Siemens Energy AG: Orders not at peak in FY26 & aftermarket story to follow, Buy

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Siemens Energy AG: Orders not at peak in FY26 & aftermarket story to follow, Buy

Siemens Energy AG UBS Research

UBS Research THESIS MAP Thesisa guideMapto our thinking and what´s where in this report

Pivotal Questions Q: Can earnings upgrades continue to FY30?

A: Yes, we are ~6% ahead of FY30 Visible Alpha EBITA forecasts, due to being +9% above in Gas

Services (GS) and 3% in Grid Technologies (GT). Robust order momentum in FY26-27 across the

undersupplied GS and GT end markets, should drive favourable backlog pricing after a +3ppts

increase y/y in GT backlog project margins and +5ppts in GS (OE) during FY25. This can deliver margin

growth after FY28 given a 2-4 year lead time, as ENR books orders for FY29-30 currently. This can be

further de-risked by elevate 'slot' reservations in 2H26 to support firm orders closing in next 6-12

months (supporting FY27).

Q: How at risk is ENR of a cyclical slowdown, is FY30 the peak?

A: Less than in its history, with ~70% of FY30e Group EBITA exposed to the structural growth areas of

the Gas Services aftermarket (AM) & Grid Technologies. We forecast a 5% EBITA CAGR across FY30-

34e, even after cautiously modelling new unit Gas Services EBITA has a -16% CAGR following peak

orders in FY28e and -300bps pricing p.a from FY30e. We find the aftermarket can absorb this decline

as the installed fleet expands on the back of the current super-cycle, supported by AM rev exposure in

GS at ~50% in FY30e, vs. ~38% in FY18-19 after the previous order up-cycles.

Q: Will the wind exposure suffer further losses across FY26-28?

A: We think this unlikely, with breakeven targeted in FY26 and cash neutrality in FY28 (after a FY25

FCF burn of €1.75bn). This remains a ‘show me’ story that can provide positive catalyst into FY28