Siemens gains further momentum in third quarter
Record Sectors profit – Orders show highest growth since 2008
Munich, Germany, Siemens increased both orders and revenue year-over-year in the third quarter of fiscal 2010 for the first time in more than a year. Orders of nearly €21 billion were up 22 percent compared to the prior-year quarter. Revenue rose slightly to just over €19 billion. The book-to-bill ratio – the ratio of orders to revenue – was therefore again above one. Orders and revenue both benefited from currency translation effects. Total Sectors profit climbed 40 percent year-over-year, to a record high of slightly over €2.3 billion. “Siemens gained further momentum in the third quarter,” said Siemens President and CEO Peter Löscher. “Such order growth last occurred in 2008. Strong demand took our order backlog to a record level. At the same time, Sectors profit reached its highest point ever, and will clearly exceed the level of the prior year.”
Order intake increased in all three Sectors and reporting regions, led by a 33 percent rise in Industry. All Industry Divisions reported double digit growth. Energy reported order growth of 18 percent, due mainly to substantially higher volume from major orders. In the Sector, the Renewable Energy Division posted orders worth nearly €2.3 billion in the third quarter, the highest order level of all the company’s 14 Divisions. Orders at Healthcare climbed 18 percent in the third quarter. Fueled by strong demand, the combined order backlog of the three Siemens Sectors hit a record high of €89 billion. This figure also reflected positive currency translation effects.
Revenue climbed four percent to €19.2 billion. In the Industry Sector, steadily recovering short-cycle businesses posted strong revenue growth, led by Industry Automation and Osram. Revenue for the overall Sector rose seven percent compared to the prior-year period. At Energy, revenue in the third quarter remained stable year-over-year. Healthcare revenue grew ten percent year-over-year with contributions from all Divisions. All three Sectors posted their second straight quarter of sequential revenue growth in fiscal 2010.
Total Sectors profit reached a new high of over €2.3 billion in the third quarter. All three Sectors showed profit increases compared to the prior-year period. Energy remained the top earnings contributor, again executing well on its large order backlog, led by the Fossil Power Generation Division. Industry produced high double-digit profit growth, due mainly to recovery of its short-cycle businesses as well as tight cost management. Healthcare also posted high double-digit profit growth. Income from continuing operations was slightly over €1.4 billion in the third quarter, up 18 percent from the third quarter a year earlier. Net income climbed nine percent to €1.4 billion.
Siemens continues to expect a mid-single-digit percentage decline in organic revenue in fiscal 2010 due in part to the stabilizing effect of the strong order backlog. The company expects Total Sectors profit for the full year above the prior-year level of €7.466 billion. This increase from the earlier guidance of €6.0 to €6.5 billion correspondingly raises expectations for after-tax growth in income from continuing operations. This outlook excludes major impacts that may arise from restructuring, portfolio transactions, impairments, and legal and regulatory matters.
Siemens AG (Berlin and Munich) is a global powerhouse in electronics and electrical engineering, operating in the industry, energy and healthcare sectors. For over 160 years, Siemens has stood for technological excellence, innovation, quality, reliability and internationality. The company is the world’s largest provider of environmental technologies, generating €23 billion – nearly one-third of its total revenue – from green products and solutions. In fiscal 2009, which ended on September 30, 2009, revenue totaled €76.7 billion and net income €2.5 billion. At the end of September 2009, Siemens had around 405,000 employees worldwide. Further information is available on the Internet at: www.siemens.com.
This document contains forward-looking statements and information – that is, statements related to future, not past, events. These statements may be identified by words such as “expects,” “looks forward to,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “project” or words of similar meaning. Such statements are based on the current expectations and certain assumptions of Siemens’ management, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond Siemens’ control, affect Siemens’ operations, performance, business strategy and results and could cause the actual results, performance or achievements of Siemens to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. For Siemens, particular uncertainties arise, among others, from changes in general economic and business conditions (including margin developments in major business areas and recessionary trends); the possibility that customers may delay the conversion of booked orders into revenue or that prices will decline as a result of continued adverse market conditions to a greater extent than currently anticipated by Siemens’ management; developments in the financial markets, including fluctuations in interest and exchange rates, commodity and equity prices, debt prices (credit spreads) and financial assets generally; continued volatility and a further deterioration of the capital markets; a worsening in the conditions of the credit business and, in particular, additional uncertainties arising out of the subprime, financial market and liquidity crises; future financial performance of major industries that Siemens serves, including, without limitation, the Sectors Industry, Energy and Healthcare; the challenges of integrating major acquisitions and implementing joint ventures and other significant portfolio measures; the introduction of competing products or technologies by other companies; a lack of acceptance of new products or services by customers targeted by Siemens; changes in business strategy; the outcome of pending investigations and legal proceedings and actions resulting from the findings of these investigations; the potential impact of such investigations and proceedings on Siemens’ ongoing business including its relationships with governments and other customers; the potential impact of such matters on Siemens’ financial statements; as well as various other factors. More detailed information about certain of the risk factors affecting Siemens is contained throughout this report and in Siemens’ other filings with the SEC, which are available on the Siemens website, www.siemens.com, and on the SEC’s website, www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forward-looking statement as expected, anticipated, intended, planned, believed, sought, estimated or projected. Siemens does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.
Reference Number: AXX20100787e
This news content was configured by WebWire editorial staff. Linking is permitted.
News Release Distribution and Press Release Distribution Services Provided by WebWire.