Siemens Aktiengesellschaft ETR: SIE raised its medium-term growth targets and forecast faster revenue growth for fiscal 2027, citing demand for data center equipment, industrial software and automation as it prepares to spin off part of its Siemens Healthineers stake.
The company reported fiscal 2026 revenue growth of 8% and a 14% increase in earnings per share before purchase price allocation, or EPS pre PPA. Free cash flow rose 12% to €12.1 billion, Chief Executive Roland Busch said on the earnings call.
For fiscal 2027, Siemens expects comparable revenue growth of 9% to 11% and EPS pre PPA of €10.20 to €10.80, excluding Siemens Healthineers. Busch said the midpoint of the earnings range represents growth of 13%.
Siemens also lifted its medium-term comparable revenue growth target to 7% to 11% from 6% to 9%, and raised its earnings growth target to double digits. Busch cited demand in data centers, automation and software, as well as the company’s Mobility backlog.
Record orders and data center demand
Fourth-quarter orders reached a record €34.8 billion, while revenue grew 10%, Chief Financial Officer Veronika Bienert said. Industrial business profit was €3.9 billion, with a margin of 16.8%, and quarterly free cash flow reached €5.6 billion.
Data center orders across Siemens grew at a triple-digit rate to more than €8.5 billion for the fiscal year, Busch said. Data center revenue rose about 60% to approximately €4.6 billion.
Smart Infrastructure, which supplies electrification and building technologies, recorded fourth-quarter orders of €8.7 billion, up 39%, and revenue growth of 15%. Its 20.3% margin included a 50-basis-point benefit from U.S. tariff refunds, Bienert said.
The division expects comparable revenue growth of 11% to 13% and a margin of 19.5% to 20.5% in fiscal 2027. Data centers account for about 20% of Smart Infrastructure revenue, and the division’s total order backlog exceeds €25 billion.
During the question-and-answer session, Bienert said Siemens expects to convert around 70% of its more than €7 billion data center backlog into revenue in fiscal 2027. Data center revenue growth could exceed 40% if execution proceeds as planned, she said.
Bienert cautioned that order intake could be volatile and that permitting issues might cause hesitation in coming months. However, she described the overall sales pipeline as healthy and said Siemens was increasing capacity in the United States, Germany and other markets.
Automation and software outlook
Digital Industries orders rose 15% in the fourth quarter, including 16% growth in automation orders. Software orders reached a quarterly record of €2.9 billion, helped by larger orders and early renewals with additional sales, Bienert said.
For fiscal 2027, Digital Industries expects comparable revenue growth of 8% to 12% and a profit margin of 20% to 22%. Bienert said double-digit software growth would lead the increase, while automation growth would accelerate.
Busch said he expects both automation and software to contribute to growth, with software growing slightly faster. He also expects faster growth in U.S. automation, although he noted that Siemens’ revenue share in that market remains small.
In China, revenue from Siemens’ local-for-local automation portfolio grew more than 25% in fiscal 2026, Busch said. The company plans to sell selected products from that portfolio globally, in part to address anticipated pricing pressure in entry-level automation.
Busch said automation customer activity in China was strong in October ahead of expected price increases, and that Siemens was moderating distributor purchases to align them with sales. Bienert said pricing actions across the automation market could cause volatility in the timing of orders.
Siemens’ digital business revenue rose 16% to €10.9 billion for the year. Digital Industries software revenue exceeded €7 billion, and annual recurring revenue grew 12%, Busch said. AI-related revenue was trending at around 5% of Digital Industries software revenue.
Bienert said Siemens plans to charge additional AI subscription fees for tools such as copilots and introduce an agentic surcharge on underlying software subscriptions. Busch said the Eigen Engineering Agent is currently sold through license fees.
Mobility and Healthineers spin-off
Mobility booked more than €10 billion in fourth-quarter orders, including over €4 billion in long-term service agreements. Revenue rose 9%, and the division reported a 9.5% margin. Its backlog exceeds €65 billion, though Bienert said many recently booked projects will begin converting to revenue only after fiscal 2028.
For fiscal 2027, Mobility expects comparable revenue growth of 6% to 8% and a margin of 8% to 10%. Bienert said integration costs related to the recently acquired key businesses of MERMEC Group and higher transformation costs would hold back profitability.
Siemens plans to transfer a 34.1% stake in Siemens Healthineers to Siemens shareholders at a ratio of one Healthineers share for every two Siemens shares. The spin-off is expected to take effect in late spring after shareholder approvals in February and the necessary filing and registration process, Bienert said.
Siemens plans to report Healthineers as a discontinued operation starting with fiscal first-quarter 2027 results. After the spin-off and deconsolidation, Siemens’ remaining stake will be accounted for at equity, with a medium-term intention to reduce that holding.
The company proposed a fiscal 2026 dividend of €5.50 per share, up €0.15 from the prior year. Bienert said Siemens had repurchased €1.7 billion of shares since its current buyback program began in July and intends to continue the program after the spin-off.
About Siemens Aktiengesellschaft (ETR:SIE)
Siemens Aktiengesellschaft, a technology company, focuses in the areas of automation and digitalization in Europe, Commonwealth of Independent States, Africa, the Middle East, the Americas, Asia, and Australia. It operates through Digital Industries, Smart Infrastructure, Mobility, Siemens Healthineers, and Siemens Financial Services (SFS) segments. The Digital Industries segment provides automation systems and software for factories, numerical control systems, servo motors, drives and inverters, and integrated automation systems for machine tools and production machines; process control systems, machine-to-machine communication products, sensors and radio frequency identification systems; software for production and product lifecycle management, and simulation and testing of mechatronic systems; and the Mendix cloud-native low-code application development platform.
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