Siemens Gamesa’s performance in the third quarter of FY 2020 (April-June) reflected the impact of Covid-19 on its operations and challenges in its onshore business, but the booming offshore market helped offset these
Despite near-term challenges, the company has a record backlog of €31.5Bn (US$36.9Bn) (+25% year-on-year) and a strong liquidity position, with €4Bn in funding lines against which only €1.2Bn have been drawn. The company’s debt has been reduced by €101M in the last 12 months, to €90M.
The increase in the backlog – which enhances the visibility of the group’s performance going forward – reflected strong commercial performance, driven by the offshore and service business units, that now represent 78% of Siemens Gamesa’s backlog. Order intake increased by 14% year-on-year in the quarter, to €5.3Bn, and by 24% year-on-year in the last 12 months, to €15.2Bn.
Siemens Gamesa underlined its position in the offshore wind market with a strong quarter in which it signed 2,860 MW in orders (+87% y/y), taking the total for the last 12 months to 4,211 MW (+110% y/y). Overall, the company has an offshore backlog totalling 7.6 GW, as well as a pipeline of conditional orders and preferred supplier agreements amounting to 9.3 GW.
Overall, between April and June Siemens Gamesa recorded revenues of €2.4Bn, a decline of 8% year-on-year. EBIT pre PPA and before integration and restructuring (I&R) costs fell to -€161M, with a negative EBIT margin of -6.7%, including a -€93M direct impact of Covid-19. Net losses in the quarter amounted to €466M.
Revenues in the first nine months of FY 2020 fell 9% year-on-year to €6,615M, with EBIT pre PPA and before I&R costs of -€264M, including an accumulated impact of the pandemic of -€149M. Net losses amounted to €805M in the period.
In his first earnings report as chief executive, Andreas Nauen said, “We are navigating a complicated period, as an industry and as a company, and the numbers we have presented today reflect that.
“We are already taking measures to turn the onshore business around and return to profitability. The long-term outlook for our business is promising and our company has the technology and people needed to play a major role in developing a recovery underpinned by clean energies that help combat the effects of climate change.”
Mr Nauen was appointed chief executive of Siemens Gamesa in June 2020 and tasked with driving a turnaround at the company. To regain profitability, the company has measures underway that include a change of course in India to tailor the business to actual market demand, optimisation of the global industrial footprint, and implementation of an acceleration programme that seeks to assure profitability for the company’s three business units. The programme will be unveiled at a Capital Markets Day, scheduled for 27 August 2020.
Siemens Gamesa withdrew its financial guidance for FY 2020 in April because of the uncertainty about the impact of the Covid-19 crisis. Now, with better visibility, the company has presented new estimates for FY 2020, which ends on 30 September, including the impact of the Senvion asset acquisition.
Siemens Gamesa expects to end the year with revenues between €9.5Bn and €10Bn and an EBIT margin before PPA and integration and restructuring costs of between -3% and -1%. This represents a reduction of €1Bn in revenues and of between €200M and €250M in profitability compared to the previous guidance.