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Dear ladies and gentlemen, welcome to the interim report Q1 2021 of Nordex SE. At our customer's request, this conference will be recorded. [Operator Instructions] May I now hand you over to Felix Zander, who will start the meeting today. Please go ahead.
Thank you very much for the introduction, Aurea. Good afternoon, ladies and gentlemen. Herewith, I'd like to welcome you, on behalf of Nordex, to our call presenting the results of the first quarter '21. Our Board members; our CEO, José Luis Blanco; our CFO, Dr. Ilya Hartmann; and our CSO, Patxi Landa, will guide you through the presentation, sharing the latest developments of Nordex, including markets and financials with you. Afterwards, as you know, there will be, and as you have just heard, a Q&A session. [Operator Instructions] And now I would like to hand over to our CEO, José Luis. José Luis, please go ahead.
Thank you, Felix. Good morning, ladies and gentlemen, and welcome to the Nordex presentation of our Q1 2020 results, as Felix mentioned, together with Ilya and Patxi Landa. Agenda for -- that we have prepared for you today is a standard agenda, with an introduction. Patxi will guide you through the situation in the markets and the orders. Ilya will discuss the financial performance of the company. I will take the operations and technology, talk about the guidance for the year and as well about the strategic targets for 2022. We will open the floor for Q&A. And I will conclude the meeting with, in our view, the key takeaways of our day. So with this, let's move to the first part of the presentation, starting with the highlights of Q1. We delivered EUR 1.254 billion in sales, 0.8% EBITDA margin and minus 7.6% working capital. Despite a very slow start of the year, order intake at the end of the quarter stood at 1.2 gigawatts, showing a catch-up and a good start into 2021. 73% of the order intake accounts for the Delta4000 platform, supporting the product part of the midterm profitability improvement plan. Sales increased to EUR 1.254 billion compared to EUR 965 million last year, reflecting high activity level despite COVID and logistic challenges. EBITDA margin of 0.8% as expected due to legacy projects, but as well impacted by the ongoing COVID pandemic as well as disruption and shortages in supply chain as well as starting some inflationary pressures. Very important to remark the refinancing of the Schuldscheindarlehen, secure via shareholder loan from anchor shareholder, Acciona, successfully executed in the quarter. Important to mention as well that Nordex share was included in the mid-cap index, MDAX, of the Deutsche Boards Group since March 22. And last but very important, guidance for full year maintained. With this, I would like to hand over to Patxi to talk about the market and customer situation. Patxi, please.
Thank you very much José Luis, and good afternoon. Looking at the orders, we closed 1.2 gigawatts of new turbine contracts during the first quarter of the year, down 24% with respect to the same period last year. More than 90% of those orders were closed in Europe, with the largest volumes coming from Spain, Turkey, Germany and Finland. We continue to have a leading position in the region where we expect good order momentum for the rest of the year. Rest of the orders in the quarter came from Latin America, and the majority of the orders continue to come with Delta4000 turbines, representing 73% of the orders in the quarter. ASP increased to EUR 0.73 million per megawatt from EUR 0.72 million in the same period last year. Next slide, please. Service sales amounted to 8.6% of group sales in the quarter, with EUR 108 million and an EBIT margin of 16.5%. Fleet under contracts stands at 23 gigawatts, with an average availability of 97%. Next slide, please. Turbine order backlog stood at EUR 5.1 billion at the end of Q1, decreasing 13% with respect to the same period last year. And service order backlog grew 8% to EUR 2.8 billion, for a combined order backlog of EUR 7.9 billion at the end of the quarter. And with this, I hand over to Ilya, that will lead you through the financials.
Thank you, Patxi. Good afternoon, ladies gentlemen, also from my side, a warm welcome. I would now like, as Patxi said, to guide you through the financials for the first quarter, starting with the income statement. So José Luis mentioned it. Our Q1 was again affected, among other things, by some COVID-19 impacts, but it also went largely as expected. We delivered the sales of around EUR 1.25 billion, which is EUR 286 million higher than in Q1 of last year. We generated a EUR 10 million total in EBITDA, representing the mentioned 0.8% level, which reflects the soft start into the year we had expected and also mentioned during our full year 2020 call in March. Gross margin stood at 17.3% compared to 16.2% one year ago. Main impact on profitability, COVID-19 effects, largely from spillovers in operations and project execution, as already mentioned and commented in a bit more detail also by José Luis before and after the section. Our EBIT is on similar levels to the first quarter of 2020, so minus EUR 28 million versus the EUR 24 million minus of last year. And the net profit dropped by EUR 17 million compared to 2020. The key driver here were higher financing costs compared to the first quarter of last year of roughly EUR 10 million. The 2 key building blocks here were: A, Our interest and fees under the RCF; and B, the high utilization of our guarantee facility than 12 months ago. The latter is a consequence of our increased business activities, as shown earlier. In summary, and as mentioned at the beginning, P&L for Q1 has been within our range of expectations. Now on the next slide, and looking at the balance sheet. The structure of our balance sheet remains, in substance, unchanged compared to year-end. With approximately EUR 740 million of liquidity, we achieved a very solid cash position at the end of the quarter, also in comparison to the roughly EUR 780 million we had at year-end 2020. In comparison, one year ago, we stood at around EUR 430 million. Among other facts, we can here see the cash contribution from the still pretty decent order intake, as explained by Patxi, product execution, and of course, the working capital management. Equity ratio and equity have dropped when compared to year-end. This is a consequence of the impacts on profitability by the factors we explained earlier. Probably, again, worth to mention, we have now repaid, as José Luis mentioned, the promissory note or Schuldscheindarlehen. And for this, we have indeed used the proceeds from a shareholder loan by Acciona, which was another strong support by them. With that, I would like to go to the working capital shown on the next slide. Our working capital ratio for the quarter ended at minus 7.6%, an improvement from our year-end level, which stood at minus 6.3%. So current level is similar to the level of Q1 one year ago, minus 7.5% and quite below our guided figure of below minus 6% for 2021. The positive development of more than EUR 80 million in absolute terms between the end of the year and Q1 was largely driven by the continuously high level of project execution in the quarter. And this has also resulted in the corresponding decrease of our inventories. So in other words, the working capital development has continued to be a good success story at Nordex, especially when taking into account the still ongoing COVID-19 backdrop. With that, I would go to the cash flow statement. Cash flow from operating activities saw an increase to plus EUR 45 million when compared to Q1 last year of approximately minus EUR 20 million. It was largely affected by our positive development in working capital. Cash flow from investing activities were basically on the same level as in Q1 a year ago, both EUR 35 million. Key driver here was the expansion of our supply chain and blade production facilities. Overall, free cash flow went positive for the quarter with approximately EUR 10 million. It is also substantially above the minus EUR 57 million in Q1 2020. That is, of course, a positive development, but we will have to see how this plays out in the remainder of the year. Finally, cash flow from financing activities was at about minus EUR 46 million. And it was largely determined by the utilization of the shareholder loan, but overcompensated by repayments under the RCF and the EIB facility. So in a nutshell, in terms of cash flow, Q1 was more, and broadly speaking, a usual one. That brings us to the investments on the next slide. Our total investment in Q1 stood at EUR 38.6 million, slightly above the prior year level. Chief investment targets mentioned already were again, blade production facilities in India, for example, molds, as well as equipment and tooling for increased installation activities worldwide. We can also see a slightly higher portion of intangible assets as a result of somewhat increased development activities compared to Q1 2020. But all in all, it has also been a regular quarter in terms of investments. That brings me to the next and my last slide, about the capital structure. Leverage ratio further declined to 0.3 compared to Q4 at 0.4. With that, continued well below our long-term ambition level of 1.5. And just for comparison, the ratio stood at 1.2 one year ago. Equity ratio slightly declined compared to year-end from 17.5% to 16.2%. Contributing factors were again the same as those when we were communicating and commenting on the profitability. So that would be it for the financials. But before handing it back to José Luis, I'd also like to characterize our Q1 with 3 key takeaways from my side. The first, the start into the year was as we had expected it. Second, our forward-looking business maintained its resilience in Q1. Despite a bit of a slowdown in the sector, Nordex came out with a decent showing in order intake. And third, again, none of this is over. While vaccine rollout picked up in many countries, others are hit hard by another wave of infections. That in turn could affect supply chain factories or logistics in some part of the world where we operate. And in addition, we have also seen some pressure from inflation within the supply chain, which has persisted for longer than most expected. So volatility and gradually increasing pricing pressures are probably the most visible consequence of that. So this adds an extra layer of risk into the current year which we will have to manage closely. And with this, I would go back to you, José Luis.
Thank you. Thank you, Ilya. If we talk about operations, I think it's fair to remark that we keep operating under a COVID business continuity task force that we established around one year ago as COVID is not yet over and is still affecting our people and our business, as mentioned before. On top, we see disruptions in supply chain, shortages due to containers issues, and the associated risk with -- for cost inflation in logistic and in certain commodities. In those circumstances, our focus is still to protect our employees and execute our customers' projects with a minimum impact possible. Despite all the mentioned additional challenges that we are confronted with, it's remarkable the operational capabilities of the company, with a total installation of 356 turbines in 20 countries in the first quarter compared to 269, quarter of last year. So an increase of 50% -- 56% compared to the same quarter of the last year. Geographical split in megawatts in the first quarter of this year: 57% Europe; 21% North America; 16% Latin America; 6% rest of the world. So continuing the already mentioned trend of derisking the geographies for the medium term, at least until COVID is still with us. Talking about production. We are ramping up Delta4000 production for nacelles as we speak in Brazil, India and Spain; and India, Brazil and Mexico for different blade models of the Delta4000 platform. We -- as mentioned, we're still facing several disruptions that we are managing in a daily basis in the context of this already mentioned business continuity task force. We expect the situation to stabilize once the vaccination campaigns are rolled out worldwide. And we expect as well commodity prices and logistics disruption to ease over time. And that is our assumption. Output of turbines amount to 304 units in the first quarter; 174 in Spain; 118 in -- 174 in Germany; 118 in Spain, all Delta4000; 12 in Brazil from legacy products, but they're already ramping up Delta4000. And as we speak, ramping up India for Delta4000 as well. In-house blade production, 383 units in the first quarter; 172, Germany; 95, Mexico, adapting the plan for 4 lines of Delta4000; 82 in Spain to launch Delta4000; 34 in India, Delta4000 as well. And outsourced blade production -- all the in-house blade production is -- or majority, big, big majorities is Delta4000 outsourced blade production, 570 units in the first quarter, keeping the reasonable balance between outsourced and in-house. With this, we are approaching to the end of the presentation, so we move to the guidance. So summarizing, the guidance for the year is maintained: Sales between EUR 4.7 billion and 5.2 billion; EBITDA margin between 4% to 5.5%; working capital below minus 6%; and CapEx around EUR 180 million. And as discussed by Ilya, we need to be aware that the assumptions underlying the guidance are subject to greater uncertainties than normal, as we discussed, due to several risks ahead of us. Talking about strategic targets, the same apply for the strategic targets. We target to achieve sales around EUR 5 billion in the short term, maybe even before 2022. Let's see. And it's our strategic task to achieve a group EBITDA margin of 8% for our financial year 2022. And we have updated the wording to reflect what we see actually based on the '21 guidance because revenue might come earlier than profitability for the already mentioned factors. And with this, while capacity remains unchanged, 6 gigawatts plus. With this, we open the floor for Q&A.
Yes. Thank you very much. Now I'd like to hand over to our operator. And I would like to ask you to open the floor for Q&A, please.
[Operator Instructions] And the first question is from George Featherstone, Bank of America.
My first one would be on the market environment. You've obviously noticed a soft start to 2021 for the industry in Q1. Have you seen a change in dynamics so far in Q3? And could you also give us an update on the negotiation with Acciona for the 1-gigawatt Australia MacIntyre wind farm project?
Patxi?
Yes. I can take that one. No, we have not seen a change in dynamics in Q2 despite the environment that you were describing. We continue to see -- to have good visibility on the pipeline of orders that are to come. And with respect to that kind of deal, we do not publicly disclose individual negotiations that we have with customers. But as I mentioned in the previous call, yes, Acciona announced a large investment, potential investment that they will be doing in Australia, and we are in discussions with them to supply that. However, we do not expect to be closing that deal in the short term.
My second question would be around raw material cost inflation, and some of your peers have noted that there'll be some impacts on margins in the medium term. Firstly, to what extent is this already incorporated in your guidance for growth this year and also for 2022? And then secondly, within the answer, maybe if you could explain your hedging policy and any mitigation you have in terms of price increases or indexation within contracts?
Okay. So I will take the first part and Ilya will take the hedging part. Regarding costs, we have built our guidance to the best of our knowledge. And we see some impact in 2021 as well as an impact in 2022, which we -- the 2022 part, we still think we can counteract with the price. So we build both the guidance and the strategic targets taking into consideration what we know. But it's fair to say that the belt is slightly tighter than before without those risks. But at the same time, this could be an opportunity to reset the margins of the sector in a more sustainable level. So to your question, we have considered what we know. There are slightly more risk. But in normal circumstances, there are opportunities to reset the marketing level of the industry following what was announced by market leader, and we welcome that announcement very much. Regarding the margin policy?
Yes. I would say probably -- thanks, José Luis, you've answered also the hedging question to a degree, because a straight answer for that one is, where orders have been closed and have the lead time, let's say, of 6 to 8 months to installation, we are covered to the degree that we have locked up and locked in our supply chain. For orders longer than that, part of our value chain is exposed, as you just explained. So we will have to manage that closely, of course, with certain limitations. So when taking into account managing of working capital, that is a crucial lever and a constraint to manage that. In another example, shipping costs, it's way more difficult to hedge that per se because they come on the back of spot pricing. And then I think the third block, you already described José Luis, which is As for new orders, we will have to pass on those increases to the value chain. And you also mentioned that other players have indicated the same.
If I could just follow up on one of the points you made there, José Luis, on resetting the margins. What does that mean for Nordex? And are you basically intimating there that as with, I think you're inferring to investors saying that you are expecting to raise prices to offset, and I think as you just mentioned then, with new contracts coming in.
Well, very much this -- you are anticipating my closing of the session today. But very much, we welcome the announcement of the market leader to protect gross margin and to pass the cost increase to the consumers through the customers. So I don't think the customers will be affected midterm. We are fully convinced that the competitiveness of the sector allows for higher price and even eventually better margins. There is no need of this very low price options, low 30s, high 20s if the spot price is in the 60s. So consumers can pay more. And this might be if things -- if we behave rationally, a good opportunity to reset the margin of the industry. So we welcome the announcement. We will follow the strategy. We don't plan to use this strategy of the market leader to capture more market share, keeping a low pricing strategy or a low margin strategy. So we will follow and protect the gross margin and pass the cost increases to customers that will pass to consumers. But at the end, temporary, we can have effects, but long term, might be positive for the group.
The next question is from Vivek Midha, Citi.
So a bit of a follow-up from George's question. So around the 2021 guidance. So I guess at the midpoint, you need to deliver about a 6% margin EBITDA for the rest of the year, rising to about 7% at the upper end, which is not that far off your '22 margin target despite not having NDF fairly up to speed. So could you maybe talk about your views around the lower end and upper end of the guidance and your confidence at either end? And secondly, following on India, obviously, it's a terrible situation there, could you maybe just expand on how you see that affecting the ramp up in India? And when do you now expect to get to full operations there for Delta4000 operations?
Okay. So I will make a statement and then Ilya will go more into detail of the guidance question. I think the range is broad because the uncertainties are weak. I mean we are not operating into, let's say, stable circumstances. And India is a good example for that. We don't see risk from the order intake to cover the revenue. Most of the orders are almost in place and in execution to cover our revenue. But we might have a project delay. We might have lockdowns. We might have factories affected. We might have ramp-ups affected, which is the case of India. As we speak, we were ramping up Delta4000 in India, 2 malls in operation. 4 malls in the middle of the ramp-up of our biggest blade facility, and nacelles in conversion to produce Delta4000. As you saw in the presentation, we were already producing rotors in India. So the running factory is still running. So we are not affected by the lockdown because we are an export-oriented unit. But the factories that are in the middle of the ramp-up are temporarily affected. For how long? Honestly, we don't know. We expect to be resumed soon as the vaccination campaign is rolled out. But we expect a couple of weeks to resume those activities, but is somehow not in our control. And maybe, Ilya, you can give more color about the guidance.
Yes. Yes, of course, José Luis. I think you already basically answered the part of the range and what are the uncertainties and factors that will impact where and which side of the bookends we will come out. But to your questions on the Qs, obviously, we're not giving intra-year guidance. But when listening to your question, I think there is a set of fair assumption in there. So expecting Q2 to be already substantially better, obviously, than the Q we're presenting here. And then in the rest of the year, Q3, Q4, going up to a run rate that would bring us into, let's call it, striking distance of what we target for next year, I think this is a fair picture.
That's helpful. Could I just quickly follow up in terms of the upper end of the guidance range. You talked about the sensitivities within the range. But what would you need to get to the upper end of the range on your profitability and on margin?
I will say executing the projects like a switch clock, not delaying anything, not having any extra cost, not failing in any slot in production. So it's somehow approaching to a best case scenario, which is possible, but presents certain challenges. But still possible, of course. So it's basically very much execution. We don't rely on order intake to achieve the top end of the guidance.
The next question is from Ajay Patel, Goldman Sachs.
So mine, carrying on the theme -- actually sticks with the raw materials. I just want to understand this in a little bit more detail. As in, as far as I'm hearing from the other wind manufacturers, when an order becomes [ firm ], you lock in the raw materials underlying to the best you can, currency to the best you can. So just thinking about how much raw materials have moved over Q4 and Q1, I would have expected your average selling price to start to move up. And it was flattish. And I just wanted to get an idea of all the orders that you basically captured here consistent with the margins that you will achieve next year. And how should we think about how the average selling price will evolve in the order intake over the year given where the current environment is on raw materials? And just how -- maybe whatever you can offer in terms of the understanding on how one filters into the numbers to the other so we can look in the company and know what to expect. And then the second question just was on India. Do you have any exemptions on the way that production works there? Or is it effectively just purely government guidelines? I just remember last week, Vestas mentioning that they do have some exemptions that will allow them to produce? So just wanted to get a similar sort of arrangement or not.
Okay. So I can take and my colleagues can jump in and further elaborate. I think the average selling price has usually, Patxi mentioned, is an indicator, but is a component of location, scope, turbine type, so on and so forth. So as we mentioned, we are derisking by design, the selection of markets where we operate, concentrating more in mature markets in those circumstances. And what -- and on top, it was not mentioned, but to give you some color, we have a substantially lower share of turnkey projects. So majority of the order intake, more than -- I think more than 80% is turbine skin sale and the rest is only with foundation. So almost no turnkey compared to the previous year that we have some different scope. So that's a distortion in the average selling price. It's true that the inflationary forces, we started to see in Q1, and we are starting to react to that with the market to protect the gross margin. So the gross margin is the indicator that we try to protect. And in the new orders that we are in discussion, we are always incorporating this higher cost. So eventually, in a like-for-like comparison, in the next quarters, you will see this impact. We believe that the order intake in volume will not be affected by this increase in -- by this pass-through, of course, increases to customers. But we will see over time in a like-for-like the ASP evolution. Talking about India. As I mentioned before, the problem is not the governmental permission, which we have, and we are still operating in one blade factory. The challenge for us was the support of international teams that needed to support our Indian colleagues in the ramp-up of Delta4000 products. So for safety reasons, until we can guarantee availability of health care in case they are affected by COVID or they are vaccinated in Europe or U.S. or in India, we decided to temporary put on hold the ramp-up activities. We plan to resume those activities in the next couple of weeks. And as we speak, we have the governmental order to operate because we are export-oriented units. We have 3 factories. One is operating. The others are as well operating, but ramp up, in a slowdown until we vaccinate our technicians and continue with the ramp-up support.
Next question is from Sean McLoughlin, HSBC.
I wanted to ask firstly about your visibility on sales in 2022. You said you're covered already for the top end of 2021 guidance. What -- yes, what level of visibility do you have currently on 2022? That's the first question.
I don't know if we have the exact number, Patxi, but ...
We do. We do, but we generally don't anticipate with this situation, generally don't provide these type of numbers. What I can tell you, Sean, is that goes very well in line with what we had same period last year. So -- and that goes also to the first question. So we see a good visibility on the order pipeline. And we are filling up the 2022 P&L sales with orders at the same pace that we were doing last year.
But somehow, you can do the math from the backlog. If we have a backlog, around about of 5 gigawatts, round about...
EUR 5 billion.
Yes?
EUR 5 billion.
Yes, EUR 5 billion. Yes. That's a backlog of slightly more than one year. And we have consumed one quarter, so we have slightly more than one quarter of backlog already secured for next year. And as Patxi mentioned, with good momentum on the pipeline, so we are not concerned about the visibility in the pipeline.
Understood. And a second question, I mean, related to that and building slightly on the previous questions. I mean thinking about the 8% target now, I mean you've talked about new uncertainties and increased uncertainties. But I mean you're sticking with that target. So clearly, you do believe that you can achieve that. I suppose how quickly would the situation need to normalize for you to continue on that pathway to 8%?
Okay. So there are 2 normalizations. One normalization is in the disruption. Our other thought normalization is with cost increases, being able to do a pass-through to consumers through the customers. So those are the 2 normalizations. And the second is ongoing. I think we welcome the announcement of the market leaders. So we are acting to protect our gross margin as well because we cannot take more cost increases, and this might temporarily impact profitability. So depending how the 2 factors evolve, we might have a temporary effect. But if the size of the market remains strong, and the midterm perspective remains strong, and if we keep our market share because we have competitive products, we are where the market is going, and the markets act rationally and not entering into price war, which should not be the case in current profitability circumstances of the sector, it might take us a little bit longer or shorter to get there, but the underlying basic assumptions remain the same.
Fantastic. That's super helpful. My last question, on debt cost. I mean your finance costs are continuing to creep up. I'm just wondering what opportunities you have over the next few months, either from new financing or restructuring around debt to bring those costs down.
Yes. Sean, happy to take that one. So I go back to my statements earlier that we're looking at the financing costs of the first Q, they're probably skewed a bit by extraordinary effects when we had to accumulate some of the fees payable under the RCFs in that quarter. So I would not extrapolate that too much for the entire year, which we would believe to be on similar levels like last year. But to the core of your question, and I think I mentioned it last time, yes, it will be one of the first and foremost tasks of myself and my team to look into options to how further bring down those financing costs from where they are right now.
And I mean, is there anything that you can give in terms of the kind of objectives that you've set yourself? Or anything that you would expect is a kind of reasonable assumption to make on that cost reduction front?
I don't think we're in a position today to have a tangible result for that because that would already need the execution of these kind of options. So I don't think today, we can give already an indication.
[Operator Instructions] And the next question is from Constantin Hesse, Jefferies.
I also have 3 questions. So #1 would be really on Q2. Has there any been any visible improvements in production and installation processes in Q2 which do support higher margins? Ilya, going back to your point. And if you can also give some color on the timing of your price increases. So I'm just trying to understand if the 0.3 -- [ 0.73 ] in Q1 were mostly driven by mix and only part of that by price. That would be my first question.
Okay. So Q2, we see an improvement coming mainly for a good level of activity and the ending of legacy low-margin projects. So if we don't face any major disruption that we don't expect, we should see better profitability, and mainly driven by the quality of the projects that we execute. We execute more Delta4000. And this loss-making project that we announced in the previous calls is approaching to the end, and less legacy projects in Q2. So that's the main factor for the improvement in the Q2.
That's great. And just on the pricing timing?
The pricing, of course, I mean what we are in discussing now is for delivering maybe Q2 2022. So the pricing discussion that is ongoing following the market will not have a substantial impact in 2021 nor in Q2 of 2021.
That's great. So question #2 would be on other operating expenses, which have grown considerably. And it seems that this has been driven mainly by expenses from remedial work for projects and post-contractual customer claims, which was worth about EUR 26 million compared to 0 last year. So I'm just wondering if this was a one-off. Or how should we really think about this one?
Thanks, Constantin. So without being too specific, yes, A -- I think there's 2 factors. A, is that we have -- we're in a growing business. So both on [ CapEx ], OpEx side, we have a growth rate which reflects the increase of our activities. And second, yes, there is some effect, like you mentioned in that, for example, we do have some costs coming over from a Mexican project where part of that increase you're mentioning is coming from. So yes, it's a mix of some, in that regard, one-off costs from those legacy, and, b, the increased business activity.
Okay. That is great. And then maybe just lastly. You said that the order intake is covering most of revenues in 2021. I'm just wondering how much that is today. Because I think back in March, you said you had about 80% visibility. I'm just wondering about how much has then gone up by from now at the moment.
Think it's 99% as we speak.
And we haven't received any further questions. So I hand back to the speakers for closing remarks.
Okay. Thank you very much, Aurea. And then thank you very much from our side, for all your questions. And I'd like to take the opportunity to pass over to José Luis for your final remarks.
Thank you very much for your interest, for your questions. And with this, we approach to the end, to the key takeaways from our side. So first, we see positive business development expected in the rest of the year, with increased EBITDA margins in the course of the year, of course, to meet the guidance. Demand for the most profitable projects remains promising, even for the latest rotor variants. We talked a lot about, in the course of the presentation to date, about volatility and inflation in commodities, ongoing COVID pandemic, and logistic risk might have an impact in short term. However, in the medium term, prices could structurally improve as the wind industry remains one of the key pillars and the key pillar competitive in the global drive to achieve net 0 emissions and to fight climate change. Price is not a roadblock to achieve that. We talked about the challenging situation, temporary challenging situation due to COVID in India. Hopefully, this will ease very soon, and we hope that for India as a country and for our Indian colleagues. This might cause some delays in the ramp-up, which we think are going to be temporary. And as mentioned, guidance for the financial year 2021 is maintained. We talked to conclude as well in the course of your questions, the -- our position towards the announcement of the market leader. We welcome the announcement of protecting gross margin in the industry and pass the eventual cost increases to consumers through customers. So eventually, we will try not to hurt much our customers. And this is an opportunity to reset margins of the industry, eventually to a more sustainable levels in the future, although we might have some pain in the implementation of that. So with that, thank you very much for your time, for your questions, for your interest. And wish you a wonderful evening.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect now.