Siemens is focusing on digital transformation: Growth through data center boom

Siemens expects solid revenue growth next year, driven by the ongoing boom in energy-intensive data centers, which is leading to increased demand for transformer and grid technologies. Comparable revenues could rise by up to 7% in the fiscal year ending in September, the company recently stated. Revenue grew by 3% in 2024, while net profit shone with a record value of 9 billion euros. Siemens increased the dividend by 11% to 5.20 euros per share. The rise in investments in artificial intelligence has fueled the demand for Siemens’ electrification solutions, compensating for weaker results in the factory automation segment. This area suffered from a continued downturn in China. "The advancing digitalization and artificial intelligence, the increasing demand for more resilience, and the move toward a fully electric and decarbonized world offer enormous opportunities for all our offerings," announced Siemens CEO Roland Busch. Siemens AG shares rose by up to 7.1% in early trading, marking the largest intraday increase since February 2023. Over the past twelve months, the stock has risen by about 40%. Although the market for factory automation equipment is weakening, Siemens hopes for new government measures in China to stimulate the economy. Swiss rival ABB also recently recorded a decline in orders in this area. Revenues in the key Digital Industries division, which manufactures machinery and systems for manufacturing automation, fell by 10% in the past fiscal year. CFO Ralf Thomas predicted that the unit could return to growth in the second half of the 2025 fiscal year. Busch explained in a Bloomberg TV interview the company's favorable positioning in China to benefit from local investment plans in high-tech manufacturing, despite sluggish consumer stimulation. As part of the realignment towards higher-margin, software-based product lines, Siemens plans a multi-billion acquisition with Altair Engineering, which is set to be completed in 2025, and further investments.