Siemens Plc has seen turnover increase only slightly in the year to September 30, rising 3.8% to ú1,292.8m. But the Bracknell, Berkshire arm of Siemens AG has seen its order books expand by 49.5% this fiscal year. However, Jurgen Gehrels, chief executive pointed out that this figure is distorted by the effect of several power plant orders; even when these are removed there is still a significant increase in business volume. Profits after tax were around ú27m, up from ú20m last year. Gehrels expressed himself not happy at this figure, but it was a great improvement on last year, he said. The company saw particularly strong growth in its components, variable speed drives, power generation, transport and air traffic management businesses. The components sector performed particularly well with a 69.0% increase in orders to ú121.0m and a 66.7% turnover rise, up to ú119.2m. Its most significant order was from British Telecommunications Plc to supply chips for Smart Cards for a new generation of payphones – the ones that will take Mondex cards, presumably. Siemens Nixdorf Information Systems Ltd broke even for the second year in succession, reporting sales up 12% to ú160m. Siemens’ workforce increased by 1.3% to 9,960, but this rise was entirely due to two acquisitions, without which there would have been a slight decline.
Paddington Station
Acquisition of the ACT Cablestream division of ACT Group Plc (CI No 2,335), which was merged with Siemens corporate networks business to form Siemens Network Systems Ltd, resulted in a very positive first half-year, and is set to continue to grow, said Gehrels. The other acquisition was 51% of Dunlop Automotive Composites, which created a new company, Siemens Automotive Systems Ltd. Siemens took over a vastly under-used large factory in the deal, which Gehrels described as quite a challenge – almost a bit scary. Siemens’ investment in research and development decreased slightly to ú123m, which represents 9.5% of turnover. Gehrels expects this downward trend to continue, but sees no cause for alarm, as many of Siemens’ businesses in the UK were in start-up situations and therefore required a lot of investment in new product development. He stressed that Siemens does not license any products from any other company, and all products and systems that are manufactured in the UK are also developed there, hence the relatively high research investment. The public communications business of Siemens is handled by its 40% stake in GEC Plessey Telecommunications Plc and it is not included in the figures. Gehrels said that Siemens was not seeking to increase its stake, and was quite impressed with GEC Plessey’s performance during its transition from hardware to a hardware-software mix. Siemens in the UK was described by Gehrels as a lively place. He expects this year to show a nice improvement, but not a quantum leap, the company’s bottom line not being the sole reason for its existence. It would rather continue to consolidate its growth and increase exports from the UK, which were actually down 6% on last year at ú206m. Gehrels hinted at major investment in the UK’s soon-to-be-privatised rail network, possible bidding for work on the Channel Tunnel rail link, after winning a major order for trains linking Heathrow Airport to London’s Paddington station.
