The German technology giant Siemens achieved a record profit in the past fiscal year and expects further growth in the future. In a press release published on Thursday in Munich, the company announced that it aims for a sales increase of four to eight percent on a comparable basis in the fiscal year 2023/24, which ends on September 30. Currency and portfolio effects are excluded.
In comparison to the previous year, in which Siemens increased revenue by 11 percent to 77.8 billion euros, the growth will decrease. Siemens expects weaker development, particularly in the field of industrial automation, especially in China, but anticipates a recovery in the second half of the year. The company also expects an increase in earnings in the fiscal year 2023/24. Earnings per share before certain purchase price effects from acquisitions are expected to be between 10.40 euros and 11.00 euros, compared to 9.93 euros in the previous fiscal year. The forecast does not include the stake in the energy technology company Siemens Energy.
Siemens exceeded its forecasts in the past fiscal year. After taxes, the company achieved a profit of 8.5 billion euros - almost double that of the previous year. Shareholders can look forward to a higher dividend of 4.70 euros per share, compared to 4.25 euros in the previous year. But Siemens has even more in store: The technology company plans to take its business with motors and large drives public under the name Innomotics.
The preparations for this have already begun. At the same time, offers from third parties for the business are also being evaluated and considered as a possible alternative. The establishment of Innomotics has already been largely completed, and the new company employs 15,000 employees.
Siemens plans a new share buyback program. Over a period of five years, shares worth up to six billion euros are to be repurchased. The company stated that this program would be initiated immediately after the current program is completed. According to Siemens, the current share buyback program is 90 percent completed, and shares worth 2.7 billion euros have already been repurchased.
These news delighted investors on Thursday. The Siemens stock rose by 6.1 percent to 147.34 euros, surpassing all other DAX values. This positive development has also contributed to the German leading index continuing to perform well. Traders described the forecasts of the technology company as surprisingly positive and the quarterly figures were also well received.
Analysts of Berenberg Bank wrote in a report that there is overall little to nothing to criticize. The strong free cash flow and high returns to shareholders should inspire confidence. The proposed dividend is higher than expected, and there is a new share buyback program worth up to six billion euros.
Analysts and experts agree: Siemens delivered strong figures in the last financial year and provided an optimistic outlook. Nicholas Green from Bernstein Research praised the order intake, revenue, and organic growth in all business areas. The forecast for the current financial year is also impressive.
A trader pointed out that the consensus for organic growth is at the lower end of the target range. In addition to the positive development of their own business, the temporarily resolved situation at Siemens Energy and the general strength of the overall market also contributed to the increase in the share price of Siemens stocks. The crisis at the former subsidiary Siemens Energy had also dragged down the share prices of Siemens.
Since the end of October, however, the stocks have gained more than 23 percent, reaching the highest level since the beginning of August. They are currently approaching the resistance of the 61.8 percent Fibonacci retracement. If this resistance is broken, even more potential price could be unleashed.
The recovery of Siemens shares, which began at the end of October, is reaffirmed by the current gain in price. Analysts believe that the temporary effects of the sale of Siemens Energy will not have a significant impact on the company's balance sheet.
