Siemens 2014 Annual Report Download - page 177

247 D. Consolidated Financial Statements
337 E. Additional Information
213 C. Overall assessment of the economic position
214 C. Subsequent events
215 C. Sustainability and citizenship
225 C. Report on expected developments and
associated material opportunities and risks
242 C. Compensation Report and legal disclosures
242 C. Siemens AG (Discussion on basis
of German Commercial Code)

Because a large part of our revenue stems from recurring busi-
ness, our business activities are to a certain extent resilient to
short-term economic trends but are dependent on regulatory
and policy developments around the world. We are currently
operating in a low growth environment, impacted by healthcare
reforms, budgetary constraints and consolidation of healthcare
service providers, predominantly in the U.S. and Europe.
In fiscal , the Healthcare Sector included four Divisions:
Imaging & Therapy Systems, Clinical Products, Diagnostics
and Customer Solutions. The Sector also included Audiology
Solutions, a Sector-led business. In addition to our Sector-level
financial results, we also reported financial results for our
Diagnostics Division.
Beginning with fiscal , Siemens Healthcare will be man-
aged separately under the Siemens umbrella. This will enable
Healthcare to adjust to markets flexibly and in a more focused
way. It means in essence, a sales organization optimized to
meet the needs of Healthcare and a Healthcare specific set up
of support and central functions. In addition, Siemens an-
nounced in November  the sale of its hearing aid business
Audiology Solutions to the investment company EQT and the
German entre preneurial family Strüngmann as co-investors.
Industry
With the businesses included in the former Industry Sector, we
are one of the world’s leading suppliers of innovative and envi-
ronmentally friendly products and solutions for industrial com-
panies, particularly those in the process and manufacturing
industries. Our end-to-end automation solutions, drive technol-
ogies, industrial IT and industry software, in-depth industry
expertise and technology-based services help our customers
use resources and energy more efficiently, improve productiv-
ity, and increase flexibility.
In fiscal year , the Sector consisted of three Divisions:
Industry Automation, Drive Technologies and Customer Ser-
vices. Financial results relating to the Customer Services Divi-
sion were included in the results for Industry Automation and
Drive Technologies. During the third quarter of fiscal ,
nearly all activities of the Metals Technologies business for-
merly included in the Industry Sector fulfilled the requirements
to be reported as discontinued operations. These activities
are to become part of a joint venture with Mitsubishi-Hitachi
Metals Machinery Inc., in which Siemens will hold a  % stake.
Results for prior periods are reported on a comparable basis.
The businesses of the former Industry Automation Division
offer a unique combination of automation technologies, indus-
trial controls and industry software that supports customers in
optimizing the complete product development and production
processes – from product design to production to sales and ser-
vice. In line with “Industrie .” – a German high-tech indus-
trial strategy – we are working on the convergence between
the real and the virtual worlds of production, sometimes called
“Digital Enterprise.” Our portfolio is geared largely to the man-
ufacturing industry and its major markets such as automotive,
aerospace and production equipment as well as food and bev-
erage, pharmaceutical and chemical. Therefore our business
activities can be strongly affected by economic cycles because
these markets tend to react quickly to changes in the overall
economic environment.
With the businesses of the former Drive Technologies Divi-
sion we are one of the world’s leading suppliers of integrated
drive systems. With our products and systems for innovative
applications and industry-specific solutions as well as end-to-
end services, we are increasing the productivity, energy effi-
ciency and reliability of machinery and installations in indus-
tries such as shipbuilding, cement, mining, and pulp and
paper. Advanced industry software facilitates our offerings’
optimal integration. Our reliable gears, couplings, and drive
solutions are partly also in high demand in other Divisions of
the Siemens Group, mainly for rail transport and wind turbines.
With our e-Car business, we develop motors and inverters for
electric cars and thereby address an additional future growth
market. The industries served by our businesses, particularly
the process industries, the energy industry and the infrastruc-
ture sector, generally show a delayed response to changes in
the overall economic environment. In contrast, our business
activities that serve customers in the manufacturing industries
can be strongly affected by economic cycles.
With a comprehensive portfolio of services and a global net-
work of experts, our businesses of the former Customer
Services Division support our industrial customers with tech-
nology-based industry services across entire lifecycles of their
plants and machinery – from planning and engineering to
operation and modernization.
Beginning with fiscal , we serve the industrial market
with two new Divisions that tailor their strategies to specific
customer industries. The Digital Factory Division primarily
addresses the manufacturing industry and its major markets:
automotive, aerospace, and machine tool and production equip-
ment over the complete product lifecycle of our customers.
The Process Industries and Drives Division focuses largely on
the process industries like pharmaceutical, food & beverage,
chemical and related industries as well as drive solutions for
infrastructure topics. The related business activities within the
former Industry Automation and Drive Technologies Divisions
were accordingly realigned into the two new Divisions. In order
to streamline the process automation activities in the oil & gas