Reserve orders hit a new high

Siemens’ revenues for the second quarter of fiscal 2024 were €19.2 billion (Q2 fiscal 2023: €19.4 billion), essentially flat on a comparable basis compared to the same period last year (i.e. excluding the impact of currency movements and business mix). New orders decreased by 12% on a comparable basis to €20.5 billion (Q2 FY2023: €23.6 billion, mainly due to large orders from Siemens Transportation). The book-to-bill ratio was strong at 1.07. With an order backlog of 114 billion euros, Siemens once again set a new record and continues on a steady path of growth.

IC200UEX264 Total profit from physical operations was €2.5 billion, close to the level of the same period last year (Q2 FY2023: €2.6 billion). Physical business margin was 14.0% (second quarter fiscal 2023:14.2%). Net income declined to €2.2 billion from €3.6 billion in the second quarter of fiscal 2023, which had benefited from a €1.6 billion tax-free gain from the reversal of the impairment of the company’s stake in Siemens Energy AG. Based on net income before the acquisition price, basic earnings per share amounted to €2.73 (Q2 FY2023: €4.57, of which €2.01 basic earnings per share was due to the reversal of impairments).

Siemens Group level free cash flow from continuing and non-continuing operations was €1.3 billion (Q2 FY2023: €2.3 billion). The decrease in free cash flow was primarily due to the decrease in free cash flow generated by physical operations. Eur 2.1 billion in the second quarter of fiscal 2024 (Q2 fiscal 2023: EUR 2.7 billion).

Smart Infrastructure and Siemens Transportation revenue grew significantly

IC200UEX264 In a challenging market environment, the Digital Industries Group’s new orders fell by 12% on a like-for-like basis to €4.3 billion, mainly due to continued high customer and distributor inventory levels, notably in China. On the other hand, Siemens’ software business saw a significant increase in orders due to significant growth in its electronic design automation (EDA) software business in the US market. Digital Industries Group revenue declined 11% on a comparable basis to €4.5 billion, with lower automation revenue partially offset by higher software revenue, particularly in the high-margin product-related business, primarily in the EDA segment. Profits fell 41 per cent to €741m, with a margin of 16.5 per cent. The decrease in profit and profitability was mainly due to lower capacity utilization due to lower revenue and the product mix to be optimized in the automation business.

The Smart Infrastructure Group’s new order book increased by 10% on a like-for-like basis to €6.1 billion, with growth across all its businesses. This is the first time that the Intelligent Infrastructure Group’s orders exceeded €6 billion in a single quarter, setting a record for quarterly new orders. In terms of geographical distribution, growth was mainly driven by the US market, where electrical products and electrification businesses won multiple orders among data center operators. All businesses contributed to the increase in revenue, which increased by 6% on a comparable basis to €5.1 billion, with the most significant growth in the electrification business, which was driven by strong execution of a large backlog of orders. By region, the US was the fastest growing market, with profits up 10% year-on-year to €854 million. Profit margin was 16.6% (Q2 FY2023:15.9%).

Siemens Transportation revenue grew significantly, up 6% on a comparable basis to €2.8 billion, with growth across all of its businesses. New orders, on the other hand, fell 49% on a comparable basis to €3.2 billion. The new orders include a €400 million contract for light rail systems in the United States and several large orders for locomotives in Europe. The second quarter of fiscal 2023 included a number of large orders including 2.9 billion euros of locomotive and related maintenance orders in India. Profit and profitability improved in nearly all transportation businesses in the second quarter of fiscal 2024 due to higher revenue and strong project execution. Profits totaled 237 million euros. Profit margin was 8.4%, compared to 9.2% in the second quarter of fiscal 2023, when profit and profitability benefited from the positive impact of the delay effect related to Russia.