Financial Data and Key Metrics Changes - Orders increased by 17%, while revenue grew by 8%, resulting in a book-to-bill ratio of 1.24 and a record order backlog of €102 billion [12][26] - Free cash flow remained strong at €8.2 billion, equating to over 10% cash return on sales, marking the third consecutive year in double-digit territory [13][92] - Earnings per share pre-PPA reached €5.47, aligning with the updated guidance range [13] Business Line Data and Key Metrics Changes - Digital Industries saw a revenue increase of 13%, with profit margins close to the prior year's level, driven by strong performance in the automation business [15] - Smart Infrastructure grew by 10%, achieving profitability at the upper end of guidance [16] - Mobility experienced a 3% revenue growth, maintaining industry-leading profitability despite challenges from the wind down of operations in Russia [16] Market Data and Key Metrics Changes - Revenue growth was broad-based, with Asia and Australia up by 22%, EMEA up by 7%, and the Americas rising by 8% [25] - Digital Industries generated €6.5 billion in revenue for fiscal 2022, with sustainability being a core growth driver across all businesses [19] Company Strategy and Development Direction - Siemens aims to play a leading role in empowering customers to tackle global challenges through digital transformation and sustainability [7][8] - The company is focused on combining real and digital worlds to create substantial value for customers in various sectors, including industry, infrastructure, transportation, and healthcare [8] - Continued investment in R&D is planned, targeting around 8% of revenue to enhance software and digital portfolios [48][98] Management's Comments on Operating Environment and Future Outlook - Management acknowledged geopolitical and economic challenges, including the war in Ukraine and supply chain constraints, but expressed confidence in managing these complexities [10] - The outlook for fiscal 2023 remains positive, with expectations for further value creation growth based on a strong order backlog [22][97] - Management emphasized the importance of agility in responding to macroeconomic developments while maintaining a robust growth trajectory [116] Other Important Information - The company proposed a dividend of €4.25, an increase of €0.25, reflecting a progressive dividend policy [20][95] - Siemens plans to execute a share buyback program totaling €1.8 billion and reduce its share count to 800 million [96] Q&A Session Summary Question: Growth guidance amidst economic projections - Management is confident in converting the existing strong backlog, providing visibility for the next 6 to 9 months, while remaining vigilant about macroeconomic developments [115][116] Question: Digital Industries growth and margins - The backlog in Digital Industries is €13.5 billion, with 70% in automation and 30% in software, indicating strong demand across regions [118] - SaaS transition is progressing well, with a 14% ARR growth and a significant share of new customers [120] Question: Assumptions for short-cycle order growth - Management is monitoring macroeconomic conditions closely and has contingency plans in place, but remains optimistic about the current momentum [116] Question: Cash dynamics and prepayments - There is an extraordinary high level of prepayments, which is expected to normalize with new orders, particularly in China [128][129]
Siemens(SIEGY) - 2022 Q4 - Earnings Call Transcript