Page 5 - AsiaElec Week 06 2022

AsiaElec COMMENTARY AsiaElec

turning around underperforming businesses,” between fiscal year 2024 and fiscal year 2025,
said Miguel Angel López, chairman of the board supported by the recovery in profitability in
of directors of Siemens Gamesa. the onshore market and by sustained profitable
The priority is to turn around the OEM’s growth in the offshore and service markets,” it
onshore business, said López. It is the sector continued.
leader globally in offshore. “We remain immersed in a very complex
“With an order backlog of more than €33bn, market environment, with disruptions and low
leadership in the growing offshore market and visibility in the supply chain” Nauen told report-
a strong service business, the company is well ers after the announcement on a conference call.
positioned for future success,” continued López. Two waves of supply chain issues have
In early February, the company elaborated in occurred: higher raw materials costs, such as
its lowered guidance, and projected even lower steel and copper, and logistical issues, he said.
revenues, citing supply chain issues, Covid and Prices for those commodities will not ease by
“ramp-up challenges of the Siemens Gamesa 5.X 2023, he predicted, and therefor pricing for the
platform [that] affected production and the pro- year after remains “impossible” to predict.
ject execution schedule.” It also said that “supply “Components are not delivered as we
chain disruptions … are expected to last longer ordered, ships are not arriving, we do not get the
than previously anticipated.” The company said electronic components and sometimes some of
its onshore business could return to profitability the mechanical components, and that interrupts
in FY 2024-5. our production,” he continued. “You are basi-
SGRE cited its guidance for FY22 and a rev- cally chasing your parts.” This mostly affected
enue growth of between -9.0% and -2.0% year the manufacturing of nacelles, he said. SGRE is
on year. This is in addition to the profitability attempting to alleviate this by ordering parts in
cited in its earnings report in January. That was larger quantities to ease the shortages.
an earnings before interest and taxes (EBIT) The outgoing CEO told the conference call:
margin – pre purchase price allocation (PPA) – “The [wind turbine] sector is experiencing an
before integration and restructuring (I&R) costs extremely difficult earning cycle. It isn’t just Sie-
of between -4.0% and 1.0%. mens Gamesa, and it isn’t just this quarter.
Previously, revenue had been expected to “We see OEMs remaining in a very difficult
decline by between -7% and -2%, and an EBIT spot and struggling to be profitable. I believe
margin pre PPA and I&R costs between +1% and that our value needs to extend beyond price: We
+4%. bring a lot of benefits to society and the energy
Despite the complex near-term environment, transition, including jobs creation in the coun-
Siemens Gamesa said it maintains its long-term tries that we work in.
vision for the business, aiming for an EBIT mar- “We need to be financially sustainable so we
gin pre PPA and I&R costs of +8% to +10%. can continue to create value for all our stakehold-
“This vision is expected to be achieved ers and create a better world.”™

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