NORDEX AG ((DE:NDX1)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Nordex AG’s recent earnings call painted a picture of optimism and resilience as the company kicked off 2025 with notable achievements and some challenges. The sentiment expressed during the call was largely positive, highlighting significant growth in order intake, improved profitability, and expansion in the service business. However, the company also acknowledged hurdles such as a decrease in revenue and installation delays. Despite these challenges, Nordex remains confident in meeting its guidance and medium-term objectives.
Strong Start to 2025
Nordex AG began 2025 on a high note, delivering improved margins and a positive free cash flow in the first quarter. The company’s total order book expanded by 21%, with a turbine order intake of 2.2 gigawatts, marking a 5% increase from the previous quarter and a 12% year-on-year rise in euro value. This robust start underscores Nordex’s strategic positioning in the market.
Improved Profitability
The company reported a significant rise in total EBITDA, which climbed by 53% to reach €80 million. This translates into a 5.5% EBITDA margin and a positive net income of €8 million, surpassing the total net income for the entire year of 2024. These figures reflect Nordex’s successful efforts in enhancing its profitability.
Service Business Growth
Nordex’s service business also demonstrated solid growth, with service EBIT increasing by 1.7% and achieving a margin of 16.8%. Service revenue surged by 19% to €197 million in Q1 2025, accompanied by a 37% year-on-year increase in the order book. This expansion highlights the company’s focus on strengthening its service segment.
Order Book Expansion
The total order book for Nordex grew to €13.5 billion, with a 12% increase in the turbine order book to €8.2 billion. The service order book reached €5.2 billion, reflecting consistent growth over the past two years. This expansion is a testament to Nordex’s robust market presence and strategic foresight.
Strategic Market Developments
Nordex reported positive market developments in Europe, particularly in Germany, where 12 to 14 gigawatts are expected to be auctioned in 2025. The company also noted that U.S. tariff discussions are not expected to have a material impact on its financial performance, indicating a stable outlook despite geopolitical uncertainties.
Revenue Decrease
Despite the positive developments, Nordex experienced a slight decrease in sales, recording figures slightly above €1.4 billion compared to €1.6 billion in the previous year. This decline was primarily attributed to low installation levels and timing effects on production.
Installation Delays
Installation levels were slightly over 1 gigawatt, down 5% year-on-year, due to customer delays. Nevertheless, Nordex achieved a positive free cash flow of €4 million, demonstrating resilience in the face of operational challenges.
High Non-Allocated Costs
The company reported non-allocated costs at €104 million, marking the highest Q1 level in recent history, though no specific breakdown was provided. This highlights an area for potential cost management improvement.
Forward-Looking Guidance
Looking ahead, Nordex maintains a positive outlook for 2025, driven by a strong order book and strategic developments in Europe. The company anticipates achieving its medium-term EBITDA margin target of 8% and remains confident in securing positive free cash flow for the full year. Despite initial installation challenges, Nordex’s strategic focus and market positioning are expected to drive continued growth.
In summary, Nordex AG’s earnings call conveyed a strong start to 2025, with significant growth in order intake and profitability. While challenges such as revenue decrease and installation delays were acknowledged, the company remains optimistic about achieving its guidance and medium-term goals. Investors and market watchers can take away a sense of confidence from Nordex’s strategic positioning and resilience in the face of operational hurdles.