Siemens AG finally completed its dance of the seven veils over its fiscal year-end figures at the annual meeting and conference yesterday, but apart from finally revealing that earnings per share were up 13% at the equivalent of $2.93, there was little new in the numbers. We still intend to achieve our target of a 15% return on equity by the end of the century, chief executive Heinrich von Pierer said at the company’s annual news conference. We are on the right course. Siemens, which in November predicted no increase in 1996-97 profit from last year’s, said yesterday it expected to show a clear profit increase again in 1997-98. Earnings in 1996-97 will be flat as a result of profit declines expected in its components, medical equipment and auto parts businesses, von Pierer said. Improved results in energy, communications and information would balance out these setbacks. To reach those goals, Siemens is focusing its business away from Germany to Asia and the Americas, where sales growth is higher and labor costs lower. Business in Germany will continue to grow, but its share of our total will decline from the current 40% to less than 30% by the year 2000, von Pierer said. The company expects to cut about 6,000 domestic jobs in 1996-97, many of them at Siemens Nixdorf, and von Pierer also expects Siemens to employ more than half of its workforce outside Germany in two years. Personnel costs in Germany, which rose seven percent last year to add $915m in costs, are one of the factors limiting 1996- 97 profits, he said. As part of a company-wide effort to raise productivity, Siemens plans to create a new division next year, Siemens Financial Services, to handle financing for all of its units. The company expects higher sales, profit and orders at Siemens-Nixdorf Informationssysteme AG computers unit, and Siemens-Nixdorf over the last three years made pretty good progress even if last year was not what we had hoped, von Pierer said. It has very god market positions in Germany where it’s number one in personal computers. It is number two or three in Europe in Unix systems and mainframes, he said. Overall, it sees restructuring costs remaining at about $325m to $450m a year over the next few years, it said, and the company is talking of selling non-core businesses.
