Siemens to exit power, gas, and renewables business

• 4 years ago (2019-05-08)
• David Flin

Europe 1061 Gas 370

---

Siemens has announced that it will be spinning its gas and power division off into a separately managed company, and cutting over 10,000 jobs. The unit will be spun off and listed by September 2020. Siemens said that it will retain “less than 50 per cent” of the new entity, which will include its 59 per cent stake in Siemens Gamesa Renewable Energy, creating a company with €30 billion in business volume. Siemens said that it will keep a significant influence in energy and electricity.

Joe Kaeser, Chief Executive Officer for Siemens, also announced job reductions at its core divisions to save about €2.2 billion by 2023.

The Gas and Power unit had sales of €12.4 billion in 2018, and a profit of €377 million. Profitability has fallen year-on-year recently due to growth in renewable power generation and decreased sales of gas turbines and other power plant equipment. Kaeser said: “The move will create a powerful pure play in the energy and electricity sector with a unique, integrated setup – an enterprise that encompasses the entire scope of the energy market like no other company. Combining our portfolio for conventional power generation with power supply from renewable energies will enable us to fully meet customer demand. It will also allow us to provide an optimised and, when necessary, combined range of offerings from a single source.”

The Gas and Power Division had the second-lowest profit of Siemens’ divisions last year, but the highest revenue.

• Gas and Power. Revenue: €18.1 billion. Profit: €720 million.
• Digital Industries. Revenue: €15.6 billion. Profit: €2.9 billion.
• Smart Infrastructure. Revenue: €14.4 billion. Profit: €1.6 billion.
• Siemens Health. Revenue: €13.4 billion. Profit: €2.2 billion.
• Siemens Gamesa Renewable Energy. Revenue: €9.1 billion. Profit: €483 million.
• Mobility: Revenue: €8.8 billion. Profit: €958 million.

It has been reported in March that Mitsubishi Heavy Industries was in talk with Siemens on a possible combination of the gas turbine business with its own operations, but neither company has confirmed the status of these talks.