Siemens 2007 Annual Report Download - page 198

198 Management’s discussion and analysis
Reducing SG&A. As part of streamlining our organizational structure, we aim
to reduce our marketing, selling, general and administrative costs by 10-20% by
the end of 2010. We expect to achieve this goal by optimizing general and admin-
istrative costs within the new organizational structure while increasing the effi -
ciency of our sales and marketing efforts on a global basis. In fi scal 2007, SG&A
expense was €12.103 billion, or 16.7% of revenue. Programs for achieving SG&A
reductions will be established in fi scal 2008.
Corporate Responsibility. Siemens has a long heritage of corporate responsi-
bility reaching back to founder Werner von Siemens. In fi scal 2007, following reve-
lations of employee misconduct in certain of our businesses in prior years, we
brought signifi cant management attention to resolving related legal and regula-
tory matters while strengthening our corporate governance systems. We intend to
continue these efforts vigorously in fi scal 2008. Effective with the beginning of
the fi scal year, we established a new Managing Board position with responsibility
for all legal and compliance issues.
We will continue to meet our commitments to our investors, employees, other
communities and the environment in fi scal 2008 and fi scal 2009. In particular, we
have set new quantifi able targets for further reducing environmental impacts
related to our global production systems. On a normalized basis, allowing for
business growth, we intend to reduce greenhouse gas emissions by 20%, water
use by 20%, and non-recyclable waste by 15% compared to fi scal 2006 levels, by
2011. We also plan to further increase our reporting on environmental issues
related to our business as part of Fit42010.
Opportunities
In the next two years we see numerous opportunities for Siemens. At the highest
level, these opportunities stem from our continuous innovation in strong global
growth industries. If market acceptance of our innovations exceeds our expecta-
tions, or major regional or national economies grow at rates exceeding our esti-
mates, or particular industries experience stronger demand than we anticipate,
our business or our profi ts could grow faster than we have outlined above.
In particular, we see opportunities in all three sectors mentioned above. With
manufacturing industries increasingly relying on information technology to track
and manage processes and products, we see an opportunity related to the acquisi-
tion of UGS at A&D, which brings us leadership capabilities in product life cycle
management (PLM) software. With oil prices rising, we see a signifi cant opportu-
nity in our wind power business which is rapidly increasing its revenues, profi ts
and production capacity. With the recent acquisitions at Med, we can begin offer-
ing hospitals, clinics and laboratories the world’s most fully integrated provider
of healthcare diagnostics solutions.
Our business, fi nancial condition or results of operation could suffer material
adverse effects as a result of certain risks. For an overview of the Company’s risk
factors, see “Risk management.”