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Earnings Release Q4 FY 2018 -July 1 to September 30, 2018 - Guidance fully achieved again – another strong year

09 November 2018

We again delivered what we promised and fully reached our guidance which we raised at mid-year. This shows the strength of our global team which competed convincingly in both growth markets and difficult environments, and achieved another strong performance. In fiscal 2019 we will give our businesses even greater entrepreneurial freedom, and lay the foundation for execution of Vision 2020+,« said Joe Kaeser, President and Chief Executive Officer of Siemens AG

Fiscal 2018

  • On a comparable basis, excluding currency translation and portfolio effects, orders rose 8% and revenue increased 2%, with the majority of the industrial businesses contributing to growth

  • On a nominal basis, orders rose 6%, to €91.3 billion; revenue was up slightly at €83.0 billion; the book-to-bill ratio was 1.10

  • Industrial Business profit came in lower, at €8.8 billion, as profit increases in most industrial businesses did not fully offset sharply lower profit at Power and Gas

  • Industrial Business profit margin excluding severance charges of 11.3%, clearly in the guidance range of 11% to 12%; profit margin including severance charges of €0.8 billion was 10.4% with most industrial businesses within or above their target ranges

  •  Net income up slightly at €6.1 billion; basic earnings per share (EPS) of €7.12; excluding severance charges, basic EPS at €7.88, well within the guidance range of €7.70 to €8.00

  •  Free cash flow rose to €5.8 billion, up 22% year-over-year

  • Siemens proposes to raise the dividend €0.10 per share, to €3.80 per share

  • Successful completion of share buyback program initiated in November 2015 with a volume of €3.0 billion; new share
    buyback program announced with volume up to €3.0 billion until November 2021

Q4 Fiscal 2018

  • In one of the best quarters for volume in Siemens’ history, revenue reached €22.6 billion, up 2%, and orders of €23.7 billion slightly exceeded the high level of Q4 FY 2017, for a book-to-bill ratio of 1.05

  •  Revenue and order growth of 5% on a comparable basis

  • Industrial Business profit up slightly at €2.1 billion despite a substantial negative swing at Power and Gas including €0.3
    billion in severance charges

  • Net income of €0.7 billion and basic EPS of €0.69, burdened by €0.5 billion in severance charges (pre-tax) and substantial
    income tax expenses related to carve-out activities at Mobility

  • Higher order intake on a comparable basis in nearly all industrial businesses led by substantial growth at Mobility and
    double-digit increases at Digital Factory and Siemens Healthineers; order decline at Energy Management from a high basis of comparison

  • Significant revenue growth in Siemens Gamesa Renewable Energy (SGRE) and clear revenue growth in Digital Factory and Mobility; revenue decline in Power and Gas in contracting markets

  • Order backlog remained on the record level reached in the last quarter, at €132 billion, despite negative effects from
    currency translation

  • Negative currency translation effects took four percentage points from order and three percentage points from revenue
    growth; portfolio transactions had a minimal effect on volume development year-over-year

  • Profit Industrial Business: profit rose in 6 out of 8 industrial businesses; largest increase in SGRE followed by Digital
    Factory; Siemens Healthineers and Digital Factory made the largest contributions to Industrial Business profit despite
    substantial negative currency effects, which to a lesser extent also impacted Process Industries and Drives and Energy
    Management; profit increases largely offset by a loss at Power and Gas, which took €301 million in severance charges
    related to previously announced measures to improve the Division’s competitiveness; severance charges at Process
    Industries and Drives were €85 million

  •  Income from continuing operations and net income declined due mainly to sharply higher income tax expenses mainly
    from carve-out activities related to Mobility

  •  Increase in Free cash flow from Industrial Business, to €3.166 billion from €2.837 billion in Q4 FY 2017, due mainly to SGRE which recorded a substantial positive change in net operating working capital in Q4 FY 2018; Free cash flow outside Industrial Business also contributed to the increase year-over- year

  • Siemens issued €2.75 billion in bonds with varied maturities up to 12 years; payments are not part of Free cash flow

  • ROCE decreased due to lower net income which more than offset the positive effect of a moderate decline in average
    capital employed

Outlook

We expect a continued favorable market environment, particularly for our short-cycle businesses, with limited risks related to geopolitical uncertainties. For fiscal 2019, we expect moderate growth in revenue, net of currency translation and portfolio effects. We further anticipate that orders will exceed revenue for a book-to-bill ratio above 1. We expect a profit margin of 11.0% to 12.0% for our Industrial Business based on our current organizational structure, excluding severance charges. Furthermore we expect basic EPS from net income in the range of €6.30 to €7.00 also excluding severance charges. Fiscal 2018 basic EPS from net income of €7.12 benefited from €1.87 per share in portfolio gains related to our stakes in Atos SE and OSRAM Licht AG and was burdened by €0.76 from severance charges, resulting in €6.01 excluding these factors. This outlook excludes charges related to legal and regulatory matters and post-closing results from combining our mobility business with Alstom SA, which we expect to close in the first half of calendar 2019.


Elisavet-Vasiliki Sachinidou 

 elisavet.sachinidou@siemens.com