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Nordex Se
2/27/2025
Thanks, Valentina, and also a very warm welcome from the Nordics team in Hamburg. Thank you for joining the Q4 2024 Nordics conference call. As always, we ask you to take notice of our safe harbor statements. With me are our CEO, Jose Luis Blanco, and our CFO, Ilja Hartmann, who will lead you through the presentation. Afterwards, we will open the floor for your questions. And now I would like to hand over to our CEO, Jose Luis. Please go ahead.
Thank you very much for the introduction, Ania. On behalf of Management Board, I would like to welcome you here as well from Hamburg. As you know, I have assumed the role of Chief Sales Officer since Pachi decided to take on a new role within the organization. let me start looking back where we stand on our path towards profitable growth. Three years ago, we communicated our plan to becoming a profitable company. Today, I can proudly say that we have made solid progress since that moment. We have been able to weather volatile times of 21 and 22 with supply chain disruptions, high inflation, and on top of a cyber incident with the support of all of our stakeholders, including you all, and we have delivered a massive improvement. Over this period, our revenue grew by 14%. EBITDA margins recovered and stabilized. and we are now generating a robust cash flow. This gives us a solid platform for the future, and we hope to keep delivering further improvements in 25 and 26. Moving to the next slide, let me talk about our progress in 2024. In a nutshell, we met all our financial and operational targets fully achieving our guidance. In detail, first, we have a record order intake in 2024, resulting in a record high order book of $12.8 billion, and with a strong momentum in both the service and the project business. Second, our service business continues to grow stronger with higher revenues and improved EBIT margins. Third, we have consistently improved both our absolute EBITDA and EBITDA margin throughout the year, ending with an exit EBITDA margin of 4.89%. And finally, in 2024, we achieved a robust free cash flow of €271 million and a net cash position of €848 million. Based on our financial performance in 24, we are reiterating our medium-term EBITDA margin target of 8%. Moving on, operationally, I'm pleased to announce that Nordest remains the third largest onshore plane worldwide in terms of order intake, excluding China. And this achievement reflects the solid and consistent performance of our sales and project teams over the years. In EMEA, we remain number one for the first time in a row. In Americas, we have been able to improve our market share, mainly driven by the Canadian orders, and we hope to improve our position far. Overall, these positions and orders very well for the future. And let me come to the operational details on the next slide. 2024 was a year of record order intake with a very strong order intake of 3.3 gigawatts in Q4. Overall order intake to a total of 8.3 gigawatts, a growth of 12% year on year. This corresponds to 7.5 billion euros in value and comes from across 24 countries. Strongest individual markets were Germany, Turkey, Canada, Spain, South Africa, among many others. Pricing continues to remain stable. ASP stands at 0.9 million euros. euros per megawatt year to date up from 0.85 one year . Without guiding for 25, we remain very confident on order momentum and expect our order intake to be better in 25 compared to 24. Moving on, on the back of a strong order intake in both segments, our total order book continues to grow with a total of €12.8 billion. Thereof, the turbine order book increased by 13% to €7.8 billion in 2024 compared to €6.9 billion in 2023. Out of this order book, majority of orders will be installed in Europe, followed by North America, rest of the world, and Latin America. On the service side, our order book increased by 37% year on year, reaching almost 5 billion by the end of December. This growth primarily reflects the expansion of our turbine business, over the past two years across multiple regions, which is now contributing to the service order book. Additionally, portfolio effects and higher pricing have also played a significant role. So let's move to the service business on next slide. Key message here is that we are on track, and margins keep improving as previously anticipated. Service revenue grew by 15%, reaching 777 million euros in 2024. And as previously communicated, EBIT margins have started to improve and are on track to return to our normal margin levels of around 18% to 19% in the next 12 to 18 months. We expect our revenue to increase further at a healthy pace, driven by an expanding service order book with longer tenors and increased installation activities. Regarding other service KPIs, the average lease availability was stable at 97%, and the average tenor of the service contract increased to around 12 years. Our strength in service is also underpinned by being ranked as number one for the fourth consecutive year in the Service Satisfaction Survey of the German Wind Energy Association. Let's move to the next slide to talk about installations and production figures. Installations of 6.5 gigawatts in 2024 are in line with the expectations. down by around 8% compared to the previous year's level, and this is mainly driven by customers' schedules. This reduction is primarily due to, as I mentioned, project schedules and minor customer side delays. Important, we did not experience any significant delays or liquidated damages beyond our normal operations. We installed a total of 1,227 wind turbines, with the majority of installation occurring in Europe, followed by Latin America. On the production side, turbine assembly decreased by 5%, totaling 1,312 turbines assembled. Late production increased by 17%, with a split of 28% in-house production, 72% outsourced. And now I would like to hand over to Ilya to discuss with you financials.
Thank you, José Luis. And as always, I will guide us through our latest financial figures, starting with the income statement. 2024 was a strong year for Nordics, achieving 7.3 billion euros in sales compared to 6.5 billion in the previous year. This is an increase of over 12%. The sustained momentum, especially in the last quarter, was primarily driven by better priced orders, growth in our service revenues, and increased activity levels in our factories, as mentioned by . Gross margin reached 21% in full year 2024, up from 15.2% in the . We continue to deliver strong gross margins, with Q4 reaching 23% compared to 18.6% in the fourth quarter of the year before. As a result, we achieved an absolute EBITDA of 296 million euros in the reporting year compared to breakeven last year. This represents a significant margin improvement from around 0% last year to plus 4.1% in 24, which is slightly above the upper end of our guidance range, as we had already indicated in our last call back in November. They're looking on a quarterly basis. Absolute EBITDA was 107 million euros, representing an EBITDA margin of 4.9% in the last quarter of the past year. Given the strong margin performance we've seen, we've also been able to generate for the first time in years, and that profit in that case, 9 million for 2024. With that, let's move us to the balance sheet. So the overall structure remains strong and has improved compared to the previous year end. We ended the year with a very solid cash position of over 1.1 billion euros. And additionally, we have that cash facility of 80 million euros. So the total liquid we leveled stood at around 1.2 billion euros at the end of the year. Beyond that, there's not much to add about the balance sheet. Working capital is in line with our guidance expectations, which I will talk about on the next slide. and the equity ratio is at a comparable level to the previous year. So with that, moving on to the working capital, ratio stood at minus 9.1% in absolute numbers at minus 663 million at the end of the year, and so we did meet our guided number of below minus 9%. The improvement in the working capital development in the last quarter was predominantly driven by high production activity levels, and the strong, very strong order intake momentum in the final weeks of the year. That brings me exactly to that part of the presentation, which is the cash flow. And here to mention that the cash flow from operating activities before net working capital stood at 512 million euro at the end of the reporting year, demonstrating a strong year-on-year improvement in that category. With marginal changes only in the working capital, cash flow from operating activities amounted to 430 million euros at the end of the year, and of course, clearly above the previous year's level. Cash flow from investing activities were around minus 159 million euros at the end of the year, slightly higher than in the previous year, but lower than our initial planning. I will address this development in a few moments, when we look at our investment slide. So, as a result, we achieved a strong positive free cash flow of 271 million euros for 2024, and this very much reflects what we already communicated with our Q3 numbers in November last year. Let me highlight again that, in contrast to last year, our free cash flow was driven by changes in working capital, In 2024, free cash flow did reflect the strength of the operational business. And as just indicated, we move on to the investment slide. Cap expendings were around $42 million in the last quarter, bringing our total cap expendings for the full year to $153 million. That was a lower level than we had initially planned. It's mainly because of a of a combination of stricter monitoring and cash controls of our spendings and a combination of typical project cycles where some spendings were carried forward into the new reporting year. However, the focus of our investments in 2024 largely remained the same. Main priorities were the investments into blade in the cell production facilities and tooling for installations and transports, including some of it in the reactivating of our IO plant in the U.S. and the development of our US-tailored German type. From the financials, I'm going, for the financial chapter, I'm going to the last slide now, which is the capital structure. As already indicated in our last call, we saw another step up in our net cash level towards the year end, now totaling 848 million euros. and the equity ratio stood at 17.7%, and on a very comparable list as it was at the end of 2023. That brings me to one more slide for me, and that is the sustainability development in Nordex. So, as we can see here on the slide, last year we continued to progress in implementing our sustainability strategy, and let me highlight a few key points there. After submitting science-based targets to reduce our greenhouse gas emissions, we have now received the science-based targets initiative approval for our short and long-term targets. We successfully achieved our goal of continuously reducing the frequency of lost time injury, reaching an LTIF ratio of 1.45 for full year 24. This marks a significant reduction of over 50% from the 2021 baseline. We've now joined the UN Global Compact, underscoring our commitment to aligning our operations with universal principles on human rights, labor, environment, and anti-corruption. And so in line with our ESG rating roadmap, we are performing well in key ratings for Nordics customers, investors, and other stakeholders. And our sustainability strategy activities are ongoing, and we will initiate further actions throughout this year and beyond. Finally, let me also add that we have published our first CSRD Sustainability Statement integrated in this year's report to further promote transparency around ESG topics. And with this, I'll hand it back to Ruiz.
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