Siemens 2012 Annual Report Download - page 144

1 A. To our Shareholders
21 B. Corporate Governance 49 C. Combined Management Report
50 C. Business and economic environment
64 C. Financial performance measures
69 C. Results of operations
82 C. Financial position
93 C. Net assets position
95 C. Overall assessment of the economic position
96 C. Subsequent events
97 C. Sustainability
111 C. Report on expected developments and
associated material opportunities and risks

External revenue of the Sector was €. billion in fiscal
, representing % of Siemens revenue. The following
chart provides a geographic breakdown of the Sector’s exter-
nal revenue in fiscal .
The Healthcare Sector comprises the following three Divisions,
one Operational Unit and one separate sector-led Business
Unit. In addition to the financial results for the Sector, financial
results are also reported externally for the Diagnostics Division.
The Imaging & Therapy Systems Division provides a broad
range of medical devices for diagnostic imaging and for therapy
solutions. Imaging equipment includes computer tomographs,
magnetic resonance imaging equipment, and positron emission
tomography. Siemens is a market leader in this field. Therapy
solutions mainly comprise angiography systems, particle thera-
py systems, and minimally invasive procedures. These systems
are closely linked with imaging equipment, in particular in the
area of therapy planning. The Division leverages synergies be-
tween imaging equipment and therapy solutions in order to
strengthen its leading position in these markets. Starting in
fiscal , the Division shifted the focus of certain particle ther-
apy projects primarily to research. In fiscal , the Sector re-
structured its radiation oncology business and stopped the sales
of linear accelerators as of January , .
The Clinical Products Division mainly comprises the business
with ultrasound and X-ray equipment including mammogra-
phy. In addition to providing innovative high-end solutions, the
Clinical Products Division focuses on the development of cost-
efficient, less complex equipment that meets essential custom-
er requirements, particularly in emerging economies. The Clini-
cal Products Division also comprises the internal supplier Com-
ponents and Vacuum Technology which also provides compo-
nents to the Imaging & Therapy Systems Division.
The Diagnostics Division offers products and services in the
area of in-vitro diagnostics. In-vitro diagnostics is based on the
analysis of bodily fluids such as blood or urine and supplies vital
information for the detection and management of disease as
well as an individual patient’s risk assessment. The Division’s
product portfolio represents a comprehensive range of diagnos-
tic testing systems and consumables, including clinical chemis-
try and immunodiagnostics, molecular diagnostics (i.e., testing
for nucleic acids), hematology, hemostasis, microbiology, point-
of-care testing and clinical laboratory automation solutions.
The Sector’s Operational Unit Customer Solutions manages
the sales and service organization as well as the Business Unit
covering hospital information systems. Audiology Solutions
provides hearing aids and is a sector-led Business Unit.
The customers of the Healthcare Sector include healthcare pro-
viders such as hospital groups and individual hospitals, group
and individual medical practices, reference and physician office
laboratories and outpatient clinics. The Sector sells the majori-
ty of its products and services through in-house sales staff,
which is grouped in its Customer Solutions Operational Unit,
supported by dedicated product specialists. In some countries,
it also uses dealers, particularly for the sale of low-end products
(such as low-end ultrasound and X-ray equipment). A small
portion of the Sector’s revenue derives from the delivery of
products and components to competitors on an original equip-
ment manufacturer (OEM) basis. The Sector’s products are ser-
viced primarily by its own dedicated personnel.
As a large part of Healthcare’s revenue stems from recurring
business, the Sector’s business activities are to a certain extent
resilient to short-term economic trends but are dependent on
regulatory and policy developments around the world. The
Healthcare Sector faces market risks in connection with ongo-
ing health care reform efforts. In the U.S., a health care reform
was enacted in the spring of . In particular in connection
with this reform, it is currently expected that an excise tax will
be charged on certain medical devices from  onwards.
Siemens believes that this tax will impact all businesses ex-
cept of Audiology.
The Healthcare Sector’s principal competitors in medical imag-
ing are General Electric, Philips, Toshiba, Hitachi and Hologic.
Other competitors include Roche, Abbott and Danaher for in-
vitro diagnostics, McKesson and Cerner for healthcare infor-
mation technology systems and Sonova, GN Resound, William
Demant and Starkey for audiology (hearing aids). The trend to-
ward consolidation in the Sector’s industry continues. Compe-
tition among the leading companies in the field is strong, in-
cluding with respect to price.
In fiscal , the Healthcare Sector launched Agenda , a
global initiative to grow its innovative capacity and make itself
more competitive. Agenda  is the Sector’s proactive re-
sponse to the challenges emerging from a changing market en-
vironment. To meet these challenges, Agenda  includes
measures targeting innovation, regional presence, competitive-
    (  )
1 Commonwealth of Independent States.
Europe, C.I.S.,
Africa, Middle East: 34%
therein Germany: 8%
Asia, Australia: 24%
Americas: 42%
therein U.S.: 35%