Thursday, 13 November 2008

Siemens IT services becomes ‘none of the above’

(By Anthony Miller) Siemens IT Services & Solutions (SIS) rated just one sentence in the company’s 14 page annual results today, and that was only to say that 4Q profits plunged over 40%. Over the year (to Sep. '08), SIS grew 1% at constant currency to €5.3bn, though margins fell from 4.7% to 2.7% against a 5-7% target. We think SIS UK is somewhere around a £550m p.a. business, mostly infrastructure management and BPO, with strong suits in the public sector, financial services, and media. We will be speaking to UK management to find out more. But the bigger question is what will Siemens do with SIS? It’s about 7% of its total revenues but only 2% of profit and clearly ‘doesn’t belong’ in its new vertical sector-based organisation. Just look at the financial statements; SIS is very much in the ‘none of the above’ category. Siemens recently announced the sale of its 50% share in Fujitsu Siemens Computers to Fujitsu. Now there’s a thought ...

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