Siemens · 2019-12-04 · Analyst presentation April 26, 2007 Klaus Kleinfeld / Joe Kaeser. Page 2...
Transcript of Siemens · 2019-12-04 · Analyst presentation April 26, 2007 Klaus Kleinfeld / Joe Kaeser. Page 2...
Siemens Analyst presentation
April 26, 2007
Klaus Kleinfeld / Joe Kaeser
Page 2 March 2007 Q2 Analyst Conference
Disclaimer
This presentation contains forward-looking statements and information – that is, statements related to future, not past, events. These statements may be identified by words as “expects”, ”looks forward to”, “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 (including margin developments in major business areas); the challenges of integrating major acquisitions and implementing joint ventures and other significant portfolio measures; 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; the outcome of pending investigations and legal proceedings; our analysis of the potential impact of such matters on our financial statements; as well as various other factors. More detailed information about our risk 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.
Page 3 March 2007 Q2 Analyst Conference
Key figures – Q2 FY07
—
+0.36
+36
+49
+10
+9
Δ(in %, except for
EPS)
538(901)Net cash(continuing operations)
9231,259Net income
1,3141,964Group profit(from Operations)
0.98
18,824
21,529
Q2 FY06
1.34
20,626
23,469
Q2 FY07
Sales
Earnings per share(in €, not diluted; change in €)
New orders
In millions of euros
Page 4 March 2007 Q2 Analyst Conference
All Groups reached or exceeded their margin ranges
Groups Profit marginQ2 FY07 IFRS Margin ranges Status
SBS 5.2%14.2%4.6%7.5%
10.7%8.1%5.0%6.3%
13.4%10.5%52.6%
5–6%A&D 11–13%I&S 4–6%SBT 7–9%PG 10–13%PTD 5–7%TS 5–7%SV 5–6%Med 11–13%Osram 10–11%SFS* 18–22%
* Return on equity
Page 5 March 2007 Q2 Analyst Conference
Fit4More – Short term action program started in April 2005
• Portfolio optimizationnecessary
• Margin targets "Operation 2003" (set 2000) partially reached
• Weak growth/no quantified growth target
• top+ Siemens Management System well established
Initial situation beginning 2005 April 2005 – Start Fit4More Program
Performanceand PortfolioPerformanceand Portfolio
OperationalExcellence
CorporateResponsibility
PeopleExcellence
Fit4More: Profit & Growth Program
Execution by April 2007!
Solve Mobile Devices
Finalize strategic reorientation of I&C i.e. Com and SBS
Strategic reorientation of L&A
Reach target margins at all groups
Build portfolio for2x GDP growth
Siemens Management System (powered by top+) with focus on
Innovation
Customer Focus
GlobalCompetitiveness
Achieve high performance culture
Establish Leadership Excellence Program
Increase global talent pool
Strengthen expert careers
Achieve Best in Class in
Corporate Governance
Business Practices
Sustainability
Corporate Citizenship
The Objectives The Enablers
Page 6 March 2007 Q2 Analyst Conference
Two-pronged strategy successfully implemented
~ 75
Q2 FY07trailing 4 quarters
~ 50
Sales2004
~ 80- 33%
+60%
e.g.Sale of DematicReorientation of I&C incl. JV Nokia SiemensRestructuring SBS
AcquisitionsOrganic growthSIS Reorganization
Sales afterstrategic
reorientation
in bn. €
Strengtheningour strengths
Strategic Reorientation
Page 7 March 2007 Q2 Analyst Conference
We significantly strengthened our strongest businesses
Market position
CTI Molecular Imaging (3/2005) # 2Diagnostic Products (4/2006) IVD overall # 3Bayer Diagnostic (6/2006) ImmunoD # 2
Healthcare
Energy & Environmental Care
Automation & Control, Industrial & Public Infrastructures
AcquisitionsVA Tech (7/2005) T&D # 4Wheelabrator (10/2005) U.S. leader in flue gas
desulphurizationSustec (5/2006) leading in gasification
Electrium (12/2005) UK # 3UGS (01/2007) leading in PLM software
Kühnle, Kopp & Kausch (7/2006) leading in ST<5MWBonus Energy (10/2004) worldwide # 5
offshore # 1USFilter (5/2004) U.S. # 1Flender (3/2005) Industry & Wind # 1Robicon (7/2005) MV converters # 1VA Tech (7/2005) VAI # 1
Application fields
Page 8 March 2007 Q2 Analyst Conference
Fit4More – A great success
Achieved what we set out to do
• Fostered profitable growth
• Company value substantially increased
• All Groups reached their margin ranges• Revenue growth of > 15% p.a.1)
• Company value increased 54%2)
• Two-pronged successfully applied to companyportfolio
• Innovation leadership strengthened
• Successful reorientation of major parts of portfolio• Acquisitions of ~12 bn. €3) in our successful
businesses• Significant investments in organic growth
• Successful execution of enabling programs• Operational Excellence• People Excellence• Corporate Responsibility
• Established Siemens Management/ top+ System further implemented
• Talent development and leadership excellencesignificantly strengthened
• Top ranking within Dow Jones Sustainability index, but serious compliance issues
1) Revenue growth total operations Groups from Q2 FY05 to Q2 FY07 excl. Com2) April 2005 until end of day April, 23rd 3) Volume of acquisitions since April 2005
Page 9 March 2007 Q2 Analyst Conference
: Accelerating Profit & Growth
PeopleExcellence Portfolio
CorporateResponsibility
OperationalExcellence
Develop talent globallyStrengthen leadership developmentAttain high performance cultureStrengthen expert careers
Execute SiemensManagement System(powered by top+)with focus on
InnovationCustomer FocusGlobal Competitiveness
Build on our strengths inEnergy & EnvironmentalCareAutomation & Control, Industrial & PublicInfrastructuresHealthcare
IPO of Siemens VDO
Achieve best-in-class in Corporate GovernanceComplianceClimate protectionCorporate Citizenship
PortfolioPeopleExcellence
OperationalExcellence
CorporateResponsibility
PerformanceOptimize capital efficiency with ROCE of >14–16%Attain cash conversion rate of "1–growth rate"Sustain 2x GDP growthAchieve new margin ranges
Page 10 March 2007 Q2 Analyst Conference
Company targets address all value drivers
Profitability CashGrowth
• Outpace world economic growthwith a growth rate > 2 x GDP
• Stronger focus on cash to finance future growth and investments
• Improved profitability on Group level through new margin ranges
• Additional target to optimizeSiemens overall profitability and more efficient capital utilization
Growth ROCE1) Cash conversion1)
> 2 x GDP10.0%
2006
>14-16%
2010
0.6
2006 2010
1- growth rate
1) Continuing operations
Page 11 March 2007 Q2 Analyst Conference
Margin ranges increased for nine out of eleven Groups
Margin rangesFit4More Q2 FY07
SIS 5-6% 5.2%
A&D 11-13% 14.2%
I&S 4-6% 4.6%
SBT 7-9% 7.5%
Med 11-13% 13.4%
Osram 10-11% 10.5%
SFS* 18-22% 52.6%
PG 10-13% 10.7%
PTD 5-7% 8.1%
TS 5-7% 5.0%
SV 5-6% 6.3%
New margin ranges
Fit4 2010
5-7%
12-15%
5-7%
7-9%
10-14%
7-10%
5-7%
7-9%
13-15%
10-12%
20-23%* Return on equity
Page 12 March 2007 Q2 Analyst Conference
Our strategy: Strong businesses in attractive markets
Energy &Environmental Care
Automation & ControlIndustrial & Public Infrastructures
Healthcare
Application fields
Megatrends
DemographicChange
Urbanization
Attractive markets with tailwind from megatrends
Increasing scarcity ofnatural resourcesGrowing need forenvironmental careGrowing demand forhealth and elder care
Increasing mobility
Growing demand forsafety and securityRegional shift ofeconomic gravity
High quality of our businesses
PG PTD Os-ram A&D I&S SBT TS SV Med SIS
No. 1 or No. 2 position
Page 13 March 2007 Q2 Analyst Conference
Power Generation: Growth through innovations and acquisitions
New H-Frame turbine:• World's most efficient turbine, efficiency > 60%
(CCPP)• Reduces CO2 emissions by 40.000 t p.a. compared
to today's best in class
Wheelabrator – Air pollution reduction technology• U.S. leader in flue gas desulphurization• Advanced burner technology
Siemens Wind Power• Entry into strongly growing wind energy market via
acquisition of Bonus Energy• No. 1 in offshore wind parks
H1 07H1 06
Wind revenues+51%
H1 07H1 06
Wheelabratorrevenues
+117%
SGT5-8000H
Page 14 March 2007 Q2 Analyst Conference
Automation: High energy savings through new drive systems
New energy saving motor range with aluminum housing• Highly efficient motors with copper rotors• Significant increase of efficiency, e.g. from 77% to 84%
Robicon Perfect Harmony medium-voltage converter• Compact design, even smaller footprint• Enabling exact control of motor speed according to requirements • Potential energy savings of up to 50% by replacement of conventional
drives with variable speed drives
Potential energy savings of 43 TWh p.a. (€ ≅3 bn) in Europe
Page 15 March 2007 Q2 Analyst Conference
Acquisition of UGS is on track
Siemens A&DUGS
TIA4)
TIP5)PLM3)
Automationdesign
Manufacturing
Factory design
Product design
Factory automation: #1Process automation: #3Electrical installation tech.: #2
Digital Factory: #2 CAx1) : #2cPDM2): #1
Winning combination
1) CAx: Computer aided design, engineering and manufacturing 4) Totally integrated automation 7) 1998-20062) Collaborative Product Data Management 5) Totally integrated power3) Product Lifecycle Management 6) UGS FY ending Dec. 31st
978
2004
1,155
2005
1,219
2006
+11,6% p.a.
UGS Revenue 6) (USD in million)
9%
14%
5%
A&D sales growth7)
Factory automation
Process automation
Electricalinstallation tech.
> 2x market growth
Closing expected in Q3 FY07Integration preparations
on track
Page 16 March 2007 Q2 Analyst Conference
Healthcare: Strong organic growth through innovations
1) 2002-20062) Total imaging matrix3) Angiography, fluoroscopy, radiology
Tim2) technology:• Most successful innovation in MR• Higher image quality, more patient comfort,
optimized workflow in MR• 50% higher patient throughput, up to 50% shorter
examination times
syngo DynaCT:• Eliminates need to move patient to a CT during
interventions• CT-like inter-operational images with an angio suite
– no time loss and no additional risk for patient
MagneticResonance
AX3)
+14% p.
+5% p.
Market share gains1)Leadership in innovations (examples)
Page 17 March 2007 Q2 Analyst Conference
Siemens automotive systems –A success story
IPO preparations for SV on track
Future trends and basic requirements
Investments to further strengthen technology position and regional set-up
Siemens as majority shareholderExcellent access to capital markets, sector specific capital structureCreation of acquisition currencyRealization of full growth and innovation potential
+
Intended IPO
Alw
ays
on
Zero emissions
Zero
acc
iden
ts
EUR 10 billion global businessAverage growth of 10% a year (1989 –2006)Margin range reached every year since 2003Outstanding position in high-growth automobile electronics sector
Page 18 March 2007 Q2 Analyst Conference
Outlook: We believe we can do even better
Compliance: Zero tolerance
Strong focus on cash and capital efficiency
Continued profitable growth
FY07: Maintain operating momentum built up in first half year
Financial Performance & Priorities
Joe Kaeser
Page 20 March 2007 Q2 Analyst Conference
Significant improvement in Net Cash
+0.8
Income from Operations(Continuing)
+1.8
+1.3
Net Working Capital
(1.0)
(0.2)
Depreciationon PPE
SFS, SRE,Corporate Treasury
(4.5)(1.7)
Other DiscontinuedOperations
(0.2)+2.2 (5.5)
Net CashCF Used in Investing Activities
(3.8)CF Provided by
Operating Activities
Net Cash from Operations (Continuing Operations)Net CashDisc. Op.
Acquisitions (4.5) EURthereof: Bayer (net of cash) (4.2) EUR
Other Net Cash
Net Cash„all in“
therein:CAPEX (PPE) (1.0) EUR
+1.2 +0.4 +0.6 +0.4 +2.6 (4.5) +1.0 (0.7) (1.6)Q2 FY07
€ in billion; YTD 2007
Page 21 March 2007 Q2 Analyst Conference
We take clear actions on cash: Trend in Capex reversed
2003 2006
TargetRange
PPE Capex*
Depreciation
115%
95%
2004 2005
100%
2007
98%
106%
122%
x 100%144%
YTD FY07
121%
* Capital expenditures on property, plant and equipment of Siemens‘ Operating Groups.2003 to 2006 are US GAAP numbers, The 2006 IFRS Capex/Depreciation ratio is 148%. YTD FY07 ratio according to IFRS.
Page 22 March 2007 Q2 Analyst Conference
We take clear actions on cash: 9 of 10 Groups have improved their Turns
7.4
6.9
Right direction, not good enough yet
FY05
FY06
NWC turns*
* Last 12 Months Sales/NWC as of period-end of Total Operations Groups, Continuing Operations, excluding SEI and Other Operations
vs. PY
12345678910
PGSVI&STSSBSOsramMedA&DPTDSBT
Ranking NWC Turns 2006 and Q2 FY07
7.6
Q2 FY07
123457968
10
Q2 Q2 vs. PQFY06 Ranking
Page 23 March 2007 Q2 Analyst Conference
Growth, profit and cash define the current performance, active portfolio management drives future success
ValueCreation
Cash
Cash Conversion
Growth
2 x GDP Growth
Group Profit Margins/ROCE
Profitability/Capital Efficiency
Page 24 March 2007 Q2 Analyst Conference
Our targeted ROCE has not been reached in any of the last 6 years
Profit*
Capital Employed*
* 2001 to 2004 US GAAP, from 2005 IFRS. See Appendix for a definition of ROCE.** YTD based on linear assumptions.
5,7%
8,4% 9,1%
12,9% 12,4%
10,0%
13,2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
2001 2002 2003 2004 2005 2006 YTD 2007**
ROCE*
>14-16% Target Range
2.0% (0.3)% 3.8% (1.0)% (0.5)% 4.1 %
0.8% 1.0 % 0.1% 0.5 % (1.9)% (0.9)%
% Change Attributable to Change in
Page 25 March 2007 Q2 Analyst Conference
We focus our financial resources on value creation*
Organic Growth
2x GDPworld
Growth
high
low
RO
CE
**
Top Groups
High Growth Groups
Substance Keepers
1x GDPworld
Growth
* Size of bubble = Value contribution of Groups (EVA)** ROCE = Group EBIT / avg. business assets
Profiteers
>14 – 16% ROCE
Page 26 March 2007 Q2 Analyst Conference
On Transparency: Refined Segment Reporting for better Tracking
OLD NEW
Group Profit
“Net Cash from Operating and Investing Activities” by Group
CapexCapital Spending on PPE, Intangibles, Acquisitions, and Non-Current Available for Sale Financial Assets and Investments
Depreciation & AmortizationMatching Capex definition above
Group Profit
“Free Cash Flow” by GroupCash Flow from OperationsUnchangedCapex as defined below
CapexCapital Spending on PPE and Intangibles (incl. PPA) as beforeAcquisitions etc. excluded
Depreciation & AmortizationMatching Capex definition above
Cash Conversionby Group
Operating CFby Group
Capex/Depreciation
Page 27 March 2007 Q2 Analyst Conference
We are committed to providing shareholder return
Balance Sheet Considerations
0.00 €
0.20 €
0.40 €
0.60 €
0.80 €
1.00 €
1.20 €
1.40 €
1.60 €
1.80 €
1977
1987
1997
1998
1999
2000
*20
0120
0220
0320
0420
0520
06
Net Dividend Payments in EUR
* Special dividend of 0.67 € in 2000 related to the Infineon IPO
10% CAGR
6% CAGR
1. Share buyback:Don‘t expect a share buybackin the short-term
2. Convertible:Multiple options
3. Gearing: Debt capacity will increase withhigher Free Cash FlowHigher debt capacity providesopportunity to grow EPS at a faster rate than profit fromoperations
We see a very good potential to grow EPS and dividends at or above historical rates
Page 28 March 2007 Q2 Analyst Conference
What else is on the CFO’s mind?
Focus on organic growth
Wise consideration of the M&A sellers market
Cash conversion through
Moderate Capex spend
Streamline NWC turns
Move down “break-even point” of business segments
Prioritize resources on most promising projects for sustainable capital efficiency
“In times of a robust cycle, it is time to look ahead”
Appendix
Page 30 March 2007 Q2 Analyst Conference
New orders – Strong growth with 9%
Groups Q2 FY07(in mio. €)
Δ(in %)
964 -29
A&D 4,154 18
I&S 2,434 -1
SBT 1,364 3
PTD 2,476 38
TS 714 -60
SV 2,678 3
Med 2,544 21
Osram 1,189 -1
PG 5,017 54
SBS
Regions Q2 FY07(in mio. €)
Δ(in %)
8,105 19
5
12
19
-29
3,826
Americas 6,332
Asia-Pacific 3,396
1,810
Europe excl. Germany
Germany
Middle East / C.I.S. / Africa
23.521.5
Q2 FY06 Q2 FY07
in bn. €
9%
Page 31 March 2007 Q2 Analyst Conference
Revenue +10% – Outstanding growth in the Power Groups
Groups Q2 FY07(in mio. €)
Δ(in %)
1,206 -13
A&D 3,711 16
I&S 2,172 2
SBT 1,335 14
PTD 1,756 17
TS 1,161 16
SV 2,687 3
Med 2,470 21
Osram 1,189 -1
PG 3,072 25
SBS
Regions Q2 FY07(in mio. €)
Δ(in %)
6,795 16
6
1
8
30
3,860
Americas 5,376
Asia-Pacific 2,892
1,703
Europe excl. Germany
Germany
Middle East / C.I.S. / Africa
20.618.8
Q2 FY06 Q2 FY07
in bn. €
10%
Page 32 March 2007 Q2 Analyst Conference
Defined benefit obligation (DBO) 2) of Principal Pension BenefitsDiscount rate 3)
Fair Value of plan assets Funded status 2)
Additional contributionRegular fundingActual Return on plan assets 4)
Actual Return on plan assets (in %)EROPA (in %)DBO of other Principal Postretirement BenefitsAsset allocation of pension assets• Equities• Fixed income• Real estate• Cash
1) Principal Funded Pension Plans and Principal other Postretirement Benefits 2) As of September, 30 for FY05 and FY063) Basis for calculation of DBO as of September, 30 and March, 31 respectively 4) For Principal Funded Pension Plans
FY05 FY06€ in billions
25.04.6%21.6(3.4)
1.50.52.4
11.9%6.7%
0.9
31%55%8%6%
31/03/0726.7
4.7%23.8(2.9)
0.00.71.4
6.2%6.7%
0.8
26.25.0%24.5(1.7)
0.00.50.8
7.3%6.5%
0.8
33%47%8%
12%
33%54%8%5%
Estimated underfunding of Siemens pension plans1) improved by € 1.2 bn
Despite the negative impact of interest rate increases on fixed income investments Siemens was able to generatean Actual Return of 7.3% annualized (€ 0.8 bn) over the last six months, mainly due to strong equity marketsIncrease in discount rates reduced Siemens’ estimated DBO by € 0.9 billion
Page 33 March 2007 Q2 Analyst Conference
SFS: Assets and Liabilities as of 31 March 2007
Finance & Operating
leases
Other assets & inventory 1)
Cash Purchased receivables
Investments Total assets/
liabilities
Equity Accruals & other liabilities
Total debt
Approx. 70% internal
business
Almost all leasing business is with
external customers
Assets LiabilitiesSFS debt for financing of operating groups
Almost all SFS assets, and consequently SFS debt, are related to business with external customers except for the internal receivables financing business
1) Other assets & inventory includes: Securities, fair values (positive) derivatives/FX, tax receivables, fixed assets, intangible assets, land and building, prepaid expenses, loan receivables and inventories
9.6 bn 1.0 bn
7.8 bn
1.6 bn1.6 bn
€ in billion
Page 34 March 2007 Q2 Analyst Conference
SFS: Net Debt as of 31 March 2007
In order to reflect SFS in the SOTP, the internal debt component has to be reflected in the SFS net debt for the enterprise value calculation
Equity value SFS
7.8 bn
SFS net debt FY07
SFS debt for financing of operating groups
Enterprise value SFS corrected
1.6 bn
6.2 bn
Equity value SFS
SFS adapted net debt
6.2 bn
€ in billion
Page 35 March 2007 Q2 Analyst Conference
ROCE Definition
Source
Income (loss) from continuing operations (i.e. post tax) (Profit and Loss Statement)+/– Other interest income, net (Notes to Consolidated Financial Statements, e.g. Note 8, p.35 of IFRS FY06 Statements)+/– Tax effect on other interest income, net (Effective tax rate derived from Profit and Loss Statement)= Income (loss) from continuing operations (post tax), before net interest expense
Total equity (incl. minorities) (Balance Sheet)+ Long-term debt (Balance Sheet)+ Short-term debt and current maturities of long-term debt (Balance Sheet)- Cash and cash equivalents (Balance Sheet)- Assets classified as held for disposal (Balance Sheet)+ Liabilities associated with assets classified as held for disposal (Balance Sheet)= Capital Employed*
* Capital Employed for a fiscal year is determined as the average of five datapoints: the capital employed at the beginning of the fiscalyear and the capital employed at the end of each of the four quarters of the fiscal year.
Post-tax ROCE from Continuing Operations =Income from Continuing Operations (post tax), before net interest expense
Capital Employed (for Siemens, including SFS, SRE and Treasury)
Page 36 March 2007 Q2 Analyst Conference
Cash Conversion Rate Definition
Cash Conversion Rate (Continuing Operations) =Free Cash Flow
Income from Continuing Operations
Source
Cash Flow from Operations (Continuing Operations) (Cash Flow Statement)+ Additions to intangible assets and property, plant and equipment (Continuing Operations) (from Q3: Segment Reporting)= Free Cash Flow
Income from Continuing Operations (Profit and Loss Statement)
Page 37 March 2007 Q2 Analyst Conference
Financial calendar FY07*
* Preliminary, updates will be posted at: www.siemens.com/financial_calender
July
June 21-22Capital Market Days 2007,Berlin
November
July 26Third quarter financial results FY07 – conference call
January
November 8Preliminary figures for FY07
June
January 24Annual General Meeting
Page 38 March 2007 Q2 Analyst Conference
Reconciliations and definitions
”Group profit from Operations” is reconciled to ”Income before income taxes” of Operations under ”Reconciliation to financial statements” on the table ”Segment information.” See ”Financial Publications/Quarterly Reports, FY07 Q2, Financial Statements” at our Investor Relations website under www.siemens.com.
ROE (Return on equity) margin for SFS was calculated as SFS' income before income taxes divided by the allocated equity for SFS. Allocated equity for SFS for the financial year 2007 is € 1.041 billion.
The allocated equity for SFS is determined and influenced by the respective credit ratings of the rating agencies and by the expected size and quality of its portfolio of leasing and factoring assets and equity investments and is determined annually. This allocation is designed to cover the risks of the underlying business and is in line with common credit risk management standards in banking. The actual risk profile of the SFS portfolio is monitored and controlled monthly and is evaluated against the allocated equity.
Siemens ties a portion of its executive incentive compensation to achieving economic value added (EVA) targets. EVA measures the profitability of a business (using Group profit for the Operating Groups and income before income taxes for the Financing and Real estate businesses as a base) against the additional cost of capital used to run a business, (using Net capital employed for the Operating Groups and risk-adjusted equity for the Financing and Real estate businesses as a base). A positive EVA means that a business has earned more than its cost of capital, and is therefore defined as value-creating. A negative EVA means that a business is earning less than its cost of capital and is therefore defined as value-destroying. Other organizations that use EVA may define and calculate EVA differently.
To measure Siemens' achievement of the goal to grow twice the rate of global GDP we use GDP on real basis (i.e. excluding inflation and currency translation effects) with data provided by Global Insight Inc. and compare those growth rates with growth rates of our revenue (under IFRS). In accordance with IFRS, our revenue numbers are not adjusted by inflation and currency translation effects.
Page 39 March 2007 Q2 Analyst Conference
Siemens Investor Relations Team
Webpage: http://www.siemens.com Investor Relations
e-mail: [email protected]
Telephone: +49-89-636-32474
Fax: +49-89-636-32830
Marcus Desimoni +49-89-636-32445
Roland Bischofberger +49-89-636-36165
Irina Pchelova +49-89-636-33693
Christof Schwab +49-89-636-32677
Susanne Wölfinger +49-89-636-30639