Andritz Earnings Call: Mixed Sentiment and Future Growth

Andritz ((AT:ANDR)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call for Andritz presented a mixed sentiment, reflecting both strengths and challenges faced by the company. On the positive side, Andritz reported a strong order intake, growth in its service business, strategic acquisitions, and stable financial performance. However, these positives were tempered by a decline in revenue, restructuring costs, currency impacts, and a negative financial result, leading to an overall neutral sentiment.

Record Order Intake

Andritz achieved a record order intake in December 2024, with particularly strong performance in the fourth quarter. This success was driven by robust demand in the Pulp & Paper and Hydropower sectors, showcasing the company’s ability to capture market opportunities effectively.

Service Business Growth

The service business of Andritz reached a new all-time high, contributing 41% to the total revenue. This growth was fueled by strong performance across various industries, highlighting the company’s strategic focus on expanding its service offerings.

Strong Financial Performance

Despite a slight decrease in revenue year-on-year, Andritz maintained a stable EBITA margin at 8.6%, with a comparable EBITA margin improving to 8.9%. This demonstrates the company’s resilience and effective cost management in a challenging economic environment.

Strategic Acquisitions

Andritz made strategic acquisitions, including Procemex for optical web inspection and LDX Solutions for pollution control. These acquisitions are expected to enhance the company’s digitalization and decarbonization strategies, positioning it well for future growth.

Dividend Increase

Reflecting its strong financial performance, Andritz proposed a dividend increase of €0.10 per share, bringing the total to €2.6. This move underscores the company’s commitment to delivering shareholder value.

Revenue Decline

The company experienced a slight decrease in revenue year-on-year, with a notable 13% decline in the Pulp & Paper sector. This highlights the challenges faced by Andritz in maintaining its revenue growth amid sector-specific headwinds.

Restructuring Costs

Additional provisions for capacity adjustments, mainly in Europe, impacted the reported EBITA. These restructuring costs reflect the company’s efforts to optimize its operations and adapt to changing market conditions.

Currency Impact

Andritz faced a €100 million decrease in revenue due to foreign exchange currency effects, primarily from a stronger euro. This currency impact posed a significant challenge to the company’s financial performance.

Negative Financial Result

The company reported a negative financial result due to a €23 million devaluation effect from the deconsolidation of a cybersecurity joint venture. This financial setback highlights the risks associated with joint ventures and currency fluctuations.

Forward-Looking Guidance

Looking ahead, Andritz provided guidance for 2025, projecting revenues between €8.0 billion and €8.3 billion, with an expected comparable EBITA margin of 8.6% to 9%. For 2027, the company targets revenue growth to €9 billion to €10 billion, driven by base growth and potential large-scale orders or M&A activities. This forward-looking guidance indicates a positive outlook for the company’s future performance.

In conclusion, the Andritz earnings call highlighted a balanced picture of achievements and challenges. While the company demonstrated strong order intake and service business growth, it also faced revenue declines and financial setbacks. The forward-looking guidance suggests optimism for future growth, supported by strategic acquisitions and a focus on digitalization and decarbonization.