Siemens 2010 Annual Report Download - page 57

40 Directions 64 Vision 56 One Siemens
57 One Siemens: Overview
59 Framework for sustainable value creation
60 Focus areas

We gear our actions to the dynamics of our markets
while measuring ourselves against the best in our
industry. Our goal is to consistently outperform our
competitors and to set new standards for leadership
in financial performance and operating strength.
We’ve established a financial target system that
defines metrics for revenue growth, capital efficien-
cy, profitability and the optimization of our capital
structure. These metrics are key tools for increasing
our company’s value.
REVENUE GROWTH
Profitable revenue growth is the most important
driver of long-term value creation. That’s why we
want to grow faster than the best companies in our
markets. To assess our performance, we compare
our average revenue growth to that of our toughest
competitors. We’ve also established strict criteria
for acquisitions.
CAPITAL EFFICIENCY / PROFITABILITY
Our aim is to remain profitable and use the capital
provided by our shareholders and lenders as effi-
ciently as possible. A key measure of our business
success, capital efficiency has been included in our
financial reporting system since fiscal . We’ve
now further developed our main metric for capital
efficiency, return on capital employed (ROCE),
defining it more simply as income from continuing
operations before interest divided by average capi-
tal employed (ROCE adjusted). We’ve set an ambi-
tious capital efficiency target for the entire company.
With respect to profitability, we intend to maintain
and expand our leading position. Our goal is to
achieve industry-leading profit margins – over the
long term and across business cycles.
CAPITAL STRUCTURE
A solid capital structure is essential for sustainable
profit and revenue growth. In addition to metrics for
operations, we’ve defined a yardstick for managing
this structure: adjusted industrial net debt divided
by EBITDA. We’re going to optimize this ratio in or-
der to ensure both wider access to debt financing
instruments in the capital markets and the servic-
ing of our financial obligations while safeguarding
our current credit rating.
Taken together, these metrics provide a balanced
framework for sustainable value creation.
CONTINUOUS IMPROVEMENT
The aim of One Siemens is to enhance the value of
our company over the long term by continuously
improving our performance relative to the market
and our competitors.
www.siemens.com/one-siemens
Framework for sustainable value creation
See overview on page  and pages - of Part II of this Annual Report.