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Released March 14, 2016 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Vestas Wind Systems A/S (Aarhus, Denmark) is back, and in a big way. Buoyed by tighter cost controls and strong global demand for wind power, the Danish turbine manufacturer reported record revenue and earnings for 2015, and predicted an even better 2016.
Full-year revenue grew 22% to a record $9.26 billion, and net profit reached $766 million, up from $432 million in 2014. Earnings before interest and taxes, and excluding special items, reached 10.2%. The company predicted revenue would approach $10 billion this year, and that margins would continue to increase.
"The wind power industry has matured in recent years and we are now seen as one of the main contributors to a more sustainable power generation footprint," Vestas Chairman Bert Nordberg said in releasing full-year results last month.
In its February 9 earnings statement, Vestas President and Chief Executive Anders Runevad said: "In 2015, we executed well on our profitable growth strategy, delivering strong financial and operational results across the board and across the globe. Vestas met or exceeded its full-year 2015 guidance on revenue, EBIT margin and free cash flow; and delivered double-digit margins and its highest ever net profit. We also secured our highest ever order intake, doing so across 34 countries on five continents, which bodes well for continued high activity levels in 2016."
Last month Vestas won a $1.2 billion order to supply 278 wind turbines to a multi-phase, 1,000 megawatt wind farm to be built around the Trondheim fjord in Norway by Statkraft, the Norwegian power company. The turbines for that project will be manufactured in Europe. That wind farm, said to be Europe's largest onshore, will be completed by 2020. For more on that, see February 29, 2016, article--Statkraft Reveals Europe's Largest Onshore Windfarm Project.
"We have seen good activity levels across all regions," Runevad said, noting that Vestas' profitable service business grew 20%. He said the extension of the production tax credit (PTC) in the U.S. was "...extremely positive. Not knowing creates both artificial highs and then artificial lows. But now we know the U.S. market will be there for the long mid-term and that gives us the ability to plan."
Vestas' bright outlook in the U.S. is a welcome turnaround from the lean years that unit recently experienced. In the U.S., employment at its four Colorado manufacturing sites fell to 1,000 from 1,700 in 2012. But a new global management team installed in 2013 cut costs sharply, including furloughing about one-third of its employees around the world. Better cost management coupled with confirmed orders from Norway, Denmark, Uruguay, Brazil, South Korea, Mexico and the U.S. led to 2015's record performance and 2016's strong start. In Colorado, Vestas now employs over 3,100 people in Colorado, and is looking to add at least 100 more.
In attempting to fill those jobs, Vestas is specifically recruiting workers displaced by the slowdown in the local Oil & Gas industry. The company closed out 2015 by announcing it won an order to supply 198 megawatts (MW) of turbines to the Bluestem windfarm in Oklahoma. Delivery of those wind turbines is expected to begin in the third quarter of 2016, and the windfarm is expected to begin operating by the end of 2016. Industrial Info is tracking over $1 billion of active windpower projects in North America where Vestas turbines will be installed.
To keep up with a surge in North American orders, Vestas' plant in Windsor, Colorado, is adding 100,000 square feet of new manufacturing space, reported the Greeley Tribune. When completed, the expansion will bring the plant's total footprint to about 650,000 square feet. That plant, which opened in 2008, already has been expanded three times. The current expansion will make the plant capable of manufacturing the company's 3MW turbines. Currently, it is limited to producing 2MW models.
Vestas' outlook--and the outlook for all wind manufacturers--has been boosted by the Clean Power Plan and the five-year extension of the federal Production Tax Credit (PTC). For more on the extension of the PTC, see December 21, 2015, article--Renewable, Alternative Energy Industries Cheer Extensions of Tax Credits and January 15, 2016, article--Extension of PTC and ITC Could Bring Some Renewable Energy Projects Back from the Dead.
"Now that the PTC is in place through 2020, we expect Vestas and other windpower equipment manufacturers to be running full-tilt to make the turbines, nacelles and towers to fill strong demand growth," commented Britt Burt, Industrial Info's vice president of research for the global power industry. "Vestas and other manufacturers also have done a very good job of lowering their costs in recent years, to the point where some projects are cost-competitive with other fuels even without the tax credits. The president's Clean Power Plan, now being litigated in the federal courts, also will boost the fortunes of windpower equipment manufacturers, assuming the rule survives court challenges."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Full-year revenue grew 22% to a record $9.26 billion, and net profit reached $766 million, up from $432 million in 2014. Earnings before interest and taxes, and excluding special items, reached 10.2%. The company predicted revenue would approach $10 billion this year, and that margins would continue to increase.
"The wind power industry has matured in recent years and we are now seen as one of the main contributors to a more sustainable power generation footprint," Vestas Chairman Bert Nordberg said in releasing full-year results last month.
In its February 9 earnings statement, Vestas President and Chief Executive Anders Runevad said: "In 2015, we executed well on our profitable growth strategy, delivering strong financial and operational results across the board and across the globe. Vestas met or exceeded its full-year 2015 guidance on revenue, EBIT margin and free cash flow; and delivered double-digit margins and its highest ever net profit. We also secured our highest ever order intake, doing so across 34 countries on five continents, which bodes well for continued high activity levels in 2016."
Last month Vestas won a $1.2 billion order to supply 278 wind turbines to a multi-phase, 1,000 megawatt wind farm to be built around the Trondheim fjord in Norway by Statkraft, the Norwegian power company. The turbines for that project will be manufactured in Europe. That wind farm, said to be Europe's largest onshore, will be completed by 2020. For more on that, see February 29, 2016, article--Statkraft Reveals Europe's Largest Onshore Windfarm Project.
"We have seen good activity levels across all regions," Runevad said, noting that Vestas' profitable service business grew 20%. He said the extension of the production tax credit (PTC) in the U.S. was "...extremely positive. Not knowing creates both artificial highs and then artificial lows. But now we know the U.S. market will be there for the long mid-term and that gives us the ability to plan."
Vestas' bright outlook in the U.S. is a welcome turnaround from the lean years that unit recently experienced. In the U.S., employment at its four Colorado manufacturing sites fell to 1,000 from 1,700 in 2012. But a new global management team installed in 2013 cut costs sharply, including furloughing about one-third of its employees around the world. Better cost management coupled with confirmed orders from Norway, Denmark, Uruguay, Brazil, South Korea, Mexico and the U.S. led to 2015's record performance and 2016's strong start. In Colorado, Vestas now employs over 3,100 people in Colorado, and is looking to add at least 100 more.
In attempting to fill those jobs, Vestas is specifically recruiting workers displaced by the slowdown in the local Oil & Gas industry. The company closed out 2015 by announcing it won an order to supply 198 megawatts (MW) of turbines to the Bluestem windfarm in Oklahoma. Delivery of those wind turbines is expected to begin in the third quarter of 2016, and the windfarm is expected to begin operating by the end of 2016. Industrial Info is tracking over $1 billion of active windpower projects in North America where Vestas turbines will be installed.
To keep up with a surge in North American orders, Vestas' plant in Windsor, Colorado, is adding 100,000 square feet of new manufacturing space, reported the Greeley Tribune. When completed, the expansion will bring the plant's total footprint to about 650,000 square feet. That plant, which opened in 2008, already has been expanded three times. The current expansion will make the plant capable of manufacturing the company's 3MW turbines. Currently, it is limited to producing 2MW models.
Vestas' outlook--and the outlook for all wind manufacturers--has been boosted by the Clean Power Plan and the five-year extension of the federal Production Tax Credit (PTC). For more on the extension of the PTC, see December 21, 2015, article--Renewable, Alternative Energy Industries Cheer Extensions of Tax Credits and January 15, 2016, article--Extension of PTC and ITC Could Bring Some Renewable Energy Projects Back from the Dead.
"Now that the PTC is in place through 2020, we expect Vestas and other windpower equipment manufacturers to be running full-tilt to make the turbines, nacelles and towers to fill strong demand growth," commented Britt Burt, Industrial Info's vice president of research for the global power industry. "Vestas and other manufacturers also have done a very good job of lowering their costs in recent years, to the point where some projects are cost-competitive with other fuels even without the tax credits. The president's Clean Power Plan, now being litigated in the federal courts, also will boost the fortunes of windpower equipment manufacturers, assuming the rule survives court challenges."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
