Annual report 2007- From The Will to Win to No. 1 in Modern Energy
Company announcement from
Vestas Wind Systems A/S
Randers, 27 February 2008
Company announcement No. 13/2008
Annual report 2007
- From The Will to Win to No. 1 in Modern Energy
Vestas continued to improve its performance in 2007. Revenue increased by EUR
1,007m to EUR 4,861m. EBIT improved by EUR 242m to EUR 443m (EBIT margin: 9.1
per cent) from EUR 201m (5.2 per cent) in 2006. Net working capital declined
over the course of the year by EUR 190m to EUR (68)m at 31 December,
contributing to a EUR 103m improvement in cash flows from operations, which rose
to EUR 701m. The progress is expected to continue into 2008.
The internally focused ‘The Will to Win' strategy has been replaced by the
externally focused strategy ‘No. 1 in Modern Energy', which puts wind power at
the top of the global energy agenda. Vestas expects the installed wind power
capacity to grow by 20 to 25 per cent per year over the next ten years among
other things due to the fact that wind power does not use water for generation
of electricity.
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| | Full year 2007 | Full year 2006 |
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| Revenue (mEUR) | 4,861 | 3,854 |
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| EBIT (mEUR) | 443 | 201 |
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| EBIT margin (%) | 9.1 | 5.2 |
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| Profit for the year (mEUR) | 291 | 111 |
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| Net working capital (%) | (1) | 3 |
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| Financial items, net (mEUR) | 0 | (40) |
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| Tax rate (%) | 34 | 31 |
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| Investments | 265 | 153 |
| - property, plant and equipment (m | 82 | 35 |
| EUR) | | |
| - intangible assets (mEUR) | | |
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The year 2007 at a glance
Revenue rose to EUR 4,861m in 2007, which was slightly ahead of expectations.
Net working capital fell from EUR 122m to EUR (68)m due to an increase in
customer prepayments, which stood at EUR 1,092m at the end of the year, compared
with EUR 926m at year-end 2006.
The strongly improved cash flow pushed up the interest-bearing net position to
EUR 614m at 31 December 2007, against EUR 271m at the end of 2006.
In 2007, Vestas shipped wind power systems with an aggregate capacity of 4,974
MW and handed over wind turbines with a capacity of 4,502 MW to its customers,
as a result of which Vestas' market share is estimated to have declined to 23
per cent from 28 per cent. The lower market share is due to new Chinese market
players and an increase in work in progress. Again in 2007, Vestas had
unutilised internal capacity when looking at the year as a whole. The order
backlog increased by 20 per cent over the course of the year to EUR 4.8bn at 31
December 2007.
Vestas improved its interaction with many sub-suppliers during 2007, but late
deliveries, component shortages as well as poor quality continue to cost Vestas
and its suppliers money. By the end of 2008, Vestas and all of its suppliers
must be at a quality level corresponding to 4 Sigma, which is a prerequisite for
continuing the improvements in profitability and competitive strength.
It is Vestas' assessment that it will take several years for the supply of wind
turbines to match demand.
In 2007, the number of employees rose from 12,309 to 15,305, of whom 12,017 work
in Europe, 1,022 in the Americas and 2,266 in Asia/Pacific. In 2008, Vestas will
increase its employee headcount by approx 2,700, especially outside Europe. The
large number of new employees will be recruited under the ‘People before
megawatt' principle, which aims to ensure that the necessary skills are in place
before Vestas expands its business volume. This is an investment in flawless
execution.
Vestas works from the principle ‘Safety first', and based on the latest wind
turbine accidents, Vestas will now carry out an extraordinary inspection of
selected turbines installed closed to residential areas, roads, etc.
Vestas is expanding its production capacity in the principal markets in an
ongoing process. 2008 will see the completion of facilities that will increase
in-house capacity by about 3,000 MW in the fourth quarter. In 2008, Vestas will
commence construction of new factories, including a foundry in China and a tower
plant in the USA, which will form part of a capacity expansion of more than
2,500 MW at the beginning of 2010 compared with capacity at the beginning of
2009. In the longer term, the expansion outside the eurozone will contribute to
ensuring improved currency equilibrium between Vestas' income and expenses.
Outlook for 2008
Revenue is forecast to rise to EUR 5.7bn, and EBIT margin is expected to
increase to 10-12 per cent. Net financial items are expected to remain unchanged
at EUR 0, and the tax rate will fall to approx 28 per cent.
Total investments are expected to amount to EUR 620m, and net working capital
will not exceed 15 per cent. Vestas expects to increase its market share to
approx 25 per cent.
Press and analyst meeting in London
Wednesday, 27 February 2008 at 2 p.m. (London time)/3 p.m. (CET)
In connection with the publication of the annual report, an information meeting
will be held today Wednesday at 2 p.m. (London time)/3 p.m. (CET) for analysts,
investors and the press at:
The Landmark London
222 Marylebone Road
London NW1 6JQ
England
Further details at www.vestas.com.
Any questions may be addressed to Ditlev Engel, President and CEO of Vestas Wind
Systems A/S, or to Peter Wenzel Kruse, Senior Vice President of Group
Communications at Vestas Wind Systems A/S, both on telephone +45 9730 0000.
Yours sincerely
Vestas Wind Systems A/S
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| Bent Carlsen | Ditlev Engel |
| Chairman of the Board | President and CEO |
| of Directors | |
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