Siemens increases dividend, announces 3 billion euro share buyback and profit sharing bonuses

FRANKFURT – Industrial equipment maker Siemens AG said Thursday it would increase its dividend and return billions to shareholders after a strong year.

The Munich-based company said it met its key profitability target in the fiscal year 2015, with a profit margin of 10.1 per cent within its stated goal of 10-11 per cent. Management predicted increased sales and earnings for 2016.

For the full business year, which for Siemens ended with the close of the July-September quarter, net income rose 34 per cent to 7.4 billion euros ($7.9 billion). Revenue rose 6 per cent to 75.6 billion euros.

Siemens makes big-ticket equipment for companies and governments such as power turbines, trains and medical diagnostic machines.

Orders rose 15 per cent in the fourth quarter, an important figure for future earnings since the company’s big projects operate with long lead times.

Management proposed a dividend of 3.50 euros for the 2015 fiscal year, up from 3.40 euros from a year earlier, and announced it would buy back up to 3 billion euros in shares, as well as pay 200 million euros to employees in profit sharing.

The company’s shares jump 3.3 per cent to 95.17 euros in early afternoon trading in Europe. Share buybacks can support share prices, and if the shares are then cancelled can mean more earnings per share.

“We delivered what we promised, and are well positioned to deliver on our plans for the year ahead,” said CEO Joe Kaeser in a statement.

For the July-September quarter, the company’s fiscal fourth, net profit fell 33 per cent to 1.0 billion euros ($1.1 billion). Profits were reduced by a 138 million euro charge relating to the company’s stake in its Primetals Technologies joint venture, and by severance charges. Revenue rose 4 per cent to 21.3 billion euros.