Andritz ((AT:ANDR)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Andritz presented a mixed sentiment, highlighting both achievements and challenges. While the company celebrated significant growth in order intake and sustainability milestones, it also faced hurdles with declining revenue and struggles in specific segments, notably Metals and Pulp & Paper services.
Strong Order Intake Growth
Andritz reported a robust increase in order intake, which rose by 20% year-to-date and 15% in the third quarter alone, reaching EUR 6.9 billion. This growth indicates strong demand across several business areas, showcasing the company’s ability to capture market opportunities effectively.
Order Backlog at Near Record High
The company’s order backlog increased by 15% from the previous year, reaching EUR 10.8 billion. This near-record high backlog provides a solid foundation for future revenue, ensuring a stable outlook despite current challenges.
Sustainability Milestones Achieved
Andritz achieved significant sustainability milestones, with EcoVadis upgrading its rating from Bronze to Gold, placing the company in the top 5 percentile. Additionally, the Science Based Targets initiative (SBTi) approved its greenhouse gas emission targets, aligning with global environmental goals.
Service Business Growth
The service business segment showed a positive trajectory, contributing 44% of total revenue in the last four months. This growth highlights the increasing importance of services in Andritz’s overall business strategy.
Hydropower Segment Performance
The Hydropower segment experienced strong growth, with order intake up by 50% in the first three quarters. The segment maintained a comparable EBITA margin of 7%, reflecting its solid performance.
Revenue Decline
Despite the positive developments, Andritz faced an 8% decline in revenue year-over-year and in the third quarter, primarily due to foreign exchange impacts and early project stages.
Metals Segment Challenges
The Metals segment encountered significant challenges, with order intake dropping by more than 50% in the third quarter. Economic uncertainties and tariffs contributed to this decline, posing a notable challenge for the company.
Strong Euro Impact
The strong euro against major trading currencies resulted in a negative foreign exchange translation impact of EUR 173 million year-to-date, affecting the company’s financial performance.
Pulp & Paper Service Revenue Decline
Service revenues in the Pulp & Paper sector declined by mid-single digits in the first nine months, attributed to low Paper & Board consumption, reflecting sector-specific challenges.
Forward-Looking Guidance
Looking ahead, Andritz confirmed its guidance for 2025, expecting revenues at the low end of EUR 8 billion. The company anticipates continued strong order intake across all business areas, contributing to a book-to-bill ratio above 1 for the fourth consecutive quarter. Despite challenges, the stable comparable EBITA margin and strong order backlog suggest a positive outlook.
In summary, the Andritz earnings call highlighted a balanced narrative of growth and challenges. While the company achieved significant order intake growth and sustainability milestones, it also faced revenue declines and segment-specific struggles. The forward-looking guidance remains optimistic, with expectations of strong future performance supported by a robust order backlog.