Record-Breaking Q1 Performance - Siemens Energy Surges Ahead - Siemens Energy Experiences Steady Growth, Shows Improvement in Q1 Results
Siemens Energy's recent quarterly results are shaking things up, marking a streak of success since spinning off from Siemens AG in 2020. In the most prosperous quarter since its independence, the energy tech giant reported a tax-adjusted profit of a staggering 501 million euros, near five times the previous year's quarterly earnings.
CEO Christian Bruch, speaking from Munich, proudly declared this period "the most successful since we broke away from Siemens." While Siemens Gamesa, a struggling subsidiary, continues to present challenges, achievements in other sectors have offset these losses dramatically. Energy has now raised its forecast significantly, predicting a net income of up to €1 billion for the year ahead.
Soaring Revenue and Orders
The uptick in revenue and order intake for the second quarter paints a bright picture. Revenue jumped about 20% to a robust 9.96 billion euros, and order intake surged by more than 50% to an impressive 14.43 billion euros. Bruch attributes this order boom to the growing demand for electricity and is optimistic about the market's sustained potential.
Problems at Gamesa, though not entirely resolved, appear to be under control. The subsidiary's struggles in the second quarter have been counterbalanced by strong performances in the turbine and maintenance business, as well as power grid technology. Despite ongoing challenges with two crucial onshore wind turbine types, Energy anticipates that Gamesa will reach the break-even point next year.
Manageable Concerns
A lingering concern for the company is the implementation of new US tariffs, which Energy predicts could burden the remaining two quarters of the fiscal year with a high double-digit million-euro cost. Bruch dismisses these effects as "annoying but manageable," noting their relative insignificance compared to impacts mentioned by German automakers.
Raising the Bar
Siemens Energy's positive performance and promising outlook have led the company to increase its fiscal year 2025 revenue growth expectations to a comparable range of 13% to 15%, up from the previous 8% to 10%. They also anticipate a profit margin between 4% and 6%, improved from their previous estimate of 3% to 5%. Net income expectations are now €1 billion, significantly surpassing the previous break-even forecast. The outlook for free cash flow before tax is also updated to approximately €4 billion for fiscal year 2025.
Shareholders Can Celebrate, but Not Yet
Despite the impressive results, the absence of a dividend for the current fiscal year has left shareholders a bit disappointed. The reason for this is the ongoing state guarantees that Energy received two years ago, which secure its full order book. Although Energy expects to shed these guarantees during the fiscal year, the company can only pay a dividend with earnings generated in the following year, potentially as early as 2027.
Regardless, shareholders had cause for celebration on the day of the announcement, as Siemens Energy was one of the top performers on the stock exchange that morning.
- Siemens Energy
- Gamesa
- Christian Bruch
- Munich
- Siemens AG
- CEO
- Christian Bruch, the CEO of Siemens Energy, expressed pride over the company's recent quarterly results in Munich, stating it as the most successful period since its separation from Siemens AG in 2020.
- Despite ongoing challenges with its struggling subsidiary, Siemens Gamesa, Siemens Energy has offset these losses with significant achievements in other sectors such as turbine, maintenance, and power grid technology.
- Siemens Energy has forecasted a net income of up to €1 billion for the year ahead, a significant increase from previous predictions, demonstrating the company's promising outlook and growth expectations.
