Energy

Siemens Buildings Business & FY 2023 Financials Examined

In this Research Note, we examine the Buildings business of Siemens, which operates within the Smart Infrastructure (SI) division, based on their Q4 earnings release and investor presentations of 16th November 2023. This article focuses on the latest financial results, revenue mix, recent Building X software/Xcelerator platform announcements and the outlook for FY 2024. Siemens Q4 2023 Financials SI revenue growth of 12% was led by strength in the Electrification business, which reported a 25% growth in Q4. The Buildings business revenue grew more modestly at 7% driven by solutions and services, with orders up 6%. Siemens Q4 2023 Presentation, 16th November 2023, slide 21 Siemens FY 2023 Financials Smart Infrastructure (SI) achieved FY 2023 revenues of €19.9 billion revenues, a comparable revenue growth of 15% versus prior year and a 15.4% profit margin. While Siemens does not report financials for its Buildings business, Memoori estimates that FY 2023 Buildings revenues are in the region […]

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In this Research Note, we examine the Buildings business of Siemens, which operates within the Smart Infrastructure (SI) division, based on their Q4 earnings release and investor presentations of 16th November 2023. This article focuses on the latest financial results, revenue mix, recent Building X software/Xcelerator platform announcements and the outlook for FY 2024.

Siemens Q4 2023 Financials

SI revenue growth of 12% was led by strength in the Electrification business, which reported a 25% growth in Q4. The Buildings business revenue grew more modestly at 7% driven by solutions and services, with orders up 6%.

Siemens Infrastructure FY 2023
Siemens Q4 2023 Presentation, 16th November 2023, slide 21

Siemens FY 2023 Financials

Smart Infrastructure (SI) achieved FY 2023 revenues of €19.9 billion revenues, a comparable revenue growth of 15% versus prior year and a 15.4% profit margin.

While Siemens does not report financials for its Buildings business, Memoori estimates that FY 2023 Buildings revenues are in the region of €7.8 billion.

Revenue Mix

Based on FY 2022 revenues, the Buildings business is the largest of 3 segments in the SI portfolio, accounting for 42% or €7.3 billion. The Buildings segment offers integrated building management systems and software, HVAC control products, fire safety/security products and systems and solutions and services, including energy and performance services.

The Electrical Products segment, accounting for 31% of FY 2022 revenues, includes low voltage control products, distribution systems and switchgear, circuit breakers, contactors and industrial controls.

The Electrification segment, accounting for 27% of FY 2022 revenues, provides grid simulation, operation and control software, substation automation and protection, medium-voltage primary and secondary switchgear and eMobility charging infrastructure.

Building X Software

Siemens Building X 2023
Siemens Building X Presentation, June 2023

Building X enables customers to digitalize, manage, and optimize building operations, allowing for enhanced user experience, increased performance, and improved sustainability. Its applications cover energy optimization, security and fire management, building operations, digital maintenance, and more.

For example, the Climatix IC Smart Energy service optimises the use of district heat in buildings, in a partnership announced by Swedish firm, Crossbreed in September 2023.

In October 2023, NavVis, a German specialist in reality capture and digital factory solutions, collaborated with Siemens to integrate accurate as-is 3D data and an immersive 3D experience to Siemens’ Building X platform. The 360° Viewer application of Siemens Building X, which is powered by NavVis IVION, combines a photorealistic view of the building with live sensor data.

In November 2023, Siemens added Building X Lifecycle Twin, a digital twin software that creates, maintains and visualizes digital twins for buildings and infrastructure based on Building Information Modelling (BIM). Developed from the Ecodomus software acquisition, Building X Lifecycle Twin supports and drives digital transformation in buildings, by leveraging design and construction data throughout the lifecycle.

Xcelerator Platform & Partnerships

The Siemens Xcelerator platform and marketplace is an open ecosystem that enables co-creation between customers, Siemens, and certified partners, who are creating integrations with Siemens Building X software, Desigo CC building management systems or Siveillance security solutions.

In August 2023, we examined the progress of Siemens Buildings business in establishing the Siemens Xcelerator open ecosystem, with 24 partners listed. In November 2023, the ecosystem addressing the commercial buildings market had expanded to 32 partners.

Priorities & Outlook for FY 2024

Smart Infrastructure priorities for FY 2024 are listed as:

  • Go-to-market synergies with Brightly. We note that the cloud-based asset and maintenance management software company has been operating independently since being acquired in 2022.
  • Drive Building X, new Grid software launches.
  • Transform on-site services to digital Siemens Xcelerator services.

In fiscal 2024, Smart Infrastructure expects comparable revenue growth of 7% to 10%. The profit margin is expected to be 1% to 17%.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.

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