Siemens 2006 Annual Report Download - page 7

Letter to our Shareholders 7
Dear Shareholders,
In fiscal 2006, we made substantial progress toward achieving sustainable
profitable growth Company-wide. We based our efforts on the rigorous
implementation of our Fit4More program, which comprises the four pillars
Performance and Portfolio, Operational Excellence, People Excellence and
Corporate Responsibility (see also pages 16 – 31 of this Report).
We’re satisfied with the results we achieved in fiscal 2006. In every quarter, we exceeded our
main target: sustainable profitable growth at twice the global GDP rate. Year-on-year, new orders
surged 15 percent to €96 billion. Six percent of this growth was organic (excluding portfolio
measures and currency effects). Sales climbed 16 percent to €87 billion, and eight percent of
this increase was organic. Despite further restructuring costs due to portfolio adjustments, we
increased Group profit from Operations 12 percent to roughly €5.3 billion. Net income soared
35 percent to €3.0 billion, and earnings per share rose 35 percent to €3.40.
Global megatrends are putting wind in our sails.
To drive our businesses, we’re leveraging two global megatrends – demographic change and
increasing urbanization. These megatrends are exerting an ever-greater impact on the world we
live in. According to UN projections, the world’s population will have increased by about one-
third and the average age will have jumped from 26 to 36 by 2050. More and more people are
moving to urban areas in search of better jobs, better education and a better life. The UN pre-
dicts that next year more people will be living in cities than rural areas for the first time in human
history.
In light of these developments, how can we meet the growing demand for energy without
degrading the environment? How can we shape the future of manufacturing so that more and
better goods can be produced using fewer natural resources? How can we safeguard and
improve the mobility of people and goods? And how can we ensure the availability of high-
quality, affordable healthcare while keeping pace with advances in medical technology?
Innovation can make a major contribution to mastering these challenges. And this is precisely
where our opportunities lie, since we already hold leading positions worldwide in many of the
technologies required. Our portfolio policies aim to strengthen and expand these positions.