Siemens raises growth target with digital drive

Siemens unveiled targets under new Chief Executive Roland Busch. This is to outpace the market by combining its core engineering business with digital expertise in the first strategic blueprint. Busch replaced Joe Kaeser as the CEO in February. He wants to win customers and deliver growth by using Siemens’s software and hardware. In the company’s investor day, they made this announcement.

This German engineering company is aiming to expand beyond its traditional industrial customers. They will boost their digital offering, which are used to improve the performance of their factories, trains and buildings. Digitalization, automation and sustainability are growth engines for their business. Busch stated that their core business and their digital business reinforce each other in a virtuous circle.

Under the plan, Siemens raised its target for increasing its comparable annual revenue at a rate of 5%-7%. A faster growth rate of 10% per year from the 5.3 billion euros ($6.33 billion) of revenues Siemens made in the area in 2020. Digital technology leads this. The company also hiked the profit margin targets for its mobility and smart infrastructure businesses. Under the strategy, Siemens said it will develop digital applications for specific industries and launch products more quickly in areas, including automation, artificial intelligence and cyber security.

The company wants to enter additional markets with a value of 120 billion euros through organic growth and acquisitions. No details were given on how much Siemens would spend. Still, Chief Financial Officer Ralf Thomas said that Siemens remained committed to keeping its investment grade rating. Siemens also committed to a progressive dividend policy. This means a rising or stable annual pay out to shareholders.

The company added that the earnings per share, before the amortization of goodwill for acquisitions would increase in the high single digit range. And this is around 8% to 10%. Siemens said that the favorable business development had continued, and it expected full year net income in the range of 5.7 to 6.2 billion euros.

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