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Vestas CEO Runevad claims turnaround on track

DENMARK: Vestas has insisted its turnaround strategy is on track despite a 27% decrease in revenue for the third quarter.

Vestas CEO Anders Runevad
Vestas CEO Anders Runevad

However, speaking about the Q3 results, new Vestas CEO Anders Runevad highlighted an increase in EBIT increased by EUR 54 million to EUR 67 million. This was due to lower costs and increased project margins.

Additionally, cash flow has also been raised by EUR 198 million to EUR 56 million. Unconditional orders for the period were at 1,547MW.

In Q3 last year, The order intake for the period (unconditional and firm) was 401MW, with the order backlog from 30 September valued at EUR 8.3 billion.

Runevad said: "The improved EBIT despite a 27% drop in revenue and another quarter of debt reduction are important results of the ongoing turnaround, and we remain focused on delivering according to plan in the last part of the year."

It was Runevad's first results presentation since replacing former CEO Ditlev Engel earlier this year.

Asked how his leadership would differ from his predecessor's, Runevad remained tight-lipped stating that he would be able to say more in February when Vestas announces its annual results.

Speaking about the results, Vestas' senior vice-president Morten Albaek, said the three highlights were the improved EBIT of the company which shows the "break even point has been lowered".

Secondly, it was the upgrading of guidelines for EBIT and cash-flow "that show we're capable of being more profitable". Lastly, he pointed to the 43% decrease in net debt for the quarter.

It was in Q3 2011 that Vestas announced its turnaround plan for the company, which was underpinned by the need to reduce costs by at least €150 million by the end of 2012.

This involved cutting the global staff count from around 23,000 to 16,000 by the end of 2013. Currently, this stands at 16,200. Albaek said the remaining 200 jobs would be cut from different parts of the group by the end of the year.

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