Siemens Sales And Profits in the New Fiscal Year
Siemens expects strong negative currency effects on sales and profits in the new fiscal year – the designated CEO, Roland Busch, declares the transportation technology area to be its core business.
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At the first virtual annual press conference of Siemens, the outgoing CEO Joe Kaeser pointed out that the DAX group was “just in time” due to its extensive restructuring program in view of the pandemic and its disruptive effects on markets and companies, even with the recent spin-off from Siemens Energy flexible enough.
The figures that Siemens presented for the fourth quarter of the fiscal year ended September were solid. Sales and incoming orders fell, but this was also due to currency effects. The operating profit rose sharply, but was positively influenced by special effects. The free cash flow rose to 3.8 billion euros in the quarter and thus reached a ten-year high of 6.4 billion in the fiscal year.
The fact that the stock exchange initially reacted negatively to the figures may also have been due to the fact that Siemens is cutting the dividend from 3.90 euros to 3.50 euros for the first time in years. CFO Ralf Thomas justified this with the fact that shareholders with the spin-off of Siemens Energy (SE) also had shares in the former energy division booked into the depots at the end of September. For every two Siemens shares, owners received one share in the new SE.
The outlook for the current financial year was mixed. Siemens is forecasting moderate growth in sales, with 57.1 billion euros in the past fiscal year, and a moderate increase in net profit, here it was 4.2 billion euros. However, Chief Financial Officer Thomas warned of “material” currency effects, especially through a weaker dollar and renminbi, which would have a significant impact on sales and profits. The impact on the operating margin of the industrial business, which was 14.3 percent in the 2020 period, could be shifted down by around half a percentage point.
For a short time the paper came under pressure. In the past few weeks, however, Siemens shares have performed much better than the DAX, close to the Siemens Energy spin-off. This is also due to the fact that the new core business around the highly profitable digital industry comes into its own in the group.