Industrial businesses drive strong result for Siemens in Q2

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Siemens, Europe’s biggest industrial conglomerate, beat forecasts on multiple key measures and highlighted another strong quarter thanks to “margin expansion in nearly all” of its industrial businesses.

The German company said revenues last quarter, the second in its financial year, rose 6 per cent from a year ago to €20.2bn, just ahead of forecasts of €19.8bn.

Net income in the quarter was €1.5bn, flat from a year ago but beating consensus forecasts of €1.43bn.

Earnings for Siemens’ industrial businesses – a closely watched measure – climbed 18 per cent to €2.5bn, versus forecasts of €2.29bn, as profit margins in its industrial businesses rose to 12.1 per cent, up from 10.9 per cent a year ago.

“We delivered another strong team performance and continue to outperform the markets,” said Joe Kaeser, chief executive.

Siemens is known as an engineering company that builds power systems, but in the past decade it has become a leader in the ‘digitalisation’ of industrial business, by acquiring a variety of software groups and integrating new methods of automation across its portfolio.

In February the group nominated Jim Hagemann Snabe, the former co-chief executive of technology company SAP, to be its next chairman, signalling Siemens would double down on digitalisation.

Earnings at ‘digital factory’ — its technology-based services unit for integrating hardware and software — rose to €482m, versus forecasts of €460m, as margins jumped to 17.8 per cent, from 15.1 per cent a year earlier.

Siemens shares are already up 14 per cent this year and up nearly 45 per cent in the last 12 months. In January it lifted its annual guidance to expect basic earnings per share of €7.20 – €7.70, with margins its closely watched industrial group expected between 11 – 12 per cent.

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