Status: 02/09/2023 09:33 a.m
There is no sign of an economic dip at the industrial and technology group Siemens. The digitization division in particular is convincing in the first quarter, and the Management Board expects a strong year.
Siemens is coming through the economic downturn better than expected. The board of directors of the Munich group has raised its sales and profit forecast for the current 2022/23 financial year (as of the end of September) after a record quarter. CEO Roland Busch spoke of the “strongest start to a new financial year so far”.
Sales in the months from October to December were 8 percent up on the previous year at EUR 18.1 billion. Siemens surprisingly increased the operating result by nine percent to 2.7 billion euros. Experts had assumed a stagnant result.
More sales, more profit
“With full order books and temporarily higher purchases of critical stocks, we are well prepared for further profitable growth in the coming quarters,” said Chief Financial Officer Ralf Thomas before today’s Annual General Meeting. Siemens is now forecasting comparable sales growth of seven to ten (previously six to nine) percent.
Adjusted earnings per share should also be higher than planned at EUR 8.90 to 9.40 (previously EUR 8.70 to 9.20). Net income should also increase significantly more than expected in the financial year. In the first quarter, however, it fell to 1.6 billion euros.
Strong digitization business
The industrial automation division Digital Industries in particular is currently developing better than expected. Siemens’ figurehead now expects sales growth of between 12 and 15 (previously 10 to 13) percent and a margin of 20 (previously 19) to 22 percent for the year as a whole. With sales growth of nine to twelve (previously eight to eleven) percent, smart infrastructure is expected to yield a margin of 13.5 to 14.5 percent, half a percentage point more than before. Operating profit there soared by almost half in the first quarter.
The train division, which has so far been on the spot in terms of earnings, is on schedule. An increase in sales of six to nine percent and a margin of eight to ten percent are expected here.
Strong order situation
Siemens had already started the fiscal year with an order backlog of more than 100 billion euros and is therefore able to absorb the difficult economic situation well. So far, there has been little sign of this in terms of incoming orders. In the first quarter, it fell by eight percent to 22.6 billion euros. But that was mainly due to billions in orders for trains last year and the fact that customers had ordered more in view of fragile supply chains.
But Siemens hardly had to contend with supply problems. The trend that incoming orders are greater than sales is not expected to change in the coming months. Investors and experts are impressed by the balance sheet and future prospects. The profitability of the industrial businesses has impressively exceeded market expectations, comments Simon Toennessen, an expert at the Jefferies analyst firm. The stock jumps to its highest level since January 2022.