German engineering group Siemens plans to trim the number of its industrial divisions to try to increase profitability, a person familiar with the matter said.

Share Market Live

NSE

The Munich-based conglomerate will reduce the units in its core industrial operations to three from five and its supervisory board has already discussed the changes, the source told Reuters on Thursday.

Details of the long-awaited strategy dubbed "Vision 2020+" are to be disclosed in August, two sources said, declining to be identified because the matter is confidential.

The changes will take effect on Oct. 1, the start of Siemens' new financial year, one of the sources said.

"This will be an evolution rather than a revolution," the source said.

Germany's Manager Magazin reported on the changes earlier on Thursday, saying higher margin targets would be assigned to the new divisions.

The overhaul is part of Chief Executive Joe Kaeser's attempt to loosen central control to enable subsidiaries to thrive, the magazine said, citing company sources.

Part of the plan is to merge the so-called Digital Factory unit with operations designed to automate process industries, and to combine overland high-voltage networks with the power plant business, Manager Magazin said.

The overhaul, sources said, would also involve energy management, building technologies and power plant engineering.

First Published:Jun 22, 2018 5:30 AM IST