Nordex is in the wind energy business. But let’s be serious, if you are reading this article, you probably know that, right? But if you’re considering investing in Nordex — or are already an investor –, you need to know a heck of a lot more than that. What follows are five things that will help you better understand the company.

According to the the company’s 2014 Annual Report, Nordex is “one of the world’s leading mid-size producers of onshore wind power systems”. Let’s elaborate and expand this statement a little.

1. Nordex offers customised solutions in the wind energy sector

The company does not only develop and produce wind power systems — i.e. the wind turbines plus the related control software — in select markets it also offers wind farm project development and turnkey solutions. Nordex wants to change its mindset from “producing 600 nacelles per year” to “doing 100 projects per year” and turning into a project-driven company is a key focus area.

2. Increasing focus on the service business

Aftersales services are becoming an increasingly important part of the business. Sales are up 75% in three years, and service backlog is at a record EUR 771 million. Nordex is putting special focus into the long-term service agreements where it was able to reach a 90% renewal rate.

3. Product portfolio focuses on the mid-range output

While wind turbines can have a power range between 250 watts to 7 MW, Nordex focuses on the mid-size range, with products between 2.4 MW and 3.3 MW. The company has two major product platforms, Generation Gamma (2.4 MW and 2.5 MW) and Generation Delta (3.0 MW and 3.3 MW). In each platform there are three rotor diameter options, depending on the wind class (strong/moderate/low). The bestselling product is the N117/2400 (2.4 MW turbine and 117-meter rotor) with 42% of the total turbine sales, but the new generation N131/3000 product is also off to a great start, having been nominated Windpower Monthly’s “Turbine of the Year” in the 3MW+ segment.

4. Focus on the onshore business only

After a failed attempt to find a joint venture partner, Nordex retreated from the offshore business in 2012 and is focusing on the onshore segment only. It’s interesting to note that while offshore was only 3% of installed capacity worldwide in 2014, in Europe, which is the key market for Nordex, offshore is a significantly bigger chunk of the overall business (12% of installed capacity in 2014).

5. Mid-sized player in a crowded market

Nordex was #10 in the wind power business in 2013 based on installed capacity, but was pushed out of the top 10 list in 2014 by upcoming Chinese competitors. It installed less than 3% of the 2014 global capacity, meanwhile the top three producers (Siemens, GE and Vestas) each had just over 10% market share — calling the company a “leading” producer may therefore be a bit of a stretch. However, this is partly due to focusing only on select markets, and in these markets, Nordex has a stronger position. In Europe, for example, it has more than 8% market share.

So where does Nordex revenue come from? I will look at the sales development of the company in an upcoming article, so stay tuned to

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Miklos Szekely doesn't own any of the shares mentioned. The Motley Fool besitzt Aktien von GE.