Ladies and gentlemen, welcome to the interim report Q1 2021 of Nordex SE. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode, and after the presentation, there will be an opportunity to ask questions. If any participant has difficulty hearing the conference, please press star key followed by zero on your telephone for operator assistance. May I now hand you over to Felix Zander, who will start the meeting today. Please go ahead.
Thank you very much for the introduction, [Aurelia]. Good afternoon, ladies and gentlemen. Here, I'd like to welcome you on behalf of Nordex to our call presenting the results of the first quarter 2021. Our Board members, our CEO, José Luis Blanco, our CFO, Dr. Ilya Hartmann, and our CSO, Patxi Landa, will guide you through the presentation, sharing the latest developments of Nordex, including markets and financials with you. Afterwards, as you know, there will be, and as you have just heard, a Q&A session. Please limit yourself up to three questions. Now, I would like to hand over to our CEO, José Luis. José Luis, please go ahead.
Thank you, Felix. Good morning, ladies and gentlemen, welcome to the Nordex presentation of our Q1 2020 results. As Felix mentioned, together with Ilya and Patxi Landa. Agenda that we have prepared for you today is a standard agenda with an introduction. Patxi will guide you through the situation in the markets and the orders. Ilya will discuss the financial performance of the company. I will take the operations and technology, talk about the guidance for the year as well about the strategic targets for 2022. We will open the floor for Q&A, I will conclude the meeting with, in our view, the key takeaways of our day. With this, let's move to the first part of the presentation.
Starting with the highlights of Q1, we deliver EUR 1.254 billion in sales, 0.8% EBITDA margin, -7.6% working capital. Despite a very slow start of the year, order intake at the end of the quarter stood at 1.2 GW, showing a catch-up and a good start into 2021. 73% of the order intake accounts for the Delta4000 platform, supporting the product part of the mid-term profitability improvement plan. Sales increased to EUR 1.254 billion compared to EUR 965 million last year, reflecting high activity level despite COVID and logistic challenges. EBITDA margin of 0.8%, as expected, due to legacy projects, but as well impacted by the ongoing COVID pandemic, as well as disruption and shortages in supply chain, as well as starting some inflationary pressures.
Very important to remark, the refinancing of the Schuldscheindarlehen secure via shareholder loan from anchor shareholder Acciona, successfully executed in the quarter. Important to mention as well that Nordex share was included in the mid-cap index, MDAX of the Deutsche Börse Group, since March 22nd. Last, but very important, guidance for full year maintained. With this, I would like to hand over to Patxi to talk about the market and customer situation. Patxi, please.
Thank you very much, José Luis, and good afternoon. Looking at the orders, we closed 1.2 GW of new turbine contracts during the first quarter of the year, down 24% with respect to the same period last year. More than 90% of those orders were closed in Europe, with the largest volumes coming from Spain, Turkey, Germany, and Finland. We continue to have a leading position in the region, where we expect good order momentum for the rest of the year. Rest of the orders in the quarter came from Latin America, and the majority of the orders continue to come with Delta4000 turbines, representing 73% of the orders in the quarter. ASP increased to EUR 73 million per megawatt from EUR 72 million in the same period last year. Next slide, please.
Service sales amounted to 8.6% of Group sales in the quarter with EUR 108 million, and an EBIT margin of 16.5%. Fleet under contract stands at 23 GW with an average availability of 97%. Next slide, please. Turbine order backlogs stood at EUR 5.1 billion at the end of Q1, decreasing 13% with respect to the same period last year. Service order backlog grew 8% to EUR 2.8 billion, for a combined order backlog of EUR 7.9 billion at the end of the quarter. With this, I hand over to Ilya that will lead you through the financials.
Thank you, Patxi. Good afternoon, ladies and gentlemen. Also from my side, a warm welcome. I would now like, as Patxi said, to guide you through the financials for the first quarter, starting with the income statement. José Luis mentioned it, our Q1 was again affected, among other things, by some COVID-19 impacts, but it also went largely as expected. We delivered the sales of around EUR 1.25 billion, which is EUR 286 million higher than in Q1 of last year. We generated EUR 10 million total in EBITDA, representing the mentioned 0.8% level, which reflects the soft start into the year we had expected, and also mentioned during our full- year 2020 call in March. Gross margins stood at 17.3% compared to 16.2% one year ago.
Main impacts on profitability were COVID-19 effects, largely from spillovers in operations and project execution, as already mentioned, and commented in a bit more detail also by José Luis, before and after this section. Our EBITDA is on similar levels to the first quarter of 2020, so EUR -28 million versus the EUR -24 million of last year, and the net profit dropped by EUR 17 million compared to 2020. The key driver here, were higher financing costs compared to the first quarter of last year of roughly EUR 10 million. The two key building blocks here were, A, our interests and fees under the RCF, and B, the high utilization of our guarantee facility than 12 months ago. The latter is a consequence of our increased business activities as shown earlier. In summary, and as mentioned at the beginning, P&L for Q1 has been within our range of expectations.
On the next slide and looking at the balance sheet, the structure of our balance sheet remains, in substance, unchanged compared to year-end. With approximately EUR 740 million of liquidity, we achieved a very solid cash position at the end of the quarter, also in comparison to the roughly EUR 780 million we had at year-end 2020. In comparison, one year ago, we stood at around EUR 430 million. Among other effects, we can here see the cash contribution from the still pretty decent order intake as explained by Patxi, project execution, and of course, the working capital management.
Equity ratio and equity have dropped when compared to year-end. This is a consequence of the impact on profitability by the factors we explained earlier. Probably again worth to mention, we have now repaid, as José Luis mentioned, the promissory note or Schuldscheindarlehen. For this we have indeed used the proceeds from a shareholder loan, by Acciona, which was another strong support by them.
With that, I would like to go to the working capital shown on the next slide. Our working capital ratio for the quarter ended at -7.6%, an improvement from our year-end level, which stood at -6.3%. Current level is similar to the level of Q1 one year ago, -7.5%, Quite below our guided figure of below -6% for 2021. The positive development of more than EUR 80 million in absolute terms between the end of the year and Q1, was largely driven by the continuously high level of project execution in the quarter. This has also resulted in the corresponding decrease of our inventories. In other words, the working capital development has continued to be a good success story at Nordex, especially when taking into account the still ongoing COVID-19 backdrop.
With that, I would go to the cash flow statement. Cash flow from operating activities saw an increase to EUR +45 million, when compared to Q1 last year of approximately EUR -20 million. It was largely affected by our positive development in working capital. Cash flow from investing activities were basically on the same level as in Q1 a year ago, both EUR 35 million. Key driver here was the expansion of our supply chain and blade production facilities. Overall, free cash flow went positive for the quarter with approximately EUR 10 million. It is also substantially above the EUR -57 million in Q1 2020. That is, of course, a positive development. We will have to see how this plays out in the remainder of the year.
Finally, cash flow from financing activities was at about EUR -46 million, and it was largely determined by the utilization of the shareholder loan, but overcompensated by repayments under the RCF and the EIB facility. In a nutshell, in terms of cash flow, Q1 was more, and broadly speaking, a usual one. That brings us to the investments on the next slide. Our total investment in Q1 stood at EUR 38.6 million, slightly above the prior year level. Chief investment targets mentioned already were again blade production facilities in India, for example, molds, as well as equipment and tooling for our increased installation activities worldwide. We can also see a slightly higher portion of intangible assets as a result of somewhat increased development activities compared to Q1 2020. All in all, it has also been a regular quarter in terms of investments.
That brings me to the next and my last slide about the capital structure. Leverage ratio further declined to 0.3x compared to Q4 at 0.4x. With that, it continued well below our long-term ambition level of 1.5x. Just for comparison, the ratio stood at 1.2x one year ago. Equity ratio slightly declined compared to year-end, from 17.5% to 16.2%. Contributing factors were again the same as those when we were communicating and commenting on the profitability. That would be it for the financials, but before handing it back to José Luis, I'd also like to characterize our Q1 with three key takeaways from my side.
First, the start into the year was as we had expected it. Second, our forward-looking business maintained its resilience in Q1. Despite a bit of a slowdown in the sector, Nordex came out with a decent showing in order intake. Third, again, none of this is over. While vaccine roll-out picked up in many countries, others are hit hard by another wave of infections. That in turn could affect supply chain factories or logistics in some part of the world where we operate. In addition, we have also seen some pressure from inflation within the supply chain, which has persisted for longer than most expected. Volatility and gradually increasing pricing pressures are probably the most visible consequence of that. This adds an extra layer of risk into the current year, which we will have to manage closely. With this, I would go back to you, José Luis.
Thank you. Thank you, Ilya . We talk about operations, I think it's fair to remark that we keep operating under a COVID-19 business continuity task force that we established around one year ago. COVID-19 is not yet over and is still affecting our people and our business as mentioned before. On top, we see disruptions in supply chain, shortages due to containers issues and the associated risk for cost inflation in logistics and in certain commodities. In those circumstances, our focus is still to protect our employees and execute our customers' projects with the minimum impact possible.
Despite all the mentioned additional challenges that we are confronted with, is remarkable the operational capabilities of the company with a total installation of 356 turbines in 20 countries in the first quarter, compared to 269 quarter of last year. An increase of 56% compared to the same quarter of the last year.
Geographically split in megawatts in the first quarter of this year, 57% Europe, 21% North America, 16% Latin America, 6% rest of the world. Continuing the already mentioned trend of de-risking the geographies for the medium term, at least until COVID-19 is still with us. Talking about production, we are ramping up Delta4000 production for nacelles as we speak in Brazil, India, and Spain. India, Brazil, and Mexico for different blade models of the Delta4000 platform.
We, as mentioned, we're still facing several disruptions that we are managing in a daily basis in the context of this already mentioned business continuity task force. We expect the situation to stabilize once the vaccination campaigns are rolled out worldwide, and we expect that with commodity prices and logistics disruption to ease over time, and that is our assumption.
Output of turbines amount to 304 units in the first quarter, 174 in Spain, 174 in Germany, 118 in Spain, all Delta4000. 12 in Brazil from legacy product, but already ramping up Delta4000. As we speak, ramping up India for Delta4000 as well. In-house blade production, 383 units in the first quarter. 172 Germany, 95 Mexico, adapting the plan for four lines of Delta4000. 82 in Spain to launch Delta4000. 34 in India, Delta4000 as well. Outsourced blade production. All the in-house blade production is, or majority, big majority is Delta4000. Outsourced blade production, 570 units in the first quarter, keeping the reasonable balance between outsourced and in-house.
With this, we are approaching to the end of the presentation, we move to the guidance. Summarizing, guidance for the year is maintained. Sales between EUR 4.7 billion and EUR 5.2 billion. EBITDA margin between 4%-5.5%. Working capital below -6%. CapEx around EUR 180 million. As discussed by Ilya, we need to be aware that the assumptions underlying the guidance are subject to greater uncertainties than normal, as we discussed, due to several risks ahead of us.
Talking about strategic targets. The same applies for the strategic targets. We target to achieve sales around EUR 5 billion in the short term, maybe even before 2022. Let's see. It's our strategic task to achieve a group EBITDA margin of 8% for our financial year 2022. We have updated the wording to reflect what we see actually based on the 2021 guidance, because revenue might come earlier than profitability for the already mentioned factors. With this, well, capacity remains unchanged, 6+ GW . With this, we open the floor for Q&A.
Yeah. Thank you very much. Now I'd like to hand over to our operator, and I would like to ask you to open the floor for Q&A, please.
Of course. Ladies and gentlemen, we will now begin our question- and- answer session. If you have a question for our speakers, please dial zero and one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question is answered before it is your turn to speak, you can dial zero and two to cancel your question. If you are using speaker equipment today, please lift the handset before making your selection. As a courtesy to the other participants, may I finally request that you limit the number of questions you ask to three at a time. Thank you, and one moment please for the first question. The first question is from George Featherstone, Bank of America. Your line is now open. Please go ahead, sir.
Hi. Good afternoon, gentlemen. Thanks for taking my questions. My first one would be on the market environment. You've obviously noticed a soft start to 2021 for the industry in Q1. Have you seen a change in dynamics so far in Q2? Could you also give us an update on the negotiations with Acciona for the 1 GW Australia MacIntyre wind farm project?
Patxi?
Yes, I can take that one. No, we have not seen a change in dynamics in Q2 despite the environment that you are describing. We continue to have good visibility on the pipeline of orders that are to come. With respect to the Acciona deal, we do not publicly disclose individual negotiations that we have with customers, but as I mentioned in the previous call, yes, Acciona announced a large potential investment that they will be doing in Australia, and we are in discussions with them to supply that. However, we do not expect to be closing that deal in the short term.
Okay. Thank you very much for the color. My second question would be around raw material cost inflation, and some of your peers have noted that there'll be some impact on margins, in the medium term. Firstly, to what extent is this all already incorporated in your guidance for both this year and also for 2022? Secondly, within the answer, maybe if you could explain your hedging policy and any mitigation you have in terms of price increases or indexation within contracts.
Okay. I will take the first part, and Ilya will take the hedging part. Regarding costs, we have built our guidance to the best of our knowledge, and we see some impact in 2021 as well as some impact in 2022. The 2022 part, we still think we can counteract with the price. We build both the guidance and the strategic targets, taking into consideration what we know. It's fair to say that the belt is slightly tighter than before without those risks. At the same time, this could be an opportunity to reset the margins of the sector in a more sustainable level. To your question, we have considered what we know. There are slightly more risks than in normal circumstances. There are opportunities to reset the margin level of the industry following what was announced by market leader. We welcome that announcement very much. Regarding the margin policy?
Yeah, I would say probably, thanks, José Luis, you've answered also the hedging question to a degree. The straight answer for that one is where orders have been closed and have a lead time, let's say, of six to eight months to installation. We are covered to the degree that we have locked up and locked in our supply chain. For orders longer than that, part of our value chain is exposed, as you just explained, we will have to manage that closely. Of course, with certain limitations.
When taking into account managing of working capital, that is a crucial lever and a constraint to manage that. In another example, shipping costs, that's way more difficult to hedge that per se, because they come on the back of spot pricing. I think the third block you already described, José Luis, which is that for new orders, we will have to pass on those increases to the value chain. You also mentioned that other players have indicated the same.
Thank you. If I could just follow up on one of the points you made there, José Luis, on resetting the margins. What does that mean for Nordex? Are you basically intimating there that, as with, I think, you're referring to Vestas, was saying that you are expecting to raise prices to offset, and I think as you just mentioned then, with new contracts coming in?
Well, very much. You are anticipating my closing of the session today, but very much, we welcome the announcement of the market leader to protect gross margin and to pass the cost increase to the consumers through the customers. I don't think the customers will be affected mid-term. We are fully convinced that the competitiveness of the sector allows for higher price and even eventually better margins. There is no need of these very low price options, low 30s, high 20s if the spot price is in the 60s. Consumers can pay more. This might be, if we behave rationally, a good opportunity to reset the margin of the industry.
We welcome the announcement. We will follow the strategy. We don't plan to use this strategy of the market leader to capture more market share, keeping a low pricing strategy or a low margin strategy. We will follow and protect the gross margin and pass the cost increases to customers that will pass to consumers. At the end, temporary, we can have effects, but long-term, might be positive for the industry.
Okay, that's great. Thank you very much.
The next question is from Vivek Midha, Citi, your line is now open. Please go ahead.
Thanks very much, and thank you for taking my question. A bit of a follow-up from George's question. Around the 2021 guidance. I guess at the midpoint, you need to deliver about a 6% margin EBITDA for the rest of the year, rising to about 7% at the upper end, which is not that far off your 2022 margin target, despite not having India fully up to speed. Could you maybe talk about your views around the lower end and upper end of the guidance, your confidence at either end? Secondly, following on India, obviously, it's a terrible situation there. Could you maybe just expand on how you see that affecting the ramp-up in India and when you now expect to get to full operations there for Delta4000 operations? Thank you.
Okay. I will make a statement, and then Ilya will go more into detail of the guidance question. I think the range is broad because the uncertainties are big. We are not operating into, let's say, stable circumstances. India is a good example for that. We don't see risk from the order intake to cover the revenue. Most of the orders are almost in place and in execution to cover our revenue. We might have project delay, we might have lockdowns, we might have factories affected, we might have ramp-ups affected, which is the case of India. As we speak, we were ramping up Delta4000 in India, two molds in operation, four molds in the middle of the ramp-up of our biggest blade facility, and nacelles in conversion to produce Delta4000. As you saw in the presentation, we were already producing rotors in India.
The running factory is still running, we are not affected by the lockdown because we are a export-oriented unit. The factories that are in the middle of the ramp-up are temporarily affected. For how long? Honestly, we don't know. We expect to be resumed soon as the vaccination campaign is roll out. We expect a couple of weeks to resume those activities. It's somehow not in our control. Maybe here you can give more color about the guidance.
Yes, of course, José Luis. I think you already basically answered the part of the range and what are the uncertainties and factors that will impact where, at which side of the bookends we will come out. To your questions on the Qs, obviously we're not giving intra-year guidance. But when listening to your question, I think there is a set of fair assumption in there. So expecting Q2 to be already substantially better, obviously, than the Q we're presenting here. In the rest of the year, Q3, Q4, going up to a run rate that would bring us into, let's call it striking distance of what we target for next year. I think this is a fair picture.
That's helpful. Could I just quickly follow up in terms of the upper end of the guidance range? You talked about the sensitivities within the range, but what would you need to get to the upper end of the range on your profitability, on margin? Thank you.
I would say, executing the projects like a Swiss clock. Not delaying anything. Not having any extra cost. Not failing in any slot in production. It's somehow approaching to a best case scenario. Which is possible, but presents certain challenges. Still possible, of course.
That's very helpful. Thank you very much.
It's basically execution. We don't rely on order intake to achieve the top end of the guidance.
Thank you.
Perfect.
The next question is from Ajay Patel, Goldman Sachs. Your line is now open. Please go ahead.
Good afternoon, and thank you for taking my question. My carrying on the theme actually sticks with the raw materials. I just want to understand this in a little bit more detail. As far as I'm hearing from the other wind manufacturers, when an order becomes firm, you lock in the raw materials underlying to the best you can, currency to the best you can. Just thinking about how much raw materials have moved over Q4 and Q1, I would have expected your average selling price to start to move up and it was flattish. I just wanted to get an idea of all the orders that you've basically captured here, consistent with the margins that you will achieve next year.
How should we think about how the average selling price will evolve in the order intake over the year, given where the current environment is on raw materials? Just maybe whatever you can offer in terms of the understanding on how one filters into the numbers to the other, so we can look in on the company and know what to expect.
Then the second question just was on India. Do you have any exemptions on the way that production works there or is it effectively just purely government guidelines? I just remember last week Vestas mentioning that they do have some exemptions that will allow them to produce. Just wanted to get a similar sort of arrangement or not. Thank you.
Okay. I can take and my colleagues can jump in and further elaborate. I think, the average selling price, as usually Patxi mentions, is an indicator, but it's a component of location, scope, turbine type, so on and so forth. As we mentioned, we are de-risking by design the selection of markets where we operate, concentrating more in mature markets in those circumstances. What on top, it was not mentioned, but give you some color, we have a substantially lower share of turnkey projects. Majority of the order intake, I think more than 80% is turbine, is clean sale, and the rest is only with foundation. Almost no turnkey compared to the previous year that we had some different scope. That's a distortion in the average selling price.
It's true that the inflationary forces we have started to see in Q1, we are starting to react to that with the market to protect the gross margin. The gross margin is the indicator that we try to protect. In the new orders that we are in discussion, we are always incorporating this higher cost. Eventually in a like- for- like comparison, in the next quarters, you will see this impact. We believe that the order intake in volume will not be affected by this pass through of cost increases to customers. We will see over time in a like- for- like, the ASP evolution.
Talking about India, as I mentioned before, the problem is not the governmental permission, which we have, and we are still operating in one blade factory. The challenge for us was the support of international teams that needed to support our Indian colleagues in the ramp-up of Delta4000 products. For safety reasons, until we can guarantee availability of healthcare in case they are affected by COVID, or they are vaccinated in Europe or U.S. or in India, we decided to temporarily put on hold the ramp-up activities. We plan to resume those activities in the next couple of weeks. As we speak, we have the governmental order to operate because we are export-oriented units. We have three factories. One is operating, the others are as well operating, but ramp-up in a slowdown until we vaccinate our technicians and continue with the ramp-up support.
Okay.
The next question is from Sean McLoughlin, HSBC. Your line is now open. Please go ahead.
Thank you. Good afternoon. I wanted to ask firstly about your visibility on sales in 2022. You said you're covered already for the top end of 2021 guidance. What level of visibility do you have currently on 2022? That's the first question.
I don't know if we have the exact numbers, Patxi?
We do, but we generally don't anticipate with this patient provide these type of numbers. What I can tell you, Sean, is that goes very well in line with what we had same period last year. That goes also to the first question. We see we have good visibility on the order pipeline, and we are filling up the 2022 P&L sales with orders at the same pace that we were doing last year.
Somehow, you can do the math from the backlog. If we have a backlog round about of 5 GW .
EUR 5 billion.
Yeah?
EUR 5 billion.
Yeah. EUR 5 billion. Yes. That's a backlog of slightly more than one year, and we have consumed one quarter. We have slightly more than one quarter of backlog already secure for next year, and as Patxi mentioned, with good momentum on the pipeline. We are not concerned about the visibility in the pipeline.
Understood. Thank you. Second question, related to that and building slightly on the previous questions. Thinking about the 8% target now. You've talked about new uncertainties and increased uncertainties. You're sticking with that target. Clearly you do believe that you can achieve that. I suppose, how quickly would the situation need to normalize for you to continue on that pathway to 8%?
Okay. There are two normalizations. One normalization is easing the disruption. Other top normalization is with cost increases, being able to do a pass-through to consumers through the customers. Those are the two normalizations. The second is ongoing. I think we welcome the announcement of the market leaders. We are acting to protect our gross margin as well, because we cannot take more cost increases. This might temporarily impact profitability. Depending how the two factors evolve, we might have a temporary effect.
If the size of the market remains strong and the mid-term perspective remains strong, and if we keep our market share because we have competitive products, we are where the market is growing, and the market acts rationally and not entering into price war, which should not be the case in current profitability circumstances of the sector. It might take us a little bit longer or shorter to get there, but the underlying basic assumptions remain the same.
Fantastic. That's super helpful. My last question on debt cost. Your finance costs are continuing to creep up. I'm just wondering what opportunities you have over the next few months, either from refinancing or restructuring around debt to bring those costs down.
Yes. Well, happy to take that one. I go back a bit to my statements earlier that we're looking at the financing costs of the first Q. They're probably skewed a bit by extraordinary facts when we had to accumulate some of the fees payable under the RCF in that quarter. I would not extrapolate that too much for the entire year, which we would believe to be on similar levels like last year. To the core of your question, and I think I mentioned it last time, yes, it will be one of the first and foremost tasks of myself and my team to look into options to how further bring down those financing costs from where they are right now.
Is there anything that you can give in terms of the kind of objectives that you've set yourself or anything that you would expect is a kind of reasonable assumption to make on that cost reduction front?
I don't think we would be in a position today to have a tangible result for that, because that would already need the execution of these kind of options. I don't think today we can give already an indication.
Super. Thank you.
Ladies and gentlemen, as a reminder, if you would like to ask a question, please press zero and one on your telephone keypad now. The next question is from Constantin Hesse, Jefferies. Your line is now open. Please go ahead.
Hi, there. Good afternoon. Thank you very much. I also have three questions. Number one would be really on Q2. Has there been any visible improvements in production and installation processes in Q2, which do support higher margins, Ilya, going back to your point? If you can also give some color on the timing of your price increases. I'm just trying to understand if the EUR 0.73 in Q1 were mostly driven by mix and only part of that by price. That would be my first question.
Q2, we see an improvement coming mainly for a good level of activity and the ending of legacy low-margin projects. If we don't face any major disruption that we don't expect, we should see better profitability. Mainly driven by the quality of the projects that we execute. We execute more Delta4000, and this loss-making project, that we announced in the previous calls, is approaching to the end, and less legacy projects in Q2. That's the main factor for the improvement in the Q2.
That's great. Thanks. Just on the pricing timing?
The pricing, of course, what we are in discussion now is for delivering maybe Q2 2022. The pricing discussion that is ongoing, following the market, will not have a substantial impact in 2021, nor in Q2 of 2021.
That's great. Thank you. Question number two will be on other operating expenses, which have grown considerably, and it seems that this has been driven mainly by expenses from remedial work for projects and post-contractual customer claims, which was worth about EUR 26 million compared to zero last year. I'm just wondering if this was a one-off, or how should we really think about this one? Thanks.
Thanks, Constantin. Without being too specific, yes. I think there's two factors. A, is that we're in a growing business, so both on exotic side, we have a growth rate, which reflects the increase of our activities. Second, yes, there is some effect, like you mentioned, in that, for example, we do have some costs coming over from a Mexican project, where part of that increase you're mentioning is coming from. Yes, it's a mix of some, in that regard, one-off costs from those legacy and, B, the increased business activity.
Okay. That is great. Thank you very much. Maybe just lastly, you said that the order intake is covering most of revenues in 2021. I'm just wondering how much that is today, because I think back in March, you said you had about 80% visibility. I'm just wondering by how much it's then gone up by from now at the moment.
I think it's 99%, as we speak.
Perfect. Thank you very much.
We haven't received any further questions, so I hand back to the speakers for closing remarks.
Okay. Thank you very much, [Aurelia]. Thank you very much from our side for all your questions, and I'd like to take the opportunity to pass over to José Luis for your final remarks.
Thank you very much for your interest, for your questions. With this, we approach to the end, to the key takeaways from our side. First, we see positive business development expected in the rest of the year, with increased EBITDA margins in the course of the year, of course, to meet the guidance. Demand for the most profitable projects remains promising, even for the latest rotor variants.
We talk a lot about, in the course of the presentation today, about volatility and inflation in commodities, ongoing COVID pandemic, and logistics risk might have an impact in short-term. However, in the medium-term, prices could structurally improve as the wind industry remains one of the key pillars, and the key pillar competitive in the global drive to achieve net zero emissions and to fight against climate change. Price is not a roadblock to achieve that.
We talk about the temporary challenging situation due to COVID in India. Hopefully, this will ease very soon, and we hope that for India as a country and for our Indian colleagues. This might cause some delays in the ramp-up, which we think are going to be temporary. As mentioned, guidance for the financial year 2021 is maintained.
We talk to conclude as well, in the course of your questions, our position towards the announcement of the market leader. We welcome the announcement of protecting gross margin in the industry and pass the eventual cost increases to consumers through customers. Eventually, we will try not to hurt much our customers. This is an opportunity to reset margins of the industry, eventually, to a more sustainable levels in the future. Although, we might have some pain in the implementation of that. With that, thank you very much for your time, for your questions, for your interest, and wish you wonderful evening.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect now.