and also potentially progress that. So I think we got to work through this.

Speaker #3: And if somebody wants to characterize it as an offshore crisis , I'm not in that category . So I think it's a proven technology .

Speaker #3: It's a proven market access that works. And therefore, now is the time to show leadership, both from developers and OEMs, to get it built out.

Speaker #3: So we are we are more positive on that . We see a 25 , 26 . To some extent , I'm happy that we are doing what we're doing right now because if we had more stress on the on the factories and the and the ramp up , that would only that would actually only create more concerns at Vestas .

Henrik Andersen: We see 25, 26. To some extent, I'm happy that we are doing what we are doing right now, because if we had more stress on the factories and the ramp-up, that would actually only create more concerns investors. We don't have that. We are comfortable executing on it. What I'm probably most encouraged by is also our customers, like the discussions and the detailed discussions we are having leading up to 2030 and even beyond.

Speaker #3: So we don't have that . So we are we are comfortable with executing on it . And what I am probably most encouraged by is also our customers .

Speaker #3: Like the discussions and the detailed discussions we are having leading up to 2030 and even beyond.

Speaker #16: Perfect . Thank you . And just a quick follow up on on tariff . I think most of what we are seeing and what has impacted you so far is more the fashion to to 32 or maybe steel or specific components , but there's also a probe that has been launched in the US into wind , specifically .

Lucas Ferhani: Perfect. Thank you. Just a quick follow-up on tariff. I think most of what we're seeing and what has impacted you so far is more the Section 232 on maybe still specific components. There's also a probe that has been launched in the US into wind specifically. Can you talk about, you know, how do you understand that? I obviously see that there's not much information out there, but how do you look at that risk of what could come out of this probe? Thank you.

Speaker #16: Can you talk about how do you understand that ? I obviously see that there's not much information out there , but how do you look at that , at that risk of what could come out of this probe ?

Speaker #16: Thank you .

Speaker #3: A I know and and there is sections and there are EU tariffs and there are tariffs that seems to be changing every quarter .

Henrik Andersen: I know and there is sections, and there are EU tariffs, and there are other tariffs that seems to be changing every quarter. We are basically taking the stand that we will, we'll deal with it as it's being thrown at us, and therefore, we're also dealing with this. Outcomes, I can't predict, but what we are both guiding for the rest of the year is what we know and what we are dealing with, and therefore, it's priced in. I think we are best doing and best served with doing that, because otherwise we have to start changing every time there is a change in legislation. It might be it goes up in tariff, it might be that it goes.

Speaker #3: So we we are basically taking the stand that we will we'll deal with it as it's being thrown at us . And therefore we are also dealing with this outcomes .

Speaker #3: I can't I can't predict but what we are both guiding for , for the rest of the year is what we know and what we are dealing with , and therefore it's priced in .

Speaker #3: And I think we are best doing and best served with doing that , because otherwise we have to start changing every time there is a change in legislation , it might be it goes up in tariff , it might be that goes , I think the last week we've seen initiatives that seems to be maybe talking to tariffs , returning towards the , the , the zero again in some areas .

Henrik Andersen: I think the last week we've seen initiatives that seems to be maybe talking to tariffs returning towards the zero again in some areas. Let's see. I don't comment on that because it's way outside my area where I can affect it. What we can affect is how we execute and how we deal with them, and that where we have a fantastic team in the US and North America that are absolutely on the details with that.

Speaker #3: But let's see , I don't I don't , I don't comment on that because it's way outside my , my area where I can affect it .

Speaker #3: What we can affect is how we execute and how we deal with them . And that that where we have a fantastic team in the in the US and North America that are absolutely on their details .

Speaker #3: With that .

Speaker #16: Perfect . Okay . Thanks .

Lucas Ferhani: Perfect. Okay. Thanks.

Speaker #5: The next question comes from the line of Arita from Berenberg . Please go ahead .

Operator: The next questions comes from the line of Harry Thapar from Berenberg. Please go ahead.

Speaker #18: Thanks for taking my questions . And and congratulations again on on a on a strong quarter . The first question is just around onshore and onshore margins into 2026 .

Harry Thapar: Thanks for taking my questions, and congratulations again on a strong quarter. The first question is just around onshore margins into 2026. Clearly that business is running very well today. As I look into next year, what are the key drivers? Sort of volumes look relatively stable, pricing seems to level out. How are you seeing sort of cost trends and mix? Do you think there's more a little more juice left in that onshore margin as you look out? Are we already sort of performing as well as you can hope?

Speaker #18: Clearly that business is running very well today . As I look into next year . What are the what are the key drivers sort of volumes ?

Speaker #18: Look relatively stable . Pricing seems to level out . How are you seeing sort of cost trends and mix ? Do you think there's more a little more juice left in that , in that onshore margin ?

Speaker #18: As you look out ? Or are we already sort of performing as well as well as you can hope ?

Speaker #3: Thanks , Henry . I think I don't know , who's left . I maybe I should comment differently . I think on 26 we'll comment on the 5th of February .

Henrik Andersen: Thanks, Henrik. I think, I don't know, juice left. Maybe I should comment differently. I think on 26th we'll comment on the 5th of February. I've learned that lesson over the years. We do nothing in the onshore business to try to make it run worse right now, and we're actually doing reasonably well. What we have seen here, expect more of the same. If we can, if we can do more and we can get more, it's probably where we have more concurrent projects where we can avoid having change cost and other stuff in the onshore. I'm really just pleased with seeing what is happening in the onshore. Of course, we don't do that.

Speaker #3: I learned that lesson over the years . We do nothing in the onshore business to try to make it run worse . Right now , and we actually doing reasonably well .

Speaker #3: So what we have seen here expect more of the same . If we can , if we can do more and we can get more , it's probably where we have more concurrent projects where we can avoid having changed costs and other stuff in the , in the onshore .

Speaker #3: But I'm , I'm really just pleased with seeing what is what is happening in the onshore . And , and of course we don't do that .

Henrik Andersen: I think that's also only fair because there are limited players. There's no need for them to sit and read the P&L of individual business segments between onshore and offshore. Onshore really well. We will see if we can do more of the same next year. We will try very hard.

Speaker #3: I think that's also only fair because there are limited players , so there's no need for them to sit and read the PNL of of individual business segments between onshore and offshore , onshore .

Speaker #3: Really ? Well . And we will see if we can we can do more of the same next year , and we will we will try very hard .

Speaker #18: Fair enough , fair enough . And then just on staying on the onshore from an orders outlook , you sort of covered the US .

Harry Thapar: Fair enough. Fair enough. Then just on, staying on the onshore, from an orders outlook, you sort of covered the US. How about the rest of the world as you look to Europe and so on? I know you sort of reference in the materials that, you know, you see potential for high single-digit growth in onshore wind, sort of globally out to 2030. Are you still sort of happy with that view, and you still see, you know, a lot of movement and activity in onshore wind in Europe as you look out over the next few years?

Speaker #18: How about the rest of the world as you look to Europe and so on . I know you sort of reference in the in the materials that , you know , you see potential for high single digit growth in onshore wind sort of globally up to 2030 .

Speaker #18: Are you still sort of happy with that view and you still see , you know , a lot of movement and activity in onshore wind in Europe as you look out over the next few years .

Speaker #3: I think there are two reasons in Europe , I think some of the countries are leading the way . If u take Germany , if you take a couple of countries like .

Henrik Andersen: I think there are two reasons in Europe. I think some of the countries are leading the way. If you take Germany, if you take a couple of countries like Romania and others, I think they're leading the way and saying, this is how we can get more done and built. I think those countries are absolutely examples to follow. I think on top of that, I think it's getting more and more discussed in detail how we can do a repowering in Europe, which again speaks back to wind was very much founded and invented out of Europe, therefore we also have an aging fleet. That of course opens up a European repowering that could be a real business opportunity for people like us.

Speaker #3: Yeah , Romania and others , I think they're leading the way and saying , this is how we can get more done and built .

Speaker #3: And I think those countries are absolutely examples to follow . I think on the on top of that , I think it's getting more and more discussed in details how we can do a repowering in Europe , which again speaks back to wind was very much founded and invented out of Europe , and therefore we also have an aging fleet .

Speaker #3: And that of course , opens up a European repowering . That could be a real business opportunity for people like us . It could also be a huge business opportunity for the owners and the developers .

Henrik Andersen: It could also be a huge business opportunity for the owners and the developers. Secondly, it's a fantastic way of increasing the energy production in Europe. That there are two levers there. I will avoid commenting on countries where they potentially haven't got it right. Let us say, we are very pleased with our Spanish colleagues and our factory in Spain. I think on the permitting side and the flow of projects in Spain, there's probably still some outstanding to wish for. Therefore, in Europe, we see really positive underlying, and of course, Germany is one.

Speaker #3: And secondly , it's a fantastic way of increasing the energy production in Europe . So so there are two levers there . I will avoid .

Speaker #3: I will avoid commenting on , on on countries where they potentially haven't got it the right . But let us say we have we are very pleased with our Spanish colleagues and our factory in Spain .

Speaker #3: But I think on the permitting side and the flow of projects in Spain , there's probably still some outstanding to to wish for .

Speaker #3: So , so therefore , in Europe we see really positive underlying . And of course Germany is is one . If you if we spoke about it .

Henrik Andersen: If we spoke about it, three years ago, Henry, we wouldn't have gotten to the number we see today, and that's thanks to both current and previous government in Germany. When it comes to Asia and Asia Pacific, a lot is being done. A lot of also is being considered. Some of the countries are a bit new on the block, getting into that. As I said, there's still some firm order intake to be shown from our colleagues in Asia Pacific. In Latin America, similar, we have had a Brazil that's probably gone very low in PPAs, and therefore we'll see when Brazil returns to that. We do have some good feelings around that.

Speaker #3: Three years ago , Henry , we wouldn't have gotten to the number we see today . And that's thanks to both current and previous governments in Germany .

Speaker #3: When it comes to Asia and Asia Pacific , a lot is being done . A lot of also is being considered some of the countries are a bit newer on the block .

Speaker #3: Getting into that , but as I said , there's still some firm order intake to be shown from from our colleagues in Asia Pacific .

Speaker #3: And then in , in Latin America , similar we have had a Brazil that's probably gone very low in PPAs , and therefore we will see when when Brazil returns to that .

Speaker #3: But we do have some some good feelings around that . Also Latin America will start showing some strength again because some of the data centers and others are moving into Latam across so so I think bit disappointed probably where we are year to date in Asia Pacific and Latin very encouraged by where we are in North America and in Europe .

Henrik Andersen: Also Latin America will start showing some strengths again because some of the data centers and others are moving into LatAm across. I think bit disappointed probably where we are year to date in Asia Pacific and LatAm. Very encouraged by where we are in North America and in Europe. That I think is a trend that we see continuing.

Speaker #3: And that I think , is a trend that we see continuing .

Speaker #18: Okay . Thank very much , Henrik .

Harry Thapar: Okay. Thanks very much, Henrik.

Speaker #5: The next question comes from the line of Caspar Bloom from Danske Bank . Please go ahead .

Operator: The next question comes from the line of Casper Blom from Danske Bank. Please go ahead.

Speaker #19: Thank you very much . A bit of a another kind of question from from my side . I think it's been close to seven years since you launched the Inventors turbine platform .

Casper Blom: Thank you very much. A bit of another kind of question from my side. I think it's been close to 7 years since you launched the EnVentus turbine platform. We now see that more and more of the orders you get in are for these larger 6, 7 MW onshore turbines. At the same time, we've also seen you talk about a stable pricing environment now for the last 3 years or so after there was this material price hike a few years ago.

Speaker #19: And we now see that more and more of the orders you get in are for these larger six megawatt onshore turbines . At the same time , we've also seen you talk about a stable pricing environment .

Speaker #19: Now for the last three years or so , after that , was this material price hike a few years ago ? Is it is it fair to say that there is an opportunity from you guys , sort of sticking to the current technology , keeping pricing flat , and then basically just having how could you say operational efficiency from the fact that you will have now gained very , very material experience in developing this turbine and as a supplement , do you have any kind of plans of adding new platforms in the foreseeable future ?

Casper Blom: Is it, is it fair to say that there is an opportunity from you guys sort of sticking to the current technology, keeping pricing flat, and then basically just having, how could you say, operational efficiency from the fact that you will have now gained very, very material experience in developing this turbine? As a supplement, do you have any kind of plans of adding new platforms in the foreseeable future? Thank you.

Speaker #19: Thank you .

Speaker #3: First of all , a platform introductions never happened on an analyst call . So Caspar , that's the first . The other thing is inventors .

Henrik Andersen: First of all, platform introductions never happen on an analyst call. Casper, that's the first. The other thing is, EnVentus, we are super pleased. You can say that you're touching spot on. The more we ramp up and the more we get in the backlog, the better we become at it. That also goes for our supply chain. When I started extending a big thank you here, it also goes to our partners in the supply chain because they help us getting some of those costs out.

Speaker #3: We are super pleased . And you can say that you are you're touching spot on . The more we ramp up and the more we get in the backlog , the better we we become .

Speaker #3: And it's, and that also goes for our supply chain. So when I started extending a big thank you here, it also goes to our partners in the supply chain because they help us get some of those costs out.

Speaker #3: And I think today from when we have been in in an environment where inflation was very close to zero or even at par , and then interest rates , everyone have seen a cost inflationary , which of course , also for some projects have either potentially dangerous the project for being built .

Henrik Andersen: I think today from when we have been in an environment where inflation was very close to zero or even at par and in interest rate, everyone has seen a cost inflationary, which of course also for some projects have either potentially endangered the project for being built. Now it's also about getting and returning and getting it built, and therefore cost out is absolutely name of the game for all of us. That goes through the supply chain, and it goes into our factories. The more volume you have, the better you get at it. That's an overarching one. I think you saw some of that.

Speaker #3: Now it's also about getting in, returning, and getting it built; therefore, cost-out is absolutely the name of the game for all of us.

Speaker #3: So so that goes through the supply chain and it goes into our , our factories and , and the more volume you have , the better you get at it .

Speaker #3: So that's a that's an overall overarching one . And I think you saw some of that . If you take the one , six , three , 4.5MW that are now selling across most of the world , but particularly in North America and in the US , that was developed as a probably an 80% component from from a from a four megawatt platform .

Henrik Andersen: If we take the V163-4.5 MW that are now selling across most of the world, but particularly in North America and in the US, that was developed as a probably an 80% components from a 4 MW platform. That also means that we are running high cost out programs on. Of course, that's a school and textbook example of how we want also to build the EnVentus. You're right, Casper, and I think some of it we'll be using to continue improve our profitability. Some of it we will definitely also let go back to the customer so we make sure that the products are being built and not being stopped for not having attractive enough investments case with local governments.

Speaker #3: And that also means that we are running a high cost out programs on . So , of course , that's a that's a school .

Speaker #3: And textbook example of how we want also to build the inventories . So you're right , Caspar . And I think some of it will be using to continue improve our profitability .

Speaker #3: Some of it we will definitely also let go back to the customers. So we make sure that the projects are being built and not being stopped for not having an enough investment case with local governments.

Speaker #19: If I may supplement , I think if one goes back in time , there was sort of a general rule of thumb that pricing would come down by maybe 3 or 5% a year due to technological advantages and and sharing this with customers , isn't it then fair to assume that when as long as you can stick to current pricing and you continue to get better , then it's in favor of your margin ?

Casper Blom: If I may, supplement, I think if one goes back in time, there was sort of a general rule of thumb that pricing would come down by maybe 3% or 5% a year, due to technological advantages and sharing this with customers. Isn't it then fair to assume that as long as you can stick to current pricing and you continue to get better, then it's in favor of your margin? Or is that too simple?

Speaker #19: Or is that too simple?

Speaker #3: I think it's maybe , maybe a bit from a from an industrial company of nearly 20 billion in total . Maybe it is a little simplified , but I will say here now you bring 5% in as a price reduction .

Henrik Andersen: I think it's maybe a bit from a, from an industrial company of nearly EUR 20 billion in turnover. Maybe it is a little simplified, but I will say here, now you bring 5% in as a, as a price reduction and other stuff. I think we are now back at a profitable area for Vestas. It's not this morning we got up and said, now we need to lower prices. As I said, we like the commercial discipline. We need to make money. If we don't make money, we don't invest in the technology for the future either. Therefore, it's a combination. As I said here, we will share it in a, in a reasonable ratio with our, with our partners. Customers, come on, there's nothing better than having a signature and winning a business with a customer.

Speaker #3: And other stuff. I think we are now back at a profitable area for Vestas. So, it’s not that we got up this morning and said, "Now we need to lower prices."

Speaker #3: As I said , we like the commercial discipline . We need to make money . If we don't make money , we don't invest in the technology for the future either .

Speaker #3: So therefore it's a combination . But as I said here , we will share it in a in a reasonable ratio with our with our partners and customers .

Speaker #3: Come on. There's nothing better than having a signature and winning a business with a customer. So therefore, that's the prime target.

Henrik Andersen: Therefore, that's the prime target, and that pays for the rest. Therefore, Casper, what you've seen today is we can now definitely say and prove that we are out of the dark days of 2022. I think that's really what we want to say to both you and the rest of the market with what we are doing today.

Speaker #3: And that pays for the rest . So therefore , Caspar , what you've seen today is we we can now definitely say and prove that we are out of the out of the dark days of , of 2022 .

Speaker #3: And I think that's really what we want to say to both you and the rest of the market with what we are doing today.

Speaker #19: That's absolutely fair. And thanks for your question and answers.

Casper Blom: That's absolutely fair. Thanks for your question, answers.

Speaker #5: The next question comes from the line of Deepa Venkateswaran from Bernstein. Please go ahead.

Operator: The next question comes from the line of Deepa Venkateswaran from Bernstein. Please go ahead.

Speaker #20: Thank you so much . I had two questions , so I wanted to pick up on something that you mentioned , which probably is not something a lot of investors focus on , which is your CapEx .

Deepa Venkateswaran: Thank you so much. I had two questions. Henrik, I wanted to pick up on something that you mentioned, which probably is not something a lot of investors focus on, which is your CapEx. This year, you're spending over 6% of revenues on CapEx. You also said that your big investment program on offshore is nearly done. On an ongoing basis, particularly given cash is king and can be buybacks in the future, what is a more reasonable level of CapEx for your business going forward, either absolute or percentage of revenues? Of course, assuming no big investments in further platforms, right? That was my first question. Secondly, I think on demand, particularly in the US, there's a lot of hype about demand from AI.

Speaker #20: So this year you're spending over 6% of revenues on CapEx. You also said that your big investment program on offshore is nearly done.

Speaker #20: So on an ongoing basis, particularly given cash is king and considering buybacks in the future, what is a more reasonable level of CapEx for your business going forward?

Speaker #20: Either in absolute terms or as a percentage of revenues? Of course, this assumes no big investments in further platforms. Right. So, that was my first question.

Speaker #20: And secondly , I think on demand , particularly in the US , there's a lot of hype about demand from AI . You know , people want to be building a gigawatt a week and so on .

Deepa Venkateswaran: You know, people want to be building a gigawatt a week and so on. What are you sensing in terms of the opportunity for Vestas to kind of capture, you know, and what are you hearing from your customers on the impact from this new AI demand?

Speaker #20: So what are you sensing in terms of the opportunity for Vestas to kind of capture , you know , and what are you hearing from your customers on , on the the impact from this new AI demand ?

Speaker #3: First of all, a gigawatt a week. Then I will not get much sleep.

Henrik Andersen: First of all, a gigawatt a week, then I will not get much sleep. That's for sure so.

Speaker #20: So, maybe that was global; maybe that was global.

Deepa Venkateswaran: Maybe that was global, but.

Speaker #17: But okay. But, as I said here,

Henrik Andersen: Okay. As I said here, the reality is real, and that's maybe the way to proper answer it. In AI terms, the reality is real. It's happening, and the electricity demand is going up. We can always discuss, sometimes is the demand and supply out of sync. Of course, it only gives one thing, which is an underlying increase of electricity prices, which unfortunately you are seeing in part of the US. I think for that matter, will come to Europe as well. I think there's something in this AI where I said we are part of the underlying base load, so therefore we are the ones that has to build part of the base load together with many others.

Speaker #3: The reality . is real . And that's maybe the way to Providence . It in AI terms , the reality is real . It's happening .

Speaker #3: And the electricity demand is going up . Then we can always discuss sometimes is the demand and supply out of sync . Then of course , it only it only gives one thing which is an underlying increase of of electricity prices , which unfortunately you are seeing in part of the US .

Speaker #3: And I think for that matter will come to , to Europe as well . So I think there's something in this AI where I , we as I said , we we are part of the underlying base load .

Speaker #3: So therefore we are the ones that has to build part of the base load together with many others . And so therefore energy in , in , in , in demand is definitely it .

Henrik Andersen: Therefore energy in, in demand is definitely it. I think if we look at a country that normally does very long-term planning, namely China, you can see how they have built out energy sources in the last three, four years. Namely last year, they built as much renewable, they built as much coal, they built as much some of the nuclear as the rest of the world did together. Somebody is taking bigger upfront decisions than probably the rest of the world are doing. For me, as a pretty fact-based person, I like to see that we take some of these decisions maybe a bit quicker, and that also goes for the US.

Speaker #3: And I think if we look at a country that normally does very long-term planning, namely China, you can see how they have built out energy sources in the last 3 or 4 years.

Speaker #3: And namely last year they built as much renewable they build as much coal , they build as much . Some of the nuclear as the rest of the world did together .

Speaker #3: So somebody is taking a bigger upfront decisions then probably the rest of the world are doing . And so for me , as a as a pretty fact based person , I like to see that we take some of these decisions maybe a bit quicker , and that also goes for the US .

Speaker #3: So US are in a demand for energy and electricity , and therefore we will continue to see that build out . And wind is part of it .

Henrik Andersen: US are in a demand for energy and electricity, and therefore we will continue to see that build-out, and wind is part of it. Maybe we should call it something else than wind, but it actually is with a low LCOE, and it does local manufacturing, and therefore it's supporting US in its energy supply. That's really... On the CapEx side, don't underestimate, there will still be tools, and there will still be factories and other stuff that from time to time will affect the CapEx. I think Jacob is nodding that when we look at EUR 1.2 billion, that's probably a bit where we spent quite a lot this year. If a factory or other footprint comes in, that will then variate and deviate to the theme.

Speaker #3: Maybe we should call it something else than wind, but it actually is with a low LCoE and it does local manufacturing, and therefore it's supporting us in its energy supply.

Speaker #3: So, that's really on the CapEx side. Don't underestimate that there will still be tools and there will still be factories and other stuff that, from time to time, will affect CapEx.

Speaker #3: But I think Jakob is nodding that when we look at $1.2 billion, that's probably a bit where we spent quite a lot this year.

Speaker #3: But if a if a factory or other footprint comes in , that will then variate and deviate to the theme . But as we said all along , it should be start going slightly lower .

Henrik Andersen: As we said all along, it should be start going slightly lower, but we won't give a guidance for it until we are in February for the coming year. As you can see, we are not nervous for actually using the cash to buy back. Because if we're not forced to invest more, then actually buying our own shares is with a pretty good return on the multiples we are seeing.

Speaker #3: But but we won't give a we won't give a , we won't give a guidance for it until we are in February for the coming year .

Speaker #3: And then , as you can see , we are not nervous for actually using the cash to buybacks because if we if we not , if we're not forced to invest more , then actually buying our own shares is with a pretty good return on the multiples we are seeing .

Speaker #17: Thank you .

[Analyst] (Unknown): Thank you.

Deepa Venkateswaran: Thank you.

Speaker #3: Could we have the last question, operator?

Henrik Andersen: Could we have the last question, operator?

Speaker #5: So the next question comes from the line of Martin Wilkie from Citi. Please go ahead.

Operator: The next question comes from the line of Martin Wilkie from Citi. Please go ahead.

Speaker #21: Thank you . Good morning . Martin , thanks for squeezing me in . Just a follow up to that question on data centers .

Martin Wilkie: Thank you. Good morning, it's Martin. Thanks for squeezing me in. Just a follow-up to that question on data centers. When we look at some of the hyperscalers or where they're signing renewable PPAs, a lot of it seems to be in Latin America and Europe and actually not very much in the US. When you look at the outlook and potential for data center orders, is that how you see it as well, that actually it's more realistic in those regions? Is there actually sort of pent-up demand opportunity in North America, where obviously the volume of data center is probably a lot higher? Just to understand regionally how we could think about that. Thank you.

Speaker #21: When we look at some of the hyperscalers and where they're signing renewable PPA, a lot of it seems to be in Latin America and Europe, and actually not very much in the U.S.

Speaker #21: And when you look at the outlook of potential for data center orders , is that how you see it as well ? That that actually it's more realistic in those regions ?

Speaker #21: Or is there actually sort of pent-up demand opportunity in North America where, obviously, the volume of data centers is probably a lot higher?

Speaker #21: Just to understand regionally how we could think about that. Thank you.

Henrik Andersen: Martin, I will say I don't think so. I think, when you see other continents like Europe and Latin America wanting to announce data centers, I think it's actually because they want to have a bite of the party. I think the two main places to have these data centers will be China and the US. That's where the AI balancing act is happening. We are behind in Europe, so if we get a data center somewhere in Europe and we are building it, yeah, sure, we will applaud it.

Speaker #3: I , Martin , I will say , I don't think so . I think when you see other continents like Europe and Latin America wanted to announce data centers , I think it's actually because they want to have a bite of the party .

Speaker #3: I think the two main places to have these data centers will be , will be China and the US . That's where the AI balancing act is , is happening .

Speaker #3: We are behind in Europe . So if we get a data center somewhere in Europe and we are building it . Yeah , sure we will .

Speaker #3: We will , we will applaud it . But I think the underlying is that us . But they are probably not just announcing it to the same extent as you are seeing , because as much as you see the demand and supply , the demand side is right now higher than the supply side of possible build outs , and that's probably why you're seeing less of of those announcements in the US .

Henrik Andersen: I think the underlying is that US, but they are probably not just announcing it to the same extent as you are seeing, because as much as you see the demand and supply, the demand side is right now higher than the supply side of possible build-outs, and that's probably why you're seeing less of those announcements in the US. Working for an American bank, I'm pretty sure you will know a lot of what goes on in the US as well. Thanks Martin.

Speaker #3: But we're working working for an American bank . I'm pretty sure you will . You will know a lot of what goes on in in the US as well .

Speaker #3: So, so thanks, Martin.

Speaker #21: Thank you . Can I just have one unrelated follow up just on on service . Obviously you've talked about these costs in the fourth quarter , but just to clarify , these will be effectively a one time hit in the fourth quarter .

Martin Wilkie: Thank you. Can I just have one unrelated follow-up just on service? Obviously you talked about these costs in the Q4, but just to clarify, these will be effectively a one-time hit in the Q4. You know, obviously in the past when you have percentage of completion, then you can amortize these costs over the life of service contracts. We shouldn't read anything into the revised outlook for the Q4 in terms of what it could mean for 2026. I know you're not guiding 2026 yet, but just so we can understand that these costs should be contained in the Q4.

Speaker #21: And obviously in the past, when you have a percentage of completion, then you can amortize those costs over the life of the service contract.

Speaker #21: But we shouldn't read anything into the revised outlook for the fourth quarter in terms of what it could mean for 2026. I know you're not diving into 2026 yet, but just so we can understand that these costs should be contained in the fourth quarter.

Speaker #3: You're absolutely right. It should be contained in the fourth quarter, and we don't intend that. That also sits outside any POC for the service contracts in offshore.

Henrik Andersen: You're absolutely right. Should be contained in Q4. We don't intend that also sits outside any POC for the service contracts in offshore. You're absolutely right. Assumption's right, Martin.

Speaker #3: So you're absolutely right . Assumptions . Right ? Martin .

Speaker #21: Thank you very much .

Martin Wilkie: Thank you very much.

Speaker #3: Okay . With that . Thank you so much . Thank you for listening in . Thank you for all your interest and and question .

Henrik Andersen: Okay. With that, thank you so much. Thank you for listening in. Thank you for all your interest and question. Really look forward to meet many of you over the coming days, and therefore, thanks again, year to date, see you soon.

Speaker #3: Really look forward to meet many of you over the coming days . And therefore thanks again year to date . And see you soon .

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