Siemens Gamesa Renewable Energy (SGRE) has reported its numbers for fiscal year 2017 (FY17), when revenue increased by 5% to EUR 10.964 billion and underlying earnings before interest and taxes (EBIT) was down 18% at EUR 774 million with an EBIT margin of 7%. Notably, the the company has also announced a restructuring plan affecting up to 6,000 employees.
Between April and September, revenues fell 12.3% while underlying EBIT came to EUR 192 million (down 63.4%) with an EBIT margin of 3.8%. According to the company, these results were impacted by specific onshore market conditions, including the temporary suspension of the Indian market and impairments relating to accounting adjustments to inventories. Excluding these impacts, revenues fell 2% with an EBIT margin of 7.3%. Also excluding currency effects, revenues were flat, the company notes.
In India, the government is planning 3 GW in central auctions, and the market is expected to fully recover in 2019, says SGRE.
In the context of the ongoing integration of legacy structures, the recently merged company has announced a restructuring plan affecting a maximum of 6,000 employees located in 24 countries (with 700 already announced). Discussions with employee representatives will start immediately, says the company, adding that the plan, which will be implemented in the coming months, is a necessary step to strengthen the group.
The company also recently announced a number of new appointments and resignations among its executive management team.
“Our financial performance is still not at the level we’re all aiming for. But it’s clear that we are making positive progress as we carry out our plan to make this company an industry leader,” says Markus Tacke, CEO of Siemens Gamesa. “Our integration efforts are proceeding ahead of schedule, and I’m confident that the decisions we’re making will allow us to better respond to changing market conditions and to better serve our customers and other stakeholders.”
SGRE says commercial activity intensified in the fourth quarter, both onshore and offshore, resulting in a significant increase in order intake, amounting to 3 GW (up 40%).
Between April and September, revenue from the sale of wind turbines decreased by 15% to EUR 4.4 billion, impacted by onshore markets that are facing challenging conditions, mainly India and the U.K., as well as pricing pressure, according to the company.
In terms of geographies, the U.S., Brazil and China were the main contributors to onshore activity during the second half of the fiscal year.
SGRE notes it continues to strengthen its balance sheet and ended the quarter with a net cash position of EUR 377 million.
Regarding the Siemens-Gamesa integration, the company says it achieved a number of important advances in the second half, including the integration of Adwen in the overall offshore business of the group. In addition, the company has decided to have one technology per business segment by 2020. It will streamline its onshore product portfolio, reducing the range by approximately 65%, and will implement a single-platform strategy in offshore. The new products will be announced at the upcoming Wind Europe conference, taking place in Amsterdam in late November.
The company has also announced its outlook for the 2018 financial year: revenues of 9 billion-9.6 billion and an underlying EBIT margin of 7%-8%.
