SIEMENS AG Strong finish for fiscal 2015
»We delivered what we promised, and are well positioned to deliver on our plans for the year ahead,« said Joe Kaeser, President and Chief Executive Officer of Siemens AG.
Fourth-quarter orders up 15% year-over-year, at €23.7 billion, and revenue 4% higher at €21.3 billion, for a book-to-bill ratio of 1.11
Volume development includes strong currency translation tailwinds; excluding currency translation and portfolio effects, orders up 6% and revenue down 4%
Industrial Business profit up 9%, at €2.5 billion; strong improvements in Energy Management, Wind Power and Renewables, Healthcare and Mobility, more than offset substantial declines in Power and Gas and Process Industries and Drives
Net income lower, at €1.0 billion, due mainly to Centrally managed portfolio activities; basic earnings per share (EPS) of
€1.18 compared to €1.72 in Q4 FY 2014
Free cash flow from continuing and discontinued operations of €4.4 billion, above the high level in the fourth quarter a year ago
Orders and revenue both up 6% compared to fiscal 2014, at €82.3 billion and €75.6 billion, respectively, for a book-to- bill ratio of 1.09; excluding currency translation and portfolio effects, orders and revenue were flat year-over-year
Industrial Business profit up 1%, at €7.8 billion; strong profit growth in Energy Management along with increases in other Divisions and Healthcare, offsetting substantial declines in Power and Gas and Process Industries and Drives; Industrial Business profit margin reached 10.1%, within the expected range
Severance charges totaled €566 million in Industrial Business and €804 million for continuing operations
Net income of €7.4 billion includes €3.0 billion related to divestments of the hearing aid business and Siemens' stake in BSH Bosch und Siemens Hausgeräte GmbH (BSH); basic earnings per share (EPS) up 39% at €8.84, including €3.66 related to the sale of the hearing aid business and the BSH stake
Free cash flow from continuing and discontinued operations of €4.7 billion, down from €5.2 billion in fiscal 2014
Siemens proposes a dividend of €3.50 per share
siemens.com
SiemensQ4 | % Change | |||
(in millions of €) | FY 2015 | FY 2014 | Actual | Comp. |
Orders | 23,716 | 20,549 | 15% | 6% |
Revenue | 21,328 | 20,438 | 4% | (4)% |
Profit Industrial Business | 2,455 | 2,255 | 9% | |
therein: severance | (264) | − | ||
Profit margin Industrial Business | 11.3% | 10.9% | ||
excl. severance | 12.5% | 0% | ||
Income from continuing operations | 1,001 | 1,468 | (32)% | |
therein: severance | (343) | − | ||
Net income | 1,000 | 1,498 | (33)% | |
Basic earnings per share (in €) | 1.18 | 1.72 | (32)% | |
Free cash flow (continuing and discontinued operations) | 4,375 | 3,450 | 27% | |
ROCE (continuing and discontinued operations) | 10.2% | 18.4% | ||
Volume growth influenced strongly by currency translation tailwinds, which added six percentage points to order and five percentage points to revenue development
Orders include a €1.2 billion order for an offshore wind-farm and service in Germany
€110 billion Industrial Business order backlog
Reported revenue increase driven by double-digit growth in Energy Management and in Power and Gas which made acquisitions between the periods under review; Energy Management, Building Technologies, Healthcare, and Digital Factory grew on a comparable basis
Profit Industrial Business: strong improvements in Energy Management, Wind Power and Renewables, Healthcare and Mobility; substantial declines in Power and Gas as well as Process Industries and Drives
Profit development also benefited from positive currency effects, most strongly in Healthcare and Process Industries and Drives
Income from continuing operations includes €72 million in severance charges in Corporate items; decline due mainly to Centrally managed portfolio activities (CMPA), which included an impairment of €138 million as well as losses from equity investments; Q4 FY 2014 included profit of €72 million related to projects remaining from the Metals Technologies business, and equity investment income of €61 million from Siemens' stake in BSH
Free cash flow: increase in Industrial Business from an already high level of €3.855 billion in Q4 FY 2014 to €4.963 billion, driven by positive effects from working capital management, particularly in Power and Gas and Energy Management
ROCE: decline due to lower net income and a substantial increase in average capital employed with the acquisition of Dresser-Rand
Underfunding of Siemens' pension plans as of September 30, 2015: €9.0 billion (June 30, 2015: €8.9 billion)
Q4
% Change
(in millions of €)
FY 2015
FY 2014
Actual
Comp.
Orders
5,275
3,735
41%
13%
Revenue
4,050
3,661
11%
(17)%
Profit
420
543
(23)%
therein: severance
(91)
−
therein: integration costs Dresser-Rand
(19)
Profit margin
10.4%
14.8%
excl. severance and integration costs
13.1%
0%
Wind Power and RenewablesQ4
% Change
(in millions of €)
FY 2015
FY 2014
Actual
Comp.
Orders
2,716
1,810
50%
45%
Revenue
1,504
1,636
(8)%
(10)%
Profit
72
(60)
n/a
therein: severance
(3)
−
Profit margin
4.8%
(3.7)%
excl. severance
5.0%
0%
Energy ManagementQ4
% Change
(in millions of €)
FY 2015
FY 2014
Actual
Comp.
Orders
3,290
2,731
20%
16%
Revenue
3,473
3,120
11%
7%
Profit
259
125
108%
therein: severance
(51)
−
Profit margin
7.5%
4.0%
excl. severance
8.9%
0%
Acquisition of Dresser-Rand and the Rolls-Royce Energy aero- derivative gas turbine and compressor business added 21 percentage points to order growth and 22 percentage points to revenue development
Comparable revenue down significantly due mainly to weaker order intake in prior periods, in particular for large gas turbines
Severance charges and lower margins particularly in the large gas turbine and solutions businesses; positive effect of €55 million related to a project settlement; solid profit from Dresser-Rand and continued strong profit contribution from the service business
Overcapacities and continuing challenges resulting in increased price pressure
Higher volume from large orders; €1.2 billion order for an offshore wind-farm and service in Germany and several large orders in the onshore business
Revenue decline in the onshore business; revenue growth in the service business
Profitability reflects the revenue decline as well as reduction in offshore margins due in part to increased competition; Q4 FY 2014 included charges of €223 million related to inspecting, replacing and repairing wind turbine components
Substantial order growth in all three reporting regions due largely to the solutions and transformer businesses, including a €0.3 billion high voltage direct current transmission contract in Europe
Revenue up in all three reporting regions; strong revenue performance in the transformer and smart grid solutions and services businesses
Profit increase due mainly to higher revenue and stronger profit contributions from projects in the solutions business; Q4 FY 2014 included charges of €41 million from project execution challenges
Q4
% Change
(in millions of €)
FY 2015
FY 2014
Actual
Comp.
Orders
1,662
1,564
6%
0%
Revenue
1,679
1,544
9%
3%
Profit
222
190
16%
therein: severance
(7)
−
Profit margin
13.2%
12.3%
excl. severance
13.6%
0%
Order growth in the Americas and the region comprising Europe, the Commonwealth of Independent States, Africa and the Middle East (Europe/CAME) due mostly to currency translation effects
Revenue growth due to the service and product businesses, partly held back by a decline in the solution business
In a typically robust fiscal year-end quarter, profit development benefited from a larger share of higher-margin service and product businesses
MobilityQ4
% Change
(in millions of €)
FY 2015
FY 2014
Actual
Comp.
Orders
2,387
2,734
(13)%
(17)%
Revenue
1,998
2,109
(5)%
(10)%
Profit
171
124
38%
therein: severance
(34)
−
Profit margin
8.6%
5.9%
excl. severance
10.2%
0%
Lower volume from large orders; Q4 FY 2014 included large orders for light rail vehicles in the U.S. and for commuter and regional trains in the U.K. totaling €0.8 billion
Revenue growth in the infrastructure business; as expected, lower revenue overall due to timing of large rail projects
Profitability improved as planned and benefited from a more favorable revenue mix due to a larger share of higher-margin infrastructure business
Digital FactoryQ4
% Change
(in millions of €)
FY 2015
FY 2014
Actual
Comp.
Orders
2,520
2,311
9%
5%
Revenue
2,654
2,526
5%
1%
Profit
483
482
0%
therein: severance
(28)
−
Profit margin
18.2%
19.1%
excl. severance
19.3%
0%
Order growth led by industry software business; increases in all three reporting regions, including positive currency translation effects
Strong revenue growth in industry software business; on a regional basis, decline in China, including the high-margin factory automation business due primarily to the industrial deceleration in the country, as well as lower revenue in Germany
Margin expansion in industry software business due mainly to increased demand in digitalization
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