The company's May 28 general shareholders meeting approved the strategy created under new CEO Jorge Calvet, who took the helm in November last year. Equity investors reacted coolly to Gamesa's strategy and outlook, with a fall and rise of just over 1% in the two sessions following the announcement.
Gamesa's growth will be pinned chiefly on consolidating existing production capacity in the key overseas growth markets of Asia-mainly China-and USA. The slumping Spanish market dropped from 39% of Gamesa's global sales in 2008 to 27% in 2009, and the company has recently closed its Alsasua blade plant in Spain.
Despite this, Gamesa's global share fell from third in 2008 with 12% to sixth last year with just over 7%, according to Danish consultancy BTM. In 2007, its share was around 15%.
Calvet says the considerable drop is mainly due to Chinese companies dominating a booming home market, which accounted for about one third of global capacity last year.
Gamesa is catching up, however, with a new 500MW turbine facility now underway in China, in addition to 1000MW already operational. In the USA, Gamesa will finish extending its 900MW production capacity to 1200MW by autumn. The company also started up a 200MW factory in India in March, its third overseas base.
On new technology, Calvet says Gamesa will enter the offshore business. This will be achieved "with or without" German offshore turbine technologist Bard, who are current in negotiations with Gamesa over a technology transfer deal. Gamesa will also start turning out its own new 4.5MW machine next year.
Meanwhile, the company is widening its net to catch new business, such as operation and maintenance (O&M). Calvet expects Gamesa's O&M portfolio to grow from 12GW last year to 20GW in 2012. The company is also extending its commercial activity and Calvet expects O&M deals in 33 new geographical markets in the next two years.
Financially, Gamesa is focusing on actively managing working capital by synchronising manufacture and delivery, as well as cutting jobs. That will continue a trend introduced last year, when Gamesa increased to 7.2% its margin of earnings before interest and tax (Ebit), above the company's 6%-7% guidance and up on the 5.8% achieved in 2008. That was despite 2009 sales and profits from core business falling 16% and 35%, respectively.
Gamesa claims firm orders of 1.55GW by end-March, marking 54% of its 2.7-3GW sales expectation over 2010, 4.8-14.3% down on the 3.15GW sold last year. Calvet expects an upturn will come in the second half. Gamesa is cautiously optimistic that 2011 earnings will beat the 2008 record.
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