Siemens : Q2 FY24 Earnings Release

Earnings Release

Q2 FY 2024

January 1 to March 31, 2024

Munich, Germany, May 16, 2024

Solid second-quarter performance - Outlook confirmed

"We continued to benefit from strong demand for digitalization and sustainability during our second quarter, particularly in the data center and semiconductor industries. Siemens proved its resilience with strong revenue performance in Smart Infrastructure, Mobility and industrial software; this nearly offset currently muted demand in Digital Industries' automation business. With the right strategy, the right technologies and the right team, we are well positioned for profitable growth," said Roland Busch, President and Chief Executive Officer of Siemens AG.

"With Innomotics, we have taken another significant step in optimizing our portfolio. Based on our solid performance in the first half of the fiscal year, a very strong balance sheet recognized by our latest rating upgrade, and our record order backlog, we look to the future with confidence as a leading technology company. We confirm our outlook for fiscal 2024," said Ralf P. Thomas, Chief Financial Officer of Siemens AG.

• Second-quarterrevenue was nearly unchanged from a year earlier on a comparable basis, excluding currency translation and portfolio effects; comparable orders came in 12% lower than in Q2 FY 2023, which included a sharply higher volume from large orders in Mobility
• On a nominal basis, revenue declined 1% to €19.2 billion and orders were down 13% at €20.5 billion; Siemens continued to advance on its growth path, with a book-to-bill ratio of 1.07 and an increase in the order backlog, which reached €114 billion
• Profit Industrial Business was €2.5 billion with a profit margin of 14.0%, both close to the prior-year quarter
• Net income was €2.2 billion; in Q2 FY 2023, net income of €3.6 billion benefited from a €1.6 billion tax-free gain from reversal of an impairment of Siemens' stake in Siemens Energy AG; for the current quarter, corresponding basic earnings per share (EPS) were €2.57 and EPS before purchase price allocation accounting (EPS pre PPA) were €2.73

Earnings Release Q2 FY 2024 | Siemens

Siemens

		Q2		% Change
(in millions of €)		FY 2024		FY 2023	Actual		Comp.
Orders		20,451		23,638	(13)%		(12)%
Revenue		19,162		19,416	(1)%		0%
Profit
Industrial Business		2,513		2,577	(2)%
therein: severance		(56)		(87)
Profit margin
Industrial Business		14.0%		14.2%
excl. severance		14.3%		14.7%
Income from
continuing operations		2,034		3,554	(43)%
therein: severance		(71)		(105)
Income (loss) from
discontinued operations,
net of income taxes		162		(3)	n/a
Net income		2,196		3,551	(38)%
Basic EPS (in €)		2.57		4.39	(41)%
EPS pre PPA (in €)		2.73		4.57	(40)%
Free cash flow
(continuing and
discontinued operations)		1,344		2,350	(43)%
Cash conversion rate		0.61		0.66	(8)%
ROCE		19.0%		30.5%

• Book-to-billratio well above one, at 1.07
• Order development was strongly influenced by the very high basis of comparison at Mobility which included a €2.9 billion order for locomotives and associated maintenance in India in Q2 FY 2023, and by a decline at Digital Industries in its automation businesses; order growth for the other industrial businesses included a double- digit increase at Smart Infrastructure
• Revenue remained close to the prior year level; a decline in the automation businesses at Digital Industries was nearly offset by growth in the other three industrial businesses; highest increase at Smart Infrastructure
• Currency translation effects took one percentage point each from order and revenue development; portfolio effects had a minimal impact
• Profit Industrial Business came in close to the prior-year level as a profit decline in Digital Industries, due to its automation businesses, was nearly offset by profit increases at Siemens Healthineers and Smart Infrastructure
• Net income benefited from reversal of income tax provisions resulting in lower income tax expenses and a positive swing in discontinued operations, but having no cash effect; net income in Q2 FY 2023 included a €1.6 billion tax-free gain within income from continuing operations from partial reversal of an impairment of the stake in Siemens Energy AG
• The decrease in Free cash flow was due mainly to Industrial Business, which generated a Free cash flow of €2.1 billion compared to €2.7 billion in Q2 FY 2023; the main factors for the decline were Digital Industries, due mainly to its profit decline, and Siemens Healthineers, with a build-up of operating net working capital
• Provisions for pensions and similar obligations as of March 31, 2024 on a low level at €1.4 billion (December 31, 2023: €1.5 billion)
• ROCE was solidly in the target range

2

Earnings Release Q2 FY 2024 | Digital Industries, Smart Infrastructure, Mobility

Digital Industries

		Q2		% Change
(in millions of €)		FY 2024		FY 2023	Actual		Comp.
Orders		4,252		4,953	(14)%		(12)%
Revenue		4,505		5,203	(13)%		(11)%
therein: software business		1,366		1,165	17%		19%
Profit		741		1,263	(41)%
therein: severance		(11)		(15)
Profit margin		16.5%		24.3%
excl. severance		16.7%		24.5%

• In a challenging market environment, orders in the automation businesses overall came in lower as stock levels at customers remained elevated, particularly in China; orders significantly increased in the software business, due mainly to the electronic design automation (EDA) software business in the U.S.
• Higher software revenue, driven by the EDA business, was more than offset by declines in the automation businesses particularly for higher-margin products
• On a geographic basis, orders and revenue declined in the Asia, Australia region, due particularly to China, and in the region Europe, C.I.S., Africa, Middle East, more than offsetting volume growth in the Americas
• Profit declined due mainly to reduced capacity utilization on lower revenue and a less favorable product mix in the automation businesses

Smart Infrastructure

		Q2		% Change
(in millions of €)		FY 2024		FY 2023	Actual		Comp.
Orders		6,093		5,535	10%		10%
Revenue		5,149		4,908	5%		6%
therein: service business		1,100		1,044	5%		6%
Profit		854		779	10%
therein: severance		(9)		(9)
Profit margin		16.6%		15.9%
excl. severance		16.8%		16.1%

• Double-digitorder growth on contributions from all businesses; on a geographic basis, growth was led by the U.S., where the electrical products and the electrification businesses recorded numerous contract wins from data center customers
• Revenue also rose in all businesses, with the strongest increase coming from the electrification business, which executed strongly on its large order backlog; on a geographic basis, the highest growth contribution came from the U.S.
• Another broad-based increase in profit and profitability year-over- year; the improvements were due mainly to higher revenue, increased capacity utilization and continued productivity measures

Mobility

		Q2		% Change
(in millions of €)		FY 2024		FY 2023	Actual		Comp.
Orders		3,155		6,175	(49)%		(49)%
Revenue		2,822		2,666	6%		6%
therein: service business		478		441	8%		9%
Profit		237		247	(4)%
therein: severance		(7)		(8)
Profit margin		8.4%		9.2%
excl. severance		8.6%		9.6%

• Order intake included a contract of €0.4 billion for light rail in the U.S. and a number of large contracts for locomotives in Europe; Q2 FY 2023 included a sharply higher volume from large orders, among them a €2.9 billion order for locomotives and associated maintenance in India
• Clear revenue growth with increases in all businesses
• Profit and profitability grew in nearly all businesses on higher revenue and strong project execution; profit in Q2 FY 2023 benefited from €78 million in trailing effects related to Russia

3

Earnings Release Q2 FY 2024 | Siemens Healthineers, Siemens Financial Services, Portfolio Companies

Siemens Healthineers

		Q2		% Change
(in millions of €)		FY 2024		FY 2023	Actual		Comp.
Orders		5,719		5,588	2%		4%
Revenue		5,435		5,345	2%		3%
Profit		681		288	136%
therein: severance		(29)		(55)
Profit margin		12.5%		5.4%
excl. severance		13.1%		6.4%

• Volume growth in most businesses; revenue in the Varian business slightly below the high basis of comparison in Q2 FY 2023
• Higher profit year-over-year on increases in most businesses partly offset by a decline in the imaging business due to a less favorable business mix. Both periods under review included charges of €0.1 billion for transforming the Diagnostics business; Q2 FY 2023 included impairments and other charges of €0.3 billion for refocusing certain activities in the advanced therapies business

Siemens Financial Services

		Q2
(in millions of €)		FY 2024		FY 2023
Earnings before taxes (EBT)		149		171
therein: equity business		54		71
therein: severance		−		−
ROE (after taxes)		16.6%		20.2%
		Mar 31,		Sep 30,
(in millions of €)		2024		2023
Total assets		32,623		32,915

• Siemens Financial Services recorded a solid earnings contribution, with results from the debt business on the prior-year level
• Reduced results of the equity business included a lower share of income from investments accounted for using the equity method, due in part to sales of equity investment stakes in previous periods

Portfolio Companies

		Q2		% Change
(in millions of €)		FY 2024		FY 2023	Actual		Comp.
Orders		1,168		1,328	(12)%		(6)%
Revenue		1,112		1,186	(6)%		(1)%
Profit		89		97	(8)%
therein: severance		(3)		(5)
Profit margin		8.0%		8.2%
excl. severance		8.2%		8.6%

• Orders came in below Q2 FY 2023, due to a lower volume from larger orders at Siemens Logistics; revenue development was due mainly to Innomotics
• Profit and profitability remained solid, despite negative currency effects, with the highest contribution coming from Innomotics
• Starting in Q3 FY 2024, Innomotics will be reported as discontinued operations, following the expected sale of that business; closing of the sale is expected in FY 2025

4

Earnings Release Q2 FY 2024 | Reconciliation to Consolidated Financial Statements, Outlook

Reconciliation to Consolidated

Financial Statements

Profit

		Q2
(in millions of €)		FY 2024		FY 2023
Siemens Energy Investment		−		1,736
Siemens Real Estate		11		(4)
Innovation		(47)		(37)
Governance		(17)		(59)
Centrally carried pension expense		(33)		(28)
Amortization of intangible assets acquired in
business combinations		(188)		(207)
Financing, eliminations and other items		(183)		(104)
Reconciliation to
Consolidated Financial Statements		(457)		1,297

• In Q1 FY 2024 Siemens has ceased accounting for Siemens Energy under the equity method, the remaining stake is reported as financial asset measured at fair value through other comprehensive income; in Q2 FY 2023 Siemens Energy Investment benefited from a gain of €1.6 billion from a partial reversal of a previous impairment on Siemens' stake in Siemens Energy AG and a gain of €0.2 billion in connection with a capital increase by Siemens Energy AG
• Financing, eliminations and other items: both periods under review included a revaluation loss on the stake in Thoughtworks Holding, Inc.

Outlook

We confirm our outlook for the Siemens Group for fiscal 2024. We continue to assume that geopolitical tensions do not further increase. Under this condition, we expect our Industrial Business overall to continue its profitable growth.

For the Siemens Group we continue to expect comparable revenue growth, net of currency translation and portfolio effects, in the range of 4% to 8% and a book-to-bill ratio above 1.

Contrary to previous assumption, destocking by customers of Digital Industries' automation businesses is likely to continue well into the second half of the calendar year, especially in China. For the second half of fiscal 2024, Digital Industries assumes that demand in its automation businesses will pick up compared to the first half of the fiscal year and expects large contract wins in its software business. As a result, Digital Industries now expects comparable revenue for fiscal 2024 to come in minus 8% to minus 4% below the prior year (previously expected at 0% to plus 3%) and the profit margin is now expected to be 18% to 21% (previously expected in a range of 20% to 23%).

Smart Infrastructure now expects for fiscal 2024 comparable revenue growth of 8% to 10% (previously expected at 7% to 10%) and a profit margin of 16% to 17% (previously expected in a range of 15% to 17%).

Mobility also confirms its expectations for fiscal 2024, which are for comparable revenue growth of 8% to 11% and a profit margin of 8% to 10%.

We continue to expect profitable growth of our Industrial Business overall to drive an increase in basic EPS from net income before purchase price allocation accounting (EPS pre PPA) to a range of €10.40 to €11.00 in fiscal 2024, excluding a positive €0.61 per share from Siemens Energy Investment in the first quarter of fiscal 2024. With termination of equity method accounting in the first quarter of fiscal 2024, Siemens Energy Investment is not expected to have additional effects on EPS going forward. EPS pre PPA excluding Siemens Energy Investment in fiscal 2023 was €9.93.

This outlook excludes burdens from legal and regulatory matters.

5

Earnings Release Q2 FY 2024 | Notes and forward-looking statements

Notes and forward-looking statements

Starting today at 08:00 a.m. CEST, the press conference call on Siemens' second-quarter results for fiscal 2024 will be broadcast live at www.siemens.com/conferencecall.

Starting today at 09:30 a.m. CEST, you can also follow the conference call for analysts live in English at www.siemens.com/analystcall. Recordings of both conference calls will be made available afterwards.

The financial publications can be downloaded at: www.siemens.com/ir.

This document contains statements related to our future business and financial performance and future events or developments involving Siemens that may constitute forward-looking statements. These statements may be identified by words such as "expect," "look forward to," "anticipate," "intend," "plan," "believe," "seek," "estimate," "will," "project" or words of similar meaning. We may also make forward- looking statements in other reports, in prospectuses, in presentations, in material delivered to shareholders and in press releases. In addition, our representatives may from time to time make oral forward-looking statements. Such statements are based on the current expectations and certain assumptions of Siemens' management, of which many are beyond Siemens' control. These are subject to a number of risks, uncertainties and factors, including, but not limited to those described in disclosures, in particular in the chapter Report on expected developments and associated material opportunities and risks in the Combined Management Report of the Siemens Report (siemens.com/siemensreport), and in the Interim Group Management Report of the Half-year Financial Report (provided that it is already available for the current reporting year), which should be read in conjunction with the Combined Management Report. Should one or more of these risks or uncertainties materialize, should decisions, assessments or requirements of regulatory authorities deviate from our expectations, should events of force majeure, such as pandemics, unrest or acts of war, occur or should underlying expectations including future events occur at a later date or not at all or assumptions prove incorrect, actual results, performance or achievements of Siemens may (negatively or positively) vary materially from those described explicitly or implicitly in the relevant forward-looking statement. Siemens neither intends, nor assumes any obligation, to update or revise these forward-looking statements in light of developments which differ from those anticipated.

This document includes - in the applicable financial reporting framework not clearly defined - supplemental financial measures that are or may be alternative performance measures (non-GAAP-measures). These supplemental financial measures should not be viewed in isolation or as alternatives to measures of Siemens' net assets and financial positions or results of operations as presented in accordance with the applicable financial reporting framework in its Consolidated Financial Statements. Other companies that report or describe similarly titled alternative performance measures may calculate them differently.

Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

Address	Siemens AG
	Werner-von-Siemens-Str. 1
	80333 Munich
	Germany
Internet	www.siemens.com
Phone	+49	89 7805-33443 (Media Relations)
	+49	89 7805-32474 (Investor Relations)
E-Mail	[e-mail]
	[e-mail]

© 2024 by Siemens AG, Berlin and Munich

6

Financial Results

Second Quarter and First Half of Fiscal 2024

Key figures

(in millions of €, except where otherwise stated)

Volume

	Q2				% Change	First half			% Change
	FY 2024		FY 2023	Actual		Comp.¹	FY 2024		FY 2023	Actual		Comp.¹
Orders	20,451		23,638	(13)%		(12)%	42,749		46,258	(8)%		(5)%
Revenue	19,162		19,416	(1)%		0%	37,574		37,486	0%		3%
Book-to-bill ratio	1.07						1.14
Order backlog (in billions of €)	114						114

Profitability and Capital efficiency

	Q2			First half
	FY 2024		FY 2023	% Change	FY 2024		FY 2023	% Change
Industrial Business
Profit	2,513		2,577	(2)%	5,236		5,231	0%
Profit margin	14.0%		14.2%		14.9%		14.9%
Continuing operations
EBITDA	2,977		5,116	(42)%	6,749		8,026	(16)%
Income from continuing operations	2,034		3,554	(43)%	4,570		5,198	(12)%
Basic EPS (in €)²	2.37		4.40	(46)%	5.38		6.27	(14)%
Discontinued operations
Income (loss) from discontinued operations, net of income taxes	162		(3)	n/a	175		(11)	n/a
Basic EPS (in €)²	0.20		−	n/a	0.22		(0.01)	n/a
Continuing and discontinued operations
Net income	2,196		3,551	(38)%	4,744		5,186	(9)%
Basic EPS (in €)²	2.57		4.39	(41)%	5.60		6.26	(11)%
EPS pre PPA (in €)²	2.73		4.57	(40)%	5.92		6.65	(11)%
Return on capital employed (ROCE)	19.0%		30.5%		20.8%		22.2%

Capital structure and Liquidity

			Mar 31, 2024				Sep 30, 2023
Total equity		51,226			53,052
Industrial net debt		14,249			7,924
Industrial net debt / EBITDA³		1.1			0.6
	Q2 FY 2024		Q2 FY 2023		First half FY 2024		First half FY 2023
Free cash flow
Continuing operations	1,346		2,363		2,372		2,439
Discontinued operations	(2)		(13)		20		(4)
Continuing and discontinued operations	1,344		2,350		2,392		2,435
Cash conversion rate
Continuing and discontinued operations	0.61		0.66		0.50		0.47

Employees

(in thousands)	Mar 31, 2024	Sep 30, 2023
Total	323	320
Germany	88	87
Outside Germany	235	232

¹ Throughout excluding currency translation and portfolio effects.

• Basic EPS - attributable to shareholders of Siemens AG. For fiscal 2024 and 2023 weighted average shares outstanding (basic) (in thousands) for the second quarter amounted to 789,530 and 791,678 and for the first half to 789,502 and 791,555 shares, respectively.

³ Accumulative EBITDA of the previous four quarters until the reporting date.

II

Consolidated Statements of Income

		Q2		First half
(in millions of €, per share amounts in €)		FY 2024		FY 2023	FY 2024		FY 2023
Revenue		19,162		19,416	37,574		37,486
Cost of sales		(11,893)		(12,217)	(23,123)		(23,321)
Gross profit		7,270		7,199	14,451		14,166
Research and development expenses		(1,586)		(1,528)	(3,098)		(2,958)
Selling and general administrative expenses		(3,468)		(3,375)	(6,929)		(6,723)
Other operating income		75		52	270		224
Other operating expenses		(205)		(126)	(284)		(260)
Income (loss) from investments accounted for using the equity method, net		72		1,818	736		1,640
Interest income		704		578	1,417		1,118
Interest expenses		(447)		(348)	(868)		(624)
Other financial income (expenses), net		(119)		(130)	(143)		(219)
Income from continuing operations before income taxes		2,294		4,141	5,553		6,365
Income tax expenses		(260)		(588)	(984)		(1,167)
Income from continuing operations		2,034		3,554	4,570		5,198
Income (loss) from discontinued operations, net of income taxes		162		(3)	175		(11)
Net income		2,196		3,551	4,744		5,186
Attributable to:
Non-controlling interests		163		74	323		233
Shareholders of Siemens AG		2,033		3,477	4,421		4,953
Basic earnings per share
Income from continuing operations		2.37		4.40	5.38		6.27
Income (loss) from discontinued operations		0.20		−	0.22		(0.01)
Net income		2.57		4.39	5.60		6.26
Diluted earnings per share
Income from continuing operations		2.34		4.35	5.31		6.20
Income (loss) from discontinued operations		0.20		−	0.22		(0.01)
Net income		2.54		4.34	5.53		6.19

Consolidated Statements of Comprehensive Income

		Q2		First half
(in millions of €)		FY 2024		FY 2023	FY 2024		FY 2023
Net income		2,196		3,551	4,744		5,186
Remeasurements of defined benefit plans		529		134	206		439
therein: Income tax effects		(120)		(14)	170		(90)
Remeasurements of equity instruments		665		(8)	788		(31)
Income (loss) from investments accounted for using the equity method, net		−		(4)	(18)		(2)
Items that will not be reclassified to profit or loss		1,194		122	976		406
Currency translation differences		768		(864)	(736)		(4,905)
Derivative financial instruments		(10)		56	83		280
therein: Income tax effects		14		(38)	(20)		(136)
Income (loss) from investments accounted for using the equity method, net		3		(22)	(72)		(171)
Items that may be reclassified subsequently to profit or loss		761		(829)	(725)		(4,797)
Other comprehensive income, net of income taxes		1,955		(707)	251		(4,390)
Total comprehensive income		4,152		2,844	4,995		796
Attributable to:
Non-controlling interests		227		(20)	270		(375)
Shareholders of Siemens AG		3,925		2,864	4,725		1,171

III

Consolidated Statements of Financial Position

	Mar 31,	Sep 30,
(in millions of €)	2024	2023
Assets
Cash and cash equivalents	7,715	10,084
Trade and other receivables	17,159	17,405
Other current financial assets	11,161	10,605
Contract assets	7,825	7,581
Inventories	12,400	11,548
Current income tax assets	1,581	1,363
Other current assets	1,725	1,955
Assets classified as held for disposal	123	99
Total current assets	59,690	60,639
Goodwill	32,094	32,224
Other intangible assets	10,198	10,641
Property, plant and equipment	12,114	11,938
Investments accounted for using the equity method	1,182	3,014
Other financial assets	24,403	22,855
Deferred tax assets	2,566	2,235
Other assets	2,505	1,523
Total non-current assets	85,061	84,432
Total assets	144,751	145,071
Liabilities and equity
Short-term debt and current maturities of long-term debt	7,135	7,483
Trade payables	8,947	10,130
Other current financial liabilities	2,132	1,613
Contract liabilities	13,258	12,571
Current provisions	2,449	2,320
Current income tax liabilities	1,753	2,566
Other current liabilities	6,690	8,182
Liabilities associated with assets classified as held for disposal	38	50
Total current liabilities	42,400	44,913
Long-term debt	43,316	39,113
Provisions for pensions and similar obligations	1,383	1,426
Deferred tax liabilities	1,854	1,655
Provisions	1,387	1,526
Other financial liabilities	1,108	1,453
Other liabilities	2,077	1,933
Total non-current liabilities	51,125	47,106
Total liabilities	93,525	92,019
Equity
Issued capital	2,400	2,400
Capital reserve	7,393	7,411
Retained earnings	35,323	36,866
Other components of equity	2,392	2,282
Treasury shares, at cost	(1,308)	(1,177)
Total equity attributable to shareholders of Siemens AG	46,199	47,782
Non-controlling interests	5,026	5,270
Total equity	51,226	53,052
Total liabilities and equity	144,751	145,071

IV