Nordex Group reintroduces guidance for 2020 with sales of around EUR 4.4 billion

Nordex SE presented new guidance for the current 2020 financial year as well as preliminary figures for the first three quarters of 2020. The third quarter was still significantly impacted by the coronavirus pandemic. However, the Group is expecting a positive development starting 2021 and is aiming by way of a strategic target for sales of around EUR 5 billion and 8 percent EBITDA margin in 2022.

The Nordex Group generated consolidated sales of EUR 3.2 billion in the first nine months of 2020 (9M 2019: EUR 1.9 billion). This sales growth is mainly attributable to the significant increase in installation and production in the “Projects” segment. Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to EUR 70.8 million (9M 2019: EUR 60.2 million), corresponding to an EBITDA margin of 2.2 percent (9M 2019: 3.1 percent). The working capital ratio as a percentage of consolidated sales stood at minus 5.7 percent (9M 2019: minus 5.2 percent) at the end of the quarter.

The effects of the ongoing COVID-19 pandemic have adversely affected the Group’s operations in a variety of ways as production and projects have been impacted by supply chain disruptions and prevailing restrictions on the movement of goods and people. Interruptions to the blade production ramp-up in Spain and Mexico, for example, resulted in a significant delay to deliveries exposing the company to potential liability for compensation. On top came market and country risks of emerging markets materializing which were aggravated by enduring Covid-19 impacts, namely in Argentina and South Africa. The Group also recorded a negative impact on earnings in the third quarter of 2020 from a major EPC project in Scandinavia.

By contrast, the sale of the European project development pipeline to RWE for a total gross value of around EUR 400 million had a positive impact on earnings. The Nordex Group continues to have a strong order book totaling EUR 7.9 billion (9M 2019: EUR 8.1 billion) for the “Projects” and “Service” segments.

On 5 May, 2020, the Nordex Group withdrew its guidance for the current financial year 2020 against the background of the pandemic. Based on the preliminary results for the first nine months of the year, the company concluded today to give a new guidance. Despite the ongoing pandemic, the Nordex Group anticipates consolidated sales of around EUR 4.4 billion (FY2019: EUR 3.3 billion) and an operating margin (EBITDA margin) of 2 percent for the current year 2020 (FY2019: 3.8 percent). Capital expenditures – particularly for production expansion and equipment for logistics and installations – will total approximately EUR 170 million (FY2019: EUR 172.5 million). The working capital ratio as a percentage of consolidated sales will be below minus 4 percent at the end of the year (FY2019: minus 9.1 percent). It should be understood that the consequences of the evolving pandemic will continue to affect business performance in unpredictable ways and that the underlying assumptions of this guidance are therefore subject to greater uncertainty than under normal circumstances.

The Nordex Group expects its future business performance to be positive. The highly competitive Delta4000 series is making an important contribution to this, with consistently high demand and good market positioning. As a result, this turbine series is making up an ever-larger proportion of the Group’s order book with increasing margins. The company also received the majority of its orders for projects in 2021 from Europe and the USA with lower risk profiles than projects executed in 2020.

The company will further develop its supply chain and is expanding production capacity, expecting to benefit from substantial economies of scale. With the extension of its EUR 1.2 billion guarantee credit facility, securing the state-backed revolving credit facility of EUR 350 million and binding agreements made in 2020 to refinance the promissory notes due in April 2021 the Group has a strong financial structure for the medium term in place.

A comprehensive company program has been kicked-off, bringing together key initiatives to further enhance operational excellence and to secure the Group’s strategic targets. The competitive product portfolio and positive impulses expected from the “green recovery” discourse for the broader economy lead management to view the medium-term growth perspective positively. In light of this, the Management Board of Nordex SE aims to generate sales of around EUR 5 billion and an EBITDA margin of 8 percent in 2022.

“With the successful sale of the European project development pipeline to RWE, we have strengthened our core business, whilst at the same time, successfully countering the effects of the COVID-19 crisis,” says José Luis Blanco, CEO of the Nordex Group. “Building on our market position as one of the top 2 sellers in the 4 and 5 MW segment, we thus continue to systematically pursue our goal of becoming a top 3 company within the industry.”

CEO José Luis Blanco will explain today’s press release in a conference call for analysts and investors tomorrow Tuesday, 10 November 2020, at 9:00 a.m. CET. The dial-in details will be sent to analysts and investors shortly and can be requested from Investor Relations.

The final figures and the complete report for the third quarter of 2020 will be published on 13 November, 2020.