Bernd Ziesemer: Symbolic victory for Siemens Energy

Even Christian Bruch feels a little uneasy when he considers his company's share price, which has increased tenfold since its low point. The CEO of Siemens Energy told the "Handelsblatt" newspaper last week that the stock market's upward trend reflects "expectations for the future, not current performance." Well said!

For some time now, Siemens Energy has been delivering almost exclusively positive news. Sales are rising, profits are growing, and the order book is filling up. The latest good news came last Friday: The company is prematurely repaying the government guarantees that had secured its survival during the 2023 crisis. This means that Siemens Energy can now pay dividends for the first time again—and also a bonus for Bruch and his fellow Management Board members.

But can we really call this a liberating move? It's true: Siemens Energy no longer has to pay €100 million per year to the federal government. But the new bank guarantees also cost money, of course. The company needs them to secure its high order backlog. So, the victory is more symbolic than a major blow to the profit and loss account.

The group can only be considered sustainably restructured and prepared for the future once Bruch finally solves its biggest problem: Gamesa. The Spanish wind power subsidiary is still making high losses – €623 million in the first six months of the current fiscal year. While Gamesa's performance was better than in the same period last year, it is still well below the break-even point. The division is thus consuming almost as much money as Siemens Energy earns from its flourishing grid business. And according to the group's forecast, the red figures will remain unchanged for the time being: Bruch expects a loss of €1.3 billion at Gamesa for the current fiscal year as a whole.

With Christian Bruch at the helm, Siemens Energy has plunged into an existential crisis – now the CEO can finally report an annual profit. But the turnaround is not yet complete.

The most astonishing thing about the Gamesa case is how long Siemens Energy has been struggling with its problems. From 2020 to 2025, the Spanish company incurred a total loss of €7 billion, bringing the current fiscal year's loss to over €8 billion. Gamesa will go down in Siemens history as the "biggest M&A flop of the last 30 years," wrote management expert Manfred Hoefle at the beginning of last year. And the misery is far from over—indeed, a solution isn't even in sight.

Siemens Energy makes money with offshore wind turbines, while the company loses massive amounts of money on land. The subsidiary is currently not accepting any new orders for onshore projects, leaving only service revenue. The company only aims to achieve at least a modest margin of three to five percent in its wind business by 2028. That will be a long time before then. And even if this goal can be achieved, wind power will still significantly dilute the profits of the entire group. After all, the other divisions recently achieved profit margins of 11 to 15 percent. Conversely, if the company can somehow get rid of the Gamesa problem, Siemens Energy's share price will really take off. This would then merit the term "liberation strike."