A lower discount rate has offset positive returns on investments and the effect of the transfer of a €500m holding in Siemens Energy to an external Pensionsfonds vehicle, boosting pension liabilities to €1.5bn, according to Siemens in its latest quarterly results.

Provisions for pensions and similar obligations increased slightly on Siemens’s balance sheet to €1.5bn, as of the end of December, compared with €1.4bn at the end of September, Siemens reported this week.

The Munich-based company has now transferred a further 8% stake in its Siemens Energy subsidiary to its pension asset manager Siemens Pension-Trust eV, reducing the parent company’s stake in the company to 17.1%. The firm has a history of funding pensions by transferring stakes in subsidiaries to its pension funds.

Siemens recorded a €500m profit from the transfers of the stake, and the associated termination of accounting the stake using the equity method, it said in its Q1 2024 results statement. The company’s fiscal year runs to end-September.

Siemens did not disclose how much the stake was worth at the time of the transfer.

The transfer of the stake to the Siemens Pension-Trust e.V. means that Siemens has no longer “any significant influence” on Siemens Energy, it said.

As a result, Siemens is not accounting for the stake using the equity method, while the remaining 17.1% stake in Siemens Energy is reported as a financial asset that is measured at fair value, the company added in a statement.

Siemens also announced its intention to gradually reduce its stake in Siemens Energy over time. It also transferred a 6.8% stake of Siemens Energy to the Siemens Pension-Trust at the end of June last year.

Siemens Pension-Trust held a 9.9% stake in Siemens Energy at the time of its spin-off in 2020, but has, meanwhile, completely sold its holdings.

Poor performance of the subsidiary Siemens Gamesa has had a negative impact on the results of Siemens Energy, stoking fears of risks for the investment of the Pensionsfonds in the company.

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Luigi is IPE's Berlin-based DACH correspondent. His coverage includes regulation and the latest pensions and investments trends, and, being a native Italian, he also covers Italy’s pensions market. He has reported from Italy and Germany on international politics and business for European and US publications including USA Today, Bloomberg BNA and for the investigative magazine L’Espresso. He was previously Germany correspondent for Mergermarket covering M&A.View full Profile

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