SIE Siemens AG

--Siemens expects a fiscal-year revenue decline of up to 5%

--The company is stepping up cost-savings in order to cope with pandemic effects

 
   By Kim Richters 
 

Siemens AG is increasing cost-saving measures amid the coronavirus pandemic after its profit took a hit in its second quarter, and said it expects a revenue decline for its fiscal year.

The German engineering conglomerate on Friday withdrew its previous fiscal 2020 outlook and its Chief Financial Officer Ralf Thomas said the company now expects a decline of up to 5% in revenue for the year ending Sept. 30. It had previously forecasted moderate growth.

The company is stepping up its cost-savings in order to cope with the effects of the pandemic. It is aiming for overall cost reductions of 475 million euros ($513.2 million) by fiscal 2021, an increase of EUR165 million, Deputy Chief Executive Roland Busch said in a press conference.

"Digital industries will account for EUR135 million of these additional savings and EUR30 million will come from smart infrastructure," he said.

"We're also right on track to achieve our savings target of approximately EUR300 million by 2021 through lean and effective governance."

On Friday, Siemens reported a drop in net profit to EUR652 million for its second quarter from EUR1.81 billion a year earlier.

At Siemens's industrial businesses, adjusted earnings before interest, taxes and amortization fell 18% to EUR1.59 billion.

Revenue for the quarter was EUR14.23 billion compared with EUR14.25 billion for the year-earlier period. Orders fell to EUR15.15 billion from EUR16.46 billion.

For its third quarter, the company expects a bigger coronavirus hit, with its short-cycle business especially effected.

Write to Kim Richters at kim.richters@wsj.com

(END) Dow Jones Newswires

May 08, 2020 04:51 ET (08:51 GMT)

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