Nvidia cooperation doesn't worry: Siemens records record sales and decline in profits

Siemens reports a decline in profits. But this only comes about through a previous special effect. The group is actually making more sales than ever before. The tensions surrounding cooperation partner Nvidia don't raise any concerns.

Siemens delivered a strong year with numerous records and still made less profit. The bottom line is that the people of Munich were left with 9.5 billion euros, as they say. That is around 900 million less than in the same period last year. At that time, however, a positive special effect worth around 2.1 billion euros from the sale of the electric motor manufacturer Innomotics drove the numbers up.

This explains why CEO Roland Busch speaks of an “extraordinarily successful” financial year despite the decline in profits. Because if you look at the industrial business, which is not distorted by the profit from the Innomotics sale, there is a significant increase of 13 percent to a record level.

The fact that things are going well for the Munich-based company is also reflected in the increasing order intake, which at 108 billion is not only a record, but also significantly higher than sales. This rose from 78.9 to 83.4 billion euros.

The crisis surrounding Nvidia boss Jensen Huang is of little concern to Siemens boss Roland Busch, although the Munich-based company cooperates closely with the US company. “We are talking about a relatively large company here, also with a large team,” emphasizes Busch. The daily work takes place with other people, for example Rev Lebaredia. “The projects we have there will continue regardless.”

The supervisory board there must ask itself the question of what will happen next with the management at Nvidia. "But the company will continue to operate either way." And Siemens' work with Nvidia takes place "two or three levels below." Ultimately, it is a partnership between companies and he believes that current events will have no impact on it.

Siemens and Nvidia are building an AI operating system

Siemens is working with Nvidia, among other things, to simulate processes using realistic-looking digital twins. Just three weeks ago, Busch said: “Together with Nvidia, we are building the operating system for industrial AI.”

This industrial AI is “a unique growth opportunity - for which Siemens is excellently positioned,” emphasizes Busch. He is not afraid of AI. “I don’t believe that in three or five years AI will destroy the world, humanity,” he says. AI is becoming more powerful every day and there will certainly be threats in the area of ​​cybersecurity, but these can also be combated with AI.

In the new financial year, which has been running since October, Busch expects a further upswing, also due to industrial AI. "We want to grow faster than our key markets. That's why we're setting ourselves an ambitious outlook for the 2027 financial year and at the same time raising our medium-term goals for the group."

Among other things, sales and profits are expected to grow significantly again in the current year. However, the calculation basis is changing because Siemens wants to sell its majority stake in the medical technology subsidiary Healthineers in the current financial year. The forecast therefore refers to a Siemens without a Healthineers majority, both in terms of comparative figures and looking ahead. And possible book profits from the spin-off and their costs are not included. Looking at the medium-term outlook, Siemens is slightly raising its forecast for growth in sales and earnings.

A good third of Siemens Healthineers is expected to go to shareholders next year. There is one Healthineers paper for every two Siemens shares, as CFO Veronika Bienert explains. In addition, the dividend is expected to increase by 15 cents to 5.50 euros.