Siemens posts rising Q2 operating profit of 1.84 bln euros

Siemens AG, Europe’s biggest engineering conglomerate reported total sectors profit for the second quarter of the fiscal year up 43% year-on-year, to 1.844 billion dollars compared to prior-year quarter. Energy was again the primary driver of total sectors profit growth.

The three sectors profit totaled 3.876 in first half of the fiscal year. In Q2 revenue rose 5% to 18.955 billion euros on competitive strength at energy and healthcare. While orders of 20.864 billion euros came in 11% below the prior-year quarter, book-to-bill remained above 1.

The order backlog of Siemens’ three sectors increased to 87 billion euros, and included no material cancellations during the quarter.

Despite The current macroeconomic and financing environment, Siemens expects growth in income from continuing operations in fiscal 2009. Total Sectors profit for fiscal 2009 is expected to exceed the prior-year level of 6.6 billion euros.

“In view of the deepening crises in the world economy, we are satisfied with our results in the second quarter. The energy and health-care sectors continued their strong run. In the industry sector, short-cycle businesses were again clearly weaker. We introduced measures to safeguard profitability early on. We’ve already made a strong impact with the SG&A reduction program. Additional measures, such as our supply chain initiative, have been set in motion. Therefore we go forward with the expectation of exceeding total sectors profit of the prior fiscal year.” said Peter Löscher, President and Chief Executive Officer of Siemens AG.

Healthcare orders rose due mainly to positive currency translation effects, while industry and energy saw reduced order intake in most divisions. Overall, order intake was down 11% yet orders of 20.864 billion euros kept the book-to-bill ratio above 1 for the quarter and for the first half.

Global macroeconomic and financing conditions continued to reduce consumer spending, business confidence and capital expenditures in the second quarter. This was particularly evident in such short-cycle industries as automotive, manufacturing and lighting. Longer-cycle energy and infrastructure customers postponed potential new business.

Q2 revenues stood at 18.955 bln euros, up 5% from prior-year quarter. Energy and health sectors delivered double digit growth in Sector revenues. This more than offset a 4% decrease at Industry driven by lower demand in short-cycle businesses.

On a geographic basis, Siemens showed particular strength in the Americas and the region comprising Europe, the Commonwealth of In-dependent States, Africa and the Middle East (Europe/CAME).

For fiscal 2009 Siemens targeted reve-nue growth at least twice the rate of actual global GDP growth. If GDP growth is negative, this means that a percentage decline in revenue for Siemens would be targeted at less than half the rate of decline in global GDP.

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