Siemens 2009 Annual Report Download - page 207

119
OPPORTUNITIES
As described in the section “Risk report,” we have implemented
a comprehensive Enterprise Risk Management (ERM) ap-
proach that is integrated into the organization and that ad-
dresses both risks and opportunities. Within the ERM ap-
proach, we regularly identify, evaluate and respond to oppor-
tunities that present themselves in our various fields of
activity, even in the current difficult macroeconomic environ-
ment.
While the stabilization in the global economy is regionally un-
balanced and subject to a high degree of uncertainty, and
market conditions are expected to remain challenging, we also
see opportunities for our business. For example, we expect to
win in the coming years a significant volume of new orders
generated by stimulus programs already announced by gov-
ernments around the world to counter the negative impact of
the macroeconomic downturn. In addition, due to a general
decline in demand as a consequence of the current economic
conditions, we hope to benefit from favorable price develop-
ments on our supplier markets for components, sub-assembles
and other materials. Further, the current macroeconomic envi-
ronment may also present increased opportunities for strate-
gic acquisitions.
We are continuously in the process of developing and imple-
menting initiatives to reduce cost, adjust capacities as well as
streamlining our product portfolio. The successful implemen-
tation of these measures may lead to additional profit and
value for our customers. For example, we expect to generate
substantial and sustainable improvements in profitability from
our Supply Chain Management initiative launched in fiscal
2009 aimed at optimizing our supply chain management and
improving the management of our supplier-related risk. For
further information regarding this initiative, see “Business and
operating environment—Strategy—Important corporate pro-
grams and initiatives—Supply Chain Management initiative.”
The realignment of our sales and marketing activities on a
global basis in our cluster structure may also represent an op-
portunity to improve our profitability. By sharing resources and
eliminating overlapping back office functions, we see the op-
portunity to optimize our enterprise-wide cost position on a
Furthermore, we expect a substantial loss on the planned sale
of the electronics assembly systems business in fiscal 2010.
During fiscal 2009, centrally carried pension costs rose by ap-
proximately €0.5 billion from the prior-year level, and we ex-
pect no significant change year-over-year in fiscal 2010.
OVERALL ASSESSMENT
Siemens anticipates that conditions in the manufacturing sec-
tor and world financial markets will remain challenging in fis-
cal 2010. Following a double-digit decline in orders in fiscal
2009, we expect only a mid-single-digit percentage decline in
organic revenue in fiscal 2010 due to the stabilizing effect of
our strong order backlog. We expect Total Sectors profit be-
tween €6.0 and €6.5 billion in fiscal 2010, and an increase of
approximately 20% in income from continuing operations
compared to €2.457 billion in the prior year. This outlook is
conditional on no material deterioration in our pricing power
during the fiscal year and on improving market conditions in
the second half, particularly for our shorter-cycle businesses.
Furthermore this outlook excludes major impacts that may
arise during the fiscal year from restructuring, portfolio trans-
actions, impairments, and legal and regulatory matters.
Under the assumption of positive effects from stimulus pro-
grams and the environmental portfolio, we should be able to
resume organic revenue growth in fiscal 2011. With tailwinds
from a recovering world economy, we expect to resume reve-
nue growth and realize corresponding benefits for Total Sec-
tors profit and Income from continuing operations.
 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