VESTAS

Best in France // Casestudy 2009Andreas Becker & Jens Riis Andersen

Agenda

I. Introduction to Vestas

II. Global Wind Energy Market (+ French Market)

III. Vestas in France & Process of Adaptation

IV. Vestas’ Advice

V. Key Takeaways

HEC School of Management, Paris

Agenda

I. Introduction to Vestas

II. Global Wind Energy Market (+ French Market)

III. Vestas in France & Process of Adaptation

IV. Vestas’ Advice

V. Key Takeaways

HEC School of Management, Paris

Introduction to Vestas

HEC School of Management, Paris

World’s largest maker of turbines

23% market share

38,000 wind turbines in 62 countries on five continents

One wind turbine every three hours

Generation of more than 60 million MWh of energy per year

Introduction to Vestas

HEC School of Management, Paris

Total employees of 21,259

Revenues of EUR 6.0bn

Return on invested capital of 34.1 per cent

Market capitalization of EUR 11.3bn

60 per cent international investors

Internationalization of Vestas

HEC School of Management, Paris

1979: First wind turbine in Denmark and start of booming wind energy.

1980 - 1999: Restructuring and large sell-off of business units followed by an expansion across Europe, USA and parts of Asia (India).

2000 : Development of new markets including France and China.

2002:Opening of a first branch in Montpellier (2002) and 8 maintenance centers across France.

2009: Office opens in La Defense, Paris in order to service growing French market.

Agenda

I. Introduction to Vestas

II. Global Wind Energy Market (+ French Market)

III. Vestas in France & Process of Adaptation

IV. Vestas’ Advice

V. Key Takeaways

HEC School of Management, Paris

Global Wind Energy Market

HEC School of Management, Paris

Global Wind Energy Market

HEC School of Management, Paris

Global Wind Energy Market

HEC School of Management, Paris

French Wind Market

HEC School of Management, Paris

Biggest players: Nordex, Vestas, Enercon & Repower

C4 concentration is 80%

Nordex is the biggest player and has been in France the longest

First areas to be used was around Marseille. Political focus on developing in around Paris and the Loire river

CAGR: 20%

Agenda

I. Introduction to Vestas

II. Global Wind Energy Market (+ French Market)

III. Vestas in France & Process of Adaptation

IV. Vestas’ Advice

V. Key Takeaways

HEC School of Management, Paris

Vestas in France

HEC School of Management, Paris

175 employees

Based in Paris & Montpellier (incl. 8 regional centers)

408 turbines with an installed capacity of 735 MW

25% market share

Production of foundation & towers outsourced. Blades and turbines imported from Italy, Spain, Germany and Denmark

Worries Coming to France

HEC School of Management, Paris

Governments inability to commitment

Ability to expand at the pace required

Ability to unite different values (DK Vs. FR)

HEC School of Management, Paris

Informal, English

Formal, French

Line, equalityHierachy, elite

Individualistic, pragmaticAuthoritative, theoretical

Cross Cultural Risk Framework

Danish cultureFrench culture

Uniting Cultures

HEC School of Management, Paris

Regulatory is King

HEC School of Management, Paris

Regulatory stability 30 different authorizations Difficult to understand all layers Political commitment >> Easy procedures (HARD)

Lobbying activities

Ability to unite different values (DK Vs. FR)

Adapting the Cost Structure

HEC School of Management, Paris

Paris prices, French prices

Salaries (Lower in France)

Performance Appraisal

Biggest problem is communicating the differences to Denmark (Paris is NOT France)

Human Resources Challenges

HEC School of Management, Paris

Attracting young and talented people

Academic relationships

Role of the leader

French culture

Importance of French Presence

HEC School of Management, Paris

People Business (Selling process) “We do not sell our products on a website”

Regulatory Environment

Gain Local Expertise

Market Growth In 2020, 23% of energy must come from renewables

Agenda

I. Introduction to Vestas

II. Global Wind Energy Market (+ French Market)

III. Vestas in France & Process of Adaptation

IV. Vestas’ Advice

V. Key Takeaways

HEC School of Management, Paris

Advice from Vestas

HEC School of Management, Paris

Before coming to France Particularities of the country

i.e. use consultants, lawyers etc.

Adaptation process Biggest mistake is to impose local structure

Study failures and the incapacity to understand local

constraints

Agenda

I. Introduction to Vestas

II. Global Wind Energy Market (+ French Market)

III. Vestas in France & Process of Adaptation

IV. Vestas’ Advice

V. Key Takeaways

HEC School of Management, Paris

Key Takeaways

HEC School of Management, Paris

World’s largest maker of turbines

175 employees in France (Paris, 2009)

Growth potential of French market by feed-in tariff system

Getting the best from both worlds (DK+FR)

People Business “Relationships are KEY”

We Thank

HEC School of Management, Paris

Mr. Nicolas Wolff CEO, Vestas France

Mrs. Marylen Schmidt Communication Director, Vestas France

Bibliography

HEC School of Management, Paris

References www.vestas.com Vestas shareholder information, 2009 “Wind-power giant keeps to its course”, WSJ 6th

May 2009 World Wind Energy Report 2008, WWEA Economist WSJ

Q & A