Jan 28 - German engineering giant, Siemens, says it needs to press on with cost cuts as it fights a tough market environment and strong euro. But it also affirms its outlook on earnings per share - predicting a rise of 15 percent in the current year. David Pollard reports.
Siemens - a German industrial powerhouse, a forbidding annual general meeting to match. But chief executive Joe Kaeser faced investors with a strong hand. Core operating profit, though shy of forecasts, is up 15 percent and seen as healthy. Earnings per share, he pledged, will also show a 15 percent rise, or more. SOUNDBITE: Siemens CEO, Joe Kaeser, saying (German): ''In the past year, some things have worked out, others haven't. Wherever we have disappointed expectations or let the competition get ahead of us, there we must do better. But we can also congratulate ourselves on our success.'' Kaeser took over in a messy boardroom battle last July from Peter Loescher - under whom Siemens was seen losing ground to ABB of Switzerland and General Electric. But the margin between them is narrowing: GE posted lower than expected margins earlier this month, and ABB issued a profits warning last week. The focus now is on cost cutting - Siemens wants to save six billion euros over the next two years. SOUNDBITE: Siemens CEO, Joe Kaeser, saying (German): ''As expected, the economic climate has not particularly helped, so we will concentrate on our productivity programme for this year and on the steps we need to take for 2014 and beyond.'' Kaeser is due to outline a new strategy in May. He was quoted as saying he sees strong demand as possible in China and emerging markets. Though, given the current turmoil, that could be wishful thinking. John-Paul Smith is from Deutsche Bank. SOUNDBITE Deutsche Bank Global Emerging Markets Equity Strategist, John-Paul Smith, saying (English): "There could be at the very least volatility coming from China, and at the worst, we might see something more significant, in other words, the beginnings of a more pronounced slowdown in the economy, which would obviously have a big influence on the views of emerging market investors.'' For the time being, investors appear confident in Kaeser's leadership. Siemens stock has outperformed the market by 17 per cent since he took the helm.