When on page two of the Siemens presentation, this conference call may include forward-looking statements. These statements are based on the company's current expectations and certain assumptions, and are therefore subject to certain risks and uncertainties. At this time, I would like to turn the call over to your host today, Mrs. Eva Riesenhuber, Head of Investor Relations. Please go ahead, madam.
Good morning, ladies and gentlemen, and welcome to our Q4 Conference Call. All Q4 documents were released this morning and can be found also on our IR website. I'm here today with our President and CEO, Roland Busch, and our CFO, Ralf Thomas, who will review Q4 and full fiscal 2021 results, followed by Siemens outlook for fiscal 2022. After Roland's and Ralf's presentation, we have around 45 minutes for Q&A. This call is scheduled for 90 minutes. With that, I hand over to Roland.
Thank you, Eva. Good morning, everyone, and thank you for joining us to discuss our fourth quarter results and our outlook for fiscal 2022. As you can see from the agenda, we have a lot to cover today, so let's start right away. One year ago, Siemens started a new chapter as a focused technology company, addressing highly attractive growth markets with our streamlined portfolio. Our technology comes with a clear purpose. It helps society to do more with less. It solves real-world problems like climate change or resource efficiency. We are at the heart of developing and delivering the solutions the world leaders are discussing at COP 26 right now. We don't stop there.
We have set ourselves a clear strategy and ambition to accelerate in many aspects, to create value and empower our customers to master their digital transformation and sustainability challenges, to combine the real and the digital worlds like no other company can, to pursue and execute a clear path of high-value growth, profitability, cash, and stringent capital allocation. Today, I'm very proud that we delivered on all our promises in fiscal year 2021 and created substantial value for all our stakeholders. We saw robust economic recovery across all regions, and in particular, core customer industries such as automotive, machine building, electronics, and most infrastructure-related verticals. However, the macroeconomic environment was and remains complex, with persistent pandemic-related challenges, supply chain-related risks, component shortages, and cost inflation. Together, we mastered all these challenges very successfully so far.
Many thanks go to all Siemens employees worldwide for their strong commitment to our customers and their focus on execution. This led to outstanding financial performance across all metrics. We achieved or even exceeded our guidance, a guidance that we raised four times over the course of the year. Revenue shows excellent growth of 11.5%, and this is many customer opportunities as new orders rose impressively by 21%, up double digits in all businesses. A book-to-bill of 1.15 bodes well for fiscal 2022. Our step change in performance is particularly visible in a sharp increase in net income to EUR 6.7 billion, well above our guided range. I'm even more proud of an exceptional free cash flow of EUR 8.2 billion.
This is a stunning 123% cash conversion and an all-time high in Siemens history. Profitability in industrial businesses reached 15%, a much higher level compared to the past, showing better profit conversion from product, software, and service businesses. Digital Industries and Smart Infrastructure fully achieved or even exceeded their growth and profitability guidance. This is a clear signal of our superior ability to increase customer deliveries at high level despite supply chain headwinds. Mobility was just shy of its targets, still impacted by pandemic-related effects, mainly on customer side. Most of them still operate on low-capacity level. I wanted to further highlight that all businesses are already operating well above their pre-pandemic levels of fiscal 2019.
Comparable revenue in fiscal 2021 versus two years ago in fiscal 2019 is up around 5%-6% in all three businesses, and we gained market share in difficult times. I talked about technology with purpose. At the Capital Market Day, we introduced our DEGREE framework, which addresses sustainability from every angle. It comes with ambitious targets around six core action fields, and we worked diligently to put it into action and continue to see strong momentum. A comprehensive progress report for fiscal 2021 will be released together with our annual report in early December. Let me highlight a few examples from Q4. The Siemens team in China launched a far-ranging zero carbon pioneer initiative. With it, Siemens significantly exceeds the requirements set by the Chinese government to lead by example.
One goal is to commit to carbon neutrality in our Chinese operations by 2030. A good example is the electrical products factory in Suzhou that is already carbon neutral today. But even more important is the approach to decarbonize entire value chains across many industries. Siemens China will work with more than 500 key suppliers and aims to support more than 10,000 customers to accelerate their transformation journey. We have the local capability to provide end-to-end solutions in China from consulting, planning, implementation to optimization. A precondition is transparency through our offering of comprehensive digital twins. We also continue to walk the talk elsewhere. Our electronic factory in Erlangen received the Lean & Green Management Award for the second time as a trailblazer for sustainable and digital production. The pandemic has also changed the way how our employees grow.
Already, more than 150,000 learners use intensively our digital platform, My Learning World, to expand their knowledge and skills. On top, sustainability is a great business opportunity where we can create major benefits for our customers' operations. Only a few of you may know Wunsiedel, a community with around 10,000 citizens in a rural area in northern Bavaria. However, together with Siemens Smart Infrastructure, this community and the surrounding region is creating a blueprint for an independent, decentralized energy system. Even more important, it is solely based on renewable generation. It connects in a very smart way different sectors and grids such as power, heat, and mobility with state-of-the-art hydrogen and battery storage solutions. This model, also supported by Siemens Financial Services, has the potential to scale.
We've seen a first step, more than 100 communities in Germany alone as a market for a holistic carbon-neutral concept. Another great example is from an emerging industry, vertical farming. Growing food locally with highest resource efficiency is rapidly gaining traction. We expect the market for automation and digitalization in this area to grow around 25% annually over the next 5 years. Our portfolio from DI and SI is well suited to take a meaningful share. A good example is our collaboration with U.S.-based 80 Acres Farms. In this case, Siemens Financial Services also participated through an equity investment in a $160 million Series B financing round to accelerate global expansion. Now, let me give you some more insight on how our teams have been able to keep deliveries on a high level by limiting the impact from component shortages.
This sets us apart from some of our peers. Resilience in supply chain, manufacturing, and service delivery is clearly supported by the power of Siemens. Good examples are pooling of demand for raw materials and components, which makes us a relevant partner for our more than 1,500 strategic suppliers. The goal is to jointly with our suppliers, improve a broad set of criteria such as availability, innovation, productivity, and of course, sustainability. With this, we aim to optimize total cost of ownership and not just the price. We use our own technology. Real-time transparency on inventory levels is paired with fully digitalized production and capacity planning in our factories. This enables a very flexible use of our global footprint and shifting between sites.
Looking ahead into fiscal year 2022, at least in the first half, we continue to see extended customer delivery times and high levels of order backlog and component shortages. Headwind from cost inflation regarding materials, transport, and labor shortage will continue. Yet, we are confident to contain bottom-line impact through adequate pricing measures over the year. On top of strong operational momentum, we drive our strategic initiatives with full speed. A key lever for future success is our targeted investment in innovation and key technologies. Around 50% of our R&D investment is allocated to software and IoT. We plan to further increase R&D intensity from a high level with a goal to accelerate new applications, extend leading market positions, and to drive gross margin. Part of the increase is related to portfolio effects such as Varian or Supplyframe.
Key areas of investment are the ongoing transition towards software-as-a-service business models. This is relevant primarily in Digital Industries, but also in the building automation, grid control, and Mobility area. You will be able to see several new solutions around the future of industrial operation, such as Industrial Edge, at the upcoming SPS Drives fair. In addition, we leverage the maximum benefit of technologies across businesses through a focused horizontal company core technologies approach. A second area to strengthen Siemens as focused technology company is shaping and optimizing our portfolio. As you can see, we strengthened all our businesses in fiscal 2021 with targeted acquisitions along our strategic imperatives, and we will continue to follow this path of bolt-on acquisitions. At the same time, we will diligently evaluate and execute strategic options in line with the best owner principle.
Progress is clearly visible. The Flender investment was a prime example among the portfolio companies in fiscal 2021 of how to create value through a private equity approach. We completed the Yunex carve-out from Mobility in fiscal 2021. Yunex, as the global company in a fragmented market, established itself as the strong player in the field of traffic and, in particular, digital traffic management at the recent ITS World Congress. We are currently also working on splitting Siemens Logistics in a parcel logistics business and an airport logistics business, which have fundamentally different business dynamics. In addition, we will carve out Siemens Large Drives to achieve full potential by increased entrepreneurial freedom. Just a few weeks ago, we participated, once again, in a substantial value creation step through the successful IPO of our joint venture, Fluence Energy.
This is a battery storage solution company founded by AES and us. A further strategic pillar of Siemens is our strength to empower customers to master their transformation challenges. An excellent example is the landmark order to bring a fully integrated rail system for high speed, main line, and freight line to Egypt. It will be built with Siemens trains and rail infrastructure. In brief, a Suez Canal on rails. A first contract covering the green line was signed in early September. A major portion of Siemens' order share of around $3 billion will be booked in fiscal 2022 after financial closing. Negotiations for the further contracts to cover the entire 1,800 km network are in full swing. This project is an excellent example of how to create impact on society, environment, and economy. The numbers are impressive.
More than 30 million passengers are expected to use the new system and save up to 50% travel time. Emissions are to decrease by around 70% compared to bus and car passenger travel. The consortium will create more than 15,000 jobs in Egypt with a strong focus on local skill development. We're not just shaping the future of transportation in Egypt. Back in September, a cross-business Siemens team participated in a completely redefined IAA Mobility in Munich. We showcased how Siemens supports the shift towards a more sustainable automotive future with e-vehicles and mobility solutions. First, we highlighted cutting-edge design and simulation software, as well as automation solutions for almost any automotive company. Second, our comprehensive charging infrastructure solutions, including an autonomous robot charging station, were displayed or in use on-site, a key growth area for Smart Infrastructure.
Finally, the mobility team showed mobility-as-a-service solutions to connect different modes of transport. Siemens plays a central role in an interconnected world, and we won't stop here. A great showcase for a digitalized smart city district can be currently visited at the Expo 2020 Dubai exhibition, the blueprint for the future. Buildings consume around 80% of energy supply in hot and humid climate conditions of the Middle East. More than 130 buildings are connected to our IoT platform, and we installed major security and building management solutions. Benefit is to optimize operations and decision-making in many aspects. Less energy consumption, lower emissions, higher comfort and safety. On top, our technology will stay as nucleus for the future sustainable smart city district 2020 in Dubai.
Expo 2020 is a signature example on how we can uniquely combine the real and the digital worlds. As discussed during the Capital Market Day, we confirm a compound annual growth of around 10% in our digital business until fiscal 2025. We leverage our hardware and automation businesses with software, digital, and IoT transformation services across Siemens. We build on a strong foundation of deep domain know-how, technology portfolio, and strong partner ecosystem. In fiscal 2021, digital revenue rose to EUR 5.6 billion, and this will continue to accelerate.
Supported by the business model shift in DI software after fiscal 2023. This transition towards software as a service for our PLM businesses has started as planned. In the fourth quarter, significant investments in product availability, customer access management, and sales enablement were taken to have a head start on October first. We are optimistic to successfully manage the SaaS transition as anticipated. To day, we are ahead of our plan with customers who are moving to SaaS, and we will share more details in the quarters to come.
Customer feedback has been positive as we take them through the new offerings and explain our cloud approach for contracting, security, and data privacy. Annual recurring revenue, our key indicator for business health in the software business, increased by 10% to EUR 2.9 billion. During fiscal 2022, we expect a material pickup of the cloud ARR share from today's 5%. Obviously, the jury on the success of our strategy as focused technology company is the capital market. Here we can also draw a very positive conclusion after the first year since the spin-off of Siemens Energy. The total shareholder return is a strong 45%, well ahead of reference indices.
We are confident to drive this further with stringent execution of our accelerating high-value growth strategy. How did all this translate into our financials? Let me give you a brief overview for the Siemens Group in the fourth quarter. Orders were at EUR 19.1 billion, up by a powerful comparable 16% over the prior year quarter. The rise was driven by double-digit growth in Mobility and Digital Industries, leading to a very healthy book-to-bill ratio of 1.09. Comparable revenue was up by 10% to EUR 17.4 billion. Increases were recorded in all businesses, with double-digit growth from Digital Industries and Siemens Healthineers. Revenue growth was broad-based across regions. Germany was up 17%, the U.S. grew 9%, and China was up 12% on tougher comps.
Adjusted EBITDA for our four industrial businesses reached EUR 2.3 billion, with structural improvements continuing to pay off. As expected, discretionary spending and selective investments picked up from low levels. Our outstanding business performance resulted in higher employee bonus accruals. In addition, we saw some impact from cost inflation. Altogether, this led to a solid margin performance of 13.8% on par with prior year when excluding portfolio gains. This translates into strong earnings per share of EUR 1.45, also benefiting from a revaluation gain of our stake in Thoughtworks. Ralf and I continue to be extremely proud of our free cash flow development throughout the year. EUR 3.8 billion of free cash flow all in the fourth quarter is another proof point that Siemens can turn outstanding business performance into cash.
Our strong cash performance is also reflected in our industrial net debt over EBITDA position. It stands at 1.5 times within the target corridor ahead of plan. With that, over to you, Ralf. Let's take a closer look at operational performance and our outlook for the fiscal year 2022.
Yeah, thank you, Roland, and good morning to everybody. Let me share further details regarding our very convincing performance in the fourth quarter. Our key markets for Digital Industries, in particular automotive and machine building, continued to show strong momentum. Although production output was in parts impacted our customer factories, we saw further dynamics in orders for automation products, which are mainly CapEx stream. The rise in demand was partially caused by customer concerns about extended delivery times and expected further price increases. We therefore expect a certain moderation of order activity in the course of fiscal 2022. Looking at a book-to-bill of 1.16, our backlog in Digital Industries exceeded EUR 7 billion. EUR 3.3 billion of this backlog is for short-cycle products. This is an all-time high level.
All automation businesses showed massive order growth, with discrete automation 54% and process automation 23% up. Software was modestly up on tough comps in the EDA business, while PLM showed double-digit growth. We are very pleased that automation revenue rose 17% year-over-year and achieved clear sequential growth over the third quarter. From what we have seen in the earnings season so far, this impressive growth points to clear market share gains in our short-cycle businesses. Discrete automation was up 20% with broad-based demand in factory automation and motion control. Process automation saw continuing recovery in customer orders and achieved 8% revenue growth. The volume also increased sequentially.
Software revenue was up 10%, driven by 13% growth in PLM. Customer sentiment has clearly improved, which is driving digitalization investments, and as Roland said, our offering for SaaS is entering the market at the very right time. EDA business showed mid-single digit growth, while Mendix continued its substantial double-digit growth trajectory. Digital Industries reached a strong 18.8% margin performance. This is an operational improvement of 90 basis points over the prior year quarter, which benefited from an effect related to the revaluation of stake in Bentley in the magnitude of 13.7 percentage points back then. Margin improvement benefited from solid profit conversion on higher revenue and short cycle businesses, combined with the impact of our measures to structurally improve the cost base. We are fully on track with our competitiveness program.
Revenue mix in automation was somewhat less favorable, with a higher share of mid-range products. In addition, higher material costs and targeted investments to implement growth initiatives alongside with higher incentive accruals affected margins. As indicated, ramping up cloud and integration investments accounted for around 180 basis points of negative impact for Q4. For fiscal 2021, it amounted to around EUR 220 million in total. We are again excited that Digital Industries achieved almost EUR 1.1 billion of free cash flow in the fourth quarter. This truly exceptional performance, with a cash conversion rate of 1.23, is based on extremely professional work on stringent working capital management across all businesses, and in part benefited from advanced customer payments.
Looking at our key vertical end markets for the next quarters, we expect a continuing recovery along broad-based positive sentiment in a wide range of our key industries. Fundamentals of investment demand for automation and digitalization, driven by labor shortages, transformation towards more sustainability, and focus on resilience of industrial value chains are intact and beneficial for Siemens way forward. Now let me give you the regional perspective on our excellent top-line automation growth. China orders once more showed extraordinary growth on strong momentum in the short cycle businesses up 61%. Our business benefited from early customer orders, while inventories and distributor channels are at usual levels. Here, we obviously expect a normalization of demand going forward. European countries contributed again with exceptional growth rates. Germany was up 49%, and Italy delivered 42% increase. Revenue growth in automation was broad-based with strong increases across all major regions.
The excellent momentum in China remained on high level, up by 21% year-over-year and was also sequentially up. Germany and Italy showed both a strong finish with double-digit revenue growth, while in the U.S., the process automation business lagged discrete. As Roland said, our team is determined to mitigate risk from supply chain shortages in areas such as electronic components. In fiscal 2022, we expect continued impact from higher commodity prices and cost inflation, which we intend to compensate with further price increases throughout the year. For the first quarter in fiscal 2022, we anticipate for DI, from today's point of view, close to 10% comparable revenue growth, reflecting strong backlog execution in short-cycle businesses. As already mentioned at our Capital Market Day, software revenue is expected to be rather flat in fiscal 2022.
In the first quarter, we see an even stronger impact due to the SaaS transition and volatile EDA business. Given the stringently managed increase in investments to leverage strong growth opportunities in new verticals and future applications, we expect the profit margin for the first quarter to be in the area of fiscal Q4 2021 levels. Please note that as of fiscal 2022, we have changed the profit definition in line with our new financial framework and are now excluding financial income. Comparable financials were published today, together with the earnings release. Now let's move on to Smart Infrastructure. The team delivered very convincing top-line growth in better end markets and the next proof point for a clear margin expansion trajectory.
In total, orders were up 9.5%, driven most notably by high-teens growth in the electrical product business, benefiting from ongoing industrial demand. In the systems business, we won attractive large orders in the U.S. from renowned semiconductor manufacturers. The data center vertical continued to show healthy momentum. Solutions and service business was flat on lower volume from large orders. Revenue growth of 7% was driven by the product businesses up by 13%, and the systems business benefited from strong demand for distribution grids. As expected, the late-cycle solutions and services business showed modest growth and will continue to recover in the quarters ahead. Margin performance of 12% benefited from higher capacity utilization related to increased revenue, as well as structural improvements from our competitiveness program, which is fully on track.
On the other hand, as expected, there were headwinds from commodities such as steel and copper, as well as component and logistics cost inflation. A clear highlight was free cash flow, even topping last year's strong performance on consistent asset management. Looking at the regional top-line development, strong momentum in the U.S. and Germany stood out, both with double-digit order growth and revenue up high single digits. China showed a temporary softness with sequentially stable revenue on tough comps in the product and systems business. I want to point out that as Digital Industries and SI did an excellent job to keep its supply chains intact and secure its global delivery capacity.
We expect the momentum in our short cycle electrical product business to continue in the strong end markets and our solutions business to pick up further in line with gradually improving growth perspectives in the late cycle buildings market. The electrification market is on a solid growth trajectory with accelerating renewables integration and higher electricity consumption. Based on this, for the first quarter, we see comparable revenue growth rate to be in line with our full year growth guidance. As Roland and I already highlighted, Smart Infrastructure has done an excellent job of mitigating the impact of strained supply chains.
However, as indicated before, we see continuing headwinds from higher raw material prices, which can only be compensated by pricing action after a short period of time throughout the fiscal year 2022. In total, we expect the first quarter margin to improve compared to prior year, but not yet in the full year guidance range of 12%-13%. Now looking at Mobility. Order growth of 31% was substantial, with several large orders in rolling stock in Europe and a strong finish in rail infrastructure. The backlog stands at record level of EUR 36 billion with healthy gross margins. Around one third is highly attractive resilient service business, which grew 11% nominal year-over-year.
Our sales funnel continues to look promising for the quarters ahead. Revenue grew 1%, just shy of our expectations. Rail infrastructure showed clear growth driven by the mainline business, whereas rolling stock and customer services was flat. This was mainly due to the COVID-19 related restrictions, leading to lower factory productivity as well as still subdued low ridership and related slow recovery of life cycle revenue services and spare part business. Again, Mobility reached industry-leading profit margins based on stringent execution, however, also impacted by the pandemic-related effects already mentioned. Mobility exceeded our expectations with a free cash flow of more than EUR 1.2 billion in the quarter, benefiting from major project milestone and advance payments.
Cash conversion for the full fiscal year 2021 stands at very healthy 1.05. Our assumption for revenue growth for the first quarter is in line with the full year guidance range of 5%-8%. First quarter margin is sequentially a notch higher compared to the fourth quarter, however, not yet achieving the lower end of the new target margin corridor of 10%. At this point, let me briefly highlight the solid operational performance of Siemens Healthineers team, who disclosed financials one week ago already. As majority shareholder, we are pleased with the strong operational outlook in total and ongoing stringent integration of Varian. In the appendix of the presentation, we have incorporated their relevant outlook slide, as well as the profit bridge from Siemens Healthineers to Siemens AG.
A negative impact of the Varian transaction on Siemens AG's fully consolidated net income reached EUR 224 million for the full fiscal year 2021, better than originally expected, mainly due to PPA. Siemens Financial Services delivered another consistent performance in the fourth quarter and achieved a significant improvement compared to the prior year on sharply lower expenses for credit risk provisions. Fully in line with its strategy, SFS acts as a business enabler, supporting new business models with its domain know-how, while continuously de-risking its business profile on very solid returns. You can find in the appendix on page 34, as usual, the complete Q4 earnings bridge for below industrial businesses. Here, I just want to briefly mention 2 additional items.
Portfolio companies in the current setup broke even for the first time with fully consolidated units, more than compensating for ongoing losses from our stake in Valeo Siemens, a great achievement by the entire team. In corporate items, we recorded a EUR 260 million revaluation gain on our stake in Thoughtworks following their successful IPO in September. As mentioned, free cash flow performance in the fourth quarter was a truly stellar finish on an outstanding year. We recorded record highs with industrial businesses close to EUR 10 billion and EUR 8.2 billion on all-in level. Despite strong revenue growth, all businesses achieved a cash conversion rate clearly above one, way ahead of our ambition over the cycle and setting a high level of comparison for fiscal 2022. We are very convinced to continue on this path of cash generation.
Excellent performance in fiscal 2021 regarding profitable growth and stringent working capital management is directly reflected in two important parameters of our new Siemens financial framework. First, ROSI, excluding Varian related M&A effects of 15.1%, returned to the target corridor 2 years ahead of time. Secondly, with 1.5 times industrial net debt over EBITDA, we are already back in our leverage target range 1 year ahead of time. Another success story in this respect is the sharp reduction of our pension deficit to EUR 2.8 billion. As previously indicated, we will continue our path of further deleveraging driven by portfolio optimization and consistent, strong free cash flow. Another proof point of stringent execution is the continuing ramp-up of cumulative savings through our competitiveness programs.
Now, in line with our new progressive dividend policy, Siemens will propose to the AGM a dividend of EUR 4 per share, significantly up by EUR 0.50 from the prior year dividend. This represents an attractive dividend yield of 2.8% based on September 30 closing share price, and reflects our great confidence in the future development of our company. At the same time, we are very mindful about capital allocation priorities. Next to dividends, the second pillar of shareholder return is our share buyback program. The previous EUR 3 billion program finished with a very beneficial outcome for our shareholders. As a next step, we will start this month a new long-term program of up to EUR 3 billion by 2026 to counter dilution through share-based compensation.
For our outlook for fiscal 2022, we assume continuing healthy growth in global GDP, albeit with slowing momentum. In addition, we expect continuing challenges from the COVID-19 pandemic and supply chain constraints, which we anticipate easing during fiscal 2022. Furthermore, we expect to balance cost inflation from raw materials, components, and labor with pricing measures by the second half of fiscal 2022. Building on our strength in automation software, digital transformation, and tapping specific growth markets, we will further expand high levels of investment in R&D with a strong focus on software and digital technologies. In addition, we will selectively invest in go-to-market digital sales channels and new verticals. Furthermore, the transition towards software-as-a-service model in our large DI software business will drive OpEx. However, each decision will be taken with a strict focus on clear priorities in resource allocation.
We assume severance charges on a substantially lower level compared to fiscal 2021, with around EUR 150 million-EUR 200 million in fiscal 2022. Based on current rates, we anticipate only marginal effect from foreign exchange rate on top line and profit margin. As Roland pointed out, we will continue to rigorously execute our portfolio optimization strategy. Our assumption for overall contribution to net income from that is on similar levels as in fiscal 2021. Last fiscal year, we generated EUR 1.5 billion in net income from four major transactions, the sale of our Flender business, divestment of our stakes in Bentley Systems and ChargePoint, and through the recent revaluation of our stake in ThoughtWorks.
We cannot predict at this time which line items will reflect which amount of specific positive contributions, but of course, we will be fully transparent on the individual effects as they materialize. An initial proof point is the gain related to the Fluence IPO in the first quarter, which Roland mentioned. It is expected to be close to EUR 300 million pre-tax and around EUR 200 million post-tax. It will be booked in the financing and other line item of below industrial businesses. On page 36 in the appendix, you can find all details as reference for the outlook below industrial businesses in the new reporting structure as of fiscal 2022.
I wanna point out a few important topics for your models. SFS results in 2022 are expected to be higher than in 2021, but not returning to pre-COVID levels yet. Profit is anticipated to be supported by higher contribution from the equity business and continuously strong results of the debt business, albeit lower than the extraordinary high levels in fiscal 2021. Return on equity is expected to be in the lower half of the new target range, 15%-20%. In portfolio companies, we expect further improvement of the fully owned businesses achieving their target of at least 5% margin in fiscal 2022. The equity investment in Valeo Siemens is expected to remain negative and volatile. For Siemens Energy investment, we anticipate a certain improvement of our net income and equity participation based on Siemens Energy's expectations.
As indicated for fiscal 2022, we expect now decreasing PPA effects close to EUR 100 million. Our investment in innovation on group level, which reflects T&I x47, will be on a similar level as in fiscal 2021 and around EUR 200 million. Cost of governance, net of Brownfield, will decrease substantially to around EUR 500 million in line with our intended path of consistently decreasing this item to net zero by 2026 latest. The tax rate is expected to be in the range of 25%-29%, strongly depending also on tax effects for portfolio-related gain.
This does not reflect any potential impact from larger tax reforms such as discussed in the U.S., for example. Here, you can see the framework for each business and outlook for Siemens at a glance. You can find the details described in the even more comprehensive written outlook section in our earnings release document. Given the extremely strong performance in fiscal 2021, our guidance is based on tough comps and reflects our confidence in accelerated high-value growth during challenging times in fiscal 2022. Digital Industries expects comparable revenue growth of 5%-8%. Therein, the software business is anticipated to be flat as indicated due to accounting changes related to the SaaS transition.
This means that for automation, we see close to double-digit growth. The margin is expected at 19%-21%, including known headwinds of up to two percentage points due to the strategic transition to software as a service in large parts of its software business. Smart Infrastructure expects to achieve revenue growth of 5%-8% with a margin of 12%-13%. Mobility anticipates achieving revenue growth in the range of 5%-8% with a margin of 10%-10.5%. This margin trajectory is ambitious, especially compared with competition, and is anticipated to be reached towards the end of the fiscal year. On Siemens Group level, we anticipate mid-single-digit comparable revenue growth and again a book-to-bill ratio above one.
As introduced at the Capital Market Day, we will switch to earnings per share pre PPA as a key guidance performance indicator to give better transparency on operational improvement. We expect EPS pre PPA in the range of EUR 8.70-EUR 9.10, clearly up from fiscal 2021 level of EUR 8.32. Besides our annual financial outlook, we have clear roadmap to execute on several milestones for fiscal 2022 and 2023, which we committed at the Capital Market Day back in June. We will diligently report on our progress regarding each and every milestone to drive further value creation. With that, I hand it back to you, Eva, for our Q&A.
Thank you, Ralf. We are now ready for Q&A. Please limit yourselves to two questions per analyst initially. As I can see, we already have quite a few analysts in the queue. Operator, please open the Q&A now.
Thank you, ladies and gentlemen. We'll start today's question and answer session. If you wish to ask a question, please press the star or asterisk key followed by the digit one on your telephone keypad. Again, ladies and gentlemen, please press star one on your telephone keypad. Our first question comes from the line of Ben Uglow from Morgan Stanley. Please go ahead.
Oh, good morning, everyone. Thank you for taking the question. Yeah, I wanted to understand, the.
Ben?
Ben, are you still there?
I think we can't hear you anymore. Oops.
Let me call the person.
Maybe operator can take the next question, and we come back to Ben Uglow.
We come back to you, Ben.
Okay, no problem.
Here we go.
Sorry, we have Ben again on the line. Would you like to proceed?
Yo.
Ben, do you want to go ahead now?
Yes. Sorry. I'm hoping that you can hear me. I was interested in the progression. You got very big orders on the short cycle side in China, i.e. over 60%. You've also had very big revenues, 21%, which is well ahead of what we've seen at any competitor. When we've listened to the competitors, they said that their revenues have been affected by chip shortages and component shortages, particularly in China. You know, they're examples of drives, industrial automation businesses, et cetera. I guess I've got sort of two questions. One, how do you explain the gap between orders and revenues in China, and what does that mean for the next quarter? Are you, in some way, able to access more components?
Why are you not seeing the same revenue pressure as some of the competitors on the short cycle side?
Yeah. Thanks, Ben. Number one, regarding the gap of order intake and revenue, that's indeed a delay. We see that we get such a dynamics in the order intake that we have indeed a stronger delay from turning order intake into revenue. That's so to say a backlog building up, which we are going to execute as we go forward. Still we have our factories really loaded. Coming back to your other point about access to components. I mean, of course, we are fighting as all the others too, with either price inflation, but also of component shortage.
On the other side, we have a very strong stance and a strategic partnership with 1,500 suppliers around the world, which we are not treating only as cheap suppliers, but also strategically in terms of innovation. That pays off. We have the power of Siemens, really, which we leverage. Then the third element is that we are using our own technology in our manufacturing sites. For example, in particular for China, the revenue which is driven by PLCs, by automation. There we have three manufacturing sites, two in Germany and one in China, really fully digitalized. We have a digital twin, and they're in sync. They can real time shift volume from one location to another according to the availability of components.
We have been able to really manufacture, maybe not to the precise mix we wanna have, but we were able to continue without any interruption. This is really a strength of Siemens power on the one side and technology, which is at work.
Understood. Thank you. One quick follow-up. I know it's an obvious question, and it was partly addressed in the opening remarks, but we are seeing some, what I would call variable data points coming out of China, some good, some bad. Certainly in October, there are some signs around steel and different areas where consumption is dropping off. Can we just confirm you're not really seeing that in your business? Is that a fair assumption?
Yeah. The point is, if you think about what's the Chinese 14th Five-Year Plan laying out, they talk about high technology, high-tech manufacturing, and they take it really serious. They want to have a higher level of automation, digitalization, all their businesses on the one side. On the other side, they also have the sustainability agenda very much on. We see in our markets and also the verticals which we are serving, as you know, it's machine tools, it's automotive, it's electronics. We see still a momentum there. Therefore, there are other areas like the real estate businesses, which has been hit where we are not that strong. We're more in the components business. Low voltage is the same one, which is all about electrification.
We do see in our markets still a good momentum. It will moderate going forward, but still a momentum there, a positive one.
That's very kind. Thank you very much for your time.
Pleasure.
Next question, moderator, please.
Thank you so much. Our next question comes from Andreas Willi from JP Morgan.
Good morning, Roland, Ralf, and Eva. Thank you for the additional disclosure in the presentation as well. The first question is on DI, maybe following up a bit on Ben's question. You mentioned market share gains that you're seeing. Maybe you could elaborate a bit on that, maybe provide some examples on how you measure this, given you may gain share because others can't deliver relative to gaining share because it's an underlying development. Maybe you could comment a little bit on that. The second question, GE announced a breakup and basically moved to plan B because plan A wasn't quite working. Your plan A is working.
If shareholders don't fully appreciate your plan A in the longer term, even if you continue to execute very strongly, how long would it take you to also consider plan B?
Regarding market share gain, I mean, we have a very strong. Just a question, Andreas, was it in the direction of China or global?
Global. I think you mentioned specifically discrete automation market share gains.
Yeah
in general.
Yeah. Yeah. I mean, you know that we have a very strong automation portfolio, a very, very strong market share in China. We are continuously developing local products geared for Chinese demand, but also on a global scale. I mean, you can see it also from our investment scheme, huh? If we talk about the investment in R&D, we laid it out. We are sitting on an 8%, or we are heading for an 8%. We are higher than anybody else, and we are investing definitively in the space of, best we said, software, digitalization, as well as automation. Therefore, I think it's quite natural that we are gaining momentum there. Regarding your question on GE, I mean, we are years ahead.
We acted at that time out of a position of strength. This is one point. The other point is the situation I consider completely different regarding also our technology strengths which we have. Is it in our software IoT space? Is it digital platforms? But also in our company technologies which we are developing continuously. Therefore we believe we have a good strategy. We are focusing on customers, on their customer needs. We are driven by their demand, namely digitalization and sustainability on the one side. On the other side, we believe that we have the right technologies in place which we are going to bring to the market.
Maybe there's a change in competition if you look for power and if they combine the power and digitalization business, but that's a question you better ask to Christian Bruch and our Siemens Energy guys.
Thank you.
Thank you very much. The next question comes from James Moore at Redburn.
I've got one on EPS and one on DI. My first question is about the EPS guidance and the EUR 1.5 billion expected gain in 2022. You mentioned the EUR 300 million Fluence gain. That seems low to me, and I wonder when was that struck on Fluence's market cap? Was it yesterday or the end of September or another valuation? How much of the remaining EUR 1.2 billion, EUR 1.3 billion gain will come from Fluence versus others? I guess on the others point, can you say what out of LDA baggage, airport, Valeo, Siemens Energy assets we might expect to leave the group this fiscal year? My second question is on DI. Again, thanks for all the color. It's very helpful.
Could you talk a little bit about if there is a wrinkle, a minor wrinkle, the slightly softer EDA trends versus your peers, and whether that's a timing issue or whether you see any technology gaps that you need to address indirectly through M&A or directly with R&D? What gives you confidence on the SaaS transition, and it going to the speed you expect?
Thanks a lot, James, for your questions. Let me take the EPS piece, and Roland will then continue with talking about the software, SaaS transition and the like. I mean, with regard to EPS guidance, I think we have been very crisp and transparent on what happened in 2021, and we will be as crisp and transparent way forward in 2022. What happened around Fluence, this is a very technical matter. If you IPO a business and your stake is diluted, you get a so-called dilution gain in place that is making good for the difference between book value and the actual value of the share for that part that you dilute for. So it's only a small stake, if you will. That has been impacting our P&L already effectively by around EUR 300 million.
This is going to be taxed obviously, so I gave indication we expect an after-tax income impact from that of about EUR 200 million. The residual stake that we hold, one-third in the company, is still on a high valuation level, of course. That value will only be materializing and crystallizing in P&L once it's either sold or potentially parts of it being transferred to our pension fund as we did that in the past. That may trigger effects at that point in time. That amount that is still there beyond book value, I think it's quite substantial, and you have been reading that between the lines.
In terms of other potential contributions to that EUR 1.5 billion that we are targeting in fiscal 2022, there is of course, first and foremost portfolio elements that have been earmarked already, like Yunex, that part of its Mobility that has been carved out. We are in the process of carving out other activities, preparing them, so to speak, for a similar pattern of finding the best owner like we did that in Flender. There's also obviously kind of public discussions around our Siemens Valeo joint venture that has been triggered by our well-regarded partner, Valeo. There, I don't want to comment on that because we stick to the rules of the agreement we have in place.
What you can take from all that is that we have quite a couple of levers in our hands, that will be played according to the best possible impact to the company. I'm very confident and relaxed on that matter.
Coming to your second point on EDA trends, this is still intact, still lumpy. You know, this is a large contract business. Comparing to competitors, I mean, if you compared us with the two main other competitors, there's one difference. You know, what we have not in our core, which is semiconductor IP and software integrity business, the SIP business, so to speak. But except that, excluding that, we have a very strong position, and we are better compared to them on that, what we are doing there. Regarding the SaaS transition, your question was what made us confident. Well, we have now a good start. October first, we launched our Xcelerator as a Service, our Software as a Service offering, showing it to our customers.
We went out to our customers. We are a little bit ahead of what we planned. With this Xcelerator platform, we have a single source of truth and the ability for them to tap into cloud-based high-performance computing at any time from anywhere and on any device. We already signed some contracts with small and medium enterprises like Local Motors in the United States, Kawasaki in Japan, or Prodrive Technologies, an automotive supplier in the Netherlands. That's something that's wins which we have. We also, this is to be announced, we have also one of the largest aerospace OEMs, which went to us as a result of our software or Xcelerator as a Service offerings that will be announced shortly. Therefore, we are quite confident from what we see as of today.
Thank you very much.
You're welcome, James.
The next question comes from Simon Toennessen at Jefferies.
Morning, Roland, Ralf, and Eva. My first question, Roland, you said on the press call that you want Siemens shareholders to participate in the value creation of Healthineers, either to only hold about 20% in the to be spun-off healthcare business. I guess most investors we speak sell down from 75%. Can you just remind us of your strategic rationale, not sell down, say, to below 50%, and free up significant balance sheet capacity to invest more in DI and SI? Then secondly, on your DI growth guidance of 5%-8% for 2022. If I take the top end, i.e. 8%, that's roughly EUR 360 million incremental revenues. The intake in Q4 was already EUR 700 million above revenues. Q3 was EUR 550 million above revenues.
Even if I take zero growth in software, new growth in 2022 not be more than 8%. Maybe you can remind us what you expect from a supply chain drag, et cetera, in the first half, particularly in DI.
Regarding the value creation from Siemens Healthineers, I mean, you know that we have with the Varian acquisition, historically sized acquisition of Siemens within Siemens context, and we have a tremendous potential for synergies and driving value out of that, and we want our shareholders to participate. We also said again and again that we are not religious about 75% shareholdership in Siemens Healthineers. There are opportunities out there. We would have a chance to leverage them and to use them. As of now, we feel quite comfortable. We see a strong development in Healthineers. It's a top line, it's a bottom line, additional incremental potentials going forward. Therefore, I would say this is a very comfortable position which we are in right now.
If there are opportunities, as you mentioned, we would definitely think about it.
So if I may chip in my five cents on that, everything that Roland said is of course super relevant in that regard. I mean, we never said we would be religious about the 75%, and I think we also delivered a clear proof point how meaningful it was to have them separately listed when we have been financing the acquisition with a decent mix of equity and debt financing, which was at highly favorable conditions, even after handing and passing that on the debt part at arm's length from Siemens AG to Siemens Healthineers, it still was by far below industrial average financing conditions at that point in time. We do see the Varian integration progressing fairly well. You heard that from Bernd and his team last week.
I mean, just imagining at which point in time we cannot predict properly, but imagining other opportunities of that magnitude and relevance would arise in the years to come, wouldn't it be nice to have another leeway to do something similar and facilitate further value creation for them and also for their shareholders? With regard to the DI momentum, I mean, it's obvious we have been sharing with you that the SaaS transition will also have impact on the top line development. We can't predict that at that point in time because it's very much depending on to what extent our customers are moving on to that offering that we give. We will share with you as soon as we have facts, but it would be crystal ball reading effort to anticipate that in particular on a quarterly basis.
We have a very, very strong backlog when it comes to automation and product business. Obviously, we have been discussing already the impact in China, with a huge new order momentum that we get there. Delivery times, as Roland said, have been extending a bit. To give you a bit of a gut feeling, I mean, in factory automation, for some product lines, that has an impact of two, three months. On the motion control side, we rather talk two, three weeks, and in other parts of the portfolio doesn't have any impact at all. Very much depending on business mix and also growth momentum. We of course are mindful, and we very much look into the details also of the mix aspects. We don't sacrifice margin without a decent reason for that.
We keep supply chains up, but that has of course impact on the mix and also on the margin development, and we don't want to sacrifice growth momentum for margin, obviously. This is going to be striking the right balance time and again. Each and every week, our factories are recalibrating their production programs and get the supply chain in place accordingly. I don't wanna say it's artwork, but close to it.
Thank you, Simon. The next question comes from Alexander Virgo at Bank of America.
Thanks, Eva. Morning, Roland and Ralf. Thanks for the opportunity. Just a couple of quick clarifications, I suppose really. On DI and SI, just thinking about how the pricing dynamics are developing. You referred in your remarks to order intake in DI reflecting a little bit of customer behavior around extended lead times and buying ahead of price increases. I just wonder if you could give us a comment on both divisions with respect to the pricing contribution in the most recent quarters and how you expect that to play out in 2022. Thank you.
Thanks for that question. I mean, generally speaking, using pricing power, as you put it, is nothing that we do only at the current point of time we are, but this is a regular exercise, and we do that every year, so to speak. Elasticity in pricing is one of the major aspects that a technology leader in the market has in his and her hands. Therefore, this is not new to us. Let me put that straight here. We generally follow the principles that we make good for any cost inflation by incremental productivity and pricing power, obviously, and that's what we feel comfortable with at the moment. As Roland said before, this is not outrageous. Nevertheless, the inflation impact is bigger than originally expected, and therefore, we are not naive.
We don't expect that we are in a position to compensate on a quarterly basis. There's a lack of, say, one or two quarters in between, and therefore, we have been trying to reflect that in our statements that we made in the speeches in the press conference and also in the analyst meeting before. The profile of this is fairly different in the two different businesses you are referring to. Within DI, I have been elaborating on the different impact of delivery times already. Pricing power is there, and we have been making use of it to a certain extent. As you know, and since we all know from yesterday's news that inflation is obviously exceeding the expected levels, we are reviewing that busily.
With a delay of 1-2 quarters, we feel quite comfortable as a market leader and technology leader who is supporting the business models of our customers. We will hopefully have the privilege to find understanding in our customer base. The pricing power as such is not a nominal value we are driving for. It's rather compensating for the cost inflation and material cost increase that we saw.
Okay. Thank you. Roland, one for you just on SI as a follow-up. The doubling of the software business ambition by 2026. I'm just thinking about how that plays through, given the strength in product orders in your recent couple of quarters, in the near term. That software business has obviously got good growth associated with it. Do we need to see any add-ons to it from a technology standpoint, or are you expecting that to be primarily organic? Thank you.
What we are guiding forward is all organic, comparable and organic. We definitely look into that space because we believe that it's a lagging penetration of software in this construction space. We are, of course, at quite a good starting point with our Navigator platform, with our Desigo platform in terms of software. There are other areas where we are looking into a side that's more about workplace, workforce management. You know that with Comfy and Enlighted, we're working on getting leverage on these software packages that we have already. And this is where we're looking to add some more. It will be bolt-on. This is nothing where it's a big move.
It's more a bolt-on acquisition, and we are looking forward to that. Great. Thanks, Bert.
Pleasure.
The next question comes from Gael de-Bray at Deutsche Bank.
Oh, good morning, everybody. Thanks very much for the time. The first question is about the difference in terms of performance between DI and SI. Is there anything fundamentally different in the supply chain organization and in the manufacturing setup between DI and SI that could sort of explain why DI appears to be managing supply chain challenges in a better way than SI? That's question number one. The second question is about the backlog at DI and SI. I'd be interested to see how it compares to a year ago, and what's the revenue coverage by the backlog for these two businesses and again how it compares to a year ago.
Let me start with the latter one. Gael de-Bray, I mean, first of all, the backlog is really at historical highs. I mean, we never saw magnitudes to take the example of DI and, you know, I'm a long-timer in the industry business. I mean, EUR 7 billion of backlog, EUR 3.3 billion in short cycle product business backlog that hasn't been seen before. It's in part driven by the behavioral aspects, I think, in the customer end space. I mean, you would expect that volumes being ordered are fairly higher than if you expect allocation effect. That's natural and kind of game theoretically anticipating what's been happening in real life. It's hard to speculate on that.
We don't see any cancellations at the moment or something that would suggest this is unwinding other than by delivery over the course of time. It will also bounce back to normal, I think, throughout the next 12-18 months maybe. From that perspective, the magnitude is extraordinary, but the behavioral aspect and also the unwinding of an extraordinary high backlog, that isn't something that hasn't been happening before. It will, of course, depend on how that is going to be nurtured way forward. If there is still supply chain constraints in place for a longer period of time, we may see even a top-up on that high level.
I think the relevant piece is that we are in the process of really mastering the supply chain challenges better than competitors, so we are able to deliver, and that comes on top of the behavioral aspect then that people, of course, lean against those companies that are able to deliver and can confirm that their own business models are stable. I wouldn't see that there's something extraordinary happening there, magnitude different. Back to the comparison, two years back, I think no one has been expecting an artifact like that, what we see at the moment. Again, the means to overcome that is not rocket science. It's just doing a great job in the supply chain, and that's what we do.
Yeah. If compared to SI, I don't think there's a difference. I mean, the supply chain management is done also jointly with a group of our supply chain managements in DI and in Corporate. We are working there very well, except maybe a different buying pattern of products, but that is all alike. If you compare it because of the growth, then you have to have in mind that SI is still a little bit held back from the non-residential construction market, which shows signs of recovery, but it holds back. If you look in the product that it's in, it's there in. I mean, it grows by 13%.
From that perspective, you can see they're capturing all the dynamics and they've been able to also weather quite well through the supply chain issues.
I think I understand the different growth dynamics, but my question was probably more related to the different margin pattern. At least sequentially speaking, it seems that SI is performing a bit less well than DI if you compare fiscal Q4 to fiscal Q3 and adjust it for seasonality. Maybe you could help in terms of giving us a bit of breakdown of the cost base, you know, between energy cost, transportation cost, and material cost, if that's possible.
No, Gael de-Bray, I mean, that doesn't make sense, to be honest, because each and every product line in SI and DI has a different pattern in that regard. I mean, just look at logistics cost. If a customer urgently wants to have a SIMATIC on site next day, you just do that via air freight. That would typically not be done because this is something a distributor holds in his stock on a regular basis. We don't trace that at that point in time. The point you wanna get to, is there material difference of margin impact from supply chain constraints? I mean, I don't think this is the relevant driver for the different margin levels.
I mean, first of all, the magnitude of growth on the factory automation and motion control side is, of course, even higher than at the electrical products that we have at SI. Therefore, economies of scale kick in at a different level. Also the fact that we do have twin factories, as Roland pointed out, for most of the DI portfolio that is also answering to a certain extent your question around logistics cost and optimization. The real driver of profitability at the moment, and in particular in the fourth quarter, is the business mix. I mean, what you try to accomplish is that your factories are loaded and you change the production programs each and every day according to availability of material.
Therefore, I think this is optimizing within the given framework of capabilities and capacities rather than a question of logistics costs or else.
Thank you, Gael de-Bray.
Okay. That's very helpful. Thanks very much.
My pleasure, Gael.
The next question comes from Guillermo Peigneux Lojo at UBS.
Hi. Good morning, Roland. Good morning, Ralf, and thank you, Eva. Apologies if this question has been asked. I was disconnected temporarily. I wanted to ask about logistics, and I think some of your peers and competitors are now starting to pass on the freight or increase freight costs to logistical costs actually to clients through an increased price. Can I ask if on a general concept level, are you doing the same?
Yeah, of course. As I said, we have the intent, if you look at the full fiscal year 2022, to compensate for cost inflation, material price, including logistic cost and freight in the new pricing. Some of the contracts allow for doing that directly. I mean, if you have extra clauses in there, this is, in some cases, that is materializing, but this is not really shaping the big picture. I mean, what we did and what we continue doing is trying to anticipate what is going to be the development of certain cost categories. I mean, take commodity pricing for steel and for copper and aluminum. I mean, we do have forward contracts in place, and therefore we are hedged to a certain period of time.
Beyond that, you then have to renegotiate or better anticipate the demand you have thereafter. I mean, to give you a bit of a feeling what impact that had for us, I mean, for the fourth quarter grand total, it was around EUR 75 million of incremental costs for those factors. This is still a lot of money, but maybe not the same dimension as you heard that from competitors. For the full fiscal year 2021, we talk about a hundred and sixty odd million roughly. That may increase, but it will not be shaping the big picture of the way forward in a value-based growth company.
Thank you. I have a follow-up on mobility. I guess, the mix was impacted especially because of the low maintenance level, driven by the low passenger load. I wonder about your FY 2022 guidance and whether your guidance is on growth and margin is actually now factoring a recovery on the maintenance business or basically the passenger load into 2022. Thank you.
Yeah. The guidance is based on the best of our knowledge. I mean, it's you know that this is a market which is extremely volatile. We didn't expect to have such a COVID impact after having this high level of vaccination already. Still, we are, in Germany at least, we're heading for the next high level. Therefore, what we backed into the budget in our 2022 budget is number one, that this market is fully intact. We see there's a lot of investment, also stimulus money going into public transport, green transport. That's where we are working on. Number two is more than 80% of the revenue next year comes, 83% comes out of our backlog.
We have a good visibility there. Profitability-wise, I mean, this is one of the areas where once we have an order, we lock in the pricing, and we have also price dynamic clauses in the contracts. Yes, we do have a pressure also on price increases, but this is in that business less dynamic, so it's more contractually covered. That's the guidance. Please have in mind when we are guiding for a profitability of 10%-10.5%, look at the competitors. We are 2.5, maybe 3% ahead of our competition. Look at our cash flow compared to what our competitors issued yesterday, actually.
You see the performance of the business which we are quite happy with.
Thank you very much.
Thank you. The next question comes from Martin Wilkie at Citi.
Yeah, thanks. Good morning. It's Martin from Citi. My first question was just a follow-up on a comment you made about infrastructure investment. Obviously, we've seen the U.S. bill get passed over the past few days. Any indications as to what that could do for the tender pipeline in the U.S.? And also, would that mean that you potentially have to invest more capital for factories in the U.S. for local manufacturing if you're to win some of these potential orders? That's the first question. Thank you.
It's too early to say. I mean, I think you also know what the breakdown was, how many billion goes roughly into which sector. It's too early to say. It's clear to say that they want to invest in infrastructure, which includes also signaling infrastructure, which is outdated as it is in many countries, but also rolling stock to have a higher capacity. You know that we won, in the last fiscal year, a $2.8 billion Amtrak order, which is already a sign that they want to renew their fleet. At the other point, the overarching theme of their investment scheme is, of course, sustainability.
They want to get into the future and develop their business in the future, now driving the CO2 emissions down, but getting a new stimulus there. Therefore, we are very optimistic that we will see in our hands a lot of these opportunities here. Having in mind also that we are also very local in that country. This is the second-largest local footprint which we have in terms of people behind Germany. Regarding our investment, I think our Sacramento plant was built up over the last years. We do have a lot of capacity there, so there's not really a big additional incremental CapEx investment there. Incrementally, yes, but that really depends on the orders which we get.
If you get an order today, that investment would anyhow, if it's a big one, come in in the next years.
Thank you. If I could do a second question just to clarify again on the annual recurring revenue in DI. You obviously had a very good growth again at 10% in Q4, even before the transition started to SaaS. Anything unusual in the Q4 numbers? Because it does seem that you could have an even better growth next year, given you've guided for the 10% over the next four or five years, when you're effectively already at that rate in Q4. Thank you.
I mean, not particular. I mean, if you ask since you're asking me, and then you were asking on ARR and SaaS, and I answered already that we are quite happy with the start which we had, also with the launch of our platform and that they have the first customers. Since you're asking about anything particular from that perspective, I would like to share with you a little bit of a success story. On the PLM side, we continue to win new accounts. I can say that a recent win is with Hyundai KIA Motors, one of the largest automotive OEMs. We have the facts. This is following a year-long benchmark.
After that, HKMC was named Siemens as its PLM partner and selected Siemens Xcelerator platform as the next generation technology solution. We replaced two incumbent solutions from competitors and that the company are planning to officially announce this win. This reminds me, by the way, a couple of years back when we won already Daimler, where we took it away from our competitors. Since you're asking, more than happy to share this news with you.
Thank you, Martin.
Thank you very much.
I'm mindful we have three more analysts in the queue and nine minutes left. Next question comes from Phil Buller at Berenberg.
Yeah. Good morning, and thanks for taking my question. Can I follow up on the conglomerate discussion, please, and the benefits you have at your disposal by being the giant versus peers? If I think about Siemens Energy as an example, as it stands, you're still the largest shareholder of the group, and it seems as though you believe the shares are undervalued. That's a view many of us share, I think. I was wondering what your thoughts are in terms of Siemens AG as this giant with vested interest being a part of the solution. i.e., can you or have you deployed some of your project management specialists that have done a great job in your core businesses to SGRE, for example?
Would you consider even using your balance sheet to support Siemens Energy should it decide to pursue the Gamesa minority? Is that something you'd rule out? Sorry, maybe I missed it, but what is the current thinking around the fair value for Siemens Energy? Thanks.
Phil, thanks for giving me the opportunity to clarify on that one. First of all, Siemens Energy is a separately listed company completely on its own. Fact is, we are a large shareholder there, and we are having two board seats there, and therefore we mindfully and respectfully adhere to corporate governance rules. We would never dare, and they would never ask for, having operational support, which is not at arm's length. I mean, what we said, and we have been also putting that down, in all the documents around, the split, that, we are of course, supporting them with transitional services like in IT, like in ERP systems, to get them up and running. All that is done with contracts, yeah, at arm's length conditions and not more and not less.
This is also one of the criteria that we mentioned from the very beginning. Our intent is and was always that we make sure that they are transitioning smoothly into that independence and the governance levels that it takes to respectfully and successfully act in the capital markets as a listed company. They are doing very well on that. They have their challenges operationally, and I think deploying specialists on project management. I think Siemens Energy has plenty of experience in their own project business on the GP, on the gas and power side historically, that they could, if asked for, then deploy at Siemens Gamesa. But this is a question for Christian and his team, and not for us.
So I don't think that there's anything that we as a shareholder in Siemens Energy can contribute beyond just making sure smooth transitioning. As we said from the very beginning, we will sell down mindfully at the right point in time. Nothing to add there.
Got it. Thank you. Sorry, just can you confirm what, and perhaps you mentioned it, the current planning assumption around the fair value for the Siemens Energy shares from your internal perspective?
Okay. Let me give a bit more color there. I mean, the way we are looking at that is obviously that we have our equity stake, and we do the relevant equity accounting, which we share with you in the energy investment line of our disclosures. On top of that, of course, we permanently review the value of the company and our stake in it. There was not at any point in time any indication that there should be a need to correct that value. Of course, there is an up and a down and a lot of volatility in the share price lately, but that has not been triggering any revaluation needs at Siemens AG. If so, we would immediately talk to the market and book accordingly.
Okay. Thank you.
Thank you. Jonathan and Andre, please limit yourself to one question each. The next question comes from Jonathan Mounsey at BNP Paribas.
Hi, thanks for fitting me in. I just wanted to understand the Bentley stake and your attitude towards it. I believe it's gonna move over to the pension this year. I mean, it's not that long ago we were discussing, you know, potentially, or the market was, you actually willing to potentially bid for all of Bentley. Now the stake moves maybe to the pension. That seems rather less strategic.
What is the rationale for doing that? At some point, have you changed your mind about owning Bentley directly? I mean, in the end, the pension is a completely different entity to you, even as it does sit on your balance sheet.
Thank you for the question, Jonathan. Fact is, Bentley shares have been moved into pension already. Pension is an independent entity. We don't manage that. It's ring-fenced, and there's no strategic intent around the shares we have in Bentley that go beyond the collaboration agreements that we still fulfill. Next one.
That was a quick one. If you have one more quick one.
Oh, yes, absolutely, yes. On Smart Infrastructure and its EV charging strategy, I see you're working with the likes of Daimler, I think Daimler Truck, to deliver customers fast charging solutions. You know, with transportation moving so quickly over to almost full EV over the next decade, what are your thoughts on the opportunity there? Is it something that where you may pursue a strategy a bit like ABB and carve that out separately in the end?
Our strategy is first and foremost to tap on the market potential, which we see here. This ranges from just plug-in charging stations to really high-power charging stations for fleet. If we talk about the latter one, this is very interesting because this normally comes also with an upgrade of the distribution grid. This is a very nice combination of the business which we have there with the charging business itself. It is and now coming to the strategic intention. We don't have a strategic intention to do similar steps like competitors at this point in time. Why? Because this market fulfills basically all our strategic requirements for being a part of business, Siemens business. Number one, it's a growth market.
Number two, we do believe if you play in the right segments, you have a very good profit pool, including also related services thereafter. Number three, it's technology-driven, and this is again coming back. It's more about DC and high power charging, which is then going into really a technology where you have to differentiate it and can differentiate. It's part of a Siemens business because we see synergies. I talked about the medium voltage grid in connection with charging and high power charging in particular. The last one is this fully plays into our sustainability portfolio. Therefore, here the point is how fast can we really bring our products to the market and ramp it up?
Thank you.
Thank you.
The last question comes from Andre Kukhnin at Credit Suisse.
Good morning. Thanks for taking my question. Can I go back to DI software and think beyond this year and SaaS transition? Could you talk about what kind of margin and growth profile do you envisage for this business, once you're done with the bulk of SaaS transition?
Yeah, I mean, we said that Andre. I mean, we are investing into the SaaS transition because we do expect material potential to increase the margin mid and long term. The transition itself will be very much driven by accounting aspects, of course, as on top line as well as on bottom line. If you foresee then the new normal as a steady state in a couple of years from now, I think we will live up to the margin leaders in the industry.
Thank you, Andre.
Thank you.
Thanks a lot to everyone for participating today. We're looking forward to continue our discussions on our mostly virtual roadshow that we will start after this call. As always, the IR team is available to ask any further questions that you might have. Please stay healthy, and goodbye.
That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. Once again, let me repeat the instant replay numbers. Participants in Germany, please call the replay number +49 69 2000 1800. Access code 3829547. Participants in Europe, please call the replay number +44 20 7660 0134. Access code 3829547. Participants from the United States, please call the replay number +1 719 457 0820. Access code 3829547. This replay service will be available until tomorrow night. A recording of this conference call will also be available on the investor relations section of the Siemens website. The website address is www.siemens.com/investorrelations.