Löscher cleaned up Siemens after the bribery scandal and drove it to a record €4.1B profit

Siemens was hit by a massive bribery investigation from 2006, paying billions in fines, and in 2007 brought in outsider Peter Löscher to rebuild. He overhauled compliance, replaced senior managers, cut tens of thousands of jobs and pruned the portfolio toward electrification, automation and healthcare.

The financial crisis interrupted the recovery: the company's fourth quarter of fiscal 2009 ended with a net loss of €1.06 billion, BBC reported. But the cost base had been reset, and the rebound came quickly.

Fiscal 2010 (ended September 30, 2010) delivered record profit: Total Sectors profit rose to €7.8 billion, net income climbed 63% to €4.1 billion and revenue stabilized at €76 billion, per Siemens' results release. 'We're coming out of the economic downturn with full momentum,' Löscher said.

Fiscal 2010 net income climbed 63% to €4.1B with record Total Sectors profit of €7.8B and revenue of €76B.

Replacing management and installing compliance made the cleanup credible.

Portfolio pruning concentrated capital on businesses with pricing power.

Cost discipline let the 2010 recovery drop straight to the bottom line.

Short-cycle businesses like automation recovered faster than project businesses.

A compliance and portfolio overhaul, done while cutting costs, can turn a scandal-scarred giant into a disciplined profit machine.

Siemens continued to post strong profits in fiscal 2011 and 2012, and the refocused portfolio later underpinned its push into digital industries; Löscher left in 2013 after the company missed its profit targets.