Latest / Warren's Watchlist - english / Siemens Energy - Update 09/23/2026 - ISIN DE000ENER6Y0

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Siemens Energy - Update 09/23/2026 - ISIN DE000ENER6Y0 · Warren's Watchlist - english

• 0:07
  Speaker 0: Picture a huge turbine hall, so big a train could fit inside.
• 0:14
  Speaker 0: In the middle —a gas turbine—hundreds of tons heavy and when it runs you can feel the floor vibrate.
• 0:22
  Speaker 0: Siemens energy builds machines like that turbines that generate electricity plus the grid technology.
• 0:30
  Speaker 0: According to the company, an estimated one-sixth of world's electricity generation is based on its own technologies.
• 0:38
  Speaker 0: Siemens Energy has seen a clear upswing lately.
• 0:41
  Speaker 0: Today we're going look at what contributed that up swing and could slow it down going forward.
• 0:47
  Speaker 1: And What have been in headlines about the company over past few years?
• 0:51
  Speaker 0: Two things above all.
• 0:53
  Speaker 0: In twenty twenty it was spun off from Siemens with ninety nine percent shareholder approval And then, in twenty-twenty three the company was pretty close to the edge.
• 1:03
  Speaker 0: Its wind power subsidiary Siemens Gamessa had massive quality problems.
• 1:09
  Speaker 0: The stock then posted heavy losses and In the end the government had a step in with guarantees so the Company could keep securing large orders.
• 1:17
  Speaker 1: Oh honestly that sounds more like a turnaround case.
• 1:20
  Speaker 0: Yes it was but A lot has happened since Then.
• 1:24
  Speaker 0: Two years later, Siemens Energy is paying a dividend again for the first time in four years.
• 1:30
  Speaker 0: The company is sitting on more cash than it has debt revenue up thirteen percent-a good thirty nine billion and the operating margin jumped from one per cent to over six Operating profit.
• 1:41
  Speaker 0: more then sex toppled.
• 1:43
  Speaker 1: So two years ago It was pretty dark In the hall.
• 1:46
  Speaker 1: now there's plenty of activity Again surely?
• 1:49
  Speaker 1: A friendlier environment played apart.
• 1:51
  Speaker 1: that too right.
• 1:53
  Speaker 1: I'm thinking, for example of the AI boom and the rising energy demand that comes with it.
• 1:58
  Speaker 1: Siemens Energy surely benefits from that too right?
• 2:01
  Speaker 0: Yes absolutely artificial intelligence runs in gigantic data centers And those need one thing above all enormous amounts of electricity around the clock.
• 2:13
  Speaker 0: Worldwide The electricity consumption Of these data centers is likely to roughly double by twenty thirty And that electricity has to be generated, transported over long distances and kept stable.
• 2:27
  Speaker 0: That's exactly Siemens Energy's business.
• 2:30
  Speaker 0: In the grid technologies segment for instance it is about transformers substations high voltage transmission and grid stability... ...and that segment grew fastest in past fiscal year.
• 2:42
  Speaker 1: So the company benefits without selling AI itself.
• 2:46
  Speaker 0: You could put it this way The company itself writes that electricity demand from data centers contributed noticeably to growth, especially in the United States.
• 2:56
  Speaker 0: So the AI boom is less a direct AI product for Siemens energy and more an indirect but powerful tailwind through electricity
• 3:04
  Speaker 0: demand.".
• 3:06
  Speaker 1: Got it!
• 3:06
  Speaker 1: Figuratively speaking you could say...
• 3:12
  Speaker 0: Yes?
• 3:13
  Speaker 0: That's one way to describe it.
• 3:15
  Speaker 0: The plant is back on the grid now.
• 3:17
  Speaker 0: But if we want to stay with this image, I'd also like you through the control room of this plant because there are three gauges in here that draw my attention and all three tell something about how the upswing at Siemens Energy actually stands Because it's core is... Is the upswing complete by now?
• 3:38
  Speaker 0: Or just really getting started?
• 3:41
  Speaker 1: Truly Back On The Grid Again?
• 3:43
  Speaker 1: but three signals need to be taken seriously.
• 3:46
  Speaker 1: For anyone hearing us for the first time, I'm talking with Warren Wise an AI technology that analyzes and evaluates equity stories like a value investor.
• 3:55
  Speaker 0: Yes exactly!
• 3:58
  Speaker 0: I reviewed it according to the methodology of Benjamin Graham, Warren Buffett and Charlie Munger.
• 4:40
  Speaker 0: Every episode is selected, reviewed and approved by an editorial team.
• 4:45
  Speaker 0: So the analysis –and the voices– are AI.
• 4:48
  Speaker 0: The responsibility is not.
• 4:50
  Speaker 0: Let's first look at what has genuinely gone well At Siemens Energy lately, Corey.
• 4:56
  Speaker 0: Here we can see it very clearly... ...the operational turnaround Is real!
• 5:00
  Speaker 0: The profit from the ongoing business That is, profit before special items Has more than sex-tupled Grid technology gained strongly and the gas business is booming too.
• 5:12
  Speaker 0: That definitely deserves recognition.
• 5:15
  Speaker 0: Hmm,
• 5:15
  Speaker 1: that sounds very positive at first of course but...is there a butt to the profit trend in general as well?
• 5:22
  Speaker 1: Yes
• 5:22
  Speaker 0: from my perspective-there is!
• 5:25
  Speaker 0: Look at one of most important metrics net profit around one point seven billion, clearly more than the year before.
• 5:32
  Speaker 0: But that figure includes a onetime book gain of almost five hundred million because a stake in India was revalued after a spin-off.
• 5:41
  Speaker 0: No recurring cash no ongoing operations translated to our power plant.
• 5:47
  Speaker 0: not lasting electricity generation but a campfire.
• 5:51
  Speaker 0: it warms and it glows But a
• 5:58
  Speaker 1: special game like that is still positive, isn't it?
• 6:01
  Speaker 1: Yes.
• 6:02
  Speaker 0: Temporarily it does lift the profit but Siemens energy itself strips this special gain back out when calculating.
• 6:15
  Speaker 0: And there's a second fire.
• 6:21
  Speaker 0: A large part of the strong free cash flow came from customers increasingly paying up front, that tailwind only lasts as long as the order books keep growing – it isn't repeatable!
• 6:32
  Speaker 0: That too is more of a snapshot than a lasting recurring inflow of
• 6:36
  Speaker 0: funds.".
• 6:38
  Speaker 1: What else stood out to you?
• 6:39
  Speaker 1: As you went through The Annual Report, Warren….
• 6:41
  Speaker 1: You just mentioned a second gauge which should be watched closely
• 6:44
  Speaker 1: right?!
• 6:45
  Speaker 0: Yes...that's right Corey and it actually takes us to where the crisis began.
• 6:50
  Speaker 0: Back to Siemens-Gahmeyser, which we already talked about at the start – It's the wind power subsidiary whose rotors & components really dragged the whole group down hard in twenty-twenty three.
• 7:02
  Speaker 1: Those were ones with quality problems right?
• 7:05
  Speaker 0: Yes Right And this part of the company The Siemens–Gahmesa business was still running In the twenty- twenty five financial year At a margin of minus sixteen percent.
• 7:16
  Speaker 0: Figuratively speaking, Siemens energy's power plant as a whole is back on the grid.
• 7:22
  Speaker 0: The other three divisions are essentially running flawlessly – it's just this one very large generator that still spinning out of balance and so to speak…still costing power instead of producing it!
• 7:34
  Speaker 0: At the end of twenty-twenty five, Siemen's Gahmesa was still showing a clear loss.
• 7:40
  Speaker 0: In a group that proudly talks about margin expansion, That's not a cosmetic flaw but still A real big problem area.
• 7:48
  Speaker 1: But the rest of the group is running pretty smoothly again, Warren Why is this one division Of all things so important?
• 7:54
  Speaker 0: Because it's still The same division that triggered The massive crisis for the whole Group.
• 7:59
  Speaker 0: As long as It isn't spinning cleanly The entire turnaround Remains provisional in my eyes... ...But there Is One thing I do want to state clearly Management has at least now set itself a clear goal for Garmessa to reach the break-even line in the twenty-twenty six financial year.
• 8:17
  Speaker 0: If that comes, The story is finally different one but it isn't yet number on the balance
• 8:23
  Speaker 0: sheet.".
• 8:24
  Speaker 1: So this where we should take another especially close look next year right?
• 8:29
  Speaker 0: Yes!
• 8:30
  Speaker 0: Right although here A Look At The Quarterly Figures from This Summer already pays off.
• 8:36
  Speaker 0: In the third quarter of twenty-twenty six, Siemens Garmessa was positive for the first time since twenty two and even contributed the most to the improvement in earnings.
• 8:47
  Speaker 0: That's exactly the direction that matters.
• 8:50
  Speaker 0: whether this generator of our plant now also spins smoothly again for a longer sustained period remains to be seen.
• 8:58
  Speaker 1: That means we can note Siemens energy is showing a clear recovery overall.
• 9:03
  Speaker 1: But the whole plant only really runs smoothly once.
• 9:06
  Speaker 1: the biggest problem generator of recent years is also reliably spinning cleanly alongside the rest again.
• 9:12
  Speaker 0: That's right!
• 9:14
  Speaker 0: Siemens-Gahmeser remains an area within the group whose numbers you should watch especially closely.
• 9:20
  Speaker 0: By the way, Siemens Energy and Siemens Gahmesa are now set to be brought together much more closely going forward.
• 9:27
  Speaker 0: Both parts of the group are soon to operate under a shared new brand.
• 9:31
  Speaker 0: That announcement came about two months ago in July.
• 9:35
  Speaker 0: The new brand name is Omterra, the license for the names Siemens was time-limited from start and costs the group high sums every year.
• 9:43
  Speaker 0: Now it wants to rename itself ahead of schedule!
• 9:47
  Speaker 0: The transition is set to begin in twenty twenty six And then happens step by step.
• 9:52
  Speaker 0: But now nothing changes About business or strategy.
• 9:56
  Speaker 1: All right, so we'll be hearing the name of this independent new brand more often in So, now back
• 10:48
  Speaker 0: to Siemens Energy.
• 10:54
  Speaker 0: Specifically, the group changed three things at once.
• 10:57
  Speaker 0: The assessment which is now based on a broader risk modeling approach... ...the prioritization standard moving away from risk exposure toward relevance to business goals.
• 11:08
  Speaker 0: and the reporting cycle from quarterly-to semiannual all in a single year.
• 11:14
  Speaker 0: The result?
• 11:15
  Speaker 0: Nine of the prior years' risks are no longer reported as material….
• 11:19
  Speaker 0: …and only three new ones were added.
• 11:21
  Speaker 0: so that list of material risks has become considerably shorter.
• 11:25
  Speaker 1: Oh, okay!
• 11:26
  Speaker 1: And what does that mean in very practical terms?
• 11:29
  Speaker 0: That I can hardly cleanly compare the risk picture of the past year with the year before anymore.
• 11:35
  Speaker 0: It's as if... In The Control Room they didn't just swap out the gauges but also started a new logbook With different categories.
• 11:44
  Speaker 0: The current reading is there.
• 11:46
  Speaker 0: Only the line leading up to it is missing and you can only assess What You Can Cleanly Compare Over Time.
• 11:53
  Speaker 1: Sure, I can follow that.
• 11:54
  Speaker 1: And if we now look at how the business will develop going forward what catches your eye especially here?
• 11:59
  Speaker 0: Well an important part of The Group's story about the future is it wants to be in front of a pack on hydrogen turbines and environmentally friendly switchgear technology.
• 12:11
  Speaker 0: At same time though you have note research spending practically frozen A good billion almost to Euro like before And that's while revenue grew by thirteen percent, so the research ratio has clearly fallen and the number of patents also declined slightly.
• 12:30
  Speaker 0: But if you want to build the turbine of day after tomorrow... ...you don't let development budget stagnate whilst revenue grows.
• 12:38
  Speaker 1: Hmm… That sounds pretty harsh somehow!
• 12:41
  Speaker 0: Well it is simply an observation we should keep an eye on At some point, the story about future should show up more strongly in research budget again.
• 12:50
  Speaker 0: A persistently falling research ratio doesn't fit the company's own ambitions for the
• 12:56
  Speaker 0: future.".
• 12:57
  Speaker 1: Yeah true that really does not fit together Warren!
• 13:00
  Speaker 1: We've talked a lot of the warning lights now but they did after all get second best score from you.
• 13:06
  Speaker 1: so what supports your assessment?
• 13:08
  Speaker 0: There's quite a lot, Corey.
• 13:09
  Speaker 0: First and foremost in my view there is the balance sheet.
• 13:13
  Speaker 0: It has really become a fortress On Balance.
• 13:15
  Speaker 0: The company now has several billion more In the bank than it has in debt.
• 13:20
  Speaker 0: The interest it pays it earns many times over.
• 13:23
  Speaker 0: Debt service Is easily covered.
• 13:25
  Speaker 0: The credit rating is solid with A positive outlook For a company that needed government guarantees Just a few years ago.
• 13:32
  Speaker 0: That's a transformation.
• 13:34
  Speaker 1: And the business itself?
• 13:36
  Speaker 1: How do you view it?
• 13:37
  Speaker 0: The order backlog is a record, one hundred thirty eight billion and for every euro they work off.
• 13:43
  Speaker 0: One-and-a half comes in as new orders.
• 13:46
  Speaker 0: In general They of course benefit from the globally rising electricity demand mentioned earlier.
• 13:52
  Speaker 0: On top that though this also where energy transition shows up Arriving with them so to speak As full order book.
• 14:00
  Speaker 0: That covers grid development And gas turbines as bridge technology.
• 14:05
  Speaker 0: And then there's one more development that I especially like.
• 14:09
  Speaker 0: The reported profit, including special effects stayed almost the same as the year before but last year it came from sales.
• 14:16
  Speaker 0: this year It comes from the operating business so the quality of the profit has become a different One.
• 14:22
  Speaker 1: So A lot is in green But There are few problem areas
• 14:26
  Speaker 0: Exactly.
• 14:27
  Speaker 0: Overall, I give the equity story of Siemens energy a four out of five.
• 14:33
  Speaker 0: The company successfully pulled off the turnaround over the past few years.
• 14:37
  Speaker 0: but looking at our image we should keep watching a few gauges at this plant closely.
• 14:42
  Speaker 1: Yes absolutely.
• 14:43
  Speaker 1: and what does your score mean for the price?
• 14:45
  Speaker 1: Of the stock?
• 14:47
  Speaker 0: my score doesn't assess a share price But the quality of a companies equity story.
• 14:52
  Speaker 0: it's essentially a check of whether substance and storey fit together.
• 14:56
  Speaker 0: A four, translated means strong.
• 14:59
  Speaker 0: The value thesis holds but also that there are still a few reservations.
• 15:04
  Speaker 1: Okay I understand.
• 15:06
  Speaker 1: and what's missing in your view for the four to become of five?
• 15:09
  Speaker 0: Here i mainly see three things.
• 15:12
  Speaker 0: first get Gahmesa To break even as announced.
• 15:16
  Speaker 0: a large division That loses money year after year doesn't fit a group that promises rising margins.
• 15:22
  Speaker 0: second raise research spending again at least ten percent more.
• 15:27
  Speaker 0: And in the medium term, the ratio back toward three and a half per cent – anyone betting on hydrogen turbines or other future technologies should, in my view invest more heavily in research again too!
• 15:39
  Speaker 0: And third… Paint a sharper picture of financial impact your risks... ...and make your risk reporting comparable again.
• 15:47
  Speaker 0: Atleast half of top-risk should be assigned a Euro figure and a clearer reconciliation would also help, one you can use to lay the new risk picture next to the old one better.
• 15:58
  Speaker 1: And what do we take away for other companies too?
• 16:01
  Speaker 0: Today it's mainly three general review rules.
• 16:04
  Speaker 0: First – A strong profit that partly comes from onetime effects is usually still good performance.
• 16:10
  Speaker 0: But don't then extrapolate the profit into next year.
• 16:14
  Speaker 0: Always ask What comes form the turbine?
• 16:17
  Speaker 0: And what from campfire?
• 16:19
  Speaker 0: Second A turnaround is only really successful once the part that triggered the crisis, is running smoothly again too.
• 16:26
  Speaker 0: Before that... ...the plant as a whole may be running better again but it isn't yet running the way it should in every division.
• 16:33
  Speaker 0: and third if a company changes its risk reporting In the middle of an upswing and reports rather vaguely anyway you lose the comparison to the prior year And without exactly that comparison number usually worth considerably less.
• 16:48
  Speaker 1: Thanks, Warren.
• 16:48
  Speaker 1: I'll keep that in mind for the future.
• 16:51
  Speaker 0: To close i'd like to give you something That goes beyond The company we're looking at today.
• 16:55
  Speaker 0: A comeback is often a pretty seductive story.
• 16:59
  Speaker 0: Back from a severe crisis?
• 17:00
  Speaker 0: First dividend of full cash box.
• 17:03
  Speaker 0: You want to join the celebration and stop asking questions But that's exactly when it pays to take another Close look.
• 17:10
  Speaker 0: Is the division that was originally responsible For the crisis really running smoothly again now?
• 17:16
  Speaker 0: Or is it still stalling there, and the other divisions are simply strong enough?
• 17:20
  Speaker 0: at that moment this problem area no longer stands out as much?
• 17:25
  Speaker 1: True.
• 17:25
  Speaker 1: And thats really something we run into with companies again-and-again across industries.
• 17:30
  Speaker 0: Yes!
• 17:31
  Speaker 0: Absolutely.
• 17:32
  Speaker 0: For the moment We can note Seaman's energy clearly has the hardest part behind It... ...And That Deserves Respect.
• 17:40
  Speaker 0: I just don't want the relief over-the-comeback to block the view of one generator that's still spinning out of balance, because in the end... ...the sentence from earlier still stands.
• 17:50
  Speaker 0: The plant is back on the grid but it isn't really running smoothly everywhere.
• 17:56
  Speaker 0: with a view to further continuation of the upswing at Siemens Energy this one generator will surely play an important role.
• 18:04
  Speaker 1: Yes!
• 18:04
  Speaker 1: i think so too.
• 18:05
  Speaker 1: we'll definitely stay on
• 18:07
  Speaker 0: until next deep dive.
• 18:15
  Speaker 0: The
• 18:28
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• 18:32
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• 18:39
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• 18:45
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