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Dear ladies and gentlemen, welcome to the Interim Results Q3 2021 of Nordex SE. At our customer's request, this conference will be recorded. [Operator Instructions] May I now hand you over to Mr. Zander, who will lead you through this conference today. Please go ahead, sir.
Thank you very much for the introduction. Herewith, I would like to welcome you on behalf of Nordex, our analysts and investor call related to the release of the Q3 results today. As you know, last week, we have already published our preliminary results for the third quarter and our revised guidance. Today, our CEO, José Luis Blanco; our CFO, Dr. Ilya Hartmann; and our CSO, Patxi Landa, will guide you through the presentation and share additional information about the development of Nordex with you. Afterwards, as you have heard, there will be a Q&A session. [Operator Instructions] And now I would like to hand over to José Luis. José Luis, please go ahead.
Good afternoon, everyone. I'm sure most of you will have seen our press release on preliminary financials and revised guidance last Monday. Today, we announced the final results for the first 3 quarters of the year, which are in line to what we announced last week. So we are confirming the preliminary results. As usual, let me start with the key highlights of the first 9 months. Moving to the next slide. Thank you. First, our order intake continues to be strong and is strong compared to the industry. We booked 23% more orders in this period compared to the previous year, of which keeping the trend around 80% of the orders were for Delta4000 platform. Second, financial performance. We delivered almost EUR 4 billion in sales with an EBITDA margin of 2.5% in the first 3 quarters of the year. And let me again reiterate that this was achieved in a high volatile and inflationary environment, with consistent increases of prices for raw materials, basic commodities as well as a very volatile environment in shipping rates, along with shortages in vessels that have been impacting supply chain costs, supply chain availability and ultimately, our overall financial performance. With this environment of continuous supply chain disruptions, we believe our team has done and is doing very well to deliver 25% growth in sales and limiting the impact on the EBITDA level so far. Additionally, during the quarter, we're addressing our balance sheet with a EUR 586 million rights issue. As a result of that, we have an equity ratio of 28.5% and a net cash position of EUR 516 million. As you can see, we now have a strong financial structure in place to drive us over the period of volatility regionally. During the first quarter, talking about technology, we added a new variant to the product portfolio, the 6.X. So we are as well playing in the 6.X market segment. Finally, as we announced last week, we have revised our guidance and strategic targets given the extreme volatile environment. This is not only just affecting wind but many others sectors as alerts. And with this, let me hand over to Patxi.
Thank you very much, José Luis. Looking at the orders and as was briefly mentioned now, we closed 4.6 gigawatts of new turbine contracts in the first 9 months of the year, up 23% with respect to the same period last year. 62% of those orders came from Europe in 13 different markets, with the largest volumes coming from Germany, Finland, Spain, France, Turkey and the Netherlands. 18% of the orders came from Latin America, mainly from Brazil, and then the large order in Australia with Acciona that was previously mentioned. We have a back-ended order profile this year in North America as a result of the relative market slowdown. And we expect the North American orders to come in Q4 this year. The good order momentum we saw in the middle of the year is confirmed, and we expect to close the year with larger order volumes than in 2020. 80% of the orders came with Delta4000 turbines. And ASP remained stable at EUR 0.70 million per megawatt. Service sales amounted to 8.4% of group sales in the first 9 months of the year with EUR 332 million and an EBIT margin of 16.7%. Fleet under contract stands at 27 gigawatts with an average availability of 97.3%. Turbine order backlog remained stable at EUR 5 billion despite the significant growth in sales in the period. And the service order backlog grew 7% to EUR 3 billion for a combined order backlog of EUR 8 billion at the end of the period. And with this, I hand over to Ilya.
Yes. Thank you, Patxi, and good afternoon also from my side. I would now like to guide you through the Q3 financials of this year and some of them we already anticipated in last week's call, but let's first look at the income statement. So our sales grew by 25% to almost EUR 4 billion on the back of the high level of execution in, as José's mentioned, a very tough environment. Our gross margin stood at 17% compared to just shy of 11% last year. We achieved an EBITDA margin of 2.5 percentage points (sic) [ 2.5% ] in the first 9 months of this year, so around EUR 100 million in total numbers. However, as also mentioned by José Luis today and last week, this was significantly impacted by the ongoing inflationary pressures and the supply chain disruptions. On this slide, probably let me also make one last point. We booked net interest costs of almost EUR 100 million. So it's a bit on the higher side of financial costs. And it's due to basically 2 reasons being one-offs for both of the cancellation of the shareholder loan as well as the state-backed RCF we had to account for one-off costs and arrangement costs for both these debt instruments that have now been canceled and have been booked into Q3. With that, let me turn to the balance sheet. So through the capital increase we've mentioned a few times, we have now significantly fortified our balance sheet and put it on a stronger footing, which is helpful in the current environment, of course. So as a result, we now have a strong cash position, EUR 870 million at the end of Q3, and improved also our equity ratio to 28.5%, which is 10 percentage points better than in Q3 of last year. Current liabilities are down more than EUR 600 million, mainly due to the, I mentioned it a few moments ago, repayment and cancellation of the Schuldscheindarlehen and the RCF facility. So with that, our net debt position now converts into a net cash position of EUR 516 million. So that brings me on the next slid to the working capital. Our working capital ratio also continues to be quite tight at a minus 7.7% compared to the 6.3% in December of last year. Improvement in the working capital was mainly driven by reducing our receivables, by reaching more milestone payments and driving project execution. So overall, it remains clearly below our guided number for the current year, which is at minus 6%. And that brings me to the cash flow statement on the next slide, where the cash flow from operating activities stood at EUR 128 million at the end of the Q, clearly higher than the previous year and mainly driven by further tightening of the working capital, as just mentioned. In terms of cash flow from investing activities, it has been a regular quarter, largely in line with our investment program. So there's a positive fresh -- sorry, positive free cash flow of around EUR 30 million in Q3, thanks to that successful working capital management. And for the 9 months, this is overall a EUR 23 million number, as you can see on the slide. So last but not least, cash flow from financing activities stood at EUR 73 million. That also reflects the cash proceeds from the capital increase, offset by the repayment and cancellation again of both the RCF and the Schuldscheindarlehen. And with that, I would quickly go to the investment side, the CapEx very briefly. We invested around EUR 110 million in the first 9 month. And this is very much on the same level as last year's period. It's a bit different on the EUR 112 million to EUR 108 million, but basically on the same level, and the focus on our investments remain the same. So many investments were again in the blade production facilities in India as well as tooling equipment covering our ongoing high installation activities. And with that, I go to my last slide, which is the capital structure. As expected and also mentioned before, our capital structure substantially improved post the rights issue, and the shareholder loan conversion that was done in the same transaction. So our leverage ratio now stands at minus 4.2 and our equity ratio now stands at, I said it before, 28.5% versus 16.5% in Q2. So with that, I would summarize my key takeaways before giving it back to you, José Luis, about again, first, our balance sheet is now in a much stronger place to support the business, and cash is also strong. Second, though, the unprecedented volatility and the macro environment continues to impact operations, and hence, our margins as we've seen. And also our planning and forecasting ability is therefore constrained in this environment because visibility is much less than usual times. And then third, in that environment, our focus remains on topics that we can control, influence, and that is stricter cost controls, accelerating cost savings through our comprehensive company program, supporting the business and tackling the cost inflation and dynamic and faster responses in our planning and costing to adapt to this fast-changing environment. And with this, I will give it back to you, José Luis.
Thank you. Thank you, Ilya. Talking about the operations side of the business, let me provide you a quick overview of the operational performance. As you can see in the left chart, we installed a remarkable 46% more megawatts compared to the same 3 quarters of the last year, and we have done this in 22 different countries across the world. This is a remarkable achievement, as is a substantial growth and its installation profile that was achieved in one of the worst supply chain disrupted environments. I think this was not very much affected by the pandemic, but was affected by the consequences of the pandemic. So a lot of disruptions in availability of parts, vessels, so on and so forth. On the production side, the same environment. We managed to keep to keep increasing our activity to support our projects and our customers. We produced 1,068 turbines, Germany, Spain, India and Brazil; 400 (sic) [ 1,242 ] blade sets, Germany, Spain, Mexico and starting in India, converting Mexico. And this is around 40% of the total demand for blades. So let me make 2 points here. First, as you can see, we have a good global production footprint to deliver our customers the well-landed cost. And as well, we have the possibility to adapt the footprint to disruptions in the costing side of the company or in the volatility in shipment. Second, India remains a key component in our strategy, although in a slow -- a slightly slow ramp-up due to the ongoing issues in the logistics environment for inbound logistics as well for project cost logistics. Moving to the next slide and approaching to the end. As we discussed last week, we announced revised guidance for 2021. We tightened our revenue guidance to the top end at EUR 5.2 billion on the back of a very good underground execution despite the challenges. Unfortunately, our EBITDA guidance for the year now stands at around 1% to account, as we mentioned, for the supply chain disruption and extra costs. Moving to the last slide, our strategic targets. No further changes to what we discussed last week. Just to summarize our message from last week, we need stability in the environment to have a stable cost structure that eventually is readjust in the pricing policy to the customers. And once those boundary conditions are achieved, we believe we can reach our normalized EBITDA margin of 8%. And with this, as always, I would like to open the floor for Q&A.
Yes. Thank you very much. Operator, please open the call for questions. Thank you.
[Operator Instructions] We have a first question. It's from George Featherstone, Bank of America.
I'll take my questions one at a time. Firstly, just trying to get a sense of the underlying margins of the business, and I know there's been some cost inflation on the supply chain, et cetera. But I wondered if you could specifically let us know what the absolute liquidated damages charge is for 2021?
I think we mentioned in the call last week and not sure how we can comment here but, of course, there are some lease into the forecast expected. We cannot go more into detail because, first, we don't know the exact number. Second, it's not that prudent because those discussions are ongoing with customers. So it's even premature to issue and pretty much to give you a precise number. So in normalized circumstances, this should not be part of business planning. But due to the, I would say, substantial disruption in availability of vessels and so on, this is adding to that impact of our forecast. Unfortunately, I cannot be more specific at this point in time.
And maybe just to complement with more to -- in addition to what José just said, let's remind us that the LDs is just part of what now we have shown last week in the guidance. I mean by and large, it is that information pressure from the logistics, from the commodities. So that is, let's say, the part of the impact we've been seeing when seeing our guidance affected.
And talking about the underlying margins. I mean without all those effects, that's very much what substantiates our view that the midterm strategic target should be able to be achieved once stability comes back to the market. So which means that the underlying margins without those effects are unchanged, so remain very much as they were before.
I mean just as a follow-up to this question in general, I think what people are trying to understand is there's clearly ongoing logistics and raw material price inflation and cost pressure associated with that, which might be transitory. It might also continue into next year. But clearly, liquidated damages is much more one-off and specific in nature. So I just wondered within the guidance range or guidance now that you've tightened to 1% EBITDA margin, can you let us know a rough range? Is it double-digit million or is it triple-digit million that could be associated with these liquidated damages?
Not triple digit. But again, as Ilya mentioned, there are the reasons for the deterioration in profitability. This is one. But the vast majority is in the extra cost that we have in the logistic operations. And as well, to a lesser extent, but as well, the extra cost that we have in the bill of material to produce our products. In resins, it's more expensive. In some cases, steel is more expensive and so on and so forth.
Okay. So my second question would be on the services margins, which increased significantly year-on-year in the third quarter. Just wondering what drove this margin expansion. And to your 1% EBITDA margin for the group, what are you assuming the services will be for the full year?
It's a quarterly effect, the increase versus the previous period. What we are seeing is not dissimilar to the turbine business, service improving the margin. But however, we also hit by the inflationary pressures that we were mentioning at less scale, but we are seeing that. If you remember, we have the objective to reach 17%, 18% EBIT for the segments. We are at 16.7%, improving profitability towards that target. But however, inflationary pressures are also preventing us to get to that target towards the end of the year.
So just to confirm that one. You don't expect to be between 17% and 18% for the full year?
It will be complicated in this volatile environment that is affecting services the same way that is affecting the turbine business.
Okay. And then my final question would be on orders ASP. This did improve a little bit year-on-year in Q3 despite around half of the order intake coming from the Acciona order in Australia. And if I've understood it correctly, this order is about as close to a clean turbine price as possible given there's no logistics and installation in there. So this order would represent a headwind in effect to the overall ASP level year-on-year. I just wondered if you could help us with the bridge to compare it basically with last year. And also, with the underlying turbine pricing increases that you've done in Q3 on a year-on-year basis.
Your logic is right. It's precisely the MacIntyre contract is very large. And the weight that it has in relative terms is making a significant impact in ASP, bringing it down because, as you rightly mentioned, the scope is reduced with respect to the normal scopes that we have generally when doing business. I will not quantify that because we do not provide such details for specific deals or specific customers. But again, reiterating that without this effect on the MacIntyre contract, the ASP will be higher than 0.70.
Okay. And on the underlying turbine price increases in Q3?
That these price increases, again, are very much contract specific, product specific, market specific, customer specific. What I can say is that we are entertaining pricing discussions. We have been entertaining pricing discussions with customers in a very constructive environment. The customers understand, as well as we do, the very volatile environment in which we are doing business. And we are entertaining those discussions with the customers on price increases.
The next question is by Vivek Midha, Citi.
I'll go one at a time if that's possible. So firstly, on the working capital and cash flow. So you delivered your second negative quarter of inventory that is quite good, quite low level. So what have you done in order to get there? And how should we think about the development of inventories going forward? Do you see this current level as sustainable? Or could they see a ramp-up going into '22?
There was a bit of a background noise during the question, but I think you were asking on the working capital development and how -- and why the inventories were reduced in the way they were and how that pans out in 2022. That's how I understood the question.
That's correct.
Okay. So yes, I guess, for the first time -- and for the first part of that question, as I've been saying earlier, so the key driver for that apart from the order intake is the good execution and higher pace of installations that we are seeing this year versus the last year. So this is why we're seeing the levels better than our guided number, and that's what helped the cash flow, as you say. For the next year, and I said it last week, apart from not guiding cash flow, I would like to ask for your understanding. So we're saying that we'll come back for a better look on 2022 when we come out with the guidance at the beginning of March. So in that case, the visibility or the lack thereof we were mentioning last week and this week, and being still in the process of the bottom-up budget is that we can't give you or shall not give you numbers that are fact because that would not be prudent to do at this stage. Again, and for the sake of completeness, I would say that, of course, we will always have that utmost ambition of keeping the working level -- working capital levels [ aside ].
Sure. I understand. I guess the question was specifically on the inventories. I mean if I look at, for example, some of your peers, they run with a higher ratio of inventory to sales. So I was just wondering if you -- I mean how you assess this current level and how sustainable that would be?
I will say, I mean, at the end, we operate in a pool system project by project. So we don't bill inventory. So we book orders, and then at the very same moment, we try to derisk production closing orders with suppliers. So the level of intermediating inventory is very much a part of the payment conditions of the contract, the title, the transfer of the contract, the supply chain configuration for the specific contract. Are the goods produced in a nearby site or not or far away? And is the title transfer at the region, at the port, at destination? So it's a quite -- there are many factors that could affect this. Generally speaking, I don't see reasons why things should change substantially. I would say that more or less in a year-on-year should be a stable thing. I think I don't expect a buildup of inventories because, I mean, the project locations are the same, 60%, 55%, 60% Europe, the rest, LatAm, U.S., Australia. Given the factory locations where they are and the payment conditions that we are demanding to the customers, under title transfer conditions, I don't think this is going to change substantially.
Okay. Understood. That's very helpful. My second question was just a follow-up on George's on the pricing. So I guess asking it in a different way, given the cost inflation, you highlighted the need for pricing to offset the higher cost. I mean, where should we need to expect or see pricing go to over the next few quarters in order to be able to fully offset that cost inflation? Also, given that there's some scope potentially on the supply chain, like what does pricing need to do to offset that?
Well, we mentioned that the impact, as you saw when we revised guidance last week, was around 3% to 5% -- 3.5 percentage points. So on average, that would be the average price that you will have to increase in order to maintain margins as they are. And that is costs remaining equal, the price increases that you would need in order to maintain prices. However, again, I have returned to the volatility that we see that is very complicated for us to have a visibility on the costing as we speak. And as a consequence, also from a pricing perspective, we are being prudent when trying to pass through the cost to the customers, which, just to clarify, this 3.5% is to recover the profitability loss of the backlog. On top of that, we have increased prices because costs increase. So this is -- so the inflation is coming in different ways. The 3.5% that I was mentioning is to recover the backlog profitability. The further impact that we are seeing in the costs are as well a pass-through. And we are trying to reset the pricing levels of the turbines in the different markets to absorb as well the further weights of inflation.
Understood. Just a follow-up on that latter point. So I understand there's -- what you need on the backlog. And then for those newer projects, which you're tendering for now, I mean, do we need to get double-digit pricing increases relative to current pricing levels in order to offset that cost inflation?
It's very, very specific, again, and I will return to the point of markets, products, customers. What I can say is that we are -- when we have leeway, when there is time also for our customers to absorb the CapEx increases and reset off-take expectations, we're trying to reset price levels to the necessary level to absorb fully. That is in the long term. Shorter term, there is less leeway in some of the situations for the customers to pass through as well for us to pass through. That is very specific to customers, markets and products. But a little bit color on that, I mean, unfortunately, we don't have a magic formula to completely hedge our costs and leading that to the price with certain conditions in the contract. I mean there are factors that are very difficult for us to hedge. The cost of inbound logistics, I mean, very difficult to agree with our customers hedging that risk, among many others. So the best thing of what we are trying to do is to strike back-to-back contracts at the notice to proceed when possible. And that is not always possible with steel towers, with shipping companies and some others. But Patxi was mentioning, so if cost remains with the view that we have today, we don't have a long-term issue of profitability. Our best enemy is that the deterioration in cost in the future weeks or months compared to the cost assumptions that we took today for the deal that we just landed today. So the deals that we are landing today, with the visibility that we have today and with the maximum derisk strategy we can apply in a build-to-bill basis, that, over time, should be able to deliver the underlying profitability. If things keep deteriorating in the cost side of the business, either because there is huge volatility or disruptions that affects your ability to deliver and as a consequence, more cost to deliver, then that assumption might not be true over time. But if the current conditions remain even at the very high cost level that we see today, the pricing that we are signing today covers for that.
The next question is by Ajay Patel, Goldman Sachs.
I have 3. I'll just go through them, and then if you could answer, that'd be great. So I'm still a little bit unclear about the MacIntyre project. So we know that the logistics was not in the contract. But what I'm trying to understand really here is what lower margin -- do we see the lower margin on these projects as you transfer that risk to Acciona? Or did you manage to actually get the same margin as you were expecting for the wider portfolio? Just trying to think about how to think about that. And if you were to strip this project out, what percentage has your ASP increased Q3-on-Q3? Then the second question is that earlier in this year, you identified that we do an equity raise to improve the credit metrics to ensure that you can get a better share of an improving U.S. market. So I'm just wondering what size buffer does that need to be to ensure that your metrics are still in the right position to take advantage of that opportunity? I'm just thinking 2, 3 years down the line when we're through this and maybe we've had the impacts, do you need any more capital? Or do you, as you see it today, you feel like your credit metrics will be in the right place to take advantage? And then the last one is just on impacts. Now rightly, we have a lot of headwinds into '22. But as you see right now, would you also expect an impact into '23 as well?
Let's elaborate in themes here the 3 questions. Regarding MacIntyre, the price is adjusted to the risk and to the scope. I don't know if yes, no, probably no specific comment on -- obviously, on margins from specific customer deals. And going back to the percentage of ASP increase, that we will not disclose, but it's not insignificant given the size -- market relative size of MacIntyre with respect to the total order intake. So I can give you one public information that we mentioned. We spend, let's say, in around close to EUR 700 million in logistics for a 6-gigawatt plus installation. I mean it's not a scientific KPI because it varies a lot, but you can do your math what the logistic impact could be, could be, in average terms.
And maybe on the second question, the capital increase, I start. The rationale remains the same, Ajay, as we've been giving it earlier, which is the resetting of the balance sheet in one go. And let's not forget that we also managed to extend and expand the bond line, the MGF in the wake of that. But more specific to your question, so from where I'm sitting from the CFO perspective and the customers playback to us, some of those ratios and metrics are important, but I would single out here probably the equity ratio, which we've seen improve from 6.5% to 28.5%, which is now in line with market peers and what customers perceive of that was one of the key drivers, if you will, for doing that when it comes to the U.S. customers or to even China's.
I think -- and very soon, we will be able to share with you good news of orders in the U.S. where the balance sheet plays a big role. In a substantial downturn in the market, we managed to share. And I'm wondering if we could do that with a different balance sheet structure, you never know. But I think this has played a role there. I think we have now -- even when we compare our balance sheet structure compared to our competitors, I think we are now well equipped to confront customers with the right balance sheet structurally even in the U.S., which is, I will call it, the most demanding in that category. Regarding the 2023, as I mentioned before, if the cost remains at the level that we have today, if we don't see disruptions in the supply chain, if we keep selling the way we are selling, yes, '23, there is no reason to think that it could not deliver the underlying profitability. Do we try to signal that? No, because in the last weeks, we saw massive volatility. And I think it's prudent to wait for stability and to form a view about how to forecast and predict the future before trying to signal you something that might change tomorrow and that we don't control. So stability, keep selling, trying to pass to consumers through customers the cost increases, trying to derisk the cost side of the company as much as we can with back-to-back when possible. And when we see several months of stability, then we can give a more reliable forecast for the future.
I think there was just one that didn't quite make sense to me. The -- just on the question on the Australian project. I'm just trying to understand here. You've clearly transferred some risk. So that must come at a lower margin, right, than the aggregate rest of the order book. Is that a fair assumption to make?
Again, you are coming back to revealing specific margins for specific customers, which we will not do. But it is true that on a risk/reward, the scopes that we differently sell generally come at different margins as well. But this does not mean that this particular deal has a particular margin, no. But generally, the concept that you mention is the right one.
The next question is by Constantin Hesse, Jefferies.
So the first one is, I know you just said that if costs remain at this level today, that you could receive the 8% EBITDA profitability level in '23. So basically, if we see logistics costs potentially coming down from the second half of next year, there is upside to this 8%. This is the first question. The second question is related to your CapEx cycle. So clearly, you're going to be a bit under pressure this year and next year with regards to margins and profitability, which might have an impact on your balance sheet. So thinking about future CapEx cycles and innovation, how far longer can you drive the Delta4000 platform? And then lastly, if you could share any updates or anything you might be doing on the project development side of things, which I know is noncore for you, but it's just interesting to hear what's happening there.
Thank you, Constantin. Let me take -- or let's do it together. So the first one, you are right. In that event, the math should work. But we don't have that visibility, unfortunately. Sorry for that. But at this stage, I will be more than happy that things do not deteriorate; that things substantially improve because logistics goes down. We are working in ways to try to bring more stability to the cost side. That is as much as we can report. Regarding CapEx, we see stability in the CapEx of the company. And we don't see yet the need for new platforms in the marketplace, at least in the horizon that we forecast business. Regarding project development, we are doing very selective activities, but nothing material to report.
Your next question is by Sean McLoughlin, HSBC.
Firstly, a question on the strategic sales targets. I mean we've talked a lot about profitability, but your order intake is up. So you've clearly been gaining market share. ASP is on a flat to, let's say, uptrend. You're already above EUR 5 billion top line in 2021. What is holding you back from providing a higher sales target? Because if I look now optically, your current target of EUR 5 billion implies flat at best on visibility going forward. If I think there's growth in services, that then implies low confidence in turbine delivery growth. Just understanding that, please?
No, I think that's a very good question. And this is something that we were internally debating. I think very much what is preventing us to do so is the volatility, the volatility we have in the ability to deliver. If things go to a reasonable stability, you are right, we should be able to outperform that. But we are, at the same time, every day facing shortages in factories because lack of parts. We see every day delays in shipments. We see every day vessels that do not show up for taking the load. I mean the environment is quite volatile. And we prefer to be slightly more prudent and conservative. And eventually, there are good news later, share those with you than to be more aggressive and disappoint you. But we fully believe and trust in our ability to keep the market share. I think we are not fighting here to increase market share. We don't want to do so. We don't want to destroy prices in the market. We are comfortable with our market share. We are comfortable in our ability to sell. As we've heard Patxi, we are going to do a better year this year than compared to last year. And the company is executing under, I would say, unprecedented global disruptions in supply chain. And in this environment, we try to give you the best visibility we can.
Okay. Then maybe if I can just follow up on that. So 8% in the midterm, would I still be assuming a EUR 5 billion sales figure on that EBITDA margin?
Very much 6-plus gigawatts, plus 10% internal growth rate in services as those -- the current cost structure stable, the current SG&A of the company and the current order intake momentum at the current prices that we are landing. Yes.
Okay. That's clear. Second question just on debt costs. I mean what is now your average cost of debt?
Well, I take that one, obviously. So again, we're typically not going into the specific run rates, what we have the financial cost, but it's fair to say and I think important to repeat now that we've got the question is that with that capital increase, the reduction will and should be substantial. So I think we've said it -- well, not I think, I know we said it earlier when we're doing the calls and the conversations around the capital increase, that just because, so to speak, of the conversation of the shareholder loan into equity and also improving our ratios, hence getting better conditions under our bond line, the MGF, plus some savings from [ DIP ] and other smaller portions, I'd repeat that our ambition must be and actually is to have an improvement on our financial costs year-over-year. And '22 will be the first full year we've seen those effects of around EUR 40 million plus. So that's still the ambition that we have. So when you compare that to our last year's and probably that year other than the one-offs I mentioned earlier are very similar, so that's where our ambition goes. So having a substantial saving in that respect.
Understood. And do you have any visibility on being able to further improve that cost through refinancing over the next 12 months?
Yes. Thanks for the question, Sean. I was asked that last week. And we have -- as I said, I was asked about that, we do have the maturity of our high-yield bond in the year after next. So we're now looking into all options how to refinance that and at the right timing. So there might be a further potential from that end.
Okay. Thank you, gentlemen, for participating in our call. And I would like to say goodbye from my side, and I would like to hand over to José Luis for your final remarks. Thank you.
Thank you very much for your questions. Thank you, Felix. So let me summarize our key takeaways from this quarter. So first, and was mentioned in the Q&A and with Patxi, we continue to generate and maintain a good order intake momentum, which give us good revenue visibility for the future. At the same time, our margins are likely to remain under pressure because of the continuing cost inflation and supply chain challenges and disruptions due to mainly the extremely difficult shipping market and shipping rates. Thankfully, we are in an industry that needs to grow quite rapidly if we are to believe the government targets, on top of the new green hydrogen aspirations or just, in general, the ambition to decarbonize the worldwide 2050. In addition, wind being one of the cheapest, if not the cheapest source of energy in most of the geographies, could very much easily accommodate those ongoing cost increases and still stay very competitive. Good news is that our customers also understand and acknowledge this dynamic, governments as well. Cost is not any longer a topic to be discussed when we talk about renewals, so that would start to change the paradigm here. In parallel, we mentioned we have fortified our balance sheet sufficiently, so we can successfully bridge over this period of transition without substantial problems. Last, once those boundary conditions are met, we believe we and the whole industry can return to normalized level of margins. And with this, just thank you for your participation in our call, for your questions, for your time. All the best and see you in the next occasion. Goodbye and have a good rest of the year.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.