Financial Data and Key Metrics Changes - Orders reached €92 billion, up 7% from previous high levels, while revenue grew by 11%, at the upper end of guidance [9] - Free cash flow exceeded €10 billion for the first time, increasing by 23% year-over-year, representing almost 13% cash return on sales [10][73] - Basic earnings per share more than doubled to €9.93, crossing the €10 mark for the first time [10] Business Line Data and Key Metrics Changes - Digital Industries revenue grew by 15% on a comparable basis, with a profit margin of 22.6%, a record high [11] - Infrastructure business grew by 15%, achieving a profitability level of 15.4% [12] - Mobility revenue accelerated by 50%, with annual order intake exceeding €20 billion and a book-to-bill ratio around 2 [12] Market Data and Key Metrics Changes - EMEA region saw a revenue increase of 13%, Americas grew by 11%, while Asia-Australia grew by 4%, impacted by softness in China [18] - Automation orders normalized, with a book-to-bill ratio of 0.83, reflecting a decrease in demand [41] - Revenue growth in automation was driven by strong backlog execution in Europe, with Germany up 18% and Italy 23% [50] Company Strategy and Development Direction - Siemens aims to leverage automation, digitalization, electrification, and sustainability trends to empower customers [5][6] - The company is focused on scaling offerings through the Siemens Xcelerator platform, enhancing partnerships to drive growth [7][20] - A strategic investment of €2 billion is planned to boost innovation and resilience, including a new high-tech manufacturing factory in the U.S. [30][31] Management's Comments on Operating Environment and Future Outlook - Management anticipates a muted global economic development but expects further value creation growth in 2024 [18][77] - The company will remain vigilant and flexible in response to market developments, with a focus on productivity and cost management [17][77] - Despite challenges in growth markets like China, management is confident in maintaining a net positive economic equation for fiscal 2024 [86][87] Other Important Information - The company proposed a dividend of €4.70, reflecting a progressive dividend policy [75] - A new share buyback program of up to €6 billion is planned following the completion of the current program [76] - The SaaS transition in digital industries is on track, with annual recurring revenue growth of 15% in Q4 [27] Q&A Session Summary Question: Regarding the DI margin guidance and potential slower margins - Management acknowledged challenges in growth markets like China and the impact of destocking on margins, highlighting unfavorable exchange rates and product mix as contributing factors [86] Question: What is the outlook for the automation business and software mix? - Management indicated that while there are challenges, they are committed to investing in R&D and expect a pickup in demand in the second half of fiscal 2024 [87]
Siemens(SIEGY) - 2023 Q4 - Earnings Call Transcript