Published: 26 May 2022 26 May 2022
Against the background of recent developments, and pending release of results for Q1/2022, the Nordex Group has updated its full-year guidance for 2022. The company now expects to generate consolidated sales of EUR 5.2 to 5.7 billion and to record an operating (EBITDA) margin of minus 4 to 0 percent.
Originally, the Nordex Group had guided consolidated sales of EUR 5.4 to 6.0 billion and an EBITDA-margin of plus 1.0 to 3.5 percent before any costs related to footprint reconfiguration and geopolitical events.
The direct impact of the war in Ukraine on Nordex Group’s business can now be discerned more precisely: the company expects to lose sales of around EUR 200 million and corresponding margins in Ukraine. Further working capital write-downs due to projects that are stopped or will not be carried out have to be anticipated. The total direct effect of this could amount up to 1 percentage point on the EBITDA-margin in FY2022.
Still, high volatility and ongoing disruptions in supply chain and logistics, especially in sea freight bookings, as well as substantial bottlenecks in steel and other critical components are proving to weigh heavily on projects in execution, partly as indirect consequences of the military conflict. Scope and extent of such impacts are difficult to gauge and even less so to predict. But, overall, the company expects these factors to have a negative impact on EBITDA-margin in FY2022 of around 2.0-2.5 percentage points.
The Company’s announced reconfiguration of the production footprint on the other hand is taking shape – the planned closure of one of the Spanish production facilities for nacelles has now been completed and negotiations for the cessation of production of rotor blades in Germany are well advanced. The Nordex Group anticipates that one-off costs in this context will reduce the EBITDA-margin by up to 1.5 percentage points; this impact on the EBITDA-margin should be recovered in two to three years from savings in the production costs.
However, in addition to the above, the sector and the Nordex Group specifically encountered another two headwinds that further deteriorate originally anticipated margins this year: (i) The lockdown in Shanghai and other municipalities in China is an aggravating factor for the supply chain disruptions and mounting component availability issues, which are already affecting our European assemblies and projects worldwide. (ii) The cyber security incident at the end of March 2022, which forced the company to shut down various IT systems in different business areas as a matter of precaution, had constrained operations. Albeit there being no indication that wind farms and third-party systems have been affected, the company’s corporate IT infrastructure has had to be recovered. The resulting delays and follow-up costs add to the direct costs incurred in connection with the recovery and the measures taken to strengthen the Nordex Group’s IT infrastructure. Management today expects the supply chain delays and the cyber incident to have an impact on the EBITDA-margin in FY2022 of up to 1 percentage point.