December 11, 2012 / 3:55 PM / in 5 years

UPDATE 1-Siemens banks on energy business in savings drive

* Siemens sees 3.2 bln euros savings coming from Energy

* Aims for overall savings of 6 bln euros over 3 years

* Sees Energy profit up this year

* Sees revenue growth in fiscal 2014 after 2013 decline

FRANKFURT, Dec 11 (Reuters) - German engineering conglomerate Siemens AG said more than half of its planned 6 billion euros ($7.8 billion) in savings would come from its energy business over the next two years.

Siemens announced its massive savings drive last month, having come under pressure to cut its cost of p roduction to close a gap with more profitable rivals such as U.S.-based General Electric and Switzerland’s ABB.

The E nergy division, which generates just over a third of group revenues, will a ccount for 3 .2 billion euros o f savings i n 2013 and 2014 a s it improves purchasing and project execution an d sells off less lucrative businesses such as solar, S ie mens told analysts at its Capital Markets Day Energy on Tuesday.

The Energy business offers products such as gas and wind turbines, subsea power supply systems for oil platforms a nd e ntire turnkey power plants.

Siemens sees p rofit at the Energy business improving this year a fter being hit by delays in the connection of German offshore wind farms to power grids and trade sanctions on Iran la st year.

Revenues at the business will return to growth in fiscal 2014 after a slump in new orders weighs on sales this year, Siemens said at the an alyst ev ent, which it held at its gas turbine factory in Charlotte, North Carolina.

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