Two weeks ago, Siemens Gamesa once again announced new special charges of 289 million euros.
(Photo: Reuters)
Munich, Dusseldorf Siemens Gamesa CEO Andreas Nauen has lost his job. The company is thus drawing the conclusion from a renewed profit warning. Siemens Gamesa announced on Wednesday evening that the new CEO would be Jochen Eickholt on March 1st. Eickholt is currently still a board member at the parent company Siemens Energy.
The Dax group Siemens Energy is taking action on the ailing subsidiary. Eickholt has “several times demonstrated its ability to make ailing businesses successful again,” said Siemens Energy Supervisory Board Chairman Joe Kaeser.
Siemens Gamesa is actually the great hope in the new Siemens Energy Group. The core business with gas power plants has been in crisis for years. The production of renewable technologies should actually raise hopes for growth.
In the wind turbine sector in particular, however, things have not been running smoothly for years. Again and again, the listed group surprised the mother in Munich with bad news.
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The negative surprises continued under Nauen, who has only been at the top for a year and a half. The Handelsblatt had already reported on his impending departure.
Which causes trouble for the parent company
Siemens Gamesa is currently experiencing major challenges in its onshore business with wind turbines on land, said Chairman of the Board Miguel Angel López. Eickholt has a lot of experience in mastering complex operational challenges and turning around ailing businesses.
After the renewed profit warning, the CEO of the wind power specialist is giving up his post.
(Photo: Siemens Gamesa)
Two weeks ago, Siemens Gamesa once again announced new special charges of 289 million euros. An operating loss is now possible in the 2021/22 financial year (September 30).
The company also lowered sales expectations. Siemens Gamesa is now preparing for a drop in sales of up to nine percent instead of the previous seven percent. As a result, the parent company Siemens Energy also had to lower its forecast.
This caused great irritation in Munich. “Siemens Energy boss Christian Bruch knows that he has to act and he will act,” said the company. According to information from the Handelsblatt, Bruch and significant parts of the supervisory board around chief controller Joe Kaeser were largely in agreement when assessing the situation.
Cultural differences
Nauen is actually well regarded in the group. He had taken the right measures, said Bruch in the summer. So it was less the operational management that Nauen stumbled over than the persistent unreliability of the forecasts. Bruch thanked Nauen for his work – “not only during the last year and a half, but also for his more than 20 years in the Siemens group”.
Jochen Eickholt should now judge it. “Siemens Gamesa is great at offshore and service, onshore causes problems,” he told the Handelsblatt at the turn of the year. He will give up his board position at Siemens Energy after moving to the subsidiary.
Siemens Gamesa’s long-term prospects remain good, an industry insider said on Wednesday. Apparently, however, the cultural differences between the Spanish Gamesa and Siemens Windkraft were greater than many had expected.
At the same time, the turbine manufacturer is struggling with a difficult market environment. The wind companies have gone through the crisis years with fierce price competition on the international stage. Because not only Germany, but also more and more other countries have switched from fixed remuneration to the system of free tenders in recent years. Here, only the lowest bidder is awarded the contract.
Vestas has also cut the forecast
The booming demand worldwide is ensuring full order books, but the margins have remained the same with increasing sales and have even fallen in recent months. Supply chain problems, high raw material prices and two years of corona pandemic have now made the situation even more difficult. Even star student Vestas from Denmark has cut its forecasts.
The wind industry is therefore looking at the recent change at the top of Siemens Gamesa with skepticism. “The internal problems are undisputed, but whether a new CEO can now deliver good results more quickly is not certain,” says industry circles. However, there is agreement that the merger of the German Siemens wind subsidiary with the Spanish Gamesa group, which primarily brought the onshore business with it, has not yet been completed smoothly.
There was also criticism in corporate circles at Siemens Energy that there were still too many silos at Siemens Gamesa. The successes with offshore wind turbines on the high seas, which Siemens in particular had brought in, would not be transferred well to the onshore division.
The engineer Eickholt started his career at the Fraunhofer Institute for Production Technology. In 1999 he started at Siemens. Above all, he is credited with bringing the train division into shape. When Energietechnik was spun off, he became a member of the Management Board of the new Siemens Energy.
More: Why Siemens Gamesa caused trouble in Munich.