Dusseldorf, Munich, Madrid The troubled wind giant Siemens Gamesa made a loss of more than 400 million euros in the first quarter. In the same period last year, there were still eleven million euros in profit. “The results are certainly not what they should be. And that’s why I understand the decision to restart,” said Siemens Gamesa boss Andreas Nauen on Thursday.
The German-Spanish wind turbine manufacturer confirmed the recently lowered forecasts, according to which sales will fall by two to nine percent for the full year 2021/22. The EBIT margin should be between minus four and plus one percent.
The number of new orders had recently collapsed in both the onshore and offshore segments. Only the service division recorded a positive trend and was able to increase by eight percent. Despite this, the EBIT margin fell to minus 17 percent. The share price of the wind giant then fell by more than 16 percent on Thursday. Overall, the Siemens Gamesa course lost almost half within a year.
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Rising commodity prices, supply chain issues and internal issues
“We are not getting the parts that we ordered, not the ships that we planned, and the problems in the onshore division have not yet been resolved,” Nauen summarized the disastrous situation. In addition to rising raw material prices, supply chain problems and the currently tense price situation on the world market, the wind giant is struggling with massive internal problems. “Siemens Gamesa needed a fresh start and a change at the top,” emphasized the Chairman of the Supervisory Board, Miguel Ángel López. He is convinced that Eickholt is now the right choice to get the company back on track.
The change of boss is also a sign that the parent company Siemens Energy is now taking tough action. Internally, Eickholt is called “Two-Week Jochen” because he demands very quick results. “Eickholt doesn’t hesitate,” says an insider. He is not a cuddle type, but will “immediately intervene” if something goes in the wrong direction.
Most recently, Eickholt had orchestrated the exit from new coal business at Siemens Energy. Internally, it is said that the assertive manager will certainly be missing from the parent company. “But there is currently no more demanding job than shooting the most important daughter.”
The fact that Nauen has to go at the top after only a year and a half also causes internal frowns. “He’s a good manager and knows a lot about the business,” said an insider. But he may be the wrong person to get the cultural problems at the German-Spanish group under control.
In the end, the persistently poor forecast reliability was the deciding factor, according to company circles. It is not unusual for a new CEO to start with a profit warning. Those are not his numbers. There is certainly understanding for a second profit warning due to balance sheet clean-up work. But patience in Munich was at an end when the annual forecast was lowered again shortly after Nauen had set it.
In view of the “perfect storm” of supply bottlenecks, rising commodity prices and internal problems, “it may be impossible to solve this in just 18 months,” Nauen defended on Thursday.
“Supply chain issues will be with us for a while”
“We won’t see commodity prices drop back to pre-crisis levels any time soon. And the supply chain problems will also be with us for a while,” said the manager. At the moment, all manufacturers have the problem of working cost-effectively because they have taken on all the risks, such as rising raw material costs, for years. That has to change.
The fact that the manufacturer market is in a difficult position could hardly be overlooked in the past few months. Industry leader Vestas had recently shocked with profit warnings. Because of the difficult world market situation, the turbine manufacturers had also raised their prices across the board for the first time.
Ángel Pérez from the Spanish analysis company Renta 4 also sees the problems of the wind giant with the change of boss not yet solved. “Siemens Gamesa now has its fourth CEO since the merger,” says the analyst. The company is pushing the prospects of breaking even further and further into the future. “I don’t believe the predictions anymore. The group must now finally show that it is able to solve the problems,” said Pérez. Then the ratings would also change, but not because the boss had to swap again.
Even Nauen’s predecessor, Markus Tacke, hadn’t got Siemens Gamesa under control. Nauen, who had previously led the offshore division to success, was to change that. A Spanish business newspaper reported that more heads are to roll and that the head of development, Carlos Albi, is also leaving the group. During the merger, he was responsible for combining the assets of Siemens and Gamesa and subsequently achieving the planned synergies. The company did not confirm the personnel on request. In development, however, people were very dissatisfied that each model was developed on its own and no attempt was made to benefit from the experiences of others.
One of the frequently cited internal problems is the rift that still exists between the former Gamesa and Siemens. Even five years after the merger, the corporate cultures have not come together, according to corporate circles in Spain. Gamesa, which brought in the onshore business, which is problematic today, was previously strong in emerging markets and has made itself visible through a high degree of flexibility and a focus on reducing costs. Siemens, on the other hand, pays close attention to quality protocols and structures that must be adhered to. “The two approaches are still clashing,” it is said in corporate circles.
The workforce was unsettled by the many rumors that were circulating. One says that Siemens Energy first wants to take over Siemens Gamesa completely and then sell parts. However, Siemens Energy did not want to comment on this.
More: Siemens Gamesa boss Nauen has to go: Jochen Eickholt takes over