Solid Performance by Siemens in Fiscal 2020
German tech giant Siemens delivered strong performance in fiscal 2020 in extremely difficult economic times. Despite the major challenges worldwide caused by the COVID-19 pandemic, Siemens successfully completed its fiscal year with a strong fourth quarter.
In appreciation of their outstanding performance during the crisis, Siemens is paying about €200 million in bonuses to its employees worldwide. Shareholders are also to participate in the company’s business success and financial strength. For this reason, the Managing Board and Supervisory Board are proposing to the Annual Shareholders’ Meeting a dividend of €3.00 plus an additional €0.50, for a total of €3.50 per share. Adjusted by ten percent to take account of the market value of the Siemens Energy spin-off, this amount is at the same level as the prior-year dividend of €3.90.
Siemens kept Group revenue stable in fiscal 2020. At €57.1 billion, it was down two percent year-over-year. At Group level, orders totaled €60.0 billion, a slight decline of seven percent year-over-year. Adjusted EBITA for the Industrial Businesses declined by three percent to €7.6 billion, including a positive €0.8 billion effect from Siemens’ stake in the U.S. software company Bentley Systems. This effect was partly offset by severance charges of €0.5 billion. The adjusted EBITA margin for the Industrial Businesses was 14.3 percent (FY 2019: 14.4 percent) and thus stable at a high level.
Discontinued operations reported an after-tax loss of €90 million for the full year (FY 2019: income of €490 million). Overall, net income declined 26 percent for the full year to €4.2 billion, yielding basic earnings per share from net income of €5.00 (FY 2019: €6.41). Despite less favorable conditions for cash collection, free cash flow rose significantly to €6.4 billion (FY 2019: €5.8 billion) to reach its highest level in the past ten years.
In the final quarter of fiscal 2020, orders and revenue were heavily burdened by negative currency translation effects. Adjusted for these effects, orders even increased by two percent to €15.6 billion. Mobility, in particular, achieved significant growth. Group revenue totaled €15.3 billion, a moderate decline of three percent on a comparable basis. At 1.02, the book-to-bill ratio remained above 1.
Adjusted EBITA for the Industrial Businesses increased ten percent to €2.6 billion. This increase was driven by a strong performance in the software business and in part by a positive effect related to the stake in Bentley Systems. In addition, there was a €0.2 billion gain from the sale of a business by Smart Infrastructure. This increase was partially offset by €0.1 billion in severance charges. Net income increased 28 percent year-over-year to €1.9 billion due to higher income from discontinued operations, which included a pre-tax gain from the spin-off of Siemens Energy. This gain amounted to €0.9 billion net of the related expenses for the full year.