Siemens Energy Eyes Slimmer Structure as Record Backlog and Buyback Buoy Shares

Siemens Energy reviews spin-off of 17,000-employee unit to slash complexity, sharpen focus on gas turbines and grid; record €154B backlog and €1B buyback boost shares.

Siemens Energy is weighing a radical portfolio shake-up that would slim down its sprawling operations. The company confirmed it is reviewing a potential spin-off of its "Transformation of Industry" unit, a business that employs roughly 17,000 people and spans hydrogen electrolysers, steam turbines, and compressors. The move is designed to slash complexity and allow the group to sharpen its focus on gas turbines and grid infrastructure. No final decision has been taken, but the very fact that the review is on the table signals a willingness to pull the trigger if it creates value.

The unit in question is part of a broader industrial portfolio that has long been a drag on the group's valuation. By carving it out, management would leave the core — gas and networks — standing alone, where it could command a higher multiple. The review comes as the company's order pipeline is already bulging. Across the group, the order backlog hit a record €154 billion earlier this year, prompting an upgrade to the full-year guidance. The grid division is leading the charge, with management expecting revenue growth of as much as 27%.

New project wins are reinforcing that optimism. A consortium including Siemens Energy is building a massive offshore converter platform for the German grid operator 50Hertz, capable of handling two gigawatts of power. The platform will connect North Sea wind farms to the onshore grid. Separately, the company won a contract to supply gas turbines for a new power plant in Abu Dhabi. These deals are keeping the factory floor busy and padding the backlog.

Shareholders are also getting direct support from the balance sheet. Siemens Energy launched a new tranche of its buyback program, running through the autumn, with a volume of up to €1 billion. The overall plan commits the company to repurchasing up to €6 billion of its own shares by 2028. The shares can be used to cover employee compensation or be cancelled. The buyback has been a steady prop for the stock.

The shares ended last week at €168.88, a level that puts them directly on top of the 50-day moving average. On the week, some analysts pegged the gain at over nine percent, while others cited a move of nearly ten percent, reflecting the buzz around the group's prospects. The next catalyst is just around the corner: management will host a pre-close call on June 29, offering the first glimpse into the quarter that just ended. That will be followed by a quiet period and then the full quarterly report on August 5. If the rhetoric on the call is as strong as the underlying order book and the buyback suggest, the stock may well take aim at its recent highs.