Siemens AG (Siemens) is expectinig to win new orders of around EUR15 billion in the next three fiscal years 2010 until 2012, which will be generated by government stimulus programs already announced around the world. Green technologies are expected to account for 40% or about EUR6 billion of this total, which will increase the share of the company’s revenues from its environmental portfolio in the future. Siemens based this forecast on an initial systematic analysis of the stimulus program.
“With their programs, governments worldwide are sending the right signal. Against the backdrop of the worst global economic crisis in decades, these government measures are at least partially cushioning, in some cases, sharp declines in private-sector demand. They should also have a stabilizing effect on our business,” said Siemens president and chief executive officer Peter Löscher. “In addition, the government programs will safeguard jobs worldwide. The large portion of the investments in environmental technologies will probably create new green jobs as well. This applies particularly to the green infrastructure giant Siemens,” Loscher added.
To overcome the global economic crisis, stimulus programs of around EUR2.0 trillion have been announced and, in some cases, already initiated. Roughly one third of this total – or some EUR700 billion – is slated for investment in infrastructure projects. The remainder is accounted for example by tax cuts for private households. The total volume of planned infrastructure expenditures relevant for Siemens comes to approximately EUR150 billion in the next three fiscal years. Given the company’s current average market share worldwide, these expenditures can be expected to generate new orders for Siemens of roughly EUR15 billion, of which some EUR6 billion will likely come from environmental technologies. In fiscal 2008, Siemens’ environmental technologies generated revenue of about EUR19 billion. The company intends to increase this figure to EUR25 billion a year by 2011.
“We’re firmly rooted in Germany. Our partners – who are often small to medium-sized companies – will also profit from the stimulus programs in Germany and other countries round the world,” said Siemens president and chief executive officer Peter Löscher.
In a country-by-country comparison, the shares of the stimulus program that Siemens can address are in the US, where they total slightly more than EUR85 billion. China comes next with a Siemens-relevant share of around EUR25 billion, followed by Germany with a share of roughly EUR5 billion. Major parts of these stimulus programs are earmarked for green technologies. For example, investments in green technologies account for nearly 50% in China and for about 60% in Germany. “The various governments are strongly focused on sustainable investments. Siemens can help other countries reach their climate protection targets, particularly in close partnership with local communities,” said Loscher.