The shareholders of the energy technology group Siemens Energy have vented their anger at the Annual General Meeting over the high losses of the Spanish wind turbine subsidiary Gamesa.

"Debacle" or "catastrophe" - these were the terms repeatedly used by investors on Monday to describe the company's billion-euro losses, for which Gamesa in particular was responsible. "The fact that the enormous additional burdens at Gamesa occurred so soon after the complete takeover and after raising additional investor funds leaves us with doubts about the due diligence process that preceded it," explained Hendrik Schmidt from DWS Investment. "When will we reliably know the exact and final amount of the additional charges at Gamesa?"

Gamesa has been struggling with quality problems in the onshore wind turbine business for years. The Spanish company has caused billions in losses for the parent company and pushed its balance sheet into the red despite strong profits in the traditional grid and power plant businesses. In 2023, the group as a whole posted a net loss of around 4.6 billion euros. There will be no dividend.

Fund manager Arne Rautenberg from Union Investment addressed CEO Christian Bruch and CFO Maria Ferraro directly: "Mr. Bruch and Ms. Ferraro, after the capital own goal you scored for yourselves and us, the shareholders, with the completely overpriced takeover, you can't afford any more profit warnings if you don't want to completely lose your credibility."

"THE MANAGEMENT BOARD HAS THE FULL CONFIDENCE OF THE SUPERVISORY BOARD"

Bruch admitted that he had not expected the level of losses. This was mainly due to the quality problems with the 4X and 5X onshore platforms and difficulties in building up capacity in the offshore business. "The quality deficiencies occurring in 2023 were not recognizable for Siemens Energy during the due diligence carried out before the takeover," emphasized Bruch. As Gamesa's majority shareholder, Siemens Energy already had a sound basis of information before submitting the takeover bid. "We were neither deceived nor did we make any mistakes."

The due diligence measures were appropriate. The solution to the problems in the onshore sector will probably take several years.

Bruch asked investors to be patient. "We will solve these problems in the wind business," the manager promised. The losses incurred in the wind business and the underlying problems are unacceptable, he said. "We will not tolerate them. But we are not running away from them either. We are tackling them consistently and solving them." There are currently no talks about selling the wind energy business.

Supervisory Board Chairman Joe Kaeser backed Bruch. A lot is going right at Siemens Energy, he said. The Supervisory Board supports the measures taken by the Managing Board. These should also be reflected in the attractive value creation for shareholders. The events at Siemens Gamesa had prevented this and had to change. Bruch and his Executive Board team have the full confidence of the Supervisory Board.

(Report by Tom Käckenhoff, Christoph Steitz; edited by Olaf Brenner. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).