Siemens Gamesa net profit continues to recover, reaching €45 million, with a record backlog of €23,226 million

Siemens Gamesa Renewable Energy released its results for the first nine months (October-June) and the third quarter (April-June) of fiscal year 2018 today.

The company’s financial performance in the third quarter and the first nine months of FY2018 was in line with the fiscal year 2018 guidance (revenues of €9,000-9,600 million and EBIT margin of 7-8%).

Revenue amounted to €2,135 million (-21% YoY) in the third quarter, and €6,504 million (-25% YoY) in the first nine months of the year, impacted by lower turbine sale volumes and pricing.

EBIT pre-PPA, restructuring and integration costs amounted to €156 million in the quarter and the EBIT margin was 7.3%. Between October and June, EBIT pre-PPA, restructuring and integration costs reached €478 million and the EBIT margin was 7.4%.

The company reported €45 million in net profit in the first nine months, including the impact of restructuring and integration costs, continuing the recovery. Net debt was €154 million at the end of the quarter.

The L3AD2020 program, presented on 15 February 2018, is fully operational and gaining traction across its four modules: growth, transformation, digitalization and change management. The transformation module-including a cost reduction of €2,000 million- is an essential driver for the success of the company; and it helps to partially offset price declines in the period. Siemens Gamesa is continuously striving for optimizations in this area to further accelerate the process and achieve the program’s target.

Commercial activity

Commercial activity remained strong in the third quarter of fiscal year 2018. During the period, the order backlog reached a new peak at €23,226 million (+14%), increasing visibility of future growth. The backlog was boosted by €3,292 million in firm orders, reaching the mid-point of 2018 revenue guidance (€9.000-9.600 million).

Onshore wind order intake during the third quarter was 1,660 MW, driven by diversified order entry (Brazil, Spain, South Africa, Ireland and USA). Offshore order intake marked a peak with 1,368 MW in firm orders, due to the agreement to supply 165 turbines to Hornsea II, the world’s largest offshore wind farm to date, and 120 MW to the first offshore wind power plant in Taiwan. Those achievements are in line with the strong outlook for global offshore industry due to significant traction in new markets.

Siemens Gamesa expects stronger performance in Q4 2018 driven by higher volumes, cost optimization and expected synergies under the L3AD2020 transformation program.

Note: EBIT pre PPA, integration and restructuring (I&R) cost excludes the impact of PPA on the amortization of intangibles (€239 m in 9M 18 and €82 m in Q3 18) and integration and restructuring costs (€100 m in 9M 18 and €25 m in Q3 18).