Siemens Energy AG Reports Strong Earnings and Raised Guidance

Siemens Energy Ag ((DE:ENR)) has held its Q2 earnings call. Read on for the main highlights of the call.

Siemens Energy AG’s recent earnings call was marked by a strong overall performance, showcasing significant improvements across key financial metrics. The company raised its guidance for the fiscal year, reflecting confidence in its market position. However, concerns were noted regarding potential tariff impacts and ongoing challenges in Siemens Gamesa’s onshore wind business.

Record Order Backlog

The company reported a record order backlog of EUR 133 billion, with a book-to-bill ratio of 1.45. This achievement underscores strong market demand and effective operational performance, positioning Siemens Energy well for future growth.

Significant Revenue Growth

Siemens Energy experienced a revenue surge, reaching EUR 10 billion for the quarter. This represents a growth of over 20% compared to the previous year, driven by robust performance across all business segments.

Raised Full-Year Guidance

The company raised its full fiscal year 2025 guidance across all key performance indicators, including growth, margin, net income, and cash flow. This reflects the company’s strong performance and favorable market conditions.

Gas Services Expansion

Gas Services reported its highest order intake in history, with orders totaling EUR 7 billion, more than doubling from the previous year. This expansion highlights the growing demand for Siemens Energy’s gas services.

Improved Profit Margins

Profit before special items rose to EUR 900 million, with a profit margin of 9.1% for the quarter. This marks an improvement of 700 basis points year-over-year, showcasing effective cost management and operational efficiency.

Strong Cash Flow

The company reported a cash flow of EUR 1.4 billion, exceeding expectations. This was driven by better results, customer payments, and reservation fees, bringing the first half-year cash flow to EUR 2.9 billion.

Successful Cost Management

Grid Technologies benefited from significant cost degression and operational improvements, contributing to the overall margin improvement and highlighting Siemens Energy’s focus on cost efficiency.

Strategic Investments and Partnerships

Siemens Energy announced a partnership with Rolls-Royce for small modular reactors and is expanding production capacities for medium-sized gas turbines, demonstrating its commitment to strategic growth and innovation.

Potential Tariff Impact

The company expressed concerns over potential global tariffs, estimating a limited direct impact of up to a high double-digit million euro after mitigation measures. This adds an element of uncertainty to the global economic outlook.

Challenges in Siemens Gamesa

Siemens Gamesa reported a loss of EUR 249 million before special items, although this marked an improvement year-over-year. The onshore wind business continues to face challenges, with orders affected by temporary sales interruptions.

Divestment of Wind Business in India and Sri Lanka

Siemens Gamesa agreed to divest its wind business in India and Sri Lanka, resulting in a non-cash impairment charge of EUR 265 million. This move is part of the company’s strategy to streamline operations.

Forward-Looking Guidance

Siemens Energy announced a significant improvement in its fiscal year 2025 guidance, with increased expectations for growth, margin, net income, and cash flow. The company remains optimistic about its market position and resilience, despite uncertainties surrounding global tariffs.

In summary, Siemens Energy AG’s earnings call highlighted a strong performance with raised guidance, reflecting confidence in its strategic direction. While challenges remain, particularly in the Siemens Gamesa segment, the company’s robust order backlog and strategic initiatives position it well for future growth.