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Siemens beat FY guidance as it overcame supply-chain obstacles

The German industrial company’s net profit attributable to shareholders jumped to 6.16 billion euros ($7.07 billion) in the 2021 fiscal year, from EUR4.03 billion last year.

On a reported basis, net income reached EUR6.70 billion, beating Siemens’s own guidance of EUR6.1 billion to EUR6.4 billion and expectations of EUR6.59 billion, according to analysts’ estimates provided by the company.

The Munich-based company said it would propose to increase its dividend to EUR4.00 a year from EUR3.50 a year earlier, reflecting what it called a “stellar” performance in fiscal 2021.

In the fourth quarter, net profit was EUR1.17 billion, down from EUR1.76 billion in 4Q 2020, although last year’s figure included around EUR800 million from discontinued operations resulting mainly from the spinoff of Siemens Energy.

Revenue in the final quarter rose 18% to EUR17.44 billion, or 10% on a like-for-like basis, above consensus views at EUR16.82 billion. The company said its book-to-bill ratio was 1.09.

Free cash flow for the full year reached EUR8.2 billion, a record high, the company said.

At 1015 GMT shares were up 2.0%, to EUR149.96.

The result came despite the company flagging continuing supply-chain issues in its final quarter, especially with electronics components and raw materials in the quarter, which it said were “successfully mitigated.”

Siemens said it expects the supply-chain constraints to ease during fiscal 2022. It is now targeting mid-single-digit comparable revenue growth in the next fiscal year, with a book-to-bill ratio above 1.

It also expects earnings per share–before purchase price allocation accounting–between EUR8.70 to EUR9.10, up from EUR8.32 in 2021.

Chief Executive Roland Busch said momentum would continue into fiscal 2022 after a year in which it won market share despite a challenging environment.

“We’re ideally positioned to support our customers and benefit from the major growth drivers of digitalization and sustainability,” he said.

In its fourth-quarter earnings, Siemens said it had orders valued at EUR19.07 billion, up from EUR15.10 billion a year earlier, driven by double-digit growth in all industrial businesses.

Its closely watched adjusted earnings before interest, taxes, depreciation and amortization at its industrial businesses was EUR2.27 billion, it said.

The figure was below analysts’ expectations of EUR2.45 billion, although orders came in ahead of expectations of EUR17.56 billion, according to the consensus.

The company, which has been slimming down in recent years with carve outs of health, power and renewable energy also said it would split two more businesses from the company.

Siemens’s motor and converter manufacturer, called Large Drives, is set to be spun off, Mr. Busch told a press conference, confirming earlier media reports.

The company will also carve out and split its logistics division into businesses for airports solutions and postage solutions.

However, the announced split of rival General Electric Co., which said on Tuesday it would separate into a health, power and aviation companies, didn’t put Siemens under pressure, Mr. Busch said.

“I see no need at all to change anything in our strategy,” he said.

The company also confirmed it would begin a share buyback for up to EUR3 billion to 2026, after announcing the plan in June.

“With a very attractive dividend, a strong stock price development and our new share buyback program, we continue to offer a highly attractive total shareholder return,” Chief Financial Officer Ralf P. Thomas said.

Olaf Ridder contributed to this report.

This story has been published from a wire agency feed without modifications to the text

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