Siemens Energy announced that Vinod Philip will succeed Jochen Eickholt as CEO of Siemens Gamesa, starting on August 1, 2024. In addition, from June 1, Siemens Gamesa's key core functions, such as human resources, IT, procurement and logistics, will be centrally managed by the group.
Siemens Gamesa, its wind power division, has launched comprehensive restructuring measures and long-term strategic development steps, including the replacement of chief executive officer, layoffs, etc., aimed at achieving a double-digit operating margin, breaking even by 2026 and returning to profitable growth.
Siemens Energy announced that Vinod Philip will succeed Jochen Eickholt as CEO of Siemens Gamesa, starting on August 1, 2024. In addition, from June 1, Siemens Gamesa's key core functions, such as human resources, IT, procurement and logistics, will be centrally managed by the group.
Christian Bruch, CEO of Siemens Energy, said: "In a very difficult situation at Siemens Gamesa, Jochen Eickholt has laid the core foundation for a much-needed restructuring and new start within Siemens Energy. The cause of the quality problem lies outside his tenure. With the concrete implementation of the restructuring plan, now is the time for a generational change at Siemens Gamesa."
In the future, Siemens Gamesa will continue to actively develop both onshore and offshore wind power businesses. As part of its long-term strategy, the company will streamline its onshore wind business to focus on European and US markets and increase offshore wind capacity.
"With growth in areas such as offshore wind, Siemens Gamesa expects headcount to remain roughly the same in the coming years. The aim is to absorb as many of the planned redundancies in the affected areas as possible through internal job movements." Siemens Energy said the exact impact of the job cuts could not yet be quantified. In the process of replacing the CEO, Jochen Eickholt and Vinod Philip will finalise various measures in the coming weeks and discuss and negotiate with their respective employee representatives over the coming months.
As of today, Siemens Gamesa has approximately 26,000 employees.
Since last year, the former offshore wind power hegemon has continued to fall into trouble due to the quality of onshore wind power.
Siemens Energy announced in June last year that a review of the failure rate of Siemens Gamesa wind turbines found that the quality problems were far more serious than thought, and it will investigate Siemens Gamesa's existing wind turbine products and designs. Of the 130 gigawatts of wind turbines Siemens Gamesa has installed around the world, about 15 to 30 percent could experience component failures. It is expected to cost more than 1 billion euros.
As a result, in the fiscal year 2023, Siemens Energy lost about 4.6 billion euros.
According to the latest data from research institution Bloomberg New Energy Finance (BNEF), in the top 10 rankings of new lifting capacity of global wind power machine manufacturers in 2023, Siemens Gamesa ranked from the fifth last year to the eighth, with an installed capacity of 7.7GW.
On the same day, Siemens Energy also announced the latest results. In the second quarter of fiscal year 2024 (January 1 to March 31), the company generated revenues of 8.28 billion euros, an increase of 3.7%. Net income was 108 million euros, compared with a net loss of 189 million euros a year earlier.
Among them, Siemens Gamesa was affected by a 70% decrease in orders, and its revenue fell 4.6%.
Due to strong performance in the first half of the year in businesses such as power grids, Siemens Energy has raised its forecast for fiscal year 2024. The company expects revenue to grow 10 to 12 percent in fiscal 2024, compared with its previous forecast of between 3 and 7 percent. Pre-tax free cash flow is expected to be up to €1 billion, compared to approximately €1 billion previously; The net income target remains unchanged at €1 billion.
