Announcement of financial results for 2009

LM Wind Power Group revenue amounts to EUR 777 million, 12% lower than previous year, yet profit margin increases for second year in a row to 18.9%. Acquisition and restructuring secure growth opportunities.

LM Wind Power’s revenues for the 12 months to 31 December 2009 were EUR 777 million, a decline of 12% compared to 2008.  Profit margins (EBITDA) increased to 18.9%.

The effects of the credit crisis, which made access to funding of new wind park developments more difficult and time-consuming to secure, significantly curtailed the pace of growth of the wind industry in European markets, in particular. However prompt restructuring actions and a strong focus on efficiency improvements, both in terms of productivity and waste minimization, helped significantly dampen the impact on profitability from the drop in sales.

The acquisition of Svendborg Brakes on July 31st further strengthens the market position of the whole Group.  2009 revenue includes 5 months of Svendborg Brakes revenue, amounting to EUR 35 million.  Excluding this contribution, therefore, sales revenue was 16% down in 2009 compared with 2008.

The company reduced its manufacturing footprint in Spain, Denmark, India and Germany but expanded in China to capitalize on strong growth.

• Revenues in 2009 amounted to EUR 777 million down from EUR 885 million in 2007. The advantage of an expanding global footprint was clearly visible as the European market stagnated with a slight decrease in 2009 in GW terms.  Elsewhere in the Americas the market grew at a modest rate, while outstanding growth was seen in China.
• Operating profit amounted to EUR 52 million compared to EUR 91 million in 2008.
• A strong focus on efficiency improvements both in terms of productivity, (average throughput increased as overall production cycle time improved 35% compared to 2008) and waste minimization, helped significantly dampen the impact on profitability from the drop in sales described above. 
• In addition the cost of certain raw materials decreased as pricing pressure from customers fed through the entire supply chain of the industry and as global commodity price reductions helped reduce raw material prices generally from their peak levels of 2008.
• Earnings before interest, taxes, depreciation, amortization and special items (EBITDA) amounted to EUR 147 million compared with EUR 145 million in 2008. .
• Cash flow from operating activities decreased from EUR 100.8 million in 2008 to EUR 70.8 million in 2009.  The main reason for this decrease is the substantial increase in working capital (a EUR 39.4 million outflow in 2009 compared with EUR 0.7 million in 2008).
• In addition to the acquisition of Svendborg Brakes, LM Wind Power is driving forward with ambitious growth plans.  The company is capitalizing on its deep technical knowledge to create an additional revenue stream from servicing all blades in operation around the world by providing a range of equipment to enhance performance and by developing comprehensive logistics support.

Roland Sundén, CEO of LM Wind Power, said:

"Throughout LM Wind Power’s three operational areas, blades, brakes, service and logistics, we adjusted to changing demand patterns.  We focused on improving operational efficiency, while developing new technologies and product solutions for the future.

It is clear that Asia’s, and especially China’s, role in the wind industry will be increasingly significant in the years ahead while challenges remain in the US, Europe and India.  Our priorities in 2009 were to streamline our capacity in Europe in line with demand, securing our presence in the North American market, while ramping up to respond to the extraordinary strength of the Chinese market.

Svendborg Brakes, which we acquired in July, is an industry leader with a market share above 50 per cent and further enhances our operational capability.  It strengthens our market position, supports our growing service and logistics business, enhances our knowledge of the sector and our market intelligence. 

In 2009, we also strengthened our Research & Development organization.  The most tangible result of this was GloBlade® launched commercially in 2010.  GloBlade® is up to 5% more efficient than current industry standard blades, enabling wind park development in lower wind areas and improving energy yields on existing turbines.

We recognized our opportunity to develop a dedicated service and logistics organization to better serve our customers’ needs while securing further revenue by extending our relationships with them.  To do this we have reorganized our after sales organization and strengthened our technical and market capability.

2009 was a positive year despite the fact that we had to make wide ranging changes to our organization. We continue to focus relentlessly on customer service, quality, operational efficiency and product innovation.”

The financial statements were adopted at LM Wind Power Group’s Annual General Meeting earlier today.

The Annual Report 2009 is available for download at 2009report.lmwindpower.com

For additional information please contact:

LM Wind Power Group
VP, Global Communication
Christopher Springham
+31 20 3043 704
chsp@lmwindpower.com

LM Wind Power Group
Senior Manager Communication
Helle Larsen Andersen
+45 51 38 83 69
hla@lmwindpower.com