Siemens Energy plans to slash $400m at struggling wind unit
The wind division is expected to rack up further losses of €2bn in 2024
Frankfurt — Siemens Gamesa, the struggling wind division of Germany’s Siemens Energy, plans to cut costs by about €400m by 2026, the group said during its much-awaited capital markets day on Tuesday.
The goal was to "simplify organisation and optimise overhead costs" while the Siemens Gamesa’s onshore wind turbine capacity is to be adjusted according to a refined product and market roadmap, according to presentation slides said.
Measures will include a review of its onshore product offering, including the markets it caters to, streamlining its service organisation and looking into supply chain partnerships, the company said.
The wind division is expected to rack up further losses of €2.2bn in 2024, the company said.
"The turnaround of Siemens Gamesa remains our highest priority and we now have a defined path and action plan to reach break-even for the wind business in fiscal year 2026 and to return to profitability thereafter," Siemens Energy CEO Christian Bruch told analysts.
"We will be very strict with capital allocation."
The comments come less than a week after Siemens Energy disclosed a €4.6bn loss due to Siemens Gamesa, where a mix of product quality issues and ramp-up problems have pushed an expected break-even out to 2026.
Siemens Energy also recently secured a €15bn guarantee package from the German government that is needed to safeguard its €112bn order book, an agreement that has caused the group’s shares to recover from a recent record low.
Siemens Gamesa, which has become a major burden for its parent, will also reduce the number of turbine variants it sells and pause any wind product initiatives in what it says are "adjacent fields", singling out hydrogen.
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