Siemens Energy Ag ((DE:ENR)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Siemens Energy AG paints a promising picture of the company’s financial health and strategic direction. The sentiment during the call was notably positive, driven by record order intake and robust revenue and profit growth. Despite some challenges, particularly in Siemens Gamesa’s onshore business and the impact of tariffs, the overall outlook remains optimistic due to strategic achievements and strong financial performance.
Record Order Intake
Siemens Energy achieved a remarkable milestone with a record-breaking order intake of EUR 16.6 billion, marking a 65% increase compared to the previous year. This surge was primarily supported by substantial offshore orders and a strong book-to-bill ratio of 1.7, indicating healthy demand and future revenue potential.
Revenue and Profit Growth
The company reported a significant increase in revenue, reaching EUR 9.7 billion, which represents a 13.5% year-over-year growth. Profit before special items also saw a notable rise to EUR 497 million, with a profit margin of 5.1%, an improvement of 450 basis points from the previous year.
Gas Services and Grid Technologies Strength
Siemens Energy’s Gas Services segment set a new order record with 86 gas turbines, showcasing significant order growth. Meanwhile, Grid Technologies experienced strong demand, particularly for power transformers, resulting in a profit margin increase to 15.9%.
Siemens Gamesa Offshore Order Success
The company secured major offshore wind project orders in Poland, each valued at over EUR 1.5 billion. These orders have significantly contributed to a robust order backlog, reinforcing Siemens Energy’s position in the renewable energy sector.
Improved Financial Position
Exiting Bund guarantees, Siemens Energy is now poised for potential dividend payments for fiscal year 2025. The company maintained a strong balance sheet with a net cash position of EUR 4.4 billion, reflecting its solid financial footing.
Impact of Tariffs
The company recorded an impact of around EUR 100 million from tariffs in Q3, with an additional expected impact in Q4 due to EU-U.S. tariff agreements. This remains a concern, but the company is navigating these challenges strategically.
Siemens Gamesa Onshore Challenges
Challenges persist in the Siemens Gamesa onshore segment, where orders continue to be affected by the temporary interruption of sales activities. The segment reported a negative EUR 438 million profit before special items, highlighting the need for strategic adjustments.
Cash Flow Decline
Free cash flow in Q3 was EUR 419 million, lower than the previous year. This decline was driven by changes in operating working capital and timing shifts in payments, but it aligns with the company’s fiscal year guidance.
Forward-Looking Guidance
Siemens Energy’s forward-looking guidance remains strong, with the company maintaining its outlook for fiscal year 2025, trending towards the upper end of guidance ranges. The strategic focus on expanding capacities and partnerships is expected to sustain profitable growth, with significant developments anticipated in the Gas Services, Grid Technologies, and Siemens Gamesa segments.
In conclusion, Siemens Energy’s earnings call reflects a positive sentiment with strong financial performance and strategic achievements. Despite some challenges, the company’s record order intake and robust growth in key segments indicate a promising future. Investors and stakeholders can remain optimistic about Siemens Energy’s trajectory in the coming years.