Release Date: March 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Andritz AG (ADRZY, Financial) reported a record order intake in December 2024, driven by strong performance in the Pulp & Paper and Hydropower sectors.
- The company achieved a stable EBITA margin with a record net income margin of 6% for the year.
- Service business revenue reached an all-time high, contributing 41% to total revenue, indicating strong growth in this segment.
- Andritz AG (ADRZY) made strategic acquisitions to strengthen its digitalization and decarbonization efforts, including acquiring Procemex and investing in HydrogenPro.
- The company proposed an increase in dividend per share by EUR0.10 to EUR2.6, reflecting confidence in its financial stability and future prospects.
Negative Points
- There was a slight decrease in overall revenue year-on-year, attributed to subdued market conditions and delayed order intake conversion.
- The company reported additional provisions for capacity adjustments, particularly in the Metals and Paper segments, impacting reported EBITA.
- Andritz AG (ADRZY) experienced a negative financial result due to a devaluation issue related to the deconsolidation of its cybersecurity joint venture, Otorio.
- The company acknowledged challenges in reaching its ESG target of 50% green revenues by 2025, currently at 44%.
- The guidance for 2025 indicates flat to slightly declining revenue, reflecting cautious market conditions and economic uncertainties.
Q & A Highlights
Q: Can you explain the change in guidance parameters from reported EBITA to adjusted EBITA and any expected restructuring in the coming years?
A: Joachim Schoenbeck, CEO: The capacity adjustments have been initiated and announced, with execution ongoing. We expect the majority of these adjustments to be completed in 2025, with full P&L effects visible from 2026 onwards. Currently, no additional restructuring is planned.
Q: Why is the 2027 margin target set at more than 9% when calculations suggest it could be closer to 10%?
A: Joachim Schoenbeck, CEO: While we would be pleased to achieve 10%, we are setting a conservative target of greater than 9% due to uncertainties in the global market. We aim to deliver on this target and would be happy to exceed it.
Q: Does Andritz have any exposure to the Defense sector, and could it benefit from increased defense spending in Europe?
A: Joachim Schoenbeck, CEO: Andritz is not a Defense contractor, but some of our customers supply the Defense sector. Our metal forming and forging businesses could see positive effects from increased demand in this area.
Q: What is the current sentiment in the Pulp & Paper industry, and could rising interest rates impact future orders?
A: Joachim Schoenbeck, CEO: We believe pulp will remain a strong product for substituting plastics. While rising interest rates could impact investments, the demand for pulp fibers in various applications remains positive. We do not foresee a significant oversupply in the long term.
Q: Does the 2025 revenue guidance of EUR8 billion to EUR8.3 billion include any M&A activity?
A: Joachim Schoenbeck, CEO: The guidance includes the acquisition of LDX Solutions made in January. Any additional M&A activity would be on top of this guidance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
