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MarketScreener Homepage  >  Equities  >  Bolsa de Madrid  >  Siemens Gamesa Renewable Energy    SGRE   ES0143416115

SIEMENS GAMESA RENEWABLE ENERGY

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Turbine maker Siemens Gamesa shares plummet on delayed margin goals

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11/05/2019 | 08:11am EST
FILE PHOTO: A model of a wind turbine with the Siemens Gamesa logo is displayed outside the annual general shareholders meeting in Zamudio

MADRID (Reuters) - Siemens Gamesa delayed its 2020 guidance by two years on Tuesday, sending its shares close to their lowest level this year and wiping almost 1 billion euros (£864 million) off the wind turbine company's market value.

By Andrés González and Clara-Laeila Laudette

MADRID (Reuters) - Siemens Gamesa delayed its 2020 guidance by two years on Tuesday, sending its shares close to their lowest level this year and wiping almost 1 billion euros (£864 million) off the wind turbine company's market value.

The German-Spanish manufacturer is grappling with lower onshore and offshore prices for its turbines amid global trade tensions and uncertainty over Britain's departure from the European Union. It has also faced pressure from project delays.

The firm had forecast achieving a core earnings margin of 8% to 10% in 2020, but said on Tuesday its earnings before interest and taxes (EBIT) margin would not achieve that level until 2022 and it was expected to be 5.5% to 7% next year.

CEO Markus Tacke forecast that Siemens Gamesa's EBIT margin in 2020 would land in the middle of the range.

The company's shares, which fell as much as 13% in early business, recovered some ground to trade 9% lower.

To achieve its goals, the company said it would implement a plan to save 600 million euros, which would include laying off 600 staff over two years, in addition to previously announced job cuts.

In September, the company said it would release 600 employees in Denmark, joining its main competitor Vestas in restructuring efforts.

The company met its 2019 guidelines, posting a 12.1% rise in sales for the full year. It also achieved a 7.1% earnings before interest and tax (EBIT) margin, although this was at the lower end of the 7% to 8.5% guidance.

Siemens Gamesa, which bought Senvion assets expecting these would increase its EBIT by 50 million euros starting in 2022, also announced it would consider further acquisition opportunities.

"These are not easy times, but I take huge encouragement in the resilience and commitment of the people we have in the face of these challenges," Tacke said in a letter to employees, seen by Reuters.

Turbine makers are being squeezed by competitive auction systems for wind farms that favour the lowest bidder, wrenching the industry away from a long-standing system of generous fixed tariffs.

(Editing by Kirsten Donovan and Edmund Blair)

By Andrés González and Clara-Laeila Laudette

Stocks mentioned in the article
ChangeLast1st jan.
SENVION S.A. -7.27% 0.0255 Delayed Quote.-98.84%
SIEMENS AG -0.67% 116.02 Delayed Quote.19.14%
SIEMENS GAMESA RENEWABLE ENERGY -0.86% 14.485 End-of-day quote.36.14%
VESTAS WIND SYSTEMS -0.84% 663 Delayed Quote.35.87%
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Financials (EUR)
Sales 2020 10 704 M
EBIT 2020 609 M
Net income 2020 244 M
Finance 2020 531 M
Yield 2020 0,63%
P/E ratio 2020 43,4x
P/E ratio 2021 25,2x
EV / Sales2020 0,87x
EV / Sales2021 0,80x
Capitalization 9 843 M
Chart SIEMENS GAMESA RENEWABLE ENERGY
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Siemens Gamesa Renewable Energy Technical Analysis Chart | MarketScreener
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Technical analysis trends SIEMENS GAMESA RENEWABLE E
Short TermMid-TermLong Term
TrendsBullishNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 18
Average target price 14,19  €
Last Close Price 14,49  €
Spread / Highest target 16,7%
Spread / Average Target -2,01%
Spread / Lowest Target -20,6%
EPS Revisions
Managers
NameTitle
Markus Tacke Chief Executive Officer & Executive Director
Miguel Angel López Chairman
Christoph Wollny Chief Operating Officer
David Jose Mesonero Molina Chief Financial Officer
Alan Feeley Chief Information & Cyber Security Officer
Sector and Competitors
1st jan.Capitalization (M$)
SIEMENS GAMESA RENEWABLE ENERGY36.14%10 898
VESTAS WIND SYSTEMS35.87%19 394
XINJIANG GOLDWIND SCIENCE & TECH CO LTD--.--%6 526
TITAN WIND ENERGY (SUZHOU) CO LTD--.--%1 525
TPI COMPOSITES, INC.-31.06%607
PNE AG65.64%337