Siemens Sees More Dresser-Rand Savings Than ForecastAlex Webb
Siemens AG is targeting almost a third more in cost-savings by integrating U.S. oil-and-gas equipment maker Dresser-Rand Inc. than the 150 million euros ($185 million) it had initially anticipated.
The synergies, which Siemens said in September would be realized by 2019, will come as the Munich-based company sees the oil-and-gas market growing 6 percent annually through 2020, according to a presentation on its website today.
Chief Executive Officer Joe Kaeser has spent 6.8 billion euros acquiring Rolls-Royce Holdings Plc’s energy business and Dresser-Rand as he focuses Europe’s biggest engineering company on solutions for energy generation and distribution. He admitted in May that Siemens had been slower than competitors to make the most of the boom in U.S. shale gas.
“That market is very attractive even though in the short-term people believe it is going to deteriorate further,” Kaeser said today in a webcast presentation from Berlin. “Who got rich from gold? Those discovering the gold or those supplying the shovels?”
Kaeser, who became CEO in August 2013 after seven years as finance chief, also said today that the wind operations, whose profitability lagged behind other parts of the business supplying energy generation equipment in 2014, will give Siemens a lock on lucrative service contracts in the future.
“About 30 percent of our backlog is in highly profitable service businesses,” Chief Financial Officer Ralf Thomas said in a separate presentation.