The following is a summary of the Siemens Aktiengesellschaft (SIEGY) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Siemens reported Q2 2024 orders at €20.5 billion, down 12% organically majorly impacted by a major locomotive order in India from the last year.

• Revenue remained steady at €19.2 billion, with contributions from the Mobility and Smart Infrastructure segments.

• The company experienced an industrial business profit of €2.5 billion, around the same level as the previous year.

• Free cash flow within its Industrial Business arrived at €2.1 billion.

• Earnings Per Share pre-PPA was €2.73.

• Siemens confirmed its group outlook for fiscal 2024, adjusting its expectations for Digital Industries down and anticipating growth in Smart Infrastructure.

• A shareholder-friendly capital allocation was reported with a dividend payment of €3.7 billion in February, and a new share buyback program of up to €6 billion for up to 5 years started.

• The company revised its tax rate to be lower, between 21% and 25% for the complete fiscal year 2024, due to a noncash reversal of income tax provisions after concluding a tax audit.

• Basic EPS for fiscal year 2024 is expected to range between €10.40 and €11.

Business Progress:

• Siemens saw strong demand for digital and sustainability transformations from its customers.

• An all-time high order backlog of €114 billion was also reported.

• The company plans to move forward with its strategic priorities, including portfolio optimization with the setup of Innomotics as a standalone company.

• Key growth drivers were identified as the digital business, organic growth in sustainable and digital technologies, and strategic partnerships.

• Siemens continued introduced product innovations, such as the Siemens EcoTech label, and collaboration with partners like NVIDIA and HD Hyundai.

• The company has plans for further growth, with a focus on areas like energy efficiency, improved asset performance, and increased electrification in a post-industrial business landscape.

• Siemens expects to maintain its guidance at the group level, with a forecast of 4% to 8% comparable revenue growth and a book-to-bill ratio above 1.

• Plans to deliver further value through profitable growth and stable cash generation were shared, despite notable macroeconomic headwinds.

• Siemens is optimistic about growth opportunities in software for the second half of fiscal year 2024, expecting a significant number of deals in the third quarter and throughout the fiscal year.

• The company predicts that positive dynamics in electrification with global net-zero commitments will drive steady demand in the future.

• Siemens disclosed current challenges in the automation sector but remains hopeful about a robust Q3 and Q4 due to a large funnel in their software business. They also stated intentions for more significant investments in software-defined automation and its value-for-money segment of automation, as well as potential mergers and acquisitions.

More details: SIEMENS AG IR

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