2016 can be justifiably described as a truly outstanding year which continued the trend of consistently improving performance across the whole company. Our carefully developed and widely communicated strategy called ‘Winning the World of Wind’ (WWOW!) delivered the focus we needed and better performance than we anticipated. Sales exceeded all previous records, and by year end, we had secured growth beyond the overall level of the global wind industry with commensurate improvements in both top and bottom lines.
Innovation – fast
The frequency and speed of innovation increased to match our customers’ ambitions with a record number of new products introduced (nine new blades in a single year). The highlight was surely the world’s longest blade at 88.4 meters for the offshore market, which was launched in June in a blaze of global publicity and attracted further attention to the company for its leadership and capabilities. We continued breaking records after the summer, where we launched the world’s longest onshore blade, the LM 69.3 P, which like the LM 88.4 P is based on our new Hybrid Carbon technology. And throughout the year, there were numerous additional breakthrough developments which can enhance the performance of our whole blade fleet, improving Annual Energy Production (AEP), reducing noise, and delivering effective de-icing solutions. All these technologies are designed to reduce the total cost of energy and with improved manufacturability and reliability as a starting point. We invested more than EUR 31 million in innovation in 2016, up 21% compared to the previous year, and reflecting the recognition that we need to continuously invest in research and development in order to maintain our position as a technology leader.
Strong operational performance
Our global manufacturing set up was expanded further in 2016, to meet increased demand from our customers. We ramped up, ahead of schedule, a new blade plant in Vadodara, Gujarat in India. At the same time, we secured more reliable and profitable performance from our facility in Suape, Brazil, now under sole ownership. All factories continued to perform well with production optimized to deliver growing customer commitments. We addressed safety and quality with consistent improvements by stricter measures and achieved good results. And we will continue to pursue the highest standards on safety and quality, which remain the foundation for the continued expansion and development that we see on almost every manufacturing site to ensure we have capacity to meet growing demand.
People made the difference
2016 was full of positive challenges. During the year, we developed plans and processes to manage further capacity expansions even more effectively, with faster ramp ups to full production. The growth resulted in the highest ever number of permanent employees: 8,178. Including trainees and contractors, we on-boarded more than 2,500 people and almost took the total headcount of the business to the 10,000 mark! In total over 70,000 training days were delivered to prepare our new colleagues for building high quality blades in our global manufacturing set up. All of our 13 plants opened onsite training facilities – ‘Centers of Excellence’ which ensure that new team members acquire robust basic working knowledge before starting to work on blades in real life production. This initiative underpins our quality improvements and expands the range, flexibility and capability of our skilled operators, combining theory and hands on training.
More customers, more satisfied
We were very proud to announce new customers, including major industry players in 2016. Equally important, we also produced more, high quality blades for existing customers with clear evidence from our Customer Satisfaction Survey and direct feedback from our main customers that our performance has improved across the board. The industry is in constant development and we see for example the new trend of ‘re-powering’ as an opportunity for consistent high volume production of well-established products.
New horizons offshore
Offshore remains a key focus area for the company. One of the highlights in 2016 was the installation of LM 73.5 meter blades at Block Island, the first offshore wind farm in the U.S. Although it is a fairly small scale project, it is significant in demonstrating the feasibility of offshore developments in North America. Generally, growth offshore, for example in Europe and China, presents still greater challenges as blades grow longer and confront the marine operating environment which can be exceptionally harsh. Already, however, LM Wind Power is perceived as a leading manufacturer for the sector with pioneering products and solutions for established and new potential customers. One reason for the vote of confidence in our offshore blades is the significantly improved quality performance with record low claims – a 20% reduction since 2015. Our data is getting stronger every day and is clearly showing that our blades will survive a 20 year lifespan.
A robust company focused on the future
During the year, we attracted significant additional external support to finance expansion in Vadodara and a new market entry in Turkey which will ramp up in 2017. We worked hard to secure further engagement from our own supply chain, paying on time to facilitate further cost reductions and driving greater intimacy in the key strategic relationships for innovation and to encourage their sustainability ambitions. We also launched an upgraded enterprise resource management system ‘One LM’ in Goleniow, Poland, which is now being rolled out globally, further improving efficiency and transparency in the business. As a result of the positive industry development, the combination of innovation and success and high visibility launches like the 88.4m world-beating blade, LM Wind Power has enjoyed considerable media interest and our overall reputation is much improved. We were particularly proud to announce an aggressive target on Sustainability at year end with the ambition to make the company carbon neutral during 2018.
Acquisition and integration
On 11 October, we formally announced that LM Wind Power is to be acquired by General Electric Company (GE) and subject to regulatory approvals, we expect the deal to close during the second quarter of 2017. Retaining the existing management team, we will continue to service our entire customer base. And we will continue to pursue the innovation we can achieve with a clearer line of sight to turbine performance and the consistency and support such a strategic partner and investor can bring. Opportunities abound, and we remain excited and optimistic about LM Wind Power’s future.
Download the full 2016 Annual Report
Want to go beyond the highlights? Explore our full annual report.
We delivered our best ever financial performance in 2016.
What a year! Sales increased by 41%, to EUR 1,059 million, and we delivered impressive growth on all indicators. View the full financial results here.
Sustainability is firmly embedded in the foundation of our corporate strategy.
Our non-financial ambitions have evolved with the growth and improved performance of the business. Explore highlights from 2016 here.