Germany

Germany

Senvion launches action plan after 'operational mistakes'

Senvion is in talks with lenders and has launched a 'transformation programme' to stabilise the company after downgrading its guidance for the fiscal year.

Senvion lowered its fiscal guidance for 2018, blaming delayed installations and revenue
Senvion lowered its fiscal guidance for 2018, blaming delayed installations and revenue

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The manufacturer stated delayed installations and revenues had triggered the change in forecast, while new CEO Yves Rannou added the company had made "operational mistakes".

Last week, Senvion announced it was likely to achieve full year revenues of around €1.45 billion with an adjusted Ebitda margin of around 3% in 2018 — below previously announced guidance of revenues of around €1.6 billion and an adjusted Ebitda margin of around 5%. Shares in Senvion have lost almost 90% of their value in the last year.

"We have a strong firm order book of almost €5 billion, a great market position and excellent products which our customers like.

"But we made operational mistakes in a challenging market environment and now need to focus on execution and on strengthening our customer focus," said Rannou, who took over as CEO at the beginning of January.

Senvion has now announced plans to recover lost revenues and profits in the new financial year, with a ‘transformation programme’ built around four key areas:

  • Re-focusing on the most attractive markets. Senvion entered new markets last year including India and Latin America. It will now increase its focus on "promising growth areas", it stated;
  • Streamlining its product portfolio and increasing modularisation to reduce costs;
  • Focusing on localisation and sourcing improvements to make savings and boost competitiveness;
  • Strengthening the financial basis in cooperation with lenders to stabilise the company through the transition period.

The manufacturer added initial talks with customers and suppliers have been positive and claimed the company’s workforce is "committed to supporting the new management in delivering its operational turnaround".

Senvion added that it would continue talks with lenders to establish a sound financial basis for the transition period.

It also has access to guarantee facilities that allow it to "continue to secure its performance", the company stated.

Senvion has commissioned a restructuring opinion in line with the S6 standard (IDW S6) of the German Institute of Certified Accountants (Institut der Wirtschaftsprüfer), which is expected to be available in the second quarter of 2019.

Meanwhile, majority shareholder Centerbridge stated that it "fully supports CEO Yves Rannou and the Senvion management as they continue to implement the ongoing transformation process". 

Senvion has delayed the release of its annual financial statement, which had been scheduled for 14 March, with a new publication date announced in due course, the company stated.

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