The Executive Board of REpower Systems AG has revised its outlook for the current financial year. The company now expects total performance between € 1.25 billion and € 1.35 billion (previously: € 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. 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.
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. 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.
