Vestas New CEO Will Focus on Return to Profit, Foreign Growth

Vestas Wind Systems A/S (VWS), the Danish turbine maker that’s been unprofitable for two years, will focus on completing a restructuring program to restore earnings, incoming chief executive officer Anders Runevad said.

Runevad also plans to expand the company’s foreign business and continue to invest in offshore turbine technology, he said today in a phone interview. The former Ericsson AB executive will take over on Sept. 1 after Ditlev Engel was fired Aug. 21.

After eight straight quarterly losses, Vestas has given itself just over four months to finish a turnaround plan seeking to lower fixed costs by 400 million euros ($530 million), including a 30 percent cut in staff to 16,000. Europe’s turbine makers including Gamesa Corp. Tecnologica SA are recovering after overcapacity and growing competition eroded profits.

“The challenge is very clearly profitability,” Runevad said. “Vestas has geographical spread and market leadership strengths, which is something to leverage on and continue to build on the international presence.”

Vestas is developing an 8-megawatt sea-based turbine, the V164 model, as European nations including Germany and the U.K. add offshore machines to curb emissions and secure supplies.

Runevad declined to comment on discussions with potential partners for its offshore wind business, including Mitsubishi Heavy Industries Ltd. (7011) Uffe Vinther-Schou, senior vice president at Vestas Offshore, said yesterday the company is seeking an offshore partner “so we can play ball with the likes of Siemens, Samsung, Mitsubishi.”

Execute Turnaround

Runevad leaves his position as president of region west and central Europe at Ericsson. Chief Financial Officer Marika Fredriksson is in charge of Aarhus-based Vestas until Runevad assumes control.

“If I look at the opportunities, overall I’m confident that renewable energy is the future and we need to change our mix,” Runevad said. “The first priority is definitely that we continue to execute on the turnaround plan announced. There are a lot of positive signs but also there’s a lot left to be done.”

To contact the reporters on this story: Sally Bakewell in London at sbakewell1@bloomberg.net; Gelu Sulugiuc in Copenhagen at gsulugiuc@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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