We have recently talked to the CEO of Vestas Henrik Andersen within the topic “The Future of Energy” where we put focus on where the world is headed. Tomorrow, we will release our fireside chat with Henrik Andersen for Saxo clients only (public release is next week) where he provides unique perspectives on the challenges of climate change and how that drives the industry of wind turbines. As a warmup to this interview, we will go through Vestas and Siemens Gamesa, the two largest publicly listed companies manufacturing wind turbines (GE has a segment called Renewable Energy which is not purely focused on wind turbines), and make a smaller comment on Xinjiang Goldwind Science & Technology (often called Goldwind) which is China’s biggest wind turbine maker.
Commodity inflation has not made margins easier
Our comparison and analysis into the wind turbine industry is limited to a few years starting in Q4 2017 as the Siemens Wind and Gamesa merger was announced in April 2017. As the chart below shows the operating margin of the wind turbine makers has been under pressure for three years before bouncing a bit higher recently. However, as Vestas has communicated in their previous two earnings releases commodity inflation especially on steel is pressuring profitability a bit. In Q4 2017, Vestas had a 8.7%-point EBITDA margin lead over Siemens Gamesa which has since shrunk to a 7.4%-point lead as of Q2 2021.