MUNICH, GERMANY – FEBRUARY 05: Activists protest outside Olympiahalle shortly before the annual general shareholders meeting of German engineering conglomerate Siemens AG on February 5, 2020 in Munich, Germany. The meeting is taking place amidst protests outside. Demonstrators are calling on Siemens to withdraw from its planned participation in the Carmichael coal mine project in Australia. (Photo by Getty Images)
Siemens reported a 3% fall in net profit in its fiscal first quarter, weighed down by weakness in the auto and energy sectors, as it begins a shareholder meeting blighted by protests.
Net profit for the period from October to December 2019 came in at 1.09 billion euros ($1.2 billion) with orders at 24.76 billion euros, down 2% from the same period in the previous year.
The Munich-based conglomerate confirmed its full-year outlook for “moderate growth in comparable revenue, net of currency translation and portfolio effects.” On a comparable basis excluding currency translation and portfolio effects, orders declined 4% from the previous year and revenue was down 1%, but the order backlog reached a new high of 149 million euros.
CEO Joe Kaeser said in the earnings report that the slower first fiscal quarter was expected, with energy weakness reinforcing the company’s priorities. Siemens plans to carve out its gas and power division and merge it with its 59% stake in Siemens Gamesa Renewable Energy to create Siemens Energy, which will be listed on the German stock exchange in September as planned.
Testy shareholder meeting
The German multinational also had its annual shareholder meeting in Munich Wednesday, where it faced protests over Siemens’ association with Australian coal mine operator Adani and its controversial Carmichael project.
Earlier this week, 19 health groups advocating climate change action published an open letter to Siemens urging it to end its commercial relationship with Adani, after the company confirmed in January that it would go ahead with its reported $30 million contract to provide signaling technology to the coal mine’s railway.
The mine has also faced opposition from Australian indigenous groups after claiming that the project was supported by the indigenous population.
An environmental activist protests with a flame-shaped placard reading “Stop Adani” during a demonstration outside the Olympic hall in Munich, where German engineering giant Siemens holds his annual shareholder’s meeting, on February 5, 2020. Outraged by the group’s sticking to a contract to supply rail equipment to a massive Adani Australian coal mining project, demonstrators were rallying outside the Munich Olympiahalle. (Photo by Christof STACHE / AFP) (Photo by CHRISTOF STACHE/AFP via Getty Images)
In his address to shareholders on Wednesday, Kaeser highlighted that the company had achieved a 41% decline in CO2 emissions since fiscal 2014 and seen 637 million tons of CO2 emissions abated during customers’ fiscal 2019, claiming the company was “in the center of public debate because we accepted an order.”
“Admittedly we failed to see the overall picture involving this order correctly in time, but it is also a fact that we are complying with all legal provisions and that the Carmichael mine has in fact received all necessary permits from the Australian authorities,” he said, reiterating the claim that the “large majority” of the indigenous population in the region had approved the project.
He added that the company must better prepare itself for the ramifications of dealing with involvement “directly or indirectly” in controversial projects, and announced a 1 billion euro investment in reviewing the sustainability of all of Siemens’ supply chains.
Martin Herrmann of the German Alliance for Climate Change and Health told CNBC’s Annette Wiesbach outside the AGM: “We are medical doctors and health professionals and we want to inform the public that climate change is the biggest threat for health in our century, and it is not tolerable any longer that companies like Siemens make money by further worsening the situation.”
“It’s a health emergency we are seeing in Australia, but it is also here in Germany or in France where you have a heatwave, thousands of people are dying and this is not yet understood, so we really need to be aware that we need to stop all the things that are furthering the climate change.”