Siemens Energy raised its midterm outlook after posting a record-high order book and reporting a narrower fourth-quarter loss, driven by rising global demand for power equipment and progress in its wind turbine division turnaround. The company, benefiting from strong growth in wind power, grid modernization needs, and continued demand for gas-fired power plants, joins competitor GE Vernova in capitalizing on these market trends.
Despite stable demand in recent years, Siemens Energy encountered a significant setback last year due to quality issues in its wind turbines, leading to reliance on state guarantees for certain projects. The company responded by selling assets and reducing losses at its wind division, Siemens Gamesa, leading to a robust order book expansion. This momentum has more than tripled Siemens Energy's share price in 2024, positioning it as the top performer among German blue-chip stocks.
“In a pivotal fiscal year 2024, we achieved all our goals, driven by strong orders and project execution across all our businesses. Our focus remains on profitable growth, supported by highly favourable market conditions,” CEO Christian Bruch said in a statement. The company's shares jumped 6.1% in Frankfurt trading following news of a €123 billion ($131 billion) order backlog.
In light of favorable market conditions for wind turbines, transmission networks, and gas turbines, Siemens Energy revised its 2028 profit margin target to 10-12%, up from a prior forecast of at least 8%. Siemens Gamesa, which has historically weighed on the company's financials, aims to reduce its pre-special item loss to €1.3 billion in 2025, compared to a €1.78 billion loss this year, supported by a 19.7% increase in fourth-quarter sales tied to offshore wind capacity expansion. The division also hopes to achieve break-even status by 2026, relying on a successful relaunch of onshore turbines affected by the quality crisis.
For 2025, Siemens Energy forecasts group sales growth of 8-10%, slightly below the 10.8% achieved in 2024 but ahead of analysts' expectations of 6.4%. The group's profit margin, excluding special items, is anticipated to improve to a range of 3-5%, up from 1% this year.
Bruch attributed the improved outlook to Siemens Energy's “leading role in the energy transition,” as the company reported €1.3 billion in net profit for 2024—its first annual profit since its 2020 spin-off from Siemens. Additionally, fourth-quarter losses, excluding special items, narrowed significantly to €83 million from €487 million a year earlier.
