SIE Siemens N Ord

RNS Number:3758D
Siemens AG
10 May 2001


Siemens' Information and Communications business area takes measures to ensure
profitability in difficult environment

The three Groups comprising Siemens' Information and Communications business
area are outlining their goals and business strategy at an analysts conference
in London. Discussions are centered on measures for concentrating on growth
businesses, cutting costs and adjusting resources and capacities. The measures
implemented should substantially strengthen profitability. Information and
Communication Mobile (ICM) and Information and Communication Networks (ICN) are
the Groups primarily affected by the measures.

Savings at ICM are expected to total E600 million. As previously announced, some
2,600 temporary employment contracts are not being extended.

Anticipated savings at ICN will total E800 million. To reduce costs, ICN will
cut 5,500 jobs and transfer a further 2,000 employees to ICM along with its
microwave radio business. Plans call for rapidly cutting back start-up losses in
the strategic core businesses of IP convergence (Surpass and Hipath), broadband
access (including Efficient Networks), optical networks (Optisphere) and
Internet routers (Unisphere), and thus achieving a targeted increase in
growth-based earnings of roughly E300 million. The entire package of measures
should enable the ICN Group to achieve an EBITA margin of 5% to 6% and sales of
some 
El4 billion to E15 billion in the coming fiscal year.

Over the next few quarters, restructuring costs at ICM will total E100 million
to E200 million, while ICN will incur some E250 million in restructuring
charges.

Despite current weaknesses in its market, the Information and Communications
business area is holding to its medium-term margin targets announced last
December.

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