(Nov 11): Siemens Energy AG said profit margins will swell to as much as 22% by 2030 after the company more than doubled earnings last year on booming demand for gas turbines and power-grid equipment.
The German maker of gas turbines and transformers expects annual revenue growth to average as much as 14% through fiscal 2030, the company said Wednesday as it reported results for fiscal 2026.
Siemens Energy has benefitted from the global surge in energy demand driven by the build-out in AI infrastructure and electrification. That has pushed its backlog to record levels, though investors have grown more cautious over whether the AI infrastructure boom can continue at the same pace.
For the current fiscal year, the company sees higher margins, net income of about €5 billion (US$5.6 billion) and free cash flow before tax of roughly €10 billion.
Siemens Energy’s gas services unit has been one of the biggest beneficiaries of the power boom. The company expects growth at the unit to accelerate again this year as demand for large turbines remains strong, particularly in North America. Data centre customers account for more than a quarter of sales at the business.
Profit before special items more than doubled to €5.5 billion in fiscal 2026, ahead of analysts’ expectations, as the company converted more of its backlog into higher-margin sales. Its margin jumped to more than 12% from 6% a year earlier.
Free cash flow before tax nearly doubled to €8.8 billion, helped by customer advances and reservation fees as buyers sought to secure capacity.
The company is also returning more cash to shareholders, announcing late Tuesday an additional share buyback of as much as €9 billion through fiscal 2030, on top of an existing €6 billion programme. On Wednesday, it proposed more than tripling its dividend to €2.30 a share.
The larger shareholder returns aim to reassure investors after concerns about the sustainability of the data centre boom weighed heavily on the stock. Siemens Energy shares have fallen roughly 36% since touching a record high in April. The stock had increased more than 10-fold from the start of 2024 through that peak.
Siemens Gamesa also reached breakeven for the full year, a milestone in a turnaround that has taken years following quality problems and mounting project costs. The wind-turbine division posted a small profit before special items, compared with a nearly €1.4 billion loss a year earlier.
“We will capitalise on strong markets and execute our record backlog with discipline, while allocating capital with the same rigor,” Chief Financial Officer Maria Ferraro said in a statement.
Siemens Energy is also reshaping its portfolio. In August, the company said it would prepare its Transformation of Industry business for independence, with options ranging from bringing in outside investors to a potential listing or sale.
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