Industrial group: Siemens feels more confident after record numbers

AConsidering the record results in the main divisions, Siemens once again raises its own targets for the year as a whole. “We will continue to capitalize on our very high backlog and our fulfillment capacity,” Siemens CEO Roland Busch said during a conference call to present the quarterly data. The numbers were well received on the stock exchange and the share price was lower. up to 3 percent at some point.

A record backlog of €105 billion allows the Executive Board to look ahead to the coming months and “beyond” with confidence even as customer order behavior returns to normal, Bush said. According to him, spare parts became available faster again, and delivery times by the company itself were reduced. In the second half of the financial year, which ends at the end of September, Busch expects to convert orders worth 30 billion euros into sales. “With such a high level of planning security, we are very confident in the second half of the year,” added Chief Financial Officer Ralph Thomas.

Profit after tax tripled

Between January and March, sales rose by 15% to 19.4 billion euros. After a decline in the first quarter, incoming orders also rose by 15% to 23 billion euros. “We kept what we promised. We were able to turn our excellent sales growth into strong profits,” said CFO Ralph Thomas.

The result of the industrial business, which means operating profitability, increased by 47 percent to 2.6 billion euros. Two major areas of industrial automation (digital industries) and building technologies (smart infrastructure) made a special contribution to this. Industrial automation alone, with a turnover of 1.3 billion euros, provided half of the group’s result. After-tax earnings even tripled to about 3.6 billion euros, mainly due to the recovery in the price of a stake in the former subsidiary of Siemens Energy, which led to a multibillion-dollar write-down.

Meanwhile, CFO Thomas announced on Wednesday that he will decide later this year how to deal with a 32 percent stake in the struggling energy technology group. It’s understandable that Siemens wants to get away completely in the long run, but it will take a little time. More is likely to be said at the balance sheet press conference in November.

“All our businesses serve long-term trends”

Overall, Bush believes that his strategy of increasingly transforming the company into a technology and digital group is proving to be true. Although the economic environment remains volatile, Bush said the company is performing consistently well. “All of our businesses are focused on long-term trends,” he said.

This was also reflected in the results of individual business lines, with Digital Industries’ sales up 23 percent to 5.5 billion euros in the second quarter. Orders fell by 10 percent, also due to the high base of the previous year. In the building technology division Smart Infrastructure, sales grew by about a fifth and profits by as much as 75 percent to a record 779 million euros. In the Mobility Train division, Siemens has placed several large orders, including locomotives from India and ICE for Deutsche Bahn. Thus, the three main divisions offset the weak results of the independent medical technology group Siemens Healthineers, in which Siemens still owns the majority.

In terms of the coming months to the end of September, the industry group now expects sales growth on a like-for-like basis of 9 to 11 percent, from 7 to 10 percent previously expected. Earnings per share should increase to 9.60-9.90 euros in the current business. So far, Siemens has been expecting between 8.90 and 9.40 euros. In addition, there are 2.01 euros per share, for a total of 1.6 billion euros, from the increase in value due to the recovery in the price of the former subsidiary of Siemens Energy.