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Introduction & Market Context
Andritz AG (WBAG:ANDR) presented its Q1 2025 financial results on April 30, 2025, revealing mixed performance in a volatile geopolitical environment. The Austrian industrial engineering group reported a significant increase in order intake but experienced declines in revenue and net income compared to the same period last year.
The company’s stock closed at €56.95 on April 29, 2025, with a modest 0.18% increase on the day. Andritz shares have shown resilience, trading well above their 52-week low of €47.06, though still below their 52-week high of €65.60.
Quarterly Performance Highlights
Andritz reported a substantial 20% year-over-year increase in order intake, reaching €2.3 billion in Q1 2025 compared to €2.0 billion in Q1 2024. This growth was primarily driven by strong performance in the Pulp & Paper (+52%) and Hydropower (+14%) business areas.
As shown in the following chart detailing order intake across business segments:
Despite the strong order intake, revenue declined by 7% to €1.8 billion in Q1 2025 from €1.9 billion in Q1 2024. The revenue decrease was most pronounced in the Pulp & Paper segment (-23%), while Hydropower showed strong growth (+23%).
The following chart illustrates the revenue breakdown by business area:
The company’s order backlog continued to strengthen, reaching €10.2 billion at the end of Q1 2025, a 2% increase from €10.0 billion in Q1 2024. Pulp & Paper and Hydropower together account for approximately two-thirds of the total backlog.
The order backlog development is visualized in this chart:
Profitability remained relatively stable despite the revenue decline. Comparable EBITA reached €145 million with a margin of 8.2% in Q1 2025, slightly higher than the 8.1% margin in Q1 2024, though the absolute value decreased by 6% from €154 million. Reported EBITA was €142 million (8.1% margin), down 7% from €152 million in Q1 2024.
Net income declined more significantly, falling 14% to €89 million (5.1% margin) from €104 million (5.5% margin) in Q1 2024. This represents a continuation of the profitability trend from Q4 2024, when the company reported a record 6% net income margin for the full year.
The following comprehensive summary provides a clear overview of all key financial metrics:
Strategic Initiatives
Andritz continues to execute its strategic acquisition plan, focusing on decarbonization and growth opportunities. In Q1 2025, the company acquired LDX Solutions, a leading provider of emission reduction technologies with annual sales of approximately USD 100 million. This acquisition expands Andritz’s service offering in Clean Air Technologies in North America.
Additionally, Andritz signed a contract to acquire A. Celli Paper, a global supplier of machinery, components, and services for tissue, paper, and board production. With annual sales of approximately EUR 70 million and locations in Italy and China, this acquisition (pending closing) will strengthen Andritz’s position as a full-line supplier and service specialist.
A key strategic focus for Andritz remains the expansion of its service business, which reached an all-time high of 44% of total revenue in Q1 2025, up from 40% in Q1 2024. This shift toward higher-margin service revenue supports the company’s profitability goals.
The following chart illustrates the steady growth of Andritz’s service business:
Detailed Financial Analysis
The bridge from EBITDA to net income reveals the components affecting Andritz’s bottom line in Q1 2025. Starting with an EBITDA of €184.7 million (10.5% margin), depreciation of €42.9 million and IFRS 3 amortization of €15.1 million (slightly higher due to the LDX Solutions acquisition) reduced EBIT to €126.7 million (7.2% margin). After accounting for financial results and taxes, net income reached €89.2 million (5.1% margin).
This waterfall chart clearly illustrates the progression from EBITDA to net income:
Andritz maintains a strong financial position with solid liquidity, though net liquidity decreased by €123 million compared to the end of 2024. This reduction was primarily due to the LDX acquisition and other investments (€180 million), partially offset by operating cash flow of €73 million.
The company’s financial strength is illustrated in this chart showing liquid funds and net liquidity over time:
Return on Invested Capital (ROIC) continued to significantly exceed the Weighted Average Cost of Capital (WACC), indicating substantial value creation. In Q1 2025, ROIC increased further, while WACC remained relatively stable.
The following chart demonstrates Andritz’s strong ROIC performance:
Forward-Looking Statements
Andritz confirmed its guidance for 2025, projecting revenue between €8.0 billion and €8.3 billion and a comparable EBITA margin of 8.6% to 9.0%. This represents broadly stable revenue and comparable EBITA margin compared to 2024.
The company also reaffirmed its mid-term targets for 2027, aiming for revenue between €9 billion and €10 billion and a comparable EBITA margin exceeding 9%. These targets are supported by anticipated growth in capital sales, expansion of service share, increasing demand for green technologies, and continued focus on digitalization and acquisitions.
For individual business areas, Andritz has set specific EBITA margin targets for 2027:
- Pulp & Paper: 11-13%
- Hydropower: 7-9%
- Metals: 6-8%
- Environment & Energy: 10-13%
The following chart shows the historical EBITA margin development and 2027 targets by business area:
Regarding potential US tariffs, Andritz emphasized its truly global footprint with over 280 locations in more than 40 countries. While the US market contributes approximately 17% of revenues, the company noted that US-based purchasing accounts for the majority of its US revenues, with negligible sourcing from China. Andritz continues to see considerable opportunities in the US market, particularly in sustainable technologies supporting the green transition.
In conclusion, Andritz’s Q1 2025 results demonstrate resilience in a challenging environment, with strong order intake offsetting revenue declines. The company’s strategic focus on service business expansion and targeted acquisitions, combined with its solid financial position, provides a foundation for achieving its confirmed 2025 guidance and 2027 targets.
Full presentation:
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