Siemens Expects $8B In Green Tech Contracts from Stimulus

June 23, 2009

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Siemens AG expects to win new orders of around $21 billion in the next three fiscal years (2010 to 2012), which will be generated by global government stimulus programs already announced. Green technologies are expected to account for 40 percent or approximately $8 billion of this total, which will significantly increase the share of the company’s revenues from its environmental portfolio in the future.

In fiscal 2008, Siemens’ environmental technologies generated revenue of about $26 billion. This can be attributed in part to the adoption of the Siemens standard, SN36350 Environmentally Compatible Products and Systems, that provides guidelines for designing environmentally compatible products and systems and integrating environmental benefits into planning, development or installation processes. The company expects to increase this share to about $35 billion by 2011.

In a country-by-country comparison, the U.S. holds the largest share of the stimulus program relevant to Siemens. Siemens said it expects orders stemming from the U.S. stimulus program to be about $8 billion, reports the Los Angeles Times. Siemens also said in the article that it has invested more than $25 billion in the U.S. in the past five years in water treatment, pollution control, medical imaging and other businesses.

China follows with a Siemens-relevant share of around $35 billion, followed by Germany with a share of roughly $7 billion. Major parts of these stimulus programs are earmarked for green technologies, says Siemens. For example, investments in green technologies account for nearly 50 percent in China and for about 60 percent in Germany.

But Forbes.com reports that the company’s calculations may be ambitious given the political, regulatory and financial risk that comes with government projects.

An analyst told Forbes.com that investors should watch for new orders that Siemens announces in its third-quarter results on June 30, and in particular watch for a recovery or slowdown in the company’s short-cycle business.

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