Nordex Expects Profitable Growth in 2012 (Germany)
The Nordex Group achieved an increase of roughly 9 percent in sales to EUR 668.2 million in the first nine months of 2011 (previous year: EUR 614.2 million). At EUR 264.9 million, sales in the third quarter were on a par with the previous year. Growth in the first nine months was driven by the 115 percent increase in business volume in the United States.
Order intake rose substantially by 34 percent to EUR 708.5 million (previous year: EUR 530.2 million). This translated into a 25 percent increase in firm order backlog to EUR 515 million (31.12.2010: EUR 411 million). As of the balance sheet date, Nordex had further contingent orders worth around EUR 1.3 billion on its books.
In the period under review, the gross margin widened by 50 basis points to 27.2 percent. On the other hand, operating earnings came under pressure from heavy structural costs as expected. Earnings before interest and taxes (EBIT) amounted to EUR 11.0 million in the year to 30 September 2011 (previous year: EUR 17.3 million), with the third quarter making a substantial contribution of EUR 9.4 million, equivalent to an EBIT margin of 3.7 percent (previous year: 4.0 percent). In the year to date, the Group has sustained a small net loss of EUR 0.6 million.
The equity ratio widened slightly to 38.9 percent (31.12.2010: 37.6 percent). At the same time, liquidity rose to EUR 211 million (31.12.2010: EUR 141.1 million) due to an equity issue and a bond issued in the spring. Operating cash flow was a negative EUR 62.8 million (previous year: net cash outflow of EUR 0.8 million). Nordex was able to reverse this trend in the third quarter, achieving a net cash inflow from operating activities of EUR 59.6 million in this period. This trend will continue in the final quarter of 2011 as final invoices will be issued for numerous projects currently being executed.
The sovereign debt crisis in Europe and rising equity requirements imposed on banks have rendered financing of wind farm projects more difficult again. As a result, some international contracts have been postponed with the result that Nordex will no longer be able to execute them to the extent originally planned for the current year. Given this fact, the Management Board now assumes that it will no longer be possible to achieve the sales target of around EUR 1 billion. Sales are now expected to fall short of expectations by around EUR 80 million in the fourth quarter. This will shave roughly EUR 20 million off operating earnings and, on the basis of full-year sales of EUR 920 million, result in an operating loss before one-off expenses of EUR 10 million.
Since summer 2011, Nordex has been creating the basis for returning to profitable growth next year. In August 2011, the company’s management decided to cut the structural costs by EUR 50 million in the short term in order to safeguard profitability. The necessary measures have since been defined in full and will be implemented once consultations with the employee representative bodies are completed in December 2011. Savings will thus take full effect as of 2012. A further programme implemented in 2010 to lower product costs is also proceeding as planned and should make an additional contribution to earnings in 2012.
Source: nordex-online, November 14, 2011