Siemens 2009 Annual Report Download - page 161

73
 Managing Board statements, Independent auditors’ report, Additional information
95 Net assets position 97 Report on post-balance sheet date events
98 Risk report
108 Information required pursuant to
§315 (4) HGB of the German Commercial
Code and explanatory report
114 Compensation report
114 Report on expected developments
Drive Technologies was strongly affected by a downturn in
the machine building industry in fiscal 2009. At the end of the
current fiscal year, delayed effects of the economic downturn
also began to reach the long-cycle businesses of the Division.
As a result, orders declined 31% from the prior-year level and
revenue was down 11%, with the strongest declines in Europe,
C.I.S., Africa, Middle East. Lower capacity utilization, a less fa-
vorable product mix and net severance charges of €30 million
in the fourth quarter combined to reduce profit 35% compared
to the strong fiscal 2008. Both periods included margin im-
pacts related to the Division’s purchase of Flender Holding
GmbH in fiscal 2005. PPA effects in fiscal 2009 were €36 million
and are expected to remain at this level in the next fiscal year,
while PPA effects in the prior year were €38 million. Following
a strategic review, the electronics assembly systems business,
for which Siemens initiated a carve-out during fiscal 2008, was
classified as held for disposal and management responsibility
was transferred from Drive Technologies to Other Operations
during fiscal 2009. The presentation of prior-year financial in-
formation has been reclassified accordingly.
Building Technologies kept revenue in fiscal 2009 stable com-
pared to the prior year, as the Division nearly offset a decline in
Europe, C.I.S., Africa, Middle East with higher revenue in the
Americas year-over-year. New orders declined 7% compared to
fiscal 2008, due to a general slowdown in the commercial con-
struction markets, particularly in Europe, C.I.S., Africa, Middle
East and the Americas. Reduced economies of scale and a less
favorable business mix, combined with €26 million in net
charges for severance programs in the fourth quarter, reduced
profit by 18% year-over-year. As mentioned above, the low-
voltage switchgear business has been transferred from the
Industry Automation Division to Building Technologies begin-
ning of fiscal 2010.
In fiscal 2009, revenue at OSRAM decreased 13% compared to
the prior year on lower revenue in all its businesses. On a geo-
graphic basis, the strongest declines came from Europe, C.I.S.,
Africa, Middle East and the Americas. Lower capacity utiliza-
tion sharply reduced profit in the current period. Profit in both
periods included charges related to structural initiatives. While
charges in the current period comprised €18 million in net
severance charges and €40 million for major impairments and
inventory write-downs taken in the fourth quarter, impacts in-
cluding severance charges and impairments in the prior-year
period were offset by a €130 million net gain on the sale of the
Division’s Global Tungsten & Powders unit.
While order intake in fiscal 2009 at Industry Solutions de-
clined sharply compared to the prior-year, the Division’s order
backlog had a stabilizing effect on revenue and profit. The
strongest order declines came in Europe, C.I.S., Africa, Middle
East and Asia, Australia. Revenue came in 4% lower than in fis-
cal 2008, including higher revenue in Asia, Australia. Profit in
the current period declined 18%, as the Division took net sever-
ance charges of €69 million in the fourth quarter. Prior-year
profit benefited from a €30 million gain on the sale of the Divi-
sion’s hydrocarbon service business. Siemens intends to carve
out Industry Solutions’ electronic design and manufacturing
business in fiscal 2010.
Mobility increased fiscal 2009 revenue 10% compared to the
prior year, including higher revenue in all regions. Orders were
14% lower than a year earlier, when Mobility took in its largest-
ever rolling stock order for more than 300 trains worth €1.4
billion. On a geographic basis, orders declined in Europe,
C.I.S., Africa, Middle East, which included the large order just
mentioned for the prior year, and the Americas. Demand in
Asia, Australia increased sharply year-over-year, including a
particularly large train order in China. Mobility delivered fiscal
2009 profit of €390 million compared to a loss of €230 million a
year earlier. This change stemmed in part from execution of
the Division’s “Mobility in Motion” program. A year earlier this
program resulted in costs of €151 million, primarily for sever-
ance charges and impairments. Profit in the prior year was also
burdened by charges of €209 million related to major projects
in the second quarter, provisions related primarily to projects
in the rail automation business, and further charges of €32
million for the Combino railcar business. At the beginning of
fiscal 2010, Mobility sold its airfield lighting business.