Home » Business » Manufacturing
Siemens unveils new cost-cutting scheme to save US$8b by 2014
Source: Agencies |
November 9, 2012, Friday
|
Print Edition
Print Edition
GERMAN industrial conglomerate Siemens said yesterday it was launching a new cost-cutting program and productivity push aimed at saving 6 billion euros (US$7.7 billion) by 2014 and increasing competitiveness.
The program came as the company saw a 2 percent drop in fourth quarter net profits from continuing operations to 1.48 billion euros. Profits were dragged down by 327 million euros in charges related to its oil and gas business in Iran due to new US and European Union trade sanctions.
CEO Peter Loescher said the strong quarter had enabled Siemens to meet its 2012 targets, but that the company "didn't fully succeed in significantly boosting our performance vis-a-vis competitors as we did in recent years."
In order to meet those goals, Loescher unveiled the two-year "Siemens 2014" cost-cutting program, which aims at raising profit margins for its four core businesses to 12 percent from 9.5 percent this year.
"We know what we have to do, and we're doing it," Loescher said.
The program, which may cost 1 billion euros in 2013 to be implemented, aims at strengthening the company's core activities.
Loescher said there were no "topdown targets of employment levels" and insisted that the focus would be on cost cuts and increasing productivity, but conceded that there would be jobs lost.
"At the end of the day, naturally there will be effects on positions," he said.
As part of the strategy, Siemens said it was acquiring for 680 million euros Belgium-based LMS International NV, a company that produces simulation software used for testing vehicles, aircraft and other complex products.
It said it would also restructure its water business to focus on automation and drives while selling units involved in processing and treating water and wastewater.
Already, Siemens said in October that it would sell its solar business and concentrate on wind and water power in its renewable focus.
Revenue for the fourth quarter gained 7 percent to 21.7 billion euros while orders rose 2 percent to 21.5 billion euros.
For fiscal 2012, orders shed 10 percent to 76.91 billion euros but revenue rose 7 percent to 78.29 billion euros on a strong backlog of orders.
The program came as the company saw a 2 percent drop in fourth quarter net profits from continuing operations to 1.48 billion euros. Profits were dragged down by 327 million euros in charges related to its oil and gas business in Iran due to new US and European Union trade sanctions.
CEO Peter Loescher said the strong quarter had enabled Siemens to meet its 2012 targets, but that the company "didn't fully succeed in significantly boosting our performance vis-a-vis competitors as we did in recent years."
In order to meet those goals, Loescher unveiled the two-year "Siemens 2014" cost-cutting program, which aims at raising profit margins for its four core businesses to 12 percent from 9.5 percent this year.
"We know what we have to do, and we're doing it," Loescher said.
The program, which may cost 1 billion euros in 2013 to be implemented, aims at strengthening the company's core activities.
Loescher said there were no "topdown targets of employment levels" and insisted that the focus would be on cost cuts and increasing productivity, but conceded that there would be jobs lost.
"At the end of the day, naturally there will be effects on positions," he said.
As part of the strategy, Siemens said it was acquiring for 680 million euros Belgium-based LMS International NV, a company that produces simulation software used for testing vehicles, aircraft and other complex products.
It said it would also restructure its water business to focus on automation and drives while selling units involved in processing and treating water and wastewater.
Already, Siemens said in October that it would sell its solar business and concentrate on wind and water power in its renewable focus.
Revenue for the fourth quarter gained 7 percent to 21.7 billion euros while orders rose 2 percent to 21.5 billion euros.
For fiscal 2012, orders shed 10 percent to 76.91 billion euros but revenue rose 7 percent to 78.29 billion euros on a strong backlog of orders.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
