Siemens orders soar as customers stock up on equipment

ZURICH (Reuters) – German engineering and technology group Siemens on Thursday disclosed a massive increase in orders in its first quarter and said it would continue to cut marginal business, sending its shares up more than 6 %.

Orders jumped 52%, the factory train and software maker said, as customers rushed to ensure they had enough equipment and demand surged after the pandemic slowed .

Siemens, one of the world’s largest capital goods companies, also beat revenue and profit forecasts for the three months to Dec. 31.

“We’ve seen an unprecedented boom,” CEO Roland Busch told reporters.

The company now has an order book of 93 billion euros ($106.4 billion), its highest on record, although that would lead to delays, Busch said.

“It will take several quarters for this backlog to be processed,” Busch said. “We are currently unable to meet our high standards for delivery times for all of our products.”

The industry has been hampered in its post-pandemic recovery by a shortage of components, especially semiconductor chips, as well as congested supply chains that have delayed production of cars, computers and other products. .

This had led to massive pre-orders from customers desperate to get their hands on electrical and automation products.

PROFITS INCREASE

Siemens said major contracts were signed during the quarter for new trains and there was strong demand for software used to manufacture integrated circuits and printed circuit boards.

Its industrial profit rose 12% to 2.46 billion euros in the quarter, beating analysts’ forecasts of 2.27 billion euros.

Net profit rose 20% to 1.8 billion euros on revenue up 17% to 16.50 billion euros, also beating forecasts, while confirming its guidance for the full year. Its shares rose 6.4%.

Siemens would also continue to shrink its portfolio of companies as it seeks to become a more focused technology company.

Late Wednesday, Siemens announced it was selling the mail and parcels portion of its logistics business and its 50% stake in the Valeo Siemens e-Automotive joint venture.

“The divestiture of parcel logistics and the exit of Valeo Siemens are major steps to focus our portfolio while creating substantial value and reducing volatility,” Chief Financial Officer Ralf Thomas told analysts.

The two deals would boost Siemens’ net profit by 1.1 to 1.3 billion euros this year, he said, with the company targeting 1.5 billion euros in business divestments for the whole of the year.

“We assume that the disciplined execution of our portfolio optimization strategy will contribute in the same way as in fiscal year 2021, when we generated 1.5 billion in net revenue,” the company said, making reference to its sale of the Flender mechanical drives business and stakes in other companies.

($1 = 0.8741 euros)

(Editing by Maria Sheahan, Jason Neely and Emelia Sithole-Matarise)

About Jun Quentin

Check Also

Crime in Burnaby: Man convicted in random transit attacks

Rainier Jesse Azucena, 35, was sentenced to parole and three years probation after pleading guilty …