On the occasion of the Annual General Meeting on February 10, Siemens publishes the figures for the first quarter of the current fiscal year. After a very successful fiscal year 2021 with a profit of €6.7 billion, the Group has made a positive start to the new year: Order intake increased by 42% year-on-year to €24.2 billion on a comparable basis. Compared to Q1/2021, the Group was able to increase sales by 9% to EUR 16.5 billion. These increases are primarily attributable to the high growth rates in all industrial businesses: Earnings there increased by 12% to EUR 2.5 billion; the earnings margin here was 15.7% after 16.5% in the same quarter of the previous year.

Profit after tax amounted to EUR 1.8 billion, which corresponds to growth of 20% compared to the same quarter of the previous year. At EUR 1.1 billion, free cash flow is also stronger than in Q1/2022 (EUR 1.0 billion).

Portfolio streamlining is being driven forward

As early as February 9, there were initial reports that Siemens was selling its parcel and mail business and divesting its share in the electric car joint venture with Valeo. The parcel and mail business will be sold to the technology group Körber for 1.15 billion euros. Valeo is taking over the partner's share in the joint venture. Siemens expects this to have a positive effect on earnings of 300 million euros in the current second quarter.

In addition, Siemens had already announced in January that it would sell its road traffic technology unit Yunex Traffic to Atlantia.

The figures in detail:
Factory automation ensures growth

Digital Industries

The quarterly result is attributable to the positive development of the industrial businesses. Digital Industries' order intake increased by 67% on a comparable basis to EUR 7.1 billion. This growth extends across all businesses and regions. The Factory Automation and Motion Control divisions contributed the most to this development. Sales revenue also increased in all businesses and reporting regions on a comparable basis by a total of 11% to EUR 4.3 billion. Earnings amounted to EUR 947 million and exceeded the previous year's quarterly figure by 12%, while the earnings margin was 21.8%. As expected, profitability was impacted by higher expenses for cloud-based activities, including the effects of the planned conversion of parts of the business to SaaS (Software-as-a-Service).

The growth momentum was boosted by customers bringing forward orders in key market segments, the Group reports. Sales revenue increased in all reporting regions. In the USA in particular, the Group recorded strong growth in software. This is attributable to the processing of large orders for electronic design automation solutions.

According to Siemens, major interruptions to the supply chain could be avoided, but there were and still are longer delivery times for some automation products when processing orders.

The earnings trend was supported by higher sales revenue, positive currency effects and cost savings from the implementation of the cost structure improvement program to date.

Smart Infrastructure

The growth in incoming orders of 26% to EUR 4.9 billion (like-for-like basis) was primarily driven by business with electrical products and electrification, which included major orders from the semiconductor industry in the USA. Continued high demand from industrial customers and data center operators also had a positive impact. On a comparable basis, sales revenue grew by 6% to EUR 3.8 billion. Earnings rose by almost a quarter to EUR 480 million compared to EUR 391 million in the same quarter of the previous year.

Earnings increased in all businesses primarily due to higher capacity utilization and cost savings from the implementation of the competitiveness program to date, according to the Group. The earnings margin rose to 12.6% compared to 11.2% in the first quarter of 2021.

Mobility

Sales revenue in the Mobility division rose by 7% to EUR 2.4 billion on a comparable basis compared to the same quarter of the previous year. Incoming orders are the highest in the history of the business unit: they amounted to EUR 5.39 billion, which corresponds to an almost doubling (+94%, like-for-like). This is attributable to a number of large orders, including an order worth EUR 1.5 billion for high-speed trains and several large orders for locomotives totaling EUR 0.5 billion in Germany as well as an order worth EUR 0.3 billion for a train control system in Norway.

In January 2022, Mobility agreed the sale of its road transportation business Yunex Traffic to Atlantia. Subject to regulatory approvals, the transaction is expected to be completed by September 2022 and will result in a gain of EUR 0.6 to 0.8 billion.

Siemens Healthineers

The growth of 23% in order intake and 19% in revenue is also due to the acquisition of Varian. Siemens Healthineers reported an increase in volume in all businesses - led by the Diagnostics business. The strong earnings performance there is mainly attributable to sales of coronavirus antigen rapid tests.

Profitability is negatively impacted by subsequent effects from the purchase price allocation in connection with the Varian acquisition totaling EUR 0.1 billion, negative currency effects and higher procurement and logistics costs

Siemens Financial Services

According to the Group, Siemens Financial Services benefited from the current favorable credit environment, which resulted in a strong improvement in earnings before income taxes in the debt financing business. The higher net result in the investment business is mainly attributable to energy-related investments in connection with rising prices on global energy markets. The main reason for the increase in total assets compared to the end of the 2021 financial year is positive currency translation effects.

Portfolio Companies

Despite lower volumes from large orders, order intake in the Portfolio Companies division increased in almost all businesses compared to the first quarter of 2021, where growth was impacted by COVID-19. The strongest contribution to revenue growth came from Siemens Logistics' parcel handling business. Portfolio Companies' share of the loss at Valeo Siemens eAutomotive was almost offset by the positive effect of a payment received from the joint venture partner in connection with a shareholder loan.