Another consecutive year of outstanding business results

At today’s Supervisory Board session, the audited financial results were ratified, highlighting 2023 as a year of remarkable and record accomplishments for KONČAR Group. 

Revenue, profit, and profit margin reached all-time highs, while order intake exceeded EUR 1.3 billion in value. The transformational initiatives and efforts undertaken over the past four years, prioritizing responsiveness to market trends and demands, have paved the way for these outstanding outcomes. The green transition in Europe has been gaining full momentum in recent years, a trend we timely recognized and fully leveraged. Swift adjustments in development, manufacturing, and business operations to align with the new electric power era have led to an unprecedented level of order intake.

Key performance indicators have seen growth across all business areas, with the power transmission and distribution segment demonstrating remarkable performance. The sustained high demand for transformers, a key component of KONČAR’s product portfolio, has yielded excellent results and reinforced KONČAR’s status as a regional leader in the development and production of high-tech solutions essential for advancing the green energy transition throughout the European Union.

Significant advancements have also been achieved in other business areas. In the domain of renewable energy, over the preceding three years, we have finalized agreements for the construction of six solar power plants for several partners, with the flagship project being the largest within HEP’s portfolio. Our efforts towards green mobility in Europe have been marked by securing contracts to produce 30 new low-floor trams. These are intended for the only two cities in Croatia that operate tramway lines - 20 trams for Zagreb’s public transport system and 10 for Osijek. These projects, won in international tenders, hold significant value and serve as a substantial incentive for the entire domestic industry. Alongside our established electric trains, we are actively working on the development and assembly production of both battery-operated and hybrid trains. The digital solutions segment leverages four decades of experience in designing automation solutions for monitoring and managing energy facilities and systems. KONČAR - Digital achieved a new milestone in this segment when the renowned certification company TÜV NORD Adriatic awarded us a certificate of compliance with the latest international standards for cybersecurity in critical infrastructure management systems.

Financial results of KONČAR in 2023

KONČAR Group delivered outstanding business results which exceeded the ambitious targets set at the beginning of the year. From the total order intake of EUR 1.31 billion, a significant 76.6% pertains to export activities. The trust and reliability that we have been building up over decades have ensured a substantial influx of new orders, in particular from the advanced markets of Germany, Sweden, Austria, Norway and the Netherlands. There was also growth in order intake in other markets, with mention of the United States, where new contracts amounted to EUR 30.9 million. Backlog amounts to EUR 1.42 billion, with emphasis on the fact that the backlog for 2025 and subsequent years is steadily growing, with EUR 465.2 million in secured order intake.

Consolidated income generated from the sales of products and services amounts to EUR 894.1 million, representing a year-on-year increase of EUR 190.2 million or 27%. Export constitutes a significant portion, accounting for over 65% of total sales revenue. Year-over-year, income from the sale of goods and services in foreign markets expanded across all markets, with significant revenue growth achieved in the EU market, where export rose by EUR 105.6 million. Export to the European Union countries reaches EUR 418.8 million or 72% of the total export.

Our exceptional sales results drive further profitability expansion. Reported net profit totals EUR 70.9 million, which is 44.3% up on year-on-year, despite the fact that last year’s results were impacted by significant one-off items. Normalized net profit amounts to EUR 86.8 million, marking a twofold year-on-year increase. Normalized EBITDA amounts to EUR 107.3 million, marking a year-on-year increase of EUR 46.8 million or 77.2%. Normalized EBITDA margin stands at 12%, compared to 8.6% in the same period last year.

We embark on the new year compelled with optimism and with expectations of good performance. Our goals remain the same - growing the income side and expanding export, further investments in equipment and new product development, investment in human resources, lifelong learning and professional development as the imperative for the realisation of strategic goals. Commitment to our customers, pursuit of excellence, fostering innovation, and preserving natural resources remain fundamental to our operations. Our reputation is built upon our dedication to our employees and the community, as well as our efforts to promote a thriving economy and a sustainable society.

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