Siemens 2008 Annual Report Download - page 80

74 Fit42010 – Unleashing the potential of an integrated technology company
To succeed over the long term, companies must set and achieve demanding goals. That’s why –
following in the footsteps of Fit4More – our Fit42010 program denes ambitious targets for
growth, protability, capital efciency and cash ow:
We want to grow Company-wide at least twice as fast as world GDP. This normally means growth

of about seven to eight percent, depending on global economic conditions.
To close the protability gap to our best competitors, we introduced a new management and
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organizational structure on January 1, 2008 and set tough new target margin ranges for our
Industry, Energy and Healthcare Sectors, their Divisions, and our Cross-Sector Businesses.
To measure capital efciency, we’re applying the performance yardstick return on capital

employed (ROCE). This metric is calculated by dividing income before interest by capital
employed. We’re aiming for an ROCE of 14-16 percent for the entire Company by 2010 – an
ambitious goal in light of our past performance.
In the area of cash ow, we’ve set a cash conversion target of “one minus the Company’s growth

rate.” Positive cash ow is vital if we are to make the investments necessary to generate future
growth.
To optimize our capital structure, we’re aiming to achieve a ratio of adjusted industrial net debt

to EBITDA of 0.8-1.0, depending on our level of protability.
Finally, we intend to further optimize our market position by achieving a €1.2 billion reduction

in our sales, general and administrative (SG&A) costs by 2010, compared with the gure for
2007.
Fit42010 – Unleashing the potential of an
integrated technology company
The Siemens-wide Fit42010 program is helping us leverage the capa-
bilities of our integrated technology company to create lasting value for
our shareholders and customers. Building on our values – responsible,
excellent and innovative – we’re also striving to become a world leader
in performance, transparency and compliance.