Siemens got off to a good start in fiscal 2009 despite challenging market conditions. Revenue rose 7% to €19.634 billion in the first quarter, which ended on December 31, 2008. Orders continued to exceed revenue, at €22.220 billion, but declined 8% compared to the record high first quarter a year earlier. Siemens has thus performed significantly better than most of its competitors. Total Sectors profit climbed 20%, to €2.005 billion, and net income was €1.230 billion in the first quarter. In spite of the adverse economic conditions, Siemens is sticking to its income goals for fiscal 2009.
"Siemens got off to a good start in fiscal 2009, including better order performance than most of our competitors in the December quarter,” commented Siemens CEO Peter Löscher. “Revenue increased strongly, yet orders again came in well above revenue. Total Sectors profit clearly increased year-over-year. Therefore we are sticking to our goals for fiscal 2009, even though reaching them has become more ambitious. While we continue to keep a close eye on market conditions, we are progressing through the year strong, confident and decisive.”
Revenue and orders increase – Orders remain well above revenue
First-quarter revenue rose to €19.634 billion, a 7% increase compared to the same period a year earlier. Revenue growth was supported strongly by high order growth in the past two fiscal years. Revenue rose in all three Sectors, led by double-digit growth throughout the Energy Sector. The Healthcare Sector also posted double-digit growth including new volume from the acquisition of Dade Behring at the Diagnostics Division. On a geographic basis, revenue rose in all three reporting regions of Siemens, with particular strength in the Americas and Asia, Australia.
In an environment of slowing global growth and a worldwide financial crisis, weaker demand was noticeable particularly in the Siemens businesses which are characterized by short cycles. Orders climbed 3% in Healthcare but declined in Industry and Energy. All regions posted lower orders. Orders however rose 12% in Germany on the strength of a large order for high speed trains at the Mobility Division.
Total Sectors profit rises strongly – compliance expenses fall
Total Sectors profit for the first quarter climbed 20% year-over-year, to €2.005 billion. Energy more than doubled its profit, thus achieving the largest profit increase of all the Sectors. Healthcare increased both its revenue and its profits. Industry made the largest contribution in absolute terms to Total Sectors profit in the first quarter, but saw a decline compared to the prior-year period due primarily to a decline in the industrial automation business.
Income from continuing operations grew to €1.260 billion, up 17% compared to the first quarter a year earlier. Basic EPS on a continuing basis rose to €1.43 from €1.14 in the prior-year period. The major factor in these increases was higher Total Sectors profit year-over-year. Expenses for outside advisors engaged in connection with investigations into legal and regulatory matters totaled €50 million in the first quarter, down from €89 million in the fourth quarter of fiscal 2008.
Net income in the first quarter was €1.230 billion, with a corresponding EPS of €1.40. A year earlier, net income was €6.475 billion and EPS €7.04. The previous year’s figures include approximately €5.4 billion, which primarily resulted from the sale of Siemens VDO Automotive.
Siemens sticks to its income goals for fiscal 2009
Achieving previously announced income targets for fiscal 2009 has become even more ambitious due to market conditions. Total Sectors profit is targeted to reach €8.0 to €8.5 billion in fiscal 2009, provided that customers do not materially slow conversion of booked orders to revenue and pricing does not further diminish due to continued adverse market development. This outlook excludes impacts from legal and regulatory matters. As in the past, Siemens continues to closely monitor global financial and macroeconomic developments and their potential impact on Siemens on a quarterly basis.
