Earnings Release Q2 FY 2022 - Gas and Power with solid performance, disappointing results at SGRE weigh down Siemens Energy Group

For the GP segment in fiscal year 2022, we maintain our guidance for comparable revenue growth (excluding currency translation and portfolio effects) between positive 1% and positive 5%, and Adjusted EBITA margin before special items between positive 4.5% and positive 6.5%. However, in light of prevailing challenges, we expect results towards the low end of the guidance ranges. For fiscal year 2023, we confirm our target of an Adjusted EBITA margin before special items in a range between positive 6% and positive 8%.

Given SGRE’s performance of the first half year and continued internal and external uncertainties, SGRE announced that its previous guidance of a comparable decline of revenue between negative 2% and negative 9% and an Adjusted EBITA margin before special items in a range of negative 4% to positive 1% is no longer valid. According to SGRE, the company cannot provide projections for the second half of the year with the desirable detail and precision but will continue to work to achieve a comparable revenue development within the range of negative 2% and negative 9%, and Adjusted EBITA margin before special items towards the low end of the previous guidance range of negative 4%.

For Siemens Energy we now expect results towards the low end of the guidance ranges for comparable revenue development (negative 2% to positive 3%) and Adjusted EBITA margin before special items (positive 2% to positive 4%). Consequently, we expect Net loss to be level with prior year compared to the previous guidance of a sharp improvement. We confirm expectations for the Free cash flow pre tax to be in a range of a positive mid-triple-digit million €.

Because of the war in Ukraine and the sanctions imposed on Russia the operating environment for Siemens Energy has become more challenging. Siemens Energy is complying with all sanctions and has stopped any new business in Russia. Siemens Energy has started to see an impact on revenue and profitability as a result of the war and is experiencing an aggravation of the existing supply chain challenges. We are currently not able to fully assess the potential impact for the remainder of the fiscal year and can therefore not rule out further negative effects mainly on revenue, profitability and recoverability of assets. In addition, we note a rising impact related to the COVID-19 situation in China.

This guidance assumes no further major financial impacts from COVID-19 on our business activity and excludes charges related to legal and regulatory matters including further negative effects from the war in Ukraine and its economic consequences.

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