Siemens Lifts Growth Targets on Record 12.1 Billion Euro Cash Flow

Siemens reported record free cash flow of 12.1 billion euros for fiscal 2026, up 12%, and raised its medium-term growth targets on the strength of data center demand, industrial software and automation. The figures are preliminary, a caveat the company itself attached and which investors should keep in view.

For fiscal 2027, Siemens guided to comparable revenue growth of 9% to 11% and EPS pre PPA of 10.20 euros to 10.80 euros — 13% growth at the midpoint, excluding Siemens Healthineers. The medium-term comparable revenue growth target moved to 7% to 11%, from 6% to 9%, with double-digit EPS growth now the stated aim. Chief Financial Officer Veronika Bienert said the company's ambition is to reach the upper half of the revenue range. An ambition is not a forecast; the distinction matters here.

Fiscal 2026 revenue grew 8% and EPS pre PPA rose 14%, Chief Executive Officer Roland Busch said. The fourth quarter delivered record orders of 34.8 billion euros, revenue growth of 10%, and record industrial business profit of 3.9 billion euros at a 16.8% margin. Quarterly free cash flow reached 5.6 billion euros.

What is driving the data center boom?

The data center business booked more than 8.5 billion euros in orders for fiscal 2026, triple-digit growth, Busch said. Sector revenue rose roughly 60% to 4.6 billion euros. Bienert said data centers now rank as Smart Infrastructure's second-largest vertical, at around 20% of segment revenue, with a backlog of more than 25 billion euros at year-end.

Asked about obstacles, Busch acknowledged local concerns over water use and noise could lengthen approvals or delay projects. He said the company was not worried about the outlook for the next couple of years. Two years of visibility is what the statement actually offers — nothing more.

The digital business generated 10.9 billion euros in revenue, up 16%, close to 20% of total revenue excluding Healthineers, and remains on track to double revenue by fiscal 2030. Digital Industries' software business exceeded 7 billion euros in revenue, with annual recurring revenue up 12%. About 5% of that software revenue came from AI or industrial AI. Busch said Siemens is weighing other ways to monetize AI but that it was too early to give figures. The AI contribution, for now, remains small and unquantified beyond that single number.

He cited Andritz Metals as a customer using Siemens' Eigen Engineering Agent, which lets it perform the same engineering tasks twice as fast. Siemens also agreed to acquire Lauterbach, a supplier of debugging and tracing technology for embedded software and system-on-chip architectures. Purchase terms were not disclosed.

What do the segment guides say?

• Digital Industries: fiscal 2027 comparable revenue growth of 8% to 12%, margin of 20% to 22%. Bienert cited double-digit software growth and faster automation growth, though industry-wide automation price changes could shift the timing of customer orders.
• Smart Infrastructure: growth of 11% to 13%, margin of 19.5% to 20.5%. Q4 orders rose 39% to a record 8.7 billion euros; revenue grew 15%; the 20.3% quarterly margin included a 50-basis-point benefit from U.S. tariff refunds — a one-off, not a run rate.
• Mobility: growth of 6% to 8%, margin of 8% to 10%. Q4 orders exceeded 10 billion euros, including more than 4 billion euros in long-term service agreements. Bienert said many recently booked projects convert to revenue only after fiscal 2028.

Regional detail: Q4 automation orders at Digital Industries rose 15% overall, including 16% in automation. U.S. automation orders grew 61%, helped by project business; China's order intake rose 8%, though Bienert said Chinese automation orders softened in September as some shifted into October.

What does the Healthineers spin-off change?

Siemens will transfer a 34.1% stake in Siemens Healthineers to shareholders, allocating one Healthineers share for every two Siemens shares. Bienert said the spin-off should take effect in late spring 2027, subject to shareholder meetings and the required filing and registration process — conditions that have not yet been met.

Siemens will report Healthineers as discontinued operations from fiscal 2027 first-quarter results. After deconsolidation, it expects to apply the equity method to its remaining stake and intends to reduce it to a financial asset over the medium term. No timeline was given for that reduction.

Shareholders receive a fiscal 2026 dividend proposal of 5.50 euros per share, up 0.15 euros. Siemens has repurchased 1.7 billion euros of shares under its current buyback program since July, Bienert said.

Every target here rests on preliminary numbers and a demand cycle the company itself admits could slow after two years. The cash flow is real; the durability question is open.