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, the Americas about 25 per cent and Asia Pacific about 25 per cent. As expected, competition remains 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. Shipments are expected to rise from 4,057 MW in 2010 to 6,000 MW in 2011.
In 2011, Vestas still expects to achieve an EBIT margin of 7 per cent and revenue of EUR 7bn. 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 to 2010. Inventory reductions will help to achieve this improvement. The expected revenue of EUR 7bn for 2011 has almost been secured by signed firm and unconditional orders. The risk thus primarily lies in the practical challenges and risks of disruptions in production and in relation to installations of new turbine types in a year, in which a large proportion of revenue, earnings, and cash flow will be generated in the latter part of the year. Revenue for the fourth quarter of 2011 is thus expected to be on a level with that achieved in the fourth quarter of 2010.
Investments in property, plant and equipment and intangible assets are expected to amount to EUR 550m and EUR 300m, respectively. Investments will, however, materialise later in the year than earlier announced, which means that the expected increase in depreciations and amortisations compared to 2010 will be around EUR 70m against the earlier announced increase of about EUR 100m.
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. The decline relative to 2010 is due to the increase in production outside Europe, where access to green electricity is often limited. The target for the customer loyalty index is 72, and the Sigma level must be at least 5.
