Siemens Aktiengesellschaft Q1 Earnings Call Highlights

Siemens Aktiengesellschaft (ETR:SIE) reported a strong start to fiscal 2026, highlighted by higher orders, broad-based revenue growth, and an improved industrial profit margin despite currency headwinds. Management pointed to continued momentum in Smart Infrastructure—particularly data center-related demand—and said the company is raising its full-year earnings-per-share outlook following the first-quarter performance.

Group performance: orders rise, backlog reaches record

CEO Roland Busch said Siemens began fiscal 2026 with a “strong start” amid heightened geopolitical uncertainty, emphasizing a focus on opportunities and partnerships. The company posted a book-to-bill ratio of 1.12, with a record order backlog of EUR 120 billion.

Busch said the strong euro “materially impacted” nominal revenue growth. Even so, group orders increased 10% year-over-year to EUR 21.4 billion, led by “massive momentum” at Smart Infrastructure. Revenue grew 8%, with all businesses contributing, and revenue increased in every region. Busch cited growth of 11% in the Americas, 8% in EMEA, and 5% in Asia/Australia, including 15% growth in India.

Industrial business profit totaled EUR 2.9 billion, with the profit margin rising to 15.6%. Busch said negative currency translation effects cost about 60 basis points. Basic EPS before purchase price allocation (EPS pre PPA) was EUR 2.80. Free cash flow in the quarter was EUR 0.7 billion, which management described as a seasonal swing after an “extraordinarily strong” Q4 of fiscal 2025.

Smart Infrastructure driven by data centers

CFO Ralf Thomas said Smart Infrastructure delivered “outstanding performance,” with orders up 22% to a quarterly record of EUR 7.2 billion and a book-to-bill ratio of 1.30. The unit’s order backlog rose to an all-time high of EUR 20.2 billion, which Thomas said provides strong visibility for the rest of fiscal 2026.

Thomas attributed the order increase to Electrification (orders up 38%) and Electrical Products (up 22%), citing a “very high volume” of large data center wins. Data center orders totaled a record EUR 1.8 billion, and Thomas said about half of that amount was from larger orders.

Revenue in Smart Infrastructure rose 10%, exceeding internal expectations, with Electrification up 22%. The unit’s profit margin improved 210 basis points year-over-year to 19.0%. Thomas noted a commodity hedging benefit of about 100 basis points due to volatile copper and silver prices, which more than offset a roughly 60 basis point negative currency impact. Regionally, U.S. orders grew 54%, led by data centers and buildings.

Looking ahead, Thomas said Siemens expects Smart Infrastructure comparable revenue growth to be in the upper half of its 6%-9% guidance range, supported by the backlog. He added that second-quarter margin should be within the 18%-19% full-year guidance range, depending on commodities and FX, and that full-year margin should land in the upper half of that range.

Digital Industries shows improving trend, but visibility limited

Thomas said Digital Industries orders rose 13% to EUR 4.8 billion, with a book-to-bill of 1.07. He said the automation business improved “for the third time in a row,” while market dynamics were “only gradually improving” with “limited visibility.” Software orders were close to EUR 1.7 billion, supported by larger electronic design automation (EDA) deals.

Digital Industries revenue increased 10%, with software up 11% and automation up 9% to EUR 7.9 billion. Discrete automation revenue increased 11%, while process automation was up slightly. Digital Industries’ profit margin came in at 17.8%, which Thomas said was higher than expected, helped by pricing and productivity gains.

He also detailed integration impacts: costs related to integrating Altair and Dotmatics reduced the segment margin by 70 basis points in Q1, with an expected ~100 basis point burden for full-year 2026 (excluding severance, which he said should be minor). Negative currency effects reduced the margin by about 110 basis points.

Busch and Thomas pointed to China as an area of particular strength, with double-digit growth in orders and revenue, supported by the expanding portfolio of products developed locally. In the Q&A, Busch described end-market conditions for Digital Industries as mixed, mentioning automotive and mechanical engineering as softer areas, while pharmaceuticals, electronics, and aerospace and defense were cited as supportive verticals.

Mobility: solid quarter, order pipeline highlighted

Mobility orders were EUR 2.9 billion, above the prior year, with a book-to-bill ratio of 0.90. The order backlog stood at EUR 51 billion, including EUR 15 billion in service business. Revenue rose 9%, driven by rolling stock and customer services. Mobility’s profit margin improved to 9%, led by margin expansion in rolling stock.

Thomas said Mobility’s free cash flow swung back in Q1 after an exceptionally strong Q4, and he expects Q2 to be “rather soft again,” followed by a catch-up in the second half of fiscal 2026. He confirmed full-year Mobility guidance for comparable revenue growth of 8%-10% and a profit margin of 8%-10%. He also noted that Siemens recorded its share as consortium leader of the Copenhagen S-Bahn project in Q2, describing it as an overall EUR 3 billion project.

Outlook raised; portfolio and shareholder return updates

Thomas said Siemens is now targeting the upper half of its 6%-8% comparable revenue growth range for fiscal 2026. The company raised its full-year guidance for basic EPS before PPA to EUR 10.70 to EUR 11.10, which he said is an increase of EUR 0.20 at the midpoint.

On cash flow and capital allocation, Thomas said operating working capital increased by about EUR 1.3 billion in Q1, consistent with seasonality. Siemens also paid around EUR 400 million to close what he called a long-running legacy obligation related to nuclear waste removal in Hanau, Germany. He said Siemens remains confident it can deliver “industry benchmark levels” of double-digit cash return on revenue in fiscal 2026.

Thomas cited industrial net debt-to-EBITDA of 0.9 and noted Siemens’ double-A ratings from S&P and Moody’s. He also referenced the dividend of EUR 5.35 and said Siemens has reached nearly EUR 4.4 billion of buybacks over the past two years under its accelerated program. Siemens plans to retire 18 million treasury shares in March, reducing capital stock to 782 million shares.

On portfolio actions, Busch said Siemens is progressing on steps toward the planned deconsolidation of Siemens Healthineers and will provide more details in the spring. Busch also said Siemens recently sold its airport logistics business in the U.S. to Vanderlande, calling the topic “closed.” In Q&A, management indicated tax-related aspects are among the considerations in the Healthineers process, but did not provide detailed figures or timelines on the call.

About Siemens Aktiengesellschaft (ETR:SIE)

Siemens Aktiengesellschaft, a technology company, focuses in the areas of automation and digitalization in Europe, Commonwealth of Independent States, Africa, the Middle East, the Americas, Asia, and Australia. It operates through Digital Industries, Smart Infrastructure, Mobility, Siemens Healthineers, and Siemens Financial Services (SFS) segments. The Digital Industries segment provides automation systems and software for factories, numerical control systems, servo motors, drives and inverters, and integrated automation systems for machine tools and production machines; process control systems, machine-to-machine communication products, sensors and radio frequency identification systems; software for production and product lifecycle management, and simulation and testing of mechatronic systems; and the Mendix cloud-native low-code application development platform.