- Siemens increases profits - automation weakens
Siemens' profits gush again. In the third quarter of its fiscal year, the Munich-based company earned a net profit of around 2.1 billion euros, it announced. That was 48 percent more than in the previous year's quarter, which was burdened by a special effect. Revenue also increased - by 4 percent to 18.9 billion euros. However, the important business of automation in industry continues to suffer from weak demand.
"Continuing high demand for electrification continues to benefit us," emphasized Siemens CEO Roland Busch. "Another driver of growth was our particularly strong industrial software business, which was able to win some major licensing agreements. However, the industrial automation business remains challenging."
Flagging demand at the model student
These licensing agreements saved the balance sheet of the Digital Industries (DI) segment. In normal times, it is usually the star performer in the Siemens group, but currently, the automation business based there is suffering from weak demand and poor capacity utilization. This is partly due to the fact that business is also running more slowly at customers and some inventories are still being reduced. However, order intake from the important market of China could increase.
This current weakness does not seem to harm the head of Digital Industries, Cedrik Neike. On the eve of the publication of the figures, Siemens announced that his contract had been extended until the year 2030. Neike is considered a potential long-term successor to the current CEO Busch.
The other major segment, Smart Infrastructure (SI), grew broadly, with business running well, especially in the USA. The much smaller rail division, Mobility, also performed solidly.
Prognosis confirmed - partly at the lower end
Given the current developments, Siemens has confirmed its forecast for its fiscal year, which runs until the end of September. The division of business between the well-performing Smart Infrastructure segment and the faltering Digital Industries is also evident here: While the margin at DI is expected to be at the lower end of the previously indicated range, it is expected to be at the upper end for SI.
The financial year for Siemens is a period ending in September, as indicated by the confirmation of their forecast. Despite the challenges faced by the Digital Industries segment due to weak demand and poor capacity utilization in its automation business, the Financial year has seen growth in other areas, such as the Industrial software business and the Smart Infrastructure division, which is expected to have a strong margin this year.
