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Nordex Group 2018

2018 ends with positive free cash flow

The Nordex Group is an integrated, global supplier of multi-megawatt onshore wind turbine systems. The company develops complete systems, including control software, as well as services related to wind turbines.

The company currently has more than 5,500 employees. The group's manufacturing network includes factories in Germany, Spain, Brazil, the USA and India, with plants in Argentina and Mexico to be added soon. The product portfolio is focused on onshore turbines in the 1.5 to 4.8 MW class which are designed to meet the market requirements of countries with limited available space and regions with limited grid capacity.

Global new business of order intake for full-year 2018 amounted to 4,754 MW or 1,423 turbines, breaking down as follows: Europe 2,145 MW (45.1%), North America 721 MW (15.1%), Latin America 1,190 MW (25%) and 699 MW in the rest of the world (14.7%). The United States, Brazil and Sweden were the strongest individual markets for the Nordex Group. This means that in 2018 the company received new orders for more than 4.75 GW compared to 2.74 GW in 2017, equating to an increase of more than 73 percent compared to the previous year.

According to the company´s Press Releases, consolidated sales of the Nordex Group totalled EUR 2.5 billion in 2018 compared to EUR 3.1 billion in 2017, and represented a year-on-year decrease of 20%. In 2018, the Nordex Group installed a total of 828 wind turbines with a total output of 2.5 GW in 17 countries compared to 932 turbines in 16 countries.
At the end of 2018 the Nordex Group has more than 27 GW of installed wind energy capacity in over 40 markets compared to 23 GW of wind energy capacity in over 25 markets in 2017.

The company achieved an EBITDA margin of 4.1% compared to 6.5% in 2017 which is within the expected range of 4% to 5%. EBITDA fell 49.3% to EUR 101.7 million compared to EUR 202 million in 2017.

Nordex Group invested EUR 112.9 million in 2018 compared to EUR 144.3 million in 2017, thus meeting its guidance of around EUR 110 million. As a result, Nordex Group recorded a positive free cash flow of EUR 44.0 million compared to EUR -54.7 million in 2017. Efficient working capital management enabled the company to significantly reduce its working capital and generate considerable positive free cash flow in 2018. Working capital ratio as a percentage of consolidated sales improved from 5.3% to minus 3.8% in 2018. This improvement was due to the continued successful implementation of the working capital program and the high intake of orders.

Accordingly, the working capital ratio had a highly positive change from 5.3% in 2017 to -3.8% in 2018. The working capital ratio of -3.8% was significantly below the target of 5%. Capital expenditures totalled EUR 112.9 million as expected and decreased by 21.8% from EUR 144.3 million in 2017.

Segmentally, the Nordex Group achieved the following results: the Projects segment recorded very positive order intake growth during 2018. The company received wind turbine orders from 18 countries with a total volume of EUR 3.64 million compared to EUR 2.22 million in 2017, and represented a year-on-year increase of 64%.

The output of the turbines ordered in 2018 reached 4,754 MW compared to 2,741.3 MW in 2017, a record high for the Nordex Group and a year-on-year increase of 73%.

At the end of 2018 the new wind turbine order book of the Project segment rose to EUR 3.9 million compared to EUR 1.67 million in 2017, up 132% on the previous year.

In the Service segment, the order book rose by 12% to EUR 2,217.7 million at the end of 2018 compared to EUR 1,979.6 million at the end of 2017. The group achieved an order intake of EUR 543 million in 2018 compared to EUR 556 million in 2017 and decreased by 2.5%. Sales in the Service segment rose by 9% to EUR 342.6 million compared to EUR 314.8 million in 2017. This made a 14% contribution to overall sales. By the end of the year, Nordex serviced more than 7,500 wind turbines with total capacity of 18.5 GW on long-term service contracts.

At the end of 2018, the Nordex Group had cash and cash equivalents totalling EUR 609.8 million, which is almost at the level of the previous year, which was EUR 623.3 million. Net debt was reduced to EUR 32.5 million compared to EUR 60.1 million in 2017.
For the 2019 financial year, the Company expects consolidated sales growth of EUR 3.2 to 3.5 billion. The EBITDA margin is expected to be in the range of 3% to 5%. These expanded ranges take into account the significant increase in activity and the operational challenges this will bring.