Siemens lifts profits as new chief takes over

27th January 2005, Comments 0 comments

27 January 2005, MUNICH - As a new chief executive took the helm on Thursday at Siemens, the German electronics and engineering powerhouse said it had lifted net income 38 percent in the quarter to December despite being dogged by losses in its mobile-phone division. Heinrich von Pierer, 64, who has run the company for the past 12 years, told shareholders in Munich "rapid relief and a strategic re- orientation" were necessary for the mobiles business which has been losing money since last summer. But the s

27 January 2005

MUNICH - As a new chief executive took the helm on Thursday at Siemens, the German electronics and engineering powerhouse said it had lifted net income 38 percent in the quarter to December despite being dogged by losses in its mobile-phone division.

Heinrich von Pierer, 64, who has run the company for the past 12 years, told shareholders in Munich "rapid relief and a strategic re- orientation" were necessary for the mobiles business which has been losing money since last summer. But the solution was not ready yet.

The future of Siemens, which makes everything from humble light bulbs to sophisticated electric trains, will be in the hands of Klaus Kleinfeld, 47, who has understudied Pierer as deputy in recent months.

Operational profit in the quarter to December (the first quarter of the Siemens business year ending 30 September) rose to EUR 1.43 billion from EUR 1.36 billion a year previously.

Net income rose 38 percent compared to the first quarter a year earlier, reaching EUR 1.0 billion or EUR 1.12 per share, but group sales rose only a modest 1 percent to EUR 18.17 billion.

Pierer has so far refused to rule out selling to another manufacturer the division that makes Siemens-trademark mobile phones.

In an interview published Thursday in the national daily Die Welt, Pierer defended Kleinfeld from charges that he would be a malleable successor when Pierer moves up to the post of chairman of the supervisory board, a body meant to set overall strategy.

"Nonsense," he said. "My task will be to support rapid change and not to hold it up. I will definitely not interfere in day-to-day business."

Pierer also rejected speculation that the company would adopt a US style of management.

"Just because Klaus Kleinfeld has spent three years in America doesn't mean he is totally Americanised ... He has come up through the company the classic way," Pierer told the interviewer.

DPA

Subject: German news

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