GERMAN industrial conglomerate Siemens raised its profit outlook on the back of cost cuts and higher demand from factories that are cranking up production amidst an economic rebound.
Europe’s biggest engineering group said yesterday it expected total sectors profit – operating profit of all three core businesses – to top €7.5bn (£6.5bn) for the year to September 2010 versus €7.47bn the year earlier.
Lightbulbs, industrial automation systems and other products with short manufacturing lead times bore the brunt of the recession last year but have now limped back to growth.
Siemens’ range of products from turbines and fast trains to hearing aids and lightbulbs compete with General Electric, Philips, Schneider Electric and ABB and making Siemens a bellwether of the euro zone’s largest economy.
“We are profiting in particular from measures we initiated early on to strengthen our competitiveness,” Siemens chief executive Peter Loescher said, referring to cost cuts in sales and administration launched in 2008 months before the recession.
Last year, Siemens completed those cost cuts and began bundling procurement to source more materials from low-cost countries.
City A.M. Reporter