Siemens Energy: Save 400 million in wind power business
The ailing energy technology group Siemens Energy wants to significantly reduce costs in its loss-making wind power business with a reorganization. The planned simplification of the structure at wind turbine subsidiary Siemens Gamesa is expected to save around 400 million euros by fiscal year 2025/26 (as of the end of September), the company announced at its Capital Markets Day in Hamburg on Tuesday. Group CEO Christian Bruch had already announced last week that Siemens Gamesa should break even again this year - two years later than originally planned.
Siemens Gamesa is struggling with quality problems with land turbines, start-up difficulties with marine turbines (offshore) and significantly higher costs. Sales of the new 5.X land turbine have been suspended and the company is concentrating on ramping up its offshore factories. Orders are to be accepted more selectively. For this reason, Siemens Energy initially anticipates low order intake in the wind division. Siemens Energy expects another billion-euro loss in the current fiscal year. Gamesa wants to concentrate on certain regions and products. The core market is Europe, as Gamesa CEO Jochen Eickholt explained.
Siemens Energy had already announced targets for 2025/26 last week. CEO Bruch is giving priority to the turnaround at Gamesa. In addition, grid technology and industrial transformation should ensure better profitability.
The Group is suffering from its ailing wind power business, which caused Siemens Energy to lose billions in the past financial year. The rest of the gas, grids and industrial transformation business is doing much better. Siemens Energy has a huge order backlog. However, the company needs money - in the form of guarantees - to be able to work through this backlog. Last week, Siemens Energy reached an agreement with banks and the federal government on guarantees to secure orders. In this context, the federal government is securing bank guarantee lines of 12 billion euros with a guarantee of 7.5 billion euros.
Siemens Energy aims to enhance profitability by focusing on grid technology and industrial transformation beyond its struggling wind power business, which has resulted in significant losses in the past fiscal year. The reorganization of Siemens Gamesa, including the suspension of land turbine sales and a shift to offshore production, is expected to save approximately 400 million euros by 2025/26.
Source: www.dpa.com
