Siemens Forecasts Slowdown in Revenue Growth in 2024

Siemens, the German industrial conglomerate, has projected a deceleration in revenue growth for next year. The global demand for automation products is not expected to recover until the second half of the year.

For fiscal 2024, Siemens aims to achieve a revenue growth rate of 4% to 8% on a comparable basis, compared to the 11% growth rate recorded this year. The digital industries division, which offers automation equipment and software to industrial customers worldwide, is predicted to grow by up to 3% or remain stagnant due to the ongoing slow recovery in automation businesses, particularly in China.

Chief Financial Officer Ralf Thomas stated, "We anticipate fiscal 2024 to be a transitional year before we experience accelerated growth once more. The first half of the year will likely see weak economic development, with sluggish demand in China and Germany and destocking in key countries. However, we expect improving trends to materialize in the second half."

Thomas also acknowledged that the relatively muted growth momentum in the coming quarters is influenced by waning effects from price inflation and a softer investment climate due to higher interest rates.

In terms of earnings per share, Siemens expects figures between €10.40 and €11 ($11.28 and $11.93) for fiscal 2024. These estimates exclude purchase price allocation accounting and the effects of investments in Siemens Energy.

Siemens Reports Strong Financial Performance in Fiscal 2023

Siemens, a global technology company, has announced its financial results for the fourth quarter ended September 30. Despite global market challenges, the company achieved remarkable success, recording a net profit of EUR7.95 billion, a significant increase from EUR3.72 billion in the previous year.

In the same quarter, Siemens experienced a 4% growth in quarterly revenue, reaching EUR21.39 billion. Additionally, orders remained steady at EUR21.80 billion, showing a growth rate of 6% on a comparable basis. These results demonstrate the resilience and strength of Siemens' business operations, even in the face of various challenges.

Chief Executive Roland Busch attributed the decline in orders primarily to customer and distributor destocking activities in key markets, especially China. However, he remains optimistic that this trend will reverse in the near future.

Within the digital industries segment, orders witnessed a decline of 14% year-on-year. This decrease was mainly driven by softening market conditions across regions and continued destocking. Nevertheless, Siemens expects its automation business to stabilize after reaching its bottom in the fourth quarter.

The company's robust financial performance is further highlighted by its free cash flow exceeding EUR10 billion for the year. To reward its shareholders, Siemens plans to raise its dividend to EUR4.70 per share from EUR4.25 in 2022. This dividend increase corresponds to a dividend yield of 3.5% based on the closing share price of EUR135.66 at the end of September.

Furthermore, Siemens intends to launch an upgraded share buyback program of up to EUR6 billion for a duration of five years upon completion of the current program. This initiative demonstrates the company's commitment to delivering long-term value to its shareholders.

Siemens' achievements reflect its unwavering dedication to innovation and excellence. As the company embarks on a new fiscal year, it remains steadfast in its pursuit of sustainable growth and continued success.