Siemens: Munich industrial giant defies delivery problems - and is now working at the limit in many areas

Created: 02/10/2022, 08:58

Siemens can look forward to good results from the first quarter.

© Daniel Karmann/dpa

Business is booming at the Munich technology group Siemens.

Thanks to full order books, the group can hardly keep up in many areas.

Munich – At Siemens* business is booming.

The Munich technology giant significantly exceeded analysts' expectations for sales and operating profit in the first quarter of the 2021/22 financial year, as it announced on Thursday before the annual general meeting.

From October to December, sales climbed on a comparable basis by 9 percent to 16.5 billion euros, and profit from industrial business by 12 percent to 2.5 billion euros.

Siemens: Earnings exceed analysts' expectations

Analysts surveyed by Siemens had expected sales of almost 16 billion and earnings of almost 2.3 billion on average.

CEO Roland Busch spoke of a very successful start to the financial year.

"Our results impressively show that we are pioneers in accelerating digitization and sustainability."

Siemens experienced a veritable boom in orders.

Incoming orders shot up by 42 percent to 24.2 billion euros.

Factory automation and ICE trains were particularly popular, with Deutsche Bahn ordering more for EUR 1.5 billion.

For the first time, Siemens admitted difficulties in processing all orders on time.

Larger interruptions were avoided despite procurement bottlenecks and failures as a result of the corona pandemic.

"Nevertheless, there are delays in the delivery of some products to customers." Siemens is working "at full speed" to optimize deliveries.

Siemens promises a higher forecast

Siemens CFO Ralf Thomas indicates an increase in the profit forecast after the unexpectedly good start to the year.

"We see potential to reach or even exceed the upper end of our EPS target corridor," he said in a conference call on Thursday, according to the text of the speech.

Siemens has previously announced earnings per share (EPS) of EUR 8.70 to EUR 9.10 (previous year: EUR 8.32).

Siemens will update the guidance after the end of the second quarter when it has a better view of when the gains from the sale of non-core businesses will be reflected in earnings, Thomas said. 

The group expects a profit of around 1.5 billion euros from the sale of other peripheral areas alone.

Another 600 to 800 million euros are to come from the sale of the road traffic technology subsidiary Yunex to the Italian infrastructure group Atlantia, which was agreed in January.

The booming business with mail and parcel sorting systems goes to the Hamburg mechanical engineering company Körber for 1.15 billion euros, as Siemens announced on Wednesday evening.

The group will exit the loss-making joint venture Siemens Valeo eAutomotive for electric car drives by the middle of the year;

French auto parts supplier Valeo is paying 277 million euros for Siemens' 50 percent stake.

The Large Drives* division, which produces electric motors, converters and generators for medium and high voltage with around 7,000 employees, is being prepared for sale.

On the day of the general meeting, the IG Metall trade union called on employees in Berlin and Nuremberg to rallies against the plans.