Siemens Energy

Overview Key strengths Key risks Strong technological capabilities, with a market-leading position. Large project exposure, especially in the offshore wind turbine segment, which translates into volatile cash flows and exposes the group to a variety of project-related execution risks Good geographical diversity with a large installed base and increasing share of services. Lower profitability compared with peers in the capital goods sector, with an S&P Global Ratings-adjusted EBITDA margin of 4.2% in fiscal 2022 (ended Sept. 30, 2022). Good long-term growth fundamentals, considering exposure to the energy sector, especially renewables.Potential to achieve good synergies after Siemens Gamesa's full integration. In first-quarter calendar 2023, the group issued a profit warning and reduced its profit margin outlook before special items to 1%-3%

...S&P Global Ratings expects Siemens Energy's profitability will remain under pressure in 2023 but it should start improving from 2024. In first-quarter calendar 2023, the group issued a profit warning and reduced its profit margin outlook before special items to 1%-3% (previously 2%-4%) for fiscal 2023 (ended Sept. 30, 2023) after the Siemens Gamesa Renewable Energy S.A. (SGRE) business discovered faulty components at its wind turbine fleet. Ultimately, in first-quarter fiscal 2023 (quarter ended Dec. 31, 2022), the company reported additional charges of 472 million, resulting in its profitability underperforming our previous estimates. Consequently, we revised our fiscal 2023 EBITDA forecast to 1.3 billion from 1.8 billion, translating into an S&P Global Ratings- adjusted EBITDA margin of 4.2% versus our previous estimate of 5.0%-6.0%. This level is broadly flat compared to fiscal 2021 and below average among the rated peer group of capital goods companies. Despite lower guidance for fiscal...

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