* CEO expects no help from global economy this year
* Company focusing on cost cuts, confirms outlook
* Q1 net profit from continuing operations 1.3 bln euros
* Q1 new orders down 3 pct
* Shares down 0.2 percent
By Maria Sheahan
MUNICH, Jan 23 German industrial bellwether
Siemens said it would stick with its focus on cost
cuts to catch up with peers such as General Electric as a
weak global economy saps demand for factory equipment.
With China's economy growing at its slowest pace in 13 years
in 2012, the euro zone in recession and recovery in the United
States still cautious, companies have curbed investment in new
machinery and software.
"We do not expect the global economy to provide any
tailwinds," chief executive Peter Loescher told thousands of
shareholders at an annual meeting on Wednesday.
The engineering group, which makes products ranging from
fast trains and gas turbines to hearing aids, reported a 3
percent fall in new orders to 19.1 billion euros ($25.4 billion)
for its financial first quarter.
Weakness in China weighed on orders for drive technology and
industrial automation, and the company said demand in its home
market was also on the decline.
Loescher, at the helm for almost six years, has been
criticised for being too slow to react to a downturn in the
global economy and is now struggling to get the company back on
track to compete with rivals.
He put on the back burner a plan to increase annual sales by
about a third to 100 billion euros and late last year launched a
massive push to save 6 billion euros over two years.
Ingo Speich, a portfolio manager at Union Investment, which
holds about 6.5 million Siemens shares according to Reuters
data, said cost cuts were not enough.
"Investors expect management to set a clear strategic course
for the future to bring the lumbering tanker that is Siemens
back on track," he told the shareholders' meeting.
Quarterly net profit from Siemens' continuing operations -
which have 370,000 employees around the world - eased by 1
percent to 1.3 billion euros, hit by a one-time charge related
to a delayed high-speed train project.
It sees annual profit declining to between 4.5 billion and 5
billion euros, from 5.18 billion last year, partly because of a
1 billion euro hit from its savings programme.
CEO Loescher aims to push up the margin on Siemens' core
operating profit to at least 12 percent from 9.5 percent last
year by cutting costs and focusing on the company's most
"What seems ambitious at first glance, since Siemens has
never reached that margin target in past year, turns out to be
not so ambitious at all at second glance," said Henning Gebhardt
of asset manager DWS, which holds more than 3 million
shares in Siemens according to Reuters data.
"Competitors reach that target margin on a regular basis,"
GE, for instance, posted an operating margin of 15.1 percent
last year and aims to further boost profitability this year.
Switzerland's ABB, a major competitor to Siemens in
power systems and industry automation, is due to publish 2012
results on Feb. 14.
Siemens' order intake in its first quarter exceeded revenues
for the first time in a year, indicating its top line could grow
The company said that it still expects new orders to grow
moderately in its financial year to Sept. 30, after a 10 percent
drop last year, and revenue to be lower.
"The question is, when will China recover?" finance chief
Joe Kaeser said, adding he expects industrial demand from China
to pick up again in the second half of 2013 at the earliest.
Siemens' rivals in industrial automation - including
Rockwell Automation and Emerson Electric - have
already warned that customers were putting off investments.