2000: The largest order to date and a new sales record
The new millennium barely starts before the largest order to date of 1,800 turbines is received by Gamesa Eólica S.A., of which Vestas owns 40 per cent. The client is the Spanish energy company Energía Hidroeléctrica De Navarra, S.A. The total value is in excess of DKK 5 billion.
In May the new 22,000 m2 factory in Nakskov, Denmark, is completed.
Vestas strengthens its position in the Japanese market by signing a new distribution agreement with Vestech Japan Corporation. The agreement is followed up in the autumn with a new order for Japan for 24 turbines of the type V66-1.65 MW for delivery in 2001.
The American market shows very positive signs as a result of the extension of the Production Tax Credit. Vestas signs the largest agreement to date in the USA for sales of V47-660 kW turbines to FPL Energy, LLC for delivery in 2000 and 2001. For the U.S. market, the development of a new OptiSlip® version V80 turbine is underway. This new wind turbine is expected to be in serial production in early 2002.
In August, Vestas receives ISO 14001 certification that documents that Vestas has implemented a new environmental management system. The certification includes Vestas' activities for the external environment. Vestas continues to work towards British standard OHSAS 18001 certification for the work environment.
In November, Vestas offers shares to all employees for the second time. More than 80 per cent of eligible employees choose to take up the offer. Similarly, warrants were issued for the first time to the company’s board of directors, executive committee and senior management.
The global market for wind power grows by approximately 4,500 MW of newly installed capacity. Vestas' share, including associated companies, amounts to 1,434 MW corresponding to a market share of 32 per cent. This means that Vestas has supplied approximately 26 per cent of the installed capacity throughout the world, and has therefore reached its goal of 25 per cent, an historical market share.
Vestas reaches sales of DKK 6.5 billion and pre-tax profit of DKK 866 million, which is a new record. With Earnings Before Interest and Taxes (EBIT) amounting to 10.7 per cent, a financial goal of 9 per cent is reached too.
At the end of the year the Group has 3,852 employees – an increase of 47 per cent. In addition to this, there are 1,131 employees in associated companies in Spain and India.
2001: Horns Rev – the world’s largest offshore wind farm
In January, Vestas is selected to be the wind turbine supplier for the first large offshore project in the North Sea, the Horns Rev project west of Esbjerg in Denmark. The project, to be constructed during the summer of 2002, is one of the world’s largest offshore wind farms to date with a capacity of 160 MW. The turbine type chosen is the Vestas V80-2.0 MW and the anticipated order value is projected to be about DKK 1 billion.
In the spring, Vestas also signs its first contracts in Costa Rica and Iran. A number of new markets are also showing positive signs, including France, Portugal and Poland.
The first half of 2001 is characterised by a flurry of activity clearly reflected in the interim financial results. Net turnover for the first half of 2001 doubles compared to 2000 and amounts to DKK 4,544 million. Pre-tax results for the first six months increase by 35 per cent to DKK 401 million.
An important subgoal for the working environment is reached in August 2001 when Vestas is awarded British OHSAS 18001 certification documenting that the working environment management system in the Group’s Danish factories conforms to the standard.
In September Johannes Poulsen announces to the Board that on his 60th birthday and after 15 years as Managing Director of Vestas Wind Systems A/S he wishes to retire at the general meeting on 18 April 2002. The Board appoints Svend Sigaard, the current chief financial officer, as the new managing director of the company effective from the same date.
In December, Vestas Wind Systems A/S sells its 40 per cent holding in Gamesa Eólica S.A. to Sesa Sistemas Electricos S.A., part of the Gamesa Group, for EUR 287 million (ca. DKK 2.1 billion). The reasons behind the sale include strategic differences between Vestas and Gamesa in relation to project development leading to an increasing number of strategic conflicts in the market.
The global market for wind power grows by approximately 51 per cent to 6,824 MW, of which the Vestas Group, including associated companies, has 1,645 MW in sales – double compared to the year before. Vestas achieves a market share of 24.1 per cent and thus an increase of six percentage points compared to 2000.
Sales amount to DKK 9.52 billion with a surplus before EBIT amounting to DKK 985 million. Pre-tax results amount to DKK 2.85 billion which includes DKK 1.81 billion for the sale of shares in Gamesa Eólica S.A.
At the end of the year Vestas employs 5,240 people, of which 825 work in foreign subsidiaries.
2002: Another record year
A challenging year for Vestas in many ways. Despite a number of problems, it becomes yet another record year for the wind turbine industry and Vestas. The total installations of wind power in the world will amount to approximately 7,000 MW, equal to an increase of approximately three per cent. Vestas sales increase by nine per cent from EUR 1,282 million to EUR 1,395 million.
The American market does not develop as expected in early 2002. Consequently, capacity is reduced in the U.S. and about 1,200 skilled and qualified staff have to switch to part-time work for three months.
On 18 April Johannes Poulsen, the Managing Director for 15 years, retires and Svend Sigaard, Chief Financial Officer, takes over his position as the Managing Director of Vestas.
In April, Vestas starts installation of 80 units of 2.0 MW offshore wind turbines at Horns Reef in the North Sea off the Danish west coast – the largest contract undertaking in 2002. Many employees make a great effort to ensure that the offshore wind farm gets established according to plan. The good teamwork within the whole Vestas group means that Vestas can erect the 80th and final turbine 11 days earlier than originally planned. At the end of 2002, the establishment of the world’s largest offshore wind farm to date is a reality, and in the future the park will supply electricity to approximately 150,000 Danish households.
The valuable experience gained from the Horns Reef project contributes to Vestas being selected as the supplier of wind turbines for several offshore wind farm projects in Europe in 2002. In July, Vestas receives an order for 30 units of V80-2.0 MW offshore wind turbines, which will be the first large offshore wind farm in England. Later in the year, Vestas is selected to be the supplier of offshore wind farms in England and Belgium.
With the establishment of the Horns Reef offshore wind farm and subsequent orders, Vestas seals its position as the world’s leading producer of offshore wind turbines.
As in previous years, Vestas ends 2002 with the establishment of new production facilities. A 10,000 m2 factory is opened in the Campbeltown, Scotland. The factory manufactures towers and assembles nacelles. Vestas is thus well prepared to service the growing UK and Irish markets. A 31,500 m2 factory producing blades is opened in Lauchhammer, Germany.
Vestas erects the first V90-3.0 MW prototype turbines – the next generation in Vestas' product program. These prototypes have to pass a trial period before serial production begins in 2004.
Due to continuing uncertainty on the American market, the expectations for growth in 2003 are lowered, and Vestas unfortunately is obliged to make 495 employees redundant at the end 2002. Despite this, there is a net staff gain of 759 in 2002.
With good market spread, a strong product range, a good order volume both onshore and offshore, as well as highly qualified, motivated staff, Vestas is well prepared for the future. Vestas expects that wind power will become one of the world’s leading energy sources.
