Siemens Energy's Strong Revenue Growth: A Beacon of Hope in the Energy Sector

Siemens Energy, a leading energy technology company, recently announced its financial results for the period ended Dec. 31, 2024, revealing a significant increase in revenue. The company's revenue amounted to 8.94 billion euros ($9.38 billion), up from 7.65 billion euros the prior year, and ahead of the consensus estimate of 8.49 billion euros. This impressive performance can be attributed to several key factors, highlighting the company's strategic focus and market position.

One of the primary drivers of Siemens Energy's revenue growth was the positive market environment, particularly the increase in global electricity demand. The global electricity demand rose by around 4% in 2024, compared with 2.5% in the previous year, which positively impacted the company's sales. This growth in demand was driven by the increasing need for energy infrastructure and the requirements of the energy transition, supporting all businesses of Siemens Energy.



Siemens Energy's strong performance in its various business areas also contributed to the overall revenue growth. The company's Gas Services business area achieved a comparable revenue growth of 7% to 9% and a profit margin before Special items of 10% to 12%. The Grid Technologies segment planned to achieve a comparable revenue growth of 23% to 25% and a profit margin before Special items between 10% and 12%. The Transformation of Industry business area expected a comparable revenue growth of 11% to 13% and a profit margin before Special items of 8% to 10%. Although Siemens Gamesa assumed a comparable revenue growth of negative 9% to negative 5% and a negative Profit before Special items of around €1.3bn, the company aimed to achieve a break-even point in fiscal year 2026, indicating progress in fixing the wind business.

Siemens Energy's positive market environment, coupled with its strong performance in various business areas, has positioned the company well for future growth. The company expects overall favorable conditions in its relevant market environment for fiscal year 2025, anticipating strong electricity consumption growth and the requirements of the energy transition. Siemens Energy expects comparable revenue growth in a range of 8% to 10% for fiscal year 2025, excluding currency translation and portfolio effects. The company also anticipates a profit margin before special items between 3% and 5% for fiscal year 2025, compared to the actual figure of 1.0% in fiscal year 2024. Net income is expected to be around break-even, excluding assumed positive special items subsequent to the demerger of the energy business from Siemens Limited, India. Free cash flow pre tax is expected to be up to €1bn for fiscal year 2025.

In conclusion, Siemens Energy's strong revenue growth in fiscal year 2024 is a testament to the company's strategic focus, market position, and the positive market environment. As the company continues to benefit from the increasing demand for energy infrastructure and the energy transition, investors can expect Siemens Energy to maintain its strong performance in the coming years.