Siemens(US:SIEGY)2024-02-13 15:19Financial Data and Key Metrics Changes - The company reported a revenue growth of 6% to €18.4 billion, with a strong profit margin of 15.8% in the industrial business, reaching its highest first-quarter level ever [7][16][41] - Book-to-bill ratio was strong at 1.21, with an order backlog reaching an all-time high of €113 billion despite negative currency effects [4][16] - Earnings per share (EPS) pre-PPA came in at €3.19, with strong operational performance driving it to €2.58 when excluding the Siemens Energy stake tailwind [51] Business Line Data and Key Metrics Changes - Mobility orders grew by 92% to €5.6 billion, significantly driven by large orders, while Smart Infrastructure saw a revenue increase of 9% [16][73] - Digital Industries (DI) revenue slightly decreased by 1%, with automation down by 4%, but software business showed growth of 8.5% [32][62] - Smart Infrastructure's electrification business grew by 20%, with a record order backlog increasing to €17 billion [40][43] Market Data and Key Metrics Changes - Revenue growth was broad-based, with EMEA and the Americas up by 7%, while Asia and Australia grew by 2%, held back by softness in China [10] - The company anticipates regional differences in inventory normalization, with China expected to take longer due to economic recovery speed [11][21] - The U.S. and Europe (excluding Germany) showed double-digit growth, particularly in data centers and power distribution [72][100] Company Strategy and Development Direction - The company is focused on leveraging its record order backlog, launching innovative products, and expanding its ecosystem while confirming guidance for fiscal 2024 [18][76] - There is a strong emphasis on digitalization and sustainability, with partnerships aimed at advancing manufacturing designs and factory operations [25][55] - The company is committed to maintaining a strong grip on working capital and delivering further value creation through profitable growth [45][104] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing destocking globally and a sluggish investment sentiment, particularly in China, but expressed confidence in a sequential improvement in orders in the second half of the fiscal year [79][83] - The company expects economic momentum to pick up, supported by government stimulus and improved investment sentiment [80][83] - Management highlighted the importance of productivity measures and maintaining a strong supply chain to mitigate risks [52][99] Other Important Information - The company closed the acquisition of an 18% stake in Siemens Limited India, accelerating the unbundling of business activities in India [20] - Free cash flow performance improved significantly year-over-year, reaching €1.3 billion in the industrial business [48] - The company completed a €3 billion share buyback program and plans to launch a new program of up to €6 billion [104] Q&A Session Summary Question: What indicators are being used to gauge confidence in sequential improvement in orders? - Management indicated that inventory levels and macroeconomic conditions are being closely monitored, with expectations for improvement post-Chinese New Year [107][110] Question: What is the outlook for the electrification business? - Management emphasized the secular growth trend in electrification driven by energy transformation and the need for reliable power in data centers and semiconductor manufacturing [88][89] Question: How does the company view profitability in Digital Industries? - Management noted that while the economic equation was neutral in Q1, they expect it to improve in the second half of the fiscal year due to productivity measures and backlog execution [126][141]