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?

ITM Power (ITM LN) - Trading update

ITM has released a trading update, providing guidance on its upcoming H1 FY 2024 results, and reiterating full year FY 2024 guidance.

Norcros - UK margins up materially, South Africa stabilising

Norcros’s compelling investment case was underpinned at the half year where underlying operating profit was down less than 3% despite material revenue pressure. Group operating margins rose 60bp, the UK business reported record underlying profits and Norcros continued to take market share in both the UK and South Africa. We believe that Norcros’s key strengths are underappreciated and that legacy issues, notably the pension deficit, have been resolved. We retain our estimates and value the share

Titon Holdings+ (TON, House Stock at 80p) - Trading update

PROGRESSIVE: Oxford Metrics: Drivers to growth and catalysts for rerating

Oxford Metrics’ results for the year to 30 September show a business that is growing strongly, driven by long-term technology, economic and demographic trends across the life sciences, entertainment and engineering markets. The results are in line with the trading update given on 25 October (see our note) that showed revenue and adjusted PBT ahead of our, and market, expectations. With a confident management commentary on the outlook, we raise our estimates for FY24E and introduce forecasts for

SP Angel Morning View: Gold powers through $2,100/oz on outlook for Fed rate cuts

PROGRESSIVE: Oxford Metrics: Technology, strategy and EPS enhancing

Oxford Metrics (OM) today announced the acquisition of Industrial Vision Systems Ltd (IVS) for £8.1m, funded from cash and 1m new shares. IVS operates in industrial applications of smart sensing, with machine learning technology for quality control in the manufacturing environment. The deal is immediately earnings enhancing and we are raising our forecasts for FY24. This is an exciting first M&A application of the funds from the Yotta disposal. The deal appears technologically and strategically

UK-Listed Energy Sector: Review of the UK oil and gas landscape – why the country needs it, current policy and tax

The front of this note takes a look at the UK oil and gas sector, why domestic production is advantageous, what the main political parties think, and what could happen going forward. The latter part contains a review of the companies in our coverage – some that are UK centric, which give exposure to the note’s wider theme, and others that are focused elsewhere.

PROGRESSIVE: SDI Group: Acquisition of Peak Sensors

SDI Group has announced the acquisition of Peak Sensors, a UK manufacturer of temperature sensors, for an estimated £2.4m (£2.3m less cash). The initial cash consideration is £1.58m, with a further c.£0.82m payment due shortly after completion. The deal will be funded from SDI’s revolving credit facility. As at 30 September, SDI had c.£1.78m cash, £15.1m bank debt and £9.9m undrawn bank facility excluding the accordion, providing considerable financial flexibility for the group. The acquisition

Water Intelligence 10m Trading Update

Water Intelligence has reported a strong 10m Trading Update that indicates it is on track to meet expectations and we increase our FY23 estimates by +2%.

Van Elle Holdings plc (VANL LN) - Trading in line with FY24 expectations, completion of Rock & Alluvium acquisition

Van Elle has released a pre close trading update for HY24 confirming it is trading in line with expectations. Revenue is down 16% yoy to £68.0m which is broadly in line with Zeus expectations for FY24 of 12.1% decline in revenue, pre the addition of Rock & Alluvium. Estimates are updated on the back of the completion of the deal increasing revenue by 6% in the current year to £138m and 11% to £155m in FY25. Zeus leave profit before tax estimates unchanged at £5.0m in FY24 due to integration cost

Morning Note – 28 November 2023

TClarke - £1.1bn order book and delivery protection measures

TClarke has confirmed it is on track to deliver its three-year growth-plan target of £500m of revenues in 2023E (up from £426m in 2022). It detailed a 99% increase in the order book to £1.1bn alongside a further £1bn in opportunities. Reflecting the current challenges in the construction sector, management has made a number of strategic decisions to preserve the business’s strong market and financial position. These include changing some supply-chain partners mid-contract to protect project comp

SP Angel Spec Sits: (YUG) H1 2023: Revised EBITDA Target of £33m+

YUG announced its finacial results for H1 2023 with revised Adj. EBITDA expectations for the year of over £33m, from ~£19m currently.

Hybridan Small Cap Feast - 01/12/23

1st December 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment obje