Siemens warns of weakening industry demand

SIEMENS warned yesterday that demand for products such as industrial automation and drive technologies was weakening, as it posted a decline in new orders for its fiscal first quarter.

Siemens, an industrial bellwether that makes products ranging from fast trains and gas turbines to hearing aids, posted a three per cent decline in new orders in the three months through December, to 19.1 billion euros (£16bn).

“For the rest of the year, we don’t expect any tailwinds from the global economy to help us reach our ambitious goals,” chief executive Peter Loescher said.

Hide Ad
Hide Ad

At its industry business, which generates about a quarter of group revenue, new orders were down eight per cent as the market environment grew more challenging.

But overall, new orders for the group were still better than the 18.9 billion euros expected by analysts, according to a poll, and Siemens confirmed its full-year outlook.

Its net profit from continuing operations eased by one per cent to about 1.3bn euros, beating a consensus of 1.1bn.

For the full year through September, it sees profit declining to between 4.5bn euros and 5.0bn.

Hide Ad
Hide Ad

That compares with 5.18bn last year, due to about 1bn of costs from a 6bn-euro savings programme announced late last year and the impact of a change in accounting standards.

German-based Siemens has come under pressure to cut costs and focus on its most profitable businesses to close a gap with rivals such as ABB and General Electric. It is divesting its solar and water businesses and plans to spin off lighting unit Osram this year, while adding a rail business it bought from Invesnsys as well as industrial software companies such as Belgium’s LMS International.

Siemens employs around 13,520 people in the UK. The company plans to open a huge offshore wind turbine factory at the Port of Hull.

Siemens has offices and factories throughout the UK, with its headquarters in Frimley, Surrey. The company’s global headquarters is in Munich.

Related topics: