Siemens 2005 Annual Report Download - page 8
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8
Majority of Groups on course
Ten of our 12 operating Groups, plus Siemens Financial Services – reached, exceeded,
or were closing in on their respective margin targets. For the two Groups that continue
to face significant challenges, SBS and Com, we are taking decisive action to improve
their long-term profitability.
Siemens Business Services faces the challenges of overcapacity, competition and
cost pressures, especially in product related services. We have set clear goals and
measures to put SBS operationally back on track. A new management team is in place.
An ambitious cost-cutting program is underway targeting savings of €1.5 billion in the
next two years. And there’s a greater focus on higher-value services.
At our Communications Group, even with the divestiture of mobile phones, there’s
still a continuing need to act. While Mobile Networks’ performance remained solid,
major steps are still required at Fixed Networks and Enterprise Networks. Com
continues to face a number of significant market challenges, including ongoing
consolidations among network operators and suppliers as the industry adjusts to
fixed/mobile convergence, technologies such as Voice over Internet Protocol (VoIP),
as well as substantial market price erosions. To meet these challenges, here too, we
have a new management team in place that is working hard to solidify this Group’s
future.
Our gameplan: Fit4More
All Groups are following our action plan, which we call Fit4More, with a target com-
pletion date of April 2007. It embraces four main pillars:
■Performance and Portfolio: We are committed to achieving profitable growth
by growing our sales at least twice as fast as global GDP and ensuring that every
one of our Groups achieves its margin targets. Strengthening our portfolio is an
ongoing process that includes continuous adaptations and acquisitions.
■Operational Excellence: We are committed to executing the top+Siemens
Management System with its sharp focus on innovation, customer focus and global
competitiveness, including finding the most strategic fit in today’s ever-changing
global value chain.