Siemens AG (SIE), whose earnings dipped in the first quarter, needs to sell slow-growing businesses that are not part of its “inner core” in order to boost profits, Chief Executive Officer Peter Loescher said.
“We are looking into businesses with slower growth and less synergies with the core part of our portfolio,” Loescher said in a Bloomberg TV interview in Davos. “Portfolio decisions will continue to be an important part of our company.”
Europe’s largest engineering company is already planning to offload units such as airport luggage systems, mail automation and water technology after shareholders approved the spinoff of the underperforming Osram lighting unit this week. Siemens is targeting profit which represents 12 percent of revenue as its profitability has trailed that at competitors General Electric Co. (GE) and ABB Ltd. (ABBN) for six consecutive quarters.
The Munich-based company this week said net income from continuing operations slipped 1.4 percent to 1.3 billion euros ($1.7 billion) in the three months through December.
To strenghten certain businesses, Siemens is also targeting acquisitions, Loescher said today.
The 680 million-euro purchase of Belgian software maker LMS International, announced in in November, is a prime example of how to bolster Siemens’ industrial information technology business, he said.
“What we are doing is really focussing on strengthening the inner core of the company,” Loescher said.
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