Siemens Energy (ENR) investor relations material

Strategic direction and market outlook

• Focus on electrification, grid expansion, energy transition, and energy security, with electricity demand expected to grow 50% over the next decade and up to 45% by 2035, doubling by 2050, driven by population growth, EVs, AI, and data centers.

• Renewables, grid modernization, and industrial transformation are key growth areas, with significant investments in capacity, R&D, and digitalization to maintain competitiveness.

• Gas remains a core business, with market forecasts supporting elevated gas turbine demand through 2035, and grid technologies positioned for growth as transmission networks are expected to double by 2035.

• Investment programs align with grid build-out, infrastructure replacement, and ramp-up of renewables, with significant transformer and gas capacity expansions planned.

• The Elevate strategy program is structured around capacity expansion, resilience, and operational transformation, guiding investments and organizational changes.

Financial guidance and capital allocation

• Achieved 15% revenue growth and a 500 basis point margin improvement in the last fiscal year, with a backlog of €138 billion and improved margins.

• Upgraded guidance targets low-teens revenue growth and a 14-16% profit margin before special items by 2028, with profit expected to more than triple by then.

• €6 billion CapEx planned over the next three years for capacity expansion, especially in gas services and grid technologies, and up to €10 billion to be returned to shareholders via dividends and share buybacks by FY28.

• Free cash flow of €20 billion expected from 2026-2028, with annual pre-tax guidance of €4-5 billion through FY28, supporting a strong investment-grade credit profile.

• R&D spending will remain above €1 billion per year, with a shift toward grid and gas technologies, and a focus on innovation and asset performance.

Business area performance and operational excellence

• Gas Services: Market leader with 78 GW secured in backlog, doubling gas turbine sales in 2025, and targeting 18-20% profit margin by 2028; service business expected to generate €30 billion over 20 years from new units.

• Grid Technologies: Order backlog doubled to €42 billion in two years, with high-teens revenue growth and a target profit margin of 18-20% by 2028.

• Siemens Gamesa (Wind): Turnaround underway, with break-even targeted for 2026 and 3-5% margin by 2028, focusing on operational excellence, portfolio streamlining, and service-centric onshore business.

• Transformation of Industry: Achieved over 1,300 basis points margin improvement since 2021, targeting 12-14% margin by 2028, with growth driven by service, digital, and diversified markets.

• Operational excellence initiatives include decentralization, digitalization, AI-driven productivity, supply chain resilience, and cost efficiency, with SG&A expenses declining as a percentage of revenue.