Nordex outperformed by rivals Siemens Gamesa and Vestas

As opposed to competitors, net revenue actually goes up for the German manufacturer, following last year’s admission of selling wind turbines at a loss. Operating earnings take a major impairment.
Photo: Nordex
Photo: Nordex

It is close to unheard of that a turbine maker lives up to its own projections in this economy. That was nevertheless the case for Nordex in 2022, which not only confirmed its revised guidance on two out of three items, but numbers also accurately reflect announced ambitions from the fiscal year’s onset, reveals preliminary 2022 financial figures published on Thursday morning.

That applies to working capital with working capital ratio clocking in at minus 10.2%. Same favorable levels as in 2021 and well within the guidance range of below minus 7%.

Consolidated sales of EUR 5.7bn (previous year: EUR 5.4 billion) also reached the upper end of the guidance range of EUR 5.2-5.7bn, up 5.6% from the previous year. It is a noticeable contrast to competitors, where Siemens Gamesa’s top line fell 3.8% while Vestas’ took a whopping 7.1% plunge.

”2022 has been again an extremely challenging year for the industry due to the numerous macro-economic headwinds. Despite these challenges, our team was able to maintain a healthy momentum in terms of order intake with significantly improved selling prices, which gives us a good platform for 2023,” explains Nordex CEO José Luis Blanco.

Relatively huge loss

Nonetheless, there is an upper limit to everything. The German turbine maker nearly quintupled its operating loss to EUR 244m, which corresponds to an EBITDA margin of minus 4.3%. And that is worse than competitors. Siemens Gamesa closed its annual report with an EBITDA margin of minus 1%, while Vestas’ came in at minus 0.4%.

The preliminary key figures do not reveal the main reason for the quite immense operating loss, relatively speaking. Nordex is due to present final annual report on March 31.

Neither does it say what the average turbine selling price was in the fourth quarter of 2022. Even though Nordex’s CEO rightly points to improved selling prices in 2022, Nordex still falls behind competitors on the rediscovered key parameter of average selling price per megawatt (ASP).

Since the start of 2021, the Germans have managed to raise prices by roughly 24%. In the same period, Siemens Gamesa upped ASP for its onshore wind turbines by 43%, while Vestas charged an additional 50%.

At the somber WindEurope conference held in Bilbao last April, José Luis Blanco made a rather startling announcement:

”We are still selling at a loss because of dynamics from auctions and low visibility regarding volumes.”

In other words, the decision is to keep activity bustling in factories despite meagre times. And that mode of conduct may be economically sound. But as Vestas has openly critiqued, it may well prove destructive for the industry as a whole, as it could lead to costly price wars.

Biggest in Germany

Interim results notwithstanding, the German developer has had a truly busy year.

Especially in the domestic market where Nordex, according to data compiled by Fachagentur Windenergie, installed more wind turbines than any other player. 32% – corresponding to 769MW – of Germany’s installed capacity in 2022 came from Nordex, while traditional market spearheads Enercon and Vestas comprised 25% and 29.6%, respectively.

Similarly, the German analyst consultancy singles out Nordex as the largest supplier for most recent German tender. Bearing in mind, however, that not all orders have been assigned yet.

Like other Western developers, the combined German order intake last year came in lower than the year before. Throughout 2022, Nordex bagged orders of 6.33GW which is a year-on-year drop of 20.4%. In the same period, Vestas order intake slumped by 20.5%, while Siemens Gamesa’s order book dwindled by 25.8%.

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