SIEMENS 2016-17 Annual Report Analysis

Sat, 30 Sep

SIEMENS has announced its results for the year ended September 2017. Let us have a look at the detailed performance review of the company during FY16-17.

SIEMENS Income Statement Analysis

• Operating income during the year rose 3.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 60.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 15.0% in FY as against 38.8% in FY.
• Depreciation charges decreased by 13.1% and finance costs decreased by 12.9% YoY, respectively.
• Other income grew by 78.7% YoY.
• Net profit for the year declined by 61.0% YoY.
• Net profit margins during the year declined from 28.0% in FY to 10.6% in FY.

SIEMENS Income Statement 2016-17

No. of Mths Year Ending		12 Sep-16*	12 Sep-17*	% Change
Net Sales	Rs m	104,129	107,260	3.0%
Other income	Rs m	1,642	2,934	78.7%
Total Revenues	Rs m	105,771	110,194	4.2%
Gross profit	Rs m	40,387	16,057	-60.2%
Depreciation	Rs m	2,276	1,978	-13.1%
Interest	Rs m	371	323	-12.9%
Profit before tax	Rs m	39,382	16,690	-57.6%
Tax	Rs m	10,245	5,324	-48.0%
Profit after tax	Rs m	29,137	11,366	-61.0%
Gross profit margin	%	38.8	15.0
Effective tax rate	%	26.0	31.9
Net profit margin	%	28.0	10.6

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SIEMENS Balance Sheet Analysis

• The company's current liabilities during FY stood at Rs 73 billion as compared to Rs 58 billion in FY, thereby witnessing an increase of 26.6%.
• Current assets rose 22% and stood at Rs 124 billion, while fixed assets fell 3% and stood at Rs 57 billion in FY.
• Overall, the total assets and liabilities for FY stood at Rs 182 billion as against Rs 161 billion during FY, thereby witnessing a growth of 13%.

SIEMENS Balance Sheet as on September 2017

No. of Mths Year Ending		12 Sep-16*	12 Sep-17*	% Change
Networth	Rs m	68,037	76,906	13.0
Current Liabilities	Rs m	57,905	73,332	26.6
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	161,010	181,656	12.8
Current assets	Rs m	102,195	124,316	21.6
Fixed Assets	Rs m	58,815	57,340	-2.5
Total Assets	Rs m	161,010	181,656	12.8

SIEMENS Cash Flow Statement Analysis

• SIEMENS's cash flow from operating activities (CFO) during FY stood at Rs 6 billion, an improvement of 11.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY stood at Rs 13 billion, an improvement of 457.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY stood at Rs -3 billion, an improvement of 82% on a YoY basis.
• Overall, net cash flows for the company during FY stood at Rs 16 billion from the Rs -9 billion net cash flows seen during FY.

SIEMENS Cash Flow Statement 2016-17

Particulars	No. of months	12	12	% Change
	Year Ending	Sep-16	Sep-17
Cash Flow from Operating Activities	Rs m	5,128	5,734	11.8%
Cash Flow from Investing Activities	Rs m	2,373	13,224	457.3%
Cash Flow from Financing Activities	Rs m	-16,143	-2,852	-
Net Cash Flow	Rs m	-8,641	16,096	-

Current Valuations for SIEMENS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 31.9, an decline from the EPS of Rs 81.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,199.2, stands at 37.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.6 times, while the price to sales ratio stands at 4.0 times.
• The company's price to cash flow (P/CF) ratio stood at 33.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Sep-16*	12 Sep-17*
Sales per share (Unadj.)	Rs	292.4	301.2
TTM Earnings per share	Rs	81.8	31.9
Diluted earnings per share	Rs	81.8	31.9
Price to Cash Flow	x	14.1	33.1
TTM P/E ratio	x	15.3	37.7
Price / Book Value ratio	x	6.2	5.7
Market Cap	Rs m	421,112	441,767
Dividends per share (Unadj.)	Rs	33.5	7.0

Ratio Analysis for SIEMENS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.7x during FY, from 1.8x during FY. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 52.7x during FY, from 107.2x during FY. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 14.8% during FY, from 42.8% during FY. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 22.1% during FY, from 58.4% during FY. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 6.4% during FY, from 18.3% during FY. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Sep-16*	12 Sep-17*
Current ratio	x	1.8	1.7
Debtors’ Days	Days	106	117
Interest coverage	x	107.2	52.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	18.3	6.4
Return on equity	%	42.8	14.8
Return on capital employed	%	58.4	22.1

To see how SIEMENS has performed over the last 5 years, please visit here.

SIEMENS Share Price Performance

Over the last one year, SIEMENS share price has moved up from Rs 1,098.7 to Rs 1,257.8, registering a gain of Rs 159.1 or around 14.5%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 16,446.0 (up 1.0%). Over the last one year it has moved up from 12,861.3 to 16,446.0, a gain of 3,585 points (up 27.9%).

Overall, the S&P BSE SENSEX is up 16.9% over the year.

(To know more, check out historical annual results for SIEMENS and quarterly results for SIEMENS)

Read: Latest Annual Report Analysis of SIEMENS