2011
In spite of the macro-economic uncertainty and the turmoil in the financial markets, Vestas still expects an intake of firm and unconditional orders of 7,000-8,000 MW. Europe and Africa are still expected to contribute about 50 per cent, whereas the Americas is now expected to contribute about 35 per cent and Asia Pacific about 15 per cent against the previous 25 and 25 per cent, respectively. As expected, competition is still fierce, but a strong product platform, advanced service solutions and regional production capacity allow Vestas to offer its customers the most competitive solutions. The majority of the orders are expected to include short-term or longer-term service contracts with varying scope. In the first nine months of the year, more than 96 per cent of the announced MW included a service contract. Shipments are now expected to be approx 5,500 MW in 2011 against the previous expectations of 6,000 MW.
In 2011, Vestas expects to achieve an EBIT margin of about 4 per cent and revenue of about EUR 6.4bn as disclosed on 30 October 2011, when the outlook for 2011 was adjusted due to the too slow commissioning of a new generator factory in Germany. The factory is expected fully commissioned in the beginning of 2012, which will be confirmed by release of a company announcement. Revenue in the service business is expected to amount to EUR 700m with an EBIT margin of 15 per cent. Vestas expects a positive free cash flow, equivalent to an improvement of more than EUR 700m compared with 2010. Continuing reductions of raw materials and component inventories will help to achieve this improvement.
Investments in property, plant and equipment and intangible assets are still expected to amount to EUR 550m and EUR 300m, respectively. Relative to 2010, depreciation and amortisation is expected to rise by about EUR 70m to about EUR 350m.
Net financial expenses and the corporate tax rate are expected to be EUR (60)m and 28 per cent, respectively. Total warranty and product provisions are expected to account for less than 3 per cent of the expected revenue for the year, as the performance of the wind power plants is constantly improved to the benefit of customer earnings and Vestas’ costs.
The aim is to keep the incidence of industrial injuries at no more than 5.0 industrial injuries per one million working hours. The green proportion of Vestas’ energy consumption is expected to be 40 per cent, and renewable electricity is expected to account for 95 per cent. The decline relative to 2010 is due to the increase in production outside Europe, where access to green electricity is often limited. In order to ensure a consistently high proportion of green energy, Vestas invests in its own wind power plants. The target for the ¬customer ¬loyalty index is 72, and the Sigma level must be at least 5.
This announcement includes expectations for free cash flow, warranty provision percentage and investments for 2012. Further outlook for 2012 will be disclosed on 8 February 2012. Vestas is considering which elements to include in the outlook.
