Siemens Energy, the energy-focused subsidiary spun off from German engineering group Siemens in 2020, aims to reassure investors about its onshore wind turbine business. Joe Kaeser, the Chairman of Siemens Energy, provided updates during the Reuters Global Markets Forum in Davos, stating that no new flaws have been identified in its newest onshore wind turbines since November.
The company has faced challenges, particularly with its Siemens Gamesa wind turbine business, which experienced repeated setbacks, raising concerns about Siemens Energy’s strategy and its ability to serve various segments of the utility sector. However, Kaeser expressed confidence, stating, “The worst is over,” and emphasized that no additional issues have emerged.
In the past year, Siemens Energy reported quality issues with its latest generations of onshore wind turbines, leading to government intervention in the form of vital project guarantees. This crisis prompted discussions about the viability of Siemens Energy retaining its onshore wind turbine business. Kaeser questioned the allocation of resources to a business that might not be profitable, highlighting the importance of financial sustainability.
Kaeser, who previously served as Siemens CEO, argued that the onshore wind turbine business should be profitable to justify its existence. He suggested that Siemens Energy’s management, led by Christian Bruch, should review the level of functionality promised to wind turbine clients, ensuring it does not pose a significant financial burden. Additionally, the management team must deliver on the promised turnaround of Siemens Gamesa, with expectations to break even by 2026.
The Chairman acknowledged that Siemens Energy’s strategy requires careful evaluation and execution, emphasizing the need for profitability. Kaeser expressed optimism about the company’s future, stating, “If the management is able to make good on the strategy they have presented to the board, it looks really, really good.” He dreams of Siemens Energy becoming a fascinating and profitable company by 2026 or 2027.
However, Kaeser acknowledged that the jury is still out because the management has not yet delivered on its promises. The company’s ability to navigate challenges, implement its strategy effectively, and achieve financial success will determine its standing in the industry. Siemens Energy’s focus on functionality, financial viability, and the successful turnaround of Siemens Gamesa will be crucial factors in shaping its trajectory in the coming years.
As Siemens Energy addresses concerns and aims for profitability, the industry and investors will closely monitor its performance and strategic decisions. The Chairman’s statements provide insight into the company’s perspective and the steps it plans to take to regain confidence and establish itself as a leading player in the energy sector.
