Siemens Energy (LON:0SEA) reported record fiscal 2026 orders and a sharp rise in fourth-quarter profit, as stronger execution in its gas and grid businesses helped the company set higher revenue, margin and cash flow targets through 2030.
Fourth-quarter revenue rose 21% on a comparable basis to €12.8 billion, while profit before special items more than tripled to €1.5 billion. For the full year, comparable revenue grew 15.5%, the profit margin before special items reached 12.4%, and net income was €4.1 billion. Free cash flow before tax totaled €8.8 billion.
President and CEO Christian Bruch attributed the performance to improved project delivery, higher production and the conversion of higher-quality orders. Siemens Gamesa, the company’s wind business, achieved a slightly positive full-year profit before special items after recording its second consecutive profitable quarter.
Higher Targets Through 2030
For fiscal 2027, Siemens Energy expects comparable revenue growth of 14% to 16% and a profit margin before special items in the same range. It forecasts net income of around €5 billion and free cash flow before tax of approximately €10 billion.
By fiscal 2030, the company is targeting revenue above €70 billion, compared with approximately €44 billion in fiscal 2026, and a profit margin before special items of 20% to 22%. CFO Maria Ferraro said the margin target would exclude the Siemens brand license fee, while the fiscal 2027 outlook still includes it.
Ferraro said the longer-term margin plan relies on higher-margin orders already in the backlog, improved productivity and cost control, recovery at Gamesa and the removal of the license fee. The plan does not require another significant increase in pricing, she said.
Siemens Energy expects about €55 billion in cumulative free cash flow before tax from fiscal 2027 through 2030. Ferraro said roughly 75% of the forecast €10 billion in fiscal 2027 cash flow would be driven by profit, with customer advances and slot reservation agreements also contributing.
Gas and Grid Backlogs Support Growth
Full-year orders rose 19% on a comparable basis to €68.1 billion, lifting the group’s backlog to €164 billion. Ferraro said the backlog covers around 85% of expected fiscal 2027 revenue. Orders from data center-related customers account for approximately €15 billion, or less than 10% of the total, she said.
Gas Services revenue rose 20.3% on a comparable basis to €14.5 billion, with a profit margin before special items of 16.4%. Grid Technologies revenue grew 26.2% to €14.1 billion, and its margin reached 18.9%.
For 2030, Siemens Energy targets margins of 25% to 27% in Gas Services and 24% to 26% in Grid Technologies. Bruch said grid pricing was flattening in some areas, making factory productivity and cost improvements increasingly important. Ferraro added that pricing varies by geography and product, with large power transformers still commanding high prices.
In Gas Services, the company secured 42 gigawatts of new unit orders during fiscal 2026. Year-end commitments totaled 104 gigawatts, including 39 gigawatts under slot reservation agreements that management expects to convert into firm orders in fiscal 2027 at more attractive margins than fiscal 2026 orders.
Asked about possible delays in data center projects, Bruch said he had not seen a slowdown in customer demand or an impact from U.S. midterm elections. He said the company can reallocate reserved production slots when contractual terms allow if projects do not advance on time.
Bruch also highlighted the longer-term service opportunity from new turbine installations. Siemens Energy expects Gas Services revenue from servicing equipment to more than double by fiscal 2035. Ferraro cautioned that rising input costs must be considered when assessing future service margins.
Gamesa Turnaround and Planned Separation
Siemens Gamesa generated €10.6 billion in revenue and a profit margin before special items of 0.1% in fiscal 2026, while free cash flow was negative €1.6 billion. The company targets a 0% to 2% margin in fiscal 2027, an 8% to 10% margin by fiscal 2030 and cash-positive operations by fiscal 2028.
Bruch described break-even as a starting point rather than the end of the turnaround. Asked about wind’s longer-term role in the portfolio, he said the business ultimately needs to contribute to and be accretive to Siemens Energy, while the outlook for onshore and offshore markets in the 2030s remains uncertain.
The company also plans to separate its Transformation of Industry business and bring in a co-investor. Bruch said discussions with potential co-investors would start early next year. Siemens Energy intends to retain a meaningful minority stake, he said.
Shareholder Returns and Capital Allocation
Siemens Energy will propose a fiscal 2026 dividend of €2.30 per share, up from €0.70 a year earlier. It also repurchased €3.1 billion of shares during the year.
Through fiscal 2030, the company plans to return more than €25 billion to shareholders, including a dividend payout of 40% to 60% of net income and buybacks of up to around €3 billion per year. Ferraro said approximately €3.5 billion to €4.5 billion is earmarked to increase Siemens Energy’s stake in Siemens Energy India Limited from 16% to 51% in 2028.
About Siemens Energy (LON:0SEA)
Siemens Energy AG operates as an energy technology company worldwide. It operates through Gas Services, Grid Technologies, Transformation of Industry, and Siemens Gamesa segments. The company provides gas and steam turbines, generators, and heat pumps, as well as performance enhancement, maintenance, customer training, and professional consulting services for central and distributed power generation; and high voltage direct current transmission systems, offshore windfarm grid connections, transformers, flexible alternating current transmission systems, high voltage substations, air and gas-insulated switchgears, digital grid solutions and components, and storage solutions.
