Shortly before Easter, Siemens cashed in: the industrial group has nearly halved its stake in its subsidiary Siemens Energy to 5.5%. The company generated proceeds of EUR 3.8 billion from the transaction. This continues the disentanglement process that began in autumn 2020. At that time, Siemens spun off its energy division and initially retained just over one-third of the shares. It took some time for the Siemens Energy equity story to gain traction with investors. During the first four years, the stock barely moved. But then Siemens Energy began an impressive rally. Over the past twelve months alone, the share price has nearly tripled. This puts Siemens Energy firmly at the top of the DAX® performance ranking, with a wide lead. In Germany’s benchmark index, the company now ranks among the five heavyweights with a weighting of just over 7%.
At Siemens Energy, the name says it all: the group covers the entire spectrum of energy supply. In addition to a gas turbine division, this includes solutions for power transmission as well as the wind power unit Siemens Gamesa. The latter business segment turned out to be a drag following Siemens Energy’s stock market listing. However, after years of deep losses, management aims to reach break-even at Siemens Gamesa in the current fiscal year 2026 (as of 30 September). Across the group, profitability is already rising significantly. For the current period, management led by CEO Christian Bruch is targeting an profit margin before special items of between 9% and 11%. If the company reaches the upper end of this range, the figure would increase by a substantial 500 basis points compared to the previous year.
Whether the company is on track will become clear on 12 May, when Bruch presents the figures for the second quarter. Shortly before entering the “quiet period,” management provided an update. According to this, the escalation in the Middle East - despite affecting individual projects - has no impact on the group’s outlook. In light of the oil price shock associated with the conflict, the fundamental drivers of Siemens Energy’s success remain more intact than ever. “We operate in a structurally growing electricity market, not in a short-term cyclical environment,” was the message from the “pre-close group call.” Specifically, the company is sold out in the gas turbine segment through fiscal year 2028. Meanwhile, the market for power transmission (Grid Technologies) has doubled over the past three years. Accordingly, the order-to-revenue ratio - known as book-to-bill - at Siemens Energy in this segment stands at 2 or higher. “Worldwide, customers are driving investments in transmission capacity to integrate renewable energy, meet rising demand, and strengthen grid stability,” the company explains.
Siemens Energy also presents itself as a compelling underlying for softcallable barrier reverse convertibles. Leonteq has launched two variants of this popular structure. In the product currency CHF, investors can expect a fixed coupon payment of 16% p.a. The EUR-denominated counterpart offers quarterly distributions amounting to 18.20% p.a. The barrier is set at a low 55% of the initial level. While BRCs are suitable for sideways strategies, traders can find opportunities in Leonteq’s leveraged products segment. Here, Siemens Energy is available as an underlying in nearly 30 instruments. In addition to mini-futures, Leonteq offers warrants as well as knock-out warrants on the DAX® top performer. These products allow short-term investors to position themselves on both the long and short side.
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