Siemens warns of coming ‘headwinds’ after strong 2016

Siemens warns of coming ‘headwinds’ after strong 2016

German industrial firm Siemens warned Thursday that global uncertainty and low confidence would sap its growth in 2017 after better-than-expected results this year.

The group predicts “headwinds for macroeconomic growth and investment sentiment in our markets due to the complex geopolitical environment” leading to only “modest growth in revenue” next year, it said in a statement marking the end of its financial year on September 30.

As part of its response, the maker of gas and wind turbines, trains and medical scanners plans to float its medical devices business to raise capital.

Siemens boosted its revenue 3.0 percent year-on-year between July and September, hitting almost 22 billion euros ($24 billion).

That brought its full-year revenue figure to almost 80 billion euros, an increase of 5.0 percent — slightly less than had been predicted by analysts surveyed by Factset.

Siemens saw especially strong growth in its Power and Gas, Wind Power and Renewables, and Energy Management divisions.

Profits were down 24 percent at 5.6 billion euros, a gap the company said was due to a 3.0-billion windfall last year from divesting some business units.

“Setting aside portfolio divestments, it was the best” year in Siemens history, chief executive Joe Kaeser said, surpassing the company’s own forecasts which it had already lifted twice.

“Siemens remains on an expansionary course. Despite risks from the economic environment, it has a good chance of rising profits,” analyst Volker Stoll of LBBW bank wrote.

In post since 2013, CEO Kaeser has launched the more than 160-year-old firm into a far-reaching restructuring.

A separate statement announced his plan to float the Siemens healthcare division, which produces imaging devices, laboratory diagnostics, and medical IT systems.

The group offered no details of the date or size of the stock market listing, saying it would “depend, among other things, on the stock market environment” once plans have been “concretised”.

Siemens has already gone through a high-profile stock market launch for a subsidiary with lightbulb maker Osram in 2013, now holding only a minority stake.

The firm also announced a “strategic alliance” with Bentley Systems to build digital services for industry and infrastructure customers.