Nordex Group Nordex SE – Financial-year figures 2019
24th March 2020
- › All financial figures within this presentation are final and audited.
- › This presentation was produced in March 2020 by Nordex SE solely for use as a source of general information regarding the economic circumstances and status of Nordex SE. It does not constitute an offer for the sale of securities or an invitation to buy or otherwise acquire securities in the Federal Republic of Germany or any other jurisdiction. In particular it is not intended to be an offer, an investment recommendation or a solicitation of an offer to anyone in the U.S., Canada, Japan and Australia or any other jurisdiction. This presentation is confidential. Any reproduction or distribution of this presentation, in whole or in part, without Nordex SE's prior written consent is expressly prohibited.
- › This presentation contains certain forward-looking statements relating to the business, financial performance and results of Nordex SE and/or the industry in which Nordex SE operates, these statements are generally identified by using phrases such "aim", "anticipate", "believe", "estimate", "expect", "forecast", "guidance", "intend", "objective", "plan", "predict", "project", and "will be" and similar expressions. Although we believe the expectations reflected in such forward-looking statements are based upon reliable assumptions, they are prepared as up-to-date and are subject to revision in the future. We undertake no responsibility to update any forward-looking statement. There is no assurance that our expectations will be attained or that any deviations may not be material. No representation or warranty can be given that the estimates, opinions or assumptions made in, or referenced by, this presentation will prove to be accurate.
| Introduction |
José Luis Blanco |
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| Markets and orders |
Patxi Landa |
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| Financials |
Christoph Burkhard |
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| Operations and technology |
José Luis Blanco |
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| Sustainability |
José Luis Blanco |
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| Covid-19 |
José Luis Blanco |
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| Guidance 2020 |
José Luis Blanco |
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| Q&As |
All |
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| Key takeaways |
José Luis Blanco |
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| 4 Introduction
› Classification: Confidential
FY figures 2019 | 24 March 2020
*Source: Wood Mackenzie - Global Wind Turbine Order Analysis Q1 2020: based on onshore order intake excl. Chinese manufacturers.
FY 2019 RESULTS FULLY IN LINE WITH GUIDANCE
› Strongest ever order intake of 6.2 GW in FY 2019 - increase of 31% compared to previous year 2018.
- › 44% of the 6.2 GW order intake in FY 2019 accounts for latest turbine generation Delta4000.
- › Book-to-bill-ratio of 1.53 signalling further growth in the future.
- › Delta4000 product portfolio with five different product variants covering all customer requirements.
- › On October 8th cash capital increase of EUR 99m through private placement to anchor shareholder Acciona.
Economics and decarbonisation support global mid-term demand
Europe:
- › PPAs and merchant projects keep driving Northern Europe
- › Permitting difficulties continue to affect auctions in Germany
- › Auctions in Poland and FIT phase-out in Ukraine lead to increased activity
- › Newly announced auction rounds expected to increase volume in Italy
North America:
- › 100%-PTC demand unstopped and continues to increase 2020 volume
- › 2021 supported by strong 80%-PTC demand and delayed 100%-PTC projects shifting from 2020 to 2021
- › Introduction of 60%-PTC extension expected to lift volume in 2023 and 2024
International:
- › Latin America outlook:
- › Brazil and Colombia continue to show good momentum
- › Increased activity in Chile and Mexico; but political uncertainties remain
- › Activity in India slowly recovering, as awarded auction projects are starting to come online; undersubscription concerns remain
- › Africa mainly driven by South Africa
| 7 Markets & orders
- › Strong order intake in FY 2019: EUR 4,415m (EUR 3,637m in the previous year)
- › Thereof in Q4/2019: EUR 1,102m (EUR 1,290m in prior-year quarter)
- › Stable ASP of EUR 0.71m/MW in FY 2019
Order intake turbine* (in MW) Order intake turbine* by regions (in %)
- › Large orders from USA, Turkey, Mexico, Sweden and Brazil in FY 2019
- › 44% of order intake for new Delta4000 generation in FY 2019
- › Share of Delta4000 generation was 49% in Q3 and increased to 57% in Q4/2019 indicating transition to 4/5 MW class products
Growing service business generates steady cash flows
Share of fleet under contract (as % of installed base)
Comments
- 15.1% 16.1% 17.7% › Service sales share amounted to 12.3% of group sales in FY 2019
- › Service EBIT margin of 17.7% in FY 2019
- › 97.5% average availability of WTGs under service
- › Strong service order backlog of around EUR 2.5bn at the end of FY 2019
- › 19.6 GW of installed base are under service agreement – this represents a coverage of around 70%
- › Average service contract duration is over 10 years
Strict policies for order recognition
- › A legally binding contract has been signed
- › All necessary construction permits have been issued
- › A connection has been established with the grid or a grid-connection agreement has been signed
- › The customer has obtained the necessary financing and payment security was exchanged
- › The customer has remitted the agreed prepayment
Nordex does not recognize "conditional" orders
Age profile of turbine order backlog* as of year end 2019
- › Order backlog provides good visibility for next two years
- › Majority of orders older than 24 months are mostly completed with only final invoicing outstanding
Combined order backlog of around EUR 8.1bn at the end of FY 2019
Order backlog turbines (EUR m) Order backlog service (EUR m)
- › Order backlog of EUR 5,534m at the end of FY 2019 reflects consistent high order intake over the last quarters
- › Distribution on Nordex focus markets: Europe (52%), North America (19%), Latin America (17%), Rest of World (12%)
› At the end of FY 2019: 7,760 wind turbines under service – corresponding to 19.6 GW
Order backlog well-balanced across platforms, markets and customers
Order backlog (EUR m) as of year end 2019
| 12 Financials
Income statement FY 2019
| in EUR m |
FY 2019 |
FY 2018 |
abs. change |
| Sales |
3,284.6 |
2,459.1 |
825.5 |
| Total revenues |
3,871.4 |
2,364.2 |
1,507.2 |
| Cost of materials |
-3,096.0 |
-1,710.2 |
-1,385.8 |
| Gross profit |
775.4 |
654.1 |
121.3 |
| Personnel costs |
-360.7 |
-325.9 |
-34.8 |
| Other operating (expenses)/income |
-290.9 |
-226.5 |
-64.4 |
| EBITDA |
123.8 |
101.7 |
22.1 |
| Depreciation/amortization |
-143.4 |
-155.8 |
12.4 |
| EBIT |
-19.6 |
-54.2 |
34.6 |
| Net profit |
-72.6 |
-83.9 |
11.3 |
| Gross margin* |
23.6% |
26.6% |
|
| EBITDA margin |
3.8% |
4.1% |
|
EBIT margin
w/o PPA |
0.1% |
0.3% |
|
Comments
- › Sales figures of EUR 3,285m and EBITDA margin of 3.8% in line with expectations and guidance
- › High total revenues signal further sales growth in FY 2020
- › PPA depreciation amounted to EUR 24m in FY 2019 (EUR 62.6m in the previous year)
|
Income statement Q4/2019
| in EUR m |
Q4/2019 |
Q4/2018 |
abs. change |
| Sales |
1,341.6 |
686.3 |
655.3 |
| Total revenues |
1,351.7 |
611.0 |
722.3 |
| Cost of materials |
-1,091.6 |
-428.7 |
-662.9 |
| Gross profit |
260.1 |
182.3 |
77.8 |
| Personnel costs |
-95.8 |
-87.7 |
-8.1 |
| Other operating (expenses)/income |
-100.7 |
-64.3 |
-36.4 |
| EBITDA |
63.6 |
30.3 |
33.3 |
| Depreciation/amortization |
-41.0 |
-45.4 |
4.4 |
| EBIT |
22.6 |
-15.2 |
37.8 |
| Net profit |
4.0 |
-32.0 |
36.0 |
| Gross margin* |
19.4% |
26.6% |
|
| EBITDA margin |
4.7% |
4.4% |
|
EBIT margin
w/o PPA |
2.1% |
0.3% |
|
Comments
- › Sales figures of EUR 1,342m in Q4/2019 show high order execution as expected
- › PPA depreciation in Q4/2019 totaled EUR 5.7m
| 14 Financials
› Classification: Confidential
Balance sheet FY 2019
| in EUR m |
31.12.19 |
31.12.18 |
abs. change |
Δ in % |
| Non-current assets |
1,488.9 |
1,277.6 |
211.3 |
16.5 |
| Current assets |
2,513.8 |
1,781.0 |
732.8 |
41.1 |
| Total assets |
4,002.7 |
3,058.5 |
944.2 |
30.9 |
| Equity |
745.4 |
697.3 |
48.1 |
6.9 |
| Non-current liabilities |
914.2 |
822.9 |
91.3 |
11.1 |
| Current liabilities |
2,343.2 |
1,538.3 |
804.9 |
52.3 |
| Equity and total liabilities |
4,002.7 |
3,058.5 |
944.2 |
30.9 |
| Net debt* |
-84.0 |
-32.5 |
|
|
Working capital
ratio** |
-9.1% |
-3.8% |
|
|
Equity
ratio |
18.6% |
22.8% |
|
|
Comments
- › Cash position of EUR 510m at year-end 2019 (EUR 610m year-end 2018)
- › Increase in current assets and current liabilities reflects preparation for high installation activity in 2020
- › Balance sheet prolongation compared to 2018 is also a result of significantly increased project pipeline
*Cash and cash equivalents less bank borrowings and bond. **Based on actual sales figures.
Working capital development FY 2019
› Low working capital ratio also supported by continuous stringent working capital management throughout FY 2019
Working capital ratio (in % of sales)* Working capital development (in EUR m)*
- › Decrease in inventories driven by high installation level in Q4/2019
- › Receivables management mirrors strong cash focus
| in EUR m |
FY 2019 |
FY 2018 |
Cash flow from operating activities
before net working capital |
-156.9 |
-31.4 |
Cash flow from changes in working
capital |
194.9 |
156.3 |
Cash
flow from operating activities |
38.0 |
124.9 |
| Cash flow from investing activities |
-163.9 |
-80.9 |
| Free cash flow |
-126.0 |
44.0 |
| Cash flow from financing activities |
30.6 |
-46.4 |
Change
in cash and cash equivalents* |
-95.3 |
-2.4 |
Comments
- › Cash flow from operating activities impacted by working capital changes and at the same time by net loss and outflows related to VAT phasing effects
- › Cash flow from investing activities reflects global SCM expansion
- › Cash flow from financing activities mainly impacted by capital increase in October and repayment of SSD tranche in April last year
*Including FX effects
CAPEX (in EUR m) Comments
- › Investments in FY 2019 mainly consists of:
- Investments in blade production facilities in Mexico and Spain
- Investments in nacelle production facility in India
- Investments in tooling and equipment for international projects
- Investments in product development
- › Slight decrease in intangible assets due to lower level of development costs compared to previous year
| 18 Financials
Net debt*/EBITDA** Equity ratio (in %)
- › Leverage ratio significantly declined towards the end of FY 2019 as communicated
- › In Q4/2019 leverage ratio well below own ambition level of 1.5 as expected
› Equity ratio improved towards year end 2019 as a result of the capital increase in October 2019
FY 2019 a year of significant ramp-up in operations
Installations (MW) Production
- › Total installations of 938 WTGs in 21 countries in FY 2019
-
› Geographical split: 44% Europe, 29% Latin America, 23% North America and 4% Rest of World
-
› Output turbines totaled 1,388 units in FY 2019: 536 GER, 526 ESP, 234 IND, 49 BRA and 43 ARG
- › Inhouse blade production of 1,366 units in FY 2019: 600 ESP, 465 GER, 234 IND and 67 MEX
- › Outscourced blade production of 2,556 units in FY 2019
Nordex supply chain – global, flexible and scalable
Blades
- › approx. 35% in-house capacity, 65% outsourced (as per Q4/2019)
- › Own production sites in Germany, Spain, Mexico and India
- › Third party sites in Turkey, Brazil and China
- › Global network of blade production necessary to ensure best landed cost in all regions
Nacelles
- › Own nacelle production in Rostock, two sites in Spain, one in India and one in Brazil. India producing for global markets, Brazil only for local market
- › Own production site in US mothballed and available if needed due to tariff conflicts
- › Nacelle production in Argentina (subcontracted assembly)
Towers
- › All steel towers sourced externally
- › Concrete towers are fully in-house (~700 concrete towers next year), track record of >1,000 concrete towers produced in-house
Product portfolio with highly efficient products for all different sites
Development of product portfolio & pipeline
Delta4000 products: range for the right fit for all sites
|
Fields of action |
Material topics |
Specific objectives |
|
Product |
■ Cost of energy |
Reduce cost of energy continuously |
|
responsibility |
∎ Customer
satisfaction |
Achieve a high recommendation rate |
|
Employee
responsibility |
Occupational safety |
Reduce accidents to a lost time injury
frequency (LTIF) of less than 5 per
1 million working hours |
|
|
Leadership culture |
Further strengthen leadership culture
and values |
|
|
|
Continue established programs &
processes for employee development |
|
|
|
Promote diversity in the company |
|
Responsibility along
the supply chain |
Standards in
cooperation |
Optimize the supplier due diligence
process |
| Environmental |
|
■ Waste |
Avoid and reduce waste by -10 % |
|
management &
resource efficiency |
Hazardous
substances |
Reduce hazardous substances and
minimize their hazard potential |
|
|
Energy and
greenhouse gas
emissions |
Procure 100% of the electricity we
consume from renewable energy sources |
|
|
Life cycle
assessment |
Improve the environmental balance of
wind turbines |
|
Responsibility
for society |
■ Educational
support |
Support education initiatives in the
region of our sites |
|
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|
Product
Lifecycle assessment of wind farm with Delta4000 turbines shows:
only 6.4 g CO2e
are emitted per kilowatt-hour electricity generated
A single Nordex large-scale turbine1covers the average annual electricity demand of about
3,000 four-person households2.
474 g of CO2
are saved per kWh generated by wind turbines (compared to the German electricity mix 20183).
Projection for one Delta4000 at medium wind speed: savings of approx.
6,300 t CO2 per year.
Employees
Lost time injury frequency (LTIF) lowered to 4.6 in FY 2019 (FY 2018: 5.6)
73
nationalities were working at Nordex in FY 2019
Environment
73.5%
of the overall amount of purchased electricity in 2019 was generated by the use of renewables
FY figures 2019 | 24 March 2020
2 https://www.musterhaushalt.de/durchschnitt/stromverbrauch/ average electricity demand of 4,432 kWh per year. 3 https://www.umweltbundesamt.de/sites/default/files/medien/1410/publikationen/2019-04-10_cc_10-2019_strommix_2019.pdf.
Management focus
- Health & safety of all Nordex employees is top priority
- Global cross-functional Covid-19 taskforce established to assess the situation closely
- Special health related measures implemented
- Ensure business continuity at all possible options
- Strong focus on working capital and cash flow management
Challenges
- New and complex situation due to continuous measures by authorities, e.g. travel restrictions
- Evaluation of impact on the business development in 2020 ongoing
- Possible delays in project execution and installations
- Impact on sourcing activities (components) along the entire supply chain
- Delays in ramping up and enlarging the supply chain
› Classification: Confidential
Guidance 2020 - subject to the unforeseeable extent and duration of the measures taken globally to contain COVID-19
| 27 Q&As
FY figures 2019 | 24 March 2020
Expected sales growth in FY 2020 will show an increase of 75% to nearly 100% compared to FY 2018.
Order momentum expected to remain strong with increasing share of Delta4000.
Business performance and ramp-up in FY 2020 are subject to significant uncertainties due to COVID-19.
› Classification: Confidential
FY figures 2019 | 24 March 2020
IF YOU HAVE ANY QUESTIONS PLEASE CONTACT THE INVESTOR RELATIONS TEAM:
Felix Zander Tobias Vossberg Rolf Becker
Nordex SE Langenhorner Chaussee 600 22419 Hamburg Germany
Phone: +49-40-30030-1000 Email: [email protected] Web: www.nordex-online.com