Germany - Nordex growing profitably and on target for 2008

After a successful third quarter of 2008, the Nordex Group (ISIN: DE000A0D6554) has come a good deal closer to achieving its full-year target. Sales between January and September 2008 climbed by 58 percent to EUR 781.1 million (year-ago period: EUR 493.1 million). In the third quarter alone, the Company registered an 85 percent rise in order receipts to EUR 315.2 million (previous year: EUR 170.5 million). The strong growth was particularly driven by non-domestic demand, with around 95 percent of revenues generated outside Germany. Production also rose considerably in the period under review. Thus, turbine assembly output surged by 47 percent to 764 megawatts (previous year: 520 megawatts), while rotor blade production was up by as much as 69 percent, rising from 250 to 422 megawatts.

Earnings before interest and taxes (EBIT) increased by 60 percent to EUR 37.3 million in the first nine months (EUR 23.3 million), improving by 163 percent to EUR 21.0 million (EUR 8.0 million) in the third quarter. Over the first nine months of 2008, the personnel and depreciation ratios shrank by 0.3 percentage points, respectively, thanks to economies of scale. On the other hand, the cost of materials ratio widened by 0.6 percentage points chiefly as a result of provisions set aside to cover the cost of reinforce-ments for rotor sets.

Net profit for the first nine months rose by 40 percent to EUR 29.2 million (previous year: EUR 20.8 million), spurred by net financial income of EUR 2.0 million (previous year: net financial expense of EUR 1.4 million). The tax rate came to 25.5 percent (previous year: 5 percent). Earnings per share rose to EUR 0.41 (previous year: EUR 0.32).

Inventories were accumulated as part of production planning required for continued growth, resulting in a decline in liquidity from EUR 212 million to EUR 127 million. Inventories for short-term projects increased by EUR 109 million to EUR 341 million. At 14.9 percent, the working capital ratio was down on the previous year’s figure of 16.2 percent primarily as a result of advance payments received. The advance payment ratio rose slightly to 118.9 million as of September 30 (previous year: 117.5 percent).

As of September 30, order receipts were valued at EUR 796 million, which is a slight decrease compared to the previous year (EUR 823 million). How-ever, the value of order books as of September 30, 2008 was up 74 per-cent, rising to EUR 3.3 billion (previous year: EUR 1.9 billion) and compris-ing firm orders of EUR 1.0 billion and master contracts of EUR 2.3 billion.

For the year as a whole, Nordex is still projecting sales of EUR 1.1 billion. “We have already achieved 71 percent of our goal for the year and at the end of the first nine months are already closer to reaching our target than we were one year ago,” said Thomas Richterich, CEO of Nordex AG. Earn-ings before interest and taxes (EBIT) are expected to increase to EUR 60 – 66 million (previous year: EUR 40.1 million).

Turning to 2009, the Management Board expects slower growth for the sec-tor as a whole and for Nordex as some customers are finding it more diffi-cult to obtain finance for their wind farm projects in the wake of the crisis af-flicting the financial markets. As a result, there is a risk of projects being postponed. Nordex projects sales growth of between 10 and 15 percent in 2009. However, it will continue investing in its structures in preparation for the medium-term return to growing sales volumes. Explains Richterich: “Our industry’s fundamental story is still intact. For this reason it is import to prepare for post-2009 growth precisely at this time.”