Siemens Energy CEO: spin-off wind business idea is valid, but first turnaround must be achieved

Siemens Energy CEO, said on Tuesday that it is reasonable for activist investors Ananym Capital?to push?for the spin-off of a loss-making division of wind turbines?of the firm.

Ananym, a U.S. company, said it took a stake in Siemens Energy in December and asked the management to review its wind division, Siemens Gamesa. It claimed that the division could be worth up to $10 billion and a spinoff would increase investor returns by 60 percent.

Christian Bruch said, "This is a question I would ask myself every time." He added that the business should have a clear path towards double-digit profit margins.

He said that the first thing to do is stabilize this business, and then make it profitable. "Until these things are in place, it is the wrong time to talk about spin-offs."

Siemens?Gamesa is expected to break even in this year, and achieve an operating margin between 3-5% by 2028.

Bruch said that offshore wind could experience a turnaround like Siemens Energy's Grid business where margins increased to 15.8% by 2025, from 3.6% in 2022. This helped lift the share price of the group nearly 11-fold over the last two years.

"If you look back at 2020 and remember how the grid business was, no one ever thought that this would be the business with the most profitable growth for the company. Bruch said that just four years after the initial turn-around, things were really different.

Could this also happen with offshore winds? Yes. Is it true that you see it now? No, not yet. This is why I'd say that it's more a matter of timing and... conditions."

Siemens Energy CEO, Mr. Henriques, also announced that Siemens Energy will invest $1 billion in the U.S. to expand its power grid component and gas turbine production. This is to support AI technology by building data centres.

(source: Reuters)