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Nordex Nine-Month Figures 2021: Business Booming - Sales Climbing - Rising Costs Impacting Profits

Hamburg, Germany - Nordex has published its preliminary figures for the first three quarters of 2021. The effects of increasing price rises, in particular the current instability in the logistics markets as well as further after-effects of the Corona virus pandemic, have been much stronger than expected in the second half of the year.

After Vestas adjusted its forecast for the full year last week, this step is also being taken by Nordex with the publication of its preliminary financial figures in the first nine months of 2021. The stock nevertheless gained yesterday.

Sales climb 25 percent - material and logistics costs weigh on profitability

Despite the unexpected increase in headwinds, the Nordex Group generated sales of EUR 4.0 billion in the first nine months of 2021. Compared with the same period last year, this represents growth of around 25 percent (9 M 2020: EUR 3.2 billion). According to Nordex, this sales growth is attributable to a strong performance in installations and production in the segment “projects”. Nordex was also able to significantly increase earnings before interest, taxes, depreciation and amortization (EBITDA) by 42 percent to EUR 100.7 million in the nine-month period (9 M 2020: EUR 70.8 million). This corresponds to an EBITDA margin of 2.5 percent (9 M 2020: 2.2 percent).

However, the economic challenges became increasingly acute, particularly in the third quarter. " Sales have developed better than expected and initiatives to enhance operational excellence and further expand capacity have been very successful - but this has not been enough to fully offset the increasing costs of materials and logistics, particularly the surge in shipping costs during the third quarter," said José Luis Blanco, CEO of Nordex Group, classifying the nine-month figures.

Nordex revises guidance for fiscal year 2021 - medium-term outlook remains positive

According to Nordex's assessment, the increased costs will probably continue to weigh on earnings in the fourth quarter of 2021 as well as in 2022. To reflect the developments in the third quarter and the outlook for the fourth quarter, the RENIXX Group has therefore adjusted its guidance for fiscal year 2021. In view of the high demand and strong project execution, Nordex Group now expects consolidated sales of EUR 5.0 - 5.2 billion in 2021 (previously: EUR 4.7 - 5.2 billion). Taking into account unexpected cost increases due to the unprecedented volatility in the commodity and logistics markets, Nordex now only expects an EBITDA margin of around 1.0 percent (previously: 4.0 - 5.5 percent).

Overall, however, Nordex remains optimistic about future business performance, which it expects to be driven by the global momentum for renewable energies, the very low electricity production costs for onshore wind power and strong demand for the highly competitive Delta4000 series. Inflationary pressures are currently very severe, but the company expects to benefit from the underlying assumptions shaping the industry in the medium term and return to a more positive business performance, Blanco summarized on the future outlook for Nordex. In the medium term, Nordex continues to aim for the strategic target of an 8 percent EBITDA margin.

Nordex stock up after slump in previous week

After competitor Vestas conceded its full-year forecast last week due to rising raw material prices and supply chain issues, the share prices of the RENIXX-listed wind turbine manufacturers slumped sharply. At the end of the week, Vestas was down 24.3 percent, Siemens Gamesa was down 20.2 percent and Nordex was down 16.5 percent. Investors were therefore not very surprised by Nordex's forecast adjustment yesterday. With a gain of 5.8 percent to a price of 13.97 euros, the Nordx share took the top spot in the RENIXX yesterday (09.11.2021, closing price, Stuttgart Stock Exchange).

Source: IWR Online, 10 Nov 2021