5.02.2020 08:19
(Act. 5.02.2020 08:19)
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Climate change debate dominates Annual General Meeting
© APA (AFP)
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Siemens started the new financial year with a significant drop in profits and thus missed the experts’ expectations. The adjusted operating result from the industrial business, the most noted success indicator, fell in the 1st quarter (October to December) by 30 percent to 1.43 billion euros, as the German industrial group announced on Wednesday before the annual general meeting.
Analysts had expected on average 1.88 billion euros. The energy technology business that was about to be spun off showed weaknesses as well as its flagship, industrial automation (digital industries). This suffered from the downturn in the automotive and mechanical engineering industries and suffered an operating profit decline of one third.
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CEO Joe Kaeser spoke of a slow start to the financial year. Net profit fell 3 percent to EUR 1.09 billion. Sales rose by one percent to EUR 20.3 billion, while order intake was EUR 24.8 billion, 2 percent below the previous year. The key figures were above analysts’ expectations. Siemens confirmed the forecasts for 2019/20 (end of September): Revenue is expected to increase moderately on a comparable basis, earnings per share should reach between 6.30 and 7.00 (previous year: 6.41) euros.
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“The unsatisfactory situation in the entire energy business makes it clear where the primary need for action lies,” said Kaeser. Siemens Energy is to be listed separately in September, and Siemens will then sell the majority. The remaining shares are to be sold to the company’s own shareholders. The core of the division is turbines and services for coal, oil and gas power plants. Operating profit in this business plummeted by almost two thirds in the first quarter, and the Siemens Gamesa wind power division, the hope for the energy transition, even slipped into the red. The discussion about climate change should also determine the general meeting in the Munich Olympiahalle.
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Siemens also announced on Tuesday evening that it would buy the controversial Spanish shareholder Iberdrola out of Siemens Gamesa for EUR 1.1 billion. The German industrial group has increased its stake in Gamesa from 59 to 67 percent. “The time has come to take the next step,” said Kaeser. With the takeover of the 8.1 percent held by the Spanish energy company Iberdrola, Siemens is getting rid of a shareholder with whom tensions have repeatedly arisen since Gamesa merged with Siemens’ wind power division. Gamesa is to become part of the energy technology group Siemens Energy, which is to be split off this year and listed separately.
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“All legal disputes between Iberdrola and Siemens will be settled,” the group emphasized in the message. The Spaniards had repeatedly argued with Siemens over the leadership of Gamesa. Iberdrola insisted on more influence, only Siemens boss Kaeser was able to settle the dispute temporarily. After Iberdrola’s departure, Siemens hopes to be able to take direct action at Gamesa. Through closer cooperation with Gamesa, savings of 100 million euros per year are possible. A contract is to regulate future cooperation with Iberdrola on wind power and grid projects.
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Siemens pays Iberdrola 20 euros for each Gamesa share. The price is a good quarter above the closing price on Tuesday, but below the amount originally agreed for an exit from Iberdrola.
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Environmental protection organizations have announced protests with hundreds of participants in front of the hall, which will take place on Wednesday’s Annual General Meeting. They are directed against the participation of the Munich industrial group in a controversial coal mine project in Australia. A dozen activists – including the group “Fridays for Future” – also want to speak officially to the shareholders. Kaeser is sticking to the signaling order in Australia because it fears Siemens’ reputation as a reliable contract partner. Eight applications have been filed against Kaeser’s discharge, but there are hardly any opportunities. His contract expires in a year.
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