Siemens Energy is optimistic about its future as it has updated its profitability goals for the coming years. The company’s order backlog reached new heights, fueled by rising demand for components used in AI data centers and gas turbines.
After announcing its new growth targets, Siemens Energy saw its shares jump as much as 11%. The company aims for annual revenue growth in the low teens—an upgrade from its previous forecast of around 10%. Additionally, Siemens Energy expects its operating margins to improve to 14-16% by 2028, up from the earlier target of 10-12%.
Last year was challenging for Siemens Energy, particularly due to issues in its wind energy division, which led the company to seek support from the German government. However, with increasing demand for electricity generation, especially for AI data centers, the company’s order backlog has surged.
CEO Christian Bruch highlighted the significant potential of the data center market, noting it would continue to be a key area of focus through 2025. He pointed out that companies that can respond quickly to market demands are particularly successful, allowing them to set competitive prices.
Although the demand for energy to support AI is a growing sector, Bruch reminded investors that most of Siemens Energy’s customers are not data centers. The enthusiasm surrounding the company is reflected in its share price, which has more than doubled since the beginning of the year.
For the business year ending September, Siemens Energy reported a 15% increase in revenues, reaching €39.1 billion, with all divisions contributing to this growth. Incoming orders totaled €58.9 billion, pushing the total to a record €138 billion. The company achieved operating margins of 6%, resulting in an operating profit of €2.4 billion.
Bruch mentioned that 2025 is shaping up to be a significant year for gas, driven by rising demand for flexible electricity generation. Orders for the gas division surged by 43% year on year, amounting to €23 billion, as the company successfully sold 194 turbines, double the previous year’s sales.
Despite ongoing struggles in its wind energy division, Siemens Energy is hopeful for a turnaround, expecting to break even this year after reducing its operating losses to €1.4 billion from €1.8 billion last year.