Siemens AG expects a slowdown in revenue growth for fiscal 2024 with demand for factory automation products in China still in recovery mode.

The German industrial company sees comparable revenue rise between 4% to 8% in the year through September, it said Thursday. Revenue at Digital Industries, which has been under pressure due to destocking, will be flat to slightly higher, Siemens said.

The slower pace of growth follows a record year with net income nearly doubling and Siemens raising its dividend by just over 10% to €4.70 a share.

China’s subdued economy has weighed on the industrial sector in recent months alongside flat consumer and business demand amid high inflation and interest rates. Siemens has already flagged it sees the slowdown in China continue into next year to drag on orders for the company’s factory-automation devices.

Read more: Siemens Sees Subdued Growth in China Lasting Into Next Year

The German company in August cut its profit-margin outlook for its digital industries unit after demand fell, but said its long term-projections remained intact. Siemens has earmarked €2 billion ($2.2 billion) in global investments to expand its high-tech manufacturing footprint globally and is set to profit from a major strategic reset of its businesses.

The company reported net income attributable to shareholders of €1.72 billion in the three months through the end of September, it said Thursday, in line with analyst estimates. Orders climbed 6% compared to last year.

In the past years, the company has shed much of its heavy-duty equipment businesses and sold smaller divisions in favor of software-driven product lines with higher profitability levels. On Thursday, it outlined plans for an initial public offering of its large-drives Innomotics business, alongside a possible divestment.

Outside its industrial business, Siemens is dealing with losses at Siemens Energy AG, its former power-generation business where it still holds a 25.1% stake. As part of a deal to shore up the struggling company’s finances, Siemens has agreed to buy an 18% stake in an Indian joint venture for €2.1 billion from its former unit.

The transaction is part of a broader €15 billion deal to help cover loan guarantees allowing Siemens Energy to compete for new business, involving Germany’s government and banks.

Author: Wilfried Eckl-Dorna