Siemens 2005 Annual Report Download - page 97
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97
Segment information analysis
Operations
Information and Communications
Communications (Com)
Com sold its mobile devices business to BenQ of Taiwan in the fourth quarter. Siemens’
income statement separates out discontinued operations for both current and prior-year periods
in order to focus on continuing operations and provide a consistent basis for comparing financial
performance over time. The following discussion conforms to this presentation.
Fiscal 2005 orders at Com rose 6%, to €13.802 billion, and sales increased 3%, to €13.141 bil-
lion. The wireless infrastructure market continued to grow, and the Mobile Networks division
accounted for much of Com’s growth for the year while also making a strong earnings contribu-
tion. Group profit for Com overall was €454 million for the year, down from €707 million a year
earlier. Group profit for the current year includes significant severance charges. The charges
were more than offset by a gain of €208 million on the sale of a portion of Com’s shares in
Juniper. Com’s enterprise business profitability declined compared to the prior-year, in part due
to margin pressure associated with demand shifts in the corporate market toward wireless and
web-based solutions. The earnings development of Fixed Networks was affected by severance
charges and the division recorded a significant loss. As part of its strategic reorientation, in fiscal
2005, Com acquired a wireless local area network (WLAN) company and a software company spe-
cializing in internet protocol video aimed at the home entertainment market. Com expects
charges in coming quarters for additional capacity adjustments.
Management’s discussion and analysis
Consolidated Financial Statements Notes to Consolidated Financial Statements
Year ended September 30,
% Change
(€ in millions) 2005 2004 Actual Adjusted*
Group profit 454 707 (36)%
Group profit margin 3.5% 5.6%
Sales 13,141 12,709 3% 2%
New orders 13,802 13,031 6% 5%
* Excluding portfolio effects of 1% on sales and orders.