• Siemens Energy will invest $2.3 billion in transformer and switchgear factories by 2028, expanding global grid capacity as electricity demand accelerates.
• The company delivered €2.355 billion in profit before Special items and €4.663 billion in free cash flow pre tax for fiscal 2025, enabling a proposed dividend restart.
• Upgraded 2028 mid-term targets include a 14%–16% profit margin before Special items and low-teens annual revenue growth on a comparable basis.
A pivotal investment push as global grids strain under rising demand
Siemens Energy is preparing a major expansion of its manufacturing base, committing €2 billion ($2.3 billion) to its global transformer and switchgear factories by 2028. The investment, disclosed in slides ahead of the company’s capital markets day, places grid infrastructure at the center of its growth strategy as electrification accelerates across advanced and emerging markets.
The plan includes a 20 percent increase in capital expenditure and research and development during 2026–2028 compared with the 2023–2025 period, alongside a streamlined global footprint. The company will consolidate its onshore wind manufacturing network to four sites in 2026, down from ten in 2023, as it doubles down on quality control, cost reductions, and a narrower operational base for Siemens Gamesa.
The investment surge follows a year of sharply improved financial performance and renewed balance sheet confidence.
Strong financial results fuel a reset in strategy
Siemens Energy closed fiscal 2025 by achieving or surpassing all previously raised guidance, supported by double-digit order and revenue growth across all business segments. Orders hit €58.9 billion, up 19.4 percent on a comparable basis, while revenue reached €39.1 billion, a 15.2 percent increase.
Profit before Special items rose to €2.355 billion, producing a 6 percent margin at the top end of the company’s targeted range. Free cash flow pre tax surged to €4.663 billion, more than double the prior year.
Net income reached €1.685 billion, and the company proposed a €0.70 per-share dividend—its first payout in four years—after replacing an €11 billion federal guarantee with a €9 billion commercial facility. The change removes prior restrictions on dividends and reflects a strengthened balance sheet and recently secured investment-grade credit ratings from Moody’s and S&P.
President and CEO Christian Bruch said: “2025 was a successful year. We delivered sustainable growth and significantly improved profitability, increasing the company’s value. For the first time in four years, we’re returning to dividend payments, which is a clear commitment to our shareholders. This success was hard-earned by our employees and gives us the momentum and conviction to raise our mid-term targets through 2028, reflecting our positive outlook for the energy market.”
Grid Technologies and Gas Services anchor growth
The company’s Grid Technologies division saw heavy demand, particularly in the United States, driving orders above €21 billion. Gas Services delivered a record profit of almost €1.6 billion and sold 194 gas turbines, benefiting from compressed project cycles and continued global reliance on firm power.
Transformation of Industry contributed through industrial steam turbines, generators, and compression technologies, while Siemens Gamesa returned to order growth following last year’s sales halt, aided by the relaunch of its revised 5.X onshore platform.
Portfolio adjustments continued, with Siemens Gamesa divesting its power electronics business to ABB and agreeing to sell 90 percent of its India and Sri Lanka wind operations to a consortium led by TPG. Both deals are expected to close in fiscal 2026.
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Expansion program meets a rapidly shifting electricity landscape
Siemens Energy’s grid-factory investment responds directly to the structural shifts underway in global electricity systems. Demand is projected to rise by roughly 45 percent by 2035 due to population growth, higher living standards, electrification, and the power needs of artificial intelligence and data centers.
For fiscal 2026, Siemens Energy expects comparable revenue growth of 11–13 percent and a profit margin before Special items of 9–11 percent. Net income is forecast at €3–4 billion, with free cash flow pre tax reaching €4–5 billion. The outlook assumes Siemens Gamesa reaches break-even.
CFO Maria Ferraro said: “We are proud of the progress we have made so far, but we know that past performance does not drive future returns. Our focus is firmly on creating sustainable value for our shareholders and delivering profitable growth. We worked hard to strengthen our balance sheet and have a strong financial foundation. The ambitious targets we have set underscore our commitment and position us to capitalize on the strong market environment ahead.”
A clearer path to 2028 as grid investment accelerates globally
Siemens Energy raised its mid-term targets for 2028, now planning for low-teens compound annual revenue growth and a 14–16 percent profit margin before Special items. The $2.3 billion grid-factory expansion is central to that strategy, positioning the company to serve markets where transmission bottlenecks, electrification policies, and energy-transition commitments are converging.
The company also plans up to €10 billion in dividends and share buybacks over 2026–2028, aligning capital returns with its operational growth strategy.
As governments and utilities attempt to modernize power systems and scale clean-energy integration, Siemens Energy’s recalibrated manufacturing footprint and strengthened financial base reflect broader structural forces shaping the global energy transition. The decisions made in Berlin will ripple across supply chains from the United States to India, where grid capacity and industrial resilience are already emerging as defining constraints in the decade ahead.
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