TIDMSIE
Facts and figures for shareholders Fiscal 2012 October 1, 2011 -
September 30, 2012
Peter Löscher President and Chief Executive Officer of Siemens
AG
Fiscal 2012 was not an easy year for us. Even though we achieved
one of our best results ever - despite the difficult economic
environment worldwide - we didn't fully attain our goals of
outperforming the market and our competitors.To move forward, we've
launched a new Company-wide program. Presented in November 2012,
the initiative will enable us to make effective, concrete
adjustments in our operations - changes we'll have to make if we're
to continue generating profitable growth of the kind we've achieved
in the last few years. For my colleagues on the Managing Board and
myself, the trust that you've placed in our Company is an
invaluable source of support.All in all, Siemens is well positioned
to seize the opportunities of the future - as we demonstrated again
in fiscal 2012. Continuing a decade of substantially improved
performance, we posted a 7% increase in revenue and generated
EUR5.2 billion in income from continuing operations, one of our
largest profits ever. I would like to thank Siemens employees
around the world for their commitment and their contribution to
this success.The unchanged dividend proposal of EUR3.00 that the
Managing Board and the Supervisory Board will make to the 2013
Annual Shareholders' Meeting is also a sign of trust and
continuity. We want you to profit from the positive developments at
our Company - and we want you to continue placing your trust in us.
Because Siemens is and will remain a strong company.
Dr. Gerhard Cromme Chairman of the Supervisory Board of Siemens
AG
Despite a difficult economic environment and special burdens in
the project business, Siemens' overall performance in fiscal 2012
was respectable.In fiscal 2012, the Supervisory Board performed the
duties assigned to it by law, the Siemens Articles of Association
and the Bylaws for the Supervisory Board. We regularly advised the
Managing Board on the management of the Company and monitored the
Managing Board's activities. We were directly involved in all major
decisions regarding the Company. In written and oral reports, the
Managing Board regularly provided us with timely and comprehensive
information on Company planning and business operations as well as
on the strategic development and current state of the Company.
Deviations from business plans were explained to us in detail. The
Managing Board coordinated with us the Company's strategic
orientation. On the basis of reports submitted by the Managing
Board, we considered in detail all business transactions of major
significance to the Company. The proposals made by the Managing
Board were approved after detailed examination and consultation.In
my capacity as Chairman of the Supervisory Board, I was in regular
contact with the Managing Board between Supervisory Board meetings
and was kept up-to-date on current developments in the Company's
business situation and on key business transactions.The Supervisory
Board would like to thank the members of the Managing Board as well
as the employees and the employee representatives of all Siemens
companies for their work.
Fiscal 2012 - Financial summary
In fiscal 2012 we increased revenue by 7% year-over-year to
EUR78.296 billion, with all four Sectors and all three reporting
regions contributing to growth. New orders came in near the level
of revenue but 10% lower compared to the prior year, which included
substantially higher volumes from large orders in our Sectors
Infrastructure&Cities and Energy. For example, orders a year
earlier included Siemens' largest-ever order for trains, worth
EUR3.7 billion.In fiscal 2012, we achieved income from continuing
operations of EUR5.184 billion. While this was one of our highest
results ever, it was substantially lower than in the prior year and
lower than we expected one year ago. The decline was due mainly to
our Energy Sector which took substantial charges mainly related to
projects with a complex marine and regulatory environment in the
current period and benefited from the divestment of its share in
Areva NP in the prior year. Due mainly to challenges in these
projects we reduced our income guidance during fiscal 2012.
Furthermore, profit in Energy in fiscal 2012 was also burdened by
profit impacts of EUR327 million (pretax) related to a change in
credit risk assessment for Iran. Income from continuing operations
in fiscal 2012 was also held back by a less favorable market
environment in the second half of the fiscal year. This was
particularly evident in the Industry Sector where profit came in
10% lower year-over-year. Profit at Infrastructure&Cities in
fiscal 2012 also declined year-over-year, as the Sector took EUR86
million (pretax) in charges at a rolling stock project in Germany.
In contrast, our Healthcare Sector increased profit year-over-year.
For comparison, profit at Healthcare in fiscal 2011 was burdened by
charges related to particle therapy projects. In fiscal 2012,
income from continuing operations was also burdened by a sharply
higher loss at Equity Investments. This was due primarily to our
share in NSN. In fiscal 2012, NSN took substantial restructuring
charges in connection with its previously announced measures aimed
at maintaining its long-term competitiveness and improving
profitability.Net income in fiscal 2012 was EUR4.590 billion, down
from EUR6.321 billion a year earlier. This decline was due to lower
income from continuing operations, only partly offset by lower
losses from discontinued operations. In the prior year,
discontinued operations were burdened by a substantial loss related
to our former Siemens IT Solutions and Services business, partly
offset by income from discontinued operations related to OSRAM.
Income from discontinued operations related to OSRAM turned
negative in the current period.As a result of the above-mentioned
profit impacts, two of our Sectors, Energy and
Infrastructure&Cities, missed their respective adjusted EBITDA
target ranges in fiscal 2012.We achieved our target for capital
efficiency measured in terms of ROCE (adjusted) on a continuing
basis, with a result of 17.0%, well within our target range of 15%
to 20%. ROCE (adjusted) on a continuing basis a year earlier was
25.3%, benefiting from the above-mentioned divestment at Energy.Our
Free cash flow from continuing operations declined to EUR4.790
billion, down 19% year-over-year. Free cash flow development was
particularly influenced by lower income from continuing operations.
Additional factors included cash outflows in the current period
related to project-related charges in Healthcare.In the fourth
quarter of fiscal 2012, we initiated a share buy-back program of up
to EUR3.0 billion, to be financed partly by long-term debt, and
issued bonds totaling EUR2.7 billion. These measures are aimed at
taking advantage of favorable capital market conditions while
reducing the gap to our capital structure target. We have set this
target, defined as the ratio of adjusted industrial net debt to
adjusted EBITDA, in the range of 0.5 to 1.0. In fiscal 2012, our
capital structure was a positive 0.24 compared to a negative 0.14
in the prior fiscal year.We believe that we achieved the goals we
had announced in our Interim report for the third quarter of fiscal
2012. With regard to One Siemens, our framework for sustainable
value creation, we believe that we did not fully succeed in our
fundamental goal of continuous improvement relative to our markets
and competitors. We believe that Agenda 2013, an initiative started
by our Healthcare Sector at the beginning of fiscal 2012 is making
a contribution to achieve these goals. We intend to expand these
efforts on a company level. We therefore initiated "Siemens 2014",
a company-wide program aimed at improving our productivity. We
defined action areas for cutting our costs, strengthening our
portfolio and becoming faster and less bureaucratic. These goals
apply company-wide, with specific implementation measures to be
developed by each Sector. While program-related productivity
measures will burden Total Sectors profit, particularly in fiscal
2013, we expect that the productivity gains realized will enable us
to achieve a Total Sectors profit margin of at least 12% by fiscal
2014.In the fourth quarter of fiscal 2012 in connection with the
"Siemens 2014" company program, we decided to divest our solar
business, consisting of our solar thermal and photovoltaic
activities, because they have not met our expectations with regard
to a number of factors, including changed market conditions, lower
growth and strong price pressure.We intend to provide an attractive
return to shareholders. We previously set a target range for our
dividend payout percentage of 30% to 50% of Net income excluding
selected exceptional non-cash effects. The Siemens Managing Board,
in agreement with the Supervisory Board, proposes a dividend of
EUR3.00 per share, unchanged from a year earlier. This proposal
represents a dividend payout percentage of 56%, based on shares
outstanding as of September 30, 2012.
The Siemens share/Investor relations
Stock performance. The Siemens share price developed positively
over the course of fiscal 2012. However, the markets were volatile
during this period due to ongoing uncertainty in the eurozone.
After increasing at the beginning of the fiscal year, stock markets
in general and the Siemens share price in particular declined for
several months. Then, in June 2012, a positive stock market trend
began. This trend continued until the end of fiscal 2012. In August
2012, the Company launched a share buyback program. From the start
of the buyback program until the end of the fiscal year, the
Siemens share price gained more than 13%.Over the entire fiscal
year, Siemens stock performed comparatively well in this market
environment, closing at EUR77.61 per share on September 30, 2012.
For shareholders who reinvested their dividends, this amounted to a
gain of 18.6% (fiscal 2011: a loss of 9.5%) compared to the closing
price a year earlier. The Siemens share performed somewhat more
weakly than the leading international index, MSCI World (which rose
21.6%), and remained noticeably behind the leading index of the
German stock market, the DAX (which advanced 31.2%).
Siemens on the capital market. We take our responsibility to
maintain an intensive dialogue with the capital market very
seriously. Cultivating close contacts with our shareholders, we
keep them informed of all major developments throughout Siemens. As
part of our investor relations work, we provide information on the
Company's development in quarterly, semiannual and annual reports.
Our CEO and CFO also maintain close contact with investors through
roadshows and conferences. In addition, Siemens holds Sector
Capital Market Days, at which the management of our Sectors informs
investors and analysts about the Sectors' business strategies and
market environments.We also provide extensive information online.
Quarterly, semiannual and annual reports, analyst presentations,
press releases and our financial calendar for the current year
(please see Financial calendar on the middle Page), which includes
all major publication dates as well as the date of the Annual
Shareholders' Meeting, are available at
www.siemens.com/investors
Additional information on our investor relations activities is
available atwww.siemens.com/investorsand in the Siemens Annual
Report, the English and German versions of which can be downloaded
atwww.siemens.com/annual-report
www.siemens.com/geschaeftsbericht
Copies of the Annual Report (free of charge) can be ordered at
E-mail siemens@bek-gmbh.de
Internet www.siemens.com/order-annualreport
Fax +49 7237-1736
This document includes supplemental financial measures that are
or may be non-GAAP financial measures. New orders and order
backlog; adjusted or organic growth rates of revenue and new
orders; book-to-bill ratio; Total Sectors profit; return on equity
(after tax), or ROE (after tax); return on capital employed
(adjusted), or ROCE (adjusted); Free cash flow, or FCF; cash
conversion rate, or CCR; adjusted EBITDA; adjusted EBIT; adjusted
EBITDA margins, earnings effects from purchase price allocation, or
PPA effects; net debt and adjusted industrial net debt are or may
be such non-GAAP financial measures. These supplemental financial
measures should not be viewed in isolation as alternatives to
measures of Siemens' financial condition, results of operations or
cash flows as presented in accordance with IFRS in its Consolidated
Financial Statements. Other companies that report or describe
similarly titled financial measures may calculate them differently.
Definitions of these supplemental financial measures, a discussion
of the most directly comparable IFRS financial measures,
information regarding the usefulness of Siemens' supplemental
financial measures, the limitations associated with these measures
and reconciliations to the most comparable IFRS financial measures
are available on Siemens' Investor Relations website at
www.siemens.com/nonGAAP. For additional information, see
supplemental financial measures and the related discussion in
Siemens' most recent annual report on Form 20-F, which can be found
on our Investor Relations website or via the EDGAR system on the
website of the United States Securities and Exchange
Commission.
This document contains statements related to our future business
and financial performance and future events or developments
involving Siemens that may constitute forward-looking statements.
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. We may also make forward-looking statements in other
reports, in presentations, in material delivered to stockholders
and in press releases. In addition, our representatives may from
time to time make oral forward-looking statements. 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 or
anticipated on the basis of historical trends. These factors
include in particular, but are not limited to, the matters
described in Item 3: Key information - Risk factors of our most
recent annual report on Form 20-F filed with the SEC, in the
chapter "Risks" of our most recent annual report prepared in
accordance with the German Commercial Code, and in the chapter
"Report on risks and opportunities" of our most recent interim
report.
Further information about risks and uncertainties affecting
Siemens is included throughout our most recent annual and interim
reports, as well as our most recent earnings release, which are
available on the Siemens website www.siemens.com, and throughout
our most recent annual report on Form 20-F and in our 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, performance
or achievements of Siemens may vary materially from those described
in the relevant forward-looking statement as being expected,
anticipated, intended, planned, believed, sought, estimated or
projected. Siemens neither intends, nor assumes any obligation, to
update or revise these forward-looking statements in light of
developments which differ from those anticipated.
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