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Earnings Release Q4 FY 2016: Twice-raised guidance exceeded – historic success through strong team performance

10 November 2016

"The fiscal year just ended was one of the strongest in the history of our company. Setting aside portfolio divestments, it was actually the best. We worked hard and I am proud of what our global team has achieved. In fiscal 2017 we will continue working with full concentration on the execution of Vision 2020."
Joe Kaeser, President and Chief Executive Officer of Siemens AG

Fiscal 2016

  • Orders and revenue both 5% higher compared to fiscal 2015, at €86.5 billion and €79.6 billion, respectively, for a book-to-bill ratio of 1.09; excluding currency translation effects, orders and revenue both up 6%

  • Industrial Business profit up 13%, at €8.7 billion; strong increases in Power and Gas, Energy Management, and Wind Power and Renewables and growth in other Divisions and Healthineers, more than offsetting a substantial decline in Process Industries and Drives

  • Industrial Business profit margin reached 10.8%, with all industrial businesses except Process Industries and Drives within their target ranges

  • Net income of €5.6 billion reflects the strong operating performance; fiscal 2015 net income of €7.4 billion included €3.0 billion related to divestments of the hearing aid business and Siemens' stake in BSH Bosch und Siemens Hausgeräte GmbH (BSH)

  • Basic earnings per share (EPS) of €6.74, above the raised target range announced in the third quarter; basic EPS of €8.84 a year earlier included €3.66 related to the sale of the hearing aid business and the BSH stake

  • Siemens proposes a dividend of €3.60 per share

Q4 Fiscal 2016

  • Fourth-quarter orders of €20.3 billion, 14% lower than the prior-year period which included a substantially higher volume from large orders; excluding the change from large orders, orders rose moderately

  • Revenue 3% higher, at €22.0 billion, for a book-to-bill ratio of 0.93; excluding currency translation effects, revenue up 5%, orders down 13%

  • Industrial Business profit remains strong at €2.4 billion, with a 10.9% profit margin; increases in most Divisions largely offset by a negative swing in Process Industries and Drives due to previously announced capacity adjustments

  • Net income up 18%, at €1.2 billion; basic earnings per share(EPS) up 21%, at €1.42 compared to €1.18 in Q4 FY 2015

  • Currency translation effects took one percentage point from order and two percentage points from revenue development; portfolio effects had a minimal effect on volume development year-over-year

  • Orders down due to a lower volume of large orders, particularly in Power and Gas and Wind Power and Renewables; orders rose moderately excluding the change from large orders

  • Industrial Business order backlog was €113 billion

  • Revenue increase in all industrial businesses except Process Industries and Drives, and driven by double-digit growth in Power and gas, due mainly to sharp increase in Egypt

  • Profit Industrial Business: increases in most of the Divisions offset by Process Industries and Drives, where profit turned negative due mainly to severance charges related to previously announced capacity adjustments

  • Income from continuing operations: improvement due mainly to Centrally managed portfolio activities, which benefited from a strong positive swing relating to a major asset retirement obligation and also included a lower loss from at-equity investments

  • Decrease in Free cash flow from Industrial Business, to €4.034 billion from a high level of €4.952 billion in Q4 FY 2015. Free cash flow in the prior-year period benefited from significantly higher project prepayments at Power and Gas

  • ROCE increase driven by higher net income

Outlook

We continue to anticipate headwinds for macroeconomic growth and investment sentiment in our markets due to complex geopolitical environment. Therefore, we expect modest growth in revenue, net of effects from currency translation and portfolio transactions. We further anticipate that orders will exceed revenue for a book-to-bill ratio above 1. For our Industrial Business, we expect a profit margin of 10.5% to 11.5%. We expect basis EPS from net income in the range of €6.80 to €7.20, compared to €6.74 in fiscal 2016 which included €0.23 from discontinued operations.

This outlook assumes stabilization in the market environment for our high-margin short-cycle businesses. It further excludes charges related to legal and regulatory matters as well as potential burdens associated with pending portfolio matters.


Elisavet-Vasiliki Sachinidou 

 elisavet.sachinidou@siemens.com