Siemens Gamesa Impacted by COVID, Reports Net Loss of €466 mn in Q3

Siemens Gamesa performance in Q3 of FY 2020 reflected the impact of COVID-19 on its operations as well as challenges in the Onshore business

Siemens Gamesa performance in the third quarter (Q3) of FY 2020 (April-June) reflected the impact of COVID-19 on its operations as well as challenges in the Onshore business, due to the slowdown of the Indian and Mexican markets, and in the execution of projects in Northern Europe.

As a result, between April and June, Siemens Gamesa recorded revenues of EUR 2,411 million, a decline of 8 percent year-on-year. EBIT pre-PPA and before integration and restructuring (I&R) costs fell to -EUR 161 million, with a negative EBIT margin of -6.7%, including a -EUR 93 million direct impact of COVID-19. Net losses in the quarter amounted to EUR 466 million.

Revenues in the first nine months of FY 2020 fell 9 percent year-on-year to EUR 6,615 million, with EBIT pre-PPA and before I&R costs of -EUR 264 million, including an accumulated impact of the pandemic of -EUR 149 million. Net losses amounted to EUR 805 million in the period.

In his first earnings report as CEO, Andreas Nauen said “we are navigating a complicated period, as an industry and as a company, and the numbers we have presented today reflect that. Nevertheless, we are already taking measures to turn the Onshore business around and return to profitability. The long-term outlook for our business is promising and our company has the technology and people needed to play a major role in developing a recovery underpinned by clean energies that help combat the effects of climate change.”

Despite these near-term challenges, the results also reflect strong foundations for the future: a record backlog of EUR 31.5 billion (+25 percent y/y) and a strong liquidity position, with EUR 4 billion in funding lines against which only EUR 1.2 billion have been drawn. The company’s debt has been reduced by EUR 101 million in the last twelve months, to EUR 90 million.

The increase in the backlog reflected strong commercial performance, driven by the Offshore and Service units, that now represent 78 percent of the backlog. Order intake increased by 14 percent y/y in the quarter, to EUR 5,342 million, and by 24 percent y/y in the last twelve months, to EUR 15,248 million.

The firm underlined its leadership in Offshore with a strong quarter in which it signed 2,860 MW in orders (+87 percent y/y), taking the total for the last 12 months to 4,211 MW (+110 percent y/y). Overall, the company has an Offshore backlog totalling 7.6 GW, as well as a pipeline of conditional orders and preferred supplier agreements amounting to 9.3 GW.

The company expects to end the year with revenues between EUR 9.5 and EUR 10 billion and an EBIT margin before PPA and integration and restructuring costs of between -3 percent and -1 percent. This represents a reduction of EUR 1 billion in revenues and of between EUR 200 and EUR 250 million in profitability compared to the previous guidance which the company had withdrawn earlier in the FY.