Strong underlying performance notwithstanding charges at SGRE – outlook for fiscal year 2023 adjusted

• Despite the subdued overall economic development, Siemens Energy’s market environment remained favorable. During the quarter, Grid Technologies (GT) was awarded the largest offshore grid connection order in Siemens Energy’s history. The platforms will connect several offshore wind farms in the (German) North Sea to the onshore grid.

• Siemens Energy delivered strong order and revenue growth and better than expected cash flow. A strongly improved operational performance at Gas Services (GS), GT, and Transformation of Industry (TI) was more than offset by charges of €0.5bn at Siemens Gamesa Renewable Energy (SGRE). During an evaluation of the installed fleet, SGRE detected a negative development of failure rates in specific components resulting in higher warranty and service maintenance cost assumptions.

• Orders continued to be very strong. Comparable growth (excluding currency translation and portfolio effects) was 49.2% despite a high basis of comparison, resulting in orders of €12.7bn, supported by large orders especially at GT. The Book-to-bill ratio (ratio of orders to revenue) was 1.80 and the order backlog rose to €98.8bn despite material negative currency translation effects.

• Revenue came in at €7.1bn reflecting a 16.0% increase on a comparable basis. All segments contributed to this growth.

• Siemens Energy’s Profit before Special items was negative €282m (Q1 FY 2022: negative €69m) due to the charges at SGRE. GS and GT reported sharp improvements year-over-year and TI delivered a positive result. Special items were negative with €103m (Q1 FY 2022: positive €6m) mainly driven by restructuring costs at SGRE. As a result, Profit for Siemens Energy was negative €384m (Q1 FY 2022: negative €64m).

• Accordingly, Siemens Energy reported a Net loss of €598m (Q1 FY 2022: Net loss €246m). Corresponding basic earnings per share (EPS) were negative €0.60 (Q1 FY 2022: negative €0.18).

• Free cash flow pre tax was negative with €58m (Q1 FY 2022: negative €69m), mainly driven by cash outflows at SGRE. Overall, the development was better than expected, supported by advance payments from customers in relation to the strong order development.

• Due to the aforementioned charges at SGRE, Siemens Energy had to adjust its outlook for fiscal year 2023. Management now expects Siemens Energy Group’s Profit margin before Special items between 1% and 3% and Net loss of Siemens Energy Group to be on prior fiscal year’s reported level. Due to the better than expected cash flow development during the quarter, management now expects Free cash flow pre tax for fiscal year 2023 to be positive.