Vestas CEO Ditlev Engel leaves

Ditlev Engel

Engel is out as Vestas CEO

CEO Ditlev Engel has left Vestas and will be replaced by Anders Runevad, an executive from Swedish telecoms group Ericsson, the wind turbine manufacturer announced this morning.

Vestas chairman Bert Nordberg said: “Following the recent measures taken, it is now the appropriate time to make this change.

"The restructuring programme has resulted in a more competitive company and we thank Mr Engel for his leadership over the past eight years."

Engel has been with Vestas since 2005. His last few years in the post have been stormy, with wholesale changes to long-serving senior managers, and a major restructuring plan in an effort to get the wind turbine group's finances back on a sound footing.

There have also been swirling legal issues, with disgruntled shareholders filing claims against Engel and others, and legal action by the company itself over deals made in India.

Runevad was president of the West & Central Europe region for Ericsson, and a member of the Ericsson Global executive team.

He said: “I am delighted to be joining Vestas and look forward to leading the company in its next phase of development. I believe that my career has equipped me with the right tools to take on this task."

Runevad will take over as group president and CEO on 1 September. Until then the company will be led by Marika Fredriksson, Vestas' CFO, who will assume the position as acting group president & CEO.

Nordberg, himself a former Ericsson executive, said: "The company is now entering a new phase, where we want to realise our growth potential, and I am confident that Mr Runevad has the right experience to lead the company going forward."

The replacement of Engel came as Vestas unveiled second quarter sales and profit figures.

Turnover was €1.185bn, a 26% fall on last year’s level, while after special items, earnings before interest and tax (Ebit) was a negative €9m, down from a positive €18m at the same stage in 2012.

The net loss was €62m, compared to a year-earlier €8m deficit.

The Danish group's gross margin was 14.3% against a year-earlier 15.4%. EBIT  margin slipped to a negative 0.8% from 1.1%.

Free cash flow improved to a positive €197m from a negative  €338m.

Vestas said it is eliminating €400m from its order backlog, which now stands at €7.1bn, “due to uncertainty surrounding a few customers’ ability to comply with the contractual obligations”.

Firm and unconditional order intake in the second quarter was 1.64GW.

The manufacturer produced and shipped 1.14GW in 520 turbines in the quarter, a drop of 47% year-on-year.

The group also revealed that it has scrapped plans to sell its wind tower factory in Pueblo, US.

The Danish group is maintaining its guidance for the full-year "of an EBIT margin before special items of at least 1% and revenue of at least €5.5bn, including service revenue, which is expected to amount to approx €1bn".

Shipments are still expected to be 4-5 GW.

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