Siemens expects its digital business to be its best performing group in 2023.
The business, which includes the EDA design tools, product lifecycle management (PLM) and digital twin tools, is expected to grow between 10 and 13%.
The company saw revenues of €72.0bn in 2022, up 16% on 2021, with orders up 25% to €89.0bn.
“Siemens delivered another outstanding performance in 2022, with a record-high profit of more than €10 billion in our Industrial Business. We successfully executed our strategy, capturing market share and achieving high value growth. Strong demand continues for our hardware and software offerings, including higher than expected growth for our digital business revenue. Our people made an incredible contribution in an extremely challenging year,” said Roland Busch, President and CEO of Siemens (above, left).
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“Our outlook for fiscal 2023 is based on the assumptions that geopolitical tensions do not further escalate and challenges from COVID-19 and supply chain constraints continue to ease,” he said.
“Under these conditions, with our high order backlog, particularly in short-cycle businesses, we expect our industrial businesses to continue their profitable growth.”
The group expects growth in the 6% to 9% range in 2023, with the Digital Industries business performing best at 10% to 13% with a profit margin is expected to be 19% to 22%.
The growth in orders was mainly driven by a significant number of larger contract wins in the product lifecycle management (PLM) software business, while orders in the factory automation business came in lower compared to the strong Q4. The strongest growth contributions coming from the factory automation and motion control businesses and in all three reporting regions, led by Asia, Australia including strong growth in China. Revenue growth in the software business was driven by the electronic design automation (EDA) business, but the company also warned of higher expenses related to cloud-based activities, including the transition to software as a service (SaaS).
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The Smart Infrastructure business expects growth of 8% to 11%, while the train-making division, Mobility, expects to see 6% to 9% growth. The IOT business saw the largest growth coming from the US, particularly for the electrification and the electrical products businesses.