Siemens in 2020
Siemens has had a mixed year, to say the least. Considering the company is involved in nine different major divisions of work, including energy, software, financial work, and healthcare services, portions of Siemens were bound to not do as well as others. With the COVID-19 pandemic affecting various revenue sources, the company took a major decline in its most recent quarterly report. In that quarterly report, Siemens AG generated $14.855 billion in revenue. This represents a 37.88% decline in revenues when compared to the same quarter in 2019. As a result of this, Siemens has had to try and streamline its business focus slightly, including selling off major assets. One of these assets was a company called Flender, held by Siemens as one of their portfolio companies. Flender is a mechanical and electrical drive technology company that represents around $2.5 billion in annual sales and employs 8,600 people. Flender was sold to the Carlyle Group, a United States buyout company, for around $2.4 billion.
At the beginning of September, Siemens further slimmed down its major business operations to focus on other moves such as spinning off its entire energy sector, Siemens Energy, into its own company — the largest ever of its kind. This adds Siemens Energy to the same list as Siemens Healthineers, representing the company’s interest in the healthcare sector, which was spun off in 2018. Since the spin-off, Siemens Energy has made major plans to target renewable energies such as wind, solar, and hydrogen in Africa. This includes the installation of a solid 3.4 GW of wind turbine energy. While Siemens's spin-off and selling news have covered much of the year, the company has actually proceeded to purchase its latest acquisition.
Siemens’s New Acquisition
This week, Siemens announced that it had acquired Culgi as part of its expanding Xcelerator portfolio. Culgi is a computational chemistry software company founded in The Netherlands whose products are used to help analyze new materials, including batteries, chemicals, and pharmaceuticals. The deal should finalize before the end of the year, though there have been no details about the transaction itself other than the fact that it’s happening. Culgi’s acquisition is expected to help expand the simulation capabilities of Siemens’s Xcelerator portfolio using chemistry models in conjunction with Siemens’s Simcenter STAR-CCM+ software. Culgi’s soft materials simulation will be integrated into Siemens’s existing software, and this technology could make a substantial difference for the company. This acquisition will be dealing specifically with Siemens Digital Industries, a section of the company specifically focusing on automation and digitalization. Siemens’s Digital Industries has seen a solid period of growth given credit to the diversified nature of the category, leading to a workforce of 76,000 employees. The Xcelerator portfolio is meant to help businesses of all sizes organize and drive automation for these companies to streamline production.
Siemens AG has had a year filled with acquisitions, leveraged spin-offs, and the sale of portions of the company. These strategies have greatly helped efforts to reduce Siemens’s costs in certain areas of the business to focus on a more specific group of goals. Especially considering the clear drops in revenue earlier in the year, allowing for a slightly leaner, more mobile company could help significantly. As Siemens continues to expand its digital industries, acquisitions such as Culgi could play an instrumental part in their recovery.
About the Author
Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.