Siemens grew significantly profitably in all three divisions in the past quarter and has raised its outlook for the new 2025/26 financial year on this basis.
The technology group now expects earnings per share, adjusted for effects from the purchase price allocation, to be between 10.70 and 11.10 euros instead of the previous range of between 10.40 and 11.00 euros, as it announced before its general meeting in Munich. The remaining targets were confirmed.
The result of the industrial business increased by 15 percent to 2.9 billion euros in the months from October to December, more significantly than the analysts’ consensus expectation of 2.64 billion euros. All areas contributed, with Siemens particularly benefiting from factory automation. CEO Roland Busch spoke of a strong start to the new financial year. “Artificial intelligence is a strong growth driver for our businesses,” he said.
As expected, net profit after third-party shares of 2.0 billion euros fell short of the previous year’s figure of 3.7 billion euros. At the time, Siemens benefited from a book profit of 2.1 billion euros from the sale of the electric motor manufacturer Innomotics. Analysts had, on average, only expected a surplus of 1.6 billion euros this year.
Sales improved by 8 percent to 19.1 billion euros, and order intake climbed by 10 percent to 21.4 billion euros, primarily thanks to strong new business in network and building technology. In a consensus compiled by the company, analysts had expected a good 20.8 billion euros in orders and 19.1 billion euros in sales.
Siemens wants to concentrate on its core businesses and plans to give up its stake in the medical technology manufacturer Healthineers in the future. First, shareholders should have 30 percent of the shares booked into their portfolios. However, it is not yet clear whether this step will take place this year.
Siemens wants to grow by more than 7 percent in 2025/26
Siemens is aiming for growth of more than 7 percent on a comparable basis in the current financial year and is therefore more optimistic than the market. After the strong start at the beginning of the year, “we now intend to achieve comparable sales growth in the upper half of our target corridor of the annual forecast of 6 to 8 percent,” said CFO Ralf Thomas, according to the speech. Analysts recently had a consensus of 6.9 percent comparable growth.
The driver is apparently the intelligent infrastructure business, where comparable sales growth is also expected to be in the upper half of the target corridor based on the high order backlog.
Smart Infrastructure recently recorded strong new business, especially in the electrification business, with an increase of 38 percent. CFO Thomas pointed out a very high volume of large orders for data centers with a record volume of 1.8 billion euros. About half of these were large orders.
“The demand for data centers has clearly exceeded our expectations,” said CEO Roland Busch.
In the morning, Siemens raised its earnings per share forecast by 20 cents in the middle of the range.
Siemens Airport Logistics is expected to bring book profits of up to 200 million euros
According to CFO Ralf Thomas, Siemens expects a book profit of between 150 and 200 million euros in the current second quarter from the sale of its airport logistics business to Vanderlande, as the manager told journalists. Siemens announced the sale last October and the closing took place a few days ago.
This is how analysts react to the numbers
After the conference call on the Siemens figures, RBC analyst Mark Fielding raised his estimates and raised his price target from 245 to 270 euros and maintained his neutral assessment of the share. “Siemens exceeded expectations for its industrial business by 10 percent in the first quarter, with stronger margins in Digital Industries (DI) and Smart Infrastructure (SI),” he praised. The forecasts for the full financial year also indicated that both areas would develop towards the upper half of the target range.
Analyst Rizk Maidi from Jefferies emphasized that the Munich-based company, similar to its competitor ABB (Asea Brown Boveri), had achieved higher order intake in the data center sector, which in turn would have significantly increased order intake in the SI sector. On top of that, order intake in the DI area increased and was supported by strong growth in the automation area in China and solid software growth. Siemens has now raised its target range for annual earnings per share before certain purchase price effects – the company’s key profit figure – to 10.70 to 11.10 euros. An increase of between 10.40 and 11.00 euros had previously been forecast. However, according to Maidi, this is “conservative” given the middle of the range.
However, the earnings consensus for 2025/26 is now likely to rise in the low single-digit percentage range, as analyst Daniela Costa from Goldman Sachs expects.
The Siemens share was finally quoted 0.29 percent higher at 257 euros in XETRA trading. At 275.75 euros it has now reached a record high. In terms of market value, Siemens is now more valuable than the previous DAX leader SAP.
DOW JONES / dpa-AFX
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