Siemens Energy will spin off its Industry Transformation division, a unit focused on power generation and grid technologies, into a standalone company as demand for electricity surges from data centers and artificial intelligence infrastructure.
The division, which generated €5.7 billion in revenue for fiscal 2025—about 15% of Siemens Energy’s total sales—employs roughly 17,000 people. Its profit before special items rose 70% year-over-year to €646 million, while free cash flow reached €686 million. The unit’s order backlog stood at around €8 billion at the end of the fiscal year.
Siemens Energy is evaluating ownership structures for the spin-off, including potential external investment or a capital markets transaction, while planning to retain a minority stake. The company raised its 2026 outlook in May, forecasting free cash flow before taxes of around €8 billion and net income of approximately €4 billion.
The move reflects broader industry trends, as utilities and technology firms expand power capacity to support data centers and AI workloads, driving demand for electrical infrastructure, gas turbines, and grid equipment. Siemens Energy emphasized that the division operates on a different market cycle than the rest of the group and competes internally for capital, though its performance is not cited as a reason for the separation.
Shares of Siemens Energy fell 0.3% in early trading, lagging a 0.2% decline in the DAX index. The division’s 2025 revenue increased from €5.1 billion the prior year, underscoring its growth trajectory amid the energy transition.
