FRANKFURT/DUESSELDORF – Siemens Energy will replace the boss of its troubled wind turbine division after little more than two years in the job, the company said on Wednesday, also flagging job and capacity cuts as it tightens its grip on the loss-making business.
The company, a former Siemens division that supplies equipment to the power industry, also raised its outlook for 2024, primarily on the back of its power grid business, causing its shares to rise 6.6% in pre-market trade.
The group, in presentation slides alongside second-quarter results, said that sales of its 4.X onshore turbine, one of the platforms plagued by quality issues and responsible for a group-wide crisis, would resume in Europe by the end of September.
It made no mention on when sales of the 5.X model, the other affected platform, would restart.
Jochen Eickholt, who took over as Siemens Gamesa CEO in March 2022, will step down at the end of July and be replaced by Siemens Energy board member Vinod Philip, the company said, adding it was time for a generational change at the struggling business that has been loss-making for years.
Eickholt, a Siemens veteran, led the wind turbine maker through its most turbulent time since it was created in 2017, including last year’s product quality crisis, which prompted Siemens Energy to seek billions of euros in state-backed guarantees.
“It is only fair to emphasise that the causes of the quality problems did not fall under his tenure as CEO,” said Siemens Energy CEO Christian Bruch.
Going forward, Siemens Gamesa’s onshore business will be focused on two main markets, Europe and the United States, the group said, fleshing out a more streamlined approach that was first flagged late last year.
Thanks to strong demand for power grid equipment, Siemens Energy raised its outlook for sales, operating profit and free cash flow, now expecting revenues to grow by 10%-12% in 2024.
Second-quarter profit before special items rose more than fourfold to 170 million euros ($183 million) in the second quarter.
“Very strong reporting. Visibility to us seemed rather low so this is a positive surprise,” a local trader said.
($1 = 0.9308 euros)
(Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Cynthia Osterman, Rachel More, Shri Navaratnam and Gerry Doyle)
