Nordex reissues 2020 financial guidance

Nordex expects a year-on-year increase in consolidated sales in 2020, but expects to see its operating profit margin squeezed

Nordex had withdrawn its 2020 financial guidance in May, but has now introduced a new set of financial expectations

Nordex has released a new set of financial expectations for 2020, having withdrawn its guidance earlier this year, citing uncertainty during the coronavirus pandemic.

It issued the new guidance alongside preliminary financial results for the first nine months of the year, which showed an increase in consolidated sales and Ebitda, but a squeezed margin.

The manufacturer added that with a “strong financial structure for the medium term” and the lower risk profiles of projects due for delivery next year, it expects positive developments starting in 2021.

CEO José Luis Blanco said that the company is targeting continued growth, and has a goal of becoming a “top three company within the industry”. 

Nordex had withdrawn its financial guidance for the year in May, citing uncertainty due to the coronavirus pandemic.

According to its new guidance, the manufacturer anticipates consolidated sales of around €4.4 billion – up 33% from one year ago – and an Ebitda margin of 2% – down 1.8 percentage points.

The company also expects around €170 million in capital expenditure – down 1.1% – and added that working capital ratio as a percentage of consolidated sales will be minus 4% – compared with minus 9.1% last year.

Nordex had originally expected consolidated sales of €4.2-4.8 billion and Ebitda of €160-240 million for the full year.

January-September results

The manufacturer reported consolidated net sales of €3.1 billion for the first nine months of the year, up 68% from the same period in 2019.

It stated that this growth was mainly due to “significant increases” in installation and production in its project segment.

Nordex’s Ebitda also rose 17% to €70.8 million in the first nine months of the year, while its Ebitda margin was squeezed by 0.9 percentage points to 2.2% for the same period.

The manufacturer stated that it had still been “significantly impacted” by the coronavirus pandemic in the third quarter of the year.

It cited supply chain disruptions and restrictions on movement of goods and people as being particularly difficult obstacles.

Nordex added that the coronavirus outbreak had interrupted the ramp-up of its blade production in Spain and Mexico, resulting in a “significant delay” to deliveries. This, in turn, exposed the company to potential liability for compensation, it stated.

The challenges created during the pandemic also created a “negative impact in earnings in Q3 from a major EPC project in Scandinavia”, it stated.

Nordex did not provide further details of either the delayed deliveries from its Spanish and Mexican factories, or the affected project in Scandinavia.

Financial outlook

Despite the challenges created by the coronavirus pandemic, Nordex sounded a positive tone in announcing its preliminary nine-month results.

It noted that the majority of its orders due for execution in 2021 are in Europe and the United States – markets it described as having “lower risk profiles than projects executed in 2020”.

The manufacturer also plans to further develop its supply chain and expand production capacity, expecting to benefit from substantial economies of scale, it stated.

Nordex claimed it has a “strong financial structure for the medium term”, having secured a three-year extension to a €1.2 billion guarantee credit facility, a state-backed revolving credit facility worth €350 million to shield it from the impacts of the pandemic, and binding agreements made in 2020 to refinance the promissory notes due in April 2021.

It also recently completed the sale of its European project development pipeline to RWE, closing a deal worth €400 million.

Nordex’s management team aims for the company to generate sales of around €5 billion and an Ebitda margin of 8% in 2022.

“Building on our market position as one of the top two sellers in the 4MW and 5MW segment, we continue to systematically pursue our goal of becoming a top three company within the industry," said José Luis Blanco, CEO of the Nordex Group.