SIEMENS AG 
However, there is no guarantee that all parts of the company will continue to exist, said Thomas in an interview with the Reuters news agency published on Friday: "We have jointly decided in the Managing Board that there will be no more new 'portfolio companies'. But it would be naive to believe that we don't have to keep reviewing the portfolio." However, this is the responsibility of the individual divisions. "Smart Infrastructure, for example, put a business volume of three billion euros under the microscope some time ago. A third has been sold to other companies," said Thomas.
With the 3.5 billion euro sale of the drive subsidiary Innomotics to the US financial investor KPS last week, Siemens drew a provisional line under the 'portfolio companies' issue. More than seven billion euros in proceeds will have been received when Innomotics comes into new hands at the turn of the year. Siemens can book 3.5 billion euros of this as net profit. "We will use the proceeds from the sale to finance dividends, share buybacks and investments, among other things," said Thomas. We will also use the Innomotics proceeds "in the interests of all stakeholders - with a good mix", said Thomas.
Under CEO Joe Kaeser, Siemens had spun off a handful of companies under the label 'Portfolio Companies', which were not part of the core business and barely made a profit. "We acted like a private equity investor. We told these companies - some of which are market leaders - to set themselves up independently without relying on the Group's network and synergies," said Thomas, explaining the approach. This paid off: "Internal processes were streamlined and the focus was sharpened on the essentials." In 2021, the decision was made to gradually divest the company.
"EVEN THE EMPLOYEE REPRESENTATIVES WERE SATISFIED"
Parcel logistics was sold to the northern German technology group Körber for 1.15 billion euros, while road transport technology was sold under the name Yunex to the Italian Atlantia holding company of the Benetton family for just under one billion euros. The transmission subsidiary Flender was acquired by the financial investor Carlyle for more than two billion euros. "Each of these sales processes had its own dynamic," said the CFO, who is responsible for the portfolio companies. "And we succeeded particularly well with Innomotics. Even the employee representatives were satisfied with the buyer."
The Nuremberg-based company, which was formed and spun off at the end of 2022 and whose core business is the Large Drives division (LDA), has a turnover of around 3.3 billion euros and is profitable. KPS has had an agreement with IG Metall for several years, said Thomas. "KPS is an expert in optimizing manufacturing. They stay in a company longer than other financial investors. It's not primarily about financial mathematics."
All that remains now is the small business with baggage carousels and cargo conveyor systems for airports. "In material terms, I consider the Portfolio Companies issue to be almost closed," said the CFO. Airport logistics is profitable, but too small for an IPO. "We won't knit anything with a hot needle here either and will wait for the right time." Aviation is currently recovering rapidly from the coronavirus crisis. "Most airports are not yet ready to expand their capacities again. Some have postponed their expansion plans. And hardly any new airports are being built at the moment," said Thomas.
In two years at the latest, however, he also wants to have this topic ticked off. "I said in 2021 that the portfolio companies won't stay in the Siemens Group for as long as I'm here. And as you know, my contract runs until December 2026."
(Report by Alexander Hübner. Edited by Olaf Brenner. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
