Siemens AG
Earnings Release
Munich, July 27, 2006
Siemens in the third quarter (April 1 to June 30) of fiscal 2006
-- Net income was Euro 792 million and earnings per share were Euro 0.89, both more
than double the level in the third quarter a year earlier. Income on a
continuing basis was Euro 804 million, up 30% compared to the prior-year period.
-- Group profit from Operations was Euro 1.278 billion, 32% higher than in the
third quarter of the prior year.
-- Orders and sales each rose 14%, to Euro 22.442 billion and Euro 21.173 billion,
respectively.
-- On a continuing basis, net cash from operating and investing activities was
Euro 1.768 billion, including Euro 1.127 billion in proceeds from the sale of
Siemens' remaining shares in Infineon Technologies AG. For comparison,
operating and investing activities in the third quarter a year earlier used
net cash of Euro 284 million, including Euro 731 million in net cash used to acquire
CTI Molecular Imaging, Inc.
"The third quarter continued our overall momentum, with higher income, sales and
orders compared to a year earlier," said Siemens CEO Klaus Kleinfeld. "It was a
particularly successful quarter in terms of reshaping our business portfolio. In
addition to announcing a new joint venture for our carrier communications
business with an outstanding partner in Nokia, we also initiated strategic
acquisitions that will make Siemens an important player in clinical diagnostics,
one of the most dynamic sectors of medicine."
"For the full year, we expect to deliver income from continuing operations at
least level with the prior year, despite significantly higher charges at our
Information & Communications Groups and substantial changes in our business
portfolio. All our efforts remain focused on meeting our stated 2007 targets."
For the third quarter of fiscal 2006, ended June 30, 2006, Siemens reported net
income of Euro 792 million, up 104% compared to Euro 389 million in the same period a
year earlier. Basic and diluted earnings per share rose to Euro 0.89 and Euro 0.85,
respectively, from Euro 0.44 and Euro 0.42 in the third quarter a year earlier. Income
from continuing operations in the third quarter was Euro 804 million, a 30% increase
from Euro 618 million a year earlier. Basic and diluted earnings per share from
continuing operations were Euro 0.90 and Euro 0.86, respectively. A year earlier, basic
and diluted earnings per share from continuing operations in the third quarter
were Euro 0.69 and Euro 0.67, respectively.
Group profit from Operations in the third quarter was Euro 1.278 billion, up 32%
from Euro 971 million in the prior-year period, as a majority of the Groups in
Operations posted higher earnings year-over-year. Major earnings contributions
came from Automation and Drives (A&D), Medical Solutions (Med), Power Generation
(PG), Siemens VDO Automotive (SV), Power Transmission and Distribution (PTD),
and Osram. Severance charges at Communications (Com) and Siemens Business
Services (SBS) totaled Euro 69 million, somewhat more than in the prior-year period
but less than the level expected for the fourth quarter of fiscal 2006.
Income before income taxes from the other two components of Siemens worldwide,
Financing and Real Estate and Corporate Treasury, rose to Euro 185 million from Euro 162
million in the third quarter a year earlier. Net income also benefited from the
sale of Infineon shares mentioned above, which resulted in a Euro 33 million gain
taken within corporate items.
Third-quarter orders of Euro 22.442 billion were up 14% compared to the third
quarter a year earlier, led by strong order growth at Transportation Systems
(TS), A&D and PTD. Sales increased 14% as well, to Euro 21.173 billion.
International markets were the primary source of top-line growth, as sales in
Germany edged up 1% and orders in Germany declined 2% compared to the prior-year
level. Currency translation effects in the quarter were negligible. Organic
growth in the third quarter included a 9% rise in orders and a 7% increase in
sales for Siemens overall, despite declines in Germany of 4% in orders and 1% in
sales. Portfolio effects included divestment of the Product Related Services
(PRS) business at SBS at the beginning of the current quarter, and a number of
major acquisitions in the fourth quarter of the prior year including VA
Technologie AG (VA Tech). Beginning with the fourth quarter, these acquisitions
will contribute to sales and orders on an organic basis rather than as new
volume, with a corresponding effect on reported growth rates.
On a continuing basis, net cash provided from operating and investing activities
within Operations in the third quarter was Euro 1.510 billion compared to Euro 101
million provided in the prior-year period. The current period included Euro 1.127
billion in proceeds from the Infineon share sale, while the prior-year period
included Euro 731 million used to acquire CTI Molecular Imaging, Inc. (CTI). Cash
payments for severance at Com and SBS were higher in the current period,
totaling Euro 81 million compared to Euro 24 million in the prior-year period. Both
periods included significant cash used for inventories and capital expenditures
associated with business growth. Within Financing and Real Estate and Corporate
Treasury activities, net cash from operating and investing activities in the
third quarter was Euro 258 million compared to a negative Euro 385 million a year
earlier. For Siemens on a continuing basis, net cash from operating and
investing activities in the third quarter was Euro 1.768 billion compared to a
negative Euro 284 million a year earlier.
Operations in the third quarter of fiscal 2006
Information and Communications
Communications (Com)
Third Quarter
--------------------------------------------------
%Change
(Euro in millions) 2006 2005 Actual Adjusted*
----------------------------------------------------------------------------
Group profit 3 (81)
Group profit margin 0.1% (2.7)%
----------------------------------------------------------------------------
Sales 2,972 2,955 1% (1)%
New orders 3,258 3,099 5% 4%
----------------------------------------------------------------------------
*Excluding portfolio effects of 2% and 1% on sales and orders, respectively.
In the third quarter, Siemens took further significant steps toward completing
the strategic reorientation of Com. The Group's carrier networks business and
its enterprise networks business are held for disposal as of June 30, 2006, and
Siemens announced an agreement to merge the carrier activities into a joint
venture with Nokia Corporation. This transaction is expected to close by the
second quarter of fiscal 2007 at the latest. Also in the third quarter, Com's
home and office communication products unit was carved out as a separate
business; it is now included in Other Operations on a retroactive basis, and its
results are no longer included at Com. Finally, the Wireless Modules division is
scheduled to become part of A&D at the beginning of fiscal 2007.
Third-quarter sales for Com edged up 1% year-over-year, to Euro 2.972 billion, and
orders rose 5%, to Euro 3.258 billion. Group profit at Com was positive compared to
a loss in the third quarter a year earlier. Severance charges of Euro 34 million
were nearly unchanged compared to the prior-year quarter. The carrier business
posted higher sales and also increased its earnings contribution year-over-year.
Sales at the enterprise networks business declined year-over-year, and its loss
widened. Com expects higher severance charges in the fourth quarter.
Siemens Business Services (SBS)
Third Quarter
--------------------------------------------------
%Change
(Euro in millions) 2006 2005 Actual Adjusted*
----------------------------------------------------------------------------
Group profit (99) (109) 9%
Group profit margin (9.2)% (8.2)%
----------------------------------------------------------------------------
Sales 1,081 1,331 (19)% (1)%
New orders 1,054 1,331 (21)% 2%
----------------------------------------------------------------------------
*Excluding portfolio effects of (18)% and (23)% on sales and orders,
respectively.
SBS closed the previously announced sale of its PRS business at the beginning of
the third quarter. On an adjusted basis, excluding portfolio effects, sales of
Euro 1.081 billion came within 1% of the prior-year level and orders of Euro 1.054
billion were up 2% year-over-year. Group profit was again negative. The current
period included higher severance charges compared to the prior year, at Euro 35
million, as well as adverse effects related to the divestiture of PRS.
Automation and Control
Automation and Drives (A&D)
Third Quarter
--------------------------------------------------
%Change
(Euro in millions) 2006 2005 Actual Adjusted*
----------------------------------------------------------------------------
Group profit 396 333 19%
Group profit margin 12.3% 13.2%
----------------------------------------------------------------------------
Sales 3,214 2,515 28% 10%
New orders 3,541 2,692 32% 11%
----------------------------------------------------------------------------
*Excluding portfolio effects of 18% and 21% on sales and orders,
respectively.
A&D posted a record quarterly profit of Euro 396 million, up 19% year-over-year.
A&D's Group profit margin remained high, despite a changing sales mix and
increased selling costs associated with strategic expansion of the Group's
business base. Both sales and orders included a combination of double-digit
organic growth and new volume from acquisitions between the periods under
review. As a result, sales climbed to Euro 3.214 billion, up 28% year-over-year, and
orders rose to Euro 3.541 billion, 32% higher than the prior-year period. A&D's
continued expansion in Asia-Pacific included particularly rapid growth in China.
Industrial Solutions and Services (I&S)
Third Quarter
--------------------------------------------------
%Change
(Euro in millions) 2006 2005 Actual Adjusted*
----------------------------------------------------------------------------
Group profit 78 13 500%
Group profit margin 3.5% 0.9%
----------------------------------------------------------------------------
Sales 2,232 1,401 59% 17%
New orders 1,744 1,384 26% 10%
----------------------------------------------------------------------------
*Excluding portfolio effects of 42% and 16% on sales and orders,
respectively.
Third-quarter Group profit at I&S was Euro 78 million, including a substantial
positive contribution from the VA Tech acquisition. For comparison, Group profit
in the prior-year period included project-related charges. Sales of Euro 2.232
billion in the third quarter were 59% higher than in the prior-year period, and
included increases in all lines of business. Orders for the quarter rose 26%
year-over-year, to Euro 1.744 billion. The growth in both sales and orders benefited
strongly from the VA Tech acquisition.
Siemens Building Technologies (SBT)
Third Quarter
--------------------------------------------------
%Change
(Euro in millions) 2006 2005 Actual Adjusted*
----------------------------------------------------------------------------
Group profit 45 26 73%
Group profit margin 4.0% 2.4%
----------------------------------------------------------------------------
Sales 1,122 1,075 4% 3%
New orders 1,142 1,139 0% (1)%
----------------------------------------------------------------------------
*Excluding portfolio effects of 1% on sales and orders.
SBT posted Group profit of Euro 45 million, up from Euro 26 million a year earlier. The
increase resulted in part from increased capacity utilization combined with
higher sales, which rose 4% to Euro 1.122 billion. Profitability at SBT also
benefited from greater emphasis on higher-margin activities based on products
and services. Third-quarter orders were level with the prior-year period, at
Euro 1.142 billion.
Power
Power Generation (PG)
Third Quarter
--------------------------------------------------
%Change
(Euro in millions) 2006 2005 Actual Adjusted*
----------------------------------------------------------------------------
Group profit 213 224 (5)%
Group profit margin 8.1% 10.6%
----------------------------------------------------------------------------
Sales 2,635 2,114 25% 22%
New orders 2,475 2,646 (6)% (11)%
----------------------------------------------------------------------------
*Excluding portfolio effects of 3% and 5% on sales and orders, respectively.
PG's Group profit of Euro 213 million in the third quarter included charges related
to a major project and a changed sales mix compared to the prior year. In
particular, while the Wind Power division doubled its third-quarter sales and
earnings compared to a year earlier, its earnings margin is rising from a lower
level compared to PG's fossil power generation business. Third-quarter sales for
PG overall climbed 25% year-over-year, to Euro 2.635 billion, as the Group converted
strong order growth in recent quarters to current business. Orders were Euro 2.475
billion compared to Euro 2.646 billion in the third quarter a year earlier, which
included a higher level of large orders in the fossil power generation business.
After the close of the quarter, PG announced an agreement to acquire AG Kühnle,
Kopp & Kausch of Germany, a maker of steam turbines, turbocompressors and fans
for industrial applications with fiscal 2005 revenues of approximately Euro 270
million. This transaction, which is pending regulatory review, is expected to
close in the fourth quarter.
Power Transmission and Distribution (PTD)
Third Quarter
--------------------------------------------------
%Change
(Euro in millions) 2006 2005 Actual Adjusted*
----------------------------------------------------------------------------
Group profit 113 27 319%
Group profit margin 6.6% 2.9%
----------------------------------------------------------------------------
Sales 1,718 945 82% 52%
New orders 2,075 1,323 57% 39%
----------------------------------------------------------------------------
*Excluding currency translation effects of 1% on orders, and portfolio
effects of 30% and 17% on sales and orders, respectively.
A very strong third quarter for PTD included substantial increases in Group
profit, sales and orders. The rise in Group profit, to Euro 113 million, was driven
by higher sales at every division, led by the High Voltage division. For
comparison, Group profit at PTD a year earlier included severance charges in the
Transformers division. New volume from the VA Tech acquisition added to the
Group's exceptionally strong organic growth in the third quarter, particularly
including large orders in the Middle East. As a result, third-quarter sales
jumped 82%, to Euro 1.718 billion, and orders for the quarter climbed 57%
year-over-year, to Euro 2.075 billion.
Transportation
Transportation Systems (TS)
Third Quarter
--------------------------------------------------
%Change
(Euro in millions) 2006 2005 Actual Adjusted*
----------------------------------------------------------------------------
Group profit 18 6 200%
Group profit margin 1.8% 0.6%
----------------------------------------------------------------------------
Sales 987 1,075 (8)% (10)%
New orders 1,550 768 102% 99%
----------------------------------------------------------------------------
*Excluding portfolio effects of 2% and 3% on sales and orders, respectively.
Group profit at TS was Euro 18 million in the third quarter, up from Euro 6 million in
the same period a year earlier. Orders more than doubled compared to the
prior-year period, to Euro 1.550 billion, led by a major new contract for trains and
maintenance in Russia. Third-quarter sales of Euro 987 million were below the level
a year earlier.
Siemens VDO Automotive (SV)
Third Quarter
--------------------------------------------------
%Change
(Euro in millions) 2006 2005 Actual Adjusted*
----------------------------------------------------------------------------
Group profit 158 178 (11)%
Group profit margin 6.1% 6.9%
----------------------------------------------------------------------------
Sales 2,604 2,566 1% (1)%
New orders 2,600 2,733 (5)% (7)%
----------------------------------------------------------------------------
*Excluding currency translation effects of 1% on sales and orders, and
portfolio effects of 1% on sales and orders.
Group profit at SV was Euro 158 million, including Euro 17 million in charges for
capacity adjustments and higher research and development (R&D) investments.
Sales and orders were Euro 2.604 billion and Euro 2.600 billion, respectively, in the
seasonally strong quarter. Orders in the prior-year period included a large
contract won jointly with SBS.
Medical
Medical Solutions (Med)
Third Quarter
--------------------------------------------------
%Change
(Euro in millions) 2006 2005 Actual Adjusted*
----------------------------------------------------------------------------
Group profit 233 241 (3)%
Group profit margin 12.7% 12.5%
----------------------------------------------------------------------------
Sales 1,837 1,921 (4)% (4)%
New orders 2,088 2,119 (1)% 1%
----------------------------------------------------------------------------
*Excluding currency translation effects of (1)% on orders, and portfolio
effects of (1)% on orders.
Med was one of Siemens' top earnings contributors, with Euro 233 million in Group
profit in the third quarter. The difference compared to the prior year is
primarily volume-related, as Med increased its quarterly Group profit margin
year-over-year. While sales of Euro 1.837 billion came in lower compared to the
strong third quarter a year earlier, orders of Euro 2.088 billion were up slightly
on an adjusted basis.
During the quarter Med announced two major acquisitions that would strengthen
its competitive position in the strategically important medical diagnostics
market. The first involves Diagnostic Products Corporation (DPC) in the U.S.,
with world-leading capabilities in in-vitro clinical diagnostics that strongly
complement Med's established strengths in in-vivo diagnostic imaging. The
preliminary purchase price for DPC is approximately Euro 1.5 billion and the
transaction is expected to close in the fourth quarter. Med also announced an
agreement to acquire the Diagnostics division of Bayer AG of Germany, which
would greatly expand Med's position in the fast-growing field of molecular
diagnostics. The Bayer Diagnostics acquisition, which requires regulatory
approval, had a preliminary purchase price of approximately Euro 4.2 billion. The
transaction is expected to close early in fiscal 2007.
Lighting
Osram
Third Quarter
--------------------------------------------------
%Change
(Euro in millions) 2006 2005 Actual Adjusted*
----------------------------------------------------------------------------
Group profit 111 111 0%
Group profit margin 10.2% 10.7%
----------------------------------------------------------------------------
Sales 1,089 1,038 5% 5%
New orders 1,089 1,038 5% 5%
----------------------------------------------------------------------------
*Excluding currency translation effects.
Group profit at Osram was Euro 111 million, level with the prior year despite higher
costs associated with the market launch of innovative new products. The Group
grew in all regions, posting sales of Euro 1.089 billion for the quarter compared to
Euro 1.038 billion in the same period a year earlier.
Other Operations
Other Operations consist of centrally held operating businesses not related to a
Group. These businesses include joint ventures, equity investments, a portion of
the VA Tech acquisition, and the distribution and industry logistics (Dematic)
businesses carved out of the former Logistics and Assembly Systems Group. Other
Operations also include Siemens' home and office communications products unit
(SHC), which was carved out of Com as a stand-alone business. Beginning in the
third quarter, results for SHC are included within Other Operations on a
retroactive basis to maintain a meaningful comparison with prior periods.
In the third quarter, Group profit from Other Operations was Euro 9 million compared
to Euro 2 million a year earlier. Earnings from joint ventures were higher compared
to the prior-year period. Dematic posted similar losses in both periods, while
SHC posted a loss following a positive result in the prior-year period. Sales
from Other Operations rose to Euro 1.176 billion from Euro 998 million a year earlier,
including new volume from VA Tech. In June of 2006, Siemens agreed to divest
Dematic pending regulatory approval. The transaction is expected to close in the
fourth quarter, and result in a loss.
Corporate items, pensions and eliminations
Corporate items, pensions and eliminations were a negative Euro 252 million compared
to a negative Euro 248 million in the third quarter a year earlier. Corporate items
improved year-over-year, due primarily to a Euro 33 million gain from the sale of
Siemens' remaining Infineon shares, while centrally carried pension expense
increased primarily due to a reduction in the discount rate assumption at
September 30, 2005.
Financing and Real Estate
Siemens Financial Services (SFS)
Third Quarter
-------------------------------------------
(Euro in millions) 2006 2005 %Change
----------------------------------------------------------------------------
Income before income taxes 64 80 (20)%
----------------------------------------------------------------------------
June 30, Sept. 30,
2006 2005
----------------------------------------------------------------------------
Total assets 10,011 10,148 (1)%
----------------------------------------------------------------------------
Income before income taxes at SFS was Euro 64 million in the third quarter. The
higher income in the prior-year period resulted from a substantial gain on the
sale of a 51% stake in the real estate funds management business of Siemens
Kapitalanlagegesellschaft mbH (SKAG).
Siemens Real Estate (SRE)
Third Quarter
-------------------------------------------
(Euro in millions) 2006 2005 %Change
----------------------------------------------------------------------------
Income before income taxes 6 44 (86)%
----------------------------------------------------------------------------
Sales 419 403 4%
----------------------------------------------------------------------------
June 30, Sept. 30,
2006 2005
----------------------------------------------------------------------------
Total assets 3,368 3,496 (4)%
----------------------------------------------------------------------------
In the third quarter, SRE recorded income before income taxes of Euro 6 million
compared to Euro 44 million in the same period a year earlier. While the current
period was affected by higher vacancy costs and lower rental income, in part due
to weaker demand in Germany, the prior-year period benefited from higher income
from real estate disposals.
Eliminations, reclassifications and Corporate Treasury
Income before income taxes from Eliminations, reclassifications and Corporate
Treasury was Euro 115 million compared to Euro 38 million in the third quarter a year
earlier. The difference was due to increased interest income from intra-company
financing and from positive effects at Corporate Treasury from derivative
activities not qualifying for hedge accounting.
Income statement highlights in the third quarter
Net income for Siemens in the third quarter was Euro 792 million, more than double
compared to Euro 389 million in the third quarter a year earlier. Income from
continuing operations was Euro 804 million compared to Euro 618 million in the
prior-year period. In both periods under review, discontinued operations relate
to the sale of the mobile devices business. Group profit from Operations was 32%
higher than a year earlier, primarily due to higher gross profit driven by
higher sales. Gross profit margin for the third quarter came in lower, however,
at 28.0% compared to 28.5% a year earlier. Third-quarter R&D expenses increased
to Euro 1.408 billion from Euro 1.251 billion a year earlier, including higher outlays
at SV. Due to the significant increase in sales year-over-year, R&D declined to
6.6% of sales from 6.7% in the prior-year quarter, and marketing, selling and
general administrative expenses fell to 17.1% of sales from 18.2% in the third
quarter a year earlier.
Income and earnings per share in the first nine months
Net income for Siemens in the first nine months of fiscal 2006 was Euro 2.492
billion, up from Euro 2.171 billion in the first nine months a year earlier. Basic
and diluted earnings per share for the first nine months were Euro 2.80 and Euro 2.67
respectively. In the prior-year period, basic and diluted earnings per share
were Euro 2.44 and Euro 2.34, respectively. Income from continuing operations in the
first nine months was Euro 2.520 billion compared to Euro 2.561 billion in the same
period a year earlier. The current period includes a higher effective tax rate
compared to the prior-year period. On a continuing basis, basic and diluted
earnings per share were Euro 2.83 and Euro 2.70, respectively, compared to Euro 2.88 and
Euro 2.75 in the same period a year earlier. Group profit from Operations for the
first nine months rose to Euro 4.005 billion from Euro 3.761 billion in the prior-year
period, despite a substantial increase in severance charges at Com and SBS only
partially offset by higher gains from sales of Juniper shares at Com. The
severance charges at SBS and Com totaled Euro 596 million compared to Euro 165 million
in the prior-year period. Juniper gains at Com were Euro 356 million compared to
Euro 208 million in the first nine months a year earlier.
Order and sales trends for the first nine months
Orders in the first nine months were Euro 73.643 billion, a 22% increase from
Euro 60.195 billion in the prior-year period. Sales of Euro 63.402 billion were up 19%
from Euro 53.339 billion in the first nine months a year earlier. On an organic
basis, excluding currency translation effects and the net effect of acquisitions
and dispositions, orders climbed 10% and sales rose 8%.
Growth was driven by international markets, where major orders were both
numerous and well-distributed. International orders for the first nine months
were up 27% year-over-year, to Euro 61.076 billion, while sales for the first nine
months climbed 23%, to Euro 51.569 billion. In Germany, orders and sales each rose
3%, to Euro 12.567 billion and Euro 11.833 billion, respectively, primarily due to
acquisitions between the periods under review. Within international growth,
Asia-Pacific orders climbed to Euro 11.668 billion and sales reached Euro 9.233 billion,
both up 35% year-over-year. Within Asia-Pacific, orders in China for the first
nine months increased 34%, to Euro 4.109 billion, and sales in China surged 56%
year-over-year, to Euro 3.201 billion. Growth in the Americas was robust as well,
particularly due to strong portfolio and currency translation effects. The
region generated 22% order growth and 24% sales growth resulting in nine-month
totals of Euro 18.165 billion and Euro 16.578 billion, respectively. Within this trend,
the U.S. posted orders of Euro 13.634 billion and sales of Euro 12.726 billion, both 22%
higher than in the first nine months a year earlier. In Europe outside Germany,
orders for the first nine months were up 19% year-over-year, at Euro 22.614 billion,
and sales increased 14%, to Euro 19.881 billion, both benefiting strongly from
portfolio effects.
Liquidity for the first nine months
In the first nine months, on a continuing basis, operating and investing
activities provided net cash of Euro 1.349 billion compared to net cash used of
Euro 2.148 billion in the prior-year period. Discontinued operations used net cash
of Euro 316 million in the first nine months this year, compared to net cash used of
Euro 789 million in the same period a year earlier.
SFS, SRE and
Corporate
Continuing operations Operations Treasury* Siemens
---------------------------------------------------------------------------------------------------
Nine months ended June 30,
(Euro in millions) 2006 2005 2006 2005 2006 2005
---------------------------------------------------------------------------------------------------
Net cash provided by (used in):
Operating activities 1,286 687 1,351 586 2,637 1,273
Investing activities (533) (2,737) (755) (684) (1,288) (3,421)
---------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating and
investing activities - continuing operations 753 (2,050) 596 (98) 1,349 (2,148)
---------------------------------------------------------------------------------------------------
* Also includes eliminations and reclassifications.
Within Operations, operating activities provided net cash of Euro 1.286 billion in
the first nine months of fiscal 2006, even as cash outflows for severance
payouts at Com and SBS rose to Euro 503 million from Euro 90 million in the same period
a year earlier. In the prior-year period, operating activities provided net cash
of Euro 687 million, including Euro 1.496 billion in supplemental contributions to
Siemens pension plans. Both periods included significant build-ups of net
working capital associated with business growth, particularly for inventories.
Investing activities also showed the effects of overall business growth in both
periods. While cash outflows for capital expenditures were higher in the current
period, payments for acquisitions were higher in the first nine months of the
prior year, which included Euro 731 million for CTI at Med. Proceeds from sales of
investments were higher in the current period and net cash from the sale of
marketable securities increased substantially due to Euro 1.127 billion proceeds
from the sale of Infineon shares in the third quarter of fiscal 2006. This
results in net cash used in investing activities of Euro 533 million in the first
nine months of the current year, compared to Euro 2.737 billion a year earlier.
The other two components of Siemens, which include Financing and Real Estate and
Corporate Treasury activities, provided net cash from operating and investing
activities of Euro 596 million in the first nine months of fiscal 2006. In the same
period a year earlier, these components used net cash of Euro 98 million from
operating and investing activities.
Funding status of pension plans
The estimated underfunding of Siemens' principal pension plans as of June 30,
2006 amounted to Euro 3.5 billion, which is approximately the same amount as at the
end of fiscal 2005. Pension service and interest costs were offset by regular
employer contributions and an actual return on plan assets in the first nine
months of Euro 531 million. This total represents a 3.4% return on an annualized
basis, below the expected annual return of 6.7%.
Economic Value Added
Economic Value Added (EVA) in the first nine months of fiscal 2006 was positive
and improved due to higher earnings compared to the same period a year earlier.
Siemens AG Reference number: AXX200607.45 e
Corporate Communications Wolfram Trost
Media Relations 80312 Munich
80312 Munich Tel.: +49 89 636-34794 Fax: -32825
E-mail: wolfram.trost@siemens.com
Note: Beginning at 10:00 a.m. CEST on July 27, 2006, the telephone conference at
which CEO Dr. Klaus Kleinfeld and CFO Joe Kaeser discuss the quarterly figures
will be broadcast live on the Internet at www.siemens.com/conferencecall. The
accompanying slide presentation can also be viewed here, and a recording of the
conference will subsequently be made available as well. Starting at 12:00 CEST,
Dr. Klaus Kleinfeld and Joe Kaeser will hold a telephone conference in English
for analysts and investors, which can be followed live at
www.siemens.com/analystcall.
This document contains forward-looking statements and information - that is,
statements related to future, not past, events. These statements may be
identified by words as "expects," "anticipates," "intends," "plans," "believes,"
"seeks," "estimates," "will" or words of similar meaning. Such statements are
based on our current expectations and certain assumptions, and are, therefore,
subject to certain risks and uncertainties. A variety of factors, many of which
are beyond Siemens' control, affect its operations, performance, business
strategy and results and could cause the actual results, performance or
achievements of Siemens worldwide to be materially different from any future
results, performance or achievements that may be expressed or implied by such
forward-looking statements. For us, particular uncertainties arise, among
others, from changes in general economic and business conditions, changes in
currency exchange rates and interest rates, introduction of competing products
or technologies by other companies, lack of acceptance of new products or
services by customers targeted by Siemens worldwide, changes in business
strategy, regulatory action and various other factors. More detailed information
about certain of these factors is contained in Siemens' 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.
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