BERLIN/MUNICH (dpa-AFX) - Energy technology group Siemens Energy continues to experience a boom. Global hunger for electricity is driving demand massively. Business with gas turbines is running just as smoothly as network technology. The company, which was still in crisis a few years ago, is also benefiting from the AI boom and the associated expansion of data centers. Following a jump in sales and profits in the past fiscal year, the management team led by CEO Christian Bruch has now raised its medium-term targets once again – and significantly so. In addition, the company is paying a dividend for the first time in four years.

This caused euphoria among investors on the stock market after the share had also closed deep in the red the previous day in the wake of a wave of selling of US tech stocks on Wall Street. The share gained more than 10 percent on Friday. In the current year, the share price has more than doubled. Over a three-year period, the share price performance is even better.

Analysts were impressed: The new medium-term targets look good, wrote Vivek Midha of US bank Citigroup, for example. They have exceeded the already high market expectations. JPMorgan analyst Akash Gupta now sees around 20 percent upside potential for the consensus on adjusted operating income. The targets for 2028 are "fully charged," praised Lucas Ferhani of the Jefferies analysis firm. They promise significantly more dynamic growth with higher margins.

CEO Bruch also expects the market environment to remain strong in the future. "We are seeing all over the world that our portfolio fits the requirement to build a resilient energy infrastructure," he said on Friday during the annual press conference, which this time took place in Berlin instead of Munich.

The high demand, reflected in record sales, order intake, and order backlog, is helping Siemens Energy in several ways: First, the company can command good prices for its new orders—something that will help it in the coming years, given the long-running projects. However, Bruch said that even more important for the high expectations for the future is that the increasing volume will enable factories to be better utilized and efficiency to be increased. And he is confident that the high utilization rate will remain so.

Bruch warned against too much euphoria about the data center business, which is currently on everyone's lips in the wake of the AI boom. It is a good business, said the manager. Although electricity demand there will rise in the coming years, it will still only account for a fraction of total global electricity demand.

All of this should translate into significant growth in revenue and profit in the coming years. Comparable revenue is expected to grow at an average annual rate in the high double-digit range until 2027/28, as the company announced on Thursday after the close of trading. So far, management has been targeting growth in the high single-digit to low double-digit percentage range. This excludes currency and portfolio effects. The adjusted profit margin is then expected to reach 14 to 16 percent. The previous target was ten to twelve percent. The new forecast exceeds analysts' previous expectations, which averaged a margin of 13.5 percent.

Siemens Energy can rely on full order books: In the past fiscal year, order intake rose by a good 17 percent to €58.9 billion. In the fourth quarter, the gas and grid technology businesses once again attracted significantly more new business. As a result, the order backlog increased by a good 12 percent to €138 billion at the end of September. Siemens Energy is currently increasing its capacities—including in Germany—in order to work through the backlog.

In the new fiscal year 2025/26, Siemens Energy expects comparable revenue growth of 11 to 13 percent, which is slightly lower than in the previous year, when growth of 15.2 percent was achieved. The adjusted margin is expected to increase from 6.0 percent to 9 to 11 percent.

Revenue and earnings growth will continue to be driven by the gas and grid technology business, with both divisions expected to grow faster than the Group as a whole. Development continues to be hampered by the Gamesa wind turbine business, which is expected to break even in terms of adjusted margin in the 2025/26 fiscal year after renewed losses in the past fiscal year.

Bruch said he wanted to continue to focus on a turnaround there. In view of the recent resurgence of fossil fuel businesses, particularly in the US, the manager warned against writing off wind power just yet. He sees continued great potential in the offshore turbine business in particular.

The bottom line is expected to be significantly higher than in the previous year: after taxes, profits are likely to rise from 1.7 billion to three to four billion euros. This means that Siemens Energy is finally putting the crisis behind it. In previous years, the company had to digest heavy losses, particularly in the wind power business.

Shareholders can now also benefit from this positive development. The group intends to pay a dividend again for the past fiscal year after it redeemed federal government guarantees ahead of schedule in June. The proposed dividend is €0.70 per share. Siemens Energy last paid a dividend for the 2021 fiscal year: €0.10 per share./nas/tih/he/jsl/mis