Siemens AG - ADR

Strong Start to Fiscal Year 2025: Siemens reported a promising first quarter with a book-to-bill ratio of 1.09, resulting in a record order backlog of €118 billion. However, overall group orders were down 8% YoY to €20.1 billion, primarily due to a decline in the Digital Industries segment and high comparative figures from prior year.

Revenue Growth and Challenges: Revenue increased by 3%, driven by strong performance in Mobility and Smart Infrastructure, with revenue in Automation (Digital Industries) down significantly due to ongoing destocking in supply chains. Notably, revenue in China remains sluggish, causing challenges in achieving growth in key regions like Europe, particularly Germany.

Profitability and Cash Flow: Siemens achieved a solid profit of €2.5 billion, exceeding market expectations, and a free cash flow of €1.6 billion. The earnings per share (pre-PPA) was reported at €2.22. Despite the profit, lower capacity utilization in the automation business led to margin contraction, emphasizing the need for continued cost restructuring.