Munich The Siemens Group started the new fiscal year with high growth rates. “We have an unprecedented boom in incoming orders,” said CEO Roland Busch on Thursday before the annual general meeting. “Our results impressively show that we are pioneers in accelerating digitization and sustainability.”
Siemens increased order intake in the first quarter of 2021/22 by 42 percent to 24.2 billion euros. CEO Busch attributes the sometimes unusually high growth to “advanced procurement measures by customers”. But there are no signs that some of the orders could be canceled again, said Busch. The down payments are unusually high, especially in Asia.
Siemens’ profits increased by 20 percent to 1.8 billion euros, and sales by a comparable 9 percent to 16.5 billion euros. The Siemens fiscal year begins on October 1st and the first quarter ends on December 31st.
There has also been progress in terms of profitability. The operating result of the divisions increased by twelve percent to almost 2.5 billion euros. This corresponded to a return of 15.7 percent.
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Siemens is thus above the expectations of analysts, who had expected an average of 15.1 billion euros in sales and an operating result of 2.3 billion euros. With an increase of more than six percent to 147 euros, the Siemens share was at the top of the Dax after the figures were presented.
The increases are achieved, although the Dax group is also increasingly feeling problems in the supply chains. The group admitted “delays in the delivery of some products to customers”. We are working “at full speed to optimize deliveries and to master these challenges together with our customers”.
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All in all, according to Busch, Siemens has coped better than others with delivery bottlenecks and material shortages: “Especially at this time, the ability to deliver is decisive for market share.” He believes that Siemens has gained ground over the competition in this critical situation.
Busch has thus made a dream start to his first full financial year as CEO. A year ago, after the Annual General Meeting, he took over the management of the company from Joe Kaeser.
Busch also confirmed the forecast for the full year. Siemens expects sales growth in the mid-single-digit percentage range and an increase in earnings per share before special items from EUR 8.23 to EUR 8.70 to EUR 9.10.
Where the demand is particularly high
All business areas were able to increase sales, incoming orders and earnings. Demand was particularly high in the core business of digital industries. The division was able to increase incoming orders by a comparable 67 percent to 7.1 billion euros. Sales grew by eleven percent to 4.3 billion euros. The margin fell slightly to 21.8 percent.
For comparison: Competitor Rockwell Automation had increased sales in the first quarter of 2021/22 (September 30) by almost 17 percent to just under $1.9 billion. The operating margin was 19.1 percent.
Siemens’ software sales grew somewhat more slowly by a comparable seven percent to 1.1 billion euros. The group attributed this to the switch to a “Software as a Service” rental model.
According to the previously published manuscript, in his speech Busch reaffirmed the company’s ambitious digital growth targets. “We connect the real world with the digital world like no other company.” The digital portfolio, which recently generated sales of around 5.3 billion euros, is expected to grow by an average of ten percent over the next five years.
Initially, growth will be somewhat slower due to the changeover to “Software as a Service”. “Then, after fiscal year 2023, faster and faster.”
This is how Siemens compares to the competition
Siemens also fared well compared to its traditional competitors. For example, the Swiss ABB Group increased sales in the fourth calendar quarter by a comparable eight percent to $7.6 billion. The operating margin was 13.1 percent.
The former archrival General Electric has lost importance as a competitor for Siemens in recent years – especially after the spin-off of energy technology. The fourth quarter showed that the groups are continuing to diverge.
Sales at GE fell by a comparable three percent to $19.5 billion, the adjusted operating margin was 8.1 percent. The Americans also want to split up. “We’re actually already two steps ahead,” commented Siemens CEO Busch in the fall.
In the last fiscal year, when he took over the management of the company from Joe Kaeser, things went well for Siemens under his leadership. Sales increased by a comparable eleven percent to 62.3 billion euros. The operating result of the industrial businesses (Ebita) improved by 17 percent to 8.8 billion euros. This corresponded to a margin of 15.0 percent. The bottom line was a profit of 6.7 billion euros.
The figures from Siemens are also so good because the low-margin energy business was spun off and no longer has a full impact on the balance sheet. Siemens Energy made a loss in the first quarter because of problems at wind power subsidiary Siemens Gamesa.
“We are not satisfied with the operational performance at Siemens Gamesa,” said Busch. However, he is confident that Jochen Eickholt, the new CEO of the wind power company, will get the problems under control. Siemens intends to further reduce its 35 percent stake in Siemens Energy, Busch confirmed, but left the schedule open.
Siemens had announced further portfolio sales the previous evening. The postal and parcel business of Siemens Logistics goes to the technology group Körber for 1.15 billion euros. The division recently achieved sales of around 500 million euros.
Siemens is also exiting the electric motor joint venture with Valeo. The French partner takes over the Siemens shares. The technology group put the positive earnings effect at around 300 million euros in the current quarter.
Both businesses had long since ceased to be part of Siemens’ core business. With the sales, the profile as a focused technology group is further sharpened, said Busch.
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