Siemens Aktiengesellschaft (SMAWF)

How it makes money

Revenue comes mostly from selling hardware and software for factory automation, building systems and rail equipment, often bundled with long-term service and maintenance contracts that generate recurring income after the initial sale. Siemens Healthineers, consolidated into group results even though it trades as its own stock, adds revenue from selling and servicing imaging machines and diagnostic equipment to hospitals, a business with its own multi-year sales and service cycle.

Revenue by segment

Once a factory or hospital is built around Siemens automation systems, imaging equipment or signaling technology, replacing it means retraining staff and requalifying processes, which discourages switching for years. The advantage is narrow rather than wide because each division faces capable global rivals — Schneider Electric and Rockwell in automation, GE Healthcare and Philips in imaging, Alstom in rail — that win contracts on price and features.

Industrial automation spending tracks factory investment cycles, which slow when manufacturers cut capital budgets in a downturn, and rail and infrastructure orders depend on large, lumpy public and private capital projects. Healthineers is the exception: hospital spending on imaging and diagnostics is comparatively steady, which softens the swings from the more industrial divisions.