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Earnings Release Q2 FY 2023: Strong orders, substantially higher revenue, positive
Profit before Special items held back by Siemens Gamesa
Siemens
Energy’s markets remained favorable. Consequently, the Company continued to
enjoy strong growth in orders and in revenue. Profit continued to be impacted
by supply chain challenges, the ramp-up of the offshore activities as well as
by effects from onerous projects at Siemens Gamesa.
Siemens
Energy recorded orders of €12.3bn reflecting 56.3% growth on a comparable basis
(excluding currency translation and portfolio effects). The Book-to-bill ratio
(ratio of orders to revenue) came in at 1.53 and the order backlog reached a
new record of €102.0bn exceeding the €100bn mark, for the first time.
Revenue
increased by 23.8% on a comparable basis to €8.0bn reflecting growth in all
segments.
Siemens
Energy’s Profit before Special items was positive with €41m (Q2 FY 2022:
negative €49m). A loss at Siemens Gamesa was more than offset by a strong
performance in all other segments, led by Gas Services (GS). Positive Special
items of €23m (Q2 FY 2022: negative €54m) were driven by a positive effect of
€78m in connection with the “Accelerating Impact” program reported under
restructuring costs. Most measures of the program have been executed or
contractually solved. Due to improved market
conditions and volume growth, the assessment of the further progress of the
program has changed. The positive effect more than offset an increase in other
restructuring and integration costs. Therefore, Profit for Siemens Energy was positive
with €64m (Q2 FY 2022: negative €103m).
Siemens
Energy reported a Net loss of €189m (Q2 FY 2022: Net loss €256m). Corresponding
basic earnings per share (EPS) were negative €0.25 (Q2 FY 2022: negative €0.22).
As
expected, Free cash flow pre tax was negative with €294m (Q2 FY 2022: negative
€351m). A higher cash outflow at Siemens Gamesa was partly offset by strong
cash flow in other segments, primarily at Grid Technologies (GT).
Due to the
financial performance in the first half-year and business volume growing faster
than previously planned, Siemens Energy adjusted its outlook for fiscal year
2023. Management now expects a comparable revenue growth of the Siemens Energy Group
between 10% and 12% (previously between 3% and 7%). Profit margin before
Special items of Siemens Energy is now expected around the low end of the guidance
range of 1% to 3% due to Siemens
Gamesa's poor performance in the first half-year. Accordingly, Net loss of
Siemens Energy Group is expected to exceed prior fiscal year’s level by up to a
low-triple-digit million € amount.
Christian Bruch, President and CEO of Siemens Energy AG:
“Strong
orders confirm
our very good positioning in
the markets for energy transition technologies, such as power generation and
transmission. Our adjusted outlook reflects the strong demand, as well as the
continuous challenging market environment in the wind industry. The turnaround
of the wind business remains the cornerstone of becoming a profitable leader of
the energy transition”
Siemens
Energy’s markets remained favorable. Consequently, the Company continued to
enjoy strong growth in orders and in revenue. Profit continued to be impacted
by supply chain challenges, the ramp-up of the offshore activities as well as
by effects from onerous projects at Siemens Gamesa.
Siemens
Energy recorded orders of €12.3bn reflecting 56.3% growth on a comparable basis
(excluding currency translation and portfolio effects). The Book-to-bill ratio
(ratio of orders to revenue) came in at 1.53 and the order backlog reached a
new record of €102.0bn exceeding the €100bn mark, for the first time.
Revenue
increased by 23.8% on a comparable basis to €8.0bn reflecting growth in all
segments.
Siemens
Energy’s Profit before Special items was positive with €41m (Q2 FY 2022:
negative €49m). A loss at Siemens Gamesa was more than offset by a strong
performance in all other segments, led by Gas Services (GS). Positive Special
items of €23m (Q2 FY 2022: negative €54m) were driven by a positive effect of
€78m in connection with the “Accelerating Impact” program reported under
restructuring costs. Most measures of the program have been executed or
contractually solved. Due to improved market
conditions and volume growth, the assessment of the further progress of the
program has changed. The positive effect more than offset an increase in other
restructuring and integration costs. Therefore, Profit for Siemens Energy was positive
with €64m (Q2 FY 2022: negative €103m).
Siemens
Energy reported a Net loss of €189m (Q2 FY 2022: Net loss €256m). Corresponding
basic earnings per share (EPS) were negative €0.25 (Q2 FY 2022: negative €0.22).
As
expected, Free cash flow pre tax was negative with €294m (Q2 FY 2022: negative
€351m). A higher cash outflow at Siemens Gamesa was partly offset by strong
cash flow in other segments, primarily at Grid Technologies (GT).
Due to the
financial performance in the first half-year and business volume growing faster
than previously planned, Siemens Energy adjusted its outlook for fiscal year
2023. Management now expects a comparable revenue growth of the Siemens Energy Group
between 10% and 12% (previously between 3% and 7%). Profit margin before
Special items of Siemens Energy is now expected around the low end of the guidance
range of 1% to 3% due to Siemens
Gamesa's poor performance in the first half-year. Accordingly, Net loss of
Siemens Energy Group is expected to exceed prior fiscal year’s level by up to a
low-triple-digit million € amount.
Christian Bruch, President and CEO of Siemens Energy AG:
“Strong
orders confirm
our very good positioning in
the markets for energy transition technologies, such as power generation and
transmission. Our adjusted outlook reflects the strong demand, as well as the
continuous challenging market environment in the wind industry. The turnaround
of the wind business remains the cornerstone of becoming a profitable leader of
the energy transition”
Due to the financial performance in the first half-year
and business volume growing faster than previously planned, we amended the
outlook for the fiscal year 2023 for Siemens Energy. The new forecast is based
on higher revenue growth assumptions for all segments. Profit assumptions for
the GS, GT and TI segments remain unchanged. In the first half of the fiscal
year, GT was well in its anticipated range which is expected to continue while
GS and TI outperformed partly benefiting from positive nonrecurring effects. For Siemens Gamesa the
situation remains volatile. However, we expect an improvement in the second
half of the fiscal year but not compensating the weak first half. Siemens Gamesa continues to focus on managing
operational problems and the turnaround, primarily through the rigorous
execution of the “Mistral” program. The performance of Siemens Gamesa throughout the
fiscal year 2023 will also depend on the timely ramp-up of the offshore
activities.
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 around the low end of the guidance range
of 1% to 3% due to Siemens Gamesa's poor performance in the first half-year. Accordingly, Net loss of Siemens Energy Group is expected to exceed prior
fiscal year’s level of €712m by up to a low-triple-digit million € amount (previously to be on prior fiscal year’s reported
level). We confirm previous quarter’s guidance of a positive Free cash flow pre
tax up to a low triple-digit
million € amount for fiscal year 2023.
The
outlook for Siemens Energy assumes no major negative financial impacts from
COVID-19 or other pandemic related events, no further deterioration in the supply
chain and raw material cost environment, and excludes charges related to legal
and regulatory matters. The outlook is based on the following overall
assumptions for the segments:
GS now
plans to achieve a comparable revenue growth of 10% to 12% (previously between
0% and 4%). The targeted Profit margin before Special items remains between 9%
and 11% (unchanged).
GT now plans to achieve a comparable revenue growth of 12% to 14%
(previously between 5% and 9%). The targeted Profit margin before Special items
remains between 6% and 8% (unchanged).
TI now plans to achieve a comparable revenue growth of 8% to 10%
(previously between 5% and 9%). The targeted Profit margin before Special items
remains between 3% and 5% (unchanged).
Siemens Gamesa plans to achieve a comparable revenue growth of 6% to 10%
for the fiscal year 2023 and to reach a Profit margin before Special items
towards negative 11%.
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 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. A majority stake in the wind power subsidiary Siemens Gamesa Renewable Energy (SGRE) 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 92,000 people worldwide in more than 90 countries and generated revenue of €29 billion in fiscal year 2022.