Siemens 2013 Annual Report Download - page 208

92 A. To our Shareholders
117 B. Corporate Governance 155 C. Combined Management Report
156 C. Business and economic environment
173 C. Financial performance system
179 C. Results of operations
192 C. Financial position
204 C. Net assets position
207 C. Overall assessment of the economic position
209 C. Subsequent events
210 C. Sustainability
227 C. Report on expected developments and
associated material opportunities and risks

Our Free cash flow from continuing operations rose % to
€. billion year-over-year, as we increased our cash flows
from operating activities and reduced investments in intangi-
ble assets and property, plant and equipment year-over-year.
We made further progress in fiscal  with regard to reach-
ing our capital structure target. This target is defined as the ra-
tio of adjusted industrial net debt to adjusted EBITDA, and set
at . to . for the medium term. As forecast in our Annual
Report for , we increased the ratio year-over-year, to .
from . a year earlier.
Overall, we believe that we achieved the goals for revenue and
our capital structure announced in our Annual Report for .
Also we exceeded our revised target for Income from continu-
ing operations announced in our Interim Report for the third
quarter of fiscal . ROCE (adjusted)
for continuing opera-
tions
was below our expectations due primarily to lower In-
come from continuing operations than we forecast a year ago.
During the course of fiscal  it became less likely that our
previous expectations for our markets would materialize. We
therefore no longer expect to achieve a Total Sectors profit
margin of at least % in fiscal . But we will continue to
rigorously execute our “Siemens ” program that was de-
signed to achieve the margin target. At the end of fiscal ,
we were ahead of identifying and implementing the measures
within the program aimed at sustainably improving our pro-
ductivity. We expect that “Siemens ” will help us to narrow
or close the gap to our competitors in coming years.
During fiscal , we also made strong progress in focusing
our portfolio. Our successful spin-off of OSRAM was the first
such partial spin-off by a German company. With the spin-off,
Siemens shareholders received one OSRAM share per ten
Siemens AG shares. Independence gives OSRAM the entrepre-
neurial flexibility to focus exclusively on its own market, with
additional sources for financing. A stake in OSRAM gives
shareholders of Siemens AG an additional opportunity to
participate in OSRAM’s potential growth and value creation.
The shares of Siemens AG rose on the first day of trading for
OSRAM, July , , and the shares of both companies clearly
outperformed the German DAX stock index through the re-
mainder of the fiscal year. We also sold our % stake in NSN.
After the end of fiscal , we signed an agreement to sell
our business of mechanical, biological and chemical water
treatment and processing. Furthermore, we intend to sell our
airport logistics and postal automation business and exit our
solar business after completion of projects under execution.
At the same time, we strengthened our core activities by
acquiring LMS International NV (LMS) to expand and com-
plement the Industry Sector’s industrial IT and software busi-
ness, and by acquiring Invensys Rail to expand Infrastruc-
ture & Cities’ presence in the growing global rail automation
market.
We intend to continue providing an attractive return to share-
holders. As in the past, we intend to fund the dividend payout
from Free cash flow. The Siemens Managing Board, in agree-
ment with the Supervisory Board, proposes a dividend of €.
per share, unchanged from a year earlier.