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Senvion takes action to strengthen business model and executionHamburg, )
- New CEO and CFO to eliminate operational inefficiencies and secure stable financing for a transition period
- CEO Yves Rannou: "We have a strong order book, a great market position and products which our customers like. But we made operational mistakes in a challenging market environment and now need to focus on execution and on strengthening our customer focus."
After a comprehensive review of Senvion's global business, the challenging market conditions and its operational performance, the new Management Board of Senvion has started to implement a transformation programme as a matter of urgency, designed to stabilise the company, eliminate inefficiencies and improve execution to tackle the problems that caused loss of revenues and profits and triggered a change of forecast on 19 February 2019.
"We have taken swift action to fix execution weaknesses both in terms of our project management as well as strengthening of regional teams in order to recover the lost revenues and profits as quickly as possible," said Yves Rannou who took over as CEO at the beginning of January. "We have a strong firm order book of almost 5 billion euros, a great market position and excellent products which our customers like. But we made operational mistakes in a challenging market environment and now need to focus on execution and on strengthening our customer focus."
Senvion adjusted its guidance for the financial year 2018 to reflect lower than expected revenues and profits, mainly as a result of delayed installations. As an immediate measure, the executive team is focusing on disciplined execution throughout the installation chain with the clear target to recover lost revenues and profits in the new financial year. Initial conversations with customers and suppliers have been positive. Senvion's workforce is committed to supporting the new management in delivering its operational turn-around. A full transformation programme is being rolled out, focusing on four major areas of improvement:
- Re-focus on most attractive markets. In 2018, Senvion successfully entered new dynamic markets such as India and Latin America and will now increase its focus on promising growth areas.
- Streamlining its product portfolio and increase modularization to reduce costs.
- Increase competitiveness by saving measures through special efforts on localisation and sourcing improvements.
- Strengthening the financial basis in cooperation with lenders to stabilize the company through the transition period.
Yves Rannou: "We have a clear roadmap to get the company back on track in the medium-term. Our business is fundamentally solid, and we can build on competitive products, a committed workforce, and an installed basis of 18 GW that gives us a strong and profitable service business with reliable and sustainable revenue flows. Our Supervisory Board and our majority shareholder Centerbridge fully support the management's operational turn-around plan."
Centerbridge: We will continue to support this transformation
Majority shareholder Centerbridge stated: "We fully support CEO Yves Rannou and the Senvion management team as they continue to implement the ongoing transformation process. Senvion has a competitive portfolio of products and strongly growing service activities, a solid order book and highly experienced workforce. As the largest shareholder, we stand by Yves and the team to execute their plan to enhance project execution and emerge as a stronger and more profitable company after a successful transformation period. We will continue to support this transformation."
Senvion will continue talks with its lenders to establish a sound financial basis for the transition period. The company has access to its guarantee facilities that allow it to continue to secure its performance. In order to support an efficient process, Senvion has commissioned a restructuring opinion in line with the S6 standard (IDW S6) of the German Institute of Certified Accountants (Institut der Wirtschaftsprüfer), which is expected to be available in the second quarter of 2019. In light of this development and as a result of a Management Board discussion on 22 February 2019, Senvion management decided to postpone the release of its annual financial statements for the fiscal year 2018 which was originally scheduled for 14 March 2019. The new publication date will be announced in due course.
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