Building DK Electronics DK Energy DK Food DK Food SE Metal Metal DK Metal NO Metal SE Retail DK Wood DK  
 

Vestas even worse off than predicted one month ago

- By Charlotte Stubben

Vestas reported 2011 results lower than preliminary figures given in early January and said it expected a 2012 operating profit margin in a range of 0-4 percent.

2011 was a very challenging year for the wind industry. The same applies to Vestas which had to issue two profit warnings and abandon its Triple15 targets.

In 2011, Vestas recorded revenue of EUR 5.8bn and an EBIT margin before special items of (0.7) per cent, slightly below the preliminary financial figures for 2011 announced on 3 January 2012 due to later-than-expected deliveries.

The results and revenue for the year are, however, substantially lower than the original expectations of an EBIT margin of 7 per cent and revenue of EUR 7bn, which is disappointing. The projects in questions have not been cancelled but postponed and that they are expected to be handed over and recognised as income in 2012, however, at a lower contribution margin due to higher costs than originally anticipated.

On the other hand, the intake of firm and unconditional orders of 7,397 MW with a value of EUR 7.3bn, was in line with expectations.

Net working capital amounted to EUR (71)m, an improvement of EUR 743m. The improvement was attributable especially to the reduction of component inventories following a successful make-to-order implementation, higher pre-payments and trade payables.

Outlook
Based on, among other things, input from a number of the company’s large shareholders, Vestas has decided to reduce the number of outlook parameters it provides to the public. Furthermore, Vestas has decided to introduce guidance ranges for earnings (EBIT), revenue and the free cash flow to take into account the heavy fluctuations characterising these items depending on timing of order intake, production, shipments and final delivery to the customers.

Read more: Vestas wins 42 MW order in Poland

For 2012, Vestas expects to achieve an EBIT margin of between 0-4 per cent and revenue of EUR 6,500-8,000m, including service revenue, which is expected to rise to approx EUR 850m with an EBIT margin of around 14 per cent. The EBIT margin will be adversely affected primarily by too high production costs for the V112-3.0 MW turbine and the GridStreamer™ technology, which will be reduced in the course of the year and by an expected increase in depreciation and amortisation charges of approx EUR 100m. Total warranty and product provisions are expected to account for less than 3 per cent of the expected revenue for the year.

Shipments which are expected to increase to approx 7 GW with the present production plans will peak in the middle of the year, while deliveries may fluctuate heavily over the quarters.

Disruptions in production
Disruptions in production and challenges in relation to wind turbine installation, for example bad weather, lack of grid connections and similar matters may thus cause delays that could affect Vestas’ financial results for 2012.

Read more: Vestas receives 58 MW order in Poland

Total investments are expected to be EUR 550m, of which investments in intangible assets are expected to amount to EUR 350m, which among other things, includes higher investments in the development of the V164-7.0 MW offshore turbine. Total research and development expenditure is now expected to amount to EUR 450m in 2012. The lower investments in intangible assets and R&D expenditure are caused by a more focused R&D organisation.

Read related article Disarray in Vestas: CFO gets fired and top Board members quit on Metal Supply.


Write Comment
Popular Articles

Sign up for our newsletter
Already 11,401 subscribers.
View the latest newsletter.
Follow us on:

Meps: EU steel price upturn slow to take hold

September 22, 2014 12:28 PM

The European holiday season in late July and August led to a significant slowdown in strip mill market activity.

Siemens presents onshore innovations at WindEnergy Trade Fair

September 19, 2014 9:17 AM

Under the banner slogan "Green Energy. Made in Hamburg", Siemens Energy is presenting its newest products at the wind power trade fair "WindEnergy 2014" in Hamburg, Germany from September 23 through 26.

Steelwind Nordenham produces Mega-Monopile with world’s largest diameter

September 18, 2014 11:09 AM

With a diameter of 7.80 meters, it is now the biggest in the world – the first Steelwind Mega-Monopile has rolled out of the plant just in time for the opening of the Dillinger Hütte subsidiary Steelwind Nordenham. Monopiles are foundation structures for offshore wind farms.


See allNews from the companies

Sandvik Coromant breaks Guinness World Record

September 19, 2014 8:43 AM
Sandvik Coromant Sverige AB, Sandvik

World's largest coin mosaic benefits next generation of manufacturing workers

Troax to exhibit at BI-MU Fieramilano, 30/9-4/10/2014

September 15, 2014 3:12 PM
Troax Nordic AB

TROAX will be exhibiting at 29.BI-MU exhibition.

Meet Pilz at WindEnergy Hamburg

September 18, 2014 8:35 AM
Pilz Skandinavien K/S

From 23 to 26 September 2014, the new international trade fair WindEnergy Hamburg will provide an overview of the trends in the wind energy sector. Visit Pilz in Hall A1, Stand 518.

September 9, 2014
September 8, 2014
September 2, 2014
September 1, 2014
August 25, 2014
August 21, 2014
August 20, 2014
August 19, 2014
August 18, 2014
August 12, 2014
August 8, 2014
August 5, 2014
July 16, 2014
July 10, 2014