Siemens Energy delivers a successful first full fiscal year

November 10, 2021
Munich

  • Revenue increased, order backlog at €83.8 billion
  • Measures to improve competitiveness in Gas and Power segment are taking effect: operational profitability improved significantly
  • Restructuring costs and losses at SGRE result in net loss
  • Solid fourth quarter with strong revenue, orders and cash flow in both segments
  • Executive Board and Supervisory Board intend to propose a dividend of €0.10 per share

 

Managing still challenging market conditions, Siemens Energy has successfully completed its first full fiscal year as an independent company. At its Annual Press Conference in Munich today, the energy technology company presents its key financial figures for fiscal year 2021, which ended on September 30, 2021. Results will be announced for the Gas and Power Segment and the Siemens Energy Group as a whole. The second reporting segment Siemens Gamesa Renewable Energy (SGRE), which is listed as an independent company on the Spanish stock exchange, already presented its financial figures on November 5. 

“I'm pleased with our first full fiscal year performance as a stand-alone company. The team did an excellent job and laid the foundation for our transformation in a challenging market environment, and I am particularly pleased with our progress in the Gas and Power segment where we improved our operational profitability. Siemens Energy has posted a net loss primarily due to the planned restructuring measures and the known problems in the onshore business of Siemens Gamesa Renewable Energy. Looking forward, we will continue to focus on our plan to increase profitability which puts us on track to achieve our mid-term targets,” says Christian Bruch, CEO of Siemens Energy AG.

Orders at Siemens Energy remained high at €33 billion. Although orders decreased moderately, by 2.9% year-over-year, this was expected, on the one hand due to currency translation effects, on the other hand because SGRE reported an exceptionally high orders in the past fiscal year. In the Gas and Power segment, the Transmission business made a particularly positive contribution to order intake with major orders for high-voltage direct current transmission (HVDC), including the SuedOstLink and SuedLink projects in Germany. With its HVDC technology, Siemens Energy is one of the industry leaders and is involved in Germany's largest energy infrastructure project, SuedLink. Recently, Siemens Energy was also awarded its first large-scale offshore grid connection project in the USA, off the coast of New York State. Siemens Energy, in a consortium with Norway's Aker Solutions, will supply the HVDC transmission system that will transport the green electricity the 50 kilometers from the wind farm to the mainland. The order backlog at the Group level was €83.8 billion at the end of fiscal year 2021. Siemens Energy's revenue increased by 3.7% to €28.5 billion in fiscal year 2021 due to growth in both segments and was within the guidance range.

Significant growth in operating profit

With Adjusted EBITA before Special Items of €661 million, earnings improved significantly in fiscal year 2021. In the prior year, a loss of €17 million was recorded. This was mainly due to operating improvements in the Gas and Power segment, which had a positive impact on earnings. In February 2021, Siemens Energy presented measures to improve its competitiveness, which are already showing an impact. For example, purchasing activities were bundled and parts of production optimized. In addition, savings have been made in material and personnel costs. With regard to personnel costs in Germany, in mid-September management and employee representatives reached a solution by concluding a reconciliation of interests and a master severance scheme. Adjusted EBITA margin before Special Items was also within the adjusted guidance range at 2.3%. Special Items amounted to €673 million in fiscal year 2021 and mainly comprised restructuring and integration costs as well as a small share of one-time costs still associated with the carve-out. Adjusted EBITA almost reached break-even with a loss of €12 million. In fiscal year 2020 the loss was still around €1.5 billion, caused by restructuring and non-recurring costs, portfolio-related impairments and write-downs. As expected, Siemens Energy closed fiscal year 2021 with a net loss of €560 million, due to Special Items and losses at SGRE. This was a significant improvement compared to the prior year’s net loss of around €1.9 billion. Free Cash Flow pre tax increased by 39.1% to around €1.36 billion.

In light of the favorable development, especially the strong cash flow, the Executive Board and the Supervisory Board intend to propose a dividend of €0.10 per share to the Annual General Meeting.

This was Siemens Energy's first fiscal year as an independent company. The energy technology company was fully spun off from Siemens AG in September 2020 and listed on the Frankfurt Stock Exchange on September 28. As early as December, the company was admitted to the MDax, and on March 22, 2021, it also became a member of Germany's highest share index, the DAX, which at that time still consisted of 30 stocks. Siemens Energy employs a total of 91,000 people and operates in more than 90 countries. The company focuses on the strategic areas of "low- or zero-emission power generation", "transportation and storage of energy," and "reducing CO2 emissions and energy consumption in industrial processes." An estimated one-sixth of the world's power generation is based on technologies from Siemens Energy.

Solid fourth quarter with high orders and strong cash flow

In Q4, Siemens Energy benefited from high orders, which increased by 30.2% to €9.1 billion yearover-year, due to several large orders in both segments. In addition to the SuedLink grid expansion project, which will transport electricity generated by wind power from the North Sea to southern Germany, Siemens Energy won an order for the Sun Ba combined-cycle gas turbine power plant in Taiwan. The plant, with an installed electrical capacity of 1,100 megawatts, will be an important building block in Taiwan's energy transition, which aims to switch from coal and nuclear power to more environmentally friendly gas-fired power plants and renewable energies. For both segments, Q4 was the strongest quarter in fiscal year 2021 in terms of revenue, with Siemens Energy's revenue increasing by 7.4% to €8.2 billion. The Gas and Power segment achieved considerable growth, while SGRE kept up the strong level of Q4 in the previous year. The service business also proved to be resilient and profitable in the past fiscal year and contributed to revenue. Adjusted EBITA before Special Items at Siemens Energy was negative at €46 million. This was mainly due to a loss at SGRE, which could not be offset despite a strong operating improvement at Gas and Power. The past quarter was negatively impacted by Special Items of €281 million, mainly due to the measures taken to enhance competitiveness at Gas and Power. Accordingly, Siemens Energy's Adjusted EBITA was negative at €327 million, compared with a loss of €332 million in the same quarter a year earlier. The net loss in the fourth quarter decreased only slightly by 1.9% compared to the prior-year’s quarter to minus €383 million. This was caused by negative earnings development at SGRE due to project burdens in the onshore business and start-up costs in a production area for offshore platforms. On the other hand, Free Cash Flow pre tax improved sharply, rising by almost 40% yearover-year to €985 million, benefiting from early project payables and successes in asset management.

Maria Ferraro, CFO of Siemens Energy AG: "Our results today demonstrate our strategy for Gas and Power segment announced last year at our Capital Market Day is paying off. We have achieved significant improvements in operating profit and ended our first full year as a company with extremely strong cash flow. Although we still have a lot of work to do to achieve our mid-term goals, with the steps we have taken this year, we are well on our way.”

Outlook for fiscal year 2022

In fiscal year 2022, Siemens Energy expects comparable revenue development (excluding currency translation and portfolio effects) to be in a range of negative 1% to positive 3% (Actual figure FY 2021: 6.0%) and an Adjusted EBITA margin before Special Items of 3% to 5% (Actual figure FY 2021: 2.3%). Siemens Energy expects a sharp improvement towards their target of positive net income (Actual figure FY 2021: net loss of €560m). Free Cash Flow pre tax is expected to be in a range of a positive mid-triple-digit million € (Actual figure FY 2021: €1,358m). For the GP segment in fiscal year 2022, a comparable revenue growth to be in a range of 1% to 5% (Actual figure FY 2021: 4.1%) is expected and Adjusted EBITA margin before special items is expected to be between 4.5% and 6.5% (Actual figure FY 2021: 4.6%). For the SGRE segment, in fiscal year 2022 a comparable decline of revenue between negative 2% and negative 7% is expected (Actual figure FY 2021: growth of 9.0%). Adjusted EBITA margin before special items is expected to be in a range of 1% to 4% (Actual figure FY 2021: negative 1.0%). The guidance assumes no major financial impacts from COVID-19 on our business activity and excludes charges related to legal and regulatory matters.

Siemens Energy will publish its complete Annual Report on December 7, 2021, and the Sustainability Report will be published on January 25, 2022.

Contact

Tim Proll-Gerwe

Siemens Energy 

 

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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. More than 50 percent of the portfolio has already been decarbonized. A majority stake in the listed company 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 more than 90,000 people worldwide in more than 90 countries and generated revenue of around €27.5 billion in fiscal year 2020.

www.siemens-energy.com.