Siemens(SIEGY) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Group orders reached €20.1 billion, which is 8% below the prior year, with a book-to-bill ratio of 1.09% [8][11] - Revenue growth for the group was 3%, with strong contributions from Mobility and Smart Infrastructure [11][12] - Earnings per share pre-PPA reached €2.22, and free cash flow was €1.6 billion [14][53] Business Line Data and Key Metrics Changes - Digital Industries (DI) orders were €4.2 billion, 6% above the prior year, with a book-to-bill of 1.04% [29] - Automation revenue in DI was down 19% to €2.7 billion, while the software business grew by 15% [33] - Smart Infrastructure saw orders up 5% to €6.2 billion, driven by a 10% growth in the electrification business [41][42] Market Data and Key Metrics Changes - The Americas region saw a 17% increase in revenue, while EMEA was flat and Asia/Australia was down 4% [12] - Orders in China increased sharply by 14% year-over-year, indicating a recovery in that market [37] - Revenue growth in the U.S. was particularly strong at 20%, driven by data center demand [46] Company Strategy and Development Direction - Siemens aims to position itself as a "ONE Tech Company" with a focus on customer-centricity and profitable growth, highlighted by the acquisition of Altair [18][19] - The company is enhancing its leadership in sustainability, with significant reductions in CO2 emissions and contributions to customer decarbonization [15][16] - Siemens is leveraging AI to improve decision-making and productivity across its industrial sectors [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving fiscal 2025 guidance despite ongoing macroeconomic uncertainties and destocking challenges [55][110] - There are expectations for improving trends in the second half of fiscal 2025, particularly in automation and software sectors [38][112] - The company is closely monitoring tariff disputes and their potential impact on the macro environment [39][120] Other Important Information - Siemens Healthineers is expected to ramp up synergies following a significant investment, with no immediate plans for deconsolidation [78][82] - The company reported a €2.1 billion gain from divesting Innomotics, strengthening its liquidity position [52][54] - Free cash flow performance was strong, with a focus on maintaining double-digit cash returns for the fiscal year [53][134] Q&A Session Summary Question: Insights on Software Business Orders - Management acknowledged a strong first quarter in the EDA business but indicated that this level may not be sustainable in the following quarters [62][64] Question: Clarification on Healthineers Stake - Management confirmed that decisions regarding Healthineers will be made thoughtfully, with a strategy update expected at the Capital Markets Day [78][82] Question: Dynamics of DI Margins - Management noted that while software profitability was strong in the previous year, it is expected to normalize, with a focus on maintaining margins [90][92] Question: Confidence in DI Growth Guidance - Management expressed high confidence in achieving growth guidance, citing early signs of recovery in new orders, particularly in automation [110][112] Question: Free Cash Flow Dynamics - Management highlighted strong free cash flow performance driven by advanced payments, particularly in the data center business [130][134]