Siemens posts strong start to 2011
Company's energy division benefits from massive surge in new orders
German engineering giant Siemens has posted its first fiscal quarter 2011 results today. The company began the year by maintaining the positive growth trend of the previous quarters, with a 19% increase in new orders year-over-year. Revenue also rose sharply by 12%. Income from continuing operations reached a record level, increasing 17% on strong development in the company’s short-cycle industry activities and power plant business.
“Capital-efficient growth is our aspiration. We have lived up to it. Orders and revenue grew in all regions, particularly in emerging markets. From this our business in Germany benefits as well. We delivered excellent bottom-line performance and are fully on track to reach the targets we set for fiscal 2011,” said Siemens president and CEO Peter Löscher. The company confirmed its targets for the current fiscal year 2011 which ends September 30.
In the first quarter of fiscal 2011, which ended on December 31, 2010, new orders soared to €22.588 billion (US$30.7 billion). Revenue increased to €19.489 billion ($26.5 billion). Benefiting from positive currency translation effects in the reporting period, new orders and revenue exceeded prior-year levels for the third successive quarter.
The company’s book-to-bill ratio in the first quarter was 1.16. At the end of December 2010, the combined order backlog of Siemens’ three Sectors totalled €92 billion ($125 billion), compared to €87 billion ($118 billion) at the end of September 2010.
All three Siemens Sectors – Industry, Energy and Healthcare – contributed to order and revenue growth. At the Industry Sector, new orders rose 22% and revenue 13% year-over-year, led by the Industry Automation and Drive Technologies Divisions.
At the Energy Sector, new orders climbed 27% and revenue 14%, with the surge in new orders driven primarily by the Fossil Power Generation Division and the increase in revenue growth especially by the Renewable Energy Division.
Siemens’ operating strength was also reflected in its first-quarter profit. Total Sectors profit increased six percent year-over-year to €2.229 billion ($3 billion). A decline in profits for its Healthcare division was more than offset by substantial increases in profit at the Industry and Energy Sectors, the company claims. Income from continuing operations rose 17% to €1.787 billion ($2.43 billion), a new record.
Siemens says that with continuing improvement in its markets, it expects organic order intake to show a clear increase compared to fiscal 2010. Supported also by its already strong order backlog, the company expects revenue to return to moderate organic growth.
The company also anticipates income from continuing operations to exceed reported fiscal 2010 results by at least 25% to 35%.