Siemens Gamesa Renewable Energy A/S

Ledelsesberetning

Data ethics

Beskrivelse af virksomhedens væsentligste aktiviteter

Business review
The company's main activity is the production, sale and installation of wind turbines, wind farms and subsequent maintenance of wind turbines. Leading the way forward in the renewable energy sector, Siemens Gamesa provides cleaner, more reliable, and affordable wind power. Our scale, global reach and proven track record ensure that we will play a central role in shaping the energy landscape of the future.
The annual report of Siemens Gamesa Renewable Energy A/S (SGRE A/S) covers only the activities of the Danish company. Activities in subsidiaries and other Siemens Gamesa entities in the wind turbine industry (including production and installations of wind turbines outside Denmark) are not covered by this annual report. Thus, the annual report does not give the full picture of Siemens Gamesa' activities in the wind turbine industry.
The company’s headquarters and nacelle production facility is located in Brande. Hub production, product development, quality and service management are also carried out from this location. In addition, there is a blade and mould production facility in Aalborg.
The company mainly sells MW class wind turbines for both onshore and offshore locations, primarily in EMEA (Europe, the Middle East & Africa). The sale is primarily made through other entities in Siemens Gamesa.

Beskrivelse af usikkerhed ved indregning eller måling

Uncertainity regarding recognition and measurement
The measurement of warranty provisions reflects whether the underlying obligation results from a single obligation or a larger population of items. The amounts recognized to settle the obligation correspond to the best possible estimate and are based, for example, on assumptions regarding failure rates and costs to remedy the failure per incident, which are occasionally derived from statistical models, based on empirical values and currently available information from ongoing inspections and defect rectifications. In particular, the assumptions and estimates regarding failure rates are sometimes subject to significant uncertainties insofar as they relate to new technologies for which hardly any operating data is available. Despite these uncertainties, we believe the process and parameters used represent the best possible estimate of warranty provisions as of the balance sheet date.

Beskrivelse af udviklingen i virksomhedens aktiviteter og økonomiske forhold

Financial review
Revenue amounted to DKK 27.095 million in fiscal year 2024 compared to DKK 24.837 million in fiscal year 2023 which slightly exceeds the expectation stated in the annual report fiscal year 2023. The net result ended at DKK -6.393 million which does not meet the expectations stated in the annual report fiscal year 2023. The main reason for this is the same as stated below (higher planned costs on project margins resulting from the quality issues with onshore wind turbines).
The net result for the year increased DKK 9.197 million compared to fiscal year 2023 and ended at DKK -6.393 million.
In the previous year, Profit at SGRE had been affected by substantial negative impacts in connection with quality issues specifically relating to the 4.X and 5.X onshore wind turbines. In addition, there were increased product costs and ramp-up challenges in the offshore area of activities. As expected, SGRE’s Profit was also negatively impacted by these issues in fiscal year 2024. The main reason for this was the effect of higher planned costs on project margins resulting from the quality issues with onshore wind turbines. Added to this were higher expenses in connection with the offshore ramp-up activities.
A group-wide task force with members from all functions and external technical experts was already deployed in the previous year to resolve the quality issues with the 4.X and 5.X platforms. Sales activities were suspended for both onshore platforms. As well as performing technical analyses of the quality issues and implementing remedial measures, further damage limitation and rectification measures were developed during the past fiscal year. Following the quality issues in the onshore activities in the prior fiscal year, ongoing analysis revealed no new technical findings. With respect to the ramp-up of our offshore activities, we were able to significantly increase productivity over the course of the past fiscal year.

Omtale af betydningsfulde hændelser, som er indtruffet efter regnskabsårets afslutning

Significant events occurring after the end of the financial year
In the financial year 2023/24, the company experienced a loss, which resulted in a reduction of its equity to less than half of the registered capital and is thereby covered by the Danish rules on capital loss. The board approved in December a plan to recover the equity in the form of a group contribution by Siemens Gamesa Renewable Energy SAU into Siemens Energy Renewable Energy A/S. In December 2024 the company received the cash contribution of DKK 7,375 billion to recover the negative equity.
Furthermore, the company has ensured the availability of liquidity through group financing lines with the parent company (Siemens Energy AG). This will ensure that the company fulfills its obligations towards its creditors when they fall due and regularly continues its business.

Beskrivelse af virksomhedens forventede udvikling

Outlook
The business performance in fiscal year 2025 is likely to be determined by the existing internal challenges. We have resumed - on schedule - sales activities for our 4.X onshore platform. Our next objective is to bring the 5.X platform back to market during fiscal year 2025, therefore we still expect our business in onshore to be significantly impacted by the temporary interruption of sales activities. In the offshore business, orders are likely to be slowed down by delayed contract placements and selective order acceptance. The development of revenue is expected to remain largely unaffected by this, as it will be determined by the processing of the existing order backlog. The project margins, burdened by higher planned costs due to the quality issues, as well as the increased product costs and challenges during the ramp-up in the offshore area in the past fiscal year, are expected to be decisive for the development of profit. For fiscal year 2025, revenue is foreseen to be around DKK 25-30 billion and a negative profit of around DKK 3-5 billion.
In fiscal year 2024, SG implemented the “Masterplan” for restructuring the wind power business. This plan builds on the Mistral program introduced in 2022. It is a general corporate program and the focal points of its activities are largely influenced by the quality issues at SG described above. A series of measures were already initiated in the past fiscal year. They include redesigning development processes, rules and regulations for a more selective bidder process, price adjustment clauses in customer contracts to reflect changes in the cost of raw materials, and higher margin requirements. In addition, at the start of fiscal year 2025, all service activities will be merged with the other activities of the onshore and offshore business to simplify communication with customers and accelerate the execution of projects.