Vestas Wind Systems A/S has ousted Ditlev Engel as company president and CEO. Engel, who has served as the wind turbine maker's head since 2005, will be replaced by Anders Runevad effective Sept. 1. Until then, Chief Financial Officer and Executive Vice President Marika Fredriksson will assume the role of acting president and CEO.
The announcement comes as Vestas reveals its interim financial report for the second quarter of 2013 (Q2'13). In the quarter, the company generated revenue of EUR 1.185 billion, down 26% from the year-earlier period, and net loss amounted to EUR 62 million, a decrease of EUR 54 million compared to Q2'12.
EBIT before special items decreased by EUR 28 million to EUR 12 million. The EBIT margin before special items was 1%, and the free cashflow increased by EUR 535 million to EUR 197 million.
The intake of firm and unconditional wind turbine orders was 1,641 MW in the second quarter. Due to uncertainty surrounding a few customers' ability to comply with the contractual obligations, Vestas says it has resolved to lower the order backlog value by EUR 4 million. Including this adjustment, the value of the wind turbine backlog amounted to EUR 7.1 billion as of June 30.
In addition to the wind turbine order backlog, Vestas had service agreements with contractual future revenue of EUR 5.9 billion at the end of June. Thus, the company says, the value of the combined backlog of wind turbine orders and service agreements stood at EUR 13 billion – an improvement of EUR 600 million during the quarter.
Vestas has experienced a longtime trend of bleak financial earnings, which had led to thousands of job cuts, executive shakeups and restructuring. In its Q2'13 report, the company says its "two-year turnaround continues according to plan."
Bert Nordberg, chairman of Vestas' board of directors, says replacing Engel is a necessary next step.
"Following the recent measures taken, it is now the appropriate time to make this change," comments Nordberg. "The company is now entering a new phase, where we want to realize our growth potential, and I am confident that Mr. Runevad has the right experience to lead the company going forward. The restructuring program has resulted in a more competitive company, and we thank Mr. Engel for his leadership over the past eight years."
Navigant Consulting's director of energy, Bruce Hamilton, tells NAW he is not surprised that Engel has been replaced.
‘This is a natural and expected transition," he says. "Having completed rigorous restructuring over the past 18 months, facing legal challenges, and criticism from disgruntled stakeholders means the focus has been on Engel rather than on the positives that Vestas has gained from the restructuring and developing a healthy order book."
Hamilton adds that he would characterize Engel's tenure as being "very challenging but overall successful in maintaining Vestas' status as the world's leading pure-play wind turbine manufacturer."
Runevad joins Vestas from telecom solutions company Ericsson, where he was president of region West and Central Europe and a member of the Ericsson Global executive team. Although he has spent his entire career in the telecom industry and has no experience in the wind sector, Vestas says Runevad has held several senior positions and led successful restructuring programs in large organizations.
"I am delighted to be joining Vestas and look forward to leading the company in its next phase of development," says Runevad. "I believe that my career has equipped me with the right tools to take on this task."
