Siemens Gamesa Renewable Energy SA, GCTAY 1.93% one of the world’s largest makers of wind turbines, replaced its chief executive—a change-up the company said was triggered by profit shortfalls related to pandemic-era supply-chain disruptions.
The Spain-based company, which is majority owned by a unit of Siemens AG SIEGY -0.11% , has struggled alongside many companies with supply-chain issues since 2020. Companies have been hit by the pandemic’s start-stop effect on assembly lines. More recently, they have had to contend with booming demand after Covid-19 lockdowns. In response, many have been forced to delay products, raise prices and issue profit warnings. Few so far, though, have replaced their CEO to cope.
It was the second chief executive change in as many years for Siemens Gamesa, which said Wednesday it was replacing Andreas Nauen with Jochen Eickholt. Mr. Eickholt most recently led the gas and power business at Siemens Energy AG , which is Gamesa’s majority owner. Mr. Eickholt will take over next month.
Siemens Gamesa said Thursday it suffered a more than 20% fall in revenue for the company’s fiscal first quarter, from October to December. It said sales growth is expected to fall 2% to 9% for 2022, compared with the previous year, citing supply-chain issues.
Companies around the world have been hit by port congestion, driver shortages, a lack of components and surging commodity prices, which have all followed the Covid-19 pandemic. Executives have increasingly said these issues aren’t short-term disruptions, but likely to stretch further into 2022 than previously expected.
“We remain immersed in a very complex market environment, with disruptions and low visibility in the supply chain,” said Mr. Nauen, the departing CEO. Siemens Gamesa shares were largely flat Thursday, but have fallen some 55% since January 2021.
The wind turbine industry has been particularly vulnerable. It has thrived over the past decade as countries transition to greener energy. The sheer size of their products—which include wind turbine blades that can span a football field—require special trucks, large cranes and big ships to transport. The increased cost of steel has weighed heavily. In the U.S., the industry has also been hit by uncertainty over tax credits.
New CEO Jochen Eickholt most recently led the gas and power business at Siemens Energy AG, which is Gamesa’s majority owner.
Photo: Imago/Zuma Press
Continued supply-chain instability and cost inflation pushed Vestas Wind Systems AS , another of the world’s wind turbine giants, to warn last month that the industry continues to be challenged by supply-chain instability, which is causing significant cost inflation and delays to projects. Profitability remains severely affected, it said.
Part of the problem is a global economy that is out of sync on the pandemic, its restrictions and the recovery. Factories and retailers in Western economies that have largely emerged from lockdowns are eager for finished products, raw materials and components from longtime suppliers in Asia and elsewhere. But many countries in Asia are still in the throes of lockdowns and other coronavirus-related restrictions, constricting their ability to meet demand.
Meanwhile, global labor shortages, often the result of people leaving the workforce during the pandemic, are throwing further obstacles in the way of producers.
Mr. Nauen said that the supply-chain issues came in two waves, with raw materials costs, such as copper and steel, increasing from the middle of last year. Logistical issues coming later.
Mr. Nauen said he doesn’t expect the cost of raw materials and logistics will return to pre-Covid levels in 2022 or 2023.
“Components are not delivered as we ordered them, ships are not arriving, we don’t get the electronic components and sometimes some of the mechanical components, and that interrupts our production,” he said on a conference call.
“You are basically chasing your parts,” he said.
Write to Alistair MacDonald at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
