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Press Release03 December 2009Siemens AGMunich, Germany
Siemens demonstrates operational strength in a difficult environment in fiscal 2009
In fiscal 2009, ended on September 30, 2009, Siemens generated revenue of €76.7 billion compared to €77.3 billion in the prior year. On a comparable basis, excluding portfolio and currency translation effects, revenue was nearly unchanged year-over-year. In the case of an economic recession, Siemens had set the goal of seeing its revenue decline at less than half the rate of the global economy. The global GDP is expected to contract by 2.1 percent in 2009.
Revenue profited considerably from a high order backlog that slipped only slightly in fiscal 2009 to €81.2 billion from €83.1 billion a year earlier. New orders for fiscal 2009 came in at €79 billion. On an organic basis, excluding currency translation and portfolio effects, the order level was 14 percent lower than in the previous year.
Despite difficult market conditions, both the Energy and Healthcare Sectors proved their competitive strength and posted higher revenues than in the previous year. This growth was largely offset by a decline in revenue at the Industry Sector, which was especially hard hit by the economic downturn. On a geographic basis, revenue grew in the Americas, Asia and Australia, while declining in Europe, the Commonwealth of Independent States, Africa and the Middle East. Overall, the Environmental Portfolio – comprised of products and solutions from throughout the company – had a stabilizing effect on business. The portfolio generated revenue of €23 billion in fiscal 2009, an 11-percent increase year-over-year.
Total Sectors profit grows substantially
Total Sectors profit, the key indicator of how company operations are developing, climbed 13 percent in fiscal 2009 to €7.5 billion from €6.6 billion a year earlier. Siemens had set the goal of at least exceeding the previous year’s result. Profit rose in the Energy and Healthcare Sectors, while falling in the Industry Sector.
Total Sectors profit, the key indicator of how company operations are developing, climbed 13 percent in fiscal 2009 to €7.5 billion from €6.6 billion a year earlier. Siemens had set the goal of at least exceeding the previous year’s result. Profit rose in the Energy and Healthcare Sectors, while falling in the Industry Sector.
Income from continuing operations climbed 32 percent to €2.5 billion, from the prior-year €1.9 billion. Siemens also considerably exceeded its target of showing stronger growth here than growth in Total Sectors profit. Net income for the fiscal year was €2.5 billion. The prior-year’s net income of €5.9 billion included a gain of around €5.5 billion related in particular to the sale of Siemens VDO Automotive.
Cost reduction target reached earlier than planned – Portfolio oriented toward growth
The global program for reducing selling, general and administrative (SG&A) expenses was successfully concluded one year earlier than originally planned. Over the past two years, Siemens reduced its SG&A costs, as planned, by a total of €1.2 billion – from €12.1 billion in fiscal 2007 to €10.9 billion.
The global program for reducing selling, general and administrative (SG&A) expenses was successfully concluded one year earlier than originally planned. Over the past two years, Siemens reduced its SG&A costs, as planned, by a total of €1.2 billion – from €12.1 billion in fiscal 2007 to €10.9 billion.
Parallel to improving efficiency in the company, Siemens continued to rigorously orient its business to future growth. Even during the crisis, the company maintained its level of investments in research and development in order to stimulate organic growth. Expenditures for research and development climbed 3 percent to €3.9 billion in fiscal 2009. In addition, Siemens further strengthened its core businesses with portfolio adjustments and expanded its Environmental Portfolio.
With its acquisition of Solel Solar Systems and a 28-percent stake in Archimede Solar, Siemens has now taken technology leadership in the field of solar thermal energy. Moreover, the company has further expanded its know-how in the area of intelligent power grids (Smart Grids) by acquiring a 60-percent stake in Energy4U. At the same time, Siemens continued to drive its focus on core businesses. These efforts included selling the 50-percent stake in Fujitsu Siemens Computers and the Airfield Lighting and Wireless Modules businesses, as well as exiting from majority holdings in the remaining telecommunications business. The elimination of Other Operations was successfully completed in fiscal 2009, as announced.
Siemens is well prepared for the future – Outlook for fiscal 2010
Siemens has set its course for sustainable and profitable growth and is in a very good position to play a leading role in growth fields of the future. Overall, however, the market environment will remain challenging in fiscal 2010. Following a double-digit decline in orders in fiscal 2009, Siemens expects only a mid-single-digit percentage decline in organic revenue in fiscal 2010. The company expects Total Sectors profit between €6.0 billion and €6.5 billion and an increase of approximately 20 percent in income from continuing operations compared to €2.457 billion in the prior year.
Siemens has set its course for sustainable and profitable growth and is in a very good position to play a leading role in growth fields of the future. Overall, however, the market environment will remain challenging in fiscal 2010. Following a double-digit decline in orders in fiscal 2009, Siemens expects only a mid-single-digit percentage decline in organic revenue in fiscal 2010. The company expects Total Sectors profit between €6.0 billion and €6.5 billion and an increase of approximately 20 percent in income from continuing operations compared to €2.457 billion in the prior year.
This outlook is conditional on no material deterioration in the company’s pricing power during the fiscal year and on improving market conditions in the second half, particularly for shorter-cycle businesses. Furthermore, this outlook excludes major impacts that may arise during fiscal 2010 from restructuring, portfolio transactions, impairments, and legal and regulatory matters.
For this press release
Notice: The Annual Press Conference of Siemens AG with President and CEO Peter Löscher, CFO Joe Kaeser and member of the Managing Board Barbara Kux will be broadcast live in the Internet beginning at 9:00 a.m. (CET) at: www.siemens.com/pressekonferenz. The slide presentation can also be seen and a video of the conference is also available later. The conference for analysts and investors (in English) with Peter Löscher, Joe Kaeser and Barbara Kux can also be followed live beginning at 4:30 p.m. (CET) at: www.siemens.com/analystconference.
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, the company has stood for technical achievements, innovation, quality, reliability and internationality. In addition, Siemens is the world’s biggest provider of ecofriendly technologies. Around €23 billion, or nearly one-third of the company’s revenue, is generated by green products and solutions. In fiscal 2009, ended on September 30, 2009, Siemens had revenue of €76.7 billion and net income of €2.5 billion. At the end of September 2009, the company had around 405,000 employees worldwide. 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. For Siemens, particular uncertainties arise, among others, from: changes in general economic and business conditions (including margin developments in major business areas and recessionary trends); the possibility that customers may delay the conversion of booked orders into revenue or that prices will decline as a result of continued adverse market conditions to a greater extent than currently anticipated by Siemens’ management; developments in the financial markets, including fluctuations in interest and exchange rates, commodity and equity prices, debt prices (credit spreads) and financial assets generally; continued volatility and a further deterioration of the capital markets; a worsening in the conditions of the credit business and, in particular, additional uncertainties arising out of the subprime, financial market and liquidity crises; future financial performance of major industries that Siemens serves, including, without limitation, the Sectors Industry, Energy and Healthcare; the challenges of integrating major acquisitions and implementing joint ventures and other significant portfolio measures; the introduction of competing products or technologies by other companies; a lack of acceptance of new products or services by customers targeted by Siemens; changes in business strategy; the outcome of pending investigations and legal proceedings, including corruption investigations to which Siemens is currently subject and actions resulting from the findings of these investigations; the potential impact of such investigations and proceedings on Siemens’ ongoing business including its relationships with governments and other customers; the potential impact of such matters on Siemens’ financial statements; as well as 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 does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.
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, the company has stood for technical achievements, innovation, quality, reliability and internationality. In addition, Siemens is the world’s biggest provider of ecofriendly technologies. Around €23 billion, or nearly one-third of the company’s revenue, is generated by green products and solutions. In fiscal 2009, ended on September 30, 2009, Siemens had revenue of €76.7 billion and net income of €2.5 billion. At the end of September 2009, the company had around 405,000 employees worldwide. 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. For Siemens, particular uncertainties arise, among others, from: changes in general economic and business conditions (including margin developments in major business areas and recessionary trends); the possibility that customers may delay the conversion of booked orders into revenue or that prices will decline as a result of continued adverse market conditions to a greater extent than currently anticipated by Siemens’ management; developments in the financial markets, including fluctuations in interest and exchange rates, commodity and equity prices, debt prices (credit spreads) and financial assets generally; continued volatility and a further deterioration of the capital markets; a worsening in the conditions of the credit business and, in particular, additional uncertainties arising out of the subprime, financial market and liquidity crises; future financial performance of major industries that Siemens serves, including, without limitation, the Sectors Industry, Energy and Healthcare; the challenges of integrating major acquisitions and implementing joint ventures and other significant portfolio measures; the introduction of competing products or technologies by other companies; a lack of acceptance of new products or services by customers targeted by Siemens; changes in business strategy; the outcome of pending investigations and legal proceedings, including corruption investigations to which Siemens is currently subject and actions resulting from the findings of these investigations; the potential impact of such investigations and proceedings on Siemens’ ongoing business including its relationships with governments and other customers; the potential impact of such matters on Siemens’ financial statements; as well as 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 does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.