17.03.04

17.3.2004: Meldung: Vestas Wind Systems: Annual Report 2003

Vestas Wind Systems A/S

Announcement regarding the Annual Report 2003
Results for 2003
Today, the Board of Directors of Vestas Wind Systems A/S ("Vestas") has approved the
Vestas Group"s Annual Report for 2003 and recommended it for adoption at the General
Meeting on 21 April 2004. The accounts show the following:
(mEUR) 2003 2002 2001
Net turnover 1,653 1,395 1,282
Profit before financial income and expenses (EBIT) 74 74 143
Profit after financial income and expenses 53 60 149
Profit on ordinary activities before tax 54 60 392
Net profit for the year 36 45 340
Equity 613 596 567
Balance sheet total 1,390 1,269 1,009

The market for wind power grew again in 2003. The installed wind power capacity worldwide
amounted to approximately 8,000 MW, equivalent to an increase of more than 10 per cent.
Vestas" turnover increased by around 19 per cent from mEUR 1,395 to mEUR 1,653.
The market growth is lower than previously expected, which is primarily attributable to
the development of the German and Italian markets. The total sales of Vestas
Technology from Vestas Group companies and Vestas" associated company amounted
to 1,812 MW, an increase of approximately 10 per cent. Vestas achieved a market
share of 22.6 per cent, which is at the same level as in 2002. Vestas lost market shares
in the USA, which was subject to special market conditions in 2003, whereas the
market share outside the United States increased.
In 2003, around 98 per cent of the Group"s turnover - or mEUR 1,627 - was generated
outside Denmark. The income statement shows a profit before financial income, expenses
and tax (EBIT) of mEUR 74, which is unchanged from the previous year. Profit after financial
income and expenses amount to mEUR 53, a decrease of 12 per cent. Profit for the year
before tax amount to mEUR 54 - a decrease of mEUR 6 in relation to 2002. On the basis of
the following, the net profit for the year - mEUR 36 - is considered to be less satisfactory.
At the beginning of the year, Vestas" financial forecasts for 2003 pointed to turnover for the
year of approximately bnEUR 1.7-1.8, with an EBIT-margin of around 8 per cent. Net working
capital was expected to amount to around 35 per cent of the net turnover for the year. The
unfavourable developments in the British pound and the American dollar, in particular,
resulted in a sharpening of the competitive situation and pressure on sales prices, especially
in the United States. For this reason, expectations for the EBIT-margin for the year was
reduced to approximately 7 per cent in May 2003, cf. announcement no. 9/2003 of 28 May
2003 to the Copenhagen Stock Exchange.
Vestas Wind Systems A/S

In connection with the publication of the quarterly information for the third quarter 2003
(released in November 2003), the turnover forecast was adjusted to approximately
bnEUR 1.7, at the lower end of the previously informed range of bnEUR 1.7-1.8. At the
same time, the projected EBIT-margin was adjusted down to approximately 5 per cent
which is ascribable to the lower turnover and to the expectations of an early termination
of the technology transfer agreement with Gamesa Eólica S.A. The potential costs
linked to an early termination of the technology transfer agreement with Gamesa Eólica
S.A. were evaluated as corresponding to approximately one percentage point. The
signing of an agreement concerning the termination of the technology transfer
agreement was made public in announcement no. 23/2003 of 12 December 2003 to the
Copenhagen Stock Exchange.
In relation to announcement no. 22/2003 of 28 November 2003 to the Copenhagen Stock
Exchange, the actual turnover and EBIT-margin matched expectations. Net working capital
amounted to 36 per cent of the net turnover for the year, which is at the level expected.
Capital expenditures in 2003 in tangible fixed assets amounted to mEUR 85, which is lower
than the level expected. The deviation is mainly due to postponements of investments to
2004.
In general, the company"s target for dividends is 25-35 per cent of the net result of the
year. However, distribution of dividends will always be decided with due consideration
for the Group"s plan for growth and liquidity requirements. With reference to the
planned capital increase in 2004, the Board of Directors recommends to the General
Meeting that no dividend be paid for the financial year 2003.

Combination of Vestas and NEG Micon

In announcement no. 24/2003 of 12 December 2003 to the Copenhagen Stock Exchange,
Vestas stated that the Boards of Directors of NEG Micon A/S ("NEG Micon") and Vestas had
reached agreement on the conditions for a combination of the two companies. After the end
of the financial year, the plans for combining Vestas and NEG Micon has become a reality.
On 4 March 2004, more than 95 per cent of the shareholders of NEG Micon had accepted
the voluntary offer of 12 December 2003 for exchanging NEG Micon shares into Vestas
shares. On 12 December 2004, Vestas announced a mandatory share exchange offer to the
remaining shareholders of NEG Micon. Vestas will carry out a compulsory redemption of the
shares owned by shareholders who do not accept the mandatory share exchange offer. The
redemption will be for cash.
In continuation of the approval of Vestas" Annual Report 2003, the Board of Directors of
Vestas today has appointed two new members of the Board of Management of Vestas. Mr.
Torben Bjerre-Madsen (the current CEO of NEG Micon) has been appointed Executive Vice
President and Deputy CEO and Mr. Knud Andersen (the current CPO of NEG Micon) has
been appointed Executive Vice President and CPO of the combined group.
The integration of the two companies has just been initiated. It is the intention of the new
management to inform in more details about the integration process in connection with the
planned capital increase in May 2004. In connection with the planned capital increase, a
prospectus will be prepared. The prospectus will include information from the group
concerning market status etc. Consequently, the combined group will not publish quarterly
information on 25 May 2004 as previously planned in "the old" Vestas.
Vestas Wind Systems A/S

Expectations for 2004
The expectations for 2004 described in the following sections are stated on the basis of
full-year operations of the combined Group. From the perspective of accounting, the
combination will be deemed to have come into effect on 1 March 2004.
The lack of extension of the PTC scheme before the end of 2003 has affected orders from
the United States. This aside, orders from the other markets have been satisfactory and
Vestas has a satisfactory order backlog at the beginning of 2004. The total backlog of firm
and unconditional orders corresponds to five months" average production.
On this basis, expectations for the coming years are generally very positive. Expectations for
2004 are based on firm and unconditional orders, a number of conditional orders and
planned projects.
The expectations for 2004 are unchanged compared to announcement no. 24/2003 of 12
December 2003 to the Copenhagen Stock Exchange. In 2004, the company thus expects a
turnover of bnEUR 2.7-2.8 taking into account the combination of Vestas and NEG Micon.
The EBIT-margin for 2004 is forecast to be approximately 7 per cent, including the effect of
expected cost synergies of mEUR 14, but before integration and restructuring costs in
connection with the combination. The EBIT-margin after integration and restructuring costs
but before amortisation is expected to be around 5 per cent. However, it must be noted that a
continuing volatility in markets, exchange rates and finance opportunities may affect turnover
and profits.
Investments in 2004 in tangible fixed assets are expected to total mEUR 140-150. Net
working capital at the end of the year is expected to amount to 30-35 per cent of the net
turnover for the full year.
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 2003.
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 2004 to be generated in the first six months.
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 2004 are likely to show high inventories.
Vestas Wind Systems A/S

Capital increase

As announced in connection with the publication of the share exchange offer to the
shareholders of NEG Micon on 12 December 2003, the Board of Directors of Vestas will
recommend to the shareholders of the combined Group at the Ordinary General
Meeting on 21 April 2004 that an increase in capital entailing proceeds in the region of
mEUR 270 be implemented in May/June 2004. The Board of Directors is of the opinion
that a stronger capital base is an important factor for the combined Group to achieve its
strategic goals. The capital increase will be with pre-emption right for the company"s
existing shareholders and it is expected to take place in May/June 2004.

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 2003 and the expectations for 2004 is included in Vestas" Annual Report 2003,
which will be sent separately to the Copenhagen Stock Exchange A/S immediately
following this announcement. The Annual Report is in EUR. The income statement is
translated based on the average exchange rate 743.07 and the balance sheet is
translated based on the exchange rate at year end 2003: 744.46.
In addition, the pages attached include pro forma consolidated financial figures for 2003
and consolidated sales in MW for the combined Group.
In connection with the publication of the Annual Report, Vestas will host a presentation
meeting (incl. telephone conference and webcast) for investors, analysts and the press in
Copenhagen on Wednesday, 17 March 2004 at 3.30 p.m. (CET). The conference will be held
in English and it will be possible to attend via Vestas" website www.vestas.com and
Copenhagen Stock Exchange A/S" website www.cse.dk.
Interested parties from Denmark, who wish to ask questions during the conference, may call
ph. +45 7026 5040, interested parties from the rest of Europe may call ph. +44 20 7769
6432, and interested parties from the US may call ph. +1 877 204 0753. Instant replay will be
available via Vestas" website www.vestas.com and Copenhagen Stock Exchange A/S"
website website www.cse.dk.
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 President and CEO
Vestas Wind Systems A/S
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