Siemens Energy has initiated plans to spin off its Transformation of Industry (ToI) business into a standalone company, seeking to sharpen focus on faster-growing power-generation and grid technologies amid surging electricity demand.
The industrial unit, which generated €5.7 billion in revenue during fiscal 2025—about 15% of Siemens Energy’s total sales—reported a 70% rise in profit before special items to €646 million. Free cash flow for the unit reached €686 million, while its order backlog stood at approximately €8 billion at the end of the fiscal year. The division employs around 17,000 people and supplies industrial customers with steam turbines, compressors, electrification solutions, digitalization tools, and electrolyzers.
Shares in Siemens Energy fell 0.3% in early trade, lagging a 0.2% decline in the broader DAX index. The move follows a May upgrade to Siemens Energy’s 2026 outlook, which raised its free cash flow before tax target to around €8 billion and net income to roughly €4 billion.
The company is evaluating ownership structures for the spin-off, including potential external investment, a capital-markets transaction, or an initial public offering (IPO), while intending to retain a minority stake. The decision reflects the unit’s distinct business cycle compared with Siemens Energy’s core power-generation and grid divisions, though the industrial unit is not underperforming. The separation is driven by rising demand for power generation, transmission capacity, gas turbines, and grid equipment, particularly from data centers and artificial intelligence infrastructure.
