- The change of model towards clean energy accelerated commercial activity, as strong order intake in Q1 FY 2020 (+82% YoY) boosted the order book to €28,089m
- Sales stood at €2,001m and the balance sheet remains sound, with €175m in net cash
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- Despite good long-term prospects, the complex situation in the industry and extraordinary costs in executing five onshore projects located in Northern Europe had a negative impact on profitability
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Rising demand for wind power as a response to the transition towards non-polluting energies drove Siemens Gamesa’s commercial activity in the first quarter of FY 2020. The company experienced an 82% increase in order intake, with firm orders rising to €4,628m, raising the order book to a record €28,089m, underlining solid long-term growth prospects.
As announced in a regulatory disclosure on 29 January, the company experienced an unforeseen €150m impact from costs on five onshore projects (1.1 GW) in northern Europe, mainly Norway, caused by adverse road conditions and the unusual early arrival of winter weather, which delayed project execution substantially. As a result, Siemens Gamesa adjusted its profitability target by one percentage point and expects to end the fiscal year with an EBIT margin before PPA, integration and restructuring costs of between 4.5% and 6%1.
“This was not an easy quarter for Siemens Gamesa. The company’s financial performance fell short of the expectations we had when we set our targets for the year. However, this was a one-off impact and we do not expect it to recur in future quarters as we are taking the necessary measures. We have stepped up risk analysis to ensure project execution is on track and we will also strengthen our internal control system to avoid a recurrence,” said Markus Tacke, CEO of Siemens Gamesa.
“The results also underlined the long-term opportunities for wind energy and Siemens Gamesa. We are in an industry with huge potential and we are taking advantage of this with intense commercial activity that resulted in a record order book. Moreover, the acquisition of strategic assets from Senvion will boost our service business, where margins are higher,” added Tacke.
