The new CEO at troubled wind turbine OEM Senvion admitted it had made “operational mistakes” as he outlined an “urgent transformation programme”, delayed publication of the group's 2018 financial results and said it's in talks with its lenders.

In a rare public statement, Senvion’s majority owner, the US investor Centerbridge, came out to give its backing to newly-installed CEO Yves Rannou, as he sketched out the programme just days after the Germany-based turbine group downgraded its financial guidance for 2018.

Although light on detail, a statement said the plan centres on a sharper focus on “dynamic markets” such as India and Latin America, a “streamlined” product portfolio and more modularisation, unspecified “saving measures” and “strengthening the financial basis in cooperation with lenders to stabilise the company through the transition period”.

Rannou, who started work as CEO at the start of this year, and will work with newly-installed finance chief Hans-Jürgen Wiecha, said: “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.

“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.”

Senvion has struggled in recent years in a ferociously competitive wind turbine sector and a shift in market activity away from its heartland in Europe. It has also failed to make progress in the offshore wind sector and has seen its share price collapse since its initial public offering (IPO) in 2016.

The company's shares suffered further steep falls on Monday following its latest statement, before recovering some lost ground to trade around 13% lower on the day in mid-afternoon business in Frankfurt.

The group last week cut its forecast for 2018 revenues to about €1.45bn ($1.64bn) from an earlier €1.6bn and cut adjusted operating margin guidance (Ebitda) to about 3% from 5%.

It postponed publication of its annual financial report, originally scheduled for 14 March, and has commissioned a “restructuring opinion” in line with German accountancy rules, which it expects to be available in the second quarter.

The company’s third quarter 2018 results saw it post a €14m net loss.

Senvion is in “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,” it said.

The turnaround plan got a vote of confidence from Centerbridge, which bought Senvion in 2015 from Indian wind group Suzlon. “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,” said the US-based investor.

Senvion is among a clutch of turbine OEMs struggling to carve out a sustainable position in a market dominated by a handful of global giants – principally Vestas, Siemens Gamesa, GE and Goldwind of China.

Siemens board member Michael Sen, the official at the German group with responsibility for Siemens Gamesa, recently predicted only the strongest will survive amid “Darwinian” competition in the turbine market.

Wind

'Mistakes made' says CEO as ailing Senvion seeks turnaround