After a furious quarter, Siemens is raising its sales and profit expectations for the third time this year.
From April to June, compared to the third quarter of the 2019/20 financial year (end of September), which was heavily influenced by the corona crisis, net profit almost tripled to 1.48 billion from 535 million euros, as the Munich technology group announced on Thursday.
On a comparable basis, sales increased by 21 percent to 16.1 billion euros, and incoming orders shot up by as much as 44 percent to 20.5 billion euros.
Without currency effects, the growth would have been even higher.
"We delivered again in the third quarter - with strong and profitable growth in all business areas," said CEO Roland Busch.
The supply chain challenge
The figures clearly exceeded the expectations of the analysts surveyed by Siemens.
“We have successfully mastered challenges - for example in the supply chains,” said Busch.
The fact that there are no major bottlenecks in the supply of chips and raw materials is also the prerequisite for the new, higher forecasts.
However, Siemens expects problems in the supply chain beyond the current fiscal year and is also resisting it with price increases.
“So far, we have been able to partially offset the headwinds from rising material costs with long-term contracts and other security measures.
And we were also able to minimize the effects on our result with timely price adjustments. "
The technology group is observing that its customers are building stocks to cushion the risks in the supply chains, said CEO Roland Busch.
“Incidentally, just like with our customers, this is also a challenge for us, for example with semiconductors.
At the same time, we see continued higher costs for raw materials, components and freight - probably also in the next financial year. "
Takeover fits the strategy
The turnover is to increase by 11 to 12 (previous forecast: 9 to 11) percent by the end of September, the net profit is to rise to 6.1 to 6.4 (previously 5.7 to 6.2) billion euros. The US cancer specialist Varian, which the listed subsidiary Siemens Healthineers took over in April, is included for the first time. Analysts trust Siemens so far on average a net profit of 6.1 billion euros.
The Erlangen medical technology subsidiary Healthineers had already raised its expectations last week, also thanks to the good business with corona rapid tests. Building and infrastructure technology (Smart Infrastructure) went particularly well in the third quarter, growing by 15 percent and almost doubling the operating result (adjusted Ebita). For the division, Siemens now expects sales growth of 8 to 9 (previously 5 to 7) percent for the year as a whole. The industrial automation division Digital Industries is now expecting growth of 10 to 12 (previously 9 to 11) percent.
For the Zug Mobility division, the expectation of sales growth of around 5 percent remains, although the orders were 74 percent higher than in the previous year thanks to a billion-dollar order from the USA.
Siemens strengthens the division with the 550 million euro takeover of Sqills, the developer of reservation software from the Netherlands.
That fits into the strategy of CEO Busch.
He wants to focus the divisions more on software and convert the software business from selling licenses to a subscription model.
Problems with Gamesa
Despite the ongoing problems in the wind power business, the group does not want to reduce its stake in Siemens Energy any faster.
“There is no reason to question the policy of the steady hand,” said Siemens CFO Ralf Thomas.
As announced, the technology group will start thinking about a partial exit 12 to 18 months after the IPO.
Siemens should initially not reduce its share from 35.1 percent to less than 25 percent.
The autonomously operating Siemens pension fund has already sold part of its initial 9.9 percent.
At 22.70 euros, the Siemens Energy share is just above its first price at the end of September 2020.
Thomas and CEO Roland Busch joined in the criticism of the Spanish energy subsidiary Siemens Gamesa, which again missed its goals due to problems in the business with wind turbines on land. “We weren't pleased,” said Busch. “That wasn't nice,” said Thomas. But Busch was confident that Siemens Energy boss Christian Bruch and Gamesa boss Andreas Nauen would get the problems under control.