Vestas Wind Systems — Interim / Quarterly Report 2011

Feb 8, 2012

Company announcement from Vestas Wind Systems A/S

Aarhus. 8 February 2012 Company announcement No. 8/2012 Page 1 of 6

Annual report 2011 - 2011 was a tough year with two profit warnings

Summary: 2011 was a very challenging year for the wind industry. The same applies to Vestas which had to issue two profit warnings and abandon its Triple15 targets. In 2011, Vestas recorded revenue of EUR 5.8bn and an EBIT margin before special items of (0.7) per cent, slightly below the preliminary financial figures for 2011 announced on 3 January 2012 due to later-than-expected deliveries.

The results and revenue for the year are, however, substantially lower than the original expectations of an EBIT margin of 7 per cent and revenue of EUR 7bn, which is disappointing. It should be emphasised that the projects in questions have not been cancelled but postponed and that they are expected to be handed over and recognised as income in 2012, however, at a lower contribution margin due to higher costs than originally anticipated.

On the other hand, the intake of firm and unconditional orders of 7,397 MW with a value of EUR 7.3bn, was in line with expectations. In terms of MW, Europe and Africa accounted for 50 per cent, the Americas accounted for 34 per cent, and Asia Pacific accounted for 16 per cent of the order intake. The backlog of orders at the end of 2011 was 9,552 MW corresponding to EUR 9.6bn, which is the highest level ever recorded.

In 2011, Vestas produced and shipped 2,571 wind turbines with an aggregate capacity of 5,054 MW against 2,025 turbines and 4,057 MW in 2010. Vestas generated revenue of EUR 5.8bn in 2011; EUR 1.2bn lower than the original forecast and 16 per cent lower compared to 2010. Commissioning problems at the new generator factory in Travemünde, Germany, and poor weather towards the end of the year: for instance in Germany, where wind speed in December was 30 to 45 per cent higher than the average for the past ten years, caused a postponement of delivery and, by extension, recognition of a number of projects.

Revenue in the service business rose by 13 per cent to EUR 705m. The service business EBIT margin stood at 16 per cent.

The gross profit amounted to EUR 725m, corresponding to a gross margin of 12.4 per cent. In 2010, the gross profit and gross margin amounted to EUR 1,175m and 17.0 per cent. The lower result was due to lower-than-expected deliveries and unforeseen high costs, primarily in connection with industrialisation of the V112-3.0 MW turbine and the GridStreamer^™ technology for the 2 MW platform.

The operating loss, EBIT, before special items, relating, among other things, to the tower factory in Varde, Denmark, was EUR (38)m, corresponding to an EBIT margin of (0.7) per cent, as compared to the original forecast of an EBIT margin of 7 per cent.

Net working capital amounted to EUR (71)m, an improvement of EUR 743m. The improvement was attributable especially to the reduction of component inventories following a successful make-to-order implementation, higher pre-payments and trade payables.

Aarhus, Compan Page 2 o 8 February 2 ny announcem of 6 2012 ment No. 8/2 2012

The free improvem e cash flow r ment. Vestas rose by EUR s thus met th R 812m to E he forecast to EUR 79m, pr o generate a rimarily as a positive free result of the e cash flow. e net workin ng capital

The Gro per cent recent ye oup achieved t in 2010. Ot ears' large-s d a return on her than the cale investm n invested ca e disappointin ments in new apital before ng full-year f facilities and e special item financial perf d technology ms of (1.3) p formance, th , not fully uti per cent, aga he decline wa lised in 2011 ainst 10.8 as due to 1.

Non-fina ancial issue es

Persona custome employe decline, much be al safety is al ers request ees, Vestas the incidenc elow the 5.0 t lways given it. Through has manage ce of industri target and a top priority a increased fo ed to reduce ial injuries w great improv at Vestas be ocus, intens e the numbe was 3.2 per o vement on 2 ecause its em sive training r of acciden one million w 007, when th mployees are and the de ts year after working hours he incidence e entitled to edicated effo r year. Cont s in 2011, w rate was 20 it and its orts of its inuing its which was 0.8.

Vestas' renewab developm volumes share of ren ble electricity ment is due s in China an newable ene y dropped to e to the fact d in parts of ergy dropped o 68 per cen t that it was the USA and d to 38 per nt in 2011 fr s not possib d India in 20 cent in 2011 rom 74 per ble to buy r 11. 1 from 42 pe cent in 2010 renewable e er cent in 2 0. The unsa electricity in 010, and atisfactory sufficient

Outlook k

Based o decided decided account productio on, among ot to reduce th to introduce the heavy on, shipment ther things, in e number of e guidance ra fluctuations ts and final d nput from a f outlook para anges for ear characteris delivery to th number of th ameters it pr rnings (EBIT sing these it e customers he company' rovides to the T), revenue a tems depen s. s large shar e public. Furt and the free c ding on tim reholders, Ve thermore, Ve cash flow to ming of orde estas has estas has take into er intake,

For 2012 6,500-8, margin o productio reduced charges than 3 pe 2, Vestas ex 000m, includ of around 1 on costs for in the cour of approx E er cent of the xpects to ach ding service 4 per cent. r the V112-3 rse of the y UR 100m. T e expected r hieve an EB revenue, wh The EBIT 3.0 MW turb year and by Total warranty evenue for th BIT margin o hich is expec margin will bine and the an expecte ty and produ he year. of between 0 cted to rise to be adversel e GridStream ed increase ct provisions -4 per cent o approx EUR y affected p mer™ techn in depreciat s are expecte and revenue R 850m with primarily by nology, whic tion and am ed to accoun e of EUR h an EBIT too high h will be ortisation nt for less

Shipmen in the m emphasi installatio whether and cha connecti 2012. nts which are middle of the ised that Ves on" projects Vestas has allenges in ions and sim e expected to e year, whil stas' accoun s as income already pro relation to milar matters o increase to le deliveries nting policies when the r oduced, ship wind turbin may thus ca o approx 7 G s may fluctu s only allow i risk has fina pped and ins ne installatio ause delays GW with the p ate heavily it to recognis ally passed stalled the tu on, for exam that could a present produ over the qu se "supply-on to the custo urbines. Disru mple bad w affect Vestas uction plans uarters. It s nly" and "su omer, irresp ruptions in p weather, lack s' financial re will peak hould be pply-andpective of roduction k of grid esults for

Total inv expected developm now exp expendit vestments a d to amount ment of the pected to am ture are caus are expected t to EUR 35 V164-7.0 M mount to EUR sed by a mor d to be EUR 50m, which MW offshore R 450m in 20 re focused R R 550m, of among othe turbine. Tot 012. The low R&D organisa which inves er things, inc tal research wer investme ation. stments in i cludes highe and develop nts in intang ntangible as er investmen pment expen gible assets ssets are nts in the nditure is and R&D

Special January reduce f items in 20 2012, are e fixed costs by 12 relative t expected to y more than to lay-off of amount to a EUR 150m w around 2,33 approx EUR with full effec 35 employee 50m with fu ct as from the es, which wa ull cash effec e end of 201 as announce ct. Vestas ex 2. ed on 12 xpects to

Aarhus, 8 February 2012 Company announcement No. 8/2012 Page 3 of 6

The free cash flow is expected to positive in 2012.

Vestas is aiming is to reduce the incidence of industrial injuries to no more than 3.0 industrial injuries per one million working hours.

In the medium term, Vestas expects to achieve a high single-digit EBIT margin, subject to a normalised US market.

2011 and outlook for 2012 in brief

mEUR	Outlook for 2012	Full year 2011	Full year 2010	Q4 2011	Q4 2010
Order intake, firm and unconditional orders (MW)		7,397	8,673	3,186	2,106
Revenue	6,500-8,000	5,836	6,920	2,038	3,123
- of which service revenue	approx 850	705	623	203	169
EBIT margin (%)	$0 - 4^{\ast}$	$(0.7)^{1}$	$6.8^{(*)}$	$2.3^{\prime}$	$13.3^{^{*}}$
EBIT margin, service (%)	approx 14	16	14	$\overline{\phantom{a}}$
Net working capital (%)		(1.2)	9.7	(1.2)	9.7
Investments - property, plant and equipment - intangible assets	200 350	406 344	458 328	138 105	150 106
Free cash flow	> 0	79	(733)	297	145
Warranty provisions (%)	< 3.0	2.5	2.8	2.8	1.9
Incidence of industrial injuries	$\leq 3.0$	3.2	5.0	3.0	5.5

before special items.

Change in the management of Vestas

Executive Management

The Board of Directors of Vestas Wind Systems A/S has received a thorough briefing on the conditions which during the last months have led to profit warnings. As a consequence of this, CFO and Deputy CEO, Henrik Nørremark resigns.

Board of Directors

At Vestas Wind Systems A/S' board meeting discussing the annual report for 2011, the chairmanship, Bent Erik Carlsen and Torsten Erik Rasmussen, informed the Board that they will not stand for reelection for the Board of Directors at the Annual General Meeting on 29 March 2012.

Furthermore, board member, Freddy Frandsen, informed the Board that he will not stand for reelection.

The remaining board members elected by the annual general meeting have all informed the Board that will stand for re-election.

Aarhus, Compan Page 4 o 8 February 2 ny announcem of 6 2012 ment No. 8/2 2012

Press an Wednes nd analyst m sday, 8 Febr meeting in A ruary 2012 a Aarhus, Den at 2 p.m. (CE nmark ET).

In conne Wednes ection with t sday at 2 p.m the disclosur m. (CET) for re of this an analysts, inv nnual report, vestors and t an informa the media at tion meeting : g will be hel ld today,

Vestas W Hedeage 8200 Aa Denmark Wind System er 44 arhus N ms A/S

Further d kdetails at ww ww.vestas.co m/investor.

Any que Specialis estions may st, Investor R be addresse Relations, tel ed to Ditlev ephone +45 Engel, Pres 9730 4593. sident and C CEO or to La ars Villadse n, Senior

Y Vestas Yours sincere Wind Syste ely ems A/S

Ben Chairman of nt Erik Carlse f the Board o en of Directors Pr Ditlev Enge resident and el d CEO

Disclaim mer and cau utionary stat tement

This docum All stateme looking sta assumptio differ mate ment contains fo ents other than atements are sta ns and involve erially from those orward-looking s statements of h atements of futu known and unk e expressed or statements con historical fact are ure expectations nown risks and implied in these cerning Vestas' e, or may be de s that are based uncertainties th e statements. ' financial condi eemed to be, for d on manageme hat could cause tion, results of o rward-looking st ent's current exp actual results, p operations and tatements. Forw pectations and performance, o business. wardr events to

Forward-lo statements factors tha forward-loo (b) currenc risks, inclu accounting the risks of the approv risks; (l) su revenue-re ooking statemen s expressing ma at affect Vestas' oking statement cy and interest r uding adverse w g policies; (f) ec f expropriation a val of projects; ( upply of compon ecognition facto nts include, amo anagement's ex future operation ts included in th rate fluctuations weather conditio onomic and fina and renegotiatio h) ability to enfo nents; and (m) c rs. ong other things xpectations, beli ns and could ca his document, in s; (c) loss of ma ns; (e) legislativ ancial market co on of the terms orce patents; (i) customer-create s, statements co iefs, estimates, ause Vestas' res ncluding (withou rket share and ve, fiscal, and re onditions in vari of contracts wit product develo ed delays affect oncerning Vesta forecasts, proje sults to differ ma ut limitation): (a) industry compe egulatory develo ous countries a h governmental opment risks; (j) ting product inst as' potential exp ections and assu aterially from tho changes in dem tition; (d) enviro opments, includ nd regions; (g) l entities, and de cost of commod tallation, grid co posure to marke umptions. A num ose expressed mand for Vestas onmental and ph ing changes in political risks, in elays or advanc odities; (k) custo onnections and o et risks and mber of in the s' products; hysical tax or ncluding cements in mer credit other

All forward referenced affect futur www.vesta date of this result of ne materially f d-looking statem d to in this state re results are co as.com/investor s document. Ve ew information o from those state ments contained ment. Undue re ontained in Vest r) and these fact estas does not u or future events ed, implied or in in this docume eliance should n tas' annual repo tors also should undertake any o s others than as nferred from the nt are expressly not be placed on ort for the year e d be considered bligation to pub required by Da e forward-looking y qualified by th n forward-lookin ended 31 Decem . Each forwardblicly update or r anish law. In ligh g statements co e cautionary sta g statements. A mber 2011 (ava looking stateme revise any forwa ht of these risks ontained in this d atements conta Additional factor ailable at ent speaks only ard-looking state , results could d document. ined or rs that may y as of the ement as a differ

Vestas Win nd Systems A/S Hedea Tel: + Bank: Comp Comp ager 44, 8200 Aar 45 9730 0000, Fa Nordea Bank Da pany Reg. No.: 10 pany Reg. Name: V rhus N, Denmark ax: +45 9730 0001 anmark A/S, Reg. 40 37 82 Vestas Wind Syst 1, E-mail: vestas@ No.: 2100, Accou tems A/S @vestas.com, Web nt No.: DKK 0651 b: www.vestas.co 117097 - EUR 50 m 005 677997

Highlights for the Group

mEUR	2011	2010	20091)	20081)	20071)
Highlights
Income statement
Revenue	5,836	6,920	5,079	5,904	3,828
Gross profit	725	1,175	836	1,125	584
Profit before financial income and expenses, depreciation and amortisation (EBITDA) before special items	305	747	469	749	338
Operating profit/(loss) (EBIT) before special items	(38)	468	251	614	202
Profit before financial income and expenses, depreciation and
amortisation (EBITDA)	305	684	469	749	338
Operating profit/(loss) (EBIT)	(60)	310	251	614	202
Profit/(loss) of financial items	(93)	(72)	(48)	46	0
Profit/(loss) before tax	(153)	238	204	660	202
Profit/(loss) for the year	(166)	156	125	470	104
Balance shee t
Balance sheet total	7,689	7,066	7,959	6,327	5,298
Equity	2,576	2,754	2,542	1,587	1,188
Provisions	329	370	534	393	399
Average interest-bearing position (net)	(990)	(593)	(55)	395	179
Net working capital	(71)	672	317	(73)	(411)
Investments in property, plant and equipment	406	458	606	509	265
Cash flow statement
Cash flow from operating activities	840	56	(34)	277	701
Cash flow from investing activities	(761)	(789)	(808)	(680)	(317)
Free cash flow	79	(733)	(842)	(403)	384
Cash flow from financing activities	(13)	568	1,075	(91)	(54)
Change in cash at bank and in hand less current
portion of bank debt	66	(165)	233	(494)	330
Ratios2)
Financial ratios
Gross margin (%)	12.4	17.0	16.5	19.1	15.3
EBITDA margin (%) before special items	5.2	10.8	9.2	12.7	8.8
EBIT margin (%) before special items	(0.7)	6.8	4.9	10.4	5.3
EBITDA margin (%)	5.2	9.9	9.2	12.7	8.8
EBIT margin (%)	(1.0)	4.5	4.9	10.4	5.3
Return on invested capital (ROIC) (%) before special items	(1.3)	10.8	9.5	43.4	21.3
Solvency ratio (%)	33.5	39.0	31.9	25.1	22.4
Net interest-bearing debt/EBITDA before special items	1.8	0.8	(0.3)	(0.1)	(1.8)
Return on equity (%)	(6.2)	5.9	6.1	33.9	9.0
Gearing (%)	35.7	33.2	13.8	7.8	12.6
Share ratios
Earnings per share (EUR)	(0.8)	0.8	0.6	2.5	0.6
Book value per share (EUR)	12.6	13.5	12.5	8.6	6.4
Price / book value (EUR)	0.7	1.7	3.4	4.7	11.5
P / E-value (EUR)	(10.3)	30.8	71.0	16.3	123.3
Cash flow from operating activities per share (EUR)	4.1	0.3	(0.2)	1.5	3.8
Dividend per share (EUR)	0.0	0.0	0.0	0.0	0.0
Payout ratio (%)	0.0	0.0	0.0	0.0	0.0
Share price 31 December (EUR)	8.3	23.6	42.6	40.7	74.0
Average number of shares	203,704,103	203,704,103	197,723,281	185,204,103	185,204,103
Number of shares at the end of the year	203,704,103	203,704,103	203,704,103	185,204,103	185,204,103

1) The comparative figures have been adjusted in accordance with the new accounting policies.

2) The ratios have been calculated in accordance with the guidelines from "Den Danske Finansanalytikerforening" (The Danish Society of Financial Analysts)

(Recommendations and Financial ratios 2010), ref. note 1 to the consolidated accounts.

	2011	2010	2009	2008	2007
Non-financial Key figure s1)
Occupational he alth & safety
Industrial injuries (number)	132	201	306	534	534
– of which fatal industrial injuries (number)	1	0	0	0	0
Products
MW produced and shipped	5,054	4,057	6,131	6,160	4,974
Number of turbines produced and shipped	2,571	2,025	3,320	3,250	2,752
Utilisation of re sour ces
Consumption of metals (tonnes)	211,754	171,024	202,624	187,478	170,505
Consumption of other raw materials, etc. (tonnes)	105,031	107,485	126,600	129,207	111,541
Consumption of energy (MWh)	585,560	578,063	537,165	458,296	372,037
– of which renewable energy (MWh)	222,694	241,930	263,611	172,800	139,983
– of which renewable electricity (MWh)	207,534	209,351	238,462	167,311	138,035
Consumption of fresh water (m3)	562,308	598,258	521,005	474,958	554,516
Waste disposal
Volume of waste (tonnes)	89,051	88,663	97,471	96,632	89,643
- of which collected for recycling (tonnes)	48,178	35,410	34,303	30,254	28,422
Emissions
Direct emission of CO2 (tonnes)	58,444	56,547	50,532	41,832	32,798
Local community
Environmental accidents (number)	0	0	10	16	15
Breaches of internal inspection conditions (number)	3	3	3	5	5
Employee s
Average number of employees	22,926	22,216	20,832	17,924	13,820
Number of employees at the end of the year	22,721	23,252	20,730	20,829	15,305
Non-financial Indicators1)
Occupational he alth & safety
Incidence of industrial injuries per one million working hours	3.2	5.0	8.1	15.6	20.8
Absence due to illness among hourly-paid employees (%)	2.3	2.6	2.8	3.3	3.6
Absence due to illness among salaried employees (%)	1.3	1.3	1.3	1.1	1.4
Products
CO2 savings over the life time on the MW produced and shipped (million tonnes of CO2)	133	108	163	164	143
Utilisation of re sour ces
Renewable energy (%)	38	42	49	38	37
Renewable electricity for own activities (%)	68	74	85	68	66
Employee s
Women at management level (%)	18	19	19	17	N/C2 )
Non-Danes at management level (%)	53	49	46	42	N/C
Management system
OHSAS 18001 – occupational health & safety (%)	973 )	98	97	98	84
ISO 14001 – environment (%)	963 )	98	97	100	80
ISO 9001 – quality (%)	94	98	98	98	98

1) Accounting policies for non-financial highlights for the Group, see page 32 in the annual report 2011.

2) Not calculated (N/C) for the year.

3) The technology centres in Singapore and the USA as well as the sales and service organisations in Canada and Vestas Offshore, UK, have not yet been certified against OHSAS 18001 and ISO 14001. The production facilities in Xuzhou, China, have not yet been certified against ISO 14001. Vestas' aim is for all new units to be certified within six months after commencing operations.