Siemens 2015 Annual Report Download - page 13

Combined Management Report 
A.3.2 Segment information analysis
A.3.2.1 POWER AND GAS
Fiscal year % Change
(in millions of €) 2015 2014 Actual Comp.
Orders 15,666 13,996 12% (1)%
Revenue 13,193 12,720 4% (11)%
Profit 1,426 2,215 (36)%
Profit margin 10.8% 17.4%
Revenue and orders benefited significantly from currency
translation and portfolio effects. Dresser- Rand and the Rolls-
Royce Energy aero-derivative gas turbine and compressor busi-
ness, which were both acquired in fiscal , contributed
eight and ten percentage points to order and revenue develop-
ment, respectively. Orders were almost on the level of the prior
year on a comparable basis, as a decline in the solutions busi-
ness, due to a lower volume from large orders, was almost off-
set by order growth in other businesses. The regional picture
was mixed; order intake increased in Europe, C. I. S., Africa,
Middle East and the Americas and declined in Asia, Australia.
Revenue was down significantly on a comparable basis, due
mainly to declines in the large gas turbine and solutions busi-
nesses. On a regional basis, revenue increased in the Americas
and declined in the other two reporting regions. Profit was
down substantially year-over-year, due mainly to lower mar-
gins, particularly in the large gas turbine business, severance
charges of €  million, charges of €  million related to a
project which incurred higher costs for materials and from cus-
tomer delays, and higher R & D and selling expenses related in
part to the acquisitions mentioned above. For comparison, the
prior year benefited from a €  million gain on the sale of the
Division’s turbo fan business and a positive €  million effect
from a successful project completion in the turnkey business.
The Division continues to face challenges in an increasingly
competitive market for large gas turbines. Beginning with fiscal
, the Division includes the E-Houses and Modules busi-
ness segment that was previously included within the Process
Industries and Drives Division. If this change had already been
effective in fiscal , profit margin for Power and Gas would
have been . %.
A.3.2.2 WIND POWER AND RENEWABLES
Fiscal year % Change
(in millions of €) 2015 2014 Actual Comp.
Orders 6,136 7,759 (21)% (26)%
Revenue 5,660 5,567 2% (3)%
Profit 160 6 >200%
Profit margin 2.8% 0.1%
Order intake was down year-over-year, due mainly to a sharp ly
lower volume of large orders, particularly in the offshore
business, which for Siemens means primarily in Europe. Asia,
Australia showed strong growth from a small base. Revenue
was down on a comparable basis, as increases in the offshore
and service businesses were more than offset by a decline in
the onshore business. On a regional basis, an increase in the
Americas was more than offset by declines in the two other
reporting regions. Profit was up sharply compared to fiscal
, when the Division recorded charges of €  million for
inspecting and replacing main bearings in onshore wind tur-
bines and for repairing offshore and onshore wind blades. In
the current year, profit development was held back by reduced
margins in the offshore business due partly to increased com-
petition and expenses for ramping up commercial-scale pro-
duction of turbine offerings.
A.3.2.3 ENERGY MANAGEMENT
Fiscal year % Change
(in millions of €) 2015 2014 Actual Comp.
Orders 12,956 11,210 16% 9%
Revenue 11,922 10,708 11% 5%
Profit 570 (86) n / a
Profit margin 4.8% (0.8)%
Orders and revenue were higher in all businesses, in particular
in the solutions, transformer and low voltage businesses. Ben-
efiting from currency translation effects, all reporting regions
showed order and revenue growth, in particular the Americas
region. The major factor in the profit improvement year-over-
year was sharply lower charges related to project execution. In
addition, margins in the solutions business improved signifi-
cantly year-over-year, including a lower share of projects with