Siemens 2013 Annual Report Download - page 87

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We want to outpace our competitors over the long term and set the standards for operational and
financial excellence in our industries. We measure and compare the success of our development
on the basis of a target system that defines indicators for revenue growth, capital efficiency and
profitability as well as for the optimization of our capital structure. Our goal is to sustainably
increase Siemens’ value.
Revenue growth
The most important driver for sustainably
increasing our Company’s value is profitable
revenue growth. Our concrete goal is to
achieve revenue growth that exceeds that
of our key competitors; to assess our perfor-
mance we compare our average revenue
growth with theirs. We have also estab-
lished strict criteria for acquisitions.
Capital efficiency
and profitability
Our aim is to be profitable and to use the
capital provided by our shareholders and
lenders as efficiently as possible. We mea-
sure our capital efficiency in terms of return
on capital employed (ROCE (adjusted)).
Simply expressed, this indicator is defined
as income from continuing operations be-
fore interest divided by average capital em-
ployed. We’ve set an ambitious target of
% to % for capital efficiency throughout
Siemens.
At the Sector level, we want to continuously
achieve top EBITDA margins compared to
those of the best competitors in our indus-
tries – throughout business cycles.
Capital structure
Sustainable profit and revenue growth can
be achieved only on the basis of a healthy
capital structure. Therefore, in addition to
our metrics for operations, we’ve defined
a yardstick for managing our capital struc-
ture: the ratio of adjusted industrial net debt
to adjusted EBITDA. We intend to further
optimize this ratio in order to better regulate
our debt-to-equity ratio. We’re also aiming
to ensure unlimited access to debt financing
instruments in the capital markets as well as
the servicing of our financial obligations.
For further information on our framework
for sustainable value creation, please see
C.. STRATEGY on pages - and
C. FINANCIAL PERFORMANCE SYSTEM on
pages - of this Annual Report.
Financial targets
Revenue growth Growth > most relevant competitors
Capital structure Adjusted industrial net debt / adjusted EBITDA
Capital efficiency / Profitability Return on capital employed / top margins throughout business cycles