- 9 million in revenues in line with guidance at €1,309 million
- Adjusted EBITDA €103 million in 9 million FY 17, with a margin of 7.9%
- Year-on-year rise in firm order intake of 51% to € 1,276 million
- Q3 positive free cash flow of €44 million
Senvion, a global manufacturer of wind turbines, is making substantial progress in meeting its financial targets for 2017. Senvion posted revenues of € 1,309 million in the first nine months of 2017, a decline of 10% in a challenging market environment. The adjusted EBITDA margin was 7.9%, in line with Senvion’s expectations. The company had €44 million of free cash flow in Q3, mainly due to lower working capital levels.
The overall slowdown in established markets such as Germany had an impact on the growth of Senvion’s order intake in the third quarter. Nevertheless, the company was still able to increase order intake by 51% in the first nine months compared with the same period in 2016. The key highlight in the third quarter 2017 was the conversion of the 299 MW Chile order to a firm order.
Moreover, Senvion was able to secure two large conditional orders to the tune of 159 MW. All in all, Senvion’s order book remains stable at €5.3 billion. The company’s service business continues to address current industry price pressures by offering more efficient service concepts. The success of this service strategy is reflected by the continuous growth of generating capacity under service and the lengthy average duration of service contracts of 11.1 years.
“Senvion’s performance for the first nine months is in line with our guidance,” said Senvion’s CEO Jürgen Geissinger. “Our year to date order intake has been strong despite worsening industry dynamics. As part of our stated strategy, we are working on powerful new product introductions and transforming our entire value chain, with visible successes. The industry not only requires better products but also quicker cost adjustments to deliver lower levelized cost of energy (LCoE). By improving our supply chain, quality and services over the next several quarters, we are already making progress in this direction.”
Senvion introduced four new products in 2017 that are part of the company’s modular product strategy, the aim of which is to deliver more efficient turbines and lower lifetime costs. While focusing on growth in selected key markets, Senvion concentrates on lower production costs through scale effects on a regional level, as well as on increasing sourcing from lower cost countries.
“We are in the middle of tremendous changes in the wind industry,” said Manav Sharma, Senvion CFO. Readjusting electricity prices by up to 50% within the last nine months and the shift to auction systems worldwide can only be tackled with innovative products and further focus on cost outs and efficiency improvements.
We are seeing the first positive results of our strategy and our efficiency program which we have implemented since the beginning of the year; improved sourcing will help us to lower our variable costs, while the efficiency measures are contributing to decreasing our fixed costs. Overall, Senvion reduced its nine months 2017 OPEX costs by 18% on a year-on-year basis. Compared with the first nine months in 2016, we have cut net interest costs by 29%. Given these large price declines globally, we will need to re-double our efforts in front of the challenges facing the sector.”
Senvion’s Q3 report is available online and further details can be found in the earnings presentation. Furthermore, the reports are available on the website of the Luxembourg Stock Exchange (www.bourse.lu) as officially appointed mechanism for the central storage of regulated information.