Siemens raised its full-year guidance on Wednesday after a strong first fiscal quarter in which orders, sales, and net income exceeded market expectations.
The German conglomerate recorded an increase in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) by 39%, while the net profit for the period from October to December from 1.1 billion euros in the same period to 1.5 billion euros (1, $ 81 billion) rose the previous year.
Orders rose 15%, with the company leading faster-than-expected recoveries in China and Germany after the Covid-19 downturn. Siemens now expects a net profit of between 5 and 5.5 billion euros for the entire fiscal year 2021. The updated forecasts forecast high single-digit growth percentages for the twelve months to September 2021.
EBITDA of 2.13 billion euros for the quarter exceeded the company’s consensus forecasts of 1.67 billion euros and 1.42 billion euros, which were forecast on average by analysts polled by Reuters.
“What we are seeing in Asia and especially in China is the massive demand, especially for industries or end markets that benefit greatly from people like the games industry and the like staying at home,” Siemens CEO Joe Kaeser told Annette Weisbach on Wednesday CNBC.
Kaeser also noted that China’s global export model also helped stimulate demand for lockdown-friendly industries.
“You think of smartphone games and the like, and that’s where the demand was the greatest, and these are very modern industries. So these are very automated lines and they need a lot of manufacturing software to automate them. That’s why we got in that area benefits a lot. “
However, he suggested that Germany and the rest of Europe would be more of a “catch-up” game than a long-term growth opportunity. Kaeser predicted that the US will be the biggest opportunity for the second half of the calendar year and through 2022.