26 June 2024

Alfen decides to adjust 2024 guidance and reassess mid-term objectives

ALMERE, THE NETHERLANDS – Alfen N.V. (AEX: ALFEN), a specialist in energy solutions for the future, today announces a slower anticipated market for 2024, causing a lowering of its 2024 outlook to €485-520m revenue and mid-single digit adjusted EBITDA margin. 

Key points:

  • A number of large Energy Storage Systems deals originally anticipated to sign in Q2 are being postponed and will likely only contribute to 2025 revenue, causing ESS 2024 revenue to decline by approximately 20% compared to 2023.
  • Smart Grid Solutions is suffering from supply constraints for its concrete housings, leading to a 2024 expected revenue growth of approximately 5%. 
  • Alfen decides to adjust 2024 revenue guidance from €590-660m to €485-520m and expects EBITDA margin to be mid-single digit as a result oflower expected revenues.
  • Alfen takes two one-offs totalling €11.1m for a provision and obsolete inventory.
  • Alfen will use H2 2024 to reassess financial objectives for the medium-term.
  • Alfen management will host a conference call today from 10:00-11:00 (CET). Registration link can be found on the company’s website in the Investor section under ‘Financial calendar’.

Adverse impacts on revenue guidance

The primary driver of Alfen’s lower revenue guidance is related to Energy Storage Systems (ESS), where a significant number of large deals, that were anticipated to sign in Q2, are being postponed. As previously communicated in the Q1 update, energy storage systems costs are declining more rapidly this year than in prior years*. This has had a slowing effect on customer decision-cycles. In addition, increased lead times to obtain and realize a grid connection in countries such as the Netherlands and Sweden are causing further delays. Q2 order intake is an important period for 2024 revenue, because deals closed after Q2 will primarily contribute to 2025 revenues given the lead times of major components. Alfen expects customer decision-cycles start to shorten once battery prices stabilize as demand for EVs increase in line with battery manufacturer’s expectations, as European and national stimulation programmes build up to their energy transition commitments. Alfen is well positioned to benefit from this with its strong and increasing qualified lead pipeline and continues to be seen as a preferred supplier in the market due its high quality & service offering. Alfen expects that revenue in ESS in 2024 declines with approximately 20%.

The second, relatively smaller impact relates to Smart Grid Solutions (SGS), where resolution of the previously reported moisture issue has led to an unforeseen bottleneck in the supply of the concrete housings for Alfen installations. For our supplier, reinforced concrete housings are more difficult to scale than originally anticipated and their production is constrained by an unavoidable maintenance period over the summer. The ramp-up of Pacto substations is therefore slower than anticipated in Q3. On the demand side, Alfen is observing a continuing strong market momentum in smart grids, with a healthy backlog. The market for grid operator substations is currently supply constrained, hence Alfen expects to continue the growth trajectory in Q4. Alfen expects to grow revenue in SGS in 2024 with approximately 5%.

The third impact relates to EV Charging (EVC), where Battery Electric Vehicle (BEV) sales in Europe are growing, however at a lower pace than expected. While the outlook for 2024 BEV sales was high single digit growth, Alfen observes 2% growth year-to-date until May**. Although there is no direct one-to-one relationship between BEV sales and Alfen’s revenue, this is an important leading indicator to take into account. Due to this temporary, yet noticeable market slowdown, Alfen has taken a more modest outlook for the second half of the year on quarter-on-quarter improvement. Alfen still expects to grow revenue in EVC in 2024 in the range of 5-10%. EV sales are likely to accelerate again in 2025 once affordable models are launched (starting end of 2024, continuing into 2025) and CO₂ emission performance standards for cars will become ~15% stricter per 2025. This will lead to more EV sales, as most car manufacturers currently do not meet the 2025 targets***. 

Adverse impact on adjusted EBITDA, one-off items and FCF

The lower expected revenues negatively impact the adjusted EBITDA margin, due to a deleverage of the cost base on lower revenues. The adjusted EBITDA margin for 2024 is expected to be mid-single digit. 

As for one-off items, an additional  provision of €7.5 million to cover the potential impact of the substation moisture issue in SGS has been taken, because of higher expected costs for infield repair works and returns as well as more stations affected than initially expected. Secondly, following a thorough analysis of all inventories of components combined with the most actual sales run rate, Alfen has decided to take a provision for €3.6 million on obsolete inventory for EV Charging. Although these specific components are still used in Alfen’s products as earlier communicated, an analysis with updated run rates indicates that some of these components will need beyond 2027 to be depleted, so Alfen considers it is unlikely that these components will be fully consumed.

The expected lower adjusted EBITDA combined with the one-off items requires a reassessment of the external debt position to stay within the bank covenant for the revolving credit facility, for which discussions with the banks are taking place. 

Alfen expects its FCF to be negative in 2024, but improved compared to -€27.2 million in 2023. This is primarily driven by a lowered adjusted EBITDA margin.

Profitability measures

The Alfen Boards are convinced that the expected adjusted EBITDA margin of mid-single digit does not represent the profitability potential of Alfen’s business model. Therefore, in order to raise the profitability to appropriate levels, management is taking both short and longer term measures on the cost base to right-size the organization. Alfen will perform an organizational effectiveness assessment in H2 2024.

Marco Roeleveld, CEO of Alfen, said: “The Management and Supervisory Board have come to the unanimous conclusion that the current market conditions call for a considered, updated approach to balancing our risks and opportunities. In growing our capabilities and organization, we anticipated faster market growth. Now that we see a delayed growth, the best option is to lower our operational expenses in proportion to our topline growth. This needs to be done carefully and accurately in H2 2024, because mid to long-term growth expectation in our markets is still there, and we want to have the right resources and capabilities to capture that growth as the markets bounce back. And they are bound to.” 

Reassess mid-term objectives

In follow-up to the above market developments and 2024 guidance adjustment, Alfen will use H2 2024 to assess the medium-term financial objectives.

HY 2024 trading update

Alfen will release its HY 2024 trading update on August 22, when the company will provide further details on each of its business lines.

* source: BNEF, 1H 2024 Energy Storage Market Outlook

** source: ACEA, BEV Sales in Europe January 2024 until May 2024

***source: Transport & Environment, April 2024

About Alfen

Netherlands-based Alfen is operating internationally in the heart of the energy transition, as a specialist in energy solutions for the future. With 85+ years history, Alfen has a unique combination of activities. Alfen designs, develops and produces smart grids, energy storage systems, and electric vehicle charging equipment and combines these in integrated solutions to address the electricity challenges of its clients. Alfen has a market leading position in the Netherlands and experiences fast international growth benefitting from its first mover advantage. For further information see Alfen’s website at: www.alfen.com

For enquiries, please contact: 

Investor relations:

Mr. Dico van Dissel, Director IR Alfen, phone +31 (0) 36 549 34 00, email ir@alfen.com.

Hefbrugweg 79

1332 AM Almere, The Netherlands

Phone: +31 (0) 36 549 34 00


Notes to the press release

This is a public announcement by Alfen N.V. pursuant to section 17 of the European Market Abuse Regulation (596/2014). This public announcement does not constitute an offer, or any solicitation of any offer, to buy or subscribe for any securities in Alfen N.V.

The reported data in this press release have not been audited. 

Forward looking statements

This press release may include forward-looking statements. All statements other than statements of historical facts may be forward-looking statements. These forward-looking statements may be identified by the use of forward-looking terminology, including the terms such as guidance, expects, aims, step up, announced, continued, incremental, on track, accelerating, ongoing, innovation, drives, growth, optimising, new, to develop, further, strengthening, implementing, well positioned, roll-out, expanding, improve, promising, to offer, more, to be or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect Alfen’s current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to Alfen’s business, results of operations, financial position, liquidity, prospects, growth or strategies. Forward-looking statements reflect the current views of Alfen and assumptions based on information currently available to Alfen. Forward-looking statements speak only as of the date they are made, and Alfen does not assume any obligation to update such statements, except as required by law.

Alfen's revenue, adjusted EBITDA margin and free cash flow guidance is based on management estimates resulting from Alfen's pursuit of its strategy. Alfen can provide no assurances that the guidance will be realised and the actual results for 2024 could differ materially. The guidance has also been determined based on assumptions and estimates that Alfen considered reasonable at the date these were made. These estimates and assumptions are inherently uncertain and reflect management's views which are also based on its historic success of being assigned orders and projects, which may materially differ from the success rates for any future orders and projects. These estimates and assumptions may change as a result of uncertainties related to the economic, financial or competitive environment and as a result of future business decisions of Alfen or its clients, such as cancellations or delays, as well as the occurrence of certain other events. A more comprehensive discussion of the risk factors affecting Alfen’s business as well as reconciliation of EBITDA with adjusted EBITDA can be found in Alfen’s annual report 2023 which can be found on Alfen's website www.alfen.com.