Siemens Energy sees higher margins as data centres boost power equipment demand

By Christoph Steitz and Tom Käckenhoff

BERLIN/DUESSELDORF, Nov 11 (Reuters) - Siemens Energy said on Wednesday it planned to more than triple its dividend and expects higher profit margins in 2027, as the construction boom in US data centres continues to boost demand for its gas turbines and grid equipment.

The forecast from Siemens Energy comes in the wake of a selloff in AI-related stocks triggered by fears of tougher regulation after the Democratic Party's success in US midterm elections in the world's biggest market for AI data centres.

"Demand for electricity for data centres is intact, also going forward," Christian Bruch told journalists during the company's annual press conference, when asked about the midterm elections' potential market impact.

"Some of the growth rates for data centres were unrealistic, it's just that nobody wanted to hear it."

Spun off from Siemens in 2020, Siemens Energy, like its main competitor GE Vernova, has benefited from rising electricity demand, fuelled more recently by the expansion of AI and data centres that require vast amounts of power.

Data centre-related orders for gas turbines and grid equipment account for around €15 billion ($16.8 billion), or 9.1%, of its record €164 billion order backlog, Bruch said.

The Democratic Party's midterm election victory had a pronounced impact on the view of US renewable energy, he said.

"It's happened very quickly, customers have started to take a different view of wind. It's only just beginning. But you can already see that things are changing in the US market," Bruch said of the revival in interest in renewables.

Shares in Siemens Energy, which late on Tuesday announced a fresh €9 billion share buyback, were up 8.4% at 1023 GMT, with Berenberg analysts calling the news "reassuring to the market following the recent sell-off".

Siemens Energy said its Siemens Gamesa wind division, which is also active in the US, had reached a closely watched break-even target, after years of losses and restructuring.

Siemens Energy, which will soon rebrand as Omterra, expects its profit margin to rise to between 14% and 16% in 2027, from 12.4% in 2026. Analysts polled by the company had forecast a margin of 14.7%.

It proposed a dividend of €2.30 per share for 2026, up from €0.70 a year earlier.

Bruch also said that a planned divestment of its division that caters to industrial clients, either via a sale to investors or a listing, would not happen before 2028 and that Siemens Energy planned to retain a stake of more than 20%.

($1 = 0.8957 euros)

(Reporting by Christoph Steitz in Berlin and Tom Kaeckenhoff in Duesseldorf; Editing by Kate Mayberry, Mark Potter and Alexander Smith)