Q3 2026 Siemens AG Earnings Call Transcript
Key Points
- Record Q3 performance with group orders surging 14% to an all-time high of EUR27.9 billion, lifting order backlog to a record EUR132 billion.
- Smart Infrastructure delivered exceptional momentum, with orders up 42% to a record EUR8 billion, driven by triple-digit growth in the data center vertical.
- Digital Industries showed strong recovery, with automation orders up 11% and a book-to-bill above 1, supported by improving market dynamics in China and the US.
- Industrial Business profit reached a record EUR3.5 billion with a margin of 17.3%, driven by operational strengths in Digital Industries and Smart Infrastructure.
- Free cash flow was a standout at EUR4.1 billion, up over 40% year-over-year, with a strong cash conversion and a deleveraged balance sheet at 0.6x net debt/EBITDA.
- Raised fiscal 2026 EPS guidance to EUR11.20-EUR11.50, reflecting confidence in continued strong performance.
- Digital business revenue grew 18% in the first nine months, well ahead of the 15% ambition, with strong adoption of AI-driven products like the Eigen Engineering Agent.
- Mobility achieved a robust book-to-bill of 2.35, with a promising pipeline including a EUR3 billion contract with Italo Holding expected in Q4.
- Progress on deconsolidating Siemens Healthineers, with tax authorities' decisions received and a clear timeline for shareholder approval in February 2027.
- Launched a new EUR6 billion share buyback program, with swift execution of EUR400 million in the first month.
- Persistently volatile geopolitical environment poses risks to global operations and demand.
- Digital Industries' Q4 orders are expected to be around prior year level due to tough comps from exceptionally high EDA bookings, with software orders below last year's record.
- Capacity utilization in key European industrial markets remains at relatively low levels, indicating a mixed recovery.
- Smart Infrastructure's margin was partly offset by an impairment related to the e-mobility charging business, and pricing measures have not yet fully compensated for higher commodity costs.
- Digital Industries' Q4 profit margin is expected to be flat sequentially due to business mix, despite strong software growth.
- Mobility's full-year margin is expected to be towards the lower end of the 8%-10% range, impacted by a less favorable project mix and higher severance costs.
- Supply chain constraints, including rising prices for selected electronic components, are creating cost pressures that need to be managed.
- Potential volatility in order intake for data center business due to lumpiness of large orders, which could affect revenue visibility.
- The SaaS transition, while progressing well, still involves ongoing investment and code rewriting, which could impact near-term profitability.
- Integration costs for Altair and Dotmatics (70 basis points in Q3) continue to weigh on Digital Industries' margins.
Good morning, ladies and gentlemen, and welcome to the Siemens 2026 third-quarter conference call. As a reminder, this call is being recorded.
Before we begin, I would like to draw your attention to the safe harbor statement on page 2 of the Siemens presentation. This conference call may include forward-looking statements. These statements are based on the company's current expectations and certain assumptions and are therefore subject to certain risks and uncertainties.
At this time, I would like to turn the call over to your host today, Mr. Tobias Atzler, Head of Investor Relations. Please go ahead, sir.
Good morning, ladies and gentlemen, and welcome to our fiscal Q3 '26 conference call. All documents were released this morning and can be found also on our IR website. I'm here today with our CEO, Roland Busch; and our CFO, Veronika Bienert. Both will review the Q3 results. After the presentation, we will have time for Q&A.
With that, I hand it over to you, Roland.
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