Green stimulus funds promise big boost for Siemens

Government stimulus spending and a shift toward green technologies are expected to yield a bumper crop of orders for Siemens in the next three years.

The company expects stimulus spending to help it win new orders of around €15 billion in the next three fiscal years — 2010 through 2012. Of that amount, some 40 per cent, or nearly €6 billion, will be for green technologies, which is expected to boost Siemen’s environmental revenues significantly.

“With their programs, governments worldwide are sending the right signal,” said Peter Löscher, president and CEO of Siemens. “Against the backdrop of the worst global economic crisis in decades, these government measures are at least partially cushioning, in some cases, sharp declines in private-sector demand. They should also have a stabilising effect on our business.”

Löscher added, “In addition, the government programs will safeguard jobs worldwide. The large portion of the investments in environmental technologies will probably create new green jobs as well. This applies particularly to the green infrastructure giant Siemens.”

To overcome the global economic crisis, stimulus programs of around €2.0 trillion have been announced and, in some cases, already initiated. Roughly one third of this total — or some €700 billion — is slated for investment in infrastructure projects. The remainder is accounted, for example, by tax cuts for private households. The total volume of planned infrastructure expenditures relevant for Siemens comes to approximately €150 billion in the next three fiscal years. Given the company’s current average market share worldwide, these expenditures can be expected to generate new orders of roughly €15 billion.

In a country-by-country comparison, the shares of the stimulus programme that Siemens can address are the largest in the US, where they total slightly more than €85 billion. China comes next with a Siemens-relevant share of around €25 billion, followed by Germany with a share of roughly €5 billion. Major parts of these stimulus programs are earmarked for green technologies. For example, investments in green technologies account for nearly 50 per cent in China and for about 60 per cent in Germany.

“The various governments are strongly focused on sustainable investments,” Löscher said.