Gamesa ended the first quarter of 2013 with 7 million euro in attributable profit, i.e. the company is back in the black, in line with its Business Plan 2013-2015.
In a complex economic and industry situation, marked by falling demand and pressure on prices, Gamesa advanced with the commitments made in its business plan:
Key figures 1Q 2013 (vs. 1Q 20121):
- Revenues: 491 million euro (-12.2%)
- 446 MWe (-12.5%)
- EBIT: 22 million euro (vs. -14 million euro in 1Q 2012)
- EBIT margin: 4.4% (+6.8 p.p.)
- Net profit: 7 million euro (vs. -19 million euro in 1Q 2012)
- NFD: 729 million euro (-29.6%)
- NFD/EBITDA: 2.8x
- Working capital/Group revenues: 25% (vs. 39% 1Q 2012)
Sales and orders. Group revenues amounted to 491 million euro in the quarter (-12% vs. 1Q 2012). At 446 MWe, sales were in line with the 2013 guidance (1,800-2,000 MWe) but were 13% lower than in 1Q 2012 due to the slowdown in demand, particularly in the US and China, and the strategy of controlling working capital by aligning manufacturing to deliveries and receipts. Latin America and the Southern Cone accounted for 53% and remain as the company’s main growth driver. Europe and the rest of the world contributed 20%, India 17%. The contribution by the US (8%) and China (1%) declined in the quarter.
New firm orders amounted to 228 MW in the first quarter and accounted for 67% of sales guidance for 2013. The reduction in order intake (-67%) reflects the decline in demand in the US (which accounted for 50% of the volume in 1Q 2012) and China, and the slowdown in projects in Europe and India due to regulatory volatility. However, the strategy of commercial diversification and the drive into emerging markets resulted in 278 MW of new orders in April, i.e. more than in all of the first quarter, boosting coverage of the guidance to 74%.
Revenues in the Operation and Maintenance (O&M) division increased by 18% to 86 million euro, while MW under maintenance increased by 12% (19,513 MW); accordingly, this unit increased its contribution to recurring revenues while profitability rose faster than MW under maintenance.
Profitability. The business plan enabled the company to return to profit. Gamesa ended the quarter with 22 million euro in consolidated EBIT and a 4.4% EBIT margin (vs. -2.4% in 1Q 2012). Despite the lower business volume and decline in sales, profitability ratios improved due to the enhanced project mix, the contribution by O&M, higher productivity, and the reduction in fixed costs (-26%), once 100% of the savings measures under the business plan had been implemented.
Sound financial position. Gamesa is progressing towards its objective of attaining a sound financial position by year-end: net financial debt amounted to 729 million euro, i.e. 26.9% lower than in 1Q 2012. Strict control of capital expenditure (25 million euro, i.e. 50% less than in 1Q 2012) assures returns and a sound balance sheet. Tight control over working capital enabled Gamesa to end the quarter with 660 million euro in working capital (vs. 1,175 million euro in 1Q 2012), i.e. 25% of revenues (vs. 39% in 1Q 2012).
The steady recovery in profitability, the commercial strategy, progress with cost cuts, order intake, and the launch of new products designed to reduce the cost of energy will enable Gamesa to attain its 2013 guidance.
1To facilitate comparison, data for 1Q 2012 does not include restructuring costs.