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“I’m pleased to see that Vestas’ financial performance continues to improve, with solid results on all key financial and operational parameters. One year on, the “Profitable Growth for Vestas” strategy is very much on track. Vestas’ strong results are creating value for our shareholders, as illustrated by the Board’s recommendation to distribute a dividend for the first time since 2002.” 

Anders Runevad
Group President & CEO 

Investor presentation

The Group President & CEO's and Executive Vice President & CFO's presentation of the interim financial report:
- investor presentation (pdf)


The overview shows which cities Vestas will be visiting during the coming roadshow.


2014 was the first year in the implementation of Vestas’ new strategic plan, Profitable Growth for Vestas, and it proved to be a year of strong performance. Compared to 2013, general performance substantially improved due to a successful execution of the strategic plan combined with a continued focus on the parameters which were at the centre of the previous turnaround plan. Wind turbine order intake increased by 10 per cent in 2014 and the service order backlog increased as well, providing continued evidence of Vestas’ strong position in the market.

For full year 2014, revenue amounted to EUR 6.9bn, EBIT margin before special items was 8.1 per cent, total investments was EUR 285m, and the free cash flow amounted to EUR 841m. This was all in line with the latest expectations of revenue of EUR 6.4bn-7.0bn, EBIT margin before special items of 7-8 per cent, total investments of approx EUR 250m, and free cash flow around EUR 850m. The activity level and earnings of the period were a result of stable execution throughout the year.

The wind turbine order intake increased from 5,964 MW in 2013 to 6,544 MW in 2014 and the value of the service order backlog increased by EUR 0.3bn to EUR 7.0bn, despite the carve-out of the offshore service order backlog during the year.

For 2015, Vestas expects revenue to amount to minimum EUR 6.5bn with an EBIT margin before special items of minimum 7 per cent, total investments of approx EUR 300m, and a free cash flow of minimum EUR 400m.

As a result of the strong performance during the year, Vestas’ capital structure targets have been met and, as per the dividend policy of the company, the Board of Directors recommends to the Annual General Meeting that a dividend of DKK 3.90 per share, equivalent to 29.5 per cent of the net profit for the year, be distributed to the shareholders.


2014 at a glance - compared to 2013

+ 10%

 Vestas had an order intake of 6,544 MW  
 - a increase of 10 per cent

+ 36%

 Vestas produced and shipped 6,125 MW  
 - a increase of 36 per cent

+ 29%

 Vestas delivered wind power systems with an aggregate capacity of 6,252 MW
 - a increase of 29 per cent

+ 14%

 Vestas generated revenue of EUR 6,910m
 - a increase of 14 per cent

+ 7%

 Onshore service revenue amounted to EUR 949m
 - a increase of 7 per cent 

+ EUR 348m

 EBIT before special items amounted to EUR 559m 
 - a increase of EUR 348m

+ EUR 474m

 Net profit amounted to EUR 392m
 - a increase of EUR 474m

- EUR 168m

 Vestas realised a free cash flow of EUR 841m
 - a decrease of EUR 168m

+ 0% point

Renewable energy amounted to 56 per cent of total energy consumption
- unchanged 

- 24%

Industrial injuries per one million working hours was 1.6
- a decrease of 24 per cent 

Strategy – Profitable Growth for Vestas


“The strategic direction is unchanged and the objectives remain – now it is time to focus on execution to create an era of profitable growth.”

Anders Runevad
Group President & CEO

Anders Runevad

    Industry dynamics

    The world, in which Vestas operates, continues to evolve in ways that significantly affect both the wind power industry and Vestas. Wind energy’s advantages are strong and Vestas’ aspiration is to continue to be the global leader in the wind power industry. To succeed – together with its customers, shareholders, employees and the surrounding society – Vestas will continue to provide superior cost-effective wind turbine technologies, products and services to the market.

    Market demand remains intact

    The demand for renewable energy continues to be strong in both mature and emerging markets and amongst renewable energy sources, wind energy is generally regarded as the most competitive. Mature markets are driven by replacement of energy capacity, providing a stable foundation for continued demand, whereas demand in emerging markets is characterised more by growth in overall energy consumption. Future growth in demand for energy is expected to mainly come from Asia, Latin America and Africa.

    The market experienced a large drop in 2013 after the previous American Production Tax Credit (PTC) expired, but with the renewal in the beginning of 2013, the market recovered in 2014. The short-term PTC extension in December 2014, whilst giving very limited time to secure orders, did provide some further market stability for the coming years by extending the demand environment in the US market.

    The European onshore market is expected to be stable driven by the renewable energy targets for 2020 and the strong existing energy structure. North America – Vestas’ second largest market – is expected to be stable the next two years, and thereafter, the size of the market is dependent on the status of the PTC. The emerging markets in Latin America, Asia, and Africa are expected to continue to grow, and China is expected to remain the largest onshore market.

    In the course of the next approx three years, growth in emerging markets, with the exception of China, is not expected to offset the stabilisation of European markets or volatile market conditions in the USA, but they do offer opportunities beyond the near-term perspective.

    The offshore market is expected to grow. With the V164-8.0 MW turbine successfully commissioned, the joint venture between Vestas and Mitsubishi Heavy Industries Ltd. is expected to be a strong platform for winning an expanding share of the global offshore market.

    Wind increasingly often cheapest new power source

    Over the last five years, the levelised cost of energy (LCOE) for onshore wind has decreased by 12 per cent, whereas it has increased by more than 60 per cent for coal and gas (Source: Bloomberg New Energy Finance (BNEF): Closing the Gap: Grid parity for onshore wind. November 2011). This increasingly often puts wind power in a position as the cheapest new power source.

    In emerging markets, where economic development requires new electricity generation capacity, wind power is often competing headto- head with other energy sources on equal terms – and winning. One example is Brazil, where the results from auctions on new electricity generation reflect the competitiveness of wind against other energy sources.

    In many mature markets, energy demand is stable, with wind power often competing with existing coal and gas facilities. Here, demand for clean energy thus stems from replacement of existing capacity and political objectives to reduce greenhouse gas emissions and to increase energy security. However, wind power is still competitive.

    To further increase wind energy’s competitiveness, wind turbine manufacturers are required to make further reductions in LCOE, which links well to Vestas’ strategic objective to continue to lower the cost of energy of its products and services and make wind power an even more attractive investment. Analysts expect that LCOE for wind power will decrease by 10 per cent from 2013 until 2020 and by 20 per cent from 2020 until 2030 (Source: Bloomberg New Energy Finance (BNEF): H2 2014 Wind Levelised Cost of Electricity Update. August 2014).

    Where LCOE shows the clean cost of the technology installed in a given market, including financing costs, the market price is often influenced by different mechanisms of both direct and indirect nature. The objective of these vary across markets, but a common driver to incentivise investments in renewable electricity production is the fact that the external costs, i.e. costs borne by the society, for instance through environmental impact, are minimal compared to electricity production through fossil fuels or nuclear.

    According to a recent study by the European Commission, the external costs per unit of energy produced at a hard coal fired power plant is more than 20 times that of onshore wind power. The same study concludes that 96 per cent of the external costs from electricity generation in Europe stems from fossil and nuclear sources totalling EUR 122.4bn every year (Source: European Commission: Subsidies and costs of EU Energy. November 2014).

    In conclusion, wind power is increasingly competitive against other energy sources and the level of financial support compared to external costs still needs to be calibrated. Based on these facts, Vestas continues to believe that the demand environment for wind energy will remain strong.

    Political and regulatory environment evolving

    Public policies that have supported renewable energy’s growth continue to evolve, along with the shifts in demand and improved competitiveness of the industry. Policy support is uncertain in many markets and governments, customers and societies are relentlessly demanding that the wind power industry reduces cost of energy. This ties well with Vestas’ vision to bring the cost of wind energy on a par with coal and gas, which today is a reality in some markets.

    While 2014 has been a year characterised by changes in the regulatory environment, the year has overall provided greater clarity and transparency on the mid-term regulatory environment. On a longer term and broader level, the EU decided on overall 2030 targets and the USA and China announced a climate accord. A few examples of specific key markets, where regulatory transparency increased, are Germany (the Erneuerbare Energie Gesetz – EEG), India (the reintroduction of the Accelerated Depreciation Scheme) and the USA (2014 extension of the Production Tax Credit – PTC). During 2014, decisions in China awaited the modifications of the Feed-in-Tariff. The modifications were introduced in January 2015.

    In the light of wind energy becoming more competitive, support systems are becoming more market-based and moving towards systems providing support in addition to the market price – not in place of it. The EU has asked all member states to decide by 2017, which form of market-based support they will introduce and several EU countries are moving in the direction of using market-based support systems. Planned transition to auction systems by 2017 embedded in the German EEG is one example of this development.

    The strategic direction remains unchanged

    Outlining the ambition

    Vestas has a strong global reach in both the wind turbine and service segments and will continue to build its strength in those segments in 2015 and beyond. The overall strategic ambition to ensure profitable growth for Vestas remains, as does Vestas’ ambition to maintain and expand its global leadership and create an even more flexible and robust company, able to consistently deliver best-in-class margins. To achieve this, Vestas must balance and utilise its three key differentiators:

    • Expand global reach (i.e. by increasing market presence and further localising manufacturing). 
    • Increase technology and service leadership (i.e. by reducing LCOE across product portfolio and by strengthening product and service offerings).
    • Leveraging global scale (i.e. by utilising installed base and sourcing opportunities).

    At the same time, profitable growth requires that Vestas maintains the virtues adopted during the recent years – meaning constantly prioritising amongst the most business critical issues and by ensuring a diligent focus on overall cost structures, cash levels, and investments.

    Vision and mission

    As part of the 2013 strategy process, Vestas’ vision and mission have been modified on some small, albeit important points, now linking even better to the overall strategic aspirations of the company. Vestas’ vision and mission serve as important beacons for uniting all Vestas’ key stakeholders and not least its employees, with a clear purpose and direction for where the company is heading and how the employees as individuals can support that journey.

    Vision: To be the undisputed global wind leader, meaning:

    • Be the market leader in revenue.
    • Bring wind on a par with coal and gas.
    • Deliver best-in-class margins.
    • Have the strongest brand in the wind power industry.

    Mission: Deliver best-in-class wind energy solutions and set the pace in the wind power industry to the benefit of Vestas’ customers and the planet.

    The four key pillars in Vestas' strategy

    To achieve its strategy, Vestas will continue to focus on four strategic objectives:

    • Profitable growth in mature and emerging markets.
    • Capture the full potential of the service business.
    • Reduce levelised cost of energy (LCOE).
    • Improve operational excellence.

    Grow profitably in mature and emerging markets

    Vestas will leverage on its strong position in mature markets such as Europe and North America. These markets have historically been the strongholds of Vestas. The product portfolio has a strong fit for these markets, the brand is well established and recognised, and an experienced sales force is in place.

    Simultaneously, Vestas plans to further reduce costs and capital expenditure requirements in these markets by offering tailored, technologically advanced product variants based on innovation of existing wind turbine platforms, targeting an even higher market share.

    Vestas has already established a strong track record of winning orders in new wind turbine markets in Eastern Europe, Asia, Africa and Latin America. Furthermore, Vestas expects to improve its regional competitiveness and presence in the specific markets China, India and Brazil. Plans have been developed for those markets and are now being implemented.

    In Brazil, key levers to succeed include local sourcing, cost-out and customisation of Vestas’ service offerings, matching the requirements in the Brazilian market, which was also substantiated by the announcement to invest up to EUR 32m in the market.

    In India, key levers are investments in the local supply chain and implementation of appropriate business models to ensure that Vestas optimises value capture in different market segments. This strategy is now being implemented.

    Finally, a key lever to succeed in China is a full suite of turbine and service products for China’s low- and medium-wind sites as outlined in Vestas’ China strategy announced in October 2014.

    Building on its long-lived global presence, Vestas will also continue to pursue opportunities in markets, where wind energy is set to expand, such as for instance Chile, Costa Rica, Kenya, Slovenia, Vietnam, and Thailand.

    Consequently, Vestas will amplify the agility and competencies of its sales organisation and deepen the partnerships with its customers through the expansion of its key account programme. Furthermore, Vestas has established a Customer Advisory Board, involving key customers in the development of new wind power technologies and services.

    To win more and larger orders, Vestas seeks to partner with potential customers early in the project development phase. Through advanced services such as SiteHunt® and SiteDesign®, providing transparency and business case certainty for its customers, Vestas is able to unlock value and enhance customer relationships at an early stage of project planning. Thus, Vestas has increasingly become an opportunity originator by helping both established and new customers and investors to step up their commercial focus on wind power as well as enter new and promising wind power markets with a high return on their investments.

    Through its unrivalled track record and close customer relationships, Vestas has developed a clear understanding of the customers’ requirements and how to optimise projects to maximise value. Combined with Vestas’ unparalleled capabilities within siting, operation and servicing of wind power plants, Vestas has a competitive advantage which will be utilised even further going forward, where the ambition is to grow faster than the market.

    Capture the full potential of the service business

    Having delivered an accumulated amount of more than 66 GW of wind power – a significantly higher amount than the closest competitor – Vestas has a unique platform from which to grow its service business, which today, is already the largest in the wind power industry. As the majority of Vestas’ wind turbine contracts are sold with service agreements, typically running for five or ten years, the stable revenue stream from the service business is set to continue its growth as the installed base of wind turbines increases.

    In 2014, the service business was established as a separate division and a head of Global Service was appointed. Following this appointment, the global service organisation was implemented later in the year and the division is now set to execute on the strategic objective to capture the full potential of the service business.

    Vestas intends to expand its service business further by offering new and value-adding service solutions and a variety of upgrades of existing wind power plants to its customers. This is made possible through the use of the wind power industry’s most powerful supercomputer and a body of unrivalled wind data. By constantly monitoring more than 27,000 wind turbines, Vestas is able to identify the optimal site for a wind power project, plan and carry out service at times with no wind and continuously optimise the power output of the wind power plant, thereby adding substantial value to its customers. Vestas aims to increase the value of its customer offerings through further development and upselling of service solutions, product improvements, and services like Vestas PowerPlus™ and VestasOnline ®.

    In addition, the largest installed capacity of wind turbines in the world provides a strong platform for renewals of service agreements and recapturing of previously expired service agreements. Vestas aims to improve the service renewal rate in 2014 of 72 per cent while at the same time developing offerings to recapture part of the around 16 GW installed Vestas wind turbines that in 2014 was not under Vestas service.

    Due to its size and global presence, Vestas is well-positioned to offer its customers the most effective service at the lowest cost. It is thus an ongoing and unchanged ambition to continue to reduce the underlying cost structures in the service division. Simultaneously, Vestas intends to improve supply chain delivery performance within the service business through optimisation of distribution networks, better forecasting, and local sourcing.

    The ambition to grow the service business by more than 30 per cent mid-term remains unchanged.

    Reduce levelised cost of energy

    Based on two wind turbine platforms, Vestas’ comprehensive product portfolio will continue to be customer and market driven. As has been the case in previous years, 2014 was also a year in which Vestas maintained focus on matching its wind turbine and service capabilities with customer requirements, following market fluctuations in demand and adapting products to comply with changing regulatory policies. This focus remains unchanged for the coming years as well.

    Vestas will continue to improve its cost structure by simplifying its manufacturing footprint as well as its products. An example is the increased integration of standard components and modularisation across Vestas’ product platforms which reduces the technical complexity and thereby the cost of the wind turbines.

    In addition, the product strategy based on two platforms is designed to accelerate and streamline product development, thereby reducing the time it takes to bring new products to market, while maintaining a broad product offering.

    The recent technological improvements to the existing 2 MW and 3 MW wind turbine platforms have resulted in significantly increased Annual Energy Production (AEP), among other things, enabling Vestas to defend its strong position in market segments characterised by constraints in terms of grid compliance, tip-height and noise. In these often highly complex markets, Vestas will further leverage on its vast expertise within site and power plant optimisation to maintain its already dominant position.

    For markets with less challenging requirements, cost per wind turbine is often more of a decisive factor. Consequently, Vestas will further utilise its proven 2 MW platform by developing new variants, targeted at reducing costs by means of design optimisations and sourcing of lower cost components.

    Combined with prioritising further development of existing, well-proven wind turbine technology over the costly development of entirely new platforms, Vestas is able to lower the cost of energy for its customers year after year. The intention is to reduce the cost of energy faster than the market.

    Improve operational excellence

    Cost savings remain a priority for Vestas, and Vestas will continue its journey towards lower costs through further site simplification, shared service centres and increased efficiency by leveraging on the scale of its operations. The goal is to achieve cost leadership within the wind power industry.

    The size of Vestas provides a competitive foundation for lowering costs at every stage of the value chain. Through the Accelerated Earnings programme, launched at the end of 2012, Vestas has successfully lowered the costs of products delivered and the programme has helped Vestas consolidate its leading position in a competitive market. More value can be captured through further capability building, and the next generation of the programme, Accelerated Earnings Pro, is planned for 2015-2017.

    Optimisation of the supply chain and increased use of standard components also decrease Vestas’ need for investments, reduce lead time and keep inventories low. Yet, the growing degree of outsourcing must never compromise Vestas’ leading position within the areas of safety, quality and technology.

    Finally, working capital management remains an area of high priority for Vestas. Consequently, the focus remains on improving the cash conversion cycle and lowering the working capital tied up while transporting and installing the wind turbine projects.-

    Financial and capital structure targets and priorities

    Vestas’ financial and capital structure targets, as well as related dividend policy, link to the strategic aspirations of the company. Financial stability and structural strength of the balance sheet remain key priorities for the company. Both the Board of Directors as well as Executive Management believe that strong financial performance and stability are prerequisites for delivering excellent commercial results, and therefore adopt a conservative approach to the structure of the company’s balance sheet, whilst at the same time ensuring that management focuses on delivering strong financial results.

    Mid-term financial targets

    By increasing earnings and keeping investment and net working capital requirements low, Vestas aims to generate a double-digit return on invested capital (ROIC) each year over the cycle. Vestas expects to be able to finance its own growth and thus the free cash flow is expected to be positive each financial year.

    Capital structure targets

    As a player in a market where projects, customers and wind turbine investors become larger, Vestas aims to be a strong financial counterpart. Consequently, the target for the net debt/EBITDA ratio remains unchanged at 1 by the end of each financial year, and the solvency ratio target has been adjusted to a minimum level of 35 per cent, in line with the company’s prudent balance sheet approach.

    Dividend policy and priorities for excess cash allocation

    Vestas operates with the following priorities for excess cash:

    1. Repayment of debt if the net debt/EBITDA ratio is above target.
    2. Allocation to shareholders if the solvency ratio is above target.


    The general intention of the Board of Directors is to recommend a dividend of 25-30 per cent of the net result of the year after tax. However, pay-out of dividends will always take into consideration the Group’s plans for growth and liquidity requirements.


      Financial performance


      “2014 was yet another piece of evidence that the financials of the company have improved tremendously over the last few years, and we now find ourselves in a financially strong position to continue our journey towards excellence.” 

      Marika Fredriksson
      Executive Vice President & CFO

      Marika Fredriksson

        Financial statements

        Order backlog and activities - wind turbines

        Compared to 2013, the order intake in MW for the year increased by 10 per cent to 6,544 MW corresponding to EUR 5.8bn. A significant pick-up in the US market combined with another year of double-digit growth in Europe and a continued solid level of order intake in new wind power markets more than offset the decrease observed in the Asia Pacific region. In terms of geography, Europe and Africa accounted for 54 per cent, the Americas for 40 per cent, and Asia Pacific for 6 per cent of the 6,544 MW. 63 per cent of the orders were announced publicly.

        At the end of 2014, the wind turbine order backlog amounted to 7,513 MW corresponding to EUR 6.7bn against 7,417 MW and EUR 6.8bn at the end of 2013. The size of the MW backlog was positively impacted by a strong order intake in the USA, Europe and Africa. The lower EUR/ MW ratio is, among other things, driven by more supply-only orders as well as a reduction of full-scope offshore orders in the backlog. In terms of MW, Europe and Africa accounted for 53 per cent of the backlog of orders, the Americas for 41 per cent, and Asia Pacific for 6 per cent.

        Level of activity

        In 2014, Vestas produced and shipped 2,527 wind turbines with an aggregate capacity of 6,125 MW, which (as measured in MW) was a 36 per cent increase compared to 2013, when Vestas produced and shipped 2,025 wind turbines totalling 4,513 MW. In 2014, final capacity delivered to the customers amounted to 6,252 MW – an increase of 29 per cent compared to 2013. The increase was in particular driven by increased deliveries to the USA where deliveries totalled 1,517 MW in 2014 compared to 102 MW in 2013. But deliveries in Europe and Africa also increased from 2,971 MW in 2013 to 3,385 MW in 2014.

        Overview per region


        Europe and Africa


        Asia Pacific


        Under completion, 1 Jan. 2014





        Delivered to customers during 2014





        Produced / shipped during 2014





        Under completion, 31 Dec. 2014





        At the end of the year, wind turbine projects with a total output of 1,477 MW were under completion – a decrease of 127 MW, or 8 per cent, compared to the end of 2013. MW under completion is reflected in the level of prepayments and inventories, as a large share of these MW have not yet been recognised as revenue. The revenue recognition of these MW will take place when the projects are finally delivered to the customers.

        Order backlog and activities - service

        At the end of 2014, Vestas had service agreements with contractual future revenue of EUR 7.0bn – an increase of 4 per cent compared to 2013. Service revenue increased by 1 per cent to EUR 964m compared to 2013. The increased revenue and order backlog in the service business should be seen in the context of Vestas carving out the offshore service business in 2014 as part of setting up the offshore joint venture with Mitsubishi Heavy Industries Ltd. Thus, on a like-for-like basis, the development of the service business would have been even stronger with onshore service revenue growing by 7 per cent from 2013 to 2014.

        The EBIT margin before allocation of Group costs amounted to 25 per cent – an increase of 3 percentage points compared to 2013. The improved margin is, among other things, driven by optimisation of the operational performance. The EBIT margin after allocation of Group costs amounted to 18 per cent in 2014, compared to 15 per cent in 2013.

        By the end of 2014, Vestas had delivered more than 66 GW in 73 countries. A high level of installed capacity and carefully planned service visits are key prerequisites for generating profit from the service business. Consequently, close monitoring of more than 27,000 wind turbines, equivalent to more than 51 GW, is one of the foundations of Vestas’ service business’ growth strategy. During 2014, Vestas renewed 72 per cent of its expiring service agreements, compared to 75 per cent in 2013.

        Income statement


        Revenue increased by 14 per cent to EUR 6.9bn in 2014 – within the revised guidance range announced in November 2014 of EUR 6.4- 7.0bn. Europe and Africa accounted for 60 per cent of annual revenue, while the Americas and Asia Pacific accounted for 31 per cent and 9 per cent of annual revenue, respectively.

        Distribution of revenue


           2014 2013 
        Europe and Africa
        Asia Pacific






        – of which service revenue



        Gross profit and EBITDA

        Vestas’ gross profit also increased from EUR 896m in 2013 to EUR 1,178m in 2014, driven by better average margins and higher volume. This equals a gross margin of 17.0 per cent – a 2.3 percentage point increase relative to 2013. EBITDA before special items increased by 52 per cent to EUR 929m, which translates into an EBITDA margin before special items of 13.4 per cent – an increase of 3.4 percentage points compared to 2013.

        Depreciation and amortisation decreased by EUR 29m to EUR 366m due to the reduced investment activity levels in recent years.

        Research and development costs

        Research and development costs recognised in the income statement decreased to EUR 213m from EUR 246m in 2013. The total research and development expenditure prior to capitalisation and amortisation decreased to EUR 159m in 2014, against EUR 241m in 2013, driven by, amongst other things, the V164-8.0 MW turbine development costs now transferred to the joint venture.

        Distribution expenses

        Distribution expenses amounted to EUR 158m, which was EUR 37m lower than in 2013.

        Administrative expenses

        In 2014, administrative expenses amounted to EUR 248m, which was EUR 4m higher than in 2013. The slightly higher administrative expenses should, however, be seen in the context of revenues increasing by 14 per cent from 2013 to 2014 and hence, highlights the continued focus on cost efficiency.

        Operating profit

        The Group reported an operating profit (EBIT) before special items of EUR 559m in 2014, an improvement of EUR 348m relative to 2013. The EBIT margin before special items was 8.1 per cent in 2014 against 3.5 per cent in 2013. This was slightly higher than the range of 7-8 per cent announced in November 2014. Higher gross profits, lower fixed capacity costs, and depreciation and amortisation were the primary drivers of the improved EBIT.

        Special items

        Vestas has recognised special items of EUR 48m in 2014, mainly driven by a gain from the establishment of the offshore joint venture, leading to EBIT after special items of EUR 607m.

        Income from investments accounted for using the equity method

        Income (expenses) from investments accounted for using the equity method amounted to EUR (31)m. This was primarily driven by timing differences related to revenue recognition in the offshore joint venture which are expected to reverse as the joint venture recognises revenue from delivery of projects.

        Financial items

        In 2014, financial items represented a net expense of EUR 53m – a decrease EUR 85m relative to 2013. The decrease in net financial items was primarily driven by lower fees and interest expenses.

        Profit before and after tax

        Profit before tax amounted to EUR 523m in 2014 compared to EUR (36)m in 2013. In 2014, the income tax expense was EUR 131m, equalling an effective tax rate of 25 per cent against (128) per cent in 2013.

        The resulting profit after tax was EUR 392m in 2014 compared to EUR (82)m in 2013, mainly driven by improved operating profit.

        Balance sheet

        Vestas’ total assets increased by EUR 1,357m to EUR 6,997m in 2014. This was primarily driven by an increase in cash at bank and in hand which in turn was attributable to the strong cash flow during the year as well as the capital increase completed in February 2014.

        Non-current assets

        Non-current assets amounted to EUR 2,198m at the end of 2014, largely at the same level as in 2013. The main development under noncurrent assets was a EUR 187m increase in investments accounted for using the equity method due to the establishment of the offshore joint venture with Mitsubishi Heavy Industries, which was offset by a similar total decrease of completed development projects and land and buildings.

        Current assets

        At the end of 2014, current assets amounted to EUR 4,696m – an increase of EUR 1,540m compared to the end of 2013, mainly driven by the improved cash position.

        Net working capital

        At 31 December 2014, Vestas’ net working capital amounted to EUR (957)m, which is an improvement of EUR 361m compared to 2013 and corresponds to (14) per cent of annual revenue. The net working capital improvement during 2014 was primarily driven by increased prepayments and payables.


        Inventories amounted to EUR 1,509m at the end of 2014, an increase of EUR 84m relative to the end of 2013. The increase can be attributed to higher levels of service inventories and raw materials and finished goods in production units more than offsetting the decreases in work in progress in both sales and production units.

        Current and non-current assets and liabilities held for sale

        Assets held for sale were reduced from EUR 332m in 2013 to EUR 103m in 2014. The reduction was driven by the agreement to enter into an offshore joint venture with Mitsubishi Heavy Industries Ltd. with effect as of 1 April 2014.

        As part of the site simplification project, Vestas expects to sell a number of its office facilities, which at the end of 2014 were classified as assets held for sale at EUR 103m.

        Net debt and cash at bank and in hand

        The average interest-bearing position (net) was EUR 494m in 2014, against EUR (862)m in 2013. At the end of 2014, Vestas had a net cash position of EUR 1,411m, which is an improvement of EUR 1,325m compared to the end of 2013. The positive free cash flow combined with the capital increase in February 2014, was the main drivers for Vestas increasing its net cash position. Cash at hand and in bank stood at EUR 2,018m and the financial debt of EUR 607m is primarily comprised of the corporate bond of EUR 600m, which matures in March 2015. Vestas is currently evaluating its options in that respect.

        The net debt/EBITDA ratio improved markedly to (1.5) by the end of 2014 from (0.1) by the end of 2013.

        Warranty provisions

        In 2014, Vestas made total warranty provisions of EUR 122m. This equals 1.8 per cent of revenue. Vestas constantly improves the reliability of its turbines owing to increased investments in development, testing, monitoring and servicing of the wind power plants and in 2014, Vestas consumed warranty provisions totalling EUR 108m, corresponding to 1.6 per cent of revenue. In 2013, warranty provisions represented 1.9 per cent of revenue and warranty consumption amounted to 1.4 per cent of revenue.

        Changes in equity

        Vestas’ equity amounted to EUR 2,379m at the end of 2014 compared to EUR 1,524m at 31 December 2013. The increase was caused by the reported profit after tax combined with the capital increase completed in February 2014. As a result of this, the solvency ratio improved, despite the increased total assets. At 31 December 2014, the solvency ratio was 34.0 per cent – an increase of 7.0 percentage points compared to 2013.

        Cash flow and investments

        In 2014, cash flow from operating activities before changes to net working capital amounted to EUR 866m, an increase of EUR 447m compared to 2013. This was driven by the improved profits for the year. Cash flow from operating activities amounted to EUR 1,126m, compared to EUR 1,248m in 2013. The decrease was driven by a smaller improvement in working capital in 2014 compared to 2013.

        Cash flow from investing activities amounted to an outflow of EUR 285m, of which EUR 163m was property, plant and equipment. This was slightly higher than the guidance of approx EUR 250m and EUR 39m higher than in 2013. Investments in 2014 were mainly driven by tangible investments for V110 and V126 blades as well as capitalised research and development costs.

         Consequently, free cash flow decreased by EUR 168m to EUR 841m, which was in line with the upgraded guidance of approx EUR 850m from January 2015.

        Sales and market development – wind turbines

        “In 2014, order intake increased for the second year in a row, driven primarily by growth in mature markets. With orders in 31 countries, our geographic diversity remains a strategic asset.”

        Juan Araluce
        Executive Vice President & CSO

        Juan Araluce

          Global trends and focus areas

          In 2014, the global wind turbine market grew strongly, rebounding from the decline in 2013.

          In the wake of a very challenging 2013, the US market accounted for a substantial portion of the increase in the global wind turbine market. In Europe, the volume of installations also increased, and the Chinese market continued its growth in 2014.

          Policy decisions, particularly on a national level, continue to influence the markets as seen for example in the USA. Uncertainty regarding energy policies further highlights the need for a flexible business model. With a strong global footprint, Vestas has a competitive edge and will continue to scale production up and down according to the level of demand in the various regions. To remain competitive, Vestas has a goal of reducing the cost of energy faster than the market.

          Vestas' market development in 2014

          Vestas’ installed capacity increased from 60 GW in 2013 to 66 GW in 2014 – an increase of 10 per cent. Installations in the USA and Europe accounted for 78 per cent of the increase.

          The year 2014 has been very busy with delivery of 6,252 MW compared to 4,862 MW in 2013. The increase especially relates to the US market, where deliveries increased by 1,416 MW. The higher level of activity was also reflected in the increased number of employees, which was mainly driven by the ramp-up at Vestas’ factories.

          2014 order intake and backlog per region 

             Europe and
           Americas Asia Pacific  Total 
          Order intake 





          Wind turbine order backlog






          In terms of orders, the overall market for wind power improved in 2014. Vestas continued a strong focus on priority accounts, which total 47 per cent of the Vestas portfolio.

          The continued work on excellence in construction of wind power plants remained a focus area in 2014, which reduced installation lead time by 11 per cent from 2013 to 2014. Among other benefits, fast installation of wind power plants also reduces the time for working capital to be tied up in the transportation and construction phase. Going forward, Vestas will continue its efforts to decrease installation lead time by standardising processes and applying lean principles.

          Europe and Africa

          The European onshore wind turbine market continued to be flat in 2014. Despite shifting political winds, Europe is still expected to remain Vestas’ largest market. Vestas delivered 3,385 MW to the markets in Europe and Africa in 2014, up from 2,971 MW in 2013.

          Although renewable energy policies and support schemes remain under discussion in several European markets, the EU as a whole agreed on a 27 per cent renewable energy target by 2030, thereby signalling its continued long-term commitment towards renewable energy buildout. (Source: European Council: European Council – conclusions (23-24 October 2014). October 2014.) This policy decision, although not fully implemented in legislation yet, should provide the wind turbine market a basis of policy stability and growth prospects.

          Like Poland and Italy, Germany, Europe’s largest wind turbine market, is moving towards a tender-based system in 2017. Due to the German Erneuerbare-Energien-Gesetz (EEG) 2014 revision, the German market has experienced a record year as projects have been pushed forward to benefit from EEG 2012 conditions. With a smooth EEG revision, Vestas expects a solid market activity in the next couple of years.

          The UK market is showing increased signs of activity, which is partly driven by developers seeking to qualify for the existing support scheme that requires projects to be operational by the end of March 2017.

          While the European market generally remains stable, Africa continues to show growth potential. In December 2014, Vestas received the largest order in Vestas’ history in terms of number of wind turbines in a single project. With its 365 V52-850 kW turbines, the 310 MW Lake Turkana Wind Power Project in Kenya is expected to be the largest wind power plant in Africa once complete.

          In 2014, Vestas had an order intake of 3,560 MW in Europe and Africa while the order backlog amounted to 4,002 MW as of 31 December 2014.


          In 2014, Vestas delivered more than 1.5 GW in the USA, including reaching the 15 GW milestone of installed capacity in North America. In total, Vestas delivered 2,323 MW in 2014 to the Americas region.

          Market activity in the USA is as always heavily correlated with the Production Tax Credit (PTC). In 2014, the market was characterised by continued PTC-related demand, as customers utilised the PTC based on certain conditions being met.

          In terms of order intake, the USA was once again Vestas’ largest market in the Americas with 2,167 MW, corresponding to 33 per cent of total order intake in 2014. Furthermore, Vestas has entered into master supply agreements or similar constructs with a potential of up to approx 3 GW under the 2013 and 2014 PTC schemes.

          Vestas experienced solid activity in Latin America with orders in e.g. Uruguay, Guatemala and Costa Rica. Markets such as Chile, Mexico, and Peru continue to show increased activity levels with deliveries of 202 MW, 170 MW and 112 MW in 2014, respectively.

          In October 2014, Vestas announced that an order received in 2011 for 254 MW to customer CPFL Renováveis in Brazil had been cancelled. The cancellation related to changes to local Brazilian legislation, which occurred after the contract was agreed.

          Vestas’ commitment to the Brazilian market was, however, once again emphasised, when the plan to invest up to EUR 32m to meet local content requirements was announced in 2014. Such investments will enable the company to compete more effectively in the Brazilian wind power market.

          In May 2014, Vestas took a significant step forward, when a formal Letter of Commitment with The Brazilian Development Bank (BNDES) was signed, spelling out that Vestas complies with the content of the Letter of Commitment.

          In 2014, Vestas delivered 87 MW to Brazil. In 2014, Vestas had an order intake of 2,607 MW in its Americas region, while the order backlog amounted to 3,106 MW as of 31 December 2014.

          Asia Pacific

          In October 2014, Vestas announced a new strategy to secure profitable growth in China, thereby reinvigorating its long-standing commitment to the world’s largest wind energy market.

          As part of the new strategy in China, Vestas will introduce its newest and most technologically advanced 2 MW variants – the V110-2.0 MW and the V100-2.0 MW turbines. These variants are ideal for the Chinese market as they have been developed for low- and mediumwind sites. Additionally, Vestas will initiate a new and more flexible approach to servicing wind turbines, allowing for tailor-made service packages to be designed in close collaboration with its customers.

          For Vestas’ customers in China, the introduction of the two 2 MW wind turbine variants and a new and more flexible approach to service will result in lower lifetime costs of energy and greater business case certainty.

          New management has been appointed in both China and India and a local India market strategy process has been initiated in 2014. The local strategies are being developed around cost-out of products, strengthening local sourcing, and “on the ground” leadership.

          Australia accounted for the majority of the overall decline in market activity for Vestas in Asia Pacific. The Australian Renewable Energy Target (RET) is still under discussion, which will impact new projects in the country.

          In 2014, Vestas delivered 544 MW to the markets in Asia Pacific. Vestas had an order intake of 377 MW in the markets in Asia Pacific in 2014, while the order backlog amounted to 405 MW as of 31 December 2014.


          MHI Vestas Offshore Wind, the joint venture between Vestas and Mitsubishi Heavy Industries Ltd. (MHI), was formally established on 1 April 2014. Dedicated to offshore wind power, the joint venture will combine Vestas’ technological capabilities and long-standing track record with MHI’s strong presence in global power markets and related technologies.

          As part of the agreement, Vestas transferred the V164-8.0 MW turbine, the V112 offshore order backlog, and existing offshore service contracts to the joint venture. In return, MHI injected EUR 100m into the joint venture, with another EUR 200m to be injected based on certain milestone achievements, reflecting the natural early product life cycle of the V164-8.0 MW turbine.

          Based on the V164-8.0 MW turbine, the partnership between Vestas and MHI is expected to be a strong vehicle to win an expanding share of the global offshore market. Since 1 April 2014, all offshore installation activities have been and will be handled by the joint venture.

          Customer performance

          Vestas continuously works to improve and deepen the partnerships with its customers.

          Since 2009, Vestas has worked intensively on its key account management programme. As a result, Vestas has improved its performance towards its largest customers, which in 2014 were responsible for 43 per cent of the total order intake.

          To address the needs of its customer base even better, Vestas continues to expand its key account management programme to a broader range of customers. The learning, best practice, and validated business results will be shared globally.

          Vestas measures its customer relationships through a rigorous annual survey. The most recent survey took place from 7-27 January 2015, and included more than 837 respondents in 46 countries, representing 416 customers. Overall, the customers’ perception of Vestas slightly decreased from 2013 to 2014. Overall satisfaction decreased from index 71 to 70, overall reputation index decreased from index 77 to 75, while the net promoter score increased from index 38 to 39 on a scale from -100 to +100.

          The survey also shows that the share of Vestas’ customers who prefer Vestas as one of their top two partners, has increased from 85 per cent to 89 per cent. This result clearly reflects the solid and trust-based relationship Vestas has with its customers.

          Sales and market development – service

          "The global trend is toward long-term service agreements. We have made adjustments to the service portfolio to match customer demand for greater flexibility, contributing to making 2014 a year of continued growth and performance.”

          Christian Venderby
          Group Senior Vice President of Global Service


            Service business outline

            The service market is expected to grow by 10 per cent in volume annually over the next six years, and the installed base is expected to reach 600 GW in 2020.(Source: MAKE Consulting: Global Wind Turbine O&M. June 2014.) With an expected 44 GW of wind turbines installed each year and an intensified focus on service, the potential of the service business is significant.(Source: IHS Emerging Energy Research (EER): Global Wind Power Market Forecast 2014-2030 – Fall Update. December 2014 (base case).

            The service business requires in-depth knowledge about the wind turbines’ performance depending on wind conditions and grid types, but only ties up a relatively low amount of capital. The outcome is predictability, strengthening the certainty of the customer business case.

            Strategic position and direction

            The global wind power plant service market is looking for new ways to create value. To capitalise on this opportunity, Vestas’ new global service strategy is built on three distinct advantages:

            • The wind power industry’s largest installed base of more than 66 GW.
            • The global footprint of Vestas’ service organisation, which today operates in more than 50 countries.
            • Vestas’ unmatched ability to analyse wind turbine data and predict wind conditions anywhere in the world.

            Vestas has a strong and historic market presence selling service offerings but intends to reinforce this competency even further, e.g. by building sales excellence capabilities in regional service sales functions. With an increased focus on cost optimisation, improved sourcing and leaner work streams, Vestas will be able to further utilise the capacity and the potential of the service business. In addition, Vestas will improve delivery performance of its spare parts through optimisation of its distribution network, better forecasting, and local sourcing.

            2014 results and ambitions for the future

            Vestas initiated a reshaping of its service business in 2014. As part of the Profitable Growth for Vestas strategy, the company created a new global service organisation reporting directly to the Group President & CEO. The ambition is to grow the service business by more than 30 per cent over the mid-term, thereby fulfilling Vestas’ strategic objective of capturing the full potential of the service business.

            Vestas will continue to reduce costs and create additional value for its customers by providing new service solutions and improve sourcing and business excellence. Operational improvements will speed up business processes, enabling smoother cooperation across service regions. Stronger customer collaboration will create the foundation for making the necessary commercial changes to fully exploit the potential of Vestas’ service business.

            As Vestas aims to capture additional market opportunities, its ambition is to become a fleet-wide service solution partner. This means closer integration with strategic customers to optimise entire fleets of wind turbines with matching service and maintenance strategies. By developing innovative and scalable solutions and best practice in collaboration with its customers, Vestas will fully utilise its global service organisation across regions and functions.

            Service market share in 2014

            Vestas’ service business holds a strong global position, characterised by a full-scale service portfolio and highly skilled personnel.

            The majority of Vestas’ wind turbine sales contracts include service agreements, typically running for five to ten years.

            Market trends such as in-sourcing maintenance and asset management have led to more focus on flexibility in the commercial and operational approach. With a comprehensive knowledge database, Vestas is able to forecast both customer output and operating costs, which ensures an important competitive edge. Also, Vestas has improved the tailor-made service solutions and thereby maintains a very strong position in the market.

            Moreover, increased supply chain efficiency, more up-tower repairs, and improved use of predictive and preventive maintenance when the wind is not blowing, will lead to reduced service costs and less lost energy production for the customer.

            Regional market share results in 2014

            In 2014, Vestas’ service order backlog increased by EUR 0.3bn to EUR 7.0bn, and the average duration of the backlog is seven years. Vestas expects the service business to continue to grow with stable margins in 2015.

            During the year, Vestas renewed 80 per cent of its expiring service agreements in Europe and Africa, compared to 75 per cent in 2013. In Americas 78 per cent were renewed, compared to 80 per cent in 2013, and in Asia Pacific the share was 49 per cent, compared to 68 per cent in 2013.

            In October 2014, Vestas announced a new strategy to secure profitable growth in China. Along with new wind turbine variants ideal for the Chinese market, Vestas initiated a new and more flexible approach to service. Tailor-made service packages are to be designed and refined in close collaboration with the Chinese customers, for instance by reshaping the work flow and increasing flexibility of the delivery model.

            Service solutions

            It is increasingly important for Vestas to be able to plan, build, operate, and service complete wind power plants for its customers. Vestas sees a strong demand for, and potential in, tailor-made solutions that provide maximum output and involve minimum risk during the lifetime of the wind power plant.

            To reach this objective, Vestas will continue to lower the cost of energy and increase the value of its service offerings through a number of initiatives.

            An example is the Vestas’ PowerPlus™ upgrades introduced in May 2014. PowerPlus™ optimises the performance and increases the power output of existing wind power plants by up to 5 per cent, directly benefiting Vestas customers’ bottom line. The Vestas PowerPlus™ technology solutions are part of Vestas’ overall strategy of growing the service business and responding to a strong customer demand to increase power output while maintaining high reliability.

            Vestas PowerPlus™ consists of three product offerings:

            • Power Uprate: A modification to the wind turbine control parameters that allows the wind turbines to increase their maximum power output from 1.8 MW up to 2.0 MW and from 1.65 MW up to 1.8 MW. The result is an increased Annual Energy Production (AEP) – generally 1.0-4.0 per cent, depending on wind turbine type and site conditions. Power Uprate is designed for the V82-1.65 MW, V90-1.8 MW and V100-1.8 MW turbines.
            • Extended Cut Out: A modification of the wind turbine control parameters that allows wind turbines to capture more wind at higher speeds by extending the maximum wind speed limit from 25 m/s up to 30 m/s. The result is an increase in AEP – generally 0.5-2.0 per cent. Extended Cut Out is designed for the V90-3.0 MW and V100- 1.8/2.0 MW turbines.
            • The Aerodynamic Upgrades: Vortex Generators, which are a costeffective solution using small fins that optimise air flow over the blades to improve the aerodynamics and increase AEP of a wind power plant – generally up to 0.8 per cent. Aerodynamic Upgrades are designed for the V82-1.65 MW turbine.

            Vestas PowerPlus™ has been well received by customers, and Vestas has already sold upgrades to more than 1,300 wind turbines across the world.

            Another example is Vestas Forecasting™. Backed by more than 30 years of wind experience, Vestas has developed advanced forecasting solutions to help make wind power more predictable by delivering more accurate, site specific forecasts at wind turbine, wind power plant, and portfolio level.

            Vestas’ climate library and big data processing tools enable Vestas Forecasting™ to deliver a portfolio of forecasting products that maximises Vestas customers’ business case certainty. This service enhancement includes power forecast, weather forecast, and seasonal forecast.

            Technology and service solutions


            "The focus in 2014 was on delivery, reducing time-to-market, and lowering cost of energy. The V164-8.0 MW turbine was successfully commissioned, and the strong performance is a validation of its quality.”

            Anders Vedel
            Executive Vice President & CTO

            Anders Vedel

              Global platforms

              Ongoing Vestas analyses of customer needs and the outlooks for various markets confirm that continued development and innovation of the 2 MW and 3 MW platforms is the right track forward in the short- to mid-term perspective. Vestas works persistently on developing product and service solutions to achieve excellent performance across platforms to deliver world-class power plant solutions.

              To further increase profitability, Vestas continues to target reductions in both operational and capital expenditure on main components through innovative design solutions. During 2014, long-term product and service solution roadmaps were established, supporting such cost reduction initiatives. As a result of lower cost of energy, and thereby an improved business case for the customers, this further enhances Vestas’ competitiveness.

              The continuous development of the 2 MW and 3 MW platforms has ensured that Vestas offers a stronger and more competitive product portfolio across wind regimes, which is being well received by customers.

              Lowering the cost of energy

              Developed with the aim of lowering cost of energy, the five new wind turbine variants launched in 20132) have proven to be a success and have been well received by customers, evidenced by a satisfying order intake in 2013, and even more so by the 61 per cent share of total order intake in 2014.

              Due to the high demand for Vestas’ new wind turbine variants, 2014 has been a year with a strong focus on delivery. For example, in January 2014, the V164-8.0 MW turbine was commissioned; in February 2014, the first V110-2.0 MW turbine was installed; and during the summer of 2014, the first V117-3.3 MW and V126-3.3 MW turbines were installed. Furthermore, Vestas also launched and installed a number of new service solutions, all designed to lower the cost of energy for customers through more efficient wind turbine operations, and hence increased energy output.

              The five new wind turbine variants also showcase Vestas’ efforts to continuously optimise the existing 2 MW and 3 MW platforms, and thereby lowering the cost of energy while at the same time keeping investments low. By further use of outsourcing and standard components, Vestas is now able to reap the benefits of lower manufacturing costs.

              The new 2 MW platform variants are examples of how to reduce costs through a combination of design adjustments and sourcing. More specifically, closer collaboration between suppliers and Vestas in the design phase allows for more optimal, and hence less costly, solutions, driven by a higher degree of usage of standard components. Especially suited for low- and medium wind sites, these new wind turbine variants will contribute to lowering the cost of energy for customers in markets like the USA, China, India and Brazil.

              In 2014, Vestas also optimised the 3 MW platform by introducing new product solutions, such as the Large Diameter Steel Tower (LDST) and the Vestas De-icing System (VDS) to improve Annual Energy Production (AEP) and help customers boost their business cases on sites with specific requirements.

              The LDST is a cost-effective solution to increase tower height for 3 MW turbines from 137 meters and above. Reaching higher hub heights with this innovative patented solution boosts AEP on low wind sites by up to 8 per cent. Vestas has so far delivered and commissioned the LDST solution on low-wind projects in both Finland and Germany and will therefore optimise power generation at these sites.

              Cold climates found in countries such as Canada, Austria, Sweden, and Finland often involve icy conditions. Severe icing can potentially reduce AEP by more than 20 per cent, directly impacting the wind power plants’ output. The VDS has been developed to detect and efficiently remove ice formed on wind turbine blades, letting wind turbines maintain full power production and revenue generation for customers when icy conditions exist. In 2014, Vestas received more than 100 MW of firm orders utilising the VDS for installation in 2015.

              Further supported by its Customer Advisory Board initiative, Vestas will continue to focus on meeting customer requirements by lowering cost of energy, reduce time-to-market and provide greater business case certainty.


              The concept of industrialisation involves moving from ‘one size fits all’ to customer specific configurability based on standardised, modular building blocks. It involves standardising design solutions and components, sharing product architecture across platforms, and configuring the standard components and modules to match customer requirements.

              Vestas continues to increase the use of standardised components and modularised concepts simplifying the product, design, sourcing and manufacturing processes, which in turn increases Vestas’ ability to meet the changing market needs through increased product flexibility. By doing this, Vestas will increase internal efficiencies and strengthen its ability to deliver more products with fewer resources, ultimately helping to reduce the cost of energy in line with Vestas’ strategy, Profitable Growth for Vestas.

              Service solutions

              Vestas offers a broad product range of service solutions, tailored to suit desired customer risk profiles and covering everything from simple on-call duty (AOM 1000) to a guaranteed minimum exploitation of the wind (AOM 5000).

              Vestas’ unrivalled data processing capacity allows it to apply unparalleled knowledge of the wind to tailor-made solutions to meet customer and project needs. With knowledge and insight from the world’s largest installed base of wind turbines, Vestas offers optimised wind turbine performance throughout the entire wind turbine life cycle.

              Manufacturing and sourcing


              “In 2014, we ramped up production by more than 30 per cent to meet a growing customer demand, introduced new products, reduced cost, and tightly managed inventories.”

              Jean-Marc Lechêne
              Executive Vice President & COO

              Jean March

                Manufacturing footprint

                With the new manufacturing set-up implemented in 2012 and 2013, Vestas has created a leaner and more asset-light manufacturing organisation focused on exploiting its core competencies.

                Vestas’ manufacturing footprint has successfully completed a fundamental shift away from being fully vertically integrated to becoming an organisation that extensively collaborates with a highly professional supplier network, ensuring the procurement – whether in-house or via the supplier network – of the full range of quality products and services, it requires.

                Also, Vestas has continued its comprehensive global supplier selection process in 2014, resulting in a stronger supplier portfolio to better meet customer requirements. Vestas delivers innovative and worldclass products and therefore also expects innovation from its suppliers. Vestas has made a shift in its product mix, introducing a significant share of new products and strengthening the ability to bring new technologies to market.

                Vestas’ global manufacturing footprint supports a robust platform strategy. The aim is to collaborate closely with global suppliers with a local footprint for key components, allowing Vestas to focus on the total value chain and securing the lowest total cost and maximum flexibility in key markets.

                Flexibility and scalability

                In 2014, Vestas once again demonstrated its ability to scale up and down according to customer demand. The increase in number of employees during the year was primarily driven by the ramp-up at the factories to meet the higher activity level.

                By improving agility and continuing the focus on lower total costs, Vestas has increased the flexibility of its manufacturing footprint. Local presence is decisive in some countries, and in others, Vestas benefits from its strong, global supply chain.

                Building a strong supply chain in the current high-volume North American market and improving competitiveness by establishing a stronger sourcing presence in China and Brazil are both examples of Vestas’ efforts to increase flexibility and scalability even further. Covering a wider sourcing field, and therefore ramping up for a wider global reach, Vestas has a well-balanced global and local presence.

                Additionally, despite a larger employee workforce, Vestas succeeded in increasing the productivity per employee. In 2014, shipments were 36 per cent higher than in 2013, while output per employee increased by 22 per cent.

                Moreover, Vestas’ supplier selection process continues to be focused on safety, quality, cost, and delivery. With the right suppliers, Vestas is able to handle large-scale manufacturing projects through close cooperation and a range of best practice procedures.

                The newly set up partnership with TPI Composites on blade manufacturing in China ensures Vestas a “build-to-print” solution and thereby represents a significant development in manufacturing for Vestas in China. By augmenting its own production capacity in this manner, Vestas continues to gain flexibility, reduce investments, and utilise capacity.

                Divestments and closures in 2014

                2014 was a year of stability. Vestas optimised its existing set-up and the overall efficiency was further improved. No divestments or closures were made in 2014.

                Moreover, Vestas remained committed to reducing costs and improving manufacturing processes in 2014. This meant continuing to reduce product costs and focusing on fully utilising its core competencies.

                Sourcing and suppliers

                It is Vestas’ ambition to work even closer with its suppliers to further improve the professional level of the supply chain. Under the centralised global sourcing programme, Vestas collaborates with fewer but larger suppliers to purchase larger amounts of components or sets of components at lower prices.

                By working closely together with Vestas, selected suppliers are able to develop the best suitable components at lowest cost, while Vestas reduces its need for in-house manufacturing. By further developing proven technologies and using more standardised components from strategic suppliers, Vestas can lower its manufacturing costs and focus its resources on core value-adding initiatives. These include further development and improvement of existing platforms to reduce the cost of energy for Vestas’ products. Sourcing and manufacturing can contribute by reducing wind turbine costs and lowering the cost of balance of plant.

                As savings also apply to suppliers, Vestas is refining the Accelerated Earnings programme formally implemented in 2013. The focus is on reducing the variable costs in all spending areas associated with external suppliers as well as indirect spend across the company, e.g. travels and factory consumables. All decisions in this regard are based on category management assessing all aspects of design, manufacturing, construction and delivery.

                By delivering improved cost bases, the Accelerated Earnings programme is still a key enabler for consolidating Vestas’ leading position in a competitive market. Going forward, Vestas intends to continuously lower the cost of energy, in part by reducing the costs associated with manufacturing and sourcing.

                When it comes to cost optimisation, one example is ensuring demand management by implementing best practice policies to determine who can buy what, when, where, and how. The savings potential when implementing a best practice on demand management can be significant.

                As cost-out initiatives must never compromise quality, Vestas continues its Six Sigma programme and continuously monitors all related activities. Cost savings will continue to be a daily focus area for Vestas in order to constantly improve profitability, remain competitive, and offer customers a lower cost of energy.

                Working capital management

                Optimisations on working capital have paid off during the past years. Ending 2013 with a balance of EUR (596)m, the net working capital was further reduced to EUR (957)m in 2014.

                Vestas continues its focus on bringing down the order-to-cash time by implementing improvements within contract management and cash collection.

                In 2014, Vestas also completed an initiative to further optimise the timing of supplier payments. The work to optimise working capital streams will continue in 2015.

                Social and environmental performance

                Combined with additional information about Vestas’ sustainability initiatives, this annual report constitutes Vestas’ Communication on Progress (COP) under the UN Global Compact. Vestas’ reporting contains Standard Disclosures from the GRI Sustainability Reporting Guidelines.

                Highlights for the Group

                Vestas' highlights for the Group 2010-2014.
                - Highlights for the Group

                Standards, goals and priorities

                Vestas’ standards and goals within sustainability build on global certificates for the three standards ISO 9001 for quality, ISO 14001 for environment and OHSAS 18001 for health and safety as well as recognised conventions established by international organisations such as the UN, ILO and OECD. The standards and goals are reflected in Vestas’ social and environmental priorities:

                • The lowest possible incidence of recordable as well as lost time injuries – the ultimate goal being to avoid accidents altogether.
                • CO2 impact from wind power must excel against other energy forms.
                • As much of the wind turbine as possible must be recyclable after decommissioning.

                Vestas joined the UN Global Compact in 2009. The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with 10 universally accepted principles in the areas of human rights, labour, environment and anticorruption.

                Combined with additional information about Vestas’ sustainability initiatives at Vestas' website, this annual report constitutes Vestas’ Communication on Progress (COP) (read more: under the UN Global Compact. As a result of its endorsement of the UN Global Compact, Vestas has opted to apply the option stipulated in section 99a of the Danish Financial Statements Act concerning the duty of large enterprises to prepare a corporate social responsibility report by referring to the COP report.

                Code of Conduct

                The Vestas Code of Conduct is the guiding document outlining Vestas’ global commitment and clearly states what is expected and acceptable behaviour from employees and people acting on behalf of Vestas. It is expected that employees becoming aware of any violation of the Code of Conduct will take actions through either nearest manager or the EthicsLine.


                The purpose of Vestas’ EthicsLine is to ensure that no information is suppressed or remains undisclosed, and it provides access for Vestas employees and external business partners to report any incidence of neglect, illegal acts, or acts that are contrary to Vestas’ policies and guidelines, as well as to ask questions about ethical dilemmas.

                In 2014, Vestas received a total of 46 inquiries through EthicsLine. In 2013, Vestas received 52 cases; 51 compliance cases and one question. For substantiated compliance cases, disciplinary sanctions like warnings and dismissals have been taken.

                Reporting categories


                Questions submitted to EthicsLine


                Compliance cases reported *)


                – hereof substantiated


                – hereof non-substantiated


                *) At the end of 2014, 12 cases are under investigation, and hence cannot yet be classified as being of either substantiated or non-substantiated character.

                Human rights and labour practices

                Vestas recognises its responsibility to respect the Bill of Human Rights. Commitments, including expectations to Vestas’ business partners, are outlined in Vestas’ Human Right Policy implemented across the organisation.

                One of the latest initiatives is the Social and Environmental Due Diligence process. Information collected through this process enables Vestas to assess the likelihood of a project materialising and allowing the company to initiate actions that either prevent or mitigate adverse human rights and labour impacts. The Social and Environmental Due Diligence process is integrated into project plans to ensure integrity within project execution.

                In the initial phase of rolling out the Social and Environmental Due Diligence process, the focus has been on turnkey projects in emerging markets. Going forward, Vestas aims to strengthen the due diligence process and tools in order to integrate it in even more activities.


                Through the dedicated efforts of its employees and supervised contractors, Vestas reduced the number of lost time injuries in 2014. At the end of 2014, the incidence rate was 1.6, reaching the target for 2014.

                In 2015, a new safety KPI is being introduced in Vestas, focusing on ‘total recordable injuries’, which in addition to ‘lost time injuries’ includes ‘restricted work injuries’ and ‘medical treatment injuries’. The measure ‘total recordable injuries’ represents a broader number of injuries giving a broader perspective of where unsafe behaviour takes place and unsafe material is used. This allows Vestas to evaluate and target injury reduction programs more effectively.

                Tragically, two employees at Vestas contractors suffered fatal injuries during 2014. The root causes of the accidents have been identified as human errors caused by the lack of compliance to existing safety processes.

                As Vestas’ own safety performance has improved strongly over the years, the performance of contractors has become increasingly important to protect both Vestas’ and its contractors’ employees from potential harm, as well as to live up to customer expectations of safe operations. Measures taken to improve contractors’ safety performance include pre-qualifications, standardisation of safety requirements and intensified tracking of safety performance. This is in line with Vestas’ strategy to never compromise Vestas’ leading position within the areas of safety, quality and technology.


                Throughout 2014, Vestas has experienced an increase in activity levels within both the production and service areas mainly in the USA. As a result, Vestas has increased the total number of employees by 4,126 compared to 2013. The increase is primarily within Vestas’ hourly paid workforce.

                In April 2014, the joint venture, MHI Vestas Offshore Wind was established, and Vestas and Mitsubishi Heavy Industries Ltd. transferred a total of 380 employees to the new entity.

                Vestas will continue to scale the organisation up and down according to the activity level.


                Vestas has a policy to offer all employees equal opportunities and, among other things, Vestas aims for a more equal distribution of gender among employees in leadership positions as also stipulated in section 99b of the Danish Financial Statements Act. If the share of either women or men at a management level is below 40 per cent, Executive Management will annually evaluate the need for further actions, although under the consideration that management should always be composed of the best qualified individuals for the job. In 2014, the share of women at management level within the Vestas Group was 18 per cent, compared to 17 per cent in 2013.

                When recruiting, Vestas has always and continues to strive at assuring that both genders are represented in the search process. However, Vestas has been through a challenging journey the last couple of years and the focus has been to maintain the distribution of gender among the employees in leadership positions. In 2015, Vestas will look into new initiatives to increase focus on the distribution of gender. In the future, it is expected that the efforts in accordance with the policy will result in more women at management level.

                By the end of 2014, Vestas’ workforce represented 81 nationalities. Non-Danish nationals held 54 per cent of the positions in the top management layers – an increase of 5 percentage points over the course of the last five years. The development mirrors the continued globalisation of the Vestas Group with Vestas’ Executive Management team itself as an example of increased diversity, including members from Denmark, France, Spain and Sweden.

                Diversity in the Board of Directors
                The Board of Directors continuously works to increase diversity on the Board in particular in connection with assessments of new Board candidates. When proposing new Board candidates, the Board of Directors pursues the goal of having both genders and several nationalities represented as well as a diverse age distribution. However, this goal must not compromise the other recruitment criteria.

                In accordance with Danish legislation, the Board of Directors has defined a target outlining that members of the underrepresented gender should constitute two to three board members elected by the general meeting no later than in 2017.

                In connection with the Annual General Meeting in 2014, eight new members were elected – two women and six men.

                Board members elected at the general meeting













                Mean age of approx



                Global bonus programme

                All employees contribute to the same value creation and provide support to the same customers, regardless of whether they work in a support function or in developing, manufacturing, marketing, selling, installing, or servicing wind turbines. As such, all employees are rewarded when Vestas improves its profitability and cash flow generation. The 2014 bonus programme is based on a set of KPIs, which helps accomplish Vestas’ strategic goals. Specifically, the bonus programme is based on reaching certain levels of operating profit (EBIT) before special items and free cash flow for the financial year and is thus aligned with some of the main performance metrics of the company. As the targets for bonus pay-out were achieved in 2014, a global bonus of EUR 82m will be paid out to all employees in 2015, compared to EUR 97m in 2014. 

                Satisfaction survey Each year, Vestas conducts an employee satisfaction survey to measure how Vestas employees perceive their daily workplace and subsequently find areas where Vestas can become an even better place to work. Vestas conducted the annual employee satisfaction survey in October 2014, and the response rate was 93 per cent – the same as in 2013. The overall satisfaction and motivation index was 69 in 2014, compared to 66 in 2013, which is considered a satisfactory development.

                Environmental footprint

                Vestas operates in an industry consuming large volumes of steel and concrete, and with energy-intensive global logistics. A V112-3.3 MW turbine weighs more than 350 tonnes, and its production, transportation, and erection requires among other things foundation, cement mixers, cranes, trains, and ships. Vestas therefore has a special obligation to minimise its environmental footprint and act in harmony with its surroundings: sustainable behaviour is a prerequisite for Vestas’ continued development.

                The divestment of its six machining and casting units in 2013 resulted in a significant reduction in Vestas’ direct environmental impact for 2014. However, looking at the life cycle assessment of a Vestas wind turbine, the environmental impact remains unchanged after the divestment.

                In 2014, 96 per cent of the MW delivered by Vestas was covered by an ISO 14040/44 life cycle assessment. The life cycle assessment identifies and evaluates the environmental impact throughout the lifetime of a wind power plant. By knowing how Vestas’ products and materials contribute to the environmental performance of the wind power plant, it is possible to make fact-based and informed decisions that will minimise overall environmental impact. Because a Vestas wind turbine only emits 5-10 grams of CO2 per kWh produced, wind power outperforms traditional energy sources when it comes to carbon footprint, energy payback and water consumption.

                Carbon footprint

                From a life cycle perspective, Vestas currently generates about 5 to 10 per cent of the total CO2 emissions for a typical wind turbine. Another 5 to 10 per cent is emitted during transport, whilst the remaining volume of CO2 (80-90 per cent) derives from suppliers’ materials and component production.

                Vestas has defined a target for 2015 that a Vestas wind turbine, throughout its lifetime – production, installation and dismantling – must be at least 15 per cent more CO2 efficient than in 2010, which will significantly reduce the carbon footprint from 7 to 6 grams of CO2 per kWh for the V112-3.0 MW turbine. The latest results released in 2014, which have been externally reviewed, confirm that the wind turbine’s environmental performance has improved significantly; the carbon footprint of the V112-3.3 MW turbine having been reduced by 12 per cent to around 6.1 grams of CO2 per kWh.

                The main sources of the improvements are environmentally-led initiatives (e.g. introduction of SF6 gas take-back scheme for worn-out switchgears) and product upgrade initiatives, which include increased energy production (in moving from a 3.0 MW to a 3.3 MW generator) and product optimisation, giving reduced material requirements.

                In order to further reduce its carbon footprint, Vestas will continue to improve wind turbine performance and lower energy consumption in factories and within the supply chain.

                Renewable energy

                Vestas has defined a goal stating that all electricity consumption in Vestas must come from renewable energy sources, subject to availability. Vestas achieved this goal in 2014, partly by purchasing renewable electricity where available, and partly by compensating for the consumption of non-renewable electricity with Vestas- owned wind power plants.

                As a result, Vestas also lives up to the WindMade™ criteria by having all its electricity coming from WindMade™ compliant energy. Furthermore, 56 per cent of all energy consumption came from renewable energy sources in 2014. By using electricity from renewable sources, Vestas spared the environment 112,000 tonnes of CO2 emissions in 2014.

                Return on energy

                A V112-3.3 MW turbine is energy neutral after approx six and a half months of operation. This means, that after six and a half months, the wind turbine has generated as much energy as the suppliers and Vestas together spend on manufacturing, transporting, installing and dismantling the wind turbine in its 20-year lifetime.

                The V112-3.3 MW turbine has significantly improved its return on energy by around 23 per cent in comparison to the previous V112-3.0 MW turbine from 2010.

                Material use

                As from 2014, metals and other raw materials are no longer included in the environmental key figures. Material use will now be reported at a product level. A life cycle assessment is used to provide the detailed knowledge regarding the material composition of the wind power plant from a life cycle perspective. 

                Each part within the wind turbine is associated with a material, manufacturing process, and country of origin. This forms a highly detailed and accurate description of the wind turbine. For example, for the V112-3.3 MW turbine, this accounts for around 25,000 parts per wind turbine. Throughout the remainder of the life cycle, all other material consumptions are also analysed, accounting for all Vestas manufacturing processes, sales and overheads as well as installation, site operation and maintenance, and wind power plant decommissioning.

                Furthermore, during final disposal, certain parts that can be more easily dismantled and recycled, will receive higher recycling efficiencies than other parts of the wind turbine. In summary, the life cycle assessment provides an extensive knowledge of material use in Vestas wind turbines.

                The figure shows a typical material breakdown of a V112-3.3 MW turbine, which is composed of around 85 per cent metals (e.g. steel, iron, copper, and aluminium), 12 per cent polymers and composite materials, and the remainder a mixture of electronics/electrical items, lubricants and fluids, and other materials.


                Recycling in Vestas’ production and recycling of components in decommissioned wind turbines are other important ways to improve CO2 efficiency. Today, 83 per cent of a V112-3.0 MW turbine can be recycled – up from 80 per cent in 2010 when the target of 85 per cent by 2015 was set. Vestas has been part of different initiatives to mature solutions for recycling of composite materials – the largest remaining fraction that is not recycled. However, commercialised solutions have not yet been established. Reaching the target by 2015 is therefore not realistic and the target has been prolonged to 2020.

                Risk management

                The Vestas Group is exposed to a variety of risks in the daily business. Vestas works actively to ensure that risk-informed decisions contribute to achievingVestas’ strategic and financial targets.

                To ensure an integrated risk management, Vestas has adopted a Group Enterprise Risk Management framework. This framework focuses on identification, evaluation, treatment, monitoring and communication of risks, where risk owners are responsible for managing risks within their area of responsibility.

                The risks are reported on a quarterly basis and consolidated further into a Group report, which is discussed in the Group Risk Management Committee each quarter. The key risks are then reviewed and considered by the Executive Management and presented to the Board of Directors semi-annually. Key risks include risks related, but not limited to, product development, changes in legislation, intellectual property right, product quality, supply chain, and entering new markets.

                In 2014, Vestas has enhanced its risk management efforts by continuous actions to identify and understand key risks related to its business performance, as well as further strengthening the clear accountability and ownership from the risk owners and improved controls.

                The main risks of the Vestas Group are:

                • Decreasing regulatory financial support for wind energy.
                • Challenges posed by entering new markets.
                • Risk related to introduction of new products.

                Financial and other risks, including risks related to currency, interest rate, tax, credit, commodity exposures and control activities, are addressed in the notes to the consolidated financial statements. These risks are also reported to the Board and evaluated by the Audit Committee, especially in relation to the treasury policy.

                Decreasing regulatory financial support for wind energy

                Risk trend for 2014: Stable
                Risk owner: Anders Runevad, Group President & CEO


                Government support for expansion of wind power has been declining in the light of tightened government spending and budgets. Vestas has seen disruptions and lack of clarity in a number of markets.

                In the EU, a target for renewable energy’s share in the overall energy mix has been set at 27 per cent*) and new state aid guidelines have been adopted**). This shows a continued commitment to renewable energy, however, with a downward pressure on the level of financial support.

                In the USA, the Congress passed a one-year extension of the American Production Tax Credit (PTC) through 20143) providing a short window to receive and execute orders. It does not, however, provide a stable and predictable business environment for wind energy.

                In Asia Pacific, a reduction of the financial support mechanisms in China has been announced, while the buildout target for wind power has been increased.

                Potential impact

                Decrease in order intake due to uncertainties surrounding the incentive schemes, which may discourage potential customers from investing in wind power plants, if wind power becomes less competitive. Delays in anticipated projects could also be expected as a result of uncertainty.


                Vestas’ sustained investment in product development has led to continued reductions in the cost of energy for wind power, making wind power more competitive. Vestas continues to focus on reducing the cost of energy to make wind power an even more attractive investment. Furthermore, Vestas works closely with governments to share best practice on policies and regulations for wind energy and to best utilise the advantages of wind power, which – besides the decreasing costs – include energy independence, environmental improvements and knowledge transfer.

                Vestas’ global presence also reduces the volatility around decreasing regulatory support for wind energy on a national level as there is limited dependence on a single market. Challenges posed by entering new

                1) Source: European Commission: Energy and climate goals for 2030. October 2014.
                2) Source: European Commission: State aid: Commission adopts new rules on public support for environmental protection and energy. April 2014.

                Challenges posed by entering new markets

                Risk trend for 2014: Stable
                Risk owner: Juan Araluce, Executive Vice President & CSO


                The share of revenue generated outside mature markets is expected to increase further over the coming years.

                To achieve widespread acceptance in each country that Vestas enters, products and services must be tailored specifically to the country in question. Furthermore, it must be taken into account that the time required to achieve widespread acceptance for those products and services may be longer than anticipated. New markets expose Vestas to a number of risks that are higher than what Vestas would otherwise encounter, if operating solely in mature markets.

                These risks include:

                • Political or economic instability or unrest.
                • Differences and changes to regulatory requirements and exposure to political and economic conditions; local customers’ preference for local providers; local content rules, tariffs, or other protectionist policies.
                • Restrictions on the withdrawal of non-Danish investments and earnings, including potential tax liabilities if Vestas repatriates any of the cash generated by its international operations back to Denmark.
                • Nationalisation or expropriation of assets as well as reduced ability to legally enforce Vestas’ contractual rights in less developed legal systems.
                • Differences in contractual provisions in different markets with which Vestas may have difficulty monitoring and complying.

                Potential impact

                Vestas’ ability to expand its operations in any country may be impacted by these and other factors that can increase costs and complexity. One or more of the above-mentioned factors could have a negative effect on Vestas’ business, results of operations, and financial strength.


                New markets pose different business risks than mature markets. As engagement in new markets increases, it is essential for the future of Vestas that a comprehensive risk assessment is completed to understand the business environment as well as determine the mitigation measures that would allow Vestas to operate in a given market. In 2014, Vestas has hence established an Emerging Markets Risk Mitigation Group which is mandated to oversee and mitigate risks related to new markets, where Vestas operates or wishes to do so.

                Introduction of new products

                Risk trend for 2014: Stable
                Risk owner: Anders Vedel, Executive Vice President & CTO


                The launch of several new products for serial production in 2014 may have an impact on Vestas and its supply chain. A successful ramp-up and delivery of new products is important as sales commitments have been made on these new wind turbines.

                Potential impact

                In the event of production schedule delays, Vestas’ delivery to site could be at risk which could impact Vestas’ ability to recognise revenue. Furthermore, if Vestas is unable to comply with contractual obligations and delivery schedules, customers could be contractually entitled to liquidated damages, which could have direct financial and reputational consequences for Vestas.


                The majority of orders to be executed over the next years are using the 2 MW platform, with which Vestas has a proven track record.

                Vestas’ full-scope testing strategy proves its technology through the testing of complete nacelles, blades and all critical components before product delivery, significantly reducing the likelihood of delayed and/ or flawed market introduction of new products. Out of all wind turbine manufacturers, Vestas has some of the largest available in-house testing facilities.

                Shareholders and governance

                "The Board is continuously vigilant of the guidelines and processes that are in place for the running of Vestas. This ensures that – at any given time – management has the necessary framework to be able to conduct business in a spirit of fairness, transparency and accountability."

                Bert Nordberg

                Bert Nordberg

                The Vestas share

                Vestas Wind Systems A/S’ share capital amounts to DKK 224,074,513, and its shares are listed on Nasdaq Copenhagen. Vestas has one share class and a total of 224,074,513 shares, which are 100 per cent free float.

                In 2014, the turnover of the company’s share on Nasdaq Copenhagen totalled EUR 19.7bn. The share price ended the year at DKK 226.50 as compared to DKK 160.20 at year-end 2013 – an increase of 41 per cent.

                Capital increase

                In February 2014, Vestas announced that the company would use the authority in article 3(1b) of the company’s articles of association to issue 20,370,410 new shares.

                The share capital increase was fully subscribed at a price of DKK 162.00 per share in a private placement to institutional and professional investors in Denmark and internationally. The company received net proceeds of DKK 3.3bn from the capital increase.

                The purpose of the capital increase was to further enhance Vestas’ financial stability and to provide a greater financing flexibility, by strengthening its solvency ratio and obtaining more flexible banking arrangements.


                At the end of the year, the company had 159,162 shareholders registered by name, including custodian banks. The registered shareholders held 94 per cent of the company’s share capital. At the end of the year, 154,440 Danish shareholders owned 45 per cent of Vestas. The number of shareholders registered by name decreased by approx 2 per cent during 2014.

                Share capital distribution at 31 December 2014
                Number of shares ・ Per cent 


                Capital, international shareholders 

                 110,296,579 (49%) 

                Capital, Danish shareholders

                 101,034,911  (45%)

                Capital, shareholders not registered by name

                 12,743,023  (6%)

                In accordance with the Danish Companies Act, article 55, Marathon Asset Management LLP, UK, has reported a shareholding that exceeds 5 per cent. The notification was received in April 2013.

                On 19 June 2014, BlackRock, Inc., USA, reported a shareholding of 5.03 per cent, and reported in October 2014, that they had reduced their holding of Vestas shares to 4.94 per cent.

                Annual General Meeting 2015

                The general meeting, consisting of the company’s shareholders, is the highest management body of Vestas Wind Systems A/S and is the highest authority in all company matters, subject to the limits laid down by Danish legislation and the company’s articles of association.

                The Annual General Meeting of Vestas Wind Systems A/S will be held on 30 March 2015 at 1 p.m. (CET) at the Concert Hall (Musikhuset) in Aarhus, Denmark.

                Time schedule 

                13 February
                2 March 
                23 March
                26 March
                29 March

                 Deadline for proposals for the agenda
                Convening for the Annual General Meeting
                The record date
                Deadline for registration and submission of proxy
                Deadline for submission of correspondence vote

                Voting and amendment requirements

                Vestas has a single class of shares, and no shares carry any special rights. Each share carries one vote.

                Proposals put to the vote are adopted by a simple majority of votes, unless the Danish Companies Act or the articles of association prescribe special rules regarding the adoption.

                Amendment to the articles of association, dissolution, demerger and merger, which under Danish law must be passed by the general meeting, can only be passed by a majority of no less than two-thirds of all votes cast and of the voting capital represented at the general meeting unless otherwise prescribed by the Danish Companies Act.

                Dividend policy

                In general, the intention of the Board of Directors is, in the future, to recommend a dividend of 25-30 per cent of the net result of the year. However, distribution of dividends will always be decided with due consideration for the Group’s plans for growth and liquidity requirements and the Group’s priorities for excess cash.

                The Board of Directors recommends to the Annual General Meeting that a dividend of EUR 0.52 (DKK 3.90) per share be paid for 2014. This is equivalent to a dividend percentage of 29.5 per cent measured against the net profit for the year.

                Election of board members

                The board members’ election terms expire in 2015, as board members elected by the general meeting must retire at the following annual general meeting. However, board members are eligible for re-election. Board members elected by the general meeting may be recommended for election by the shareholders or by the Board of Directors. When proposing candidates for board membership, the Board of Directors seeks to ensure that it is possible for the general meeting to elect a continuing Board of Directors that:

                • is able to act independently of special interests;
                • represents a balance between continuity and renewal;
                • suits the company’s situation;
                • is knowledgeable of the industry and has the business and financial competencies necessary to ensure that the Board of Directors can perform its duties in the best way possible; and
                • reflects the competencies and experience required in order to manage a company with shares registered for trade on a stock exchange and fulfils its obligations as a listed company.

                When proposing new board candidates, the Board of Directors pursues the goal of having different nationalities of both genders. In addition, the Board of Directors focuses on having a diverse age distribution. However, these goals must not compromise the other recruitment criteria. Candidates proposed by the Board of Directors must not have reached the age of 70.

                Board member Jørn Ankær Thomsen has informed that he will not stand for re-election. The remaining board members elected by the general meeting have all informed the Board of Directors that they will stand for re-election. The Board of Directors proposes that Mr Torben Ballegaard Sørensen is elected as new member of the Board of Directors. Mr Sørensen holds an MBA from Aarhus School of Business and is an adjunct professor in the Faculty of Organisation and Management at Aarhus University, Denmark.

                Remuneration of the Board of Directors for 2015

                The Board of Directors expects to propose that the level of the basic remuneration for 2015 is increased by 10 per cent from EUR 47,966 to EUR 52,763 per board member, and that the basic remuneration for 2015 for committee members is increased by 10 per cent from EUR 23,984 to EUR 26,382 per membership.

                Appointment of auditors

                The Board of Directors proposes that PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab be re-appointed as the company’s auditor.

                Remuneration policy – general guidelines for incentive pay

                The Board of Directors expects to propose that the Annual General Meeting approves a new remuneration policy and new general guidelines for incentive pay for the Board of Directors and the Executive Management. The draft for the remuneration policy and the draft guidelines for incentive pay will be published at www. in connection with the convening for the Annual General Meeting. The proposals can be adopted by a simple majority of votes.

                Amendments to the articles of association

                The Board of Directors expects to propose the following amendments to the company’s articles of association:

                Article 4(4) is updated to the effect that it is no longer necessary to announce the general meeting in a national daily newspaper. The proposal can only be adopted by a majority of not less than two-thirds of all votes cast and of the share capital represented at the Annual General Meeting.

                As the Executive Management consists of five members, the Board of Directors proposes that the Executive Management’s authority to bind the company mentioned in article 10(1) of the articles of association be amended to the effect that in the future, the company can be bound by “the joint signatures of two members of the Executive Management” instead of “the joint signatures of the Group President & CEO and another member of the Executive Management”. The proposal can only be adopted by a majority of not less than two-thirds of all votes cast and of the share capital represented at the Annual General Meeting.

                The Board of Directors will also propose a renewal of the authorisation for the Board of Directors to acquire treasury shares corresponding to approx 10 per cent of the share capital in the period until the next Annual General Meeting. After such acquisition, Vestas’ combined portfolio of treasury shares must not exceed 10 per cent of the share capital. The proposal can be adopted by a simple majority of votes.

                Authorities granted to the Board of Directors

                Vestas’ articles of association include an authority to Vestas’ Board of Directors concerning an increase of the company’s capital in one or more issues of new shares up to a nominal value of DKK 22,407,451 (22,407,451 shares), ref. article 3 of the articles of association. The authority is valid until 1 March 2019.

                At the Annual General Meeting in 2014, the shareholders authorised the Board of Directors to let the company acquire treasury shares in the period until the next annual general meeting within a total nominal value of up to 10 per cent of the company’s share capital from time to time, ref. section 198 of the Danish Public Companies Act.

                Statutory report on corporate governance

                Pursuant to section 107b of the Danish Financial Statements Act and clause 4.3 of “Rules for Issuers of Shares – NASDAQ OMX Copenhagen”, listed companies shall give a statement on how they address the Recommendations on Corporate Governance issued by the Danish Committee on Corporate Governance.

                The recommendations of the report specify that the circumstances of each company will govern the extent to which the recommendations are complied with or not, as the key issue is to create transparency in corporate governance matters.

                Vestas’ statutory report, which is part of the annual report.

                Communication with shareholders

                Vestas aims to be visible and accessible to existing and potentialshareholders and other stakeholders with due consideration to legislative requirements and based on corporate governance standards.

                To keep the interest in the Vestas share at a high level, Vestas regularly provides information to the company’s stakeholders by means of:

                • broad distribution of the company’s financial reports and company announcements;
                • live webcasts/audio webcasts in connection with the company’s presentation of financial results;
                • an informative website;
                • roadshow activities following each financial presentation;
                • meetings for investors and analysts, investor seminars, exhibitions, conference calls, capital markets days, company visits and other arrangements; and
                • daily contact and correspondence through Investor Relations


                Vestas aims to continuously improve the communication with its shareholders to inform them about Vestas’ goals and to safeguard long-term shareholder interests.

                However, in order to optimise communications it is necessary for Vestas to know the identity of its shareholders. Vestas therefore recommends that its shareholders have their Vestas shares registered by name in the company’s register of shareholders.