Siemens Aktiengesellschaft (ETR:SIE) has reported a robust performance for the first quarter of fiscal 2026, showcasing increased orders, broad revenue growth, and an improved industrial profit margin, despite challenges presented by currency fluctuations. The company announced an upward revision of its full-year earnings-per-share outlook following this positive start.
Record Orders and Profit Margins
CEO Roland Busch characterized the beginning of fiscal 2026 as a “strong start,” particularly in a climate marked by geopolitical uncertainty. Siemens achieved a book-to-bill ratio of 1.12, resulting in a record order backlog of EUR 120 billion. For the industrial business, profit reached EUR 2.9 billion, elevating the profit margin to 15.6%. Busch noted that negative currency translation effects had a 60 basis point impact on these results.
The basic earnings per share before purchase price allocation (EPS pre PPA) was reported at EUR 2.80. Free cash flow for the quarter stood at EUR 0.7 billion, a figure that management attributed to normal seasonal adjustments following an exceptionally strong fourth quarter of fiscal 2025.
Smart Infrastructure Leads Growth
CFO Ralf Thomas highlighted the outstanding performance of the Smart Infrastructure segment, with orders soaring by 22% to a quarterly record of EUR 7.2 billion. The book-to-bill ratio for Smart Infrastructure was an impressive 1.30, and its order backlog reached an all-time high of EUR 20.2 billion. This strong demand was largely driven by electrification and electrical products, with orders in Electrification increasing by 38%.
Data center-related orders contributed significantly, totaling a record EUR 1.8 billion, with larger orders making up approximately half of this figure. Revenue in the Smart Infrastructure segment grew by 10%, surpassing internal expectations, while profit margins improved by 210 basis points year-over-year, reaching 19.0%. Thomas noted that benefits from commodity hedging offset currency impacts, which added a positive dimension to the financial outcomes, especially given the volatility in copper and silver prices.
Regionally, Siemens experienced a remarkable 54% growth in orders from the United States, driven primarily by data centers and building projects. Looking ahead, Siemens expects comparable revenue growth for Smart Infrastructure to be in the upper half of its guidance range of 6%-9%.
Digital Industries and Mobility Segments
The Digital Industries segment also showed promising trends, with orders rising by 13% to EUR 4.8 billion and a book-to-bill ratio of 1.07. Thomas reported that the automation business has improved for the third consecutive quarter, although market dynamics remain challenging with limited visibility. Revenue for Digital Industries increased by 10%, with software and automation revenues up by 11% and 9% respectively.
In terms of profit margins, Digital Industries achieved 17.8%, exceeding expectations thanks to pricing adjustments and productivity gains. However, costs related to the integration of Altair and Dotmatics negatively impacted the segment margin by 70 basis points in Q1, with further burdens anticipated for the full year.
The Mobility segment also reported solid performance, with orders reaching EUR 2.9 billion and a book-to-bill ratio of 0.90. The order backlog for Mobility stood at EUR 51 billion, including EUR 15 billion from the service business. Revenue grew by 9%, driven by rolling stock and customer services, while profit margins improved to 9%.
Revised Outlook and Shareholder Returns
Siemens has raised its full-year guidance for basic EPS before PPA to a range of EUR 10.70 to EUR 11.10, marking an increase of EUR 0.20 at the midpoint. The company is now targeting the upper half of its 6%-8% comparable revenue growth range for fiscal 2026.
In terms of cash flow, operating working capital increased by approximately EUR 1.3 billion in Q1, consistent with seasonal trends. Siemens also addressed legacy obligations, paying around EUR 400 million related to nuclear waste removal in Hanau, Germany. The company remains confident in achieving double-digit cash returns on revenue in fiscal 2026, citing a net debt-to-EBITDA ratio of 0.9 and maintaining double-A ratings from both S&P and Moody’s.
In terms of shareholder returns, Siemens has completed nearly EUR 4.4 billion in buybacks over the past two years under its accelerated program and plans to retire 18 million treasury shares in March, reducing its capital stock to 782 million shares.
Looking ahead, Siemens is progressing towards the planned deconsolidation of Siemens Healthineers and has recently sold its airport logistics business in the U.S. to Vanderlande. Management indicated that tax-related aspects are among the considerations in this process, although specific details were not disclosed during the earnings call.
Siemens Aktiengesellschaft continues to position itself as a leader in technology and automation, with a diversified portfolio that spans several key sectors globally.
