(Feb 13): Siemens AG’s revenue rose in its first fiscal quarter as robust demand for its electrification products offset an ongoing slump in sales of factory-automation equipment.

Group revenue increased 3% in the three months through December, the company said Thursday. Siemens left its guidance unchanged, saying revenue is expected to grow by as much as 7% this year.

Demand for Siemens’ electrification products, like software and microgrid controllers that service data centers, has surged amid massive investments in infrastructure to power artificial intelligence applications in the US. Siemens in December said the unit would reach annual profit margins as high as 20% within the next three to five years.

Growth in the electrification business has helped offset weakness in other units, including factory equipment and the mobility business that makes trains and rail infrastructure. Overall orders fell 8% on a comparable basis during the first fiscal quarter.

The factory-automation business, which has suffered from an ongoing slump in China, is showing signs of recovery, chief executive officer Roland Busch said.

“We are seeing an increase in demand from semiconductors, electronics and aerospace industries. Also, chemicals is picking up, which is a leading indicator,” Busch said in an interview with Bloomberg TV. “We are quite positive that the recovery comes, it is moving in the right direction.”

To improve profitability, Siemens has been pivoting toward higher-margin, software-driven product lines in all its units. The German manufacturer plans to acquire US software maker Altair Engineering Inc in a US$10 billion (RM44.5 billion) deal expected to close in the second half of this year.

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