Nordex - Wind Turbines

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Nordex SE (SE=Societas Europeae, which is the Latin name for "European Company") develops, manufactures, and distributes multi-megawatt onshore (wind turbines located on land) wind turbines worldwide! On top of selling products and projects, it offers services such as maintenance, remote monitoring, spare parts, and repair for wind farms. 

The stock price today closed at €20.90, the 52-week high was €29.20 and the 52-week low was €6.80! We see that we are much closer to the high than the low! ❌

How as the development the last 1-y, 3-y, 5-y and 10 years

The 1-year development was +213%, 3-year +148%, 5-year -1% and 10-year +242%! So the majority of the gain has come the last year!

How does the long-term chart (10years) say us

We see a previous peak in 2016 up at around €32, a slow upward trend since 2013, and some kind of support at ~€6-€7, which the stock bounced back from in 2018 and 2020! Since the end of 2020, it has started to climb its second peak! 

Who are the owners of the company

The majority holder with 34% is Acciona SA (which sold Acciona Windpower to Nordex in 2015). Susanne Klatten, one of Germany's richest persons owns almost 5% and we see as well BlackRock, Vanguard, etc as a good sign! ✅

As we always do, Balance Sheet and Assets first

The Total Assets ("Summe Aktiva") have increased by €1.4 billion, or almost 50%! The majority of the growth has come from the Inventory ("Vorräte") by ~€1 billion, which is only a good sign if the revenue has increased accordingly - we remember that for later! The cash balance is more or less the same, roughly €150 million higher in 5 years

Equity and Liabilities side

The Debt-to-Capital ratio is 82%, which means that more than 80% of the assets are funded by liabilities. But the majority of those liabilities are current liabilities ("Summe kurzfristiges Fremdkapital") with almost €3 billion, where Short-term Debt and Accounts Payables are the biggest parts. The shareholders' equity has decreased while the liabilities have increased, my suspicion is that the company needs a lot of cash and investment to grow and deliver its projects. As the liabilities are mainly short-term debt and Accounts Payable which are due coming year, we expect that this can be handled by the operative business if the order books are full ✅

Income Statement

We start at the top, revenue development, the last 2 years, the company almost doubled in 2 years...If we used the rule of 72, this would mean 72 divided by 2 years would give us the roughly yearly growth rate of 36%! But the growth from 5 years ago was ~€ 1.3 billion, which is in accordance with the assets side increase! The gross margin pre-Corona has been at ~20%, dropping to 10% in 2020!  The EBIT ("Operatives Egebnis") has been negative for the last 3 years, we see a big cost coming from Cost of Materials ("Materialaufwand") , which is a variable cost and is depending on how much revenue is generated! ❌

We see as well that not much CapEx is needed for the business, but the margins are low (at the moment) and the question is if that the growth in revenue can be higher than the growth of costs to have some kind of scale effect!

Summary: In a new world, with new and massive investments in "green" energy, full order books, the question is still to be answered if the company can make money, maybe increase prices to be more profitable!