Siemens Energy to hand investors $11.5 billion as power market booms

By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF, Germany (Reuters) -Siemens Energy said on Thursday it plans to return up to 10 billion euros ($11.5 billion) to shareholders by the end of 2028 on the back of booming demand for power infrastructure equipment, lifting its shares to a record high.

Up to 6 billion euros will be in the form of a share buyback programme, Siemens Energy said as part of a U.S. capital markets day, with dividends accounting for the rest.

Shares in Siemens Energy, which last week raised its mid-term targets on strong global demand for gas turbines and energy grids, climbed as much as 8.4% to their highest level since the company was spun off from Siemens AG in 2020.

They were 3.9% higher at 1448 GMT.

BUYBACK DRIVES SHARES

"We are a company with an electricity DNA since the days of Werner von Siemens," CEO Christian Bruch said, referring to the 19th century founder of the Siemens business empire.

"We are convinced that the electricity and electrification markets provide us with plenty of opportunities to grow the company profitably," Bruch added.

A "strong buyback could help the shares re-rate relative" to GE Vernova, Siemens Energy's main rival that trades at a price-to-earnings ratio of 50 times, compared with Siemens Energy's 30 times, analysts at Citi said.

Part of this gap has been attributed to generally higher multiples in North America, Siemens Energy's second-biggest market after Europe where it makes around a quarter of revenues.

The boom in demand for power infrastructure, partly driven by the need for data centres for AI technology, will also result in investments of around 6 billion euros by 2028, around a third of which will go to transformer and switchgear plants.

GE Vernova said a year ago it planned to invest around $9 billion through 2028.

($1 = 0.8687 euros)

(Reporting by Christoph Steitz and Tom Kaeckenhoff, Editing by Miranda Murray, Madeline Chambers and Alexander Smith)