Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Andritz AG (ADRZF, Financial) reported a 6% increase in order intake for Q3 2024 compared to the same period last year, indicating strong demand in certain sectors.
- The company maintained a stable EBITDA margin of 8.4%, demonstrating effective cost management despite challenging market conditions.
- There was a notable increase in the service business, which now constitutes 40% of total revenue, up from 38%, reflecting a strategic shift towards more stable revenue streams.
- The metals segment showed strong order intake in Q3, particularly in metals processing and forming, suggesting potential growth in these areas.
- Andritz AG (ADRZF) is making progress in its ESG targets, with many KPIs already achieved or overachieved ahead of the 2025 targets, showcasing its commitment to sustainability.
Negative Points
- Revenue for Q3 2024 decreased by 3% year-on-year, indicating challenges in converting order intake into revenue.
- The order backlog decreased by 9% year-on-year, reflecting potential future revenue challenges.
- The pulp and paper segment experienced a significant decline in order intake and revenue, down nearly 20%, highlighting sector-specific difficulties.
- The company had to make additional provisions for capacity adjustments, indicating ongoing challenges in aligning production with demand.
- Andritz AG (ADRZF) faces pricing pressure due to market conditions, which may impact its ability to pass on cost increases to customers in the future.
Q & A Highlights
Q: Can you clarify the difference between "stable" and "slightly down" in your guidance?
A: Stable typically means within a 1-2% variation, while slightly down suggests a 3% decrease. We do not expect to drop below this level. - Joachim Schoenbeck, CEO
Q: How much revenue can be expected from the Paracel project in 2025 if it proceeds?
A: If Paracel moves ahead as planned, we expect minimal revenue in 2025, primarily from engineering and civil works, as the full notice to proceed is expected by mid-next year. - Joachim Schoenbeck, CEO
Q: What is the outlook for the automotive sector, particularly in Europe and China?
A: We are heavily dependent on German OEMs, which are currently weak. However, we are growing in the Chinese press market. We are preparing for a challenging environment by focusing on service business growth. - Joachim Schoenbeck, CEO
Q: Can you provide insights into the restructuring efforts at Schuler and their impact on profitability?
A: We are restructuring to adjust to market changes, reducing capacity by 700-800 people. This is part of a strategy to protect profitability and adapt to lower demand. - Joachim Schoenbeck, CEO
Q: How are you managing pricing pressures and wage increases in the current market?
A: Pricing pressure is expected to increase, making it more challenging to implement price increases. We will strive to manage this, as wage increases cannot be offset by productivity gains alone. - Joachim Schoenbeck, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
