Munich, Germany, January 31, 2017

Siemens continues on road to success - earnings outlook raised

»With a strong first quarter and a considerably raised outlook for fiscal 2017, we are sending a clear signal. I am proud of my global Siemens team that has been working hard and has delivered convincing success. We will continue to rigorously execute our strategy program Vision 2020 to even further strengthen our innovation power and customer proximity,« said Joe Kaeser, President and Chief Executive Officer of Siemens AG.

  • Benefiting from a strong performance by short-cycle businesses, revenue up 3% on a comparable basis, excluding currency translation and portfolio effects

  • Orders 14% below Q1 FY 2016 on a comparable basis; the prior-year quarter included a higher volume from large orders

  • Order intake continues to exceed revenue resulting in a book-to-bill ratio of 1.02

  • On a nominal basis, revenue 1% higher at €19.1 billion; orders of €19.6 billion, down 14% compared to the prior-year quarter

  • Significant margin expansion in most industrial businesses due to strong operational execution, and a €172 million portfolio gain, take Industrial Business profit margin up to 13.0%; Industrial Business profit climbs 26% year-over-year, to

    €2.5 billion; Centrally managed portfolio activities posted profit of €0.4 billion

  • Net income of €1.9 billion, up 25%; basic earnings per share (EPS) of €2.35 compared to €1.89 in Q1 FY 2016

siemens.com Siemens

Q1

% Change

(in millions of €)

FY 2017

FY 2016

Actual

Comp.

Orders

19,554

22,801

(14)%

(14)%

Revenue

19,119

18,891

1%

3%

Profit

Industrial Business

2,514

1,990

26%

therein: severance

(48)

(52)

Profit margin Industrial Business

13.0%

10.4%

excl. severance

13.2%

10.7%

Income from continuing operations

1,927

1,484

30%

therein: severance

(63)

(62)

Net income

1,938

1,557

25%

Basic earnings per share (in €)

2.35

1.89

25%

Free cash flow (continuing and discontinued operations)

714

(728)

n/a

ROCE (continuing and discontinued operations)

18.9%

16.3%

  • Currency translation effects took one percentage point from order and two percentage points from revenue development; portfolio effects had a minimal effect on volume development year-over-year

  • Compared to strong order intake in Q1 FY 2016, orders down due to a lower volume of large orders

  • Industrial Business order backlog was €115 billion

  • Revenue increased in the majority of industrial businesses

  • Profit Industrial Business: higher profit in nearly all industrial businesses; Digital Factory posted the highest profit and largest increase, benefiting also from a €172 million gain related to the eCar business which was contributed to a joint venture; Healthineers and Power and Gas also contributed substantial profit along with strong earnings growth

  • Income from continuing operations: higher Industrial Business profit and a pretax profit contribution of €409 million from Centrally managed portfolio activities (CMPA); Q1 FY 2016 benefited from lower tax expenses due to the release of a deferred tax liability

  • Strong working capital management drives €1.4 billion positive swing in Free cash flow; Free cash flow from Industrial Business increased to €1.286 billion from €68 million in Q1 FY 2016; improvement was due mainly to Energy Management, Mobility and Wind Power and Renewables

  • Higher net income substantially increased ROCE, despite a moderate increase in average capital employed

  • Provisions for pensions and similar obligations as of December 31, 2016: €11.1 billion (September 30, 2016: €13.7 billion); decreased significantly mainly due to higher discount rate assumptions

    Q1

    % Change

    (in millions of €)

    FY 2017

    FY 2016

    Actual

    Comp.

    Orders

    3,309

    5,537

    (40)%

    (40)%

    Revenue

    3,895

    3,680

    6%

    7%

    Profit

    458

    349

    31%

    therein: severance

    (1)

    (22)

    therein: integration costs Dresser-Rand

    (5)

    (13)

    Profit margin

    11.8%

    9.5%

    excl. severance and integration costs

    11.9%

    10.4%

    Wind Power and Renewables

    Q1

    % Change

    (in millions of €)

    FY 2017

    FY 2016

    Actual

    Comp.

    Orders

    1,436

    1,898

    (24)%

    (24)%

    Revenue

    1,384

    1,197

    16%

    18%

    Profit

    111

    51

    119%

    therein: severance

    (1)

    Profit margin

    8.0%

    4.2%

    excl. severance

    8.1%

    4.3%

    Q1

    % Change

    (in millions of €)

    FY 2017

    FY 2016

    Actual

    Comp.

    Orders

    2,990

    3,500

    (15)%

    (14)%

    Revenue

    2,808

    2,765

    2%

    3%

    Profit

    189

    183

    3%

    therein: severance

    (12)

    Profit margin

    6.7%

    6.6%

    excl. severance

    7.2%

    6.6%

    Energy Management
  • Lower volume from large orders compared to Q1 FY 2016, which included a €1.6 billion order for the solutions and service businesses in Egypt, and reduced new-unit business in an unfavorable market environment; sharp decline in the region Europe, C.I.S., Africa, Middle East (Europe/CAME) and substantial decline in the Americas

  • Revenue growth driven by strong execution from the backlog, particularly including large orders in Egypt

  • Profitability influenced by improved project execution, higher profitability in the service business and lower severance charges

  • Overcapacities from market weakness continue to create an aggressive competitive environment, resulting in ongoing price pressure

  • Lower volume from large orders included a €0.7 billion contract win for an offshore wind-farm, including service, in Belgium; Q1 FY 2016 included a €1.0 billion order for an offshore wind-farm, including service, in the U.K.; book-to-bill ratio above 1

  • Revenue growth in all businesses, most pronounced in the offshore business in Europe

  • Strong profitability driven by the revenue increase, higher productivity, positive effects related to project execution, higher capacity utilization, and a larger contribution from the service business

  • Lower volume from large orders; Q1 FY 2016 included a large high-voltage direct current (HVDC) order in Africa won by the transmission solutions business; book-to-bill ratio above 1

  • Revenue growth with increases in nearly all businesses

  • Higher profit in a majority of businesses led by the high voltage products and transmission solutions businesses

    Q1

    % Change

    (in millions of €)

    FY 2017

    FY 2016

    Actual

    Comp.

    Orders

    1,715

    1,547

    11%

    11%

    Revenue

    1,552

    1,479

    5%

    5%

    Profit

    170

    131

    29%

    therein: severance

    (5)

    (1)

    Profit margin

    10.9%

    8.9%

    excl. severance

    11.2%

    8.9%

    • Strong order growth particularly in the solutions business; orders up in all reporting regions, including double-digit increases in Asia, Australia and the U.S.

    • Robust order intake in recent periods lifted revenue across the businesses and in all reporting regions

    • Profit growth supported by higher revenue and productivity increases particularly in the product business

      Mobility

      Q1

      % Change

      (in millions of €)

      FY 2017

      FY 2016

      Actual

      Comp.

      Orders

      2,151

      2,663

      (19)%

      (17)%

      Revenue

      1,801

      2,044

      (12)%

      (8)%

      Profit

      163

      193

      (15)%

      therein: severance

      (4)

      (3)

      Profit margin

      9.1%

      9.4%

      excl. severance

      9.3%

      9.6%

      Q1

      % Change

      (in millions of €)

      FY 2017

      FY 2016

      Actual

      Comp.

      Orders

      2,693

      2,492

      8%

      7%

      Revenue

      2,562

      2,465

      4%

      4%

      Profit

      668

      417

      60%

      therein: severance

      (6)

      (6)

      Profit margin

      26.1%

      16.9%

      excl. severance

      26.3%

      17.2%

      Digital Factory
  • Despite lower volume from large orders, book-to-bill ratio significantly above 1; the current period included major contract wins in Europe/CAME, most notably a €0.4 billion order for commuter rail in Austria, as well as a contract win in the U.S. for light rail vehicles; Q1 FY 2016 included a large commuter rail contract in Germany and Siemens' largest-ever rail automation order

  • Decline in revenue particularly in the rolling stock business due to timing factors related to the execution of large rail projects

  • Profit decline due mainly to lower revenue; solid project execution kept profitability on a high level

  • Orders and revenue up in all regions including double-digit increases in China; volume growth particularly in the Division's short cycle businesses

  • Profit and profitability increased significantly in the high-margin short-cycle businesses

  • Profit included a non-cash gain of €172 million related to the eCar business which the Division contributed to a newly formed joint venture, Valeo Siemens eAutomotive; Siemens' share in the joint venture is reported within CMPA

Siemens AG published this content on 31 January 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 31 January 2017 19:16:01 UTC.

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