Vestas Wind Systems Aktie

Good morning, everyone, and welcome to our presentation of Q2 for 2026. Strong quarter. And let me also here immediately thank our customers, partners, the full supply chain and also colleagues for an exceptionally well-executed quarter. And with that, I would like to go to our key highlights for the quarter. So in quarter, revenue of EUR 4.7 billion. That's an increase of 26% year-on-year, driven by strong growth in Power Solutions of 37%. EBIT margin of 9.4%, strong profitability improvement driven by both onshore and offshore. EPS of EUR 1.1 per share. Earnings per share grew 46% year-on-year to one of the highest levels in the history of Vestas.

The order intake of 3.3 gigawatts, that's an increase of 67% year-on-year, driven by commercial traction in both EMEA and the Americas. Importantly here, returning cash to shareholders, we are also having a new share buyback of EUR 400 million that will begin 13th of August as of tomorrow and run until the end of the year. That's a little special note. It runs until the 16th of December intended, but Jakob will give you more details on that when we come to the capital structure for that. And then outlook for 2026, guidance raised, reflecting the performance in the second quarter and the improved visibility for the rest of the year.

With that, I'd like to take you through the markets and environments we are operating and executing in. First of all, wind energy, key to affordability, security and sustainability. No new words in that, but especially the 2 key words right now for societies worldwide is affordability and security. When we look at the global environment, inflation, raw materials and transport costs are stable, but tariffs and blockages increase costs over time or from time to time, as we say. It's a changeable environment. When we look at the ongoing geopolitical trade volatility and energy crisis that are leading to a regionalization, we've spoken about that. We're still seeing it, and that trend has not reversed to any better.

When we look at the market environment, heightened focus on energy security and affordability, I think most societies, we have that. Unfortunately, also sometimes included with some nonfactual basis, and we are probably the one that will strive and keep striving for telling what are the real benefits and what are the costs and how fast can we get the energy. When we look at grid investment, it's prioritized in key markets and getting higher and higher prioritized in key markets, including also EU. When we look at the permitting, it's improving in some markets, but overall permitting auctions and market design are still showing challenging things. I would just say here, take Denmark as an example, in November 2024, a failed offshore auction then included better and improved conditions for the developer and customers to us. Then in August 2026, we see that a full subscribed offshore auction. But unfortunately, it only leads to that Denmark actually missed the new energy supply with another 18 to 24 months. So we got to change our way of looking at it.

On the project level, really strong project execution this quarter. We have had a really good quarter, and thanks to everyone. And also, of course, we will strive whatever we can to keep having that momentum into the second half of the year. So this time, before we go to the segments, let me also anchor Q2 '26 in the bigger picture and also you in the longer-term picture of our 10% bridge. This bridge and this slide and picture is important for the whole of the investors and not least for me personally.

When we look at it, we're talking about how we get to the 10% EBIT, and it says plus 10%, so that means at 10% or above. We have now a starting point with the grace guidance for today at a midpoint of 8%. And we also just want to take you through that the 4 levers to get to 10% are still the same, but we have rearranged a little bit. But it also means that when you see this in a bigger picture, you've seen it before, now there's 200 basis points to go. And I will assure the investors that raised it at the AGM that we might now be at 8%, but that doesn't satisfy us. We still have the 10% target, and we will work towards that diligently in not least the coming quarters and the coming years.

I will start here with the offshore, still the same, by far, the largest lever to get us to 10%. It's the ramp-up, it's the cost out and it's extending the competitiveness that we add volume to the platform of our 15-megawatt. We have then rearranged it, so we actually have service as the second highest delivery operational recovery, the commercial reset with the ambition to achieve 25% EBIT margin, and we are assured through our recovery process that is possible, and we will work diligently, but it doesn't come overnight. On the quality side, we removed that. So it sort of has a lever and has a very important lever to us because it's driving operational performance. It's talking about lower warranty cost, but we are at 3%, and Jakob will comment on it a bit later, but it's also reduced the cost of poor quality through close collaboration throughout our full value chain, especially also when we source and when we use the inbound in our factories.

And last but not least, on the onshore, it is a quarter where we could sort of debate, is there really that big a lever in onshore still, and there is. There is the operational leverage. There's the cost out that we still can do more of. And then there is the retaining the commercial culture. So when we look across the world, it is also what are we talking about today, how do we get other countries to pursue the same alley as, for instance, U.S. and Germany are doing by scaling up. And of course, we'll benefit from that. Takeaway, doable, we believe in it. And of course, the closer you get, probably also, therefore, your level of confidence goes up.

With that, I would like to go to the Power Solutions and what has happened in Q2. So order intake of 3.3 gigawatts in the quarter, driven by strong onshore order intake, especially in the U.S. and Germany. There are no offshore orders in the Q2, but don't worry about that. They come quarter-on-quarter and they will be lumpy. So therefore, we will address that when things happen. On the ASP on new orders, it was EUR 1 million per megawatt for the quarter. The ASP reflects a good mix of project scope and geography and the overall pricing environment remains stable, which, of course, bodes well for also what we have of quality in our order backlog on Power Solutions.

The Power Solutions order backlog was EUR 36 billion at the end of the quarter. And when we look at it, we continue to see progress in our offshore ramp-up with reduced takt times, better efficiency in manufacturing and improved installation time. So again, here, keywords for us are the scale offers us the both required but also expected dilution, and we can see that the offshore team and across Vestas are really pulling forward in that journey, which is positive also when we look to the end of the year and also into '27. You can see the numbers described on the charts to the right.

With that, I'll go to service. So the recovery plan is progressing. It is the heading for Q2. The service order backlog increased to EUR 40.9 billion. That's an increase of EUR 5 billion compared to a year ago. That's including a EUR 1.3 billion uplift from indexation and a EUR 0.2 billion headwind from foreign exchange rate movements in the quarter. When we see that service reached 166 gigawatts under active service contracts. That's an increase of 2 gigawatts compared to last quarter, as strong contract renewals and also new additions more than offset expiries and customer deselection.

I think here, we are confirmed after Q2 that we are doing the right things in commercial reset as part of this recovery, but we can also see that we have actually been positive surprised over, first of all, the value we create together with our partners, but also, therefore, the stickiness of our renewal process in service. The service recovery plan is progressing well, and we continue to see the operational movement drive down cost levels, while the commercial reset is improving the backlog health, and we can see that quarter-on-quarter. Again, the drivers here are working and the new service operating discipline is getting adopted worldwide as we speak, and we're getting comfort to see it's being adopted at the pace we are implementing it.

With that, I will finish with the sustainability for Q2. Sustainability is still in everything we do. And if we start on this, turbines produced and shipped in the last 12 months are expected to avoid 535 million tonnes of greenhouse gas emissions over the course of their lifetime. This is, of course, one of the highest numbers we have had for a quarter and therefore, also a reflection of that we see the increase in levels of activity, total turnover up 26% and in the Power Solutions, 37%, which, of course, reflects in this. The carbon emission from our own operation increased by 7% compared to last year. That's mainly due to the vessel emission from increased activity in the offshore. So we know we have to spend some more carbon emission to do also the offset what you just saw above of the 535 million tonnes. Therefore, it's also worth noticing that the carbon emission went from 110,000 to 118,000 tonnes. So therefore, it's a different ball game when you compare the 2. But of course, here, it demonstrates how low we got Scope 1 and 2 before we also embarked in the offshore journey with our customers.

The number of recordable injuries per million working hours, TRIR increased to 2.9 compared to 2.6 last year. Safety remains a top priority for us, and we are committed to addressing the identified hotspots. And what I mean by that is we still have parts of Vestas where we see that some of these safety incidents come from a behavioral and attitude point, and we are addressing that because it's not acceptable in the environment we work. Of course, we also have to appreciate we are now working close with almost 40,000 employees and some of the sites are also new or have embarked new into Vestas. We will address that as we go and comment on it in the coming quarters. I think it's actually now time, Jakob, that you have been looking forward to take us through the financials. So with that, over to you, Jakob, on the financials.

Thank you, Henrik. And as you mentioned, a strong quarter where we see earnings per share increase up by 46%. The other highlights of the quarter is that revenue increased by 26% compared to Q2 last year. The increase was driven by Power Solutions, while service revenue was slightly lower. EBIT margin before special items was 9.4%, an increase of almost 8 percentage points year-on-year. The development was driven by improved profitability in Power Solutions from both onshore and offshore. Then also on the right, you can see that we incurred EUR 27 million of special items in the quarter that's mostly related to our operating model reset, including staff severance provisions.

Moving into the segment split and the financials for that. We start with the strong quarter in Power Solutions. In Power Solutions, Henrik, as you mentioned, revenue increased by 37% year-on-year, driven mainly by higher megawatts delivered in both onshore and offshore and to a lesser degree, by higher average selling prices on megawatts delivered. EBIT margin of 10.4% in Q2 was strong, up more than 10 percentage points year-on-year. Positive benefits in both onshore and offshore from operating leverage, outstanding project executions and lower-than-expected project costs. All of this contributed to the strong profitability in the quarter. And here, you can see the quarterly split on the right, also the split between onshore and offshore. And it is worth to note that onshore revenue is expected to follow the usual back-end loaded profile during the year, while offshore revenue is more evenly spread across the quarters. So this is, and we mentioned it last time, this is a change from what you have seen previously when you look at the total numbers.

Moving on to our Service segment, where, as you mentioned, Henrik, we are really pleased to see cost out coming out and that the commercial reset is working as planned. Service revenue decreased by 5% year-on-year, including a 1% currency headwind. The ongoing recovery plan is working and driving lower cost levels, leading to a decrease in contract revenue that we also spoke about last quarter, so the same trend this quarter. Transactional sales were slightly lower than last year. Our service generated an EBIT of EUR 149 million, equivalent to an EBIT margin of 16.6%, which is in line with our expectations.

Moving to the focus on SG&A cost and our scalability in general. SG&A costs amounted to 7% of revenue on a last 12 months basis, an improvement of 0.4 percentage points compared to a year ago and obviously driven by higher revenue. We continue to work and improve our SG&A costs through the operating model reset program, and we see right now also with an increasing top line, we see an opportunity to scale the organization while growing the business. And as you can see on the right side, we have, for the last 3 quarters, seen a marginal decrease in the cost, while, yes, we have just spoken to the top line increases. So that obviously gives the scalability. Net working capital, we saw a slight increase in the quarter to negative EUR 2.3 billion, mainly driven by an increase in inventories and contract costs. As a percentage of last 12 months revenue, net working capital in the second quarter amounted to negative 11.1%, so still a strong place to be.

Cash flow. Operating cash flow was positive by EUR 419 million in the quarter, a significant improvement compared to Q2 in prior year, and that is driven by higher profitability. Total investment amounted to EUR 278 million in quarter 2, which is stable compared to last year. Adjusted free cash flow in the quarter amounted to EUR 94 million, an improvement compared to last year, driven by the reasons mentioned above. Cash flow from financing activities in the quarter was driven mainly by the repayment of the bond, which we also spoke about last quarter as well as the dividend payments and share buybacks. We ended the quarter with a net cash position of EUR 92 million.

Then Henrik, you spoke about quality. And here, looking at our LPF, our lost production factor, we see a slight improvement in Q2, reflecting the better fleet performance and operational improvements across our serviced turbines. Warranty costs amounted to EUR 141 million in the quarter, corresponding to 3% of revenue. Warranty consumption was in Q2, EUR 218 million, and that confirming previous quarter's positive trend where we consume, meaning repair old identified quality cases more than we provision for new quality cases.

The capital structure and shareholder distribution. Henrik, you mentioned the EUR 400 million buyback program. The net debt-to-EBITDA ended the quarter at 0x stable compared to last year and within our targeted range of -1x to +1x. We maintain, as previous quarters, a solid investment-grade rating from Moody's with a stable outlook. And given our performance and visibility at this point of time of the year, combined with a healthy capital structure, a new share buyback program of EUR 400 million will be initiated in line with our previously communicated intention to return at least 40% of net profit to shareholders.

The buyback will begin tomorrow and run until the end of the calendar year. And as you can see also on the right, the EUR 400 million is covering the 2 quarters, which is, of course, different from what we have previously done. And then ending, I've said it before, on my favorite slide because this is where we look at our long-term shareholder value creation. Here, you see the most important financial metrics in a longer perspective. These metrics are central to how we measure our performance and align nicely to our shareholder value creation and, of course, also our equity story. And I encourage if you want to read more about that, to read further about that in the annual report. And with that, over to you, Henrik, for the outlook.

Thank you so much, Jakob. And of course, I absolutely understand your liking for the slides, but there are many slides that could compete on the favorite one this quarter. But also on the slide here, I also want to just hear saying it's nice to see the trend, but it's also nice to see that how you have been able, since your start, able to accelerate a couple of those graphs as well. So thank you for that.

With that, I would just like to go to the outlook. So outlook here. As you, most of you have also seen, revenue kept EUR 20 billion to EUR 22 billion. Previous outlook, same. When we look at the EBIT margin, we are raising the guidance to 7% to 9% from 6% to 8%. And that also means in this, we keep service as it was previous from February. So service is expected to generate EBIT margin before special items of 15.5% to 17.5%, and then we see total investment around the EUR 1.2 billion mark for the year. With that, I will say thank you for listening in. I'm sure there will be a few questions and answers to come. And therefore, also, let me by this, pass back to the operator, and let's start the Q&A.

[Operator Instructions] The first question comes from the line of Akash Gupta from JPMorgan.

My first one is on the U.S. market. Could you please talk about the dialogues that you are having with your U.S. customers and whether the intensity of those discussions has changed as we can see the demand for power equipment continued to grow, especially given we saw new record for gas turbine orders in second quarter. So I'm just wondering, has anything changed on your side on the U.S. pipeline and your view of the market in the course of the quarter? That's the first one.

Akash, thank you so much. And the easy answer is no. The bit more filling on this one is in the U.S. demand and fundamentals are making its way into also how it's being evaluated. And right now, speed to energy and speed to not least energy and electricity and electrons are also part of the driver. So the environment is underlying strong from fundamentals and the whole of the U.S. society in many states need more power and more energy faster than probably new sources or other competing technologies. But in reality, U.S. is also coming to a conclusion of we need more of everything.

And my follow-up question is on Power Solutions margins. You delivered a strong performance in Q2 and a lot of people that follow Vestas split margins between onshore and offshore given the large differences between the 2. Can you give an indication of what offshore margins are in the quarter and where you might get there by end of the year? And also, when we think about the guidance upgrade, which is coming from Power Solutions entirely, how much of that is onshore versus offshore?

Yes. Thanks, Akash. You know already that. I will give you the, you know the answer to it. No, we won't give you the breakdown, but we will also say here, as we've said, we're aiming for a better full year number in '27 than we have had in '26 on offshore. But on the other hand, having a second quarter where we had 10.4% in Power Solutions, we see both onshore and offshore contributing positively compared to where we started the year and planning for it. So there is a good momentum in both parts.

For obvious reasons, I don't have an interest in showing you the split between onshore and offshore. But you also know that we will most likely end this year in a red number and the scale and the ramp-up will take us to a black number in '27 for offshore. So of course, that's the positive development we also see in this quarter and also part of why we are raising the guidance overall for Vestas.

The next question comes from the line of John Kim from Deutsche Bank.

Congrats on the numbers. Two questions, if I may. If we think about the guide after a very strong evolution in H1, I want to say the upper end of your guide only implies about 200 points of margin expansion year-on-year. I'm wondering if there's certain things we need to consider, think about that kind of curtail perhaps the optimism into H2?

No. I think life is what we just see here. Q2 has been an exceptional quarter. We have had some projects in Q2 that also contributed strongly to that. So we, you know that, John, there's no linear programming between the quarters. We are still back-end loaded. That also means that we see some risk in, just by the nature of what we're executing for in the second half of the year, which, of course, is reflected in our guidance. And I can assure you that if we have an opportunity to do better, we will do that. But that's what we see currently for the second half of the year.

And the split intra-quarter, we are so dependent on some of those major completions on the projects, what that project is exactly with as a percentage in the backlog. But I will say in this quarter, really well executed. And there are some lower costs on some of those exceptional projects in good executed in second quarter, of course, that contributed to it. But it's not too shabby to raise the guidance to 7% to 9%. So I thank you for your congrats. We definitely feel it's been, there's been a lot of hard work going into it.

Great. And my second question, if I may, is about the contract assets. We saw a sequential increase from Q1 to Q2. Wondering if you could help us unpack that and what you're seeing around kind of price cost or price cost in the service space.

Yes. Let me take that. Similar to last quarter, the development is driven by our Power Solutions. So that's the first, to answer your first part of the second question. The second part on the service cost, we are, as I also mentioned, we are pleased with the development this quarter. The team is delivering as we have expected and as we have planned. We take out cost as we have planned. And we are also have the success we expect in the commercial reset, which is really one of the initiatives we see that also now is having a positive impact on the overall service business. So service is progressing as we have planned and as expected.

The next question comes from the line of Claus Almer from Nordea.

Also from my side, impressive quarter, well done by the Vestas organization. I will also do 2 questions. So the first is about the Power division. As Jakob, mentioned in his prepared remarks, the strong performance was driven both by onshore and offshore. And I think, Henrik, you mentioned this '27 could be in black numbers. This question is not to get any guidance for next year, but could we get a bit more color to the strength of the momentum? Could it be a 5% potential next year? Or where is the range of outcome? That would be the first one.

I love the camouflage of various reasons to ask for '27. If a black number, that also includes a 5%, I don't know, but it's a positive number for next year. And then we will say not more about it because in reality, we'll say more about where we expect Vestas to perform next year. And from giving a service percentage, you can then calculate the Power Solutions. I think here, we're giving ourselves time to enjoy a little bit the execution of this. It is hard work and has been hard work and has had also mixed feelings when you ramp up and scale up of this nature in offshore, Claus.

So what we are, first and foremost, really happy with is that there is a large contribution from both offshore and of course, from a different contribution in onshore because onshore is just execution of all what is so well known to us where the offshore is reducing the marginal cost from offshore and the scaling of it. So it is different. And therefore, same thing is we'll fight hard to see if we get it to a full year plus/minus 0 or whatever for '26. And then there is a black number coming in '27. How big that black number is, we won't tell you, and we won't tell you that in February either.

That is fair. So maybe asking in a different way. So the improvement you're seeing within offshore, is this an improved speed of output of the factories? Is it your better projects that are starting to be delivered? Or what is the main driver for the better profitability or this loss?

I think when we open a new site, we open new capacity, you're always a bit questionable to that. When does it work? When do we have the right practices in and around those shifts? We can see that. The negative side of that, for instance, on [ Lindø ] was we had to say goodbye to some very good colleagues on [ Lindø ]. But when you get to that point where takt time is improving and others, so that's the main part we have seen. So it is working towards the takt time. And of course, then it's getting now the full value chain also to link to it. So we see the installation time offshore. We see the transport. And of course, the benefit now is people are seeing it much more frequent than they did a year ago. And that really is, for us, the key driver where it looks very much comparable, but it's very different assets.

We are both manufacturing and transporting and installing. So we are fully aware of that. So it's the ramp-up and it's the efficiency across the team, which is why I extend a huge thank you to especially the teams that have been working diligently with that ramp. We are just around the plan and maybe in some quarters a little bit better, but we see the momentum in there, and that's what we are also adding to by raising the guidance today.

Okay. Then my second question is the onshore backlog. These price initiatives you have taken for the last year, 1.5 years, have you seen the full effect in the P&L in this first half? Or do you still see some additional effects in the rest of the year?

I don't think there's anything to say about the rest of the year. We've just said something about the rest of the year in raising our guidance. And as I said, I got to correct you. If you think we have done something with pricing in the last 18 months, I've been here long enough. We have discussed it for the last more than 4 years. And everyone probably question a little bit in our quarterly also, is it enough? Will we ever get to 10%? Is this enough priced for 10%? And the truth of it is we live in a very changeable world, but the backlog is supportive and our pricing and commercial culture is very supportive of that journey to 10%, which is probably also it means a lot more with the day-to-day trusted customer conversation that also supports this pricing. So I see it as a much longer thing than 18 months.

And if you look at that, there's nothing what we have said in the last couple of years that hinder that. But you also know that there has been either further realization, there's been disruption and there's even been some tariffs that have been coming and going. So therefore, it's never a locked in as more as we share the risk in a transparent way. So for us, strong pricing, EUR 36 billion in the backlog, very supportive for also the coming not quarters but years.

The next question comes from the line of Ajay Patel from Goldman Sachs.

I've got a couple of questions, please. Firstly, can I just, can I get a little bit more of an understanding on the improvement in margin? Like it's very rare that Vestas beats consensus Q2 results by a factor of 2. And if you look at what you delivered in margin for Q2, the 9% or so number and look at what's implied at the midpoint for the second half, that's also a 9% number. That would seem odd given like you have a sizable amount of operational leverage in the second half of the year from onshore. So I'm just trying to understand to what degree is Q2 fantastic performance on contingencies that maybe you provided for? And if you could maybe give us an idea of how good that execution is? And what kind of contingencies may -- you have made in the second half of the year in the new guidance to get us to understand at least what the sort of risks or potential upside or downside to numbers could be for the second half? And then I'll come back on the second question, if you don't mind.

That was what I call a long first question with a few dimensions in. So let me give you the credit for that raise. First of all, Ajay, it's nice to see, I won't comment on why we beat the consensus because in reality here, you and I know that we know the backlog, none of you are on our payroll. So you don't have access to see what projects we are executing in a quarter. And the mix for us in this quarter on the deliveries and other stuff have formed that basis. And then there will always be in there projects that have either in this quarter, over delivered on some parts towards an average we're looking in for the second quarter or the third quarter or the fourth quarter. So you can't sort of, again here, it is not a constant percentage in the backlog we're executing. It is actually a diverse spread project portfolio. So therefore, that came out positively. And of course, have we had to give you guidance, we probably indicated that Q2 will be a bit higher, but I will just say, fortunately, we don't.

So therefore, in this, we look into a second half, we have a good momentum, but there's also something in the projects we already look for in second half that doesn't imply that it is as backloaded as you probably have seen in previous years of Vestas. And please then don't forget that we also now have an offshore that is a much bigger proportion of the business. It has a stable factor to it, but it doesn't necessarily have the same seasonality and back-end loaded when we look into that. So that's for you is one you have to balance a little, and we give that guidance through the revised guidance today.

On the H2 risk, you very well know what we have of H2 risk in Vestas. So we have a seasonality. We are getting into a fourth quarter where weather and can we get from the inbound to the outbound doing, yes, latter part of Q3 into Q4. So we are sure we have all the assets there. Team is executing extremely well right now. So I know exactly what I'm going to tell the organization in a town hall later today because this is about keeping that attention and keeping that spirit, don't try to do anything else. So we won't try to change our good execution. But as I said here, it's not too shabby to now raise the guidance to 7% to 9%. And as I probably also referred to Claus Almer previously, we feel we are where we would like to be right now, and that's a pretty positive place.

And then on the second question side, I think on the tapes we're seeing from the press call that it was cited that management saw an opportunity to reach the 10% EBIT margin next year. And I know you don't want to give guidance for next year, but just to make sure we're all treated exactly the same way. Is there -- is it possible to achieve your medium-term guidance next year as was asked on the press call?

We don't give that sort of guidance, and we don't give a time guidance on it that I've been here too long for. So as I said here, we just took you through the slide, and we took you through the bridge. We have changed a little bit in the order of the bridge. Trust me, if we can get it out, we will get it out as quickly as we can. We just said to you, it's definitely not going to happen this year, but we are building that bridge. So it actually has a lasting bridge.

So therefore, please don't run ahead of yourself. And I think, a little bit here, it's -- I feel a bit over the last probably couple of years, some has called it an impossible why we keep talking about it and others have said, "Hey, come on, there's probably a chance you can do it." For us right now, it means a lot that we can see that we have the levers, we have the handles. And then in reality, for all of us, we have been here very long in Vestas.

Whether that comes in 1 year or the other, it doesn't matter, but we will do whatever we can to get there. But don't read into something people will quote for us because when we now start talking about 10%, people can see it's the lowest distance we have had for more than 6 years. And that probably makes everyone now imply, "Oh, we think you'd do it next year." That's not where -- we work diligently on improving quarter-on-quarter, day-on-day.

The next question comes from the line of Kristian Tornøe from SEB.

I have 2 questions as well. And the first one goes to your guidance. So I've noticed you highlight the strong execution of your organization on several occasions here. And I guess that already started in Q1 as well as the explanation for the strong margin in Power Solutions. But it has also been pointed to your guidance for the second half of the year, it doesn't really imply any substantial margin uplift.

So at least my take seems here to be that you're assuming your organizational performance should go back to a more average level in the second half of the year, which I understand why you would sort of assume that in a spreadsheet, but why shouldn't we expect that your organization could keep pace to some extent in the coming quarters?

Thanks, Kristian. You know me well enough. I probably work slightly more outside than in the spreadsheet, but I understand fully your question. We don't try to necessarily do worse. But as I also said it here, I think it's actually a bit of a nice reminder on a day like this that we are sitting here and discussing if we're going to do a mix of what we are executing on. And you will say, come on, the Power Solutions is up 37% compared to a year ago on quite a large-sized company.

So I think here, when we then have a mix of projects, do you know what, we will do whatever we can, but it's also fair saying there is always a risk attached, and we only need 1 or 2 of the medium to large-sized projects to have a negative bump on the road or whatever. And then at the same time, we also can see that there is a pricing in some of the projects that comes in Q3 and Q4 that probably not bode as high as you will normally see in -- sometimes in what we have had in Q4.

But as I said, let's see how that goes. But the guidance right now, 7% to 9% is the best estimate for the full year. And that implies we're actually doing pretty okay in second half. So I understand maybe there are people that are sitting and now trying to do even better. But you know what, if we hit the 7% to 9% in that part, we are doing a really, really good year.

Fair enough. And then my second question is regarding the blade incident at the He Dreiht offshore wind project. And just if you could sort of update us on that? Has there been any notable financial implication? And have you identified the root cause and so on?

Yes. First of all, as I said, there is an incident in He Dreiht, it happened on the 22nd of July. We are -- we are due process, shouldn't happen, but when you produce blades and you produce turbines of the size we are doing, then it will happen from time to time. I'm particularly proud again to the wider organization here and not least also the collaboration with EnBW and especially our -- or at least for my part, my contact, [indiscernible] in there.

We are going through normal process. I think the first thing to observe is no one got hurt by it, which is positive. Secondly is that we have managed to also keep and contain something as the debris that comes off. We even -- I can see on some of the pictures, we even got help from the German coast guard. So that's another important one, and we have had here both vessels and we have people on beaches collecting things. So it doesn't sort of mess up summer holiday for people that are coasting on the North Sea. So that is really well done.

Then at some point in time, we are doing that, and we are going through the normal root cause analysis on that. And then, of course, right now, as you probably also have seen, we managed on Saturday to complete the last turbine #64 on the -- on He Dreiht. And that means right now, we have a full turbine park we can work with. But of course, there is a blade -- one blade short. And we need to get the remaining part of that blade down, and then we will finish our root cause analysis. So that's where we are.

It's something you can probably hear on my voice, I would rather not have, but now we have it and we deal with it, and we deal with it in a really professional way, and I can't thank at least our partner enough for also having the same professionalism and availability to deal with an anomaly like this. So if it has done anything, it has probably strengthened the partnership. And for more details, I will reserve my partnership right with He Dreiht.

The next question comes from the line of Alex Jones from Bank of America.

My first question, just on the Power Solutions margin again, this quarter. One of the reasons you cited for the strength is lower-than-expected project costs. Could you just expand a little bit on that? Are there any specific items that are common across projects that have driven the lower-than-expected costs? Or is it just generally a good execution and a lot of project-specific factors?

Just normal project factors, project factors that hit. Sometimes you have an execution where you have no delays, you have access to full -- to full access to site and you get the assets there and you get the cranes and everything else. So it has just come together really well. And of course, we are probably benefiting in a quarter like this on some projects that were having commercial, really good traction.

And at the same time, also, we are executing, as you can see on our delivery table on markets where we have very, very experienced operators on site. So that's the main reason underlying. Then there will always be some one-offs hitting some of the projects. And of course, that also leads to what we have as a common in saying here that there are some of the projects that simply just have a lower operating cost in the quarter.

Okay. Understood. And then the second one on the buyback. Obviously, you've decided to announce sort of a larger program for the next 2 quarters today rather than the sort of 1 quarter at a time approach that you were taking previously. Can you just talk through the decision to do that? Is it implying that you now have better visibility on sort of future results, orders, cash flow than you've had in the past year when you've been taking a quarterly approach? Or any other interpretation we should take from that?

Yes. Thanks for the question, Alex. No, there's nothing else you should take from that. That is, as we also communicated, that is the -- on the back of the strong first half and on the visibility we now have into second half. And that, yes, the EUR 400 million, together with what we have done so far this year, we will go up to EUR 650 million in total with what we have announced.

The next question comes from the line of Martin Wilkie from Citi.

It's Martin from Citi. And congratulations again on such a great set of results. I did want to come back to Power Solutions. And if I understand correctly, the offshore business is still loss-making, so you expect that to go to profit by Q4. But that does mean that your onshore margin has to be sort of low to mid-teens, which we've not seen for about a decade.

And it sounds like there were some lower cost in the quarter. But you used to frame the way that you saw the margins with the pre-calc and the post-calc, what you expected when you signed the contract, what it ultimately ended up being? I mean, in aggregate, was that post-calc just way better this quarter? Or was it much more just the particular mix this quarter was better and you kind of knew that already given the backlog and the comment that you made earlier. Just to understand what really drove that magnitude of improved margin?

We've just been through this and seen, of course, a quarter where -- I don't think I've had to raise my voice one single time on a project execution this quarter. If I had to raise my voice this quarter, it was to give people an extra prize for something. So I think margin in this quarter, it is just very -- I mean, I don't think I can go back in the quarter and say there were some projects where we should have done differently or something.

So it's really been -- really well executed. And that also means that, of course, in a quarter like that, where you have some really positive projects in the backlog to execute on, you just didn't have much deviation. So that is really the one. On your split between offshore and onshore, of course, you can make some of those calculations, but there, I won't comment on it because in reality here, we know what we are aiming at. And therefore, of course, I can't say anything else. Of course, onshore is performing above the average and the average was 10.4%. So there's no shying away from that. So we are doing well. In onshore, we are also improving and getting there in offshore.

Great. And if I could just -- a follow-up question. I mean the question did come up earlier about the U.S. market, but obviously, still a lot of moving parts in the U.S. There were some court rulings on permitting recently. Obviously, the tariff backdrop has changed quite a bit since the start of the year. Are you seeing any signs of pent-up demand in the U.S. getting released? Or do you still think that the -- some of these uncertainties are sort of weighing on the market still and we have to wait for a bit more progress before we kind of unleash a new wave of order intake in the U.S.?

Yes. I don't know what you -- I don't know what people are sort of unreasoning. I don't know. We got to fulfill the demand that comes. And I think last quarter, I think the talking point was, at that point in time, there was a department in the U.S. that probably didn't work exactly accordingly to the expected legislation on issuing the permitting or the -- at least the negative interference permitting with, for instance, the Department of War. And I think that, of course, ended with a judge ruling as late as a week ago.

So I think, Martin, in the U.S., as I said earlier on this call, the underlying demand and fundamentals are really strong. So whenever people can get a project through, there is an offtaker in the other end immediately. And of course, that bodes well for both getting permitting and volume through whenever you have a full approved project in the U.S. So I see the lifting of it potentially again, accelerating something, but we will see more of that when we get further into the year and in '27.

I think the same as did when we were sitting here last quarter and discussing, I think there's still a Section 232 that is outstanding. But then on the other hand, then some tariffs have been going and some tariffs have been returned, and then might new tariffs be coming. Do you know what? It starts feeling a little bit on a day-to-day what we have seen before. So to have an incredibly good organization, not only in the U.S. but also globally to deal with it, so we are positive we can overcome some of those challenges. So far, it doesn't look too shabby.

The next question comes from the line of Casper Blom from Danske Bank.

And of course, also congrats from my side. So happy to see that your hard work is paying off here. Two questions also here. First one goes to the Service recovery plan. You've now for a couple of quarters, talked about how you can see that your efforts are paying off and that you are able to take out costs. Can you talk a bit to where you are in this recovery plan?

Are you sort of past all identification of challenges and is now more execution? Or should we more think about this recovery plan as something that will also continue after 2026 for '27, '28 and onwards as you continue to sort of optimize this business? And as a bit of a follow-up to this, I know many investors are eager to see when will this cost takeout lead to higher margins in the service business. Is there anything you can say about how you will evaluate the business when you get to the end of 2026?

Thanks, Casper. I will only repeat what we have said. Service recovery plan is on track, deliver as expected. It's both on the cost side, but also on the commercial side. The team is delivering exactly as we have planned and as we expect. I appreciate you all would like to see when and how much and so forth and what we have said and we will repeat this quarter. We have 2 more quarters of the recovery plan ahead of us. We'll speak to those in the next 2 quarterly investor calls.

And then after that, we'll have a conversation about how do we -- naturally, as part of the last quarter, we will talk about how do we see into 2027. And let's talk about guidance there. But again, we have more to do for the rest of the year. The last 6 quarters of the recovery period is giving us good confidence in the team in terms of their ability to deliver on the plan because they have done so far.

Okay. Then my second question is a little bit of a follow-up to all the previous ones on Power Solutions and your statement about having outstanding execution here in the quarter, which I suppose we can also see in your gross margin. Henrik, you pointed to the fact that you are delivering a lot in markets where you have a lot of experience. And looking at the table, it's Germany and the U.S. are 2 places that stand out.

I suppose these are also markets where we can expect to see a high degree of onshore deliveries, both for the remainder of this year and for the next year. Should we then also expect that these markets can continue this outstanding execution? And is it possible to take the best practice from these places to other markets?

Yes. I mean we -- it's a special day because you sit here and now you almost have to explain why we are doing so well. And we have probably trained very well quarter-on-quarter for 5 years in explaining why we were doing so badly. I think here, today, we are doing so well. So it's an interesting one. Listen, we learned all the hard practices 3, 4 years ago, and we have tried to bottle that and take it into the countries.

But you also will appreciate where you have several projects on an execution on a goal, then it's a lot easier to compensate where you have single country, single project. If something goes wrong, you have no compensating factor. So of course, we are right now blessed with part of that. And that's probably why some of the execution just came so well together. As I said, it's not a Q2, we can sort of bottle and -- because it just came well together and the pricing of and the commercial terms of the Q2 orders were significant beneficial project by project.

So there is a combination in this quarter, which is really well. Trust me, if we can continue doing that and we can bottle it to the rest of the world, life will do -- look different for the future, but it will also have looked very different in the past if we have had more quarters of this nature. So I don't know what more to -- I'm not sitting here and apologizing for doing good in the quarter. That's for sure, Casper.

The next question comes from the line of Sean McLoughlin from HSBC.

Well done from my side, too. I have a question on offshore. Deliveries now stable over the last 3 quarters at about 0.8 gigawatts. Is this a new run rate? Is there any reason to expect H2 offshore deliveries to fade versus H1? That's the first question.

I think the quarters here will be more equal because it's about getting out -- getting it prepared. There is more installation, there's more pre-installation work when you talk about offshore. So that will probably be more flatlined. It doesn't have the same seasonality and shouldn't have the same seasonality.

But of course, in offshore, you would also appreciate that where you are more, I can call it, sort of easier or safe in terms of working days. Offshore is always going to be Q2 and Q3, where you will use Q1 and Q4 to ramp and get some capacity out. So it's slightly different. It becomes more difficult to rely on the weather installation in Q4 for offshore because both the wind and the waves there will impact that. So counted a little bit more, I wouldn't say linear, but a little bit more better balanced on the 4 quarters and also between H1 and H2.

Yes. And then staying on offshore, I mean, it remains the largest hog, if you like, in the bridge to the 10% margin target. We've seen that takt times have been falling. So obviously, you've already reached a degree of production efficiency in the last quarter, which I imagine is also part of that margin strength.

Just where we go from here? Is it -- how -- is it really about higher volume? Or are we already at a level where this 3 to 4 gigawatt run rate is, I guess, the delivery norm and it's really -- there's still a lot more to do on the actual efficiency of production? Just wondering where -- if any detail around where we see those incremental improvements that drive you from red to black and drive the company to 10%?

Yes. I think you're right in saying we can start seeing and you can start seeing the same as we can in terms of scalability and volume. We are getting there. I think we spoke about it a lot through last year. I think there was an initial, when people start not liking offshore as much a couple of years ago. I think last year, when you ramp something up, I actually appreciate today that the ramp we have done takes a lot more effort and a lot more resources also from something simple that just getting the full value chain tools into installation and being sure you have the right tools and the tools available.

There is a lot, Sean, until you get comfortable with that. Are we fully comfortable with that? The -- has the journey ended? No, not at all. But we are at a point now where we can say that from a scale point of view, from last year, we had a couple of projects this year, we're right now fully focused on running 5 projects in various parts. So therefore, also, it just takes different scalability also from right -- from people to the tools.

And of course, the by far biggest thing here sitting with the variant or -- I call it -- today, I have to say '24 and '25, it was the investments in getting off the ground. But as you can also start seeing, this is now a business that are, from next year, starts contributing positively, and then we will start seeing something that are also meaningful drives and lifting what is the midpoint of the guidance from 8% towards the 10%. And there was a little plus in -- ahead of the 10%. So let's see where we stop with it. But you can see the lever of it. And I think now you can also start seeing the lever of it in a context.

The next question comes from the line of William Mackie from Kepler Cheuvreux.

A couple of follow-ups really. Starting with Service, you've explained you're making good progress with the cost out, and that's evident in the revenue progression being slightly down in the year. Can you share how you see the scope of revenue development in the second half of the year or rather how you see the scope of cost development? And also maybe touching on the viability of the 25% margin in Service that you've called out in previous quarters? That's my first question.

Yes. First of all, we'll take it as a positive here, cost-out journey progressing. So that means the cost out as a meaningful lever here is continuing, and that is also continuing, but it is also continuing as a day-to-day working discipline. But there are still a couple of areas around the world where more attention is needed. So that will be. Then on the guidance of second half of the year, there's also transactional sales, which makes that a little bit sort of, hey, that we don't do that and we don't have a top line.

We have an EBIT margin guidance right now and that we are following because I'm a bit nervous for in the recovery of -- in all fairness, it's not a chasing of top line or it's not a top line here. So top line will be what it is, and then we will show that quarter-on-quarter. But the business is in better health than it was 6 quarters ago. And our colleagues in there running it are responding positively to it. And of course, at some point in time, Jakob's point on LPF will also start helping when the LPF is coming down and therefore, also support a more stable running of the service business.

On the 25% ambition, it will take some quarters, and it will take us a little bit more comfort in finishing the recovery before we are able to probably say a bit more of what jumps will that come in, but there is no doubt for all of us. First, the immediate target of the service business is to complete what we are doing, get the backlog right and then the target is for having a margin that starts with a 2. And that we will get to in a time frame.

The second question goes to the onshore business development again. I think your installation volumes are declared 3% up year-to-date. I mean, if you could share all being well and obviously subject to weather and execution risk, the sort of level of increase in output you might achieve in '26? Or to think of it another way, how do you see your factory utilization trending into '26, '27?

And then an add-on to that really is to come back to a question that you sort of prompted earlier, which is about your back-end of the year, including weaker price of projects, some in Q3 and Q4? And maybe any more color on how that would occur, given that we've seen a steady progression of price development over the last 2 years and a steady development of the supply chain and costs. So it seems a little counterintuitive.

Thanks. First of all, well, I will say here on the utilization, I think we are still seeing that. You can also see in this quarter, and Jakob has had that in his part as well. We have included now the factories from also TPI in Mexico and India, and we expect to use those factories as well in our capacity planning. So therefore, we are not sitting here and trying to say that our utilization will go down, opposite.

But that also speaks to still part of the handle to the 10% bridge, which is onshore can still do things. We can still have a better utilization. And you know right now that in the U.S., we're having a good utilization, but it's also finding that balance in the U.S. because, of course, there is a U.S. manufactured advantage. And of course, we are using that. So the utilization right now goes hand-in-hand, and there's more also on the scale and the advantage and the mix in the onshore, we can take advantage of.

And then I will really encourage people not to walk away from a call here and think that second half is a kind of a disappointment. I'm saying if we are now discussing a rounding whether it's 9% or it's 9.5% or something, I have variances in a quarter on executing Power Solutions that are far bigger than 0.5%, as you are saying. So it's priced well. It's in there, but we have had some execution and we have had some part of the Q2 that was just exceptionally well.

And I think we have had it because it also looked like it surprised you in some of the consensus for Q2. So therefore, let's go through the quarters. And I think here, we know each other that well. We shouldn't talk a negative out of raising a guidance and now having 7% to 9% because we are not aiming at hitting 7%. And if we can, we will try to see if we can get to 9%, but that's the guidance we are seeing for the business. And after that, I could take the last question, operator.

The last question from today's call comes from the line of Lucas Ferhani from Jefferies.

Perhaps 2. The first one is just on inflation. Obviously, we're seeing steel prices, copper prices go up, logistics also accelerating a bit as of late. I mean, how do you think about what that means for ASPs for underlying pricing? And then the second one is just on Germany. Obviously, the new EGD has been released -- EEG, sorry, the new grid package as well. There are some changes for developers there. I guess the feedback is mixed, but it's still up in the air and it could change again. But how do you see, let's say, the regulatory changes in Germany and what that means for kind of '27, '28 if they stay like this?

Yes. Thanks for your question, Lucas. Let me start with the first and then Henrik will end on Germany. So in terms of inflation, we have learned our lesson also from history in terms of locking this in when we have a project that is firm. There, we either have agreed with the customer that they will cover part of the risk contractually.

And the rest we are securing through whether that is indexes or whether that is through our various tools in our treasury team, then we cover that treasury and procurement, then we cover that. So I would say inflation and other changes to raw materials and pricing, we are dealing with better than what we have done in the past.

And Lucas, on your German EEG policy and other stuff. This is -- this is again, I think, wisely for a country that has revised so much and changed so much in the last 24 months, you're inviting to a consultation period where people are invited to also come with feedback. We've actually seen a number of European countries doing that. I think, to the benefit, I saw it latest in France just a couple of months ago, where also they invited for feedback on, for instance, the offshore expansion.

So I think this is positive when it comes in this way that you invite the market participants. You also will appreciate that what has come with the German expansion and the German policy, and let's not forget, it's only sort of 3 years ago, Germany was doing on average what rest of Europe was doing well below an average of expanding the energy accessibility for Germany. And now Germany in today's future expansion on auctions are, of course, suddenly doing almost in auction volume the same as EU did totally in installation just 3 years ago.

So we're trending towards auction volumes of somewhere around 13, 15 even, maybe 15 gigawatt, while the EU just a few years ago totally did 16 gigawatts. So I think there is a good example developing and the cost of it has also come down because now you suddenly see the upside of having the capacity, having the infrastructure, having the cranes, having the experienced construction people. So this is really, really good. That they deserve a lot of credit for that the new government [indiscernible] deserves a lot of credit for.

And therefore, as an industry, we can then only add how we think that will work in the next 3 to 5 years, depending on how we structure it. But I think there has to be something for both and that German government is looking for. So maybe we can comment on it in -- after Q3 when we know a bit more of how the actual rules then came out. But so far, active participants from Vestas' side and active participants also together with our partnerships on customers. So we're really looking forward to that.

Thank you so much, Lucas. And to everyone else, thank you for listening in. Thank you also for your active questioning. And we look forward to see many of you over the coming days or even the coming weeks. So therefore, thank you for that, and thank you for your support, not least through the many last years, and I hope you appreciate the support and also our saying proper thank you with the share buyback after Q2. Thank you so much.

Good morning, and welcome to our Q1 2026 release. I think the key word for this first quarter, of course, for the world is hitting of energy crisis, another one after the last one in H1 2022. It's also here very much appropriate to thank you. Thank you for a good start of the year. That thanks goes especially to customers, to partners, colleagues and other stakeholders. Thank you for many -- very many valuable conversations and commitments in what has been an increasing volatile world throughout the first 4 months of the year.

So with that, let's go to the key highlights of Q1. So key highlights for Q1, revenue of EUR 4 billion. That's an increase of 14% year-on-year, driven by offshore, where we also see the manufacturing ramp-up is improving year-on-year. EBIT margin of 3.2% is better profitability in both onshore and offshore, leading to the best first quarter EBIT margin since 2018. Our Service EBIT margin of 16.3% continued cost-out in the Service leads to lower revenue with profitability in line with outlook. We'll come back to more details on that.

And then, of course, order intake of 4.5 gigawatts, strong offshore order intake in the U.K., mainly related to AR7 and a good onshore momentum leads to record high backlog of now more than EUR 36 billion. We're also returning cash to shareholders for the third quarter in a row. We will initiate -- a new share buyback of EUR 100 million will be initiated and starting as of tomorrow morning. And then last, but not least, outlook for 2026. We maintain our guidance, and I'll give you more details of that when we get to the end of my presentation.

With that, I will go to orders and markets in general. I think here, wind energy, key to affordability, security and sustainability, we probably couldn't have chosen a better value proposition and probably a better narrative to talk to. So the energy crisis only confirms both the need for energy security, not least energy affordability, and of course, as always, energy sustainability.

When we look at the global environment for us, I think so far in Q1, we have seen inflation, raw materials and transport costs being reasonably stable. But, of course, tariffs and blockages will, over time, increase cost, and some of the energy will also lead to inflationary pressures when we get quarters ahead from where we are today.

On the ongoing geopolitical side, I think we can say it is -- there is trade volatility. There's also some movements in the geopolitical scenario, if not for day-to-day, then at least week-to-week or month-to-month. And of course, the energy crisis is only leading to further regionalization. I think we have seen this. We have also moved toward this. We also, therefore, have created a large part of our resilience being prepared for this. So I will say we're in a good position also to deal with some of these variances.

When we get to the market environment, I think, of course, in the longer term, the energy crisis here again gives us an opportunity to talk to not only customers, but also to governments around, not least in Europe, where the need for energy security and affordability is probably higher than it's ever been.

When we look at the grid investment, it is prioritized and getting prioritized in key markets, but the challenge is still here. And being a Danish national citizen, I will say, we don't have the best example to share when we pause something of a grid for now 3 to 4 months in the middle of an energy crisis.

When we look at permitting, I think it's improving in certain selected markets, but overall, permitting still struggles with its red tape. Some of the auctions and market designs are still challenging, but I can also see governments are sharing with each other, and therefore, improving, so terms are getting better.

I think here is the time, and also, the place to say a proper thank you in mentioning U.K. and Germany. U.K., Germany shows examples of, what I will call, courage, political leadership characterized by Katherina Reiche and Ed Miliband. You're doing it. You're doing it, maybe it's not always as popular. But in years from now, we will all appreciate what you have done to increase capacity and get these permitting processes running so we can actually get capacity installed.

When it comes to project level in this Q1, we have had a very good start of the year. Thank you to the team, thank you to partners on it. We have had very small disruptions in it, and it's probably some of the best execution we have seen in the onshore, and now, also in the offshore, where there is, at the same time on execution, also a very high focus on simplifying Vestas from sourcing the components out to installing it at site.

Next one, time of the year where normally WoodMac and others releases their market data. We continue leading the industry. I will just say here highlights on installation in our addressable markets increased to 47 gigawatt in '25 from 37 gigawatt in '24, so a growth there. Vestas remains the market leader. When we look at the market and the development, again, an increase in the market size, but also installations often deviate of what WoodMac counts as installation compared to, for instance, the OEMs and how well we install and finish the project with our customers.

The Vestas market share in key development markets was relatively stable in 2025, while the market share development in others was mainly driven by installation growth in emerging markets, predominantly such as India. When we look ahead, we see growth in our core markets. We're really happy with that, and we will take advantage of it. And at the same time, we will use time really well to increase our competitiveness in those markets that is really core to Vestas.

With that, I will go to the Power Solutions. And the Power Solutions is a really positive story in Q1. First of all, because we're operating in a market where the need for electricity is underpinning the demand and it's demand that it needs to have a timely supply. So when we look at it, order intake in the quarter was 4.5 gigawatts in the quarter. It's driven by strong offshore order intake in the U.K., mainly related to AR7 announcements. And then, it's the onshore momentum across all regions.

The ASP on new orders was EUR 1.16 million per megawatt. It's above the prior quarters, but also the ASP reflects a good mix of project scope, geography and type. The overall pricing environment remains stable, and therefore, is also very supportive for the progress of the profitability of Vestas.

In Q1 2025, Vestas Development generated 230 megawatts of order intake from Brazil with the Esquina do Vento project, fully developed by Vestas, and therefore, also exchanged with the partner, Equinor. I will also say here for the ease of presentations in the quarters, we have decided to take the slide out on development simply because we think there's happening too little on the slide quarter-on-quarter, and therefore, you will typically see it in a bullet format on the Power Solutions in the quarters to come.

When we then look at the Power Solutions order backlog, it's increased to a record high of 37 -- sorry, EUR 36.3 billion at the end of the quarter. The progress that we have seen in the offshore ramp-up, including reduced takt time and improved efficiency, of course, required us, unfortunately, to adjust the number of colleagues and employees at the Lindø factory. It was something we have spoken to some of you about in the last couple of quarters because, of course, that is part of the evidence of that our offshore ramp is progressing as planned and probably in this quarter progressed positively compared to where we expect it to be.

I will say in combination with further progress on our operating model reset by simplifying and becoming more competitive towards our customers, this is a really positive sign coming out of Q1. You see the underlying breakdown of the order intake to the right, and you can also see the last 5 quarters development in ASP.

With that, I would like to go to Service. We've had a good start of the year. The recovery is absolutely in full execution. We spent a lot of time on it. And I will say here a couple of testaments in the numbers, which I will also, and both me and Jakob, will spend some time in taking you through. So the Service order backlog increased to EUR 39.8 billion. That includes EUR 1.1 billion uplift from indexations and also EUR 0.6 billion headwind from foreign exchange rate movements compared to a year ago. The Service reached 164 gigawatts under active service, an increase of 3 gigawatt compared to last quarter as healthy additions and renewals in the quarter outweighed expiries and deselections.

I will say, especially on the renewals, they are better than we expected a year ago and probably also better than we had exchanged of our internal discussions. So that just shows our value proposition of the Service business is really appreciated by our customers. Service remain and is a high priority, strategic priority for us in 2026, as we aim to recover profitability through operational excellence, commercial reset and cost-out initiatives. We're still not there, but I think this quarter was a real testament of that the progress we are making, the cost-out initiatives are really proving its effect, which, therefore, also lower the top line, but stabilizes and also build the profitability for the future. I'm happy with that, but I'm also happy to see that we are progressing in both parts, both the operational cost-out excellence and also the commercial reset.

You will see the breakdown of Service here to the right. So we have EUR 39.8 billion in the backlog, of which EUR 33.9 billion is onshore. We have 164 gigawatts on the Service, of which 155 is onshore. And we have, as stated here, more than 11 years of average contract duration. Again, here, tough times in Service for many colleagues, but we are having the focus, and we keep the focus because it's actually now showing the real movement in the quarter and that you should take away as a positive.

Let me, by that, go to Sustainability, Q1, sustainability in everything we do. And I think for those who follows also us on social media, you will see we also welcome really the progress we have seen where blade recycling are now moving from what I would call an early prototype to also scalable. Thank you to Stena and our partner chosen there, and we look forward in both the quarters and the years to come to find and solve another part of our recyclability of the turbine. Another thing here is 1 of the 10 energy companies that makes a difference that reach now the Times list. Thank you, Times for taking us into consideration of that, and we will prove you with some examples also in the future years to come.

Highlights else, turbines produced and shipped in the last 12 months are expected to avoid 468 million tonnes of greenhouse gas emissions over the course of their lifetime. The carbon emission from our own operations increased by 4% compared to last year, mainly due to vessel emissions from increased activity in offshore. We've spoken about that. We've also spoken about this in the sense of that this is part of the negative development in carbon emission when you now install more projects offshore, and therefore, have more of that emission coming. But I just want to highlight here, we are measuring our own Scope 1 and 2 emissions in 112,000 tonnes, and then, we are putting solutions in place that displaces 468 million tonnes over the time. Anyone with that in mind probably say that's a trade worth doing.

On the number of total recordable injuries per million working hours, TRIR, remained stable at 2.8 compared to last year. Safety remains absolutely one of our top priorities for us, and we tirelessly work to improve our safety performance across our value chain. This is an average across our more than 80 countries where we work in. And, of course, there are places where we are above that average. So right now, it is about getting everyone to work at work and home from work safely, and that is really the ethos of what we strive for.

With that, I'm pretty sure Jakob is excited to present some of the quarterly numbers. So over to you, Jakob, for the Q1 '26.

Thank you, Henrik. And let me take us through some of the details of the financials of what is the highest first quarter profitability since 2018. Revenue increased by 14% compared to Q1 last year. The increase was driven by higher revenue in Power Solutions, offset by lower revenue in Service, which Henrik already spoke to. EBIT margin before special items was 3.2%, an increase of 2.8 percentage points year-on-year. The development was primarily driven by improved profitability in Power Solutions. In the quarter, we incurred EUR 35 million of special items, mostly related to the operating model reset started in the fall of '25, which included both additional severance provisions and noncash write-down of inventory related to a few development projects.

And diving into the segments, starting with Power Solutions, where we see a solid start to the year. In Power Solutions, first quarter revenue increased by 23% year-on-year, driven mainly by higher megawatt delivered in offshore and to a lesser degree by higher average selling prices on the megawatt delivered. EBIT margin for Power Solutions reached 2.7% -- plus 2.7% in Q1, up 5 percentage points year-on-year, driven by improved profitability in both offshore as well as onshore as well as for obvious reasons when we increase the top line benefits from operating leverage.

Please note that the onshore revenue is expected to follow the usual back-end loaded profile during the year, while offshore revenue is more evenly spread across the quarters. And you see on the right, both the onshore and the offshore revenue as well as the EBIT margin.

Moving on to the Service segment, where we see the recovery plan improvements leading to cost-out. Service revenue decreased by 9% year-on-year, impacted by a 4% currency headwind and a decrease in contract revenue. A higher level of gigawatt under active service was more than offset by the continued cost-out. Transactional sales were on par with last year. Service generated an EBIT of EUR 136 million in the quarter, equivalent to an EBIT margin of 16.3%, so as expected. We continue to execute on the recovery plan to achieve our long-term ambitions.

Then moving on to a new slide and moving on to the focus of the impact of our operating model reset and our operating scale benefits. The operating model reset is ongoing, as you know, and aims to improve our operational and commercial efficiency through removing bureaucracy and rightsizing the organization together with strengthening our culture. The SG&A cost amounted to 7.4% of revenue on a last 12 months basis, an improvement of 0.1 percentage points compared to a year ago as higher revenue more than offset the increased cost level. And as you can see, we have seen significant improvement since 2024.

In terms of net working capital for the quarter, we see an increase in the quarter, which is reflecting normal seasonality. Net working capital increased in Q1 to a negative EUR 2.4 billion, driven by an increase in inventory levels and other receivables and liabilities. Net working capital reflects the typical seasonality of our business, as we build inventory for higher activity later in the year. As a percentage of the last 12 months revenue, net working capital in the first quarter amounted to negative minus 12.3%, which is a minor improvement compared to Q1 last year.

Then moving on to the cash flow statement. Our operating cash flow was minus EUR 289 million in the quarter, a decline compared to Q1 in the prior year, mainly due to the changes I just mentioned in net working capital. Total investments amounted to EUR 198 million in Q1, a decrease compared to EUR 307 million last year. The decline reflects quarterly phasings of the investments. Our adjusted free cash flow in the quarter amounted to minus EUR 533 million, a decline compared to last year, driven by the reasons mentioned in above. Nonetheless, this is on plan, and we ended the quarter with a net cash position of plus EUR 435 million.

In terms of our provisions, LPF reduced as planned. The lost production factor improved in Q1 now that the repairs at the sites mentioned in the recent quarters have been completed. Please note that the LPF is measured over the last 12 months, and therefore, it will take some quarters before this effect of the specific sites are fully out. Warranty costs amounted to EUR 119 million in the quarter, corresponding to 3% of revenue. Warranty consumption in Q1 was EUR 149 million. So that's in line with expectation and also in line with what you see in the previous quarters on the right, where you see consumption is higher than our provisions.

Then on capital structure, we are announcing, as Henrik was mentioning, a share buyback in the third quarter -- for the third quarter in a row. Net EBITDA -- net debt to EBITDA ended the quarter at minus 0.2x, stable compared to last year and within our targeted range of minus 1 to plus 1. We maintained a solid investment-grade rating from Moody's with a stable outlook.

Given our solid start to the year and a healthy capital structure, the share buyback of EUR 100 million is initiated, as Henrik mentioned, and it's in line with our intentions to return at least 40% of net profit to shareholders. You would see that we have shaded it in the Q2, Q3 and Q4, and that is in line with our communication that we will communicate this on a quarterly basis. At the shareholders' Annual General Meeting in April, the proposal to cancel the 14.3 million shares was adopted. So this is a friendly reminder to everybody on the call that you remember also to change that in your model.

And with that, ending on my new favorite slide, focusing on shareholder value through performance. Here, you see our most important financial metrics in a longer perspective. These metrics are central to how we measure our performance and align nicely to shareholder value creation and also to our equity story. And I encourage you to read further on that in the annual report.

With that, Henrik, over to you for the outlook.

Thank you so much, Jakob. And I think, you have internalized that to your favorite new slides, and I think I can find a few other in that club because this also shows our long-term trajectory is actually paying off. And I think this is a testament to many people working to generate the underlying progress in our financial metrics here, and of course, also is a testament of why we feel comfortable of doing the third share buyback third quarter in a row.

So with that, I will go to the outlook. And the outlook here for 2026, revenue, EUR 20 billion to EUR 22 billion. The EBIT margin before special items is kept at 6% to 8%. Service is expected to generate EBIT margin before special items of 15.5% to 17.5%, and total investments sits around EUR 1.2 billion overall for the year.

With that, I will also sort of again thank everyone for being here, thank everyone for the conversations we have had, and we look forward to see many of you also in the coming day. And I can see -- as somebody that followed the presentation here, I can see my IR person has sort of lost almost as much here as I have because there were 1 or 2 slides that were probably an early draft versions or something, but that what happens, Frederick. So let's go to the Q&A and pass back to the operator for opening the Q&A. And I hope people are okay with not raising questions to things that were in draft in here.

[Operator Instructions] The first question comes from the line of Akash Gupta from JPMorgan.

My first one is on offshore ramp-up. You had very strong revenues, which indicate ramp-up is progressing well. But can you comment on installation activity and where do we currently stand on commissioning of the first 2 projects? Also, if you can elaborate on how much of increase in contract assets in the quarter was driven by offshore, where you had strong revenues and I believe invoicing is generally slow in the start of the year? That's the first one.

Thank you, Akash. I will sort of say thank you for the offshore point here. Installation is clearly as we would expect when you get through Q1 and you have better weather improving throughout Q1, that's picking up and it has definitely continued in also to Q2. So we plan to have the started projects we started on last year finished here in, I would say, first half of this year, give and take, and we see ships are going out. But the more positive thing of it as well, Akash, is that what you've also seen from the factories, we are now ahead in some of those plans, which is really positive for our ramp for also the future projects.

Then, we will always find -- we will find things when you establish offshore projects of that nature, lumpy parts, both when it comes to grid connection. We have turbines connected, and we are working to the commissioning of turbines, as they go offshore and get commissioned, but it is also clear that in Germany, we are working parallel. It works really well. There are a couple of delays in when we look at other parts of Europe when it comes to the offshore grid. So that might push some of it to the right in terms of timing. But at least I can now -- we can now see -- sit here and say it feels good in the sense of the progress we have made. And, therefore, it was a testament when we also had to say goodbye to some colleagues in the factories because that was part of our over-hour in the factories for the ramp-up.

In terms -- Jakob, you take the next?

Yes. Akash, in terms of net contract asset, I can confirm that the increase we see in Q1 is driven by Power Solutions.

My second one is on the U.S. So the Section 232 investigation that is currently ongoing, it started on 13th of August. And as per 270 days deadline, we are not far from when the administration might come out with announcement. I'm wondering if you can tell anything you have heard on this regard from either administration or among the players, customers in the market? And also give us some indication of what could be pent-up demand when we get some sort of clarity on Section 232 tariffs, which might be sooner than later.

Thanks, Akash. And again, said here, I don't think anyone is better than you to try to lump a few questions into 2 questions. But as always, here is the thing. I think the Section 232 is undergoing a review. It can point a bit in different directions, and I don't think necessarily there is that much and have been that much predictability around the tariff and directional setting. I think, as we've also seen, many tariffs are being up for discussion, and then, you might have a complaint, and then, they either disappear or they get in a different direction.

I think the underlying here is more important. The underlying is that most places around in the U.S. need electrons, and they need it fast. And that normally in the U.S., and you will appreciate that, capital moves where there is both a need and a return. And right now, with the underlying energy and electricity and the price of electrons, are going up in many places. So it is a little counterintuitive. I think the conditions for establishing projects in the U.S. of the nature of renewables, solar and wind has probably never been better. But there, we have to go through a couple of bumps on the road. But so far, we are dealing with it. Our customers are keen to deal with it, but you can also see many of our customers are not that particularly interested in pointing to locations or projects or customers for that matter because there is no need to be taken in that. So progress on order intake, progress on establishment of projects. And so far, it seems that we are having an okay balance with the current interpretation.

The next question comes from the line of Kristian Tornøe from SEB.

Fairly pleased and confident with the development we are seeing. And I'm not completely sure the stock market share your confidence here. As we look at the margin on Slide 13, it seems that there's been this downward trend for the past year or so. So can you maybe help us understand why we shouldn't be concerned around this downward pressure on the Service margin?

I'm 5 quarters through now on the recovery. And I think here, we do all the right things for the business. We share with you on the -- both the renewable, and this time, when you see a drop in the top line here, as Jakob rightly took us through, some of it relates to pure and simple effects on the business and where it comes from. And the rest of it is a dedicated executed cost-out, which I'm really pleased with. And as Jakob also said on the net contract assets, it's in well control under the Service side. So I don't know, Kristian, you know me well enough, I don't necessarily speculate in a couple of hours on a share price development. We're doing all the right thing for the business, and that's what really matters on the renewable.

We are surprised positively over we are able to do the -- both the terms and also the renewable pricing on some of the service parts that's happening with good partnership with customers because it makes and creates value for them on their solution. So I don't know. And the honest is I don't know, and I don't know if that is the reason or the link to a share price development since 9:00 this morning. And in reality, Kristian, it doesn't matter to me because we are doing exactly the right thing for the business. And it is well progressed since last quarter, and it is enormously progressed since we started the journey 5 quarters ago. So I'm not sharing the same frustration. I just thanked most of the colleagues doing it. And some of it is tough job. I fully appreciate that when you take cost out of that nature. But there are plenty of spaces where we can take further cost out, and that's what we have also spent the start of Q2 doing. So I don't know, Kristian, is the honest answer. At least on the short-term share price, I've given up that I don't want to comment on.

That's fair enough. And then my second question on Power Solutions. Obviously, quite a remarkable improvement in the margin year-on-year. Are there any drivers where we should be a bit careful not to just assume that you can continue to deliver sort of the same underlying performance when we look into the next couple of quarters?

Thanks, Kristian. I love the question here. I could hear that it was sort of just around the neck with 500 basis points over the following 3 quarters as well. I will sort of say here, we've seen -- and don't forget, when you compare 4 quarters back, you compare about something where ramp-up cost in offshore was very high to something where we, in reality, have improved ramp-up cost of offshore continuously now for those 4 quarters. But of course, it is significant improvement. And that's also why you can hear on both the voice and the tone and a bit of the confidence on it. We are in a good place now on the offshore ramp. And that, of course, is reflected also in a bit of what we are looking into. And that you can read back into sort of taking a share buyback program because that's how confident we are in where we are with the ramp.

And of course, 500 basis points is not to be neglected in Power Solutions. It is a really, really good underlying, and a material part of that comes from the offshore ramp-up coming out, but significantly also in there is still an improvement in onshore, both onshore execution. But also, onshore deliveries because we now see when you're establishing that many turbines, for instance, in a key market like Germany, you get synergies in terms of people, you get synergies in terms of installation time that, of course, also underlying supports our synergies, and therefore, profitability on establishing that capacity.

We now have a question from the line of Casper Blom from Danske Bank.

Congrats on the strong improvement here in Q1. I'm sorry, but I'm going to dwell a little bit more into the Service division. I think that is getting a lot of attention from the stock market these days. And I was hoping maybe you could comment a little bit as to what degree that the Service margin is currently being burdened by fixed cost because as the -- as you're taking out costs and thereby driving down revenue, I assume that there is a worsened absorption of the fixed cost base within Service. Can you give any kind of commentary as to what the impact is here?

And secondly, in Service, if you could comment on to what degree the Service margin is currently burdened by any kind of penalties from customers on the turbines? And what improvement we could see from that side in the future?

Casper, I think there's 2 -- first of all, it's 2 good questions, and it's a yes to both of them because, of course, you can always say when you have a successful cost-out, if you only do that in direct cost, then, of course, it will hurt the business over time because the way the accounting of the Service business is that when you see the top line going down, that's actually a very strong signal of the cost is coming off quickly, and that is happening. But we have managed also here to take part of the FCC, and therefore, the white collars out as well. So it's not only in -- at site and frontline, it's also throughout simplifying the Service business, which is why when you come in now with something that is still in the mid-16s, it's actually pretty positive and pretty satisfying in a quarter like this.

Right now, we are not so much fixed on or focused on driving a top line growth on the Service business. We got to have every site in control of their cost allocation directly. So that's a positive with it. And as I said here, outlook for the year is exactly in that range. So I think here, we're happy with the first quarter. And if we can continue some of that, then it's a positive also for the full year, but not least also the years to come.

On the LD side, as Jakob went through, when we are hovering around 3% in LPF, that is still -- I wouldn't say it's a percent too high, but let's just say at least it has to start with a 2%, and it's not 2.9%. It has to come towards 2.5%, 2% before we are pleased with and before we see some of those performance LDs actually coming out of the P&L. And that's not insignificant to the Service business as well. So, therefore, that's another dimension where we see a family play right now, where we got to get the warranties and we got to get the repairs done. And I think here, you can see that commitment in another number we are sharing with you.

We are spending more than we are providing quarter-on-quarter, meaning that we don't see new components failing of material degree, but we are spending quite a lot on repairing some of the older ones. And that's the drive we have right now. And we've spoken to that. And of course, that has one purpose only, which is, of course, getting, first of all, the LPF towards 2.5, and therefore, also getting LDs lower in the Service business. And that will also have a material contribution to get Service back to 25%.

The next question comes from the line of Alex Jones from Bank of America.

If I can start back on the U.S., there have been press reports recently that the Department of Defense is holding up permits on around 30 gigawatts of onshore projects. Could you comment on whether that's impacting any projects where you've already had orders and it could face delays? And perhaps more importantly, is it holding back any customers from placing orders on new projects despite clearly, as you mentioned, the underlying need for electrons only increasing?

And then secondly, just on raw material inflation given the Middle East situation, could you comment a little bit on what you're seeing so far and the supply chain situation and whether you expect any impact on profitability later in the year into '27 if the situation remains as it is today?

Thanks, Alex. I would say on the U.S., I think here, it's a little bit of an interesting one because, of course, yes, that is a thing that has come in and is being used as part of the defense or blocking that in a sense or at least not progressing the sort of the applications that are at a certain point in time, I'm pretty sure the industry will be after that attitude. And, therefore, you will see that probably people will be told nicely that, that has to start working again.

There's nothing in the backlog that is hurt by it because it's not like -- I've never seen customers in the U.S. doing closure or for that matter firm order intake or building projects or starting on them without having their full permits. That has always been the environment in the U.S. with the legal framework on projects of any energy nature that if you don't have the permits or you don't have it. So, therefore, a lot of those that are in there, and you're talking about potentially 30 gig being hold up by not having permits, but then, I could give you a similar impressive number that is already in there that I can actually pursue already now project start. So it's not like it's holding up wind if somebody sat with that thing.

And you can see that in order intake in Q1. You will also see it in the coming quarters that there will be order intake because rightly so, it is so attractive -- it's not only financially attractive, but it is physically attractive to get the electrons out to either the factories or the data centers. And that is key critical for any U.S. states, for any U.S. company. So I'm -- yes, I see that there is a hold up, but I'm also fully aware of that sometimes some of these holdups are being used in either a negotiation on what is permitting legislation or whatever in a wider scheme of the U.S. I will allow somebody else to comment on that, but there's clearly something in this that is going on in a wider space.

When it comes to the raw materials on the Middle East, we are not immune. But on the other hand, we have built an enormous resilience. And I think sometimes when you sit and see effect on businesses, of course, you see effect on businesses because, yes, oil has gone up to $120 and other stuff. But in the short term in our supply chain, we are very little hit by that. And when we look towards 2027, it is not like we saw in '20 and '21, where, first of all, physically, exchange were very difficult and very complicated because societies was closed down. But on the other hand, our binding period with customers is down to something which is a month, 1.5 months or 2, and that means our indexations and other stuff covers some of this.

I haven't seen it yet, and we have many partners that have helped us mitigate throughout the first 4 months of the year. So I'm not so worried so far. But, of course, if we get longer into the year, and it still has this open and close literally daily throughout the week, of course, that's upsetting to the logistics. But let's not forget, Alex, that it's only a few quarters ago where we also saw a similar thing on Suez, where we found ways of rerouting components and materials. So the world has become better in rerouting. But I fully understand the frustration or the worry if you are using jet fuel every day or something like that because, of course, that has to come through Hormuz at some point in time. And that I fully see not so much a risk for us, but that's probably more a macro benefit, but thanks. So we're in good shape, and that's just what we come out of Q1 and confirming.

We now have a question from the line of John Kim from Deutsche Bank.

I'm wondering if you could help us think through perhaps the pipeline for Offshore for the rest of the year. What other projects, regions should we be focused on versus a very strong Q1 intake? I also wanted to follow up with any comment or color you can give us just on profitability in the near-term pipeline and the backlog. How should we think about price cost given your earlier comments on logistics and direct energy costs for the year, specific offshore, please?

Yes. You hear on the tone of voice, I'm pretty sure a pretty good momentum. We're coming out of something where we are 500 basis points better in Power Solutions. So John, I'm on the last part there, pretty well suited, and that sits in line with also what we comment on. We have a really healthy backlog. We are building to that healthy backlog, not by compensating things in there that is not healthy. So we are just in full execution mode on something where we can see profitability is really underpinning and underlying the foundation of building towards not only the guidance we have, but also to the longer-term aspiration we have of 10% EBIT.

When we look at pipeline rest of the year, I always say, guys, we got to put a line in the sand every quarter end. And then, if it drops into that quarter, we sit here and we say it's a really good quarter. Significant on offshore this quarter. We will see what else we get there in offshore, but they will always be lumpy, where the onshore is more running, but still some of the part, and part of the world is lumpy in onshore as well. So if you're in U.S., if you're in Australia, if you saw it also here in LatAm, then it suddenly becomes lumpy, and if it drops into that quarter, we still see good order intake remainder part of the year. We see an opportunity to accelerate certain places, and we will try to do that. And yes, so now I've given you a couple of places.

If there's one place I would have expected more by overriding and taking the interest of society and energy supply into consideration, it would be Europe. But it seems like the only 2 places in Europe where they really get the act together is Germany and U.K. The rest of it is still sitting and discussing throughout bureaucracy and probably hiding in their own bureaucracy instead of just getting capacity permitted. So I'm positive on pipeline, and I do somehow in here hold a belief that Europe will pick up throughout this year.

The next question comes from the line of Sean McLoughlin from HSBC.

First question is about the lost production factor. You've talked about the importance of this at the fall. Given this is a 12-month trading indicator, maybe can you share the direction of the latest readings just to gauge a level of confidence of how quickly that LPF might move down and understand that what still is the most critical element that needs to be addressed to get that LPF down?

It is correct. It's a 12-month rolling, and we will continue to show it like that. We do see the warranty, so a picture of that or a financial picture of that is what we provision on a monthly -- sorry, on a quarterly basis. And there, you see that we have -- we peaked that some years back, and Q1 here, albeit, of course, being only 1 quarter is also down compared to last year. So it's a good indication. And there, we -- what we see, let's say, in our maybe shorter rolling, 12 months rolling is good indications that we over the year should see further improvements as we have seen in the last 12 months. I think that's the closest where I can get to that.

Very clear. Can I touch also on U.K. and on offshore? Obviously, you have the -- let's say, the conditional factory announcement that you said clearly is predicated on more order intake. Can I understand maybe what your expectations are on maybe cadence of order intake? And what you'd actually need in order to trigger that investment?

No. As I said, what is out there is we have a partnership. We will join builds with U.K., and for that matter, Scottish government. So, therefore, it's between us to make that decision. There is an outcome from AR7. There is -- we walk into the next planning of AR8. I think U.K. is doing all the right things. So again, one of the credit, I will say, countries get credit, but behind countries, it's key politicians. And in this case, it's Ed Miliband that drives that.

So when you feel we have the right demand in that as partners, we also will build the factory in Leith that will then be an SL factory. So we're confident that will happen. I don't want to set an opening year on it. It typically takes us 18 months to scale and ramp some of that. So, therefore, Sean, we're getting closer, and I will be -- in all honesty, personally, I'll be disappointed if it hasn't happened within this decade. We have a 3.5 years' time line. So it has to happen now. And then, we will see when is the time where we have enough demand that, that really triggers that, but we are not long from it.

The next question comes from the line of William Mackie from Kepler Cheuvreux.

Two, please. Firstly, on Power Solutions profitability, when we look at the operational leverage on a top line basis, it's close to 25% in terms of incremental revenue versus the change in profit. But there's a shift in the mix between onshore and offshore. So can you throw any more color around how the delta in profitability was driven? I'm guessing most of it is -- or nearly all of it is offshore, but perhaps you could throw some color on that, the direction of change? And then specifically, to what extent offshore still has further upside relative to your longer-term ambitions in terms of profitability of the offshore segment?

Yes. William, I will just sort of say positively here. It just shows probably what we have been speaking about for now 6 to 8 quarters of we have invested high, high numbers of getting it mobilized. We have invested high, high numbers and also getting the ramp right. Looking back, absolutely the right thing to do. We're now seeing the benefit of it, but we still have also substantial still to take out. But it also shows that when you now have a business that is also running potentially close to EUR 1 billion a quarter, then suddenly you have one, you have a leverage in the business. But at the same time, when you then get your takt time and your efficiencies out on the manufacturing, then suddenly, there is a rather large leverage fast approaching what we also said, getting back to a black number and also a margin that can actually be positive to be seen.

It hasn't taken away. There is still quite a lot more to be done. And hint here is still that even after first quarter, offshore still sits with a red number when we get towards the year-end. The full year number will be red, but we will do whatever we can to fast approach a black number. So when we look into '27, with part of what we can do now in ramp and what we can see ahead of us, we strongly believe that '27 will be with that black number on offshore. And of course, that gives us the leverage what we have been talking to.

I think we lack to be able to demonstrate it, but you are right here. If you assume there was only offshore, that will be a little -- that will be one dimensional from your side. So I will say onshore is proving, too, with the mix. The countries we are delivering in, it is actually proving, also contributing to that 500 basis points. But materially of the 500 basis points comes from your offshore that you're right in.

The second is to delve back into service after your 5 consecutive quarters of developing your turnaround plan. Can you throw perhaps some more light on the evolution of the KPIs in terms of the backlog of outstanding work to perform or the scale of the fleet that still requires rectification work? And perhaps specifically on the numbers, a sense of what the drop in costs was that you called out quarter-on-quarter within Service?

William, that was almost in a cash category of getting a number of questions into one. But let me just put it like this. When you are able across things like this on a comparison to take something like 10% cost out in a quarter, that means also now we are getting to the meat of what the recovery is about. It's getting to the optimization, not only by site, but also what is the variable and potentially mobile work parts of technicians. So we are getting much better in that. Part of that is better to organize getting into the sites, get better in a lot of way and also sourcing the parts and others.

And then, I will say we got some stickiness. We now know exactly what parts of the world are we still what I will call at high alert. We operate with something called hypercare sites now where we have a little less than 100 sites globally, but they sit in a less than -- I will say, less than a handful of real countries where we then operate hypercare because hypercare comes from the name, which is here is an imbalanced cost allocation or there is an imbalance of liquidated damages of availability and other stuff. And that, William, has now also narrowed our way of running some of this. But what -- so in reality, some of it is really, as you can almost hear, homing in on certain sites in the portfolio. But I will say here, the other thing that really thrills me is that we now have enterprise processes for costs and how you equip yourself across the operations.

And then, on the commercial reset, many similar likes of what we did in Power Solutions back in, yes, '21, '22. And therefore, that I hold a lot of regards, but it is -- yes, I got to be surprised. Maybe we should have addressed the commercial reset earlier, but now we are doing it, and it's catching momentum because of competencies and experience from the Power Solutions of how to get it done.

We now have a question from the line of Ajay Patel from Goldman Sachs.

I have 2. Just on the working capital movement this quarter, is any of that to maybe derisk and buy ahead of hand for any critical components that may become constrained as a function of the conflict? Is there a derisking element in this cash flow number? And does that -- how far would that be out, just to give us a sense if possible?

And then secondly, on ramp-up costs offshore, how much of a drag was it on offshore margins over the first half? I'm just thinking relative to the second half, how much of an uptick that might present because there's clearly going to be a lot of moving parts this year?

Thank you. Let me take that. The first one on working capital. As Henrik is talking to our supply chain team has learned a lot from last time and are working with the various tools and mechanisms that you can do to deal with that, overall, explaining the net working capital, that is nothing to do about bringing things forward on inventory. That's -- the net working capital you see is the normal seasonality of the year. So yes, we have done that in a small here and there where possible, but you will not see it in that number. It's driven by the seasonality that we build and install a lot end of the year or the next part of the year.

Your second question around ramp-up. Remember, the first, I think we were celebrating it when we had the first turbine standing midyear and last year. So, of course, that tells you that throughout last year, we had a lot of ramp-up in the first half and basically nothing installed or very limited. We had, of course, manufacturing going on, but that was ramping up throughout the year. So there is definitely a year-on-year development that you will see there, and you see that. If you look at quarter 4 and quarter 1, the last 2 quarters, you see the level of what we can do in our manufacturing sites, and that's a good reflection of what you should expect. So you're correct in your analysis.

We now have a question from the line of Deepa Venkateswaran from Bernstein.

I had a follow-up question on the U.S. and then one on offshore wind. So starting with offshore wind, obviously, the U.K. is a great market. AR8 should also put you in a strong position. But I was just wondering, are you able to comment on any other markets other than the U.K., where in the next couple of years, you may see more orders, Denmark, Netherlands, Belgium, Taiwan, South Korea, any of these markets? That was my first question.

Second one, just a clarification on the U.S., a follow-up to the previous question. So you're saying that the main hang up for you is not the 30 gigawatts stuck in DoD permitting. And I think previously, you have mentioned Section 232. So is it fair to say that once you have clarity on Section 232, the tap should flow a bit more openly on U.S. orders? Or is there something else? That was it.

I don't know what you mean by if we chart in the reverse order here. I think sort of U.S. orders are coming in. They're not coming in as usually informative as they normally would with location and who and others because people have become sensible of announcing that deeper. But -- so I will say here mainly the main uncertainties in the U.S. for us. I will say the ones where you will see we are progressing is the ones where it's either conditional upon final offtake or something like that.

The offtake market, as you can see in Q1, it's gone up again despite what maybe a few people are claiming on energy prices, they're actually increasing across both molecules and electrons in the U.S. So for us, the thing you're focusing on is the argument of what potentially will in '29, '30 or '31 will slow down. And I think there, we have plenty of time to deal with that because that I don't think will -- in the current environment on the price of energy will survive that sort of, we won't do that or we won't give you the permits.

There are plenty of gigawatts already now ready to be executed, fully permitted in inside states, inside the federal permits as well. So that one, I'm not so nervous of. So this is more about getting the finance, getting yourself organized just like you would normally assume. So we don't see that stuff in the U.S., and as I said, I'm that much in the U.S. right now, and that's not what I hear from customers either. But you don't want to end in a one-to-one fight with one person that potentially doesn't like wind in the U.S.

On the offshore, I appreciate your comment, and I will keep it from a market point rather than because you probably also appreciate we are confident we see the offshore upside, that we can also probably see that in a number of the main markets, we are 1 and 2. And therefore, when we talk about markets here, I think what I really welcome, it seems like European energy ministers have stopped competing with each other to have a free auction because everyone have now experienced a failed auction.

So most recently in the Eurowind conference in Madrid, I think everyone are now fully onboarded in that offshore works with some kind of a CfD across all of Europe. Holland has done it. Denmark is doing it, but that means they are reissuing their auction design in Europe. So offshore Europe, very positive on, whether it's Ireland or it's Holland or it's Belgium or -- one day, France will also adjust to it, but we'll see, maybe they will be the last in the row.

And then when we look outside Europe, yes, you're in Asia, you are in -- back in Korea. Japan has something to prove for themselves if they wanted to recover from the failed round 1. And of course, that we will try to help those countries if they want our input because we know the markets there really well. So if I look at it, we are fulfilling the offshore project we have in the U.S., but then I will say U.S. goes silent, which is not surprisingly, but Europe will be plenty of things to do in the coming decade.

The next question comes from the line of Claus Almer from Nordea.

Yes. Also a few questions from my side. So the first question goes to the Service division, and congratulations with the good efforts you have made so far. Given those initiatives implemented, shouldn't we expect a better profitability rest of the year? That would be the first one.

We keep the guidance, Claus, and this is a much matter of done some turnarounds in Service business. We have a strong hold of the business right now. We are not letting any of that go. And, therefore, cost-out is still name of the game and getting in control. And when I now share with you that we have hypercare of a certain number of sites until we are in full control over that, Claus, I don't think you should start modeling anything else of that nature, not quarterly. So that's why we are repeating the year-end and full-year guidance for the Service business.

But, of course, it progresses well, and we are happy with that. That is also why we are internally giving us some momentum, but also some further commitments of getting this done within the coming 3 quarters. And there, I'm not so focused right now on 1 quarter's EBIT or top line. I want the business to -- we want the business to run as a proper business, where they are in control of their KPIs and the operational measurement. So that's the focus area right now. Yes, you know me by now. That's what really is on the agenda.

Sure. And I was not trying to get any guidance upgrade during this conference call. It was more like all the things you're doing, everything equal underlying, things should be improving in the coming quarters. So that was more what I'm trying to hint at.

I've heard that. And then, as I said here, the commercial reset, as you will appreciate, of course, that is going to increase the profitability at a certain point in time. Sure it is. And we have a higher renewal rate than we ever expected 4 or 5 quarters ago because the internal feedback was we would hardly have any renewables when we start having a conversation around renewables on different terms. And let us take the multi-brand, something we can honestly say we should not probably not have engaged in, but now we are having it and most of the multi-brands are transferring into something else called cost plus or even just a spare part arrangement together with our partners.

Good. So my second question, and I just want to repeat, and I'm not hinting for a guidance upgrade at this call. But looking at the group level, you showed in a slide that the 12-month rolling EBIT margin is 6.1%. And with the improvement in offshore, onshore is doing pretty well. And the Service, doesn't it look -- what should drive full year margin in the low end of range?

I think if we were only sitting here in a little bubble and talking investors alone, then I'm pretty sure we could quickly fix something that would look slightly better. But we also have a world around us. And I think the world around us are probably giving us something that still could hit various parts of that guiding range, which is why we keep the guidance, Claus. So 6% to 8% feels comfortable in the current surroundings. But, of course, you can sort of say if we were sitting in Q1, take away the following, we're not buying back shares if we were not feeling pretty confident of how we're executing right now. And as some of you also asked here is the offshore and the feeling around offshore is therefore a much bigger relief.

And that I think we can send the signal back to you and saying that's partly why we're also now buying shares back for the third quarter. If you do that calculation, I will go from the bottom line instead. If we have to distribute 40% of net profit to shareholders over this year, then we still have some shares to buy back outside also the EUR 100 million we announced today. And that's probably a focus area for us. I know you will then see if it's 7% or is it midpoint, is it 7% or is it 7.2% or 6.8%, I can get to all of those numbers right now. But let's have that conversation a little later in the year, but I would much rather sit here after Q1 and feel we have had a good start than feeling that I needed to catch up on something.

We now have a question from the line of Henry Tarr from Berenberg.

I have 2, if I may. The first, just on the Power Solutions business, were the offshore margins -- do the offshore business effectively explain all of the improvement year-on-year, so onshore margins relatively similar year-on-year? Or was there some potential improvement in onshore as well?

And then the second question, just on the buyback. I guess -- so EUR 100 million buyback even despite the sort of weaker free cash flow, I guess we should expect that to continue as long as you sit with a net cash position. Is that what I'm sort of taking away from the slides?

Let me take those 2. First, the Power Solutions question. I do believe it's a slight repeat of what we have said before also on this call. In general, this is -- the main driver is offshore. That explains the main impact of it.

In terms of share buyback, I think also we indirectly are hinting this, right? Yes. And as I said, and I showed the slide, right, we have graded out the quarter 2 to quarter 4, that we do it already in Q1 is a sign of strength and where we are confident, as Henrik is saying, with how the business has started and the business can carry this despite of -- as you say, despite of the cash flow in the first quarter, the business can carry this, and this is a good sign of also where we see the strength of the good start and also how we look at the rest of the year.

So with that, I think we take the last 2 questions.

We have the question from Lucas Ferhani from Jefferies.

My question was just on the market share you show at the start of the data from WoodMac. Obviously, we're seeing most of the Western players lose a bit of share and then others kind of go from 11% to 25%. So can you talk a little bit around what is happening there? You do talk about India and emerging markets, but I'm thinking about a country like Brazil, for example, where you're seeing maybe other players come in. But when you look at your overall footprint, what countries maybe outside Europe and the U.S. that are relatively still strongholds for the Western OEM? Do you see maybe that pressure coming from these smaller players?

No. As I said here, that's always the thing when you have averages of that nature and you have individual countries of that nature. We generally work well with customers where we are in our main markets, where there are markets coming in like India, like, yes, part of Egypt or Middle East and others. We generally sort of say if somebody wants to pass that with pricing that's not even covering direct cost, Lucas, then that's not the game we are in. And if you want to do that, then we are fine. But governments generally understand the criticality of the infrastructure, the grids and others, which, of course, we have been guiding angels of for decades. So we are fine with that.

And then as I said, we had orders in Brazil. We had development parts in Brazil related also to Brazil developing their data center legislation. So game on. I mean, I'm fine with that. And therefore, here, you should more -- as I said, you can drill on that slide and you could probably find 1 or 2 negative arguments with some of you, which share price outlook probably needs to find and others doesn't need to find. But you know what, if I look at our backlog right now, it's -- yes, it's EUR 36 billion, and we are happy with that. And it's for me, and I joined in August '19 as a Chief Executive, it's the best backlog I've had. So, therefore, I'm literally a little bit relaxed on that market share because there's still some markets in there, which doesn't make sense to sit and have a bad day over.

So that's last question then, operator, thank you, or last questions if...

So the last question comes from Martin Wilkie from Citibank.

The question was just coming back to the U.S. market. Obviously, the Big Beautiful Bill has its 1-year anniversary in a couple of months from now. And I think we've talked in the past that the construction start deadline is not necessarily a sort of firm cliff, if you like, because customers can achieve it in different ways in ordering the turbine. But any sort of updated commentary as to how we should think about how customers are thinking about achieving construction start, just so we can understand how that may or may not act as a catalyst.

And then related to that, there has been noise and actually a bill proposed by some Republicans, just in the last few days, to try and reverse some of this -- the expiration of these tax credits effectively removing this cliff in '29, 2030. Now, I know there's obviously lots of policies to happen later this year. But is that entering customer conversations that it's possible that these tax credits may not actually expire in '29 and 2030?

I think here, there will be -- I mean, if you take the constant stream of also things that are potentially not right, I think I always say, Martin, the best way of addressing a market like the U.S. that has so strong fundamentals. This is about demand and supply of electrons and the price and the time of wherein you can deliver it.

Then, you have in the U.S. right now, a political arena and probably also an environment that includes emotions, and as I'm also typically using a bit, by repeating something that is not right doesn't make it right. And, therefore, we got to just flow through some of that. I think on the anniversary and other things, we know that if you're in construction, if you still have safe harbor, then, of course, you're also able to construct some of the things. And I would say who the hell would stop something that is that attractive to supply your society with electrons that is in desperate need for new electrons. I don't know, but maybe that's why I'm business and not political person.

So I think there is a lot to be done. There is a midway election coming up in November. I think both sides are start seeing the realities of slowing things down or creating or pushing to an energy crisis. So that's why we keep doing what we do best, stay close with your customers and with your partners, and then, I'm pretty sure we'll solve some of those obstacles that are thrown at us. And so at the current pricing of PPAs and offtake, both 10, 15, 20 years, that they stop worrying about the tax credits and other stuff because it is so attractive anyway. So that's actually fundamentals of U.S. right now.

Okay. Thanks for joining this call. And again, here, thanks for all your attention and support as well. I'm sure we'll see many of you over the coming days. So a good start to the year. Looking forward to the next 3 quarters together with you. And thanks for our Q1. Thanks.

So good afternoon, everyone. I will do this in English, as usual, even if I by now have spent many years at Vestas, my Danish is still not good enough. But -- so you have to excuse me for that. It's really nice to be back in Aarhus and nice to see familiar faces. I would like to extend a really warm welcome to the Vestas' Annual General Meeting for 2025. And for those of you who don't know me, my name is Anders Runevad, and I'm the Chair of the Board of Directors. The Board and I are delighted to welcome you here today to share our reflections on 2025. It's been a year with a lot of volatility in the macro economy, but also a year where Vestas has delivered well. But before I get into that and our vision for the years to come, please let me invite Louise from Gorrissen Federspiel, and she will lay out the formalities for today so we can ensure that everything runs according to schedule. Louise is taking over from Klaus, if you wonder, and please give her a warm welcome. Louise, over to you.

[Interpreted] Thank you for appointing me. My first job is to ensure that the AGM is legally convened. It has to be convened within 3 to 5 weeks before the date through the website, NASDAQ Copenhagen and through information to shareholders that have asked for it. The convening notice was sent out on the 6th of March, so that complies with the rules. It also contains all the information that is required under the Articles of Association and Danish legislation. And all information has also been available on the webcast -- website since the convening notice was sent out. You can see the agenda on the slide behind me. It contains the normal subjects for an AGM and 3 proposals from the Board under Item 8. The 3 proposals deal with a reduction in the share capital, a change in the title of the region where the AGM is to be held and authorization to the Board to acquire treasury shares. For adoption, we need 2/3 of the votes and the represented share capital. All other items on the agenda can be adopted with a simple majority.

This includes also Item 4, which is an advisory vote on the remuneration report. Before we jump into the agenda, I can tell you that about 63% of the share capital represented, 286 have asked for admissions card and 190 have turned up 5 minutes before we started, and I see quite a few have joined us since then. We have received many proxies and postal votes, so we know that all proposals will be adopted. But of course, we can still have a good debate here today. That brings us to the agenda proper. As we typically do at Vestas, we deal with the first 2 items as under 1. So the Chairman of the Board will start with the presentation of the report and then CEO, Henrik Andersen, will go through the rest of the things, including the annual report. Then you can ask questions and make comments before we adopt the first 2 items. The report will be partially in English, partially in Danish. So if you need interpretation, we have interpretation between Danish and English today. I now give the floor to the Chairman of the Board, Anders Runevad.

So thank you, Louise. We will now turn to the Board's perspective. And let me start with a brief look at the environment that we are operating in. As outlined in our annual report, we continue to navigate in a volatile global business environment, shaped by inflation trends, geopolitical shifts in global trades and, of course, conflict zones. Looking at the global business environment, raw material and transport costs stabilized during 2025, which supports a greater predictability. But this is, of course, now challenged by the conflict in the Middle East. Even if we, this morning then got some good news, I think it's, of course, extremely hard to have any kind of forecast on what will happen in that environment. If you look at the markets, the main drivers remain energy affordability and security. These are now the center of every investment decisions.

Grid investments are picking up, but permitting and market design challenges still persist. Execution remains strong, but regional disruptions still poses risks to the supply chain. So while some uncertainties remain, the fundamental drivers for wind energy, affordable, secure and sustainable power continues to strengthen. This was the case in 2025 and will be for the years ahead. To highlight some of the challenges that we see from a regional point of view, let me then zoom in on Europe. Back one slide, I think. So Europe's competitiveness is under pressure and the drivers are structural. First, Europe continue to struggle with high energy prices and the trend is clear, market with higher shares of wind power sees a lower electricity prices. Europe's wind share is already at 18%, about double the global average. And it plays a critical role in stabilizing pricing. This is shown in the illustration of energy prices in selected EU markets. And it helps dismantle a very recurring [ niff ]. Wind is not the expensive option.

On contrary, it is increasingly one of the strongest levers to reduce energy cost and restore competitiveness. But energy cost is not the only barrier. Excessive bureaucracy, slow permitting and the fragmented regulated framework slows down deployment of wind, investments overall and industrial scaling. At the same time, Europe lacks a clear and coherent industrial policy that matches the ambition and pace of that of other regions. This puts European industry, including the wind sector at a competitive disadvantage. So the challenge is twofold: high structural cost and the policy environment does not yet match the strategic ambition for Europe. Wind energy is central to the solution. It lowers the electricity prices, strengthens the energy security and provides a foundation for a more competitive industry. If Europe wants to remain competitive, accelerating wind build-out is -- and a supportive policy framework is at the core.

Vestas is positioned at the intersection of global megatrends. I believe that we talked about this the last time we met, and it was further highlighted during 2025 when forces shaping the energy system have only grown stronger. Geopolitical uncertainties remains high. Energy markets are still very volatile and many regions are facing an energy crisis. This development have reinforced something very fundamental. The value of wind energy is increasing not because of long-term climate targets alone, but because wind directly addresses the core pressure societies are facing today. First, affordability. Energy prices in Europe and several other regions remain a structural challenge. Wind is one of the few technologies that lowers the long-term price of electricity, making industries more competitive and easing pressure for consumers. Second, security. The past few years have shown how exposed global energy supply chains are. Every market is now looking for solutions that reduce their dependency on imported fuel.

And third, sustainability. While climate actions remain important, they are no longer the primary driver, but they still matter. And wind is essential for any credible decarbonization path. Wind energy sits at the intersection of these megatrends, affordability, security and sustainability. And that positions Vestas strongly for the future. Our task is to make sure that we capture this opportunity by delivering competitive technology, efficient supply chain and continue to advocate for a policy framework that allows wind to scale. If we look at the market forecast, the fundamentals behind wind energy translate directly into strong growth expectation for our core markets. As we can see here, the installations outside China was around 48 gigawatts in 2025, with both onshore and offshore contributing. For '26 and onwards, a significant step-up is expected. Forecast points to annual installation reaching more than 70 gigawatts by 2030, driven by the need to meet rising energy demand and strengthen energy independence.

Importantly, this growth is not driven by climate policy alone. It's again driven by affordability, security needs in both advanced and emerging economies. Onshore continues to scale as the most cost-efficient technology, while offshore becomes a strategic pillar for countries seeking long-term energy resilience, especially in Europe and in selected markets in Asia Pacific. The main message is clear. The market is growing, demand is robust and the underlying megatrends that we discussed are translating into concrete volumes. To meet society's needs, this growth is not enough. Current forecast will not cover rising electricity demand or replace fossil fuel-based generation at the required pace. This gap between what is needed and what is currently forecasted is a clear opportunity for Vestas and an important reminder of the critical role wind energy will play in the coming decade. So let me then go a little bit deeper into the company for 2025.

So Vestas today is more than 34 -- 35,000 people designing, manufacturing, installing, developing, servicing wind and hybrid projects around the world. We have more than 56,000 turbines under service, and that translates to 161 gigawatts, the largest fleet in the world. Last year, we passed the milestone of having installed 200 gigawatts, more than any other company. And personally, I actually don't feel it was that long ago we celebrated 100 gigawatts. The turbines we produced in 2025 is expected to displace 463 million tonne CO2 during their lifetime. That maybe not tell you much and neither it doesn't really tell me much. But if you translate that, it's actually the yearly electricity consumption of 88 million U.S. households. Going into highlights. There are several highlights for 2025. Let me mention some, and I'm sure that Henrik will come back to a lot more highlights in his presentation. Vestas achieved an all-time high revenue during the year.

The profitability was in the upper end of the outlook and the positive earnings trajectory continued during the year. 2025 ended with a record high order backlog with a strong momentum in both on and offshore. The first year of the service recovery plan was completed and good progress was made on the ramp-up challenges in U.S. and Europe. I'm also happy that we could return value to shareholders with a dividend of DKK 0.74 per share and a share buyback program of EUR 150 million. And of course, I'm very satisfied with the development of our share price that increased 77% during last year. Those of you who have been at the annual meeting before will remember our long-term ambitions. The financial targets remain unchanged, but we have revised our ESG targets due to the change in baseline that happened when we acquired the offshore business. So for revenue, the ambition remains to grow faster than the market and to be the market leader in revenue.

For profitability is to generate best-in-class earnings with an EBIT of at least 10%. We strive to have a 20% return on investment over the cycle and a positive free cash flow. On ESG, the target is to reduce our own emission with 50% and for Scope 3 with 45%. And this reduction should be measured from a baseline in 2022 to 2030. Our strong balance sheet has led us to update our strategy for the capital structure. If we look at the allocation priorities, we will continue to reinvest in the business to deliver our strategy. We will make market -- we will make value-creating acquisitions if and when we see an opportunity. We maintain a solid investment-grade profile with a net interest-bearing debt to EBITDA between minus 1x and plus 1x. And you can see the historic development here to the right. Last but not least, we will return at least 40% of net profit through a combination of dividend and share buyback.

Let me then move on a bit to the Board activities and remuneration for 2025. Throughout the year, there was a high participation rate in all meetings, indicated that all members allocated sufficient time to carry out their responsibilities to Vestas. Over the past year, we've had a particular focus on topics such as geopolitical risks and opportunities, our products and technology development and competitiveness, supply chain disruptions and follow-up on launched improvement projects. We, the Board, perform an evaluation of our work and compensation every year. Our goal with this is to continue our ongoing development of the Board's efficiency and working procedure. The evaluation process is also a tool to determine the competencies needed for the Board. And with that in mind, I'm really happy to introduce Anders or Anders, as you say, Boyer-Søgaard, that the Board of Directors proposed to join the Board.

Anders is here today, standing up here. And I'm confident that Anders will bring a lot of valuable knowledge and experience to the Board. So Anders, most welcome. Looking at the remuneration, the Board received a total remuneration of EUR 1,554,245. This was in accordance with the remuneration level approved by the Annual General Meeting in 2025 as well as within the remuneration policy. Members of the Board received a fixed basic annual fee, which was a 3% increase from 2024's level. With that, that was my last slide. So again, thank you so much for taking your time. Really good to see you here again. And maybe I come back. But otherwise, I see you next year. So with that, over to you, Henrik.

Thank you, Anders. [Interpreted] Well, thank you, and that's the last thing I'll say in English today. So good afternoon, and once again, welcome to Aarhus. It's nice to see so many of you here. For us, the AGM is one of the highlights of the year because we really nice -- find it really nice to meet and to chat a bit also after the AGM to hear about what's going on with you and with us. And therefore, I'm also very happy to say that the members of the Board and the Executive Board will stay here throughout the AGM. So you can have a chat with them as well if you feel the need. And some people might think that my dialect is a bit too rural for Denmark, but then you can, of course, use a headset and get it in English. Then I just want to come back to the share price. I mean, last year, we talked a lot about food inflation. You could actually get a meal here costing about DKK 90, both for husband and wife. So this year, it's about DKK 180.

Well, I better get to the numbers that actually influence Vestas. If we look at our numbers, the most important thing in 2025 is what we've achieved. We have the highest order backlog ever in the combination of onshore and offshore wind. We have a backlog of EUR 33 billion, which is, of course, thanks to teamwork across many countries and regions because we cover all 24 time zones. We have also spent a lot of time in investments and how we produce our products. And we have our own control of our production. It takes up a lot of our time, and we are not quite where we want to be yet, but we are sure that the investment is the right one, both in the American part of our setup, but not least in the European part of our production setup. And have been careful in the past quarters that when we unfortunately have to say goodbye to some employees, it's not a sign of crisis, but because we have a lower lost working time.

And in Denmark, you certainly always get new media coverage if you fire people or lay off people. But when you employ 500 new employees, then you don't get media coverage. Now the third one here is wind. Wind is the fastest and energy source and one of the lowest costs when it comes to energy sources. And it's not many places in the world you meet facts like this. Many places, you meet the exact opposite, but we have to emphasize it very clearly because independence in energy is actually the reason why we haven't learned our lesson in Europe yet. We have had an energy crisis in 2022, where we imported about 55% of our energy. And now 4 years later, we have the same numbers, 55% of our energy coming from the outside, and we are still 430 million people. So we need to deal with that, and you'll hear us say that again and again. There are 2 challenges that we take with us into 2026.

The geopolitical uncertainty, well, we can't really take responsibility for that, but we have become very good at navigating through that. But I think we now considered as being a global company, you have to live with geopolitical uncertainty, also with the legislative changes in some of our markets. Of course, we have an opinion about it, but we have to deal with it. And last but not least, we continue our recovery plan in service. We are only about halfway there, and we are learning something every day in service, and we teach service something every day. And I think we are happy to be halfway there, but we still want to get there 100%. These are the numbers. And it's no coincidence that our baseline is 2022 because I think we all agree that wasn't the best AGM we've had. Our revenue has gone up from EUR 14.5 billion to EUR 18.8 billion. This -- even if this were Danish kroner, this would be very large, but we are talking about euros.

The others, the EBIT margin in 2022, it was minus 8% and 5.7% last year, an increase of 13.5%. And I'm sure -- but I'm sure Kristian from ATP may have a comment, but we are still on a positive trajectory here. We have just over EUR 1 billion in cash flow, and that's also very good because that means we can continue to invest and pay dividends to shareholders or do share buybacks. And Anders, you explained clearly how we will do that. And we consider that every day. Then we continue our high investment level. And where we're investing now is still primarily in our production plants and in transport tools to transport our large turbines, both onshore and offshore. We expect that to continue at this level, about EUR 1 billion. And you will also see that when we cover our outlook at the end of the report. And then there are the 2 last parts because if you look at '22, we had EUR 19 billion in turbines, and now it's EUR 33.2 billion. And in services, it's EUR 38.7 billion now.

That's very positive. It means we have more than EUR 500 billion in backlog, and that's pretty good to put it like we do in Jutland. And we have also been very disciplined commercially to ensure that we make money in what we have in our backlog. What we've talked a lot about since '21, '22 is our turbines. Turbines have developed. If you look at the graphs here, you can see that the price levels are stable at a higher level. We are happy about that because we are making money now developing and selling turbine solutions globally. And secondly, you can see the backlog development. And we have to say that we have almost tripled the backlog since 2018. We were very good at making money back in '18. But during COVID, it dropped, but now we are back at 5.4% in revenue, but we are not happy yet. But in the EBIT margin of 5.4%, we also cover the investments in our production plants where we scale up our facilities.

So we're investing in 2 places for the future, both in our investment level over EUR 1 billion, and we invest a lot in our EBIT margin because it would actually have been higher if we hadn't continued to invest in our turbine business and capacity. A few comments about service. We have 161 gigawatts under service. And under that, we also have the turbines of other producers because if there's something we've learned, it wasn't our best idea. The turbines from other producers that we service are not as good as our own turbines. And therefore, it's difficult for us to be efficient. So yes, that still annoys us a bit. Our customers would like us to keep these service contracts, but we need to find a different model. And there's probably a reason why other producers have handed over their turbine service contracts to us. Our contracts have an average duration of 11 years, but we have a backlog of EUR 38.7 billion. And we operate in 72 countries.

That is really a global service business, and there are a lot of customers who use us because they see the added value in working with us. And last but not least, we couldn't do this without our 16,000-plus employees in the service business. And in our incentive program, there was no incentive because of service. I know that they know that, but it also just shows that we need to get service back on track. And we are very happy with how things are developing. We love this business, and we're going to invest in it and spend a lot of time on it. But it hurts to see that it's not quite in top form yet, but it will be some quarters from now. So what are we doing in the recovery plan or turnaround? You can call it whatever you like. But the fact is we have 2 main points. The one on the left here is operational excellence that we know what our cost is even in the site farthest away. We've learned that the hard way by counting hours and spare parts and other things, and we didn't do that as well as we should previously.

So we are working on that every day. We're improving every day, but we are not quite there yet. And the other part is that when we started this journey, we should probably have listened more to ourselves about what we thought customers thought of us. But for our customers, we are actually much more valuable than we thought we were. So pricing and commercial conditions is something where we actually can get better terms. When we did our commercial reset in turbines, we should probably have started service as well. But you cannot go back in time. So it's not wrong to say that now we focus there. And what you saw in the previous slide about turbines, that's the sort of thing we should look into when we talk service a year or 2 from now. And always look at Christian when I say this because I think he feels as certain that we'll fix this as I am. We also need to talk about quality and our money set aside for guarantees.

We cannot get to a point where the loss production factor will be 0. But we would -- because even if we get close to 0, then we would always have some money set aside for warranties. It was 3.2% in 2025. And we have actually halved it over the past 4 years. And harming the warranty cost is not a goal in itself, but we want to get to a lower level. But we don't have a target for this because it would be wrong to set a percentage target here. But just like the lost production factor where turbines aren't working, we also want to get it down towards at least 2%. It's around 3% today. But as you see, they're going down again, but this is a sticky one for us. And we have also said to Christian in Service that he has to help us cut back on the need for spare parts, et cetera. And you can see that the dark blue columns are higher than the gray ones, which means that provisions consumed are higher than warranty costs.

But we think that, that can bring down the lost production factor. I hope this wasn't too technical. Otherwise, I'll try to do better later. Then we have sustainability. There's no doubt that sustainability means something that affects everything we do. And I know that there are several media who don't want to spend too much time on this, but they need to spend time to see everything we do. We are avoiding CO2 equivalents to the tune of 463 million tonnes a year in 2025, which is amazing because it's a product that will be CO2 neutral between month 6 or 7, depending on the turbine. This is world-class. And then it will be CO2 negative in the rest of its life of 29 years. I've just seen a turbine that was still running after 39 years. I mean you should have bought a new one after 30 years, but it was still working after 39. And it's amazing that we have such a good product, and we need to continue to invest that. because it becomes CO2 neutral so quickly. Now Scope 1 and 2 is what we use.

When you look at the parking lot where most of you arrived, we have more than 100 charging points for e-vehicles here. A few years ago, we had 6. So most of the Vestas cars you see today are e-vehicles. They are certainly cheap at the moment with all the wind we've had over Eastern and it's certainly cheaper than diesel today. Now Scope 3 is our problem here a bit. Scope 1 and 2, that's 1%. Scope 3 is 99%. So when it comes to dealing with CO2, it's in our supply chain, and that's transport and steel. And when we were here in 2021, the world thought hydrogen, green steel, we could produce steel without any of the known hydrogen, et cetera. But the world isn't there today. So now to get CO2 -- to get steel without too much CO2 is through recycling of steel. But then you have to be intelligent enough to say that our Scope 3 attack is different because we don't have the same as we used to.

It would have been a wrong strategy if we hadn't been in offshore wind. But offshore wind takes up more CO2 because we have to sail equipment offshore, et cetera. So the CO2 footprint of offshore is bigger, but we also have bigger wind farms and bigger production numbers. So it makes a lot of sense to be offshore. And I'm sorry, people don't have time to read that in an annual report. I hope they would because there are so many good things to see. But we are very close to getting our e-vehicles and most of them are changing, but there's still management cars that are not e-vehicles because in parts of the world, you can't find a charging point. But we are certainly doing everything we can under Scope 1 and 2. Now I'll go to the area that becomes more forward-looking. This is also why I have a disclaimer here because this is forward-looking, but I move quickly on to this one.

I would also like to touch upon what you talked about, Anders, about the kind of environment that we're working in. And this is no random picture. This is from January this year when a number of energy ministers of Europe and the Vice Chancellor of Germany met for the so-called Offshore Summit, where they agreed to build 100 gigawatts of offshore wind. I've been quoted for saying that I didn't believe in it. But what I'm seeing now is that now it's actually being done, and you have set a target of 100 gigawatts, which is more realistic than the 460 gigawatts that they talked about the last time around. But still, I'm seeing more talk than actual action, and that is what really worries me because nothing that they talked about in Esbjerg wasn't what they also talked about in Ostend when they met there. And I think this is really a cause for concern. And that leads me to the market environment. Anders, you touched upon bureaucracy red tape, things just work too slowly.

But there are also areas where things are going very quickly. Just south of the border, just 24 months ago, they decided to allocate land and to make sure we had energy and electricity generation up and running in Germany, and they are now installing 10 gigawatts of onshore every year and Katherina Reiche, which also visited Houston at a conference recently and increased it by 12 gigawatts a year for the next 3 years. So this is half of all the installation in Europe each year. It can be done. It only requires one thing, and that is decisiveness and political leadership. So perhaps someone could take a bus trip just south of the border to see how things are done. And I should get to this slide, which you've probably been expecting, but I'm sure you know this story about the frog sitting in the pot while the water is starting to boil ever so slowly, and it doesn't really wake up to find out that it's boiling and to jump out.

And we have to point out things that are not going the right way. The idea that we should have a secure and competitive energy supply, well, it's just going too slowly. We're in a country where companies want to install production capacity, but they cannot get an answer as to whether they can get sufficient electricity for their workplaces and for their production sites. That's just not good enough. We have to do something about that. So when we have a self-generating energy grid where you need a 3-month standstill in order to figure out what to do with electricity generation, that is just not good enough, not least when we're in an energy crisis. And when it comes to red tape, I think it's the first time that I have seen that a company our size has used the phrasing bureaucratic mess in our annual report. I wasn't sure that I would leave it in after our letter to stakeholders, but we did. And I'm glad we did because Denmark and Finland were the only countries who fully implemented the CSRD directive.

The 25 other member countries said, that's a bit too bureaucratic. But here we are. And if you read the annual report, you will see that the first 56 pages are about the world, the strategy, the energy prices and how we have executed. The next 72 pages of the annual report are solely to comply with the CSRD. And we have Deloitte here on the second row, and they need to do a lot of work. We almost suspect that they were -- had something to do with all of these rules and requirements. When we have EUR 21 billion in revenue, it doesn't make any sense that we have to live up to all of these piles of rules. And now we have the omnibus package. So now all the small- and medium-sized companies that trade with us, then they could be exempt they thought, but that's just not true because when we have 72 pages of CSRD requirements, then that's because we have chosen the simple model. It could have been a lot worse.

And then, of course, we have to roll it out to our suppliers in order to comply. So it has not been helped yet. And I really took a hit recently because when you meddle in tax politics in Denmark, at least my daughters would say that I shouldn't have done that. But let me put it this way. We haven't seen anything else in recent years than rules being introduced that are against all of the globally headquartered companies that we have in Denmark. And all the companies we've had in Denmark are moving out due to all of these rules and regulations. So I just try to point out that these rules just don't make sense when it comes to a company like ours. We need to be able to attract Danish and international top talents. But it's no use that they can only be here for 7 years and then they have to flee the country because if our executive management will stand up, we have 6 people standing there. I see Javier just had to wait for the translation before standing up.

But Javier is Spanish, Felix is German and Anne Pearce is Australian. And the 3 others are Danes. So 3 foreigners pay 32 and the Danes pay 61. You can sit down before it gets awkward. That's okay. But my problem is that next year, Javier will have been here for 25 years. And he's been under this exemption scheme for 7 years. So we have to decide whether we have to lose Javier next year or if we can find a solution perhaps with the Danish government. Otherwise, we will find a place where we can find a solution with Javier. And here, we have to really think very thoroughly about this because we can't just read in the newspaper that, well, now it's been 7 years. So of course, he'll leave because now he will have to pay Danish taxes. I mean that's crazy because we have a technology cycle of 5 to 10 years. project cycle is 4 to 6 years. And I mean, we can only have our top talents halfway through a project before they have to consider where to go next.

And let me just take the final point before moving on. It is quite bizarre that on the 1st of January 2023, you've made up a rule under which you can't deduct salaries that are above DKK 8 million. I mean, in a global company with global responsibility, I mean, come on. So we shouldn't be happy about the 22% as shareholders. That's all I'm saying. And I know some people noticed my salary. And I can tell you that my basic fee is not DKK 32 million. So I'm happy to pay my taxes out of my bonus scheme. But I think we should talk to each other in a respectful tone, and I think we should make Denmark bigger and better when it comes to our international talent. We purchase to the tune of DKK 20 billion with our suppliers each year. So we really need to do something about this. And let's now move on to something more positive. Our global strategic priorities. We have 7 points here, and we will stick to these. And we have efficiency as one of them because here -- and here, we are going to talk about simplification.

We need to cut the red tape, and I will get back to that in my next slide. And the next thing here is what happens towards 2030. Once we have reached our goals when it comes to service and offshore and onshore, then we are going to look at the top of this mountain, the very summit. And no, Kristian from ATP, I'm not going to give you any answers yet on this. We are talking about model reset. And this is a simplification. We need to be simpler in Vestas. Complexity just creeps in, in all big companies. And with regards to our Prime Minister, that is also the case in smaller countries like ours. And we have 4 areas, focus areas here when it comes to this subject. First of all, we need to listen to our customers. How do we take care of their needs. And then we need to simplify. Why are we still carrying out so many paper-based processes in this day and age. We are asking ourselves these questions, and we are trying to do something about it.

And then we are trying to rightsize Vestas. It sounds brutal, and it might be, but it means that by the end of the year, we will be fewer white-collar workers than when we began the year. And that is a natural consequence of simplifying. That is how we think. That is how we go to work every day, and that is how we develop the culture of Vestas and strengthen the culture in Vestas. I'm not going to talk much more about that right now. You will hear more about it quarter-by-quarter. And sometimes you will hear that we have downsized. But just like we sometimes say goodbye to people in our production. Of course, it's a negative development for the individual, and I completely recognize that, but it is in the interest of our shareholders, and these 2 interests are not always aligned. And the journey towards the 10% is good also to include. Now we are in the middle of our outlook towards 2026. We have said 7%. I can see someone in the third row nodding in agreement, and that means that we are just 3% behind our ambition of 10%.

And that means that we only have 300 basis points left until we reach the holy grail of 10% and these are the areas that are going to contribute mainly to this ambition. We need to align our investments in offshore and quality is also what Felix in manufacturing uses when he works with quality and waste and everything that is going on in our value chain. And then we have service. And Kristian, no, we're not happy yet with the contribution from service. So we need to get up from 16.5% and then we still need to optimize things. But we have come a long way, and we are very happy with the performance we've seen in onshore. And there's no doubt, I can see some of you are looking at me looking like a question mark, but it would have been higher if we weren't investing in offshore, but we wouldn't have been as robust looking towards 2030 if we hadn't. A good thing can't be said too often, as we say in Jutland, and that goes for the share price. And the Chair has already mentioned this, but I also wanted to include it in my report, of course.

Another thing that's very important for me, as you know, is what we call EPS, earnings per share. And what you can see here is that earnings per share, of course, has to do with earnings and the number of shares. But here, it also has to do with the size of the company. And perhaps that's a reference to our Chairman. As you might know, we have a friendly competition going, but you can see Anders' EPS number back from 2014, and then he reached EUR 0.9. So you still hold the record. But looking at the middle of our outlook here in the gray, I would say that we are going to reach EUR 1.1. Of course, I can't wait to be able to present that number on next year -- at next year's AGM. And I'm sure that will mean a higher share price and more earnings per share. This is something we can control, and we are very happy about that because we cannot control the share price. We can adjust with share buyback programs, but that will mean that we have fewer shares and get a better earnings per share.

And it also has the advantage that when earnings increase, this number also increases. So this is the graph I'm going to be traveling with in the coming months. And this leads me to my last slide, which is the outlook for 2026. Most of you will have seen this already. Our outlook for revenue is EUR 20 billion to EUR 22 billion EBIT margin. Service is expected to generate between EUR 15.5 billion to EUR 17.5 billion and total investment approximately EUR 1.2 billion. So now we are already through the first quarter, and the results will be published on the 6th of May, and we're looking forward to that. And thank you to all those of you who reach out via LinkedIn or elsewhere and send us some words of praise or encouragement. And I'm sure that we will talk more together over our glass of wine this evening. So thank you very much to all of you for participating today.

[Interpreted] Thank you very much, Henrik and Anders. You've now heard the report from the Board of Directors for 2025 and the annual report. There are already 3 people who have asked for the floor. If anybody else wants the floor, please come up here and present yourself to Daniel up here, so you can get on the speakers' list. But I will first give the floor to Kristian Gaarde from ATP.

[Interpreted] Thank you very much for the floor. My name is Kristian Gaarde, and I represent the pension fund ATP. Thank you for the report and the annual report. 2025 was a strong year for Vestas with record high profitability and also revenue. Though in service, there's still potential for improvement as we heard. And in offshore, it's still being constructed at the moment, so to speak. We have also seen smaller share buyback programs in '25 and '26, and that sends a signal in the right direction. As investors, we have also received a profit of about 90% since 2025. And of course, we appreciate that very much. And you're quite right, Henrik. I have to ask about that EBIT margin. But at last year's AGM, [ ATP ] said that we questioned whether Vestas could ever reach the 10%. And even though we are not there yet, we have to admit that Vestas has certainly taken a big step in the right direction, and that gives us increasing optimism that this target can be achieved.

And based on your guidance for 2026, where you look at the mid-level of 7%, there's still about 30 percentage points lacking before we are 10%. And hopefully, that can become a reality in the next couple of years. Now I have to be careful to not just do a back-of-the-envelope calculation here, Henrik, but I'll try. You had 4 areas that would contribute to this improvement. I've divided into 3 because I haven't included onshore because it seems to be going really well already. But the 3 I've categorized as operating model reset we heard about, firstly, improvement of service and ramp-up in offshore. And if you assume that the first to operating model reset and service could contribute with a total of 1 percentage point to the margin, then it would require about 2 percentage points from the offshore ramp-up.

So the question is whether this is more or less correct or correct way of looking at things. And my follow-up question is where we see the greatest risks in these 3 areas. So things that could keep you from achieving the target of 10% EBIT. And I won't ask about your 2030 ambitions, but I think it was a very tall mountain to climb there, but it's very promising. And just in closing, I have a more general comment. which probably echoes what we heard from both the Chairman of the Board and the CEO because geopolitical tensions have made it clear that energy security in Europe is a central political subject and wind energy plays a vital role here. And at the same time, the sector also promotes European employment. You also see that in what you said about a possible new nacelle factory in Scotland. From where we sit, it looks like the green transition is accelerating in Europe. For instance, changes in framework conditions in certain areas.

In some places, it already works well as we see in your strong backlog in offshore. And in total, we believe that Vestas is very strongly placed both in the green transition and in contributing to energy security. And that should also support continued growth in revenue and progress towards the margin target. I did actually have one final question related to how you look at the prospects for the European market. But I think you already mentioned it a bit, both of you, but if you have anything to add, I would, of course, be interested to hear about that. I think we are seeing signals that things are improving. So it would be interesting. Even though we're not quite there yet, are we seeing any signs that we could see growth in Vestas business in the next few years? That's what I had to say. Thank you to everyone at Vestas for your hard work in 2025 and all the best in the coming year.

[Interpreted] It was made clear to me that the CEO should answer this. To start from the last question. The green transition is highly prioritized probably on a critical background because we need to find something quickly because we are probably in a worse situation now than in 2022. So there's that sort of alarmist side of things. But I think we should forget about our alarm we should not forget now because now we have a cease fire in the Middle East. So -- but we have to remember that we still need to ensure energy security from quarter-to-quarter to quarter the next 10 years, and that needs to be part of the work in every parliament in Europe that we prioritize energy security as highly as defense. And again, I have to tease the Danish government because when Denmark removes an energy tax from 1st of January, then we build south of the Danish border. so that new cheap energy can be constructed.

So when we look at our energy prices, we need to look at the right thing, what it costs to produce. And if it then contributes to the tax in the country, then it's not the pure energy price. And we have to get used to that in Europe because in Europe, we are covered with strange tax systems. And in some countries, energy is more expensive than the alternative we could import. And in many cases, it's only 1/3 of the production price that could be made. So talking about what it costs to get new energy or renewable energy, I mean it's quite remarkable. If you can produce energy for about EUR 0.10, I think most people would say thank you. So yes, thank you to the green transition. We want that. And of course, it's important for our business case, and it will grow, Kristian.

But let's remember that we also need to see whether there are also other aspects of energy we need to look into also from a political side. Of course, I like it when you and Claus turn up and you sit with this envelope and you said, let's look at the back of the envelope our calculations here. And I have to be careful because, of course, if you start adding numbers together, you saw my 4 areas of priority about 10%. You're right, I still need 3 percentage points if we reach 7% this year, but it's difficult to split up the cold water and the warm water because we won't hit an exact percentage point. But I can promise you, if you look at the 4 areas, they will give more than the 300 basis points because we, of course, also know that things won't happen as we maybe thought.

And of course, we don't quite like splitting percentages up in the operating model reset because we don't think we can put this into earnings or employees. So we believe we will have a streamlining and that our customers will like Vestas more. But I dare not put percentage points on any of it. And I'm sure Claus Wiinblad from ATP didn't come today because he got the 7% earlier than expected. But I hope you'll come back next year also along with you, and then we can talk further about this. And we share your positive feedback. And also thank you for your feedback to the employees because that's very important to us. But we also appreciate your good input every quarter and we very much welcome that we are one of the shares that could give ATP a bit of a boost this year.

[Interpreted] The next speaker is Mikael Bak from the Association of Danish Shareholders.

[Interpreted] Thank you for the floor. It's good to be here back in Jutland. I'm from Western Jutland myself, as I told Henrik. I represent the Association of Danish Shareholders, representing 17,000 private investors. Many of our members are here today. I'm not going to ask you to stand up like the executive management. But thank you very much for taking shareholder democracy seriously. I had a note called the Jutland style shareholders' democracy, where you can really tease each other a little bit. But I will try not to deviate too much from my script, which I had in the day before. So he will reply. I know you're going to ask about this. And yes, of course, you know because I sent in my contribution beforehand. But let's get to it.

My first question has to do with what Kristian from ATP said about the EBIT margin and the 10%. That's your long-term ambition. And I wouldn't focus so much about the substance, but the time frame, is it in '28, '29, '30? When do you expect to reach this target? Another question is about your guidance. And of course, that could be difficult for you to say right now, but it's more if you could venture a guess. On the same day, as you published these very strong results for 2025, the share price dropped markedly, and that's quite frustrating, of course, to the shareholders. And therefore, on behalf of the shareholders, I would like to ask whether management would consider a more specific and perhaps multiannual guidance in order to reduce uncertainty in the market and so that investors could have a clearer view of the road ahead. That is a common interest of ours. I know it's difficult, but could you try to elaborate on that?

And my last question before I go freestyle here is that today, the U.S. is Vestas' biggest market. And as most people would have noticed, they have now a President that is not a fan of wind energy. And therefore, my question is what the worst-case scenario would be for the U.S. and what your plans are in order to deal with that. For instance, if tax incentives for wind energy are removed or do you have any contractual protections in place? Or what are you going to do about it? And what is at risk here for the share price? And just finally, I promise to tease you a bit. You mentioned the elephant in the room. If some of my members were to hear about these tax comments that you made in the media recently. And I had dinner with a friend of mine, [ Kim ] recently, and he owned Vestas shares. He had bought them for his daughters.

And [ Kim ] had read that Henrik Andersen had said in the media that he was against these new taxation rules. And it's funny that the football hero from 1992 had something to do with the taxation. And then I could tell him, it's not the Henrik Andersen, the footballer. It's Henrik Andersen, the CEO of Vestas. But from the Association of Danish Shareholders, we believe that investment in shares should be for everyone. And I hope that Vestas can be for everyone. And in that manner, I hope we can bring different resources into play. I also noticed that you are on a first name basis with each other, and I can say that [indiscernible] is sitting here in the -- one of the first rows. So perhaps she can contribute to making Vestas for everyone and investment in shares for everyone. And with that, I wish you all the best for the year ahead.

[Interpreted] Thank you very much, Mikael. I guess that's also a question for the CEO to answer. When are we going to reach the 10%? Of course, I can't tell you that because that would get me in trouble. I know my tie is perhaps not very elegantly tied, but I would be strung up in a news if I were to say anything about where we have an EBIT margin in 18 months from now. There's no upside in trying to do that. And I think it will not contribute to ensuring the interests of your members. In the past few months, we have seen a development. And as a shareholder, because I'm a shareholder myself, I will not venture any guess on what the share price is tomorrow. I will just venture a guess that you will be happy what we are doing in 3 or 5 years from now because that is something we can promise you. So if the quarterly report didn't match what I said today, then you would be angry with me the next time we meet. So there's not really any point in that.

So our task at hand is to run this business to the best of our ability to make sure that we continue to deliver. And therefore, my answer to your question about multiannual guidance is the same. We are adhering quite strictly to the rules of guidance. And we are saying this again and again because in Denmark, we try to control big companies, and we think we can control big country -- big companies by making very tight rules. But we are trying to run this business to the best of our ability every year, every day, but things are in movement all the time. And I tried to say this in a diplomatic way, but repeating something enough doesn't make it any more true. So people are saying all sorts of false things about wind, and that doesn't make it true because wind energy is a strong energy source and all other sorts of energy, fossil fuels have increased remarkably during the past many years.

And you've seen that in the U.S. And the U.S. is going to need a lot more of energy. Many of us have moved production back to the U.S. in the past 5 to 10 years. So the underlying energy consumption is increasing in the U.S. And at the same time, we have these data centers now. We all have a mobile phone in our pocket, and we all ask ChatGPT about things now and then. And that means, Mikael, that today, in some way, places you have reached a level where the demand for electricity is so high that it's higher than what you can produce on your own without tax incentives in the U.S. because there's no alternative. We have shown you what the costs would be if we were to choose nuclear energy, for instance. It would take 20x as long and the cost would be much, much higher than when it comes to wind energy. And you have seen the high costs in the U.S. because they're not choosing wind energy as it is. And you can see the consequences of the administration they have in the U.S.

I'm glad we don't have a guy like that running Vestas. And perhaps property taxes and then perhaps my meddling in the taxation debate wasn't a good idea, but I hadn't even paid the top, top tax bracket for 90 days before there was a new rule being introduced, which honestly is discriminating against Danish top talents who choose to take up an executive post. And I mentioned it on the 1st of January 2023, when that rule came into force. And even though I've said it before, people didn't pay any attention. So of course, I did taste the whip after meddling in that debate. I can assure you that I really took the heat for it. But hopefully, being a shareholder shouldn't be politically motivated because that is not in the interest of a value-creating in Vestas.

[Interpreted] The next speaker is Søren Svendsen. And after Søren, we have 2 more speakers on the list. Søren, go ahead.

[Interpreted] Thank you. My name is Søren Svendsen. I've been a shareholder of Vestas since it was listed on the stock exchange almost 30 years ago. Thank you to hear the reports and the annual report. You are both very positive and optimistic, and that's always good to hear. And when we talk property tax and share tax, then we have to remember that the property tax has probably been dropped, but there's still talk about a share tax being reduced to 35%, but that's then for all. I would like to get it down to 30%. But let's see if we can work on that. It's a capital gains tax on shares. We have an annual report that looks very well for the future and certainly in much better shape than a year ago. The clearest indicator on that is the share price. It was exactly DKK 88 a year ago, and now it's actually just over the double today. This is a share price which is quite reflective of the actual situation.

And it shows that you are now on top of costs and a bottom line that shows EUR 5.8 billion. That's the best result in 5 years by far. So both the result and earnings have -- and revenue have increased in the past 4 years. So Vestas is a growth company. The backlog has never been higher than it is now, and that's also very positive for all our shareholders. When you follow the market and what's written in the media, media like Berlingske, Jyllands-Posten and other Danish newspapers, they have previously been a bit hard on Vestas. But when you read the articles now, they are more optimistic. Last year, I said that trust is a key word for Vestas. That, of course, applies to all companies, but particularly to Vestas because there have been quite a few cases of broken trust in the past 30 years.

So therefore, I was very happy some years ago, Anders Runevad then when you said, I don't promise a lot, but I do keep what I do promise. And we weren't used to that from other Chairman. So I think trust in Vestas is returning. As I said initially, I've owned shares in Vestas since the listing because I like the concept of green energy. And I have added to my portfolio. So now I have 160,000 Vestas shares. It's by far the largest share in my portfolio. So I therefore look very clearly and often at Vestas. And I remember Ditlev Engel's Triple15 strategy. Do you remember that one? Of course, it came to nothing, but also the gearbox problems years ago, problems we haven't heard about in the past 4, 5 years, fortunately.

I also remember there were 3 suedes who came and saved Vestas or certainly helped Vestas. And one of them was you, Anders. And I hope you will stay quite a while yet. Last year, I finished by saying that Vestas was the one of the major shares that fell the most in share price last year. It was halved. I said we have quite a lot we still wish for. And luckily, we got what we wished for in '25 and '26 because Vestas has more than doubled its share price. And in '25, Vestas was the share that increased the most by about 78%. Thank you very much for that result, Henrik Andersen, Anders Runevad and everybody else at Vestas. Thank you for the floor.

[Interpreted] Well, Anders didn't want to come up here to receive the praise himself, but I was part of the Swedish school here in Denmark. So I'm quite sure that this combination will work quite well. Thank you very much, Søren. It means a lot to me coming from you. And I know, of course, you had to mention how many shares you own so that you really have a lot on the line and that you count on us meeting on good terms again next year. I just wanted to make sure that is recorded in the minutes here today.

[Interpreted] Thank you very much. Our next speaker is [indiscernible]. And after [ Jen ], it will be [indiscernible]. Go ahead.

[Interpreted] Thank you very much for that report. It's been quite interesting to hear. And I know that you really like headwinds. So I will really try to put a hair in the soup and see if you are aware of the frog in your hot soup. In 2025, we have seen a very volatile electricity price where the value of electricity in the most expensive hours of the day are 60% to 70% higher than the average. Does Vestas recognize that there is a significant added earning if you could move the production to those hours of the day? And do you have a concrete strategy for how to take part in that value creation, for instance, through the use of batteries or partnerships? And if not, why not?

[Interpreted] It's very nice to be able to stand up here and say, yes, fortunately, we do, and we believe in that development as well. To me, it's incomprehensible that when we see what we have done out here, which we have been allowed to do, where we have 2 container solutions with batteries holding power for 5 charges of vehicles so that we can charge when the price is low. And alternatively, I would put it this way. Every time you have a space, and I think when you leave here, you will see how aesthetically pleasing it is and how well it fits into this area.

And the second part of it is if you want to do this in real life, you need to find the opportunity for a new environmental assessment, and that will take 5 to 7 years to carry out. And in that time span, we will have seen yet another energy crisis. So anyone with a solar park or a wind farm should be allowed to put up batteries so that they can absorb power into those batteries when the production circumstances are optimal. But that is concerning that you can't do that and that the processes are so slow. But I'm not sure that we should start building production facilities for these batteries just yet because it is -- you can't get much closer to raw material than that. But the idea of being able to predict when the energy price is low and something and stuff like that, that is really something we want to pursue.

[Interpreted] Thank you very much. And the last speaker on our list is [indiscernible].

[Interpreted] The bad result in 2022 was owing to raw material prices and competition in components, et cetera. Is that something you experienced now in 2026 again? Or what are your thoughts about this? How resilient are you? Have you done something to sort of hedge your bets compared to 2022?

[Interpreted] Yes, we have done something because if we hadn't learned from 2022, we wouldn't deserve to be here today. On one of the things we learned in '22 was that we had offers to our customers that couldn't be changed for up to over a year, which was really something that weighed us down. because we were in bad shape when we got to 2022. We have a close partner in A.P. Møller - Maersk. And for them, it helps when the transport of a container goes from $3,000 to $30,000. And we need a lot of hours to achieve the same thing. And today, we make better contracts also with a company like Maersk.

So we are in a much better situation in controlling the price of our products and services. And Javier is sitting here, and I'm sure he still has a bit of a delay in the interpretation, difficult to avoid. But we don't have offers now that are valid for 6 to 12 months. Now it's 30 to 45 days, and they have to say yes or no. So then we can say, well, the price has changed, even though what they're buying is maybe 18 or 24 months into the future. So we are in a better shape, we are handling things better. But of course, there's still plenty of challenges. So now it's April. And I wouldn't show this outlook now if we weren't in better shape or weren't better prepared because we are.

[Interpreted] Thank you very much. We have no more speakers on the list, and that leads me to the formal adoption of Item #1 and 2. Under Item 1, it is the proposal of the Board that the AGM take note of the report of the Board of Directors. Are there any other comments? Otherwise, I will conclude that the report on the company's activities has been taken note of by the AGM. Under Item 2, the proposal is that the AGM adopt the annual report. We have an auditor's report on Page 190 in the annual report. I will not read it out loud, but just conclude that it is an unqualified auditor's report. I can also inform you that the sustainability reporting that has been mentioned a few times also has been qualified with a statement from the company auditor. Any comments? Otherwise, I will conclude that the annual report has been adopted. That leads us to agenda Item 3. And under Item 3, the proposal is to pay out a dividend of DKK 0.74 per share, which is corresponding to EUR 100 million in dividends.

And here, I can inform you that you cannot propose a higher dividend, only a lower one, and that does not seem to be the case that anyone wishes to do so. So I can conclude that, that has been adopted. Item 4 is the presentation of and an advisory vote on the remuneration report, which has been prepared according to the Danish legislation. And in this report, you can see the remuneration for the Board of Directors and the executive management for 2025. The report has been available on the website since the time of the notice. Any comments or questions in this respect? Otherwise, I will conclude that the remuneration report is adopted. Under Item 5, the Board of Directors propose that the remuneration for 2026 is increased by 8%. That means that the basic fee is DKK 526,590 per Board members with 3x the basic remuneration for the Chair and twice the basic remuneration for the Deputy Chair.

In addition, the Board proposes an 8% increase in the committee fee so that the Chair fee will receive DKK 309,759, and that's for the committee fee and the committee Chair fee will be DKK 557,566. That is also adopted, and that leads me to Item 6, which is the election of members to the Board. They are elected for 1 year at a time. And the Board proposes reelection of all of the current members, which you can see here. Anders Runevad, Bruno Bensasson, Claudio Facchin, Eva Berneke, Helle Thorning-Schmidt, Henriette Thygesen, Karl-Henrik Sundström and Lena Marie Olving. Furthermore, the Board proposes that Anders Boyer-Søgaard be elected as a new member of the Board. A full description of all of the candidates and their managerial votes has been available on the website since the day of the notice as Annex 1 to the convening notice. Are there any comments or questions? Otherwise, the proposal has been adopted.

There are no comments. And therefore, all of the current members of the Board of Directors have been reelected and Anders Boyer-Søgaard has been elected as a new member. Congratulations. Under Item 7, we have the appointment of auditor. The Board of Directors proposes reappointment of Deloitte Statsautoriseret Revisionspartnerselskab, both when it comes to the statutory financial audit and the sustainability reporting. This is proposed by the Audit Committee, and the Audit Committee has not been influenced by third parties to restrict the AGM's choice of auditors. Are there any other candidates? Otherwise, Deloitte will be reelected. So Deloitte Statsautoriseret Revisionspartnerselskab has been reappointed. Congratulations. That brings us to Item 8. The Board of Directors proposes 3 proposals. 8.1 is a reduction of the company's share capital down to DKK 199,112,292 by canceling treasury shares. These treasury shares have been acquired in 2025 in the share buyback program to a total of just over DKK 8.6 billion.

If this is adopted, the cancellation will be announced to the Danish Companies authorities. And then we will adjust the Articles of Association with the information on the slide now. Are there any comments or this will be adopted? The proposal is adopted. That brings us to Item 8.2. 1st of January next year, the capital region of Denmark will become merged with another region. And therefore, this will be reflected in the Articles of Association, Article 4.2 so that AGMs can be held in Region Midtjylland like now or in East Denmark. Are there any comments for this proposal? Otherwise, it's also adopted. And yes, it's adopted. Item 8.3, the Board proposals that the Board of Directors be granted authorization to acquire treasury shares. This is common practice and that this will be an aggregate of 10% of the company's share capital at the time of authorization so that you can -- that treasury shares at no time can exceed 10%.

And the purchase price has to be -- has to not deviate more than 10% from the price quoted on NASDAQ Copenhagen at the time. Are there any comments to this? Then the authorization has been approved. Item 9 is to authorize me as Chair of the AGM to make adjustments required by the Danish Companies authority and inform the authority about what has been decided. Are there any comments or does anybody else want to take on that job? That doesn't seem to be the case. So I have received this authorization. Thank you for that. That brings us to the last item on the agenda, which is any other business. We can't make any decisions here, but you can make a final comment or ask a final question. It doesn't seem -- that doesn't seem to be anyone who wants the floor. So I'll give the floor to the Chairman of the Board.

So for me, a very big thank you again. I really appreciate the dialogue and I really appreciate your kind words. And as I said, I think it's important that we keep this physical and of course, also possibility to vote by mail. But I appreciate your comments, your interactions and a big thank you for taking your time. Now I think it's time for food. So thank you for coming.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

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 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.

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.

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 and, 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 gigawatts, leading to a record high order backlog. Its higher Onshore activity, especially in EMEA, was offset by lower Offshore orders in the year. The manufacturing ramp-up leading to extra costs and investments, as we were speaking to throughout the year. Progress is made and being made on the persistent challenges, and we expect further improvements here in 2026.

We are returning value to our shareholders. A dividend of DKK 0.74 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 billion to EUR 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. 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 a high generation of electricity from now more than 200 gigawatt installed.

When we look at the global environment, inflation, raw materials, transport costs are stable. 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 are 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. 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 U.K., 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 10 gigawatt 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'll also here use the opportunity to thank our colleagues. It has been an exceptionally good execution in 2025 and the best execution we have seen in the last 5 years on our projects when it comes to our often discussed pre and post calc on the project. So a huge thank you to everyone here who has contributed to '25.

With that, I'll go to the Power Solutions slide. So strong finish to 2025. The order intake of 6.5 gigawatts in the quarter, driven by strong momentum in Onshore across all regions and good activity in Offshore, such as the 390-megawatt Shinan-Ui project in Korea. The 6.5 gigawatt in the quarter also, therefore, hints and indicates an unannounced order intake of 1.1 gigawatt, which again supports the strong momentum that sits in and around the whole Onshore part.

The largest order in the quarter was 828-megawatt 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 1.01 million per megawatt, 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 Solutions increased by EUR 1.6 billion compared to 1 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. 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 reached 161 gigawatts under service. That's an increase of 2 gigawatt 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.

I would 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, gigawatt under active service contract, 161 gigawatt versus 152 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. But year '25 was very much a year that 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 102 megawatts of order intake from Argentina. At the end of Q4, Vestas' pipeline of Development projects amounted to 28 gigawatt with Australia, the U.S. 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. And 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 tonnes of greenhouse gas emissions over the course of their lifetime. Undoubtedly, this is Vestas' 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 tonnes. So we are sort of beating that with a factor 2, give and take.

During 2025, we also supplied 22,000 tonnes of low-emission steel, driving significant emission reductions in those projects. The 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. I'll also say here, no fatalities in 2025, and 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. You will also see, we don't no longer comment on Corporate Knights. We don't understand the changed 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.

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.

Thank you, Henrik. And 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 '25, 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 were though affected by a 3% currency headwind. Gross profit landed at an all-time high of EUR 2.5 billion, and 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. Finally, on this slide, I want to highlight the ROCE 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 costs 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 negative EUR 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. And therefore, the EUR 56 million entailed both redundancy costs, but also some noncash impairments of legacy assets, and 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. '25 was a back-end loaded year, and '26 is expected to follow a similar seasonal pattern. And of course, on the right on the slide here, you can see that was the same in '23 and '24. 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. And yes, '26 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 unusual 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. For full year '25, 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 negative EUR 3.1 billion in quarter 4, 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.

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 EUR 872 million in the quarter. For '25, we ended with a strong net cash position of EUR 1.2 billion, having actually, throughout the year, paid out dividends and also completed 2 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. And 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 investing for growth and competitiveness. Total net investments amounted to EUR 382 million in quarter 4, 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 '26 ready to execute a higher number of projects in Offshore. Total net investments for the year amounted to EUR 1.250 billion, in line with our outlook.

And moving into the quality slide, where we also see a strong development year-on-year. 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, and it will take some quarters before this effect is fully out. Warranty costs amounted to EUR 207 million in the quarter, corresponding to a 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. And 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 halved that in '25, and it's now the lowest in 5 years.

Then before handing back to Henrik, I want to end on my favorite slide, the capital structure slide. It is important for Henrik, for me, for team Vestas that Vestas remains resilient to economic fluctuations and respecting the volatility of the industry. 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 we before talked about having a net interest-bearing debt to EBITDA before special items at maximum plus 1. We now also say we want to have it within the boundary of plus 1x to minus 1x.

And the final comment on this slide will be that the net interest-bearing debt ended the year at minus 0.6x EBITDA. And 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.

And with that, Henrik, back to you.

Thank you, Jakob. And again, here, a 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, 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.

And I think one of the heads of state has said, it's an untapped energy source in what else is an energy deficit Europe, because we need to be more independent on that. So the energy 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 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.

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 strengthened security through national decentralized power generation. We see that. We see that evidenced also in areas where it is conflicted, like, for instance, ultimately in 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. 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 I 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 7 priorities down here, there's no doubt that we also have become, as team Vestas, much more direct and more specific in what it means to drive quality cash or, for that matter, efficiency in it. 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. And I think in some ways, Jakob, 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 in Service, but Service works really well and supports not only the business, but also our customers as key.

When 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. 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 say, 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, 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.

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 midyear last year. We've been speaking about it for some time, because the overall 2 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 7, but the efficiency part sits under the efficiency box. So therefore, operating model is having that drive and also requires that attention from everyone among our 37,000 colleagues across the world.

When we look at our 4 focus areas for steering the outcomes, I think the first and foremost, it's listen to customers. Customers told us throughout the last year or 2 that in some ways, we have become too complex, too difficult to talk to. And sometimes that was too long from when you presented a potential need or solution to 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 sat out facing to our customers, it took far too long. Some of the things is fair saying we had examples of both processes and the way we acted, where I will sort of say, even if you make 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. 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 first wave of it, that 900 positions were gone by the end of 2026 (sic) [ 2025 ], and it is fairly obvious that the rightsizing of Vestas is, of course, painful. But on the other hand, it's also needed. And 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 in Vestas. And therefore, we are not finished simplifying. We just started and scratched the surface of it. 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 3 work streams. And I think, Jakob, you touched a part of the financials. We also here had a special item 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 everyday. And this is what I call day-to-day. Very easy. If you onboard the group of colleagues, investors and say, 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. That is one of the things where I just encourage 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 expect it 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 rightsizing, you see in the first one, I mentioned the 900. I 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. This is also the most challenging and probably, for a lot of us, a bit more 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, 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 change 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. 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 OnePlan 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 strength of this.

So very importantly, we have exited trim contracts with unacceptable terms. We're not finished with it. We also drive early renewal negotiations and, of course, strengthen the backlog health. And one of the things I will comment here on that where it was possible to have very disfavorable 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. That also means that by the end of this year, the net contract assets sits at EUR 1.168 billion. It's around 3% of the Service backlog. It's in good control, and we can also know, 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 wage inflation, rising material cost indexations. Some will also add in there how tariffs and others are passed to the contract -- payment 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 really speed.

And then as the quality-related effect, you've seen it. Jakob 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 exceptionally 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 comes 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.

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 this multi-brand, which I have not talked too positively around for the last 6 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. And 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 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 in 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 during 2025, to revise and look at our capital structure strategy going forward. That is described, if you want to read much more about it, in Page 21 and 22 in our annual report. But here it is that we will -- as the priorities here sit, we will continue investing in the business. Jakob just showed you the EUR 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 in '26 compared to '25, because we are more investing now 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. It's not something that has been that much on our mindset since '21 and '22, 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, which also means that when we look at our net interest-bearing debt to EBITDA, we aim for having that between minus 1 to plus 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 three share buybacks. We don't like to do big things in that sense. We 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 a combination of dividend and share buybacks. I mean, for many of our investor exchanges, in general, we will see that people probably prefer more share buys and therefore, less dividend. We follow that guidance very much. 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 '25, 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. And 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 of 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 Scope 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. 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, your ROCE, Jakob, but those 2 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 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. 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, and this has almost become a personal thing. So drive us 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 4 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 of 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. 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 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, we haven't observed anything that prevents the Service business from doing 25% EBIT margin. It's just not in '26, and it won't be in '27, because we won't jump from a midpoint of 16.5%. We came out of '25 just around 16.5%, and we will continue having that as a work assumption. And then we will see. We need to get it into starting with a 2 first, 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 '25, 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 '25 and keep building some more volume, 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 do a bit better. So that, of course, we will use in this margin bridge.

If you add those 4 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. I will also say, when we sit here in beginning of '26, 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 really 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 billion to EUR 22 billion. 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 slightly more volatile in these days.

Then 2 more little service message here. Some of you might observe over the coming day or 2 that I'll be selling some of the shares I have now bought and had since I joined as CEO in August '19. 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. 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 sit with end of '25. Thanks to also listening in. And please just here on the last page, I would just say, we have our Annual General Meeting on the 8th of 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.

[Operator Instructions] And the first question comes from Claus Almer from Nordea.

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. So maybe give some color on what is the margin drag in '26 and maybe some comments on what should we expect beyond 2026, except for your 25% margin target? That will be the first one.

Thank you. I always love when you ask, Claus, for '27 guidance on the Service. So therefore, listen, we're going through diligently quarter-on-quarter. We're saying what we are doing. We're showing it. If you ask some of our customers, most of them will also say that they probably understand why we are doing and how we are 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, into the backlog is also getting addressed, whether that's renewables (sic) [ renewals ] or it's new, it's working. But giving outside what is here a range for '26, I don't want to do that. 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.

I didn't try to get a '27 guidance because I knew that was impossible. So I was a bit puzzled why the guidance for '26 is as it is. Why shouldn't we hope or expect a better margin in '26 versus '25? That was more the things I was trying to figure out.

I don't know if you should hope or think or whatever. Claus, we hold the business in very tight ropes right now. And if you open the remuneration report, you will see that actually out of what went well in '25, EBIT and cash flow gave employees, investors an incentive payout where the 20% that relates to Service gave 0. And therefore, Service continues to be part of the incentive scheme for also 2026. And 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 for Service, 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 really where -- but we cannot let the recovery run ahead of what we feel we are addressing, and it does take time.

That is fair. I think we all appreciate that, Henrik. Then my second question goes to your pipeline, and by the way, congratulations with the strong Q4 order intake. There's a lot of talk about data center and the data center build-out and that being powered by Onshore wind turbines. What do you see in your pipeline from that area? That would be my final question.

Yes. No, I will say here. I think it's interesting because when pendulum swings in this world, everyone have now learned that you got to start thinking of what if the pendulums change 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, but it also comes from something as simple as in the U.S. that you have manufacturing that has been home shored to the U.S. that are also in the need for energy generation. So generally, across many societies, you have 3 drivers. Yes, you have the single-handed 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 secondly, and 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.

Then the next question comes from John Kim from Deutsche Bank.

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?

Yes. Thanks for that. I will say, John, here, there's nothing else than it works to plan. We are progressing. We are seeing that the takt time is developing. As I said, one of the most rewarding for me between Christmas and New Year was standing on Esbjerg Harbour and seeing that there was blades and nacelles waiting for a weather window to go out on the North Sea. So in reality there, we 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 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 sort of its own generating electricity for the turbine.

So no, we are really pleased with it, which is also part of what I referred 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 projects in execution in '26 that we are also following and having with us in the factory. So really pleased with its progress. Always, you will never meet me, John, and not here 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.

Okay. Helpful. A quick follow-up, if I may. Given the near-term outlook for Offshore, I believe you have more projects to execute this year than the 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?

Yes, I will sort of say yes. And then at the same time, I think here, I think never leave the big principles of that '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 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 '26, we are not at the revenue we neither need to dilute that or the depreciation. So therefore, it's still with a red number in '26, but the progress, as you can see from our outlook, and therefore, we aim for a black number in '27. That's no surprise. That's how you should think about it sort of on the big years. And then as I said, on the quarters, let's talk a bit more about that when we probably sit together.

Then the next question comes from Alex Jones from Bank of America.

First, maybe on the buyback. If I take the profit 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 you've announced EUR 250 million today. So should we expect a further EUR 50-ish million later in the year? Or could you do much more than that such as continuing EUR 50 million per quarter run rate?

Thanks for the question. I think when you look at the buyback and return to shareholders, we should also look at what we did in Q4 and add that to your calculation. And 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 '26. But '25, 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.

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 costs you had in Q4, then the 2025 margin was probably nearly 17.5%. Could you just talk about the midpoint, whether there are any particular drivers of why margins would be down year-on-year as a further one-offs like they 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?

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. And I keep coming back. We're doing the right thing, what is right for the business. If you then take 1% of, give and take, EUR 4 billion, it's EUR 40 million. When we see quarter-on-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, there is -- with the entry to this year, we want to complete the recovery plan, and 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.

And the next question comes from Colin from RBC.

Perhaps one on capital allocation. Clearly, a 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 near 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 V236 entry. Is that your view? Is that possible that it could potentially stabilize at a level not too much higher than this?

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. And 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-up of the manufacturing. Now it's more back to Jakob's point about tools and other things that sits in the CapEx. 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 it. 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.

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 kind of commented Service is underneath, beneath, below your expectations for the year. But maybe just to clarify 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?

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, 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.

Then the next question comes from Kristian Tornoe from SEB.

Two questions from my side. So first one is on the current sentiment among your U.S. customers. So last year, you ramped up your production capacity in the U.S., but sort of listening to your key competitor in the U.S. Onshore business, they are not necessarily very up to speed on demand. So just maybe help us on how we should think about the risk of your capacity utilization and hence margins for your U.S. Onshore?

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. And therefore, we believe that has a pretty bright future. And 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, and it also works in the U.S. And I think, especially in the countries we are debating here on the Onshore side, the levelized cost of energy is fairly attractive. The time to energy, very attractive compared to any other alternative energy sourcing. So therefore, Kristian, I don't hear anything else of doing that.

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 month, 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 30 gigawatt in the backlog plus/minus. 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 U.S. And don't forget, we have factories there that works really well now. So I'm pleased with it. So I'm not going to -- I don't 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 '27.

Understood. And then my second question is actually on Offshore. You said it just before that you expect that to be profitable in '27. 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 that you have visibility for sort of continued growth for your Offshore business towards the end of the decade?

I'm smiling, because now I've been an ambassador for Offshore wind, and I probably at some point in time, 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.

And if you take that, AR7 gave 8 gigawatt, that's 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 nacelle in Poland. We have expanded blade facilities across Europe. So therefore, we are more than ready for that. I still sit with another one, which is 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.

The next question comes from Ajay Patel from Goldman Sachs.

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 '25. 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 derisk or become more visible to you, i.e., 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 '27 onwards?

And then I think my second question would be, from my utility perspective, we're hearing increasingly about the opportunities around repowering in the U.S. 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 '25?

Thanks, Ajay. I will just sort of say, first of all, thanks for your initial reflection over where we are and how far we have come. And 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 debt 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.

Jakob's comments on, we like doing repeatedly share buybacks is also a good hint of we are not finished with that. We are just now showing you how we want to think about it quarter-on-quarter of capital redistribution back to our shareholders. That we wouldn't have done if we didn't feel we had Offshore visibility.

And if you then take the guidance '26 versus '25, as Service is plus/minus 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 U.S. So that you can take as a progress just seeing between 5, 7 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 therefore, on these calls, I know they are listening in as eagerly as I'm speaking. So therefore, that I would rather keep to another day.

On the repowering, yes, please. So U.S., yes, please. And that 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 U.S., yes, please. You can replace 3 with and 1 have even much more electricity out of it. So 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.

Just, sorry, on the operational leverage, is there any sense you can give us on that side?

No, thank you. But it's positive.

You can't blame me for trying.

No, I put you immediately in the same category as Claus Almer.

Then the next question comes from Martin Wilkie from Citi.

It's 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 triple-digit million drag from the Offshore ramp-up in '25, 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?

So 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 '26 is not the full thing we need to get out. So therefore, when we imply that, it's not only a volume game for '27, it's also a cost and a ramp-out cost in '27. So Martin, this will lead -- so therefore, what you're seeing in the guidance and outlook for '26 is what I will call a first stage of what comes out of an improvement in the Offshore ramp, but we are not done with it at all.

And 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. 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 margin is the current period margin just because of this overtime accounting. And given the range that you've given for '26, there is going to be some influence 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 '26?

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 have 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 back-end loaded or whatever loaded in 10, 20 or 30 years contract where you have let 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 know, when you have 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 discussed with customers as part of new order intake. And that, of course, will overall improve, 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. And that, of course, gives us a little bit right now, let's come through the quarters.

I know what you're asking for everyone, and you want to know what the outcome is when the recovery is over, but we just have to go through this. And this is painful because, yes, you find still some of the examples where you said we'd rather not have them, but then we deal with them. And that, of course, influence your average profitability of a business like this. 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 measured, it will be 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.

And the next question, today's last question, now comes from Max Yates from Morgan Stanley.

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 U.K. 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 U.K., what is the willingness to kind of leverage the Chinese supply chain in some of those projects?

You're 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 know what the agreement was. I know what we are talking to U.K. government about. I know what we are talking to a head of State of the energy in there, Ed Miliband. 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 saying 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. And 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.

Okay. Interesting.

I know this is -- we look forward to see you, 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 yes, 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.

Ladies and gentlemen, the conference has now concluded, and you may disconnect. Thank you for joining, and have a pleasant day. Goodbye.

Good morning, and welcome to Vestas' Q3 reporting and also closing and looking forward to close a very solid year 2025. I'll also take here the opportunity to extend a big thank you to our customers, colleagues and not least our external stakeholders, great support and commitment through the current environment through the first current 9 months of the year to the execution we are talking and going to talk much more about, today.

So with that, could I go here to the key highlights. So, key highlights, revenue of EUR 5.3 billion. That's an increase of 3% year-on-year driven by higher deliveries, despite negative foreign exchange development. When we look at the EBIT margin of 7.8%, earnings achieved through improved Onshore project execution, lower warranty costs, partly offset by our manufacturing ramp-up, which is continuing, but also progressing well. When we look at the order intake of 4.6 gigawatts, up 4% year-on-year, driven by U.S. and Germany and Onshore is up more than 60% quarter-on-quarter comparison to last year.

When we look at the manufacturing ramp-up, the driver cost and also investments the Onshore and Offshore ramp-up is progressing as we focused on delivering a very busy fourth quarter but also as importantly, getting a strong start of 2026.

By this, we also decided to return value to our shareholders, I think, most importantly, in line with our capital structure strategy and also solid liquidity position, a share buyback of EUR 150 million will be initiated and will be starting as of tomorrow morning.

And then on the outlook, we narrowed the outlook in terms of turnover EBIT, reflecting the lower Service EBIT, but also the stronger Onshore execution.

With that, I will talk about the market environment we are in. And again here, wind energy is key to affordability, security and sustainability. That is our narrative and we can see it actually working in across many of our markets, as you've also seen in our order intake and not least also in our delivery table. When we look at our global environment, no doubt, inflation, raw materials and transport costs are stable, but tariffs will increase cost over time for the end user. When we look at the ongoing geopolitical and trade volatility leading to a regularization. We have spoken about that in now many of the previous quarters, and I will almost say the previous years. And we are seeing it's continuing, and we are dealing and planning and executing well in it.

When we look at the market environment, there is a heightening focus on energy security and affordability across many of our main markets. The grid investment is prioritized in our key markets and we can see it's progressing in a number of markets, but also probably have status quo in the numbers of others.

On the permitting side, it is improving in some markets, but overall permitting auctions and market design is still challenging. Maybe here is the perfect place also to just express a bit of a concern with Europe's continuing introduction of rules like CSRD, CBAM and others, while the rest of the world are after competitiveness.

However, when we then look at the project level, I will say, Vestas, we see a strong project execution in the quarter and also year-to-date. We see some regional disruptions from time to time, but we are coping very well with it. And of course, that's then leading to the result we are also seeing in Power Solutions today, which I'm sure Jakob will talk us much more in details about.

When we look at the Power Solutions in Q3 2025, strong quarter across all key markets. So, when we look at the Q3 order intake of 4.6 gigawatt, that's up 4% compared to the last year. The increase was mainly driven by strong order intake in the Americas, especially in the U.S. as well as continued positive momentum in EMEA, especially in Germany. There are no Offshore orders in Q3, so it is a clean Onshore order intake quarter.

The ASP declined to EUR 1.01 million per megawatt in Q3 compared to EUR 1.11 million per megawatt in the prior quarter. The decline was driven by a change in the order mix with higher share of supply-only orders in the U.S. Generally, we are very pleased with the positive continuing price and price discipline we are showing and our customers' support and understands it.

When we look at the order backlog in Power Solutions, it increased to EUR 31.6 billion. That's up EUR 3.3 billion compared to 1 year ago as our energy solutions continue to have good traction with customers across our core markets. And you can see more of the details in the chart to the right.

With that, on to Service. So, Service outlook revised and also the recovery plan is progressing as we go through and we are now three quarters in. So, the Service order backlog increased to EUR 36.6 billion from EUR 35.1 billion a year ago, despite EUR 1.5 billion headwind from foreign exchange rate movements year-to-date.

When we see a Service, it reached 159 gigawatt under Service. It's flat compared to Q2, as additions were offset by a higher level of expiries and also deselecting in the quarter as the commercial reset continues. This is some of the consequences we have spoken about in the previous quarters as part of our Service turnaround. And I think we can now start seeing that some of it also shows at least in the Service under -- the gigawatt under Service as such.

When we look at the Service recovery plan, which runs until the end of 2026, it's progressing, and we are seeing early signs of operational improvements and also a reduction especially in our overdue work orders and the backlog of the same. That's very healthy, and it's very positive to see. And of course, we will continue working with that, and we look forward to talk more in details over the coming days.

However, earnings in Service are also affected by foreign exchange rate headwinds as well as some costs related to some specific Offshore sites, which has led to a revision of the 2025 outlook of Service.

You will see here to the right, the breakdown of the Service order backlog, EUR 36.6 billion overall, of which EUR 31 billion is Onshore, 159 gigawatts under active Service contracts and then an average duration of 11 years. You will see the breakdown on the regions below. And as you will also not surprisingly see in Asia Pacific, if you don't have new order intake, it also is limited to how much you grow gigawatt under Service.

With that, take you through development. Development, not a lot, so I'll have that pretty quickly. Discipline, the same. We also focus very much about finding projects and advancing projects. But as you can also see, the environment right now is a lot of focus on in the key markets to progress projects, and we haven't really progressed anything in Q3. So, I'm pretty sure from a performance point of view, they also feel that for Q4.

In Q3 2025, we had a pipeline of development projects that were stable around 27 gigawatts with Australia, U.S., Spain and Brazil, holding the largest opportunities.

Strategic focus is on maturing and growing a quality project pipeline as well as conversion of mature projects in project sales and related turbine order intake. You can see the regional breakdown below.

And I'll go to sustainability. In Q3, Vestas is the most sustainable energy company in the world, and we keep having that focus also with our customers and stakeholders.

When we look at the turbines produced and shipped in the last 12 months, they are expected to avoid 461 million tonnes of greenhouse gas emissions over the course of their lifetime. You will see that here to the right. And of course, as we are ramping up, we expect that to continue increasing.

The carbon emission from our own operations over the last 12 months increased by less than 1%, which is actually a very positive achievement, because our activities are increasing. So therefore, keeping Scope 1 and 2 at the current level is a testament to the focus and execution of our operations across. It is also saying when we ramp up Offshore, it is a significant change in business mix. So, there will be an upward pressure on the carbon emission, because we are using and spending more time at sea, at vessels and other transport measures.

When we look at the number of recordable injuries per million working hours, that was up from 2.8 to 3.3 year-on-year. Safety remains a top priority for us as we tirelessly work to improve our safety performance across our value chain.

I think also here from a personal point of view, I would say this is not good enough. When we see overall the year, we have less serious injuries and we have no fatalities that's positive. But the higher frequencies in especially Northern Europe and North America with onboarding many of our new colleagues, that also means that when we ramp-up Offshore, we see some of those frequent injuries we shouldn't see.

So therefore, we have highlighted that. We talked directly to our colleagues, how do we see our colleagues and our family members remain safe on sites in this. So therefore, we are taking it extremely serious that it has not gone down, but actually gone up in the last 12 months after Q3.

With that, I will hand over to the financials. Jakob, take it away.

Thank you, Henrik, and let me take us through details. I'll just flip the slides. Let us take through the details of the income statement and the highest ever third quarter gross profit.

Revenue increased 3% year-on-year, driven by growth in Power Solutions offset by slightly lower revenue in Service, primarily as a result of negative foreign exchange rate developments.

Gross profit, that I just spoke to, increased to record-breaking EUR 772 million in the quarter, the highest ever in the third quarter. The record was achieved by improved profitability in Onshore, lower warranty costs, partly offset by manufacturing ramp-up costs.

And EBIT margin before special items was 7.8% in the third quarter. As mentioned throughout the year, '25 is a backend-loaded year. The third quarter that we are just going out of was a strong start to a busy second half, and we expect a better balance between earnings in the third and fourth quarters compared to previous years.

Diving into the segments starting with the strong performance in Power Solutions, as Henrik also alluded to. Revenue increased by 4% year-on-year, driven by higher megawatt delivered at stable average selling prices. EBIT margin before special items improved to 3.9 percentage points year-on-year to 8.1%. The improvement was driven by lower warranty provisions, continued strong onshore project profitability and importantly, execution, partly offset by costs related to the manufacturing ramp-up in our Offshore in Europe and Onshore U.S.

Moving into the Service segment. Service revenue declined 3% year-on-year due to lower transactional sales compared to last year, while contract revenue was stable. Revenue growth in the quarter was affected by 3% currency headwind. Service generated EBIT of EUR 153 million, corresponding to an EBIT margin of 17%. The profit levels is in line with recent quarters, but we expect additional costs in Q4 related to some specific Offshore sites. The Service recovery plan continues and it will take time before benefits are visible in the financials.

Net working capital decreased in Q3, mainly due to a reduction in inventory as a result of high project deliveries in the quarter and continued focus on working capital management. Important to notice, compared to Q3 last year, we have seen EUR 1.4 billion improvement in the net working capital.

That leads us into the cash flow statement, where importantly, and what you have seen also where we say we initiated a share buyback on the back of strong cash flows and our net cash position.

Our operating cash flow was EUR 840 million in the quarter, a significant improvement compared to last year. The improvement was driven by better profitability and a favorable development in net working capital, as you just saw.

Adjusted free cash flow in the quarter amounted to EUR 508 million, also a substantial improvement, driven by the same reasons as mentioned in above. And then finally, we ended the quarter with a net cash position of EUR 0.5 billion.

Total investments in the quarter amounted to EUR 274 million in quarter 3. The spending is primarily related to tangible investments such as transport equipment and tools as well as property plans and equipment across our turbine portfolio, such as the Offshore 15-megawatt EnVentus and our 4-megawatt platform in the U.S.

Importantly, we are also very pleased to welcome more than 400 new Vestas colleagues at the Onshore blade factory in Poland, which we took over in September from LM Wind Power. The factory will deliver blades for our EnVentus platform and expand our industrial competitiveness in Europe.

Looking at provisions and our lost production factor, we see signs of stabilization. The repairs of the sites mentioned in previous quarters are now largely completed. Disregarding these sites, the underlying LPF has trended down during '25. Warranty costs amounted to EUR 160 million in the quarter, corresponding to 3% of the revenue, and that is a significant improvement from the 6% we saw in Q3 last year. Warranty consumption was EUR 206 million for the quarter. The higher consumption level in the quarter is related to the above-mentioned repairs.

And finally, ending on a high, we can report our best EPS and RoCE in 5 years. Net debt-to-EBITDA ended the quarter at minus 0.2x compared to 0.9x a year ago. Investment-grade rating from Moody's, we still have with a stable outlook.

Earnings per share, measured on a 12-month rolling basis, improved to EUR 0.9, driven by the better profitability. Our return on capital employed, which broke the 10% barrier last quarter improved again and now to 13.6% as the earnings recovery continues.

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

And now back to Henrik to take us through the outlook.

Thank you so much. So thank you, Jakob, and thanks very nice slide to finish with. And if we were a bit out of sync, I have to catch up with that change of your slides in the future. But we will rehearse that.

When we look at the outlook, the outlook for the year, revenue narrowed EUR 18.5 billion, EUR 19.5 billion from previous EUR 18 billion to EUR 20 billion. Of course, there are some negative foreign exchange that you picked up. On the EBIT margin before special items, 5% to 6% narrowed from 4% to 7%, and Service is expected to generate an EBIT before special items of around EUR 625 million. And then total investments remained stable at EUR 1.2 billion, as we also had in our previous outlook.

With that, I will just say thank you for listening in. I will pass to the operator, and we will go to the Q&A. And also in that slide, you will be able to see the financial calendar for 2026.

Over to you, operator.

[Operator Instructions] The first question comes from the line of Sean McLoughlin from HSBC.

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

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

So if we, at some point in time, wanted to do a further capacity expansion, then it's an opportunity and option for us. And right now, we are working well. We are progressing well with our own capacity plant upgrade and that we will just wait and see. This is a dependency on what happens in the backlog when we look 4 years plus ahead that's where we will adjust capacity. Currently, we don't see any reason for raising the question or question too, if we need to adjust capacity downwards. That's for sure, Sean.

So, we are ramping up. And therefore, in a call like this, start talking about capacity downwards. That's not -- we have a backlog of more than EUR 10 billion of projects and we will be throughout this year, next year and into '27 reach what we will call a more stable full capacity utilization.

And if I could just follow up on Offshore is looking at the moving parts for you effectively not lifting the midpoint of the guidance after the strong Q3 surprise? I mean, is Offshore a component of that? Or is that really driven by Service?

I don't -- as I said here, if we look at the midpoint here, you can sort of see if you have three quarters now, you can see we struggled to absorb the Offshore ramp and the ramp-up cost in generally, if we are laying around EUR 2.5 billion in turnover. Now we are above EUR 5 billion. We have a very good quarter. But again, there, it's a lot easier to absorb it when we have a higher turnover. So, we are pleased with where we are, probably is around the maximum of the ramp we are seeing here in the second half of the year. So therefore, coming into '26, we should start seeing also, it's reducing and disappearing over time. So, that is sort of the -- in our heads, the timing of it.

And then as I said, in the mid-range, also here, Sean, of course, we still have also the business absorbing for instance, tariff and other exchanges that happens in the world. So, we're not -- we're actually very pleased with what is in here, and we're also very pleased with what Onshore execution is supporting our continued investment into Offshore.

The next question comes from the line of John Kim from Deutsche Bank.

Two questions, if I may. If we think about the updated guidance here and include the headwinds in Service, I believe it still implies a sequential -- a weaker margin in Q4 for Power Solutions. I'm just wondering if you could give us a bit of color here whether it's more about the cadence of the Onshore deliveries or potentially a bigger drag in Q4 from Offshore? How should we think about that?

I think here, it's the busiest quarter again in Q4. We walk into Q4. You will have seen it. We always said when we started the year back end loaded, but it's second half of the year. I will sort of say here, when you look at that, John, I would much rather see it in that we have managed to equalize Q3 and Q4 much better. Last year, we didn't. So therefore, compared to last year, we are looking into a Q4 that looks fairly much as execution of Q3. And then there can be a variation to the theme of what do we have in the backlog in there. You shouldn't read more into that. Then it is a busy quarter. We got 56 days to go, and we will always be subject to the normal variables in Q4. So that -- yes, we won't try to make it worse, that's for sure, in the Onshore execution, which we so far have had a really good run at this year.

Okay. Helpful. And on the Service guidance, EUR 625 million as the updated guide. I want to say there's a little bit under EUR 20 million in FX headwind. Is the remainder of the difference from EUR 700 million to EUR 625 million due to the Offshore that you had mentioned in the commentary?

I won't comment on your FX calculation. I think, we probably will see it slightly a bit more than that. But as I said, let's not do that. What we are just saying here, if we have a couple of things where we put a lot of vessels and a lot of people see in a Q4, it will drag something. So when we see that in a Q4 of a Service, which, let's just say, between us, we maybe end up around EUR 1 billion in turnover, then you can easily invest EUR 20 million in some of these Offshore sites in a quarter, and that's why we are guiding towards the EUR 625 million.

The next question comes from the line of Kristian Tornøe from SEB.

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

How material are we, we had listed. We know that it's ordinary ramp. So, that means, the longer you get in, the better we get added, Kristian. But it's also here for both the Onshore U.S. and Offshore. We see a tendency too that we are further into the Onshore U.S. So, that should be definitely disappearing over the coming 2026. And then, as I said, in the Offshore ramp, listen, we opened these the nacelle factory less than 6 months ago. So therefore, we are at a maximum of both onboarding and running the education and training there.

So, I can't give you a date where it maxed out and then it starts coming down, but we do everything we can to actually having coming out gradually over '26. Will it be totally done in '26? I don't know, because there always be things. So that we will talk more about when we get to 2026 outlook in February. But we are comfortable with it, and that's probably the main reason here. We have more than 0.5 gigawatt I see now in the Baltic Sea and the North Sea. So, we see that progressing. But of course, we are into the winter season where it's a slightly different environment to construct and install Offshore.

Understood. Fair enough. And then, my second question is on your order intake in the APAC region, which again this quarter was fairly low. So, just any commentary on the outlook and your optimism for actually seeing APAC orders pick up?

I would just say nothing more than he should be doing better. There's a whole region out there in Asia Pacific, so that we encourage them to do. I think, it's lumpy when you are in markets of the nature of what they have in Asia Pacific. They are a bit more depending on when does it come over the finish line. I'm pretty sure that it's a whole region and not wanting to show us and you that they are good. They're doing zero in fourth quarter, because that's not the intention. So, we'll see where they end in 31st of December, but game on for the region to build a proper FOI in fourth quarter.

The next question comes from the line of Dan Togo Jensen from DNB Carnegie.

Sorry, can you hear me now?

Yes.

Okay. Good. A couple of my questions from my side as well. On warranty provisions, low this quarter here, but how should we think of this level both absolutely and also relative, of course, as you put on more on the Offshore side? Can you maintain this level here? Or is there a risk that we will start to see level or an increase in that ratio? And then a question on the share buyback, the EUR 150 million. Can you elaborate a bit about the math behind reaching the EUR 150 million? I mean, cash flow -- free cash flow generation was more than EUR 0.5 billion, and you have almost EUR 0.5 billion in cash by end Q3, and how should we think of it by end Q4? Will you again be possibly in a position where share buybacks could roll into the current program be released by a new program?

Dan, this is Jakob here, let me take the first part, and then Henrik will comment on the latter. Warranty, what we should remember, and I'm sure that those are also the numbers you're looking at. '23, we had more than 5%. '24, we were down to 4.3%. And then this year, we are hovering around the 3%. So, it's something we're really proud of, and it's an outcome of our focus on quality. We also see the underlying LPF reducing as we say, except for these couple of sites. And our ambition is to continue that journey down. And again, looking at next year, we'll talk about after Q4, but it's certainly our ambition. We are not satisfied with the current level of 3%. We see further potential and we have higher ambitions.

Okay. Sounds good. And then, on share buyback?

On the share buyback, I think always when we do these things, we look at it in a bigger scheme of things. We have had a highest EPS, as Jakob mentioned, highest EPS and highest return on capital employed for 5 years. As you know, our Chairman very well. It's probably also the highest EPS for most of the 10 years. So therefore, when we look into this, we think it's fairly reasonable that we also say to shareholders, you will get cash back. Could we have done more? Yes. Could we have done less? Yes. But we ended EUR 150 million, because it's also the time of the year where we can get this done until the 17th of December. And then, of course, we get together again in beginning of February.

And as you're rightly saying, we're not about piling up cash here in an environment where we feel very comfortable of the investments we have been doing and still are doing in Offshore, but that is also to say if people have struggling to see the value in Vestas shares, then share buyback is the best way we can also say, we -- at least, we trust in the Vestas share.

The next question comes from the line of Akash Gupta from JPMorgan.

My first one is on Service. So, I think when we look at your Q4 -- implied Q4, it's slightly over EUR 140 million adjusted EBIT, which is smaller since 2020. Can you tell us maybe how much of this is structural and how much of this is like temporary figures? And can you also talk about growth rates for Service in Q4, given last year, we had 30% year-on-year growth in Service top line. So, that's the first one.

Thanks, Akash. I will say sort of top line first. When you see the Service top line, there can be, and there was also last year some repowerings. Therefore, if Q-on-Q, there are differences in the top line that can relate to special things like that. And you will also appreciate we do have transactional sales as part of it, which can vary. We don't comment much about that and don't want to comment much about it.

But as we also discussed over the last quarters when we have embarked into this Service reset. It is important for us that also we get better in saying, in this quarter, we already know this is what we are going to do in the quarter in especially some of these Offshore sites. So therefore, we have to give you a bit more guidance on some of these. That is not a recurring thing. So therefore, when you're into next year, you should see probably year-to-date and what we have done in the previous quarters is the underlying run rate of the business.

So, I'm not so nervous of that, but we got to pick it up with you when we have already now a month into Q4. So that's the reason why we are seeing it. And as I said, it relates to something specifically in Offshore that is in the quarter, dragging it down.

Are these Offshore sites are same as where you were fixing some quality issues where you took provisions or they are different?

They are partly, partly different. So therefore, it's not related to any of that, and it's not related to the 236 either. So, this is something where we just know that when you're in this season, and you got to have it, then it's a focus from us, and it's a focus from the customers, and it is very few customers involved as well.

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

No, I will say here, and I think Jakob spoke to that, if I can point to a positive here. We get better and better together with our partners in having a straight through on the production and also the supply chain. So, we've been better able to control inventory. And therefore, if we do that, then are we also, to some extent, in some quarters, you can't adjust it completely from what is going to be delivered and constructed next quarter. So, we have been better at that, and there are no -- we haven't yet seen any influence of any supply chain shortages, then we wouldn't have used the expression of very good execution in Onshore. So, we actually, again, coming into Q4, we won't be many weeks away from when we have all what we need on site. So therefore, Akash, we are -- we see good traction on execution towards the end of '25 as well.

The next question comes from the line of Colin Moody from RBC.

Just focusing on the very strong margin performance in Power Solutions this quarter, well understood on the drivers regarding warranties and volumes. But maybe just on that project execution point. Am I right in thinking this is essentially a contingencies release? And could you help us understand how much of a contributor this was and generally, should there be some more in Q4 to come? And generally, on contingencies, do you recognize the benefits of that release every quarter as projects approach the end or more kind of towards the back end of the year?

I don't know if I'm commenting on something a new special way of doing. We do exactly what we've always done. If we have a project, we do a pre and post cal cap, when we get the final payment from the customer, we put it into our P&L. So therefore, I can't comment on what others are doing in contingencies or whatever. We run whatever we do when we have a project, as you would expect us to do, there's always something in a project where you have what if something goes wrong. And of course, that gets released when you also have the project completed.

So, it's a quarter where Onshore execution has been and delivered this. And of course, even in this quarter in Power Solutions, we have also spent quite a lot of amount in ramping still and investing in the Offshore and Onshore ramp. So for us, this is a normal quarter. But I think you should read back to what I started saying by it is difficult to absorb our investments in ramp when you have a much lower turnover and top line as you saw in Q1 and Q2. That's what you should read into it. There is nothing else. Then it's just a clean execution and profitability, and that's also what we are looking in for the full year.

Well understood. And then maybe just a second question, if I could. On U.S. market trends, clearly, very strong U.S. orders intake year-to-date. Just thinking about the July safe harbor coming up in 2026. How do you think about order developments going forward? And am I right in thinking that you shouldn't necessarily expect a big peak or ramp ahead of that deadline. But actually, you could continue to see very strong order momentum even beyond 2026 into 2027 and beyond?

Yes. Thank you. As I said, it's always difficult to predict in individual quarters. You know my statistics in that, that has been relatively poor, as Claus Almer will remind me of. So I think here, we are also saying we take the orders we can get to. I think it's also fair saying we are pleased with what we are seeing. We are having a well-covered order backlog in the U.S. and people are building out and planning for building out. What is that based on? That's based on that the Wind also in the U.S. has a very attractive levelized cost of energy. It goes well in combining up against gas and others.

So therefore, it's a build-out ROCE that we will continue to see in the U.S. also beyond whenever PTC is expiring or not. I think we will probably have had more orders if we haven't had some uncertainties around the tariff side. But outside that, no, we love getting close to our customers in the U.S. and keep developing that plan for the coming years. So, we're in a good state.

I won't comment on when orders are coming because that's simply too difficult to predict. But don't forget, when we talk about tariffs, we have a very, very large local supply chain that has been there for more than 2 decades. And of course, that we are supported well for and customers can come and see both the sourcing of the components and supply chain into the U.S. factories, which gives a very comfort situation and confidence situation between us and customers in the U.S.

The next question comes from the line of Claus Almer from Nordea.

First of all, congratulations with the solid Q3. I will not ask about orders, but about the tariffs. So, first of all, did tariffs in Q3 had an impact on the profitability in power? That would be the first one.

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

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

That goes a little tight in what we are sitting with. So, we have a P&L to optimize in and for our customers and that we do very well. We can't mitigate 100% of tariffs, because there is not an opportunity to be 100% local sourcing in the U.S. So therefore, there will be a tariff and they will come on either projects or components and therefore, be booked up against the projects when we execute on them.

We don't have an interest in sharing that. Why is that? It's not a market for many. So therefore, we keep that execution with us and our customers. They understand what we are doing and they support what we are doing, and I think we are in the best possible way, trying to mitigate what we can mitigate, but mitigate all of it, not possible.

Fair enough. Then my second question, which is also tariffs. So, there's been some quotes out today from you, Jakob, that U.S. customers are holding back due to the tariff uncertainty, which also was mentioned on this call. I guess this is mainly the ongoing U.S.-China situation which may last for quite a while. So, is there any way that you can reduce this uncertainty and thereby unlocking some of these projects in the pipeline?

I will just say maybe Jakob better comment on his -- himself. We fully agree on that. Of course, as I also said to the previous one, we will probably have taken more if it wasn't for the tariff, and that's absolutely right. And there is also probably a continuing backlog sitting and waiting for clearance on a few of these things. So therefore, let's see what happens there. But as I said, I'm not trying to predict sort of macroeconomics and geopolitics these days, because it's simply not predictable.

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

There's no doubt on 1.8 gigawatts from the U.S. -- player from the U.S. was quite amazing in the quarter. That was all for me.

The next question comes from the line of Ajay Patel from Goldman Sachs.

A couple of questions, please. Firstly, on Offshore, we're largely through this year, I'm just thinking about the Offshore business where that has been hampered by a number of issues this year, fixed cost absorption, ramp-up cost, maybe lower margins on the contracts. And I'm thinking beyond because that's a sizeable proportion of the reflection on the profitability of Vestas. Is there any sort of guide you can give on the ramp-up costs this year so that we can have better modeling of how that profitability may turn?

And then the second question I had was you're performing really well on the Onshore side. You can see the green shoots of Offshore turning around sizably. You talked to Service margins improving by the end of the Service plan. It looks like the significant profit improvement to happen over the next 2 to 3 years. I'm just thinking today's buyback. Can we infer that sizable amount of cash flow that buybacks will be very much part of that debate. And that really, we're really looking at a picture that's got returns of value as a sizable proportion of the investment case?

You're asking me quite a number of questions in the question. S,o, I will try to, sort of, we believe very much in our three business areas. Onshore, very mature, very well developed. And you can say the Onshore has been -- if I was an inside Vestas colleague has been paying a lot for some of the investments we have continued doing in the Offshore. We are absolutely convinced and we adamant that Offshore will be a really great business area, not only for Vestas, but for a few around and also for our customers. So, we are not being caught by the same, I call it, a bit the frustration or depression over Offshore. But the great days of Offshore in the P&L for Vestas will rightly so come when you look beyond the further ramp-up in terms of projects in '26.

So therefore, second half '26 into '27, you're right, Offshore would start looking much more like what we're also seeing in the Offshore profitability. That comes together with that we are doing the right things in Service. So yes, you can definitely come into a higher EBIT margin when you do the future years. It's not why we are looking at a share buyback in an individual quarter. But I think it's a testament from the Board and also from management here to see, we feel confident of what we are doing and where we are and that confidence you need to see.

Because if there's something we probably discussed in the last 4 quarters, which is, when did the business turn around, when was it, we were comfortable of the turnaround we have done? And is it working? And I think today, we can definitely say to people, this is the first sign of it's working and then, of course, everyone can do their predictions. The more cash we get available, the more we will probably redistribute back. Because the biggest part of the investment we needed to get done in Offshore is actually behind us.

The next question comes from the line of Alex Jones from Bank of America.

Great. Two, if I can. First, just to follow up on tariff costs. To what extent were those already hitting the P&L this quarter? Or are there still the sort of incremental increase in tariff costs ahead as you work through inventory imported before the various tariff measures were put in place?

And then second question, if I can, on Offshore. And sorry if I missed it, but could you explain exactly what is happening at the Offshore sites either because of technology or because of your customers' demand that is driving additional costs in Service in Q4?

If I take the Offshore first, then I can leave the tariff a bit more on to Jakob. I think we've spoken about the tariff already. But on the Offshore, it is specific sites. It is where we are manning up. It is not related to our 236, and it's not related to the, sort of, back in Q3 and Q4 last year, where we had a component failure in one of the platforms. So, this is about that we have, what I would probably more call a hyper care in a couple of Offshore sites where we agreed that with the customer. And therefore, of course, we are also investing in that. So, that is in winter and a high season for Offshore is a way of also us saying we are investing with in also prioritizing cost here. So that's what we have done and that's what we are sort of pre-guiding you on for Q4.

And on the question around tariffs, it is hitting our books right now. As Henrik also answered in the previous question, continue hitting in Q4. But what is important is, and that's what we're also saying with our narrowed guidance, we can keep that within the narrowed guidance and you will see doing the math that we have the same midpoint as we had basically since the beginning of the year. So in that sense, yes, it's in there, and it will continue to be in there.

The next question comes from the line of Max Yates from Morgan Stanley.

Just one question from me. Just on the Services business. Could you give us an update on how the turnaround program is going? Are customers kind of accepting the renegotiated terms? And I guess maybe if you could just help us with the kind of how long we will actually -- how long it will take to actually see this in numbers? I guess you're kind of operating in a 16% to 18% margin. I appreciate you won't want to give guidance to '26, but do we still see sort of '26 as a year where the groundwork is being laid for future margin improvement? Or do you really see it as we'll start to see some of the improvement is actually coming through in kind of growth and margins in the Service business as we go into 2026? Just trying to get a sense of -- so we don't anticipate it happening sooner than we actually see it in numbers.

Max, I'll really, really appreciate your comment in that way, because I couldn't agree with you more. This is a global business that has 159 gigawatt under Service. And we have more than 15,000 employees. So, when you do a reset and a turnaround of the business, it will take longer time. So, please don't start making things in 22% or 25% Service margin in '26. We have said it takes the 2 years. We are 5 quarters away from finishing this work, because it does take some time.

I'm really pleased with where we are in the Service team and Christian Venderby, who heads it, have done a really good job. We know the details of what we are going through, but I think also as we are hinting here.

When we looked and talked about this 2 or 3 quarters ago where we said we probably would foresee that we will have some flat gigawatt under Service, then surprisingly it didn't happen in the first 1 or 2 quarters. Now it does happen, because we are getting to some of the gigawatts where, as I think we also spoke about that, for instance, something like multi-brand, it doesn't make an awful lot of value for shareholders, and it doesn't make an awful lot of sense for us, unless we have customers that ask us specifically to do it more on a cost-plus basis. So therefore, you will see now that we're actually having a real firm grip of what is happening from quarter-to-quarter.

So, we're in good momentum. We're in good momentum of addressing where we wanted to have a better operational environment. And then we have a good momentum and also talking to customers straight and that includes even escalations to me as well. So, we are actually pretty pleased of where we are with the commercial reset and we are not done with it. That will be wrong. But that's because you cannot fix that much in 1 or 2 quarters. But run rate up until third quarter is the run rate. I will say, and that's, for me, the middle of the road we are going with.

The next question comes from the line of Lucas Ferhani from Jefferies.

Just a follow-up on Offshore. When are you kind of booked out to? I know you said you have EUR 10 billion of projects in the backlog that kind of last you until 2027, even into 2028. And then, when you look at the kind of the recent failed auction in several countries in Europe, and maybe the AR7 in the U.K. that was maybe slightly below expectations. It depends on who you asked to, how do you feel about kind of the ability to kind of get those redone and then rebid and then the orders coming through to the turbine suppliers kind of roughly on time?

Yes. No, as I said, it's a good 10 gigawatt. We are sitting and muscling around. We have more PSAs, but there are also more PSAs in discussions. So, I'm not so worried about that. And then, when you look at the near term right now, we have a lot to do in the coming 3 to 4 years. So that is also the cycle of it. So, where you come from -- and I keep in currency stay -- don't compare. Compare, but don't compare between the backlog and the process we're running between Offshore and Onshore. Because Offshore processes are longer and therefore, not so nervous about that.

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

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

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

Perfect. And just a quick follow-up on tariff. I think most of what we are seeing and what has impacted you so far is more the section 232 on maybe steel or specific components. But there's also a probe that has been launched in the U.S. into Wind specifically. Can you talk about how do you understand that? I obviously see that there's not much information out there. But how do you look at that risk of what could come out of this probe?

I know and there is sections and there are EU tariffs and there are other tariffs that seems to be changing every quarter. So, we are basically taking the stand that we will deal with it as it's being thrown at us, and therefore, we are also dealing with this.

Outcomes, I can't predict, but what we are both guiding for, for the rest of the year is what we know and what we are dealing with and therefore, it's priced in. And I think we are best doing and best served with doing that. Because otherwise, we have to start changing every time there is a change in legislation.

It might be -- it goes up in tariff, it might be that it goes -- I think the last week, we've seen initiatives that seems to be maybe talking to tariff returning towards the zero again in some areas. But let's see. I don't comment on that because it's way outside my area where I can affect it. What we can affect is how we execute and how we deal with them. And that's where we have a fantastic team in the U.S. and North America that are absolutely on the details with that.

The next question comes from the line of Henry Tarr from Berenberg.

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

Thanks, Henry. I think, I don't know, juice left, maybe I should comment differently. I think on '26, we'll comment on the 5th of February. I've learned that lesson over the years. We do nothing in the Onshore business to try to make it run worse right now, and we're actually doing reasonably well. So, what we have seen here expect more of the same. If we can do more and we can get more, it's probably where we have more concurrent projects where we can avoid having change cost and other stuff in the Onshore. But I'm really just pleased with seeing what is happening in the Onshore. And of course, we don't do that. I think that's also only fair, because there are limited players. So there's no need for them to sit and read the P&L of individual business segments between Onshore and Offshore. Onshore really well, and we will see if we can do more of the same next year. And we will try very hard.

Fair enough. And then, just on staying on the Onshore from an orders outlook. You sort of covered the U.S. How about the rest of the world as you look to Europe and so on? I know you sort of referenced in the materials that you see potential for high single-digit growth in Onshore wind, sort of, globally out to 2030. Are you still, sort of, happy with that view and you still see a lot of movement and activity in Onshore Wind in Europe as you look out over the next few years?

I think there are two reasons in Europe. I think some of the countries are leading the way. If you take Germany, if you take a couple of countries like Romania and others, I think they are leading the way and saying, this is how we can get more done and built. And I think, those countries are absolutely examples to follow.

I think on the -- on top of that, I think it's getting more and more discussed in details how we can do a repowering in Europe which again speaks back to Wind was very much founded and invented out of Europe. And therefore, we also have an aging fleet and that, of course, opens up a European repowering that could be a real business opportunity for people like us. It could also be a huge business opportunity for the owners and the developers.

And secondly, it's a fantastic way of increasing the energy production in Europe. So that -- there are two levers there. I will avoid -- I would avoid commenting on countries where they potentially haven't got it right. But let us say, we are very pleased with our Spanish colleagues and our factory in Spain. But I think on the permitting side and the flow of projects in Spain, there's probably still some outstanding to wish for. So therefore, in Europe, we see really positive underlying. And of course, Germany is one, if you -- if we spoke about it 3 years ago, Henry, we wouldn't have gotten to the number we see today. And that's thanks to both current and previous government in Germany.

When it comes to Asia and Asia Pacific, a lot is being done. A lot of also is being considered. Some of the countries are a bit new on the block getting into that. But as I said, there's still some firm order intake to be shown from our colleagues in Asia Pacific.

And then, in Latin America, similar, we have had Brazil that's probably gone very low in PPAs. And therefore, we'll see when Brazil returns to that. But we do have some good feelings around that also Latin America will start showing some strength again, because some of the data centers and others are moving into LatAm across. So, I think bit disappointed probably where we are year-to-date in Asia Pacific and LatAm, very encouraged by where we are in North America and in Europe. And that, I think, is a trend that we see continuing.

The next question comes from the line of Casper Blom from Danske Bank.

A bit of another kind of question from my side. I think it's been close to 7 years since you launched the EnVentus turbine platform. And we now see that more and more of the orders you get in are for these larger 6, 7-megawatt Onshore turbines. At the same time, we've also seen you talk about stable pricing environment now for the last 3 years or so after that was this material price hike a few years ago. Is it fair to say that there is an opportunity from you guys, sort of, sticking to the current technology, keeping pricing flat, and then basically just having, how could you say operational efficiency from the fact that you have now gained very, very material experience in developing this turbine? And as a supplement, do you have any kind of plans of adding new platforms in the foreseeable future?

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

And I think today, from when we have been in an environment where inflation was very close to zero or even at par and then interest rate. Everyone have seen a cost inflationary which, of course, also for some projects have either potentially dangered the project for being built. Now it's also about getting and returning and getting it built, and therefore, cost out is absolutely name of the game for all of us.

So that goes through the supply chain and it goes into our factories. And the more volume you have, the better you get at it. So, that's an overarching one.

And I think you saw some of that. If you take the V163, 4.5 megawatts that are now selling across most of the world, but particularly in North America and in the U.S. That was developed as a probably an 80% component from a 4-megawatt platform. And that also means that we are running high cost-out programs on. So of course, that's a school and textbook example of how we want also to build the EnVentus.

So, you're right, Casper. And I think some of it will be using to continue to improve our profitability. Some of it, we will definitely also let go back to the customer. So, we make sure that the projects are being built and not being stopped for not having attractive enough investments case with local governments.

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

I think, it's maybe a bit from an industrial company of nearly EUR 20 billion and maybe it is a little simplified. But I will say here, now you bring 5% in as a price reduction and other stuff. I think, we are now back at a profitable area for Vestas. So, it's not this morning, we got up and said, now we need to lower prices. As I said, we like the commercial discipline. We need to make money. If we don't make money, we don't invest in the technology for the future either. So therefore, it's a combination.

But as I said here, we will share it in a reasonable ratio with our partners and customers. Come on, there's nothing better than having a signature and winning a business with a customer. So therefore, that's the prime target, and that pays for the rest. So therefore, Casper, what you've seen today is we can now definitely say and prove that we are out of the dark days of '22. And I think that's really what we want to say to both you and the rest of the market with what we are doing today.

The next question comes from the line of Deepa Venkateswaran from Bernstein.

I had two questions. So Henrik, I wanted to pick up on something that you mentioned, which probably is not something a lot of investors focus on, which is your CapEx. So this year, you're spending over 6% of revenues on CapEx. You've also said that your big investment program in Offshore is nearly done. So, on an ongoing basis, particularly given cash is king and can be buybacks in the future, what is a more reasonable level of CapEx for your business going forward, either absolute or percentage of revenues, of course, assuming no big investments and further platforms, right? So that was my first question.

And secondly, I think on demand, particularly in the U.S. there's a lot of hype about demand from AI. People want to be building a gigawatt a week and so on. So, what are you sensing in terms of the opportunity for Vestas to kind of capture and what are you hearing from your customers on the impact from this new AI demand?

First of all, a gigawatt a week, then I will not get much sleep, that's for sure.

Maybe that was global.

Okay. But as I said here, the reality is real. And that's maybe the way to prevent it. In AI terms, the reality is real. It's happening, and the electricity demand is going up. Then we can always discuss sometimes is the demand and supply out of sync. Then of course, it only gives one thing, which is an underlying increase of electricity prices, which unfortunately, you are seeing in part of the U.S. And I think, for that matter, will come to Europe as well.

So I think there's something in this AI where we as said, we are part of the underlying base load. So therefore, we are the ones that has to build part of the baseload together with many others. So therefore, energy in demand is definitely it. And I think if we look at a country that normally does very long-term planning, namely China, you can see how they have built out energy sources in the last 3, 4 years. And namely, last year, they build as much renewable. They build as much coal. They build as much some of the nuclear as the rest of the world did together. So, somebody is taking bigger upfront decisions than probably the rest of the world are doing.

And so for me, as a pretty fact-based person, I like to see that we take some of these decisions may be a bit quicker, and that also goes for the U.S. So U.S. are in a demand for energy and electricity. And therefore, we will continue to see that build out and Wind is part of it. Maybe we should call it something else than wind, but it actually is with a low LCOE, and it does local manufacturing, and therefore, it's supporting U.S. in its energy supply. So that's really.

On the CapEx side, don't underestimate, there will still be tools and there will still be factories and other stuff that from time to time will affect the CapEx. But I think Jakob is nodding that when we look at EUR 1.2 billion, that's probably a bit where we spent quite a lot this year. But if a factory or other footprint comes in, that will then variate and deviate to the theme.

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

Could we have the last question, Operator?

So the next question comes from the line of Martin Wilkie from Citi.

Just a follow-up to that question on data center. When we look at some of the hyperscalers and where they're signing renewable PPAs. A lot of it seems to be in Latin America and Europe and actually not very much in the U.S. And when you look at the outlook and potential for data center orders, is that how you see it as well that they're actually more realistic in those regions? Or is there actually sort of pent-up demand opportunity in North America, where obviously, the volume of data center is probably a lot higher. Just to understand regionally how we could think about that.

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

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

Can I just have one unrelated follow-up just on Service. And obviously, you talked about these costs in the fourth quarter. But just to clarify, these will be effectively a onetime hit in the fourth quarter. And obviously in the past when you have percentage of completion, then you can amortize these costs over the life of service contracts, but we shouldn't read anything into the revised outlook for the fourth quarter in terms of what it could mean for '26. And I know you're not guiding '26 yet, but just so we can understand that these costs should be contained in the fourth quarter?

You're absolutely right. It should be contained in fourth quarter, and we don't intend that, and that also sits outside any POC for the service contracts in Offshore. So you're absolutely right -- assumption is right, Martin.

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