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Author: Cornelia Wels-Maug
Fujitsu Siemens Computers (FSC) yesterday announced its H1 results for the period to September 2006. Revenues of €3.1bn included, for the first time, €450m of the newly acquired IT Product Services (ITPS) division - maybe still better known as Siemens Business Services's (SBS) Product Related Services (PRS) support business. Excluding ITPS and taking into account that FSC has had some IT services activities already before the merger, FSC revenues would have been below last year's €2.8bn in H1, around €2.6bn.
FSC's operational profits were €18m, down from €31m in the same period last year. After restructuring costs of €14m, pre-tax margin was 0.1% compared to 0.9% last period. However, the gross operating margin was 14.4%, above the 13.2% of H1 the previous year.
CEO Bernd Bischoff announced an immediate cost-cutting and restructuring programme. It foresees annual savings of €100m, including 300 job cuts until end 2007 and expansion of its business in the growing East European markets. In addition, FSC is looking at further acquisition to broaden its customer base, whilst focussing on its central growth themes: mobility, dynamic data centres and IT services.
In yesterday's analysts' conference call, CEO Bernd Bischoff did not comment on FSC's guideline for 2006, but emphasized the 'tough year ahead of us.'
Comment: FSC's hardware business has suffered particularly badly in its main market Germany - still accounting for almost half of FSC's overall business - where prices tumbled against the backdrop of a shrinking PC market. FSC's complex integration with SBS's former PRS operation (see EVD 27 February) seems to be well on track and in line with planned restructuring costs. The new ITPS entity, in which FSC's brought in its own service activities, helped to increase FSC's H1 revenues as well as its gross margin. However, the associated restructuring costs of €14m, though planned, still weigh on FSC's overall performance and will continue doing so in H2, but 'only' in a lower one-digit euro-million sum.
Though it's early days, with only six months into ITPS's operation, FSC claims it has already profited from this union: due to the shared knowledge available from FSC's hardware and service units, FSC says it has been better positioned to identify client needs, which in turn it says have resulted in a higher level of customer satisfaction as well as winning of new clients.
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