Highlights
Revenue increase: Alfen increased H1 2024 revenue by 10% to €245.7m vs. H1 2023 (€223.9m), mainly driven by its Energy Storage Systems & Smart Grid Solutions businesses.
Group adjusted gross margin at 28.9% compared with 30.5% in H1 2023. Note: gross margin after one-off costs stands at 22.3% in H1 2024, while no one-off costs were incurred in H1 2023.
Adjusted EBITDA of €13.5m (5.5% of revenue) vs. H1 2023 €21.1m (9.4% of revenue).
Alfen has started the strategy validation and organizational right-sizing project and will continue this assessment in Q3 2024. Alfen will communicate an update on progress during its Q3 trading update on November 7.
Alfen obtained a pre-emptive waiver up to Q3 2024 for a breach of the bank covenant. In Q4 Alfen will continue the constructive conversation with the bank to conclude an updated covenant based on a revised business plan, in which our organizational right-sizing effort has been taken into account.
Alfen’s Supervisory Board has decided to appoint Onno Krap as CFO and statutory board member per 1 January 2025.
Alfen reconfirms its 2024 updated full-year revenue outlook (€485-520m), adjusted EBITDA margin outlook (mid-single digit) and FCF outlook (negative FCF but improvement compared to -€27.2m in 2023).
ALMERE, THE NETHERLANDS – Alfen N.V. (AEX: ALFEN), a specialist in energy solutions for the future, today reports its condensed interim consolidated financial statements for the H1 2024.


Marco Roeleveld, CEO of Alfen:
“The markets that we operate in developed more slowly than anticipated in the first half of 2024, as we communicated at the end of June when we updated our guidance for the year. Since the end of June, our markets, revenue and costs have developed in accordance with our updated guidance. While we expect the markets to inevitably bounce back, we are taking the necessary measures in our business lines and our operations.

The primary factor affecting revenue is Energy Storage. As a result of rapidly declining battery prices, a significant number of large deals that we anticipated to sign in Q2 were postponed. Oversupply of batteries in the market due to slower than expected growth of EV sales leads to a competitive market environment for energy storage systems. We expect conditions to normalize when EV sales pick up again.

Lower prices have also resulted in more volume. We see stronger momentum in the market with a funnel of qualified opportunities that has considerably increased in value compared to a year ago. We continue to close the deals we expect, differentiating ourselves with our turn-key approach for our customers. That includes technical consulting upfront, project management in the construction phase and our service proposition after commissioning.

To improve visibility on this business line, we have decided to start communicating our backlog on a quarterly basis. At the end of Q2, the value of our total ESS backlog of signed projects was €72.4m, which will convert into revenue in 2024 and 2025. Early July, we closed four anticipated deals that will contribute to 2024 revenue as expected. As of mid-August, we stand at €88.3m backlog. We have sufficient backlog to cover the revenue guidance for ESS in 2024.

Last year revenue for Energy Storage was strongly backloaded in the second half of the year, while this year Energy Storage revenue is more equally distributed between H1 and H2. Hence, despite 23% growth in H1, we still expect an approximately 20% decline for 2024 overall.

Regarding Smart Grid Solutions, as indicated earlier, we will use Q3 to ramp up to be at anticipated capacity in Q4. Due to the moisture issue, our concrete manufacturer has not been able to build stock before their summer closure. As a consequence, the Alfen production in the first 6 weeks of the 3rd quarter has been an average 37 of new stations a week. With the summer closure now finished, Alfen will ramp the production week by week up to the end of December 2024 to more than 100 substations a week.

With regard to the moisture issue, we have three workstreams: new builds, rebuild of existing stations not installed in the field yet, and substations installed in the field. The first priority to get production up and running again for new builds has been achieved. The remaining part of 2024 will be used to further optimize our processes that are needed to warrant the required quality of the new build concrete products. In order to prioritize the new substations, the second workstream to rebuild substations has been spread over time from now until Q1 2025. For the third workstream, some repairs on site have been executed, but this will also run into next year. For these reasons, only a small portion (€1.1m) of the provision has been used in H1 2024.

The lower than expected revenue negatively impacted our adjusted EBITDA margin. We have taken considerate action with a number of profitability measures, for instance related to travel, procurement costs and strict controls on new hirings. In addition, we have selected and started the engagement with an external management consulting firm to support Alfen in a strategy validation (refinement of our markets and target segments) as well as right-sizing the organization. We will take a balanced approach between improving profitability for 2025 and having the right resources and capabilities to capture growth as the markets bounce back.

The expected lower adjusted EBITDA, combined with the one-off items, required a reassessment of the external debt position to stay within the bank covenant for the revolving credit facility. Alfen obtained a pre-emptive waiver up to Q3 2024 for a breach of the bank covenant. In Q4 Alfen will continue the constructive conversations with the bank to conclude an updated covenant based on a revised business plan, in which our organizational right-sizing effort has been taken into account.

Lastly, we are very happy with Onno Krap becoming our permanent CFO. We value his expertise and what he brings to the team. We are looking forward to continue our cooperation and executing on our profitable growth strategy together.”


Financial highlights
Key figures

see & read more on https://alfen.com/nl/news/alfen-reports-hy2024-results-line-updated-guidance