Vestas proclaims 'end of turnaround' with 2013 results

DENMARK: Vestas has declared its turnaround programme is complete following the publication of its 2014 results and the outlining of its upcoming strategy.

Vestas board. Runevad (second right).
Vestas board. Runevad (second right).

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In its annual results, Vestas revealed it had a net income of EUR 218 million in Q4 2013. For the year as a whole, it had an operating profit (EBIT) of EUR 211 million compared to EUR 4 million in 2012.

THe company also recorded a profit after special items of EUR 102 million, the first time it has moved out of loss by this measure since 2010.

In 2013, revenue was EUR 6.1 billion, above the company’s forecast of EUR 5.5 billion, and free cash flow of just over a EUR 1.009 million.

Additionally, Vestas' order intake was up around 38% for the year, with a 2013 order pipeline of 5.96GW compared with 3.74GW in 2012.

Looking to 2014, the company said it expects a minimum revenue of EUR 6 billion.

Vestas CEO Anders Runevad also revealed his plans for the company following completion of the turnaround programme that has seen the workforce cut by around 30%.

Much of this appears to be a continuation of the company's existing strategy. For example, it plans to continue looking at offloading non-core production facilities and attempting to lower costs.

Giving an example of this, it said it planned to increase the standardisation of components across its range and "simplifying [its] global manufacturing footprint".

Runevad also said there would be an expansion of the company's key account programme and a focus on new and emerging markets.

The company would also seek to improve the performance of its services divsion. Runevad said: "We want to grow services by 30%. We want a more segmented portfolio and a greater offering from scale by doing the same things across the globe. We will be creating a new services organisation reporting to me."

In terms of Europe and North America, the company said it plans to create product variants designed for the specific regions. In India and China, it will focus on driving down the cost of its 2MW platform.

Offering a word of warning about the current market, Runevad said: "While it is encouraging that the demand for clean, renewable energy to power future global development will continue to increase in the long term, we must adjust to lower growth rates and increasing demands on our industry’s maturity and ability to continuously lowering the cost of energy."

Vestas has also announced a EUR 850 million credit facility. Explaining this, chief financial officer Marika Fredrikssen said: "We want to compete head to head with our competitors who have a stronger position. Customers want to know we're there for the long term."

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