Dividend increased : Siemens achieves record results

Siemens’ net profit fell by a third in the past fiscal year. But day-to-day business went very well for the largest German industrial group. The shareholders should also benefit from this.

The Munich technology and industrial group Siemens is apparently hardly feeling the weakening economy. In the past fiscal year 2021/22 (as of the end of September), the DAX group generated record results with its operating business.

Passed the ten billion mark

The result from the industrial business soared by 17 percent to 10.3 billion euros and thus exceeded the ten billion mark for the first time in the company’s 175-year history, as Siemens announced before the balance sheet press conference. Analysts had credited Siemens with an average of only 9.9 billion euros.

The bottom line, however, was that things didn’t go so well for Munich. The net profit of the Siemens group fell significantly. Earnings after taxes were 4.4 billion euros – a drop of 34 percent compared to the previous year.

Participation in Siemens Energy burdened

The main reason for the decline was the “non-cash impairment” of the stake in Siemens Energy, the group said. Siemens Energy is independent and has been public since the end of 2020; the parent company Siemens still holds 35 percent. Siemens Energy shares have fallen by more than 40 percent in the past twelve months.

The settlement of the Russian business weighed on the net profit. The final withdrawal from Russia cost Siemens another around 300 million euros in the fourth quarter. In the past quarter, the financing and leasing business was also divested, the statement said. No further downside risks are now expected from Russia.

Full order books, dividend should increase

In view of the challenging economic environment, the group spoke of an “excellent performance”. The Supervisory Board and Executive Board therefore proposed increasing the dividend for shareholders from EUR 4.00 in the previous year to EUR 4.25.

The group is also expecting growth in the new financial year – based on an order backlog of 102 billion euros. The Siemens board of directors forecast an increase in sales of six to nine percent and earnings per share adjusted for special effects of EUR 8.70 to 9.20 (2021/22: 5.47).

“It is a strong signal that the order books in Munich are full in times of economic uncertainty. The Group’s next quarterly results should also be significantly better again,” said capital market strategist Jürgen Molnar from broker RoboMarkets on the Siemens outlook.

Siemens shares extremely in demand

Analysts also rated the Siemens figures positively. The people of Munich have exceeded expectations with solid results across the board, wrote UBS analyst Guillermo Peigneux Lojo in a first reaction. The major Swiss bank confirmed its buy recommendation for Siemens shares with a price target of EUR 141.

The US bank JPMorgan left the rating for Siemens at “Overweight” with a price target of 156 euros. The analyst firm Jefferies also confirmed its buy recommendation. “Strong in all aspects,” analyst Simon Toennessen called the Munich-based company’s annual report.

The annual figures, the increased dividend and, above all, the outlook are also very well received on the stock exchange. The Siemens share increases in early DAX trading up to 8.3 percent to 131.18 euros. It is thus at its highest level in the past seven months.