A New Beginning
November 29, 2007
Siemens CEO Peter Löscher said the company expected more quality growth with earnings per share (EPS) rising "considerably" in the current fiscal year 2008, ending on Sept. 30.
"We want to be world leader in terms of profitability," Löscher told a press conference on Thursday, Nov. 29.
In the fiscal year 2007, Siemens posted a diluted EPS from continued operations of 3.99 euros. Including discontinued operations, EPS came in at 4.10 euros in the 2007 fiscal year.
Löscher -- who took over the job in July in the midst of a massive investigation into bribery allegations at the top of the German industrial concern -- said Siemens only planned "smaller acquisitions and disposals'' to bolster the company's fastest-growing businesses.
"The focus now needs to be on organic growth,'' he said.
A new beginning
Löscher's comments came after Siemens announced on Wednesday that the company would be reorganized into three branches covering industrial goods, energy and medical technology, each with its own chief executive.
The management board will be slimmed down from 11 members to eight from Jan. 1, 2008, as part of an effort to make Siemens' corporate structure leaner and more efficient.
A total of five directors are expected to leave. The industry sector will be headed by current Siemens board member Heinrich Hiesinger; the energy sector will be placed in the charge of current Siemens VDO Automotive CEO Wolfgang Dehen; and the health care sector will be taken over by board member Erich Reinhardt.
"After a year of far-reaching changes and a new leadership and organizational structure, we have laid the foundations for the next successful chapter in the concern's 160-year history," supervisory board chairman Gerhard Cromme said.
Shaken by scandals
The Munich-based company, one of Germany's biggest, has been shaken by a corruption scandal in which 1.3 billion euros ($1.9 billion) in dubious payments were reportedly made to secure orders in Nigeria, Russia and Libya.
Two former Siemens managers in the power-generation division received suspended sentences from a German court in May related to the payment of more than 6 million euros in bribes to two managers of the Italian energy concern Enel with the aim of securing contracts for Siemens gas turbines.
The company, which agreed to pay 201 million euros to end the corruption probe, said the restructuring into three branches with 15 divisions would increase Siemens' ability to compete with its rivals on the global market.
Earlier this month, Siemens reported a fourth-quarter fiscal loss of 74 million euros. Over the full year, net income increased 21 percent to 4.038 billion euros.