Outstanding start to fiscal 2021 - Guidance raised

(PresseBox) ( München, )

»Our team has delivered an outstanding performance in a rather complex environment. I am grateful to be able to hand over such a strong enterprise to the next generation of management,« said Joe Kaeser, President and Chief Executive Officer of Siemens AG.
Orders surged 15% on a comparable basis, excluding currency translation and portfolio effects, and revenue was up 7%, with all industrial businesses contributing to growth
On a nominal basis, orders climbed 11% to €15.9 billion, driven by higher volume from large orders in Mobility; revenue rose 3%, to €14.1 billion; the book-to-bill ratio was 1.13
Adjusted EBITA Industrial Businesses jumped 39% to €2.1 billion, including strong operating performances and sharply lower severance charges, resulting in Adjusted EBITA margin Industrial Businesses of 16.0%
Net income rose substantially to €1.5 billion; corresponding increase in basic earnings per share (EPS) to €1.72
Strong Free cash flow from continuing and discontinued operations of €1.0 billion (Q1 FY 2020: €44 million)

During the quarter the businesses of Flender (previously reported in Portfolio Companies) were classified as held for disposal and discontinued operations; prior-period amounts are presented on a comparable basis.

Continuing complex macroeconomic environment influenced by the coronavirus pandemic (COVID-19); pent-up demand and growth opportunities during the quarter that varied by business and geographic region, including strong growth in China
Substantial currency translation effects took five percentage points each from order and revenue growth year-over-year; portfolio effects added one percentage point each to order and revenue growth year-over-year
Order intake increased in all four industrial businesses on a comparable basis, led by Mobility which recorded a sharply higher volume from large orders
Revenue also up in all four industrial businesses on a comparable basis; on a geographic basis, growth was most notable in China and Germany
Adjusted EBITA Industrial Businesses rose sharply at Digital Industries, including recovery in the high-margin short-cycle businesses and sharply lower severance charges; substantial increases also at Smart Infrastructure and Siemens Healthineers; Mobility continued to perform successfully, holding Adjusted EBITA and profitability steady at prior-year, pre-COVID-19 levels; overall, negative impact from currency effects was strongest at Siemens Healthineers
Outside Industrial Businesses, positive change in Corporate items primarily from transfers of assets to Siemens Pension-Trust e.V.
in Germany totaling €138 million; Q1 FY 2020 included an even higher amount of gains related to investments for Siemens Real Estate and Siemens Financial Services
Net income rose on substantially higher Adjusted EBITA Industrial Businesses partly offset by a higher income tax rate, and a positive contribution from discontinued operations mainly related to Flender; Q1 FY 2020 included a loss from discontinued operations mainly related to the former energy business
Industrial Businesses generated strong Free cash flow of €1,468 million compared to €789 million in Q1 FY 2020, mainly driven by Siemens Healthineers with a high cash conversion rate of 1.19
Provisions for pensions and similar obligations as of December 31, 2020: €5.0 billion (September 30, 2020: €6.4 billion); substantially reduced mainly due to a positive return on plan assets and to the contribution of Siemens’ stake in Bentley Systems, Inc. to Siemens Pension Trust e.V., to strengthen Siemens’ pension assets for the post-employment benefits of employees; substantially lower discount rates had a partly offsetting influence
ROCE increased on a combination of substantially higher net income and a significant decrease in average capital employed
Strong order growth in the automation businesses, including double-digit growth in China and Germany. Order intake in the software business below the strong Q1 FY 2020, which included a number of large contract wins; reported orders came in lower due mainly to negative currency translation effects
Revenue slightly above the prior-year level even with substantial headwinds from currency translation effects; growth contributions on a comparable basis from nearly all businesses; double-digit revenue growth in China
Adjusted EBITA higher in all businesses, with the strongest increases in the short-cycle businesses, due in part to higher capacity utilization, and in the software business; Adjusted EBITA development also benefited from sharply lower severance charges year-over-year and from expense reductions related to prior execution of the cost structure optimization program and due to COVID-19 restrictions such as lower travel and marketing expenses
Orders rose slightly despite substantial negative currency translation effects; on a comparable basis double-digit growth in the products business in all reporting regions
Slight decline in revenue due to substantial adverse currency translation effects; comparable growth driven by the products business and the systems and software business; double-digit growth contribution from China
Adjusted EBITA and profitability rose in all businesses, due in part to higher capacity utilization and cost savings related to prior execution of the competitiveness program as well as sharply lower severance charges and expense reductions related to COVID-19 restrictions
Sharply higher volume from large orders year-over-year, including orders in Germany worth €0.4 billion and €0.3 billion, respectively for light rail vehicles and regional trains and an order worth €0.1 billion for Germany’s initiative to digitalize its rail infrastructure
Revenue rose on successful execution from the backlog
Adjusted EBITA on the strong prior-year level despite ongoing impacts due to COVID-19-related measures to safeguard employee health in manufacturing facilities; profitability continued on an industry-leading level
Broad-based increases in orders and revenue, including new volume from rapid coronavirus antigen tests; volume growth held back by substantial negative currency translation effects
Adjusted EBITA up from a low basis of comparison on increases in all businesses due to the higher revenue; Adjusted EBITA included negative effects of €67 million relating to the planned acquisition of Varian Medical Systems, Inc. and negative currency effects
Earnings before taxes came mainly from the debt business, with a solid profit contribution, however, as expected, below the level a year earlier; results from the equity business came in sharply lower, particularly because Q1 FY 2020 included a gain from the sale of an equity investment
Decrease in total assets since the end of fiscal 2020 due mainly to negative currency translation effects
Orders and revenue declined due mainly to impacts related to COVID-19 and adverse currency translation effects
Fully consolidated units delivered a positive earnings performance on the prior-year level; decreased burden recorded for equity investments
Equity investment results are expected to remain volatile in coming quarters
Siemens Energy Investment includes our participation in its profit after tax and, in addition, amortization of assets resulting from purchase price allocation due to the initial recognition of the investment at fair value
Siemens Real Estate mainly included a gain related to a disposal of real estate; Q1 FY 2020 with a gain of €219 million resulting from the transfer of an investment to Siemens Pension-Trust e.V.
in Germany
Positive change in Corporate items primarily due to transfers of assets to Siemens Pension-Trust e.V. in Germany totaling €138 million, including the stake in Bentley Systems, Inc.; severance charges were €8 million (€16 million in Q1 FY 2020)
Eliminations, Corporate Treasury and other reconciling items included lower interest expenses on debt


We continue to expect a complex macroeconomic environment influenced by COVID-19. We already saw improving conditions in some of our businesses and geographic regions during the first quarter of fiscal 2021. Based on the assumption that these conditions continuein coming quarters, particularly for our short-cycle businesses, we raise our outlook for the fiscal year.

We continue to anticipate that negative currency effects will strongly burden both nominal growth rates in volume and Adjusted EBITA for our industrial businesses in fiscal 2021.

We raise our previous expectation of moderate comparable revenue growth for the Siemens Group, net of currency translation and portfolio effects, to mid- to high-single-digit growth. We continue to expect a book-to-bill ratio above 1.

Digital Industries now expects fiscal 2021 comparable revenue to grow clearly year-over-year instead of modestly. The expectation for Adjusted EBITA margin is now 19% to 20%, 2 percentage points higher.

Smart Infrastructure continues to expect to achieve moderate comparable revenue growth in fiscal 2021. The expectation for Adjusted EBITA margin is now 10.5% to 11.5%, 0.5 percentage points higher.

Mobility continues to anticipate mid-single-digit comparable revenue growth and an Adjusted EBITA margin at 9.5% to 10.5% in fiscal 2021.

In line with the expectations described above, we raise our outlook for net income to the range from €5.0 to €5.5 billion, well above the previous expectation of only moderate growth compared to €4.2 billion in fiscal 2020.

Excluded from this outlook are burdens from legal and regulatory issues and effects in connection with Siemens Healthineers’ planned acquisition of Varian Medical Systems, Inc., which is expected to close in the first half of calendar 2021.

Notes and forward-looking statements

Starting today at 07:30 a.m. CET, the press conference call on Siemens' first-quarter results for fiscal 2021 will be broadcast live at www.siemens.com/conferencecall.

Starting today at 08:45 a.m. CET, you can also follow the conference call for analysts and investors live in English at www.siemens.com/analystcall.

Recordings of the press conference call and the telephone conference for analysts and investors will subsequently be made available as well.

Starting today at 10:00 a.m. CET, we will also provide a live video webcast of Chairman of the Supervisory Board Jim Hagemann Snabe’s and CEO Joe Kaeser's speeches to the Annual Shareholders' Meeting in Munich, Germany. You can access the webcast at www.siemens.com/press/agm.

A video of the speeches will be available after the live webcast. Financial publications are available for download at: www.siemens.com/ir.

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