Decent finish to FY23, the FY24 targets could turn out to be cautiously optimistic

Siemens’ Q4 results came in slightly ahead on revenues and profits, decently ahead on orders and strongly ahead on FCF. SI and Mobility delivered several positives during the quarter, while DI’s performance was largely driven by software. EPS pre-PPA was slightly ahead of the guidance. FCF amounted to €10bn for the fiscal year. The group will propose a dividend of €4.70 and launch a new €6bn buyback programme. Lastly, the FY24 targets are ahead of the consensus and offer some upside.

Meeting with Siemens' IR: key takeaways and Q4 expectations

We had a meeting with Siemens IR at our offices and discussed a variety of topics surrounding the group. We share some of these insights in this short write-up alongside our expectations for Q4. Given our Buy recommendation on the name, we believe that the current share price is a good entry point for long-term investors.

DI short-cycle weakness drives a consensus miss, FY23 outlook (mostly) reiterated

Hindered by DI, Siemens’ Q3 results missed the consensus estimates on revenues and profits despite delivering a beat on orders and FCF. Orders jumped on the back of large orders in Mobility, while DI and SI continued to normalise. Revenues grew yoy on strong execution, continually easing supply chains and solid pricing. This led to good yoy growth in profitability (Industrial businesses) and robust FCF generation with good cash conversion. Lastly, Siemens confirmed its FY23 targets albeit with a

Solid Q2 print (ex. Healthineers) prompts another guidance upgrade

Siemens delivered another strong quarter, beating consensus on orders, revenues and FCF. Order growth was driven by SI and Mobility, whereas DI continued to normalise. Revenue growth was boosted by strong execution helped by easing supply chains and improved component availability. However, profitability (Industrial businesses) was slightly below expectations due to a materially weak result at Healthineers. FCF generation was robust with good cash conversion. Lastly, the group raised its FY23 ta

Strong execution propels Q1; 2023 guidance raised; is there room for more?

Siemens picked up right where it left off last quarter, with Q1 FY23 order and profits strongly beating consensus. The order backlog remained at a high level despite strong revenue growth. This performance was driven by solid showings in DI and SI, whereas Mobility remained muted. However, CFO and FCF were lower due to the build-up in working capital. On the back of this strong quarter, the group raised its outlook with comparable revenue and margin revisions in both DI and SI.

Strong finish to FY22; FY23 outlook above expectations and positive read-across for others

Siemens closed FY22 with a solid Q4, leading to a comprehensive consensus beat on the FY22 figures. The order intake and order backlog ended at high levels with revenues also growing strongly. Despite the impairment charge from Siemens Energy, profitability was better than expected. The highlights of the release were robust FCF generation and a positive FY23 outlook, which bodes well for the sector. Lastly, the group will propose a progressive dividend of €4.25, above our expectations.

Mixed Q3 figures; Siemens Energy impairment (virtually) weighs on the FY22 outlook

Siemens’ Q3 results were a mixed bag with orders and revenues above consensus, but profitability below it. The hit to profitability primarily came from a €2.7bn impairment of Siemens Energy. The remainder came from another round of impairments related to the Russian operations. CFO and FCF, however, were above expectations. The group also accelerated its buyback programme. Following the release, the group altered its FY22 outlook, mainly driven by the impairment charge (already expected) and inc

Russian write-downs steal the show, FY22 outlook confirmed

Siemens’ Q2 results were a mixed bag with orders above consensus, revenues largely in line and profitability missing estimates. The latter resulted from write-downs in Russia, following the group’s decision to exit its business in the country. Digital Industries and Smart Infrastructure delivered solid performances with Mobility bearing most of the brunt. FCF generation was decent despite the lower profitability. The group confirmed its outlook for the year and now expects the Parcel Logistics t

Quick off the line

Siemens reported a strong set of results that beat consensus across the board. The group witnessed a surge in orders across all its industrial businesses. Revenue and profitability growth was also high, which resulted in decent FCF generation. Good progress was made on portfolio optimisation with three different deals expected to close in 2022. Despite such a strong result, the group did not raise its outlook, not that it is a negative as the group wants to see how Q2 progresses.

Excellent 2021 sets the stage for 2022

Siemens closed out FY21 with results that were above our expectations. Compared to consensus, revenue was above expectations, whereas profitability was just slightly below them. Order growth, in particular, remained very strong. Backed by such figures the group generated robust FCF and decent net income. Supported by the former, the group proposed a dividend of €4.0, an increase of €0.5 over FY20. The group also put forward its outlook for FY22, which is an overall positive in our view.

Solid Q3, FY21 outlook raised again

Siemens, like its peers, posted a solid set of quarterly results beating both our and consensus expectations. This was brought about as a result of strong performances across all its Industrial businesses. Order growth, in particular, was very strong. The beat on the profitability side was higher and was certainly aided by the revenue beat. Net income increased substantially and FCF generation was very robust. Consequently, the group raised its FY21 outlook again.

Strong Q2 leads to a better FY21 outlook

Siemens posted another good set of results which beat our and consensus expectations. The recovery in short-cycle markets across most sectors led to revenue and order growth. Additionally, lower discretionary spending due to ongoing restrictions and structural cost measures helped improve margins. Net income got a boost from the Flender sale but registered good growth even without it. FCF generation was solid too. Finally, the group revised its FY21 outlook, which was also above our expectations

Faster than expected rebound boosts Q1

Siemens’ Q1 figures built up on the positive preliminary results released last week. This was made possible due to a faster than expected recovery, as well as a focus on cost savings, the benefits of which directly trickled down to the bottom line. Moreover, FCF generation was also robust. On the back of these results, the group has provided a more precise upgraded forecast for 2021 which improves upon both revenue and profitability.

Better Q4 leads to stable FY20 results

Siemens released a stable set of figures for FY20, bolstered in part by a relatively stronger performance in Q4. While revenues and orders were slightly lower, FCF generation was robust. Additionally, the group is mulling over whether to pay a dividend of €3.50. Management also put forward its FY21 outlook and the path ahead for the group under a new leadership.

A tale of two listed entities

Siemens Energy looks like an acceptable “fossil” servicing plus green proposition but the spin-off begs two equally important questions – is it being done to really create a leader in energy or is it an opportunistic attempt to derisk the parent entity?

Supreme (SUP LN) - Record performance, EBITDA ~doubled

Supreme’s FY24 trading update confirms a record performance in the 12 months to 31 March 2024. Organic revenue and profit growth across all four divisions has driven Group revenue +45% YOY to £225m, with FY24 adj. EBITDA almost doubling to ‘at least £38m’, driving record levels of cash generation. Supreme is actively exploring complementary M&A, supported by a debt free balance sheet. Trading on an undemanding FY25 PE of just 6.7x, with a 3.4% yield, we believe downside risks are more than price

Morning Note – 22 April 2024

Morning Note – 25 April 2024

Supreme+ (SUP, House Stock at 125p) - Supreme, Supreme!

Vianet Group: FY24 trading update, strategic contract win

Vianet has published a positive trading update for FY24 with turnover up 7.6% to £15.18m, a 3.5 percentage point increase in gross margin YoY, and adjusted EBITA ahead of market expectations. Net debt continues to fall and closed FY24 at £1.52m (£2.1m at 30 September 2023), demonstrating strong free cash flow generation, even without the benefit of the £0.9m tax receipt received in 1H24, which augers well for a final dividend. The company reported a new contract with Wilcomatic Wash Systems, the

Renewi - Solid trading and better cash generation

Renewi’s FY24 trading update was in line with management’s expectations and its improved cash generation is reassuring for investors. Attention is now likely to turn the strategic review of the UK Municipals with management stating that they remain on track to update markets by the end of June. This could lead to an exit of key liabilities and leave Renewi as an attractive circular economy investment with strong market positions and organic growth plans, which should assist in generating value,

Vianet - FY24 ahead, strategic forecourt customer win

Vianet’s FY24 trading update shows FY24 revenue +1% ahead of our previous forecast, adjusted EBITA +2% ahead, EFCF and net debt +£0.6m ahead, and a strategic new customer win with prominent forecourt operator Wilcomatic. A robust FY25 pipeline and outlook leads us to reiterate our FY25E forecasts at this point, with the update highlighting: strong progress renewing and winning new customers on 3-5 year contracts as they migrate from 3G to Vianet’s advanced 4G LTE solutions; the successful integr

SP Angel Spec Sits: FY Trading Update (LTHM)

Headlam Group - Strategy for growth in tougher market

Headlam Group has laid out an ambitious long-term revenue target of between £900m and £1bn, as it seeks to grow its share of the UK floor coverings distributor market. Despite a challenging backdrop due to the low level of residential housing transactions, management is seeking to expand each of its sales channels: Trade Counters, Larger Customers, Regional Distribution and Europe & Other. The FY23 results reflected the more challenging environment and the group trades at a discount to its long-

Norcros (NXR LN) - Sale of Johnson Tiles UK streamlines the business and improves operating margin

Norcros has announced the sale of its Johnson Tiles UK business to the current management team for a consideration of £1.0m, with a further modest earnout based on the equity value of the business, both payable in April 2028.

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

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SP Angel Morning View: Copper prices hit $9,700/t as China smelts concentrates for zero charge Tc/Rc

Hybridan Small Cap Feast - 24 April 24

24th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

Norcros - Sale of Johnson Tiles UK agreed

Norcros’s disposal of Johnson Tiles is the latest strategic activity taken by management to better allocate capital to fit with priorities. Last year it closed its UK adhesives operation. Norcros has a compelling investment case, where its new product development initiatives, market positioning and self-help initiatives allow it to take market share in both the UK and South Africa. Its rating is low at 6.0x FY24e P/E, which is attractive, especially when compared to its yield of 5.4% on its well

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