Anders Runevad - CEO Marika Fredriksson - CFO

Niels Poulsen - Borsen Kristian Johansen - Danske Bank David Vos - Barclays Claus Almer - Carnegie Patrik Setterberg - Nordea Jose Arroyas - Exane Shai Hill - Macquarie Sean McLoughlin - HSBC Pinaki Das - Bank of America Alok Katre - Societe Klaus Kehl - Nykredit Market

So, good morning, everyone and welcome to this Full Year 2014 Presentation. So, let’s walk through the key highlights. So earnings improved significantly year-over-year. EBIT margin of 8.1% up 4.6 percentage points compared to ’13, also combined order backlog increased to 13.7 billion combined well balanced between turbines and services. The return on invested capital increased to 35%, more than 27 percentage points during 2014. Overall one year, actually we are well on track on the profitable growth strategy that I talked about yester year [ago] now. So, a good performance on all key financial and operational parameters, based on the improved earnings, the strong net cash position the Board of Directors have recommended a dividend payout for the first time since 2002. Going to bit more into day sales and start with orders in the market. If you look at order intake it was up 10% to 6.5 gigawatts this is year-on-year development and also quarter-on-quarter. So short comment are from me, we see good development in Americas very much driven by the U.S. offsetting low activity primarily in Canada and Mexico. In the quarter we saw a decrease of 18% again U.S. because we had a very strong quarter year-ago. Europe and Africa they are big regions up 16% year-over-year and here it’s really broad based so a lots of countries got a broad based performance that is up, slightly offset them by some single countries in offshore. In Africa overall, more or less flat. In Q4 we saw a good increase driven by Lake Turkana in Kenya which it was order in the quarter and also good development in Poland, slightly offset and by lower activity in primarily Romania. Asia Pacific we saw a decline year-over-year in the quarter this is very much due to our no activity in Australia, but the influence both orders and delivery and of course Australia has traditionally been our strong Vestas market is Asia Pacific. Very slow quarter overall, low levels in the quarter impact is from a single project. The positive thing is that we see year-over-year improvements in order in China from a small level. On the delivery side, delivery was up close to 30% at 6.2 gigawatt, a very strong increase in America again driven both year-over-year and Q-on-Q by the U.S. so strong growth. But as I also said before we see good development in also in Latin America. Also Europe and Africa up 14% again a good development in several of the European markets and in the quarter mainly down due to less Romania and offshore but overall a good increase in delivery Australia’s orders in Europe and Africa. In Asia Pacific we saw a decline in delivery of 20%. Again I talked about Australia but we also see offset in that markets coming in, like Philippines, like South Korea and that is really what has driven the uptake was in the fairly low quarter in Q4. Moving into Q4, orders been up 120 megawatts to 2.2 gigawatts. U.S., Kenya, Poland and Germany main contributor to the orders in the quarter accounting for almost 60%. The price per megawatt in the quarter was 0.91 so a small uptick. We have to remember that the price per megawatt depends on the number of different factors the scope, geography and type of turbine and of course the uniqueness of the offering. So all-in-all I would say that prices remains fairly stable in the market also in Q4. U.S., we have talked about before on quarterly calls, so to update you here. In 2014 we had an order intake of 2.2 gigawatts, that of course I am really pleased with a good show. We believe of the U.S. market out of those 1.6 were frame agreement in the MSAs and 0.6 was outside. In the very late of last year we got a PTC extension and after cost then improves the visibility of potential delivery also for '16 in the U.S market. I think as I said last time we met that I expected our sales force in the U.S to be busy and they were very busy also by the end of the year with this extension. And we have now up to approximately a potential combined MSAs of 3 gigawatt in the U.S and that’s a combination of carryovering from 2013 MSA to new lease-lined MSA by the end of last year. And as before there is also a possibility for cost to take orders outside the frame contract as we did in this quarter with close to 300 megawatt order in Kingfisher. As I said backlog increased 300 million coming from the service business. A combined backlog of 13.7 billion well balanced between turbines and services. Short uptake on the joint venture with Mitsubishi Heavy Industries as well so the Mitsubishi Vestas Offshore Wind and company, last year was the start of that company started operation in April. I would say it has been very well received by the customer, we see continued interest on the 3 megawatt platform and also we have signed our first or the joint venture I should say have signed their first commercial V164 contract with DONG. Now also busy all setting up the supply chain, Nacelles production here in Denmark and Blade Manufacturing in the UK. If you look at the external forecast for offshore and also turbine types we feel that we're well positioned for the joint venture to penetrate this offshore market. Further we have got great reception of the V164 product, strong technical performance and positive reception in the market. From an operational point of view we're on track the Milestone payment from Mitsubishi Heavy Industries into the joint venture is progressing as planned and was the basis for the joint venture agreement. Marika, please financials.

Thank you, Anders and we will start with the income statement for the full year of 2014. And as you can see our revenue has increased by 14% so the activity level in the company has been fairly highly during the course of 2014. You see gross profit improvement, so we continue our cost out on the product so you see a gross profit in percentage increase from 14.7% to 17% for the full year 2014. And you can also see that we continue to focus on our fixed capacity costs so they are down by 10% despite the higher activity level. And that gives us a great improvement on the EBIT line and consequently we're delivering an 8.1% margin for the full year -- EBIT margin compared to 3.5% of last year. We also made a net profit for the full year 2014 which again is great achievement by the company. So I think the P&L or the income statement clearly reflects that we're working on all parameters to continue to improve our operations. So if we go to Q4 you also here see a slightly higher activity level compared to last year, you see a 5% improvement. You don't see the same improvement on the gross profit and that is primarily due to the mix but I would also like to remind everyone that last year of Q4 we said we had an exceptional Q4 from a lot of aspects but mix is the primary reason here for the drop. But it also shows that we have a P&L that is under control. We have a good fixed capacity cost level in Q4 and consequently we managed to deliver 10.2% margin for Q4 which is at the same level as last year in 2013, so again a good story. Service business is one of the key parameters in our mid-term strategy. And what we have said and continue to say is that we're growing as a service business with stable margin and that is clearly what we have done also in 2014, so this picture is a reflection of that stability. You can see that we have carved out the offshore business to give you a flavor of the size of the offshore business previously and for 2014 we obviously have the offshore business included for the first quarter. The renewable rate that we have been talking about earlier is 72% in the quarter we would like to reiterate that the service renewable rate will continue to vary in the quarter depending on what type of contracts are out for renewable. Balance sheet again a good story and good focus in the company we have as everyone is aware of by what Anders told you earlier a focus on the working capital. We did as everyone also I think remember at the same time February of 2014 increased our share capital so we did new equity. If you look at the net debt you see a positive swing of 1.3 billion which I think is quite remarkable in only a year time frame. And you see an improvement of the net working capital of 361 the whole 361 is not a reflection in our cash flow as 100 million is currency and is consequently a non-cash item. Solvency has increased from 27% full year ’14 to 34% this year and you remember our capital structure target is said to be above 30%. Changing working capital again a good story not only for Q4 but also for the full year and in Q4 you see that the main contributor to the positive development is the inventory and also prepayments. So this is a process that we as a company is very proud of because it runs through the whole company improve the efficiency gains we have made and we’ll continue to focus on. So it’s process reflection of a good process in the company so good achievement. If we look at the warranty provision that is another thing that has been a focus in the company and that is quality and we have seen great improvement from the quality work. You see that the warranty consumed is going down and the provision is a reflection of how much money of the revenue in a single quarter. That consequently has led to a loss reduction factor that is very stable below 2%, so again a very good and solid performance of Vestas. The cash flow for the full year is slightly different compared to last year because last year a lot of the improvement came from net working capital releases. This year earnings have improved quite significantly compared to last year and is also reflected here. And here you can also see the change in net working capital because here you have the cash items so it’s 260 so the 101 are not reflected in the cash flow. So that gives us a very high level of 841 million in cash flow compared to 1 billion last year so again a good achievement. If we look at Q4 which is normally and also this year -- last year has been a very active quarter. Earnings are slightly up compared to last year we also see a continued change in net working capital. Positive for Vestas and also as I said in Q3 we were basically collecting money as late as New Year’s Eve. So it is a lot of activity and a lot of loyalty pool actually being available for the last minutes of the year. Net debt good story only a one year and we have improved by 1.3 billion of course we did new capital in February last year but we have also very efficient net working capital focus and we have improved earnings consequently and that is a reflection in the net debt. Total investments are slightly up compared to last year but having said that we continued the CapEx like solutions for the company so the investments you see up primarily in molds for the new blade technology and the molds are actually movable so we can move them from one region to another. So it is a very flexible solution that we have today in our industrial set up. Capital structure we have as everyone I think can understand, met the targets. We said that net debt to EBITDA no more than one time we’re clearly below that on the solvency ratio we said we will reach minimum of 30% and we are at 34% so great improvements during the quarter of 2014. Return on the invested capital which is one of the midterm target that we have as a company, we have increased from 7.7 year end ’13 to 35.3 year end ’14 to really, really good improvement and we said that in ’14 the improvements will primarily come from better earnings and that is also what we have provided of course some also comes from the net working capital improvements that you see in the company. But we are efficient on our invested capital so I think a very good improvement overall in the company. With that turning towards you.

Thank you Marika. So as I said a year-ago, I talked about and presented our strategy around profitable growth and therefore I think it’s a timing to do an update both on where we are, what we have done, but also what’s looking forward. So if I look at overall market environment I will say it basically remains unchanged. We see a good solid growth in energy demand, this looks up in 2040, so long-term good growth. There are much two different types of markets, [obviously] flattish to a slight growth with the China growing now and then over this period flattening out and of course the rest of the world sounds for the majority of new energy need. That means that we basically have two different kinds of markets you can say a replacement market and addition market. And what we also see is that renewable is expected to take about 50% of this total market growth when it comes to replacement and additions and onshore wind is the most competitive renewable alternative. So a good potential for a long-term growth. Two different types of markets with slightly different dynamics. Also worth mentioning is of course that despite the limited demand growth in for new addition. Of these [countries] steel dam expected to account for one-third of the total capacity addition. And if course if you look closer to time, of course the replacement is even bigger than one-third, this will of course play out over the years up to 2040. So market remains if you look at long-term climate and energy policy, I think we see positive development the U.S. - China climate core around lowering CO2 emission. The EU climate agreement with binding renewable target of 27%, 2030 currently at 14% and also the reduction in greenhouse gas emission. [Hope 22] in Paris is coming up, we see positive development and of course we are also well aware that we are long way to go before we have some agreements in place. Also positive signal from India on new government on renewable and energy build out. And in India there is also an agreement on fighting global climate with U.S. And we see progress in green trade negotiation. So all-in-all positive signals but a lot of work remains and lot of work remains of course make these firm policies. Looking at the competitiveness of wind and then onshore wind, we see good development again looking back loss for the years; wind energy has lowered across 70% so significant efficiency gain in the last five years 12% while coal and gas has increased the costs of energy production with about 50% in the same five year period. These are average numbers and of course will vary greatly between different countries but if you look at the global number you can see that on the global average on the lower side for all comprising onshore wind on level of course we’re not -- there is not competitive with gas. Still have some way to go to coal. The picture is very similar I am looking at different regions in Asia Pacific, in EMEA and in Americas. So competitiveness of wind is increasing and that is of course key driver for us for the future growth. That leads me into the strategy that remains and also the [indiscernible] that remains that and yes I repeat in a bit, as I said reduced level as cost of energy the key enabler for Vestas to grow our business and focus area across the whole company. Improved operations and excellence is another enabler for us to capture growth in a profitable way in both mature and emerging market. We have now an installed base of more than 66 gigawatt, so the full focus on be active on expanding our service business also remains. Same thing with division our desire and ambition to be the undisputed global wind leader. Show to them how we have done for the first year reimplementation and as I said very satisfied with a solid track record and that that we’re on track on delivering in our all strategy. On the market side, revenue growth 14%, we seeing increased activity levels in both delivering orders and we feel we are well on track on growing faster than the market on the revenue side. Services growth in revenue of 7% and good margin development, so obviously we’re going to say if news established with more data time plan and a different focus to drive into organization and we feel again that we’re well on track on our ambition of growing more than 30% in the mid-term. Reduced level has cost [indiscernible] which is of course very much the competitiveness of our product, we feel that we have a very competitive product portfolio we’re present in all wind classes, we are present in more market than anyone else we took new orders than further on markets last year, so will be key also going forward to make sure that competitiveness of our portfolio remains. On operational excellence it's about improved earning capability and as Marika presented, I would say that we’re really deliver on that during last year with the great improvement in every margins and the ROIC of 35%. Looking ahead down as I said on the market side, ambition is to grow faster than the market, present in 31 countries, we see continued strength in the U.S. and Europe, of course a very good development year-on-year in the U.S. market. But as I said broad based improvement also in Europe and we see some of the highlights Turkey, Poland, France, Finland, so maybe not the usual in Europe -- European market that you would expect, but we see good solid improvement there. And I will say that I feel it is very important foundation for further growth. Also strong position in the rest of the world Latin America mainly new markets coming online also see new markets such as Kenya, South Africa, where we now saw the delivery, South Korea and Philippines, new markets and good activity level. We have special attention to China, India, and Brazil. In our strategy we start to say that is paying off with recent orders in both China and Brazil. So going forward continue to focus and strengthen our account management across all market, make sure that we improve our competitiveness with cost out and localization in appointed key growth market and we will continue to be a pioneer and win when it comes to exploring new markets. On the services side the organization is established more data plans has been grown up, revenue growth in the year was 7%, we increase the backlog and it's now stands at €7 billion. We have launched multi-branding propositions to the market that has been well received, we’re also diversified the portfolio both more customer as to see fix [centric] solutions and also with energy and half the energy production solution such as PowerPlus. Focus will continue to be on revenue growth to leverage our scale and our operational performance, to broaden the portfolio and of course we will still track or the renewal rate. On levelised cost of energy, which I said is of course a key KPI for the whole company, we have seen improvements on our 2 and 3 megawatt platform, launch new product offering that aims to low the cost of energy, successfully commissioned V164, 8 megawatt turbine that of course Vesta develops for the joint venture, it's now the record holder in most of the end of the production within 24 hours and of course will considerably lower the cost of energy into offshore market and continue our focus on cost reduction on existing platform. Going forward key driver will continue to be more efficient, wind turbine lower the levelized cost of the energy and therefore the addressable market for us. And we will continue to the cost reduction and leverage our scale, leverage localization and standardization within components. On operationally excellence as I said very, very solid improvement was working when the fix cost side with simplification during last year and setting up shared service examples. On the cost [indiscernible] cost we will continue that and have a new program in pace and we will leverage the potential though early on shared service and outsourcing continue with strong focus on working capital and we will move site simplification also to new market in time when lease is expired. All-in-all our key differentiator remains intact and this is really how we will deliver and the reason why we will deliver on the strategy. So global rate obviously in 31 countries and unique perception not just when it comes to save the manufacturing but that actually also when comes to installation capability, service capability globally, that’s a key. Technology and service leadership a broad based portfolio 2 and 3 megawatt and also at least half in offshore. Best in class quality loss production in fact on our consistently below 2% which I believe is world class and across the citing and forecast capability we have in Vestas, very important, scale more than 66 gigawatt installed the largest service organization and all in all Vestas has the most people dedicated to wind and the largest volume to utilize the scale, Marika?

Thank you. We have heard in Q3 that we would revisit the capital structure and the targets from those and we have done so and what you can see here is that our net debt to EBITDA target remains so we have one time net of debt to EBITDA. And I mean this chart clearly reflects -- is a reflection of the cyclicality in the industry, so even if it may seem prudent to keep that target considering the position we are in right now we find net debt to EBITDA one time still meaningful for Vestas in the industry. The solvency ratio reflects basically the same picture historically it's bouncing up and down quite significantly as you can see here. We have set a target of 30% earlier that target of solvency is now increased to 35%. And we have benchmarked our own industry as best as we can but also other capital goods industry and there clearly the 35 is more or less a reflection of the cyclicality in this type of an industry, so 35 is the new target for solvency going forward. Andres?

Thank you. So talking about target and target fulfillment we have then fulfilled our targets for 2014 on the capital structure side. So the conditions for the priorities on excess cash are met. As I said we have a strong net cash position, we see good improvements in earning and the Board of Directors has recommended a dividend payout of DKK3.9 per share and that is then in the upper end of the dividend policy that is 25% to 30% of the net result of the year. So to summarize and outlook. So the profitable growth strategy is on track, a solid performance during 2014. We continue to keep our four main objectives our vision and mission. We see very good improvement in ROIC as we talked about in earnings and also on the activity level both in deliver and in orders. And we have end the year with a cash position of €1.4 billion. Looking ahead and looking at this year we expect it to be a year with a solid financial performance revenue minimum 6.5 billion, EBIT margin before special items minimum 7%, total investment approximately 300 million and a free cash flow of minimum 400 and service business is expected to continue to grow with stable margins. Midyear ambition when it comes to ROIC, free cash flow all the same as previously as Marika said we have increased our solvency ratio target to 35%. The priority for excess cash and dividend policy also remained. We also keep our midterm strategic ambitions, we want to be the market leader in revenue being wind on par with coal and gas, deliver best in class margins over the cycle and have the strongest brand in the wind power industry which of course is a reflection of our products or services and the daily interaction between all the paper investors and external stakeholders. So thank you very much for your attention and with that we can move over to Q&A and we start with this room. Q - Unidentified Analyst: There are some questions about your expectations for 2015 and occasionally it seems like the stock market is very not happy with that. I know you don’t comment on the stock market but I will ask you to comment on your very conservative estimates for 2015 and comment on if its right that you in many ways says that 2015 is not going to be much better than 2014, is basically if you hit the low end of the estimates for 2015. Thank you.

Yes, if I start with that and of course relative to 2015 and the guidance is our best estimate at this point in time. We’re very early in the year it is a minimum guidance and of course as I also said our ambition remains when it comes to strategic ambitions we have on growth but yes that’s how it is.

I don’t know if have much else to say, I would also like to highlight that even if the guidance can be perceived as prudent in others eyes, it is the best estimate at the beginning of 2015. But I would also like to say that even though the guidance is -- it is the minimum guidance but it’s also higher than what we provided beginning of ’14 so it’s clearly an ambition in the guidance.

What kind of markets do you see challenges and is that the reason why you come out with really good services you do mentioned Australia and [ALAM Agus] which are not performing very well?

No but in general as I said we see a fairly stable market I mean we all know that we all dependent on political decisions in this industry and those decisions are hard to predict and they can create either a bit of an artificial boom if you have to be ready before a certain date or they can take down the market, when you look at it in the short-term. But overall I would say that since we look -- we come from a situation of course from ’13 to ’14 where we saw a great uptick in the market from a percentage point of view because ’13 was fairly depressed market. We don’t see the same kind of growth overall of course in the markets from ’14 to ’15. But having said that we see a stable market which I think and I hope also was reflected when I look and describe our orders and into the different regions.

Niels Poulsen from Borsen. You have a conservative guidance, are you afraid to disappoint the market?

As I said we have a guidance that is our current best estimate.

But are you afraid to disappoint the market?

I think we have -- we do our guidance that always based on our best estimate at this point in time. So that’s our guidance I mean that’s what I can enumerate and can influences this of course to Vestas and how we run Vestas to try to influence the market is not really my business or my expectation.

So Vestas has learnt from the past?

I have not changed my view since I arrived in Vestas that we talk about what we can achieve from Vestas, we give our best estimate from the Vestas point of view and then the market decides what they estimate. That’s my view and I would continue to focus on the operational performance of Vestas and the forecast that I can delivery from Vestas. That’s my job and that’s my worry you can say.

Last question, you've clearly changed Vestas since you arrived 1.5 years ago; is Vestas where you want it to be right now?

I am very satisfied with the results during last year it’s good performance and tremendous efforts from all 20,000 employees. Okay, so then I think that’s all?

Hello. My name is [indiscernible]. I have a couple of questions and first one is regarding current oil price. So how do you evaluate, how do you see the impact of current oil price in terms of the new installation? And second point is offshore wind market and it’s true that the result was nice but now the Siemens is big giant in this area so how do you compete with Siemens in offshore market and could you elaborate some comment on Japan market. Japanese government is trying to expand offshore wind as well. And third point is you experienced a lot in Ericsson, so EA -- could you give me some comment on what kind of experience in Ericsson was useful for you in our investors?

Thank you. So if I start with the oil price question the short answer is there is a very small correlation when comes to electricity generation and oil, so of the total global electricity generation about 4% currently is generated with oil. So the direct correlation is small. And then of course we can have indirect correlations between our industry and prices of oil. And that’s of course a very long answer but it goes to the macro economy and I think that is the global debate for the moment if low oil price is good or bad for the macro economy I think it depends very much in which country you sit and how much of that reduction in oil price actually felt through to the population so to speak and therefore lift the income. So there is a positive argument to say that we will see an increased economic activity therefore the need for energy will increase and that’s positive. We also say that oil price of course influence other commodities and there we can see positive effect on our transportation costs, possibly we see of course the influencing also commodity prices like steel and copper and so on, those are commodities as we are use. You can also see a potential consequential negative effect when of course you look at in some market to correlation between gas prices and oil prices and therefore if you have a lower gas price and the lower coal price then you have a negative effect. So secondary of course there is lot of speculation. But short answer 4%, the other short answer is that our customer invest in 20 year return on investment case for electricity production in wind. And you can’t look at short-term prices in sort of a 20 year business, because it’s a fairly different business case to look at compared to all the customers. And I think the good news for us is that wind once you done the investment it’s a free resource in all currency. So that’s the oil price, the second question around offshore. I think and I was saying on the high-level here we have [no] joint venture together we Mitsubishi and they are really the spokes persons for the offshore. If I look at the market and I say -- I showed the external analyst I think we are in a good position at the good point in time. We see the market now coming -- being more firm when it comes to the regulatory support being putting in place UK, Germany and so on. We see definitely the size of more automotive has come down from initial very high numbers, but still a very attractive and big market. We are very focused in the initial phase on the North Sea we think that is where big turbine -- the market for big turbines resulted that these are primarily focus from the joint venture. We feel that we have a very good product that we will bring to market in ’16 with an 8 megawatt platform and we are confident that we can challenge the existing players in that market. On my previous experience of course there is a lot of similarity business-to-business, infrastructure when it comes to restructure work, when it comes to importance of the growing service business. So hopefully I learned something when I was there as well and can bring that to use in this role.

What are the major challenges in 2015 for delivering the results you have promised today?

I would say that -- I mean its normal business risks and opportunities, market development production ramp, up better than expected demand or worst, so nothing unusual. Normal business risk ups and downs.

The reason for asking is also the profitability guidance you have made that is minimum 7% while delivering 8%. Is there anything in 2015 that would indicate that the profitability will go down even though that we have all these cost effectiveness programs running?

I think if you look at the guidance, it is the guidance of best estimates. As I said earlier in February 2015 it is increase compared to ’13 guidance and of course we have at this point as well, a minimum guidance so the focus on continuous improvements is there and also the minimum guidance is very important for all our employees to see that we are trying to do better also in 2015.

Do you see any risk that Danish Central Bank would give up the Danish crown specs to the euro and if it did would have any impact for Vestas?

Well I think obviously we have been alert to that question in considering what happened in Switzerland and we have looked into it and as we have employees we have assets and then Mark yes it would affect us. But also as the head of the central bank said we shouldn’t speculating in that and I think that would be overall very severe for the Danish economy. So, we are following, we are tracking, we have good visibility on our exposure, but we’re not speculating in that.

But which impact would it have?

As I said we have a cost base in Danish krona, we have assets, we have employees. So it would have an impact.

Okay, then if we go to the phone questions.

We’ll now take questions via the teleconference. (Operator Instructions) Our first question comes from Kristian Johansen from Danske Bank. Please go ahead.

Could you please comment on the impact from the currency movement on your earnings for 2015 and especially how you're impacted by the movement in the U.S. dollar?

Yes, well overall Vestas is fairly naturally hedged of course, we have an exposure in U.S. dollar, but what we do is we have the -- our hedging policy means that we are hedging the contracts where we are expose to local currency, overall there is I would say on a comparable basis fairly little exposure. The impact you would see on our P&L is primarily translation and the translation impact on EBIT for ’14 is very, very marginal.

And do you expect it to be that for ‘15 as well?

I mean that is obviously something we monitor, but as I said we -- as we have the industrial platform we have -- we are fairly naturally hedge and we also have the possibility to source locally if need to be.

Then my second question is regarding the contribution from the joint venture. You had a negative contribution of 31 million in ‘14; should we expect another negative contribution in ‘15 or do you expect that to become positive?

Well, the joint venture contribution in terms of our P&L for ’14 you have a positive -- when the joint venture was signed you have a positive impact on the special items that is why we have the big positive impact on special items. Overall, you have slight positive result from the P&L for ’14 -- from the joint venture on the P&L for ’14 and half of that amount is in Vestas, not EBIT, but below EBIT line.

Yes, I understand. But I was referring to income from investments in the joint venture, not the special items.

But that will be -- other the revenue from the joint venture will come on the other revenue line. It's not in the Vestas revenue, but on other revenues and is fairly small for ’14 as you can see.

Okay. But again, do you expect a positive contribution?

Well that is, I mean we’re not guiding or looking into the future for the joint venture, so that remains to be seen what a result from the joint venture will be for ’15.

Next question comes from David Vos from Barclays. Please go ahead.

I have two really. First, on the balance sheet, it occurs to me that the balance sheet is still relatively over capitalized and you've indeed now put out even stricter targets for 2015 and beyond. Could you comment on how you intend to use the cash that you've accumulated and, indeed, whether your solvency targets excludes you from levering up to your one times net debt to EBITDA target? That's the first question, thank you.

In terms of the cash that we have at hand, at this point it is obviously creating more opportunities for us in terms of evaluating our position, Anders just presented that we will propose from our Board of Directors dividend which is obviously a good sign to all our loyal shareholders that we have. The solvency ratio of 35% we still think it's feasible, but we also see that we have not changed our net debt to EBITDA target, so we remain on the one-time and that is of course looking at the cyclicality in the industry, I think that makes a lot of sense to keep that target not to sort of corner ourselves too much.

No, indeed; I fully appreciate that. I was just wondering whether you could potentially lever up to one times net debt to EBITDA.

Yes, I think it's still premature to speculate on that. What I said is I think is a bit premature to speculate considering our net cash position today when and how we will gear up the company or increase the leverage of the company.

Okay. And the second question on the guidance. I understand the 2015 guidance to be a minimum guidance; I think the market takes that as well. But what about the target? What about your ambitions longer term 2016? 2017? What do you aim at internally?

I think Andres presented the mid targets. We have reiterated the double-digit growth through the cycle even in tough years and that means we would in theory be even in tough year in the lower single-digit EBIT. We are also gearing for positive free cash flow. Which we expecting, we will continue the focus. And I think that the ambitions that Andreas presented to have best in class margins are very ambitious targets for us also going forward. I don’t know if you want to elaborate a little bit more.

No, but as I can -- as I said I think from -- when I presented a strategy in midterm ambition and the strategic planning to be the undisputed leader, to grow in the market in revenue -- to grow the company revenue, trusted in the market and best in class margins over the cycle.

Yes, I fully appreciate those targets are out there and we know that, but to a certain degree, you've met all those targets now. With a ROIC of 35%, that is comfortably in the double-digit range. What else can we expect from Vestas from here? Do you achieve to go to 50%, or are we in effect saying, we will be comfortable going to 11%, which is also double digit.

We are of course very happy about the performance so that we have done first year in the strategic cycle. It is midterm, we know it's a bit in the long-term this is a market that is cyclic we are well aware of that, we are really pleased with our performance and I mean I would argue that to grow faster in the market, generate best in class our very ambitious targets also follow long-term. And we will always strive to improve of course like any company and I think that is very much reflected in our targets. We are not coming out with numbers for '16 and '17.

Our next question comes from Claus Almer from Carnegie. Please go ahead.

The first question goes to the capital structure. Should we expect a share buyback program, first of all, later in 2015, given that you are 25% to 30% payout target, and the fact that you are already in the higher end of your new solvency ratio? That would be the first one.

Yes Clause, I mean obviously share wise it is something that we can consider it's nothing that we have in the plan right now. We are for the first time since 2002 paying our or proposing to pay out a dividend for this year. So it is something that we will continue to evaluate in terms of buying back shares but there is no current plans for that right now.

What would trigger such a decision?

I think that is something we again are evaluating and will be discussing internally and agreed internally what we will do and consequently also by the Board.

Okay. And then my second question, that goes again to your 2015 guidance. Have you based this year's guidance on the same method as you did in 2014? Marika, you have several times now referred to how 2014 guidance started the year.

Yes I mean I think Andreas and I would like to see ourselves as very consistent so of course we have a methodology in how we view each beginning of the year. And again the guidance is a prudent guidance but it is the best estimate and it is the minimum guidance, so the strive to improve is certainly there in the company.

Okay. So which market could potentially drop in 2015?

We never -- as I said we don’t see a specific potential market risk in single market so to speak. But we also know from experience that we are dependent on political decisions, we've seen that happening before. But nothing that -- as I said as well we see a stable market development in 2015 it will not be -- we don't expect the same kind of year-on-year growth in the overall market as we saw between '13 and '14. And but we expect a stable market into '15.

Our next question comes from Patrik Setterberg from Nordea. Please go ahead.

Two questions. The first one is regarding your average selling price which has been around 7.9 in 2014, would you still argue that it’s only due to the contract type or is there structural element in terms of you been able to reduce the production cost that you said are able to offer to customer cheaper turbines?

As I said throughout last year we see a stable price picture overall -- a relatively stable price picture overall and that is the same picture in Q4 as I talked about in Q3 and Q2 and then at the same time then of course we’ve seen I must say fairly stable as you also point out price per megawatt and we see a small uptick now in the fourth quarter. But that is dependent on the scope, the turbine supply only compared to full turnkey and those are the factors that influence the price per megawatt and that is what we see through all the last year and on a price we have its fairly stable. Of course it’s a competitive business so of course like competitive business we have to fight to get our orders and of course there is also drive for lowering the cost of energy, the [levelized] cost at the end of the year. And there are number of ways that that is decided but of course the big thought there is actually more efficient turbines, bigger rotors, larger power curves that’s the big driver for lowering the cost of energy.

Okay, my second question is relating to your bonus program. It's been a successful year for you in 2014 and there's going to be nice bonus payment for all the employees. Will you have a similar program in place for employees in 2015?

Yes, we will have a similar set of bonus program in ’15 as we had in ’13 and I think ’12 as well and going back so the setup of the program has not changed and will not change for ’15. It’s well deserved bonus for all employees in Vestas on a really good execution of ’14. So we will keep the structure as such -- yeah we will keep the structure.

Will it be like in 2014 that the target for this bonus program will be above the minimum target you have been giving to the market in terms of your own Group guidance?

Yes that is will be the case we will have a stand and if you look at the bonus payout for last year they are actually less money than there before despite the fact that we were considerably more employees which of course means that we didn’t reach as high on the target scale during ’14 as we did in ’13.

Okay, thank you very much.

And also that we include of course bonus in our guidance and as we did last year, so no changes there.

Our next question comes from Jose Arroyas from Exane. Please go ahead.

Two questions from me, please. On working capital performance and in particular on the inventory side, could you give us some color as to what actions Vestas took in 2014 to improve inventory levels that it didn't take in 2013? That's question number one. And on the offshore JV, does the target of [ROIE] of at least 10% that you used for Vestas as a whole also apply to the JV and, if so, when could that be reached? Thank you very much.

Okay, if we start with the first question we initiated the working capital project in June of 2013 and at that point we had more than 80 different activities to improve the working capital. The main focus and the big part of the improvements were in work in progress and finished goods and because that is a big part of our net working capital, we have obviously focus also on the payables but to a lesser extent because they’re simply smaller although we have seen improvements in that case as well and also on receivables. So it is a lot of activities in terms of the whole manufacturing set up for work in progress so it’s a leaner manufacturing that we have today. We’re sourcing differently, we’re sourcing much more timely so we avoid to have supplies in inventory the finished goods is obviously the bigger challenge because there we are dependent on the customers and the customers having the grid connections we’re dependent on weather. So it’s a lot of factors beyond our control. But we are continuing to identify processes that can also improve that part. So and then of course we had a big activity level now for also for ’14 in the last quarter and that means that we manage to get a lot of inventory out. And the second question when it comes to target for JV, we I think Andres say that it -- the JV had to speak to their EBIT targets.

It’s a separate company, so they will have to speak for that.

Our next question comes from Shai Hill from Macquarie. Please go ahead.

I have two questions and, in some sense, they have been asked before but I'm afraid I need to ask them again. Firstly, is in terms of revenues. You've used the phrase best estimate, so a minimum of 6.5 billion is, at this stage, your best estimate. It's fair to assume that the U.S. revenues will be up firmly in 2015, so is there some concern in your guidance that Europe revenues will decline ’15 on ’14? That's my first question. The second question is on your EBIT guidance for minimum 7%. Are there any price or cost issues emerging recently that have made you think that the EBIT margin could be lower in 2015 than in 2014, please?

Thank you for the question. If I start with first, I mean Europe as I presented we see order intake year-over-year in Europe up 16% as I said with the broad base, we come from a number of different countries. So we see as I also said we see a stable development in Europe. So I don’t see any specific countries that we have specific worry about today overall is stable market, we are also present in 31 markets, we knew what was lost here. So that gives us a benefit if we see ups and downs in market. So from a market point of view that’s not the reason at all. And as Marika said and as I said as well if this our estimates very earlier on the year, there are no sort of one-time issues that if you ask for that, that we are worried about, we have seen how the business developed during last year which of course gives us confidence, we see a fairly stable market but we are also well aware of that we are early in the year that we have to see both, how the market develop and the execution as year goes by.

I think its questions that you are asking and just to give you a flavor, it’s not on the market conditions that could have an impact on the revenue and the EBIT. I mean we have provided a minimum guidance and that can include supply constrains it can include transportation issues, so you can have strikes and it’s a lot of things that would go into a full year result. So the best estimate that we have right now is the 6.5 -- or the minimum 6.5 and the minimum 7% EBIT, is our best estimate at this point in time.

Our next question comes from Sean McLoughlin from HSBC.

I think, just building on the last few questions; how confident are you, or how confident can we be, that you're going to see revenue growth in 2015? Is my first question. My second question then on the fixed cost base, how much how do you see that on a year-over-year basis now? And secondly or thirdly rather on services, impressive EBIT margin 18% is this a sustainable margin now going forward?

So we will maintain our guidance of minimum 6.5 billion it’s a minimum guidance, it’s early in the year, it’s our best estimate at this point in time. And we see no specific risks that we have seen before or not seen before or that we highlight. So let me ask also that question as clear as possible and I think you can comment bit on the fixed cost about --. But you have the statement from me, there is of course as we’ve seen great improvement in fixed cost development. During the year we of course assumed -- no we have actually lowered the fixed cost and increased delivery close to 30% last year, which I think is great to share. Of course we will not expect to see the same kind of continued lower cost and increase in delivery. So of course from a fix cost point of view we have lot of activities to make sure that we stay in control, but the focus now on reducing fixed cost we will have still as of going forward.

I think Sean if you look at the fix capacity cost, I think we are at a good level, we have project in place, we have the shares service center that is an enabler, and we also have the site simplification. But we will focus on is to fine tune and continue to improve the processes we have within the company, but is also reallocation of cost dependent on where the activities are. So, I mean the flexibility overall in the organization is very important, so we can move the cost where the activities are and that is one of the focus areas right now. When it comes to services and a good margin as you say, we still consider the service business to grow with stable margins and we consider the -- although at a high level 18% as a fairly stable with the margin for the service business.

Our nest question comes from Pinaki Das from Bank of America. Please go ahead.

A couple of questions. The first one is on cost cutting; you've mentioned something about the cost out program. You've already done a lot of fixed cost savings; is there room for more variable cost savings in the future? And do you think that can uplift margins going into 2015 or ‘16? That's my first question. Obviously my second question is around the guidance. I understand you don't move from the guidance but, clearly, the stock is down 8%, and the market is not taking it well. So is there anything that you can give us which gives the market more confidence that 2015 should be a decent year? And my last question is around PTC. There's been news around the PTC potentially being made permanent. What are your views and where do you stand on the eventual outcome on U.S. PTCs? Thank you.

If I start with the start last question and then will [indiscernible] backlogs, so on the PTC, as I said of course we got an extension by the very late last year which gives them another year and basically in the U.S. which will causes positive, of course we follow all the discussions carefully about the potential or longer-term PTC. We will reach -- of course would be very beneficial for us and not just us but for the wind industry overall in U.S. But what the best scenario for us is of course to have more long-term rules on PTC. All business likes predictability also obvious from your questions are today and so do we, so of course a long-term PTC mechanist would be very beneficial for us.

And then if we start with the cost cutting on the variable part, yes it has been in place for 2014, will also be in place for 2015, so that continues to be a very important element of our P&L performance and the guidance, I mean we can only -- I can only reiterate what we said it is a minimum guidance, it is an improved minimum guidance compare to 2014 and we of course have set a minimum guidance because we are aiming for continuous improvements within Vestas.

Our next question come from Alok Katre from Societe. Please go ahead.

A couple of questions. Well, first and foremost, in terms of just following up on the margin questions, but looking a little beyond 2015, over the medium term, where do you see the margin opportunity, or what level of margin opportunity do you see? You're already at 8%; if consensus is right, then you should be above that number next year as well. So is a double-digit sort of margin possible in the medium term, and what really needs to happen for you, and the industry as a whole, to get to double-digit margins? So that's the first one. The second question really is on working capital. If I look at your overall guidance, then it seems to suggest only a small outflow in 2015, which means your working capital as a percentage of sales could perhaps be, well, only slightly lower. Is that because the payment terms on some of the orders in 2014 are better than what we saw previously? And then a related question, obviously, is how confident are you of keeping these working capital levels so negative? Because some of the peers are suggesting 0% to 5% is a sort of sensible medium-term level, so just wanted your take on that as well? Thank you.

If I start with working capital assumptions, as I said the working capital has been a very important element for us in our journey since 2013, it continues to be a focus areas because it clearly defines the processes throughout the company which obviously is very important to make sure that we’re doing the right things. In the guidance that we -- and you know that not guiding on working capital, the focus remains but of course a lot of the quicker impact was taken already in ’13, we saw continuous improvement in ’14 and the working capital element is obviously also very important on the overall activity level in the market. And coming back to your prepayments, we don’t see changes in the prepayment or down payment behavior, overall on a global basis. So I would say it's still fairly consistent, but of course overall our good cash position, our overall good performance of the company enable us also to get the down payment easier than when we were truly in the tough years of the company. If I start with the mid-term guidance on the ROIC, as I said, I think -- still think that double-digit ROIC even in tough year is an ambitious target and of course a double-digit the ROIC even in tough years would be an EBIT of the lower single-digit and the guidance now provided is for ’15 is again I mean among guidance so the strive to continue to improve, but I think also what we’re saying with now think, what we’re saying with the mid-term guidance is also that we want to create a stability. So you’d see less of the really, really big swings both on the P&L and as well as the balance sheet going forward.

(Operator Instructions) The next question comes from Klaus Kehl from Nykredit Market. Please go ahead.

My first question would be about your visibility for ‘15 based on the backlog. You've talked a little bit about the market and you expect it to be flat, but I guess most of the activity level you will see in ‘15 will already be in the books. So could you try to give us a flavor of the visibility you have for ‘15?

I mean first of all I think we’re in talking about [indiscernible] because I didn’t say flat, I said is stable market in ’15. So on a global market point of view, so overall market we see a stable market in ’15, so it will not have the growth we saw year-on-year ’13, ’14, but stable market. I am also very happy with our backlog and our order intake and the position that we have executed for this year, so I am confident in our backlog, of course the backlog contents projects for ’15,, for ’16 and to some extent till ’17 the backlog average time of the service backlog with just a little bit more in half is around seven years on the service contracts or considerably loan growth lead time in that backlog. So, I am confident in the backlog, I am confident in the quality of the backlog, I am confident in our position in the market and I will not go in exactly under all the coverage of the backlog for ‘15

Would it be fair to say that your visibility based on the backlog ought to be very strong for ‘15 and better, compared to ‘14, when you started the year?

I think it's fair to say that we have a good visibility based on a strong backlog.

Okay. And then a second question would be, you have recently started to have some success in China and Brazil on your new strategy, but could you just give us a feeling for the price levels or the profitability in these markets? Would the projects be just as profitable as Vestas is on Group level or --?

I mean on strategy in those market as we talked about for -- I mean is actually -- they are seem lower in the sense emerging and solid growth but that revised actually fairly different, so we have to have more specific strategy from market. So on China, we see as I said positive development when it comes to order a year-on-year, so we’re starting to get some better traction, but also as I said from a very low level that has been also what I communicated before in the strategy, first step is to turn around the development of having a negative order year-on-year. So it’s start to grow again from the level where we are. We have done a number of different internal initiatives when it comes to what we need to implement to improve the competitiveness of the product leverage on the manufacturing capability that we have to be more flexible in our service offering and we start to see good signs of improvement in that area. And that is also the enablers in place to maybe answer with more of your question is that for us the overall strategy is about profitable growth and that means that it’s not a strategy to drive market share in those markets without leaving up to the profitability requirements that we have and that’s why we rather take it in steps to make sure that we put the enablers in place to actually drive a positive margin also from those markets. Price levels will vary but again so will cost levels and -- but still I am also really encouraged we have put a plan in place we thought we got an order now in the first Q we are confident that also there it’s about localization and we need to execute on those plans because that is again the enabler to address those markets over the mid-term in a profitable way. And then price level will defer quite a lot but so will actually cost levels in those different markets.

We have no further questions so back to you speakers.

So I would like again thank you for coming. Thank you for your interest. Thank you for your questions. And I see you next quarter. Thank you.