Siemens' Resilience: Profit Surge Despite Automation Struggles

Siemens, the German industrial conglomerate, reported better than expected profit for its latest quarter, despite ongoing struggles at its factory automation business. The company's profit industrial business increased 11% to €3.0 billion, with a profit margin of 16.5%, while net income climbed 48% to €2.1 billion. Free cash flow all-in at Group level totaled €2.1 billion.

The strong performance was driven by continuing demand for electrification, transportation, and industrial software offerings. Siemens' industrial software business won several large license contracts, contributing to the company's growth in the third quarter of 2024. The company's order backlog remained strong at €113 billion, with a book-to-bill ratio greater than 1.

However, the factory automation business continued to face challenges, with revenue lower in all regions apart from the Americas. The business has been particularly hurt by a downturn in China and Germany, as well as geopolitical uncertainty and overcapacity issues in the manufacturing sector.

To address these challenges, Siemens is focusing on profitable growth and investing in R&D and M&A. The company's acquisition of Altair reinforces its leadership in industrial software and AI, enabling it to combine the real and digital worlds in a way that is unmatched by its competitors. This strategy has allowed Siemens to maintain its position as a leading technology company and continue to deliver strong financial results, even in the face of significant external challenges.



In conclusion, Siemens' strong performance in the third quarter of 2024 demonstrates the company's resilience and ability to maintain profitability despite challenges in its factory automation business. The company's focus on secular growth themes, such as electrification and industrial software, has enabled it to drive growth and profitability. By continuing to invest in R&D and M&A, Siemens is well-positioned to navigate the complex macroeconomic environment and capitalize on new opportunities.