Siemens 2011 Annual Report Download - page 194

6 A. To our shareholders
23 B. Corporate Governance 51 C. Combined management’s discussion and analysis
52 C. Business and operating environment
80 C.2 Fiscal  – Financial summary
83 C. Results of operations
101 C. Financial position
114 C. Net assets position
117 C. Overall assessment of the economic position
118 C. Report on post-balance sheet date events
119 C. Report on expected developments and
associated material opportunities and risks
135 C. Information required pursuant to Section  ()
and Section  () of the German Commercial
Code (HGB) and explanatory report

Healthcare
Sector
Year ended September , % Change therein
(in millions of €)   Actual Adjusted Currency Portfolio
Profit 1,334  %
Profit margin 10.7% .%
New orders 13,116 , % % % %
Total revenue 12,517 , % % % %
External revenue 12,463 , %
therein:
Europe, C.I.S., Africa, Middle East 4,489 4,681 (4)%
therein Germany 992 1,056 (6)%
Americas 5,233 5,142 2%
Asia, Australia 2,741 2,459 11%
1 Excluding currency translation and portfolio effects. 2 Commonwealth of Independent States.
With effect from October , , the Healthcare Sector im-
plemented a new organizational structure. The new align-
ment achieves greater integration of the Sectors’ businesses,
and also unifies sales and service in one Sector-wide organiza-
tion. The audiology business unit is now managed as a Sector-
led Business Unit. Following the new structure, financial re-
sults are reported externally for the Sector and for the Diag-
nostics Division. Prior-year information is presented on a com-
parable basis.
The healthcare market environment included continuing
pressure on public health budgets in developed countries
while healthcare spending increased in emerging market
countries, particularly including China. The Healthcare Sector
posted a profit of €. billion for fiscal , including nega-
tive impacts related to particle therapy business. The primary
impact stemmed from a reevaluation of the commercial feasi-
bility of particle therapy for general patient treatment, after
which the Sector decided to shift the focus of certain particle
therapy projects primarily to research. In the third quarter,
charges totaling € million were recognized related to this
reevaluation. In accordance with project accounting rules,
Healthcare reduced revenue in the imaging and therapy sys-
tems businesses by an amount of revenue recognized from
the projects in prior periods. The negative impact on profit re-
lated to this revenue effect was approximately € million
within the total impact for the reevaluation mentioned above.
In the first quarter, before the reevaluation, the Sector took
€ million in charges stemming from increased costs esti-
mates for completing particle therapy contracts. Profit in fiscal
 was also held back by the Sector’s € million share of the
special employee remuneration allocation mentioned earlier
and a loss of € million on the sale of a healthcare IT business
in France. For comparison, the Sector’s profit of € million a
year ago included charges for impairments totaling €. bil-
lion at Diagnostics and € million in charges related to the
particle therapy business. Profit in the prior year benefited
from € million of the pension curtailment gain discussed
earlier and a gain of € million related to the Sector ceasing
consolidation of a former subsidiary due to loss of control. The
Sector expects burdens on profit in coming quarters from mea-
sures aimed at improving its competitive position.
Profit at Diagnostics in fiscal  was € million, held
back by increased pricing pressure in a competitive market
environment, a less favorable business mix from a higher
proportion of lower-margin product lines and higher service
costs compared to the prior year. Operational challenges
are expected to continue in coming quarters. The profit was
also burdened by an increase in valuation allowances for re-
ceivables triggered by a debt rating downgrade related to
Greece. A year earlier, Diagnostics posted a loss of € mil-
lion due to the impairment charges mentioned above, and
benefited from € million of the pension curtailment gain