For to long the board have clinched to the hope that their CEO, Ditlev Engel, would have some sort of grip on the realities he and the company is facing. Year after year, quarter after quarter he has led the people who have put their trust in his statement down.
By being to optimistic he has again and again showed that he is unable to set realistic targets and even when nobody else has any doubt, which way the market is going. Vestas keep on insisting on unrealistic targets. Take for example the target of firm and unconditional orders for 7000-8000 MW and an EBIT margin of 7%. But until date the intake is only around 5200 MW very far from the and when the average announced intake is only around 80MW per order it is hard to imagine that the company will reach its targets in 2011. The investors have already taken the necessary steps and have punished the stock so that the change in stock price from last year is -58%. With the fall in the last 6 months of 53% it is clear that investors wants to see real change especially when it comes to realistic communication by management.
Investors like to know what they are buying and at the moment they do not trust the communication coming from Veatsa and when a company have lost the trust of their investors it is a true sign that change have to happen and happen fast. For the past three or four years there have been hopes that Ditlev Engel would start to deliver as he promised and time and time again he has been unable. I do not think that it is a loss of confidence in the product or the way that Vesats have put their business model together. Rather investors do not believe a word that Ditlev Engel is speaking and that is a real problem for the company as a whole.
As I see it is Vestas at the moment really undervalued and would be a good target for a takeover for a smaller windmill producer that could put in effective management.
The board need to step in and find a replacement that can build confidence with the market there is CEOs out there who have the necessary experience and competencies to bring Vestas back on track.
- Vestas Plunges Most in Eight Years After Cutting Forecasts (businessweek.com)
- Vestas Launches One-Of-A-Kind Marketing Campaign Asking 600 Top Executives At Global Brands To Promote Direct Investment In Wind (prweb.com)
- Wind turbine maker back in profit (bbc.co.uk)