Siemens Energy announced the successful replacement of its €11 billion financing facility backed by the German federal government with a new €9 billion agreement, supported by an expanded consortium of 23 international banks. The move underscores the company’s improved financial position and marks a key milestone in its ongoing transformation.
Siemens Energy has significantly improved its financial position following a strong first half of the fiscal year, underpinned by a standout performance in the second quarter. The company’s robust order intake, solid revenue growth, and marked profitability gains prompted an upward revision of its full-year outlook.
In Q2, Siemens Energy reported orders totaling €14.4 billion, representing a 52.3 percent year-on-year increase on a comparable basis. This surge was driven mainly by record-high orders in the Gas Services segment and continued momentum in Grid Technologies. The book-to-bill ratio reached 1.45, reinforcing a healthy demand environment and pushing the order backlog to a new high of €133 billion.
Revenue rose 20.7 percent year-over-year to €10.0 billion, with all segments contributing to the growth. The company’s Profit before Special items rose to €906 million, achieving a profit margin of 9.1 percent, a significant improvement compared to €170 million in the same quarter last year. After accounting for special items related to the sale of the Indian wind business, net profit stood at €501 million, up sharply from €108 million in Q2 FY 2024.
Siemens Energy demonstrated strong cash generation capabilities. Free cash flow before tax climbed to €1.39 billion, up from €483 million in the prior-year quarter, supported by improved profitability and upfront customer payments, including reservation fees.
Siemens Energy today said the newly established facility, together with existing guarantee lines, will continue to support Siemens Energy’s global large-scale project business. As part of the transition, a separate €1 billion facility previously backed by Siemens AG has also been replaced.
Maria Ferraro, Chief Financial Officer of Siemens Energy, said: “The federal government’s counter-guarantee was instrumental in 2023 during a challenging phase to secure our strong anticipated growth. Due to our performance in the past two years and the positive market environment, we were able to improve margins, cash flow, and strengthen our balance sheet. This enabled us to replace the facility before the end of our fiscal year and deliver on our commitment as promised.”
The new facility carries a term of five years, providing long-term financial flexibility and confidence as Siemens Energy continues to expand its order book and deliver complex energy infrastructure projects worldwide.
In 2023, Siemens Energy’s order backlog exceeded €100 billion for the first time, creating a need for substantial guarantee commitments. At the time, challenges in the wind business had impacted the company’s risk profile, making banks hesitant to provide unsecured guarantees. The German government stepped in with a €7.5 billion counter-guarantee, for which it received a fee, but ultimately made no financial payouts.
Guarantees such as these are common in the industry to secure advance payments and ensure project delivery, with a historically low default rate of less than 0.5 percent.
The successful refinancing marks a return to greater financial independence for Siemens Energy and reflects renewed market confidence in its operational and strategic direction.
GreentechLead.com News Desk