Siemens raises outlook again after revenue and orders surge

Siemens now sees comparable revenue growth of 9 per cent to 11 per cent for the year, up from between 7 per cent and 10 per cent. PHOTO: REUTERS

HAMBURG – Siemens raised its outlook for a second time in fiscal 2023 after revenue and orders jumped, with its main businesses pairing industrial products with digital solutions driving the result.

The German company now sees comparable revenue growth of 9 per cent to 11 per cent for the year, up from between 7 per cent and 10 per cent, it said on Wednesday.

After a surge in demand during the fiscal second quarter, Siemens said orders are set to normalise during the second half. 

Industrial manufacturers like Siemens are benefiting from supply-chain issues improving and demand holding up well despite a darkening global outlook. The company’s order backlog rose again during the quarter to an all-time high of €105 billion (S$153 billion), following a record intake in the mobility segment which makes trains. 

At Siemens’ main divisions, digital industries and smart infrastructure, the picture was more mixed. While profit surged, orders at the unit making factory products and related digital services fell 10 per cent. The company still raised its profit margin outlook for digital industries to as much as 23.5 per cent, up from as much as 22 per cent. 

At smart infrastructure, with products helping buildings reduce their carbon footprint, orders rose 9 per cent, and Siemens also boosted expectations for revenue and returns. 

The company is reaping the results of a major strategic reset of its businesses, shedding heavy-duty equipment in favour of software-driven product lines with higher profitability levels.

It has sold many of its smaller divisions, alongside spin-offs of businesses like gas turbine maker Siemens Energy and healthcare equipment manufacturer Siemens Healthineers.

During the fiscal second quarter, comparable revenue climbed 15 per cent to €19.4 billion, beating analyst estimates of a €18.7 billion.

Net income grew to €3.48 billion, above analyst estimates of €3.1 billion. Siemens’ bottom line profited from a €1.59 billion accounting gain related to the partial impairment reversal on its stake in Siemens Energy. BLOOMBERG

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