Siemens has announced record #2 billion turnover for its UK electronics and electrical engineering business, a 34 per cent increase on the last fiscal year.
Juergen Gehrels, chief executive of Siemens plc, described the news as the "highlight" of the year, and was confident that the figure was set to double over the next five years. He said the UK was a ?dynamic and lively place? in 1997, and that, as the electrical market had grown by an estimated six per cent to around #55 billion, Siemens had once again increased its market share.
Though no profit figures were available, Gehrels stated that the UK operation was ?very profitable?. There were just two lossmaking operations in the UK in 1997, one of which was the newly opened Siemens Microelectronics plant in North Tyneside, though no-one would reveal the second.
Despite the increased turnover, exports fell by nearly 20 per cent to #261 million. However, this fall was not attributed to the strength of sterling, but to fluctuations in the project cycle from one year to the next.
Gehrels said that Siemens? move into the services market would remain a prime objective, stating that turnover in this sector had increased threefold in the past three years to #500 million, and that Siemens Network Systems and Siemens Business Services were becoming increasingly important parts of the business.
On the product side, a semiconductor design centre is planned in North Tyneside to complement the production site already there. Overall, investment in research and development increased by 2.2 per cent to #125 million.
Siemens also has high hopes of the single European currency as 65 per cent of its worldwide sales are in Europe, according to Bernd Euler, finance director at Siemens plc. ?We believe that the Euro will accelerate the integration of European markets and improve economic conditions throughout Europe,? he said.
Siemens has estimated that the lower transaction costs and shorter transaction times associated with the Euro will save the company around DM35 million annually. The company also expects that the costs associated with converting to the Euro will be paid back within three years through these savings.
Euler also issued a warning to Euro-sceptics. ?If UK companies are not prepared to quote their prices in Euros then they will lose out in the long run,? he said.
Meanwhile, Juergen Gehrels has announced that he will step down as chief executive of Siemens plc at the end of March this year, after almost 12 years of overall resposibility for Siemens? activities in the UK. He will take on the role as non-executive chairman of the company, and will be replaced by Alan Wood, currently group managing director.
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