Siemens Energy has unveiled a comprehensive strategic roadmap at its third Capital Market Day in Hamburg, Germany.
Siemens Energy’s top executives presented a clear plan designed to enhance shareholder value, spotlighting three pivotal priorities: delivering sustainable growth, resolving wind business issues, and fortifying financial stability.
Christian Bruch, President and CEO of Siemens Energy, highlighted the company’s significant strides, emphasizing robust performance across 70 percent of its business segments.
Christian Bruch affirmed the strategic alignment aimed at leadership in the energy transition, citing the company’s well-positioned portfolio and a staggering order backlog totaling 112 billion Euros. Moving forward, Siemens Energy aims to accelerate growth, execute its backlog with improved margins, and prioritize operational excellence.
Christian Bruch emphasized the priority of steering Siemens Gamesa’s turnaround, setting a defined path and action plan to achieve break-even for the wind business by fiscal year 2026, with subsequent plans to restore profitability. Siemens Energy did not reveal its plans to revive the ailing Siemens Gamesa that competes with Vestas.
Vestas has reported third-quarter revenue of EUR 4.4 billion with an EBIT margin before special items of 1.6 percent. Vestas has achieved order intake of 4.5 GW and record-high combined order backlog of EUR 54 billion.
Maria Ferraro, Siemens Energy’s CFO, underscored prudent resource allocation, focusing on investments geared toward growth and customer demands while maintaining the company’s commitment to sustain an investment-grade credit profile. Ferraro reiterated Siemens Energy’s fiscal year 2024 net cash target as a testament to its fiscal responsibility.
Siemens Energy’s key revenue-driving sectors – Gas Services, Grid Technologies, and Industry Transformation – are on track to meet or surpass mid-term targets. With a bullish outlook, the company anticipates margins between 7-9 percent for Industry Transformation, 9-11 percent for Grid Technologies, and 10-12 percent for Gas Services by fiscal year 2026, reflecting upgraded or confirmed targets.
The company’s growth trajectory aligns with global energy trends, witnessing substantial investments in clean energy technologies, amounting to a staggering $1.7 trillion in 2023. Siemens Energy foresees amplified demand for electricity, set to double between 2022 and 2050, with renewable energy sources expected to contribute six times more to the global grid by 2050.
Acknowledging setbacks faced by its wind subsidiary, Siemens Gamesa, the company revealed a comprehensive action plan. This includes streamlining the product portfolio, optimizing operations, and fortifying controls to rectify challenges.
Siemens Gamesa will concentrate on selective criteria for its onshore business, aligning with supportive regulations and profitable markets, while bolstering offshore production capacity to address the order backlog. Implementation of operational enhancements and cost-saving measures aims to achieve break-even by fiscal year 2026, followed by sustained profitable growth.
Siemens Energy’s strategic vision underscores its commitment to navigating industry challenges, driving growth, and cementing its role as a pivotal player in the global energy transition.