Owners
Siemens Power is a technology company in the field of power. Thanks to the portfolio of products, solutions and services offered by the company, Siemens Power operates along almost the entire energy chain: from energy production and its transfer to storage. Siemens Power of solutions include technologies for the production of both traditional and renewable energy, including gas and steam turbines, hydrogen-powered hybrid power plants, generators and transformers. More than 50% of the company's product portfolio has already been presented decarbonized solutions. Holding a majority stake in Siemens Gamesa Renuel Energy (SGRE), Siemens Power operates in the renewable power market.
Business in Russia
2023
Moving the company from Moscow to St. Petersburg
A subsidiary of the German concern Siemens - Neftegaz and Power LLC - is moving to St. Petersburg, which became known at the end of September 2023. The decision of the legal entity to change its territorial location is evidenced by the data of the Unified State Register of Legal Entities. Earlier, the Siemens "daughter" was located in Moscow at the address: 2nd Syromyatnichesky Lane, 1. The former name of the company is Siemens Power LLC. It was registered in 2020. In July 2023, the organization was renamed, but its owner did not change.
Claim for 9.1 billion rubles from Kazanorgsintez due to an undeveloped object
At the end of February 2023, it became known that Kazanorgsintez requires Siemens to return 9.1 billion rubles in advance due to an undeveloped facility. We are talking about a construction project for the needs of the chemical plant of a combined-cycle gas plant with a capacity of 250 MW (PSU-250).
According to Interfax, citing materials from the file of arbitration cases, Kazanorgsintez asked to seize and prohibit registration actions in relation to Siemens Energy's share in the authorized capital of Neftegaz and Power LLC, arrest funds in the amount of 1.6 billion rubles in the company's accounts, and also prohibit registration actions in relation to vehicles owned by LLC. In relation to Enka (subcontractor for the PGU-250 project), Kazanorgsintez asked to seize and prohibit registration actions with two commercial real estate in Moscow.
Under the terms of the contract, the PGU-250 should have been handed over by March 2023. But in July 2022, Siemens notified that the company was refusing to fulfill its obligations due to the sanctions imposed by the EU, after which all work at the facility was stopped, the press service of Kazanorgsintez told the agency.
 | The company considers this refusal to perform work unreasonable, violating the terms of the contract and requires the return of an undeveloped advance payment, which exceeds the size of the equipment shipped and the work performed. The company also subsequently may declare a claim for recovery of losses, the Russian chemical company said. |  |
As the press service of Kazanorgsintez emphasized, the imposition of possible interim measures in the future will not lead to adverse consequences for the activities of Siemens Energy and Enka, since companies will be able to use their property, including to benefit.[1]
2022: Plan to leave Russia before the end of the year with a loss of €400 million in revenue
Energy, a manufacturer of equipment and components for the energy sector Siemens , has begun restructuring its business in the Russian Federation. The company expects that the restructuring will be completed by the end of fiscal 2022. Siemens Energy plans to lose about €400 million in revenue related to its activities at the Russia end of fiscal 2022.
Siemens Energy may continue servicing equipment for the Nord Stream gas pipeline, despite the planned departure from Russia - the head of the company.
2020: Registration of Siemens Neftegas and Power
Siemens Neftegaz & Power LLC was registered on February 10, 2020. Siemens Neftegaz Power has competencies throughout the value chain to power and offers a unique portfolio for power producers, backbone network operators oilgas , industry and other energy-intensive industries. The company's products, solutions, systems and technologies are designed for the extraction, processing and transportation and, oil energy and gas heat production at central and distributed TPPs, energy transmission and network stability. It also includes technologies for energy transmission, including storage.
In Russia, the company has production sites Siemens Gas Turbine Technologies and Siemens Transformers. The number of employees, including enterprises, is over 800 people.
Services
The company offers competencies throughout the energy value chain and a comprehensive portfolio for generating companies, power plants, the power grid complex, the oil and gas industry and other energy-intensive industries. Siemens Power products, solutions and technologies are designed to solve the problems of oil and gas production, processing and transportation, energy and heat production at central and distributed TPPs and energy transfer. It also includes technologies for energy conversion, including storage and cross-sector solutions. The majority stake in Siemens Gameza Renuel Energy will make it possible to make the portfolio of products focused on the future full. Siemens Power intends to become a leader in the decarbonization of the global energy system, making it a preferred partner for enterprises, governments and customers interested in a more sustainable future.
The relationship between fossil fuels and renewables is changing. At the same time, about 850 million people still lack access to electricity. According to research, global demand for electricity production should grow by 50% by 2040.
The company has 91 thousand employees in more than 90 countries. About one-sixth of all electricity in the world is produced using Siemens Energy technologies (company data for September 2020).
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Siemens Power occupies a leading position in the field of decarbonization of the industry: more than 50% of the company's product portfolio has already been decarbonized. The extensive product portfolio includes solutions that enable energy transformation, such as hybrid power plants and gas turbines capable of running on hydrogen. Siemens Power is also a key player in the wind sector and invests in hydrogen power.
The Company strives to meet the UN sustainable development goals and make its activities climate neutral by 2030, while adhering to strict standards in the field of occupational health and safety of its employees. -- >
History and Financial Performance
2023: Talks with German government on state guarantees amid rising net losses
Siemens Energy AG is in talks with the German government in October 2023 for government guarantees in a bid to save its troubled wind turbine division. The company does not experience acute liquidity problems, but Siemens AG, which owns about a quarter of Siemens Energy, does not want to provide additional guarantees.
Net losses and cash outflows in 2023 are expected to exceed market forecasts as the Spanish arm of Siemens Gamesa stopped entering into new contracts to supply some ground platforms, the company said in a statement.
Shares of Siemens Energy fell more than 16%, the biggest intraday drop since June. Since the beginning of the year, the company's shares have fallen by almost 50%.
2021: Sacking 7,800 employees
In early February 2021, Siemens Energy, which supplies turbines for the electric power industry, announced the reduction of 7,800 jobs, which make up 8.5% of the company's workforce. This is stated in a press release published on Tuesday on the concern's website. It is known that the reorganization of production should be carried out by the end of 2025, but a significant part of the reductions is planned to be carried out by the end of 2023.
| | There are major changes in the energy market that open up new opportunities for us, but at the same time pose big challenges, "said CEO Christian Bruch. He added that with the help of this program, the company seeks to restore competitiveness and financial stability, and promised to take all possible measures of social protection of personnel. | |
Most of the cuts will be carried out by 2023, the company's management said. Basically, the cuts will affect employees employed in the gas and energy sector, with about 75% of layoffs coming from the administrative and management apparatus and sales. It is known that Siemens Energy plans to cut 3 thousand jobs in Germany, 1.7 thousand in the United States and 3.1 thousand in other countries of the world. At the beginning of 2020, the concern's staff was about 385 thousand people.
Siemens Energy was formed in 2020 by separating from the German concern Siemens AG. The company offers a wide range of products, solutions and services throughout the energy chain and operates in more than 90 countries of the world, including Russia. By reducing costs, Siemens Energy hopes to meet its stated goals in 2023, which call for adjusted earnings margins before interest, taxes and amortization of 6.5-8.5%.[2]
2020
- At the end of fiscal 2020, Siemens Power turnover amounted to about 27.5 billion euros.
Frankfurt Stock Exchange IPO conduct with €15.9bn valuation
Siemens Energetika AG listed its shares on the Frankfurt Stock Exchange. TAdviser was informed about this by Siemens Neftegaz and Power LLC on September 29, 2020. The initial trading price was 22.01 euros per share, which corresponds to the total market value of the company in 15 993 460 697,93 euros.
| | The entry into the stock exchange marks the beginning of an important era in the history of Siemens Power. Thanks to this, our independent company now has the entrepreneurial flexibility necessary to contribute to the sustainable transformation of the global energy market. We understand all the responsibility associated with this important step: by placing shares on the stock exchange, we undertake obligations not only to the company, but also to our shareholders. We are doing everything in our power to take advantage of the opportunities that the transformation of the world power opens up for us. 91 thousand employees of the company are ready to fully help our customers in the transformation of the energy market. - said Christian Bruch, President of Siemens Power
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Going public was the result of the separation of the Energy and Gas Production division of Siemens AG and its transformation into an independent company. As of September 2020, Siemens Power has 91 thousand employees in more than 90 countries of the world and is a global technology company in the field of power.
Having a developed service business and owning a 67% stake in Siemens Gamesa Renuel Energy, which is also a public company, Siemens Power offers solutions along almost the entire energy chain. According to estimates, one-sixth of all electricity produced in the world is generated using Siemens Energy technologies. A major shareholder of the company is Siemens AG, which owns 35.1% of its shares.
| | The company has everything necessary for a successful start on the stock exchange. We are backed by funding and we have a compelling story for investors. Our mission is to help customers transform the global energy market while increasing the value of their equity. This includes a stable dividend policy. We plan to pay 40% to 60% of total net income after taxes to shareholders annually. - rock Maria Ferraro, Chief Commercial Officer of Siemens Power
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Siemens Power shares are traded on the regulated Premium market of the Frankfurt Stock Exchange under the symbol ENR. International Security Identification Code (ISIN) - DE000ENER6Y0, German Security Identification Code - ENER6Y.
Company Development Strategy
On September 7, 2020, Siemens Power shared its strategy after being allocated to an independent company.
Siemens Power strives for accelerated profitability growth. The company's management plans to increase its adjusted profitability before interest expense taxes , and accrued depreciation (EBITA) from 6.5% to 8.5% by 2023 to financial. This figure increased from 1.46 billion euros in 2018 financial to 1.52 billion euros in 2019. Of these, 0.8 billion euros were received by the Siemens Neftegaz and Power business segment.
| | "The separation of the energy business into a separate company is a key stage of our Vision 2020 + strategy. We create an independent company - a leader in the energy sector with a wide portfolio of products and solutions in this area. Siemens Power has everything it needs to lead the transformation of global power in an environmentally responsible and economically sound manner. On the other hand, the transparency of Siemens AG will increase, and the risks will be significantly reduced. With the help of its key divisions Digital Manufacturing, Intelligent Infrastructure and Mobility, the company will play a leading role in the digitalization of the industry, called Industry 4.0, said Joe Kaeser, President of Siemens AG. | |
At the end of August 2020, more than 50% of the company's product portfolio has already been decarbonized. The extensive product portfolio includes solutions that enable energy transformation, such as hybrid power plants and gas turbines capable of running on hydrogen. Siemens Power is also a key player in the wind sector and invests in hydrogen power. The company also offers a portfolio of energy transfer solutions without the use of SF6 (sulfur hexafluoride).
The Principles of Environmental Protection, Social Responsibility and Corporate Governance (ESG) are a key element of Siemens Power strategy. The Company strives to meet the UN Sustainable Development Goals and make its operations climate neutral by 2030, while adhering to stringent health and safety standards for its employees. Other important elements of Siemens Power sustainable development strategy are inclusivity and ethnic and socio-cultural diversity. In terms of gender diversity, the Board intends to increase the number of women in senior positions at the first two organizational levels to at least 25% by 2025 and at least 30% by 2030.
The company's board aims to accelerate the company's global profitability growth by actively improving operational efficiency, adapting the product portfolio to market requirements and gradually shifting the focus on innovation and R&D towards technologies for sustainable development and providing high-quality service.
At the first stage of the strategy implementation, the main task of the Siemens Neftegas and Power business segment will be to increase profitability and increase free cash flow until fiscal year 2023.
The most important aspects of improving the operational efficiency of the company will be building a more rational cost structure, optimizing logistics, centralizing procurement and reducing costs. For example, Siemens Power recently optimized its aeroderivative gas turbine portfolio. In addition, the possibilities of a phased exit of the company from the business in the field of coal power, which is characterized by large CO2 emissions, are being studied.
Another feature of the Siemens Neftegaz and Power business segment will be the tight selection of projects and increased efficiency of their implementation. The company will consistently abandon projects with negative margins in terms of life cycle and more selectively approach tenders in order to increase the profitability of projects. Siemens Power is evaluating operational efficiency initiatives aimed at additional savings of more than €300 million of global costs per year, in addition to the already stated planned savings of €1 billion by fiscal year 2023 compared to the baseline cost level of fiscal year 2018.
The key area ensuring Siemens Power growth should be the service business with high conversion rates, up to 100% (the latter refers to large gas turbines with high efficiency). Long-term service contracts generated a profit of 9.5 billion euros in the 2019 financial year. In 2019, 51% of the turnover of the Energy Production division was associated with the service, while the Equipment and Solutions for Industry division had an even higher share in the turnover and reached 60%. The Energy Transmission Division does not have the same large service contract volumes but tends to increase as Siemens Gamesa Renuel Energy (SGRE). As of June 30, 2020, Siemens Power has a portfolio of service contracts totaling 48 billion euros.
Siemens Power plans to optimize R&D costs strictly in accordance with their payback and with a great bias towards service and technologies for sustainable development - two key factors for business growth in the context of power transformation. The importance of R&D for Siemens Power proves the amount of spending in this area, amounting to 1 billion euros per year, as well as an extensive portfolio of patents and industrial designs (more than 24,000) and the number of employees employed in R&D (approximately 5,000 people).
The company has liquidity equivalent to approximately €6.4 billion, making Siemens Power 's net cash (net of SGRE) of approximately €2.2 billion and its order book of €82 billion as of June 30, 2020. In fiscal 2019, Siemens Power showed its sustainability by receiving orders totaling €33.7 billion with a profit of €28.8 billion, with a volume ratio of new and completed orders of 1.2.
Separation from Siemens
On July 8, 2020, it became known that Siemens decided to spin off the energy business of Siemens Gas and Power GmbH & Co. KG into a separate structure. A public offering on the exchange of a new company called Siemens Energy is scheduled for September 28, 2020.
Siemens CEO Joe Kaeser noted that the transformation of Siemens' energy business into an independent company is a key milestone in the successful implementation of the Vision 2020 + strategic program. The significant increase in the value of the healthcare business demonstrates the huge potential of the company, which can be unlocked even more through making such important decisions.
It is known that the coal and oil and gas assets of the concern will be allocated to the new structure. Siemens Energy will also take control of the company's stake in, Gamesa which is the world's largest manufacturer of wind generators. As part of the shareholder meeting, at which they voted almost unanimously (99.36% of the vote) for the Siemens Energy branch, Kaeser presented a plan to gradually exit Siemens Energy from, coal power engineering specialists so far there is no detailed information on when exactly this will happen.
Siemens Energy was formed on January 1, 2008. By May 2020, the company has employed approximately 91 thousand people around the world. Siemens Energy is engaged in the production of fossil fuel energy (gas turbines, steam turbines, generators and compressors), the production of energy from renewable sources, develops solutions for the maintenance of power plants, conducts training and consulting, and is engaged in the maintenance of components. According to a report from Siemens, in 2019, the energy division brought in revenues of €29 million.[3]
Notes
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