Eyes on Runevad as Vestas revives

All eyes will be on Vestas CEO Anders Runevad tomorrow, when he is expected to give his first detailed view of his future strategic vision for the manufacturer – likely against the welcome background of a quarterly profit.

Vestas is on course to unveil a return to the black for its fourth quarter of 2013 tomorrow, according to financial analysts, with the market keen to hear some insights into Runevad’s plans.

Vestas is expected by analysts to post a fourth-quarter net profit in the region of €159m ($215m), turning around a run of quarterly negatives stretching back more than two years.

Runevad, who took over  from previous CEO Ditlev Enegel in August last year, has at previous set-piece announcements insisted he remains focused on seeing through Vestas’s turnaround strategy, but indicated that he would look to the future at tomorrow’s Q4 and year-end results announcement.

A big part of that future will be the joint venture in offshore wind announced with Japan's Mitsubisi Heavy Industries.

Analysts expect the turnaround strategy started under Engel to continue bearing fruit in the latest figures.

That strategy has seen cost reductions and divestments of non-core assets across Vestas’ global operations, including removing thousands of staff from the payroll.

Investment bank Nordea analysts Patrik Setterberg and Andreas Brock said for the last three months of 2013 they expect to see “a solid improvement in the Ebit margin (before special items) thanks to lower fixed costs and better project margins.” They expect the Q4 Ebit figure before one-offs to be €213m compared to €155m in the year-ago same quarter.

The Nordea analysts added: “We believe the Q4 report will show strong free cash flow of €895m” and guided unannounced orders for the quarter at 600MW.

As far as future guidance goes, they expect a "conservative" figure that could be updated as the year goes on.

"Plausible guidance would in our view be revenue of a minimum of €6bn, an Ebit margin (before special items) of at least 3% and free cash flow of at least €200m."