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SIEGY · Forward model · Digital Industries · Bear case

What has to happen in Digital Industries

Model as of

This page changes Digital Industries inside the complete SIEGY model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

SIEGY forward model
Horizon
Consolidated fair value $100.14 all other verticals held in this portfolio case
Final-quarter revenue $6.45B 25% of company revenue
Explicit segment contribution $15.20B EBITDA less segment capex, before corporate items

The two things that went wrong in a record quarter get worse instead of better. Siemens Healthineers is 28% of consolidated revenue and has already had its own fiscal 2026 growth guide cut to 3.5-4.0% from 4.5-5.0% on what Siemens calls a structural, not cyclical, change in Chinese diagnostics; Mobility's profit fell 2% and its margin fell from 9.3% to 8.6% on 6% revenue growth; and currency took a full percentage point off both order and revenue growth. Take a point a quarter off growth, two points off margin, and let a conglomerate exit at 10.0x rather than the 15.85x the tape pays now, and fair value is $100.14 - 39.4% below the traded price. That is not a demand collapse: revenue still grows, at about 5% a year rather than 8%, and 73.8% of the remaining value is still the terminal.

Digital Industries

Basis quarter$5.74B
Final quarter$6.45B
Implied CAGR+2%
Final revenue mix25%

Factory automation hardware plus the industrial-software stack Siemens has spent $10.6bn on Altair and a further sum on Dotmatics to build. The automation half is a short-cycle, distributor-fed business that spent fiscal 2024 and 2025 working off a customer inventory glut - revenue fell from $5,268m in FY2024 Q3 to $4,323m in FY2025 Q1 - and has now recovered to $5,737m. The software half, EUR 1,790m of the quarter's revenue and growing 15% comparable, is what the margin story rests on: it carries the highest gross margin in the group and is the reason management guides an FY2026 profit margin of 17-19% on a business that earned 14.5% a year ago.

Last four quarters
2025 Q4 $5.88B Reported
2026 Q1 $5.27B Reported
2026 Q2 $5.41B Reported
2026 Q3 $5.74B Reported
Automation hardware and systemsIndustrial software (Siemens Xcelerator, Altair, Dotmatics)Electronic design automationAutomation service
Sequential growth +2.1%/qtr decaying toward +1.2% Compounds to 8.5%, the midpoint of the guided 7-10% comparable growth for fiscal 2026.
Digital Industries

Latest: $6.45B (2031Q3E)

Period Value
2024Q1 $4.91B
2024Q2 $4.89B
2024Q3 $5.27B
2024Q4 $5.03B
2025Q1 $4.32B
2025Q2 $4.51B
2025Q3 $5.01B
2025Q4 $5.88B
2026Q1 $5.27B
2026Q2 $5.41B
2026Q3 $5.74B
2026Q4E $5.97B
2027Q1E $5.37B
2027Q2E $5.62B
2027Q3E $5.95B
2027Q4E $6.18B
2028Q1E $5.54B
2028Q2E $5.78B
2028Q3E $6.12B
2028Q4E $6.34B
2029Q1E $5.68B
2029Q2E $5.92B
2029Q3E $6.25B
2029Q4E $6.47B
2030Q1E $5.79B
2030Q2E $6.02B
2030Q3E $6.36B
2030Q4E $6.57B
2031Q1E $5.88B
2031Q2E $6.12B
2031Q3E $6.45B

Assumptions & reasoning

  • EBITDA margin is not the 20.4% the basis quarter printed. It is the midpoint of Siemens' guided 17-19% fiscal 2026 DI profit margin plus the 1.7 points by which the quarter's EBITDA margin exceeded its profit margin - EUR 192m of depreciation and amortisation less EUR 110m of purchase-price-allocation amortisation on EUR 4,932m of revenue. The trailing four quarters ran at 19.3%.
  • This line already fell 18% peak to trough inside the eleven quarters shown - $5,268m in fiscal 2024 Q3 down to $4,323m in fiscal 2025 Q1 - on an automation inventory destock, with no recession behind it. That cycle, not a calendar, is why the seasonality test on this vertical returns no usable shape.
  • The quarter carried EUR 35m of Altair and Dotmatics integration cost, which Siemens says cut the DI profit margin by 0.7 percentage points. Siemens has not said when that cost stops, so the terminal margin of 21.5% assumes it does.
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