Siemens Energy has begun a multiyear restructuring of its wind power business, which temporarily has halted sales of certain onshore turbine models due to quality-control problems.
Siemens Gamesa CEO Jochen Eickholt will step down effective July 31 and the company will focus its onshore efforts on attractive markets with stable regulatory frameworks, primarily in Europe and the United States. Siemens Gamesa hopes to end its losses by 2026 and then return to profitable growth.
The announcements came May 8, as Siemens Energy reported its second-quarter earnings. Eickholt’s impending departure is “by mutual agreement.”
Siemens Energy CEO Christian Bruch thanked Eickholt for laying the foundation for the reorganization and planned rebound and emphasized the quality-control problems that flared up did not begin while Eickholt was CEO.
Siemens Gamesa orders in the second quarter of fiscal 2024 were down 76% from the same quarter a year earlier but revenue was down only 5%, with higher offshore revenue more than offset by lower onshore revenue.
The company expects substantially better revenue in the second half of fiscal 2024, especially because of its efforts to ramp up its offshore production capacity. Multiple internal organizational changes are underway, as well.
Siemens Gamesa temporarily has stopped selling its 4.X and 5.X onshore turbines as it deals with the defects that have been observed.
Bruch addressed this early in his conference call with financial analysts.
“Obviously, we will need time to work through the quality matters,” he said.
“We will develop new onshore business based on, first of all, selected regions, and second, based on revised 4.X and 5.X platforms but with a heavily reduced number of variants. This is what Jochen and the team [have] been also driving over the past couple of months already — simplify the product structure in our company.”
Bruch said the target date for restarting turbine sales in Europe is the end of fiscal 2024 for the 4.X and fiscal 2025 for the 5.X, with relaunch in the United States later.
“Please keep in mind the volumes will not come back immediately,” he said. “We still have a big plan to work through. And we also have still the quality matters but we are confident that we are able to rebuild a strong market position over the coming years but it’s really a long-term trajectory.”
Siemens Energy stock closed 12.8% higher in trading on May 8.
