Siemens Gamesa Named First Global Wind Turbine Manufacturer With An Investment Grade Rating

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Siemens Gamesa Renewable Energy became the world’s first wind turbine manufacturer to receive an investment grade rating this week, a day before the company announced it had recorded a 7% increase in revenue for its second quarter.

Siemens Gamesa published its Fiscal Year 2019 October-March results on Monday, revealing that it had increased revenue by 6% to €4,651 million in the first half of its financial year (which runs from October to September), and increased its second-quarter revenue by 7% to €2,389 million, supported by strong performance in its Offshore and Service divisions.

The company ended its first six months with earnings before interest and taxes (EBIT) pre-Power Purchase Agreements (PPAs) and integration and restructuring costs of €316 million, equivalent to a margin of 6.8%. For the second quarter, EBIT pre-PPA and integration and restructuring costs amounted to €178 million, equivalent to a margin of 7.5%. The company pointed to declining prices in its order book partly offset by improvements in productivity, synergies, and fixed costs, as well as higher volume of activity in its Offshore and Service divisions.

Commercial activity remained strong for Siemens Gamesa during the recorded period, with a record order backlog of €23.6 billion, a 7% increase year-over-year, fully covering the low-end of the company’s full-year 2019 revenue guidance range, in turn providing enhanced visibility for the following years. Order intake for the second quarter amounted to  €2.5 billion driven by its Service segment which saw its order intake increase by 11% year-over-year.

Overall, across all the company’s segments, order intake in the last 12 months amounted to €10.9 billion, an 8% year-over-year increase, supported by strong performance across the board.

The company’s strong position was further solidified on Tuesday when it obtained a BBB- long-term credit rating, with positive outlook, from Standard & Poor’s (S&P), and a Baa3 outlook stable rating from Moody’s, becoming the first wind turbine manufacturer to attain an investment grade rating.

“We are very proud to have achieved an investment grade rating from two agencies of the calibre of Standard & Poor’s and Moody’s,” said David Mesonero, Chief Financial Officer of Siemens Gamesa. “This is a significant milestone for Siemens Gamesa and a recognition of our achievements. The ratings confirm our financial and industrial strength and will enable us to continue diversifying and optimising our funding sources.”

S&P highlighted the company’s leading position in the competitive and consolidating onshore and offshore wind markets with an improved scale, install base, and technology, which it believes will help Siemens Gamesa increase its market share and lead market consolidation. S&P also pointed to Siemens Gamesa’s conservative financial management and transparent financial policy, with a strong balance sheet.

Moody’s, on the other hand, also said that the rating is primarily supported by the company’s leading market position, its high revenue visibility, as well as related and growing service activities, strong regional diversification, and moderate financial leverage.