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MarketScreener Homepage  >  Equities  >  NASDAQ OMX COPENHAGEN  >  Vestas Wind Systems A/S    VWS   DK0010268606

VESTAS WIND SYSTEMS A/S

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Vestas Considering Factory Sale Amid Operations Overhaul

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03/12/2013 | 06:21am EDT

By Clemens Bomsdorf

COPENHAGEN--After a tough year marked by profit-warnings and job cuts, Danish wind turbine maker Vestas Wind Systems A/S (VWS.KO) is looking to overhaul its business model by fostering closer ties with parts suppliers and concentrating its own activities on higher margin turbine engineering and design and service of wind power plants.

Chief Operating Officer Jean-Marc Lechene said in an interview that the company would like to outsource the manufacturing of less advanced components, such as wind towers, in order to focus more on lucrative advanced wind turbine technology including blades and control systems, manufacturing of turbines and sale and service of wind power plants.

As part of that strategy, the company is seeking buyers for a number of manufacturing facilities, possibly including the towers factory in Pueblo, Col. Vestas declined to confirm if talks were already underway regarding Pueblo, which currently produces towers, the tall structural support components carrying the turbine's rotor blades, for both Vestas and an unidentified third party.

"We want to focus on areas where we create value and realize that, in towers, Vestas does not add a lot," Mr. Lechene said.

The company last year said it plans to sell or close down some of its 25 factories by the end of 2014 in order to bring built-up excess production capacity in line with demand and reverse deep losses. In 2012, the company widened its net loss to 963 million euros ($1.25 billion) from EUR166 million in 2011. It aims to cut staff to 16,000 by the end of this year from 17,778 at the end of 2012.

Once boosted by subsidy-fueled growth, Vestas has recently been hurt by development-budget overruns and production overcapacity as it ramped up in the past five years in anticipation of a wind-power boom that never materialized. The company has said it expects to rein in turbine shipments to between 4 Gigawatts to 5 GW of production capacity this year from 6 GW in 2012.

Mr. Lechene joined Vestas in July 2012 after the company underwent a management and boardroom shake-up amid pressure from shareholders.

The COO said he is studying organizational models typically used by the car industry where suppliers work for many companies and thereby can keep unit production costs down.

Any possible new owners of Pueblo and other factory sites to be sold should become strategic partners since Vestas would use them as suppliers and involve them in the development of products as well, Mr. Lechene said.

Vestas has plants in North America, Europe, China and India.

Write to Clemens Bomsdorf at clemens.bomsdorf@dowjones.com

Corrections & Amplifications

This article was corrected at 14:28 GMT to fix the status of a possible divestment in the headline, third and second-to-last paragraphs.

Stocks mentioned in the article
ChangeLast1st jan.
ONE STOP SYSTEMS, INC. -3.31% 1.46 Delayed Quote.-27.72%
VESTAS WIND SYSTEMS A/S -0.80% 544.6 Delayed Quote.-18.45%
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Financials (EUR)
Sales 2020 14 158 M
EBIT 2020 1 126 M
Net income 2020 831 M
Finance 2020 2 469 M
Yield 2020 1,74%
P/E ratio 2020 17,2x
P/E ratio 2021 15,9x
EV / Sales2020 0,83x
EV / Sales2021 0,84x
Capitalization 14 232 M
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Mean consensus OUTPERFORM
Number of Analysts 20
Average target price 90,48  €
Last Close Price 72,86  €
Spread / Highest target 52,5%
Spread / Average Target 24,2%
Spread / Lowest Target -16,4%
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NameTitle
Henrik Andersen President & Group Chief Executive Officer
Anders Erik Runevad Chief Executive Officer
Bert Åke Stefan Nordberg Chairman
Jean-Marc Lechêne Chief Operating Officer & Executive Vice President
Marika Fredriksson Chief Financial Officer & Executive Vice President
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