Siemens Gamesa sees profitable 2022 after narrowing full-year losses

Turbine manufacturer hit by supply chain and raw material issues, but narrows losses in full financial year

Despite the heavy losses, Siemens Gamesa CEO Andreas Nauen remains optimistic about the company’s future
Despite the heavy losses, Siemens Gamesa CEO Andreas Nauen remains optimistic about the company’s future

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Siemens Gamesa expects to return to profit in its 2022 financial year after narrowing its losses.

It made a €522 million loss (reported Ebit) in its 2021 financial year, citing supply chain struggles, sharp increases in commodity prices, shortages of components, logistics bottlenecks and high transportation costs.

This net loss marks an improvement from the €958 million net loss it made in the previous financial year, when the coronavirus pandemic impacted commercial activity and project execution.

Its net income improved from a €918 million loss in the 2020 financial year, to €617 million loss in the 2021 fiscal year.

And although its operating income (Ebit) before purchase price allocation and integration and restructuring (I&R) costs was an improvement on the €233 million loss in the 2020 financial year, it still recorded a €96 million loss for the 2021 financial year.

The manufacturer added that these supply chain, raw materials and transportation challenges were particularly intense in the second half of its financial year (1 October to 30 September). It expects these issues to continue to affect operations in the 2022 financial year.

However, despite these continuing pressures Siemens Gamesa expects to turn an Ebit margin of 1-4% in the 2022 financial year.

CEO Andreas Nauen said: “We are operating in a very difficult environment with challenging short-term market dynamics and low visibility on supply chain normalisation, and we will continue our efforts to return the company to sustainable profitability. 

“However, the current difficulties should not overshadow the bright future for wind energy, driven by its role in the decarbonisation of our planet.”

As of 30 September, Siemens Gamesa’s backlog stood at €32.5 billion, up 7.6% year on year. It explained that this means it is well-placed to capture the potential of wind energy.

The manufacturer’s full-year revenue increased 7.5% to €10.2 billion, supported by a 16% growth in offshore and 9% growth in service.

The company added that it ended FY21 with a solid balance sheet and ample access to funding. As of 30 September, Siemens Gamesa's net debt position stood at €207 million, with €4.4 billion in committed funding lines, against which it had drawn €1.3 billion.

It signed orders worth €12.1 billion in the financial year. Onshore accounted for €4.7 billion of these years, but this was down 15% year on year, due to a slowdown in sales of its 5.X platform as well as in the US and Spanish markets. 

Meanwhile, offshore accounted for €4 billion of orders and service accounted for €3.4 billion.

Siemens Gamesa also pushed back its expected date for achieving a key target outlined in a business strategy designed to help it return to profitability.

The manufacturer now expects to achieve an Ebit margin, before factoring additional costs, of 8-10% in either the 2024 or 2025 financial year. It had previously expected to achieve this in the 2023 financial year. 

It pushed back the deadline due to challenges brought about by the coronavirus pandemic, and added that meeting this target depends on turning around its onshore division and achieving sustainable profit growth in offshore and services.

Alongside publishing its full-year results for the 2021 financial year, the manufacturer unveiled an upgrade to its flagship offshore wind turbine, pushing the rotor size to 236 metres. Read Eize de Vries's exclusive review of the SG 14-236 DD here.

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