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Siemens said late last year it would decide by
May what to do with the businesses it has identified as problems
and that account for 18 percent of sales, or some 13 billion
euros ($15 billion), and no profit.
The source said Siemens would try to sell three to five small
divisions, such as industrial waste water treatment, which
require expertise that does not fit with Siemens' electrical
competence, or operations that will cost too much to fix.
"These are marginal things," the person said. "The core
businesses will be restructured."
Siemens, which has not disclosed what the 13 businesses are,
declined to comment.
Once a sprawling engineering group with businesses from trains
to turbines to hospital IT to hearing aids, Siemens is being
streamlined by new Chief Executive Joe Kaeser.
He wants to focus on Siemens' strengths in electrification,
automation and digitalization and close a profitability gap with
arch-rival General Electric.
A second source familiar with the matter said Kaeser wanted to
prove Siemens could turn around unprofitable businesses by
itself.
The decision is due to be taken at Siemens' supervisory board
meeting next Wednesday before it presents second-quarter results
on Thursday, the first source said.
Siemens is aiming for an industrial profit margin of 10-11
percent in its current financial year under a new way of
defining its profits. The margin was 10.2 percent in its first
quarter to the end of December.
The company has said a 10-11 percent margin will be a clear
improvement on its previous financial year but has not given a
comparable figure.
That compares with an industrial margin of 16.2 percent at GE
last year and Swiss engineering group ABB's 13.5 percent
operating margin.
Siemens is also restructuring its power and gas unit, where
profits have collapsed due to price pressures in gas and steam
turbines. They are becoming unprofitable for operators in many
markets due to a rise in renewable energy and lower demand.
It is cutting at least 1,200 jobs in this area and trade union
IG Metall fears there will be thousands of job cuts in Germany
over the coming years. Siemens employs 343,000 staff worldwide,
a third of whom are in Germany.
(Editing by David Clarke)
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