Siemens Energy shares surged by up to 13% on Wednesday following an announcement that the company had raised its forecast for the year. Additionally, the CEO of its wind turbine unit, Siemens Gamesa, will be replaced as part of “comprehensive restructuring measures.” Jochen Eickholt will step down as CEO on July 31 and be succeeded by Vinod Philip. The company stated that Eickholt had laid the foundations for the necessary reorganization and new start within Siemens Energy, despite not being responsible for the quality problems during his tenure.
Siemens Gamesa has initiated restructuring measures and long-term strategic development steps to improve operating margins. Strong demand for power grid equipment, along with the company’s success in stabilizing the wind business, led Siemens to raise its forecast for the year. Revenue growth between 10% and 12% and a profit margin before special items between negative 1% and positive 1% are now expected for the full year, compared to previous forecasts of revenue growth between 3% and 7% and a profit margin between negative 2% and positive 1%. Consequently, Siemens Energy’s shares were trading 11.3% higher on Wednesday morning.
Siemens Energy CEO Christian Bruch spoke to CNBC and mentioned that the company had a good quarter with positive order momentum in the energy sector. Despite this, quality issues still need to be addressed, especially in the wind business. Bruch emphasized that the company is focusing on onshore and offshore activities, with an increased focus on offshore projects and volume products. The aim is to work through operational issues and get the business back on track.
In 2023, Siemens Energy faced challenges, including significant losses due to manufacturing faults at Gamesa, resulting in a 4.6 billion euro loss for the fiscal year. The company launched an investigation into quality issues within the wind turbine division. Earlier in the year, Siemens Energy had to scrap its profit forecast and warned that the problems at Gamesa could have long-lasting effects. Investors expressed concerns that these issues might extend beyond Gamesa and affect the wider wind industry.
Siemens Energy reported a net income of 108 million euros for the last quarter. The company also raised its outlook, citing stronger growth and positive cash development. Despite the difficulties faced in 2023, the positive results in the latest quarter indicate progress and potential for improvement. The company’s focus on restructuring and strategic development, along with the change in leadership at Siemens Gamesa, reflects a commitment to overcoming challenges and positioning Siemens Energy for future success.
