Siemens Energy (LON:0SEA) executives told analysts the company delivered a “very strong start” to fiscal 2026, driven by record order intake, higher profitability, and sharply higher free cash flow. On its Q1 fiscal 2026 call, President and CEO Christian Bruch said the company is benefiting from “favorable market momentum and successful execution of the backlog,” while CFO Maria Ferraro highlighted record orders and cash generation supported by customer prepayments, including reservation agreements.
Record orders and backlog build visibility
For the first quarter, Siemens Energy reported orders of EUR 17.6 billion, up 34% year-over-year on a comparable basis and described as the strongest quarter in the company’s history. The book-to-bill ratio was 1.82, and total order backlog rose to a record EUR 146 billion, up from EUR 138 billion at the end of fiscal 2025.
Profitability rose sharply; free cash flow hit a quarterly record
Revenue increased to EUR 9.7 billion, up 12.8% on a comparable basis, with all segments contributing to growth. Ferraro said foreign exchange—primarily a weaker U.S. dollar—created a roughly 400-basis-point headwind to revenue growth, but did not have a material impact on profitability due to the company’s global footprint and hedging approach.
Profit before special items rose to EUR 1.159 million (as stated on the call) with a 12% margin, more than double the prior-year margin of 5.4%. Net income increased to EUR 746 million, up EUR 494 million year-over-year. Special items were negative EUR 152 million, mainly tied to the sale of the Indian wind business.
Free cash flow pre-tax reached a record EUR 2.9 billion, nearly doubling the prior year, driven by profit improvement, strong orders, and customer advance payments including reservation fees. Ferraro said cash flow also benefited from timing effects and seasonal patterns typically favoring the start of the fiscal year. Siemens Gamesa quality-related cash out was EUR 101 million in the quarter, with the company still expecting a “mid-triple million” total for the year, similar to fiscal 2025.
The quarter ended with EUR 11.8 billion in cash and cash equivalents and EUR 3.8 billion of debt, resulting in an adjusted net cash position of EUR 7.6 billion, up from EUR 4.8 billion at fiscal 2025 year-end.
Gas Services and Grid Technologies led growth and cash generation
Gas Services posted what management called an outstanding quarter. Orders climbed to EUR 8.8 billion, up 81% year-over-year, with a book-to-bill ratio of 2.83 and record backlog of EUR 60 billion. Bruch said Gas Services booked 102 gas turbines in the quarter (including 19 large and 83 industrial units), representing more than half of the prior year’s unit volume in a single quarter. Ferraro added the company’s Q1 market share for gas turbines above 10 MW was 43%, “securing the number one position.”
Bruch said Siemens Energy booked around 13 gigawatts of new gas turbine orders in the quarter, including 12 gigawatts converted from existing reservation agreements, while adding 12 gigawatts of new reservations. He said this increased total commitments to 80 gigawatts, even after delivering 3 gigawatts during the quarter. Management emphasized that data centers are not the primary driver of the company’s gas growth trajectory, noting that data centers represent about one-fourth of total global commitments and that roughly 60% comes from traditional applications.
Gas Services revenue increased nearly 14% to EUR 13.9 billion, helped by strong new unit performance, which Ferraro said grew nearly 51% on a comparable basis. Profit before special items was EUR 515 million with a 16.6% margin, up from 14.6%, supported by backlog margin quality and productivity. Free cash flow pre-tax was EUR 1.9 billion, more than double the prior year, benefiting from advance payments on large orders. Management reminded investors that Gas Services profitability is typically stronger in the first half due to the service mix.
Grid Technologies also delivered strong results. Orders were EUR 6.0 billion, up 22%, with a book-to-bill ratio of 1.95 and record backlog of EUR 45 billion. Revenue rose to EUR 3.1 billion, up 26.9%. Profit before special items increased to EUR 538 million, representing a 17.6% margin. Free cash flow pre-tax was EUR 1.8 billion, up about EUR 600 million year-over-year, aided by operational performance and milestone payments. In Q&A, Ferraro pointed investors to the company’s existing full-year guidance range of 16% to 18% for Grid Technologies margin.
Siemens Gamesa improved; management warned quarterly path may be uneven
At Siemens Gamesa, management said turnaround measures are showing results, including improved offshore productivity, higher service profitability, and reduced structural costs in onshore. Orders were EUR 1.6 billion, down year-over-year due to timing and a large offshore order booked in the prior-year quarter. Revenue was EUR 2.4 billion, up 3.9% on a comparable basis. Profit before special items improved to negative EUR 46 million from negative EUR 374 million a year earlier.
Bruch noted that Q1 profitability at Siemens Gamesa benefited from timing effects and may not progress linearly across quarters. Ferraro added that timing and one-off items in the quarter were likely in the “mid-double-digit” million euro range, citing items such as positive hedging effects and project shifts, and said tariff uncertainty remains an ongoing factor, with assumptions embedded in guidance.
Bruch also highlighted the first order for the SG 7.0 wind turbine, described as the successor to the 5.X platform, with Siemens Energy set to supply six turbines for a 42 MW wind park in Germany.
Investment programs, capital returns, and unchanged guidance
Bruch said the company remains on track with its “Elevate” program, including capacity additions and a simplified operating model. He outlined a U.S. investment program of around $1 billion to expand manufacturing and the workforce, including two training centers, across six states. The company expects the effort to add 1,500 jobs on top of 12,000 existing U.S. employees. He also cited European grid expansion steps, including tripling wind transformer production in Austria and opening a transformer tank manufacturing facility in Croatia with partner Končar.
Ferraro said Siemens Energy will propose a EUR 0.70 per share dividend for fiscal 2025 at its February 26 annual general meeting, implying about EUR 600 million of cash out in Q2. She also reiterated that a share buyback program of up to EUR 6 billion through fiscal 2028 is intended to begin in March. Management also noted credit rating upgrades announced in December 2025: S&P upgraded Siemens Energy to BBB with a positive outlook and Moody’s upgraded the company to Baa1 with a stable outlook.
Looking ahead, management said fiscal 2026 guidance and fiscal 2028 targets remain unchanged. While acknowledging that Q1 exceeded expectations in some areas, Ferraro said it is “too early” to draw firm conclusions from first-quarter momentum, given seasonality and the influence of reservation agreements and working-capital timing. Bruch added that the gas market remains positive but cautioned investors not to annualize Q1 order levels.
About Siemens Energy (LON:0SEA)
Siemens Energy AG operates as an energy technology company worldwide. It operates through Gas Services, Grid Technologies, Transformation of Industry, and Siemens Gamesa segments. The company provides gas and steam turbines, generators, and heat pumps, as well as performance enhancement, maintenance, customer training, and professional consulting services for central and distributed power generation; and high voltage direct current transmission systems, offshore windfarm grid connections, transformers, flexible alternating current transmission systems, high voltage substations, air and gas-insulated switchgears, digital grid solutions and components, and storage solutions.
