Earnings on target despite lower sales growth
The weakness in the factory automation business segment will continue to slow Siemens down in the current fiscal year 2023/2024 (30 September). „In terms of sales growth, the trend is not in the direction of 4%, but in the direction of 3%,“ CFO Ralf Thomas told Börsen-Zeitung. In August, Siemens had forecast growth at the lower end of the planned range of 4% to 8% for the financial year. Thomas said that the profitability targets would be achieved, saying "profitability is clearly at the level we announced.“ Siemens is aiming for adjusted earnings per share of 10.40 to 11.00 euros.
China stimulus package will have delayed effect
Thomas pointed out that the revenue of the Digital Industries division, which offers factory automation, may have shrunk even more than expected in the past fiscal year. The CFO does not expect an immediate increase in momentum, even in view of the economic stimulus package in China: „Even if the incentives take effect, it will take up to six months for these effects to take hold in our customer industries,“ he predicted. Factory automation is mainly dependent on the Chinese sales market. The reduction in inventories will not be completed before February 2025.
„One important measure will be to shift the focus more towards the USA,“ said Thomas, referring to Digital Industries. The Munich-based company is not as present in the sales market there.
Dividend payout likely to increase
Thomas emphasised that the Group also wants to grow inorganically, stressing that Siemens is interested in „continuing our very successful strategy of acquiring software businesses“. Even if an acquisition were to be made, this would not affect the ability to pay out dividends. The dividend for the past financial year will probably be increased.
Against the backdrop of the Unicredit takeover considerations, Thomas praised Commerzbank as a bank that is working on digital business processes with a focus on technology: „In this respect, I see Commerzbank as an enrichment of the banking landscape", though does not want to make a judgement whether and to what extent something might be lost if a takeover happens. In the SME sector, many companies live from exports, and there „must be structures in an economy for this part of the market,“ he said.
