- Record order book of €28.6 billion (+21% YoY) sustains good long-term prospects.
- COVID-19 had a direct negative impact of €56 million on profitability, and intensified challenges experienced by the onshore business in India and Northern Europe.
- The company faces the crisis with a solid balance sheet and healthy liquidity.
Siemens Gamesa’s performance in the second quarter of FY 2020 (January-March) reflected the unexpected effect of the COVID-19 pandemic on its operations and commercial activity, with a direct impact of €56mn on the company’s profitability. This complicated situation further intensified the challenges in the onshore business, mainly in the Indian market and the execution of projects in Northern Europe.
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Siemens Gamesa reacted rapidly to address this unprecedented crisis and to safeguard the health and safety of its employees and the communities where it operates. The company enacted strict health and safety protocols ahead of official guidelines, both at plants and offices, and applied new solutions to assure operations continue – including re-routing certain supply chains, optimizing remote monitoring to guarantee service operations and, in Offshore, extending periods for maintenance teams working at sea. The company has also maintained a sound liquidity position, with credit lines amounting to €4.0bn, against which it has drawn just €1.1bn.
Although the lack of short-term predictability has led the company to withdraw the guidance it issued in the first quarter of 2020, the long-term prospects for the industry and Siemens Gamesa remain sound. The company registered a record order backlog of €28.6bn (+21% YoY) and is well positioned to take advantage of sector growth outlook thanks to its geographical diversification and leadership in technology. According to the International Energy Agency, renewables will account for two-thirds of total capacity installed by 2040, with a sustained level of installations averaging 57 GW per year.
In this context, Markus Tacke, CEO of Siemens Gamesa, called for a green recovery: “We are experiencing a situation without precedent that has changed our lives in just weeks. Siemens Gamesa considers that the renewables industry must play a key role in the economic recovery to move towards a sustainable energy model that generates quality jobs. It is in our hands to avoid another crisis: the climate crisis,” said Markus Tacke.
“I would like to thank all our employees for keeping our business running and enabling us to continue serving our customers despite the difficulties. My most sincere gratitude for the responsibility and courage they demonstrate on a daily basis,” he added.
Author: Bryan Groenendaal
Source: Siemens Gamesa