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Vestas ousts chief executive amid industry turmoil
Credit: By Richard Milne, Nordic Correspondent | August 21, 2013 | www.ft.com ~~
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Translate: FROM English | TO English
Vestas has ditched its chief executive Ditlev Engel after years of investor criticism of his leadership of the Danish wind turbine manufacturer.
Bert Nordberg, Vestas’ chairman for the past year and a former Ericsson executive, has chosen a former colleague from the Swedish telecoms equipment maker to take over from Mr Engel.
Anders Runevad, who was head of western and central Europe for Ericsson, will take over at the troubled Vestas on September 1, and the Danish group’s shares opened up 12 per cent Wednesday morning on the news.
Mr Engel became the lightning rod for investor dissatisfaction in Vestas. The group’s shares fell 96 per cent from their peak in 2008 to their 2012 trough.
The shares had tripled from the start of this year until Wednesday, but they were still down 85 per cent from their peak.
Mr Engel was blamed for a series of management missteps that pushed the Danish group into financial trouble. The entire wind industry has come under pressure as government subsidies decline and Chinese competition increases.
Vestas has been forced into a deep restructuring to keep its banks onside and has cut close to a third of its workforce, which Mr Engel increased in an ill-timed expansion. All the other members of Vestas’ management team had been replaced except Mr Engel, and the Danish company is facing several lawsuits over his time in charge.
“Following the recent measures taken, it is now the appropriate time to make this change. The company is now entering a new phase where we want to realise our growth potential,” Mr Nordberg said.
Mr Runevad, a former executive in the Sony Ericsson joint venture like Mr Nordberg, added: “I am delighted to be joining Vestas and look forward to leading the company in its next phase of development.”
Vestas underlined on Wednesday how its nascent turnaround was continuing to gather momentum. The closely-watched free cash flow showed a second quarter of significant improvement, rising by €535m to €197m. The Danish group increased its forecast for free cashflow for the year from merely positive to at least €200m.
But signs of its problems were still evident. Revenues fell by 26 per cent to €1.2bn compared with a year earlier while Vestas shipped 1,144MW of turbines, down by almost a half. Its net loss worsened from €8m to €62m.
Vestas was also forced to lower the value of its order backlog by €400m to €7.1bn due to “uncertainty surrounding a few customers’ ability to comply with the contractual obligations”.
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