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