Siemens major progress with portfolio optimization in Q3
In the Q3 of fiscal 2013, Siemens made progress in strengthening its core business activities. Orders rose considerably on a major contract win. Total Sectors Profit declined due to charges related to the implementation of the Siemens 2014 program.
Revenue declined slightly owing to a weak market environment.
In the Q3 of fiscal 2013, which ended on June 30th 2013, new orders soared 19% YoY to EUR 21.1 billion primarily due to a major contract win for the company's train business in the UK in the Infrastructure & Cities Sector. Revenue was down 2% to EUR 19.2 billion.
Revenue increases at Infrastructure & Cities and Healthcare were more than offset by declines at the Energy and Industry Sectors. The ratio of new orders to revenue was 1.10 in the Q3. The order backlog for all Sectors totaled EUR 102 billion at the end of the quarter.
In the Energy Sector, new orders totaled EUR 5.4 billion, an increase of 2%. Uncertainties in the German and European energy markets resulted in a decline in new orders at the Fossil Power Generation Division.
However, this was offset by double-digit increases at the other Divisions. Sector revenue declined in the Q3 5% YoY to EUR 6.6 billion due to strong, ongoing competitive pressure. New orders and revenue at the Healthcare Sector remained roughly at prior year levels. Sector revenue increased one percent to EUR 3.4 billion, while new orders were down 1% to EUR 3.3 billion.
The Q3 saw the first signs of stabilization in the Industry Sector's market environment.
As in the comparable period a year earlier, new orders at the Sector totaled EUR 5.1 billion. Revenue declined 2% to EUR 5 billion.
The Infrastructure & Cities Sector profited in the Q3 primarily from the major Thameslink order at the Rail Systems Division. With a volume of EUR 3 billion, the order, which encompasses the supply and maintenance of 1,140 regional trains for London, is the largest that Siemens has ever won in the UK. New orders at the Sector climbed 79% YoY to EUR 7.5 billion. Revenue increased 4% to EUR 4.5 billion.
Profit
In Q3, Total Sectors Profit was EUR 1.3 billion to 31% below the comparable prior-year figure of EUR 1.8 billion. This decline was due primarily to Q3 charges of EUR 436 million in connection with Siemens 2014, of which EUR 180 million were taken at the Infrastructure & Cities Sector, EUR 140 million at the Industry Sector, EUR 102 million at the Energy Sector and EUR 14 million at the Healthcare Sector.
Siemens 2014
With the announced sale of its NSN stake to Nokia and the successful spinoff of Osram, Siemens has now further strengthened its focus on its core business activities.
Outlook
For fiscal 2013, Siemens expects clear order growth and a moderate decline in revenue compared to the prior year, both on an organic basis. Charges associated with the Siemens 2014 program in the Sectors are expected to total approximately EUR 1.0 billion for the full fiscal year.
Meanwhile, Siemens AG, a global powerhouse in electronics and electrical engineering, operating in the fields of industry, energy and healthcare as well as providing infrastructure solutions, primarily for cities and metropolitan areas.
Source - Strategic Research Institute