APPENDIX 1: List of Figures
FIGURE 1: CUMULATIVE INSTALLED CAPACITY IN MW (INCLUDING OFF-SHORE).ERROR! BOOKMARK NOT
DEFINED.
FIGURE 2: THE WIND POWER SECTOR STRUCTURE. ............................ ERROR! BOOKMARK NOT DEFINED.
FIGURE 3: GENERATED REVENUE AND MW DELIVERED TO THE THREE SEGMENTS BY VESTAS. ......ERROR!
BOOKMARK NOT DEFINED.
FIGURE 4: VESTAS’ MARKET SHARE IN THE YEARS 2003-2008. ........... ERROR! BOOKMARK NOT DEFINED.
FIGURE 5: GLOBAL MARKET SHARE 2006-2008 ................................... ERROR! BOOKMARK NOT DEFINED.
FIGURE 6: VESTAS’ MANAGEMENT FOCUS. ......................................... ERROR! BOOKMARK NOT DEFINED.
FIGURE 7: VESTAS' GROSS PROFIT 2005-2009, IN MILLION EUROS. .... ERROR! BOOKMARK NOT DEFINED.
FIGURE 9: REVENUE GENERATED FROM THE THREE SEGMENTS IN PERCENTAGE. ERROR! BOOKMARK NOT
DEFINED.
FIGURE 8: REVENUE GENERATED FROM THE THREE SEGMENTS IN PERCENTAGE. ERROR! BOOKMARK NOT
DEFINED.
FIGURE 10: OPERATING PROFIT, EBIT DYNAMICS AND EBIT MARGIN FOR VESTAS.ERROR! BOOKMARK NOT
DEFINED.
FIGURE 11: EBIT OF VESTAS, IN MILLION EUROS. ................................ ERROR! BOOKMARK NOT DEFINED.
FIGURE 12: OPERATING PROFIT GENERATED BY THE THREE SEGMENTS, IN PERCENTAGE.ERROR! BOOKMARK
NOT DEFINED.
FIGURE 13: EBIT MARGIN AND RATES OF RETURN FOR VESTAS, GAMESA AND REPOWER.ERROR! BOOKMARK
NOT DEFINED.
FIGURE 14: DUPONT DECOMPOSITION, VESTAS 2008. ....................... ERROR! BOOKMARK NOT DEFINED.
FIGURE 15: DUPONT DECOMPOSITION, VESTAS 2007. ....................... ERROR! BOOKMARK NOT DEFINED.
FIGURE 16: CUMULATIVE INSTALLED CAPACITY IN MW. ..................... ERROR! BOOKMARK NOT DEFINED.
FIGURE 17: GROWTH RATES. ............................................................... ERROR! BOOKMARK NOT DEFINED.
FIGURE 18: VESTAS’ NET WORKING CAPITAL. ...................................... ERROR! BOOKMARK NOT DEFINED.
FIGURE 19: CURRENT AND QUICK RATIOS FOR GAMESA, VESTAS AND REPOWER.ERROR! BOOKMARK NOT
DEFINED.
FIGURE 20: LEVERAGE RATIOS FOR VESTAS, GAMESA AND REPOWER.ERROR! BOOKMARK NOT DEFINED.
FIGURE 21: AVERAGE COLLECTION PERIOD, ASSET AND INVENTORY TURNOVER RATIOS.ERROR! BOOKMARK
NOT DEFINED.
FIGURE 22: VESTAS’ NWC, INVESTIGATING CASH FLOW STATEMENT. ERROR! BOOKMARK NOT DEFINED.
FIGURE 23: SOLVENCY RATIOS ON THE BASIS OF CASH FLOW STATEMENTS.ERROR! BOOKMARK NOT DEFINED.
FIGURE 24: THE FIVE FORCES FRAMEWORK ........................................ ERROR! BOOKMARK NOT DEFINED.
FIGURE 25: WIND TURBINE PRODUCERS AND TURBINE SIZE OFFEREDERROR! BOOKMARK NOT DEFINED.
FIGURE 26: COST ALLOCATION IN PERCENTAGE FOR ERECTING A WIND TURBINEERROR! BOOKMARK NOT
DEFINED.
FIGURE 27: COST COMPONENTS OF WIND TURBINES ......................... ERROR! BOOKMARK NOT DEFINED.
FIGURE 28: FIVE FORCES ANALYSIS CONCLUSION ............................... ERROR! BOOKMARK NOT DEFINED.
FIGURE 29: SWOT ANALYSIS OF VESTAS. ............................................. ERROR! BOOKMARK NOT DEFINED.
FIGURE 30: ENTERPRISE RISK DIVISION................................................ ERROR! BOOKMARK NOT DEFINED.
FIGURE 31: RISKS AFFECTING GLOBAL WIND TURBINE MANUFACTURERSERROR! BOOKMARK NOT DEFINED.
FIGURE 32: STRATEGY FOR THE FUTURE – VESTAS. ............................. ERROR! BOOKMARK NOT DEFINED.
FIGURE 33: VESTAS VALUE CHAIN........................................................ ERROR! BOOKMARK NOT DEFINED.
FIGURE 34:WIND TURBINE MANUFACTURERS AND THEIR SUPPLIERS ERROR! BOOKMARK NOT DEFINED.
FIGURE 35: CURRENT STRATEGY AND RECOMMENDATIONS WITH REGARD TO GEARBOXES. .........ERROR!
BOOKMARK NOT DEFINED.
APPENDIX 2: The Bond Example
The example considers two investment options. Let us assume a low–grade junk bond with a
face value of euro 1000 promises to pay 8% interest, and a high-grade government bond with
the same face value promises to pay 4% interest. Investing in the junk bond promises a
contractual profit of euro 80. If we require the same profit from the governmental bond, this
requires twice the initial investment, as governmental bonds only offer 4% interest. (Euro
2000 x 4% = Euro 80). If we should apply the engineering based COE (cost of energy)
models which are biased towards low-cost but high risk-intensive technologies, according to
Dr. Awerbuch we would draw the conclusion that “government bonds are twice as costly as
junk bonds, and require twice the investment to produce the same promised annual income
stream”. From this example we can see that investments in wind power energy are not directly
comparable to investments in conventional power. This is because conventional power bears a
higher risk with the unpredictability and uncertainty of fossil fuel prices. If we apply a riskadjusted discount rate to the calculation, the unique market value of the bonds will be
revealed. This is because the market considers two different levels of risk to be connected
with each security.
APPENDIX 3: Formulas used for calculations
Operating profit = revenue – cost of sales – R&D costs – selling and distribution expenses –
administrative expenses
ROA = net sales/average assets
ROE = net profit/average equity
ROS = net profit/net sales
Current ratio = total current assets / total current liabilities
Quick ratio = (total current assets - inventories- corporation tax) / total current assets
Debt to asset = total liabilities / total assets
Debt to equity = total noncurrent liabilities / total equity
Interest coverage = operating profit / interest
Operating cash flow = cash flow from operations / current liabilities
Cash current debt coverage = (cash flow from operations – dividends) / current financial
debt
Average collection period = (trade receivables*360) / gross profit
Fixed assets turnover = gross profit / total fixed assets
Total asset turnover = gross profit / total assets
Inventory turnover = cost of sales / inventory
NWC = Inventories + trade receivables + construction contracts in progress + other
receivables – (prepayment from customers +construction contracts in progress + trade
payables + other liabilities)
Financial leverage = average total assets / average total equity
Change in current assets = trade receivables + construction contracts in progress + other
receivables
APPENDIX 4: Financial Statements of Vestas, Gamesa and REpower