Speaker 1: Semens says weak demand for factory automation is hitting returns
Speaker 1: and revenue. Bloomboats. Guy Johnson spoke to the CEO of
Speaker 1: that company, take a lessen.
Speaker 2: It was driven basically by another very strong quorder of
Speaker 2: some other infrastructure. Our electrical business grew by twenty one percent,
Speaker 2: but you also had a very strong software business. The
Speaker 2: underlying the softer business was very strong. But we also
Speaker 2: had a couple of winds, large wins. They don't repeat
Speaker 2: in that size again, but this helped quite a bit
Speaker 2: also and drive our top line end bottom line as well.
Speaker 3: So some fairly some fairly lovely numbers this time around,
Speaker 3: which probably are repeatable. You have there, You have those
Speaker 3: stuck to your guidance for the full year. Given what
Speaker 3: you've just said, given what you see in the world
Speaker 3: at the moment, how predictable is the business though right now?
Speaker 2: Well, yes, we indeed we confirm our guidance our full
Speaker 2: year outlook for the growth We will end up at
Speaker 2: the lower end though, and we also confirm on our
Speaker 2: EPs guidance the heads name holds true for our businesses
Speaker 2: regarding the IVC their profitability for the full yem on
Speaker 2: the lower end for the SI on the upper end.
Speaker 2: So coming to the predictability, it's really there are. The
Speaker 2: biggest element which we have here is that over the
Speaker 2: last three years, the automation business was growing tremendously fast
Speaker 2: and this ended up in quite a bit of stocking
Speaker 2: in our distribution channels. And this stocking effect has to
Speaker 2: go down. You have to de stock on the one side,
Speaker 2: and the market has to pick come on the other.
Speaker 2: This is the unpredictability. How fast does that go? When
Speaker 2: will the market pick up? We see a certain light
Speaker 2: in chemical industry also in China, which is a leading indicator,
Speaker 2: but this is not really the momentum we need in
Speaker 2: order to really grow there. Therefore, we still have a
Speaker 2: muted market for automation. It is temporary effect structural. We
Speaker 2: believe this market keeps on going because there's a demand
Speaker 2: and for higher automation and digitalization in the whole industry.
Speaker 3: Right, but just trying to figure out when that happens
Speaker 3: it's proving difficult. How big a factor is China in
Speaker 3: that thinking? You've talked about maybe China recovering next year,
Speaker 3: looking at the latest numbers we see out of China,
Speaker 3: is that still your thinking as well? Do you continue
Speaker 3: to believe that we do see a recovery next year.
Speaker 2: Yeah, there's still the assumption which we have we will see.
Speaker 2: Our assumption is still that we still see a week
Speaker 2: Q four and Q one, so until the end of
Speaker 2: the calendar year and then let's see. We do not
Speaker 2: believe that this is a kind of a fast pick
Speaker 2: up in the Chinese market. It will pick up slowly gradually.
Speaker 2: It depends really on the one side, on the domestic
Speaker 2: consumption in China, so the market itself, how it's growing.
Speaker 2: It's dements also on the global markets. Remember China's are
Speaker 2: very strong export markets through in the whole economy. And
Speaker 2: it depends also how fast will China goes through their
Speaker 2: reduction of the GDP share coming from real estate. This
Speaker 2: is something that really holds them back. All in all,
Speaker 2: Chinese is then the second largest market for US and
Speaker 2: it will remain this market and it will come back
Speaker 2: to growth. It might take a little bit. Structure wise,
Speaker 2: we don't have any dots.
Speaker 3: The story over the last few days has been huge
Speaker 3: debates around whether or not the US is heading for
Speaker 3: a recession. Do you see any indication that the US
Speaker 3: market is heading for a recession. What data are you
Speaker 3: getting well.
Speaker 2: I mean, on the one side, inflation reduction Act is
Speaker 2: the right thing to do in order really to attract
Speaker 2: value added to the United States. The money is not
Speaker 2: going that fast to the market, so we see a
Speaker 2: slide pick up, but not really that impact that we
Speaker 2: would hope to see on the one eddor on the
Speaker 2: other side, I mean ahead of the elections. Obviously, maybe
Speaker 2: the market is a little bit muted. But in all
Speaker 2: the United States was always a market. It was quite resilient,
Speaker 2: very fast, and we believe that this is another market
Speaker 2: which is also driving coming. This was now the overall
Speaker 2: perspective and it comes to our markets where we see
Speaker 2: the demand for digitalization, for automization. We really believe that
Speaker 2: this is a high growth market for US exceptionally HI.
Speaker 2: Why you have labor shortage, you have high salaries in
Speaker 2: the United States compared to others. If you want to
Speaker 2: bring manufacturing back, and this holds true for the United
Speaker 2: States maybe also for other surrounding countries, then you need
Speaker 2: a high level automation digitalization. Last point, AI is driving
Speaker 2: a huge demand for data centers, and electrification itself is
Speaker 2: picking is taking a huge momentum you see that in
Speaker 2: our smart infrastructure numbers. This goes on. This is a supercycle.
Speaker 2: It will go on, so very strong business there. Last point.
Speaker 2: We are one of the strongest players in the United
Speaker 2: States if it comes to trains and signaling, and we
Speaker 2: play that card as well, and you see our last
Speaker 2: order for high speed trains for United States. That's just
Speaker 2: one element in end this.
Speaker 1: Cause on Okay, Bloomer's guy Johnson there speaking two seamens.
Speaker 1: See yoak Ryland Bush