Senvion, a global manufacturer of wind turbines, has recorded one of the strongest first quarter order intake ever in the first three months of 2018. This was mainly driven by solid business in new markets, such as Australia and India.
Senvion’s order intake growth is expected to continue in 2018 because of a large pipeline secured in key markets, and it is likely to pave the way for further growth in 2019 and 2020.
Senvion posted EUR 256 million in revenues the first quarter 2018. The main reasons for this development were the typical seasonality, witnessed in this industry coupled with the back-end loaded nature of the installation schedule this year. In line with revenues, EBITDA was also weaker resulting in an adjusted EBITDA margin of 0.3%. Working capital was slightly higher, up 3.1% influenced by the build-up of inventory for the business installation phase in the second half of the year.
Given the soft start to the year and the higher working capital, the free cash flow amounted to EUR (59) million. Nevertheless, Senvion remains fully optimistic that it will meet its 2018 revenue and EBITDA targets against the background that 99% of the revenues are already covered at the lower end of our guidance range.
The order intake in the first quarter grew by 37 % year-on-year. The company’s total order book amounted to EUR 5.2 billion, of which EUR 1.9 billion was in firm orders, EUR 0.6 billion in conditional orders and EUR 2.7 billion in service orders. In particular, the onshore firm order book showed solid growth in the first quarter, growing by 35% and is expected to grow even further during the course of the year. Senvion has secured multiple exclusivities and preferred supplier status in many markets totaling to more than 2.5 GW, which is expected to keep order intake at a healthy level by the end of 2018.
“The first quarter is typically a soft quarter in our sector. We recorded thin operating margins due to lower revenues and installation levels in this quarter,” commented Senvion’s CEO Jürgen Geissinger. “However, we were able to show a very solid strong growth in order intake in the first three months of this year. It was our best first quarter in terms order intake since IPO. It is a very encouraging sign and it underscores our outlook for 2018 and 2019. Our focus is now on making sure that we deliver our cost savings program in time.”
Senvion is continuing to make good progress in implementing the announced strategy. While it is still focusing on the transition of its supply chain to reduce variable costs without compromising on high-quality standards, the efficiency measures in the “Move Forward Program” are contributing to decreasing fixed costs.
“Our financial performance was weaker during the quarter mainly due to cyclical nature of the business,” stated Manav Sharma, CFO of Senvion. “But, we are happy to report further improvements in our opex rate and interest costs. We were able to achieve a quarterly opex reduction of 8 % on a year-on-year basis in the first quarter and we expect to maintain a stable cost base going forward. Compared with the first quarter of 2017, net interest costs were down by 34 % in the first quarter.”
Senvion’s Q1 report is available online and further details can be found here.
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