Siemens reports a solid result for the third quarter of 2023. On a comparable basis, sales grew by 10% to €18.9 billion (Q3/2022: €17.9 billion) and order intake by 15% to €24.2 billion (Q3/2022: €22.0 billion). At €2.8 billion, earnings from industrial business were at a similar level to the same quarter of the previous year (Q3/2022: €2.9 billion), although earnings continue to be impacted by the investment in the former energy division Siemens Energy. Profit after tax therefore amounted to €1.4 billion (Q3/2022: €-1.5 billion).

While Siemens had raised its forecast for the current fiscal year following the earnings presentations in the first and second quarters, the Group confirmed the forecast from the second quarter: the Munich-based company expects revenue growth of 9 to 11%. The forecast was adjusted in the Digital Industries division, more on this on the next page.

Digital industries and smart infrastructure as growth drivers

At EUR 2.8 billion, earnings were slightly down on the same quarter of the previous year (Q3/2022: EUR :2.9 billion), which included a profit of EUR 739 million from the sale of Yunex. The profit margin amounted to 15.3% (Q3/2022: 17.0%). Profit after tax rose to €1.4 billion, following a loss after tax of €1.5 billion in the same quarter of the previous year due to an impairment loss on the investment in Siemens Energy and Russia-related effects. The pro rata loss from the investment in Siemens Energy amounted to €0.6 billion in Q3/2023. Siemens cites the Digital Industries and Smart Infrastructure divisions as growth drivers.

Free cash flow (all-in) from continuing and discontinued operations reached EUR 3.0 billion at Group level (Q3/2022: EUR 2.3 billion) and is mainly the result of the very strong free cash flow from the industrial business of EUR 3.1 billion (Q3/2022: EUR 2.5 billion).

The results of the individual divisions

Digital Industries: Strong impetus from the automation business

On a comparable basis, turnover in the Digital Industries division increased by 11% to EUR 5.3 billion. The automation businesses in particular contributed to this, including Factory Automation and Process Automation. Order intake fell by 35% to EUR 4.1 billion on a comparable basis. The decline extends across all regions and is due to the development of incoming orders in the Factory Automation business. Orders here were higher in the previous quarters due to customer orders being brought forward. The software business is developing well: here, incoming orders increased due to several larger orders.

Earnings grew by 24% to EUR 1.1 billion, while the earnings margin amounted to 21.1%. Growth was supported by higher capacity utilization and a more favourable business mix with improved component availability for high-margin products.

In the previous quarter, the Group raised its forecast for the Digital division - from 12 to 15% to 17 to 20% for sales and from 20 to 22% to 22.5 to 23.5% for the profit margin. Siemens is now adjusting them: For the current fiscal year, the Munich-based company now expects sales growth on a comparable basis of 13 to 15% and an earnings margin of now 22 to 23%

Digital Infrastructure: Electrification business grows

Smart Infrastructure is at a similar level to the same period of the previous year. The order growth in the Electrification business is also attributable to several major orders from data centers and customers in the areas of battery production and power distribution. Incoming orders amounted to EUR 5.4 billion (Q3/2022: EUR 5.5 billion). The 15% like-for-like sales growth from EUR 4.4 billion in Q3/2022 to EUR 4.9 billion was supported by all businesses, above all Electrification and Electrical Products. These two divisions were also responsible for the higher earnings and increased profitability: earnings rose by 37% to EUR 769 million. The profit margin reached 15.6% compared to 12.9% in the same quarter of the previous year.

Siemens confirmed its forecast from the second quarter for the Smart Infrastructure division: sales growth on a comparable basis of between 14% and 16% and an earnings margin in the range of 14.5% to 15.5% are still expected.

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Mobility: Record order intake

The Mobility division reported a record order intake: due to major orders, order intake rose from 2.8 billion euros in the same quarter of the previous year to 8.3 billion euros in the third quarter of 2023. The increase is attributable to major orders, including a EUR 2.5 billion order for the first line of a turnkey rail system in Egypt, a EUR 2.1 billion order for S-Bahn trains in Germany, a EUR 0.6 billion order for intercity trains and service in the USA and a EUR 0.5 billion service contract for rail vehicles in the United Kingdom.

On a comparable basis, sales revenue grew by 12% to EUR 2.6 billion. Earnings and profitability increased in all businesses; however, at EUR 208 million, they did not reach the high level of the same quarter in the previous year, which was due to a profit of EUR 739 million from the sale of Yunex. Impairment losses and other charges of €89 million due to the termination of business activities in Russia also had a negative impact on earnings.

Siemens also confirms its forecast for the Mobility segment: for the current fiscal year 2023, revenue growth on a comparable basis of between 10% and 12% and an earnings margin of between 8% and 10% are still expected.

Siemens Healthineers: Decline in incoming orders

The continued sharp decline in demand for rapid coronavirus antigen tests is weighing on Siemens Healthineers' Diagnostics business. Order intake fell from €6.1 billion in the third quarter of 2022 to €5.6 billion in the past quarter. On a comparable basis, revenue increased by 4% from €5.19 billion to €5.20 billion. The higher earnings are attributable to the Imaging and Advanced Therapies businesses.