Siemens 2012 Annual Report Download - page 147

135 D. Consolidated Financial Statements
239 E. Additional Information
130 C. Siemens AG (Discussion on basis of
German Commercial Code)
134 C. Notes and forward-looking statements
129 C. Compensation Report, Corporate Governance
statement pursuant to Section a of the
German Commercial Code, Takeover-relevant
information and explanatory report

External revenue of the Sector was €. billion in fiscal
, representing % of Siemens revenue. The following
chart provides a geographic breakdown of the Infrastruc-
ture & Cities Sector’s external revenue in fiscal .
The Sector consists of five Divisions: Rail Systems; Mobility and
Logistics; Low and Medium Voltage; Smart Grid; and Building
Technologies. Financial results of the Rail Systems and the Mo-
bility and Logistics Divisions are reported together in the Trans-
portation & Logistics Business. Financial results of the Divisions
Low and Medium Voltage and Smart Grid are reported together
in the Power Grid Solutions & Products Business.
The Rail Systems Division comprises Siemens’ rail vehicle
business. The Division’s activities consist mainly of the busi-
nesses relating to rail vehicles for mass transit, regional and
long-distance transportation, driverless systems, locomotives
for passengers or rail freight, traction systems, bogies and on-
board power supplies.
The Mobility and Logistics Division primarily provides prod-
ucts, solutions (including IT solutions) and services in operating
systems for rail transportation such as central control systems,
interlockings and automated train controls, for road traffic in-
cluding traffic detection, information and guidance, for airport
logistics including cargo tracking and baggage handling and
for postal automation including letter and parcel sorting.
The Low and Medium Voltage Division supplies electrical
grid operators and large industrial electricity consumers with
medium- and low-voltage equipment. Furthermore, the Divi-
sion provides systems and services for the distribution of elec-
trical power from high-voltage transmission grid access to me-
dium or low-voltage grids directing the electrical energy to
end consumers and their access points.
The Smart Grid Division provides energy automation solutions,
smart grid applications, transmission and distribution services,
applications for electromobility solutions and rail infrastructure
electrification solutions for mainline and mass transit applica-
tions. In fiscal , the Division acquired the U.S.-based com-
pany eMeter in order to position the Division to expand its ener-
gy information and meter data management solutions.
The Building Technologies Division offers products, services
and solutions for commercial, industrial, public and residential
buildings, including building automation, comfort, building
safety and security and building operations. In addition, the
Division offers energy solutions aiming to improve a building’s
energy cost, reliability and performance, while minimizing its
impact on comfort and the environment. The Division’s offer-
ings include heating and ventilation controls, security systems
and devices such as intruder detection, video surveillance and
building access control, fire safety solutions such as fire detec-
tion, protection alarm systems and non-water based fire extin-
guishing.
The Infrastructure & Cities Sector also holds the Atos S.A. (AtoS)
shares and the convertible bond, which Siemens received fol-
lowing the sale of Siemens IT Solutions and Services to AtoS.
The Infrastructure & Cities Sector distributes its products and
services through its own dedicated sales force, supported by
Siemens’ worldwide network of regional companies. In addi-
tion, the Divisions of the Sector use, to varying degrees, third-
party distributors, panel builders, original equipment manufac-
turers, value added partners, installers and general contractors.
Overall, the Sector’s principal customers are railway operators,
public utilities, industrial and infrastructure customers, elec-
trical grid operators, construction and real estate customers
and manufacturers of heating, ventilation and air-conditioning
solutions. The timing and extent to which a Division of the
Infrastructure & Cities Sector is affected by economic cycles de-
pends largely on the kind of business activities it conducts.
Business activities that tend to react very quickly to changes in
the overall economic environment include Low and Medium
Voltage. Divisions where business activities are generally af-
fected later by the changes in the overall economic environ-
ment include Smart Grid and Building Technologies. The de-
velopment of markets served by our Rail Systems Division and
Mobility and Logistics Division is primarily driven by public
spending. Customers of these Divisions usually have multi-
year planning and implementation horizons. They therefore
tend to be independent of short-term economic trends.
The Sector is globally active in a broad range of markets, in-
cluding construction and real estate, transportation and logis-
tics and utilities. The Sector’s activities include emerging mar-
kets, e.g., those in the Asia, Australia region. While the Sector
believes that these markets offer significant growth potential,
the Sector’s activities in that region expose it to risks associat-
ed with economic, financial and political disruptions that
could result in lower demand or affect customers’ abilities to
pay. Some markets, such as those served by our Divisions Rail
Systems, Mobility and Logistics and Smart Grid, are signifi-
cantly influenced by public spending. The large size of some of
the Sector’s projects (especially in the following Divisions: Rail
Systems, Mobility and Logistics and in parts of Building Tech-
nologies) occasionally exposes it to risks related to technical
performance or specific customers or countries. In the past,
the Sector has experienced significant losses on individual
projects in connection with such risks. For additional informa-
tion on these risks, see .    
    .