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Siemens AG expects solid revenue growth next year as strong demand for its electrification infrastructure products offsets a continued weak market for factory-automation equipment, especially in China.
Author of the article:
Bloomberg News
Wilfried Eckl-Dorna and Oliver Crook
Published Nov 14, 2024 • 2 minute read
(Bloomberg) — Siemens AG expects solid revenue growth next year as strong demand for its electrification infrastructure products offsets a continued weak market for factory-automation equipment, especially in China.
Comparable revenue is expected to rise as much as 7% in the fiscal year through September, the company said Thursday. Revenues increased 3% in fiscal 2024, while net income reached a record €9 billion ($9.5 billion). Siemens raised its dividend 11% to €5.20 per share.
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Siemens and other industrial companies have seen sales suffer from a prolonged slump in China and are banking on fresh government efforts including tax cuts to revive the economy. Swiss rival ABB Ltd. last month reported a decline in factory-automation orders in China.
Revenues in Siemens’ key digital industries unit, which makes machines and systems to automate manufacturing, fell 10% last fiscal year, prompting the company to lower its outlook for the unit twice this year.
Chief Executive Officer Roland Busch said the company is well positioned to take advantage of China’s plan to invest in high-tech manufacturing. Speaking Thursday in a Bloomberg TV interview, he added that private consumption has yet to pick up despite Beijing’s stimulus efforts.
“We have a very strong position in China,” Busch said. “It is of utmost importance for us that the Chinese market is picking up.”
The boom in artificial intelligence is helping offset the downturn in manufacturing equipment, as new, power hungry data centers rely on electrification products like transformers and grid software from companies including Siemens and ABB.
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Busch is pivoting the German industrial manufacturer to higher-margin, software-driven product lines to improve profitability. In October, Siemens announced it would buy software maker Altair Engineering Inc. for an enterprise value of $10 billion, its largest-ever acquisition that is expected to close in the second half of 2025.
Munich-based Siemens is also grappling with high energy prices and an economic slump in its home country. Busch said the German government needs to invest more in sectors including infrastructure and education and work toward reducing energy prices for industry.
(Updates with CEO interview beginning in fifth paragraph.)
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