13 February 2025
If you are covering Siemens’ Q1 2025 results, please find comments below from Jarek Pominkiewicz, industrials analyst at Quilter Cheviot:
"Siemens has delivered a solid set of Q1 2025 results, with group profit orders, revenues, profit, and free cash flow all surpassing consensus expectations. Notably, free cash flow was a substantial beat.
“A standout positive is the turnaround in Digital Industries (DI). Orders have returned to growth, driven by both software and the automation business, achieving a book-to-bill ratio of 1.04x, the first time it has been above 1x in two years. While DI orders in Germany were down 3%, the recovery in China (+14% YoY) is encouraging, and we expect Germany to follow suit later in 2025.
“Industrial order intake decreased by 8% year-on-year organically, mainly due to a strong Mobility intake in Q1 2024, although still coming in 5% ahead of consensus. Excluding Mobility, industrial orders grew by approximately 8% organically. This beat was driven by strong intakes in Healthineers and Digital Industries, with DI orders turning positive (+6% YoY, with China +14%).
“Management has maintained its FY24/25 guidance, with like-for-like revenue growth expected at 3% to 7% (consensus at approximately 4%).
“We remain positive on Siemens due to its strategic positioning in industrial automation and software, where peers trade at much higher multiples. The end of destocking in Chinese automation should support a cyclical recovery in DI's automation business. Combined with strong growth in its smart infrastructure business, this should drive margin expansion in the coming years. Additionally, a potential reduction in Siemens' 75% holding in Healthineers, currently under review, could help reduce Siemens' relative discount to peers."
