Christian Bruch, CEO of Siemens Energy.
The restructuring of Siemens Gamesa (SG) will mean a cost reduction of 400 million by 2026. The savings will be achieved through “organizational simplification”, without specifying the areas affected by the restructuring, which appears to be focused on the wind division. Country. At the end of this year, the wholly owned subsidiary of Siemens Energy (SE) is expected to give up losses after posting red figures of 4,347 million in 2023, which the German group estimates will be 2,000 million next year.
In a meeting with analysts, SE CEO Christian Bruch described the wind turbine manufacturer’s results as “completely unsatisfactory” but said that “the necessary changes would be made” to return to profitability. He gave no details about possible layoffs and plant closures at a company with factories in a dozen countries (nine of them in Spain). Siemens Gamesa CEO Jochen Eickholt identified Europe as one of the preferred markets for its stability and support for the wind industry, with a current EU aid program worth 1.4 billion euros. From Brussels, they aim for the “old continent” to double its wind energy production to 420 GW in 2030.
The CEO identified the plants in Ágreda (Soria) and Vagos (Portugal) as the causes of the technical problems that have affected the 5.X land turbine, which is expected to reach a unit capacity of 7 MW, becoming the largest in the world segment of the renewable energies. Its commercial launch was crippled by this fiasco. There were also failures on the 4.X platform. In both cases, the breakdowns are about to be fully resolved, said the German manager. Rotor blades are manufactured in the Portuguese factory and turbines are assembled in Ágreda, 70% of which are then exported outside Spain, namely to Europe, benefiting both centers.
The central message of the conference this Tuesday in Hamburg was that Siemens Energy wants to consolidate itself as one of the global protagonists of the energy transition. 70% of its gas, smart grid and digital industry businesses are profitable. The wind energy division has deteriorated its balance sheet, causing it to record a loss of 4,588 million in 2023, 95% attributable to the former Gamesa.
China
Jochen Eickholt sent a message to suppliers this Tuesday in the sense that he wants to involve them more closely in the outsourcing of part of SG’s own production, following the example of the automotive industry. This strategy is behind the announcement of the sale of the wind company’s eight factories in Spain, which is about to be implemented. In the onshore wind sector, which concentrates the activities of Spanish plants, Eickholt wants to reduce capacity and adapt it to the demand of each market. In China, where there is aggressive price competition and the protection of the Beijing government, SG has two factories. And two more in India, but that’s a market with a lot of upside.
SG’s plan also includes expanding its service business, as maintenance of the turbines creates more scope. They now make up 23% of income. When it comes to offshore wind, Europe appears to be a preferred market alongside the United States, although investment there is currently stagnating as companies such as Orsted and Iberdrola withdraw projects. SG has achieved a 20% improvement in the price agreed with customers in the offshore segment as raw material prices increased by around 30%. In the offshore wind sector, industrial capacity will increase in contrast to the land turbine sector. In fact, the company is expanding its facilities in Hull, UK, with 1,000 employees, where it produces rotor blades for marine turbines. Other reference centers in this area are the centers in Cuxhaven (Germany) and both in Denmark, which are also in the growth phase, as well as one each in the French port city of Le Havre and in Taiwan.
Siemens Energy, which will receive 50 percent support from the federal government for a 15 billion financing plan, is also negotiating with Spain and Denmark to provide guarantees in return. SE has also resorted to divestitures to strengthen its balance sheet. In this way, it expects revenues of 3,000 million, as the group’s financial director, María Ferraro, recalled this Tuesday. The company has already received 2.1 billion through the sale of 18% of the Indian company SIL. A stake that was taken over by its 25.1% shareholder Siemens AG, which was already the majority shareholder of SIL and now concentrates 69% of the shares.
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