RECOVERY IN ACTIVITY OUTSIDE SPAIN AND EFFICIENT MANAGEMENT ENABLE GAMESA TO INCREASE NET PROFIT BY 67% AND MAINTAIN 2011 GUIDANCE
o For the first time in Gamesa’s history, 100% of MW sales came from outside Spain. Sales increased 8-fold in India, where the company has attained a 10% market share and ranks third
Progress in internationalisation, efficient management and the recovery in all business lines enabled Gamesa to end the first quarter of 2011 with solid results and notable growth in its key figures; as a result, the company has already covered the bulk of its wind turbine sales guidance for the year and maintains earnings, working capital and debt guidance for 2011.
Gamesa’s consolidated revenues amounted to 585 million euro (+24%) in 1Q2011, EBIT was 28 million euro (+18% yoy) and net profit 13 million euro (+67% yoy).
Wind turbine sales (in MWe) expanded by 24% to 579 MW and, for the first time in Gamesa’s history, entirely outside Spain. The backlog for delivery in 2011 amounted to 1,706 MW, covering 58% of the wind turbine sales guidance for the year (2,800-3,100 MW). Sales coverage in 12 May stands at 70%.
Wind turbine deliveries totalled 546 MW, 2.6 times the 1Q2010 figure, with India accounting for a notable 26% of MW delivered in the period.
Growth in sales and the consolidation of cost improvement measures (materials, construction and logistics) provided the Wind Turbine division with an EBIT margin of 5.1%, slightly higher than guidance for the year (4%-5%). The division’s working capital/sales ratio was 15%, i.e. in line with 2011 guidance and below the figure for the first quarter of 2010 (21%).
Notwithstanding the funds allocated to international expansion and development of the wind farm portfolio, Gamesa continued to focus on managing its finances, obtaining consolidated net debt of 313 million euro, with a net financial debt/EBITDA ratio of 0.9 (below 2011 guidance).
100% of sales from outside Spain
During the period, 100% of MW sales came from outside Spain and 25% of total 2011 orders to May from new clients.
Although 1Q2011 sales are not indicative of an annual trend, the geographic breakdown of sales reflects the growing contribution from one of the countries with greatest growth potential –India- where sales expanded 8-fold and accounted for 24% of the quarter’s total.
Gamesa attained a market share of 10% (*) after just 18 months in India, placing it the third wind energy company in the country.
China accounted for 13% of total sales, the US for 8%, Europe (ex-Spain) for 27% and the rest of the world for 28%. Gamesa made significant progress in Latin America (included under ROW), more than tripling sales there (164 MW in 1Q2011); sales in Eastern Europe totalled 107 MW, i.e. twice the figure for 1Q2010.
Gamesa continued to invest in the principal wind energy markets and in innovation, with capital expenditure in the quarter totalling 39 million euro, for:
o New manufacturing blade capacity for the G9X-2.0 MW in China and of two new plants, in Inner Mongolia and Jilin, which will become operational in 2011;
o New capacity in India for the G5X-850kW and commencement of construction of a blade plant in Gujarat which will open this year. Gamesa has announced capex of over 60 million euro through 2012 for the installation of three new production plants in India (blades, nacelles and towers (in joint venture));
o New capacity in Brazil with the construction of the first nacelle assembly plant (G9X-2.0 MW) in that market;
o Capex related to manufacturing the new G10X-4.5 MW wind turbine in Spain.
Services revenues expand 30%
During 1Q2011, Gamesa continued to strengthen its operations and maintenance (O&M) services area, which increased revenues by 30% to 78 million euro.
This area, which has over 13,600 MW under O&M contracts, contributed 12.7% of the Wind Turbine division’s total revenues.
Development and sale of wind farms: sales agreements for 112 MW and backlog up 12%
Results in the quarter from the development and sale of wind farms maintained the trend that began in the second half of 2010; as a result of the recovery, Gamesa signed deals in the period for 112 MW in Mexico and Greece, for delivery later in 2011.
Gamesa’s wind farm development portfolio expanded 12%, to 24,097 MW because of the contribution on India: 1,730 MW, in seven states. The “highly confident” pipeline attained greater visibility, having expanded by 39% during the period to 3,352 MW.
The company had 396 MW in the final phases of construction and commissioning in 1Q2011.
The division ended the quarter in EBIT break even while strict working capital control enabled it to maintain debt levels.
Strengthening operations in growing markets and progress in offshore and technological innovation
In coherence with the Business Plan 2011-2013, all of Gamesa’s business lines continued to expand globally in 1Q2011 and the company maintained its offshore strategy and plans to launch new platforms to continue responding to market needs.
o Announced capex of over 60 million euro through 2012: opening a blade plant in Gujarat in 2011 with initial capacity of up to 300 MW and installing new plants to manufacture nacelles and towers (joint ventures) in the states of Gujarat and Tamil Nadu.
o In April, Gamesa signed a Memorandum of Understanding with Longyuan, China Resources Power (CRP) and Datang to supply 900 MW. A few weeks later, the company signed contracts to supply 300 MW to CRP (delivery in 2011) and 36 MW to Fujian Coal;
o Strategic agreements with Longyuan to jointly develop wind projects outside China as well as 200 MW in China by 2015.
o Agreement to supply E.ON with an offshore prototype of the Gamesa G11X-5.0 MW platform in 2012. Gamesa will also provide the utility with one -and possibly two- G128-4.5 MW wind turbines for a site in Europe;
o Announcement of the opening of an offshore office in Hamburg in the second quarter of 2011 to meet the needs of one of the largest offshore wind energy markets.
o Technology centres were opened in Virginia, India and Singapore (advanced materials) with plans to open 2 more technology centres later in 2011, creating a network of 10 R&D offices worldwide;
o Strengthening the 4.5 MW platform with the launch of the G136-4.5 MW, designed for sites with low wind. This new turbine shares the same low-CoE approach and is as easy to ship and install as a 2.0 MW turbine.
(*) According to the Indian Wind Turbine Manufacturers Association (IWTMA)