Siemens raises growth target and launches share buyback

June 24, 2021

By John Revill

ZURICH (Reuters) – Siemens unveiled new targets on Thursday to “clearly outpace the market” in the first strategic blueprint under new Chief Executive Roland Busch.

Busch, who took over as CEO from Joe Kaeser in February, wants to win customers by using the Siemens’s software and hardware to “combine the real and digital worlds”, the company said at its investor day.

The German engineering company aims to expand beyond its traditional industrial customers by boosting its digital offering used to improve the performance of their factories, trains and buildings.

“Digilitalisation, automation and sustainability are growth engines for our business. Here, our core business and our digital business reinforce each other in a virtuous circle,” Busch said in a statement.

“This effect forms the foundation of our growth strategy for achieving more profitable growth.”

Under the plan, Siemens raised its target for increasing annual revenue to a rate of 5-7%, above global market growth and Siemens’s own previous target. Both ran at 4-5%.

Digital technology is expected to lead the charge, with 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.

Accompanying the targets, which will apply from October 2021, will be a new 3 billion euro ($3.58 billion) share buyback, starting in October to run until 2026.

Siemens also committed to a progressive dividend policy, which means a rising or stable annual pay out to shareholders.

In an update on trading, Siemens said the favourable business development had continued, and it expected full year net income in the range of 5.7 to 6.2 billion euros.

The forecast included the impact of integration and financing costs associated with the $16.4 billion acquisition of Varian Medical Systems by Siemens Healthineers which had not been included in previous company outlook.

($1 = 0.8387 euros)

(Reporting by John Revill; editing by Barbara Lewis)

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