Siemens CEO highlights weakening of global economy

Siemens CEO Joe Kaeser and CFO Ralf Thomas attend the company’s annual results press conference in Munich on Thursday. (AFP)
Updated 07 November 2019

Siemens CEO highlights weakening of global economy

  • Trains to turbines maker cautions about 2020 after beating quarterly forecasts

MUNICH: Siemens sounded a cautious note about the global economy over the next 12 months after booming industrial software sales helped the German engineering company beat forecasts during its fourth quarter.

The trains to turbines maker said on Thursday it expected the macroeconomic environment to remain “subdued” next year, citing geopolitical and economic risks, as well as elections in big markets like the US.

The problems would particularly hit demand for its short-cycle products, used by the automotive and machinery industries, where the company expects a “moderate decline” in the market.

Still, Siemens forecast a recovery during the second half of next year and said it expected to outperform the market.

“The weakening of the global economy accelerated considerably fiscal 2019,” CEO Joe Kaeser told reporters, adding Siemens nonetheless achieved its fiscal guidance.

“While many other industrial companies had to revise their outlooks, and some conglomerates had to struggle even more to survive, we kept our word.”

Global readings of manufacturing business surveys in October showed the aggregate ticked up for the third month to show an expansion in factory activity, easing some concerns about the world economy.

Rivals

But Siemens’ rivals such as ABB and General Electric, as well as steelmaker ArcelorMittal, have recently sounded downbeat.

Siemens reported a 20 percent increase in industrial operating profit in the three months to the end of September. 

The €2.64 billion ($2.92 billion) outcome beat analyst expectations for €2.33 billion.

Orders rose 4 percent to €24.71 billion, and revenue by 8 percent to €24.52 billion — both beating forecasts.

The Munich-based company’s full-year operating profit margin — excluding severance charges — was 11.5 percent, within its target range of 11-12 percent.

During the quarter, the company benefitted from demand at its smart infrastructure business, which makes products to automate buildings, and Siemens Healthineers, the medical equipment maker where Siemens retains an 85% stake.

But Siemens’s flagship Digital Industries business saw tepid revenue growth as a 21% rise in sales of industrial software as offset by weaker demand for factory automation and motion controllers.

During its 2020 financial year, Siemens expects total revenue growth of 3-5 percent.

Confidence

CEO Kaeser said customer confidence was being hit by political and economic uncertainties, such as the US-China trade war and Britain’s messy exit from the EU.

“Machine-building production in the most important export nations — Germany, Japan, China and the US is a widely followed parameter for the global economy. The best case scenario for 2020 assumes a certain degree of stabilization,” he said.


Getting more women into leadership positions top priority: CEO

This June 23, 2018 photo, shows a general view of Riyadh, Saudi Arabia. (AP)
Updated 18 January 2020

Getting more women into leadership positions top priority: CEO

  • Saudi Arabia is focusing on the Business 20 (B20), making this one of the key engagement groups. Women in Business will be Saudi Arabia’s signature topic

RIYADH: The boss of one of Saudi Arabia’s biggest banks says that getting more women into leadership positions is a top priority.
Samba CEO Rania Nashar chairs the action council for Women in Business created by the Business Twenty (B20), which is the official G20 dialogue with the business community. It represents the global business community across all G20 member states and all economic sectors.
She said the council was set up to boost women’s particpation not only in business but also in global leadership positions.
During the launch of the B20 in Saudi Arabia this week, Nashar highlighted the under-representation of women in the economy.
“There is a gap of 27 percent between male and female workers; 75 percent of males are part of the labor force while only 48 percent of females are working,” she said.
She said it was important not to just talk about women as workers but as business owners.

FASTFACT

Saudi Arabia will host the 15th G20 Summit in Riyadh on Nov. 21-22, 2020.

“That’s why entrepreneurship is very fundamental to our task force,” she said.  “The majority of the finance development programs have incentives for giving loans to females; however, despite the fact that many large borrowers are females, the amount of loans granted to them is far below what is granted to males,” she added.
Nashar said that two-thirds of female business founders feel that they were not taken seriously by investors when they pitch for investments. They also feel that they are treated differently from their male counterparts.
Saudi Arabia will host the 15th G20 Summit in Riyadh on Nov. 21-22, 2020. The Kingdom is focusing on the Business 20 (B20), making this one of the key engagement groups. Women in Business will be Saudi Arabia’s signature topic.