Joe Kaeser’s latest Siemens balance sheet: billions in profit despite the crisis

Despite the corona crisis, outgoing Siemens boss Joe Kaeser can present billions of profit in his last annual balance sheet.

Joe Kaeser is visibly satisfied: despite Corona, the outgoing Siemens boss can present a profit of a billion dollars in his last annual balance sheet. Although the result fell by a quarter in the past financial year, the net result still amounts to 4.2 billion euros, the group announced. A final sprint in the fourth fiscal quarter helped: Siemens earned 1.9 billion euros from July to September alone.

Siemens ended “a remarkable fiscal year with a strong fourth quarter,” said Kaeser. The company is “excellently positioned” after having listed its energy business as Siemens Energy on the stock exchange in recent months and – in the current new fiscal year – sold its propulsion subsidiary Flender for about two billion euros.

7 years of Siemens boss

Kaeser also looked back on his time at the top of Siemens, where he moved to in 2013. At the time, he said he would work hard to hand over the business in a better state than he got it. It is up to others to judge whether he has succeeded in this. But he also stressed, “Overall, we have had a really good and very reliable series of successes over the years.” He is proud of what Siemens has achieved. “It could have been more, maybe even should, but maybe not necessarily.”

In view of his departure at the General Meeting of Shareholders in February, Kaeser said he felt no bitter remark that this would happen without shareholders on the spot. He always spoke when there was something to say. That was partly criticized when it came to socio-political issues. For him, it’s about what stays and not standing ovations: “When people get up, they sit down again. And then it’s over and you go back to work.”

Kaeser left unanswered the question of whether he could imagine returning to Siemens in two years’ time on the Supervisory Board. He is chairman of the supervisory board of the divisional Siemens Energy.

Outlook: recovery in sight

For the new fiscal year 2020/21, which started in October, Siemens expects a recovery despite headwinds. Although the group expects “significant charges” from currency effects with a negative impact of about half a billion euros, earnings should grow “moderately”, as CFO Ralf P. Thomas said.

The designated Kaeser successor Roland Busch is already responsible for the figures for the new financial year. He spoke of a new chapter in the company’s 173-year history. Siemens has “transformed from a conglomerate to a focused technology company”.

The group’s restructuring continues

And the mass restructuring of the group under Kaeser is not over yet, even if the steps in progress are smaller initially. Busch wants to outsource the Intelligent Traffic Systems (ITS) division of the mobility division at the end of the current financial year. Busch did not comment on how to proceed for the area with around 600 million euros in turnover.

Siemens has written off almost half a billion euros on the joint venture with the French car supplier Valeo. The joint venture has been making losses since its inception in 2016, CFO Thomas explained the write-off of 453 million euros. “We don’t expect this to change in the medium term.” Based in Erlangen, Valeo Siemens builds components for electric cars and hybrid vehicles. At the beginning of the year, media reports reported that Siemens would sell its shares in the company with approximately 2,500 employees to Valeo by the end of 2021. The Munich technology group did not comment on this. Valeo Siemens will continue to implement its “transformation program,” said only future CEO Busch.

On the stock exchange, however, the Siemens share came under considerable pressure after the presentation of the figures. According to analysts, the cautious outlook in particular disappointed investors. Investors will also feel the effects of the decline in earnings in the past financial year: the proposed dividend is EUR 3.50 per share – 40 cents less than a year ago.

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