Nordex AG’s Q1 2025 Results: A Turnaround in Motion?

Nordex AG, the German-based wind turbine manufacturer, reported a pivotal first quarter of 2025, marking a sharp reversal in its financial trajectory. After years of volatile performance, the company swung to a net profit of €8 million in Q1 2025—compared to a €13 million loss in the same period last year—while boosting its order backlog and achieving a positive free cash flow for the first time in over a year. The results underscore a strategic recalibration, but questions linger about whether this turnaround can be sustained.

Financial Turnaround, But With Nuance

The headline numbers are encouraging. EBITDA surged 52.6% year-on-year to €80 million, lifting the EBITDA margin to 5.5%—a 2.2 percentage-point improvement over Q1 2024. This margin expansion, driven by cost discipline and a stronger service segment, is critical for a sector where razor-thin margins have plagued manufacturers.

However, sales dipped 8.8% to €1.435 billion, reflecting lower turbine installations—a deliberate slowdown as Nordex prioritized profit over volume. Management emphasized that reduced production in Q1 was temporary, tied to supply chain adjustments and a shift toward higher-margin projects.

Order Backlog Soars, Service Segment Blossoms

The most striking figure is the €13.5 billion total order book, up 18% year-on-year. The Projects segment’s order backlog rose 12.5% to €8.25 billion, while the Service division surged 37.4% to €5.21 billion. This diversification is key: service revenue grew 19% to €197 million, demonstrating the value of long-term maintenance contracts in an industry where recurring revenue is increasingly vital.

Geographically, Nordex’s European dominance remains intact—75% of installations were in Europe—but emerging markets like Türkiye, Brazil, and the U.S. are driving growth. The company’s focus on compact, grid-friendly turbines (4–6 MW models) has positioned it well for constrained markets, a strategy that appears to be resonating.

Cash Flow and Liquidity: A Fragile Improvement

Nordex’s transformation is most evident in its cash position. Free cash flow turned positive at €4 million, a dramatic turnaround from -€254 million in Q1 2024. Cash and equivalents totaled €1.132 billion, with a net cash position of €824 million—a robust liquidity buffer to weather supply chain hiccups or demand volatility.

Risks and Challenges Ahead

While the results are promising, risks remain. The sales decline highlights reliance on project timing, and a 7% drop in turbine installations year-on-year could pressure future revenue if production doesn’t ramp up. Additionally, Nordex’s equity ratio dipped slightly to 17.6%, though its net cash position mitigates balance sheet risks.

CEO José Luis Blanco’s confidence in hitting the 2025 sales target of €7.4–7.9 billion and a 5–7% EBITDA margin hinges on executing a plan to boost production. The company aims to install 5.5–6.5 GW of turbines this year, up from 4.4 GW in 2024. Achieving this will require resolving lingering supply chain bottlenecks and sustaining order momentum.

Conclusion: A Turnaround Worth Watching

Nordex’s Q1 results are a compelling case of operational discipline paying off. The company has stabilized its finances, diversified its revenue streams, and built a fortress-like balance sheet—all while positioning itself in high-growth markets. The order backlog’s record size suggests future revenue is secured, and the service segment’s growth provides a shield against project delivery fluctuations.

Yet investors must weigh this progress against execution risks. If Nordex can scale production without sacrificing margins and sustain order intake, its stock—which has lagged peers this year—could rebound. A positive free cash flow and a 5.5% EBITDA margin are milestones, but the test will come in sustaining these gains over the next two quarters. For now, the data suggests Nordex is on the right path, but the final verdict remains a few earnings reports away.