German wind turbine manufacturer Senvion has set in motion a transition plan expected to put the company on track towards double-digit growth in revenues and absolute EBITDA by 2019.
In the short term, Senvion expects near pricing pressure with wind growth in current markets softening, and growth in new markets improving from a low base, as markets move towards increasingly market-based mechanisms.
In 2016, Senvion prepared the base to address these market trends and has since set the Move Forward plan into motion, including the recent announcement of workforce reductions across the production sites in Germany.
According to the company, 2017 will be a transition year to ”build the ground for profitable growth by 2019 as Senvion expands its presence in new markets and works towards commercializing new products.”
The company expects revenues for 2017 in the range of EUR 2bn to EUR 2.bn, a slight decrease compared to the revenues of EUR 2.21bn in 2016, and corresponding softer EBITDA margins of about 8% to 8.5% as a result of these near term market trends.
After this phase of consolidation, Senvion expects to return to profitable, capital-efficient and international growth by 2019 achieved through three priorities: new market entries, product portfolio optimisation, and organisational efficiency.
Senvion aims to achieve revenues of EUR 2.6-2.7bn with adjusted EBITDA margins of 9.5%-10.5% in 2019. This means a growth of around 24-35% in revenues and 40-75% growth in absolute EBITDA from 2017 levels.
The Move Forward plan was highlighted in the company’s annual report for the Fiscal Year 2016 in which Senvion’s offshore wind segment received an order for the 203MW Trianel Borkum II wind farm, and extended the service contract for the 150MW Ormonde offshore wind farm until 2020.