Earnings Release and Financial Results Q2 FY 2020: Robust performance in complicated times

Revenue was €14.2 billion, nearly level with the same quarter a year ago, as increases at Siemens Healthineers and Mobility offset a decline at Digital Industries; orders declined 8%, to €15.1 billion, on sharply lower volume from large orders at Mobility
On a comparable basis, excluding currency translation and portfolio effects, revenue declined 1% and orders came in 9% lower; the book-to-bill ratio of 1.06 remained well above one
Adjusted EBITA Industrial Businesses was significantly lower at €1.6 billion, with all industrial businesses showing effects from the COVID-19 pandemic; Adjusted EBITA margin Industrial Businesses of 12.1% was held back also by severance charges of €0.2 billion, taking 1.2 percentage points
Net income, including a loss of €0.3 billion from discontinued operations, was €0.7 billion compared to €1.9 billion in Q2 FY 2019, which benefited from income of €0.2 billion from discontinued operations as well as a lower tax rate; basic earnings per share (EPS) declined to €0.80
Given the current situation, we can no longer confirm our original guidance for fiscal 2020; for our new guidance, see page 5 of this document

At the end of the second quarter of fiscal 2020, Gas and Power and Siemens Gamesa Renewable Energy (SGRE) were classified as held for disposal and discontinued operations. Prior-period amounts are presented on a comparable basis.

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We delivered a robust quarter given the serious circumstances. I am particularly impressed with my team that we are able to keep the original timeline for the spin-off of our energy business. While we expect to reach the bottom in the third quarter of fiscal 2020, we continue to keep the health and safety of our partners and employees as our first priority, while maintaining business continuity as much as responsibly possible.

Siemens performed solidly in the second quarter of fiscal 2020 even as the economic consequences of the COVID-19 pandemic began to impact our operations and our financial results. We expect even stronger impacts from the pandemic on business development in our fiscal third quarter. Beyond the third quarter of fiscal 2020, macroeconomic developments and their influence on Siemens currently cannot be reliably assessed. Therefore, we can no longer confirm our original guidance for fiscal 2020.

We now expect a moderate decline in comparable revenue in fiscal year 2020, net of currency translation and portfolio effects, with the book-to-bill ratio remaining above 1. The decline in demand most strongly affects our Operating Companies Digital Industries and Smart Infrastructure.

We adhere to our plan to complete the spin-off and public listing of Siemens Energy before the end of fiscal 2020. We expect to record a spin-off gain within discontinued operations, the amount of which cannot yet be reliably forecast. We continue to expect material impacts on Net income from spin-off costs and tax expenses related to the carve-out and sub-group creation of Siemens Energy.

Given the above-mentioned circumstances we currently refrain from giving guidance for basic EPS from Net income for fiscal 2020.

This document contains statements related to our future business and financial performance and future events or developments involving Siemens 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’ management, of which many are beyond Siemens’ control. These are subject to a number of risks, uncertainties and 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 of the Annual Report, and in the Half-year Financial Report, which should be read in conjunction with the Annual Report. Should one or more of these risks or uncertainties materialize, events of force majeure, such as pandemics, occur or should underlying expectations including future events occur at a later date or not at all or assumptions prove incorrect, actual results, performance or achievements of Siemens may (negatively or positively) vary materially from those described explicitly or implicitly in the relevant forward-looking statement. Siemens 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 – in the applicable financial reporting framework not clearly defined – supplemental financial measures 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’ net assets and financial positions 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.

Earnings Release and Financial Results Q2 FY 2020: Robust performance in complicated times

Joe Kaeser, President and Chief Executive Officer of Siemens AG

Earnings Release Q2 FY 2020: Robust performance in complicated times

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