Over the past few days, the financial press was pretty much unanimous: Siemens' quarterly figures were expected to be poor. But they are now better than expected. This is due to the very good result of the Digital Industries division: the adjusted operating result of the industrial businesses (EBITA) increased by 8% to just under €1.8 billion. According to the company's press release on August 6, a positive effect of 211 million euros at Digital Industries contributed to this, which influenced the margin by 1.7 percentage points. The "positive effect" refers to a revaluation of the shareholding in Bentley Systems.

Nevertheless, the overall result is influenced by the negative effects of the Covid-19 pandemic.

Strong software business ensures upswing

But now from the beginning: Group revenue fell by 5% to €13.491 billion, while profit after tax fell by 53.3% to €535 million. In total, adjusted EBITA in the Industrial Businesses - i.e. the core of the future Siemens AG with Digital Industries, Smart Infrastructure, Siemens Mobility and Siemens Healthineers - amounted to €1.8 billion. This corresponds to an increase of 8% compared to the previous year. On the one hand, this increase is attributable to the strong performance of Digital Industries, specifically the software business. On the other hand, there was a slight increase in sales at Mobility; however, this was offset by declines in the three other industrial businesses.

At €14.402 billion, order intake was also down (-7%) and could not be turned into positive territory even thanks to an increase in the volume of major orders. Siemens cited weaker demand at Siemens Healthineers and Smart Infrastructure due to the coronavirus pandemic as the reason for the decline in order intake.

Free cash flow at Group level increased by €0.4 billion compared to the previous year to €2.5 billion. All units, but above all Siemens Mobility, contributed to this significant improvement. In the discontinued operations, a positive free cash flow of €433 million (Q3 2019: minus €287 million) was achieved. This was mainly due to a series of measures in Asset Management at Siemens Energy.

The divisions in detail

Despite the effects of Covid-19, the decline in order intake in the Digital Industries division was cushioned by business in China and larger contracts in the software business. Sales in the automation business declined significantly. Cost savings and significantly higher sales in the software business nevertheless led to an increase in earnings.Smart Infrastructure suffered a drop in incoming orders. The lower turnover in the high-margin product business was also reflected in earnings and profitability for the quarter.

Picture gallery: The new Siemens Executive Board

Picture gallery: Klaus Helmrich retires at the end of March 2021. His successor on the Siemens Executive Board will be Cedrik Neike on October 1. To the picture gallery

Siemens Mobility developed positively: order intake and sales increased. Numerous new major orders in various business areas of the unit led to an increase in order intake, led by the order from Deutsche Bahn worth €1.1 billion: From 2022, 30 new high-speed trains from Siemens will strengthen the DB long-distance fleet. Sales also increased in the quarter, primarily driven by growth in the train business. The unsatisfactory earnings situation in the 3rd quarter will improve again in the 4th quarter and be within the target corridor.

Due to the unpredictable situation caused by the coronavirus, Siemens is not providing an outlook or an estimate for the rest of the fiscal year.