Siemens 2006 Annual Report Download - page 108

Management’s discussion and analysis
104
Fiscal 2006 – Results of Siemens
The following discussion presents selected information for Siemens for the fiscal years ended:
Orders in fiscal 2006 were €96.259 billion, a 15% increase from €83.791 billion in the prior
year. A majority of the Groups in Operations posted double-digit growth in orders compared to
fiscal 2005. Sales of €87.325 billion were up 16% from €75.445 billion a year earlier, led by sub-
stantial increases at I&S, A&D, PTD and PG. Excluding currency translation and the net effect of
acquisitions and dispositions (organic growth), orders climbed 6% and sales rose 8%. Growth
was driven by international markets, where major orders were both numerous and well-dis-
tributed. International orders were up 18% year-over-year, to €79.736 billion. Sales rose 19%, to
€71.080 billion. In Germany, orders were up 1% and sales increased 4% year-over-year, to
€16.523 billion and €16.245 billion, respectively, primarily due to acquisitions between the
periods under review.
On a regional basis, international growth was fastest in Middle East/Africa/CIS, including a
35% rise in orders, to €10.910 billion, and a 33% increase in sales, to €8.191 billion. Growth was
nearly as rapid in Asia-Pacific, where orders climbed 26%, to €15.058 billion, and sales rose
28%, to €12.871 billion. Within Asia-Pacific, orders in China increased 23%, to €5.089 billion,
and sales were up 39%, at €4.438 billion. Orders in India rose 67%, to €1.962 billion, and sales
climbed 47%, to €1.202 billion. In the Americas, order and sales grew 16% and 20%, respec-
tively, benefiting from strong portfolio and currency translation effects. Within this trend, the
U.S. posted orders of €18.509 billion and sales of €17.388 billion, for increases of 17% and 18%,
respectively. In Europe outside Germany, orders and sales each increased 11%, to €29.117 bil-
lion and €27.105 billion, respectively, benefiting strongly from portfolio effects.
Gross profit for fiscal 2006 increased 10% year-over-year, as a majority of the Groups in
Operations increased both sales and profit compared to fiscal 2005. In contrast, gross profit
margin declined to 26.9% from28.2% a year earlier. While the change year-over-year included
moderate decreases in gross profit margin at a majority of the Groups, the major factors were
a sharp decline at PG, which took substantial charges in its fossil power generation business,
and lower gross profit margins at Com and SBS, which took higher severance charges com-
pared to a year earlier.
(€ in millions) 2006 2005
New orders 96,259 83,791
New orders in Germany 16,523 16,333
New international orders 79,736 67,458
Sales 87,325 75,445
Sales in Germany 16,245 15,685
International sales 71,080 59,760
(€ in millions) 2006 2005
Gross profit on sales 23,513 21,299
as percentage of sales 26.9% 28.2%