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Windtech International July August 2024 issue

 

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In a year with challenges, the performance and success of 70% of Siemens Energy’s businesses in the fiscal year 2023 were offset by difficulties in the wind business. The wind business remains a major challenge and has led to a net loss in 2023.
 
In the past financial year, Siemens Gamesa suffered an unexpected, serious setback. Charges for quality issues in the onshore business, increased product costs, and ramp-up challenges in the offshore business severely impacted the results for the fiscal year 2023 and will continue to impact the group's profitability in the near to mid-term. Break-even at Siemens Gamesa is now expected in fiscal year 2026.

The technical analysis of the quality issues for the onshore platforms 4.X and 5.X is almost complete, and the results so far confirm what was communicated in August 2023. No further provisions in these fields have been made since the Q3 announcement. Remedial actions have been defined, and mitigation and corrective actions are under development. Siemens Gamesa has still suspended commercial activities on the 5.X platform and is defining a timeline and approach to set out how and when to resume sales with a design incorporating the respective corrective measures.

In the offshore sector, Siemens Gamesa is focusing on ramping up its factories and new product generation, as well as executing its order backlog. Output has increased compared to the fiscal year 2022. To help achieve the turnaround and return Siemens Gamesa to profitability, the scope of Siemens Gamesa’s activities is currently being reviewed. More details will be revealed on Capital Market Day on November 21.

Siemens Energy’s market momentum continued to be strong in the 2023 fiscal year. The order backlog of €112 billion reached another new record, while orders at Siemens Energy exceeded the already high prior-year level and rose by 33.8% on a comparable basis to €50.4 billion. Both Siemens Gamesa and Grid Technologies contributed to this growth. Revenue increased by 9.9% on a comparable basis to €31.1 billion, with all segments apart from Siemens Gamesa contributing to this growth. Gas Services, Grid Technologies, and Transformation of Industry all exceeded guided revenue targets for the fiscal year, which helped the group meet its guidance.

Siemens Energy’s profitability was severely impacted by the large loss at Siemens Gamesa. Profit before special items decreased to negative €2,776 million. Gas Services, Grid Technologies, and Transformation of Industry delivered profits before special items in line with guidance. The profit margin before special items of negative 8.9% was in line with the latest adjusted guided range of negative 10% to negative 8%. The net loss of Siemens Energy was €4,588 billion.
 
Following cordial and intense negotiations, the German government decided to counter-guarantee €7.5 billion of a total of €12 billion in guarantees, €11 billion of which are offered to Siemens Energy by a consortium of banks. Siemens Energy will pay the federal government a typical market amount in exchange. An new consortium led by Deutsche Bank will fund the remaining €1 billion.
 
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