Business at Siemens Energy is going better again – despite the loss-making Gamesa wind power division. picture alliance / Panama Pictures | Dwi Anoraganinrum
The ailing energy technology group Siemens Energy appears to be recovering despite the loss-making wind power business at Gamesa.
After a good second quarter, the Munich-based company is increasing its forecast. This causes a jump in prices on the stock market. Nevertheless, Siemens Energy is expected to be in the red again in the second half of the year.
Now a restructuring plan for the problem child Gamesa should help. And a change at the top management.
Siemens Energy appears to be slowly recovering from its setbacks. The energy technology group also recorded black figures in the second quarter of its current financial year, as it announced on Wednesday. In addition, the company, which has already had to issue several profit warnings, is increasing its forecast for the current year.
The bottom line is that Siemens Energy made a profit of 108 million euros in the second quarter from January to March. A year ago there was a loss of 189 million. Sales rose by three percent to 8.3 billion euros. According to CEO Christian Bruch, the development in the second quarter is evidence of “the continued strong demand for our energy transition technology as well as initial successes in stabilizing the wind business.” Bruch added: “Against the background of this positive development, we have increased our outlook.” The sales forecast for the current year has been raised significantly. Instead of growth of three to seven percent, sales are now expected to increase by ten to twelve percent. Margins are also expected to be slightly better. However, the target for the annual result remains unchanged at a profit of one billion euros.
However, this means that Siemens Energy will probably be in the red again in the second half of the year – because after a very profitable sale in the first quarter, the profit after the first six months currently stands at almost 1.7 billion – well above that for the company year-end predicted value. Now a restructuring plan for the problem child Gamesa should help. And a change at the top management.
According to the restructuring plan, Gamesa should concentrate on onshore in Europe and the USA
The head of the Spanish Siemens subsidiary Gamesa, Jochen Eickholt, who developed the restructuring plan for Gamesa, will resign from his mandate on July 31st. His successor, Vinod Philip, will take over the implementation of the program to ensure continuity during the transition. According to CEO Bruch, he had already gained operational experience as head of service for the power plant business.
The background to the restructuring program that has now begun is Gamesa’s wind power business, which continues to be loss-making. Here, Energy still has to process old contracts that can no longer be implemented profitably and is struggling with quality problems. Gamesa also contributed significant losses in the second quarter, which, however, were offset by solid figures in the other areas – especially Grid Technologies.
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The restructuring program is intended to help Gamesa get back into the black by 2026 and even achieve double-digit positive margins in the long term. To achieve this, Gamesa should concentrate primarily on Europe and the USA in the currently particularly problematic business with onshore wind power and adapt its production capacities. In addition, hierarchy levels will be reduced there and new business in the onshore and offshore areas will be merged with the service business.
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The restructuring is expected to cost jobs, but Gamesa’s headcount is expected to remain “roughly constant” over the next few years. Particularly due to the growth in the offshore sector. Furthermore, Siemens Energy plans to bring the 4.X and 5.X wind turbine models back into sales at the end of the fiscal year and 2025, respectively, after they led to losses last year due to quality problems.
The news from Siemens Energy was received positively on the stock market. The group’s shares were the biggest winners in the DAX in the morning and have now gained double digits.
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with material from the dpa