The Chairman underlined the company’s global presence and its goal of growing in tandem with the international market. Calvet described wind power as the most efficient renewable energy and noted the positive outlook for the sector in the medium and long term.
Gamesa’s General Meeting of Shareholders today approved a capital increase of up to 29 million euro against reserves to be used to pay the dividend in stock rather than cash. The new "Gamesa Flexible Dividend" system will enable shareholders to receive part or all of the standard remuneration in cash or in Gamesa shares.
Each outstanding Gamesa share will be granted a warrant for one bonus share; the warrants may be traded on the market over a 15-day period. Gamesa undertakes to acquire the warrants during the established trading period.
The execution of the bonus issue will commence on 30 June with the announcement of the number of free warrants required to receive one (1) share and the price at which Gamesa undertakes to acquire the warrants. The process will foreseeably conclude on 23 July 2010, when the new shares commence trading.
The deadline for requesting remuneration in cash is 13 July 2013. Trading in the warrants will conclude on 16 July; on 21 July, the new shares will be assigned and shareholders who elected to receive the dividend in cash will be paid.
Jorge Calvet, Chairman of Gamesa, stated: "With a view to improving our shareholder remuneration policy and aligning with trends at leading Spanish and international companies, Gamesa is offering its shareholders the choice of collecting the dividend in cash or in shares, considering the tax advantages of bonus shares".
Management focused on efficiency and profitability
Gamesa shareholders approved the company’s management and results for 2009, when priority was given to efficiency and profitability against a backdrop of macroeconomic and financial weakness worldwide, which slowed industry growth.
Mr Calvet commented: "Gamesa has responded efficiently and realistically to a complex environment and to regulatory changes, focusing on active management of working capital (synchronising manufacture and delivery) and implementing an efficiency plan which has enabled us to notably improve margins in our core business".
In 2009, the EBIT margin in the wind turbine business increased to 7.2%, compared with 5.8% in 2008, and exceeding the guidance for the year (6%-7%). Consolidated revenues totalled 3.229 billion euro, and wind turbine sales amounted to 3,145 MWe. Consolidated EBIT was 177 million euro and net profit was 115 million euro.
A global company
Mr Calvet underlined Gamesa’s internationalisation, noting it as "one of the areas where we have continued to expand in the last 12 months in response to customer needs and growth in various markets."
In 2009, markets outside Spain (primarily Europe, the US and China) accounted for 73% of wind turbines sales, compared with 61% in 2008. "During the year we advanced in developing new products tailored to local needs and in expanding production capacity in the US and China as well as India, where we started up our first manufacturing plant".
The company also consolidated its global presence with a wind farm portfolio of 22,000 MW in different stages of development in Europe, America and Asia.
New business strategy
In order to seize foreseeable growth opportunities in the short to medium term and respond to the new situation in the industry (now more selective and demanding greater efficacy and flexibility), Gamesa implemented a new business strategy based on the following lines of action:
* Deepening the internationalisation strategy under a new commercial approach and analysing new manufacturing locations in countries where the market is expanding. In this vein, the company will enter up to 33 new markets and expand into new customer segments (small and medium-sized developers). This will enable it to double the worldwide sales network, triple the volume of MW it can supply and quadruple the number of commercial bids;
* Expand the operation and maintenance business with a view to providing an end-to-end response to the new needs of customers and markets. Gamesa expects to double revenues in this area to 400 million euro by 2012, and raise the EBIT margin to 15% in the same period. By 2012, the company expects to have 20,000 MW under maintenance (12,000 MW currently);
* Increase new product launches. In the next few years, Gamesa plans to launch two new turbine models for locations with medium- to low wind regimes, which will enhance the competitiveness of its product range; it will also introduce the new Gamesa G10X-4.5 MW turbine;
* Move into the offshore wind business, through alliances or by developing proprietary technology;
* Continuous improvement of efficiency by optimising costs and tailoring capacity and investment to demand. According to Calvet:
"The company will redesign its industrial strategy towards markets where there are prospects for strong sustainable growth in the medium and long term, namely Asia, the US, Latin America and North Africa."
Wind power, the most efficient renewable energy
Calvet commented: "In 2009, wind power reinforced its position as the most efficient renewable energy for responding to growing demand for energy and to the commitment by countries and governments to continue contributing to socio-economic development in a way that is intelligent, sustainable, safe, competitive, environmentally-friendly, and able to create a stable industrial fabric with viable employment".
However, the world financial and economic crisis impacted demand for wind turbines, which negatively affected turbine orders and output. In this context, the number of new projects and orders in 2009 slowed, and competition was occasionally based purely on price due to "raised lending standards and difficulties on the part of developers and investors in obtaining credit; the decline in world energy demand; and the decline in fossil fuel prices; and uncertainty in the market. Moreover, in Spain the sector faced difficulties following the approval of the Pre-Assignment Register, which led to a sharp deceleration in turbine production, a slower pace of orders and thousands of job losses".
Nonetheless, installed wind capacity worldwide increased by 31% in 2009, adding 37.5 GW to reach a total of 157.9 GW. Asia, North America and Europe were again the fastest-growing areas in the industry, installing 15, 11 and 10 GW of new capacity, respectively, during the year.
"In terms of the industry’s contribution to national economies, since 2005 the wind industry has created more jobs than any other industrial sector in the world according to the World Wind Energy Report 2009, published by the World Wind Energy Association (WWEA), which estimates that the industry currently employs 550,000 people". The WWEA expects employment in the industry to reach 670,000 by the end of 2010 and 1 million in 2012.
"The industry’s impact on the environment is indisputable". The 158 GW of installed capacity existing at year-end produced 340 TWh of clean electricity and saved 204 million tons of CO2 emissions in the year.
"The medium- and long-term growth prospects are positive and are based on commitments made by various countries," Calvet commented. Installed wind capacity worldwide will total 490 GW in 2014, i.e. 16% more than in 2009 according to estimates by the Global Wind Energy Council (GWEC). That represents 21% annual growth over the next five years.
Items approved by the Meeting
In addition to approving the items on the agenda in connection with the financial statements and company management, Gamesa’s shareholders ratified the appointment to the Board of Luis Lada as external independent director and Benita Ferrero-Waldner in the category of "other external director".
It also empowered the Board of Directors, for a period of five years, to issue bonds, debentures and other fixed-income securities amounting to at most 700 million euro and commercial paper amounting to at most 300 million euro, as well as debentures or bonds that are exchangeable for, and/or convertible into, shares of the Company, and warrants on newly-issued or outstanding shares of the Company amounting to at most 700 million euro.
The General Meeting of Shareholders authorised the Board to increase the share capital by up to one-half of the current share capital, on one or more occasions, in line with standard practice at the leading companies in Spain and other countries.
The shareholders ratified the change in Gamesa’s registered offices to Zamudio (Vizcaya) and the reduction of director terms from six to four years with a view to reinforcing the company’s corporate governance policies.