Munich: Joe Kaeser has a difficult year ahead as he prepares his last major moves at the helm of Europe’s biggest engineering company.
The Siemens chief is the target of environmental protests on Wednesday over a controversial Australian coal mine contract, and reported a steep earnings decline even before the virus epidemic slows growth in major market China. The shares fell as much as 1.8 per cent.
“We got off to a somewhat slow start into the new fiscal year,” Kaeser said at a press conference. The German industrial giant’s main gauge of quarterly profit fell 30per cent, and the company said it’s not ruling out further job cuts at the energy division.
Siemens is planning to name Kaeser’s successor later this year ahead of the end of his mandate in 2021. In the run up, the CEO is facing increasing pressure from environmental activists to pull out of a contract to supply equipment to the coal mine. The controversy has led to noisy demonstrations, with Greenpeace unfurling a ‘Bush Fires Start Here’ banner on its headquarters ahead of a shareholder meeting later in the day.
Kaeser dug in on Wednesday, calling the movement against the company “almost grotesque” and vowing to deliver the signaling system for the mine as planned. Protesters have staged demonstrations at Siemens locations across Germany and police presence was expected at the investor meeting.
In what could be the last major change under his tenure, Kaeser is in the midst of revamping Siemens’s energy businesses ahead of a planned listing of the power and gas division in September.
As part of the overhaul, Siemens announced Tuesday it’s raising its holding in wind turbine maker Siemens Gamesa Renewable Energy through the purchase of Iberdrola’s 8 per cent stake for €1.1 billion. The Siemens Gamesa holding will be folded into the energy spinoff. Once that is complete, the company will be focused on making rail and power-distribution equipment and industrial automation software.
Siemens’s adjusted earnings before interest, taxes and amortisation from the company’s industrial business dropped to €1.43 billion, according to a statement. This compared with the average company-compiled analyst estimate of €1.88 billion.
Swiss rival ABB was more upbeat, reporting its first profit growth for three quarters driven by cost savings and demand from industries from food to packaging. The companies compete in supplying factory automation gear.