Siemens first quarter financial report for the first fiscal year of 2015: divested hearing aid business

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On the evening of January 27th, Siemens announced that it announced that the first quarter of fiscal 2015 (October 1, 2014 - December 31, 2014) revenue reached 17.415 billion euros, an increase of 5%. However, the new order amount was 18.013 billion euros, down 11% from the first quarter of fiscal 2014, especially in the energy business sector. The first quarter realized a net profit of 1.08 billion euros ($1.21 billion), compared with a net profit of 1.43 billion euros in the same period last year. Profit from continuing operations fell 18% to 1.11 billion euros, while analysts expected 1.26 billion euros.

In the first half of 2014, Siemens put forward the “Vision of 2020 Company” and announced major strategic adjustments. In the future, it will focus on electrification, automation and digitization. In these value chains, Siemens has identified several areas of growth with its long-term potential, including the acquisition of Rawls? The main part of the Royce energy business, as well as the preparation of the hearing business.

Surprisingly, on November 6, 2014, Siemens officially announced that the hearing aid business was sold to the investment company EQT and the German Strüngmann family for 2.15 billion euros. In the first quarter of fiscal 2015, Siemens completed the divestiture of the hearing aid business, with an estimated pre-tax profit of approximately 1.6 billion euros.

“In the past few years, Siemens Medical has invested a lot of money in the hearing business. The transaction is not only satisfactory from a financial perspective, we also believe that the two investors will develop a clear growth strategy for the long-term further development of the hearing aid business. Hermann Requardt, CEO of Siemens Medical Services, said that because the investor's bid was very attractive, Siemens decided to stop the hearing business listing plan announced in May this year.

According to the "Vision 2020", it is normal for Siemens to complete the Rolls. The acquisition of Royce Energy's aero-engineering gas turbine and compressor business. However, the quarterly report did not disclose the purchase price. According to previous media reports, the purchase price was 785 million pounds, about 950 million euros.

Rolls Royce Energy's gas turbine and compressor business unit is one of the leading suppliers of aero-derivative gas turbines. This part of the business has about 2,400 employees, and the company has 2,500 gas turbines installed. Revenue for fiscal 2013 was £871 million and EBIT was £72 million.

In addition, the quarterly report also announced that Siemens sold shares of Bosch and Siemens Home Appliances Group (Bosch Home Appliances), with an estimated pre-tax profit of approximately 1.4 billion euros, and the completion of the formation of a metallurgical technology business joint venture. Bosch and Siemens, which have been merged for half a century, have declared their way out, and Siemens has completely withdrawn from the appliance business.

From the published quarterly data, Siemens' performance in the energy business sector is not satisfactory. According to the quarterly report, Industrial Business's profit reached 1.819 billion euros, down 4% from the same period of last year, mainly due to the expected poor performance of the power generation and natural gas groups. Affected by the market environment, the revenue from continuing operations was 1.106 billion euros; due to negative fluctuations in non-sustained operations, net income was 1.095 billion euros and basic earnings per share was 1.3 euros.

“Most of our business performance has met expectations. Some business groups have achieved excellent results, while the medical business group needs to work harder to quickly renew its previous success. The power generation and gas group needs a more comprehensive solution to return. And has maintained a high level of profitability in history for a long time.” Siemens Kaiser, president and CEO of Siemens AG, has publicly acknowledged that the energy business in 2014 did encounter challenges, mainly due to market factors.

In FY2014 (as of September 30, 2014), Siemens' orders reached 78.4 billion euros, with revenues totaling 71.9 billion euros. The overall profit of the business sector increased by 26% year-on-year to 7.3 billion euros.

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