Earnings Release Q2 FY 2023: Strong orders, substantially higher revenue, positive Profit before Special items held back by Siemens Gamesa

May 15, 2023
Munich

  • Siemens Energy’s markets remained favorable. Consequently, the Company continued to enjoy strong growth in orders and in revenue. Profit continued to be impacted by supply chain challenges, the ramp-up of the offshore activities as well as by effects from onerous projects at Siemens Gamesa.
  • Siemens Energy recorded orders of €12.3bn reflecting 56.3% growth on a comparable basis (excluding currency translation and portfolio effects). The Book-to-bill ratio (ratio of orders to revenue) came in at 1.53 and the order backlog reached a new record of €102.0bn exceeding the €100bn mark, for the first time.
  • Revenue increased by 23.8% on a comparable basis to €8.0bn reflecting growth in all segments.
  • Siemens Energy’s Profit before Special items was positive with €41m (Q2 FY 2022: negative €49m). A loss at Siemens Gamesa was more than offset by a strong performance in all other segments, led by Gas Services (GS). Positive Special items of €23m (Q2 FY 2022: negative €54m) were driven by a positive effect of €78m in connection with the “Accelerating Impact” program reported under restructuring costs. Most measures of the program have been executed or contractually solved. Due to improved market conditions and volume growth, the assessment of the further progress of the program has changed. The positive effect more than offset an increase in other restructuring and integration costs. Therefore, Profit for Siemens Energy was positive with €64m (Q2 FY 2022: negative €103m).
  • Siemens Energy reported a Net loss of €189m (Q2 FY 2022: Net loss €256m). Corresponding basic earnings per share (EPS) were negative €0.25 (Q2 FY 2022: negative €0.22).
  • As expected, Free cash flow pre tax was negative with €294m (Q2 FY 2022: negative €351m). A higher cash outflow at Siemens Gamesa was partly offset by strong cash flow in other segments, primarily at Grid Technologies (GT).
  • Due to the financial performance in the first half-year and business volume growing faster than previously planned, Siemens Energy adjusted its outlook for fiscal year 2023. Management now expects a comparable revenue growth of the Siemens Energy Group between 10% and 12% (previously between 3% and 7%). Profit margin before Special items of Siemens Energy is now expected around the low end of the guidance range of 1% to 3% due to Siemens Gamesa's poor performance in the first half-year. Accordingly, Net loss of Siemens Energy Group is expected to exceed prior fiscal year’s level by up to a low-triple-digit million € amount.

 

Christian Bruch, President and CEO of Siemens Energy AG:

“Strong orders confirm our very good positioning in the markets for energy transition technologies, such as power generation and transmission. Our adjusted outlook reflects the strong demand, as well as the continuous challenging market environment in the wind industry. The turnaround of the wind business remains the cornerstone of becoming a profitable leader of the energy transition” 

Please read the complete Earnings Release:

Earnings Release Q2 FY 2023: Strong orders, substantially higher revenue, positive Profit before Special items held back by Siemens Gamesa
PDF (607 KB)

Outlook

Due to the financial performance in the first half-year and business volume growing faster than previously planned, we amended the outlook for the fiscal year 2023 for Siemens Energy. The new forecast is based on higher revenue growth assumptions for all segments. Profit assumptions for the GS, GT and TI segments remain unchanged. In the first half of the fiscal year, GT was well in its anticipated range which is expected to continue while GS and TI outperformed partly benefiting from positive nonrecurring effects. For Siemens Gamesa the situation remains volatile. However, we expect an improvement in the second half of the fiscal year but not compensating the weak first half. Siemens Gamesa continues to focus on managing operational problems and the turnaround, primarily through the rigorous execution of the “Mistral” program. The performance of Siemens Gamesa throughout the fiscal year 2023 will also depend on the timely ramp-up of the offshore activities.

Therefore, we now expect Siemens Energy to achieve a comparable revenue growth (excluding currency translation and portfolio effects) in a range of 10% to 12% (previously between 3% and 7%). Profit margin before Special items is now expected around the low end of the guidance range of 1% to 3% due to Siemens Gamesa's poor performance in the first half-year. Accordingly, Net loss of Siemens Energy Group is expected to exceed prior fiscal year’s level of €712m by up to a low-triple-digit million € amount (previously to be on prior fiscal year’s reported level). We confirm previous quarter’s guidance of a positive Free cash flow pre tax up to a low triple-digit million € amount for fiscal year 2023.

The outlook for Siemens Energy assumes no major negative financial impacts from COVID-19 or other pandemic related events, no further deterioration in the supply chain and raw material cost environment, and excludes charges related to legal and regulatory matters. The outlook is based on the following overall assumptions for the segments:

  • GS now plans to achieve a comparable revenue growth of 10% to 12% (previously between 0% and 4%). The targeted Profit margin before Special items remains between 9% and 11% (unchanged).
  • GT now plans to achieve a comparable revenue growth of 12% to 14% (previously between 5% and 9%). The targeted Profit margin before Special items remains between 6% and 8% (unchanged).
  • TI now plans to achieve a comparable revenue growth of 8% to 10% (previously between 5% and 9%). The targeted Profit margin before Special items remains between 3% and 5% (unchanged).
  • Siemens Gamesa plans to achieve a comparable revenue growth of 6% to 10% for the fiscal year 2023 and to reach a Profit margin before Special items towards negative 11%.

Notes and forward-looking statements

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

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Tim Proll-Gerwe

Siemens Energy 

 

Contact

Oliver Sachgau

Siemens Energy 

 

Siemens Energy is one of the world’s leading energy technology companies. The company works with its customers and partners on energy systems for the future, thus supporting the transition to a more sustainable world. With its portfolio of products, solutions and services, Siemens Energy covers almost the entire energy value chain – from power generation and transmission to storage. The portfolio includes conventional and renewable energy technology, such as gas and steam turbines, hybrid power plants operated with hydrogen, and power generators and transformers. A majority stake in the wind power subsidiary Siemens Gamesa Renewable Energy (SGRE) makes Siemens Energy a global market leader for renewable energies. An estimated one-sixth of the electricity generated worldwide is based on technologies from Siemens Energy. Siemens Energy employs around 92,000 people worldwide in more than 90 countries and generated revenue of €29 billion in fiscal year 2022.

www.siemens-energy.com.