Siemens $SIE (-0,45%) also presented its latest quarterly figures last week. I have summarized the analyst conference for you here.
Siemens has made a promising start to the 2025 financial year. financial year. With a book-to-bill ratio of 1.09, incoming orders were higher than in the previous year, increasing the order backlog to a record a record value of 118 billion euros increased. Demand was particularly strong in the Smart Infrastructure segment. There were signs of a recovery in the Digital Industries segment.
Turnover increased by 3%, with Mobility and Smart Infrastructure being the biggest growth drivers. At 2.5 billion euros, earnings exceeded market expectations. At 1.6 billion euros, free cash flow reached a seasonally high level. An important component of the strategy is the planned acquisition of Altair to strengthen the software business.
The company continues to see great potential in the application of artificial intelligence in the areas of automation, mobility, infrastructure and healthcare. Roland Busch emphasized that the intensive use of AI in all industries that Siemens serves will accelerate the transformation towards better and faster decisions and productivity gains based on data-driven knowledge. AI should increase productivity by simplifying tasks, shortening time-to-market and using resources more efficiently.
Siemens sees itself as an ideal partner to enable customers to deploy AI in the real world at scale, as Siemens has know-how and access to large amounts of operational data at its disposal.
The Digital Industries recorded incoming orders of 4.2 billion euros, an increase of 6% compared to the previous year. However, sales fell by 11%, which was primarily due to the reduction in inventories by customers customers. Profitability reached 14.5%, with the software business showing a robust performance. Incoming orders for the second quarter are expected to be on a par with the previous year. The company expects the situation to improve situation will improve in the second half of 2025as soon as the inventory reduction has been completed.
Smart Infrastructure once again delivered an outstanding quarterly performance with an increase in orders of 5% to EUR 6.2 billion. Growth was particularly strong in the Electrification division. Sales increased by 8%. The operating margin increased to 16.9%. Sales growth at the upper end of the annual forecast of 6% to 9% is expected for the second quarter.
Mobility recorded a solid start to the financial year. Incoming orders were lower, as expected. The order backlog stands at 49 billion euros. Turnover increased by 10%. The profit margin reached 8.4%.
Various topics were addressed in the subsequent Q&A part of the conference call:
Software business: An analyst asked about the software business as a competitor of Siemens had received some orders from VW. Chief Financial Officer (CFO) Ralf Thomas explained that it is difficult to predict large orders. He pointed out that the first quarter was very strong in the EDA (Electronic Design Automation) segment, but that this would not be repeated in the second and third quarters. The fourth quarter looks promising again. Thomas emphasized that Siemens wants to grow profitably and not as fast as possible. Roland Busch added that Siemens software is used by many car manufacturers. Siemens values the long-term partnership with VW and will continue to work with VW in the future.
Portfolio: Another analyst mentioned the rumor about the sale of shares in Healthineers. shares. Roland Busch replied that they wanted to see the synergies after the investment in Varian. If you take a closer look at Siemens Healthineers, the synergies would rise to a higher level in this financial year and good progress would also be made in diagnostics.
Digital Industries margin: An analyst asked about the margin of 14.5% in Digital Industries. Ralf Thomas explained that the second half of 2024 was very strong in the software sector, but that this would not be repeated to the same extent in the 2025 financial year. However, the market for electronics and semiconductors is developing very promisingly. The automotive industry is stagnating in Europe and Japan, while China is developing positive momentum. There are initial signs of stabilization in the mechanical engineering sector. The chemical and pharmaceutical industries are developing positively.
Outlook for digital industries: One analyst wanted to know how confident the Executive Board is of achieving the growth targets for Digital Industries. Ralf Thomas confirmed that he was very confident of achieving the growth targets. The first signs of new orders in the automation sector, including China, are encouraging.
Europe: An analyst asked about the development of the European business. Ralf Thomas replied that it was not a single driver. China is gaining momentum, while Japan, Europe and the USA are stabilizing, but remain negative compared to the previous year. He expects a stabilization, followed by a slight expansion for the year as a whole, which, however, will only take place in the second half of the year. Europe is a challenge due to customs discussions and the like.
I hope you enjoyed the summary.
Stay tuned!
