Siemens Gamesa has unveiled a comprehensive cost-cutting strategy, aiming to reduce expenses by approximately 400 million euros ($436 million) by 2026. This strategic move was presented during the much-anticipated capital markets day on Tuesday, where the company outlined its plan to simplify its organizational structure and optimize overhead costs.
The focus of the cost-cutting initiative includes a thorough review of Siemens Gamesa's onshore wind turbine capacity, aligning it with a refined product and market roadmap. According to presentation slides, the measures involve assessing the onshore product offerings, evaluating target markets, streamlining the service organization, and exploring potential supply chain partnerships.
Siemens Gamesa is determined to navigate its turnaround, with the ultimate goal of reaching break-even for the wind business in fiscal year 2026 and returning to profitability thereafter, as stated by Siemens Energy CEO Christian Bruch. He emphasized the company's commitment to strict capital allocation in pursuit of this objective.
This announcement follows Siemens Energy's recent disclosure of a 4.6-billion-euro loss attributed to Siemens Gamesa. Challenges related to product quality and ramp-up issues have pushed the anticipated break-even for Siemens Gamesa to 2026. The company is now taking decisive steps to address these issues and enhance its financial performance.
Siemens Energy recently secured a 15 billion euro guarantee package to safeguard its 112 billion euro order book, leading to a recovery in the group's shares from a recent record low. Siemens Gamesa, perceived as a significant burden for its parent company, will also reduce the number of turbine variants it sells and temporarily halt wind product initiatives in certain “adjacent fields,” notably singling out hydrogen initiatives. These strategic adjustments reflect Siemens Gamesa's commitment to a streamlined and more focused approach as it strives to overcome its current challenges.