14.3.2003: Meldung: Vestas: Results for 2002

Today, the Board of Directors of Vestas Wind Systems A/S has approved the Vestas Group"s Annual Report for 2002 and recommended it for adoption at the General Meeting on 9 April
2003. The accounts show the following: (mEUR) 2002
Net turnover 1,395
Profit before financial income and expenses (EBIT) 74
Profit after financial income and expenses 60
Profit on ordinary activities before tax 60
Net profit for the year 45
Equity 596
Balance sheet total 1,269
2002 ended as another record year in spite of a number of difficulties for Vestas and the wind turbine industry in general. The installed wind power capacity worldwide amounted to
approximately 7,000 MW, equivalent to an increase of 3 per cent. Vestas" turnover increased by around 9 per cent from mEUR 1,282 to mEUR 1,395. In 2002, Vestas increased its market share in the United States by approximately 3
percentage points to approximately 42 per cent and in rest of world by 2 percentage points to approximately 22 per cent. In total, Vestas achieved a market share of approximately 23 per
cent in 2002, which represent a decrease of approximately 1 percentage point in relation to 2001. The decrease is due to the significant drop in the American market, of which Vestas
has historically held an appreciable market share. The Vestas Group"s accumulated market share is hereinafter increased by approximately 1 percentage point to approximately 21 per
cent. In 2002, around 85 per cent of the Group"s turnover - or mEUR 1,185 - was generated
outside Denmark. The income statement shows a profit before financial income, expenses
and tax (EBIT) of mEUR 74 and after financial income and expenses of mEUR 60.
Compared to the previous year, these figures represent decreases of 48 per cent and 60 per
cent, respectively. Profit on ordinary activities before tax for the year totalled mEUR 60. This
represents a decrease of mEUR 332 in relation to the figures for 2001, which were affected
by extraordinary non-recurrent income in the amount of mEUR 243 from the sale of shares in
Gamesa Eólica S.A. On the basis of the following, the net profit for the year - mEUR 45 - is
considered unsatisfactory.
At the beginning of the year, Vestas" financial forecasts for 2002 pointed to turnover for the
year of approximately bnEUR 1.4, with an EBIT margin of at least 10 per cent. On account of
the decision in March to extend the American Production Tax Credit (PTC) scheme for a
further two years, expectations for turnover were increased to approximately bnEUR 1.6, with
the expectation for the EBIT margin remaining at a minimum of 10 per cent.
In connection with the publication of the interim report in August 2002, expectations for
turnover were adjusted, due to delayed order intake from the United States, to approximately
bnEUR 1.4-1.5, with the EBIT margin forecast to reach approximately 9 per cent. The
decrease in the EBIT margin was attributable to extraordinary costs resulting from the
implementation of improvements to the V80-2.0 MW turbine in particular.
It was generally expected that the situation as regards the United States Energy Bill would be
clarified towards the end of September 2002, and that this would involve a further extension
of the PTC scheme. However, this clarification was repeatedly delayed, forcing American
customers to postpone their plans. This situation was exacerbated by a number of other
factors, including decrease of the dollar and declining ratings for energy companies, causing
problematic financing conditions. This affected the various projects to a greater or lesser
On the basis of the situation on the American market, expectations for incoming orders were
reduced in November 2002. This led expectations for turnover being adjusted to
approximately bnEUR 1.3. This, in turn resulted in the expected EBIT margin being reduced
by approximately 2 percentage points, while delays and extra costs arising from the
commissioning of the turbines and the implementation of the remote monitoring system at
Horns Reef pressed the EBIT margin down a further percentage point. The EBIT margin was
thus expected to reach 5-6 per cent.
In relation to the announcement no. 18/2002 of 26 November 2002 to the Copenhagen Stock
Exchange, the actual turnover generated was mEUR 95 higher than expected, while the
EBIT margin matched expectations. The capital expenditures in 2002 amounted to mEUR
138, which is the level expected.
In general, the intention of the Board of Directors is to recommend a dividend of 25-35 per
cent of the net result of the year. With reference to this and the expectations for the future,
the Board of Directors recommends dividend payment of EUR 0.1 per share equivalent
to a pay-out ratio of 23.5 per cent.
Expectations for the future
The United States have failed to live up to expectations for incoming orders towards the end
of 2002. On the basis of orders received from other markets, Vestas" order backlog was
satisfactory at the beginning of 2003. The total backlog of firm and unconditional orders
corresponds to approximately four months" average production at Vestas, which is at the
level of end 2001.
Expectations for the coming years are generally very positive. Expectations for 2003 are
based on firm and unconditional orders, a number of conditional orders and planned projects.
Currently, half of the expected sales to the United States in 2003 is secured by firm and
unconditional orders.In summary, current expectations for 2003 indicate a turnover in the region of bnEUR 1.7-1.8
and an EBIT margin of approximately 8 per cent, which is unchanged in relation to Stock
Exchange announcement no. 18/2002 of 26 November 2002. However, it shall be noted that
a continuing volatility in markets, exchange rates and finance opportunities may affect
turnover and profits. Investments are expected to total mEUR 90-100 in 2003. This includes
that the conversion from kW- to MW-turbines happens faster than previously expected.
Vestas" expectations for the global market from 2004 onwards are heavily dependent on the
development of the American market. Should an extension to the PTC scheme be approved
early in 2003, the American market should develop positively from 2003 onwards. However,
if approval of the extension of the PTC scheme should be delayed until later in 2003, this
would naturally result in corresponding delays in the development of the American market.
Should this prove to be the case, little is to be expected of the American market in 2004
although growth is anticipated in 2005 and 2006. The development of markets outside the
United States is expected to be very positive.
Upon the sale of its shareholding in Gamesa Eólica S.A. in 2001, Vestas has
considered the strategy for the Spanish market. The conclusion is that local presence is
a necessity in Spain due to the local approvals of industrial plans for establishment of
wind power projects. Local presence can either take place via acquisition or via
establishment of own production. Vestas has decided to give priority to a speedy
access via acquisition of a local wind turbine manufacturer. Investigations are on-going
and a solution is expected within first half-year 2003. Such an acquisition is not
included in the above mentioned expectations for level of investments in 2003.
The business activities of the Vestas Group are subject to a number of risks, which means
that a degree of uncertainty is linked to all forecasts. More detailed information concerning
the risks is included in Vestas" Annual Report 2002.
The profits of the Vestas Group are subject to seasonal fluctuations, which are generally
attributable to the nature of the projects. Historically, turnover tends to be higher in the latter
half of the financial year. The management thus expects 30-35 per cent of the turnover
forecast for 2003 to be generated in the first six months. This will result in EBIT of 0 for this
For this reason, and on account of the desire to make optimal use of available production
capacity, production is expected to balance out over the year as a whole. As a result, the
balance sheet totals at 30 June 2003 are likely to show high inventories.
General information
The financial highlights, the income statement and balance sheet are included in the
pages attached. More detailed information concerning the company"s annual accounts
for 2002 and the expectations for 2003 is included in Vestas" Annual Report 2002,
which will be sent separately to the Copenhagen Stock Exchange A/S immediately
following this announcement. The Annual Report is in EUR translated based on the
exchange rate at 31 December 2002: 742.43.In connection with the publication of the Annual Report, Vestas will host a telephone
conference on Wednesday, 12 March 2003 at 3 p.m. (CET). The telephone conference will
be held in English. Interested parties from Denmark may call ph. +45 3271 4611, interested
parties from the rest of Europe may call ph. +44 20 7162 0125, and interested parties from
the US may call ph. +1 334 323 6203.

Any questions may be addressed to the Board of Management at Vestas Wind Systems
A/S, phone +45 96 752575.
Yours faithfully,
Vestas Wind Systems A/S
Bent Carlsen Svend Sigaard
Chairman of the Board of Directors Managing Director
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