Release Date: April 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nordex SE (NRDXF, Financial) reported a strong start to 2025 with improved margins and positive free cash flow in the first quarter.
- The total order book grew by 21%, with a turbine order intake of 2.2 gigawatts, marking a 12% year-on-year increase in euro value.
- Profitability levels increased across all segments, with total EBITDA rising by 53% to EUR 80 million, translating into a 5.5% EBITDA margin.
- The service order book increased by 37% year-on-year, reaching EUR 5.2 billion, reflecting the expansion of the turbine business.
- Nordex SE (NRDXF) remains confident in achieving positive free cash flow for the full year 2025 and is on track to meet its medium-term EBITDA margin target of 8%.
Negative Points
- Sales in the first quarter of 2025 were slightly above EUR 1.4 billion, down from EUR 1.6 billion in the previous year, due to lower installation levels and timing effects.
- Installations reached slightly over one gigawatt in the first quarter, down around 5% year-on-year, mainly due to customer delays.
- The gross margin, although improved, is influenced by a relatively weak top line, and future quarters may not see the same level of gross margin.
- There are concerns about potential local inflation impacts on the supply chain due to tariffs, which could affect local execution costs.
- The company faces challenges in the US market due to tariffs and geopolitical uncertainties, impacting order intake and timing.
Q & A Highlights
Q: Can you explain the assumptions behind the strong service order and revenue growth, and whether inflation has played a significant role?
A: José Luis Blanco, CEO: The growth in service revenue is driven by three main factors: renewal rates on existing contracts, inflation on the backlog, and order intake in the turbine business. We prefer to guide conservatively, considering inflation is difficult to predict. However, with the current pace of order intake, we are confident in achieving double-digit growth in the service business.
Q: How are you managing your sourcing strategy, especially with increasing turbine assembly in China and India?
A: José Luis Blanco, CEO: Our strategy focuses on diversification and optionality rather than optimizing for the best short-term configuration. This approach allows us flexibility to adapt to geopolitical circumstances. We maintain a presence in Europe, the US, China, and India, balancing proximity to demand with cost optimization.
Q: Given the strong start to the year, is the 8% EBITDA margin target still appropriate for the medium term?
A: José Luis Blanco, CEO: We are committed to achieving the 8% EBITDA margin target in the medium term. The current quarter's low activity level means we expect margins to improve as activity ramps up. The timing of project execution and order intake will influence when we reach this target.
Q: What are your plans for capital allocation given the strong cash flow position?
A: Iiya Hartmann, CFO: Our priority is to support and de-risk operations, including supply chain and project execution. While dividends are not ruled out, we will focus on sustaining the business and investing in growth. We plan to provide more specific guidance on capital allocation in future earnings calls.
Q: How are you addressing customer delays related to permits, and do you expect to recover these revenues in Q2?
A: José Luis Blanco, CEO: The delays are mainly due to permits for installations. We expect to recover some of the delayed revenues within the year and anticipate slightly better installation levels compared to last year. We remain confident in achieving our revenue guidance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
