Alfen Q1 2025 slides: Revenue decline prompts guidance revision amid transition delays

Introduction & Market Context

Alfen Beheer BV (AEX:ALFEN) presented its Q1 2025 trading update on May 13, revealing continued challenges across all business segments as energy transition delays and competitive pressures weighed on performance. The Dutch energy solutions provider reported an 11% year-over-year revenue decline, prompting a downward revision of its full-year guidance.

The company’s stock, which has traded between €9.92 and €43.51 over the past 52 weeks, closed at €16.82 on May 12, up 2.06% ahead of the earnings release.

Quarterly Performance Highlights

Alfen reported Q1 2025 revenue of €103.8 million, down 11% from €116.8 million in the same period last year. Gross margin decreased to 29.8% of revenue (€31.0 million) compared to 32.0% (€37.4 million) in Q1 2024. Adjusted EBITDA fell to €5.5 million (5.3% of revenue) from €9.6 million (8.2% of revenue) a year earlier.

As shown in the following quarterly financial overview, the company has experienced declining revenue growth over recent quarters:

All three business segments reported year-over-year revenue declines in Q1 2025:

• Smart Grid Solutions revenue decreased 1.1% to €54.3 million, with gross margin falling to 23.9% from 27.8% in Q1 2024. The company produced approximately 935 substations during the quarter.

• EV Charging Equipment saw the steepest decline, with revenue falling 26.9% to €28.8 million. Gross margin decreased to 39.0% from 41.8% in Q1 2024. The company produced 28,360 charge points, a 24.8% decline from approximately 37,700 in Q1 2024.

• Energy Storage Systems revenue decreased 8.3% to €20.7 million, though gross margin improved to 32.5% from 25.3% in Q1 2024 due to one-off effects. The company noted that the 40% price decline for battery systems during 2024 is now impacting revenue.

Detailed Financial Analysis

Alfen has implemented significant cost control measures to address margin pressure. Personnel and other operational costs were reduced by 18.2% compared to Q4 2024, with personnel costs specifically declining by 18.7% following a reorganization.

The following chart illustrates the company’s cost reduction efforts:

Despite revenue challenges, Alfen maintained positive cash flow of €0.2 million in the quarter. The company’s Energy Storage Systems segment shows promising backlog development, with 86 million euros of orders for 2025 and 23 million euros for 2026 as of March 31, 2025.

The backlog for Energy Storage Systems provides some optimism amid current challenges:

Strategic Initiatives

In a significant business development, Alfen announced it won its largest Energy Storage deal to date with Return Energy in April 2025. The 100MW/200MWh system will be the second largest energy storage project in the Netherlands and is expected to be operational by the end of 2026, contributing primarily to Alfen’s 2026 revenues.

The company highlighted this major win in its presentation:

In the EV charging segment, Alfen plans to launch new V2G-ready Double Plus and Single Plus chargers in Q4. These products feature vehicle-to-grid capability, reduced installation costs for charging plazas, and secure payment options using dynamic QR codes.

Alfen also noted that while EV growth in 2025 remains uncertain, the long-term outlook is supported by the EU’s 2035 zero-emission car target. BEV registrations showed strong growth in Q1 2025 across several European markets, though the Netherlands saw only 8% growth and France experienced a 7% decline.

Forward-Looking Statements

Based on Q1 performance, Alfen has revised its 2025 guidance. The company now expects full-year revenue to be in the range of €430-480 million, down from the previous guidance of €445-505 million. The adjusted EBITDA margin guidance has been lowered to 5-8% from the previous "high single digits."

The outlook adjustment includes revised expectations for each business segment:

• Smart Grid Solutions: Now expected to decline 0-5% (previously forecast to grow 5-10%)
• EV Charging: Now expected to decline 10-15% (previously forecast to decline 5-10%)
• Energy Storage Systems: Now expected to decline 0-10% (previously forecast to decline 5-15%)

The company cited installation and regulatory constraints faced by grid operators, softened car OEM CO₂ targets, increased competition in the home charging segment, and favorable backlog developments in Energy Storage as factors influencing the revised guidance.

Alfen indicated it will implement additional cost reduction measures in response to current revenue developments, while maintaining its CAPEX guidance at below 4% of revenue.

Full presentation:

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