Bruch said “there are not yet clear signs of a recovery” at Siemens Gamesa itself, while in the wider wind power market “I don’t believe the supply chain environment will get easier ...The Siemens Energy CEO also repeated his insistence that there are no plans to move away from onshore wind, which has been at the root of the problems facing Siemens Gamesa due to project execution difficulties and a stuttering ramp-up of its flagship 5.X turbine platform. “There’s no reason you can’t be successful in onshore if you fix your operational issues,” Bruch said.
Bruch said “there are not yet clear signs of a recovery” at Siemens Gamesa itself, while in the wider wind power market “I don’t believe the supply chain environment will get easier ...The Siemens Energy CEO also repeated his insistence that there are no plans to move away from onshore wind, which has been at the root of the problems facing Siemens Gamesa due to project execution difficulties and a stuttering ramp-up of its flagship 5.X turbine platform. “There’s no reason you can’t be successful in onshore if you fix your operational issues,” Bruch said.
Christian Bruch says lack of clear signs of recovery at OEM giant and challenging market makes full integration best option
Siemens Energy has to move as fast as possible to integrate Siemens Gamesa as there are “not yet clear signs of a recovery” at the troubled wind turbine manufacturer which needs “multiple years” to fix the issues it faces, said CEO Christian Bruch.
Siemens Energy this weekend made its long-expected move to buy the one third of Siemens Gamesa it does not own, offering minority shareholders €18.05 per share in cash in a bid worth about €4.05bn ($4.3bn).
Speaking to financial analysts and reporters, Siemens Energy CEO Bruch said while “there are a lot of things you can do as a majority owner” a full integration would …
... more [truncated due to possible copyright]Christian Bruch says lack of clear signs of recovery at OEM giant and challenging market makes full integration best option
Siemens Energy has to move as fast as possible to integrate Siemens Gamesa as there are “not yet clear signs of a recovery” at the troubled wind turbine manufacturer which needs “multiple years” to fix the issues it faces, said CEO Christian Bruch.
Siemens Energy this weekend made its long-expected move to buy the one third of Siemens Gamesa it does not own, offering minority shareholders €18.05 per share in cash in a bid worth about €4.05bn ($4.3bn).
Speaking to financial analysts and reporters, Siemens Energy CEO Bruch said while “there are a lot of things you can do as a majority owner” a full integration would mean a “faster and more effective” route to resolving the internal and external challenges that have driven Siemens Gamesa to multiple profit warnings.
Bruch said “there are not yet clear signs of a recovery” at Siemens Gamesa itself, while in the wider wind power market “I don’t believe the supply chain environment will get easier [making it] even more important to push for operational excellence everywhere as fast as possible”.
Bruch said Siemens Energy had to weigh “the most effective setup in this challenging environment. My strong belief is this is now the most effective move and necessary to drive the solutions as fast as possible”.
Siemens Energy stalwart Jochen Eickholt took over as Siemens Gamesa CEO in February and is working on short- and medium-term plans to turnaround the company.
“It’s not a short-term fix, those project businesses will take multiple years to work off the challenging backlog of the portfolio,” said Bruch.
A full integration of Siemens Gamesa would remove barriers to operational integration and deliver cost synergies of up to €300m per year within three years of full integration, Siemens Energy believes.
There will also be big opportunities in a shared R&D approach in areas such as green hydrogen and transmission, claimed Bruch.
The Siemens Energy CEO also repeated his insistence that there are no plans to move away from onshore wind, which has been at the root of the problems facing Siemens Gamesa due to project execution difficulties and a stuttering ramp-up of its flagship 5.X turbine platform.
“There’s no reason you can’t be successful in onshore if you fix your operational issues,” Bruch said, stressing the value of onshore wind to Siemens Gamesa's valuable service business.
HSBC analyst Sean McLoughlin said in a note issued when Siemens Energy first confirmed it would mount a bid that, with the problems at Siemens Gamesa identified and Eickholt taking action, “the situation could finally be stabilised and improved over coming quarters. A full takeover we believe will not speed up this process but at least will fully internalise it within Siemens Energy”.
'Significantly deteriorated'
The €18.05 offered to minority shareholders is an “attractive price”, Bruch claimed, but admitted that it was one that reflects the tough situation facing Siemens Gamesa and the wider wind sector.
“The business has not been doing well, and also peers have not been doing well in the last quarters. We are looking ahead in terms of some market effects we have to face. We will continuously be required to invest money into the business,” said the Siemens Energy CEO.
Asked about the discount from the €20 per share paid to power group Iberdrola for its 8% stake in early 2020, Bruch said: “The situation of the company has significantly deteriorated. That obviously has an effect on the overall pricing and valuation.”