Tag: Siemens

World needs to be prepared for a future with EVs, says Siemens CTO

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In a world that is rapidly evolving with technological advancements, the future is set to be dominated by Electric Vehicles (EVs). To shed light on the importance of preparation for this inevitable transition and the role of e-fuels, CNBC-TV18 spoke to Peter Koerte, Chief Tech & Strategy Officer at Siemens.

Peter Koerte strongly emphasises the need for the world to prepare for a future where Electric Vehicles (EVs) become a norm rather than an exception. EVs represent a significant step towards reducing carbon emissions and mitigating the effects of climate change.

E-fuels, also known as synthetic fuels, have been considered a bridging technology on the path to decarbonisation. These fuels are created by converting renewable energy into liquid or gaseous fuels, which can be used in various applications, including internal combustion engines. However, Koerte raises an important point: the production of e-fuels necessitates a substantial amount of renewable energy and therefore is inefficient.

“There is not much life for internal combustion engines (ICEs). There is a conversation about hydrogen particularly for heavy-duty vehicles such as tractors, trucks etc, but no so much of e-fuels,” Koerte added.

Peter Koerte strongly believes that companies must take proactive steps to invest in decarbonisation efforts if they aim to achieve carbon neutrality by 2030.

Koerte points out that India, with its vast potential and growing economy, is an ideal destination for investment. He highlights that they prefer the railway industry, infrastructure and industrial sector for investment in India.

Watch the accompanying video for the entire conversation

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Siemens Q3 net profit zooms to Rs 456 crore, beats estimates

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Technology firm Siemens Ltd on Tuesday reported a 51.8 percent year-on-year (YoY) jump in consolidated net profit at Rs 455.5 crore for the third quarter that ended June 30, 2023. The company follows October-September financial year.

In the corresponding quarter last year, Siemens posted a net profit of Rs 300.1 crore, the company said in a regulatory filing. CNBC-TV18 Polls had predicted a profit of Rs 442 crore for the quarter under review.

In the quarter, total revenue stood at Rs 4,873.2 crore, up 14.4 percent against Rs 4,258 crore in the corresponding period of the preceding fiscal. CNBC-TV18 Polls had predicted revenue of Rs 4,900 crore for the quarter under review.

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At the operating level, EBITDA jumped 37.5 percent to Rs 566.6 crore in the first quarter of this fiscal over Rs 412 crore in the corresponding period in the previous fiscal.

EBITDA margin stood at 11.6 percent in the reporting quarter as compared to 9.7 percent in the corresponding period in the previous fiscal. EBITDA is earnings before interest, tax, depreciation, and amortisation.

The company’s new orders stood at Rs 5,288 crore, a 5.9 percent increase over the same period last year. The base business has increased by 10.9 percent, whereby advance orderings in our short-cycle product businesses still had some adverse impact.

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Sunil Mathur, managing director, and chief executive officer of Siemens, said, “We continue to see a consistently strong performance across all our businesses with a healthy mix of orders from both the government and private sector, especially in infrastructure and railways. As delivery periods and supply chain issues start improving, volumes are beginning to normalise.”

The results came after the close of the market hours. Shares of Siemens Ltd ended at Rs 3,781.85, down by Rs 51.35, or 1.34 percent on the BSE.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Siemens shareholders vote against proposal to sell low-voltage motors business to subsidiary

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shareholders of Siemens have voted against the company’s proposal to sell its low voltage motors and geared motors businesses to its subsidiary Simens Large Drives India.

“The Company had sought the approval of its Members in relation to the aforesaid matter (among other matters) vide the postal ballot notice dated 23rd June, 2023. As an update, as disclosed in our letter dated 28th July, 2023, setting out the voting results of the aforementioned postal ballot, the said Resolution has not been approved by the Members of the Company,” Siemens informed the stock exchanges on Friday, July 28.

In May, the company had announced to sell and transfer the low voltage motors and geared motors businesses to its subsidiary for a cash consideration of Rs 2,200 crore. The same would have come in effect from October 1, had the approvals gone through.

The business vertical that was considered for sale, added Rs 1,061 crore revenue and Rs 132 crore profit in FY22. It made up for 7 percent of the company’s revenue as well as 9 percent of its profits from operations.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

ABB India shares decline on weak order inflows of parent company, peers Cummins and Siemens react

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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ABB, the parent company of ABB India, declared its results for the second quarter of CY2023, wherein the order inflows declined 2 percent to $8,667 mn versus $8,807 mn year on year.

Two out of four business areas recorded single digit order growth, with Process Automation declining due to portfolio changes and Robotics and Discrete Automation down from last year’s level which benefited from pre-buys in a period of significant component shortages.

Order intake in Asia, Middle East and Africa declined as the positive development in countries like India and Saudi Arabia did not offset declines in other countries such as China.

Automotive remained broadly stable while the general industry and consumer-related robotics segments declined. In transport & infrastructure, there were positive developments in marine & ports and renewables. In buildings there was weakness in all three regions in residential-related demand. In the commercial construction segment weakness was noted in China and Germany, while demand was solid in the US.

The revenues grew 13 percent to $8,163 mn compared with $7,251 mn. The Operational EBITA margin of 17.5 percent is up 200 basis points year on year, with all four business areas above 15 percent. This was supported by a strong price contribution which more than offset labor inflation as well as some limited cost inflation related to commodities, with additional support from operational leverage on increased volumes in production.

ABB closed the divestment of the Power Conversion division at around $500 million. As a result, it expects to record a non-operational book gain estimated at approximately $50 million in income from operations in the third quarter of CY2023.

ABB, in the third quarter of CY2023,  anticipates a low double digit comparable revenue growth and the Operational EBITA margin to be slightly up from the 16.6 percent reported in the third quarter last year. For the full-year 2023, despite current market uncertainty, ABB anticipates comparable revenue growth to be at least 10 percent and Operational EBITA margin to be above 16 percent.

At 11 am on July 20, ABB India declines nearly 8 percent, while peers – Cummins and Siemens are trading  1 to 3 percent lower on NSE.

ABB India shall declare its June quarter results on August 11, while Cummins  shall declare on August 3.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Siemens Energy AG’s profit warning hurts sector, stock slumps over 30%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Siemens Energy AG’s profit warning led to a 36 percent drop in share price, marking its worst one-day performance ever. Siemens Energy warned on June 22 that the impact of quality problems at its Siemens Gamesa wind turbine business would be felt for years and were not yet quantifiable. The shares of Siemens Energy tumbled in trade.

Siemens Energy, which supplies equipment and services to the power sector, scrapped its 2023 profit outlook late on June 22 after a review of its wind turbine division exposed deeper-than-expected problems that could cost more than 1 billion euros ($1.09 billion).

“Even though it should be clear to everyone, I would like to emphasise again how bitter this is for all of us,” Siemens Energy CEO Christian Bruch told.

“Given the history and nature of the wind industry, the profit warning was not a complete surprise, but what surprised us was the magnitude,” analysts at JP Morgan said.

Issues at Siemens Gamesa have been a drag on the parent for a long time, prompting Siemens Energy to take full control of the business after only partially owning it for several years.

The Stoxx 600 Index was down 0.15 percent as of 8:12 in London, and was set for its worst weekly drop since mid March. Energy and industrials lead the declines, while defensive sector like healthcare and telcos outperformed. Siemens Energy AG slumped after it took back its profit guidance due to mounting issues at its Spanish wind-turbine unit.

European stocks fell for the fifth day, extending their longest losing streak since December, as sentiment has soured following hawkish signals from central banks.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Five questions that Siemens minority shareholders seek answers to

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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On May 19, Siemens investors were taken by surprise when the company announced the sale of its low-voltage and geared motors business to its parent company, Siemens AG. The stock tanked 12 percent since this announcement in the last hour of trade on May 19.

The low-voltage and geared motors business is a part of the Digital Industries segment of Siemens and the deal is for a cash consideration of Rs 2,200 crore, to paid as a special dividend. This consideration was twice the FY22 revenue, representing 7 percent and 9 percent of Siemens consolidated revenue and earnings before, interest and tax.

Siemens, however, shall be taking minority approval for this transaction. But before providing an approval, Siemens minority shareholders seek answers to five crucial questions in regards to this deal.

First being, the cogitation for arriving at the given valuation. The company’s management highlighted that independent valuation by a reputed firm further supported by a fairness opinion from a merchant banker has been used to arrive at the transaction value.

The analyst community thinks, prima facie, the deal seems unattractive for minority shareholders and hence their approval is unlikely.

Second, have the growth prospects for a high margin business – Digital Industries – turned weak? The low voltage motors FY22 margin at 12.5 percent is ahead of the 10 percent reported for the Digital Industries segment, in which it is housed. Going by the valuations for this deal, Digital Industries margins shall be be much lower than what the shareholders anticipate, which leads to a question if there is a possibility of downward revision in margins for next two years.

Third, how can a low dividend announcement compensate the offset loss of value? The entire sale proceeds of Rs 2,200 crore is being proposed by
management to be paid as a special dividend, which post tax implies a cash payout of Rs 1,600 to 1,700 crore, according to Nomura. This is lower compared with the 9 percent of overall company EBIT being sacrificed.

Fourth, even after grabbing high market share in the Indian low voltage motors market, why is Siemens not able to gain significant pricing power? The management while addressing queries of investors in its conference call on May 19 said that three to four companies, including Siemens, cumulatively dominate the Indian low voltage motors market with 50-70 percent market share, while the remainder market is held by smaller players. It added that the industrial motors are a commodity with insignificant pricing power. Thus, with commodity prices broadly stabilizing, pricing related top-line growth witnessed in FY22 and first half of FY23 may no longer be feasible in the long term.

Fifth, what investors most importantly seek answers to now are on the company’s governance. This deal has created concerns for minority shareholders, arising on the fairness of valuation for businesses being sold to the parent and this deal being categorised as a related party transaction.

Along with Siemens, the street is now concerned about the valuations of the low voltage motors business for peers like ABB. Going by the commentary made by Siemens management that low voltage motors may witness mid single digit growth in the medium term, ABB could see a rerating. Nomura says, the motion segment accounted for 36 percent of EBIT in CY22 for ABB and this could weigh heavily on its growth prospects.

Siemens fell 8 percent in trade on May 22, in addition to 5 percent lost in the last hour of trade on May 19. Post this stock price correction, the stock has given up half of its gains made in calendar year 2023.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Siemens to sell low voltage motors business and buy Mass-Tech Controls’ EV division

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Siemens tanked 5 percent in the last hour of trade on May 19 and is trading 9 percent lower at 10am on May 22. This comes after an announcement by the company to sell and transfer its low voltage motors and geared motors businesses to Siemens Large Drives India, a subsidiary of Siemens AG. This is with effect from 1st October, 2023 for a cash consideration of Rs 2,200 crore.

The low voltage motors and geared motors business contributed 7 percent of Siemens revenue or Rs 1,061 crore in the year ended September 2022. Siemens follows a financial year of October to September.

The Board has also decided to consider the distribution of 100 percent of the sale consideration (after applicable Capital Gains Tax, and any other applicable taxes, if any), as a special dividend, at the first Board Meeting after completion of the proposed transaction.

The rationale for sale is that Siemens AG intends to carve out the low voltage motors and geared motors business globally into a legally separate company and is based on Siemens AG’s decision to form Innomotics, an integrated provider of motors and large drives.

Siemens stock tanked 5 percent in the last hour of trade on May 19 and is trading 9 percent lower at 10am on May 22.

Philip Capital says the sale of company’s India business to parent in the past as well has been a regular occurrence. This deal seems to have a negative impact for Siemens, as it is valued at 16.7x, while Siemens TTM P/E is 84.8x. Philip Capital has a ‘Buy’ rating with a target price of Rs 4,328.

Brokerage Prabhudas Lilladher says the sale of low voltage motors and geared motors business will lead to readjustments in revenue and profit after tax. The brokerage has ‘Accumulate’ rating on stock with target price of Rs 4,254.

Nomura has downgraded the stock to ‘Reduce’ from ‘Neutral’ citing concerns on fairness of valuation for the business being sold to the parent company. Nuvama says the deal puts minority shareholders at a disadvantage given that the sale is to parent entity.

Also read: State Government infra spending yet to pick up to its true potential, says Siemens

Alongside, in an another development, Siemens, on May 19 said in a press release said that it entered into agreements for the acquisition of Electric Vehicle division of Mass-Tech Controls Private Limited.

With the acquisition, Siemens looks at addressing the fast-growing demand for electric vehicles charging infrastructure in India, expand local market presence and enable creation of export hub. Mass-Tech Controls will also help Siemens scale up the range of e-mobility solutions.

The acquisition of the electric vehicle division is in cash and is likely to be completed by September 2023. The cost of acquisition is Rs 38 crore.

Mass-Tech Controls was incorporated in the year 1988 and its EV division was started in the year 2017. The EV division is engaged in the business of design, engineering, and manufacturing of a wide range of AC and 30 – 300kW capacity DC chargers for various end applications for electric vehicles. Mass-Tech Controls is headquartered in Mumbai and its sales are within India. The turnover of Mass-Tech Controls electric vehicle division tripled in FY23 to Rs 16.7 crore from Rs 5.7 crore in FY22, while in FY22 the revenues stood at Rs 1.8 crore.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Siemens raises full year outlook after Q2 sales beats forecasts

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Siemens raised its full year sales and profit guidance on Wednesday after the German engineering and technology group beat sales forecasts during its second quarter.

The maker of products ranging from trains and industrial software now expects comparable revenue growth of 9 percent to 11 percent in the 12 months to the end of September, up from its previous outlook for an increase of 7 percent to 10 percent.

Siemens also expects to increase its underlying basic earnings per share to a range of 9.60 euros to 9.90 euros, up from the 8.90 euros to 9.40 euros it said it expected in February.

With a gain from the partial reversal of a previous charge, the overall EPS is expected to increase to a range of 11.61-11.91 euros.

The company had already raised its full-year outlook in February, citing strong demand and its massive order backlog, which increased to 105 billion euros ($115.58 billion) in the second quarter.

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The raised guidance came after Siemens reported its second quarter revenue jumped by 14 percent to 19.42 billion euros ($21.38 billion). Analysts in a company-compiled poll had expected 18.59 billion euros.

Industrial profit in the three months to the end of March rose 47 percent to 2.61 billion euros, missing forecasts for 2.70 billion euros.

“Siemens continues its outstanding performance, delivering several records, including impressive margin increases and all-time highs in profit for Digital Industries and Smart Infrastructure, as well as another record in order backlog,” said Chief Executive Roland Busch in a statement.

The results of Siemens, whose sensors, controllers and software are used in factories, transport systems and buildings, are seen as indicators for the health of the broader industrial economy.

The group’s industrial profit includes gains made by its digital industries, smart infrastructure, mobility and health care businesses, which form the core of its operations.

The results underline the recent upward trend in global industry as it overcomes supply chain bottlenecks that have plagued it until last year.

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Swiss peer ABB recently raised its full-year guidance for sales and profit on the back of a strong first quarter, while French train maker Alstom last week said market momentum remained very positive.

Siemens’s net income almost tripled to 3.55 billion, helped by the company booking a non cash gain of 1.59 billion euros from reversing an impairment charge related to its investment in Siemens Energy.

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3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

State Government infra spending yet to pick up to its true potential: Siemens

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Siemens which posted 39 percent growth in net profits and 28 percent growth in revenues in the March ended quarter, interacted with CNBC-TV18 on Tuesday. Sunil Mathur, MD and CEO of Siemens, says the company’s growth is closely tied with the industrial and infrastructure activities in the country.

The company is an important part of India’s growth story, especially in the ongoing railway capex cycle. The player bagged a large locomotives order worth Rs 26,000 crore in January 2023 for 10 years.

Siemens’ performance in past two years has been positive and reflects India’s growth story. Mathur says “We have good visibility for growth in next 3 to 6 months as orders continue to flow in”.  The company booked new orders of Rs 31,151 crore in the March ended quarter, which included 9000 HP locomotive project.

Though commodity prices are easing, Mathur does not expect the 12 to 13 percent margin range to sustain in the long term as the revenue mix will keep changing. The product segment is short cycle, versus project segment which is long cycle.

Speaking on the Rs 26,000 crore locomotives order, Mathur says every year specified number of locomotives have to be delivered for 10 years. Post which, there will be 35 years of its maintenance. This order will yield mid margins for the company.

“We are very focused on our mobility business, we are looking at more orders for Vande Bharat trains and metros”. Mathur says “we are hungry for more and more and more”.

The company also has operates in the power segment. It acknowledges that it receives payments on time and non receipt of payment is not a concern. The company is not directly exposed to power distribution companies, but is bidding to the Engineering, Power and Construction (EPC) companies and says it receives timely payments from EPC players.

Central government capex spending is strong, while private sector capex is yet to gain pace in the next one year. State government capex has not yet picked up to its true potential, but is expected to gain pace in the next 2 years, says Mathur.

Siemens stock is trading 1 percent higher on the exchanges at Tuesday noon and has gained 37 percent since the start of calendar year 2023.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow