Siemens New Strategy and Q3 Numbers

By Florian Güldner

Category:
Industry Trends

Siemens announced new its new strategy and their latest numbers.  Timing wise, this is a smart move, as it is always better to change before it starts to hurt and the numbers are indeed quite good.

Looking at the power and gas segment, which has been in crisis for some time, revenues dropped again, while orders jumped to +54%(!).  Energy management (EM), another division with problems for a few years, revenues increased slightly (+5%), while orders dropped (-5%).  For EM this is not really a convincing business performance. 

Looking at the digital factory (DF) and process and drives (PD) division, the numbers look very good indeed.  For DF, orders and revenues increased and show a healthy development.  PD had to undertake several restructuring initiatives, especially in the large drives area, revenues increased as well; now their orders even increased by double digits.  In order to put these into context, we can compare the numbers with the ones already published by the competitors.

 

DF + PD

DF

PD

Fanuc

GE

Honeywell

Mitsubishi Electric

Rockwell

Schneider Electric

Revenues

+9.5%

13%*

5%*

9%

2%

+6%*

+2%

5.7%*

+10.7%*
(industry)

Orders

+11.6%

12%*

11%*

 

 

 

 

 

 

Guidance for next quarter

 

 

 

-14%

 

+5 - +7%

 

 

 

Guidance for FY

 

 

 

-12%

 

+5 - +6%*

+1.6%

5.5%*

+5 - +6%*

* organic


Looking at the revenue performance of Siemens in Q2 2018 (Q3 FY), Siemens is on the high side combining PD and DF, only Schneider Electric grows slightly faster.  The real positive news for Siemens is that their orders increased that much.  Not all companies publish orders, but the order growth is higher than the guidance given by most of the competitors.  Even if these numbers are not 1:1 equivalent, it gives some indication.  One of they key reasons for Siemens' numbers is their stronger position in many software markets.

The reason, why people were not talking about the numbers that much is Vision 2020+, announced by Joe Kaeser.  Kaeser announced the formation of three operating companies: Gas & Power, Smart Infrastructure and Digital Industries (combining DF and PD, similar to the old A&D).  Next to the operating companies, there are strategic companies where Siemens holds a majority-interest, including Healthineers, Siemens Gamesa Renewable Energy, as well as the planned Siemens Alstom.  The goal is to give the individual companies more freedom, which in turn should result in faster growth and higher margins. 

A more detailed ARC comment on the restructuring is currently in the making.

Siemens also announced the acquisition of Mendix for €600 million, paid in cash.  The company is operating in the area of low-code- programming platforms.  The Mendix application platform is based on visual, model-driven software development.  With this deal Siemens keeps ahead of other companies, even though companies like Rockwell Automation or Schneider Electric have also invested in digital SW companies.

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