The Munich technology giant Siemens did surprisingly well in the first quarter of the 2021/2022 fiscal year in view of the tight supply chains. In the three months from October to December, the DAX group increased its sales on a comparable basis by nine percent to EUR 16.5 billion.
Profit increases by a fifth
The result from the industrial business increased by twelve percent to 2.5 billion euros. After taxes, profit rose by a fifth to almost 1.8 billion euros. Siemens clearly exceeded the expectations of the analysts with all key figures.
The technology group experienced a veritable boom in orders in the past quarter. Order intake shot up by 52 percent to 24.2 billion euros, mainly thanks to orders for factory automation and for ICE trains.
problems with punctuality
CEO Roland Busch spoke of a very successful start to the financial year. "Our results impressively show that we are pioneers in accelerating digitization and sustainability."
For the first time, however, the group admitted difficulties in processing all orders on time. With reference to the tense supply chains, major interruptions could have been avoided, the group said. However, there are delays in the delivery of some products to customers.
Industry order backlog higher than ever
However, Siemens is not alone with these problems. The incoming orders of the past few months could not have been processed because the companies lacked important preliminary products and raw materials, according to the head of the ifo economic forecasts, Timo Wollmershäuser, with a view to German industry.
The result is a gigantic backlog of orders: According to a survey among companies, the orders are sufficient for the next 4.5 months. "This has never happened since we first asked this question in 1969," says Wollmershäuser.
Is Siemens raising the forecast?
With regard to the further course of the fiscal year, Siemens has fueled investors' expectations. The group initially confirmed its annual forecast of earnings per share of 8.70 to 9.10. After the unexpectedly good start to the year, CFO Ralf Thomas indicated an increase in the profit forecast.
The group could "reach or even exceed the upper end of its target corridor," Thomas said in a conference call, according to the text of the speech. Siemens will update the forecast after the end of the second quarter when it has a better view of when the gains from the sale of non-core businesses will be reflected in earnings.
This prospect is well received on the stock market in connection with the unexpectedly positive quarterly figures. At the start of trading on XETRA, Siemens shares jumped 7.1 percent to EUR 148.00. It has already made up for its price slump in early February.