Wind turbine manufacturer Siemens Gamesa had a record-breaking financial year 2019, powered by growth in demand for wind turbines as the pace of the energy transition picks up
The company fulfilled market guidance with an EBIT margin before PPA and integration and restructuring costs of 7.1% and an increase in revenues of 12.1% year-on-year to €10.23Bn (US11.41Bn). It did so despite price pressure in the wind industry. Net income doubled to €140M (US$156M) compared to FY 2018.
Siemens Gamesa closed fiscal year 2019 with a record orderbook of €25.5Bn US$28.4Bn (+12%). The company also strengthened its balance sheet with a net cash position of €863M (US$962M) at the end of FY 2019, up €248M (US$277M) year-on-year.
“There is no question that wind energy is coming of age and is now leading the energy transformation which is so critical to tackling climate change,” said Siemens Gamesa chief executive Markus Tacke.
“These results show we are successfully adapting to a changing industry and that our strategy is on the right track to delivering long-term sustainable growth and leadership in our industry.”
Siemens Gamesa logged strong order intake in its onshore business: 9,389 MW (+4.8%), but the company’s offshore unit registered double-digit growth (+10.9%), due to new markets, mainly Taiwan, which contributed 1.5 GW in firm orders. Service orders increased by 13.4% in FY 2019, to €2.72Bn (US$3.03Bn).
All of Siemens Gamesa’s business units realised increased revenue compared to last year: onshore by 7%, offshore by 18%, and service by 17%.
“This solid performance reflects the growing worldwide recognition that accelerating investment in clean energy is vital to responding to climate change, which has become the focus of significant public and institutional attention in 2019,” the company said.
“Wind power has strong potential and significant growth opportunities in the long-term and, according to the International Energy Agency, average annual wind installations will double by 2040, with €5Trn of investment by 2050.”
However, despite the good news about its order book, Siemens Gamesa said price pressure is affecting the wind industry’s margins and weighing on manufacturers’ returns. As a result, in order to enhance competitiveness and secure profitable growth in the long-term, it is to "adjust its structure" and reduce its head count by 600 people worldwide over the next two years.