Andritz Earnings Call: Mixed Outlook with Growth in Hydropower

Andritz ((AT:ANDR)) has held its Q2 earnings call. Read on for the main highlights of the call.

The recent earnings call for Andritz presented a mixed sentiment, reflecting both optimism and challenges. While the company showcased strong order intake and strategic acquisitions, which highlight potential growth, particularly in the Hydropower segment, it also faced a decline in revenue and profitability. This decline was attributed to past low order intake and restructuring costs, which somewhat overshadowed the positive developments.

Strong Order Intake

Order intake for the second quarter of 2025 reached EUR 2.4 billion, marking a 26% increase compared to the previous year. This robust performance was notably driven by the Metals and Hydropower segments, indicating a healthy demand and strategic positioning in these areas.

Hydropower Growth

The Hydropower segment experienced a remarkable 173% increase in order intake, signaling a significant upturn in the market. This growth suggests strong future prospects and positions Andritz well to capitalize on the expanding demand in this sector.

Strategic Acquisitions

In the first half of 2025, Andritz completed four major acquisitions. These strategic moves have enhanced the company’s product offerings and complemented its existing business areas, thereby strengthening its market position.

Record Service Revenue

Service revenue reached an all-time high, accounting for 44% of total revenue. This increase in service revenue has been crucial in supporting overall margin stability amidst other financial pressures.

Revenue Decline

Despite the strong order intake, revenue for the second quarter decreased by 8% to EUR 1.9 billion. This decline was primarily due to low order intake in 2024 and negative foreign exchange impacts.

Profit Margin Pressure

Andritz reported a drop in its EBITDA margin to 7.8% from 8.6%, largely due to restructuring costs. Additionally, the net income margin decreased to 4.5% from 5.7%, indicating pressure on profitability.

Environment & Energy Challenges

The Environment & Energy segment faced challenges with a decrease in order intake. Cautious market conditions and delays in investment decisions have impacted this segment, reflecting broader market uncertainties.

Forward-Looking Guidance

Looking ahead, Andritz remains optimistic about its strategic direction, supported by a robust order backlog of EUR 10.4 billion, which grew by 7%. Despite an 8% revenue decline to EUR 1.9 billion, the company maintains a stable EBITDA margin of 8.4% and a strong book-to-bill ratio above 1 for three consecutive quarters. The first half of the year showed a strong order intake of EUR 4.7 billion, up 23%, with a revenue decline to EUR 3.7 billion. These factors provide a solid foundation for future revenue growth.

In conclusion, the Andritz earnings call highlighted a mixed outlook with promising growth prospects in certain segments, tempered by current financial pressures. The company’s strategic acquisitions and strong order intake, especially in Hydropower, offer a positive outlook, although challenges in revenue and profit margins remain. Investors will be keenly watching how Andritz navigates these dynamics in the coming quarters.