Siemens Energy Reports Fiscal Year 2023 Results Amid Sector Challenges

Siemens Energy

Siemens Energy, in its recently disclosed report for the fourth quarter ending September 30, 2023, revealed a mixed performance across their diverse portfolio.

Despite facing unprecedented hurdles, the company’s President and CEO, Christian Bruch, highlighted that a significant portion of their ventures showcased robust growth, meeting or surpassing yearly targets. However, attention was underscored on addressing challenges within the wind business, emphasizing cost efficiency, strategic selection, and productivity enhancement.

Fourth Quarter Performance Overview

The fourth quarter witnessed a slight decline in orders to €10.6 billion, marking a 7.8 percent reduction from the preceding year, mainly attributed to lower orders in Grid Technologies (GT). Nevertheless, the order backlog soared to a record €112 billion at the end of the fiscal year, supported by a book-to-bill ratio well above 1. Revenue saw a comparable decrease of 2.5 percent to €8.5 billion, primarily due to Siemens Gamesa, impacting the Profit before special items, which settled at negative €487 million.

Siemens Energy reported a net loss of €870 million for Q4 FY 2023 compared to a net income of €354 million in Q4 FY 2022.

Fiscal Year 2023 Insights

While Gas Services (GS), Grid Technologies (GT), and Transformation of Industry (TI) thrived with commendable performances throughout the fiscal year, Siemens Gamesa faced challenges related to quality issues in certain onshore turbines, increased product costs, and offshore business ramp-up hurdles. Despite these setbacks, the company’s overall orders surged by 33.8 percent to €50.4 billion, driven by GT and Siemens Gamesa, while revenue reached €31.1 billion, up by 9.9 percent in comparable terms, except for Siemens Gamesa which experienced a decline.

However, the Profit before special items took a hit, dropping to negative €2,776 million in FY 2023 from a positive €225 million in FY 2022 due to Siemens Gamesa’s losses. Consequently, Siemens Energy reported a profit of negative €2,960 million for FY 2023, leading to a net loss of €4,588 million, in contrast to a net loss of €712 million in FY 2022.

Outlook for Fiscal Year 2024

Looking ahead, Siemens Energy anticipates revenue growth between 3 percent and 7 percent for fiscal year 2024. They also project a Profit margin before special items within a range of negative 2 percent to positive 1 percent. Furthermore, the company forecasts a net income of up to €1 billion, considering factors such as disposals and an expedited portfolio transformation.

Siemens Energy aims to navigate the challenges within its wind business, leveraging selective strategies and operational efficiencies while continuing to drive growth and profitability across its diversified segments in the upcoming fiscal year.