LM Wind Power achieved EBITDA on ordinary activities, before impairment and special items of EUR 73.9 million for the year. This represents a significant decline of 40.9% from EUR 125.1 million the previous year.
Sales were down 2.7% at EUR 707.5 million, (727.5 million in 2010).
Off to a good start
In June, EBITDA was EUR 59.5 million, a 26 % increase versus 2010. In China there was an improvement in year on year sales and EBITDA – clear evidence of the company’s strong position in this critical market. Margins held despite significant price pressure.
Read more: LM Wind Power to build second blade factory in Brazil?
In Europe, there was 16% growth in sales. In India, there was major growth with sales and EBITDA also up. In North America, a temporary downturn in orders was compensated by a headcount reduction of 180 employees to protect profitability. Service and Logistics capacity utilisation improved and the warranty backlog was reduced. Svendborg Brakes maintained acceptable margins despite strong challenges in the marketplace.
Major change in the third quarter
However, in the third quarter, the company began to feel the full effects of a variety of unexpected headwinds in the different markets in which it operates. The consequences of the European financial crisis became more evident, in China the government began to temporarily re-balance renewable energy capacity and our customers were forced to confront significant challenges which in turn affected LM Wind Power.
A variety of proactive measures
“While LM Wind Power has maintained a global leadership position in a highly competitive market, we had to take a number of steps during the year to ensure we remain ahead of the game. The management has demonstrated a strong track record of acting to address challenges and opportunities. 2011 provided further evidence of this,” Roland Sundén said.
Read more: LM Wind Power announces expansion in Brazil
To optimise the global manufacturing footprint, the company downsized its largest plant in Spain at Ponferrada. Likewise in China, production temporarily ceased at one plant, Urumqi, in a further cost saving move.
The Annual Report 2011 is available for download here.