Siemens Energy Reports Mixed Q3 Results, Focuses on Growth

Siemens Energy AG, a key player in the energy sector, presented a mixed financial performance during its third-quarter earnings call. The company reported an order intake of EUR 10.4 billion, reflecting a year-over-year decline mainly attributed to reduced orders from its subsidiary, Siemens Gamesa.

Despite this downturn in orders, Siemens Energy achieved a record order backlog of EUR 120 billion, bolstered by strong contributions from its Gas Services and Grid Technologies segments. The company experienced a revenue increase of nearly 20% for the quarter, resulting in a profit before special items of EUR 49 million, which was in line with expectations.

On a less favorable note, Siemens Gamesa reported losses of around EUR 450 million for the quarter and EUR 1.3 billion for the first nine months of the fiscal year. Nonetheless, Siemens Energy remains optimistic, increasing its cash flow guidance and announcing several strategic expansions.

### Key Takeaways
– Siemens Energy’s Q3 order intake was EUR 10.4 billion, with significant contributions from Gas Services and Grid Technologies.
– The order backlog exceeded EUR 120 billion, with approximately 50% of this representing service-related orders.
– Revenue grew close to 20%, with a profit before special items of EUR 49 million.
– Siemens Gamesa’s losses persist, prompting Siemens Energy to raise cash flow guidance to between EUR 1 billion and EUR 1.5 billion.
– New capacity expansions have been initiated, including the commissioning of a vacuum interrupter tube production facility in Berlin.

### Company Outlook
– Siemens Energy plans to reintroduce 4.X and 5.X turbines.
– Revised financial expectations for Siemens Gamesa include anticipated losses of up to EUR 2 billion.
– Management priorities focus on delivering profitable growth, revitalizing the wind business, and maintaining financial stability.

### Challenges
– Continued losses from Siemens Gamesa are affecting Siemens Energy’s overall profitability.
– Concerns persist regarding the viability of offshore wind projects and delays in the German approval process.

### Opportunities
– Strong order momentum in Gas Services and Grid Technologies, with record orders of EUR 5.3 billion and EUR 3.5 billion, respectively.
– Positive cash flow is expected in Q4, driven by sustained order strength and seasonal trends.

### Misses
– A year-over-year decline in order intake was observed, mainly due to Siemens Gamesa’s lower performance.
– The wind energy sector is facing extended planning phases and increased delivery timelines.

### Q&A Highlights
– Siemens Energy anticipates executing over EUR 3 billion of its onshore backlog in 2024 and aims for breakeven in fiscal year 2026.
– Efforts to address supply chain issues and engage customers for better wind margins are ongoing.
– The transformation of the industries segment is progressing slower than expected, with a focus on commercialization and supply chain enhancements.

Siemens Energy’s results indicate a company seeking to navigate a challenging market, especially within its wind energy division. While the ongoing losses at Siemens Gamesa present hurdles, the robust order backlog and strategic expansions signify a commitment to long-term growth. Future earnings calls are expected to shed light on the company’s roadmap for 2025 and beyond.