Fixing its wind business, Siemens Gamesa, is one of the three priorities Germany’s Siemens Energy AG (ETR:ENR) set out at its Capital Market Day today, alongside delivering on profitable growth and maintaining a solid financial foundation.
Siemens Energy, which just recently reported fourth-quarter results and secured guarantees from the German government and private banks to support its business, plans to bring the wind business to break even in fiscal 2026 and make it profitable thereafter. The action plan is based on “simplifying the product portfolio, optimising footprint and operations, and strengthening processes and control,” says the company’s statement.
Siemens Gamesa has been hit by serious challenges, including quality issues in the onshore segment. Siemens Energy said that the technical review has identified the deficiencies with high impacts in the onshore business and remediation measures are being developed. In onshore, the company intends to focus on Siemens Gamesa 5.X as a mainstream platform and to narrow focus only to attractive markets, with Europe seen as the core market. In offshore, the focus will be on securing ramp-up in manufacturing plants and implementing a cost-out programme. Siemens Energy will further aim to ensure healthy order intake by applying strict selectivity and to bring the service business back to target profitability after the Siemens Gamesa 4.X and 5.X issues.
In the fiscal year through September 2023, Siemens Gamesa recorded a EUR 4.3 billion (USD 4.7bn) loss before special items. In the new fiscal year, this is seen to narrow to around EUR 2 billion.
Siemens Energy’s other businesses, Gas Services, Grid Technologies, and Transformation of Industry, which account for 70% of its revenue, are all set to achieve or exceed their mid-term targets, the company said.
“We are achieving consistent and impressive results in 70% of our businesses. Those results show that our underlying strategic north star to become a leader in the energy transition is right. Our portfolio is excellently positioned, and our record order backlog of EUR 112 billion clearly demonstrates this,” commented chief executive Christian Bruch.
(EUR 1 = USD 1.093)