Siemens AG (SIE) named SAP AG (SAP)’s co-Chief Executive Officer Jim Hagemann Snabe to its supervisory board and appointed Ralf Thomas as chief financial officer to rebuild its ranks after months of upheaval.
Snabe joins Europe’s biggest engineering company after former Deutsche Bank AG Chief Executive Officer Josef Ackermann last week announced he’ll step down as deputy chairman. Former Bayer AG (BAYN) chief executive officer Werner Wenning, who is already on the supervisory board, will become deputy chairman.
Snabe brings expertise in technology as software systems increasingly steer Siemens’s offerings such as factory automation systems and high-speed trains and help customers to manage and integrate other equipment. New Siemens CEO Joe Kaeser tapped Thomas, previously finance chief of the industry division, to help manage a company with 60 sub-units and catch up with the profitability of General Electric Co. and ABB Ltd.
“The appointment of Snabe is good news because industrial software has been a huge driver in the industrial automation chain,” Simon Toennessen, a London-based Credit Suisse analyst who rates Siemens outperform, said by phone. “Siemens has done a few deals in product life-cycle management in software and in industrial automation.”
Ackermann left his post after a dispute over the ouster of former Siemens CEO Peter Loescher, a person familiar with the matter said last week. Ackermann opposed the decision, which was driven by Chairman Gerhard Cromme, people familiar with the matter said at the time. Loescher was replaced by Joe Kaeser in July, leaving open the finance chief position.
Loescher, an Austrian national, who joined Munich-based Siemens from drugmaker Merck & Co. in 2007 as the company’s first external appointment as CEO, had to write down the value of several acquisitions, and drove a failed push into environmentally friendly energy that led to spiraling costs.
Siemens’s head of human resources Brigitte Ederer will also leave the management board at the end of September, before the official end of her term, with Chief Technology Officer Klaus Helmrich assuming her responsibilities in addition to his current role, Siemens said today.
Ederer, a former Austrian politician and CEO of Siemens’s unit in that country, joined the company’s managing board in 2010. The only other woman on Siemens’s management board is Barbara Kux, responsible for procurement and sustainability, and she’s scheduled to leave when her contract expires in November.
Siemens rose 1.3 percent to 89.73 euros as of 12:23 p.m. in Frankfurt trading, valuing the company at 78.8 billion euros ($104 billion).
Snabe joins Siemens after SAP said earlier this year that it will end its dual CEO structure next year, with Bill McDermott becoming sole leader as the largest maker of business-management software battles intensifying competition. Co-CEO Snabe will join the supervisory board after a shareholder vote, leaving McDermott at the helm.
Snabe and McDermott took over at SAP in February 2010 from Leo Apotheker, who was removed after failing to boost revenue amid customer and employee discontent. Over 3 1/2 years, the co-CEOs spent more than $14 billion on acquisitions to add mobile and cloud-computing technologies and accelerated a push in SAP’s homegrown database product, boosting the stock and giving it a brief run as Germany’s most valuable company.
Snabe will add “technology and software competence” to the supervisory board, Cromme said today.
Ackermann last week said he’ll step down as Siemens’s deputy chairman, two weeks after he resigned as chairman of Zurich Insurance Group AG (ZURN) following his naming in the suicide note of finance chief Pierre Wauthier.
Ackermann’s move was also prompted by public pressure amid questions about his role at Zurich Insurance, people familiar with the matter said last week. Ackermann also decided to step down after his own attempt to become Siemens chairman and replace Cromme failed in July, the people said. Ackermann denied that he tried to replace Cromme and also said that his Siemens departure is not connected to Zurich Insurance.
Wenning, 66, spent about 45 years at Leverkusen, Germany-based Bayer before retiring as CEO in 2010. The trained accountant had spent eight years at the helm of Germany’s largest drugmaker following stints in South America, Spain and a secondment year in the early 1990s with the privatization agency that worked to rebuild eastern Germany following reunification.
“Wenning is a surprise as deputy chairman,” Credit Suisse’s Toennessen said. “It’s too early to say whether that means he’ll replace Cromme.”
As CFO of the industry sector, Thomas reported directly to Kaeser. He moved into the job at the end of 2007 from a position heading the reporting and taxes functions at the corporate finance division. With profit representing 12 percent of sales in 2012, industry was the second-most profitable of Siemens’s four divisions, lagging behind health-care’s 13.3 percent.
Siemens had a profit margin of 9.5 percent in 2012 when competitors ABB Ltd. (ABBN) and General Electric Co. had margins of 10.3 percent and 15 percent, respectively. So-called sector profit from the main health care, industry, infrastructure and energy divisions fell to 1.26 billion euros in the fiscal third quarter of this year, from 1.82 billion euros a year earlier.
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