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Siemens expects infrastructure business to become profitable

by on28 November 2013

Better late than never

German firm Siemens expects its Infrastructure & Cities business, which has been hit by project delays and restructuring, to reach its profitability target this financial year.

There was some speculation, brushed off by Siemens' new chief executive Joe Kaeser, that the group might dismantle the I&C business after its performance fell well short of expectations. The division looks after Siemens security systems, high-speed trains and power distribution systems.

In the financial year ended September 30, the business posted a margin on earnings before interest, tax, depreciation and amortization of 3.7 percent, well below a target range of 8-12 percent. That made it the least profitable of Siemens' four main businesses, behind Industry, Energy and Healthcare.

It generates about $23.1 billion of annual revenue - or 23 percent of group sales - but accounted for only about 5 percent of group profit last year, hit by restructuring costs and charges related to the delayed delivery of high-speed trains.

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