Annual balance sheet: Siemens writes record profits – and cuts jobs

Siemens is defying the weak economy and difficulties in its automation business with record profits. The group reported profit after taxes of 9 billion euros for the past financial year. The group also owes the record to a book profit of half a billion through the transfer of shares in its former subsidiary Siemens Energy to its own pension fund. In terms of sales, however, the Munich-based company is only making slow progress. And in the weakening automation, jobs are to be cut. The stock rises to an all-time high on the stock market.

Siemens is benefiting “from the continued high demand for electrification, mobility and our industrial software offerings,” said CEO Roland Busch. The automation business, on the other hand, remains “challenging” and is affected by significant headwinds. Here Busch announced job cuts that will affect a low to mid-four-digit number of people worldwide.

However, many of these are to be absorbed through retraining or relocation to one of the 8,000 open positions in the group. Busch has not yet given any further details – including whether Germany will be affected. But we’re not talking about a big program here, he emphasized.

Sales are only growing slightly

The Smart Infrastructure division, which produces building technology, among other things, made significant growth this year. In doing so, it overtook the previous model student, Digital Industries, with its weak factory automation business. Digital Industries has been suffering for some time, among other things, from high inventory levels among customers and dealers. Sales and earnings there fell significantly. The order backlog is also shrinking, and CFO Ralf Thomas only expects an improvement in the second half of the new financial year.

Overall, Siemens was only able to increase sales by 1 percent to 75.9 billion euros in the 2024 financial year. Incoming orders even fell by 6 percent to 84.1 billion.

In the new financial year, Siemens still expects moderate sales growth of 3 to 7 percent on a comparable basis. The profit should take place on a similar basis as in 2024 – without special effects. If you count special effects, Siemens already has the first 2 billion euros in its pocket. The recently completed sale of the electric motor manufacturer Innomotics ensures a preliminary profit of this amount, which will be reflected in the current new financial year.

A program called One Tech Company, with which Siemens wants to bring its units closer together, is intended to help Siemens achieve its goals. This is not an austerity program, emphasized Busch. One example is the creation of a team to develop basic technologies for the individual units. This should avoid duplication of work. Another approach is to integrate artificial intelligence into all offers.

Siemens shareholders can be doubly happy. On the one hand, Busch announced that he wanted to increase the dividend by 50 cents to 5.20 euros. On the other hand, the Munich company’s shares rose sharply on Thursday morning and reached a new all-time high.