FRANKFURT - Wind turbine maker Nordex on Tuesday forecast a recovery in Germany, its largest market by sales, by 2020, helped by easing pricing pressure, efficiencies and an expected pick-up in demand.
Germany accounted for nearly 30 percent of Nordex’s sales in 2017, which came in at 3.1 billion euros ($3.86 billion), but a shift towards a more competitive auction-based system for wind projects has led to a steep drop in new orders.
Having scaled up after the takeover of Acciona’s wind business in 2015, Nordex was able to counter-balance its heavy exposure to Germany with Acciona’s broad footprint in Latin America.
That is a key advantage at a time when competition in the industry is tightening as governments reduce subsidies for wind power.
Nordex said that while sales in Germany were expected to slump by nearly two thirds this year, volumes would recover from 2020, with traders citing this positive mid-term outlook as the driver behind a 6.6 percent gain in the group’s shares.
“We have a great turnaround plan in place and are optimistic that with our new products we will be again in a top market position,” Nordex Chief Executive Jose Luis Blanco told reporters on Tuesday.
Like most of its peers, including market leaders Vestas and Siemens Gamesa, Nordex faces heavy margin pressure as tender-based systems reward project developers able to make the lowest bid.
Nordex, the world’s sixth-largest maker of wind turbines, said it expects sales to fall to between 2.4 billion and 2.6 billion euros in 2018, down from 3.1 billion last year. Analysts, on average, expect 2.6 billion euros.
The company expects its margin on earnings before interest, tax, depreciation and amortisation (EBITDA) to drop to 4 to 5 percent this year from 6.5 percent in 2017. This is also below the 5.5 percent average analyst poll.
Asked about the relationship with major shareholder Acciona, which holds a stake of just below 30 percent in Nordex, Blanco said that the Spanish group was a very important customer and a constructive partner.
Sources have told Reuters previously that Acciona could at some point choose to buy the remaining stake in Nordex, which is currently worth 536 million euros, once a three-year lock-up period expires later this year.
Blanco said that the group would study opportunities that could add value, including mergers and takeovers, but added he did not see any at the moment. ($1 = 0.8035 euros)