Siemens Energy to divest industrial unit in bid to focus on gas turbines, grids
XLI•Focus shifts toward higher-margin gas turbines and grids
The announcement confirms the company's efforts to simplify its set-up, which is mostly focused on customers requiring components to produce electricity, including gas turbines and grid equipment.
Those divisions have higher profit margins than ToI, benefiting from an increased demand for generation capacity and network equipment to power data centres needed for artificial intelligence technology.
CEO says current structure limits what the unit can achieve
CEO Christian Bruch previously said that ToI faced different demand cycles than Siemens Energy's other divisions and was in competition with them for limited investments, arguments that are often made when it comes to spinning off of businesses.
"If we don't change our structure, we limit what Transformation of Industry can achieve," Bruch said in a statement, adding the group's focus was on its divisions offering higher returns.
Siemens Energy plans to sell most of Transformation of Industry
FRANKFURT/DUESSELDORF, Aug. 25 (Reuters) - Siemens Energy plans to sell most of its division supplying industrial customers, it said on Tuesday, in a move aimed at sharpening the supplier of power equipment's focus on the booming utility sector.
Siemens Energy's Transformation of Industry (ToI) business unit - which among other products makes steam turbines and electrolysers - accounted for €5.7 billion ($6.7 billion), or 15%, of group sales last year, with a profit margin of 11%.
Company may seek external investors or a capital markets transaction
Siemens Energy said it could bring in external investors for ToI and also flagged a "potential capital markets transaction", adding it would retain a minority stake.
