Siemens 2013 Annual Report Download - page 231

253 D. Consolidated Financial Statements
357 E. Additional Information
245 C. Compensation Report, Corporate Governance
statement pursuant to Section a of the
German Commercial Code, Takeover-relevant
information and explanatory report
246 C. Siemens AG ( Discussion on basis of
German Commercial Code)
250 C. Notes and forward-looking statements

imately € billion in revenue conversion from the € billion
backlog of Infrastructure & Cities, approximately € billion in
revenue conversion from the € billion backlog of Industry
and approximately € billion in revenue conversion from the
€ billion backlog of Healthcare. For fiscal , we expect that
orders will continue to exceed revenue, leading to a book-to-
bill ratio above .
Overall, we assume growth in revenue from emerging mar-
kets, which accounted for % of total revenue in fiscal ,
to be largely offset by lower revenue from industrialized
countries.
In fiscal , we set ourselves the goal to increase revenue
from our Environmental Portfolio to more than € billion in
fiscal . In fiscal , revenue from our Environmental
Portfolio was € billion. Due to recent and ongoing portfolio
changes, particularly including the spin-off of OSRAM and the
disposal of our Water Technologies Business Unit, it is no lon-
ger likely that we will achieve this target purely with our own
operations by the end of fiscal . Siemens’ strategic focus
on technologies for energy efficiency and climate and environ-
mental protection will nevertheless remain in place.
Profitability
For fiscal , we anticipate that basic EPS from Net income
will increase by at least % compared to €. in fiscal .
This increase is calculated on a base of  million shares,
which was the actual number of shares outstanding as of
September , . We expect that this increase will come
predominantly from growth in Net income. In addition, we
expect EPS growth to benefit modestly from our previously
announced plan to repurchase Siemens shares in a volume of
up to € billion within the next up to  months.
Our forecast for basic EPS growth in fiscal  is based on a
number of additional expectations and assumptions. As men-
tioned above, we forecast organic revenue near the level of fis-
cal , which means we do not expect positive influences on
profit development from economies of scale. We assume pric-
ing pressure across our businesses of around .% to .% in
fiscal , which will also hold back profit development, and
upward pressure on costs from wage inflation of around % on
a global basis. Finally, we anticipate that our tax rate in fiscal
 will be slightly higher, on the assumption that we will
generate a greater share of profit in higher-tax jurisdictions. We
expect that these factors will be offset by significant positive
developments, particularly including a steep decline in charges
compared to fiscal , which included €. billion in im-
pacts for the “Siemens ” program. Furthermore, we expect
substantial productivity benefits from the program, continued
progress with reducing costs in our supply chain, and a more
favorable revenue mix in some businesses due to portfolio
measures and selective ramp-down of lower-margin activities.
We expect Total Sectors profit in fiscal  to benefit from
implementation of “Siemens .” At the end of fiscal , we
were ahead of schedule with regard to identifying and
implementing the measures within the program aimed at sus-
tainably improving our productivity. As a result, we took the
great majority of the charges we expected under the program
within fiscal , totaling €. billion. With only some supple-
mental charges for the program in fiscal , and with most of
the program’s productivity gains expected to materialize during
the year, we expect a substantial increase in Total Sectors profit
year-over-year, and that Total Sectors profit margin will rise to
.% to .%. We assume that all Sectors will contribute to the
Total Sectors profit margin improvement, except for Healthcare
which already achieved a very high margin level in fiscal 
due to execution of its “Agenda ” initiative. We assume that
pricing pressure will be modestly higher for Healthcare and En-
ergy than for Infrastructure & Cities and Industry.
As part of One Siemens, our framework for sustainable value
creation, we have defined adjusted EBITDA margin corridors
for the respective industries of our four Sectors, which the Sec-
tors seek to achieve and maintain throughout the entire busi-
ness cycle. For Energy the margin corridor is % to %; for
Healthcare the margin corridor is % to %; for Industry the
margin corridor is % to %; and for Infrastructure & Cities the
margin corridor is % to %. With anticipated improvements
in Total Sectors profit, we expect that all Sectors will be in their
respective margin corridors in fiscal , with Infrastruc-
ture & Cities reaching the low end of its target range.
Anticipated improvements within Total Sectors profit are ex-
pected to be partly offset by results outside the Sectors and
within discontinued operations. Within Equity Investments
we expect profit of approximately € million in fiscal . In
fiscal , profit of € million benefited strongly from the
sale of our stake in NSN.
We expect SFS to continue successfully executing its growth
strategy, which drove a higher interest result in fiscal 
compared to the prior year. With continued growth in fiscal
, we anticipate profit of SFS to be above the prior-year
level of € million. Within One Siemens, we set a target
range for return on equity or ROE (after tax) for SFS of % to
%. We expect that SFS will continue to reach this range in
fiscal .