Aug. 9 2024

Profitable growth in third quarter – outlook confirmed

•Revenue rose 5 percent year-over-year on a comparable basis to €18.9 billion (Q3 2023: €18.1 billion)
•Orders in Q3 2024 reached €19.8 billion (Q3 2023: €23.5 billion), down 15 percent on a comparable basis vis-à-vis a very strong Q3 2023
• Profit Industrial Business increased 11 percent to €3.0 billion (Q3 2023: €2.7 billion)
•Net income climbed 48 percent to €2.1 billion (Q3 2023: €1.4 billion)
•Free cash flow all-in at Group level totaled €2.1 billion (Q3 2023: €3.0 billion)
•Outlook confirmed

Siemens continued its profitable growth trajectory again in the third quarter. Overall, the company clearly increased its net income and profit margin and thus demonstrated its financial strength once again. With a sustained large order backlog, which totaled €113 billion in Q3, and a book-to-bill ratio greater than 1, Siemens is optimally equipped for the future.

As a result, the Siemens Group confirms its outlook for fiscal 2024, whereby comparable revenue growth – that is, excluding currency translation and portfolio effects – at Group level (in the range of 4 percent to 8 percent) and the profit margin at Digital Industries (18 percent to 21 percent) will be at the lower end of their respective target ranges. The profit margin at Smart Infrastructure is expected to be at the upper end of its target range (16 percent to 17 percent).

“We grew profitably in the third quarter, continuing to benefit from the high demand in electrification. Another growth driver was our particularly strong industrial software business, which won several large license contracts. The industrial automation business remains challenging. We confirm our company’s full-year outlook,” said Roland Busch, President and Chief Executive Officer of Siemens AG.

“Overall, we achieved clear increases in both net income and profit margin in the third quarter. We again generated strong free cash flow, and we will re-emphasize our clear focus on cash with a strong fourth quarter,” said Ralf P. Thomas, Chief Financial Officer of Siemens AG.

Clear increase in net income and profit margin

Revenue in Q3 2024 rose 5 percent on a comparable basis – that is, excluding currency translation and portfolio effects – to €18.9 billion compared to the prior-year period (Q3 2023: €18.1 billion). Orders declined 15 percent on a comparable basis to €19.8 billion (Q3 2023: €23.5 billion), with higher order volumes at most industrial businesses, including double-digit percentage increases at Digital Industries and Smart Infrastructure. In contrast, the volume of major orders at Mobility was lower compared to Mobility’s record-high order intake in Q3 2023. With an order backlog that remained at the high level of €113 billion and a book-to-bill ratio of 1.05, Siemens again delivered strong results.

Profit Industrial Business grew 11 percent to €3.0 billion (Q3 2023: €2.7 billion) with contributions from all industrial businesses. The profit margin increased to 16.5 percent (Q3 2023: 15.4 percent). Net income rose to €2.1 billion (Q3 2023: €1.4 billion), whereby the prior-year quarter had been impacted by a loss of €0.6 billion relating to the stake in Siemens Energy AG. Corresponding basic earnings per share before purchase price allocation accounting (EPS pre PPA) were €2.66 (Q3 2023: €1.78).

Free cash flow all-in at Group level from continuing and discontinued operations reached €2.1 billion (Q3 2023: €3.0 billion). The decline in free cash flow was due first to the Industrial Business, which generated solid free cash flow of €2.5 billion compared to €3.1 billion in Q3 2023. The prior-year quarter had included significant advance payments from Mobility customers. Second, cash outflows for tax payments were €0.5 billion higher in Q3 2024 than in the prior-year quarter.

Increase in profit margin at all industrial businesses

Orders at Digital Industries climbed 21 percent on a comparable basis to €4.5 billion, with exceptionally high order growth in the software business primarily driven by a number of large contract wins for licensed software. On the other hand, orders in the automation businesses came in moderately lower in a challenging market due to ongoing elevated stock levels at customers. At €4.9 billion, revenue was nearly at the level of Q3 2023, whereby higher revenue in the software business was offset by declines at the automation businesses and negative portfolio and currency translation effects. Profit rose 3 percent to €1.1 billion, while the profit margin improved one percentage point to 22.9 percent.

At Smart Infrastructure, orders rose 11 percent on a comparable basis to €6.0 billion with all businesses contributing to growth. Order intake included a number of larger contract wins for data centers and from customers in the energy sector. Revenue also rose at all businesses by 10 percent on a comparable basis to €5.4 billion, including substantial growth at the electrification business, which continued to execute rigorously on its large order backlog. On a geographic basis, the largest growth contribution came from the United States. Smart Infrastructure continued to increase profit and profitability year-over-year on higher revenue, increased capacity utilization and ongoing productivity improvements. Profit rose 20 percent to €923 million. The profit margin reached 17.0 percent compared to 15.6 percent in Q3 2023.

At Mobility, revenue rose slightly by 2 percent on a comparable basis to €2.6 billion. Orders, on the other hand, declined 71 percent on a comparable basis to €2.4 billion compared to Q3 2023, in which Mobility had reported a record order intake, including a €2.5 billion order for a turnkey rail system in Egypt and a €2.1 billion order for suburban trains in Germany. Profit totaled €227 million. The profit margin was 8.7 percent compared to 8.1 percent in Q3 2023.

This press release is available at: https://sie.ag/BfvtH

Siemens AG

Siemens AG (Berlin and Munich) is a leading technology company focused on industry, infrastructure, mobility, and healthcare. The company’s purpose is to create technology to transform the everyday, for everyone. By combining the real and the digital worlds, Siemens empowers customers to accelerate their digital and sustainability transformations, making factories more efficient, cities more livable, and transportation more sustainable. Siemens also owns a majority stake in the publicly listed company, Siemens Healthineers, a leading global medical technology provider shaping the future of healthcare.

In fiscal 2023, which ended on September 30, 2023, the Siemens Group generated revenue of €74.9 billion and net income of €8.5 billion. As of September 30, 2023, the company employed around 305,000 people worldwide on the basis of continuing operations.Further information is available on the Internet at www.siemens.com.

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