Siemens Energy saw a significant increase in its shares after raising its forecast for the year and announcing changes in its leadership. The CEO of its wind turbine unit, Siemens Gamesa, will be replaced amid restructuring measures. Jochen Eickholt will step down from his position on July 31 and be succeeded by Vinod Philip. Siemens Energy CEO Christian Bruch stated that Eickholt laid the groundwork for the reorganization needed within Siemens Energy, despite not being in charge during the quality problems experienced at the wind turbine division.
Siemens Energy has initiated comprehensive restructuring measures, focusing on long-term strategic development to increase operating margins. The company raised its forecast for the year due to strong demand for power grid equipment and stabilization of the wind business. The revised forecast includes expected revenue growth of 10% to 12% and a profit margin before special items between negative 1% and positive 1%. This is an improvement over the previous forecast of revenue growth between 3% and 7% and a profit margin between negative 2% and positive 1%. The positive news led to a significant increase in Siemens Energy’s shares.
CEO Bruch highlighted a positive quarter for Siemens Energy, with strong order momentum in the energy sector. Despite the progress made, he acknowledged the need to address quality issues in the wind business. Bruch emphasized the focus on onshore and offshore activities, with a specific emphasis on offshore operations. He expressed confidence in the initiatives launched by Eickholt and the continued efforts to turn around the wind business after facing challenges in previous years.
Siemens Energy faced challenges in 2023, with manufacturing faults at Gamesa resulting in a significant loss for the company. An investigation into quality issues at the wind turbine division was launched, leading to concerns among investors about the broader implications for the industry. The wind industry has experienced rapid expansion over the years, competing with fossil fuels in terms of cost-effectiveness and efficiency. The issues faced by Gamesa raised questions about the health of the industry as a whole.
Despite the challenges, Siemens Energy reported a net income of 108 million euros for the last quarter, demonstrating positive growth and cash development. The company remains focused on addressing quality issues and driving strategic initiatives to strengthen its position in the market. The changes in leadership and restructuring measures are part of the company’s efforts to overcome the difficulties faced in the wind business and achieve sustainable growth. Siemens Energy’s outlook for the future is positive, supported by the strong performance in the energy sector and ongoing efforts to improve operations.
