Siemens Energy Q3 2024 $ENR (+2,7%)

Financial performance:

• Revenue: Siemens Energy reported revenue of €34.5 billion for fiscal year 2024 (FY24), representing 12.8% year-on-year comparable growth.
• Net income: The company reported a net income of €1,335 million in FY24, a significant improvement from a loss of €4,588 million in FY23.
• EBITDA: EBITDA for FY24 amounted to €3,636 million, compared to a negative EBITDA of €1,742 million in the previous year.

Balance sheet overview:

• Assets: Total assets increased to €50,874 million as of September 30, 2024, compared to €47,907 million in 2023.
• Liabilities: Total liabilities increased to 41,511 million euros, compared to 39,119 million euros in the previous year.
• Equity: Equity grew to 9,364 million euros, compared to 8,787 million euros in the previous year.

Details of the income statement:

• Gross profit: Gross profit for FY24 amounted to 4,503 million euros, a significant increase from 753 million euros in the previous year.
• Profit margin: The profit margin before exceptional items improved to 1.0% from negative 8.9% in FY23.

Cash flow overview:

• Operating cash flow: Siemens Energy generated €2,889 million from operating activities in FY2024, an increase from €1,622 million in the prior year.
• Free cash flow before taxes: Free cash flow before taxes amounted to €1,859 million, compared to €784 million in the previous year.

Key figures and profitability metrics:

• Book-to-bill ratio: The book-to-bill ratio for FY24 was 1.46.
• Order backlog: The order book reached a record €123 billion, compared to €112 billion in the previous year.

Segment information:

• Gas Services: Sales of €10,796 million with a profit margin before exceptional items of 9.5%.
• Grid Technologies: Sales of €9,280 million with a profit margin before special items of 10.5%.
• Siemens Gamesa: Sales of €10,008 million, but with a negative profit before exceptional items of €1,781 million.

Competitive position: Siemens Energy has a strong market position with a record order backlog and improved margin quality, indicating high demand in the power market.

Outlook and management commentary: For fiscal 2025, Siemens Energy expects revenue growth of 8% to 10% and a profit margin before special items of 3% to 5%. The company aims to reach breakeven at Siemens Gamesa by FY26.

Risks and opportunities:

• Risks: Challenges include the turnaround at Siemens Gamesa and the management of quality issues in the offshore segment.
• Opportunities: Strong growth in the electricity market and increasing demand for infrastructure investments offer significant opportunities.

Summary of results:

Positives:

• Revenue growth: An increase of 12.8%, reaching the upper end of the forecast.
• Net income turnaround: Significant improvement from a loss to a net income of 1,335 million euros.
• Order backlog: Record order backlog of 123 billion euros, indicating strong future demand.
• Profit margin improvement: Profit margin before exceptional items increased from negative 8.9% to 1.0%.
• Cash flow generation: Strong pre-tax free cash flow of €1.9 billion.

Negative aspects:

• Losses at Siemens Gamesa: Continued losses at Siemens Gamesa with a negative profit before special items of €1,781 million.
• Operational challenges: Continued quality issues and ramp-up challenges in the offshore segment.
• Debt level: Increase in total liabilities to 41.511 million euros.
• Profit margin pressure: Despite improvements, the overall profit margin remains low at 1.0%.
• Market risks: Potential risks from macroeconomic factors and regulatory changes.