Siemens Energy’s Record Splurge Meets Activist Wrath Over Wind Anchor

Siemens Energy posts record €17.7B orders, ramps up share buybacks to €3B, while activist hedge fund pushes for wind turbine spin-off. Wind losses narrow but remain a drag.

Siemens Energy is sprinting on two tracks that could hardly be more different. While its gas and grid businesses are clocking record orders and the group has sharply accelerated share buybacks, an activist hedge fund is demanding the break-up of the entire company — arguing that the struggling wind turbine unit is dragging down an otherwise stellar machine.

The activist has a point about the numbers. Gas Services alone booked €8.87 billion in new orders in the latest quarter, fuelled by a rush of data-centre construction in the US. Grid Technologies landed a massive Baltic Sea project. Total group orders hit €17.749 billion, a 29.5% jump that beat the analyst consensus of €15.6 billion. The backlog now stands at an eye-watering €154 billion.

Yet the share price has been marking time. After a 38% rally since January — and a 116% gain over twelve months — the stock closed Friday at €169.18, still just shy of its year high. On the week, it slipped 5.13%. Good news alone is no longer enough to attract new buyers after such a run.

Buyback Ramps Up

The single biggest signal of management confidence came in the form of a bigger shareholder payout. Siemens Energy now plans to repurchase up to €3 billion of its own shares in the current financial year, up from the earlier ceiling of €2 billion. The overall programme through 2028 remains capped at €6 billion, but the pace has clearly quickened.

Combined with the dividend paid in March, total shareholder returns this year could reach around €3.6 billion. The move underlines how much the board trusts its cash-generation power — free cash flow before taxes surged 42% to €1.98 billion in the second quarter, helped by advance payments on new contracts. For the full year, management has lifted its free-cash-flow target to roughly €8 billion, a level that UBS notes sits well above market expectations.

The Activist’s Case

Not everyone is impressed by the dividend-and-buyback story. Ananym Capital, a hedge fund co-founded by Charlie Penner, is pushing for a complete spin-off of Siemens Gamesa, the wind power subsidiary. Penner argues that the wind business acts as a brake on the rest of the group, which he says could generate a 60% return if freed from Gamesa’s losses.

Siemens Energy boss Christian Bruch has flatly rejected the idea. He is sticking with the ongoing turnaround plan, and large investors including DWS and Union Investment have publicly backed him. The gap in profit ambitions between the two halves of the group is stark: while the parent targets double-digit margins, Gamesa will be happy to reach 3% to 5% by 2028.

Gamesa Narrows the Hole

The wind arm is making progress, albeit slowly. On an adjusted basis before special items, Gamesa’s quarterly loss shrank to €44 million from €249 million a year earlier. The operating loss came in at €46 million. Analysts had braced for a much bigger shortfall.

The goal for the current financial year is to break even, which puts the second half firmly in focus. If Gamesa can stabilise, a big valuation discount on Siemens Energy should start to lift. Any fresh blow-up, however, would quickly puncture the high expectations baked into the stock.

Full Order Book, Thin Margin of Error

The market is already pricing in a lot. Siemens Energy’s expected P/E for 2026 stands at 42.73, and the trailing multiple based on last year’s net profit is even higher. That leaves zero room for disappointment.

To help deliver on the margin promise, the group is pouring around $1 billion into new North American manufacturing capacity, including a plant for high-voltage switchgear in Mississippi. The raised guidance — revenue growth of 14% to 16% and net profit of roughly €4 billion — hinges on converting that record backlog into cash.

The next hard data point comes on 5 August 2026, when Siemens Energy is scheduled to report third-quarter results. Until then, two questions will dominate the conversation: whether Gamesa can keep closing its loss gap, and whether the margin embedded in that €154 billion order book is as good as it looks.