Group sales increased by 14% to EUR 19.4 billion in the second quarter of the current financial year. Incoming orders rose by 13% to 23.6 billion euros. According to the Group, the order backlog reached a new record level of 105 billion euros. The book-to-bill ratio, i.e. the ratio of new orders to sales, amounted to 1.22. As a result, profit after tax increased to €3.6 billion. Siemens also benefited from a tax-free profit of €1.6 billion due to a write-up of the Group's stake in Siemens Energy.

As a consequence, Siemens raised its forecast for the current fiscal year. The Group now expects revenue growth on a comparable basis (adjusted for currency translation and portfolio effects) of 9 to 11%. Previously, the management had assumed growth of 7 to 10 %.

CEO Roland Busch is pleased: "Siemens continues its excellent performance and achieved several records, including impressive margin increases and all-time highs in Digital Industries and Smart Infrastructure results as well as another record order backlog. Our very strong results show that we have the right strategy, the right technology and the right team to help our customers become more competitive, resilient and sustainable."

Industrial business almost doubled

The result from Industrial Business rose by 47% to EUR 2.6 billion (Q2/22: EUR 1.8 billion). The earnings margin amounted to 14.2% and was therefore 3.2 percentage points higher than in the same quarter of the previous year (Q2 2022: 11.0%). Profit after tax almost tripled to EUR 3.6 billion (Q2/22: EUR 1.2 billion). The Group benefited from a tax-free profit of €1.6 billion due to a write-up of the Siemens stake in Siemens Energy.

Free cash flow "all-in" from continuing and discontinued operations amounted to €2.3 billion at Group level, compared to €1.3 billion in the second quarter of 2022. The Industrial Business recorded a free cash flow of EUR 2.7 billion (Q2/22: EUR 1.9 billion).

An overview of the divisions can be found on the next page.

Digital Industries - Highest quarterly result ever achieved

Digital Industries increased its sales on a comparable basis by 23% to €5.5 billion - according to Siemens, this is the highest quarterly result ever achieved. The double-digit percentage growth extends across all areas. The highest contributions to growth came from the automation businesses due to improved availability of components and accelerated processing of the order backlog. On a comparable basis, incoming orders fell by 10% to EUR 5.3 billion and were below the level of the same quarter in the previous year. In the software business, order intake increased, mainly due to some larger orders, according to Siemens.
Earnings rose by 57% to €1.3 billion, making it the highest quarterly result ever achieved; the earnings margin was 23.5%. Earnings and profitability increased in all automation businesses.

Smart Infrastructure

9% growth in incoming orders was recorded in Smart Infrastructure, bringing the total to EUR 5.5 billion. The increase is mainly due to strong growth in the Electrivication business as a result of a number of major orders from data centers, the semiconductor industry and customers in the electricity distribution sector. On a comparable basis, sales grew by 21% to EUR 4.9 billion. The Electrical Products and Electrification businesses were the main contributors to the double-digit sales growth. Earnings rose by 75% to 779 million euros. At 15.9%, the profit margin increased compared to the same quarter of the previous year (11.1%). Both earnings and profitability recorded the highest level ever achieved in a quarter.
The fact that the quarterly result and profitability reached their highest level ever is due to improvements in all businesses. According to the Group, this includes higher sales revenue, increased capacity utilization, a more favourable business mix and cost savings from the implementation of the ongoing program to increase competitiveness.

Mobility

The Mobility division also reported a record figure: the division more than doubled its order intake and achieved a new quarterly high: order intake amounted to EUR 6.2 billion in the past quarter (Q2/22: EUR 2.5 billion). This growth is attributable to a number of major orders, including an order worth EUR 2.9 billion for locomotives and associated maintenance in India and an order worth EUR 0.3 billion in Singapore for signaling systems and railroad infrastructure. Sales revenue grew by 33% on a comparable basis to EUR 2.7 billion, with growth contributions from all businesses and led by a very strong increase in the rolling stock business.
Earnings rose to 247 million euros, with a profit margin of 9.2%. Earnings and profitability were therefore back in positive territory, in contrast to the same quarter of the previous year, which was impacted by charges of EUR 0.6 billion as a result of sanctions imposed on Russia. The past quarter benefited from Russia-related effects in the amount of EUR 78 million, which were largely offset by provisions for incentive payments and a less favorable business mix, according to the Group.

Siemens Healthineers

Siemens Healthineers recorded a 14% decline in order intake compared to the same quarter of the previous year. This is attributable to the sharp decline in demand for rapid coronavirus antigen tests in the Diagnostics business, which also recorded charges of €77 million (excluding personnel restructuring) in connection with its transformation program. In contrast, the division recorded sales growth in the Varian, Imaging and Advanced Therapies businesses. However, this was not enough to have a positive impact on earnings: Earnings fell from 875 million euros (Q2/22) to 288 million euros (Q2/23). Profitability was also impacted by impairment losses and other charges totaling EUR 329 million. The charges are attributable to a management decision to realign certain activities in the Advanced Therapies business as well as cost increases, particularly in procurement and logistics.

Outlook: Record year expected

With results already exceeding expectations for 2023, the Group is raising its forecast. Like-for-like sales growth of 9 to 11% is now expected; previously, growth of 7 to 10% was anticipated. The book-to-bill ratio is expected to remain above 1.

The Digital Industries division is expected to achieve like-for-like revenue growth of between 17% and 20% in the 2023 financial year (previously between 12% and 15%). The earnings margin is now expected to be between 22.5% and 23.5% (previously between 20% and 22%).

Smart Infrastructure now expects revenue growth on a comparable basis of between 14% and 16% in the 2023 financial year (previously between 9% and 12%) and an earnings margin in the range of 14.5% to 15.5% (previously 13.5% to 14.5%).

The Mobility business division is expected to achieve sales growth on a comparable basis of between 10% and 12% (previously between 6% and 9%). The profit margin is still expected to be between 8% and 10%.

Siemens is expected to achieve higher EPS pre PPA in the range of €9.60 to €9.90 (previously €8.90 to €9.40) in fiscal year 2023 due to the profitable growth of the industrial businesses.