• Order Intake: 5.1 gigawatts in the first three quarters of 2024, up from 4.9 gigawatts last year.
• Average Selling Price: EUR0.9 million per megawatt, stable compared to EUR0.85 last year.
• Installations: Approximately 5 gigawatts year-to-date, slightly lower than the previous year.
• Gross Margin: Improved to 21.6% in Q3 2024 from 18.3% in Q3 2023.
• EBITDA Margin: 3.7% for the first nine months of 2024, up from negative 1.5% in the same period last year.
• EBITDA: EUR190 million in the first nine months of 2024.
• Free Cash Flow: EUR160 million at the end of Q3 2024, break-even year-to-date.
• Liquidity: EUR962 million at the end of Q3 2024.
• Sales Revenue: Increased by 14% to EUR5.1 billion in the first nine months of 2024.
• Service Revenue: Grew by 13% to EUR543 million in the first nine months of 2024.
• Order Book: EUR11.5 billion at the end of September 2024.
• Service Order Book: Increased by 29% year-on-year to EUR4.6 billion.
• Cash Level: EUR882 million at the end of Q3 2024.
• Working Capital Ratio: Minus 7.3% in Q3 2024.
• Net Cash: Improved to EUR583 million.
• Equity Ratio: 18.5% at the end of Q3 2024.

• Warning! GuruFocus has detected 7 Warning Signs with NRDXF.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Nordex SE (NRDXF) reported a stable pricing environment with an average selling price of EUR 0.9 million per megawatt, indicating strong market demand.
• The company achieved a significant improvement in gross margins, reaching 21.6% in Q3 2024 compared to 18.3% in the same period last year.
• Nordex SE (NRDXF) ended the quarter with a healthy liquidity level of EUR 962 million, reflecting strong financial management.
• The order book remains robust at EUR 11.5 billion, with a notable increase in service order book by 29% year-on-year.
• The company is on track to achieve its midterm EBITA margin target of 8%, supported by a stable market environment and strong order intake pipeline.

Negative Points

• Total installations in 2024 are expected to be slightly lower than in 2023, indicating potential challenges in scaling operations.
• The company faces geopolitical uncertainties, such as potential changes in the US and German political landscapes, which could impact future market dynamics.
• Legacy projects continue to affect profitability, with some projects having lower than average profitability.
• There is ongoing competition from Chinese manufacturers in certain markets, which could pressure pricing and market share.
• Provisions related to legacy products have increased, reflecting ongoing challenges in resolving past issues and impacting financial performance.

Q & A Highlights

Q: Can you provide insights into Nordex's operating leverage and margin potential, especially considering the current geopolitical climate? A: Jose Blanco Dieguez, CEO, explained that while it's too early to provide specific guidance for next year, they anticipate a better year than the current one. Legacy projects, which have lower profitability, are expected to phase out, potentially improving margins. However, they do not foresee reaching nine gigawatts next year but expect an improvement over this year.

Q: How does the potential political change in Germany and the US impact Nordex's operations and market outlook? A: Jose Blanco Dieguez, CEO, stated that regardless of political changes, the legislative framework in Germany is stable until 2026, and they expect continued strong volumes. In the US, their strategy is long-term, and they do not anticipate immediate impacts from political shifts, maintaining confidence in the onshore wind market.

Q: What is Nordex's strategy regarding the US market and the potential impact of changes in manufacturing credits? A: Jose Blanco Dieguez, CEO, confirmed that the West Branch facility in Iowa is designed for blade production, and they plan to source other components from non-US plants. They are prepared to adjust the Iowa plant's activity based on demand and potential changes in manufacturing credits.

Q: Can you elaborate on the growth in provisions and its implications for Nordex's financials? A: Iiya Hartmann, CFO, explained that the increase in provisions is due to a more conservative approach to warranty provisions and ongoing discussions with customers about legacy products. These provisions are factored into their guidance, and there are no new issues affecting the current product lines.

Q: How is Nordex addressing the competitive landscape, particularly with Chinese manufacturers entering the European market? A: Jose Blanco Dieguez, CEO, noted that while Chinese competition is present in Latin America and Africa, it has not significantly penetrated Europe. The complexity of the German market, with its project finance requirements and long-term service contracts, poses challenges for new entrants.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.