Spin-off of energy business on track – Outlook relativized
Siemens expects the pandemic to have even stronger impacts on business development in the third quarter. For the period beyond the third quarter, reliable estimates are not yet possible. For this reason, Siemens will no longer confirm its original guidance. Instead, the company expects a moderate decline in comparable revenue in fiscal 2020, with the book-to-bill ratio remaining above 1. The decline in demand is expected to have the strongest impact on the business activities of Digital Industries and Smart Infrastructure. Siemens is adhering to its plan to spin off and publicly list Siemens Energy before the end of fiscal 2020. The company expects to record a spin-off gain, the amount of which cannot yet be reliably forecast. Siemens also assumes that there will be material impacts on net income from spin-off costs and tax expenses related to the carve-out and creation of the subgroup Siemens Energy. Therefore, Siemens is currently refraining from giving guidance for basic earnings per share (from net income) for fiscal 2020.
However, the company is financially, in particular, very well prepared for the challenges that COVID-19 will be posing in the coming months. “The company has a strong rating and a very solid liquidity position,” said Ralf P. Thomas, Chief Financial Officer of Siemens AG. “If needed, we have direct access to more than €11.4 billion in net liquidity. In addition, we have a very resilient and diversified business portfolio with a growing share from service and software.”