Quickie: Siemens AG mentions $100m PL order from GM amid solid FQ1

Feb 1, 2017 | Hot Topics

We’re getting ready to roll on earnings season in our PLMish universe. Tomorrow, Dassault Systèmes. But first, Siemens AG reported results earlier for the quarter ended December 31 and, while I don’t generally write about it since the PLM business is such a small part of the whole, Siemens’ growing focus on software and digitalization warranted a quick listen to the earnings call.

First, some cautious notes: The company says it anticipates “increasing headwinds for macroeconomic growth and investment sentiment in our markets due to the complex geopolitical environment.” Interpret the reasoning how you will — but it means that the company now expects “modest growth in revenue, net of effects from currency translation and portfolio transactions.” In FQ1, total revenue was up 1% to €19.1 billion but orders fell 14%, leading to the foward-looking caution. The Financial Times says Siemens is Europe’s biggest industrial conglomerate so statements like this are bound to have a ripple effect, leading to caution from many other players, too.

But here’s the kicker: CEO Joe Kaeser told investors that the “PL software business showed a clear comparable order growth”. That in itself is good, BUT he went on to say: “Siemens PL signed a multi-year contract with a value greater than US$100 million with General Motors. This new agreement validates the strength of our partnership helping GM to leverage digitalization.”

Somehow I missed this news – and it’s a big deal. GM decided back in 2011 to extend its contract with Siemens PLM Software, after a hard-fought battle with DS. No value was ever formally announced, so to hear that a follow-on deal is this large is … a big endorsement. [UPDATE: No details forthcoming. This is as much as GM is willing to have Siemens say.]

Mr. Kaeser also said that the shareholder vote on the proposed acquisition of Mentor Graphics will take place tomorrow (Feb 2);  he “expect[s] a positive outcome”. We’ll know tomorrow.