Siemens posts record profit for fiscal 2010
Operating profit up again – Growth gains momentum – Outlook optimistic
Munich, Germany, In fiscal 2010, Siemens generated the largest operating profit in its history. Total Sectors profit rose four percent to €7.8 billion. Net income climbed 63 percent to €4.1 billion. Growth picked up speed once again during the year. While declining in the first two quarters, new orders and revenue rebounded sharply in the second half-year. For the full fiscal year, new orders increased by three percent to €81.2 billion, while revenue stabilized at €76 billion. “We completed fiscal 2010 very successfully. We’re coming out of the economic downturn with full momentum. Our growth is gaining speed. Operationally, we achieved record profit twice in a row. We expect to take this positive momentum into the next fiscal year. We have to keep winning, order by order,” said Siemens President and CEO Peter Löscher.
With continuing improvement in its markets, Siemens expects organic order intake to increase substantially in fiscal 2011, compared to fiscal 2010. Supported by an already strong order backlog, the company expects revenue to return to moderate organic growth. Siemens also anticipates that income from continuing operations will exceed the results reported for fiscal 2010 by at least 25 to 35 percent. This outlook excludes effects that may arise from legal and regulatory matters.
Record profit – Strong earnings growth in short-cycle businesses
After the Siemens Sectors had achieved a record total profit in fiscal 2009, the company improved its performance once again in fiscal 2010, despite impairment charges of some €1.2 billion in the Healthcare Sector. The Energy Sector made the largest contribution, generating profit of €3.6 billion – a seven percent increase year-over-year. The Sector’s fossil power plant business and, to a lesser extent, its business in power transmission systems were the major drivers. Profit at the Industry Sector increased by 29 percent to €3.5 billion, with the short-cycle businesses of the Industry Automation Division and Osram developing exceptionally well. Profit at the Healthcare Sector totaled €748 million, including the above-mentioned impairment charges of €1.2 billion in the diagnostics business. The Healthcare Sector profited from a strong year in its imaging devices business, which – after the fossil power plant business – made the largest contribution to company profit.
Growth accelerating – Stronger momentum in Asia and the emerging countries
Overall, Siemens’ strong second half-year pushed new orders for all of fiscal 2010 above the prior-year level. Of the company’s 14 Divisions, Renewable Energy had the strongest order growth. Siemens’ revenue, which also stabilized in the course of fiscal 2010, was only slightly below the prior-year level. The company expanded its business in ecofriendly products and solutions. Revenue from its Environmental Portfolio rose to about €28 billion from some €27 billion in fiscal 2009, on a comparable basis. While declining slightly in Europe, the Commonwealth of Independent States, the Middle East and the Americas, revenue jumped a total of ten percent in the Asia, Australia region. Growth was particularly strong in the emerging countries. Revenue in India climbed 17 percent, in China 12 percent and in Brazil 32 percent.
Note: All figures are preliminary and unaudited. Starting at 9:00 a.m. (CET), the Annual Press Conference of Siemens AG with President and CEO Peter Löscher and CFO Joe Kaeser will be broadcast live on the Internet at www.siemens.com/pressconference. A related slide presentation and, afterwards, a video of the conference will also be available on this site. Starting at 4:00 p.m. (CET), the conference for analysts and investors with Peter Löscher and Joe Kaeser (in English) can be followed live 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, Siemens has stood for technological excellence, innovation, quality, reliability and internationality. The company is the world’s largest provider of environmental technologies, generating some €28 billion – more than one-third of its total revenue – from green products and solutions. In fiscal 2010, which ended on September 30, 2010, revenue totaled €76 billion and net income €4.1 billion. At the end of September 2010, Siemens 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. 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 cancellations of recognized orders, of prices declining as a result of continued 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), 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 pension obligations 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 post-employment benefit plans. Any increase in market volatility, further deterioration in the capital markets, decline in the conditions for the credit business, continued 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 certain strategic reorientation measures; the performance of its equity interests and strategic alliances; the challenge of integrating major acquisitions and implementing joint ventures and other significant portfolio measures; the introduction of competing products or technologies by other companies; 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 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.
Reference Number: AXX20101113e
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