SIEMENS GAMESA RENEWABLE ENERGY, S.A. Activity Report
First quarter FY 2021
October-December 2020 Results
29 January 2021
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Contents | |
Key financial performance metrics ................................................................. | 7 |
WTG ......................................................................................................................... | 9 |
Operation and Maintenance Service ....................................................................... | 11 |
Sustainability .................................................................................................. | 12 |
Outlook ............................................................................................................ | 13 |
Economic situation.................................................................................................. | 13 |
Long-term worldwide prospects for wind ................................................................. | 13 |
Quarterly update of short- and medium-term demand............................................. | 15 |
Summary of the main events relating to wind power in Q1 21................................. | 16 |
FY21 Guidance................................................................................................ | 19 |
Annex .............................................................................................................. | 20 |
Financial Statements October 2020 - December 2020 ........................................... | 20 |
Alternative Performance Measures ......................................................................... | 24 |
Glossary & Definitions for Alternative Performance Measures.................. | 40 |
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Introduction
Siemens Gamesa1 registered strong financial performance going into fiscal 2021 (FY21), supported particularly by Offshore and Service strength. Group revenue amounted to €2,295m with an EBIT margin pre PPA and before integration and restructuring costs of 5.3%, both figures within the guidance for the fiscal year released in November 2020, which remains unchanged.
Revenue growth in the quarter (+15% y/y) was affected by the depreciation of the currencies in which the Group operates, especially in the Onshore and Service markets. Excluding said impact, revenue would have amounted to €2,427m, 21% above the revenue of the first quarter of fiscal year 2020 (Q1 20). For its part, EBIT margin pre PPA and before integration and restructuring costs in the first quarter of FY21 (Q1 21) includes a positive impact associated with a comparatively high reduction of product failure rates and lower maintenance costs.
COVID-19 pandemic continued to affect Onshore project execution, particularly in US, but this effect is expected to tail off over the coming quarters as the vaccine is rolled out. This impact was clearly lower than in fiscal year 2020 (FY20), as there were no material disruptions to manufacturing or the supply chain.
Including integration and restructuring costs (€47m in Q1 21) and the impact of PPA on amortization of intangibles (€60m in Q1 21), reported EBIT amounted to €14m, with net income attributable to the equity-holders amounting to €11m, in Q1 21.
As for the balance sheet, Siemens Gamesa ended Q1 21 with -€476m in net debt, i.e. €427m more than at the end of the previous fiscal year. The increase in net debt in Q1 21 was mainly due to an increase in working capital, which ended the quarter at -€1,699m, equivalent to -17.4% of revenue in the last twelve months. The working capital position represents a normalization from the level at FY20 closing and reflects both the lower level of commercial activity in Q1 21 and the planning for annual activity, with a higher level of execution and deliveries in the second half of the fiscal year. The shift in activity towards the second half of the fiscal year has been accentuated by the persistence of the pandemic. At December 31, 2020, Siemens Gamesa had €4.4bn in authorized funding lines, against which it had drawn €1.3bn, and a total available liquidity that amounts to €4.6bn considering the cash position on the balance sheet as of the end of Q1 21.
As for commercial activity, the Group ended Q1 21 with a backlog of €30,104m, i.e. €2,015m more than at the end of December 2019, having signed orders worth €2,281m in Q1 21. Order volume in Q1 21 and its annual evolution reflects the volatile profile of the Offshore market, that affects the order intake for both Wind Turbine Generators and Service. It is important to highlight the high volume of auctions expected in the Offshore market during 2021 and for which the company maintains a high level of cooperation with its customers. The conditional Offshore pipeline amounted to 9.3 GW. In Onshore, it is important to note that the SG 5.X platform proved very successful, contributing 1.1 GW in orders for Q1 21, and that plays a role in the return to a normalized and sustainable level of profitability in the Wind Turbine business. At the date of this report the accumulated volume of orders for the SG 5.X amounted to 2.3 GW.
In the area of sustainability, Siemens Gamesa's membership was renewed for the Gender Equality Index, with a score increase compared to 2020 (from 69% to 75%), and for the Dow Jones Sustainability indexes (Dow Jones Sustainability World and Dow Jones Sustainability Europe), in which it ranked #4 out of 114 in the Machinery and Electrical Equipment sector. Also in Q1 21, ISS ESG2 completed the ESG rating process and granted the company a B+ rating.
1Siemens Gamesa Renewable Energy (Siemens Gamesa or SGRE) is the result of merging Siemens Wind Power, which was the wind power division of Siemens AG, with Gamesa Corporación Tecnológica (Gamesa). The Group engages in wind turbine development, manufacture and sale (Wind Turbine business) and provides operation and maintenance services (Service business).
2ISS ESG is a division of the ISS (Institutional Shareholder Services) group that, among other activities, rates the sustainability of listed companies on the basis of their environmental, social and governance performance.
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Main consolidated figures Q1 21
- Revenue: €2,295m (+15% y/y)
- EBIT pre PPA and before integration and restructuring costs3: €121m (N.A.)
- Net income: €11m (N.A.)
- Net cash/(Net financial debt - NFD)4: -€476m
- MWe sold: 2,478 MWe (+28% y/y)
- Order book: €30,104m (+7% y/y)
- Firm order intake in Q1: €2,281m (-51% y/y)
- Firm order intake in the last twelve months: €12,389m (-16% y/y)
- Firm WTG order intake in Q1: 2,360 MW (-39% y/y)
- Firm WTG order intake in the last twelve months: 10,778 MW (-17% y/y)
- Installed fleet: 110,026 MW
- Fleet under maintenance: 75,493 MW
Markets and orders
Renewable energies, including wind, have proved to be very resilient during the pandemic. Acceleration of decarbonization commitments and the role of renewable energy in economic recovery programs have had a positive impact on demand prospects in the short-,mid-, and long-term. In this context, Siemens Gamesa booked orders worth €12,389m in the last twelve months, ending December 2020 with an order book totaling €30,104m (+7% y/y), i.e. €2,015m more than at the end of December 2019. Order intake in the period amounted to 1.3 times LTM revenue.
At the end of Q1 21, 51% of the backlog (i.e. €15,272m) was in Service, which has higher returns and expanded by 17% year-on-year, after the acquisition of the European service business of Senvion. The WTG order book is split into €7,903m Offshore (+4% y/y) and €6,929m Onshore (-7% y/y).
Figure 1: Order book at 12.31.20 (€m)
6,929
(23%)
15,272
(51%) 7,903
(26%)
Figure 2: Order intake Q1 21 (€m)
505
(22%)
157
(7%)
1,619
(71%)
WTG ON WTG OF Service | WTG ON WTG OF Service | |
The Group signed new orders worth €2,281m in Q1 21, compared with €4,628m signed in Q1 20. Performance year-on-year reflects mainly the standard volatility in the Offshore market, with a large volume of orders in both WTG and Service in Q1 20. During the coming quarters, commercial activity associated to this market will recover.
Onshore ended the quarter with €1,619m in new orders, stable y/y, and a volume of 2,360 MW, down 8% on the year-ago quarter. Order intake in the last twelve months amounted to 7,919 MW, worth €5,539m, i.e. a book-to-bill
3EBIT pre PPA and before integration and restructuring costs excludes integration and restructuring costs in the amount of €47m and the impact of fair value amortization of intangible assets as a result of the PPA (purchase price allocation) in the amount of €60m.
4Cash / (Net financial debt) is defined as cash and cash equivalents less financial debt (both short- and long-term, including lease liabilities). The Siemens Gamesa Group adopted IFRS 16 effective October 1, 2019. At December 31, 2020, lease liabilities amounted to €677m: €194m short- term and €483m long-term.
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Siemens Gamesa Renewable Energy SA published this content on 29 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 January 2021 07:35:01 UTC.
