Siemens expects sales growth to slow in 2024 after record Q4

Siemens on Thursday gave a more cautious sales outlook for 2024, citing continuing destocking by Chinese customers, after the maker of products from trains to industrial software reported record industrial profit.

Siemens has been seeing demand levels return to normal in recent months after a post-pandemic jump when customers ramped up production and pre-ordered in bulk to avoid shortages of key components. Image Source: Reuters

Siemens on Thursday gave a more cautious sales outlook for 2024, citing continuing destocking by Chinese customers, after the maker of products from trains to industrial software reported record industrial profit.

Siemens is the latest company to highlight tougher market conditions, with Swiss rival ABB last month flagging falling orders in China.

The German group, whose products are used to automate factories and buildings, said it expected revenue growth of 4-8 per cent in the next 12 months, less than the 11 per cent increase recorded for its 2023 business year.

At its key industrial automation unit, the group expects "soft economic development with sluggish demand - especially in China and Germany – and with destocking in key countries" in the first half of fiscal 2024, finance chief Ralf Thomas said.

"We assume that improving trends will begin to materialize in the second half of fiscal 2024," he told journalists at the group's annual press conference.

Frankfurt-listed shares in the German industrial heavyweight were still up 3.6 per cent at 0735 GMT, boosted by record results in the July-September quarter, which showed sales rising 10 per cent to 21.4 billion euros ($23.19 billion).

That beat the 20.99 billion euros forecast in a company-gathered poll of analysts.

Industrial profit too grew 7 per cent to a record 3.4 billion euros, above the 3.34 billion euros forecast.

"Fiscal 2023 was a year of multiple records," CEO Roland Busch said. "In our Industrial Business, profit and profit margin reached their highest levels ever, and we nearly doubled our net income to a historic high."

Siemens has been seeing demand levels return to normal in recent months after a post-pandemic jump when customers ramped up production and pre-ordered in bulk to avoid shortages of key components.

The company has also been working through its massive order book, which stood at 111 billion euros at the end of September, up from 110 billion euros at the end of June.

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