SIEMENSNSEJune 10, 2022

Siemens Limited

14,615words
1turns
0analyst exchanges
4executives
Management on call
Sunil Mathur
Managing Director and Chief Executive Officer, Siemens Limited
Daniel Spindler
Executive Director and Chief Financial Officer, Siemens Limited
Ramya Rajagopalan
Head, Communications, Siemens Limited
Bijesh Kamath
Head, Media Relations, Siemens Limited:
Key numbers — 40 extracted
60%
market momentum will continue and I'll talk more about this a little bit later. Our orders are up 60% – over 60% with revenue over 10% in the first half year. We've talked a little bit more a
10%
d I'll talk more about this a little bit later. Our orders are up 60% – over 60% with revenue over 10% in the first half year. We've talked a little bit more about this as well. The revenues h
17,000 crore
f all the challenges that are coming. We currently have the highest order backlog of close to over 17,000 crores. We have the base business, which is pretty solid and we see that growing very well and by the ba
30%
at the growth of the half year 22 versus half year 21, our Energy business has grown by close to 30%. Where is this coming from, primarily our customers are now moving into decarbonization solutions.
40%
ly focusing on decarbonization solutions. Our Smart Infrastructure business is growing by close to 40%, private discoms are really revamping their networks. We see investments happening there bringing
rs,
just giving an overview of how the business looks in the Energy segment, we have got some good orders, substation orders for AIS for example. In the lift irrigation space, we got some great Statcomm ord
26%
the new metro rail policy where we have got a consortium Siemens Project Ventures Global has got a 26% share and Siemens and Tata's TRIL has got a 74% share in the company. So with that there is quite
74%
sortium Siemens Project Ventures Global has got a 26% share and Siemens and Tata's TRIL has got a 74% share in the company. So with that there is quite a huge potential. Train set is something that we
15%
, boost productivity, bring in flexibility here, and actually bring in greater efficiency of up to 15%. For example here, we were able to bring in efficiencies of up to 15% in the paint shop, another g
7 MW
people here where we are looking at the supply chain. For example, we've started on our own with a 7 MW green energy that we've introduced in Kalwa, 3 MW of that is using solar – rooftop solar for our o
3 MW
in. For example, we've started on our own with a 7 MW green energy that we've introduced in Kalwa, 3 MW of that is using solar – rooftop solar for our own use, distributed energy systems for our own us
4 MW
r own use, but we have also entered a joint venture with SunSole for buying Greentech for another 4 MW, and we will expand this to all our factories in the country as well. - In parallel to that, we
Guidance — 20 items
Management
opening
“The revenues have been muted, but as we have mentioned in our last press release, we do expect the revenues to pick up.”
Management
opening
“We expect that they will continue on this trend at least for the next six months in terms of the visibility that we currently have.”
Management
opening
“So Mobility will be our growth driver in the coming years.”
Management
opening
“Mobility, I've spoken about Hinjewadi being the first PPP metro project in India under the new metro rail policy where we have got a consortium Siemens Project Ventures Global has got a 26% share and Siemens and Tata's TRIL has got a 74% share in the company.”
Management
opening
“Our digital twin of the automation production, this is where we are actually working with or have done a project to deploy both our Mindsphere as well as plants simulation technologies together where we are leveraging the digital technology which includes automation, IoT, data analytics, plant simulation software, our mind sphere platform to reduce the energy consumption, boost productivity, bring in flexibility here, and actually bring in greater efficiency of up to 15%.”
Management
opening
“For example, we've started on our own with a 7 MW green energy that we've introduced in Kalwa, 3 MW of that is using solar – rooftop solar for our own use, distributed energy systems for our own use, but we have also entered a joint venture with SunSole for buying Greentech for another 4 MW, and we will expand this to all our factories in the country as well.”
Management
opening
“On the equity of course, our CSR programs in project Asha where we are looking at over a 100 villages that we've already electrified, brought in health and education into them for over 600,000 people.”
Management
opening
“Everything that he talks about will be related to the first half year and he will give a much more detailed explanation on the financials end.”
Management
opening
“- So like in our last call and Sunil was also touching on it on a supply chain is an unchanged critical topic which we have to master and mitigate also for some more time going forward, it will not fade very quickly, it will stay with us for many more quarters if not years, so we have to master and mitigate also for some more time going forward our supply chain issues.”
Management
opening
“Energy as well as the book to bill increased in the second half of this financial year too due to higher order volumes although from large orders and on the other hand experiencing some supply chain delays and project shifts .”
Risks & concerns — 12 flagged
- Logistics has been a challenge, but these are challenges that we have been dealing with the last 6 to 8 months and I don't think those are materially impacting our financials currently, but what is, however, creating an issue is the delay in availability of semiconductor components and again here Daniel will break this down in a little bit more detail when he explains the impacts on the respective businesses.
— Management
Inflation is a concern, the impact on commodity, the impact on raw materials, the impact of the increase in oil prices this will all have an impact – an inflationary impact and then we are already beginning to see interest rate increase is happening, the challenge is, however, at what point in time will the interest rate increase and the inflationary impact start impacting growth.
— Management
So overall we are very pleased that we delivered a very strong performance during eventful first six months of fiscal 22 against impact of the ongoing global pandemic and the crisis in Europe; later one marking a significant turning point.
— Management
Globally the macroeconomic environment remains extremely volatile as there was amplifying cost inflation and puts constraints on supply chains and during the last half year the pandemic still impacted productivity in some areas besides the recent omicron outbreaks in China leading to lockdowns.
— Management
CapEx is still rising despite inflation and interest rate increases, there was just another interest rate increase earlier this week, however, this favorable development was also reflected in the achievements in our business aspect in their respective key verticals and like I mentioned our last year macroeconomic environment in India is and will remain to some extent volatile and dependent on the first development of the ongoing pandemic and also the crisis in Europe.
— Management
If there is no further let's say if you take the current situation as of today, the inflation levels, the interest levels in spite of the 50 basis point recent increase, I do not expect a slowdown on CapEx spending in the economy for the next at least visibility for the next 6 to 12 months.
— Management
At these current levels of inflation and interest rates, I do not expect a slowdown.
— Management
As I said, I can't predict how things will move both on the inflation and interest rate environment in the future, but as we said today, I do not think there will be a slowdown in CapEx spending either on the government side or on the private sector side.
— Management
So, I mean our challenge and this is what we have been saying at least I've been saying for the last seven or eight years at least may be longer is that our driver is profitable growth and this is a balance that we're going to have to strike to ensure that we do have growth, but that growth does not dilute margin levels, and that is going to be our intent moving forward.
— Management
We do not intend to dilute margin levels, we hope to maintain the margin levels, and grow the margin levels if possible, but the real challenge for us in the management team of Siemens is going to be to keep this balance to ensure that the large projects that we get our balance with a whole lot of additional product businesses and short cycle businesses and digital businesses that can offset a lot of the margin that we are having.
— Management
I think the challenges will continue, resource constraints will continue for our customers, competition will increase, the volatility in the global environment and the local environment will become much more apparent, and we are gonna have to deal with a lot of issues what we have not yet seen to be honest is the impact of any future escalation in the US, China trade war.
— Management
The challenge that we have of course is particularly when you go in as an equity partner and you want to participate in the same project as an EPC partner, is there a conflict of interest somewhere or the other.
— Management
Speaking time
Management
1
Opening remarks
Management
Mr. Sunil Mathur – Managing Director and Chief Executive Officer, Siemens Limited Dr. Daniel Spindler – Executive Director and Chief Financial Officer, Siemens Limited Ms. Ramya Rajagopalan – Head, Communications, Siemens Limited - Mr. Bijesh Kamath – Head, Media Relations, Siemens Limited: - Good morning and welcome to Siemens Limited Analyst Call for H1 FY2022. I am Bijesh Kamath, Head of Media Relations, Siemens Limited. This conference will be in listen-only mode and there would be an opportunity for you to ask questions after the presentation concludes. For this purpose, you need to press the hand icon on the bottom right side of the screen. In the interest of time, we request you to limit the number of questions to a maximum of two each. Please note that this conference is being recorded. On the call, we have Mr. Sunil Mathur, Managing Director and Chief Executive Officer, Siemens Limited and Dr. Daniel Spindler, Executive Director and Chief Financial Officer, Siemens Limited. Yo
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