Siemens Aktiengesellschaft ETR: SIE raised its medium-term growth targets after reporting record free cash flow for fiscal 2026, as demand for data center infrastructure, industrial software and automation supported its outlook for the year ahead.
The company expects comparable revenue growth of 9% to 11% in fiscal 2027 and earnings per share before purchase price allocation accounting, or EPS pre PPA, of 10.20 euros to 10.80 euros. The earnings forecast represents growth of 13% at the midpoint and excludes Siemens Healthineers.
Siemens also lifted its medium-term comparable revenue growth target to 7% to 11%, from 6% to 9%, and said it now aims for double-digit EPS growth. Chief Financial Officer Veronika Bienert said the company’s ambition is to achieve the upper half of the revenue growth range.
For fiscal 2026, revenue grew 8%, EPS pre PPA rose 14% and free cash flow increased 12% to a record 12.1 billion euros, Chief Executive Officer Roland Busch said. The company’s results for the year are preliminary.
In the fourth quarter, orders reached a record 34.8 billion euros, revenue grew 10%, and industrial business profit rose to a record 3.9 billion euros, with a 16.8% margin. Quarterly free cash flow was 5.6 billion euros.
Data Centers and Industrial AI Drive Growth
Siemens’ data center business recorded more than 8.5 billion euros in orders for fiscal 2026, representing triple-digit growth, Busch said. Revenue from the sector rose about 60% to 4.6 billion euros.
Bienert said data centers are now Smart Infrastructure’s second-largest vertical, accounting for around 20% of the segment’s revenue. The business had a backlog of more than 25 billion euros at year-end.
Asked about potential obstacles to data center construction, Busch said local concerns about issues such as water use and noise could lengthen approval processes or delay some projects. He nevertheless said the company was not worried about the outlook for the next couple of years.
Siemens’ digital business generated 10.9 billion euros in revenue during fiscal 2026, up 16%. Busch said the business accounted for close to 20% of Siemens’ total revenue, excluding Siemens Healthineers, and remained on track to double revenue by fiscal 2030.
Revenue at Digital Industries’ software business exceeded 7 billion euros, with annual recurring revenue rising 12%. About 5% of that software revenue was attributable to AI or industrial AI, Busch said. He added that Siemens is considering other ways to monetize AI but that it was too early to provide more specific figures.
Busch cited Andritz Metals as a customer using Siemens’ Eigen Engineering Agent, saying the tool allows it to perform the same engineering tasks twice as fast. He also said Siemens had signed an agreement to acquire Lauterbach, a supplier of debugging and tracing technology for embedded software and system-on-chip architectures.
Segment Outlooks
Siemens forecast comparable revenue growth of 8% to 12% and a profit margin of 20% to 22% for Digital Industries in fiscal 2027. Bienert said double-digit software growth and faster automation growth would drive the increase, although industry-wide automation price changes could cause volatility in the timing of customer orders.
Fourth-quarter orders at Digital Industries rose 15%, including a 16% increase in automation orders. U.S. automation orders grew 61%, helped by project business, while China’s order intake rose 8%. Bienert said growth in Chinese automation orders softened in September, partly because some orders shifted into October.
For Smart Infrastructure, Siemens projected fiscal 2027 comparable revenue growth of 11% to 13% and a profit margin of 19.5% to 20.5%. Fourth-quarter orders in the segment rose 39% to a record 8.7 billion euros, while revenue grew 15%. Its 20.3% quarterly margin included a 50-basis-point benefit from U.S. tariff refunds.
Mobility’s fourth-quarter orders exceeded 10 billion euros, including more than 4 billion euros in long-term service agreements. Siemens forecast comparable revenue growth of 6% to 8% and a margin of 8% to 10% for the business in fiscal 2027. Bienert said many recently booked projects would begin converting to revenue only after fiscal 2028.
Healthineers Spin-Off and Shareholder Returns
Siemens plans to transfer a 34.1% stake in Siemens Healthineers to its shareholders, allocating one Healthineers share for every two Siemens shares. Bienert said the spin-off is expected to take effect in late spring 2027, subject to shareholder meetings and the necessary filing and registration process.
Siemens plans to report Healthineers as discontinued operations beginning with its fiscal 2027 first-quarter results. After the spin-off and deconsolidation, Siemens expects to account for its remaining stake using the equity method and intends to reduce it to a financial asset over the medium term.
The company will propose a fiscal 2026 dividend of 5.50 euros per share, up 0.15 euros from a year earlier. It has also repurchased 1.7 billion euros of shares under its current buyback program since July, Bienert said.
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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