Operating profits at Vestas fell 39% in 2021, according to the Danish manufacturer’s annual results.
The company reported EBIT before special items of €461m for the year, compared to €750m in 2020.
Rising energy prices, supply chain disruptions and accelerated cost inflation from raw materials, transport, and turbine components all affected profits.
The turbine maker reported an EBIT margin before special items of 3%, below outlook of around 4%.
Compared to 2020, revenue and free cash flow increased while earnings decreased.
Vestas revenue in 2021 amounted to €15.6bn, compared with €14.8bn in 2020.
The value of the combined order backlog increased from €43bn to €47bn across Power Solutions and Service.
As announced on 26 January 2022, Vestas’ outlook for 2022 is revenue ibetween €15bn and €16.5bn, including Service revenue.
Vestas expects to achieve an EBIT margin before special items of 0-4% and total investments are expected to amount to €1000m in 2022.
Henrik Andersen, group president and CEO, said: “In a challenging environment, everyone at Vestas did an outstanding job to ensure record-high revenue and deliveries of 16.6GW without compromising on safety or quality.
“Together with rising energy prices, the supply chain disruptions and accelerated cost inflation from raw materials, transport, and turbine components, continued to amplify costs throughout the year, which severely impacted profitability.”
Vestas achieved an order intake of 13.9GW in 2021 with an average selling price of €830,000 per MW, 3GW of preferred supplier agreements on its V236-15.0 MW offshore turbine as well as a 21% increase in revenue in Service.
Andersen added: “We remain focused on strengthening the industry’s discipline to protect profitability and improve value creation in the long term as well as executing our strategy to drive the energy transition forward with our customers.
“With supply chain disruptions expected to continue throughout the year, 2022 will be challenging for the industry, and on behalf of the Executive Management team, I want to extend a huge thank you to our colleagues, customers, and other partners for their continued support.”