Siemens Tops Q1 Estimates, Raises Full-Year Guidance

By Mariliana Fotopoulou Wednesday, February 3, 2021

Siemens AG stock trades around 2% higher in Germany today after the company smashed analysts’ expectations for the first business quarter.

Siemens logo at their Munich headquarters.

Strong Demand in China and Germany

Siemens AG, a German multinational conglomerate company that generates revenues of more than $100 billion per year, saw its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) rose by 39% to €2.13 billion ($2.55 billion) in the first business quarter to end-December.

This is higher than both €1.67 billion ($2 billion) expected by the company and €1.42 billion ($1.7 billion) expected from analysts.

The business reported a net income of €1.5 billion ($1.8 billion), much higher than the €1.1 billion ($1.32 billion) reported by the company a year ago. Strong results came after the company witnessed a strong rebound in orders, which jumped by 15%, in Germany and China.

“Our team has delivered an outstanding performance in a rather complex environment. I am grateful to be able to hand over such a strong enterprise to the next generation of management,” said Joe Kaeser, president and chief executive officer of the company.

As for the full-year guidance, the business said it now forecasts net income to come between €5 billion ($6 billion) and €5.5 billion ($6.6 billion). The company also reported a free cash flow (FCF) of €1 billion ($1.2 billion).

“What we see in Asia, and especially of course in China, is that there is massive demand especially for those industries or for those end-markets which benefit a lot from people staying home, like the gaming industry and the likes,” Kaeser told CNBC.

“Think about smart phone gaming and the likes and that is where the biggest demand has been, and those are very modern industries, so they are very automated lines and they need a lot of manufacturing software in the automation, and that is why we have benefited a lot in that area.”

For the rest of the world, Kaeser believes that his native Germany and Europe will play a “catch up game,” while the US will offer the biggest opportunities for businesses in the second half of this year and extending into the next year.

Summary

German multinational business Siemens AG raised its full-year guidance and reported extremely strong financial numbers in the first quarter amid growing demand witnessed in China and Germany.

About the Author


Headshot for author Mariliana Fotopoulou

Mariliana has an MSC in consumer analytics and business strategy. She has a special interest in fast-moving industries and big data.

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