Group headwind for Siemens Energy – economy

Siemens Energy ended the first independent year with a loss. In the end, the group, which was separated from Siemens in 2020, recorded a loss of 560 million euros. However, the loss has decreased significantly compared to the previous year, at the time it amounted to 1.9 billion euros. The high special effects also played a role here.

Group boss Christian Bruch was therefore satisfied, in particular due to the improvement in the operating result of the “Gas and Power” division, which is moving towards conventional power plant technology. The fact that the group is ultimately still in deficit is due “to the well-known problems of the onshore activity of Siemens Gamesa, but above all to restructuring measures”. Gamesa is the Group’s Spanish wind subsidiary. It had already presented its figures last week and reported a loss, among other things due to problems with onshore projects and difficulties with supply chains. After the third quarter Bruch got mad at Gamesa, now he was more lenient: management was fixing the issues, but it would take some time for that to take effect. In addition, Gamesa is ahead of the curve in the offshore and transmission areas. “As such, the company knows how to do it,” said Bruch. This must now be implemented everywhere.

In terms of sales, Siemens Energy was able to increase by almost four percent to 28.5 billion euros in the past financial year. The number of employees has grown from around 93,000 to 91,000. The group is cutting thousands of jobs in the “Gas and Electricity” division. In the fourth quarter alone, which ended on September 30, it cost 222 million euros. And for the year as a whole, the cost of austerity programs is the “lion’s share” of negative special effects for a total amount of 673 million euros, according to financial director Maria Ferraro. The job cuts will continue in the new fiscal year, but the associated costs are expected to come down.

During the new financial year which began in October, Siemens Energy intends to continue its progression towards profit. A “very big improvement” is expected here, the company said. The prognosis leaves open whether this will be enough for the black numbers at the end. In all likelihood, that will depend heavily on how Gamesa behaves. Energy owns two-thirds of the business. Bruch also assumes that supply chain problems will persist until 2022. Added to this is the problem of rising raw material costs for the entire industry. If, on the one hand, steel is getting more and more expensive, but wind turbines are getting cheaper and cheaper, then that won’t work. Ultimately, we will also have to talk about price increases.

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