Siemens expects its markets to remain challenging in fiscal 2014. The company's short-cycle businesses are not anticipating a recovery until late in the fiscal year. It is expected that orders will exceed revenue, for a book-to-bill ratio above 1. Assuming that revenue on an organic basis remains level year-over-year, the company expects basic earnings per share (net income) for fiscal 2014 to grow by at least 15 percent from €5.08 in fiscal 2013.
In fiscal 2013, orders climbed by ten percent, excluding portfolio and currency translation effects, to €82.4 billion. The order backlog at the end of the fiscal year totaled €100 billion. Revenue declined slightly by one percent to €75.9 billion. The decline in revenue was due to, among other factors, the drop in orders in the prior year and a continuing difficult market environment for the company's short-cycle businesses.
Total Sectors Profit was €5.8 billion, compared to €7.3 billion a year earlier. Above all, the charges of €1.3 billion related to the Siemens 2014 program had an impact here. Thanks to a positive contribution from outside the Sectors and from discontinued operations, net income climbed to €4.4 billion, compared to €4.3 billion the previous year. Basic earnings per share were €5.08, compared to €4.74 a year earlier.
Siemens had launched the Siemens 2014 program in fiscal 2013 to close the gap in profitability with competitors and become faster and less complex. The charges of €1.3 billion previously mentioned were primarily related to personnel measures. Yet, as announced, the number of employees in continuing operations at Siemens remained virtually unchanged year-over year at 362,000.
The Sectors showed a mixed picture in fiscal 2013. In the Energy Sector, orders grew by eight percent, excluding portfolio and currency translation effects. Revenue declined by three percent. Sector profit was around €2 billion, up three percent year-over-year. The Industry Sector showed a three-percent decline in orders and a four-percent drop in revenue on an adjusted basis. The Sector was burdened by, among other factors, a more difficult market environment for short-cycle businesses than in the previous year. The Sector profit was €1.5 billion, compared with €2.4 billion a year earlier.
The Infrastructures & Cities Sector increased its orders by 28 percent, on an adjusted basis, thanks to a number of major contracts. While revenue was slightly above the prior-year level, profit was sharply reduced to €306 million from €1.1 billion in fiscal 2012 as a result of charges for Siemens 2014, project burdens and value adjustments. The Healthcare Sector profited in fiscal 2013 from the successful implementation of its Agenda 2013 program. Orders climbed four percent and revenue rose two percent, excluding portfolio and currency translation effects. Healthcare contributed the biggest share, €2 billion, of the Total Sectors Profit. Healthcare had launched its Agenda 2013 in calendar year 2011 to improve its innovative strength and competitiveness, and completed the initiative in fiscal 2013.
Based on the results of fiscal 2013, the Supervisory Board and Managing Board will propose a dividend of €3.00 per share for approval at the Annual Shareholders' Meeting in January 2014. For the future, Siemens is continuing to aim at a payout rate of 40 to 60 percent from dividends and eventual share buybacks.
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