Ditlev Engel - President and CEO

Rupesh Madlani - Barclays Capital Allen Wells - Morgan Stanley Archie Fraser - Redburn Partners Stig Frederiksen - ABG Sundal Collier Martin Prozesky - Bernstein Robert Clover - HSBC Jason Channell - Goldman Sachs Mark Freshney - Credit Suisse Andreas Willi - JP Morgan Teea Reijonen - Royal Bank of Scotland Kasper Larsen - Macquarie Patrick Hummel - UBS Peter Rothausen - Danske Markets Pearce Hammond - Simmons Daniel Patterson - SEB Christian Nagstrup - Jyske Bank Scott McCollister - Ardour Capital Claus Almer - Carnegie Tom Gibney - Credit Suisse Ben Lynch - BryanGarnier & Co. Arnaud Brossard - Exane BNP Paribas Sebastian Ubert - UBS

Good afternoon and welcome to Vestas Wind Systems first half results for the year 2010 and obviously also for Q2. Special welcome to press and analysts in the room here in London and of course also a special welcome to everybody who have decided to join us on the web.

And of course, not least, a special welcome to all of my colleagues at Vestas. We have decided to call this report "Mixed activity as expected," as obviously it is clear that there are a number of signs pointing in many different directions.

And I guess this raised the question of how well is Vestas really doing. And I hope after the presentation today, it will give people a good flavor for why we actually do believe that Vestas is standing in a much stronger position than the actual result for the first half 2010 indicates.

If we start to look at the respective units at Vestas, it is clear that the activities have been very mixed. If we start with the production business units, they obviously have not been very busy for the simple fact of the order situation in 2009.

Let me just remind everybody that in 2009, we saw a decrease in the order intake of 50% compared to 2008, and the effect of this is really what we are seeing here in the first half 2010 and one of the reasons why we have also said when we looked at 2010 that we did expect the year to be very back-end loaded. If we look into the sales business units, then they obviously have been extremely busy, as we have seen a significant progress on the actual order intake.

We will come back and talk about this later on. And they of course have been very busy in signing of new orders.

And in our technology R&D, they also have been extremely busy with a very high activity level, working not just on new technologies, but also ensuring getting, for instance, the V112 turbine into the market. And therefore, we have set the mixed activities illustrated here by the three buttons of some on fast-forward and some, on the production side basically, on a pause button.

Trying to summarize in just a very few words, I can say that the low activity in the first half in the production business unit was as expected. And the fact that today we are reconfirming that we are on track for an order intake of 8,000 megawatts to 9,000 megawatts in the year 2010 I think also is very important to be aware of.

Unfortunately, we have decided for the first time in five years to make a revision of our guidance for the year, and I'll come back later on and discuss why we have decided to do that. Let me also just say that despite this challenging first half 2010 that Vestas is still working proactively towards our Triple 15 aspiration, as you can see at the bottom on the right-hand side here.

Let's just first turn into the figures starting off by the income statement. What you can see is that the first half 2010 really does reflect the very low 2009 order intake.

And this obviously also hurt our earnings and the EBIT due to the very low utilization of the manufacturing capacity. And I have to say this was as expected.

And of course, when these things happen, it immediately has a tremendous impact. As can be read here on the earnings going in the first half 2009 from plus-€154 million down to minus-€244, giving a negative EBIT of close to 14% versus plus-6.6% at the same time last year.

If we just look at where this is from a manufacturing and shipment perspective actually coming from, we've tried here just to give a flavor of how things actually did evolve in previous years. And as can be seen here, in Q1 and in Q2 2010, we have shipped just a little more than we actually did in the first quarter 2009, i.e., an activity level which is approximately 50% lower than the same time last year.

And this is of course hurting the earnings significantly in the first half. I guess you can see from here the variations that we've had in the last few years through the quarters, and here this first half 2010 is extremely low.

Turning to the balance sheet and the development of the balance sheet, I think it's important to underline, and I will come back a little later and talk about the net working capital. But let me just say that if we look at the equity ratio, Vestas is still standing in a pretty strong position with an equity ratio of more than 47%.

If one looked at one of those lines which have a significant difference, which is the financial liabilities going from €118 million to more than €1.1 billion, let me just say that this means that the net debt of the Vestas after the first half year's deficit and investment program is being financed through this, which basically constitutes the Eurobond that we issued earlier this year together with facilities from the European Investment Bank and the Nordic Investment Bank, and in our opinion clearly demonstrate the robust balance sheet that we do have and also one of the reasons why we maintained our CapEx program for the full year in 2010 despite obviously the very negative result that we did realize in the first half. Turning to the net working capital, we have seen a decrease in the inventories by close to 20%, but we still believe that the inventories at Vestas are too high and we will definitely work to bring them further down.

We have seen a big increase in receivables, but that is not to be interpreted as receivables coming from bills not being paid, but reflects the very high level of orders in progress that we are in the process of executing and that is giving this big variation on the actual receivables. Prepayment from customers are also down, and there is one very important reason for this, and I will come back and talk more about the prices and terms and conditions in the market, is the fact that the larger projects with a longer time span impacts in the way that the milestone payments actually take place.

And of course, also we have seen some impact from the credit crisis, but first and foremost, because of the larger projects with a longer time span impacts the prepayments by the end of the first half. Turning into the cash flow, again, I have to repeat the story that the cash flow obviously is heavily impacted due to the very slow and low first half 2010.

But again, I have to say this was as expected. And if you look at, for instance, the investment activities, Vestas is maintaining our investment activities for the full year 2010, and we of course therefore also expect as things will improve in the second half of this year, that also will have a positive impact on the cash flow going forward.

One the non-financial results, I think it's also important to highlight that the safety at Vestas as a company is being further improved. After the first six months, we are now down to 4.6 million injuries per 1 million working hour, which is an improvement of nearly 40% compared to the same time last year.

And that is not just important for the safety of all of my colleagues, but definitely also a very important parameter in signing of future orders where there are significant demands in how good you are in dealing with this issue as a supplier. Let me also say that I think we are making good progress on both renewable energy and electricity as can be seen here when with the targets that we have set for Vestas becoming as green as it possibly gets.

And the same goes with our approach to women at management level and non-danes. And also, for the sake of good order, we have actually signed the World Economic Forum partnering against corruption initiative here in order to further improve Vestas code of conduct.

Let me also just say that due to the very low activity level in the first half, we have had more than 4,000 colleagues attending safety courses in order to further improve on this record and thereby utilizing the time. Trying to drill a little into this mixed activity between the production, the sales and technology and how this actually has impacted the first half of this year.

I mentioned that the sales business units have been extremely busy in terms of order intake. And if one looked at Q2 2010, then that is the largest Q in order intake ever.

In fact, as you can see on this slide on the left-hand side, we got as many orders in the second quarter 2010 as we did in the entire year of 2009. Since the end of June, which means that we actually until today have announced orders of more than 1,400 megawatts, meaning that we are getting close to approximately 5,500 announced megawatts of orders, and that means that we do believe we are quite well on track for the 8,000 megawatts to 9,000 megawatts that we have forecasted for the full year and we are vastly maintaining our expectation for such a strong rebounce in the order intake.

If we try to drill into the geographical spread, where this coming from, compared to our expectations, then we still expect that approximately half of the orders are going to come from Europe, approximately 30% from the Americas and the remaining 20% from Asia/Pacific. And on the left-hand side of each of the three areas, you can see where we were in year-to-date, plus what has happened since June, i.e., how close are we to fully utilizing or filling up the gap through the full year order intake; whereas, as I said, we are now approximately two-third of the way in order to realize this target.

I think also it's important to look at what has actually happened over the last 24 months. Two years ago, just in the summer 2008 we stood at an all-time high with an order backlog of 6500 megawatts.

And ever since, we have seen the order backlog going down. Booking in the middle of 2009, just 12 months ago, we were at 3500 megawatts.

But the tide started to turn in the beginning of the year 2010 for Vestas. And actually from Q1 to Q2 2008 we saw an increase of 52% in order intake, the largest ever in the spring/summer 2008.

But here, from Q1 to Q2 this year we have seen a progress of 93%, i.e. the largest increase ever, and it says in three years; I think I can say, the largest increase ever in terms of progress of the order backlog.

And I think it's important to be aware of on which background have we secured these orders. If we go back to the, shall I say happy days in the summer of 2008, there was plenty of liquidity in the market; that's why we had a fast forward button here.

The energy prices were very high; natural gas prices doubled for instance from where they are today, and the political momentum was very strong, working towards, at that time, a global climate deal. The scenario in the markets that we are operating in now is quite different.

The market liquidity has become much tighter; the energy prices has gone down considerably, and there are in certain areas question marks about the political momentum dealing with climate change and the green agenda. So it is on this background, going one slide back that we have managed to secure this increase.

And I think it is in two very different environments that Vestas have secured this kind of progress. And why is that?

In our view, the business case certainty, the lowest cost of energy and the easy-to-work-with approach, i.e. the bankability of Vestas has proven to be absolutely essential in order to secure this progress.

And I really mean it when I say that we are bringing home orders in a very challenging world. But it happens because of these three issues, but it definitely also happens because of the products and the presence that Vestas provides.

Let me just say, with some of the orders we have signed up, if Vestas did not have a global footprint nor had an unparalleled product line we would not have seen this progress. And therefore, looking at the tide that Vestas have turned here, we really do believe that we are standing in a much stronger position going forward than we did for instance two years ago in order to address issues like these.

I know that there has been a lot of debate about terms and conditions in the market and how this has affected the order progress that Vestas have seen. Let me say that the prepayments and the impact of the prepayments are really reflecting larger projects with a longer time span.

And when it comes to the prices, we have seen no material changes adjusted for input prices. Well, what does this mean?

This means for instance that a turbine produced in China sold to some of our customers in China obviously reflect the fact that it is cheaper to operate in that part of the world versus a turbine produced in Scandinavia for the Scandinavian market. But many of the discussions about the price development we have put in, in the stock exchange announcement.

Just to quote that adjusted for input prices, Vestas generally expect that prices will remain unchanged in 2010 relative to 2009 when the price per megawatt on average was about €1 million measured on order intake. And that is something that we stand by, and I think therefore it's very important to be aware of when people are looking at the terms and conditions that Vestas are enjoying in the market.

This was a little bit about the activity level that Vestas has experienced in our sales business units and shall I say lack of activity in the production business units. If we should turn to our technology R&D, they have also definitely been on the fast forward button.

Last week I had the pleasure of traveling to Australia and signing the first major order or the first order and even a major order for the V112 to two of Vestas' very good customers, Meridian and AGL. These orders were secured not just because the V112 on paper is for sure a very competitive turbine; these orders were secured thanks to a very diligent work by both of these very professional clients in assessing whether or not this turbine is ready, and with a proven track record going into the market as a new technology.

And if Vestas had not used our entire value chain, especially with our colleagues from technology R&D but also from the production business unit giving our customers comfort in what we can achieve with such a machine, I'm not so sure that Vestas would have landed this biggest order in Australia. And we are delighted to see, how, by utilizing the full value chain that Vestas offer, we can move forward with such important projects.

And as I said, we call it products and prices. We are not just only involved in this; we have, since we are in the U.K.

here today, just to remind everybody that we are in the process of building new testing facilities on the Isle of Wight, not very far away from where we unfortunately, 12 months ago decided to close down the manufacturing plant. But we are moving ahead also here in the U.K., ramping up these facilities, where I have noticed a lot of people talk about doing something in the U.K., and just to remind everybody that we are actually doing it, and this time it is technology R&D.

So this gives a little bit about the mix activities that we have seen in the first half between these for instance three major areas within Vestas, being production, sales and technology. And again, I have to say, as expected.

And just to show you, on this graph, on the blue one, the future, the development of the order backlog increasing very rapidly and the shipment, obviously, as previously mentioned being very low, why are we then changing the guidance for this year? We changed it not because of the poor first half 2010; we changed it because in three areas, there are orders that we do expect to receive, predominantly from Spain, Germany and United States that are delayed, and therefore will not turn into revenues less shipments in the second half 2010.

And this is unfortunately why we have to change the guidance. And as we said, we expected a very backend loaded year, but we maintained the order intake.

And these orders are now in our assessment not going to hit the revenues this year, but beyond this year. And therefore, obviously, we have to change our forecast.

This is of course not good enough, but I think it's important to underline that there can be various reasons for a revision of guidance. And I think hopefully, that these orders will become Vestas' and then we will have the benefit of them later on.

So if you look at the overall guidance that we have provided to the market, let me just remind everybody line for line what it is that we have told the world, and where is it that we are making the changes. Our order intake for firm and unconditional orders remain 8000 megawatts to 9000 megawatts.

The revenues, where we previously saw €7 billion is now approximately €6 billion, but the service revenue remains unchanged. And if you wonder why it remains unchanged since we are lowering the revenue expectations, it is of course that these orders would come anyway so late in the year that it will be very hard to get any service out of those specific orders.

That initially, of course immediately, unfortunately, hits the EBIT margin, which we are changing from 10 to 11, to 5 to 6. And let me say that this change in both revenue and guidance is due to the timing of shipment.

And the fact that we are lowering the EBIT expectations to 5 to 6 is only due to lack of volume. And of course, when the volume is not there it immediately hits the earnings.

The service and the margin on service remain unchanged, and we have changed the financials from 25 to 35. And the net working capital will of course also be directly impacted by the fact that we are changing the revenue guidance the way that is being calculated, and that is the reflection we are seeing here when it was 15 before, and we are now saying 15 to 20.

All the other parameters remain unchanged. Warranty provision of 3%; we maintained our capital expenditure program of €1 billion.

And the ramp up we have done with the capacity by year end of 10000 megawatts is still in place. Our goals and objectives on customer loyalty, share renewal, energy and quality also remain the same.

And therefore, as I said, the reason why we changed the guidance is not because of the deficit in the first half, but because some of these orders expected coming in will be so late that they will not impact us positively this year. I will say, and especially to all of my colleagues at Vestas, the fact that we are coming out with a deficit in the first half is really where we are seeing the consequence of the financial crisis.

And with a deficit of €244 million, I shall be the first to say, is not a nice position to be in, but it is what I would say the unavoidable deficit. You all know how busy we were in the fourth quarter 2009, and going from full speed in the fourth quarter '09 down to, especially manufacturing, to very low activity is obviously something that comes at a cost.

But it is when you are closest than when you are at the darkest point that you are the closest to light. And if I look at the second half 2010, we expect a strong rebound leading to a year-end profit.

That means in the second half, we expect a progress in earnings of approximately €540 million to €600 million, but not enough to catch our full year expectations. But again, please remember, we do expect a very strong rebound in the second half.

This unfortunately, has some consequences to the organization, and due to this postponement of shipments and lay-offs that we have to carry through because of these postponements is something that we have to start to negotiate now. It will impact approximately 300 people and approximately 300 staff temporary hire that will not be prolonged.

And in certain factories, we will be looking at work sharing. This is not what we hoped for with expectations we had for the full year.

But when we have looked at the consequences of these delayed shipments, we will have to react, and unfortunately this will have an impact of some of the colleague's investors. And believe me; we can only say that management are very sorry that we have to take these steps.

And of course it is no comfort those affected that Vestas actually, by the end of the year would have created another 3,000 jobs in the group around the world. But that will be more in North America and other parts of the organization in technology where we are going to see this progress.

So we are creating more jobs as Vestas, but that is not a lot of comfort for those that are going to be directly affected for these lower shipments. In 2008 and in 2009 all investors have benefited from strong financial results, also leading to bonus to the employees.

When we are changing and revising our guidance for 2010 downward here, let me say upfront that it will be very challenging to get to the bonus level in 2010. As you can see on the left-hand side, the impact from EBIT, Network and Capital and Revenue and Loyalty and the initial targets of €10 billion, €15 billion and €7 billion.

And it cost them a loyalty of 70 and with the revised targets that is going to be very challenging. But I sincerely hope that despite this, we will keep on fighting for a strong second half result.

We'll keep focusing on our customers as we've done so far, because these are some of the very important milestones that is going to bring us forward in 2011 and beyond. And I sincerely hope you will all join me in going for this even though it will be challenging on the bonus side.

Let me also talk a little bit about, as I promised in Q1 about the development we are seeing in policy and especially when it comes to the 2020 targets in the EU. Again, we have decided to use the buttons to try to get an understanding of how we see this development.

If I look at the policy makers, we have decided to use the pause button as there is a lot of uncertainty where negotiations are going on climate et cetera. But one thing, which is for sure, is when it comes to the planet, we are really moving in the wrong direction, i.e.

we are moving backwards. And this is not something we just say, this is something we say because the figures are telling us this.

This is the latest observation from the National Oceanic And Atmospheric Administration, which is clearly pointing to that all caveat is moving in the wrong direction that is if we want to avoid an increase in temperature on the planet. We know that after the first six months, we have recorded the hottest first half year on the planet in the 139 years we have done the recording.

And there is no emotions attached to these figures, these are just the facts, which of course makes it sometimes even more important that we are good enough in our type of industry to explain to everybody why it is so important we move ahead with this type of energy. And what is then that we have seen so far, for instance in the EU?

We have received, and you have on this slide compiled by us at Vestas, what is it that each country intends to do when it comes to wind energy in the 2020 targets. And due to our Triple 15 aspirations, we have also put in the planned installed wind capacity until 2015.

And you have, on the left-hand side, all the countries and the megawatts that they intend to install until '15 and until 2020. If you look at the annual growth rate, then of course they vary quite a lot between the countries.

But it is still countries like the U.K., Germany and Spain, which in terms of megawatts are going to be the major drivers for this industry. But in terms of growth, so far, it is Bulgaria, which has the highest expected growth of nearly 50% and Denmark which has the lowest growth of 4% going from now to 2015.

We are still missing other EU countries, but these are the figures that we are looking at in order to try to understand the growth for the wind industry based upon the 2020 targets. It is encouraging then to see that here in the middle of July, the Minister for Climate and Energy in the U.K.

in France and in Germany wrote an article together in the FT saying why it is so important that the EU should go for 30%. And being in Australia last week, you sometimes are reminded of how important this type of electricity being generated for wind is for the climate.

And just to quote the Australian Minister for Climate Change and Energy Efficiency, Penny Wong, when she said that the Macarthur Wind Farm of 420 megawatts will have the capacity to abate more than 1.7 million tons of greenhouse gases every year, the equivalent of taking more than 420,000 cars off the road each year. Again, wind is playing a very important part of the future aspiration if we want to combat climate change.

Finally, let me just say, coming back to the risk looking at the macro economics, the financing situation and regulatory issues are the same as we have seen in the past. As are the others on exchange rate and et cetera and there is no change there compared to what we have previously announced in other quarter.

Some of you joining here today, will be with us I a fortnight in the state of Colorado for our Capital Markets Day and I'm pleased to say that more than 150 participants have signed up, which means they will be sold out for this event. And we look very much forward to showing you what we have been doing in United States, as well as taking you through a lot of the technology and other activities that we have undertaken at Vestas in terms of the progress that we are seeing when it comes to our products line; and in particular, on the V112.

So before we turn to the Q&A, how well is Vestas really doing? Well in my mind, we of course are not very pleased with the fact that we have registered a deficit in the first have.

And of course, we are not pleased with the fact that we have to change our guidance for the full year downwards. Know that we have to say goodbye to some good colleagues at Vestas, even though we are increasing the workforce.

But if I look at Vestas competitiveness, if I look at the number of orders that Vestas is securing in a difficult world, it is my clear belief that Vestas is standing stronger than ever before in terms of being competitive in this market. And the fact that we have used the last number of years to secure a global footprint for the region and in the region is absolutely essential.

The latest orders announced in China, is good evidence of exactly just that. So we are confident at Vestas, that we are definitely on the right track in order to remain a very important player in this very exciting industry.

When we come to the 26 October in New York, we will report on our Q3 figures and also, we will give our expectations to 2011. And then, we will now open up for Q&A.

And as ever, please two questions and please state you name.

First, what happens if orders are delayed further? Would you plan to use your credit lines or do you envisage the possibility of raising capital?

And second, with respect to the 2010 remaining revenue that you expect, what percentage would you say is at risk of being deferred into 2011?

We have no plans to change our capital structure. And as I said, when it comes to the capital situation, so far basically Vestas has been financed on our bond situation.

And therefore, we have not revealed our other financial facilities, but we have no plans to change our capital structure. Secondly, concerning what is at risk, I can only say that the assessments we have made now, I hope we have assessed correctly what was at risk?

And that is what we have taken into account when we changed the guidance.

Any of your credit lines are no longer available to you, given the first half performance or is that not an option?

We never disclose our financial facilities?

Firstly, on the orders, particularly in the regions you've highlight a delay, U.S., Spain, Germany; what really has changed in those markets you think relative to the guidance you were giving before? You obviously expected them to come through sooner, what is causing the delays there?

And secondly, just to try and understand a little bit better the fixed cost base with investors, how do you typically think about that and how do you expect that to evolve over the next 12 to 18 months?

It's clear that in a country like Spain for instance, we've had a lot of regulatory uncertainty concerning the future price for wind. And obviously, our expectations to the timing is very much based upon also listening to our customers when they expect the project to go through.

So it is regulatory driven, there can be other issues in terms of permitting or other issues that have caused this expected delay that we have assessed and taken the consequence of. Then, let's say, other areas which may not necessary be with our control where we're being informed by a client that unfortunately we will do this project a little later than anticipated and then obviously this is impacting us.

But these are predominantly in these three regions. I think it is important to be aware of, that despite this, we do expect that the order intake remain unchanged and also with the same geographical split.

So we do expect these orders still to turn to Vestas. Concerning the in the region and for the region, it's clear that when it comes to the fixed cost, Vestas is right now in a period where we are ramping up in the United States.

We are getting things aligned for this. And obviously, going forward what we need to see at Vestas is obviously that our European markets are carrying our European manufacturing facilities, the same in the United States and the same in Asia as best possible, in order to increase our competitiveness.

But of course, as we are in a ramping up process, that comes at a cost. Without getting into the 2011 guidance, then we can probably discuss that further when we get to Q3.

Couple of questions. First, the turbine pricing; you said something about your expectation for turbine prices this year.

Given the visibility you must now have on next year, what can you say about pricing next year compared to this year? Secondly, in terms of production capacity, you'll have 10 gigawatts of capacity by the end of this year.

In view of your Triple15 target, what kind of indication can you give us on when you expect that 10 gigawatts of capacity to be fully utilized?

I would say, let's see what we expect for 2011 instead of when it's going to be fully utilized. But it's true we will continue the completion of the ramp up.

And then it is of course also clear, the very low shipments in the first half of 2010 comes at a high cost. But I don't want to speculate about when exactly is it that we want to get this capacity fully utilized.

Talking about the turbine and the turbine prices, I think it's important to be aware of, that so far in the backlog, one has to be very careful of just calculating very average figures between megawatts and the value of the order backlog. As I said, there are of course variations in terms of the regions, and of course there are also variations in terms of how the contracts are being put together.

But what of course I can say is going forward, that so far in the order backlog we are not really seeing any impact from the new products going into the order backlog.

So could you just explain that last point again?

What I said was that the order backlog's so far basically constituted on the existing platforms. Well, you asked about the future pricing, and I'm just saying that for instance the Macarthur project that we have just sold is for instance not part of the backlog.

And I'm just saying that new technologies are not a part of the backlog, when you ask about the future pricing.

Can you say anything about the pricing of them compared to existing pricing though, for new orders?

I could, but I don't think I will. But I'm just saying that people have to, and this is why I read the statement from the stock exchange announcement about how we see the pricing development, because there have been a lot of discussion about where are the prices going, and so fast and so on and that's why we reiterated that.

First of all, you had a very successful launch of the V112. When you look at the order intake for the rest of the year, how much do you expect the V112 to contribute from that, maybe including coastal offshore.

And secondly, I would like to hear about your view on the U.S. It seems we're heading for 2011 without an ITC.

How do you think that's going to impact the market, and do you think we will see some delays from customers reaching the 5% on construction and then waiting for deliveries until end 2012 to still maintain the ITC?

Well, if we start with the U.S., your guess is as good as mine what this legislation will look like on the 31st of December. We have noticed that obviously we did not get a renewable energy standard here before the summer break.

Whether or not they will try to go for one after the summer break, I don't know. I noticed the President's comments the day before yesterday and was concerned about the importance of renewable energy.

When it comes to what we will be heading in for, I can't say. Whether somebody will try to have a rush to get into the ITC grant, time will tell.

We still have the PTC running until 2012, and the capacity, and therefore of course also the interest in the PTC going forward. But again, I think history has only shown us that in the U.S.

we do have a low visibility, and this is how it has been. We obviously hope that we will have a renewable energy standard.

But of course, we will have to look upon this. I still think it's important also to remember that we would very much like to have a federal renewable energy standard.

But we still have a number of states which have their own RESs in place. But having said all this, we can definitely see that thanks to the setup that we have in United States now, it definitely increases Vestas' competitiveness towards the North American market.

And I think that's important to be aware of as well. But your guess is as good as mine on this.

Concerning the V112 order intake, we don't specify our expectations customer per customer, but I think it's important to say as we also mentioned previously that Vestas have seen a very strong interest into the product. And we are therefore also delighted that two very important players in the market like AGL and Meridian has decided to use it for the largest project in Australia.

So we'll see.

Two questions please. On capacity utilization, what is your breakeven capacity utilization now?

I mean, looking at the numbers historically, it looks like it's got to be about 50% on your new 10 gigawatts. Is that an accurate range, and is that reasonable too, therefore expected to be well in excess of that in the second half?

And the second question, just looking at Q2 versus Q1, you shipped more, you booked more. It looks like the activity in terms of manufacturing components was also up, but the upper end profit for the quarter was down compared to Q1.

Is that because costs are up, and is that the U.S. ramp up?

Or what else is going on in cost, or is it pricing coming through from the backlog?

Concerning the earnings in the quarters, there will always be fluctuations between the quarters in terms of exactly how this hits it. And that's why we have said time and time again that one has to be careful on drawing too many conclusions on the quarter.

I think if you look at the earnings that we expect for the full year based upon the €6 billion of revenue, gives you a better indication of what is it that we see overall in terms of earnings. And I think if you look at the second half, coming back to your question, of course in the second half we will be running at close to full capacity, but of course not as fast as we initially thought because of some of these projects being delayed.

But that obviously gives earnings on a completely different scale when you are fully utilizing it. And it's clear that we have been, and you can see that in the shipment, the activity level has been very low in the first half.

I don't want to say we have been x percentage booked, but it's clear that in the first half the capacity utilization has been very low.

On the cost though, can you just be clear on Q2 versus Q1? Is the cost up because of the U.S.

ramp up or is that a whole H1 effect?

The U.S. ramp up is definitely costing in the second quarter.

Just wondered if I could follow up on this operational gearing and capacity utilization point, wondered if you are willing to share at least qualitatively how the different regions panned out in terms of capacity utilization. And secondly, just coming back to the point that you've roughly taken, say, gigawatts, in terms of shipments off our guidance, has that really taken 500 basis points of your margin or is there something else that perhaps you've not highlighted and therefore can we deduce from that, that if you were to make say, a run rate of 6.5 gigawatts that you'd be at sort of roughly double digit margin levels where your previous guidance was?

Let me just answer the last one first, because I'm not sure I got the first part of your question. But in the second part, it's clear as we said the reason why the EBIT is going from 10 to 11 down is purely due to lack of volume, and that's why.

And so you're right. And if we've had the volume, we would have been up in this level.

And this is what is causing it and nothing else. But it clearly goes to show that when you're utilizing it as we can that even we have taken some of, I mean we are running at a double digit EBIT in the second half when we are fully utilizing the organization.

And your first question was something about the region?

Just wanted a sense on the capacity utilization by region.

We haven't disclosed this. But as we said previously, the capacity in China has been reserved for China.

And as you can see the fact that we are postponing this order intake in Germany and Spain unfortunately is impacting some of our European plans. And of course, in United States we are busy in ramping up.

So I think that gives you a kind of a flavor of where we are.

I just wanted to ask you specifically about the gross margin, because historically you've done about 20% up until the start of this year. And then first half of this year, you've done about 5% in both of the quarters.

So that's sort of a 15% drop in gross margin. And if you look at sort of €1.8 billion of sales, that equates to about kind of €250 million of extra costs in there.

Now clearly headcount would be an obvious conclusion, but you said that, that only increased from about 20,800, I think you said it was in the figure average for the first half was 21,150. So it's only 350 extra staff.

So I was trying to get a handle on exactly sort of what that €250 million of extra costs in COGS which excluding staff, one would assume would be volume related, actually is?

I'm not 100% sure I got all your numbers and your calculation. But I think as you've said here, the first half of 2010 is really so heavily impacted, but all the things that did not happen in 2009.

And that is very costly. When you at the same time decide to keep on ramping up United Sates and complete all these facilities.

I mean you can say that despite the fact that we're having a very bad first half year, we decided to maintain the ramp up activity levels. We decided to continue with the hiring in technology R&D and so far and so on.

And that obviously comes at a cost. That maybe brings the question, why do we decide to do that when we know that we had a very difficult first half 2010?

Well, our view is that only by our global products and presence will we secure the future orders and Vestas future earnings. And we are fortunate, financially to be in a situation that we can take this decision and continue despite knowing we got a very bad first half 2010.

And therefore, that's why we decided to do it. But of course, it comes at a cost.

Just following up again slightly on the second quarter, one quarter change I mean the other notable shift in terms of your increased losses is the higher R&D expense in the quarter. And also a generally higher depreciation and amortization which we maybe linked.

So perhaps you could just talk a little bit about where the extra R&D is going and what's required to spend in the quarter and whether that's an ongoing level. And secondly, you obviously said pricing is unchanged x input costs.

I assume you mean as a sort of absolute level, not the margin, because obviously if sales were 10% lower, you're theoretically saying you would still make the same profit number adjusting to the input cost faster.

Well, as we said, on the input cost, that is just for people to understand that we announced the orders. But of course, we don't announce what they've been sold at.

And it's just for people to get a flavor of what is the pricing picture we're seeing, and how does this relate, and this is why as I specifically read out how we see this as mentioned in the stock exchange announcement. And you're right of course, also variation depending on whether you're selling kilowatt machines or megawatts machines and so on.

And therefore, one has to be very careful in just saying on average gives what. But we still feel that with the bank ability and the services that Vestas are providing, we are standing in a strong position.

And that is also reflected as we're seeing it going forward in the pricing in our view.

Just on the R&D?

On the R&D, it's clear that we have continued ramping up the activities in R&D. Taking more people on board.

And I believe you're right, there have been some additional expenditure there. I don't have the exact detail here.

But the R&D, we do expect to be 2,000 people by the end of this year. And we are well ahead of these people on board.

Just following up on that same point in terms of the difference in profitability. Actually the other line that has moved as well is admin expenses, would that all be in the U.S.

or were you adding admin cost as well?

Well, we have been ramping up in the U.S. for sure.

I mean we just don't take people on board in the plants. We were ramping up administrations et cetera.

I mean we are going up to be close to these 3,000 to 4,000 people in the U.S. by the end of the year.

And not just in manufacturing, but the throughout the value chain.

Just on the backlog in the past, I think you've mentioned that anything in the backlog is firm and unconditional and usually deposited. Can you confirm that is still the case?

For example, do you have anything in the backlog that is not deposited or that clients can push out or differ? And just secondly, on the payment terms, many customers are talking about more attractive payment terms from the manufacturers.

Can you confirm or perhaps give a comment as to when you think the payment terms might start to move back in your favor, or when you might have to stop providing a form of temporary vendor financing to them?

Concerning the order backlog, we only have firm and unconditional orders in the order backlog. Otherwise, they would not be there.

Very simple. So they are only firm and unconditional orders.

And we haven't had any firm and unconditional orders changed in the period. Concerning the payment, as I said, when the projects have a longer time span, of course the payment structures will fall in different categories than if you have a shorter turnaround time.

And this is what is reflected. But we haven't seen any significant changes in the overall payment structure as such.

So I think it's a natural reflection of the lengths of some of these contracts which then are impacting it in terms of this.

First question is a follow-up on the payments. Maybe you could just give us a little bit more detail on why these larger contracts have weaker payment terms?

And given that some of your competitors throw in money rather than ask for a pre-payment, I mean you say you've no significant change, does it mean you have some change? What would be a significant change for you in payment terms?

And second question on seasonality, year after year it seems you become more and more Q4 weighted. What does this mean to your overall profitability targets?

Also, longer term, I guess the more seasonal Q4 becomes, the more difficult it is to reach overall EBIT margin targets for the full year, given utilization for the rest of the year. A few years ago, the message was more if we expect this to become less seasonal as contracts become bigger to buyers, more professional, less tax subsidy driven.

Why is it going the other way?

For whatever it's worth, I think actually we're pretty good on track to get quarters even out. And then the financial crisis came in the middle of 2008.

So the order backlog started to do down, things took longer time, and that definitely has impacted also the seasonality that we have seen. But I can promise you that if there is something we in the management are fully aware of is how we're going to get the investors back to an even distribution between the quarters, because it's clear that's very important for the profitability.

So I would say in the first half of 2010, we have had no choice. We had a very busy fourth quarter 2009.

And in order to capture the second half of 2010, we've had to have this very low activity period, which of course comes at a cost. But the aspiration to get it back to even quarters is definitely still there.

And I sincerely hope that in the future, we will, from investors' perspective, be better in this, because obviously it is not satisfactory to have these kinds of seasonal swings. So you are right on this one.

Concerning the payments, to give an example, if you buy or place a contract which is much longer, you may have a smaller down-payment in the beginning, which then you pay according to some milestones. Instead, if you have a shorter period, you pay maybe more in the first installment, which is basically what we have seen here in the reflection of the prepayments.

My point is just because there seems to be a lot of discussion about this that there have been significant changes in the market in terms of how the payments have taken place. And overall, this in not what we're seeing.

There will always be some variations. But why we are seeing it here is very much related to the longer contract impacting the prepayments.

Are there any contracts you lost over the last 12 months? You're seeing (inaudible) if you had Vestas financial services attached to your company like Siemens or GE have?

Answering hypothetical questions is not something I am very good at. The only thing I will say is if I look at the bankability, then I would say Vestas' order intake is illustrating that we do not need this kind of in-house financing in order to get the orders done.

I can answer your question hypothetically, but I would say the money is out there. And that's my point.

But it takes something quite different now to get into the money. I think that Terra-Gen deal that we did here in July is an interesting example of how the bond market was being used to finance the turbines, i.e., a different approach than what we have seen in the past.

Teea Reijonen from Royal Bank of Scotland. Talking about turbine prices remaining stable on an underlying basis, I'd like to ask if there are any changes that you've made to warranty on service arrangements as a part of the orders they've been receiving.

Obviously, it appears you've been gaining market share over competitors during the first half of the year. The other question is what progress do you expect to make in the offshore markets in second half and 2011.

Just so I get this on warranty again?

Basically has Vestas made any changes to the terms in their warranties or their service agreements? Since you haven't changed the prices and you've been getting market share, are there other changes that you've made in the contract terms?

I would say I think what we're seeing is, and this is also reflected in the earnings, that the interest in the services business is increasing. And when it comes to the warranty, we haven't seen any.

If your question is have you taken on a lot of additional liability, no, of course we are responsible for what we are doing, but not significant changes in terms of warranty. But I would say there is a bigger, bigger interest of longer service agreements and cooperation in this area which we of course welcome.

When it comes to the offshore, when we announced the project for the V112 in Australia last week, we also did release the V112 for offshore. And obviously we sincerely hope that this will have a positive impact on our offshore business.

You said that component prices are rising, given your purchasing power. Is it purely because of rising steel and raw material costs, or is there another reason for rising component prices, given old supply?

I think as we also mentioned in Q1, we had some concerns about we were seeing some raw materials at that time moving upward. It seems to be more stable now.

Whether that's good news or bad news is another question. But I wouldn't say we've seen any major changes in this.

Kasper Larsen from Macquarie. Two questions on cash flow, working capital for starter.

Do you think that in terms of levels of inventories you have sufficient levels in place now to execute the volumes that you are expecting in the second half, or would you see inventories go up to execute that, or should we assume that what we see now is actually at sufficient levels? And secondly, on the cash flow statement, in the item of reversals without cash flow, you have some very big fluctuations when you adjust for depreciation and amortization, especially during the last four quarters.

If you could give a little bit more granularity about what else is moving in this item please?

I think instead of going in through it here, maybe we can take that afterwards. Will that be okay with you?

Your cutting stops in Europe by 600. And at the same time, it seems that there is not an immediate clear growth perspective for the European market.

So I am just wondering if that cut in staff is actually sufficient given what we currently see in the key European markets. They'd rather be flattish than strong growth also into next year.

So do you think this small adjustment is already enough to make sure the European operations can run on a profitable basis? And the second question is regarding your financing.

I got your point that you're not going to provide us with numbers for the remaining credit facilities, but I hope you can understand that this is a key array of concerns, since you've used quite a significant amount of money now during the first half. So is there any time soon an update on your financing situation, remaining credit facilities, et cetera?

I remember you gave a number. I think that was a year ago.

And I think the market would really appreciate if you provide an update on that sometime soon.

Concerning the European situation and the capacity, let me say half of the order intake we do expect this year is coming from Europe. And of course, the assessments that we have made here now is based upon also looking ahead at how we expect to utilize our European plants.

So that is of course based upon our assessment. And this is why we have come up with a figure that we do have in terms of the people that we unfortunately have to say good bye to.

So that is based upon that assessment. And of course, we do not hope that we have to make additional changes to this.

I would say if I look at the orders that have been announced in the market and be aware of, it's my view that I think Vestas has made a good progress on the order intake. And that of course also goes to the situation in Europe.

Concerning the financials, I think of course it's important to remember that the first half obviously from cash flow with a very low activity level has of course been impacted. However, when we look ahead and when we look at the cash that we expect to generate from the operations, we still believe that we have what we need in order to make sure that we can both execute all this and also have the money for the capital expenditure.

And I think as I was asked previously, do we have any plans to change our capital structure, and to this I can say, no, we have no plans to change our capital structure.

Two questions, I'll take them one by one. You're talking about the delayed order intake as the main reason for the profit warning today.

My natural thought is that if you had expected these orders to come this year and also take into an account, it must be some orders that are expected for short-term delivery. Is it fair to assume then that this €1 billion in revenue shortfall should be added on top of 2011?

That's the first question.

As I said, we did not expect these orders to hit revenues in 2010, then it will have to be after 2010. And then I think you can draw the conclusion on that.

Would it be fair to conclude that it would hit the P&L pretty soon, because you already had taken these orders into account for '10?

Well, based upon these orders that we're looking at here, obviously if they go as expected, then they will have a positive impact after 2010.

When you entered into the company in 2005, you put up a margin target of 10%. The cost reduction that you're now coming forward to, is this to reflect that your underlying business is to be run with a margin target of at least 10%, so that a quarter or two from here you would definitely be getting those margin targets?

How did you come forward to the cost reduction level that you are putting forward today?

Well, let me say that I don't think anyone of us really planned for the impact in 2009 in orders and financial crises and so on and the impact that had on Vestas in the first half 2010. If we look at the EBIT or the earnings that we expect in the second half, which is of course on a completely different level than in the first half, we have not put out a figure that we have to have minimum something or whatever in EBIT.

Our expectations for EBIT in 2011 we will give when we present in October. The year 2010 is a very special year fortunately where we see the consequences of these crises.

And that's just what we need to reflect on. I think the important decision we have taken at Vestas, and I am absolutely confident that this would benefit Vestas in the future, is that we've stuck to our guns, kept ramping up, ensured our global presence, ensured our global competitiveness, because if we hadn't, some of these orders that we are securing today we would not be able to get them to Vestas.

And therefore, even though it cost here in the short term, I am absolutely confident, going towards our Triple 15 aspirations, they are a very important part of ensuring that we're moving towards that journey.

Given that the EBIT margin shortfall in 2010 is due to volume, is your old EBIT margin guidance of 10% to 11% applicable to the current backlog, or was backlog increased to more aggressive pricing and some lower margins?

As I said on the EBIT, whatever EBIT margin we expect for 2011 we'll have to discuss this at the end of October. But again, coming back to the backlog, I think we have addressed, as I said, on the pricing, how we have seen the pricing.

And I think then hopefully you can draw the conclusion of how we believe we have progressed in terms our order intake when we have given already how we see the expected prices for the full year.

I have two questions. I would like to take them one by one.

First of all, warranty provisions have gone up quite a lot in the quarter, 4.6% of revenue, the highest level in a couple of years and certainly not near the 3% you're targeting. What's going on?

Basically, what is going on is the fact that we had some jobs we had to do in this quarter. And of course, secondly, when the revenue is so low, then the number overall becomes higher.

But as you saw, our full-year expectation is still 3% for the full year.

Okay. So it should be one-off.

It's related to specific projects?

This is just what happened in this quarter, but it doesn't change our expectations for the full year of 3%.

The second question concerns sort of cost versus pricing. One of the other guys had alluded to it a little bit.

It looks like fixed costs are still increasing, partly due to the U.S. ramp-up, as you said.

But how can you sort of provide the market with a bit of confidence that as you execute this backlog in the second half and into next year that it'd be at a decent unit profitability? Can we look at the implied pricing in the backlog and find comfort there, or how we should try and think about this?

Well, as I said, I've given you the pricing already on how we saw that. And of course, as we've said previously, looking at we believe where Vestas is standing competitively, it will be the right decision to move ahead with the ramping up and secure Vestas' future competitiveness despite that we knew that it will come at a cost by doing so short term in 2010.

And that is the decision we have taken, instead of stopping up and waiting hopefully that things would get better. And again, as I said, that definitely comes at a cost.

But that is the decision we have taken, and how that is going to impact us and giving the comfort you talk about is something obviously we need to get back to where we can talk about 2011 coming into the third quarter.

Can you give an example on where you're trying to cut your variable cost? We know prices have come down.

Clearly, you want to try and offset this. Can you give an example of what you're trying to do on an operational level?

When you have no volume, as we have not had in the first half, then that comes at a very high cost. And if you look at the earnings that if you calculate it in the second half that we expect from the revenue compared with the full year guidance, moving towards to see what we expect in the second half, I think you can see that there when you're starting to fully utilize it you get a much different picture of the efficiency of the organization in the second half than you do in the first half.

Could you please explain in more detail actually why the orders that you mentioned has been delayed? And what's the risk of further delays of these orders into next year?

Well, as I mentioned previously some of it is due to regulatory issues, some has to do with permitting issues and some of it has to do with the fact that customers that we are talking to have told us, well, it will happen at this or this time instead. And there are of course various reasons for that.

It is this reason; of course, when we look at the full year, we assessment we had to make, and we have then taken a decision, well, it probably would not happen in 2010. And based upon this evaluation we have taken the decision to postpone the expectations to beyond 2010.

So there are various reasons for it, but it's clear for instance that as previously mentioned in Spain, the regulatory issues here have been an important driver for this.

And secondly, do you see any other effects than the U.S. ramp up impacting gross margin in Q2 relative to Q1?

Well, I would say Q2, when we have had so little activity in the first half both in Q1 and Q2, it has been extremely costly for Vestas to having such a low activity level. And had we not believed that we would see a strong rebound in the second half, then obviously we would not just have had carried all these costs in the first half 2010.

However, and we believe what we're seeing is, in the strong rebounds in the second half, if we have not maintained, let's say the people on-board, it would not be possible to capture the upside in the second half. So of course it has been a very difficult bridge that we have to do in order to getting from a very busy Q4 2009, getting into the activity level we are seeing now in the second half.

So it is ramp up, and of course the cost of being with such a low activity level in the first half has of course been very costly.

There are two questions if I may. The first has to do with your V112 turbine.

And I guess I was just curious if you could just give us some indication when do you see this turbine making up a significant portion of your group sales. For example, if we are looking at 2012, are you guys thinking this turbine is going to make up 20% of your sales, or 30% or 40%, just so we have an idea of how fast this turbine will make it into the market?

Well, we're not giving those sorts of indications away. But if you look in Q1, we decided to increase our capital expenditure in order to ramp up the V112 manufacturing.

So obviously we have high expectations for the V112.

In terms of your supplier strategy, to my knowledge you basically have on supplier for that gearbox at this point. Can we expect you to be going to a multiple supplier strategy on that some point when volumes increase or how should we be doing that?

Well, we have a clear strategy that we should have two suppliers to each of the components and that also goes for the gearboxes.

I know you guys are hesitant to speak about 2011 guidance and we'll get this in the third quarter. But I guess I'm just trying to get a feeling for how you guys are viewing this now?

Let's say if we step back to the end of 2009, you guys basically had about 27% of your guidance covered with orders on hand. How should we be doing this for the end of 2011 or 2010?

Should we be thinking that if you have 30% coverage or 40% coverage, how are you guys doing that right now? Would you like to have 40% coverage for 2011 or 50% coverage or something like this?

To be frank, we would like to have 100% coverage if possible. But if you look at the math, I think you can do by looking at the expected revenue and order intake and so on, I think will give you a flavor of where we would then potentially stand in order coverage.

But we don't specifically say that we have a number that we would like to see in order coverage, but apart from the 100. But apart from that I would say we are delighted to see, as I mentioned in the presentation that compared to the last 24 months when the order backlog has gone down that we are now seeing Vestas is really moving up in the order backlog.

But we'll have to see by the end of Q4 this year where we will end.

You had 3.1 gigawatts on the completion end of Q2, is it fair to assume those turbines will be shipped as recognized as revenue in 2010? That's the first one.

To be frank, I can't remember the figure off my head, whatever it says in the announcement. But it is clear that we have a lot of things work under progress here in the first six months.

All of that will be delivered and recognized as revenue in 2010?

I can't tell you of exactly how much of it is going to be recognized for revenue in 2010. The only thing I can tell you is that based upon this work in progress and whatever we have been doing, hats off to approximately the €6 billion that we expect for the full year.

The about the average selling price, should we expect the same level achieved in Q1 in remaining of 2010?

Well, what we have said, and as I said before in the statement, this is in the order backlog, what we expect for the full year. And I think that is what you should use as our indication of where we see the pricing development in the market as mentioned and which is also in the announcement.

How should we read your new revenue guidance, is that around €6 billion, so is that some mid range or should we read it as a minimum €6 billion revenue?

Well, you can say, since we thought it was going to be €7 billion and now we believe it's going to be €6 billion. €6 billion is our best estimate of what it'll be.

But again, depending on the type of contract and depending on how we recognize revenue and so on, it's very hard to give and say it's going to be six-point something or whatever. But based upon our estimation, we talk about €6 billion.

So why didn't you give us a range to reflect this uncertainty?

I think we gave you as best as we possibly can. So if you ask me for the best figure to look at, I would say €6 billion straight.

Just to go back to the difference between the cash flow and the income statement. If we look at the cash flow from operating activities, the full working capital and the full tax paid and interest paid, the number is €210 million differed to EBITDA.

I guess a very small part of that is due to the difference between warranty provisions charged and paid. But for the remaining €185 million, what are the main elements of that?

And then also for the debt maturities excluding the (EIB) line of 250 and the bond of 600, and you have €250 million of bank debt remaining. When exactly does that mature, it's clear from the balance sheet that it isn't short-term, but does it mature in 2011, in the second half or does it mature much later?

It's not to be impolite, but I'm not too sure what the question was?

The first one is why is the cash flow so much lower than EBITDA. And the second one is what is the majority of your bank lines aside from the EIB line and the booked.

Obviously, it was such a low activity level as we have seen in the first half of 2010 is obviously impacting the cash flow negatively. As when we at the same time have been continuing with the investment level that we've been running in and keeping up this organization.

So I would say it's not surprising, seeing from our perspective that the cash flow in the first half of 2010 is so low, as is actually from operations.

I still don't understand why low activity level would impact your cash side, but not your EBITDA.

Okay. Well, then maybe we should get back to you.

And the maturity of your bank debt?

We haven't talked about the other financial facilities, but only talking about the bonding financing that we have being used. And as for instance the Europe bond for instance is running for five years.

Ditlev, I'm just sort of struggling to see how markets in Spain, Germany and U.S. which accounted for 40% of your deliveries last year.

And where I think everyone knew 2010 would be weak and disappointing. And given also percentage of completion revenue recognition why weakness there has led to a full 15% cut in revenues.

And even a 20% cut in the second half, given that the first half was sort of as you expected. And then the second question was I thought it was difficult to interpret quarterly margin move, but your gross margins were sort of flat, Q2 over Q1, despite a 33% top-line growth.

You referred I think generally, probably on a year-on-year basis to low utilization, but if you look in the report, the non-financial highlights, you get much higher consumption of raw material and electricity and everything in Q2 versus Q1. So that would suggest that utilization was much better in Q2 versus Q1.

So, again all of these R&D and warranty things. I'm still struggling more to know why your margins were so much worse in Q2 versus Q1.

Again as I said, if you look at the full year, I think that's where you got to put your focus instead of exactly what we have recognized in Q2 specifically, because there will be variations when we see this between the quarters. And coming back to the Spain and German situation, it's very much based upon the assessment of the deliveries as we saw them.

And therefore, when you sit and assess this and look upon what our customers are telling us, well, we didn't say, well we do believe that these orders will not come in, in 2010 or will come in, in 2010, but so late that they are not going to have an impact positively in the year 2010. And that is an assessment that you do continuously, but unfortunately this time round this is what we came up with.

There's not a lot of magic in it; it's just the way we looked upon it.

I have three questions in fact. First, about the order intake; in fact in H1 it was €3.9 billion.

Can you tell us how much of these orders were initially expected to be won in 2009? I'm trying to get a better understanding of what would be your, let's say clean order intake.

I don't know. You're of course correct in that there's some projects in 2009, because of delay and other things have been taken in, in 2010.

But I can't give you, say, this and this was actually for '09, but now has become '010. I think the most important thing for us is really that we have seen this rebounce in the order intake when we saw this huge decrease in 2009 of 50%.

But whether they were for 2009 or not, I don't know why this should be of importance.

About the second question now; so €3.9 billion order intake in the first half, and yet prepayment from customers have only slightly increased. I know you talked about this earlier and mentioned the timing and the longer time span, but in a more general view let's say, can you generally describe the principles of prepayment terms?

Should we expect the previously announced orders to lead to prepayment at later stages?

What you would normally see in these longer contracts is obviously that you will have different types of milestone payments instead of having for instance one bunch upfront; that they will come more in installments instead of just a one figure upfront where it has a longer time span. And I think that's what we are seeing, and also what we're referring to when we say that they do reflect larger projects with longer time span.

Okay, so you would still expect to receive those prepayments that may be closer to the deliveries but still ahead of the deliveries?

Yes.

Just a clarification, I thought I heard you say that the Australian order, you won that a few days ago, was not included in the order backlog. Was that correct?

Not in the Q2 backlog. Of course, we showed you here the orders we have received after Q2, also year-to-date.

It's in there, but it is not in the Q2 order backlog.

Just one final question maybe with regard to the volumes. How much of that would you expect for the fourth quarter?

Would you expect to have really spilled over into Q1 and Q2 next year so that you see additional deliveries than your targeted ones, maybe having a very good start into 2011? And then final question, also in terms of the gearbox manufacturers, how do you see there the pricing development and your renegotiation power?

Could you repeat the first question again regarding spilling over?

How much of the volumes you would have expected for late 2010? Do you expect to spill over really into Q1 and see that as additional volumes to your targeted volumes in the first quarter, so meaning is there a (inaudible) start then into 2011?

I'll try to answer as I hear what you're saying. Are you asking me what is the volume that is not happening in '10 that is spilling over?

Yes, correct.

Well, it's clear that what we talk about specifically here is the billion, as we still expect these to become orders. The business to billion that we talk about that is to use your phrase as spilling over.

And when it comes to the gear boxes or the manufacture of gear boxes, it's clear that the policy that Vestas is having on this and the critical to quality, and so fast and so on. And here the V112 a good example of this, that we have been very diligently in putting in some completely new design and quality criteria into the gear box, which is mandatory going forward in order to make sure that we eliminate the previous uncertainties that we have seen on gear boxes.

And for those of you who participated in the Capital Market's Day in 2008 in Denmark would have seen some of the testing facilities that have been utilized on a parts basis in order to make sure that for instance, the gear boxes going into the V112 have been tested and validated on a completely different level than we did in the past when we said yes to putting gear boxes into to Vestas turbines.

And do all of your current players qualify then for the new generation?

We haven't said that. And so far, this is something of course we take on a case-to-case basis.

But it is cleat that the requirements ref our sigma strategy is quite different today than it was just a few years ago when we said yes to this. So definitely, new requirements when it comes to, I would say all components including the gear boxes.

Unfortunately, I think we will have to wrap it up here. Thanks to everybody here in the room.

Thank you to everybody else who decided to tune in today. And hope to see all of you in connection with the Q3 at the end of October in New York.

Thank you so much.