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Siemens Energy Revamps Leadership at Struggling Wind Division, Improves Financial Forecast

ByYasmeeta Oon

May 9, 2024
Siemens Energy Revamps Leadership at Struggling Wind Division, Improves Financial Forecast

Siemens Energy Revamps Leadership at Struggling Wind Division, Improves Financial Forecast

Frankfurt/Duesseldorf, May 8Siemens Energy has announced a major leadership reshuffle within its wind turbine division, Siemens Gamesa, signaling a fresh approach to tackle ongoing challenges. Jochen Eickholt, the current CEO of Siemens Gamesa, will step down at the end of July after more than two years at the helm. He will be succeeded by Siemens Energy board member Vinod Philip.

The leadership change comes at a critical juncture for Siemens Gamesa, which has been grappling with significant losses and quality issues in its turbine models. The company stated that the decision marks a generational shift aimed at revitalizing the business.

“Jochen Eickholt has led Siemens Gamesa through some of its most challenging times since its inception in 2017,” said Christian Bruch, CEO of Siemens Energy. “While the quality issues that have affected our products did not occur during his tenure, it is crucial to acknowledge his efforts in navigating the company through these difficulties.”

Vinod Philip, who has served on the Siemens Energy board, is expected to bring new strategic visions to the struggling division.

Alongside the leadership overhaul, Siemens Energy presented an optimistic financial forecast for 2024, underpinned by robust demand for its power grid equipment. The company has raised its revenue growth expectations to 10%-12% for the upcoming year, primarily driven by its power grid operations.

In its second-quarter financial results, Siemens Energy reported a more than fourfold increase in profit before special items, reaching 170 million euros (approximately US$183 million). The improvement in financial performance led to a 6.6% rise in pre-market trading of Siemens Energy shares.

The company also provided updates on its turbine sales, particularly the 4.X onshore model, which has been plagued by quality issues. Sales of this model are set to resume in Europe by the end of September. However, there was no update regarding the resumption of sales for the 5.X model, another platform affected by similar issues.

Going forward, Siemens Gamesa’s onshore business will concentrate on two main markets: Europe and the United States. This strategic focus is part of a broader initiative to streamline operations and enhance product quality.

The positive financial results and strategic adjustments have been well-received in the market. A local trader commented on the recent developments, noting, “Very strong reporting. Visibility to us seemed rather low, so this is a positive surprise.”

Siemens Energy Financial Highlights Q2
IndicatorQ2 2023Q2 2024 Forecast
Revenue Growth6%10%-12%
Profit Before Special Items41 million euros170 million euros
Free Cash FlowNegativePositive Outlook

Key Takeaways:

  • Leadership change at Siemens Gamesa with Vinod Philip set to replace Jochen Eickholt.
  • Resumption of sales for the troubled 4.X turbine model by the end of September in Europe.
  • Enhanced focus on the European and U.S. markets for onshore wind operations.
  • Significant improvement in financial performance, with expectations of continued growth in 2024.

The adjustments in leadership and strategic focus are part of Siemens Energy’s broader efforts to stabilize its operations and return to profitability, particularly in its wind turbine division. As the company embarks on these changes, the market remains optimistic about its potential to overcome past hurdles and capitalize on growing demand across its key business segments.

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Yasmeeta Oon

Just a girl trying to break into the world of journalism, constantly on the hunt for the next big story to share.

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