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Press Release04 May 2011Siemens AGMunich, Germany
Siemens achieves broad-based growth in second quarter
Siemens expects for fiscal 2011 organic order intake to show a significant increase compared to order intake of €74.1 billion from continuing operations in fiscal 2010. Supported by an already strong order backlog, the company expects revenue, which was €69 billion for continuing operations in fiscal 2010, to return to mid-single-digit organic growth. Siemens further anticipates income from continuing operations to be at least €7.5 billion. Income from continuing operations in fiscal 2010 was €4.3 billion. For fiscal 2010, orders, revenue and income from continuing operations exclude results from Osram and Siemens IT Solutions and Services which are reported as discontinued operations in fiscal 2011. This outlook excludes effects that may arise from legal and regulatory matters – among others, possible effects from an ongoing arbitration proceeding between Siemens and Areva S.A. The arbitral tribunal will decide, among other things, on the possibility of increasing or reducing Areva's payment by as much as 40 percent.
In the second quarter of fiscal 2011, new orders surged 28 percent to €20.7 billion. Revenue climbed seven percent to €17.7 billion. Both results also profited from above-average growth in the emerging countries. The book-to-bill ratio in the second quarter was 1.17. At €92 billion, the combined backlog for the Sectors was at the record level of the prior quarter, despite negative currency translation effects.
The above-stated figures for new orders, revenue and profit do not include Siemens IT Solutions and Services, the Osram Division or the related effects on profit. Since the second quarter, both businesses have been assigned to discontinued operations. As a result, the corresponding figures for the second quarter of fiscal 2010 and the first quarter of fiscal 2011 have been calculated on a comparable basis. In the middle of December 2010, Siemens announced that it was selling Siemens IT Solutions and Services to Atos Origin. At the end of March, Siemens announced its intention to publicly list the Osram Division in the fall of 2011. The company intends to hold a minority stake in the future Osram and remain a long-term anchor shareholder.
In the second quarter of fiscal 2011, all three Sectors – Industry, Energy and Healthcare – contributed to the increase in new orders and revenue. With a record-setting 51 percent increase in order intake, the Energy Sector was the top growth driver. The Sector profited from a number of major orders for fossil power plants, wind power turbines and power transmission systems. Revenue at the Energy Sector climbed eight percent. At 22 percent, the increase in new orders at the Industry Sector was also in the double-digit range. Revenue at the Industry Sector rose nine percent. The largest gains in new orders were posted by the Industry Automation, Drive Technologies and Mobility Divisions. At the Healthcare Sector, new orders increased six percent and revenue five percent.
Total Sectors' profit doubled in the second quarter to €3.7 billion, with the Energy Sector making the largest contribution. At €2.4 billion, second-quarter Energy Sector profit – which includes €1.5 billion in pre-tax proceeds from the sale to Areva S.A. of a 34 percent stake in Areva NP – was nearly triple the figure for the second quarter of fiscal 2010. Due to the increase in Total Sectors' profit, income from continuing operations soared 122 percent to €3.2 billion.
Income from discontinued operations in the reporting period was a negative €338 million. Osram reported net income in the second quarter of €87 million on higher revenue in all businesses and regions. Siemens IT Solutions and Services, on the other hand, posted an after-tax loss of €345 million. This figure includes a pre-tax impairment of €464 million. Siemens' net income totaled €2.8 billion compared to €1.5 billion in the comparable prior-year period.
For this press release
Siemens AG (Berlin and Munich) is a global powerhouse in electronics and electrical engineering, operating in the industry, energy and healthcare sectors. For over 160 years, Siemens has stood for technological excellence, innovation, quality, reliability and internationality. The company is the world's largest provider of environmental technologies. More than one-third of its total revenue stems from green products and solutions. In fiscal 2010, which ended on September 30, 2010, revenue from continuing operations (excluding Osram and Siemens IT Solutions and Services) totaled €69 billion and net income from continuing operations €4.3 billion. At the end of September 2010, Siemens had around 336,000 employees worldwide on the basis of continuing operations. Further information is available on the Internet at: www.siemens.com.
This document contains forward-looking statements and information – that is, statements related to future, not past, events. These statements may be identified by words such as "expects," "looks forward to," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "will," "project" or words of similar meaning. Such statements are based on the current expectations and certain assumptions of Siemens' management, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond Siemens' control, affect Siemens' operations, performance, business strategy and results and could cause the actual results, performance or achievements of Siemens to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. In particular, Siemens is strongly affected by changes in general economic and business conditions as these directly impact its processes, customers and suppliers. This may negatively impact our revenue development and the realization of greater capacity utilization as a result of growth. Yet due to their diversity, not all of Siemens' businesses are equally affected by changes in economic conditions; considerable differences exist in the timing and magnitude of the effects of such changes. This effect is amplified by the fact that, as a global company, Siemens is active in countries with economies that vary widely in terms of growth rate. Uncertainties arise from, among other things, the risk of customers delaying the conversion of recognized orders into revenue or cancelling recognized orders, of prices declining as a result of adverse market conditions by more than is currently anticipated by Siemens' management or of functional costs increasing in anticipation of growth that is not realized as expected. Other factors that may cause Siemens' results to deviate from expectations include developments in the financial markets, including fluctuations in interest and exchange rates (in particular in relation to the U.S. dollar and the currencies of emerging markets such as China, India and Brazil), in commodity and equity prices, in debt prices (credit spreads) and in the value of financial assets generally. Any changes in interest rates or other assumptions used in calculating obligations for pension plans and similar commitments may impact Siemens' defined benefit obligations and the anticipated performance of pension plan assets resulting in unexpected changes in the funded status of Siemens' pension and other post-employment benefit plans. Any increase in market volatility, deterioration in the capital markets, decline in the conditions for the credit business, uncertainty related to the subprime, financial market and liquidity crises, or fluctuations in the future financial performance of the major industries served by Siemens may have unexpected effects on Siemens' results. Furthermore, Siemens faces risks and uncertainties in connection with: disposing of business activities, certain strategic reorientation measures; the performance of its equity interests and strategic alliances; the challenge of integrating major acquisitions, implementing joint ventures and other significant portfolio measures; the introduction of competing products or technologies by other companies or market entries by new competitors; changing competitive dynamics (particularly in developing markets); the risk that new products or services will not be accepted by customers targeted by Siemens; changes in business strategy; the interruption of our supply chain, including the inability of third parties to deliver parts, components and services on time resulting for example from natural disasters; the outcome of pending investigations, legal proceedings and actions resulting from the findings of, or related to the subject matter of, such investigations; the potential impact of such investigations and proceedings on Siemens' business, including its relationships with governments and other customers; the potential impact of such matters on Siemens' financial statements, and various other factors. More detailed information about certain of the risk factors affecting Siemens is contained throughout this report and in Siemens' other filings with the SEC, which are available on the Siemens website, www.siemens.com, and on the SEC’s website, www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forward-looking statement as expected, anticipated, intended, planned, believed, sought, estimated or projected. Siemens neither intends to, nor assumes any obligation to, update or revise these forward-looking statements in light of developments which differ from those anticipated.
This document contains forward-looking statements and information – that is, statements related to future, not past, events. These statements may be identified by words such as "expects," "looks forward to," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "will," "project" or words of similar meaning. Such statements are based on the current expectations and certain assumptions of Siemens' management, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond Siemens' control, affect Siemens' operations, performance, business strategy and results and could cause the actual results, performance or achievements of Siemens to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. In particular, Siemens is strongly affected by changes in general economic and business conditions as these directly impact its processes, customers and suppliers. This may negatively impact our revenue development and the realization of greater capacity utilization as a result of growth. Yet due to their diversity, not all of Siemens' businesses are equally affected by changes in economic conditions; considerable differences exist in the timing and magnitude of the effects of such changes. This effect is amplified by the fact that, as a global company, Siemens is active in countries with economies that vary widely in terms of growth rate. Uncertainties arise from, among other things, the risk of customers delaying the conversion of recognized orders into revenue or cancelling recognized orders, of prices declining as a result of adverse market conditions by more than is currently anticipated by Siemens' management or of functional costs increasing in anticipation of growth that is not realized as expected. Other factors that may cause Siemens' results to deviate from expectations include developments in the financial markets, including fluctuations in interest and exchange rates (in particular in relation to the U.S. dollar and the currencies of emerging markets such as China, India and Brazil), in commodity and equity prices, in debt prices (credit spreads) and in the value of financial assets generally. Any changes in interest rates or other assumptions used in calculating obligations for pension plans and similar commitments may impact Siemens' defined benefit obligations and the anticipated performance of pension plan assets resulting in unexpected changes in the funded status of Siemens' pension and other post-employment benefit plans. Any increase in market volatility, deterioration in the capital markets, decline in the conditions for the credit business, uncertainty related to the subprime, financial market and liquidity crises, or fluctuations in the future financial performance of the major industries served by Siemens may have unexpected effects on Siemens' results. Furthermore, Siemens faces risks and uncertainties in connection with: disposing of business activities, certain strategic reorientation measures; the performance of its equity interests and strategic alliances; the challenge of integrating major acquisitions, implementing joint ventures and other significant portfolio measures; the introduction of competing products or technologies by other companies or market entries by new competitors; changing competitive dynamics (particularly in developing markets); the risk that new products or services will not be accepted by customers targeted by Siemens; changes in business strategy; the interruption of our supply chain, including the inability of third parties to deliver parts, components and services on time resulting for example from natural disasters; the outcome of pending investigations, legal proceedings and actions resulting from the findings of, or related to the subject matter of, such investigations; the potential impact of such investigations and proceedings on Siemens' business, including its relationships with governments and other customers; the potential impact of such matters on Siemens' financial statements, and various other factors. More detailed information about certain of the risk factors affecting Siemens is contained throughout this report and in Siemens' other filings with the SEC, which are available on the Siemens website, www.siemens.com, and on the SEC’s website, www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forward-looking statement as expected, anticipated, intended, planned, believed, sought, estimated or projected. Siemens neither intends to, nor assumes any obligation to, update or revise these forward-looking statements in light of developments which differ from those anticipated.
Contact
Alexander Becker
Siemens AG
Wittelsbacherplatz 2
80333 Munich
Germany
80333 Munich
Germany
+49 (89) 636-36558