'This isn't a crisis – just a very tough environment': outgoing Vestas finance chief

Marika Fredriksson took over as finance chief of Danish OEM Vestas when the company was in freefall back in 2013 – and announced her departure on a day that saw the wind turbine giant’s share value slide 18%. But she insists there is a “big difference” between the two scenarios.

Fredriksson, who on Wednesday said she will step down by March as chief financial officer, arrived at Vestas during a period of turmoil that led some to wonder whether the wind OEM would survive at all in its current form.

Along with former CEO Anders Runevad she was part of a team credited with restoring stability to Vestas and sparking a long period of growth that led it to global pre-eminence in the onshore wind sector and a role as pacesetter in the renewables revolution. Fredriksson was named Denmark's CFO of the year in 2015.

The challenges a decade ago were all internal and required a “true turnaround” and a major overhaul of its entire industrial base.

In 2021 the pressures are coming from outside, she underlined: “What we see now is a lot of external factors. It’s not that the company is in a mess.

“We’re doing everything we should. We have a very sound service business. We’re executing as perfectly as we can – you can see that in the revenue increase,” said Fredriksson, referring to the fact that amid a third quarter that saw unprecedented pressures on profitability, the Danish group actually increased revenue by 16%.

“It is a different situation – when these external factors start normalising we’ll be prepared,” said Fredriksson.

“It’s not a crisis – it’s a very tough environment.”

'Things got worse in Q3'

Just how tough was brought into sharp focus by current CEO Henrik Andersen, who on Wednesday told financial investors that already challenging market conditions had “actually got worse” during Q3, with some key components seeing price increases of 20-30%.

“When you look at logistic and transport, there will be suffering. Rescheduling in this current transport market is almost prohibitively expensive,” he told analysts.

With the issues now tipped to last through 2022, Andersen said Vestas was working on a “customer by customer” basis over how to deal with the pressures.

“I don’t think we can call any of this normal business right now.”

Bernstein analyst Deepa Venkateswaran said in a note that Wednesday's results “were disappointing for 2021 and 2022’s margin outlook due to continued headwinds from supply chain/logistics as well as the impact of raw-material inflation which will be more pronounced next year”.

However, with wind power’s place as an engine of the energy transition set to continue, Venkateswaran joined many in flagging a brighter future beyond the current whirlwind.

“While the shorter term outlook is challenging, the mid to long-term outlook for wind energy continues to improve with signs of improvement in markets like Germany,” she said.