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'Re-industrializing' US is growth driver for Siemens: CEO

CNBC with Reuters
Siemens CEO on Germany slowdown

German engineering group Siemens is focusing on the United States to drive growth amid a weakening European economy, the chief executive told CNBC on Thursday.

The group derived about a quarter of its revenues from the U.S. in 2013 and 86 percent of the company's revenues are currently from outside Germany.

Siemens missed expectations for fourth-quarter core profit, hurt by charges for faulty wind turbines that pushed its wind power division to a loss.

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The group, one of Germany's biggest companies and a major exporter of goods from trains to turbines to hospital equipment, posted total sectors profit up 28 percent to 2.2 billion euros ($2.76 billion), missing the average estimate of 2.25 billion euros in a Reuters poll.

It forecast flat sales for the current year and targeted an industrial profit margin of 10-11 percent, a new benchmark for Siemens as it seeks to close a profitability gap with rivals under Chief Executive Joe Kaeser, who took over in 2013.

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Following the results, Kaeser told CNBC that the firm had delivered a "strong quarter" in what had been a year of "strategic direction and realignment of our organization."

He told CNBC he believed the U.S. looked more attractive than Europe. The U.S. economy grew at its fastest pace in 2-1/2 years in the second quarter, while growth in the euro zone was stagnant in the second quarter. Activity in Germany contracted and weak data for the country has weighed on investor sentiment.

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"The U.S., and Mexico and Canada that are in the neighborhood of the biggest economy in the world, have always been important to us. We have $20 billion in business in the U.S. and 60,000 people work for us there so we've always been very clear that this is an important market for us."

"The re-industrialization of the U.S. is only at the beginning and there is going to be more to come which we think is going to be very attractive."

Kaeser added the group's most prominent resource allocation was towards the U.S and China. Although Germany's economy was still strong, he said, "we do see some slowdown and we will need to act based on this [fact] and put more emphasis into areas which have upside in economic growth."

Siemens also said it had agreed to sell its hearing-aid unit to private equity firm and Germany's Struengmann family for 2.15 billion euros, and would keep a 200 million-euro equity investment in the business.

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