Siemens 2015 Annual Report Download - page 4

Combined Management Report
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A.1.1 The Siemens Group
A.1.1.1 ORGANIZATION AND BASIS OF PRESENTATION
We are a technology company with core activities in the fields
of electrification, automation and digitalization, and activi-
ties in nearly all countries of the world. Siemens comprises
Siemens AG, a stock corporation under the Federal laws of
Germany, as the parent company and its subsidiaries. Our
Company is incorporated in Germany, with our corporate head -
quarters situated in Munich. As of September , , Siemens
had around , employees.
Following the organizational changes described in the Annual
Report for fiscal , we have the following reportable seg-
ments beginning with fiscal : the Divisions Power and
Gas; Wind Power and Renewables; Energy Management;
Building Technologies; Mobility; Digital Factory; and Pro-
cess Industries and Drives as well as the separately managed
business Healthcare, which together form our Industrial Busi-
ness. The Division Financial Services (SFS) supports the activ-
ities of our Industrial Business and also conducts its own busi-
ness with external customers. As “global entrepreneurs” our
Divisions and Healthcare carry business responsibility world-
wide, including with regard to their operating results.
Our reportable segments may do business with each other,
leading to corresponding orders and revenue. Such orders and
revenue are eliminated on the Group level.
A.1.1.2 BUSINESS DESCRIPTION
For more information on the portfolio transactions described
below, see NOTE 3 in B.6 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS.
The Power and Gas Division offers a broad spectrum of prod-
ucts and solutions for generating electricity from fossil fuels
and for producing and transporting oil and gas. The portfolio
includes gas turbines, steam turbines, generators to be applied
to gas or steam power plants, compressors, integrated power
plant solutions, and instrumentation and control systems for
power generation. Customers are public utilities and indepen-
dent power producers, companies in engineering, procurement
and construction that serve these companies, and companies
that generate power for their own consumption. Due to the
broad range of its offerings, the Division’s revenue mix may
vary from reporting period to reporting period depending on
the share of revenue attributable to products, solutions and
services. Because typical profitability levels differ among these
three revenue sources, the revenue mix in a reporting period
accordingly affects Division profit for that period. In June ,
Siemens acquired all shares of Dresser- Rand Group Inc. (Dresser-
Rand), a world-leading supplier for the oil and gas industry.
With Dresser- Rand on board, we have a comprehensive port-
folio of equipment and capability for the oil and gas industry
and a much expanded installed base, allowing us to address
the needs of the market with products, solutions and services.
In December , Siemens acquired the Rolls-Royce Energy
aero-derivative gas turbine and compressor business of Rolls-
Royce plc, U. K. (Rolls-Royce). By acquiring Rolls-Royce’s small
and medium aero-derivative gas turbines business, we closed a
technology gap in our extensive gas turbine portfolio.
The Wind Power and Renewables Division designs, manufac-
tures and installs wind turbines for onshore and offshore appli-
cations. This includes both geared turbines and direct drive tur-
bines. The product portfolio is based on four product platforms,
two for each of the onshore and offshore applications. The Divi-
sion serves a variety of customers, in particular large utilities
and independent power producers. Due to the significant off-
shore business of the Division and its activities in the Northern
hemisphere, production and installations are typically higher
during spring and summer months because of the more favor-
able weather and marine conditions during those seasons. The
revenue mix of these businesses may vary from reporting pe-
riod to reporting period depending on the project mix between
onshore and offshore projects in the respective period. The Divi-
sion also includes a minority stake in a hydro power business.
The Power Generation Services Division offers comprehen-
sive services for products, solutions and technologies, covering
performance enhancements, maintenance services, customer
trainings and consulting services for the Divisions Power
and Gas and Wind Power and Renewables. Financial results of
these two Divisions include the respective financial results of
the Power Generation Services Division, which itself is not a
reportable segment. Based on the business model, all discus-
sions of the services business for Power and Gas as well as
Wind Power and Renewables concern the Power Generation
Services Division.
The Energy Management Division offers a wide spectrum of
products, systems, solutions, software and services for trans-
mitting and distributing power and for developing intelligent
grid infrastructure. The Division’s customers include power
providers, network operators, industrial companies, infrastruc-
ture developers and construction companies. The offerings are
used to process and transmit electrical power from the source
down to various load points along the power transmission and
distribution networks to the power consumers. Our solutions
for smart grids enable a bidirectional flow of energy and infor-
mation, which is required for the integration of more renew-
able energy sources into conventional power transmission and
distribution networks. In addition, the Division’s portfolio in-
cludes power supply solutions for conventional power plants
A. Business and economic environment