Siemens Accelerates Cost-Savings Amid Coronavirus, Expects Revenue Decline -- Update
08 May 2020 - 7:06PM
Dow Jones News
--Siemens expects a fiscal-year revenue decline of up to 5%
--The company is stepping up cost-savings in order to cope with
pandemic effects
By Kim Richters
Siemens AG is increasing cost-saving measures amid the
coronavirus pandemic after its profit took a hit in its second
quarter, and said it expects a revenue decline for its fiscal
year.
The German engineering conglomerate on Friday withdrew its
previous fiscal 2020 outlook and its Chief Financial Officer Ralf
Thomas said the company now expects a decline of up to 5% in
revenue for the year ending Sept. 30. It had previously forecasted
moderate growth.
The company is stepping up its cost-savings in order to cope
with the effects of the pandemic. It is aiming for overall cost
reductions of 475 million euros ($513.2 million) by fiscal 2021, an
increase of EUR165 million, Deputy Chief Executive Roland Busch
said in a press conference.
"Digital industries will account for EUR135 million of these
additional savings and EUR30 million will come from smart
infrastructure," he said.
"We're also right on track to achieve our savings target of
approximately EUR300 million by 2021 through lean and effective
governance."
On Friday, Siemens reported a drop in net profit to EUR652
million for its second quarter from EUR1.81 billion a year
earlier.
At Siemens's industrial businesses, adjusted earnings before
interest, taxes and amortization fell 18% to EUR1.59 billion.
Revenue for the quarter was EUR14.23 billion compared with
EUR14.25 billion for the year-earlier period. Orders fell to
EUR15.15 billion from EUR16.46 billion.
For its third quarter, the company expects a bigger coronavirus
hit, with its short-cycle business especially effected.
Write to Kim Richters at kim.richters@wsj.com
(END) Dow Jones Newswires
May 08, 2020 04:51 ET (08:51 GMT)
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