Friday, 20 September 2024

Home Earnings Release Q2 FY 2024: Siemens Energy benefits from positive market environment and delivers another solid quarter. Adjusted outlook reflects stronger growth and positive cash development.

News Release

The following content is a news release issued by Siemens. The original news release may be found here.

Earnings Release Q2 FY 2024: Siemens Energy benefits from positive market environment and delivers another solid quarter. Adjusted outlook reflects stronger growth and positive cash development.

Issued by Siemens8 May 2024

During the second quarter of the fiscal year, Siemens Energy’s relevant markets and demand for electricity continued to develop strongly.
As expected, orders decreased year-over-year from a high level of comparison mainly due to a lower volume of large orders. Growth at Grid Technologies and Transformation of Industry could not offset lower orders in the other segments, mainly Siemens Gamesa. Overall, the decline was 21.8% on a comparable basis (excluding currency translation and portfolio effects) and orders came in with €9.5bn. The book-to-bill ratio (ratio of orders to revenue) was again above 1, driving the order backlog to a new high of €119bn.
Revenue grew by 3.7% on a comparable basis to €8.3bn with substantial and significant growth at Grid Technologies and Transformation of Industry, respectively.
Siemens Energy’s Profit before special items sharply increased to €170m (Q2 FY 2023: €41m) in part benefiting from positive currency effects. Special items amounted to positive €331m (Q2 FY 2023: positive €23m), driven by pre-tax gains from the sale of businesses related to the ongoing progress on disposals and accelerated portfolio transformation. As a result, Profit for Siemens Energy came in at €501m (Q2 FY 2023: €64m).
Siemens Energy reported a Net income of €108m (Q2 FY 2023: Net loss €189m). Corresponding basic earnings per share (EPS) were positive €0.08 (Q2 FY 2023: negative €0.25).
Free cash flow pre tax was positive with €483m (Q2 FY 2023: negative €294m). The improvement to prior-year quarter was primarily due to strong cash conversion across all business areas and shifts in timing from Siemens Gamesa.
Due to the strong business performance in the first half-year, Siemens Energy raised its outlook for fiscal year 2024. Management now expects for the Siemens Energy Group a comparable revenue growth between 10% and 12% (previously between 3% and 7%) and a Profit margin before special items between negative 1% and positive 1% (previously between negative 2% and positive 1%). Free cash flow pre tax is now expected to be up to positive €1.0bn (previously around negative €1.0bn). The outlook for Siemens Energy’s Net income remains unchanged at up to €1bn.

Christian Bruch, President and CEO of Siemens Energy AG:

“Our strong development in the second quarter underscores the continued strong demand for our technology to power the energy transition and our success in stabilizing the wind business. We have raised our outlook to reflect this positive development. The turnaround of our wind business is still our focus. To this end, we are taking steps to reduce complexity and create a more focused business.”

Please read the complete Earnings Release:

Organizations

Siemens

https://www.siemens-energy.com/global/en/home/press-releases/second-quarter-results-fy-2024.html

Outlook

Due to the business performance in the first half-year, we raised the outlook for the fiscal year 2024 for Siemens Energy. The new forecast is based on adjusted revenue growth assumptions for all segments and higher Profit assumptions for Grid Technologies. In the first half of the fiscal year, the product and service businesses in the Grid Technologies and Transformation of Industry segments performed better than expected driven by strong market demand. For Siemens Gamesa, we expect a revenue development in the second half of the fiscal year substantially exceeding the first half-year, especially driven by the continuous ramp-up in the offshore area. In terms of Free cash flow pre tax, we expect all segments to exceed original expectations excluding Siemens Gamesa. This is particularly applicable for Gas Services and Grid Technologies, which both are to experience strong cash inflows driven by customer payments related to a continuing orders momentum.

Therefore, we now expect Siemens Energy to achieve a comparable revenue growth (excluding currency translation and portfolio effects) in a range of 10% to 12% (previously between 3% and 7%). Profit margin before special items is now expected between negative 1% and positive 1% (previously between negative 2% and positive 1%). Unchanged, we expect a Net income of up to €1bn including impacts from disposals and the acceleration of the portfolio transformation. Furthermore, we now expect a positive Free cash flow pre tax up to €1.0bn (previously a negative Free cash flow pre tax of around €1.0bn). We now expect proceeds for the whole fiscal year around positive €3.0bn (previously in a range of positive €2.5bn to €3.0bn) from disposals and the acceleration of the portfolio transformation.

The outlook for Siemens Energy does not include charges related to legal and regulatory matters.

Amended overall assumptions per business area

Gas Services now assumes a comparable revenue growth of negative 2% to 0% (previously negative 4% to 0%) and a Profit margin before special items of 9% to 11% (unchanged).
Grid Technologies now plans to achieve a comparable revenue growth of 32% to 34% (previously 18% to 22%) and a Profit margin before special items between 8% and 10% (previously between 7% and 9%).
Transformation of Industry now expects a comparable revenue growth of 14% to 16% (previously 8% to 12%) and a Profit margin before special items of 5% to 7% (unchanged).
Siemens Gamesa now assumes a comparable revenue growth of 10% to 12% (previously 0% to positive 4%) and a negative Profit before special items of around €2bn (unchanged).

Notes and forward-looking statements

This document contains statements related to our future business and financial performance, and future events or developments involving Siemens Energy that may constitute forward-looking statements. These statements may be identified by words such as “expect,” “look forward to,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “will,” “project,” or words of similar meaning. We may also make forward-looking statements in other reports, prospectuses, in presentations, in material delivered to shareholders, and in press releases. In addition, our representatives may from time to time make oral forward-looking statements. Such statements are based on the current expectations and certain assumptions of Siemens Energy´s management, of which many are beyond Siemens Energy´s control. These are subject to a number of risks, uncertainties, and other factors, including, but not limited to, those described in disclosures, in particular in the chapter “Report on expected developments and associated material opportunities and risks” in the Annual Report. Should one or more of these risks or uncertainties materialize, should acts of force majeure, such as pandemics, occur, or should underlying expectations including future events occur at a later date or not at all, or should assumptions not be met, Siemens Energy´s actual results, performance, or achievements may (negatively or positively) vary materially from those described explicitly or implicitly in the relevant forward-looking statement. Siemens Energy neither intends, nor assumes any obligation, to update or revise these forward-looking statements in light of developments which differ from those anticipated. This document includes supplemental financial measures – that are not clearly defined in the applicable financial reporting framework – and that are or may be alternative performance measures (non-GAAP-measures). These supplemental financial measures should not be viewed in isolation or as alternatives to measures of Siemens Energy´s net assets and financial position or results of operations as presented in accordance with the applicable financial reporting framework in its consolidated financial statements. Other companies that report or describe similarly titled alternative performance measures may calculate them differently. Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

Siemens Energy is one of the world’s leading energy technology companies. The company works with its customers and partners on energy systems for the future, thus supporting the transition to a more sustainable world. With its portfolio of products, solutions and services, Siemens Energy covers almost the entire energy value chain – from power and heat generation and transmission to storage. The portfolio includes conventional and renewable energy technology, such as gas and steam turbines, hybrid power plants operated with hydrogen, and power generators and transformers. Its wind power subsidiary Siemens Gamesa makes Siemens Energy a global market leader for renewable energies. An estimated one-sixth of the electricity generated worldwide is based on technologies from Siemens Energy. Siemens Energy employs around 97,000 people worldwide in more than 90 countries and generated revenue of €31 billion in fiscal year 2023.
www.siemens-energy.com