Siemens AG, the giant industrial and electronics group based in Munich, Germany says that its titanic effort to boost profits is about to pay off, but not until next year. Results just released show group net profits for the nine months to June this year up 3.3% at the equivalent of $949.2m with revenue up 10.4% at $39.637bn. Analysts and investors have been heckling chief executive Heinrich von Pierer for some time over the group’s lack of profitability, but Pierer is sticking to the script drafted earlier this year. In a press conference on Monday he reiterated Siemens’ earlier forecasts that profits would remain flat for the full year at around $1.4bn, held back by restructuring charges and the global fall in semiconductor prices. But Pierer has set a performance target for the group of 15% return on equity by the year 2000, and in 97/98 he insists we’ll start to see profits accelerate. Siemens is scheduled to divest itself of poor performing businesses with combined revenues of $2bn over the next 18 months, starting with the disposal of its defense electronics business in September. Revenue is growing thanks to buoyant markets in the Americas and Asia-Pacific but Siemens performed poorly in the home market it knows best, a reflection of the poor state of the German economy.
