Vestas Wind Systems Q4 2025 Vestas Wind Systems AS Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Vestas Wind Systems AS Earnings Call
Henrik Andersen: Good morning, and welcome to our presentation of our full year 2025, Q4 of course in '25. And as always, as this full year presentation, also a short strategy update section. For us, 2025, a year of evidence in both important milestones in our strategy Value Through Performance, but also here, it's absolutely timely to say proper thank you to our customers, to our partners, shareholders, and colleagues. So today, both shareholders and colleagues will see a reward from financial year 2025 in the form of a proposed dividend share buyback, and also for our colleagues around the world, a very well-deserved incentive bonus payout. I also just want to here take the opportunity to just point to the picture. As you can see, a nice weather day in the North Sea where we are constructing one of our offshore turbines for He Dreiht. So really appreciative of seeing that.
Henrik Andersen: Good morning, and welcome to our presentation of our full year 2025, Q4 of course in '25. And as always, as this full year presentation, also a short strategy update section. For us, 2025, a year of evidence in both important milestones in our strategy Value Through Performance, but also here, it's absolutely timely to say proper thank you to our customers, to our partners, shareholders, and colleagues. So today, both shareholders and colleagues will see a reward from financial year 2025 in the form of a proposed dividend share buyback, and also for our colleagues around the world, a very well-deserved incentive bonus payout. I also just want to here take the opportunity to just point to the picture. As you can see, a nice weather day in the North Sea where we are constructing one of our offshore turbines for He Dreiht. So really appreciative of seeing that.
Speaker #1: For us, 2025, a year of evidence in both important milestone in our strategy value through performance, but also here it's absolutely timely to say proper thank you to our customers, to our partners, shareholders, and colleagues so today both shareholders and colleagues will see a reward from financial year 2025 in the form of a proposed dividend share buyback and also for our colleagues around the world, a very well-deserved incentive bonus payout.
Speaker #1: I also just want to here take the opportunity to just point to the picture. As you can see, a nice weather day in the North Sea where we are constructing one of our offshore turbines for hydride.
Speaker #1: So really appreciated of seeing that. With that, I would like to go to key highlights for the year. So revenue of the year of 18.8 billion and an EBIT margin of 5.7%.
Henrik Andersen: With that, I would like to go to key highlights for the year. So revenue of the year of EUR 18.8 billion and an EBIT margin of 5.7%. Revenue all-time high from growth in both segments and profitability achieved in the upper end, of course, narrowed part of our outlook from Q3. The service EBIT of EUR 626 million delivered on a revised service EBIT guidance. However, the outcome fell short of our performance targets and also internal expectations, as you can see also in our remuneration report. Order intake of 16.3 GW leading to a record high order backlog. It's higher onshore activity, especially in Americas, was offset by lower offshore orders in the year. Manufacturing ramp-up leading to extra cost and investments, as we're speaking to throughout the year. Progress are made and being made on the persistent challenges, and we expect further improvements here in 2026.
Henrik Andersen: With that, I would like to go to key highlights for the year. So revenue of the year of EUR 18.8 billion and an EBIT margin of 5.7%. Revenue all-time high from growth in both segments and profitability achieved in the upper end, of course, narrowed part of our outlook from Q3. The service EBIT of EUR 626 million delivered on a revised service EBIT guidance. However, the outcome fell short of our performance targets and also internal expectations, as you can see also in our remuneration report. Order intake of 16.3 GW leading to a record high order backlog. It's higher onshore activity, especially in Americas, was offset by lower offshore orders in the year. Manufacturing ramp-up leading to extra cost and investments, as we're speaking to throughout the year. Progress are made and being made on the persistent challenges, and we expect further improvements here in 2026.
Speaker #1: Revenue all time high from growth in both segments. And profitability achieved in the upper and of course narrowed part of our outlook from Q3.
Speaker #1: The service EBIT of €626 million delivered on a revised service EBIT guidance. However, the outcome fell short of our performance targets and also internal expectations, as you can see also in our remuneration report.
Speaker #1: Order intake of 16.3 gigawatt leading to a record high order backlog. It's higher onshore activity, especially in EMERA, was offset by lower offshore orders in the year.
Speaker #1: The manufacturing ramp-up is leading to extra costs and investments, as we're speaking to throughout the year. Progress is made and being made on the persistent challenges, and we expect further improvements here in 2026.
Speaker #1: We are returning value to our shareholders, with a dividend of DKK 0.74 per share proposed, and a share buyback of €150 million will be initiated from tomorrow.
Henrik Andersen: We are returning value to our shareholders. A dividend of 0.74 DKK per share is proposed, and a share buyback of EUR 150 million will be initiated from tomorrow. The outlook for 2026: revenue expected between EUR 20 to 22 billion. EBIT margin before special items expected between 6 to 8%. And as always, you will hear and see more details of that later in the presentation. So now I'll go to the environment we work in. And wind energy key to affordability, security, and sustainability. This is the key factors of our narrative for wind. And not surprisingly, it works in more than 80 countries across the world, and it's delivering high generation of electricity from now more than 200 GW installed. When we look at the global environment, inflation, raw materials, transport costs are stable.
Henrik Andersen: We are returning value to our shareholders. A dividend of 0.74 DKK per share is proposed, and a share buyback of EUR 150 million will be initiated from tomorrow. The outlook for 2026: revenue expected between EUR 20 to 22 billion. EBIT margin before special items expected between 6 to 8%. And as always, you will hear and see more details of that later in the presentation. So now I'll go to the environment we work in. And wind energy key to affordability, security, and sustainability. This is the key factors of our narrative for wind. And not surprisingly, it works in more than 80 countries across the world, and it's delivering high generation of electricity from now more than 200 GW installed. When we look at the global environment, inflation, raw materials, transport costs are stable.
Speaker #1: 2026 revenue expected between 20 to 22 billion EBIT margin before special items expected between 6 to 8% and as always you will hear and see more details of that later in the presentation.
Speaker #1: The environment we work in—so now I'll go to wind security and sustainability. This energy, key to affordability, is the key factor of our narrative for wind, and not surprisingly, it works in more than 80 countries across the world. It's delivering high generation of electricity from now more than 200 gigawatts installed.
Speaker #1: When we look at the global environment, inflation, raw materials, and transport costs are stable, but of course, everyone appreciates that will increase costs over time.
Henrik Andersen: But of course, with some degree of variability to tariff, as everyone appreciates, that will increase cost over time. It will come towards and through the value chain, and it will come to the energy and electricity price over time. The ongoing geopolitical and trade volatility leading to realization, that's not new. It's just a continuation of the trends we have been seeing over the previous years. And I think it's only been accelerated further by the ongoing discussions on the geopolitical side. On the market environment, heightening focus on energy, security, and affordability. It almost is the one thing that is being discussed in every leadership, political as business leadership across the world. The grid investment prioritized in key markets. It's also prioritized and even now announced as part of the EU plan for grid expansion across Europe.
Henrik Andersen: But of course, with some degree of variability to tariff, as everyone appreciates, that will increase cost over time. It will come towards and through the value chain, and it will come to the energy and electricity price over time. The ongoing geopolitical and trade volatility leading to realization, that's not new. It's just a continuation of the trends we have been seeing over the previous years. And I think it's only been accelerated further by the ongoing discussions on the geopolitical side. On the market environment, heightening focus on energy, security, and affordability. It almost is the one thing that is being discussed in every leadership, political as business leadership across the world. The grid investment prioritized in key markets. It's also prioritized and even now announced as part of the EU plan for grid expansion across Europe.
Speaker #1: It will come towards the degree of variability to tariff as through the value chain, and it will come to the energy and electricity price over time.
Speaker #1: The ongoing geopolitical and trade volatility leading to realization that's not new it's just a continuation of the trends we have been seeing over the previous years and I think it's only been accelerated further by the ongoing discussions on the geopolitical side.
Speaker #1: On the market environment heightening focus On energy security and . It almost is the one thing that are being discussed affordability in every leadership , political as business leadership across the world .
Speaker #1: great investment The prioritized in key It's also priority markets . business , as leadership across the world . , political The grid investment prioritized in key markets .
Henrik Andersen: On the permitting side, it's improving in some markets, but overall permitting, auctions, and market design are still challenging or still being changed or picked up. Two of the really strong examples of positive development is AR7 offshore in the UK, led by Ed Miliband, which is really showing the leadership required. And then on the onshore in Germany, I will say we will have years where we are now in excess of 10GW onshore. Again, a testament to if leadership, both political and business, put their minds to it, then it will also get done. On the project level, strong project execution, some regional disruptions to supply chain always at risk. But I will also here use the opportunity to thank our colleagues.
Henrik Andersen: On the permitting side, it's improving in some markets, but overall permitting, auctions, and market design are still challenging or still being changed or picked up. Two of the really strong examples of positive development is AR7 offshore in the UK, led by Ed Miliband, which is really showing the leadership required. And then on the onshore in Germany, I will say we will have years where we are now in excess of 10GW onshore. Again, a testament to if leadership, both political and business, put their minds to it, then it will also get done. On the project level, strong project execution, some regional disruptions to supply chain always at risk. But I will also here use the opportunity to thank our colleagues.
Speaker #1: also prioritized It's even now and announced part of the EU plan for great expansion across Europe . On the permitting side , it's improving in some markets .
Speaker #1: But overall permitting auctions and market design are still challenging or still being changed or picked up . Two of the really strong examples of positive development is R seven offshore in the .
Speaker #1: UK LED by at Miliband , which is really showing the leadership required . onshore in And then on the Germany , will I say we will have years where we are now in excess of .
Speaker #1: ten gigawatts onshore a testament Again , if to leadership , both political and business , put their minds to it , then it will get also on the done level .
Speaker #1: ten gigawatts onshore a testament Again , if to leadership , both political and business , put their minds to it , then it will get also on the done level . project Strong project .
Speaker #1: execution Some regional disruptions to supply chain , always at risk . But I will also here use the opportunity to our colleagues has .
Speaker #1: Execution: Some regional disruptions to supply chain, always at risk. But I will also here use the opportunity to our colleagues—it's been exceptionally a good execution.
Henrik Andersen: It has been an exceptionally good execution in 2025 and the best execution we have seen in the last five years on our projects when it comes to our often discussed pre and post-calc on the projects. So a huge thank you to everyone here who has contributed to 2025. With that, I will go to the power solution slide. So strong finish to 2025. The order intake of 6.5GW in the quarter, driven by strong momentum in onshore across all regions, and good activity in offshore, such as the 390MW Shinan-Ui project in Korea. The 6.5GW in the quarter also therefore hints and indicates an unannounced order intake of 1.1GW, which again supports the strong momentum that sits in and around the whole onshore part.
Henrik Andersen: It has been an exceptionally good execution in 2025 and the best execution we have seen in the last five years on our projects when it comes to our often discussed pre and post-calc on the projects. So a huge thank you to everyone here who has contributed to 2025. With that, I will go to the power solution slide. So strong finish to 2025. The order intake of 6.5GW in the quarter, driven by strong momentum in onshore across all regions, and good activity in offshore, such as the 390MW Shinan-Ui project in Korea. The 6.5GW in the quarter also therefore hints and indicates an unannounced order intake of 1.1GW, which again supports the strong momentum that sits in and around the whole onshore part.
Speaker #1: In 2025 , and the best execution we have seen in last five the years on our projects . When it comes to our often discussed pre and calc on the on the project .
Speaker #1: So, a huge thank you to everyone here who has, to the 25, contributed to go to Power Solution Strong. So, of 2025.
Speaker #1: order to finish intake The 6.5GW in the quarter , driven by strong activity in regions all and good in momentum onshore offshore such as the slide 390 megawatt project Korea in .
Speaker #1: The 6.5GW in the quarter also therefore hints and indicates an unannounced order intake of 1.1GW , which again supports the strong momentum that sits in and around the whole thank part .
Henrik Andersen: The largest order in the quarter was 828MW onshore project in Brazil with a long-standing partner and friend, Casa dos Ventos, marking the first major deal in Brazil's wind market since 2023. ASP on new orders was EUR 101 million per MW, like the prior quarter. The ASP reflects a good mix of project scope, geography, and type. The overall pricing environment remains stable and positive for our continuous financial performance and progress. The order backlog in power solution increased by EUR 1.6 billion compared to one year ago to a record high of EUR 33.2 billion. It's the highest ever. You can see the breakdown of both geography and quarter-on-quarter comparison to the right. With that, I'll go to the service business. So heading here is that we are halfway through our service recovery plan.
Henrik Andersen: The largest order in the quarter was 828MW onshore project in Brazil with a long-standing partner and friend, Casa dos Ventos, marking the first major deal in Brazil's wind market since 2023. ASP on new orders was EUR 101 million per MW, like the prior quarter. The ASP reflects a good mix of project scope, geography, and type. The overall pricing environment remains stable and positive for our continuous financial performance and progress. The order backlog in power solution increased by EUR 1.6 billion compared to one year ago to a record high of EUR 33.2 billion. It's the highest ever. You can see the breakdown of both geography and quarter-on-quarter comparison to the right. With that, I'll go to the service business. So heading here is that we are halfway through our service recovery plan.
Speaker #1: in the quarter The largest order was 828 megawatt onshore project in with a long partner and friend . As Brazil , this winter's marking the first major deal in Brazil's wind since 2023 .
Speaker #1: ASP on new orders , was 101 million per megawatt . Like the prior quarter , the ASP reflects a good mix of project scope , geography and type .
Speaker #1: The overall pricing environment is stable and positive for our continuous financial performance and progress. The order backlog in Power Solution increased by $1.6 billion compared to one year ago, to a record high of $33.2 billion.
Speaker #1: It's the highest ever you see. The can breakdown of both and geography quarter comparison to the right quarter on. With that, go to the I'll service business heading here.
Henrik Andersen: When we look at the highlights for the service business in 2025, I think the service order backlog increased to EUR 38.7 billion from EUR 36.8 billion a year ago, despite EUR 1.9 billion headwind from foreign exchange rate movements in the year. The service business reads 161GW under service. That's an increase of 2GW compared to Q3, as healthy additions in the fourth quarter outweighed expiries and deselection as part of the ongoing commercial reset. The first year of the Service Recovery Plan has been completed. We have achieved better operational discipline during 2025, but we have not yet finished, and the plan continues throughout 2026. It remains our strategic priority to drive operational excellence, cost out, and improve cash flow, and with full attention and support across all of Vestas and the full value chain of Vestas.
Henrik Andersen: When we look at the highlights for the service business in 2025, I think the service order backlog increased to EUR 38.7 billion from EUR 36.8 billion a year ago, despite EUR 1.9 billion headwind from foreign exchange rate movements in the year. The service business reads 161GW under service. That's an increase of 2GW compared to Q3, as healthy additions in the fourth quarter outweighed expiries and deselection as part of the ongoing commercial reset. The first year of the Service Recovery Plan has been completed. We have achieved better operational discipline during 2025, but we have not yet finished, and the plan continues throughout 2026. It remains our strategic priority to drive operational excellence, cost out, and improve cash flow, and with full attention and support across all of Vestas and the full value chain of Vestas.
Speaker #1: So is that halfway we are through our service recovery plan look at the . When we highlights for the service business in 2025 , I think the service order backlog increased to 38.7 billion from 36.8 billion a year ago , despite €1.9 billion headwind from foreign exchange rate movements in the year .
Speaker #1: The service business reached 161 GW under service. That's an increase of two gigawatts compared to Q3, as healthy additions in the fourth quarter outweighed expiries and deselection as part of the ongoing commercial reset. The first year of the service recovery plan has been completed.
Speaker #1: We have achieved better operational discipline during 2025 , but we have not yet finished and plan the continues throughout 2026 . It remains our strategic to drive priority operational excellence , cost out improve cash and and flow with full attention and support across all of Vestas and value chain the full Vestas .
Speaker #1: We have achieved better operational discipline during 2025 , but we have not yet finished and plan the continues throughout 2026 . It remains our strategic to drive priority operational excellence , cost out improve cash and and flow with full attention and support across all of Vestas and value chain the full Vestas of I will also say at year end , there's no doubt that across Vestas , both about the plan and expectations , that is fully aligned and also fully understood .
Henrik Andersen: I will also say at year-end, there's no doubt that across Vestas, both about the plan and expectations, that is fully aligned and also fully understood. I will talk more to it when we get to the strategy overview later in the strategy section. You can see the breakdown here to the right. So the service order backlog, EUR 38.7 billion, of which EUR 33 billion is onshore, 161GW under active service contract, 161GW versus 152GW from onshore. And then we have an average year's contract duration of 11 years. With that, I'll go to the Vestas development part. And I think this is in short. It is a business we talk about, and it's also a business that we often give a quarterly update on.
Henrik Andersen: I will also say at year-end, there's no doubt that across Vestas, both about the plan and expectations, that is fully aligned and also fully understood. I will talk more to it when we get to the strategy overview later in the strategy section. You can see the breakdown here to the right. So the service order backlog, EUR 38.7 billion, of which EUR 33 billion is onshore, 161GW under active service contract, 161GW versus 152GW from onshore. And then we have an average year's contract duration of 11 years. With that, I'll go to the Vestas development part. And I think this is in short. It is a business we talk about, and it's also a business that we often give a quarterly update on.
Speaker #1: I will talk more to it when we get to the strategy overview later in the strategy section , you can see the breakdown here to the right .
Speaker #1: The service order backlog is $38.7 billion, of which $33 billion is onshore gigawatt under active service contract, versus 161 gigawatt—152 from onshore.
Speaker #1: And then we have an average year's contract duration of 11 years . With that , I'll go to the Vestas development part . And I think this is , in short , it is a business .
Henrik Andersen: But the year of 2025 was very much a year that is also characterized with the heading revised organizational structure as part of the Operating Model Reset. So it was a year of simplification and also a year of refocusing the development business. So in Q4 2025, Vestas Development generated 102MW of order intake from Argentina. At the end of Q4, Vestas pipeline of development projects amounted to 28GW, with Australia, the US, and Brazil holding the largest opportunities. As part of the Operating Model Reset, we have implemented a leaner organizational structure with simpler governance to benefit from market trends and ensure traction with key projects. Ultimately, the goal of Vestas Development is to develop quality projects to the benefit for our customers and very close partners, thereby contributing meaningfully to the Vestas group EBIT over time and quarter-on-quarter. Then I will go to sustainability.
Henrik Andersen: But the year of 2025 was very much a year that is also characterized with the heading revised organizational structure as part of the Operating Model Reset. So it was a year of simplification and also a year of refocusing the development business. So in Q4 2025, Vestas Development generated 102MW of order intake from Argentina. At the end of Q4, Vestas pipeline of development projects amounted to 28GW, with Australia, the US, and Brazil holding the largest opportunities. As part of the Operating Model Reset, we have implemented a leaner organizational structure with simpler governance to benefit from market trends and ensure traction with key projects. Ultimately, the goal of Vestas Development is to develop quality projects to the benefit for our customers and very close partners, thereby contributing meaningfully to the Vestas group EBIT over time and quarter-on-quarter. Then I will go to sustainability.
Speaker #1: We talk about it. And it's also a part of that we often quarterly update. But the year of '25 was very much on. Also, a year characterized by that heading revised with the organizational structure.
Speaker #1: As part of the operating model So it reset . was a year of and also a year of simplification refocusing the development business .
Speaker #1: So in Q4 2025 , Vestas development generated 102 megawatt of water intake from Argentina . At the end of Q4 , Vestas of pipeline development projects amounted to 28 gigawatt , with Australia , the US and Brazil holding the largest opportunities as part of the operating model reset , we have implemented a leaner organizational structure with governance to benefit from simpler trends and ensure traction with key projects .
Speaker #1: The Ultimate . Vestas benefit for customers the projects to and develop goal of our very close development is to partners Ebit Group Vestas contributing , thereby the over time quarter quarter and meaningful to .
Henrik Andersen: Here, positively, record high greenhouse gas emissions avoided. If we look at Vestas turbines produced and shipped in 2025, are expected to avoid a record of 463 million tons of greenhouse gas emissions over the course of their lifetime. Undoubtedly, this is Vestas's main contribution to sustainable energy system. And maybe just put that a bit in perspective. The whole emission from Spain in a year is approximately 250 million tons. So we are sort of beating that with a factor two, give and take. During 2025, we also supplied 22,000 tons of low emission steel, driving significant emission reductions in those projects. A number of recordable injuries per million working hours, TRIR, remains unchanged at 2.7 in 2025 compared to 2024. Safety remains a top priority for us as we tirelessly work to improve our safety performance across our value chain.
Henrik Andersen: Here, positively, record high greenhouse gas emissions avoided. If we look at Vestas turbines produced and shipped in 2025, are expected to avoid a record of 463 million tons of greenhouse gas emissions over the course of their lifetime. Undoubtedly, this is Vestas's main contribution to sustainable energy system. And maybe just put that a bit in perspective. The whole emission from Spain in a year is approximately 250 million tons. So we are sort of beating that with a factor two, give and take. During 2025, we also supplied 22,000 tons of low emission steel, driving significant emission reductions in those projects. A number of recordable injuries per million working hours, TRIR, remains unchanged at 2.7 in 2025 compared to 2024. Safety remains a top priority for us as we tirelessly work to improve our safety performance across our value chain.
Speaker #1: And I will go to that. And on sustainability, we record positively here high greenhouse gas emissions avoided. If we look at Vestas turbines produced and shipped in 2025, they are expected to avoid a record of 463 million tons of greenhouse gas emissions over the course of their lifetime.
Speaker #1: Undoubtedly, this is Vestas' main contribution to a sustainable energy system, and maybe just to put that a bit in perspective, the whole emission from Spain in the year is approximately 250 million tons.
Speaker #1: we are So sort of beating that with a factor two give and take going 2025 . We also supplied 22,000 tons of low emission steel driving significant emission reductions in those projects .
Speaker #1: A number of recordable injuries million working hours per Trhere remains unchanged at 2.7 . In 2025 , compared to 2020 . For safety remains a top priority for us as we tirelessly improve safety , performance our value our chain across .
Henrik Andersen: I'll also say here, no fatalities in 2025. We can also see that the frequency of serious injuries have reduced and gone down over the year, which is a really pleasing trend of what we see across our many countries, but also across now 37,000 employees. I also encourage you to read our annual report. There is a very large section on CSRD. Some will say too much and too bureaucratic. We are one of them. But it also contains a lot of the emotions and passion that goes from us. We'll also see we don't no longer comment on Corporate Knights. We don't understand the change rules and ways of potentially evaluating sustainability retroactively back in time. So therefore, we'll come back when we have chosen a new sensible partnership later in the year.
Henrik Andersen: I'll also say here, no fatalities in 2025. We can also see that the frequency of serious injuries have reduced and gone down over the year, which is a really pleasing trend of what we see across our many countries, but also across now 37,000 employees. I also encourage you to read our annual report. There is a very large section on CSRD. Some will say too much and too bureaucratic. We are one of them. But it also contains a lot of the emotions and passion that goes from us. We'll also see we don't no longer comment on Corporate Knights. We don't understand the change rules and ways of potentially evaluating sustainability retroactively back in time. So therefore, we'll come back when we have chosen a new sensible partnership later in the year.
Speaker #1: I'll also say here no fatalities in 2025 and we can also see that the frequency of serious injuries have and reduced down over year , the which is a really pleasing trend of what we see across our many countries , but also across now 37,000 employees .
Speaker #1: I also encourage you to read our annual report. There is a very large section on CSR. Some will say too much and too bureaucratic.
Speaker #1: We are one of them . But it also contains a lot of the emotions and passion that goes from us . We'll also see we don't no longer commenting on corporate knights .
Speaker #1: We don't understand the change , rules and ways of potentially evaluating sustainability retroactively . Back in time . So therefore we'll come back when we have chosen a new , sensible partnership later the in in year .
Henrik Andersen: With that, I think it's time to come to the financials and what better year could be to have your debut of a full year, Jakob. So over to you.
Henrik Andersen: With that, I think it's time to come to the financials and what better year could be to have your debut of a full year, Jakob. So over to you.
Speaker #1: the With that , time to it's financials what better year could be to have your debut of a full I think year ? Jacob .
Jakob Wegge: Thank you, Henrik. We start off with the full year 2025 income statement with a historic record high revenue and EBIT that landed within the narrowed outlook range. When we look at the highlights, in 2025, revenue increased 9% year-on-year to a record high, EUR 18.8 billion. The increase was primarily driven by a larger amount of megawatt delivered in power solutions. Revenue for the year was, though, affected by a 3% currency headwind. Gross profit landed at an all-time high of EUR 2.5 billion. Our EBIT margin before special items landed at 5.7% in the upper end of our narrowed outlook range and is an increase of 1.4 percentage points compared to last year and was driven by better profitability in both segments.
Jakob Wegge: Thank you, Henrik. We start off with the full year 2025 income statement with a historic record high revenue and EBIT that landed within the narrowed outlook range. When we look at the highlights, in 2025, revenue increased 9% year-on-year to a record high, EUR 18.8 billion. The increase was primarily driven by a larger amount of megawatt delivered in power solutions. Revenue for the year was, though, affected by a 3% currency headwind. Gross profit landed at an all-time high of EUR 2.5 billion. Our EBIT margin before special items landed at 5.7% in the upper end of our narrowed outlook range and is an increase of 1.4 percentage points compared to last year and was driven by better profitability in both segments.
Speaker #1: So, and over to you.
Speaker #2: Thank you . Henrik . And we start off with full year 2025 income statement with a the historic record high revenue and Ebit that landed within the narrowed outlook range .
Speaker #2: When we look in 2025 , highlights increased 9% year on revenue year to a record high €18.8 billion . The increase was primarily driven by a larger amount of megawatt delivered in power solutions revenue for the year , though effected by a 3% currency headwind , gross profit landed at an all time high of 2.5 billion , and our Ebit margin before special items landed at upper end 5.7% in the of our narrowed and is an range outlook increase of 1.4 percentage points compared to last year , and was by better driven profitability in both segments .
Jakob Wegge: Finally, on this slide, I want to highlight the ROSI that improved to 11.8% for the year, while EPS rose 60% to EUR 0.8. In terms of Q4, we see strong project execution in onshore, offset by ramp-up cost and service. Revenue in the fourth quarter increased 2% compared to Q4 last year. The increase was driven by higher revenue in power solutions, offset by lower service revenue. EBIT margin before special items in the quarter was 9.3%, a decrease of 3.1 percentage points year-on-year. The development was primarily driven by ramp-up cost in offshore, higher depreciations, and lower service revenue, offset by continued strong profitability and execution in onshore. It's worth to note here on the slide that we incurred EUR -56 million of special items in the quarter.
Jakob Wegge: Finally, on this slide, I want to highlight the ROSI that improved to 11.8% for the year, while EPS rose 60% to EUR 0.8. In terms of Q4, we see strong project execution in onshore, offset by ramp-up cost and service. Revenue in the fourth quarter increased 2% compared to Q4 last year. The increase was driven by higher revenue in power solutions, offset by lower service revenue. EBIT margin before special items in the quarter was 9.3%, a decrease of 3.1 percentage points year-on-year. The development was primarily driven by ramp-up cost in offshore, higher depreciations, and lower service revenue, offset by continued strong profitability and execution in onshore. It's worth to note here on the slide that we incurred EUR -56 million of special items in the quarter.
Speaker #2: Finally, on this slide, I want to highlight the ROCE that improved to 11.8% for the year, while EPS rose 60% to €0.8.
Speaker #2: In terms of Q4, we see project execution in onshore, offset by ramp-up and cost. Strong service revenue in the fourth quarter increased 2% compared to Q4 last year.
Speaker #2: The increase was driven by higher revenue in Power Solutions, offset by lower service revenue. EBIT margin before special items in the quarter was 9.3%, a decrease of 3.1 percentage points year on year.
Speaker #2: The development was primarily driven by ramp up costs in offshore , higher depreciations and lower service revenue , offset by continued profitability and execution in onshore worth .
Jakob Wegge: This is primarily relating to the Operating Model Reset, which, among others, led to a reduction of 900 positions. Therefore, the EUR 56 million entailed both redundancy cost, but also some non-cash impairments of legacy assets. Henrik will speak to this a little bit later in the presentation. Diving into the segment split, starting with power solutions, where we see double-digit profitability. In power solutions, the fourth quarter revenue increased by 7% year-on-year, driven by higher megawatt delivered in offshore, while onshore revenue was flat. The EBIT margin of 10% in Q4 is down year-on-year due to higher depreciations and ramp-up cost in offshore, but offset by continued strong execution and profitability in onshore. 2025 was a backend-loaded year, and 2026 is expected to follow a similar seasonal pattern.
Jakob Wegge: This is primarily relating to the Operating Model Reset, which, among others, led to a reduction of 900 positions. Therefore, the EUR 56 million entailed both redundancy cost, but also some non-cash impairments of legacy assets. Henrik will speak to this a little bit later in the presentation. Diving into the segment split, starting with power solutions, where we see double-digit profitability. In power solutions, the fourth quarter revenue increased by 7% year-on-year, driven by higher megawatt delivered in offshore, while onshore revenue was flat. The EBIT margin of 10% in Q4 is down year-on-year due to higher depreciations and ramp-up cost in offshore, but offset by continued strong execution and profitability in onshore. 2025 was a backend-loaded year, and 2026 is expected to follow a similar seasonal pattern.
Speaker #2: note here on To the slide that we incurred a -56 million of special items in the quarter , this is primarily relating to the operating model reset , which , among others , led to a reduction of 900 positions therefore the 56 million entailed both and costs but also some non-cash assets .
Speaker #2: And Henrik speak to will this a little bit impairments of later in the presentation . Diving the segment split , starting with power Solutions , where we see double digit profitability in power Solutions , the fourth quarter revenue increased by into 7% year on year , driven by higher megawatt delivered in offshore , while onshore revenue was flat .
Speaker #2: The EBIT margin of 10% in Q4 is down year on year due to higher depreciations and ramp-up costs in offshore, but this was offset by strong execution and continued profitability in onshore.
Jakob Wegge: Of course, on the right on the slide here, you can see that was the same in 2023 and 2024. This is linked to what you all know, but let me just repeat it. It's the operational leverage, of course, where deliveries in the first half is mainly covering the fixed cost. Yeah, 2026 is expected to follow this as well. Moving to our service segment. As Henrik mentioned, this is the first year of the Service Recovery Plan, and we completed that. In service, the revenue decreased by 16% year-on-year, driven by a decrease in contract revenue and a lower level of transactional sales against an unusually strong Q4 last year. Service generated an EBIT of EUR 144 million in the quarter, equivalent to an EBIT margin of 14.4%, affected by extra costs at a few specific sites.
Jakob Wegge: Of course, on the right on the slide here, you can see that was the same in 2023 and 2024. This is linked to what you all know, but let me just repeat it. It's the operational leverage, of course, where deliveries in the first half is mainly covering the fixed cost. Yeah, 2026 is expected to follow this as well. Moving to our service segment. As Henrik mentioned, this is the first year of the Service Recovery Plan, and we completed that. In service, the revenue decreased by 16% year-on-year, driven by a decrease in contract revenue and a lower level of transactional sales against an unusually strong Q4 last year. Service generated an EBIT of EUR 144 million in the quarter, equivalent to an EBIT margin of 14.4%, affected by extra costs at a few specific sites.
Speaker #2: 25 was a back end loaded year and 26 is expected to follow a similar seasonal And of course , on pattern . the right on the slide you can see there here same in 23 and 24 .
Speaker #2: This is linked to to what you know , but let all me just repeat it . It's the operational leverage . Of course where deliveries in the first half is mainly covering the fixed cost .
Speaker #2: And yeah , 26 is expected to follow this as well . our Moving to service segment , the as Henrik mentioned , this is the first year of the service recovery plan .
Speaker #2: And we completed that in service . The revenue decreased by 16% year on driven by a decrease in contract year , revenue and a lower level of transactional sales against an unusual strong last Q4 year , service generated 144 million in the of an quarter Ebit , equivalent to an margin Ebit of 14.4% affected by extra costs at a few specific sites for full year 25 , we delivered on our revised Ebit guidance in service .
Jakob Wegge: For full year 2025, we delivered on our revised EBIT guidance in service. However, as Henrik also mentioned, the overall outcome fell short of our internal performance targets. We continue to execute on the recovery plan to achieve our long-term ambitions. And Henrik will also speak to that in a little while in this presentation. Moving from the P&L into the balance sheet, starting with net working capital, our working capital decreased in the quarter. It improved to EUR -3.1 billion in Q4, mainly related to an improvement in accounts payables and a continued focus around in the organization on improving our working capital. Compared to Q4 last year, we have seen an improvement of EUR 830 million in net working capital. This level, this development, I'm really, really positive about. While we can always improve, this is a strong and satisfactory level.
Jakob Wegge: For full year 2025, we delivered on our revised EBIT guidance in service. However, as Henrik also mentioned, the overall outcome fell short of our internal performance targets. We continue to execute on the recovery plan to achieve our long-term ambitions. And Henrik will also speak to that in a little while in this presentation. Moving from the P&L into the balance sheet, starting with net working capital, our working capital decreased in the quarter. It improved to EUR -3.1 billion in Q4, mainly related to an improvement in accounts payables and a continued focus around in the organization on improving our working capital. Compared to Q4 last year, we have seen an improvement of EUR 830 million in net working capital. This level, this development, I'm really, really positive about. While we can always improve, this is a strong and satisfactory level.
Speaker #2: However , as Henrik also mentioned , the overall outcome fell short of our internal performance targets . We continue to execute on the recovery plan to long achieve our term ambitions , and Henrik will also that in a speak to little while .
Speaker #2: In this presentation, moving from the P&L and balance sheet, starting with net working capital, our working capital decreased in the quarter.
Speaker #2: It improved to negative $3.1 billion in quarter four, mainly related to an improvement in accounts payables and a continued focus around in the organization.
Speaker #2: On improving our working capital . Compared to Q4 last year , we seen an haven't improvement of 830 million in net working capital .
Speaker #2: This level . I'm really , really positive about development . . While we can always improve , this is a strong and satisfactory level .
Jakob Wegge: And with that note, we move into the cash flow statement. We saw strong and good cash flows that resulted in further strengthening of our cash position. Our operating cash flow was EUR 1.3 billion in the quarter, a decline compared to Q4 in the prior year, mainly due to higher warranty consumptions as well as changes in the net working capital. Adjusted free cash flow was 872 in the quarter, EUR 802 million in the quarter. For 2025, we ended with a strong net cash position of EUR 1.2 billion, having actually throughout the year paid out dividends and also completed two share buybacks in 2025. This is a situation that I'm obviously also very positive about. And it shows the strength of our business model.
Jakob Wegge: And with that note, we move into the cash flow statement. We saw strong and good cash flows that resulted in further strengthening of our cash position. Our operating cash flow was EUR 1.3 billion in the quarter, a decline compared to Q4 in the prior year, mainly due to higher warranty consumptions as well as changes in the net working capital. Adjusted free cash flow was 872 in the quarter, EUR 802 million in the quarter. For 2025, we ended with a strong net cash position of EUR 1.2 billion, having actually throughout the year paid out dividends and also completed two share buybacks in 2025. This is a situation that I'm obviously also very positive about. And it shows the strength of our business model.
Speaker #2: And with that note , we move into the cash flow statement . We saw a strong and good cash flows that resulted in further strengthening of our cash position operating , our cash flow was 1.3 billion in the quarter .
Speaker #2: A decline compared to Q4 in the prior year , mainly due to higher warranty consumptions as well as changes in the net capital cash flow was 872 in the quarter , €802 million in the quarter for 25 , we ended with a strong net cash position of 1.2 billion , having actually throughout the year paid out dividends and also completed two share buybacks in 2025 .
Speaker #2: This is this is a situation that I'm obviously also very positive And about . it shows the strength of our business model . And and we have to thank Henrik , both Henrik and me , the strong execution by all of the teams around the world in securing strong end this to the year for our cash flow .
Jakob Wegge: We have to thank both Henrik and me, the strong execution by all of the teams around the world in securing this strong end to the year for our cash flow. Moving to net investments in Q4, we are continuing to invest in for growth and competitiveness. Total net investments amounted to EUR 382 million in Q4, as expected, slightly down from Q4 last year. Compared to last year, investments have focused less on intangible investments, such as research and development, and is now primarily related to tangible investments, such as transport equipment and tools, as we enter 2026 ready to execute a higher number of projects in offshore. Total net investments for the year amounted to EUR 1.25 billion in line with our outlook. Moving into the quality slide, where we also see a strong development year-over-year.
Jakob Wegge: We have to thank both Henrik and me, the strong execution by all of the teams around the world in securing this strong end to the year for our cash flow. Moving to net investments in Q4, we are continuing to invest in for growth and competitiveness. Total net investments amounted to EUR 382 million in Q4, as expected, slightly down from Q4 last year. Compared to last year, investments have focused less on intangible investments, such as research and development, and is now primarily related to tangible investments, such as transport equipment and tools, as we enter 2026 ready to execute a higher number of projects in offshore. Total net investments for the year amounted to EUR 1.25 billion in line with our outlook. Moving into the quality slide, where we also see a strong development year-over-year.
Speaker #2: Moving to net investments in Q4 , we are continuing to investing for growth and competitiveness . Total net investments amounted to 382 million in quarter four .
Speaker #2: As expected , slightly down from Q4 last year compared to last year . Investments have focused less on intangible investments , such as research development , and is now primarily related to tangible investments such as transport equipment and tools .
Speaker #2: As we enter 26 ready to execute a higher number of projects in offshore total net investments for the year amounted to our line with €1,000,000,250 million in outlook .
Speaker #2: And moving into the quality slide, where we also see a strong development year on year, the production loss factor improved. Now that the repairs of the sites in the recently mentioned quarters have been completed.
Jakob Wegge: The Lost Production Factor improved now that the repairs of the sites mentioned in the recent quarters have been completed. Note that the LPF, the Lost Production Factor, is measured over the last 12 months. It will take some quarters before this effect is fully out. Warranty cost amounted to EUR 207 million in the quarter, corresponding to 3.3% of revenue. Warranty consumption in Q4 was EUR 251 million, mainly due to finalization of the above-mentioned repairs. For the full year, warranty costs were 3.2% of revenue. I want to highlight the lower right corner, where you can see that in 2022, we were at 6.4% of revenue. So we have half that in 2025. It's now the lowest in five years. Before handing back to Henrik, I want to end on my favorite slide, the capital structure slide.
Jakob Wegge: The Lost Production Factor improved now that the repairs of the sites mentioned in the recent quarters have been completed. Note that the LPF, the Lost Production Factor, is measured over the last 12 months. It will take some quarters before this effect is fully out. Warranty cost amounted to EUR 207 million in the quarter, corresponding to 3.3% of revenue. Warranty consumption in Q4 was EUR 251 million, mainly due to finalization of the above-mentioned repairs. For the full year, warranty costs were 3.2% of revenue. I want to highlight the lower right corner, where you can see that in 2022, we were at 6.4% of revenue. So we have half that in 2025. It's now the lowest in five years. Before handing back to Henrik, I want to end on my favorite slide, the capital structure slide.
Speaker #2: Note that the LPF, the lost production factor, is measured over the last 12 months, and it will take over some quarters before this effect is fully out.
Speaker #2: Warranty costs amounted to €207 million in the quarter, corresponding to a 3.3% of revenue. Warranty consumption in Q4 was €251 million, mainly due to the finalization of the above-mentioned repairs.
Speaker #2: For the full year, warranty costs were 3.2% of revenue, and I want to highlight that in the lower right corner, you can see that in 2022, we were at 6.4% of revenue.
Speaker #2: We have half that in 2025, and it's now the lowest in So. And before handing back to Henrik, I want to end on my favorite slide.
Jakob Wegge: It is important for Henrik, for me, for the team Vestas, that Vestas remains resilient to economic fluctuations and respecting the volatility of the industry. With this in mind, we have updated our capital allocation priorities. Henrik will speak to this a little bit later. But already on this slide, you can see we have changed the upper right corner, where we before talked about having a net interest-bearing debt to EBITDA before special items at maximum plus one. We now also say we want to have it within the boundary of plus one to minus one. The final comment on this slide will be that the net interest-bearing debt ended the year at minus 0.6 times EBITDA. We are therefore very pleased to propose a new buyback of EUR 150 million, so second quarter in a row, in addition to the dividend proposal of EUR 100 million.
Jakob Wegge: It is important for Henrik, for me, for the team Vestas, that Vestas remains resilient to economic fluctuations and respecting the volatility of the industry. With this in mind, we have updated our capital allocation priorities. Henrik will speak to this a little bit later. But already on this slide, you can see we have changed the upper right corner, where we before talked about having a net interest-bearing debt to EBITDA before special items at maximum plus one. We now also say we want to have it within the boundary of plus one to minus one. The final comment on this slide will be that the net interest-bearing debt ended the year at minus 0.6 times EBITDA. We are therefore very pleased to propose a new buyback of EUR 150 million, so second quarter in a row, in addition to the dividend proposal of EUR 100 million.
Speaker #2: The capital structure slide . It is important for for Henrik , for me , for for investors that Vestas remains resilient to fluctuations and respecting the economic the industry .
Speaker #2: And with this in mind, we have updated our capital allocation priorities. Henrik will speak to this a little bit later, but already on this slide you can see we have changed the upper right corner, where before we talked about having a net interest-bearing debt to EBITDA before special items at a maximum of one plus one.
Speaker #2: We now also say to have we want it within the boundary of plus 1 to -1 . And the comment final on this slide will be that the net interest bearing debt ended the year at -0.6 times EBITDA , and we are therefore very pleased to propose a buyback of 150 million .
Jakob Wegge: And with that, Henrik, back to you.
Jakob Wegge: And with that, Henrik, back to you.
Speaker #2: So second quarter in a row , in addition to proposal dividend of €100 million . And with that , Henrik , back to you .
Claus Almer: Thank you, Jakob. And again here, solid end on what you call your favorite slide. I like that. When we then go into the strategy update, I will also try to point you a little bit back to much more information out of the annual report. But I think starting with really what it's all about, the wind energy value drivers. And as mentioned before, we just chose here to choose one of the things that happened just a few days ago in Hamburg, the North Sea Summit, 26 January 2026, where European leaders got together to confirm how we can now tangibly build out the offshore wind resource in the North Sea. And I think one of the heads of state has said it's an untapped energy source in what else is a energy deficit Europe because we need to be more independent on that.
Henrik Andersen: Thank you, Jakob. And again here, solid end on what you call your favorite slide. I like that. When we then go into the strategy update, I will also try to point you a little bit back to much more information out of the annual report. But I think starting with really what it's all about, the wind energy value drivers. And as mentioned before, we just chose here to choose one of the things that happened just a few days ago in Hamburg, the North Sea Summit, 26 January 2026, where European leaders got together to confirm how we can now tangibly build out the offshore wind resource in the North Sea. And I think one of the heads of state has said it's an untapped energy source in what else is a energy deficit Europe because we need to be more independent on that.
Speaker #1: Thank you , Jakob . again , And here , solid end on on your what you call your favorite slide . I like that when we then go into the to the strategy I'll update , also try to point you a little bit back to much more information out of the out of the annual report .
Speaker #1: But I think starting with really what it's all about , the wind energy And as drivers . value mentioned before , we just chose here to choose happened just a that few days ago in Hamburg , the summit , 26th of January , 2026 , where European leaders got together to confirm how we can now tangible build out the offshore wind resource in the North Sea .
Speaker #1: And I think one of the heads of state has said it's an untapped energy source in what else is a energy deficit ? Europe , because we need to be more on independent on that .
Claus Almer: So the energy affordability, the energy security, and the energy sustainability are the pillars and also what we see as the main drivers of the growth and the build-out, not only in Europe, but across the world of wind. I think on the energy affordability, when you look at it, wind energy is cost competitive and also fast to deploy. And the fast to deploy has, in many societies today, become a much more sought-after factor in this. When you need to build something, whether it's the demand for the energy or the electricity as factories or build-out capacity for the society because the electrification is happening, or it's for data centers, it's the same underlying positive trend.
Henrik Andersen: So the energy affordability, the energy security, and the energy sustainability are the pillars and also what we see as the main drivers of the growth and the build-out, not only in Europe, but across the world of wind. I think on the energy affordability, when you look at it, wind energy is cost competitive and also fast to deploy. And the fast to deploy has, in many societies today, become a much more sought-after factor in this. When you need to build something, whether it's the demand for the energy or the electricity as factories or build-out capacity for the society because the electrification is happening, or it's for data centers, it's the same underlying positive trend.
Speaker #1: the energy So affordability , the energy security and the energy sustainability are the headings and also what we see as the main drivers of the growth and the build out , not only in Europe but across the world of , of wind .
Speaker #1: I think on the energy affordability , when you look at it , when energy is cost competitive and also fast to deploy and the fast to deploy has in many societies today become a much more sought after factor in this when you build need something , whether it's the demand energy for the or the electricity , as factories or build out capacity for the society because the electrification is happening or it's for data centers , it's the same underlying positive trend on energy the security , the world has , in some ways , much more complex , but also in some ways more simple , because people be sure that they are in control the critical infrastructure , whether that's energy , defense or telecom .
Claus Almer: On the energy security, the world has become, in some ways, much more complex, but also in some ways, more simple because people want to be sure that they are in control over the critical infrastructure, whether that's energy, defense, or telecom. It's exactly the same. So therefore, wind energy strengthens security through national decentralized power generation. We see that. We see that evidenced also in areas where it is conflicted, like, for instance, Ukraine. And when you then go to the energy sustainability, we believe sustainability in everything we do. And we work tirelessly with that across both our Scope 1, 2, and 3 at Vestas. This is a low-carbon source of power. And whatever you believe in, fact shows that the wind will continue in this planet also long after we have stopped presenting, or at least I have stopped presenting quarterly of Vestas.
Henrik Andersen: On the energy security, the world has become, in some ways, much more complex, but also in some ways, more simple because people want to be sure that they are in control over the critical infrastructure, whether that's energy, defense, or telecom. It's exactly the same. So therefore, wind energy strengthens security through national decentralized power generation. We see that. We see that evidenced also in areas where it is conflicted, like, for instance, Ukraine. And when you then go to the energy sustainability, we believe sustainability in everything we do. And we work tirelessly with that across both our Scope 1, 2, and 3 at Vestas. This is a low-carbon source of power. And whatever you believe in, fact shows that the wind will continue in this planet also long after we have stopped presenting, or at least I have stopped presenting quarterly of Vestas.
Speaker #1: It's exactly the same . So therefore wind energy strengthened security through national power generation . We see that . We see that decentralized evidenced also in areas where it is conflicted , like for instance , ultimate in in Ukraine .
Speaker #1: And when you then go to the energy sustainability , we believe sustainability in we everything do and we work tirelessly with across our both that one , scope two and three at Vestas , this is a low carbon source of power and whatever you believe , facts in shows that will the wind continue in this , in this planet .
Claus Almer: So therefore, this works. And it works in more than 80 countries. And it's a testament to how far the industry and the technology has developed. I will point you to page 16 to 20 in our annual report, where you can see more about what we also expect in terms of growth rates, underlying positive trends in the markets. So encourage you to take the time following. So what do we then say in terms of our global strategic priorities? The heading here, and you saw that, we have used that throughout 2025, as well externally as internally, Value Through Performance. And when we look at our seven priorities down here, there's no doubt that we also have become, as a team Vestas, become much more direct and more specific in what it means to drive quality cash or, for that matter, efficiency in it.
Henrik Andersen: So therefore, this works. And it works in more than 80 countries. And it's a testament to how far the industry and the technology has developed. I will point you to page 16 to 20 in our annual report, where you can see more about what we also expect in terms of growth rates, underlying positive trends in the markets. So encourage you to take the time following. So what do we then say in terms of our global strategic priorities? The heading here, and you saw that, we have used that throughout 2025, as well externally as internally, Value Through Performance. And when we look at our seven priorities down here, there's no doubt that we also have become, as a team Vestas, become much more direct and more specific in what it means to drive quality cash or, for that matter, efficiency in it.
Speaker #1: Also , long after we stopped . Or at least I've stopped presenting quarterly of of Vestas . So therefore this works and it works in more than 80 countries .
Speaker #1: And it's a testament to how far the industry and the technology has developed . I will point you to page 16 to 20 .
Speaker #1: In our annual report, you can also see what we expect in terms of growth, and the underlying positives in the market trends.
Speaker #1: So I encourage you to take the time following. So what do we then say in terms of our global strategic priorities? The heading here.
Speaker #1: And you saw that we've used that throughout 2025 as well, externally and internally, as value through performance. And, when we look at our priorities, and down here, there's no doubt that we also have become Team Vestas, become much more direct and more specific in what it means to drive to quality, cash, or, for that matter, in it.
Claus Almer: I'll speak more of the efficiency in the coming slide, where we talk about Operating Model Reset, which is something that also hit home to us throughout 2025 and was needed to do something about. We have become more dedicated. I think, in some ways, Jacob, as much as it was your favorite slide on the capital structure, that is actually a reflection of all the activities and all the commitment that goes in and also the support from customers, especially from the onshore execution this year, ramping up in the offshore and still doing the recovery and service. Service works really well. It supports not only the business, but also our customers as key. We look to the right side of this towards the end of this decade. No doubt that our ambition is to be a global leader in sustainable energy solutions.
Henrik Andersen: I'll speak more of the efficiency in the coming slide, where we talk about Operating Model Reset, which is something that also hit home to us throughout 2025 and was needed to do something about. We have become more dedicated. I think, in some ways, Jacob, as much as it was your favorite slide on the capital structure, that is actually a reflection of all the activities and all the commitment that goes in and also the support from customers, especially from the onshore execution this year, ramping up in the offshore and still doing the recovery and service. Service works really well. It supports not only the business, but also our customers as key. We look to the right side of this towards the end of this decade. No doubt that our ambition is to be a global leader in sustainable energy solutions.
Speaker #1: I'll speak more of the efficiency in the in the coming slide , where we talk about operating model reset , which is something that also hit home to us throughout 2025 and was needed to do something about .
Speaker #1: We have become more dedicated , and I think in some ways , Jacob , as much was your favorite slide on the capital as it a reflection of all the of all the activities and all the commitment that goes in , and also the support from customers , especially from the onshore execution this year , ramping up in the offshore and the still doing recovery in service .
Speaker #1: service But works really well and it supports not only the business but also our customers as key . We look to this of the right side towards the end of this decade .
Claus Almer: I think we can tick a couple of boxes when we look at onshore and service. I think we are a strong pursuer in the offshore. And we will probably remain that. But we are a good pursuer in terms of discipline and how we work and build with customers and the industry. And then not least in development, where, of course, as you heard me saying, development will never be something where you will see it overtakes the whole purpose of what it is with Vestas. But we are in markets where we have projects we can support our customers and partners with. So therefore, we will remain as a global provider in more than 80 countries. We will remain also there as a good partner in early development to the benefit of our customers.
Henrik Andersen: I think we can tick a couple of boxes when we look at onshore and service. I think we are a strong pursuer in the offshore. And we will probably remain that. But we are a good pursuer in terms of discipline and how we work and build with customers and the industry. And then not least in development, where, of course, as you heard me saying, development will never be something where you will see it overtakes the whole purpose of what it is with Vestas. But we are in markets where we have projects we can support our customers and partners with. So therefore, we will remain as a global provider in more than 80 countries. We will remain also there as a good partner in early development to the benefit of our customers.
Speaker #1: doubt that No our ambition is to be global leader in sustainable energy solutions . I think we can take a couple of boxes when we look at onshore and service .
Speaker #1: I think we are a pursuer in the strong offshore and we probably will we will remain that , but we are good in terms of discipline and and how we we work and build with customers and the and industry then not least in development where of course , as you heard me saying , development will never be you will see it , it overtakes the whole purpose of what it is with , with Vestas .
Speaker #1: But we are in markets where we have projects we can support our customers and partners with. So, therefore, we will remain as a global provider in more than 80 countries.
Claus Almer: With that, I will take a look into something which we probably haven't talked that much about, but what we call Operating Model Reset in Vestas. It started mid-year last year. We've been speaking about it for some time because the overall two drivers of making an Operating Model Reset is making Vestas more simple and also more customer-focused. When you look down, it's anchored in the Vestas strategy, of course. Anything that is closer to customer is basically across all seven. But the efficiency part sits under the efficiency box. So therefore, Operating Model Reset is having that drive and also require that attention from everyone among our 37,000 colleagues across the world. When we look at our four focus areas for steering the outcomes, I think the first and foremost, it's listen to customers.
Henrik Andersen: With that, I will take a look into something which we probably haven't talked that much about, but what we call Operating Model Reset in Vestas. It started mid-year last year. We've been speaking about it for some time because the overall two drivers of making an Operating Model Reset is making Vestas more simple and also more customer-focused. When you look down, it's anchored in the Vestas strategy, of course. Anything that is closer to customer is basically across all seven. But the efficiency part sits under the efficiency box. So therefore, Operating Model Reset is having that drive and also require that attention from everyone among our 37,000 colleagues across the world. When we look at our four focus areas for steering the outcomes, I think the first and foremost, it's listen to customers.
Speaker #1: We will remain also there as a good partner in early development to the benefit of our customers . With that , I will take a into something which we probably look haven't about , talked that much call model operating reset but what in in we investors , mid-year it last year .
Speaker #1: We've been speaking about it for some time because the overall two drivers of making an operating reset is making investors more also more customer focused .
Speaker #1: When you look down , it's anchored in the Vestas strategy . Of course , anything that is customer closer to is across basically all seven .
Speaker #1: the But efficiency part sits under the efficiency box . So therefore operating model reset is having that drive . And also require that attention from everyone among our 37,000 colleagues across the world .
Claus Almer: Customers told us throughout the last year or two that, in some ways, we have become too complex, too difficult to talk to. Sometimes that was too long from when you presented a potential need or solution to when you could actually get the right answer or a committed answer from Vestas. That we picked up. Not all of it we liked when we went back because if we look at some of our processes that also stood out facing our customers, it took far too long. Some of the things, it's fair to say, we had examples of both processes and the way we acted, where I will sort of say, even if you made your best, you couldn't invent something that was more complex than what we had in Vestas. So therefore, part of it was, first of all, stop, avoid being in denial.
Henrik Andersen: Customers told us throughout the last year or two that, in some ways, we have become too complex, too difficult to talk to. Sometimes that was too long from when you presented a potential need or solution to when you could actually get the right answer or a committed answer from Vestas. That we picked up. Not all of it we liked when we went back because if we look at some of our processes that also stood out facing our customers, it took far too long. Some of the things, it's fair to say, we had examples of both processes and the way we acted, where I will sort of say, even if you made your best, you couldn't invent something that was more complex than what we had in Vestas. So therefore, part of it was, first of all, stop, avoid being in denial.
Speaker #1: When we look at our four focus areas for steering the outcomes , I think the first and foremost is listen to customers . Customers told us throughout the year or two that in some ways we have become too last complex to difficult talk to and to sometimes there too was long from when you presented a potentially need or solution to you could actually get a the right answer or a committed answer from from Vestas that we picked up .
Speaker #1: Not all of it . We liked when we went back , because if we look at some of our processes that also sets out facing to our customers , it took far too long .
Speaker #1: Some of the things is fair . Saying we had examples of both processes and and the way we acted where I will sort of say , even if you , if you , if you made your best , you couldn't invent something that was more complex than what we had investors .
Claus Almer: Then also, let alone, this is not something which the Executive Management Board of Vestas knew all the details of. So how do we actually get this through everyone's mind and therefore becomes an integrated part of our culture and DNA, which it is not? The overall consequence of this is you've seen the first wave of it, that 900 positions were gone by the end of 2026. It is fairly obvious that the right sizing of Vestas is, of course, painful. But on the other hand, it's also needed. Therefore, it's not the last time you will hear because the continuation of this is not a project way of thinking. This has to be a part of the DNA of being investors. Therefore, we are not finished simplifying. We just started and scratched the surface of it.
Henrik Andersen: Then also, let alone, this is not something which the Executive Management Board of Vestas knew all the details of. So how do we actually get this through everyone's mind and therefore becomes an integrated part of our culture and DNA, which it is not? The overall consequence of this is you've seen the first wave of it, that 900 positions were gone by the end of 2026. It is fairly obvious that the right sizing of Vestas is, of course, painful. But on the other hand, it's also needed. Therefore, it's not the last time you will hear because the continuation of this is not a project way of thinking. This has to be a part of the DNA of being investors. Therefore, we are not finished simplifying. We just started and scratched the surface of it.
Speaker #1: So therefore, part of it was, first of all, stop, avoid being in denial. Then also, let alone, it's not as if this is something the executive management board of Vestas knew details of.
Speaker #1: So how do we actually get all the this through everyone's therefore mind and becomes integrated an part of our culture and DNA , which it is not ?
Speaker #1: overall consequence of The this is you've first wave of it , that 900 positions were gone end of 2026 . And it is fairly obvious right sizing of Vestas is , of course , painful .
Speaker #1: But on the other hand , it's needed also and therefore it's not the last time you will hear because the continuation of this is not a project way of thinking .
Speaker #1: It is . This has to be a part of the DNA of being investors , and therefore we are not finished simplifying . We just started and scratched the of it .
Claus Almer: So this you will hear more about in the coming, not only quarters, but hopefully also the coming years with much better examples to share. We've also said here there are three workstreams. I think, Jakob, you touched a part of the financials. We also here had special items for the first time, which relates to this very clearly because it actually is an immediate return when you use those special items to do that. First one is ease of every day. And this is what I call day-to-day. Very easy. If you onboard the group of colleagues, investors, and saying, "Give us what you find that is actually hindering you making an easier impact of value creation," then we had a catalog of hundreds of good ideas to improve that.
Henrik Andersen: So this you will hear more about in the coming, not only quarters, but hopefully also the coming years with much better examples to share. We've also said here there are three workstreams. I think, Jakob, you touched a part of the financials. We also here had special items for the first time, which relates to this very clearly because it actually is an immediate return when you use those special items to do that. First one is ease of every day. And this is what I call day-to-day. Very easy. If you onboard the group of colleagues, investors, and saying, "Give us what you find that is actually hindering you making an easier impact of value creation," then we had a catalog of hundreds of good ideas to improve that.
Speaker #1: So this you will surface about in the coming, not only quarters but hopefully also the coming years, with much better examples to share.
Speaker #1: We also said here there are three workstreams and I think Jacob , you touched a part of the financials . We here also had a special for the first items which this very relates clearly to time , actually a immediate because return when you use those special do items to that .
Speaker #1: First one is ease of every day . And this is what I call day to day . Very easy . If you on board the group of colleagues investors and saying give us what you find , that is actually hindering you , making an easier impact of value creation .
Claus Almer: That is one of the things where I'm just encouraging everyone to sort of common sense, make your decision. No one is forcing you to sit in a virtual meeting double the time of what you're expected to. So, if you have contributed what you need or you're not even contributing in the meeting, please leave the meeting. That's just one example. There are plenty more. When we look at the right sizing, you've seen first the one. I mentioned the 900. Wouldn't be surprised if that is a continuation with similar numbers for the coming year. And then the third box is really where the big prices sit because that's where we tie the value chain together and where we shorten it.
Henrik Andersen: That is one of the things where I'm just encouraging everyone to sort of common sense, make your decision. No one is forcing you to sit in a virtual meeting double the time of what you're expected to. So, if you have contributed what you need or you're not even contributing in the meeting, please leave the meeting. That's just one example. There are plenty more. When we look at the right sizing, you've seen first the one. I mentioned the 900. Wouldn't be surprised if that is a continuation with similar numbers for the coming year. And then the third box is really where the big prices sit because that's where we tie the value chain together and where we shorten it.
Speaker #1: Then we had a catalogue of hundreds of good ideas to improve that , that is one of the things where I'm just encouraged everyone to sort of common sense , make your decision .
Speaker #1: No one is forcing you to sit in a virtual meeting , double the time of what you're expected to . So if you're contributed what you need or you're not even in the meeting , contributing please leave the meeting .
Speaker #1: That's just one example . There are more plenty . When we look at the right sizing . You see , in first one , I mentioned the 900 .
Speaker #1: surprised Wouldn't be if that is a with continuation with some numbers for the coming year , and then the third box is really where the big prizes sit , because where we that's tie the value chain together and where we are , shorten it .
Claus Almer: This is also the most challenging and probably a bit for a lot of us, a bit the most disturbing part because we got to somehow get back to in customers, how do we get to a much faster response time and not use each other as an excuse for not answering proper and direct? So that's, I will say it, for me personally, very, very engaging and a very, very motivating process to embark in. I didn't know where we would be when we came out of end of July and beginning of August. Today, I know that it's festering and anchoring much better in the organization. So really encouraged by where we are and also how this step changed Vestas week in and week out. With that, I go to an area that is feeling some of the same measures and some of the same magnitude of change.
Henrik Andersen: This is also the most challenging and probably a bit for a lot of us, a bit the most disturbing part because we got to somehow get back to in customers, how do we get to a much faster response time and not use each other as an excuse for not answering proper and direct? So that's, I will say it, for me personally, very, very engaging and a very, very motivating process to embark in. I didn't know where we would be when we came out of end of July and beginning of August. Today, I know that it's festering and anchoring much better in the organization. So really encouraged by where we are and also how this step changed Vestas week in and week out. With that, I go to an area that is feeling some of the same measures and some of the same magnitude of change.
Speaker #1: This is also the most challenging, and probably a bit for a lot of us, a bit the most disturbing part, because we got to somehow get back to customers.
Speaker #1: How do we get to a much faster response time and not use each other as an excuse for not answering proper and direct ?
Speaker #1: So that's I will say it personally for me , very , very engaging and very , very motivating process to embark in . I didn't know where we would be when we out of end of July and beginning of of August .
Speaker #1: Today , I know that it's festering and anchoring much came better in the So really organization . by encouraged by where we are and also how this step change Vestas week in and week out .
Claus Almer: So the Service Recovery Plan, we are entering the second year of our Service Recovery Plan. The headings are exactly the same, hasn't changed, haven't discovered other areas we need to touch. So the strategic priorities for service is the same. We need to deliver the operational recovery, the commercial reset, and also ensure delivery of one-plan initiatives. I think we can definitely say when we jump down to see the commercial reset, we have no longer a challenge of that we are getting things in or have gotten things in from a contractual side that is not playing to the strengths of this. So very importantly, we have exited trim contracts with unacceptable terms. We're not finished with it. We also drive early renewal in the negotiations and, of course, strengthen the backlog health.
Henrik Andersen: So the Service Recovery Plan, we are entering the second year of our Service Recovery Plan. The headings are exactly the same, hasn't changed, haven't discovered other areas we need to touch. So the strategic priorities for service is the same. We need to deliver the operational recovery, the commercial reset, and also ensure delivery of one-plan initiatives. I think we can definitely say when we jump down to see the commercial reset, we have no longer a challenge of that we are getting things in or have gotten things in from a contractual side that is not playing to the strengths of this. So very importantly, we have exited trim contracts with unacceptable terms. We're not finished with it. We also drive early renewal in the negotiations and, of course, strengthen the backlog health.
Speaker #1: I go to that area with the feeling that some of the same measures and some of the same magnitude of change are present. So, for the service recovery plan, we are entering the second year of our service recovery plan.
Speaker #1: The headings are exactly the same , hasn't changed , haven't discovered other areas we need to touch . So the strategic priorities for service is the same .
Speaker #1: We need to operational recovery . The commercial lines , commercial reset and also ensure delivery of one plan initiatives . I think we can definitely say when we jump down to see the commercial reset , we have no a longer of that .
Speaker #1: We need to operational recovery . The commercial lines , commercial reset and also ensure delivery of one plan initiatives . I think we can definitely say when we jump down to see the commercial reset , we have no a longer of that . challenge We are things getting in or have gotten things in from a contractual side that is not playing to the strengths of this .
Speaker #1: So very importantly , we have exited trim contracts with unacceptable terms . We're not finished with it . We also drive early renewable negotiations and of course , strengthen the Health backlog .
Claus Almer: One of the things I will comment here on, that where it was possible to have very unfavorable sculpting arrangements or phasing arrangement on the cash flow side of these contracts, that has per se also been stopped effectively. On the operational excellence, I will say, for me, rewarding to see that it's understood, rewarding to see that we are executing on it. Not so rewarding is also to see some of it is a bit more sticky for our leadership and for our day-to-day teams to get it out. So therefore, the drive of operational excellence is one of the key, key areas of getting and keeping and potentially even increasing momentum because now we have some of also the better examples to work with. So this leads to more global regional cost out and also, of course, reducing cost of unscheduled maintenance, both on frequency and others.
Henrik Andersen: One of the things I will comment here on, that where it was possible to have very unfavorable sculpting arrangements or phasing arrangement on the cash flow side of these contracts, that has per se also been stopped effectively. On the operational excellence, I will say, for me, rewarding to see that it's understood, rewarding to see that we are executing on it. Not so rewarding is also to see some of it is a bit more sticky for our leadership and for our day-to-day teams to get it out. So therefore, the drive of operational excellence is one of the key, key areas of getting and keeping and potentially even increasing momentum because now we have some of also the better examples to work with. So this leads to more global regional cost out and also, of course, reducing cost of unscheduled maintenance, both on frequency and others.
Speaker #1: . And one of the things I will comment here on that , where it was possible to have very favorable sculpting arrangements or phasing arrangements on the cash flow side of of of these contracts that has per se also been effectively on the operation operational excellence stopped .
Speaker #1: I will say for me , rewarding to see that it's understood , rewarding to see executing on it , not so to see some of it is a bit more sticky for our leadership and for our day to day teams to get it out .
Speaker #1: So therefore , the driver of operational excellence is one of the key key areas that we are rewarding is getting and keeping and potentially even increasing momentum , because now we have some of also the better examples to work with .
Speaker #1: So leads more to this global regional cost out . And also course of reducing cost of unscheduled maintenance both on frequency others and that also means that by the end of this year , the net contract assets sits at 1,168,000,000 .
Claus Almer: That also means that by the end of this year, the net contract assets sits at EUR 1,168 million. It's around 3% of the service backlog. It's in good control. And we can also drill down to contracts where that contract asset sits and, of course, is being addressed ongoing as we speak. On the challenges side, I think the challenges remain grouped in the same. It's the unit cost, which means it's waste inflation, rising material cost indexations. Some will also add in there how tariffs and others are passed to the contract payments of the service contracts. The operational inefficiency, for me, this was probably disappointing to see, but somehow also expected that if a part of the business has not had the attention on a day-to-day basis that we expected, then this is the one that has been picked up at real speed.
Henrik Andersen: That also means that by the end of this year, the net contract assets sits at EUR 1,168 million. It's around 3% of the service backlog. It's in good control. And we can also drill down to contracts where that contract asset sits and, of course, is being addressed ongoing as we speak. On the challenges side, I think the challenges remain grouped in the same. It's the unit cost, which means it's waste inflation, rising material cost indexations. Some will also add in there how tariffs and others are passed to the contract payments of the service contracts. The operational inefficiency, for me, this was probably disappointing to see, but somehow also expected that if a part of the business has not had the attention on a day-to-day basis that we expected, then this is the one that has been picked up at real speed.
Speaker #1: It's around 3% of the backlog . It's in good control . And we can also know down to contracts where that contract asset sits .
Speaker #1: Of course, it is being addressed and ongoing as we speak. On the challenges side, I think the challenges remain grouped in the same.
Speaker #1: It's the unit cost , which means it's waste inflation rising material costs , indexation . Some will also add in there how tariffs and others are passed to to the contract payment of the service contracts .
Speaker #1: The operational inefficiency for me this was probably disappointing to see , but somehow also expected that if a part of the business has not attention the on a had day to day basis that we expected , then one that has been this is the picked up at really speed as the quality related effects , you've seen it .
Claus Almer: Then as the quality-related effects, you've seen it. Jacob talked really positively around how we are now seeing the quality improving. We are seeing the warranties coming down. And I always said, warranties are a bit of reflection together with LPF. So the good thing in here, we don't have exceptional warranty and other component cases, which, of course, suddenly release also a constraint and a strain on the service business to a very large extent. So the repairs turbine stops come now from a day-to-day normal operations and to a lesser extent of an LPF-related repair. So that will support the business. We don't and we can't yet predict the size of that positive. So therefore, we are also there pretty prudent in looking ahead for now the next or the last year in our recovery plan because we don't run ahead of ourselves in looking at that.
Henrik Andersen: Then as the quality-related effects, you've seen it. Jacob talked really positively around how we are now seeing the quality improving. We are seeing the warranties coming down. And I always said, warranties are a bit of reflection together with LPF. So the good thing in here, we don't have exceptional warranty and other component cases, which, of course, suddenly release also a constraint and a strain on the service business to a very large extent. So the repairs turbine stops come now from a day-to-day normal operations and to a lesser extent of an LPF-related repair. So that will support the business. We don't and we can't yet predict the size of that positive. So therefore, we are also there pretty prudent in looking ahead for now the next or the last year in our recovery plan because we don't run ahead of ourselves in looking at that.
Speaker #1: Jacob talked really positively around how we are now seeing the quality. We are seeing the improving warranties coming. And then warranties are a bit of a reflection together with LPF.
Speaker #1: So the good thing here is we don't have exceptional warranty and other component cases, which, if suddenly released, also create a constraint and a strain on the service business to a very large extent.
Speaker #1: So the repairs turbine stops comes now from a day to day normal operations and to a lesser extent of a LPF related repair .
Speaker #1: So that will support the business . don't and we can't We yet predict the size of that So therefore we positive . are there also .
Speaker #1: Pretty , pretty prudent in looking ahead for now . The next or the last year in our recovery plan , because we don't run ahead of ourselves in in looking at that .
Claus Almer: And then here in the bottom, you can see the development in the service backlog. I will say here, in some ways and in some markets, we probably underestimated a little bit the strength of the partnerships we have had with our customers. And in some markets, we have also on this multi-brand, which I have not talked too positively around in the last six quarters, we might end up having some gigawatts of multi-brand still remaining. But then the contract way of looking at multi-brands will be very much a part solution and a direct cost-plus solution with our partners. We are helping running turbines of sometimes OEMs that disappeared years ago. With that, I will go to also one of the areas, Jakob, you already mentioned, which is the capital structure. I think there's a couple of observations here.
Henrik Andersen: And then here in the bottom, you can see the development in the service backlog. I will say here, in some ways and in some markets, we probably underestimated a little bit the strength of the partnerships we have had with our customers. And in some markets, we have also on this multi-brand, which I have not talked too positively around in the last six quarters, we might end up having some gigawatts of multi-brand still remaining. But then the contract way of looking at multi-brands will be very much a part solution and a direct cost-plus solution with our partners. We are helping running turbines of sometimes OEMs that disappeared years ago. With that, I will go to also one of the areas, Jakob, you already mentioned, which is the capital structure. I think there's a couple of observations here.
Speaker #1: And then here in the bottom, you can see the development in the service backlog. I will say here in some ways and in some markets, we probably underestimate it a little bit.
Speaker #1: The strength of the partnerships we have had with our customers, and in some markets we have also on this multi-brand, which I have not talked to positively around in the last six quarters, we might end up having some gigawatts of multi-brand still remaining.
Speaker #1: But then the contract way of looking at Multibrands will be very much a part solution and a direct cost-plus solution with our partners.
Speaker #1: We are helping running turbines of sometimes OEMs . That disappears . Years ago . With that , I also the to will go one of areas you mentioned , Jacob , which is the capital already structure .
Claus Almer: First of all, we feel that we are that far in our ramp. We are that far in our investment into offshore that we can definitely see that the model we are scaling and working after works really well, which also means we see a lot more transparency when we look towards the end of this decade. That also have led to that we look now at our revised capital structure. We come out at a year now with the highest turnover ever. We come out with an EBITDA of Vestas that is the highest ever due to both size and scale of what's working. And that have led us, also based on the feedback and exchanges we have had with you as our owners in doing 2025, to revise and look at our capital structure strategy going forward.
Henrik Andersen: First of all, we feel that we are that far in our ramp. We are that far in our investment into offshore that we can definitely see that the model we are scaling and working after works really well, which also means we see a lot more transparency when we look towards the end of this decade. That also have led to that we look now at our revised capital structure. We come out at a year now with the highest turnover ever. We come out with an EBITDA of Vestas that is the highest ever due to both size and scale of what's working. And that have led us, also based on the feedback and exchanges we have had with you as our owners in doing 2025, to revise and look at our capital structure strategy going forward.
Speaker #1: I think there's a couple of observations here . First of all , we feel that we are that far in our ramp . We are that far in our investment into offshore that we can definitely see that the model we are scaling and working after works really well , which also means we see a lot more transparency when we look towards the end of of this decade that also have led to that .
Speaker #1: We look now at our revised capital structure . We come out at a year now with the highest turnover in ever . We come out with an EBITDA of Vestas .
Speaker #1: That is the highest ever due to both size and scale of of what's working and that have led us also based on the feedback and exchanges we have had with you as our owners in the in doing 2025 to our and look at structure revise strategy going forward .
Claus Almer: That is described, if you want to read much more about it, on pages 21 and 22 in our annual report. But here it is, that we will, as the priorities here sit, continue investing in the business. Jakob just showed you the EUR 1.2 billion we have invested in 2025. And we will invest approximately the same. But the underlying split of what we are investing in will be different in 2026 compared to 2025 because we are more investing now in what is needed to ramp up the volume rather than the technology or, for that matter, the manufacturing facilities. So reinvest in the business, very important, and we'll continue doing that, among other things, Virtual Service Tech and other stuff in the service business. So anything there we can do to make the business better, make value-creating acquisitions.
Henrik Andersen: That is described, if you want to read much more about it, on pages 21 and 22 in our annual report. But here it is, that we will, as the priorities here sit, continue investing in the business. Jakob just showed you the EUR 1.2 billion we have invested in 2025. And we will invest approximately the same. But the underlying split of what we are investing in will be different in 2026 compared to 2025 because we are more investing now in what is needed to ramp up the volume rather than the technology or, for that matter, the manufacturing facilities. So reinvest in the business, very important, and we'll continue doing that, among other things, Virtual Service Tech and other stuff in the service business. So anything there we can do to make the business better, make value-creating acquisitions.
Speaker #1: That is want to If you described . read much more in page 21 and in our in our annual report . But here it is that we will , as the priorities sits , we will here continue investing in the business .
Speaker #1: Jacob just showed you the 1.2 billion we have invested in 25 , and we will invest approximately the same . But the underlying split of what we are investing in will be different 26 compared to 25 , because we are more investing now .
Speaker #1: What is needed to ramp up is the volume, rather than the technology or, for that matter, the manufacturing facilities. So, reinvestment in the business is important and will.
Speaker #1: Very continue doing that among other things , virtual service tech and other stuff in the service business . So anything there we can do to make the business better , make value , creating acquisitions , it's not something that has been that much on our mindset since 21 and 22 , but we will continue measuring if there adjacent are areas or even within our areas where we can add to it , either directly into our business areas or if it is of of another nature , also use our Vestas Ventures to do some of those investments or acquisitions .
Claus Almer: It's not something that has been that much on our mindset since 2021 and 2022. But we will continue measuring if there are adjacent areas or even within our areas where we can add to it either directly into our business areas or, if it is of another nature, also use our Vestas ventures to do some of those investments or acquisitions. Thirdly, we will, of course, look at maintaining the solid investment grade. We have now a long-standing partnership and understanding with Moody's. So therefore, we want to keep stable rating. And we want to keep working with a stable rating.
Henrik Andersen: It's not something that has been that much on our mindset since 2021 and 2022. But we will continue measuring if there are adjacent areas or even within our areas where we can add to it either directly into our business areas or, if it is of another nature, also use our Vestas ventures to do some of those investments or acquisitions. Thirdly, we will, of course, look at maintaining the solid investment grade. We have now a long-standing partnership and understanding with Moody's. So therefore, we want to keep stable rating. And we want to keep working with a stable rating.
Speaker #1: Thirdly, of course, we will look at maintaining the solid investment grade we have now. We have a long-standing partnership and understanding with Moody's.
Claus Almer: Which also means that when we look at our net interest-bearing debt to EBITDA, we aim for having that between -1 to +1, also meaning to you shareholders out there that when we are building a cash position, that cash position will be distributed back towards you over time. And I think testament is always better than claiming. So therefore, the last just 5 quarters mean there we have carried out free share buybacks. We don't like to do big things in that sense. We would much rather have a frequent one and then being a one that also therefore supports the daily sort of trade in the share with our share buyback programs. And then we have also looked at what is the best way. So therefore, we've said return at least 40% of our net profit through combination of dividend and share buybacks.
Henrik Andersen: Which also means that when we look at our net interest-bearing debt to EBITDA, we aim for having that between -1 to +1, also meaning to you shareholders out there that when we are building a cash position, that cash position will be distributed back towards you over time. And I think testament is always better than claiming. So therefore, the last just 5 quarters mean there we have carried out free share buybacks. We don't like to do big things in that sense. We would much rather have a frequent one and then being a one that also therefore supports the daily sort of trade in the share with our share buyback programs. And then we have also looked at what is the best way. So therefore, we've said return at least 40% of our net profit through combination of dividend and share buybacks.
Speaker #1: So, therefore, we want to keep a stable rating, and we want to keep working with a stable rating, which also means that when we look at our net interest-bearing debt to EBITDA, we aim for having that between minus one to plus one.
Speaker #1: Also meaning to you shareholders out there that when we are building a cash position , that cash position will be distributed back towards you over time .
Speaker #1: I think it's always better than just testament claiming. Therefore, the last five quarters mean we carried out three share buybacks. We don't like to do big things in that sense.
Speaker #1: We're rather have a frequent one . And then being a one that also therefore support the daily sort of trade in in this year with our with our share buyback programs .
Speaker #1: And then we have also looked at what is the best, therefore we've said return at least 40% of our net profit through a combination of share buybacks and dividend.
Claus Almer: I mean, for many of our investor exchanges, in general, we will see that people probably prefer more share buybacks and therefore less dividend. We follow that guidance very much. So therefore, when we have proposed here a dividend of EUR 100 million and a share buyback of EUR 150 million, just following the release of the full year for 2025, that sets sort of a good tone of also saying that doesn't mean that you can then immediately extrapolate that to the next 5 years and saying dividend will never be more than EUR 100 million. But we are just sort of saying it's probably the least effective way of distributing cash back. And therefore, of course, we will continue also doing the share buyback. You can see here earnings per share is just now touching some of the highest earnings per share in the last 10 years.
Henrik Andersen: I mean, for many of our investor exchanges, in general, we will see that people probably prefer more share buybacks and therefore less dividend. We follow that guidance very much. So therefore, when we have proposed here a dividend of EUR 100 million and a share buyback of EUR 150 million, just following the release of the full year for 2025, that sets sort of a good tone of also saying that doesn't mean that you can then immediately extrapolate that to the next 5 years and saying dividend will never be more than EUR 100 million. But we are just sort of saying it's probably the least effective way of distributing cash back. And therefore, of course, we will continue also doing the share buyback. You can see here earnings per share is just now touching some of the highest earnings per share in the last 10 years.
Speaker #1: mean , I for many of of our investor exchanges in general , we will see that people probably prefer more share buybacks and therefore less dividend .
Speaker #1: We follow guidance very much. Therefore, when we have proposed here a dividend of €100 million and a share release of the buyback, full, just following year for ’25, that is a good tone of also saying that doesn't mean that you can then immediately extrapolate that to the next five years and say the dividend will never be more than €100 million.
Speaker #1: But we are just sort of saying it's the least effective way of distributing cash back. And therefore, of course, we will.
Speaker #1: We will also be doing the share buyback. You can continue to see here, earnings per share is just now touching the highest earnings per share in the last ten years.
Claus Almer: I will leave you to do the assumed or calculated earnings per share with our 2026 guidance. But now volume and size of Vestas matters also when you look at earnings per share. With that, I'll go to our long-term ambitions. They remain mostly unchanged. The only thing that has had a change is the ESG simply because we will restate and we have restated what we are going to do on the ESG side, reflecting off that we bought offshore activities back into Vestas. And we can see that is going to give us a different sum of CO2 and therefore also how we address that in both our Scope 1, 2, and 3. When we look at the revenue, still the same, ambitious to be the market leader and grow faster than the market. On the EBIT side, 10% EBIT margin.
Henrik Andersen: I will leave you to do the assumed or calculated earnings per share with our 2026 guidance. But now volume and size of Vestas matters also when you look at earnings per share. With that, I'll go to our long-term ambitions. They remain mostly unchanged. The only thing that has had a change is the ESG simply because we will restate and we have restated what we are going to do on the ESG side, reflecting off that we bought offshore activities back into Vestas. And we can see that is going to give us a different sum of CO2 and therefore also how we address that in both our Scope 1, 2, and 3. When we look at the revenue, still the same, ambitious to be the market leader and grow faster than the market. On the EBIT side, 10% EBIT margin.
Speaker #1: And I will leave you to do the assumed or calculated earnings per share with our 2026 guidance. Now, volume and size of Vestas matters.
Speaker #1: Also , look when you per share with that , I'll go to our long term ambitions . They remain a mostly unchanged . The only thing that has had a change is the ESG because we , simply will restate and we have restated what we are going to do on the ESG side .
Speaker #1: Reflecting off bought offshore, we activities back into Vestas, and we can see that it is going to give us a different sum of CO2, and therefore also how we address that in both our Scope 1, 2, and Scope 3.
Speaker #1: When we look at the revenue , still the same , ambitious to be the market leader and grow faster than the market on the Ebit side , 10% Ebit margin , I will come back to that on the following slide , because on chart , I think that I feel very comfortable when you look at that chart compared to what we have also shared with you in the previous years .
Claus Almer: I will come back to that on the following slide because on that chart, I think I feel very comfortable when you look at that chart compared to what we have also shared with you in the previous years. But we'll come back to that, as I said, on next slide. Return on Capital Employed, you're rosy, Jacob. But those two go well hand in hand and are easy to compare. Free cash flow positive, you've seen it. You've also seen it when we generate free cash flow. Business is good, predictable, and with an increasing earnings. Then, of course, free cash flow knows their way or know their way back to the shareholders in what we just discussed in the previous slide. And last but not least, ESG, 50% reduction across our own operations and 45% Scope 3 reduction by 2030.
Henrik Andersen: I will come back to that on the following slide because on that chart, I think I feel very comfortable when you look at that chart compared to what we have also shared with you in the previous years. But we'll come back to that, as I said, on next slide. Return on Capital Employed, you're rosy, Jacob. But those two go well hand in hand and are easy to compare. Free cash flow positive, you've seen it. You've also seen it when we generate free cash flow. Business is good, predictable, and with an increasing earnings. Then, of course, free cash flow knows their way or know their way back to the shareholders in what we just discussed in the previous slide. And last but not least, ESG, 50% reduction across our own operations and 45% Scope 3 reduction by 2030.
Speaker #1: But we'll come back to that. As I said on the next slide, return on Capital Employed. You're right, Jakob. But those two goals go hand in hand and are easy to link to free cash flow. You're positive.
Speaker #1: We've seen it. Also, when we see it generate free cash flow, the business is good, predictable, and with increasing earnings. Of course, then the free cash flow knows its way, or knows its way back, to the shareholders, in what we just discussed in the previous slide.
Speaker #1: And last but not least, 50% ESG reduction across our own operations and 45% Scope 3 reduction by 2030. Part of the Scope 3 is very much still the steel, and I think from some years ago where everyone was really very optimistic about hydrogen and green steel.
Claus Almer: Part of the Scope 3 is very much still the steel. And I think from some years ago where everyone were really very optimistic about hydrogen and green steel, I think today we see much more drive for the recycled steel that still has a 60% reduced input of Greenhouse Gas. So therefore, how do we do that? Some of it, we have the tools. Some of it, we don't. But our biggest internally is still transport. So therefore, it's the service vehicles. It's the vessels that we are looking into how we can do better with. But I really, really encourage you to also here deep dive into our ESG part. We are not a big fan of the CSRD directive, but we are a big fan of sustainability. And that I hope you will enjoy reading our annual report. This is an important one.
Henrik Andersen: Part of the Scope 3 is very much still the steel. And I think from some years ago where everyone were really very optimistic about hydrogen and green steel, I think today we see much more drive for the recycled steel that still has a 60% reduced input of Greenhouse Gas. So therefore, how do we do that? Some of it, we have the tools. Some of it, we don't. But our biggest internally is still transport. So therefore, it's the service vehicles. It's the vessels that we are looking into how we can do better with. But I really, really encourage you to also here deep dive into our ESG part. We are not a big fan of the CSRD directive, but we are a big fan of sustainability. And that I hope you will enjoy reading our annual report. This is an important one.
Speaker #1: I think today we see much more drive for the recycled steel that still has a 60% reduced input of of greenhouse gas . So therefore , how do we do that ?
Speaker #1: Some of it, we have the tools; some of it, we don't. But our biggest, internally, is still—therefore, it's the vehicles.
Speaker #1: Transport—it's the service. So, vessels that we're looking at are what we can do, and how we can do better with them. But I really, really want to encourage you here to deep dive into our ESG part.
Speaker #1: We are not a big fan of the CSR directive, but we are a big fan of sustainability, and I hope you will be as well.
Claus Almer: This has almost become a personal thing. So, drivers to the long-term financial ambition of 10%. We have 10% firm in target. We are not saying a year, but we are having here the four factors. I think we can narrow it down to in main what we see. The offshore, the ramp up, the cost out, and the extent competitiveness of what we see is increasing, of course, when we add the volume to the platform. And therefore, offshore is by far in this bridge between the midpoint of our outlook, 7% to 10%, is by far the biggest lever we have. On the quality side, you often see the quality side. And when you say the quality here is that we drive operational performance, lower warranty cost, and reduce the cost of poor quality through close collaboration throughout the full value chain.
Henrik Andersen: This has almost become a personal thing. So, drivers to the long-term financial ambition of 10%. We have 10% firm in target. We are not saying a year, but we are having here the four factors. I think we can narrow it down to in main what we see. The offshore, the ramp up, the cost out, and the extent competitiveness of what we see is increasing, of course, when we add the volume to the platform. And therefore, offshore is by far in this bridge between the midpoint of our outlook, 7% to 10%, is by far the biggest lever we have. On the quality side, you often see the quality side. And when you say the quality here is that we drive operational performance, lower warranty cost, and reduce the cost of poor quality through close collaboration throughout the full value chain.
Speaker #1: You will enjoy reading our annual report . This is an important one and this is almost become a personal thing . So drivers to the long term financial ambition of 10% , we have 10% firm in in target .
Speaker #1: We are not saying a year , but we are having here the four factors . I think we can narrow to in main it down what we see the offshore , the ramp up , the cost out and the extent competitiveness of what we see is increasing .
Speaker #1: Of course , when we add the volume to the platform and therefore offshore is by far in this the midpoint of bridge between our outlook , ten is to 7% by far the biggest lever we have on the quality side , you often see the quality and when side , you say the quality here is that we drive operational performance lower warranty costs and reduce the cost of poor quality through close collaboration .
Claus Almer: So what you see as a heading of the warranty percentage of 3.2% for 2025, that's only part of the equation here. The related quality issues that has also both been apparent in the service, but also in the manufacturing, of course, is still a major contributor also how we can build a bridge to the 10%. Service goes without saying. I haven't observed anything that prevents the service business from doing 25% EBIT margin. It's just not in 2026. And it won't be in 2027 because we won't jump from a midpoint of 16.5. We came out of 2025 just around 16.5. And we will continue having that as working assumptions. And then we will see. We need to get it into starting with a 2 first.
Henrik Andersen: So what you see as a heading of the warranty percentage of 3.2% for 2025, that's only part of the equation here. The related quality issues that has also both been apparent in the service, but also in the manufacturing, of course, is still a major contributor also how we can build a bridge to the 10%. Service goes without saying. I haven't observed anything that prevents the service business from doing 25% EBIT margin. It's just not in 2026. And it won't be in 2027 because we won't jump from a midpoint of 16.5. We came out of 2025 just around 16.5. And we will continue having that as working assumptions. And then we will see. We need to get it into starting with a 2 first.
Speaker #1: Throughout the full value chain . So what you see as a heading of the percentage of warranty 2025 , for 3.2% that's only part of the equation here .
Speaker #1: The related quality issues that have also both been apparent in service, also, but in the manufacturing, of course, still is a major contributor.
Speaker #1: Also , how we can build a bridge to 10% service goes without saying . We haven't the . I haven't found I anything that observed prevents the service business for doing 25% Ebit margin .
Speaker #1: just It's not in in won't be haven't 26 . in in 27 because we won't jump from a midpoint of of 16.5 . We came out of of 25 just around 16.5 .
Claus Almer: But there's nothing in here in neither the model, neither the way we run the service business, and neither in the way we look at it with the number of employees across the world that prevents us from getting to 25% EBIT margin. Then on the onshore, after 2025, it can actually be a bit difficult to sit here and saying, "Here it is. We can do much better." I think the onshore has one lever really here is keep doing as good as we did in execution in 2025 and keep building some more volume.
Henrik Andersen: But there's nothing in here in neither the model, neither the way we run the service business, and neither in the way we look at it with the number of employees across the world that prevents us from getting to 25% EBIT margin. Then on the onshore, after 2025, it can actually be a bit difficult to sit here and saying, "Here it is. We can do much better." I think the onshore has one lever really here is keep doing as good as we did in execution in 2025 and keep building some more volume.
Speaker #1: And we will continue having that as a work. Assumptions. We will, and then see, we need to get it into starting with a two first.
Speaker #1: But there's nothing in here in neither the model , neither the way we run the service business and neither in the way we look at it with the with the number of employees across the world that prevents to getting 25% Ebit margin , then on the , us from after a 25 , it can actually be a bit difficult to sit here and say , here it is .
Speaker #1: We can do much better. I think the onshore has one lever, really. Here it is: keep doing as good as we did and keep building some more volume than onshore.
Claus Almer: Then onshore has another contributor into this because don't forget, we wouldn't be at 5.5 if onshore wasn't working as good it is because we have been able to do that and back some of the negative variances we have had in the offshore ramp, and also from the service that we have backfilled from the onshore. So thank you for that. And therefore, people that are doing really well, it's funny enough, they seem always to be able to a bit better. So that, of course, we will use in this margin bridge. If you add those four together, they come to by far more than 300 basis points. So therefore, for us to sit and have that in mind, it feels in many ways better. It feels doable.
Henrik Andersen: Then onshore has another contributor into this because don't forget, we wouldn't be at 5.5 if onshore wasn't working as good it is because we have been able to do that and back some of the negative variances we have had in the offshore ramp, and also from the service that we have backfilled from the onshore. So thank you for that. And therefore, people that are doing really well, it's funny enough, they seem always to be able to a bit better. So that, of course, we will use in this margin bridge. If you add those four together, they come to by far more than 300 basis points. So therefore, for us to sit and have that in mind, it feels in many ways better. It feels doable.
Speaker #1: Has another contributor into this, because don't forget, we wouldn't be at five and a half if onshore as it is, working.
Speaker #1: It wasn't because we as good have been able to do that, and some of the negative variances we have had in the offshore ramp, and also from the service that we have backfilled from onshore.
Speaker #1: So, thank you for that. And therefore, people that are doing really well, it's funny enough, they seem always to be doing a bit better.
Speaker #1: Of course, we will use 'able to' in this bridge margin. If you add those four together, they come to by far more than 300 basis points.
Speaker #1: So therefore , for us to sit and have that in mind , it feels in many ways better . It feels doable . I will also say when we sit here in in beginning of 26 , now , it has a gap of 300 basis points .
Claus Almer: I will also say when we sit here in the beginning of 2026, now it has a gap of 300 basis points. I think we probably also gained a bit of credibility compared to when we sat in 2022 and talked about it because that was where the gap was, 1,800 basis points. But now I can say with the first 1,500 basis points in the back, let's get the last 300 basis points done. And then everyone can do your own planning and linear progressing in the calculations because that also means at that point in time, our EPS, ROCE, and other things would look a lot different. And I can promise you at that point in time, we will have less years than we have outstanding today. With that, I'll go to the outlook of the year and the outlook for 2026, revenue EUR 20 to 22 billion.
Henrik Andersen: I will also say when we sit here in the beginning of 2026, now it has a gap of 300 basis points. I think we probably also gained a bit of credibility compared to when we sat in 2022 and talked about it because that was where the gap was, 1,800 basis points. But now I can say with the first 1,500 basis points in the back, let's get the last 300 basis points done. And then everyone can do your own planning and linear progressing in the calculations because that also means at that point in time, our EPS, ROCE, and other things would look a lot different. And I can promise you at that point in time, we will have less years than we have outstanding today. With that, I'll go to the outlook of the year and the outlook for 2026, revenue EUR 20 to 22 billion.
Speaker #1: I think we probably also gained a bit of credibility compared to when we said in 2022 and talked about it , because that was where the gap was .
Speaker #1: 1,800 basis. But points now I can— the first, say with back, get the in the last— let's, 1,500 basis points done, everyone.
Speaker #1: 300 basis points can own planning and linear progression in , in , in the calculations , because that also means at that point in time , our EPs , Rosie and other things would look a lot different .
Speaker #1: And and I can promise you at that point in time , we will have less years than we have outstanding . Today . With that , I'll go to the outlook of the year and the outlook for 2026 .
Claus Almer: So that's another progress and another uplift in revenue. EBIT margin before special items, 6 to 8%. Service is expected to generate an EBIT margin before special items of 15.5 to 17.5%. And total investments sits around EUR 1.2 billion. This outlook is also based on the current foreign exchange rates, which we know is coming a slightly more volatile in these days. Then two more, a little service message here. Some of you might observe over the coming day or two that I'll be selling some of the shares I have now bought and had since I joined as CEO in August 2019. I paid a lot of tax of those. I even borrowed to pay the tax in Denmark, which is a tax rate of more than 60%. And therefore, I just want to repay some of that lending. I will have a lot more shares back than I'm selling.
Henrik Andersen: So that's another progress and another uplift in revenue. EBIT margin before special items, 6 to 8%. Service is expected to generate an EBIT margin before special items of 15.5 to 17.5%. And total investments sits around EUR 1.2 billion. This outlook is also based on the current foreign exchange rates, which we know is coming a slightly more volatile in these days. Then two more, a little service message here. Some of you might observe over the coming day or two that I'll be selling some of the shares I have now bought and had since I joined as CEO in August 2019. I paid a lot of tax of those. I even borrowed to pay the tax in Denmark, which is a tax rate of more than 60%. And therefore, I just want to repay some of that lending. I will have a lot more shares back than I'm selling.
Speaker #1: Revenue $20 to $22 billion. So that's another progress and another uplift in revenue. EBIT margin before special items 6 to 8%.
Speaker #1: Services is expected to generate an EBIT margin before special items of 15.5 to 17.5, and total investments sit around $1.2 billion. This outlook is also based on the current foreign exchange rates, knowing it's coming into a volatile period, which we may see more slightly in the days ahead.
Speaker #1: Then a little, two or two more, service here. Some of you might observe over the coming day or two that I'll be selling some of the shares I now have and bought—had since I joined as CEO in August '19.
Speaker #1: I paid a lot of tax—of those, I even borrowed to pay tax in Denmark, which has a tax rate of more than 60%. Therefore, I just want to repay some of that lending.
Claus Almer: So therefore, don't worry. But it is to pay the tax in a strange country. So just as you know, have a question to that over the coming days. Then I will also say thank you. Thank you for everyone here supporting the journey that now we sits within of 2025. Thanks to also listening in. And please just here on the last page, I will just say we have our annual general meeting on 8 April. I think it's a highlight. There is an opportunity to come in person and both meet the board and the executive management and also, like previous years, have a bite to eat and also a drink on the way. Rest is our financial calendar. And I will just leave it therefore back to the moderator and open up for the Q&A.
Claus Almer: So therefore, don't worry. But it is to pay the tax in a strange country. So just as you know, have a question to that over the coming days. Then I will also say thank you. Thank you for everyone here supporting the journey that now we sits within of 2025. Thanks to also listening in. And please just here on the last page, I will just say we have our annual general meeting on 8 April. I think it's a highlight. There is an opportunity to come in person and both meet the board and the executive management and also, like previous years, have a bite to eat and also a drink on the way. Rest is our financial calendar. And I will just leave it therefore back to the moderator and open up for the Q&A.
Speaker #1: I will have a lot more shares back than I'm selling, so therefore don't worry. But it is to pay the tax in a strange country.
Speaker #1: So just as you now in have a question to that over the coming days, then I will also say you. Thank you for everyone here supporting the journey, thank that sit within of of 25.
Speaker #1: Now, we thank you also for listening in, and please just hear—on the last page, I say we have our annual meeting on the 8th of April.
Speaker #1: In general, I think it is a highlight. There is an opportunity for people to come in and both meet the board and the executive, and also, like previous years, have a bite to eat and also a drink along the way.
Speaker #1: It's our financials, and I will just leave it there. Therefore, back to the calendar, moderator, and open up for the Q&A.
Claus Almer: Ladies and gentlemen, 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. Questioners 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. And the first question comes from Claus Almer from Nordea. Please go ahead. Thank you. Yeah, both to you, Henrik and Jakob, a few questions. The first is the service division. As you said in the presentation and the report that all these recovery initiatives will end by end of 2026.
Operator: Ladies and gentlemen, 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. Questioners 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. And the first question comes from Claus Almer from Nordea. Please go ahead.
Speaker #3: And ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question, please press star and one on their telephone.
Speaker #3: 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. Questioners on the phone are requested to disable the loudspeaker mode while asking a question.
Speaker #3: Anyone who has a press question may start one at this time, and the first question comes from Klaus Ulmer from Nordea. Please go ahead.
Claus Almer: Thank you. Yeah, both to you, Henrik and Jakob, a few questions. The first is the service division. As you said in the presentation and the report that all these recovery initiatives will end by end of 2026.
Speaker #4: Thank you . Yeah , both to you few Jakob . A questions . The first is the service division . As you said in the presentation report , that and the all these recovery initiatives will end by end of maybe you can give on what some color is the drag margin in 26 and maybe some comments on what should we beyond 2026 , your except for expect 25% margin That would be the first one .
Claus Almer: So, maybe you give some color on what is the margin drag in 2026 and maybe some comments on what should we expect beyond 2026, except for your 25% margin target. That will be the first one.
Claus Almer: So, maybe you give some color on what is the margin drag in 2026 and maybe some comments on what should we expect beyond 2026, except for your 25% margin target. That will be the first one.
Henrik Andersen: Thank you. I always love when you ask Klaus for guidance on the service. So therefore, listen, we're going through diligently quarter-over-quarter. We're saying what we're doing. We're showing it. If you ask some of our customers, most of them will also say that they probably understand why we're doing it, how we're doing it. And internally, there's no doubt that I won't simply besides what we are saying here in a recovery phase of what we are doing, we're making good progress. We can see it's working. And I'm very encouraged by seeing that what we are coming into the backlog is also getting addressed, whether that's renewables or it's new, is working. But giving outside what is here a range for 2026, I don't want to do that.
Henrik Andersen: Thank you. I always love when you ask Klaus for guidance on the service. So therefore, listen, we're going through diligently quarter-over-quarter. We're saying what we're doing. We're showing it. If you ask some of our customers, most of them will also say that they probably understand why we're doing it, how we're doing it. And internally, there's no doubt that I won't simply besides what we are saying here in a recovery phase of what we are doing, we're making good progress. We can see it's working. And I'm very encouraged by seeing that what we are coming into the backlog is also getting addressed, whether that's renewables or it's new, is working. But giving outside what is here a range for 2026, I don't want to do that.
Speaker #1: Thank you . I always love when you Klaus for a 27 guidance on the service . So therefore , listen , we're going through a diligently quarter on We're saying what we're doing , we're showing it .
Speaker #1: If you ask some of our customers, most of them will also say that they probably understand why we are doing it and how we're doing it.
Speaker #1: internal , there's no doubt that I won't simply besides what we are saying here in a recovery phase of what doing , we're quarter .
Speaker #1: good we are can see working it's and I'm very encouraged by seeing that what coming we are into , into the backlog , is also getting addressed , whether that's renewables or it's new , is working .
Henrik Andersen: That we can talk about when we get longer into the year, of how it's progressing and how it's working. I would prefer to do it like that, Claus.
Henrik Andersen: That we can talk about when we get longer into the year, of how it's progressing and how it's working. I would prefer to do it like that, Claus.
Speaker #1: But giving outside what is here, a range for— for— for 2026. I don't want to do that. That— that we can talk about when we get longer into the year. It's of how progressing and how it's working.
Claus Almer: I didn't try to get 2027 guidance because I knew that was impossible. So I was more a bit puzzled why the guidance for 2026 is as it is. Why shouldn't we hope or expect a better margin in 2026 versus 2025? That was more the things I was trying to figure out.
Claus Almer: I didn't try to get 2027 guidance because I knew that was impossible. So I was more a bit puzzled why the guidance for 2026 is as it is. Why shouldn't we hope or expect a better margin in 2026 versus 2025? That was more the things I was trying to figure out.
Speaker #1: Our preferred way is to do it like that. Klaus.
Speaker #4: , I didn't try to get a 27 guidance because I knew that was impossible . So I was more , you know , a bit puzzled why the guidance for is , why shouldn't we hope or a better expect margin in 26 versus 25 ?
Henrik Andersen: I don't know if you should hope or think or whatever. Klaus, we hold the business in very tight ropes right now. If you open the remuneration report, you will see that actually out of what went well in 2025, EBIT and cash flow gave employees, investors, and an incentive payout where the 20% that relates to service gave zero. Therefore, service continues to be part of the incentive scheme for also 2026. I think I can honestly say as a chief exec, unless we hit the numbers and the predictability of the business that also triggers an incentive payout of service, then I'm not interested in talking about more progress than that. So we are pushing. We're doing everything we can. That's really where. But we cannot let the recovery run ahead of what we feel we are addressing. It does take time.
Henrik Andersen: I don't know if you should hope or think or whatever. Klaus, we hold the business in very tight ropes right now. If you open the remuneration report, you will see that actually out of what went well in 2025, EBIT and cash flow gave employees, investors, and an incentive payout where the 20% that relates to service gave zero. Therefore, service continues to be part of the incentive scheme for also 2026. I think I can honestly say as a chief exec, unless we hit the numbers and the predictability of the business that also triggers an incentive payout of service, then I'm not interested in talking about more progress than that. So we are pushing. We're doing everything we can. That's really where. But we cannot let the recovery run ahead of what we feel we are addressing. It does take time.
Speaker #4: That was more the things I was trying to figure out.
Speaker #1: I don't I don't know if you should hope or think or whatever . Klaus . We hold the business in very tight ropes right now , and if you open the Renumeration report , you will see that what actually out of went well in 25 Ebit and cash flow gave employees , investors a an incentive payout where the 20% that relates to service gave zero and therefore continues to be part of the incentive scheme for also 2026 .
Speaker #1: And I think I can I can honestly say as a chief exec , unless we we hit the numbers and the predictability of the business , that also service triggers an incentive payout of service .
Speaker #1: Then then I'm not interested . I'm talking about more progress than that . So we are pushing , we're doing everything we can and that's , that's that's really where .
Speaker #1: But we cannot let the recovery run off what ahead we feel we are addressing. And it does take time.
Claus Almer: That is fair. I think we all appreciate that, Henrik. My second question goes to your pipeline. By the way, congratulations with a strong Q4 order intake. There's a lot of talk about data center, the data center build-out, and that being powered by onshore wind turbines. What do you see in your pipeline from that area? That will be my final question.
Claus Almer: That is fair. I think we all appreciate that, Henrik. My second question goes to your pipeline. By the way, congratulations with a strong Q4 order intake. There's a lot of talk about data center, the data center build-out, and that being powered by onshore wind turbines. What do you see in your pipeline from that area? That will be my final question.
Speaker #4: That is fair . I think we all appreciate that . And I then my second question goes to your pipeline . And by the way , congratulations .
Speaker #4: With a , there's a Q4 order lot of strong talk about data center and the data center out . And that being powered by by onshore wind turbines .
Henrik Andersen: Yeah, no, I will say here. I think it's interesting because when the pendulum swings in this world, everyone has now learned that you got to start thinking of what if the pendulum changed next time. So I think that's what goes on right now. No one is single-handedly betting on either/or. So therefore, you see a lot of these data centers now being planned, built, and also talked about, that it should involve both gas and probably electricity from renewables as well. So there is a combination. Why is that? It is huge investments that has to be able to survive also changes in political arena and other stuff. And I think if we look across the world on a day-to-day basis, we see some of these offtakes being made. So that goes from the hyperscalers, the sort of the data center part.
Henrik Andersen: Yeah, no, I will say here. I think it's interesting because when the pendulum swings in this world, everyone has now learned that you got to start thinking of what if the pendulum changed next time. So I think that's what goes on right now. No one is single-handedly betting on either/or. So therefore, you see a lot of these data centers now being planned, built, and also talked about, that it should involve both gas and probably electricity from renewables as well. So there is a combination. Why is that? It is huge investments that has to be able to survive also changes in political arena and other stuff. And I think if we look across the world on a day-to-day basis, we see some of these offtakes being made. So that goes from the hyperscalers, the sort of the data center part.
Speaker #4: What do wind , you see in your pipeline from from that , from that area that we my final question .
Speaker #1: Yeah. No, I will say here, I think it's interesting because when the pendulum swings in the world, everyone has now learned that you've got to start thinking of what if the pendulum changes next time?
Speaker #1: So I think that's what's going on right now . No one is single handling betting on either or so . Therefore you see a lot of these data centers now being planned , built and also talked about that .
Speaker #1: It can, it should involve both gas and probably electricity from renewables as well. There is a 'Why combination.' So, is that.
Speaker #1: It is huge investments . That has to be able to survive . Also changes in political arena and other stuff . And think if I world on a the day to basis , we see some day these offtakes of being made .
Henrik Andersen: But it also comes from something as simple as, in the US, that you have manufacturing that has been homeshored to the US that are also in need of energy generation. So generally, across many societies, you have key drivers. Yes, you have the data centers, but you have the electrification. You now have more electric cars in the country we live in, Claus, that are electric than are diesel. So that's also a part of the electrification. And then, on the other hand, generally, the energy demand across all societies are increasing. So that, I think, wind is serving well. And we don't see any change to that.
Henrik Andersen: But it also comes from something as simple as, in the US, that you have manufacturing that has been homeshored to the US that are also in need of energy generation. So generally, across many societies, you have key drivers. Yes, you have the data centers, but you have the electrification. You now have more electric cars in the country we live in, Claus, that are electric than are diesel. So that's also a part of the electrification. And then, on the other hand, generally, the energy demand across all societies are increasing. So that, I think, wind is serving well. And we don't see any change to that.
Speaker #1: So goes that hyperscalers , the , the sort of the data center But it also comes from something as simple as in the US manufacturing you has have that that been home shored to the US that also are in the need for , for energy generation .
Speaker #1: So you generally across many societies , drivers , you you have three yes , you have the single handed data centers , but you have the electrification .
Speaker #1: You now have more electric cars in the country . You live in . Klaus , that are electric than are So that's also a part of the diesel .
Speaker #1: electrification . And then secondly , generally the energy and demand across all societies are increasing . So that I think wind is serving well .
Claus Almer: Fair enough. Thank you so much. That was all.
Claus Almer: Fair enough. Thank you so much. That was all.
Speaker #1: And we don't see any change to that.
Henrik Andersen: Thank you.
Henrik Andersen: Thank you.
Operator: Then the next question comes from John Kim from Deutsche Bank. Please go ahead.
Operator: Then the next question comes from John Kim from Deutsche Bank. Please go ahead.
Speaker #4: Thank you
Speaker #4: So much... all.
Speaker #4: That was
Speaker #1: Thank you
John Kim: Hi. Good morning. Two questions, if I may. Can you just update us on operations in offshore? I'm interested to see how Q4 compared to Q3 in terms of production throughput over time or any issues around the blades. If you could comment on that, please.
John Kim: Hi. Good morning. Two questions, if I may. Can you just update us on operations in offshore? I'm interested to see how Q4 compared to Q3 in terms of production throughput over time or any issues around the blades. If you could comment on that, please.
Speaker #1: .
Speaker #3: Then the next question comes from John Kim from Deutsche. Please go ahead.
Speaker #5: Good Hi . morning . questions , Two if I may . Can you just update us on operations in offshore ? I'm interested to see how Q4 compared to Q3 , in terms of production throughput over time or any issues around the blades .
Henrik Andersen: Yeah, thanks for that. I will say that, John, here there's nothing else than it works to plan. We are progressing. We are seeing that the tack time is developing. I said one of the most rewarding for me between Christmas and New Year was standing on Esbjerg Harbor and seeing that there was blades and nacelles waiting for a weather window to go out on the North Sea. So in reality, there I feel really good. And as I said, highlighted with the picture we have on the introduction to this presentation, we have more than 50 turbines out there. It's working. It's working both with works always better with grid connection. But let me throw that a little bit as a straw here. But outside that, it also works without grid because then it has its sort of its own generating electricity for the turbines.
Henrik Andersen: Yeah, thanks for that. I will say that, John, here there's nothing else than it works to plan. We are progressing. We are seeing that the tack time is developing. I said one of the most rewarding for me between Christmas and New Year was standing on Esbjerg Harbor and seeing that there was blades and nacelles waiting for a weather window to go out on the North Sea. So in reality, there I feel really good. And as I said, highlighted with the picture we have on the introduction to this presentation, we have more than 50 turbines out there. It's working. It's working both with works always better with grid connection. But let me throw that a little bit as a straw here. But outside that, it also works without grid because then it has its sort of its own generating electricity for the turbines.
Speaker #5: If you could comment on that, please.
Speaker #1: Yeah , thanks for that . I will I will say to John here , there's not nothing else than it works to plan .
Speaker #1: We are progressing . We are seeing that the tech time is developing , that one of the most rewarding for me , between Christmas and New Year , was standing on Esbjerg Harbor and seeing that there was blades and the cells waiting for for a weather go window to nothing , on on the North Sea .
Speaker #1: So in reality , there feel , feel out really good . And as I said , highlighted with the picture we have on the on the this introduction to presentation , we have more than 50 turbines out there .
Speaker #1: working . It's working . Both with works always better with grid connection , but let throw that a little bit me as a as a straw here .
Speaker #1: But outside that, it works also without grid because then it's sort of its own, has generating electricity for the turbine.
Henrik Andersen: So no, we are really pleased with it, which is also part of what I refer to when we talk about capital structure. We feel confident of the ramp. We feel confident of the technology. We have been testing it for a long time. And it seems also like our customers are appreciating that we work diligently right from technology, design. And we have a lot of our partners that are now bringing the products in execution in 2026 that we are also following and having with us in the factories. So really pleased with it. Progress always. You will never meet me, John, and not hear that I probably would like to have been a bit further on and that we are acutely reminding probably also our manufacturing colleagues on. But it is as much now also to get it at sea and get it installed.
Henrik Andersen: So no, we are really pleased with it, which is also part of what I refer to when we talk about capital structure. We feel confident of the ramp. We feel confident of the technology. We have been testing it for a long time. And it seems also like our customers are appreciating that we work diligently right from technology, design. And we have a lot of our partners that are now bringing the products in execution in 2026 that we are also following and having with us in the factories. So really pleased with it. Progress always. You will never meet me, John, and not hear that I probably would like to have been a bit further on and that we are acutely reminding probably also our manufacturing colleagues on. But it is as much now also to get it at sea and get it installed.
Speaker #1: So no, we are really pleased with it. And this is also part of what I refer to when talking about capital structure.
Speaker #1: We feel confident we talk of the ramp . We feel confident of the technology we have been testing it for a long time and seems also like our customers are appreciating that we work diligently right from technology design , and we have a lot of our partners that are now the projects in in execution , in 26 , that we are following and also us having with in the in the factory .
Speaker #1: So really pleased with it . Progress always . You will never meet me not here that I to have John , and probably would like bit been a further on and that we are acutely reminding probably also manufacturing colleagues on .
Speaker #1: So, really pleased with it. Progress, always. You will never meet me not here that I, too, have, John, and probably would like a bit to have been further on, and that we are acutely reminding, probably also, manufacturing colleagues on our—but, but it is as much now also to get it at sea and get it installed.
Operator: Okay. Helpful. Quick follow-up, if I may. Given the near-term outlook for offshore, I believe you have more projects to execute this year than last. And the POC accounting treatment, is it fair to say that the seasonality on offshore is different to onshore, perhaps a bit more balanced through the quarters?
Operator: Okay. Helpful. Quick follow-up, if I may. Given the near-term outlook for offshore, I believe you have more projects to execute this year than last. And the POC accounting treatment, is it fair to say that the seasonality on offshore is different to onshore, perhaps a bit more balanced through the quarters?
Speaker #5: On the . Okay helpful quick follow up , if I may , given the near-term outlook for offshore , I have more projects to execute this year than last , and the PLC accounting treatment .
Speaker #5: Is it fair to say that the seasonality on offshore is different to onshore? Perhaps a bit more balanced through the quarters?
Henrik Andersen: Yeah, I will sort of say yes. And then at the same time, I think here, I think never leave the big principles off that 2025 was the first year where we put the turbines out there. So it's working. 2026 will be for us a bit of a year where we are not disappointing the partners we have. And we are ramping further up. We have all the factories open that we need right now. And therefore, it's all about getting the output in. And then that also means 2026, we are not at the revenue. We neither need to dilute that or the depreciations. So therefore, it's still with a red number in 2026. But the progress, as you can see from our outlook. And therefore, we aim for a black number in 2027. That's no surprise.
Henrik Andersen: Yeah, I will sort of say yes. And then at the same time, I think here, I think never leave the big principles off that 2025 was the first year where we put the turbines out there. So it's working. 2026 will be for us a bit of a year where we are not disappointing the partners we have. And we are ramping further up. We have all the factories open that we need right now. And therefore, it's all about getting the output in. And then that also means 2026, we are not at the revenue. We neither need to dilute that or the depreciations. So therefore, it's still with a red number in 2026. But the progress, as you can see from our outlook. And therefore, we aim for a black number in 2027. That's no surprise.
Speaker #1: will I will Yeah , I sort of say yes . And then at the same time , I think here I think never leave the big principles of that .
Speaker #1: 25 was the first year where we put the turbines out there . So it's working . 26 will be for us a bit of a we are not year where disappointing the We have and we are partners .
Speaker #1: ramping further up . factories need open getting and right it's all about We have the now the output in and then that also means 26 .
Speaker #1: not We are at the the revenue . We neither need to dilute that or the depreciation . So it's still therefore with a with a red number in 26 .
Speaker #1: But the progress, as you can see from our outlook, and therefore we aim for a black number in ’27. That's no surprise.
Henrik Andersen: That's how you should think about it, sort of on the big years. Then, as I said, on the quarters, let's talk a bit more about that when we probably sit together.
Henrik Andersen: That's how you should think about it, sort of on the big years. Then, as I said, on the quarters, let's talk a bit more about that when we probably sit together.
Speaker #1: That's how you should think about it . Sort of on the big years . And then as I said on the on the quarters , let's talk a bit more about that .
Operator: Okay. Thank you. Then the next question comes from Alex Jones from Bank of America. Please go ahead.
Operator: Okay. Thank you. Then the next question comes from Alex Jones from Bank of America. Please go ahead.
Speaker #1: When we, when we probably sit together.
Speaker #5: Okay . Thank you .
Alex Jones: Great. Good morning. Thanks for taking my questions. First, maybe on the buyback, if I take the prop you made for 2025 and use your new 40% payout ratio, then I think it implies around sort of EUR 300 million of shareholder returns. And Claus announced EUR 250 million today. So should we expect a further 50-ish later in the year? Or could you do much more than that, such as continuing EUR 50 million per quarter run rate?
Alexander Jones: Great. Good morning. Thanks for taking my questions. First, maybe on the buyback, if I take the prop you made for 2025 and use your new 40% payout ratio, then I think it implies around sort of EUR 300 million of shareholder returns. And Claus announced EUR 250 million today. So should we expect a further 50-ish later in the year? Or could you do much more than that, such as continuing EUR 50 million per quarter run rate?
Speaker #3: Next comes a question from Alex from Bank Jones. Please go ahead.
Speaker #3: .
Speaker #6: morning . Thanks for Great . Good questions taking my . First , the maybe on buyback , if I take the profit you made for I think it 40% payout implies 2025 and use your ratio , then new around 300 million of shareholder returns .
Speaker #6: And you’ve announced, so, 250 today. Expect a 50-ish further later you do in the year? Or could it be much more than that, such as containing a 50 million per quarter run rate?
Henrik Andersen: Thanks for the question. I think when you look at the buyback and return to shareholders, you should also look at what we did in Q4 and add that to your calculation. Then what we will do, as Henrik also presented, we will look at now with our new guidance in place; we will look at this quarter by quarter. When we deliver the result, we will make the decision on what we pay back also for 2026. But 2025, we are seeing actually that we are above the 40% if we take everything that we have done end of last year and what we are now announcing.
Henrik Andersen: Thanks for the question. I think when you look at the buyback and return to shareholders, you should also look at what we did in Q4 and add that to your calculation. Then what we will do, as Henrik also presented, we will look at now with our new guidance in place; we will look at this quarter by quarter. When we deliver the result, we will make the decision on what we pay back also for 2026. But 2025, we are seeing actually that we are above the 40% if we take everything that we have done end of last year and what we are now announcing.
Speaker #2: Thanks for for the question . I think when you when you look at the buyback and return to shareholders , you should also look at what we did in Q4 and add that to to your calculation .
Speaker #2: And then what we will do , as Henrik also presented , we will we will look now with the new our new guidance in place , we will look at this at by quarter when we deliver the result , we will we will make the decision on on what we pay back for , for , for also for 26 but 25 , we are seeing actually that we are above the 40% .
Alex Jones: Okay. That's clear. And then maybe if I can just follow up on the earlier questions on service. I suppose if I take out the one-off cost you had in Q4, then the 2025 margin was probably nearly 17.5. Could you just talk about at the midpoint whether there are any particular drivers of why margins would be down year-on-year at the further one-offs like there were in Q4? Is there cost inflation or tariff impact? Is there a change in how you're treating the accounting? Or is it very much, as you outlined earlier, just conservatism given you're still only halfway through this turnaround? Thank you.
Alexander Jones: Okay. That's clear. And then maybe if I can just follow up on the earlier questions on service. I suppose if I take out the one-off cost you had in Q4, then the 2025 margin was probably nearly 17.5. Could you just talk about at the midpoint whether there are any particular drivers of why margins would be down year-on-year at the further one-offs like there were in Q4? Is there cost inflation or tariff impact? Is there a change in how you're treating the accounting? Or is it very much, as you outlined earlier, just conservatism given you're still only halfway through this turnaround? Thank you.
Speaker #2: If we take everything that we have done at the end of last year and where we are now.
Speaker #2: announcing
Speaker #6: Okay, that's clear. And then maybe if I can just follow up on the earlier...
Speaker #6: questions on service , I suppose if I take out the one off cost you had in Q4 , then the 2025 margin was probably , you know , nearly 17.5 .
Speaker #6: Could you just talk about, at the midpoint, whether there are any particular drivers of why margins would be down year on year? Are there further one-offs, like there were in Q4?
Speaker #6: Is there cost inflation or tariff impact ? Is there a change in how you're treating the accounting , or is it very much , as you outlined earlier , just conservatism , given you're still only through this halfway turnaround ?
Henrik Andersen: I think when you do a turnaround, the one thing you should never do is to stress the people that you are stressing a bit every day. So therefore, I don't think we need a stress on a percentage point here. I keep coming back. We're doing the right thing, what is right for the business. If you then take a percent of give and take a EUR 4 billion, it's EUR 40 million. When we see quarter-over-quarter, when we have either single projects and other stuff that gives us either a challenge or an upside, therefore, it is too easy to get out of sync with that. So therefore, with the entry to this year, we want to complete the recovery plan.
Henrik Andersen: I think when you do a turnaround, the one thing you should never do is to stress the people that you are stressing a bit every day. So therefore, I don't think we need a stress on a percentage point here. I keep coming back. We're doing the right thing, what is right for the business. If you then take a percent of give and take a EUR 4 billion, it's EUR 40 million. When we see quarter-over-quarter, when we have either single projects and other stuff that gives us either a challenge or an upside, therefore, it is too easy to get out of sync with that. So therefore, with the entry to this year, we want to complete the recovery plan.
Speaker #6: Thank you .
Speaker #1: I think when you do a turnaround , the one thing you should never do is to stress the that you people are , you are , you are stressing a bit every day .
Speaker #1: So therefore , I don't think we need a I don't think we need a stress on a percentage point here . And I , I keep coming back .
Speaker #1: doing the We're right thing . What is right for the business . you then If percent take a a of 4 billion , give and take it's 40 million .
Speaker #1: When we see quarter on quarter, when we have either single projects and other stuff, that gives us either a challenge or an upside.
Speaker #1: Therefore it is it is too easy to get out of sync with that . So therefore there is the entry to this with year , we want to complete the recovery plan .
Henrik Andersen: That gives us some stability, just saying there's no stress for doing anything else than completing that, and then continue with the results generation we see.
Henrik Andersen: That gives us some stability, just saying there's no stress for doing anything else than completing that, and then continue with the results generation we see.
Speaker #1: that gives And us some some stability . Just saying . There's no stress for for doing for doing anything else . Than completing that .
Alex Jones: Thank you.
Alexander Jones: Thank you.
Speaker #1: And then with the results continue generation we see .
Operator: The next question comes from Colin from RBC. Please go ahead.
Operator: The next question comes from Colin from RBC. Please go ahead.
Speaker #6: you Thank .
Colin: Hi there. Thanks for taking my question. Perhaps one on capital allocation. Clearly, strong balance sheet and there's been an update. But digging down a bit deeper, could you maybe clarify what sort of areas you could potentially do M&A in? And then perhaps picking up on your comments that you have better transparency out to the nearer of the end of the decade. I think back to the 2021 CMD, and I appreciate it's a very different world. But the guidance then sort of implied that CapEx should sort of stabilize at a steady level kind of post V2, V6 entry. Is that your view? Is that possible that it could potentially stabilize at a level not too much higher than this? Thank you.
Colin Moody: Hi there. Thanks for taking my question. Perhaps one on capital allocation. Clearly, strong balance sheet and there's been an update. But digging down a bit deeper, could you maybe clarify what sort of areas you could potentially do M&A in? And then perhaps picking up on your comments that you have better transparency out to the nearer of the end of the decade. I think back to the 2021 CMD, and I appreciate it's a very different world. But the guidance then sort of implied that CapEx should sort of stabilize at a steady level kind of post V2, V6 entry. Is that your view? Is that possible that it could potentially stabilize at a level not too much higher than this? Thank you.
Speaker #3: And the question comes next from Colin from RBC. Go ahead.
Speaker #7: Hi there . Thanks my question . Perhaps one on capital allocation . You know , clearly a balance strong sheet . And , you know , update .
Speaker #7: But digging down a bit deeper, could you maybe clarify what sort of areas you could potentially do if there’s been an M&A in?
Speaker #7: And then perhaps picking up on your comments that you had better transparency out to the nearer the end of the decade ? You know , I think back to the 2021 CMD , and I appreciate it's a very different world , but but the guidance then sort of implied that , you know sort of , CapEx was stabilized at a steady level , kind of post V2 three six entry .
Speaker #7: your Is that view ? Is that is that possible that it could potentially stabilize at a , at a level not too much higher this than you ?
Henrik Andersen: I think here, first of all, if we both go back to the memory lane of 2021, I think we both learned the lesson. I think here what we sit with today is so progressed. I don't think we were wrong in the scale and the investment into offshore. I think what we were definitely wrong in that the world gave us a bigger challenge on the execution and the profitability from the onshore. That, of course, we can see works really well. At the same time, we can also see we are over the top of what was needed to do in terms of technology design and, also to a very large extent, the ramp of the manufacturing. Now it's more back to Jacob's point about tools and other things that sits in the CapEx.
Henrik Andersen: I think here, first of all, if we both go back to the memory lane of 2021, I think we both learned the lesson. I think here what we sit with today is so progressed. I don't think we were wrong in the scale and the investment into offshore. I think what we were definitely wrong in that the world gave us a bigger challenge on the execution and the profitability from the onshore. That, of course, we can see works really well. At the same time, we can also see we are over the top of what was needed to do in terms of technology design and, also to a very large extent, the ramp of the manufacturing. Now it's more back to Jacob's point about tools and other things that sits in the CapEx.
Speaker #7: Thank
Speaker #1: think first of . I all , if we both go back to the the memory lane of 2021 , I think we both learned a lesson .
Speaker #1: here ,
Speaker #1: I think here sit with today is , is so I progressed . don't think I don't think we were wrong in the scale and the investment into offshore .
Speaker #1: I think what we definitely got wrong is that the world gave us a bigger challenge on the, and on the execution profitability, we can onshore that, of course, really well.
Speaker #1: can needed we are what was time we of works terms of in to do technology , design and also to a very large extent , the ramp of of the manufacturing .
Henrik Andersen: So CapEx north of EUR 1 billion seems to be slightly elevated in this part of it. But at the same time, we can also see that even with a CapEx of EUR 1 billion or more, then the business is actually contributing really well on that. On the acquisition, we don't have anything planned. We are just saying here, acquisitions could very well be seen as part of also this equally as investing in the business. So I think we are just not shying away from if and when there is something, then, of course, we will also consider that. And if you took note of it end of last year, we actually acquired a factory in Poland on the onshore, which made sense for us to expand the onshore capacity of blades in Europe.
Henrik Andersen: So CapEx north of EUR 1 billion seems to be slightly elevated in this part of it. But at the same time, we can also see that even with a CapEx of EUR 1 billion or more, then the business is actually contributing really well on that. On the acquisition, we don't have anything planned. We are just saying here, acquisitions could very well be seen as part of also this equally as investing in the business. So I think we are just not shying away from if and when there is something, then, of course, we will also consider that. And if you took note of it end of last year, we actually acquired a factory in Poland on the onshore, which made sense for us to expand the onshore capacity of blades in Europe.
Speaker #1: Now it's more back to Jakob's point about tools and other things that sit in CapEx. The CapEx north of, seems to be, a billion, is slightly elevated in this part of— but at it.
Speaker #1: At the same time, we can also see that even with CapEx of more than, the business is actually contributing really well on that. On the acquisition, we don't have anything. We are just saying here acquisitions could very well be seen as part of also this.
Speaker #1: Equally as investing in the business. So, we are just not shying away from, if and when there is something, then of think course we will also consider that.
Speaker #1: And if you took note of it , end of last year , we actually acquired a factory in , in , in Poland on the onshore , which made sense for us to expand the onshore capacity of blades in Europe .
Colin: Great. That's very clear. And maybe then just a question back to service. So put that slide in the deck, page 24. The net contract assets climbed EUR 300 million year on year, clearly better than last year's EUR 400 million on an underlying basis. I know you've kind of commented service was underneath, I believe, below your expectations for the year. But maybe just to clarify on that specific point, was the contract asset development as expected? And just to confirm, do you still expect contract asset declines to begin in 2027? Thank you.
Colin Moody: Great. That's very clear. And maybe then just a question back to service. So put that slide in the deck, page 24. The net contract assets climbed EUR 300 million year on year, clearly better than last year's EUR 400 million on an underlying basis. I know you've kind of commented service was underneath, I believe, below your expectations for the year. But maybe just to clarify on that specific point, was the contract asset development as expected? And just to confirm, do you still expect contract asset declines to begin in 2027? Thank you.
Speaker #7: That's very clear . And maybe the end Great . question back to this So service . you know put that slide in the deck .
Speaker #7: Page 24 . The net contract assets climbed 300 million year on year . Clearly better than last year's 400 on an underlying basis you've kind .
Speaker #7: I know of commented , you know , service was underneath , I believe below your expectations for the year . But maybe clarify in to that specific point , was the contract asset development as expected .
Speaker #7: And just to confirm , do you still expect contract asset declines to begin in 2027 ? Thank you .
Henrik Andersen: So firstly, on your first question on whether it developed as we expected, and I can confirm that that was in line with our modeling when we went into first quarter. So this is in line with expectations. As Henrik is saying, this is something, of course, that we work on. We are not starting guiding on net contract asset going forward. But of course, as this is, you can look at this as a future receivable to be invoiced and collected. Of course, we are very focused on getting that invoiced and getting that collected. So it's certainly something that we work on as part of our Service Recovery Plan.
Henrik Andersen: So firstly, on your first question on whether it developed as we expected, and I can confirm that that was in line with our modeling when we went into first quarter. So this is in line with expectations. As Henrik is saying, this is something, of course, that we work on. We are not starting guiding on net contract asset going forward. But of course, as this is, you can look at this as a future receivable to be invoiced and collected. Of course, we are very focused on getting that invoiced and getting that collected. So it's certainly something that we work on as part of our Service Recovery Plan.
Speaker #2: So firstly , on your first question on whether developed it as we expected , can confirm that that was in line with our modeling when and I into first quarter .
Speaker #2: So this is in line with expectations . As Henrik is saying , this is of course , that that on we work . We are not starting guiding on net contract asset going forward .
Speaker #2: as this of course , is , But can look at this as a future receivable to invoiced and be collected . course , we are very Of getting invoiced and getting focused on that collected .
Colin: Well understood. Thank you.
Colin Moody: Well understood. Thank you.
Speaker #2: it's So certainly something that that that we work on as part of recovery plan .
Operator: Then the next question comes from Kristian Tornøe Johansen from SEB. Please go ahead.
Operator: Then the next question comes from Kristian Tornøe Johansen from SEB. Please go ahead.
Speaker #7: Understood. Thank you, well.
Kristian Tornøe Johansen: Yes. Thank you. Two questions from my side. So first one is on the current sentiment among your US customers. So last year, you ramped up your production capacity in the US. Sort of listening to your key competitor in the US onshore business, they are not necessarily very upbeat on demand. So just maybe help us on how would you think about the risk of your capacity utilization and hence margins for your US onshore business?
Kristian Tornøe Johansen: Yes. Thank you. Two questions from my side. So first one is on the current sentiment among your US customers. So last year, you ramped up your production capacity in the US. Sort of listening to your key competitor in the US onshore business, they are not necessarily very upbeat on demand. So just maybe help us on how would you think about the risk of your capacity utilization and hence margins for your US onshore business?
Speaker #3: Then the next question comes from Christian Tono from CIB . Please go ahead .
Speaker #8: Yes . Thank you . Two questions from my side . So first one is on current the sentiment among your US customers . So last year you your production ramped up capacity in the US , but sort of listening to your key competitor in the .
Speaker #8: US , onshore business , they're not necessarily very upbeat on So just maybe help us on how we should think about the risk of demand .
Henrik Andersen: I think, first of all, I will avoid comment on too many participants. It seems like we are pretty good in doing what we are doing globally in wind. Therefore, we believe in that has a pretty bright future. We don't need to try to sell anything else because we don't have anything else to sell than what relates to wind onshore or offshore. We'll continue to do that. I think it works well. It works in more than 80 countries. It also works in the US. I think, especially in the countries we are debating here on the onshore side, the levelized cost of energy, fairly attractive. The time to energy, very attractive compared to any other alternative energy sourcing. Therefore, Christian, I don't hear anything else of doing that.
Henrik Andersen: I think, first of all, I will avoid comment on too many participants. It seems like we are pretty good in doing what we are doing globally in wind. Therefore, we believe in that has a pretty bright future. We don't need to try to sell anything else because we don't have anything else to sell than what relates to wind onshore or offshore. We'll continue to do that. I think it works well. It works in more than 80 countries. It also works in the US. I think, especially in the countries we are debating here on the onshore side, the levelized cost of energy, fairly attractive. The time to energy, very attractive compared to any other alternative energy sourcing. Therefore, Christian, I don't hear anything else of doing that.
Speaker #8: your utilization and margins for your, hence US entrepreneurs.
Speaker #1: I think , first of all , I will avoid comment on on too many participants . It seems like we are pretty good in doing what we are doing globally in wind , and therefore we believe in in that has a that has a pretty bright future and we don't need to try to sell anything else because we don't have else to sell than what relates to wind onshore or offshore .
Speaker #1: We'll continue to do that . I think works well . it It works in more than 80 countries , and it works in the in the US .
Speaker #1: And I think . Especially in the countries we are debating here on the onshore side , the levelized cost of energy fairly attractive .
Speaker #1: The time to energy very attractive any other compared to alternative energy sourcing . So therefore , Christian , I don't hear anything else of doing that .
Henrik Andersen: When you then sit with it, it is also beyond any doubt that when you have a business environment where it does have some volatility and sort of variances to it, some days even within the days or some days within the weeks and some days within the months. But I think here, the clearance of some of the tariff parts and other stuff will be very helpful of part of the conditional part. And then at the same time, we sit with something that is an FOI that is more than 30GW in the backlog, ±. It's the historic high one. And you will see on our deliveries that also from the annual report, you can see that deliveries have actually grown to a tune also in the US. And don't forget, we have factories there that work really well now. So I'm pleased with it.
Henrik Andersen: When you then sit with it, it is also beyond any doubt that when you have a business environment where it does have some volatility and sort of variances to it, some days even within the days or some days within the weeks and some days within the months. But I think here, the clearance of some of the tariff parts and other stuff will be very helpful of part of the conditional part. And then at the same time, we sit with something that is an FOI that is more than 30GW in the backlog, ±. It's the historic high one. And you will see on our deliveries that also from the annual report, you can see that deliveries have actually grown to a tune also in the US. And don't forget, we have factories there that work really well now. So I'm pleased with it.
Speaker #1: When you then sit with it , it is also beyond any doubt that when business you have a environment where it does have volatility in and sort of variances to it , some days , even within the days days or some within the weeks and some days months .
Speaker #1: But I within the think here the clearance of some tariff of the parts and other stuff will be very helpful of part of the conditional part .
Speaker #1: And then at the same time , we sit with something is that FOI that is more than 30 gigawatt in the in the backlog plus minus .
Speaker #1: If the historic high one, and you will see on our deliveries that also from the annual report, you can see that deliveries have actually grown to a tune.
Speaker #1: Also in the US . And don't forget we have factories there that works really well . Now . I'm So with it . pleased So I'm not going to I don't think I don't talk it down and I won't talk things down when you can see that when we we have just into this a look year , percentage from wind .
Henrik Andersen: So I'm not going to, I don't think, talk it down. And I won't talk things down when you can see that, when we look just into this year, we have a double-digit percentage growth from wind. And at the same time, we have a much bigger growth when it comes to EBIT in terms of absolute euro value. So it works. And of course, we keep reinvesting in the offshore that will start paying off in 2027.
Henrik Andersen: So I'm not going to, I don't think, talk it down. And I won't talk things down when you can see that, when we look just into this year, we have a double-digit percentage growth from wind. And at the same time, we have a much bigger growth when it comes to EBIT in terms of absolute euro value. So it works. And of course, we keep reinvesting in the offshore that will start paying off in 2027.
Speaker #1: Time growth, we have much. And at bigger growth comes when it comes to EBIT in terms of euro absolute value. So it works.
Speaker #1: And and of course we keep reinvesting offshore . That will start paying off in 27 .
Kristian Tornøe Johansen: Understood. And then my second question is actually on offshore. You said it just before that you expect that to be profitable in 2027. I'm just a bit curious, sort of looking towards the end of the decade, and especially in the light of the outcome of the AR7. So assuming all those projects are actually built, are you comfortable and do you have visibility for sort of continued growth for your offshore business towards the end of the decade?
Kristian Tornøe Johansen: Understood. And then my second question is actually on offshore. You said it just before that you expect that to be profitable in 2027. I'm just a bit curious, sort of looking towards the end of the decade, and especially in the light of the outcome of the AR7. So assuming all those projects are actually built, are you comfortable and do you have visibility for sort of continued growth for your offshore business towards the end of the decade?
Speaker #8: Understood . And then my second question is actually on on offshore you you said it just before that you expect that to be profitable in 27 .
Speaker #8: I'm just curious, sort of looking towards the end of the decade, and especially in light of the outcome of the R7.
Speaker #8: So assuming all those projects are actually built , are you comfortable and do you have visibility for sort of continued for your of your growth business ?
Henrik Andersen: I'm smiling because now I've been an ambassador for offshore wind. I probably at some point in time, I almost felt I was the only one that believed in it. But here it is, to now see that auction now start working, that raises the question critically of if we then now can deliver. I mean, come on, we have built capacity in Europe for a decade, whether it comes to onshore or offshore, that will supersede what is actually going on. If you take that, AR7 gave 8 GW. That spread over several years, several good customer partners, potential projects in there. But then pause for a second. We've just opened last year a cell in Poland. We have expanded blade facilities across Europe. So therefore, we are more than ready for that.
Henrik Andersen: I'm smiling because now I've been an ambassador for offshore wind. I probably at some point in time, I almost felt I was the only one that believed in it. But here it is, to now see that auction now start working, that raises the question critically of if we then now can deliver. I mean, come on, we have built capacity in Europe for a decade, whether it comes to onshore or offshore, that will supersede what is actually going on. If you take that, AR7 gave 8 GW. That spread over several years, several good customer partners, potential projects in there. But then pause for a second. We've just opened last year a cell in Poland. We have expanded blade facilities across Europe. So therefore, we are more than ready for that.
Speaker #8: Was the end of the decade ?
Speaker #1: I'm , smiling I'm because now I've been an ambassador for offshore wind and I probably at some point in time almost felt I was the But but it .
Speaker #1: I'm , smiling I'm because now I've been an ambassador for offshore wind and I probably at some point in time almost felt I was the But but only one that believed here it is now see to auction .
Speaker #1: that Now start working . That raises the critically of if we then now can deliver . I mean , come on , we have built capacity in Europe question for a decade , whether it comes to onshore or offshore , that will supersede what is actually going on .
Speaker #1: you take that R7 gave eight gigawatt that's spread over several years , several good customer partners , potential projects in there . But then pause for a second .
Speaker #1: We've just opened last year a cell in Poland. We have expanded blade facilities across Europe. So therefore, we are more than ready for that.
Henrik Andersen: I still sit with another one, which is I hope this time is the round where we all learn from the same auction conditions. So we actually get a real tangible if it's scheduled to be built in this year, it gets built in this year, and it doesn't always move to the right. So the scale-up of onshore, I should give everyone on this call a good sense of that the industry is ready to scale if it has the 1-2 years lead. And therefore, it's not a problem with the capacity. Not a problem.
Henrik Andersen: I still sit with another one, which is I hope this time is the round where we all learn from the same auction conditions. So we actually get a real tangible if it's scheduled to be built in this year, it gets built in this year, and it doesn't always move to the right. So the scale-up of onshore, I should give everyone on this call a good sense of that the industry is ready to scale if it has the 1-2 years lead. And therefore, it's not a problem with the capacity. Not a problem.
Speaker #1: I still sit with another one, which is hope. This time is the round where we all learn from the same auction conditions.
Speaker #1: So we actually get a real tangible—if it's scheduled to be built in this year, it built in this, always doesn't move year, and it to the gets right.
Speaker #1: So the up of scale onshore , I should give should give on this everyone call good sense of that . The industry is ready to scale if and it has the 1 or 2 years a lead and therefore it's not a problem with the capacity , not a problem .
Kristian Tornøe Johansen: Understood. Thank you.
Kristian Tornøe Johansen: Understood. Thank you.
Operator: The next question comes from Ajay Patel from Goldman Sachs. Please go ahead.
Operator: The next question comes from Ajay Patel from Goldman Sachs. Please go ahead.
Speaker #8: Understood . Thank you .
Ajay Patel: Good morning. Look, I think when I look at what you presented, the opportunity is clear, right? Even if you deliver similar revenues in the future and your margin targets, you double the EBIT that you achieved in 2025. I think a number of questions I get is around the visibility. Now, I think if we think about the course of this year, what elements will de-risk or become more visible to you? Will we have a much clearer picture of the offshore ramp and therefore the recovery of the profitability of that business by year-end? On service, will you have executed on the more closer and more easier wins that we then have a better visibility of margin recovery from 2027 onwards? And then I think my second question would be, from my utility perspective, we're hearing increasingly about the opportunity around repowering in the US.
Ajay Patel: Good morning. Look, I think when I look at what you presented, the opportunity is clear, right? Even if you deliver similar revenues in the future and your margin targets, you double the EBIT that you achieved in 2025. I think a number of questions I get is around the visibility. Now, I think if we think about the course of this year, what elements will de-risk or become more visible to you? Will we have a much clearer picture of the offshore ramp and therefore the recovery of the profitability of that business by year-end? On service, will you have executed on the more closer and more easier wins that we then have a better visibility of margin recovery from 2027 onwards? And then I think my second question would be, from my utility perspective, we're hearing increasingly about the opportunity around repowering in the US.
Speaker #3: The next question comes from Ajay from Goldman Sachs. Please go ahead, Patel.
Speaker #9: Good morning . Look , I think when I look at what you presented , the opportunity is clear . Even if you similar deliver revenues in the future and your margin targets , you double the Ebit that you achieved in 25 .
Speaker #9: I think a number of questions I get is around the visibility. Now, I think if we think about the course of this year, what elements will de-risk or become more you?
Speaker #9: a much We have clearer the picture of visible to ramp therefore the and offshore recovery of the profitability of business that by year end on service .
Speaker #9: Will executed the on more closer and more easier. We then wins that have a better visibility of margin from '27 onwards recovery?
Speaker #9: And then I think my second question would be from my utility perspective , we're increasingly about the opportunity around repowering in the US .
Ajay Patel: Is that something where you're seeing increasing activity in terms of just inward-bound conversation? And you mentioned operational leverage on the onshore side. Is there any sense you can give us what an incremental gigawatt adds in terms of operational leverage so we can kind of get a sense for what maybe the margin opportunity is in that part, given that onshore is doing so well over 2025? Thanks.
Ajay Patel: Is that something where you're seeing increasing activity in terms of just inward-bound conversation? And you mentioned operational leverage on the onshore side. Is there any sense you can give us what an incremental gigawatt adds in terms of operational leverage so we can kind of get a sense for what maybe the margin opportunity is in that part, given that onshore is doing so well over 2025? Thanks.
Speaker #9: something where Is that you're seeing increasing activity in terms of just inward bound conversation and you mentioned operational leverage on the side onshore .
Speaker #9: any Is there sense you can give us what an incremental gigawatt adds in terms of operational leverage that we can kind of get a sense for what may be the margin is opportunity in that given that part , onshore is doing so well over 25 .
Henrik Andersen: Thanks, AJ. I would just sort of say, first of all, thanks for your initial reflection over where we are and how far we've come. I sit with exactly the same 10-year EBITDA and EBIT development as well. I think you can read a lot into how we are presenting the combined deck today. Because if you take and reflect over also our comments on capital structure, we would not readdress the capital structure in a time where we didn't have the visibility. So maybe conclude and take a bit away from the capital structure and that visibility. Jacob's comments on we like doing repeatedly share buybacks is also a good hint of we are not finished with it. We are just now showing you how we want to think about it quarter-over-quarter of capital redistribution back to our shareholders.
Henrik Andersen: Thanks, AJ. I would just sort of say, first of all, thanks for your initial reflection over where we are and how far we've come. I sit with exactly the same 10-year EBITDA and EBIT development as well. I think you can read a lot into how we are presenting the combined deck today. Because if you take and reflect over also our comments on capital structure, we would not readdress the capital structure in a time where we didn't have the visibility. So maybe conclude and take a bit away from the capital structure and that visibility. Jacob's comments on we like doing repeatedly share buybacks is also a good hint of we are not finished with it. We are just now showing you how we want to think about it quarter-over-quarter of capital redistribution back to our shareholders.
Speaker #9: Thanks , thanks .
Speaker #1: will just I sort of say , first of all , thanks for your initial reflection over , and we are over where how far we've come and and I , I sit with exactly the same ten year EBITDA and Ebit development as well .
Speaker #1: I think you can read a lot into how we are presenting the combined deck today , because if you take and reflect over also our comments on capital structure , we would not readdress the capital structure in a time where we didn't have the visibility .
Speaker #1: So maybe conclude and and , and take a bit away from the capital and that structure visibility . Jacob's on comments we like doing repeatedly share buybacks is also a good hint of we are we are not finished with that .
Speaker #1: We are just now showing you how we want to think about it. Quarter on quarter of capital redistribution back to our shareholders.
Henrik Andersen: That we wouldn't have done if we didn't feel we had offshore visibility. And if you then take the guidance 2026 versus 2025, as service is ± in round terms, more or less the same, then you can probably assume that a lot of the progress is happening from both top line on offshore, but therefore also the progress of what we are seeing in our ramping on offshore and what is sitting still as a bit of remainder on some of the onshore US. So that you can take as a progress just seeing between 2005, 2007, and to the new guidance range. I hope you will appreciate. I'm not going to comment specifically on offshore individual projects or an individual market because how the world has developed is we either sit here and comment on a competitive situation that typically only have one other player.
Henrik Andersen: That we wouldn't have done if we didn't feel we had offshore visibility. And if you then take the guidance 2026 versus 2025, as service is ± in round terms, more or less the same, then you can probably assume that a lot of the progress is happening from both top line on offshore, but therefore also the progress of what we are seeing in our ramping on offshore and what is sitting still as a bit of remainder on some of the onshore US. So that you can take as a progress just seeing between 2005, 2007, and to the new guidance range. I hope you will appreciate. I'm not going to comment specifically on offshore individual projects or an individual market because how the world has developed is we either sit here and comment on a competitive situation that typically only have one other player.
Speaker #1: That we wouldn't have done if we didn't feel we had offshore visibility . And if you then take the the guidance 26 25 as service is plus in minus round terms , more or less the same , you can then probably assume that a lot of the progress is happening from both top line on on offshore , but therefore also the progress of what we are seeing in our ramping on offshore and what is sitting still as a bit of on remainder some of the onshore US .
Speaker #1: So that you can take as a as a progress . Just seeing between five seven and to the new guidance range . I hope you will appreciate I'm not going to comment specifically on offshore individual projects or an individual market , because how the world has developed is we either sit here and comment on a competitive situation that typically only have one other player , and and therefore on these calls , I know there are listening in as , as eagerly as speaking .
Henrik Andersen: Therefore, on these calls, I know they are listening in as eagerly as I'm speaking. Therefore, that I will rather keep to another day. On the repowering, yes, please. US, yes, please. And that also means as we have that many gigawatts over there, and it was also one of the first places 20 years ago, 15- or 20-year-old turbines in the US, yes, please. You can replace three with one and have even much more electricity out of it. It's ongoing. It's happening. It's only now a matter of how quickly can you get the permitting because the capital is there to get it done.
Henrik Andersen: Therefore, on these calls, I know they are listening in as eagerly as I'm speaking. Therefore, that I will rather keep to another day. On the repowering, yes, please. US, yes, please. And that also means as we have that many gigawatts over there, and it was also one of the first places 20 years ago, 15- or 20-year-old turbines in the US, yes, please. You can replace three with one and have even much more electricity out of it. It's ongoing. It's happening. It's only now a matter of how quickly can you get the permitting because the capital is there to get it done.
Speaker #1: I'm So therefore that I would keep to a rather a to a to , to another day on the repowering . Yes , please .
Speaker #1: So us . Yes , And that please . also means , as we have , that many gigawatts over there . And it was also one of the first place 20 years ago , 15 , 20 years old turbines in the US .
Speaker #1: Yes , please can . replace free You with have even much more electricity out of it . So it's ongoing . It's happening .
Ajay Patel: Just, sorry, on the operational leverage. Is there any sense you can give us on that side?
Ajay Patel: Just, sorry, on the operational leverage. Is there any sense you can give us on that side?
Speaker #1: It's only now a matter of how quickly can you get the permitting , because the there to get it capital is done .
Henrik Andersen: No, thank you. But it's positive.
Henrik Andersen: No, thank you. But it's positive.
Speaker #9: I'm just sorry. On the leverage, is there any sense operationally for us on that side?
Ajay Patel: Thank you. You can't blame me for trying.
Ajay Patel: Thank you. You can't blame me for trying.
Henrik Andersen: No. I put you immediately in the same category as Claus Almer.
Henrik Andersen: No. I put you immediately in the same category as Claus Almer.
Speaker #1: No, thank you, but it's positive.
Speaker #9: Thank you . You can't blame me for trying .
Operator: Then the next question comes from Martin Wilkie from Citi. Please go ahead.
Operator: Then the next question comes from Martin Wilkie from Citi. Please go ahead.
Speaker #1: No , it's I put you immediately in the same category as Klaus . Alma .
Martin Wilkie: Yeah. Thank you. Good morning, Martin from Citi. Just come back to the offshore progress. If we look at your guidance for 2026, and obviously, given the service guidance, the power solutions profitability is probably a bit higher than perhaps was embedded in consensus. You had talked in the past about having a EUR triple-digit million drag from the offshore ramp-up in 2025 and that that would largely sort of reverse going into 2026. Just any comments around that? Is that sort of developing better than expected? And you've talked in the past about improving takt time, these kind of things to effectively pick up that level of profitability. Just to understand if offshore is actually running a little bit ahead of where you thought, say, last quarter, or if that's just sort of in line with the plan that you already had in place. Thank you.
Martin Wilkie [Managing Director, Co-Head of the Industrial Tech and Mobility Super-Sector, and Head of European Capital Goods R: Yeah. Thank you. Good morning, Martin from Citi. Just come back to the offshore progress. If we look at your guidance for 2026, and obviously, given the service guidance, the power solutions profitability is probably a bit higher than perhaps was embedded in consensus. You had talked in the past about having a EUR triple-digit million drag from the offshore ramp-up in 2025 and that that would largely sort of reverse going into 2026. Just any comments around that? Is that sort of developing better than expected? And you've talked in the past about improving takt time, these kind of things to effectively pick up that level of profitability. Just to understand if offshore is actually running a little bit ahead of where you thought, say, last quarter, or if that's just sort of in line with the plan that you already had in place. Thank you.
Speaker #3: from Martin Wilkie from question next comes Then the city . Please go ahead
Speaker #10: Thank you . It's Martin
Speaker #10: from city . Just to come back to the offshore progress . If we look at your guidance for 2026 , then obviously , given the service guidance , the power solutions is a probably bit higher than .
Speaker #10: was embedded in consensus . Yeah . You had talks in the past about having a digit triple drag million from the offshore ramp up in 25 , and that would that largely reverse going into 2026 .
Speaker #10: Just any comments around that ? Is that sort of developing better than expected ? You've talked in the past about improving tech time , these kind of things to effectively pick up that level of profitability just to understand if offshore is actually running ahead of where you thought , say , last quarter or if that's just sort of in line with the plan that had in you already place .
Henrik Andersen: As I know, some of our internal colleagues are also listening into these calls. I will say absolutely not. So they are not ahead of plan. So therefore, the offshore ramp is probably right now on what I will say on the plan we have agreed to. But I think here, we can still improve, and we can still do better. And when we look at the offshore ramp, what we are getting out in 2026 is not the full thing we need to get out. So therefore, when we imply that, it's not only a volume game for 2027. It's also a cost and a ramp-out cost in 2027. So Martin, this will lead so therefore, what you're seeing in the guidance and outlook for 2026 is what I will call a first stage of what comes out of an improvement in the offshore ramp.
Henrik Andersen: As I know, some of our internal colleagues are also listening into these calls. I will say absolutely not. So they are not ahead of plan. So therefore, the offshore ramp is probably right now on what I will say on the plan we have agreed to. But I think here, we can still improve, and we can still do better. And when we look at the offshore ramp, what we are getting out in 2026 is not the full thing we need to get out. So therefore, when we imply that, it's not only a volume game for 2027. It's also a cost and a ramp-out cost in 2027. So Martin, this will lead so therefore, what you're seeing in the guidance and outlook for 2026 is what I will call a first stage of what comes out of an improvement in the offshore ramp.
Speaker #10: Thank you .
Speaker #1: I know some of our internal colleagues are also listening in to these calls. I will say, not absolutely, so they are not ahead of plan.
Speaker #1: So therefore the offshore ramp is probably right now on the plan . We agreed to , but I will say have on what I think here we can can can still we improve and we still do still better .
Speaker #1: And at the offshore, when we look what ramp we are getting out in '26, it's not the full thing. We need to get out.
Speaker #1: So therefore, when we imply that it's only a volume game for '27, it's also a cost, and a ramp-out in cost.
Speaker #1: 27 . So Martin , this will this will therefore lead . So what you're seeing in in the guidance and outlook for 26 is what I will call a first stage of what comes out of the an improvement in the offshore ramp .
Henrik Andersen: But we are not done with it at all.
Henrik Andersen: But we are not done with it at all.
Martin Wilkie: Thank you. If I could just come back to service. I know you don't want to give huge amounts of detail, but obviously, it's a huge question for people today. But I guess under the sort of accounting that you use in service, we've used the example in the past that the best predictor of the next period's margin is the current period's margin just because of this overtime accounting. And given the range that you've given for 2026, there is going to be some inference of how we think about the exit rates. But I guess the thing that would stop that happening is if there were particular contracts that were falling away this year or other one-offs. I mean, is there anything that you can give us to sort of help us think about what those impacts are inside 2026? Thank you.
Martin Wilkie [Managing Director, Co-Head of the Industrial Tech and Mobility Super-Sector, and Head of European Capital Goods R: Thank you. If I could just come back to service. I know you don't want to give huge amounts of detail, but obviously, it's a huge question for people today. But I guess under the sort of accounting that you use in service, we've used the example in the past that the best predictor of the next period's margin is the current period's margin just because of this overtime accounting. And given the range that you've given for 2026, there is going to be some inference of how we think about the exit rates. But I guess the thing that would stop that happening is if there were particular contracts that were falling away this year or other one-offs. I mean, is there anything that you can give us to sort of help us think about what those impacts are inside 2026? Thank you.
Speaker #1: But we are not done with it at all.
Speaker #10: Thank you . If I could just come back to service . And you don't want huge to give a amounts of detail , but obviously it's a huge question for people today .
Speaker #10: I guess under the sort of use in service, we've used the example in the past that the best predictor of the next period is the current period margin.
Speaker #10: Just because of this overtime accounting . And given the range that you've given there for 26 , is going to some be inference think about of how we the exit rate .
Speaker #10: But I guess the thing that would stop that happening is if there were contracts that were falling away this year or others. Is there anything that you can give us to sort of help us think about what those impacts are inside?
Henrik Andersen: I think we won't give you a drill down of that. You can see some of it is. And as I said, one of the things that probably still annoys me a bit in the commercial reset, which we've also seen, is that when you do the commercial reset, this is not only about talking to customers. It's also about disciplining ourselves. Because some of these backend-loaded or whatever loaded in a 10-, 20-, or 30-year contract where you have led yourself to believe that it was a different payment profile or whatever, that doesn't work. And I think some of that, of course, relates to the net contract assets. So therefore, for us, as you will know, when you have an 11-year portfolio really encouraged by what we are doing to restore the whole backlog of contracts, some of them we have up.
Henrik Andersen: I think we won't give you a drill down of that. You can see some of it is. And as I said, one of the things that probably still annoys me a bit in the commercial reset, which we've also seen, is that when you do the commercial reset, this is not only about talking to customers. It's also about disciplining ourselves. Because some of these backend-loaded or whatever loaded in a 10-, 20-, or 30-year contract where you have led yourself to believe that it was a different payment profile or whatever, that doesn't work. And I think some of that, of course, relates to the net contract assets. So therefore, for us, as you will know, when you have an 11-year portfolio really encouraged by what we are doing to restore the whole backlog of contracts, some of them we have up.
Speaker #10: 26 thank you
Speaker #1: think I we won't we
Speaker #1: won't . give you a drill down of that . You can see some of it is and as I said , one of the things that probably annoys still annoys me a bit in the in the commercial reset , which we've also seen , is that when you do the commercial reset , this is not only about talking to customers , it's also about ourselves .
Speaker #1: of Because some these disciplining back loaded or end whatever , loaded in in ten , 20 or 30 years contract where you have led yourself to believe that it was a different payment profile or whatever , that that doesn't work .
Speaker #1: And I think some of that , of course , relates to to the to the net contract assets . So for therefore , us , as you will know , when you have a 11 years portfolio , really encouraged by what we are doing to restore the whole backlog of contracts , some of them we have up , some of them gets in there either as renewed or untimely with customers as part of New order intake , and that , of course , will overall improve the I call it the the wealth and the health of the of the backlog .
Henrik Andersen: Some of them get in there either as renewed or untimely discussed with customers as part of new order intake. That, of course, will overall improve the, I call it, the wealth and the health of the backlog. But at the same time, it also still means that a number will come out every year, Martin. That, of course, gives us a little bit right now. Let's come through the quarters. I know what you're asking for, everyone. You want to know what the outcome is when the recovery is over. We just have to go through this. This is painful because, yeah, you find still some of the examples where you said we'd rather not have them, but then we deal with them. That, of course, influences your average profitability of a business like this.
Henrik Andersen: Some of them get in there either as renewed or untimely discussed with customers as part of new order intake. That, of course, will overall improve the, I call it, the wealth and the health of the backlog. But at the same time, it also still means that a number will come out every year, Martin. That, of course, gives us a little bit right now. Let's come through the quarters. I know what you're asking for, everyone. You want to know what the outcome is when the recovery is over. We just have to go through this. This is painful because, yeah, you find still some of the examples where you said we'd rather not have them, but then we deal with them. That, of course, influences your average profitability of a business like this.
Speaker #1: But at the same time , it also still means that a number will come out every year . Martin . And that that of course , gives us a little bit right now .
Speaker #1: Let's let's come through the quarters . I know what you're asking for , everyone , and want to know what you the outcome is when recovery is over .
Speaker #1: But we just have to go through this , and painful because yeah , this is you find still some of some of the examples where you we'd rather have them , not but then we deal with them of course influence your average profitability of a business There's said business nothing in that the is not looking as a good When we business .
Henrik Andersen: There's nothing in the business that is not looking as a sound and a good business when we look ahead outside the recovery period. But it's not going to jump from 16.5 to 25. It will be a measured. It will be a controlled. And for me, it's also about seeing that people stick to the discipline of what we have experienced and initiated in the business.
Henrik Andersen: There's nothing in the business that is not looking as a sound and a good business when we look ahead outside the recovery period. But it's not going to jump from 16.5 to 25. It will be a measured. It will be a controlled. And for me, it's also about seeing that people stick to the discipline of what we have experienced and initiated in the business.
Speaker #1: look ahead , outside the recovery period , but it's not going to jump from 16.5 to 25 . It will be a measured .
Speaker #1: It will be controlled. And for me, it's also about seeing that we stick to the discipline of what we have experienced. And business people.
Martin Wilkie: Thank you very much.
Martin Wilkie [Managing Director, Co-Head of the Industrial Tech and Mobility Super-Sector, and Head of European Capital Goods R: Thank you very much.
Operator: Then the next question. Today's last question now comes from Max Yates from Morgan Stanley. Please go ahead.
Operator: Then the next question. Today's last question now comes from Max Yates from Morgan Stanley. Please go ahead.
Speaker #10: Thank you very much .
Speaker #3: And the next question, today's last question, now comes from Max James from Morgan. Go ahead.
Max Yates: Hi. Good morning, Francis. Just quite a quick one. Just when we get the auctions and the turbine orders for the AR7 offshore wind projects, do you expect any of the Chinese players to participate in that, to win orders? And I'm asking in the context of obviously, we've seen kind of the UK Prime Minister has been in China quite recently. And I was just wondering kind of when you speak to people in the industry and in the UK, what is the willingness to kind of leverage the Chinese supply chain in some of those projects?
Max Yates: Hi. Good morning, Francis. Just quite a quick one. Just when we get the auctions and the turbine orders for the AR7 offshore wind projects, do you expect any of the Chinese players to participate in that, to win orders? And I'm asking in the context of obviously, we've seen kind of the UK Prime Minister has been in China quite recently. And I was just wondering kind of when you speak to people in the industry and in the UK, what is the willingness to kind of leverage the Chinese supply chain in some of those projects?
Speaker #3: Please
Speaker #11: Hi . Good morning . Thank just quite a quick one . Just when we get the the
Speaker #11: auctions and the and the offshore wind for the orders turbine projects Stanley .
Speaker #11: , do you expect any of the Chinese players to participate in that to win orders ? And I'm asking in the context obviously we've seen of kind of the UK Prime been in has been in China quite recently , Minister's just wondering kind of when you speak to people in the industry and in the UK , what is what is the willingness to to kind of leverage the Chinese supply chain in some of those projects ?
Henrik Andersen: Yeah. You're asking again a little bit outside what, first of all, I was not part of the delegation in China. And therefore, I don't know what the agreement was. I know what we are talking to the UK government about. I know what we are talking to the head of state for energy in the UK, Ed Miliband. And I don't think that sort of leans towards that. I also think there is a lot going on if you revert to not only the annual report but also to the slide I'm showing in here. The narrative starts working more seriously in a world that seems to be a bit more aware of what geopolitical uncertainty means. And I think energy is getting higher and higher prioritized in terms of energy independence and how you control your energy supply, not least to say also how you distribute it.
Henrik Andersen: Yeah. You're asking again a little bit outside what, first of all, I was not part of the delegation in China. And therefore, I don't know what the agreement was. I know what we are talking to the UK government about. I know what we are talking to the head of state for energy in the UK, Ed Miliband. And I don't think that sort of leans towards that. I also think there is a lot going on if you revert to not only the annual report but also to the slide I'm showing in here. The narrative starts working more seriously in a world that seems to be a bit more aware of what geopolitical uncertainty means. And I think energy is getting higher and higher prioritized in terms of energy independence and how you control your energy supply, not least to say also how you distribute it.
Speaker #1: Are you asking again , a little bit outside what I first of all , I was not part of the delegation in China and therefore , I don't and know what agreement was .
Speaker #1: I know what we are talking to UK government know what we about and are talking to a a ahead of of of state of of the energy in there at Miliband and I don't think that that sort of leans toward , towards that .
Speaker #1: I think there lot is a not to going only the annual on . If report , but you also to the slide . I'm saying in here , the working narrative more starts seriously in a world seems to be a bit more aware of what uncertainty means geopolitical .
Speaker #1: And energy is getting higher and higher prioritized in terms of energy independence and how you control your energy supply too, not least to say also how you distribute it.
Henrik Andersen: The access to grid is a difficult one. Let's put it that way. So therefore, I think that is a question mark. I've learned to say these days, never be surprised. But in this case, I would actually be surprised if somebody took that measure in the current environment.
Henrik Andersen: The access to grid is a difficult one. Let's put it that way. So therefore, I think that is a question mark. I've learned to say these days, never be surprised. But in this case, I would actually be surprised if somebody took that measure in the current environment.
Speaker #1: And the access to is a grid difficult one . Let's put it that way . So therefore I , I think that is a that is a mark .
Speaker #1: I've learned to say these days, never be surprised. But in this case, I would actually be surprised if somebody took that measure in the current environment.
Max Yates: Okay. Interesting. Thank you very much.
Max Yates: Okay. Interesting. Thank you very much.
Henrik Andersen: Okay. I know this is but I look forward, we look forward to see many of you over the coming days, both here in Copenhagen and also in London tomorrow. Again, thank you for your enormous support, especially shareholders that are on the call over the last years. This was the year of evidence. And yeah, some of us really feel proud of returning some value back to you and saying proper thank you. So therefore, look forward to see you over the next coming days. Thanks. And good 2026 ahead. Thank you.
Henrik Andersen: Okay. I know this is but I look forward, we look forward to see many of you over the coming days, both here in Copenhagen and also in London tomorrow. Again, thank you for your enormous support, especially shareholders that are on the call over the last years. This was the year of evidence. And yeah, some of us really feel proud of returning some value back to you and saying proper thank you. So therefore, look forward to see you over the next coming days. Thanks. And good 2026 ahead. Thank you.
Speaker #11: Okay. Interesting. Thank you very much.
Speaker #1: Okay. I know this is, but I want to see how we look forward, over the coming... Many look forward to hearing from you.
Speaker #1: days . Both in here in Copenhagen and in London tomorrow . thank you Again , for your enormous support , especially shareholders that are on call the over the last years .
Speaker #1: This was the year of evidence and yeah , some of us feel proud really of of returning some value back to you and saying proper thank you .
Speaker #1: So, therefore, look forward to see you over the next coming days. Thanks, and good, good 2026 ahead. Thank you.
Operator: Ladies and gentlemen, the conference is now concluded, and you may disconnect. Thank you for joining, and have a pleasant day. Goodbye.
Operator: Ladies and gentlemen, the conference is now concluded, and you may disconnect. Thank you for joining, and have a pleasant day. Goodbye.
Speaker #3: Ladies and gentlemen , the conference is now concluded and you may disconnect . Thank you for joining and have a pleasant day . Goodbye .
