Siemens Gamesa Tables 3-Year Strategic Plan

Siemens Gamesa has unveiled its 3-year strategic plan, with the L3AD2020 program, which includes a series of measures that will unlock EUR 2 billion of cost reductions.

The cost reduction methods include accelerated delivery of the targeted merger synergies, estimated at over EUR 400 million by 2020, fine-tuning of the product portfolio, procurement and industrial footprint, as well as the restructuring effort already underway, the company said.

Against a backdrop of increasing competition, Siemens Gamesa expects to outperform the market on sales while maintaining strict balance-sheet control.

The L3AD2020 program is articulated around three strategic cornerstones: Business model agility, Best-in class LCoE (Levelized Cost of Energy), and Digital intelligence.

Siemens Gamesa’s CEO, Markus Tacke, said: “The measures rolled out in recent months, coupled with the strategic plan we are presenting today, set Siemens Gamesa on track for strong profitable growth that will enable us to create more value for our shareholders and customers, fully bearing out the merger rationale and positioning us as leaders in an increasingly competitive environment.”

The company’s technology strategy is premised on “one segment, one technology”, which means consolidating geared technology in the onshore segment and direct-drive technology in the offshore arena.

In the offshore segment, Siemens Gamesa plans to maintain its leadership in Europe, where it has a market share of 70%, and establish itself as a benchmark player in new markets such as Taiwan and the US.

Siemens Gamesa is in the process of developing its new offshore turbine, the SG 8.0-167 DD, expected to be market-ready in 2020.

In operations and maintenance services, the company remains the number-two player worldwide and expects to leverage digitalization to grow faster than the market. By 2020 it expects to increase the portfolio for this business by 40% to 80 GW.

The wind power sector expects huge growth in the coming years. The onshore market will grow a 5% until 2020, and the offshore market will rise 13% to 2025, the company said. For Services, market size will increase by 11% to 2020.