BMirror Desk:
Siemens Energy has unveiled a comprehensive strategy aimed at revitalizing its wind turbine business, following a tumultuous period marked by significant market value losses. The company’s latest efforts include the appointment of Vinod Philip as the new chief executive of its wind division, Siemens Gamesa, effective August. Philip will spearhead a series of cost-cutting measures, including job reductions, as part of the company’s bid to streamline operations and regain financial stability.
The announcement comes on the heels of Siemens Energy’s impressive second-quarter performance, with group operating profit skyrocketing fourfold to €170 million compared to the previous year. Encouraged by these results, the company has revised its full-year revenue growth forecast upwards from 3-7% to 10-12%. Additionally, Siemens Energy has committed to resuming sales of its troubled turbine models, the 4.x and 5.x, in the near future, signaling a significant step forward in its recovery efforts.
Christian Bruch, CEO of Siemens Energy, emphasized the company’s unwavering focus on revitalizing its wind business, stating, “The turnaround of our wind business is still our focus. To this end, we are taking steps to reduce complexity and create a more focused business.” Shares in Siemens Energy surged by 13% following the announcement, nearly offsetting losses incurred over the past year.
While Siemens Energy’s quarterly results were buoyed by strong performances in its Grid Technologies and Transformation of Industry divisions, the company anticipates that Siemens Gamesa will play a pivotal role in driving revenue growth in the latter half of the financial year. Siemens Gamesa is poised to undergo a streamlined approach, with plans to implement €400 million in cost reductions at the division.
Looking ahead, Siemens Energy intends to concentrate its turbine business operations in Europe and the US, with plans to ramp up production capacity at key sites in Denmark, France, and Germany. The company’s restructuring efforts underscore its commitment to adapting to market challenges and positioning itself for future success in the wind energy sector.
Siemens Gamesa’s challenges come amid broader industry pressures stemming from rising interest rates and supply chain disruptions, which have contributed to increased costs. Nevertheless, demand for wind energy remains robust, with a record 117 gigawatts of new capacity installed last year, according to the Global Wind Energy Council trade group.
