Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Vestas Plans to Restructure After Cutting Sales Forecast

Vestas Plans to Restructure After Cutting Sales Forecast
Vestas Wind Systems A/S 415-foot-tall wind turbines operate at the Sacramento Municipal Utility District (SMUD) 102 megawatt wind farm in Rio Vista, California. Ditlev Engel, the company's chief executive officer, said problems starting up a factory in Germany were under control, but revenue would be delayed. Photographer: Ken James/Bloomberg

Vestas Wind Systems A/S, the biggest wind-turbine maker, will announce a ``significant'' change to the corporate structure after cutting its revenue forecast for the second time since October. The stock fell 17 percent.

A total of 1 billion euros ($1.3 billion) of revenue expected in 2011 will be booked this year because of delays in connecting projects to the electricity grid and bad weather that stalled construction of several ventures, the Aarhus, Denmark-based company said yesterday in a statement. The shares opened at 58 kroner, down from 69.60 kroner yesterday in Copenhagen.

The announcement adds to a series of earnings misses that have depressed Vestas shares about 90 percent from their peak in 2008. Vestas and its rival General Electric Co. are suffering from slower demand growth and narrowing margins caused by rising competition from Asian companies and subsidy cuts in Europe.

Vestas now expects sales of about 6 billion euros for 2011, down from the 6.4 billion euros it forecast on Oct. 30, which itself was a reduction from 7 billion euros. Those two deferrals total about 1 billion euros. Chief Executive Officer Ditlev Engel said on a conference call that while problems starting a factory in Germany were under control, revenue would be delayed.

“We are looking at very carefully how come we have experienced these kind of challenges when taking new technologies to the market,” Engel said.

No New Equity

The company gave no details of the restructuring program being announced on Jan. 12, saying only that it wouldn’t involve tapping equity markets for more cash and that it has no plans to seek any kind of strategic investor.

Delays relating to weather, connecting wind plants to the grid and “other disruptions” meant some projects wouldn't be counted as revenue until the first quarter of this year.

Earnings before interest and tax for last year, previously expected to be about 255 million euros, were cut to an implied forecast of zero, the statement shows. About 100 million euros of the shortfall is due to development costs for the V112-3.0 MW turbine and GridStreamer technology for the 2-megawatt design.

As a result, the Ebit margin will be “approximately zero percent,” with cash flow remaining positive in 2011.

Vestas said it had orders for turbines last year totaling 7.4 gigawatts of capacity, valued at 7.3 billion euros, in step with its forecast of 7 gigawatts to 8 gigawatts. Some customers postponed signing contracts for a “number of major orders from 2011 to 2012,” according to the statement.

Delays in Europe

The delayed turbine orders mostly were from customers in Europe, the company said during the call, and most fourth-quarter sales originated in Europe.

The company said the commissioning problems at its generator factory in Travemuende, Germany, were “under control” and not expected to hurt operations in 2012.

Vestas will present “a significant change of the whole organization” on Jan. 12, it said in the statement. Vestas is due to announce full-year orders data in its annual report on Feb. 8.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.