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 plans to more than triple its dividend and expects higher profit margins in 2027, it said on Wednesday, as the construction boom in US data centres continues to boost demand for its gas turbines and grid equipment.

The news comes after a global selloff in AI-related stocks, triggered by fears of tougher regulation following the Democratic Party's sweeping success in US midterm elections in the world's biggest market for AI data centres.

Spun off from Siemens in 2020, Siemens Energy has benefited from rising electricity demand, fuelled more recently by the expansion of artificial intelligence 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, Chief Executive Christian Bruch said.

"We are not yet seeing any fundamental change in demand or in project management," Bruch told reporters when asked about the potential impact of tougher AI regulation in the US on gas turbine orders. "I see sufficient demand going forward."

He said some expectations for data centre growth may have been overblown, but added that the company was seeing increased interest in wind power following last week's elections.

Shares in Siemens Energy, which late on Tuesday announced a fresh €9 billion share buyback, were up 7.6% at 0833 GMT.

Siemens Energy also said its Siemens Gamesa wind division had reached a closely watched break-even target, marking a milestone after years of losses and restructuring.

Siemens Energy 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.

($1 = 0.8957 euros)

(Reporting by Christoph Steitz in Berlin and Tom Kaeckenhoff in Duesseldorf. Editing by Kate Mayberry and Mark Potter)