Koncar Elektroindustrija d d : KONČAR Group continues to deliver outstanding results in Q2 2023

Following the Q1 outstanding results, KONČAR Group has achieved another milestone with record-breaking order intake in Q2 2023. New order intake reaches EUR 748.1 million, more than double in comparison to H1 2022 performance. Backlog currently stands at EUR 1,337.4 million and we are delighted to report that the 2024 backlog has already reached EUR 630 million. During H1 2023, we have also secured new orders for 2025 worth EUR 139 million.

Exceptionally strong performance was realized in the power transmission and distribution segment. Growing demand for transformers across the EU is driven by the accelerating green transition. Customers, primarily in competitive markets such as Germany, Sweden and Austria, have recognized the quality and reliability of KONČAR solutions, and the reputation we have been consistently building over the years has resulted in record-high order intake. Strong H1 2023 book-to-bill ratio in the German market stands at 3.2, reflecting market conditions and surging demand for power engineering equipment.

"Excellent order intake, expanding backlog and growing income have generated outstanding financial results. All key performance indicators point to an upward trend despite rising operating costs which remain considerably above the pre-pandemic and pre-war in Ukraine levels. Consolidated revenue generated from the sale of goods and services amounts to EUR 382.9 million, representing a year-on-year increase of EUR 93.9 million or 32.5%. Exports account for 67% of the total revenue from the sale of goods and services and continue to expand. While the EU remains our key export market constituting nearly 75% of total exports, growth was recorded across all other markets", states Gordan Kolak, KONČAR CEO.

Financial performance should be observed on a normalized basis year-over-year, as H1 2022 results were exposed to significant one-off items. Normalized EBITDA amounts to EUR 34.3 million and is EUR 13.9 million or 68.4% higher year-on-year. Normalized EBITDA margin is 9% (it amounted to 7.1% in H1 2022). Normalized net profit doubled from EUR 12.7 in H1 2022 to EUR 23.3 million in H1 2023. Although soaring prices of commodities and raw materials have levelled off, the market remains exposed to great uncertainty arising from the ongoing war in Ukraine.

One of the most significant events for KONČAR Group in Q2 was the EUR 37.8 Sales Agreement signed with Zagreb's public transit operator, Zagrebački električni tramvaj, for the purchase of 20 trams. The Agreement was signed as part of the project The application of green technologies in railway passenger transport included in the 2021 - 2026 National Recovery and Resilience Plan. This Agreement represents the continuation of the successful cooperation between KONČAR and ZET, which includes the delivery of the total of 142 low-floor trams in the period 2005-2010. KONČAR has also made an important breakthrough by securing two new agreements for major projects in Germany and Austria. The customer, Austria's leading electricity company VERBUND, selected KONČAR's bid for the comprehensive revitalization of two hydropower plants on the German-Austrian border.

Moreover, we have recently contracted two strategic projects with Svenska Kraftnät (SVK), Swedish transmission system operator. KONČAR will carry out complex upgrades of the 200 kV Linnvasselv transformer station and the reconstruction of primary equipment including monitoring and control systems at seven 220 kV transformer stations near Stockholm.

KONČAR has also secured new orders for 2025 worth EUR 139 million. We can therefore confidently set more ambitious targets and enhance our performance in the upcoming period.