Siemens Misses Profit Forecast as Customers Stick to Trend of Destocking

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Siemens reported a decline in second-quarter earnings within its industrial business on Thursday, attributing the drop to a prolonged period of destocking by customers, particularly in China. This trend has been driven by uncertain customers opting to run down their existing supplies instead of purchasing new equipment.

Chief Executive Roland Busch highlighted that the business’s recovery is anticipated to be slower than initially expected, largely due to the muted market development in China. Overcapacities in industries such as solar and electric vehicles, as well as a sluggish recovery in key export-driven markets like Germany, have compounded the issue.

Busch stated, “A key reason is the muted development in China. Overcapacities in certain customer industries, such as solar and electric vehicles, are another reason. In addition, Europe’s key export-driven markets, such as Germany, are recovering only very sluggishly.”

Siemens projects that the destocking trend in China will persist throughout the remainder of 2024, while stock levels in Europe and the United States are expected to normalize by the end of September.