REpower Revises Forecast for Current Financial Year (Germany)

• Total performance of EUR 1.25 – 1.35 billion
• EBIT margin of 5% – 7%
• Cost-cutting measures to increase competitiveness

The Executive Board of REpower Systems AG (WKN 617703) has revised its outlook for the current financial year. The company now expects total performance between EUR 1.25 billion and EUR 1.35 billion (previously: EUR 1.5 – 1.6 billion) and an operating margin (EBIT margin) of 5% – 7% (previously: 7.5% – 8.5%). The main reason for this change is the further increase in the number of project postponements, which is due in particular to financing commitments still pending. In light of the weak market development, it has only been possible to offset these postponed projects with adequate replacement orders to a limited extent in the current financial year.

Andreas Nauen, CEO of REpower Systems AG, emphasized, “Primarily this is due to projects being postponed – wind farms are being realized later than originally planned. In line with market forecasts, for our company and for the whole wind industry we expect further growth in the medium to long term and thereby an increasing demand for REpower onshore and offshore products.”

In response to the price and margin pressure, the Executive Board has already initiated extensive cost reduction measures in order to achieve a sustainable improvement in the competitiveness of REpower. In particular, this includes leveraging cost benefits to a greater extent by purchasing components in Asia, especially in China and India. The first phase of this development will largely focus on established suppliers with corresponding local production sites. From 2011 on, the company is also planning to manufacture turbines in Asia. The wind turbines manufactured there are planned to be supplied to Australia, New Zealand and the USA.

[mappress]

Source: repower, December 22, 2010