After deep cuts, Siemens forecasts return to growth

12th November 2015, Comments 0 comments

German engineering giant Siemens on Thursday predicted growth for the coming year despite a weak economic environment, as it looked to its recent massive restructuring to boost profitability.

"Siemens anticipates further softening in the macroeconomic environment and continuing complexity in the geopolitical environment in fiscal 2016," the group said in an earnings statement.

"Nevertheless the company expects moderate revenue growth, net of effects from currency translation."

Siemens this year embarked on a major restructuring programme, slashing around 12,000 jobs in a bid to save up to one billion euros ($1.1 billion).

The sprawling conglomerate also sought to streamline its businesses by selling several divisions including electronic appliances and telecoms, as well as floating others on the market like its Osram lightbulb business.

The reorganisation sharpens the group's focus on certain sectors including energy, medical equipment and digitised systems for industry and transport.

These divestments have had a strong impact on Siemens' net profit for the year ending September 2015, which reached 7.4 billion euros, the group announced Thursday, sharply up from last year's 5.5 billion euros.

But in an illustration of the group's still fragile health, in the last quarter of the financial year which does not include income from divestments, net profit actually fell by a third to 1.0 billion euros.

Meanwhile for the full fiscal year, sales rose six percent to 75.6 billion euros while orders also climbed six percent to 82.3 billion euros.

That was mostly down to a favourable exchange rate, without which both sales and orders would have been down 1.0 percent.

The company is proposing to pay out a dividend of 3.50 euros, and buy back up to 3 billion euros in shares in the next three years.

© 2015 AFP

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