ZURICH: Siemens flagged mounting geopolitical risks like trade conflicts and weak consumer demand in the year ahead after posting fourth quarter earnings slightly ahead of forecasts.
The company, whose products range from industrial controllers and software to trains, is targeting comparable sales of 3-7 per cent over the next 12 months.
That is down only slightly from its target of 4-8 per cent in 2024, despite the company seeing rising risks following the election of Donald Trump in the United States and the collapse of the German government – issues affecting the company’s two biggest markets.
“During the year, the world experienced ongoing geopolitical and macroeconomic uncertainties,” Chief Executive Roland Busch told reporters after Siemens reported fourth-quarter results.
“And following the elections in the US and considering the political situation in Germany, times won’t be getting easier.”
Siemens said it expected only moderate macroeconomic growth in the year ahead, citing risks like trade conflicts.
The manufacturing sector was also facing “ongoing challenges” with overcapacity and weak consumer demand, it said.
But while its factory automation market was struggling, smart infrastructure and transport remained strong, Siemens said. The company also had an order backlog of €113 billion (US$119 billion), its largest ever.
Busch said Siemens would not be standing still, unveiling a new programme to accelerate the company’s focus on technology.
“That means even stronger customer focus, faster innovation and, above all, higher profitable growth,” said Busch. “In a nutshell: it’s a growth program, not a savings program.”
Siemens’ industrial profit fell 7 per cent to €3.12 billion for the three months to the end of September, ahead of analysts’ consensus forecast of €3.0 billion.
The company, seen as a bellwether for the broader economy due its products being used in factories and infrastructure projects, reported revenue rising to €20.81 billion, slightly better than the forecast of €20.77 billion.
On a comparable basis, which cuts out the impact of currency swings, acquisitions and disposals, sales rose 2 per cent.
Siemens shares were indicated 1.8 per cent higher in premarket activity, as analysts cheered the better than expected performance and the proposed dividend hike to €5.20 from €4.70.
“We expect the shares to do well today on the back of a strong Q4, a solid outlook and a much better than expected divi proposal,” said Simon Toennessen at Jefferies.
