Siemens 2012 Annual Report Download - page 166

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

In fiscal , profit at Industry declined % year-over year as
market conditions for the Sector became less favorable in the
second half of the period. This was particularly evident in
China and to a lesser extent in Germany, two of the Sector’s
most important national markets. Profit development in fiscal
 was also held back by a less favorable business mix as
well as higher marketing, selling, general and administrative
expenses associated with innovation and growth opportuni-
ties. Furthermore, profit at Industry was impacted by market
challenges for its renewable energy offerings. The Sector took
€ million in charges related to severance programs for ad-
justing capacity and adapting its portfolio primarily related to
those offerings. These factors were only partially offset by In-
dustry ’s € million portion of the OPEB gain mentioned earli-
er. For comparison, profit in fiscal  was burdened by Indus-
try ’s € million share of a special remuneration allocation.
Revenue in fiscal  for Industry rose moderately year-over-
year on broad-based increases across its businesses. Industry ’s
orders declined slightly compared to the prior fiscal year as
higher orders at Industry Automation were more than offset by
a decrease at Drive Technologies and the metal technologies
business. On a regional basis, revenue was up in the Americas
and Europe, C.I.S., Africa, Middle East, more than offsetting a
decline in Asia, Australia. The decline in orders was due pri-
marily to lower demand from Asia, Australia. Revenue and or-
der development in fiscal  benefited from positive curren-
cy translation effects. On a book-to-bill ratio of ., Industry ’s
order backlog was € billion at the end of fiscal , un-
changed from a year earlier.
Profit at Industry Automation declined % year-over year. The
decline compared to the prior fiscal year was due mainly to a
less favorable business mix, higher marketing and selling,
general and administrative expenses and lower earnings from
the Division’s offerings for renewable energy. On growth in all
three reporting regions, revenue for the Division was up %
and orders increased % year-over-year. Both fiscal years under
review included PPA effects from the acquisition of UGS Corp.,
acquired in fiscal . PPA effects were € million in fiscal
 and € million a year earlier.
Profit at Drive Technologies in fiscal  came in at € mil-
lion, down significantly from a year earlier also due mainly to a
less favorable business mix, lower earnings from its offerings
for renewable energy, and higher research and development as
well as marketing, selling and general administrative costs
compared to fiscal . The Division’s portion of the severance
charges mentioned for the Sector was € million. While reve-
nue for Drive Technologies grew moderately compared to fiscal
, orders declined clearly year-over year. On a regional basis,
revenue growth was driven by the Americas and supported by
moderate growth in Europe, C.I.S, Africa, Middle East. The de-
cline in orders was due to weak demand from Asia, Australia.
  
Year ended September , % Change therein
(in millions of €)   Actual Adjusted  Currency Portfolio
Industry Automation 9,563 8,974 7% 3% 3% 0%
Drive Technologies 9,640 9,179 5% 3% 2% 0%
1 Excluding currency translation and portfolio effects.
   
Year ended September , % Change therein
(in millions of €)   Actual Adjusted  Currency Portfolio
Industry Automation 9,547 8,983 6% 4% 3% 0%
Drive Technologies 9,395 9,995 (6)% (8)% 2% 0%
1 Excluding currency translation and portfolio effects.
     
Profit Profit margin
Year ended September , Year ended September ,
(in millions of €)   % Change  
Industry Automation 1,335 1,411 (5)% 14.0% 15.7%
Drive Technologies 970 1,158 (16)% 10.1% 12.6%