German industry has a lot to worry about, but business is going well at the heavyweight Siemens. The bottom line is that the group earned nine billion euros, more than ever before in the company's history.
Even if the global economy is slowing down and entire industrial sectors such as car manufacturers are suffering from a lull in demand: Siemens seems to be almost immune to this trend – at least when looking at the group's balance sheet. In the past financial year, sales rose by three percent to almost 76 billion euros. The bottom line is that Siemens generated a record profit of nine billion euros.
When presenting these figures in Munich, Siemens boss Roland Busch referred to his company's broad positioning and focus on long-term global trends. Countries and companies around the world are investing in more and more digital solutions, for example in infrastructure, in the development and modernization of rail transport and in industry.
From industrial to Software company
In recent years, Siemens boss Roland Busch and his predecessor Joe Kaeser have restructured the Munich industrial giant into an increasingly software-heavy group. Decades ago, the then CEO Heinrich von Pierer liked to explain that Siemens employed more software developers than Microsoft.
In the public perception, however, the company still often stands more for heavy steel equipment than for IT programs. Siemens, like hardly any other company, relies on a combination of both, says Busch. It is precisely this interlinking of the real and digital worlds that is the secret of Munich's success.
We are one of the largest software companies in the world. And when it comes to industrial software, i.e. design and simulation software, then we are number one. Linking the digital world with the real one is where the music plays. For example, if you have shorter development times, then that makes a lot of sense. This is Siemens' strength, and that's why we continue to invest in software.
Not afraid of Trump?
Just a few weeks ago, Siemens made an acquisition in the software business: The Munich-based company is taking over Altair Engineering in the USA, a specialist in simulation programs, for almost nine billion euros. As far as US business is concerned: For Siemens and its shareholders, the question naturally arises as to what will happen next in the United States when Donald Trump takes over the reins of government there on January 20th.
Shareholder advocate Daniela Bergdolt from the German Association for the Protection of Securities Ownership does not expect any dramatic changes, even if Trump introduces new protective tariffs. Siemens has long been present in the USA with tens of thousands of employees and large factories. In a sense, Siemens is also partly a US company.
Optimistic forecast and more dividends
For the current new financial year, Siemens expects an overall increase in sales and order intake. Despite the shaky global economy and the risks from trade conflicts, demand for infrastructure solutions remains high, particularly in the electrification and mobility sectors.
Siemens shareholders should also receive a higher dividend. The distribution will increase by more than ten percent to 5.20 euros per share.
