Profit Margin

Siemens' Tough Target

So far, Joe Kaeser is still laughing, but come September 30, it's delivery time.
  • Why it matters

    Why it matters

    Siemens is aiming to increase its profitability to catch up with rivals such as General Electric and ABB.

  • Facts


    • Siemens is aiming at a profit margin of 10 to 11 percent of sales in fiscal 2015, compared with 10.6 percent in fiscal 2014 and 8.85 percent in fiscal 2013.
    • Siemens, with revenues of €72 billion in fiscal 2014, wants to lower costs by €1 billion by 2016.
    • It plans to cut more than 12,000 jobs in low-profit units and to streamline management and speed up decision making.
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It is not yet certain whether Joe Kaeser, Siemens’ chief executive, will achieve all his objectives for the current fiscal year, which ends on September 30.

To achieve his prospective return on revenue of 10 to 11 percent in the industrial business, which covers all of Siemens’ operations excluding financial services, a last-minute push will be required in the final quarter of the current fiscal year, people familiar with the matter, who declined to be named, told Handelsblatt.

Mr. Kaeser has done a great deal of restructuring since his promotion to chairman of the board from chief financial officer in August 2013. He has announced a string of acquisitions and divestments, moved the company’s energy operations to Houston, Texas, and is implementing a program to slash 12,000 jobs to save €1 billion in costs by 2016.

Mr. Kaeser’s predecessor, Peter Löscher, resigned unexpectedly in 2013 because he kept lowering his profit forecasts and was unable to turn the tide at Siemens, which has been hit by a change in energy demand in Europe.

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