Siemens Energy (OTCPK:SMEG.F) 2025 Capital Markets Day Transcript

Siemens Energy Capital Markets Day 2025 Summary Company Overview - Company: Siemens Energy - Event: Capital Markets Day 2025 - Date: November 20, 2025 - Location: Charlotte, North Carolina Key Industry Insights - Energy Transition: Siemens Energy aims to be a reliable partner in the energy transition, focusing on combining manufacturing, technical expertise, and large-scale industrial systems design [5][4] - Electricity Demand Growth: Electricity demand is expected to grow at a sustained rate, increasing by approximately 50% over the next decade and doubling by 2050, driven by population growth and electrification [19][20] - Gas Market Stability: The gas turbine market is projected to maintain elevated growth until 2035, indicating a continued need for gas in reliable electricity supply [21] - Grid Infrastructure Investment: The expansion and stabilization of grids are expected to fuel demand for grid technologies, with transmission networks anticipated to double by 2035 [22] Financial Performance Highlights - Revenue Growth: Siemens Energy reported a 15% revenue growth in the last fiscal year, with a backlog of EUR 138 billion [14][15] - Profit Margins: The profit margin before special items is expected to be between 14%-16% by 2028, with a commitment to operational excellence and disciplined execution [23][60] - Free Cash Flow: Projected free cash flow of EUR 20 billion from 2026 to 2028, reflecting a strong cash conversion rate [56] Strategic Initiatives - Elevate Program: A strategic program structured around three pillars: transforming the energy world, strengthening resilience, and improving operational processes [24][25] - Capacity Expansion: Siemens Energy plans to invest around EUR 6 billion in CapEx over the next three years to expand capacities, particularly in gas services and grid technologies [37][55] - R&D Investment: The company intends to maintain R&D spending above EUR 1 billion per year, focusing on grid technologies and gas services [28] Safety and Employee Engagement - Safety Performance: Achieved a 30% reduction in total injury rate over the last three years, with a strong emphasis on a zero-harm framework [8][9] - Employee Engagement: Over 90% of employees express pride in working for Siemens Energy, with plans to continue building the workforce through apprenticeships and learning opportunities [39] ESG Commitment - Emission Reductions: Siemens Energy has achieved a 55% reduction in Scope 1 and Scope 2 emissions since 2019, aiming for climate neutrality by 2030 [38] - Workforce Development: Commitment to developing a motivated workforce with significant investment in training and apprenticeships [39] Market Position and Future Outlook - Market Leadership: Siemens Energy is positioned at the center of the energy transformation, ready to capture growth opportunities in the electricity and electrification markets [20] - Long-term Growth: The company expects to continue its trajectory of profitable growth, with a focus on operational excellence and value creation for stakeholders [23][62] Conclusion Siemens Energy is strategically positioned to leverage growth in the energy sector, with a strong focus on operational excellence, safety, and sustainability. The company's commitment to expanding its capabilities and enhancing its market position is expected to drive significant value creation for shareholders in the coming years.