Siemens 2006 Annual Report Download - page 149

Management’s discussion and analysis 145
■Med is a leader in advanced diagnostic imaging systems, molecular and in-vitro immunodi-
agnostics, and healthcare IT systems. Diagnostics of all types are increasingly central to the
practice of medicine in developed economies, with their growing emphasis on early detec-
tion and prevention of disease states in steadily aging populations. Though Med faces
strong competition and pricing pressure, we expect the Group to grow profitably on a con-
sistent basis and to remain within its target margin range of 11 – 13% in fiscal 2007, despite
acquisition related charges. We expect that integrating the diagnostics acquisitions will be
a significant management focus at Med.
■Osram is a leader in general and automotive lighting as well as advanced lighting technolo-
gies, and will be increasing its penetration in Eastern Europe and Asia-Pacific to comple-
ment established markets in Western Europe and the U.S. Coupled with R&D programs for
new products, especially in the field of optoelectronics, Osram is expected to remain within
its target margin range of 10 – 11% in fiscal 2007.
■In our Information and Communications business area, we expect to execute the strategic
reorientation of Com and SBS, resulting in the dissolution of Com, whereas activities of SBS
will be bundled with other corporate IT and software solutions activities within a new Group
called Siemens IT Solutions and Services (SIS). This Group will consist of Siemens software
development units in Austria, Greece, India and Switzerland combined with our worldwide
IT consulting and outsourcing organization. We expect successful integration of the
Group’s various capabilities and market acceptance of its solutions and strategy. We expect
SBS/SIS to approach the profit margin range of 5– 6% in fiscal 2007. The transfer of our car-
rier business from Com to the Nokia Siemens Networks (NSN) joint venture with Nokia is
expected to result in a significant gain in fiscal 2007, along with positive equity earnings
contributions. NSN will be part of a new segment called Strategic Equity Investments (SEI).
SEI includes centrally managed at equity investments and will consist of BSH Bosch und
Siemens Hausgeräte GmbH, Fujitsu Siemens Computers (Holding) BV and NSN. We also
expect to divest Com’s enterprise networks and services business during fiscal 2007.
■SFS continues to be focused on actively supporting the Groups in their business require-
ments. Future emphasis will be given towards taking advantage of Siemens’ leading posi-
tion in energy and environment, industrial and public infrastructure as well as healthcare.
SFS is expected to meet its return on equity target of 18 – 22%.
Management’s discussion and analysis