Siemens Gamesa Renewable Energy recently released its results for the first nine months (October-June) and the third quarter (April-June) of fiscal year 2018.
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 billion to 9.6 billion euros and EBIT margin of 7-8 percent).
Revenue amounted to 2.135 billion euros (-21 percent YoY) in the third quarter, and 6.504 billion euros (-25 percent YoY) in the first nine months of the year, affected by lower turbine sale volumes and pricing.
EBIT pre-PPA, restructuring, and integration costs amounted to 156 million euros in the quarter and the EBIT margin was 7.3 percent. Between October and June, EBIT pre-PPA, restructuring and integration costs reached 478 million euros and the EBIT margin was 7.4 percent.
The company reported 45 million euros in net profit in the first nine months, including the impact of restructuring and integration costs, continuing the recovery. Net debt was 154 million euros at the end of the quarter.
The L3AD2020 program, presented February 15, 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 billion euros — 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 billion euros (+14 percent), increasing visibility of future growth. The backlog was boosted by 3.292 billion euros in firm orders, reaching the mid-point of 2018 revenue guidance (9 billion to 9.6 billion euros).
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 million euros in 9M 18 and 82 million euros in Q3 18) and integration and restructuring costs (100 million euros in 9M 18 and 25 million euros in Q3 18).
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