p 60
of the economic position
p 62
Overall assessment
B.5
statements
Notes and forward-looking
P 20
A.6
of Cash Flows
Consolidated Statements
Consolidated Statements
Financial position
C.5
p 61
B.4
p 16
A.5
Corporate Governance
of Financial Position
Net assets position
p 136
p21
Subsequent events
A.8
A.1 Business and economic environment
Combined Management Report
A.
о
Financial Statements
Notes to Consolidated
p 64
B.6
of Changes in Equity
Takeover-relevant information
p 53
A.11
Compensation Report
P 38
A.10
Siemens AG
p 35
A.9
and associated material opportunities
and risks
Report on expected developments
p22
p 128
C.4
Consolidated Statements
P 15
p2
A.1
Additional Information
Consolidated Financial Statements
C.
B.
Combined Management Report
A.
Table of contents
siemens.com
Annual Report
2015
001
00100111
1 1 1 1
1
1 0 0 1 1 0 1 0 1 1 0 0
0001 00
11010011
0 0 1 1 1 0
0 1 0 1 1 0 0 0 1
1010
Ingenuity for life
SIEMENS
B.1
A.1.1 The Siemens Group
p 58
Business and economic environment
A.4
Report of the Supervisory Board
B.3
Results of operations
P 125
C.3
of Comprehensive Income
p 10
A.3
Consolidated Statements
Independent Auditor's Report
p 59
B.2
Financial performance system
p 123
C.2
p 8
A.2
Responsibility Statement
P 122
Consolidated Statements
of Income
C.1
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 30, 2015, Siemens
had around 348,000 employees.
A.7
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.
For purposes of managing and controlling profitability at the
Group level, we use net income as our primary measure. This
measure is the main driver of basic earnings per share (EPS)
from net income, which we use in communication to the capital
markets.
In line with common practice in the financial services business,
our financial indicator for measuring capital efficiency at Finan-
cial Services (SFS) is return on equity after tax, or ROE (after
tax). ROE is defined as SFS' profit after tax, divided by the Divi-
sions' average allocated equity.
FOR FISCAL 2014.
Within One Siemens, we have established a financial frame-
work - for revenue growth, for profitability and capital effi-
ciency, for our capital structure, and for our dividend policy.
Beginning with fiscal 2015 we modified our financial frame-
work in the course of organizational changes and due to our
new strategy "Vision 2020", as described in the 7 ANNUAL REPORT
A.2.1 Overview
A.2 Financial performance system
7
Combined Management Report
In fiscal 2015, markets served by Healthcare continued to
grow. Growth was again driven by emerging markets, which
continued to build up their healthcare infrastructures and ex-
pand access to modern medical technology for their growing
populations. Market development in industrialized countries
remained weak, impacted by healthcare reforms and budgetary
constraints. Healthcare's imaging customers saw growing de-
mand for diagnostic imaging procedures but also experienced
increasing public pressure to slow the growth of healthcare
costs. Growth in the large Chinese imaging market was weak
compared to prior years. Together with market entries of local
vendors this led to increased price pressure. Within the mar-
kets for clinical products, demand in the low-end product seg-
ment in emerging markets was the main growth driver, while
demand in industrialized countries remained stable year-over-
year. Within emerging economies, the market for clinical prod-
ucts increasingly includes incentives for local production,
particularly in China, Brazil and Russia. Growth in in-vitro diag-
nostics markets is benefiting from increasing test volumes as
populations are aging. Overall, demand for in-vitro diagnostics
solutions from emerging markets, particularly China, grew
faster than markets in industrialized countries. For the health-
care market as a whole, the trend towards consolidation con-
tinues. Competition among the leading companies is strong,
including with respect to price.
broad portfolio and companies that are active only in certain
geographic or product markets. Consolidation is taking place
mostly in particular market segments and not across the broad
base of the Division's portfolio. Consolidation in solution-driven
markets is going in the direction of in-depth niche market ex-
pertise, whereas consolidation of the product-driven market
follows the line of convergence. Most major competitors have
established global bases for their businesses. In addition, the
competition has become increasingly focused on technological
improvements and cost position.
Markets served by the Process Industries and Drives Division
grew slightly in fiscal 2015. While all regions contributed to
growth and growth rates in Europe, C.I.S., Africa, Middle East
were lower than in the Americas and Asia, Australia, growth
rates in the latter two regions came in below the levels in prior
years. Within the Division's main industries, demand from the
chemicals, food and beverage, and pharmaceuticals industries
grew year-over-year. This growth was largely offset by lower
demand from the oil and gas and the mining industries. Com-
petitors of the Division's business activities can be grouped into
two categories: multinational companies that offer a relatively
In fiscal 2015, markets for the Digital Factory Division grew in
all regions. Markets in Asia, Australia grew more strongly than
in other regions but growth dynamics lost momentum signifi-
cantly compared to fiscal 2014, particularly in China. While
growth in Europe accelerated somewhat year-over-year, markets
in the Americas showed a mixed picture: In the U.S. demand
from consumer-oriented manufacturing industries was strong,
whereas factory automation investment slowed down in coun-
tries affected by reduced global demand for export commodi-
ties including oil and gas. Within the Division's customer seg-
ments, markets for the manufacturing and machine building
industries grew slightly overall in fiscal 2015, with decelerating
growth during the course of the fiscal year. A slow-down in
growth was particularly evident in the global automotive in-
dustry, which showed strong growth at the beginning of the
fiscal year but started to cut investments due to lower demand
for cars in emerging countries. The competition for Digital
Factory's business activities can be grouped into two catego-
ries: multinational companies that offer a relatively broad port-
folio and companies that are active only in certain geographic
or product markets.
Markets for the Mobility Division grew moderately in fiscal
2015, with all regions contributing to growth. Market develop-
ment in the Europe, C.I.S., Africa, Middle East region was char-
acterized by continuous investment and awards of large orders.
This was particularly evident in Germany, the U.K. and Russia.
Demand in the Middle East and in Africa was mainly driven by
turnkey and rail infrastructure projects. In the Americas region,
growth continued to benefit from demand for passenger loco-
motives and urban transport products in the U.S. Chinese mar-
kets saw ongoing investments in high-speed trains, urban
transport and rail infrastructure. The Division's principal com-
petitors are multinational companies. Consolidation among
Mobility's competitors is continuing.
business also competes with system integrators and small local
companies. The Division faces continuing price pressure, par-
ticularly in its solutions business, due to strong competition
from system houses and some larger competitors.
Combined Management Report
6
Markets for the Building Technologies Division grew moder-
ately in fiscal 2015. Growth was driven by rising demand from
the U.S. and Asia, despite weaker growth in China. Within the
Europe, C.I.S., Africa, Middle East region, markets in the Middle
East grew stronger than the region overall. The European mar-
ket grew modestly with growth in Germany, the U.K., and Scan-
dinavian countries above average. The Division's principal com-
petitors are multinational companies. Its solutions and services
In fiscal 2015, markets for the Energy Management Division
saw demand growth overall. The utilities market, the Division's
most important customer segment, showed moderate growth.
There was also stronger demand from the chemicals, metals
and construction industries year-over-year. Within the chemi-
cals industry, drivers of growth were sustainability and energy
efficiency. In the Americas, growth in the chemicals industry
benefited from process industries, which showed a trend to-
wards re-industrialization in the U.S. and a build-up of capac-
ities within the region overall. Within the metals markets,
demand was held back by continued overcapacities and re-
duced investment activity, particularly in the region Europe,
C.I.S., Africa, Middle East. Construction markets grew in all
regions. In contrast, demand in the Division's oil and gas and
minerals and mining markets declined year-over-year. The oil
and gas industry has significantly reduced capital expenditures
due to the global oil price decline. The minerals and mining
industry suffers from lower demand for raw materials, mainly
driven by the economic slowdown in China, and also by over-
capacities and higher extraction costs. Competitors of the
Energy Management Division consist mainly of a small number
of large multinational companies. International competition is
increasing from manufacturers in emerging countries such as
China, India and Korea.
remains difficult. Policy and regulatory frameworks continue to
influence regional wind power markets. For example, the pro-
duction tax credit remained pertinent for the U.S. market. In
Germany, the scheduled expiration of feed-in-tariffs beginning
with calendar 2017 for newly build onshore wind power plants
fueled demand in fiscal 2015. Market growth also benefited
from stronger demand from some emerging countries in the
Middle East, in Africa and Latin America. The competitive situ-
ation in wind power differs in the two major market :
segments.
In the markets for onshore wind farms, competition is widely
dispersed without any one company holding a dominant share
of the market. In contrast, markets for offshore wind farms con-
tinue to be dominated by a few experienced market players.
Consolidation is moving forward in both on- and offshore seg-
ments, including exits of smaller players. The key drivers of
consolidation are technology challenges and market access
challenges, which increase development costs and the impor-
tance of risk sharing in offshore wind power.
Markets served by the Wind Power and Renewables Division
grew moderately in fiscal 2015. Overall growth was driven by
the onshore wind power market segment, while the relatively
smaller offshore wind power market segment saw a slight de-
cline year-over-year. On a geographic basis, growth was strong
in China, which has the largest national wind market in the
world, but where market access for foreign manufacturers
The markets of the Power and Gas Division remained challeng-
ing in fiscal 2015. This was particularly evident in the market for
steam turbines where volume shrank substantially year-over-
year due including to an ongoing shift from coal-fired to gas-
fired power generation in the U.S. and emission regulation e.g.
in China. Demand in compression markets declined year-over-
year. This was due mainly to a fall in capital expenditure for oil
and gas upstream applications following the global oil price
decline in 2014. In contrast, demand in the gas turbine market
grew in fiscal 2015, driven by demand for replacement of aged
existing inefficient and inflexible power plants, particularly
in the U.S.; energy market reform in Mexico; and rising de-
mand for energy in emerging countries, particularly China and
countries in Latin America and the Middle East. The Division's
competition consists mainly of two groups: a relatively small
number of equipment manufacturers, some with very strong
positions in their domestic markets, and on the other hand a
large number of engineering, procurement and construction
contractors. The gas turbine market is experiencing overcapac-
ity among original equipment manufacturers and engineering,
procurement and construction contractors, which is leading to
market consolidation.
A.2.2 Revenue growth
A.1.2.2 MARKET DEVELOPMENT
Following the organizational changes described in the Annual
Report for fiscal 2014, we have the following reportable seg-
ments beginning with fiscal 2015: 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.
Within the framework of One Siemens, we aim to achieve mar-
gins through the entire business cycle that are comparable to
those of our relevant competitors. Therefore, we have defined
profit margin ranges for our Industrial Business, which are based
on the profit margins of the respective relevant competitors.
8 Combined Management Report
Sustainable revenue and profit development is supported by a
healthy capital structure. Accordingly, a key consideration within
the framework of One Siemens is to maintain ready access to the
capital markets through various debt products and preserve
our ability to repay and service our debt obligations over time.
Our primary measure for managing and controlling our capital
structure is the ratio of industrial net debt to EBITDA. This
financial measure indicates the approximate amount of time in
years that would be needed to cover industrial net debt through
income from continuing operations, without taking into account
interest, taxes, depreciation and amortization. We aim to achieve
a ratio of up to 1.0.
A.2.4 Capital structure
15 - 19%
15-20%
8-12%
14 -20%
5-8%
7-10%
8-11%
6-9%
Margin range
11-15%
|
SFS ((ROE) (after taxes))
Healthcare
Process Industries and Drives
Digital Factory
Mobility
Building Technologies
Energy Management
Wind Power and Renewables
Power and Gas
Within the framework of One Siemens, we seek to work profit-
ably and as efficiently as possible with the capital provided
by our shareholders and lenders. For purposes of managing
and controlling our capital efficiency, we use return on capital
employed, or ROCE, as our primary measure. We aim to achieve
a range of 15% to 20%.
To emphasize and evaluate our continuous efforts to improve
productivity, we incorporated a measure called total cost pro-
ductivity into our One Siemens framework. We define this
measure as the ratio of cost savings from defined productivity
improvement measures to the aggregate of functional costs for
the Siemens Group. We aim to achieve an annual value of 3% to
5% for Total cost productivity.
| Profit margin ranges
A.2.3 Profitability and capital efficiency
The partly estimated figures presented here for GDP and fixed
investments are calculated by Siemens based on an IHS Global
Insight report dated October 15, 2015.
Within the framework of One Siemens, we aim to grow our rev-
enue faster than the average weighted revenue growth of our
most relevant competitors. Our primary measure for managing
and controlling our revenue growth is comparable growth,
which excludes currency translation and portfolio effects.
The U.S. economy experienced a slowdown during the start of
the year as a result of a harsh winter and disruptions caused by
port strikes. The acceleration in the succeeding quarters
showed that the underlying recovery trend was intact, mainly
because of strong domestic demand. In particular, fixed invest-
ments performed better than the overall economy, although
capital expenditures related to oil and gas production declined
significantly due to lower oil prices. Strong consumption ex-
penditures were fueled by a steadily improving labor market.
Our research and development (R&D) activities are ultimately
geared to developing innovative, sustainable solutions for our
customers and the Siemens businesses - and simultaneously
safeguarding our competitiveness. For these reasons, we focus
in particular
A.1.1.3 RESEARCH AND DEVELOPMENT
equipment, project and structured financing. SFS provides cap-
ital for Siemens customers as well as other companies and also
manages financial risks of Siemens. SFS operates the Corporate
Treasury of the Siemens Group, which includes managing
liquidity, cash and interest risks as well as certain foreign
exchange, credit and commodities risks. Business activities
and tasks of Corporate Treasury are reported in the segment
information within Reconciliation to Consolidated Financial
Statements.
Combined Management Report 3
The Financial Services (SFS) Division provides business-to-
business financial solutions. With specialist financing and
technology expertise in the areas of Siemens businesses, SFS
supports customer investments with leasing solutions and
Healthcare is one of the world's largest suppliers of technol-
ogy to the healthcare industry and a leader in medical imaging
and laboratory diagnostics. We provide medical technology and
software solutions as well as clinical consulting services, sup-
ported by a comprehensive training and service portfolio. There-
fore, we offer our customers a comprehensive portfolio of med-
ical solutions along the healthcare continuum of care – from
prevention and early detection to diagnosis, treatment and fol-
low-up care. Because large portions of our revenue stem from
recurring business, our business activities are to a certain ex-
tent resilient to short-term economic trends but dependent on
regulatory and policy developments around the world. During
fiscal 2015, we completed the sale of several businesses, in par-
ticular the hearing aid business and the hospital information
business. With the beginning of fiscal 2016, Healthcare is stra-
tegically reorganized into six newly defined business areas
and six regions. The Business Areas are Diagnostic Imaging,
Laboratory Diagnostics, Advanced Therapies, Ultrasound, Point
of Care Diagnostics and Services.
The Process Industries and Drives Division offers its custom-
ers standard products including converters, gears, motors,
drives and couplings on the one hand and also customized, ap-
plication-specific systems and solutions on the other hand. In
addition, the Division supplies machine-to-machine communi-
cation products and sensors that measure pressure, tempera-
ture or flow rate for example. The Division's products, systems
and industry-specific solutions as well as end-to-end services
are designed to increase productivity, energy efficiency and re-
liability of machinery and installations, mainly in industries
such as oil & gas, shipbuilding, mining, cement, pulp and paper,
chemicals, food and beverage, and pharmaceuticals. In addi-
tion, the Division sells gears, couplings and drive solutions to
other Divisions of the Siemens Group, which use them in rail
transport and wind turbines. Demand within the industries
served by the Division generally shows a delayed response to
changes in the overall economic environment. Even so, the
Division is strongly dependent on investment cycles in its key
industries. In basic process industries such as oil & gas or min-
ing, these cycles are driven mainly by commodity price fluctu-
ations rather than changes in produced volumes.
Because demand depends directly on the investment decisions
of end customers as well as indirectly on orders from OEMs, a
downturn or upswing in the overall economic environment
impacts the Division's business results more timely than those
of other Siemens businesses.
The Digital Factory Division offers a range of products and
system solutions for automation technologies and industrial
controls used in manufacturing industries. The Division is a
leading provider of industry software together with a compre-
hensive product and service portfolio that covers all aspects of
"Industrie 4.0" - a German high-tech industrial strategy. The
Division supports customers in transforming their traditional
companies into digital enterprises, in increasing the flexibility
and efficiency of their production processes and in reducing
the time to market for new products. The Division's lifecycle
services and data-driven services complement its products and
system solutions. The Divisions' offerings are geared largely
to the manufacturing industry and its major markets such as
automotive, aerospace, machine tools and plant installations.
The Building Technologies Division is a leading provider of
automation technologies and services for safe, secure and effi-
cient buildings and infrastructures throughout their lifecycles.
The Division offers products, solutions and services for fire
safety, security, building automation, heating, ventilation, air
conditioning and energy management. The large customer
base is widely dispersed. It includes public and commercial
building owners, operators and tenants, building construction
general contractors and system houses. Changes in the over-
all economic environment generally have a delayed effect on
the Division's business activities. Particularly in the solutions
and service businesses, Building Technologies is affected by
changes in the non-residential construction markets with a
time lag of two to four quarters.
> on enabling energy supplies that are also economically sus-
tainable;
and renewable energy systems as well as substations for urban
and rural distribution networks. We also offer energy-efficient
solutions for heavy industry, the oil and gas industry and the
process industries. The portfolio is rounded off by solutions
and energy storage systems for integrating renewable energy
into power grids, together with vertical IT software applica-
tions that link energy consumers and producers.
2
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
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 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.
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 2014, 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 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 2015,
Siemens acquired all shares of Dresser-Rand Group Inc. (Dresser-
Rand), a world-leading supplier for the oil and gas industry.
STATEMENTS.
For more information on the portfolio transactions described
below, see NOTE 3 in → B.6 NOTES TO CONSOLIDATED FINANCIAL
A.1.1.2 BUSINESS DESCRIPTION
All in all the negative effects outweighed the positive ones,
leading to declining worldwide gross domestic product (GDP)
forecasts for 2015 in the course of the year, down to 2.5%
growth from 3.2% expected in October 2014. Fixed investments
are forecast to expand by 2.4% in calendar 2015, down from
4.5% expected in October 2014.
Combined Management Report
> further enhancing efficiency in the generation of renewable
and conventional power and minimizing losses during power
transmission;
The Mobility Division combines all Siemens businesses in
the area of passenger and freight transportation, including rail
vehicles, rail automation systems, rail electrification systems,
road traffic technology, IT solutions and related services. The
Division also provides its customers with consulting, plan-
ning, financing, construction, service and operation of turnkey
mobility systems. Integrated mobility solutions for networking
of different traffic systems round off Mobility's offerings. The
principal customers of the Mobility Division are public and
state-owned companies in the transportation and logistics sec-
tors. Markets served by Mobility are driven primarily by public
spending. Customers usually have multi-year planning and
implementation horizons, and their contract tenders therefore
tend to be independent of short-term economic trends.
and simulations are prerequisites for end-to-end digitalization
and automation and require, for example, consistent engineer-
ing, optimized and more efficient processes, and intelligent
and predictive service concepts. The Division is also developing
technologies for the digital oil field and the electric propeller
pod drive. Our gears portfolio will be expanded and gears will
be integrated into a digitalized condition monitoring and con-
trolling system while increasing energy efficiency, reducing
material costs and further cutting emissions.
5
> finding novel solutions for smart grids and for the storage of
energy from renewable sources with irregular availability;
Combined Management Report
In the European economies, growth improved slightly in the
first half of calendar 2015. Uncertainties stemming from the
Greek bailout renegotiations and Greece's snap referendum
on the bailout proposal had only minor impact on economic
activity outside Greece itself, which is again in a deep recession
after the economy started to stabilize last year. The German
economy grew a solid 1.7%, with fixed investments expanding
even faster at 2.4%.
A.1.2.1 WORLDWIDE ECONOMIC ENVIRONMENT
The global economic outlook deteriorated during fiscal year
2015, particularly for many emerging economies. The main rea-
son for the deceleration in commodity exporting countries is
globally weaker demand for raw materials and a further soften-
ing of the Chinese economy that suffered from weaker foreign
demand, slower investment activity, a correction in real estate
markets, and overcapacities in several industries. Additional
stress for emerging countries resulted from capital outflows and
exchange rates depreciation. Severe recessions have followed
in Russia and Brazil, both countries having to deal with addi-
tional adverse shocks. A rare exception amongst the emerging
economies is India, where the recovery has gained traction.
A.1.2 Economic environment
The R&D activities of our Healthcare business are directed to-
wards our growth fields in therapy, molecular diagnostics, and
services. We want to tap the full potential of imaging solutions
in therapy and to establish a closer connection between diag-
nostics and therapy in cardiology, interventional clinical disci-
plines, surgery, and radiation oncology. Strategic partnerships
are an essential part of our strategy to reach this goal. Expand-
ing our innovation map beyond our established portfolio, and
investing in new ideas will help us tap new business fields. As
an example, we will drive our activities in the highly dynamic
growth field of molecular diagnostics. We will expand our ser-
vices business beyond product-related services by adding a dig-
ital services portfolio and increasing enterprise transformation
services to help customers in their transition to value-based
care within more and more provider organizations across geo-
graphical borders.
The R&D strategy of the Process Industries and Drives Divi-
sion is focusing on the digitalization of crucial portfolio ele-
ments across the complete lifecycle of processing plants. Inno-
vative technologies for sensors, actuators, communications
One of the R&D priorities at the Digital Factory Division is the
Digital Enterprise Software Suite. Using Teamcenter software
for central data management, the Digital Enterprise Software
Suite creates a seamless data connection across the entire
value chain - from product design to production planning and
set-up all the way to real production and subsequent service.
Innovative data services are another field of research: Siemens
has already developed an open cloud solution for analyzing
large datasets in industry. Data-based services such as pre-
dictive maintenance, asset and energy data management can
be hosted on this platform. Control of Hybrid Manufacturing
is another example. Additive manufacturing (e.g. 3D printing)
is combined with subtractive procedures (e.g. milling) in
one machine to ensure that components or products with a
high degree of individualization can be manufactured quickly
and efficiently.
R&D work at the Building Technologies Division focuses on
optimizing comfort, operational and energy efficiency in build-
ings and infrastructures, protecting against fire and security
hazards, and minimizing related risks. We aim to create a port-
folio of products and services ranging from the field level to
the cloud, based on open standards wherever possible. This
includes data-based services for new ways of optimizing energy
consumption, easily scalable and reasonably priced services, a
new and harmonized system landscape with particularly effec-
tive integration of electrical consumption, fire detection and
HVAC (heating, ventilation, air conditioning) systems, and a
complete range of field-level products tailored specifically to
growing markets.
The Mobility Division's R&D strategy addresses customers' de-
mand for maximum availability, high throughput and enhanced
passenger experience. Although there is a growing need for
mobility worldwide, possibilities for building new roads and
railways are limited. Meeting the demand for mobility requires
intelligent solutions that make transport more efficient, safe
and environmentally friendly. Reflecting this, Mobility's R&D
activities strongly emphasize digitalization in developing state-
of-the art rail vehicles, automation solutions for rail and road
traffic, and rail electrification systems. Most of these goals can
be achieved only with intelligent IT solutions such as WLAN-
based control systems for driverless and conductorless metro
train operation, decentralized wayside architecture for rail au-
tomation, cloud-based product solutions, or Integrated Mobility
Platforms that intelligently network passengers, mobility ser-
vice providers and traffic management centers.
4
The R&D activities of our Energy Management Division focus
on preparing our portfolio for changes on all voltage levels in
the world of electricity. The increasing infeed of renewable
energy to power grids requires that those grids become more
flexible and efficient, particularly with distributed generation
on the rise. The digitalization of future grids will enable intel-
ligent grid operation and data-driven services. Cost-out pro-
grams and optimization of our footprint are improving the
competitiveness of our product portfolio on global markets.
Our innovations are centered on power electronics, digitaliza-
tion or grid stabilization. The full integration of energy supply
systems with process automation is a core portfolio element for
industrial applications and infrastructures.
At Siemens' Wind Power and Renewables Division, our R&D
efforts are focused on innovative products and solutions that
allow us to take the lead in performance, improve our compet-
itiveness, and build a stronger business case to present to our
customers. This includes finding ways to more intelligently
monitor and analyze turbine conditions, and smart diagnostic
services. Our R&D efforts also focus on digitalization. At our
remote diagnostics center in Brande, Denmark, we collect digi-
tal data from nearly 10,000 turbines in more than 30 countries:
a total of more than 24 million data sets annually. We use this
data to provide value for our customers: in 85% of cases, prob-
lems can be corrected and turbines restarted without the need
to send out a service team.
Research and Development in our businesses
R&D at the Power and Gas Division concentrates on develop-
ing products and solutions for enhancing efficiency, flexibility
and economy in power generation and in the oil and gas indus-
try. These products and solutions include turbomachinery -
primarily high-performance, low-emission gas turbines for
single operation or for combined cycle power plants - and com-
pressor solutions for various process industries. The Division's
technology initiative started in fiscal 2015 is aimed at intensify-
ing R&D in innovative materials, advanced manufacturing
methods and plant optimization. Along with promoting digita-
lization in overall product lifecycles, Power and Gas is on track
preparing for changing energy markets and their increasingly
diversified centralized and decentralized structures.
In fiscal 2015, we reported research and development expenses
of €4.5 billion, compared to €4.0 billion in fiscal 2014. The re-
sulting R&D intensity, defined as the ratio of R&D expenses
and revenue, was 5.9%, thus above the R&D intensity of 5.6%
in fiscal 2014. As of September 30, 2015, Siemens held approx-
imately 56,200 granted patents worldwide in its continuing
operations. As of September 30, 2014, it held approximately
56,100 granted patents. On average, we had 32,100 R&D
employees in fiscal 2015.
Corporate Technology is both a creative driver of disruptive
innovations and a partner to the Siemens businesses. The R&D
activities are focused on the company's core activities in the
fields of electrification, automation, and digitization. In many
research projects, CT works closely with scholars from leading
universities and research institutions. These partnerships, along
with a close collaboration with start-ups, are an important part
of Siemens' open innovation concept, which is designed to
make the company even more innovative.
Beyond these points of focus, we recognize how important
highly sophisticated software solutions are for all the fields of
business in which Siemens is active. R&D activities are carried
out by our businesses as well as our Corporate Technology (CT)
department.
> creating the highly flexible, connected factories of tomorrow
using advanced automation and digitalization technologies;
> turn unstructured data into value-adding information, e.g.
when providing services such as preventive maintenance;
> advancing the integration of medical imaging technology, in
vitro diagnostics and IT for medical engineering to support
achievement of improved patient outcomes.
> promoting the efficient utilization of energy, especially in
buildings, industry and transportation, e.g. through highly
efficient drives for production facilities or for local and
long-distance trains;
Combined Management Report
98
1,995
476
476
1,995
(in millions of €)
2,569
702
98
702
2,569
1,749
Net gains (losses) of financial instruments are:
1,338
406
1,338
406
The fair value of available-for-sale financial equity instruments
quoted in an active market is based on price quotations at the
period-end date. The fair value of debt instruments is either
based on prices provided by price service agencies or esti-
mated by discounting future cash flows using current market
interest rates.
Non-current available-for-sale financial assets measured at
fair value include interests in Atos SE (AtoS) and OSRAM of
€1,703 million and €1,241 million as of September 30, 2015 and
2014. Unrealized gains (losses) in fiscal 2015 and 2014 resulting
from non-current available-for-sale financial assets measured
at fair value are €367 million and €(48) million, respectively.
Siemens determines the fair values of derivative financial instru-
ments depending on the specific type of instrument. Fair values
of derivative interest rate contracts are estimated by discount-
ing expected future cash flows using current market interest
rates and yield curves over the remaining term of the instru-
ment. Interest rate futures are valued on the basis of quoted
market prices, if available. Fair values of foreign currency deriv-
atives are based on forward exchange rates. Options are gener-
ally valued based on quoted market prices or based on option
pricing models. In determining the fair values of the derivative
financial instruments, no compensating effects from underly-
ing transactions (e.g. firm commitments and forecast transac-
tions) are taken into consideration.
The Company limits default risks resulting from derivative
financial instruments by generally transacting with financial
institutions with a minimum credit rating of investment grade.
Based on Siemens' net risk exposure towards the counterparty,
the resulting credit risk is taken into account via a credit valua-
tion adjustment.
The unquoted equity instrument allocated to level 3 of the fair
value hierarchy relates to an investment in an offshore wind
farm. The fair value is determined based on discounted cash
flow calculations. The most significant unobservable input
used to determine the fair value is the cash flow forecast which
is mainly based on the future power generation income. This
income is generally subject to future market developments and
thus price volatility. Since a long-term power purchase agree-
ment is in place that mitigates price volatility, significant
changes to the cash flow forecast are unlikely and thus, no sig-
nificant effects on Other comprehensive income, net of income
taxes, are expected.
2015
1,834
1,749
307
534
1,527
In connection with cash flow hedges
Cash and cash equivalents
Available-for-sale financial assets
Loans and receivables
534
|
Consolidated Financial Statements 91
(in millions of €)
Financial assets measured at fair value
Available-for-sale financial assets: Equity instruments
Available-for-sale financial assets: Debt instruments
Derivative financial instruments
Not designated in a hedge accounting relationship
(including embedded derivatives)
1
In connection with fair value hedges
Financial liabilities measured at fair value - Derivative financial instruments
Not designated in a hedge accounting relationship
(including embedded derivatives)
In connection with cash flow hedges
Sep 30, 2014
Level 1
Level 2
Level 3
Total
1,527
3,272
307
5,105
In connection with cash flow hedges
(24)
As previously reported, in March 2014, Siemens was informed
that in connection with the above mentioned metro and urban
train projects the Public Prosecutor's Office São Paulo has re-
quested criminal proceedings at court into alleged violations of
Brazilian antitrust law against a number of individuals includ-
ing current and former Siemens employees. The proceedings
continue; the Public Prosecutor's Office São Paulo has, in the
meantime, appealed all decisions where the courts denied
opening criminal trials.
39
Reverse repurchase agreements
Gross
amounts
Amounts set
Net amounts
off in the
Statement of
Financial
Position
in the
Statement of
Financial
Position
Related
amounts not
set off in the
Statement of
Financial
Position
Sep 30, 2015
Net
amounts
Derivative financial assets
2,678
2,668
1,065
1,604
2,678
10
2,668
1,065
1,604
Financial liabilities - Derivative financial liabilities
1,885
1,383
10
19
Financial assets
Siemens enters into master netting agreements and similar
agreements for derivative financial instruments and reverse
repurchase agreements. The requirements to offset recognized
financial instruments are usually not met. The following table
reflects financial assets and financial liabilities that are subject
to netting agreements and similar agreements:
29
(42)
60
Financial liabilities measured
at amortized cost
(1,049)
(844)
(945)
(283)
Financial assets and financial
liabilities held for trading
92 Consolidated Financial Statements
(in millions of €)
Net gains (losses) in fiscal 2015 and 2014 on financial liabilities
measured at amortized cost are comprised of gains (losses)
from derecognition and the ineffective portion of fair value
hedges. Net gains (losses) in fiscal 2015 and 2014 on financial
assets and financial liabilities held for trading consist of
changes in the fair value of derivative financial instruments,
including interest income and expense, for which hedge ac-
counting is not applied. The amounts presented include foreign
currency gains and losses from the realization and valuation of
the financial assets and liabilities mentioned above.
(in millions of €)
Total interest income on financial assets
Total interest expenses on financial liabilities
Fiscal year
2015
2014
1,248
1,048
(739)
(643)
In fiscal 2015 and 2014, gains (losses) reclassified from Other
comprehensive income to the Consolidated Statements of
Income relating to cash flow hedges were €(268) million and
€14 million, respectively; unrealized gains (losses) recognized
in Other comprehensive income amounted €(311) million and
€(301) million, respectively.
OFFSETTING
Interest income (expense) other than from post-employment
benefits includes interest from financial assets and financial
liabilities not at fair value through profit or loss:
1,383
As previously reported, in June 2015, Siemens Ltda. once again
appealed to the Supreme Court against a decision confirming
the decision of the previous court to suspend Siemens Ltda.
from participating in public tenders and signing contracts
with public administrations in Brazil for a five year term based
on alleged irregularities in calendar 1999 and 2004 public ten-
ders with the Brazilian Postal authorities. In July 2015, the
court suspended enforcement of the debarment decision pend-
ing the appeal.
Not designated in a hedge accounting relationship
3,639
2,728
53,092
45,591
Financial liabilities measured
at amortized cost³
39,067
30,128
Financial liabilities held for trading4
Derivatives designated in a hedge
accounting relationship4
Financial liabilities
1,383
1,338
536
40,986
411
31,877
1 Reported in the following line items of the Statements of Financial Position: Trade
and other receivables, Other current financial assets and Other financial assets,
except for separately disclosed €2,464 million and €1,803 million available-for-sale
financial assets and €3,228 million and €2,569 million derivative financial instru-
ments as of September 30, 2015 and 2014, respectively. Includes €13,909 million
and €12,537 million trade receivables from the sale of goods and services in fiscal
2015 and 2014, thereof €726 million and €788 million with a term of more than
twelve months.
2 Includes equity instruments classified as available-for-sale, for which a fair value
could not be reliably measured and which are therefore recognized at cost.
3 Reported in the following line items of the Statements of Financial Position:
Short-term debt and current maturities of long-term debt, Trade payables, Other
current financial liabilities, Long-term debt and Other financial liabilities, except
for separately disclosed derivative financial instruments of €1,919 million and
€1,749 million, respectively, as of September 30, 2015 and 2014.
4 Reported in line items Other current financial liabilities and Other financial liabilities.
Cash and cash equivalents includes €378 million and €429 mil-
lion as of September 30, 2015 and 2014, respectively, which are
not available for use by Siemens mainly due to minimum re-
serve requirements with banks. As of September 30, 2015 and
2014, the carrying amount of financial assets Siemens has
pledged as collateral amounted to €345 million and €271 mil-
lion, respectively.
Consolidated Financial Statements
The following table presents the fair values and carrying
amounts of financial assets and financial liabilities measured at
cost or amortized cost for which the carrying amounts do not
approximate fair value:
(in millions of €)
Notes and bonds
1,995
2,620
574
608
As previously reported, in September 2011, the Israeli Antitrust
Authority requested that Siemens present its legal position
regarding an alleged anti-competitive arrangement between
April 1988 and April 2004 in the field of gas-insulated switch-
gear. In September 2013, the Israeli Antitrust Authority con-
cluded that Siemens AG was a party to an illegal restrictive ar-
rangement regarding the Israeli gas-insulated switchgear
market between 1988 and 2004, with an interruption from Oc-
tober 1999 to February 2002. The Company appealed against
this decision in May 2014.
Based on the above mentioned conclusion of the Israeli Anti-
trust Authority, two electricity consumer groups filed motions to
certify a class action for cartel damages against a number of
companies including Siemens AG with an Israeli State Court in
September 2013. Both class actions seek compensation for al-
leged damages, which are claimed to be in a range of ILS2 billion
to ILS2.8 billion (approximately €455 million to €636 million as
of September 2015). The court dismissed one of the two class
actions claiming ILS2 billion. This proceeding is therefore final-
ized. In addition, the Israel Electric Corporation (IEC) filed at the
end of December 2013 with an Israeli State Court a separate
ILS3.8 billion (approximately €864 million as of September 2015)
claim for damages against Siemens AG and other companies
that allegedly formed a cartel in the Israeli gas insulated switch-
gear market. Siemens AG is defending itself against the actions.
In October 2015, Siemens AG and Siemens Israel Ltd., Israel,
were asked to present their position before the Israeli District
Attorney (DA) regarding potentially illegal payments that were
allegedly paid to Israeli Electric Company-representatives in the
early 2000's. In August 2015, the Israeli Exchange Supervisory
Authority (ISA) concluded its investigation and transferred
the investigation files to the DA, who will make the decision
whether or not to take any legal steps against any of the sus-
pects named in the ISA investigation. Siemens has not been
served with any charges so far. Siemens is cooperating with
the Israeli authorities.
As previously reported, in May 2013, Siemens Ltda., Brazil,
(Siemens Ltda.) entered into a leniency agreement with the
Administrative Council for Economic Defense (CADE) and other
relevant Brazilian authorities relating to possible antitrust vio-
lations in connection with alleged anticompetitive irregulari-
ties in metro and urban train projects, in which Siemens Ltda.
and partially Siemens AG, as well as a number of other compa-
nies participated as contractor. In March 2014, CADE com-
menced administrative proceedings, confirming Siemens
Ltda.'s immunity from administrative fines for the reported po-
tential misconduct. In connection with the above mentioned
metro and urban train projects, several Brazilian authorities
initiated investigations relating to alleged criminal acts (cor-
ruptive payments, anti-competitive conduct, undue influence
on public tenders).
As previously reported, in May 2014, the Public Affairs Office
(Ministério Público) São Paulo initiated a lawsuit against
Siemens Ltda. as well as other companies and several indivi-
duals claiming, inter alia, damages in an amount of BRL2.5 bil-
lion (approximately €558 million as of September 2015) plus
adjustments for inflation and related interest in relation to train
refurbishment contracts entered into between 2008 and 2011.
A technical note issued by the Brazilian cartel authority CADE
earlier in 2014 had not identified evidence suggesting Siemens
Ltda.'s involvement in anticompetitive conduct in relation to
these refurbishment contracts. In January 2015 the district
court of São Paulo admitted a lawsuit of the State of São Paulo
and two customers against Siemens Ltda., Siemens AG and
other companies and individuals claiming damages in an un-
specified amount. In March 2015, the district court of São Paulo
admitted a lawsuit of the Public Affairs Office (Ministério
Público) São Paulo against Siemens Ltda. and other companies
claiming, inter alia, damages in an amount of BRL487 million
(approximately €109 million as of September 2015) plus adjust-
ments for inflation and related interest in relation to train main-
tenance contracts entered into in 2000 and 2002. In Septem-
ber 2015, the district court of São Paulo admitted another
lawsuit of the Public Affairs Office (Ministério Público) São Paulo
against Siemens Ltda. and other companies claiming, inter
alia, damages in an amount of BRL918 million (approximately
€205 million as of September 2015) plus adjustments for infla-
tion and related interest in relation to train maintenance con-
tracts entered into in 2006 and 2007. Siemens will defend itself
against these actions. It cannot be excluded that further signif-
icant damage claims will be brought by customers or the state
against Siemens.
As previously reported, CADE is conducting - unrelated to the
above mentioned proceedings - two further investigations into
possible antitrust behavior in the field of gas-insulated and
air-insulated switchgear from the 1990's to 2006. Siemens is
cooperating with the authorities.
Consolidated Financial Statements 89
00
90
11
Loans from banks and other financial indebtedness
Obligations under finance leases
As previously reported, the Vienna public prosecutor in Austria
is conducting an investigation into payments between calendar
1999 and calendar 2006 relating to Siemens Aktiengesellschaft
Österreich, Austria, for which adequate services rendered
could not be identified. In September 2011, the Vienna public
prosecutor extended the investigations to include a tax evasion
matter for which Siemens AG Österreich is potentially liable.
Siemens is cooperating with the authorities.
Some of these Legal Proceedings could result in adverse deci-
sions for Siemens that may have material effects on its finan-
cial position, the results of its operations and/or its cash flows
in the respective reporting period. At present, Siemens does
not expect any matters not described in this Note to have mate-
rial effects on its financial position, the results of its operations
and/or its cash flows.
For Legal Proceedings information required under IAS 37, Provi-
sions, Contingent Liabilities and Contingent Assets is not dis-
closed if the Company concludes that disclosure can be expected
to seriously prejudice the outcome of the matter.
NOTE 22 Additional disclosures on financial
instruments
The following table discloses the carrying amounts of each cat-
egory of financial assets and financial liabilities:
(in millions of €)
Loans and receivables1
Cash and cash equivalents
Derivatives designated in a hedge
accounting relationship
Financial assets held for trading
Available-for-sale financial assets²
Financial assets
2015
36,268
Sep 30,
2014
32,281
9,957
8,013
Siemens is in the course of its normal business operations in-
volved in numerous Legal Proceedings in various jurisdictions.
These Legal Proceedings could result, in particular, in Siemens
being subject to payment of damages and punitive damages,
equitable remedies or criminal or civil sanctions, fines or dis-
gorgement of profit. In individual cases this may also lead to
formal or informal exclusion from tenders or the revocation or
loss of business licenses or permits. In addition, further Legal
Proceedings may be commenced or the scope of pending Legal
Proceedings may be expanded. Asserted claims are generally
subject to interest rates.
Fair value
Sep 30, 2015
Carrying
amount
318
2,299
Available-for-sale financial assets: Debt instruments
1,131
10
1,141
Derivative financial instruments
3,181
46
3,228
Not designated in a hedge accounting relationship
1,980
(including embedded derivatives)
46
2,620
In connection with fair value hedges
329
329
In connection with cash flow hedges
279
279
Financial liabilities measured at fair value - Derivative financial instruments
1,919
1,919
2,574
(including embedded derivatives)
Available-for-sale financial assets: Equity instruments
374
Fair value
Sep 30, 2014
Carrying
amount
26,516
25,955
18,787
18,165
3,544
207
3,559
147
2,605
6,668
216
Fixed-rate and variable-rate receivables with a remaining
term of more than twelve months, including receivables from
finance leases, are evaluated by the Company based on pa-
rameters such as interest rates, specific country risk factors,
individual creditworthiness of the customer, and the risk
characteristics of the financed project. Based on this evalua-
tion, allowances for these receivables are recognized.
The fair value of notes and bonds is based on prices provided
by price service agencies at the period-end date (Level 2). The
fair value of loans from banks and other financial indebted-
ness, obligations under finance leases as well as other non-cur-
rent financial liabilities is estimated by discounting future cash
flows using rates currently available for debt of similar terms
and remaining maturities (Level 2).
The following table allocates financial assets and financial lia-
bilities measured at fair value to the three levels of the fair
value hierarchy:
(in millions of €)
Level 1
Level 2
Level 3
Sep 30, 2015
Total
Financial assets measured at fair value
1,980
4,313
2,626
156
1,874
Fiscal year
2014
843
80
957
Other financial
indebtedness
1,737
3
16
50
Obligations under
finance leases
37
783
19
Trade payables
7,740
23
12
Other financial liabilities
1,189
145
98
16
Derivative financial
liabilities
71
943
Loans from banks
9,175
Interest rate risk is the risk that the fair value or future cash
flows of a financial instrument will fluctuate because of changes
in market interest rates. This risk arises whenever interest terms
of financial assets and liabilities are different. In order to man-
age the Company's position with regard to interest rate risk, in-
terest income and interest expenses, Corporate Treasury per-
forms a comprehensive corporate interest rate risk management
by using fixed or variable interest rates from bond issuances
and derivative financial instruments when appropriate. The in-
terest rate risk relating to the Group, excluding SFS' business, is
mitigated by managing interest rate risk actively relatively to a
benchmark. The interest rate risk relating to the SFS' business is
managed separately, considering the term structure of SFS's fi-
nancial assets and liabilities. The Company's interest rate risk
results primarily from the funding in U.S. dollar, GBP and euro.
If there are no conflicting country-specific regulations, all
Siemens operating units generally obtain any required financ-
ing through Corporate Treasury in the form of loans or inter-
company clearing accounts. The same concept is adopted for
deposits of cash generated by the units.
As of September 30, 2015 and 2014 the VaR relating to the inter-
est rate was €500 million and €220 million. In fiscal 2015 the
interest VaR mainly increased due to the issuance of fixed-rate
US$ bonds and higher interest rate volatilities for EUR and US$.
The issuance of fixed-rate U.S. dollar bonds locked in a fixed
rate and thus avoided additional cash flow risk.
EQUITY PRICE RISK
Siemens' investment portfolio consists of direct and indirect
investments in publicly traded companies held for purposes
other than trading. The direct participations result mainly from
strategic partnerships, strengthening Siemens' focus on its
core business activities or compensation from merger and ac-
quisitions transactions; indirect investments in fund shares are
mainly transacted for financial reasons.
These investments are monitored based on their current mar-
ket value, affected primarily by fluctuations in the volatile tech-
nology-related markets worldwide. As of September 30, 2015
and 2014 the market value of Siemens' portfolio in publicly
traded companies was €1,814 million compared to €1,351 mil-
lion in the prior year. The increase is due mainly to higher mar-
ket values of our stakes in OSRAM and Atos.
As of September 30, 2015 and 2014, the VaR relating to the eq-
uity price was €189 and €122 million. The increase is due
mainly to higher market values related to the above-mentioned
stakes and an increased volatility.
LIQUIDITY RISK
Liquidity risk results from the Company's inability to meet its
financial liabilities. Siemens follows a deliberated financing
policy that is aimed towards a balanced financing portfolio, a
diversified maturity profile and a comfortable liquidity cushion.
Siemens mitigates liquidity risk by the implementation of an
effective working capital and cash management, arranged
credit facilities with highly rated financial institutions, via a
debt issuance program and via a global multi-currency com-
mercial paper program. Liquidity risk may also be mitigated by
the Siemens Bank GmbH, which increases the flexibility of de-
positing cash or refinancing.
In addition, Siemens constantly monitors funding options
available in the capital markets, as well as trends in the avail-
ability and costs of such funding, with a view to maintaining
financial flexibility and limiting repayment risks.
13,746
The following table reflects the contractually fixed pay-offs for
settlement, repayments and interest. The disclosed expected
undiscounted net cash outflows from derivative financial liabil-
ities are determined based on each particular settlement date
of an instrument and based on the earliest date on which
Siemens could be required to pay. Cash outflows for financial
liabilities (including interest) without fixed amount or timing
are based on the conditions existing at September 30, 2015.
Non-derivative financial
2016
2017
2018 to
2020
Fiscal year
2021 and
thereafter
7
(in millions of €)
liabilities
Notes and bonds
3,243
5,667
96 Consolidated Financial Statements
INTEREST RATE RISK
508
23
In addition, in fiscal 2014, agreements were entered into which
entitle members of the Managing Board to EPS-based stock
awards and Bonus Awards contingent upon the target attain-
ment. The fair value of these entitlements amounting to
€5 million and €2 million was determined by calculating the
present value of the target amount.
Commitments to members of the senior
management and other eligible employees
In fiscal 2015 and 2014, 366,929 and 769,049 stock awards, re-
spectively, were granted based on the EPS target. The fair value
of these stock awards amounts to €27 million and €62 million,
respectively, in fiscal 2015 and 2014, and corresponds to the
amount representing the EPS target attainment.
In fiscal 2015 and 2014, 1,162,028 and 652,162 stock awards,
respectively, were granted contingent upon attaining the pro-
spective performance-based target of Siemens stock relative to
five competitors. The fair value of equity-settled stock awards
amounting to €57 million and €40 million, respectively, in fis-
cal 2015 and 2014, was calculated by applying a valuation
model. In fiscal 2015 and 2014, inputs to that model include an
expected weighted volatility of Siemens shares of 22% and 23%,
respectively, and a market price of €88.03 and €95.62 per
Siemens share. Expected volatility was determined by reference
to historic volatilities. The model applies a risk-free interest rate
of up to 0.3% in fiscal 2015 and up to 0.9% in fiscal 2014 and an
expected dividend yield of 3.8% in fiscal 2015 and 3.1% in fiscal
2014. Assumptions concerning share price correlations were
determined by reference to historic correlations.
Changes in the stock awards held by members of the senior
management and other eligible employees are:
Vested and fulfilled
Forfeited
2015
Fiscal year
2014
Non-vested, beginning of period
Granted
4,985,998
1,528,957
by reference to historic volatilities. The model applies a risk-free
interest rate of up to 0.3% in fiscal 2015 and up to 1.0% in fiscal
2014 and an expected dividend yield of 3.8% in fiscal 2015 and
3.1% in fiscal 2014. Assumptions concerning share price cor-
relations were determined by reference to historic correlations.
4,876,455
1,421,211
(159,754)
(120,350)
(305,951)
(149,942)
Non-vested, end of period
6,049,250
4,985,998
|
Settled
98 Consolidated Financial Statements
1,032
(1,041,376)
537
Commitments to members of the Managing Board
In fiscal 2015 and 2014, agreements were entered into which
entitle members of the Managing Board to stock awards contin-
gent upon attaining the prospective performance-based target
of Siemens stock relative to five competitors. The fair value of
these entitlements amounting to €9 million and €5 million, re-
spectively, in fiscal 2015 and 2014, was calculated by applying a
valuation model. In fiscal 2015 and 2014, inputs to that model
include an expected weighted volatility of Siemens shares of
22% and 22%, respectively, and a market price of €88.03 and
€98.36 per Siemens share. Expected volatility was determined
Stock awards are tied to performance criteria. The annual target
amount for stock awards can be bound to the average of earn-
ings per share (EPS, basic) of the past three fiscal years and/or
to the share price performance of Siemens relative to the share
price performance of five important competitors during the
four-year restriction period. The target attainment for the per-
formance criteria ranges between 0% and 200%. If the target
attainment of the prospective performance-based target of
Siemens stock relative to five competitors exceeds 100%, an ad-
ditional cash payment results corresponding to the outperfor-
mance. The vesting period is four years and five years for stock
awards granted to members of the Managing Board in fiscal
2014, respectively.
Credit guarantees¹
859
Irrevocable loan
commitments²
3,300
158
125
101
7
1 Based on the maximum amounts Siemens could be required to settle in the event
of default by the primary debtor.
2 A considerable portion result from asset-based lending transactions meaning
that the respective loans can only be drawn after sufficient collateral has been
provided by the borrower.
Until fiscal 2014, additionally one portion of the variable com-
pensation component (bonus) for members of the Managing
Board was granted in the form of non-forfeitable awards of
Siemens stock (Bonus Awards) subject to a vesting period of
one year. Beneficiaries will receive one Siemens share without
payment of consideration for each Bonus Award, following an
additional waiting period of four years.
CREDIT RISK
Siemens provides its customers with various forms of direct
and indirect financing particularly in connection with large
projects. Hence, credit risks arise are determined by the sol-
vency of the debtors, the recoverability of the collaterals and
the global economic development.
The effective monitoring and controlling of credit risk through
credit evaluations and ratings is a core competency of our risk
management system. In this context, Siemens has imple-
mented a binding credit policy for all entities.
Ratings, defined and analyzed by SFS, and individually defined
credit limits are based on generally accepted rating methodolo-
gies, with the input consisting of information obtained from
the customer, external rating agencies, data service providers
and Siemens' credit default experiences. Ratings and credit lim-
its for financial institutions as well as Siemens' public and pri-
vate customers, which are determined by internal risk assess-
ment specialists, are continuously updated and considered by
investments in cash and cash equivalents, and in determining
the conditions under which direct or indirect financing will be
offered to customers.
For analysis and monitoring of the credit risk the Company ap-
plies different systems and processes. A central IT application
processes data from the operating units together with rating
and default information and calculates an estimate which may
be used as a basis for individual bad debt provisions. In addi-
tion to this automated process, qualitative information is con-
sidered, in particular to incorporate the latest developments.
Furthermore Corporate Treasury has established the Siemens
Credit Warehouse to which numerous operating units from the
Siemens Group regularly transfer business partner data as a ba-
sis for a centralized rating process. Furthermore, the Siemens
Credit Warehouse purchases trade receivables from numerous
operating units with a remaining term up to one year. Due to
the identification, quantification and active management of
the credit risk the Siemens Credit Warehouse increases the
transparency with regard to credit risk. In addition, the Siemens
Credit Warehouse may provide Siemens with an additional
source of liquidity and strengthens Siemens' funding flexibility.
The maximum exposure to credit risk of financial assets, with-
out taking account of any collateral, is represented by their car-
rying amount. As of September 30, 2015 and 2014 the collateral
for financial instruments classified as financial assets measured
at fair value in the form of netting agreements for derivatives
in the event of insolvency of the respective counterparty
amounted to €1,065 million and €955 million, respectively. As
of September 30, 2015 and 2014 the collateral held for financial
instruments classified as receivables from finance leases
amounted to €2,003 million and €2,057 million, respectively,
mainly in the form of the leased equipment. As of Septem-
ber 30, 2015 and 2014 the collateral held for financial instru-
ments classified as financial assets measured at cost or amor-
tized cost amounted to €3,165 million and €2,841 million,
respectively. The collateral mainly consisted of property, plant
and equipment. Credit risks arising from irrevocable loan com-
mitments are equal to the expected future pay-offs resulting
from these commitments. As of September 30, 2015 and 2014
the collateral held for these commitments amounted to
€1,445 million and €1,466 million, respectively, mainly in the
form of inventories and receivables.
Consolidated Financial Statements 97
NOTE 25 Share-based payment
Share-based payment awards may be settled in newly issued
shares of capital stock of Siemens AG, in treasury shares or in
cash. Share-based payment awards may forfeit if the employ-
ment of the beneficiary terminates prior to the expiration of
the vesting period. Total pretax expense for share-based pay-
ment amounted to €203 million and €183 million for the years
ended September 30, 2015 and 2014, respectively, and refers
primarily to equity-settled awards.
STOCK AWARDS
The Company grants stock awards to members of the Manag-
ing Board, members of the senior management and other eligi-
ble employees. Stock awards are subject to a restriction period
of about four years and entitle the beneficiary to Siemens
shares without payment of consideration following the restric-
tion period.
Credit risk is defined as an unexpected loss in financial instru-
ments if the contractual partner is failing to discharge its obli-
gations in full and on time or if the value of collateral declines.
Many Siemens units are located outside the euro zone. Since
the financial reporting currency of Siemens is the euro, the fi-
nancial statements of these subsidiaries are translated into
euro for the preparation of the Consolidated Financial State-
ments. To consider the effects of foreign currency translation in
the risk management, the general assumption is that invest-
ments in foreign-based operations are permanent and that re-
investment is continuous. Effects from foreign currency ex-
change rate fluctuations on the translation of net asset
amounts into euro are reflected in the Company's consolidated
equity position.
Concerning trade receivables and other receivables, as well as
loans or receivables included in line item Other financial assets
that are neither impaired nor past due, there were no indica-
tions that defaults in payment obligations will occur, which
lead to a decrease in the net assets of Siemens. Overdue finan-
cial instruments are generally impaired on a portfolio basis in
order to reflect losses incurred within the respective portfolios.
When substantial expected payment delays become evident,
overdue financial instruments are assessed individually for ad-
ditional impairment and are further allowed for as appropriate.
As of September 30, 2015 and 2014 the VaR relating to foreign
currency exchange rates was €179 million and €47 million. This
VaR was calculated under consideration of items of the Consol-
idated Statement of Financial Position in addition to firm com-
mitments which are denominated in foreign currencies, as well
as foreign currency denominated cash flows from forecast
transactions for the following twelve months. A higher volatil-
ity between the U.S. dollar and the euro in comparison to prior
year resulted in an increase of the VaR. Furthermore, the VaR
was influenced by changes to hedging level and hedging hori-
zon with regard to foreign currency denominated cash flows
from forecast transactions.
Financial liabilities - Derivative financial liabilities
1,533
7
1,526
905
621
|
Consolidated Financial Statements 93
NOTE 23 Derivative financial instruments
and hedging activities
Fair values of each type of derivative financial instruments
recorded as financial assets or financial liabilities are:
Periods in which the hedged forecast transactions or the firm
commitments denominated in foreign currency are expected to
impact profit or loss:
400
Fiscal year
2016
2017
2018 to
2020
2021 and
thereafter
(in millions of €)
Asset
Sep 30, 2015
Liability
Asset
Sep 30, 2014
Liability
Foreign currency
Expected gain (loss) to be
reclassified from line item
Other comprehensive in-
(in millions of €)
exchange contracts
400
Reverse repurchase agreements
Gross
amounts
Translation risk
Amounts set
Net amounts
off in the
Statement of
in the
Statement of
Financial
Position
Financial
Position
Related
amounts not
set off in the
Statement of
Financial
Position
Sep 30, 2014
Net
400
amounts
Financial assets
2,764
7
2,757
1,355
Derivative financial assets
2,364
7
2,357
955
1,402
(in millions of €)
713
1,402
352
The Company's operating units apply hedge accounting for cer-
tain significant forecast transactions and firm commitments
denominated in foreign currencies. Particularly, the Company
has entered into foreign currency exchange contracts to reduce
the risk of variability of future cash flows resulting from fore-
cast sales and purchases as well as firm commitments. This risk
results mainly from contracts denominated in US$ both from
Siemens' operating units entering into long-term contracts e.g.
project business and from standard product business.
INTEREST RATE RISK MANAGEMENT
Derivative financial instruments
not designated in a hedging relationship
For the interest rate risk management relating to the Group ex-
cluding SFS' business, derivative financial instruments are used
under a portfolio-based approach to manage interest risk ac-
tively relative to a benchmark. The interest rate management
relating to the SFS business remains to be managed separately,
considering the term structure of SFS' financial assets and lia-
bilities on a portfolio basis. Neither approach qualifies for
hedge accounting treatment. Net cash receipts and payments
in connection with interest rate swap agreements are recorded
as interest expense in Other financial income (expenses), net.
Cash flow hedges of floating-rate
commercial papers
Since fiscal 2015, Siemens applies cash flow hedge accounting
to a revolving portfolio of floating-rate commercial papers of
nominal US$700 million. To benefit from low interest rates in
the USA, Siemens pays a fixed rate of interest and receives a
variable rate of interest, offsetting future changes in interest
payments of the underlying floating-rate commercial papers.
Net cash receipts and payments are recorded as interest ex-
penses.
Fair value hedges of fixed-rate debt obligations
Under the interest rate swap agreements outstanding during
the years ended September 30, 2015 and 2014, the Company
has agreed to pay a variable rate of interest multiplied by a no-
tional principle amount, and to receive in return an amount
equal to a specified fixed rate of interest multiplied by the same
notional principal amount. These interest rate swap agree-
ments offset an impact of future changes in interest rates des-
ignated as the hedged risk on the fair value of the underlying
fixed-rate debt obligations. Carrying amount adjustments to
debt for fair value changes attributable to the respective interest
rate risk being hedged are included in Other financial income
94
94
Consolidated Financial Statements
(expenses), net resulted in a gain (loss) of €103 million and
€(8) million, respectively, in fiscal 2015 and 2014; the related
swap agreements resulted in a gain (loss) of €(135) million and
€3 million, respectively. Net cash receipts and payments relat-
ing to such interest rate swap agreements are recorded as inter-
est expenses.
Cash flow hedges
The Company had interest rate swap contracts to pay variable
rates of interest of an average of 0.1% and 0.3% as of Septem-
ber 30, 2015 and 2014, respectively and received fixed rates of
interest (average rate of 4.3% and 4.0%, as of September 30,
2015 and 2014, respectively). The notional amount of indebted-
ness hedged as of September 30, 2015 and 2014 was €6,012 mil-
lion and €6,645 million, respectively. This changed 26% and
41% of the Company's underlying notes and bonds from fixed
interest rates into variable interest rates as of September 30,
2015 and 2014, respectively. The notional amounts of these
contracts mature at varying dates based on the maturity of the
underlying hedged items. The net fair value of interest rate
swap contracts (excluding accrued interest) used to hedge in-
debtedness as of September 30, 2015 and 2014 was €242 mil-
lion and €386 million, respectively.
In order to quantify market risks Siemens has implemented a
system based on parametric variance-covariance Value at Risk
(VAR), which is also used for internal management of the Cor-
porate Treasury activities. The VaR figures are calculated based
on historical volatilities and correlations of various risk factors,
a ten day holding period, and a 99.5% confidence level.
Actual results that are included in the Consolidated Statements
of Income or Consolidated Statements of Comprehensive In-
come may differ substantially from VaR figures due to funda-
mental conceptual differences. While the Consolidated State-
ments of Income and Consolidated Statements of Comprehensive
Income are prepared in accordance with IFRS, the VaR figures are
the output of a model with a purely financial perspective and
represent the potential financial loss which will not be exceeded
within ten days with a probability of 99.5%. Although VaR is an
important tool for measuring market risk, the assumptions on
which the model is based give rise to some limitations including
the following. A ten day holding period assumes that it is possi-
ble to dispose of the underlying positions within this period.
This may not be valid during continuing periods of illiquidity
markets. A 99.5% confidence level means, that there is a 0.5%
statistical probability that losses could exceed the calculated
VaR. The use of historical data as a basis for estimating the sta-
tistic behavior of the relevant markets and finally determining
the possible range of the future outcomes on the basis of this
statistic behavior may not always cover all possible scenarios,
especially those of an exceptional nature.
Any market sensitive instruments, including equity and inter-
est bearing investments, that our Company's pension plans
hold are not included in the following quantitative and qualita-
tive disclosures.
FOREIGN CURRENCY EXCHANGE RATE RISK
Transaction risk
Each Siemens unit conducting businesses with international
counterparties leading to future cash flows denominated in a
currency other than its functional currency is exposed to risks
from changes in foreign currency exchange rates. In the ordi-
nary course of business Siemens units are exposed to foreign
currency exchange rate fluctuations, particularly between the
U.S. dollar and the euro. Foreign currency exchange rate expo-
sure is partly balanced by purchasing of goods, commodities
and services in the respective currencies as well as production
activities and other contributions along the value chain in the
local markets.
Operating units (Industrial business and SFS) are prohibited
from borrowing or investing in foreign currencies on a specula-
tive basis. Intercompany financing or investments of operating
units are preferably carried out in their functional currency or
on a hedged basis.
According to the company policy each Siemens unit is respon-
sible for recording, assessing and monitoring its foreign
currency transaction exposure. The net foreign currency posi-
tion of each unit serves as a central performance measure and
has to be hedged within a band of at least 75% but no more
than 100%.
1,297
Generally, the operating units conclude their hedging activities
internally with Corporate Treasury. By applying a cost-optimiz-
ing portfolio approach Corporate Treasury itself hedges foreign
currency exchange rate risks with external counterparties and
limits them Company-wide.
Consolidated Financial Statements 95
NOTE 24 Financial risk management
not designated in a hedging relationship
The Company manages its risks associated with fluctuations in
foreign currency denominated receivables, payables, debt, firm
commitments and forecast transactions primarily through a
Company-wide portfolio approach. Under this approach the
Company-wide risks are aggregated centrally, and various de-
rivative financial instruments, primarily foreign currency ex-
change contracts, foreign currency swaps and options, are uti-
lized to minimize such risks. Such a strategy does not qualify
for hedge accounting treatment. The Company also accounts
for foreign currency derivatives, which are embedded in sale
and purchase contracts.
Increasing market fluctuations may result in significant earn-
ings and cash flow volatility risk for Siemens. The Company's
operating business as well as its investment and financing ac-
tivities are affected particularly by changes in foreign exchange
rates, interest rates and equity prices. In order to optimize the
allocation of the financial resources across the Siemens seg-
ments and entities, as well as to achieve its aims, Siemens iden-
tifies, analyzes and manages the associated market risks. The
Company seeks to manage and control these risks primarily
through its regular operating and financing activities, and uses
derivative financial instruments when deemed appropriate.
RISK MANAGEMENT
901
come, net of income taxes
into revenue or cost of sales
(163)
(87)
(72)
23
Interest rate swaps
and combined interest
and currency swaps
1,824
1,769
456
381
derivatives, options,
FOREIGN CURRENCY EXCHANGE RATE
391
1,749
448
2,569
1,919
Other (embedded
3,228
691
commodity swaps)
241
Derivative financial instruments
843,449
823,408
Weighted average shares outstanding – basic
Effect of dilutive share-based payment
5,159
attributable to shareholders of Siemens AG
5,251
5,349
2015
(134)
(98)
5,292
9,425
non-controlling interest
Less: Portion attributable to
Income from continuing operations
Income from continuing operations
Weighted average shares outstanding - diluted
6.30
8,485
851,934
(in millions of €)
Total revenue
2014
Intersegment Revenue
External revenue
Orders¹
The dilutive earnings per share computation in fiscal 2015 and
2014 does not contain 22,7 million and 21,7 million shares,
respectively, relating to warrants issued with bonds. The inclu-
sion of those shares would have been antidilutive in the years
presented. In the future, the warrants could potentially dilute
basic earnings per share.
832,832
6.06
NOTE 28
(from continuing operations)
Diluted earnings per share
6.12
6.38
(from continuing operations)
Basic earnings per share
Segment information
2015
214
Fiscal year
67
220
208
212
Manufacturing and services
Sales and marketing
2014
2015
67
2014
(in thousands)
Continuing
and discontinued
operations
Fiscal year
Fiscal year
Continuing
operations
Fiscal year
2014
Severance charges amount to €804 million in fiscal 2015.
Item Expenses relating to post-employment benefits includes
service costs for the period. Personnel costs for continuing
and discontinued operations amount to €27,584 million and
€25,533 million, respectively, in fiscal 2015 and 2014, respec-
tively. Employees were engaged in (averages; part time em-
ployees are included proportionally):
1,040
24,161
2015
(shares in thousands; earnings per share in €)
68
Research and development
NOTE 27 Earnings per share
Consolidated Financial Statements 99
359
349
339
345
34
71
35
34
and general services
Administration
34
33
31
32
33
2015
10,014
2015
771
926
8,430
9,030
9,233
Digital Factory
7,249
7,508
17
31
7,232
7,477
9,280
10,262
Mobility
9,956
9,201
Process Industries and Drives
9,337
83,819
27,177
Industrial Business
35
11,707
12,896
12,126
5,569
13,349
9,645
9,894
1,749
1,780
7,896
8,113
9,968
Healthcare
5,999
123
139
7,759
6,136
Wind Power and Renewables
12,720
13,193
52
88
5,658
12,668
13,996
15,666
Power and Gas
2014
2015
Fiscal year
Fiscal year
2014
13,105
Fiscal year
2014
5,566
1
5,446
5,860
5,587
6,099
Building Technologies
10,708
11,922
2
568
10,139
11,344
11,210
12,956
Energy Management
5,567
5,660
578
1,163
113
3,404
2015
2014
2015
Joint ventures
Associates
167
198
377
72
82
638
255
280
280
1,015
327
(in millions of €)
Sep 30,
Receivables
Sep 30,
2014
2015
and other expenses
Fiscal year
2014
365
341
39
23
Associates
As of September 30, 2015 and 2014, guarantees to joint ven-
tures and associates amounted to €2,145 million and
€2,263 million, respectively, including the HERKULES obliga-
tions of €1,090 million and €1,490 million, respectively. As of
September 30, 2015 and 2014, guarantees to joint ventures
amounted to €472 million and €593 million, respectively. As of
September 30, 2015 and 2014, the Company had commitments
to make capital contributions of €38 million and €107 million to
its joint ventures and associates, therein €26 million and
€56 million related to joint ventures, respectively. For a loan
raised by a joint venture, which is secured by a Siemens guar-
antee, Siemens granted an additional collateral. As of Septem-
ber 30, 2015 and 2014 the outstanding amount totaled to
€124 million and €129 million, respectively. As of September 30,
2015 and 2014 there were loan commitments to joint ventures
and associates amounting to €134 million and €52 million, re-
spectively, therein €58 million and €52 million, respectively
related to joint ventures.
687
197
165
1,052
1,074
236
188
Liabilities
732
RELATED INDIVIDUALS
In fiscal 2015 and 2014, members of the Managing Board re-
ceived cash compensation of €19.6 million and €17.9 million.
The fair value of stock-based compensation amounted to
€7.9 million and €10.7 million for 113,281 and 170,444 Stock
Awards, respectively, in fiscal 2015 and 2014. In fiscal 2015 and
2014, the Company granted contributions under the BSAV to
members of the Managing Board totaling €4.8 million and
€5.1 million.
104 Consolidated Financial Statements
2015
2014
Audit services
43.7
43.5
Other attestation services
7.1
(in millions of €)
5.9
0.1
0.2
0.1
51.0
49.6
Other services
79,158
Tax services
2014
Fiscal year
NOTE 31 Principal accountant fees
and services
Therefore in fiscal 2015 and 2014, compensation and benefits,
attributable to members of the Managing Board amounted to
€32.2 million and €33.7 million in total, respectively.
In connection with the mutually agreed-upon termination of
Prof. Dr. Hermann Requardt's activity on the Managing Board as
of January 31, 2015, it was agreed that his current employment
contract with the Company would terminate as of Septem-
ber 30, 2015. The entitlements agreed upon under the contract
remained in effect until that date. A gross compensatory pay-
ment of €1,888,566 and a one-time special contribution of
€279,552 to the BSAV were agreed upon with Prof. Dr. Hermann
Requardt in connection with the mutually agreed-upon prema-
ture termination of his Managing Board membership. The
86,281 Stock Awards already granted and for which the restric-
tion period is still in effect, will be maintained, in accordance
with the terms of his employment contract, and will be settled
in cash at the closing price of Siemens stock in Xetra trading on
September 30, 2015 (€79.94). The respective fair value of the
Stock Awards already granted in the past at grant date
amounted to €5.77 million. The Stock Awards for fiscal 2015 are
included in the above mentioned stock-based compensation
amount. In addition, non-monetary benefits were covered by a
payment amounting to 5% of the compensatory payment. The
Company also reimbursed Prof. Dr. Requardt for out-of-pocket
expenses of €5,000 plus value-added tax.
In fiscal 2014, in compensation for the forfeiture of stock, pen-
sion benefits, health benefits and transitional remuneration from
her former employer, the Supervisory Board granted Ms. Davis a
one-time amount of €5.5 million. This amount was provided 20%
in cash, 30% in the form of Siemens Stock Awards and the re-
maining 50% as a special contribution to the pension plan.
In fiscal 2014, the following settlements have been agreed in
connection with termination of Managing Board memberships:
As Barbara Kux's appointment to the Managing Board expired
regularly on November 16, 2013, no compensatory payments
were agreed upon. The 51,582 Stock Awards already granted in
the past for fiscal 2011, 2012 and 2013, for which the restriction
period was still running, were maintained, in accordance with
the terms of her contract with the Company. The respective fair
value of these Stock Awards at grant date amounted to
€3.47 million.
In connection with the mutually agreed termination of Peter Y.
Solmssen's activity on the Managing Board as of December 31,
2013, it was agreed that his contract with the Company would
remain in effect until March 31, 2015. The entitlements agreed
under the contract remained in effect until that date. These did
not include the fringe benefits under the contract, particularly
the Company car and contributions toward the cost of insur-
ance, which was covered until the contract ends by a monthly
lump-sum payment of €11,500. The 51,582 Stock Awards al-
ready granted in the past for fiscal 2011, 2012 and 2013, for
which the restriction period was still in progress, were main-
tained. The respective fair value of these Stock Awards at grant
date amounted to €3.47 million. Mr. Solmssen was also reim-
bursed for relocation costs, in accordance with the commit-
ment he received when he took office. The Company further-
more reimbursed Mr. Solmssen for out-of-pocket expenses of
€100,000 plus value-added tax.
In connection with the mutually agreed termination of
Dr. Michael Süẞ's activity on the Managing Board as of May 6,
2014, it was agreed that his current contract with the Company
would terminate as of September 30, 2014. The entitlements
agreed under the contract remained in effect until that date.
Dr. Süẞ received a compensatory payment in the gross amount
of €4.3 million in connection with the mutually agreed prema-
ture termination of his activity as a member of the Managing
Board, together with a one-time special contribution of
€0.8 million to the BSAV, credited in January 2015. It was also
agreed with Dr. Süß that the long-term stock-based compensa-
tion (8,126 Stock Awards) for fiscal 2014 were calculated once
the actual target attainment was available, and were granted at
the usual date. The 46,399 Stock Awards already granted in the
past and those for fiscal 2014, for which the restriction period
was still running, were maintained (54,525 Stock Awards), in
accordance with the terms of his contract with the Company,
and were settled in cash in September 2015 at the closing price
of Siemens stock in Xetra trading on May 6, 2014 (€93.91). The
respective fair value of the Stock Awards already granted in the
past at grant date amounted to €3.16 million. The Stock Awards
for fiscal 2014 were included in the above mentioned stock-
based compensation amount. Dr. Süß agreed not to take up ac-
tivities for any significant competitor of Siemens for a period of
one year after the end of his employment contract - that was,
until September 30, 2015. For this post-contractual non-compete
commitment, he has been paid a monthly total of gross €65,000.
Fees related to professional services rendered by the Compa-
ny's principal accountant, EY, for fiscal 2015 and 2014 are:
Consolidated Financial Statements
In fiscal 2015 and 2014, expense related to share-based pay-
ment and to the Share Matching Program amounted to
€8.1 million (including the above mentioned Stock Awards in
connection with the departure from members of the Managing
Board) and 16.1 million (including the above mentioned Stock
Awards in connection with the departure from members of the
Managing Board) respectively.
Former members of the Managing Board and their surviving
dependents received emoluments within the meaning of Sec-
tion 314 para. 1 No. 6 b of the German Commercial Code totaling
€30.5 million (including €9.6 million in connection with the
above mentioned departure from members of the Managing
Board) and €24.2 million (including €7.9 million in connection
with the above mentioned departure from members of the
Managing Board) in fiscal 2015 and 2014.
The defined benefit obligation (DBO) of all pension commit-
ments to former members of the Managing Board and their
survivors as of September 30, 2015 and 2014 amounted to
€228.3 million and €234.4 million.
Compensation attributable to members of the Supervisory
Board comprises in fiscal 2015 and 2014 of a base compensation
and additional compensation for committee work and
amounted to €5.1 million and €5.1 million (including meeting
fees), respectively.
Information regarding the remuneration of the members of the
Managing Board and Supervisory Board is disclosed on an indi-
vidual basis in the Compensation Report, which is part of the
combined management report.
In fiscal 2015 and 2014, no other major transactions took place
between the Company and the members of the Managing
Board and the Supervisory Board.
Some of our board members hold, or in the last year have held,
positions of significant responsibility with other entities. We
have relationships with almost all of these entities in the ordi-
nary course of our business whereby we buy and sell a wide
variety of products and services on arm's length terms.
105
3,190
2015
Fiscal year
(85,056)
(437,989)
(548,947)
Vested and fulfilled
609,758
610,771
Granted
1,733,497
1,750,176
Outstanding, beginning of period
2014
2015
Fiscal year
The fair value of matching shares granted in fiscal 2015 and
2014 amounting to €69.43 and €73.00 per share was deter-
mined as the market price of Siemens shares less the present
value of expected dividends taking into account non-vesting
conditions.
Resulting Matching Shares
(92,035)
(71,164)
(63,055)
Outstanding, end of period
19,931
22,611
2014
2015
Fiscal year
|
Statutory social welfare contributions
and expenses for optional support
Expenses relating to post-employment
benefits
Under the Base Share Program employees of Siemens AG and
participating domestic Siemens companies may invest a fixed
amount of their compensation in Siemens shares, sponsored
by Siemens with a tax beneficial allowance. The shares are
bought at market price at a predetermined date in the second
quarter and grant the right to receive matching shares under
the same conditions applying to the Share Matching Plan de-
scribed above. The fair value of the Base Share Program equals
the amount of the tax beneficial allowance sponsored by
Siemens and totaled €33 million and €32 million in fiscal 2015
and 2014, respectively.
Wages and salaries
NOTE 26 Personnel costs
For their 25th and 40th service anniversary eligible employees
receive jubilee shares. There were 4.46 million and 4.56 million
entitlements to jubilee shares outstanding as of September 30,
2015 and 2014, respectively.
JUBILEE SHARE PROGRAM
Settled
Forfeited
1,750,176
1,655,780
(in millions of €)
Base Share Program
Under the Monthly Investment Plan employees other than se-
nior managers may invest a specified part of their compensa-
tion in Siemens shares on a monthly basis over a period of
twelve months. Shares are purchased at market price at a pre-
determined date once a month. If the Managing Board decides
that shares acquired under the Monthly Investment Plan are
transferred to the Share Matching Plan, plan participants will
receive the right to matching shares under the same conditions
applying to the Share Matching Plan described above. The
Managing Board decided that shares acquired under the
tranches issued in fiscal 2014 and 2013 are transferred to the
Share Matching Plan as of February 2015 and February 2014,
respectively.
Monthly Investment Plan
25,484
therein U.S.
15,263
12,647
16,540
13,565
17,296
34,705
10,861
NOTE 30 Related party transactions
JOINT VENTURES AND ASSOCIATES
Siemens has relationships with many joint ventures and asso-
ciates in the ordinary course of business whereby Siemens
buys and sells a wide variety of products and services generally
on arm's length terms.
and services
Purchases of goods
and services
Sales of goods
and other income
Non-current assets consist of property, plant and equipment,
goodwill and other intangible assets.
(in millions of €)
52,742
60,446
Under the Share Matching Plan senior managers may invest a
specified part of their variable compensation in Siemens
shares (investment shares). The shares are purchased at the
market price at a predetermined date in the second quarter.
Plan participants receive the right to one Siemens share with-
out payment of consideration (matching share) for every three
investment shares continuously held over a period of about
three years (vesting period) provided the plan participant has
been continuously employed by Siemens until the end of the
vesting period.
Share Matching Plan
In fiscal 2015, Siemens issued a new tranche under each of the
plans of the Share Matching Program.
ITS UNDERLYING PLANS
SHARE MATCHING PROGRAM AND
41,453
31,981
57,194
thereof Germany
10,781
18,443
18,485
6,748
6,497
thereof foreign countries
64,392
11,244
73,483
Joint ventures
1,048
CONSOLIDATED FINANCIAL STATEMENTS
RECONCILIATION TO
Centrally managed portfolio activities follow the measurement
principles of the segments except for SFS. SRE applies the mea-
surement principles of SFS.
MEASUREMENT - CENTRALLY MANAGED
PORTFOLIO ACTIVITIES AND SRE:
Amortization, depreciation and impairments:
Amortization, depreciation and impairments includes depreci-
ation and impairments of property, plant and equipment as
well as amortization and impairments of intangible assets each
net of reversals of impairment.
Free cash flow of the segments except for SFS constitutes cash
flows from operating activities less additions to intangible as-
sets and property, plant and equipment. It excludes Financing
interest, except for cases where interest on qualifying assets is
capitalized or classified as contract costs and it also excludes
income tax as well as certain other payments and proceeds.
Free cash flow of SFS includes related financing interest pay-
ments and proceeds; income tax payments and proceeds of SFS
are excluded.
Free cash flow definition:
Orders are determined principally as estimated revenue of ac-
cepted purchase orders and order value changes and adjust-
ments, excluding letters of intent.
Orders:
Management determined Assets (Net capital employed) as a
measure to assess capital intensity of the segments except for
SFS. Its definition corresponds to the Profit measure except for
amortization expenses of intangible assets acquired in busi-
ness combinations which are not part of Profit, however, the
related intangible assets are included in the segments' Assets.
Segment Assets is based on Total assets of the Consolidated
Statements of Financial Position, primarily excluding intra-
group financing receivables, tax related assets and assets of
discontinued operations, since the corresponding positions are
excluded from Profit. Mobility includes in Assets the project-
specific intercompany financing of a long-term project. The re-
maining assets are reduced by non-interest-bearing liabilities
other than tax related liabilities, e.g. trade payables, to derive
Assets. In contrast, Assets of SFS is Total assets.
Asset measurement principles:
102 Consolidated Financial Statements
Profit of the segment SFS differs from the other segments since
SFS uses Income before income taxes as a measure of profit.
In contrast to performance measurement principles applied to
other segments interest income and expenses is an important
source of revenue and expense of SFS.
Profit of the segment SFS:
The effect of certain litigation and compliance issues is ex-
cluded from Profit, if such items are not indicative of perfor-
mance. This may also be the case for items that refer to more
than one reportable segment, SRE and (or) Centrally managed
portfolio activities or have a corporate or central character. Costs
for support functions are primarily allocated to the segments.
| Profit
(in millions of €)
Fiscal year
2015
(498)
(543)
acquired in business combinations
Amortization of intangible assets
(393)
(440)
Centrally carried pension expense
Amortization expenses of intangible assets acquired in busi-
ness combinations are not part of Profit. Furthermore, income
taxes are excluded from Profit since income tax is subject to
legal structures, which typically do not correspond to the struc-
ture of the segments.
(446)
Corporate items
242
205
280
714
Centrally managed portfolio activities
Siemens Real Estate
2014
(709)
Decisions on essential pension items are made centrally.
Accordingly, Profit primarily includes amounts related to ser-
vice cost of pension plans only, while all other regularly recur-
ring pension related costs are included in reconciliations in line
item Centrally carried pension expense.
Financing interest, excluded from Profit, is any interest income
or expense other than interest income related to receivables
from customers, from cash allocated to the segments and inter-
est expenses on payables to suppliers. Financing interest is ex-
cluded from Profit because decision-making regarding financ-
ing is typically made at the corporate level.
Siemens' Managing Board is responsible for assessing the per-
formance of the segments (chief operating decision maker).
The Company's profitability measure of the segments except
for SFS is earnings before financing interest, certain pension
costs, income taxes and amortization expenses of intangible
assets acquired in business combinations as determined by the
chief operating decision maker (Profit). The major categories of
items excluded from Profit are presented below.
120,348
7,306
7,218
326
338
450
468
104,879
(2,219)
58,351
60,855
(862)
(1,138)
194
219
31
(3,359)
Eliminations, Corporate Treasury,
and other reconciling items
Reconciliation to
4,984
1,897
Profit
Accounting policies for Segment information are generally the
same as those used for Siemens. Lease transactions, however,
are classified as operating leases for internal and segment re-
porting purposes. Intersegment transactions are based on mar-
ket prices.
SEGMENTS
-
MEASUREMENT
Eliminations, Corporate Treasury and other reconciling
items comprise consolidation of transactions within the seg-
ments, certain reconciliation and reclassification items and the
activities of the Company's Corporate Treasury. It also includes
interest income and expense, such as, for example, interest not
allocated to segments or Centrally managed portfolio activities
(referred to as financing interest), interest related to Corporate
Treasury activities or resulting consolidation and reconciliation
effects on interest.
Pensions - includes the Company's pension related income
(expense) not allocated to the segments, SRE or Centrally man-
aged portfolio activities.
5,278
Corporate items - includes corporate charges such as person-
nel costs for corporate headquarters, corporate projects and
non-operating investments or results of corporate-related de-
rivative activities.
CONSOLIDATED FINANCIAL STATEMENTS
Centrally managed portfolio activities (CMPA) - in gen-
eral, comprises equity stakes held by Siemens that are ac-
counted for by the equity method or as available-for-sale finan-
cial assets and that for strategic reasons are not allocated to a
segment, Siemens Real Estate (SRE), Corporate items or Corpo-
rate Treasury. CMPA also includes activities generally intended
for divestment or closure as well as activities remaining from
divestments and discontinued operations.
RECONCILIATION TO
101
Consolidated Financial Statements
2,387
2,549
1,813
Siemens Real Estate (SRE) - manages the Group's entire real
estate business portfolio, operates the properties, and is re-
sponsible for building projects and the purchase and sale of
real estate.
17
(365)
Consolidated Financial Statements
42,145
42,432
38,449
38,799
Europe, C.I.S., Africa, Middle East
2014
2015
2014
2015
2014
2015
(in millions of €)
Sep 30,
assets
Non-current
20,085
17,053
Americas
21,702
In fiscal 2015 and 2014, 45% and 44%, respectively, of the total
fees related to Ernst & Young GmbH Wirtschaftsprüfungs-
gesellschaft, Germany.
71,227
75,636
Siemens
2,753
2,791
10,909
Fiscal year
11,765
15,135
Asia, Australia
12,175
18,577
18,173
21,440
18,494
14,283
Fiscal year
of companies
Revenue by location
Asset-based adjustments:
(2,007) (1,779)
Assets Corporate items and pensions
4,696
4,895
2,116
1,322
Intragroup financing receivables
Assets Centrally managed portfolio activities
Assets Siemens Real Estate
2015
(in millions of €)
Assets
In fiscal 2015 and 2014, Profit of SFS includes interest income
of €1,086 million and €966 million, respectively and interest
expenses of €340 million and €336 million, respectively.
In fiscal 2015, Corporate items included €196 million in sever-
ance charges for corporate reorganization of support functions.
In fiscal 2014, Profit includes a one-time effect of €186 million
regarding insurance matters, which were mainly included in
Eliminations.
(862)
(1,138)
Sep 30,
2014
(48)
and investments
42,129
Revenue by location
of customer
NOTE 29 Information about geographies
103
Consolidated Financial Statements
58,351
60,855
Consolidated Financial Statements
45,576
(30,372)
Eliminations, Corporate Treasury, other items
Reconciliation to
37,779
42,282
Liability-based adjustments
3,781
3,103
Tax-related assets
(34,315)
522
884
21,970
Sep 30, 2015
2014
2015
Amortization,
depreciation & impairments
Fiscal year
Additions to intangible assets
and property, plant & equipment
Fiscal year
Fiscal year
Fiscal year
Free cash flow
Assets
Profit
The reportable segments HC and SFS primarily remained
unchanged; Equity Investments ceased to be a reportable seg-
ment and became part of the reconciling item Centrally man-
aged portfolio activities. Prior period information has been
reclassified to correspond to the new reporting structure.
> Financial Services (SFS), a provider of business-to-business
financial solutions.
> Healthcare (HC), a technology supplier to the healthcare in-
dustry with products in medical imaging, laboratory diagnos-
tics and IT solutions,
> Process Industries and Drives (PD), which offers standard
and customized products, systems, solutions and services to
industry sectors,
> Digital Factory (DF), which offers products and solutions for
automation technology and industrial controls sold primarily
to the manufacturing industry,
Sep 30, 2014
2015
2014
2015
(346)
6
160
238
350
225
225
> Mobility (MO), a provider of passenger and freight transpor-
tation systems and solutions,
1,517
(275)
8,873
2,215
1,426
2014
2015
2014
1,331
> Building Technologies (BT), a provider of automation tech-
nologies and services for save, secure and efficient buildings
and infrastructure systems,
> Energy Management (EM), a supplier of products, systems,
solutions, software and services for transmission and distri-
bution of electrical energy and for developing intelligent grid
infrastructure,
> Wind Power and Renewables (WP), a provider of solutions for
on- and offshore wind power,
1,396
1,298
(2,438)
(2,527)
Reconciliation to
937
1,048
(3,772)
72,396
11,736
12,930
29
3,311
191
3,579
193
69,085
746
855
937
77,062
(146)
Consolidated Financial Statements
(2,475)
> Power and Gas (PG), which offers products and solutions for
generating electricity from fossil fuels and for producing and
transporting oil and gas,
As of October 1, 2014, Siemens realigned its organizational struc-
ture. Siemens eliminated the Sector level and arranged its busi-
ness primarily based on its Divisions managing Healthcare sepa-
rately. Instead of the previously six reportable segments composed
of the four Sectors Energy, Healthcare, Industry and Infrastruc-
ture & Cities, and of SFS and Equity Investments, Siemens has
nine reportable segments as of October 1, 2014, being:
DESCRIPTION OF REPORTABLE SEGMENTS
Consolidated Financial Statements
100
It is not part of the Consolidated Financial Statements subject to the audit opinion.
1 This supplemental information on Orders is provided on a voluntary basis.
(3,502)
71,227
-
71,227
75,636
77,657
82,340
Siemens (continuing operations)
(2,106)
75,636
389
552
119
11,153
2,072
2,184
227
248
168
170
10,822
732
2,169
2,211
773
536
320
277
197
496
184
2,048
346
24,970
466
600
1,866
1,993
1,331
1,413
1,927
6,975
24,559
34,522
7,703
7,755
529
545
284
7,460
Financial Services (SFS)
1,454
4,652
1,337
511
553
212
230
184
185
1,250
(105)
3,986
3,929
(86)
570
140
132
145
691
1,840
546
57
4,840
1,681
1,738
119
126
85
127
544
353
2,102
2,526
532
588
81
86
43
118
106 Consolidated Financial Statements
71,227
NOTE 32 Corporate Governance
10011
ILLIT Grundstücksverwaltungs-Management GmbH, Grünwald
IPGD Grundstücksverwaltungs-Gesellschaft mbH, Grünwald
85
Jawa Power Holding GmbH, Erlangen
100
10011
Siemens Fuel Gasification Technology GmbH & Co. KG, Freiberg
Siemens Fuel Gasification Technology Verwaltungs GmbH,
Freiberg
Siemens Fonds Invest GmbH, Munich
10010
KompTime GmbH, Munich
Kyra 1 GmbH, Erlangen
Kyros 48 GmbH, Munich
10011
10011
Siemens Global Innovation Partners Management GmbH,
Munich
1008
10011
HSP Hochspannungsgeräte GmbH, Troisdorf
10011
10010
1008
evosoft GmbH, Nuremberg
10011
FACTA Grundstücks-Entwicklungsgesellschaft mbH & Co. KG,
Munich
Siemens Campus Erlangen Verwaltungs-GmbH, Grünwald
Siemens Convergence Creators GmbH & Co. KG, Hamburg
1008
10010
10010
HanseCom Gesellschaft für Informations- und
Kommunikationsdienstleistungen mbH, Hamburg
Siemens Convergence Creators Management GmbH, Hamburg
Siemens Finance & Leasing GmbH, Munich
1008
10011
74
Siemens Financial Services GmbH, Munich
1008
10010
1008
1008
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to substantive removal or participation rights held by other parties.
5 No control due to contractual arrangements or legal circumstances.
7 Significant influence due to contractual arrangements or legal circumstances.
6
No significant influence due to contractual arrangements or legal circumstances.
8
2 Control due to rights to appoint, reassign or remove members of the key
management personnel.
Not consolidated due to immateriality.
10 Exemption pursuant to Section 264b German Commercial Code.
11 Exemption pursuant to Section 264 (3) German Commercial Code.
108
Consolidated Financial Statements
75,636
Audit Services relate primarily to services provided by EY for
auditing Siemens' Consolidated Financial Statements and for
auditing the statutory financial statements of Siemens AG and
its subsidiaries. Other Attestation Services include primarily
audits of financial statements in connection with M&A activi-
ties, comfort letters and other attestation services required un-
der regulatory requirements, agreements or requested on a
voluntary basis.
9 Not accounted for using the equity method due to immateriality.
100
Siemens Immobilien Chemnitz-Voerde GmbH, Grünwald
10010
Siemens Grundstücksmanagement GmbH & Co. OHG,
Grünwald
100
Lincas Electro Vertriebsgesellschaft mbH, Hamburg
100
Siemens Healthcare Diagnostics GmbH, Eschborn
100
Mannesmann Demag Krauss-Maffei GmbH, Munich
100
Omnetric GmbH, Munich
51
OPTIO Grundstücks-Vermietungsgesellschaft mbH & Co. Objekt
Tübingen KG, Grünwald
Siemens Healthcare Diagnostics Holding GmbH, Eschborn
Siemens Healthcare Diagnostics Products GmbH, Marburg
Siemens Healthcare GmbH, Erlangen
100
100
10011
Kyros 49 GmbH, Munich
10010
1 Control due to a majority of voting rights.
10010
in %
10011
10011
10011
100
10011
100
100
100
Alpha Verteilertechnik GmbH, Cham
10011
Siemens Bank GmbH, Munich
100
Anlagen- und Rohrleitungsbau Ratingen GmbH, Ratingen
1008
Equity interest
Siemens Beteiligungen Inland GmbH, Munich
R&S Restaurant Services GmbH, Munich
REMECH Systemtechnik GmbH, Kamsdorf
RHG Vermögensverwaltung GmbH, Berlin
RISICOM Rückversicherung AG, Grünwald
Samtech Deutschland GmbH, Hamburg
Partikeltherapiezentrum Kiel Holding GmbH, Erlangen
WWW.SIEMENS.COM/GCG-CODE
The Managing Board and the Supervisory Board of Siemens
Aktiengesellschaft provided the declaration required by Sec-
tion 161 of the German stock corporation law (AktG) as of Octo-
ber 1, 2015, which is available on the Company's website at:
10010
NOTE 33 Subsequent events
In November 2015, Siemens announced the extension of its
seven-year IT outsourcing contract with AtoS through Decem-
ber 2021, with minimum committed volumes increasing by
€3.23 billion to €8.73 billion. Furthermore Siemens announced
the extension of its current lock-up shareholder commitment in
Atos through September 2020.
Also in November 2015, Siemens announced the sale of its 49%
stake in Unify to Atos. While ownership of the Unify stake has
adversely affected Siemens' financial results in fiscal 2015 and
prior fiscal years, the transaction is not expected to result in a
material effect. Closing of the transaction is subject to the ap-
provals of the regulatory and antitrust authorities. Closing is
expected in the second quarter of fiscal 2016.
Consolidated Financial Statements
107
September 30, 2015
Subsidiaries
Airport Munich Logistics and Services GmbH, Hallbergmoos
100
NOTE 34 List of subsidiaries and associated
companies pursuant to Section 313
para. 2 of the German Commercial Code
Equity interest
in %
September 30, 2015
Project Ventures Butendiek Holding GmbH, Erlangen
Projektbau-Arena-Berlin GmbH, Grünwald
10011
Germany (113 companies)
100
100
Dade Behring Grundstücks GmbH, Marburg
100
D-R Holdings (Germany) GmbH, Oberhausen
100
Dresser-Rand GmbH, Oberhausen
Dade Behring Beteiligungs GmbH, Eschborn
100
EDI - USS Verwaltungsgesellschaft mbH, Munich
1008
Siemens Campus Erlangen Objekt 1 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 2 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 3 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 4 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 5 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 6 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 7 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objektmanagement GmbH,
Grünwald
10010
Atecs Mannesmann GmbH, Erlangen
10010
EDI - USS Umsatzsteuersammelrechnungen und Signaturen
GmbH & Co. KG, Munich
100
10010
Capta Grundstücks-Verwaltungsgesellschaft mbH, Grünwald
DA Creative GmbH, Munich
Siemens Beteiligungen Management GmbH, Grünwald
Siemens Beteiligungen USA GmbH, Berlin
100
1008
100
Berliner Vermögensverwaltung GmbH, Berlin
AXIT GmbH, Frankenthal
10011
Siemens Beteiligungsverwaltung GmbH & Co. OHG, Grünwald
10011
BWI Services GmbH, Meckenheim
10011
CAPTA Grundstücksgesellschaft mbH & Co. KG i.L., Grünwald
10010
Siemens Campus Erlangen Grundstücks-GmbH & Co. KG,
Grünwald
10010
10010
100
501
CSI Services Pte. Ltd., Singapore/Singapore
100
100
100
Siemens Healthcare Pte. Ltd., Singapore/Singapore
Siemens Convergence Creators Private Limited, Mumbai/India
Siemens Financial Services Private Limited, Mumbai/India
Siemens Healthcare Private Limited, Mumbai/India
100
Siemens Industry Software Pte. Ltd., Singapore/Singapore
100
Powerplant Performance Improvement Ltd., New Delhi/India
Preactor Software India Private Limited, Bangalore/India
100
Siemens, Inc., Manila/Philippines
100
100
1008
Siemens Healthcare Limited, Auckland/New Zealand
Siemens Healthcare Inc., Manila/Philippines
Siemens Power Operations, Inc., Manila/Philippines
Province of China
PETNET Radiopharmaceutical Solutions Pvt. Ltd.,
New Delhi/India
100
LMS India Engineering Solutions Pvt Ltd, Chennai/India
1008
100
Dresser-Rand India Private Limited, Mumbai/India
100
Siemens Postal, Parcel & Airport Logistics PTE. LTD.,
Singapore/Singapore
8
Siemens Industry Software (India) Private Limited,
New Delhi/India
ubimake GmbH, Berlin
100
Siemens Healthcare Limited, Taichung/Taiwan,
September 30, 2015
in %
September 30, 2015
Equity interest
117
Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
100
Not consolidated due to immateriality.
6
7 Significant influence due to contractual arrangements or legal circumstances.
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the key
management personnel.
1 Control due to a majority of voting rights.
100
Siemens Rail Automation Pte. Ltd., Singapore/Singapore
100
100
Siemens Pte. Ltd., Singapore/Singapore
No significant influence due to contractual arrangements or legal circumstances.
100
100
100
Siemens Industry Software Ltd., Seoul/Korea, Republic of
60
Siemens Energy Solutions Limited, Seoul/Korea, Republic of
Smart Metering Solutions (Changsha) Co. Ltd.,
Changsha/China
100
Dresser-Rand Korea, Ltd., Chungnam-do/Korea, Republic of
100
Siemens X-Ray Vacuum Technology Ltd., Wuxi, Wuxi/China
100
Siemens K.K., Tokyo/Japan
100
Siemens Wiring Accessories Shandong Ltd., Zibo/China
100
Siemens Japan K.K., Tokyo/Japan
100
Shanghai/China
100
Siemens Japan Holding K.K., Tokyo/Japan
Siemens Wind Power Blades (Shanghai) Co., Ltd.,
100
Siemens Healthcare Diagnostics K.K., Tokyo/Japan
100
Siemens Venture Capital Co., Ltd., Beijing/China
100
Dresser Rand Japan K.K., Tokyo/Japan
1008
100
100
100
Trench High Voltage Products Ltd., Shenyang, Shenyang/China
Siemens Ltd. Seoul, Seoul/Korea, Republic of
100
100
HRSG Systems (Malaysia) SDN. BHD., Kuala Lumpur/Malaysia
Reyrolle (Malaysia) Sdn. Bhd., Kuala Lumpur/Malaysia
Siemens Healthcare Sdn. Bhd., Petaling Jaya/Malaysia
Siemens Malaysia Sdn. Bhd., Petaling Jaya/Malaysia
VA TECH Malaysia Sdn. Bhd., Kuala Lumpur/Malaysia
Siemens (N.Z.) Limited, Auckland/New Zealand
100
Hong Kong/Hong Kong
Siemens Postal, Parcel & Airport Logistics Limited,
100
Siemens Ltd., Hong Kong/Hong Kong
100
Siemens Industry Software Limited, Hong Kong/Hong Kong
100
Siemens Healthcare Limited, Hong Kong/Hong Kong
100
SAMTECH HK Ltd, Hong Kong/Hong Kong
100
Dresser-Rand Asia Pacific Sdn. Bhd., Kuala Lumpur/Malaysia
100
Camstar Systems (Hong Kong) Limited, Hong Kong/Hong Kong
492,8
Dresser-Rand & Enserv Services Sdn. Bhd.,
Kuala Lumpur/Malaysia
1008
Asia Care Holding Limited, Hong Kong/Hong Kong
51
100
Camstar Systems Sdn. Bhd., Penang/Malaysia
Yangtze Delta Manufacturing Co. Ltd., Hangzhou,
Hangzhou/China
100
65
Veja Mate Offshore Project GmbH, Hamburg
LIB Verwaltungs-GmbH, Leipzig
Voith Hydro Holding GmbH & Co. KG, Heidenheim
499
MeVis BreastCare Verwaltungsgesellschaft mbH, Bremen
49
MeVis BreastCare GmbH & Co. KG, Bremen
207
20
Energie Electrique de Tahaddart S.A., Tanger/Morocco
Buitengaats C.V., Amsterdam/Netherlands
26
Maschinenfabrik Reinhausen GmbH, Regensburg
50
Magazino GmbH, Munich
33
OWP Butendiek GmbH & Co. KG, Bremen
Electrogas Malta Limited, St. Julian's/Malta
Ludwig Bölkow Campus GmbH, Taufkirchen
49
Temir Zhol Electrification LLP, Astana/Kazakhstan
509
Siemens Transformer (Wuhan) Company Ltd., Wuhan City/China
865,9
VAL 208 Torino GEIE, Milan/Italy
409
Infineon Technologies Bipolar Verwaltungs-GmbH, Warstein
499
Transfima S.p.A., Milan/Italy
40
259
23
Power Vermögensbeteiligungsgesellschaft mbH Die Erste,
Hamburg
509
Region Moscow Krasnogorsky District/Russian Federation
509
Transrapid International Verwaltungsgesellschaft mbH i.L., Berlin
000 UniPower Transmission Solutions,
655,9
Symeo GmbH, Neubiberg
26
359
000 Transconverter, Moscow/Russian Federation
207,9
Sternico GmbH, Wendeburg
Rousch (Pakistan) Power Ltd., Lahore/Pakistan
1005,9
Siemens Venture Capital Fund 1 GmbH, Munich
339
209
ZeeEnergie Management B.V., Eemshaven/Netherlands
Wirescan AS, Torp/Norway
87
Siemens EuroCash, Munich
509
207
ZeeEnergie C.V., Amsterdam/Netherlands
PTZ Partikeltherapiezentrum Kiel Management GmbH,
Wiesbaden
50
49
46
209
Buitengaats Management B.V., Eemshaven/Netherlands
Infraspeed Maintainance B.V., Zoetermeer/Netherlands
Unify Holdings B.V., Amsterdam/Netherlands
Ural Locomotives Holding Besloten Vennootschap,
The Hague/Netherlands
Infineon Technologies Bipolar GmbH & Co. KG, Warstein
429
Transfima GEIE, Milan/Italy
50
OIL AND GAS PROSERV LLC, Baku/Azerbaijan
Associated companies and joint ventures
239
44
449
Aspern Smart City Research GmbH, Vienna/Austria
Aspern Smart City Research GmbH & Co KG, Vienna/Austria
E-Mobility Provider Austria GmbH, Vienna/Austria
100
1008
Siemens Healthcare Limited, Ho Chi Minh City/Viet Nam
Siemens Ltd., Ho Chi Minh City / Viet Nam
259
Europe, Commonwealth of Independent States (C.I.S.),
Africa, Middle East (without Germany) (55 companies)
Arelion GmbH, Pasching b. Linz/Austria
99
Siemens Limited, Bangkok/Thailand
100
Siemens Healthcare Limited, Bangkok/Thailand
100
Dresser-Rand (Thailand) Limited, Rayong/Thailand
100
Siemens Ltd., Taipei/Taiwan, Province of China
359
35
41
50
in %
Equity interest
Voith Hydro Holding Verwaltungs GmbH, Heidenheim
100
259
Siemens Industry Software (TW) Co., Ltd., Taipei/Taiwan,
Province of China
Germany (27 companies)
20
IFTEC GmbH & Co. KG, Leipzig
20
Metropolitan Transportation Solutions Ltd., Rosh HaAyin/Israel
499
48
Eviop-Tempo A.E. Electrical Equipment Manufacturers,
Vassiliko/Greece
FEAG Fertigungscenter für Elektrische Anlagen GmbH,
Erlangen
499
25
TRIXELL S.A.S., Moirans/France
DKS Dienstleistungsgesellschaft f. Kommunikationsanlagen
des Stadt- und Regionalverkehrs mbH, Cologne
40
Compagnie Electrique de Bretagne, S.A.S., Paris/France
50
Caterva GmbH, Pullach i. Isartal
249
Noliac A/S, Kvistgaard/Denmark
505
BWI Informationstechnik GmbH, Meckenheim
49
A2SEA A/S, Fredericia/Denmark
499
BELLIS GmbH, Braunschweig
479
Meomed s.r.o., Prerov/Czech Republic
259
ATS Projekt Grevenbroich GmbH, Schüttorf
T-Power NV, Brussels/Belgium
63
MWB (Shanghai) Co Ltd., Shanghai/China
PT. Siemens Industrial Power, Kota Bandung/Indonesia
Acrorad Co., Ltd., Okinawa/Japan
100
Siemens Factory Automation Engineering Ltd., Beijing/China
Siemens Finance and Leasing Ltd., Beijing/China
100
Exemplar Health (NBH) Holdings 2 Pty Limited,
Bayswater/Australia
85
100
100
Siemens Electrical Apparatus Ltd., Suzhou, Suzhou/China
Siemens Electrical Drives (Shanghai) Ltd., Shanghai/China
Siemens Electrical Drives Ltd., Tianjin/China
1008
100
Australia Hospital Holding Pty Limited, Bayswater/Australia
Exemplar Health (NBH) 2 Pty Limited, Bayswater/Australia
Asia, Australia (138 companies)
100
in %
in %
September 30, 2015
Equity interest
Equity interest
115
Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
Not consolidated due to immateriality.
8
7 Significant influence due to contractual arrangements or legal circumstances.
September 30, 2015
Exemplar Health (NBH) Trust 2, Bayswater/Australia
100
Siemens Financial Services Ltd., Beijing/China
94
Guangzhou/China
100
Memcor Australia Pty. Ltd., South Windsor/Australia
Siemens High Voltage Switchgear Guangzhou Ltd.,
100
Exemplar Health (SCUH) Trust 4, Bayswater/Australia
51
Shanghai/China
100
Exemplar Health (SCUH) Trust 3, Bayswater/Australia
Siemens High Voltage Switchgear Co., Ltd. Shanghai,
100
51
Siemens High Voltage Circuit Breaker Co., Ltd., Hangzhou,
Hangzhou/China
Exemplar Health (SCUH) Holdings 4 Pty Limited,
Bayswater/Australia
100
Bayswater/Australia
100
Siemens Healthcare Diagnostics (Shanghai) Co. Ltd.,
Shanghai/China
Exemplar Health (SCUH) Holdings 3 Pty Limited,
1008
51
Siemens Gas Turbine Parts Ltd., Shanghai, Shanghai/China
1008
Exemplar Health (SCUH) 3 Pty Limited, Bayswater/Australia
Exemplar Health (SCUH) 4 Pty Limited, Bayswater/Australia
100
6 No significant influence due to contractual arrangements or legal circumstances.
Siemens Healthcare Pty. Ltd., Melbourne/Australia
5 No control due to contractual arrangements or legal circumstances.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
Wilmington, DE/United States
Siemens Convergence Creators Corp.,
1008
Via Stylos S.A., Montevideo/Uruguay
100
Siemens Capital Company LLC, Wilmington, DE/United States
100
Siemens Telecomunicaciones S.A., Montevideo/Uruguay
100
PETNET Solutions, Inc., Knoxville, TN/United States
100
Siemens S.A., Montevideo/Uruguay
100
63
Engines Rental, S.A., Montevideo/Uruguay
PETNET Solutions Cleveland, LLC, Wilmington,
DE/United States
100
Winergy Drive Systems Corporation, Wilmington,
DE/United States
501
PETNET Indiana LLC, Indianapolis, IN/United States
51
P.E.T.NET Houston, LLC, Austin, TX/United States
100
MD/United States
100
Omnetric Corp., Wilmington, DE/United States
100
Dresser-Rand de Venezuela, S.A., Caracas/Venezuela,
Bolivarian Republic of
100
Siemens Corporation, Wilmington, DE/United States
2 Control due to rights to appoint, reassign or remove members of the key
management personnel.
1 Control due to a majority of voting rights.
100
Dade Behring Hong Kong Holdings Corporation,
Tortola/Virgin Islands, British
100
100
100
Siemens S.A., Caracas/Venezuela, Bolivarian Republic of
100
Siemens Energy, Inc., Wilmington, DE/United States
Siemens Financial Services, Inc., Wilmington, DE/United States
Siemens Financial, Inc., Wilmington, DE/United States
100
Bolivarian Republic of
100
Siemens Electrical, LLC, Wilmington, DE/United States
Siemens Rail Automation, C.A., Caracas/Venezuela,
100
1008
Bolivarian Republic of
Siemens Demag Delaval Turbomachinery, Inc., Wilmington,
DE/United States
Siemens Healthcare S.A., Caracas/Venezuela,
100
DE/United States
100
Bolivarian Republic of
Siemens Credit Warehouse, Inc., Wilmington,
Guascor Venezuela S.A., Caracas/Venezuela,
100
4 No control due to substantive removal or participation rights held by other parties.
60
100
Siemens Ltd., Bayswater/Australia
Equity interest
Siemens Ltd., Mumbai/India
100
Siemens Shanghai Medical Equipment Ltd., Shanghai/China
Siemens Shenzhen Magnetic Resonance Ltd., Shenzhen/China
Siemens Signalling Co. Ltd., Xi'an, Xi'an/China
September 30, 2015
in %
September 30, 2015
Equity interest
116 Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
in %
Not consolidated due to immateriality.
No significant influence due to contractual arrangements or legal circumstances.
6
7 Significant influence due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
5 No control due to contractual arrangements or legal circumstances.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the key
management personnel.
1 Control due to a majority of voting rights.
100
Siemens Sensors & Communication Ltd., Dalian/China
60
100
Siemens Real Estate Management (Beijing) Ltd., Co.,
Beijing/China
8
75
100
70
90
Siemens Transformer (Jinan) Co., Ltd, Jinan/China
63
Guangzhou/China
100
PT Dresser-Rand Services Indonesia, Cilegon/Indonesia
Siemens Transformer (Guangzhou) Co., Ltd.,
100
P.T. Siemens Indonesia, Jakarta/Indonesia
90
100
Mumbai/India
Siemens Technology Development Co., Ltd. of Beijing,
Beijing/China
Siemens Technology and Services Private Limited,
55
Siemens Switchgear Ltd., Shanghai, Shanghai/China
100
Siemens Rail Automation Pvt. Ltd., Mumbai/India
100
Siemens Surge Arresters Ltd., Wuxi/China
100
Siemens Postal Parcel & Airport Logistics Private Limited,
Mumbai/India
100
77
Siemens Special Electrical Machines Co. Ltd., Changzhi/China
Siemens Standard Motors Ltd., Yizheng/China
1008
Siemens Postal and Parcel Logistics Technologies
Private Limited, Mumbai/India
Siemens Eco-City Innovation Technologies (Tianjin) Co., Ltd.,
Tianjin/China
Siemens Industrial Automation Ltd., Shanghai,
75
Siemens Rail Automation Technical Consulting Services
(Beijing) Co. Ltd., Beijing/China
100
Beijing Siemens Cerberus Electronics Ltd., Beijing/China
60
Changzhou, Changzhou/China
100
Siemens Investment Consulting Co., Ltd., Beijing/China
Beijing Siemens Automotive E-Drive Systems Co., Ltd.,
100
Siemens International Trading Ltd., Shanghai, Shanghai/China
100
100
100
Siemens Logistics Automation Systems (Beijing) Co., Ltd,
Beijing/China
Siemens Industry Software (Beijing) Co., Ltd., Beijing/China
Siemens Industry Software (Shanghai) Co., Ltd.,
Shanghai China
Westinghouse McKenzie-Holland Pty Ltd, Clayton/Australia
Siemens Bangladesh Ltd., Dhaka/Bangladesh
100
SIEMENS RAIL AUTOMATION PTY. LTD., Clayton/Australia
100
84
Siemens Industrial Turbomachinery (Huludao) Co. Ltd.,
Huludao/China
SIEMENS RAIL AUTOMATION INVESTMENT PTY. LTD.,
Clayton/Australia
100
Siemens Rail Automation Holding Pty. Ltd., Clayton/Australia
100
Shanghai/China
100
100
100
Camstar Systems Software (Shanghai) Co. Ltd.,
Shanghai/China
Siemens Ltd., China, Beijing/China
100
100
Siemens Power Plant Automation Ltd., Nanjing/China
70
Siemens Building Technologies (Tianjin) Ltd., Tianjin/China
Siemens Business Information Consulting Co., Ltd, Beijing/China
Siemens Circuit Protection Systems Ltd., Shanghai,
Shanghai/China
100
Siemens PLM Software (Shenzhen) Limited, Shenzhen/China
Siemens Power Automation Ltd., Nanjing/China
65
100
80
Siemens Numerical Control Ltd., Nanjing, Nanjing/China
IBS Industrial Business Software (Shanghai), Ltd.,
Shanghai China
85
Siemens Medium Voltage Switching Technologies (Wuxi) Ltd.,
Wuxi/China
51
GIS Steel & Aluminum Products Co., Ltd. Hangzhou,
Hangzhou/China
100
Siemens Mechanical Drive Systems (Tianjin) Co., Ltd.,
Tianjin/China
100
Dresser-Rand Engineered Equipment (Shanghai) Ltd.,
Shanghai/China
51
Shanghai/China
100
DPC (Tianjin) Co., Ltd., Tianjin/China
Siemens Manufacturing and Engineering Centre Ltd.,
100
100
100
100
Dresser-Rand Energy Services LLC, Wilmington, DE/United States
Dresser-Rand Global Services, Inc., Wilmington,
DE/United States
100
Siemens Holding S.L., Madrid/Spain
Siemens Healthcare Diagnostics (Pty.) Limited,
100
SIEMENS HEALTHCARE, S L, Getafe/Spain
03
100
Samtech Iberica Engineering & Software Services S.L.,
Barcelona/Spain
Siemens Employee Share Ownership Trust,
Johannesburg/South Africa
70
100
Petnet Soluciones, S.L., Sociedad Unipersonal, Madrid/Spain
03
Linacre Investments (Pty) Ltd., Kenilworth/South Africa
Siemens (Proprietary) Limited, Midrand/South Africa
100
Opción Fotovoltaica 1 S.L., Vitoria-Gasteiz/Spain
100
Dresser-Rand Southern Africa (Pty) Ltd., Centurion/South Africa
100
Microenergía Vasca, S.A., Vitoria-Gasteiz/Spain
100
100
Isando/South Africa
Siemens Industry Software S.L., Barcelona/Spain
100
Siemens S.A., Madrid/Spain
70
Desimpacte de Purines Altorricón S.A., Altorricón/Spain
Desimpacto de Purines Turégano, S.A., Turégano/Spain
Dresser-Rand Holdings Spain S.L.U., Vitoria-Gasteiz/Spain
Empresa de Reciclajes de Residuos Ambientales, S.A.,
Vitoria-Gasteiz/Spain
100
Siemens Renting S.A., Madrid/Spain
858
B2B Energía, S.A., Vitoria-Gasteiz/Spain
100
Siemens Rail Automation S.A.U., Madrid/Spain
100
Axastse Solar, S.L., Vitoria-Gasteiz/Spain
100
S.L. Sociedad Unipersonal, Madrid/Spain
100
Halfway House/South Africa
SIEMENS POSTAL, PARCEL & AIRPORT LOGISTICS,
Siemens Healthcare Proprietary Limited,
100
100
Dresser-Rand Service Centre (Pty) Ltd., Centurion/South Africa
1008
1008
100
Guascor Solar Corporation, S.A., Vitoria-Gasteiz/Spain
60
100
Guascor Servicios, S.A., Madrid/Spain
SAT Systémy automatizacnej techniky spol. s.r.o.,
Bratislava/Slovakia
in %
September 30, 2015
in %
September 30, 2015
Equity interest
Equity interest
111
Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
Not consolidated due to immateriality.
8
Siemens Healthcare s.r.o., Bratislava/Slovakia
100
Siemens Program and System Engineering s.r.o.,
Guascor Solar Operacion and Mantenimiento, S.L.,
Vitoria-Gasteiz/Spain
100
100
Inversiones Analcima 6 S.L., Vitoria-Gasteiz/Spain
Inversiones Analcima 7 S.L., Vitoria-Gasteiz/Spain
Inversiones Ortosa 13 S.L., Vitoria-Gasteiz/Spain
Microenergía 21, S.A., Zumaia/Spain
100
Dresser-Rand Property (Pty) Ltd., Centurion/South Africa
100
Siemens Healthcare d.o.o, Ljubljana/Slovenia
100
Siemens d.o.o., Ljubljana /Slovenia
100
100
100
Guascor Wind, S.L., Vitoria-Gasteiz/Spain
100
Siemens s.r.o., Bratislava/Slovakia
100
Guascor Solar S.A., Vitoria-Gasteiz/Spain
100
Bratislava/Slovakia
100
SIPRIN s.r.o., Bratislava/Slovakia
7 Significant influence due to contractual arrangements or legal circumstances.
Sistemas y Nuevas Energias, S.A, Vitoria-Gasteiz/Spain
100
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the key
management personnel.
6 No significant influence due to contractual arrangements or legal circumstances.
1 Control due to a majority of voting rights.
100
Zurich/Switzerland
1008
Guascor Proyectos, S.A., Madrid/Spain
Siemens Postal, Parcel & Airport Logistics AG,
100
Guascor Promotora Solar, S.A., Vitoria-Gasteiz/Spain
100
Siemens Industry Software AG, Zurich/Switzerland
100
Guascor Power, S.A., Zumaia/Spain
100
Siemens Healthcare Diagnostics GmbH, Zurich/Switzerland
100
Vitoria-Gasteiz/Spain
4 No control due to substantive removal or participation rights held by other parties.
5 No control due to contractual arrangements or legal circumstances.
100
7 Significant influence due to contractual arrangements or legal circumstances.
Not consolidated due to immateriality.
100
Stadt/Land Immobilien AG Zürich, Zurich/Switzerland
100
Surrey/United Kingdom
100
Siemens Schweiz AG, Zurich/Switzerland
Siemens Healthcare Diagnostics Ltd., Frimley,
100
Siemens Power Holding AG, Zug/Switzerland
in %
Equity interest
September 30, 2015
in %
September 30, 2015
Equity interest
112 Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
8
Siemens Healthcare AG, Zurich/Switzerland
Guascor Power Investigacion y Desarollo, S.A.,
100
100
Grupo Guascor, S.L., Vitoria-Gasteiz/Spain
100
Siemens Industrial Turbomachinery AB, Finspång/Sweden
100
Fábrica Electrotécnica Josa, S.A., Barcelona/Spain
100
Siemens Healthcare AB, Stockholm/Sweden
100
Enviroil Vasca, S.A., Vitoria-Gasteiz/Spain
100
Siemens Financial Services AB, Stockholm/Sweden
1008
Engines Rental, S.L., Zumaia/Spain
100
Siemens AB, Upplands Väsby/Sweden
678
100
Telecomunicación, Electrónica y Conmutación S.A.,
Madrid/Spain
Siemens Industry Software AB, Kista/Sweden
100
Guascor Bioenergía, S.L., Vitoria-Gasteiz/Spain
100
Zug/Switzerland
898
Guascor Postensa AIE, Zumaia/Spain
Siemens Fuel Gasification Technology Holding AG,
608
Guascor Isolux AIE, Vitoria-Gasteiz/Spain
100
Huba Control AG, Würenlos/Switzerland
100
1008
Guascor Ingenieria S.A., Vitoria-Gasteiz/Spain
Dresser-Rand Services, S.a.r.l., Freiburg/Switzerland
100
Guascor Explotaciones Energéticas, S.A., Vitoria-Gasteiz/Spain
99
Dresser-Rand Sales Company S.A., Freiburg/Switzerland
708
Guascor Borja AIE, Zumaia/Spain
100
SKR Lager 20 KB, Finspång/Sweden
100
6 No significant influence due to contractual arrangements or legal circumstances.
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
Siemens Healthcare Diagnostics, Unipessoal Lda.,
100
Siemens d.o.o. Podgorica, Podgorica/Montenegro
100
Siemens Sp. z o.o., Warsaw/Poland
100
100
Siemens Industry Software Sp. z o.o., Warsaw/Poland
100
Tecnomatix Technologies SARL, Luxembourg/Luxembourg
TFM International S.A. i.L., Luxembourg/Luxembourg
100
Siemens Healthcare Sp. z o.o., Warsaw/Poland
100
100
Siemens Finance Sp. z o.o., Warsaw/Poland
100
75
Siemens Pakistan Engineering Co. Ltd., Karachi/Pakistan
AXIT Sp. z o.o., Wroclaw / Poland
100
Guascor Maroc, S.A.R.L, Agadir/Morocco
100
100
100
100
Siemens Pty. Ltd., Windhoek/Namibia
SIEMENS (AUSTRIA) PROIECT SPITAL COLTEA SRL,
100
Siemens Lda., Maputo/Mozambique
402
Siemens W.L.L., Doha/Qatar
100
Siemens S.A., Casablanca/Morocco
100
Siemens S.A., Amadora/Portugal
100
Siemens Plant Operations Tahaddart SARL, Tanger/Morocco
100
Lisbon/Portugal
100
Casablanca/Morocco
Siemens Postal, Parcel & Airport Logistics, Unipessoal Lda,
SCIENTIFIC MEDICAL SOLUTION DIAGNOSTICS S.A.R.L.,
Amadora/Portugal
51
100
Siemens Healthcare Diagnostics AS, Oslo/Norway
Siemens L.L.C., Muscat/Oman
SIEMENS Postal Parcel Airport Logistics S.A.S., Paris/France
Kuwait City/Kuwait
100
Siemens Lease Services SAS, Saint-Denis/France
Siemens Electrical & Electronic Services K.S.C.C.,
100
Siemens Industry Software SAS, Vélizy-Villacoublay/France
100
Siemens Kenya Ltd., Nairobi/Kenya
100
Siemens Healthcare S.A.S, Saint-Denis/France
100
Siemens TOO, Almaty/Kazakhstan
100
Siemens Healthcare Diagnostics S.A.S., Saint-Denis/France
1008
Almaty/Kazakhstan
100
Siemens France Holding, Saint-Denis/France
100
D-R Luxembourg Holding 1, SARL, Luxembourg/Luxembourg
492
100
1 Control due to a majority of voting rights.
100
100
D-R Luxembourg Holding 2, SARL, Luxembourg/Luxembourg
D-R Luxembourg Holding 3, SARL, Luxembourg/Luxembourg
D-R Luxembourg International SARL, Luxembourg/Luxembourg
D-R Luxembourg Partners 1 SCS, Luxembourg/Luxembourg
Dresser-Rand Holding (Delaware) LLC, SARL,
Luxembourg/Luxembourg
in %
September 30, 2015
in %
September 30, 2015
Equity interest
Equity interest
Bucharest/Romania
110 Consolidated Financial Statements
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
Not consolidated due to immateriality.
8
7 Significant influence due to contractual arrangements or legal circumstances.
6 No significant influence due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
5 No control due to contractual arrangements or legal circumstances.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the key
management personnel.
11 Exemption pursuant to Section 264 (3) German Commercial Code.
100
Castor III B.V., Amsterdam/Netherlands
100
Termotron Rail Automation Holding B.V.,
51
Arabia Electric Ltd. (Equipment), Jeddah/Saudi Arabia
100
Siemens Nederland N.V., The Hague/Netherlands
1008
Moscow/Russian Federation
100
Siemens Healthcare Limited Liability Company,
Siemens Medical Solutions Diagnostics Holding I B.V.,
The Hague/Netherlands
100
Siemens Finance LLC, Vladivostok/Russian Federation
100
Siemens International Holding B.V., The Hague/Netherlands
100
Moscow/Russian Federation
100
Siemens Industry Software B.V., 's-Hertogenbosch/Netherlands
100
Dresser-Rand Arabia LLC, Al Khobar/Saudi Arabia
501
The Hague/Netherlands
501
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the key
management personnel.
1 Control due to a majority of voting rights.
100
OEZ Slovakia, spol. s r.o., Bratislava/Slovakia
100
Siemens AS, Oslo/Norway
100
Siemens d.o.o. Beograd, Belgrade/Serbia
100
100
51
VA TECH T&D Co. Ltd., Riyadh/Saudi Arabia
100
Siemens Ltd., Lagos/Nigeria
51
51
ISCOSA Industries and Maintenance Ltd., Riyadh/Saudi Arabia
Siemens Ltd., Riyadh/Saudi Arabia
100
Dresser-Rand (Nigeria) Limited, Lagos/Nigeria
Dresser-Rand AS, Kongsberg/Norway
Siemens Healthcare Diagnostics Manufacturing Ltd, Frimley,
000 Siemens Industry Software, Moscow/Russian Federation
000 Siemens Transformers, Voronezh / Russian Federation
000 Siemens Urban Rail Technologies,
Siemens Healthcare Diagnostics B.V., Breda / Netherlands
Obschestwo s ogranitschennoj Otwetstwennostju (in parts)
"Dresser-Rand", Moscow / Russian Federation
100
NEM Energy Holding B.V., The Hague/Netherlands
100
NEM Energy B.V., The Hague/Netherlands
100
SIMEA SIBIU S.R.L., Sibiu/Romania
100
Siemens Financial Services SAS, Saint-Denis/France
100
Siemens S.R.L., Bucharest/Romania
100
Dresser-Rand International B.V., Spijkenisse/Netherlands
100
Siemens Industry Software S.R.L., Brasov/Romania
100
Dresser-Rand B.V., Spijkenisse/Netherlands
100
Siemens Convergence Creators S.R.L., Brasov/Romania
100
Omnetric B.V., The Hague/Netherlands
100
000 Legion II, Moscow/Russian Federation
65
The Hague/Netherlands
Siemens Gas Turbine Technologies Holding B.V.,
100
Leningrad oblast/Russian Federation
100
The Hague/Netherlands
66
000 Siemens Elektroprivod, St. Petersburg/Russian Federation
000 Siemens Gas Turbine Technologies,
100
Siemens Financieringsmaatschappij N.V.,
Siemens Finance B.V., The Hague/Netherlands
100
100
000 Russian Turbo Machinery, Perm/Russian Federation
000 Siemens, Moscow/Russian Federation
100
Siemens Diagnostics Holding II B.V., The Hague/Netherlands
100
Pollux III B.V., Amsterdam/Netherlands
100
100
Wheelabrator Air Pollution Control Inc., Baltimore,
Siemens Tanzania Ltd., Dar es Salaam/Tanzania,
100
100
Siemens Industry Software Ltd., Ontario/Canada
100
Siemens Servicios S.A. de C.V., México, D.F./Mexico
1008
Siemens Healthcare Limited, Oakville/Canada
100
Siemens Innovaciones S.A. de C.V., México, D.F./Mexico
100
Siemens Financial Ltd., Oakville/Canada
100
100
Siemens Industry Software, SA de CV, México, D.F./Mexico
Siemens Inmobiliaria S.A. de C.V., México, D.F./Mexico
100
Siemens Canada Limited, Ontario/Canada
100
Dresser-Rand Canada, Inc., Calgary/Canada
1008
Siemens Healthcare Servicios S de RL de CV, México,
D.F./Mexico
Siemens, S.A. de C.V., México, D.F./Mexico
100
100
Siemens S.A., Managua/Nicaragua
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the key
management personnel.
1 Control due to a majority of voting rights.
100
Siemens S.A.C., Lima/Peru
100
1008
Siemens Healthcare S.A.C., Surquillo/Peru
Wheelabrator Air Pollution Control (Canada) Inc.,
Ontario/Canada
100
Siemens S.A., Panama City/Panama
100
100
Panama City/Panama
100
Siemens Transformers Canada Inc., Trois-Rivières/Canada
Trench Ltd., Saint John/Canada
Siemens Healthcare Diagnostics Panama, S.A.,
100
100
Siemens Postal, Parcel & Airport Logistics Ltd.,
Oakville/Canada
Siemens Ltda., São Paulo/Brazil
100
Siemens Industry Software Ltda., São Caetano do Sul/Brazil
100
Dade Behring, S.A. de C.V., México, D.F./Mexico
90
Guascor Wind do Brasil, Ltda., São Paulo/Brazil
100
Siemens S.A., Tegucigalpa/Honduras
90
Guascor Solar do Brasil, Taboão da Serra/Brazil
100
Siemens S.A., Guatemala/Guatemala
60
Guascor Serviços Ltda., Taboão da Serra/Brazil
100
Guatemala/Guatemala
90
SIEMENS HEALTHCARE DIAGNOSTICS GUATEMALA, S.A.,
Guascor Empreendimentos Energéticos, Ltda.,
Taboão da Serra/Brazil
100
Siemens S.A., San Salvador/El Salvador
Iriel Indústria e Comercio de Sistemas Eléctricos Ltda.,
Canoas/Brazil
Dresser-Rand de Mexico S.A. de C.V., Tlalnepantla/Mexico
100
100
100
Siemens Healthcare Diagnostics, S. de R.L. de C.V., México,
D.F./Mexico
100
Siemens Healthcare Diagnósticos S.A., São Paulo/Brazil
100
Siemens Eletroeletronica Limitada, Manaus/Brazil
100
Ciudad Juárez/Mexico
1008
4 No control due to substantive removal or participation rights held by other parties.
5 No control due to contractual arrangements or legal circumstances.
Indústria de Trabajos Eléctricos S.A. de C.V.,
100
100
Grupo Siemens S.A. de C.V., México, D.F./Mexico
75
Minuano Participações Eólicas Ltda., São Paulo/Brazil
Tlalnepantla/Mexico
89
Jaguarí Energética, S.A., Jaguari/Brazil
Dresser-Rand Services, S. de R.L. de C.V.,
OMNETRIC Group Tecnologia e Servicos de Consultoria Ltda.,
Belo Horizonte/Brazil
85
6 No significant influence due to contractual arrangements or legal circumstances.
8
Dresser-Rand Services, LLC, Wilmington, DE/United States
100
Wilmington, DE/United States
100
Dresser-Rand Power LLC, Wilmington, DE/United States
Siemens Power Generation Service Company, Ltd.,
100
Dresser-Rand LLC, Wilmington, DE/United States
100
DE/United States
100
Dresser-Rand International Inc., Wilmington, DE/United States
Siemens Postal, Parcel & Airport Logistics LLC, Wilmington,
100
DE/United States
100
DE/United States
Dresser-Rand International Holdings, LLC, Wilmington,
Siemens Molecular Imaging, Inc., Wilmington,
100
100
Siemens Product Lifecycle Management Software Inc.,
100
Nimbus Technologies, LLC, Bingham Farms, MI/United States
100
Synchrony, Inc., Glen Allen, VA/United States
100
NEM USA Corp., Wilmington, DE/United States
100
SMI Holding LLC, Wilmington, DE/United States
100
Mannesmann Corporation, New York, NY/United States
100
Siemens USA Holdings, Inc., Wilmington, DE/United States
100
IBS America, Inc., Wilmington, DE/United States
100
Siemens Public, Inc., Wilmington, DE/United States
100
Guascor Inc., Baton Rouge, LA/United States
100
Wilmington, DE/United States
eMeter Corporation, Wilmington, DE/United States
DE/United States
100
DE/United States
D-R Acquisition LLC, Dallas, TX/United States
100
DE/United States
100
Siemens Fossil Services, Inc., Wilmington,
in %
Equity interest
September 30, 2015
in %
Couva/Trinidad and Tobago
Dresser-Rand Trinidad & Tobago Limited,
September 30, 2015
Equity interest
Consolidated Financial Statements
114
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
Not consolidated due to immateriality.
100
Siemens Generation Services Company, Wilmington,
D-R International Sales Inc., Wilmington, DE/United States
100
Dresser-Rand Holding (Luxembourg) LLC, Wilmington,
Siemens Medical Solutions USA, Inc., Wilmington,
100
Dresser-Rand Group Inc., Wilmington, DE/United States
100
Siemens Industry, Inc., Wilmington, DE/United States
100
100
CA/United States
7 Significant influence due to contractual arrangements or legal circumstances.
Siemens Healthcare Diagnostics Inc., Los Angeles,
50
100
Siemens Government Technologies, Inc., Wilmington,
DE/United States
100
Dresser-Rand Company, Bath, NY/United States
100
D-R Steam LLC, Wilmington, DE/United States
100
DE/United States
100
Guascor do Brasil Ltda., São Paulo/Brazil
1008
Antiguo Cuscatlán/El Salvador
100
Cambridgeshire/United Kingdom
Siemens Rail Automation Holdings Limited, Frimley,
Dresser-Rand Company Ltd., Peterborough,
100
Surrey/United Kingdom
100
Siemens Protection Devices Limited, Frimley,
100
Surrey/United Kingdom
100
Siemens Postal, Parcel & Airport Logistics Limited, Frimley,
100
Siemens plc, Frimley, Surrey/United Kingdom
100
100
Surrey/United Kingdom
Siemens Pension Funding Limited, Frimley,
100
Surrey/United Kingdom
100
100
100
Siemens Transmission & Distribution Limited, Frimley,
100
Preactor International Limited, Frimley, Surrey/United Kingdom
100
Surrey/United Kingdom
100
Siemens Rail Systems Project Limited, Frimley,
Industrial Turbine Company (UK) Limited, Frimley,
Surrey/United Kingdom
100
Surrey/United Kingdom
100
Surrey/United Kingdom
Siemens Rail Systems Project Holdings Limited, Frimley,
GYM Renewables ONE Limited, Frimley,
100
Surrey/United Kingdom
100
GYM Renewables Limited, Frimley, Surrey/United Kingdom
Siemens Rail Automation Limited, Frimley,
Electrium Sales Limited, Frimley, Surrey/United Kingdom
Surrey/United Kingdom
Siemens Pension Funding (General) Limited, Frimley,
492
100
Dresser-Rand Turkmen Company, Ashgabat/Turkmenistan
100
Siemens Holdings plc, Frimley, Surrey/United Kingdom
100
1008
Surrey/United Kingdom
1008
Siemens Healthcare Saglýk Anonim Sirketi, Istanbul/Turkey
Siemens Sanayi ve Ticaret A.S., Istanbul/Turkey
Siemens Healthcare Limited, Frimley,
100
Siemens Finansal Kiralama A.S., Istanbul/Turkey
100
Surrey/United Kingdom
100
Siemens S.A., Tunis/Tunisia
Siemens Healthcare Diagnostics Products Ltd, Frimley,
100
United Republic of
Siemens Industrial Turbomachinery Ltd., Frimley,
100% foreign owned subsidiary "Siemens Ukraine", Kiev/Ukraine
Dresser-Rand Field Operations Middle East LLC,
100
Surrey/United Kingdom
100
Siemens Industry Software Simulation and Test Limited,
Frimley, Surrey/United Kingdom
492
Cambridgeshire/United Kingdom
Dresser-Rand (U.K.) Limited, Peterborough,
Cambridgeshire/United Kingdom
D-R Holdings (UK) Ltd., Peterborough,
D-R Dormant Ltd., Peterborough,
Cambridgeshire/United Kingdom
Masdar City/United Arab Emirates
Project Ventures Rail Investments I Limited, Frimley,
Surrey/United Kingdom
Siemens Middle East Limited,
SD (Middle East) LLC, Dubai/United Arab Emirates
100
Gulf Steam Generators L.L.C., Dubai/United Arab Emirates
100
Surrey/United Kingdom
492
Abu Dhabi/United Arab Emirates
Siemens Industry Software Limited, Frimley,
100
Siemens LLC, Abu Dhabi/United Arab Emirates
Surrey/United Kingdom
100
100
Siemens S.A., Costado Sur - Tenjo/Colombia
100
VA TECH International Argentina SA, Buenos Aires/Argentina
Siemens Soluciones Tecnologicas S.A.,
100
Dresser-Rand Colombia S.A.S., Bogotá/Colombia
100
Siemens S.A., Buenos Aires/Argentina
100
Siemens S.A., Santiago de Chile/Chile
100
Siemens IT Services S.A., Buenos Aires/Argentina
1008
Santiago de Chile/Chile
1008
Siemens Healthcare S.A., Buenos Aires/Argentina
Siemens Healthcare Equipos Médicos Limitada,
69
Guascor Argentina, S.A., Buenos Aires/Argentina
100
100
Siemens Healthcare Diagnostics S.A., San José/Costa Rica
100
Santa Cruz de la Sierra/Bolivia, Plurinational State of
100
Siemens Healthcare, Sociedad Anonima,
100
Dresser-Rand do Brasil, Ltda., Santa Bárbara D'Oeste/Brazil
Dresser-Rand Participações Ltda., São Paulo/Brazil
100
100
Siemens S.A., Quito/Ecuador
100
Dresser-Rand Comercio e Industria Ltda., Campinas/Brazil
Siemens Healthcare Diagnostics Manufacturing Limited,
Grand Cayman/Cayman Islands
Higüey/Dominican Republic
Cinco Rios Geracao de Energia Ltda., Manaus/Brazil
Sociedad Energética Del Caribe, S.R.L.,
100
100
Siemens, S.R.L., Santo Domingo/Dominican Republic
Chemtech Servicos de Engenharia e Software Ltda.,
Rio de Janeiro/Brazil
100
Siemens S.A., San José/Costa Rica
100
100
Surrey/United Kingdom
1008
Americas (126 companies)
100
Buckinghamshire/United Kingdom
Siemens Financial Services Ltd., Stoke Poges,
100
Buckinghamshire/United Kingdom
100
Surrey/United Kingdom
Siemens Financial Services Holdings Ltd., Stoke Poges,
VA Tech Reyrolle Distribution Ltd., Frimley,
573
100
VA TECH (UK) Ltd., Frimley, Surrey/United Kingdom
SBS Pension Funding (Scotland) Limited Partnership,
Edinburgh/United Kingdom
100
Tronic Ltd., Frimley, Surrey/United Kingdom
100
Samtech UK Limited, Frimley, Surrey/United Kingdom
100
The Preactor Group Limited, Frimley, Surrey/United Kingdom
VA TECH T&D UK Ltd., Frimley, Surrey/United Kingdom
VTW Anlagen UK Ltd., Banbury, Oxfordshire/United Kingdom
Zenco Systems Limited, Frimley, Surrey/United Kingdom
100
100
100
in %
September 30, 2015
in %
September 30, 2015
Equity interest
Equity interest
113
Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
Artadi S.A., Buenos Aires/Argentina
10 Exemption pursuant to Section 264b German Commercial Code.
8
7 Significant influence due to contractual arrangements or legal circumstances.
Not consolidated due to immateriality.
No significant influence due to contractual arrangements or legal circumstances.
6
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the key
management personnel.
1 Control due to a majority of voting rights.
9 Not accounted for using the equity method due to immateriality.
1 Control due to a majority of voting rights.
Dresser-Rand Services B.V., Spijkenisse/Netherlands
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
Siemens-Fonds S-7, Munich
100
Siemens-Fonds S-8, Munich
100
SILLIT Grundstücks-Verwaltungsgesellschaft mbH, Munich
100
100
Siemens Liegenschaftsverwaltung GmbH, Vienna/Austria
Siemens Metals Technologies Vermögensverwaltungs GmbH,
Vienna/Austria
100
SIM 16. Grundstücksverwaltungs- und -beteiligungs-
GmbH & Co. KG, Munich
Siemens Personaldienstleistungen GmbH, Vienna/Austria
100
10010
SIM 2. Grundstücks-GmbH & Co. KG, Grünwald
100
Siemens Konzernbeteiligungen GmbH, Vienna/Austria
100
Siemens-Fonds Principals, Munich
Siemens Convergence Creators GmbH, Vienna/Austria
Siemens Convergence Creators Holding GmbH, Vienna/Austria
100
100
10011
Siemens Turbomachinery Equipment GmbH, Frankenthal
10011
Siemens Gebäudemanagement & -Services G.m.b.H.,
Vienna/Austria
100
Siemens Venture Capital GmbH, Munich
10011
Siemens-Fonds C-1, Munich
100
Siemens Healthcare Diagnostics GmbH, Vienna/Austria
Siemens Industry Software GmbH, Linz/Austria
100
100
10010
100
Siemens Urban Rail Technologies Holding GmbH,
Vienna/Austria
SIMAR Nordost Grundstücks-GmbH, Grünwald
SIMAR Nordwest Grundstücks-GmbH, Grünwald
SYKATEC Systeme, Komponenten, Anwendungstechnologie
GmbH, Erlangen
Limited Liability Company Siemens Technologies,
Minsk/Belarus
100
10011
Trench Germany GmbH, Bamberg
10011
10011
Dresser-Rand Machinery Repair Belgie N.V.,
Antwerp/Belgium
1 Control due to a majority of voting rights.
2 Control due to rights to appoint, reassign or remove members of the key
management personnel.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to substantive removal or participation rights held by other parties.
5 No control due to contractual arrangements or legal circumstances.
6 No significant influence due to contractual arrangements or legal circumstances.
100
SIMOS Real Estate GmbH, Munich
51
Siemens W.L.L., Manama/Bahrain
10011
Steiermärkische Medizinarchiv GesmbH, Graz/Austria
52
10011
Trench Austria GmbH, Leonding/Austria
100
SIMAR Ost Grundstücks-GmbH, Grünwald
10011
VVK Versicherungs-Vermittlungs- und Verkehrs-Kontor GmbH,
SIMAR Süd Grundstücks-GmbH, Grünwald
10011
Vienna/Austria
100
SIMAR West Grundstücks-GmbH, Grünwald
10011
75
10010
100
Siemens Convergence Creators GmbH, Eisenstadt/Austria
10010
Siemens Insulation Center Verwaltungs-GmbH, Zwönitz
1008
Siemens Liquidity One, Munich
100
VR-LEASING IKANA GmbH & Co. Immobilien KG, Eschborn
VVK Versicherungsvermittlungs- und Verkehrskontor GmbH,
Munich
Siemens Insulation Center GmbH & Co. KG, Zwönitz
943
Siemens Medical Solutions Health Services GmbH, Erlangen
100
Weiss Spindeltechnologie GmbH, Schweinfurt
100
Siemens Nixdorf Informationssysteme GmbH, Grünwald
100
10011
100
51
VIB Verkehrsinformationsagentur Bayern GmbH, Munich
VMZ Berlin Betreibergesellschaft mbH, Berlin
2 Control due to rights to appoint, reassign or remove members of the key
management personnel.
Siemens Healthcare Limited Liability Partnership,
Equity interest
Equity interest
September 30, 2015
Siemens Industriegetriebe GmbH, Penig
in %
10011
September 30, 2015
in %
Verwaltung SeaRenergy Offshore Projects GmbH i.L., Hamburg
100
Siemens Industriepark Karlsruhe GmbH & Co. KG, Grünwald
10010
Siemens Industry Software GmbH, Cologne
10011
Siemens Novel Businesses GmbH, Munich
10011
Siemens Postal, Parcel & Airport Logistics GmbH, Constance
10011
1008
Siemens Spezial-Investmentaktiengesellschaft mit TGV, Munich
100
ITH icoserve technology for healthcare GmbH, Innsbruck/Austria
KDAG Beteiligungen GmbH, Vienna/Austria
69
100
Siemens Technology Accelerator GmbH, Munich
10011
Omnetric GmbH, Vienna/Austria
100
Siemens Technopark Mülheim GmbH & Co. KG, Grünwald
Siemens Technopark Mülheim Verwaltungs GmbH, Grünwald
Siemens Technopark Nürnberg GmbH & Co. KG, Grünwald
Siemens Technopark Nürnberg Verwaltungs GmbH, Grünwald
Siemens Treasury GmbH, Munich
10010
Siemens Aktiengesellschaft Österreich, Vienna/Austria
100
100
Siemens Real Estate Management GmbH, Grünwald
7 Significant influence due to contractual arrangements or legal circumstances.
100
ETM professional control GmbH, Eisenstadt/Austria
Hochquellstrom-Vertriebs GmbH, Vienna/Austria
Siemens Power Control GmbH, Langen
10011
Europe, Commonwealth of Independent States (C.I.S.),
Africa, Middle East (without Germany) (298 companies)
ESTEL Rail Automation SPA, Algiers/Algeria
51
Siemens Private Finance Versicherungsvermittlungs-
Siemens Spa, Algiers/Algeria
100
gesellschaft mbH, Munich
10011
Siemens S.A., Luanda/Angola
51
Siemens Project Ventures GmbH, Erlangen
10011
Siemens Real Estate GmbH & Co. OHG, Grünwald
10010
100
8
100
9 Not accounted for using the equity method due to immateriality.
NEM Energy Egypt LLC, Alexandria/Egypt
100
Guascor Italia, S.R.L., Mirandola/Italy
100
Siemens Healthcare Diagnostics S.A.E, Cairo/Egypt
100
100
Officine Solari Aquila S.R.L, Gela/Italy
Siemens Limited for Trading, Cairo/Egypt
100
Officine Solari Kaggio S.r.I., Gela/Italy
100
Siemens Technologies S.A.E., Cairo/Egypt
90
100
Dresser-Rand Italia S.r.I., Genoa/Italy
100
Siemens Wind Power A/S, Brande/Denmark
Siemens Israel Projects Ltd., Rosh HaAyin/Israel
1008
Siemens, s.r.o., Prague/Czech Republic
100
Siemens A/S, Ballerup/Denmark
100
Siemens Product Lifecycle Management Software 2 (IL) Ltd.,
Airport City/Israel
100
Siemens Healthcare Diagnostics ApS, Ballerup/Denmark
100
Siemens Industry Software A/S, Ballerup/Denmark
100
UGS Israeli Holdings (Israel) Ltd., Airport City/Israel
Denesa Italia, S.R.L., Mirandola/Italy
100
100
100
Siemens Healthcare Oy, Espoo/Finland
100
Siemens Healthcare Diagnostics S.r.I., Milan/Italy
Siemens Transformers S.p.A., Trento/Italy
100
Samtech France SAS, Massy/France
100
Trench Italia S.r.l., Savona/Italy
100
118 Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
5 No control due to contractual arrangements or legal circumstances.
6 No significant influence due to contractual arrangements or legal circumstances.
Not consolidated due to immateriality.
100
100
PETNET Solutions SAS, Lisses/France
Siemens S.p.A., Milan/Italy
100
Siemens Osakeyhtiö, Espoo/Finland
100
Siemens Industry Software S.r.I., Milan/Italy
100
D-R Holdings (France) S.A.S., Le Havre/France
100
Siemens Postal, Parcel & Airport Logistics S.r.L., Milan/Italy
100
Dresser-Rand S.A., Le Havre/France
100
Siemens Renting S.p.A. in Liquidazione, Milan/Italy
100
Flender-Graffenstaden SAS, Illkirch-Graffenstaden/France
100
100
Siemens Industry Software, s.r.o., Prague/Czech Republic
Samtech Italia S.r.I., Milan/Italy
Siemens Israel Ltd., Tel Aviv/Israel
Siemens Industry Software NV, Leuven/Belgium
100
100
Siemens Product Lifecycle Management Software II (BE) BVBA,
Anderlecht/Belgium
Siemens A.E., Elektrotechnische Projekte und Erzeugnisse,
100
Athens/Greece
100
Siemens S.A./N.V., Beersel/Belgium
100
Siemens Healthcare Industrial and Commercial
Siemens d.o.o. Sarajevo, Sarajevo /Bosnia and Herzegovina
100
Société Anonyme, Athens/Greece
100
100
Siemens Medicina d.o.o, Sarajevo / Bosnia and Herzegovina
Siemens EOOD, Sofia/Bulgaria
Trench France S.A.S., Saint-Louis/France
Siemens Healthcare Diagnostics SA, Beersel/Belgium
11 Exemption pursuant to Section 264 (3) German Commercial Code.
Consolidated Financial Statements
10 Exemption pursuant to Section 264b German Commercial Code.
100
109
Equity interest
Equity interest
September 30, 2015
in %
September 30, 2015
in %
Samtech SA, Angleur/Belgium
79
Siemens S.A.S., Saint-Denis/France
100
100
100
Tecnomatix Technologies (Gibraltar) Limited, Gibraltar/Gibraltar
100
Siemens Healthcare Medical Solutions Limited, Swords,
County Dublin/Ireland
1008
OEZ s.r.o., Letohrad/Czech Republic
100
Siemens Limited, Dublin/Ireland
100
Siemens Convergence Creators, s.r.o., Prague/Czech Republic
Siemens Electric Machines s.r.o., Drasov/Czech Republic
100
Siemens Concentrated Solar Power Ltd., Rosh HaAyin/Israel
100
100
evosoft Hungary Szamitastechnikai Kft., Budapest/Hungary
100
Siemens Healthcare, s.r.o., Prague/Czech Republic
1008
100
J. N. Kelly Security Holding Limited, Larnaka/Cyprus
Siemens Industry Software Ltd., Airport City/Israel
Siemens d.d., Zagreb/Croatia
Siemens Healthcare Kft., Budapest/Hungary
100
100
Siemens Healthcare EOOD, Sofia/Bulgaria
100
Siemens Zrt., Budapest/Hungary
100
100
51
Siemens Sherkate Sahami (Khass), Teheran/Iran,
Siemens Convergence Creators d.o.o., Zagreb/Croatia
100
97
Islamic Republic of
Koncar-Energetski Transformatori, d.o.o., Zagreb/Croatia
7,454
49
1005,6
92
8
265
3,402
12
(1)
(2)
744,6
Longview Intermediate Holdings B, LLC, Wilmington, DE/United States
506
456
7 Significant influence due to contractual arrangements or legal circumstances.
(3)
0
¡BAHN Corporation, South Jordan, UT/United States
6 No significant influence due to contractual arrangements or legal circumstances.
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the key
management personnel.
0
1 Control due to a majority of voting rights.
(36)
7
34
9
N/A
N/A
810
Guascor México S.A. de CV, México, D.F./Mexico
1005,6
Siemens Benefits Scheme Limited, Frimley, Surrey/United Kingdom
18
SIM 9. Grundstücksverwaltungs- und -beteiligungs-GmbH, Munich
Siemens Pensionsfonds AG, Grünwald
Siemens Global Innovation Partners I GmbH & Co. KG, Munich
OSRAM Licht AG, Munich
(91)
5
975,6
398
35
1005,6
84
3
MAENA Grundstücks-Verwaltungsgesellschaft mbH & Co. KG, Grünwald
8
151
Americas (3 companies)
2,422
6
Corporate XII S.A. (SICAV-FIS), Luxembourg/Luxembourg
Medical Systems S.p.A., Genoa/Italy
ATOS SE, Bezons / France
Dils Energie NV, Hasselt/Belgium
1
(2)
506
Europe, Commonwealth of Independent States (C.I.S.), Africa, Middle East (without Germany) (6 companies)
SMATRICS GmbH & Co KG, Vienna/Austria
8
1
1005,6
8
(1)
1005,6
72
506
Not consolidated due to immateriality.
Additional Information
Not accounted for using the equity method due to immateriality.
Spannagl
Wirtschaftsprüfer
Дения
Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft
Munich, November 30, 2015
In our opinion, based on the findings of our audit of the consoli-
dated financial statements and group management report, the
group management report is consistent with the consolidated
financial statements, and as a whole provides a suitable view of
the Group's position and suitably presents the opportunities
and risks of future development.
Pursuant to Sec. 322 (3) Sentence 1 HGB, we state that our audit
of the group management report has not led to any reservations.
We have audited the accompanying group management report,
which is combined with the management report of Siemens
Aktiengesellschaft, for the business year from October 1, 2014
to September 30, 2015. The management of the company is
responsible for the preparation of the group management
report in compliance with the applicable requirements of
German commercial law pursuant to Sec. 315a (1) HGB. We are
required to conduct our audit in accordance with Sec. 317 (2)
HGB and German generally accepted standards for the audit of
the group management report promulgated by the IDW.
Accordingly, we are required to plan and perform the audit of
the group management report to obtain reasonable assurance
about whether the group management report is consistent
with the consolidated financial statements and the audit
findings, and as a whole provides a suitable view of the Group's
position and suitably presents the opportunities and risks of
future development.
REPORT ON THE GROUP MANAGEMENT REPORT
123
Additional Information
In our opinion, based on the findings of our audit, the consol-
idated financial statements comply in all material respects
with IFRS as adopted by the EU, the supplementary require-
ments of German commercial law pursuant to Sec. 315a (1)
HGB and full IFRS as issued by the IASB and give a true and
fair view of the net assets and financial position of the Group
as at September 30, 2015 as well as the results of operations
for the business year then ended, in accordance with these
requirements.
Pursuant to Sec. 322 (3) Sentence 1 HGB, we state that our audit
of the consolidated financial statements has not led to any
reservations.
Audit Opinion
We believe that the audit evidence we have obtained is suffi-
cient and appropriate to provide a basis for our audit opinion.
An audit involves performing audit procedures to obtain audit
evidence about the amounts and disclosures in the consoli-
dated financial statements. The selection of audit procedures
depends on the auditor's professional judgment. This includes
the assessment of the risks of material misstatement of the
consolidated financial statements, whether due to fraud or
error. In assessing those risks, the auditor considers the inter-
nal control system relevant to the entity's preparation of the
consolidated financial statements that give a true and fair view.
The aim of this is to plan and perform audit procedures that are
appropriate in the given circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the group's
internal control system. An audit also includes evaluating the
appropriateness of accounting policies used and the reason-
ableness of accounting estimates made by management, as
well as evaluating the overall presentation of the consolidated
financial statements.
[German Public Auditor]
and plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free
from material misstatement.
Prof. Dr. Hayn
Wirtschaftsprüfer
C.3 Report of the Supervisory Board
of women to men on the Managing Board of Siemens AG at at
least its current level until June 30, 2017. This proportion is 2/7 (or
28.57%) of the Board's members. The Managing Board informed
us about the status of the integration of Dresser-Rand Group Inc.,
which had been acquired, and of the aeroderivative gas turbine
and compressor business acquired from Rolls-Royce. At an execu-
tive session, we discussed the efficiency review of our activities.
125
Kyros Beteiligungsverwaltung GmbH, Grünwald
At the Supervisory Board meeting of September 23, 2015, the
Managing Board reported to us on the state of the Company. In
addition, we extended the Managing Board appointments of
Dr. Roland Busch and Klaus Helmrich, effective April 1, 2016 to
March 31, 2021. As part of our regular review, we adjusted the
amount of Managing Board compensation. The Supervisory Board
also set the gender-quota target of maintaining the proportion
At our meeting of July 29, 2015, the Managing Board reported
on the Company's business and financial position following the
conclusion of the third quarter. We also dealt with the business
situation and strategic orientation of the Building Technologies
Division and of the separately managed Healthcare business.
At our meeting of May 6, 2015, the Managing Board reported on
the Company's business and financial position following the
conclusion of the second quarter as well as on the status of the
implementation of Siemens Vision 2020. We also discussed the
strategic orientation of the Power and Gas Division. In addition,
the Managing Board reported in detail on regional business de-
velopments in China.
At our meeting of January 26, 2015, the Managing Board
reported to us on the Company's business and financial posi-
tion following the conclusion of the first quarter. The Super-
visory Board approved the termination by mutual consent of
Prof. Dr. Hermann Requardt's appointment as a member of the
Managing Board, effective January 31, 2015, as well as the ter-
mination agreement regarding his Managing Board employ-
ment contract. Janina Kugel was appointed a full member of
the Managing Board, effective February 1, 2015. We also ap-
proved a reassignment of responsibilities in the Managing
Board. Ms. Kugel was appointed to succeed Prof. Dr. Siegfried
Russwurm as head of Human Resources and Labor Director.
We transferred to Prof. Dr. Russwurm Board-level responsibility
for the separately managed Healthcare business, whereby he
will retain his regional responsibilities for the Middle East and
the CIS as well as his position as Chief Technology Officer. The
Managing Board also reported at this meeting on the further
development of the Power and Gas Division's regional setup.
On December 3, 2014, we discussed the financial statements
and the Combined Management Report for Siemens AG and
the Siemens Group as of September 30, 2014, and the Annual
Report for 2014, including the Report of the Supervisory Board
and the Corporate Governance Report as well as the agenda for
the Annual Shareholders' Meeting on January 27, 2015. The
Managing Board reported on the current status of acquisitions
and divestments. We also discussed Siemens' compliance sys-
tem and enterprise risk management system.
ness and the implementation of Siemens Vision 2020. At this
meeting, we also approved the sale of the hearing aid business.
At our meeting of November 5, 2014, we discussed the Compa-
ny's key financial figures for fiscal 2014 and approved the budget
for 2015. On the basis of reported target achievement, we
also defined the compensation of the Managing Board mem-
bers for fiscal 2014. The appropriateness of this compensation
was confirmed by an external review. On the recommendation
of the Compensation Committee, we also approved the targets
for Managing Board compensation for fiscal 2015. On Janu-
ary 27, 2015, the Annual Shareholders' Meeting approved by a
majority of over 92% the remuneration system for the Manag-
ing Board members for fiscal 2015. At our meeting on Novem-
ber 5, 2014, the Managing Board also informed us about its
plans regarding the future setup of Siemens' Healthcare busi-
Topics of discussion at our regular plenary meetings were reve-
nue, profit and employment development at Siemens AG, at the
Company's operating units and at the Siemens Group as well as
the Company's financial situation and profitability. We also con-
cerned ourselves as required with major investment and divest-
ment projects and with particular risks to the Company.
We held a total of six regular plenary meetings in fiscal 2015.
In addition, we made one decision outside meetings. Attend-
ance at Supervisory Board meetings by members was 95%.
TOPICS AT THE PLENARY MEETINGS
OF THE SUPERVISORY BOARD
In fiscal 2015, the Supervisory Board performed, in accordance
with its obligations, the duties assigned to it by law, the
Siemens Articles of Association and the Bylaws for the Super-
visory Board. We regularly advised the Managing Board on the
management of the Company and monitored the Managing
Board's activities. We were directly involved at an early stage in
all major decisions regarding the Company. In written and oral
reports, the Managing Board regularly provided us with timely
and comprehensive information on Company planning and
business operations as well as on the strategic development
and current state of the Company. On the basis of reports sub-
mitted by the Managing Board, we considered in detail busi-
ness development and all decisions and transactions of major
significance to the Company. Deviations from business plans
were explained to us in detail and intensively discussed. The
Managing Board coordinated the Company's strategic orienta-
tion with us. The proposals made by the Managing Board were
approved by the Supervisory Board and/or the relevant Super-
visory Board committees after in-depth examination and con-
sultation. In my capacity as Chairman of the Supervisory Board,
I was also in regular contact with the Managing Board and, in
particular, with the President and Chief Executive Officer and
was kept up-to-date on current developments in the Company's
business situation and on key business transactions.
Berlin and Munich, December 2, 2015
124 Additional Information
9
Our responsibility is to express an opinion on these consoli-
dated financial statements based on our audit. We conducted
our audit in accordance with Sec. 317 HGB and German gener-
ally accepted standards for the audit of financial statements
promulgated by the Institut der Wirtschaftsprüfer [Institute of
Public Auditors in Germany] (IDW) as well as in supplementary
compliance with International Standards on Auditing (ISA).
Accordingly, we are required to comply with ethical requirements
The management of Siemens Aktiengesellschaft is responsible
for the preparation of these consolidated financial statements.
This responsibility includes preparing these consolidated finan-
cial statements in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union
(EU), the supplementary requirements of German law pursuant
to Sec. 315a (1) HGB ["Handelsgesetzbuch": German Commercial
Code] and full IFRS as issued by the International Accounting
Standards Board (IASB), to give a true and fair view of the net
assets, financial position and results of operations of the group
in accordance with these requirements. The company's man-
agement is also responsible for the internal controls that man-
agement determines are necessary to enable the preparation of
consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
2.гл
Joe Kaeser
Au
Siemens Aktiengesellschaft
The Managing Board
Munich, November 30, 2015
To the best of our knowledge, and in accordance with the appli-
cable reporting principles, the Consolidated Financial State-
ments give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Group, and the Group Manage-
ment Report, which has been combined with the Management
C.1 Responsibility Statement
Additional Information
C.
120 Consolidated Financial Statements
N/A = No financial data available.
12 Values according to the latest available local GAAP financial statements;
the underlying fiscal year may differ from the Siemens fiscal year.
Exemption pursuant to Section 264 (3) German Commercial Code.
11
10 Exemption pursuant to Section 264b German Commercial Code.
Dr. Roland Busch
Auditor's Responsibility
1. Ye
Report for Siemens Aktiengesellschaft, includes a fair review
of the development and performance of the business and the
position of the Group, together with a description of the
material opportunities and risks associated with the expected
development of the Group.
Management's Responsibility for the
Consolidated Financial Statements
We have audited the accompanying consolidated financial
statements of Siemens Aktiengesellschaft, Berlin and Munich,
and its subsidiaries, which comprise the consolidated state-
ments of income, comprehensive income, financial position,
cash flow and changes in equity, and notes to the consolidated
financial statements for the business year from October 1, 2014
to September 30, 2015.
REPORT ON THE CONSOLIDATED
FINANCIAL STATEMENTS
To Siemens Aktiengesellschaft, Berlin and Munich
C.2 Independent Auditor's Report
122 Additional Information
Dr. Ralf P. Thomas
wang
Миг
Klaus Helmrich
Alaus Helms h
Prof. Dr. Siegfried Russwurm
586
Lisa Davis
Shan
Janina Kugel
BSAV Kapitalbeteiligungen und Vermögensverwaltungs Management GmbH, Grünwald
Nanjing/China
2
Tusso Energía, S.L., Sevilla/Spain
Asia, Australia (19 companies)
50
Solucia Renovables 1, S.L., Lebrija/Spain
50
Soleval Renovables S.L., Sevilla/Spain
207,9
Innovex Capital En Tecnologia, C.A., Caracas/Venezuela,
Bolivarian Republic of
515
Barcelona/Spain
Nertus Mantenimiento Ferroviario y Servicios S.A.,
409
Caracas/Venezuela, Bolivarian Republic of
50
Hydrophytic, S.L., Vitoria-Gasteiz/Spain
50
Empresa Nacional Maquinas Eléctricas, S.A.,
Certas AG, Zurich/Switzerland
Interessengemeinschaft TUS, Männedorf/Switzerland
GSP China Technology Co., Ltd., Beijing/China
50
25
DBEST (Beijing) Facility Technology Management Co., Ltd.,
Beijing/China
Lincs Renewable Energy Holdings Limited,
London/United Kingdom
49
Ethos Energy Group Limited, Aberdeen/United Kingdom
309
219
50
50
Exemplar Health (NBH) Partnership, Melbourne/Australia
Exemplar Health (SCUH) Partnership, Sydney/Australia
Magellan Technology Pty. Ltd., Annandale/Australia
ChinaInvent (Shanghai) Instrument Co., Ltd, Shanghai/China
33
Cross London Trains Holdco 2 Limited, London/United Kingdom
50
50
50
50
259
409
33
PhSiTh LLC, New Castle, DE/United States
46
37
Panda Stonewall Intermediate Holdings I, LLC, Wilmington,
DE/United States
49
in %
September 30, 2015
in %
ZAO Interautomatika, Moscow/Russian Federation
ZAO Nuclearcontrol, Moscow/Russian Federation
000 VIS Automation mit Zusatz „Ein Gemeinschaftsunter-
nehmen von VIS und Siemens", Moscow/Russian Federation
September 30, 2015
Equity interest
Equity interest
Power Properties Inc., Boston, MA/United States
Gate Solar, S.L., Vitoria-Gasteiz/Spain
259
26
USARAD Holdings, Inc., Fort Lauderdale, FL/United States
509
Explotaciones y Mantenimientos Integrales, S.L., Getxo/Spain
515
Siemens First Capital Commercial Finance, LLC, Wilmington,
DE/United States
509
Desgasificación de Vertederos, S.A, Madrid/Spain
359
Ardora, S.A., Vigo/Spain
30
Rether networks, Inc., Berkeley, CA/United States
31
Impilo Consortium (Pty.) Ltd., La Lucia/South Africa
219
Powerit Holdings, Inc., Seattle, WA/United States
ZAO Systema-Service, St. Petersburg/Russian Federation
Odos Imaging Ltd., Edinburgh/United Kingdom
509
Saitong Railway Electrification (Nanjing) Co., Ltd.,
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances.
6 No significant influence due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
5 No control due to contractual arrangements or legal circumstances.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the key
management personnel.
1 Control due to a majority of voting rights.
409
Bangkok/Thailand
32
Modern Engineering and Consultants Co. Ltd.,
32
Cyclos Semiconductor, Inc., Wilmington, DE/United States
Echogen Power Systems LLC, Wilmington, DE/United States
11 Exemption pursuant to Section 264 (3) German Commercial Code.
49
Consolidated Financial Statements
September 30, 2015
1005,6
2
0
1005,6
Ausbildungszentrum für Technik, Informationsverarbeitung und Wirtschaft gemeinnützige GmbH (ATIW), Paderborn
BOMA Verwaltungsgesellschaft mbH & Co. KG, Grünwald
€
€
in millions of
in millions of
interest
in %
Equity
Net income
Equity
Germany (9 companies)
Other investments 12
119
43
Power Automation Pte. Ltd., Singapore/Singapore
209
50
Siemens Traction Equipment Ltd., Zhuzhou, Zhuzhou/China
Xi'An X-Ray Target Ltd., Xi'an/China
49
50
RWG (Repair & Overhauls) Limited, Aberdeen/United Kingdom
Joint Venture Service Center, Chirchik/Uzbekistan
40
Shanghai Electric Power Generation Equipment Co., Ltd.,
Shanghai/China
349
Pyreos Limited, Edinburgh/United Kingdom
49
Primetals Technologies, Limited, London/United Kingdom
509
CORPORATE GOVERNANCE CODE
509
Plessey Holdings Ltd., Frimley, Surrey/United Kingdom
43
Americas (17 companies)
Zhenjiang Siemens Busbar Trunking Systems Co. Ltd.,
Yangzhong/China
50
Advance Gas Turbine Solutions SDN. BHD.,
Kuala Lumpur/Malaysia
259
259
50
Yaskawa Siemens Automation & Drives Corp., Tokyo/Japan
23
40
(39)
PT Asia Care Indonesia, Jakarta/Indonesia
Bethel Holdco LLC, Houston, TX/United States
Brockton Power Company LLC, Boston, MA/United States
Brockton Power Holdings Inc., Boston, MA/United States
Brockton Power Properties, Inc., Boston, MA/United States
BuildingIQ, Inc., San Mateo, CA/United States
50
259
26
Bangalore International Airport Ltd., Bangalore/India
Transparent Energy Systems Private Limited, Pune/India
P.T. Jawa Power, Jakarta/Indonesia
309
Cia Técnica de Engenheria Eletrica Sucursal Argentina
VA TECH ARGENTINA S.A. Union transitoria de Empresas,
Buenos Aires/Argentina
67
At the Supervisory Board meeting of July 29, 2015, we con-
cerned ourselves with the amendments made to the German
Corporate Governance Code in the new version of May 5, 2015.
At the subsequent Supervisory Board meeting, on Septem-
ber 23, 2015, the Supervisory Board established a limit of three
complete terms for length of service (15 years) and adjusted
the concrete targets for its composition, which are specified
in chapter → c.4.1 MANAGEMENT AND CONTROL STRUCTURE. We ap-
proved an unqualified Declaration of Conformity in accordance
with Section 161 of the German Stock Corporation Act (Aktien-
gesetz). Information on corporate governance at Siemens is
available in chapter → C.4 CORPORATE GOVERNANCE. Our Decla-
ration of Conformity has been made permanently available to
our shareholders on our website. The current Declaration
of Conformity is also available in chapter → C.4.2 CORPORATE
506
WORK IN THE SUPERVISORY BOARD COMMITTEES
The Supervisory Board has established seven standing commit-
tees, which prepare proposals and issues to be dealt with at the
Board's plenary meetings. The Supervisory Board's decision-
making powers have also been delegated to these committees
within the permissible legal framework. The committee chair-
persons report to the Supervisory Board on their committees'
work at the subsequent Board meetings. A list of the members
and a detailed explanation of the tasks of the individual Super-
visory Board committees are contained in chapter → C.4.1 MAN-
Reinhard Hahn*
January 24,
2008
June 28,
1949
Scientific Member of the
Max Planck Society
(until January 27, 2015)
Prof. Dr. rer. nat.
Peter Gruss,
January 24,
2008
March 2,
1942
Supervisory Board Member
Hans Michael Gaul,
Dr. iur.
Trade Union Secretary of the
Managing Board of IG Metall
January 24,
2008
Supervisory Board Member
January 24,
2008
April 6,
1942
Supervisory Board Member
July 11,
2014
July 24,
1952
of Siemens Dynamowerk, Berlin,
Germany
Chairman of the Works Council
January 23,
2013
October 21,
1946
Chairman of the Supervisory Boards
of Bayer AG and E.ON SE
December
23, 1954
January 24,
2008
June 24,
1956
1 As of January 27, 2015.
GOVERNANCE STATEMENT PURSUANT TO SECTION 289A OF THE GERMAN
COMMERCIAL CODE.
> Siemens Healthcare GmbH, Munich
(Deputy Chairman)
> Pfleiderer GmbH, Neumarkt
German positions:
> Actelion Ltd., Switzerland
> Münchener Rückversicherungs-Gesellschaft
Aktiengesellschaft in München, Munich
Positions outside Germany:1
> HSBC Trinkaus & Burkhardt AG, Düsseldorf
German positions:1
> BDO AG Wirtschaftsprüfungsgesellschaft,
Hamburg (Deputy Chairman)
German positions:
> Linde AG, Munich (Deputy Chairman)
January 27,
2015
(Deputy Chairman)
> Fresenius Management SE, Bad Homburg
> BASF SE, Ludwigshafen am Rhein
(Deputy Chairman)
German positions:
> Henkel Management AG, Düsseldorf
> Henkel AG & Co. KGaA, Düsseldorf²
> E.ON SE, Düsseldorf (Chairman)
> Bayer AG, Leverkusen (Chairman)
German positions:
128 Additional Information
Shareholders' Committee.
2
> Fresenius SE & Co. KGaA, Bad Homburg
March 26,
1960
[German Public Auditor]
Michael Diekmann
127
Additional Information
Dr. Gerhard Cromme
Chairman
Gerhard
дремал Сложие
For the Supervisory Board
On behalf of the Supervisory Board, I would like to thank the
members of the Managing Board as well as the employees and
employee representatives of Siemens AG and all Group compa-
nies for their outstanding commitment and constructive coop-
eration in fiscal 2015.
Prof. Dr. Hermann Requardt resigned from the Managing Board,
effective January 31, 2015. The Supervisory Board would like to
thank him for his many years of successful work as a member
of the Managing Board. Under Prof. Dr. Requardt's leadership,
Siemens' Healthcare business succeeded in further consolidat-
ing its leading position on the world market. The Supervisory
Board appointed Janina Kugel a full member of the Managing
Board, effective February 1, 2015.
CHANGES IN THE COMPOSITION OF THE
SUPERVISORY AND MANAGING BOARDS
Effective the end of the Annual Shareholders' Meeting on Janu-
ary 27, 2015, Deputy Chairman Berthold Huber, Gerd von Bran-
denstein and Prof. Dr. Peter Gruss resigned from their positions
on the Supervisory Board of Siemens AG. The Supervisory
Board would like to express its appreciation to the members
who have left the Board for their professional commitment and
contributions to the success of the Company as well as for their
many years of loyal support. Dr. Nathalie von Siemens and
Dr. Norbert Reithofer were elected by the 2015 Annual Share-
holders' Meeting to succeed the two departing shareholder rep-
resentatives. At the same time, Reinhard Hahn was appointed
by court order to succeed Mr. Huber on the Supervisory Board.
The Supervisory Board elected Birgit Steinborn to serve as Dep-
uty Chairwoman of the Board.
distribution be used to pay out a dividend of €3.50 per share
entitled to a dividend and that the amount of net income attrib-
utable to shares of stock not entitled to receive a dividend for
fiscal 2015 be carried forward.
FINANCIAL STATEMENTS
C.4 Corporate Governance
DETAILED DISCUSSION OF THE
126 Additional Information
The Audit Committee met six times. In the presence of the
independent auditors as well as the President and Chief Execu-
tive Officer and the Chief Financial Officer, the Committee dis-
cussed the financial statements and the Combined Manage-
ment Report for Siemens AG and the Siemens Group. In
addition, the Audit Committee addressed the half-year and
quarterly financial reports and, in the presence of the indepen-
dent auditors, discussed their audit reviews. The Committee
recommended that the Supervisory Board propose to the An-
nual Shareholders' Meeting the election of Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft as the independent auditors.
The Committee appointed the independent auditors for fiscal
2015, defined the audit focal points and determined the audi-
tors' fee. The Committee monitored the independence and
qualifications of the independent auditors. Furthermore, the
Audit Committee dealt with the Company's financial reporting
and risk management systems and with the effectiveness,
The Innovation and Finance Committee met four times and
made one decision by written circulation. The focuses of its
meetings included the Committee's recommendation regarding
the budget for fiscal 2015 as well as the preparation and/or
approval of investment and divestment projects. In addition,
the Committee intensively addressed the Company's innova-
tion focuses. At the Committee meeting on July 29, 2015 -
which all Supervisory Board members were invited to attend -
Prof. Dr. Peter Gruss reported, as the Chairman of the recently
established Siemens Technology & Innovation Council, on its
work for the first time. As a precaution, Jim Hagemann Snabe
abstained from voting on proposals submitted by the Innova-
tion and Finance Committee and the Supervisory Board on
November 4 and 5, 2014, respectively, regarding the sale of the
audiology business since he held minor private investments in
the EQT fund involved in the acquisition.
The Compensation Committee met four times. It also made
two decisions by written circulation. The Compensation Com-
mittee prepared, in particular, proposals for the full Supervisory
Board regarding the determination of targets for variable com-
pensation, the determination and review of the appropriate-
ness of Managing Board compensation and the approval of the
Compensation Report.
The Mediation Committee was not required to meet.
The Compliance Committee met four times. It primarily dis-
cussed the quarterly reports and the annual report submitted
by the Chief Compliance Officer.
nating Committee took into account the requirements of the Ger-
man Stock Corporation Act, the German Corporate Governance
Code and the Bylaws for the Supervisory Board as well as the tar-
gets that the Supervisory Board had set for its own composition.
The Nominating Committee met twice. It prepared recommen-
dations regarding the candidates to be proposed to the Super-
visory Board for a by-election of shareholder representatives at
the Annual Shareholders' Meeting on January 27, 2015, and was
supported in this process by an external personnel consultant. In
searching for and evaluating succession candidates, the Nomi-
The Chairman's Committee met six times. It also made one
decision by written circulation. Between meetings, I discussed
topics of major importance with the members of the Chair-
man's Committee. The Committee concerned itself, in particu-
lar, with personnel topics and corporate governance issues as
well as with the assumption by Managing Board members of
positions at other companies and institutions.
Chairwoman of the Central Works
Council of Siemens AG
AGEMENT AND CONTROL STRUCTURE.
resources and findings of the internal audit as well as with
reports concerning potential and pending legal disputes.
C.4.1 Management and control structure
The independent auditors, Ernst & Young GmbH Wirtschafts-
prüfungsgesellschaft, audited the Annual Financial Statements
of Siemens AG, the Consolidated Financial Statements of the
Siemens Group and the Combined Management Report for
Siemens AG and the Siemens Group for fiscal 2015 and issued
an unqualified opinion. The Annual Financial Statements of
Siemens AG and the Combined Management Report for
Siemens AG and the Siemens Group were prepared in accord-
ance with the requirements of German law. The Consolidated
Financial Statements of the Siemens Group were prepared in
accordance with the International Financial Reporting Stand-
ards (IFRS) as adopted by the European Union (EU) and with
the additional requirements of German law set out in Sec-
tion 315a (1) of the German Commercial Code (Handelsgesetz-
buch). These financial statements also comply with the IFRS as
issued by the International Accounting Standards Board (IASB).
The independent auditors conducted their audit in accordance
with Section 317 of the German Commercial Code and in com-
pliance with the generally accepted German standards for the
audit of financial statements promulgated by the Institut der
Wirtschaftsprüfer (IDW) and with the International Standards
on Auditing (ISA). The abovementioned documents as well as
the Managing Board's proposal for the appropriation of net in-
come were submitted to us by the Managing Board in advance.
The Audit Committee discussed the dividend proposal in detail
at its meeting on November 10, 2015. It discussed the Annual
Financial Statements of Siemens AG, the Consolidated Finan-
cial Statements of the Siemens Group and the Combined Man-
agement Report in detail at its meeting on December 1, 2015.
The audit reports prepared by the independent auditors were
distributed to all members of the Supervisory Board and com-
prehensively reviewed at the Supervisory Board's meeting on
December 2, 2015, in the presence of the independent auditors,
who reported on the scope, focal points and main findings of
their audit. No major weaknesses in the Company's internal
control or risk management systems were reported. At this
meeting, the Managing Board explained the financial state-
ments of Siemens AG and the Siemens Group as well as the
Company's risk management system. The Supervisory Board
concurs with the results of the audit. Following the definitive
findings of the Audit Committee's examination and our own
examination, we have no objections. The Managing Board pre-
pared the Annual Financial Statements of Siemens AG and the
Consolidated Financial Statements of the Siemens Group. We
approved the Annual Financial Statements and the Consoli-
dated Financial Statements. In view of our approval, the finan-
cial statements are accepted as submitted. We endorsed the
Managing Board's proposal that the net income available for
C.4.1.1 SUPERVISORY BOARD
Olaf Bolduan*
Siemens AG is subject to German corporate law. Therefore, it
has a two-tier board structure, consisting of a Managing Board
and a Supervisory Board.
Birgit Steinborn*
First Deputy Chairwoman
Werner Wenning
Second Deputy Chairman
> Volkswagen AG, Wolfsburg (Deputy Chairman)
> Porsche Automobil Holding SE, Stuttgart
> Audi AG, Ingolstadt (Deputy Chairman)
German positions:1
Membership in supervisory boards whose establishment
is required by law or in comparable domestic or foreign
controlling bodies of business enterprises
July 1,
2004
February 15,
1950
President of IndustriALL Global
Union
2003
(as of September 30, 2015)
As of September 30, 2015, the Supervisory Board comprised
the following members:
The Supervisory Board of Siemens AG has 20 members. As stip-
ulated by the German Codetermination Act (Mitbestimmungs-
gesetz), half of the members represent Company shareholders,
and half represent Company employees. The employee repre-
sentatives' names are marked below with an asterisk (*). The
present Supervisory Board's term of office will expire at the
conclusion of the Annual Shareholders' Meeting in 2018.
1943
Name
Gerhard Cromme, Dr. iur.
Chairman
Berthold Huber*
First Deputy Chairman
(until January 27, 2015)
Gerd von Brandenstein
(until January 27, 2015)
Chairman of the Supervisory Board
of Siemens AG
Date of birth
Member since
February 25, January 23,
Occupation
September
18, 2013
> NXP Semiconductors B.V.,
Netherlands
Positions outside Germany:
> Daimler AG, Stuttgart
> Allianz Deutschland AG, Munich
German positions:
(as of September 30, 2015)
External positions
Membership in supervisory boards whose establishment is required by law or in comparable
domestic or foreign controlling bodies of business enterprises
September
17, 2018
German positions:
May 1,
2006
Ralf P. Thomas,
Dr. rer. pol.
March 31,
2017
January 1,
2008
June 27,
1963
Prof. Dr.-Ing.
Siegfried Russwurm,
March 31,
2016
expired on
Term origi-
nally to have
February 11,
1955
> OSRAM Licht AG, Munich
(Deputy Chairman)
March 7,
1961
> OSRAM GmbH, Munich
Japan (Chairman)
Positions outside Germany:
> Siemens Japan K. K.,
Prof. Dr. phil. nat.
(until January 31, 2015)
> Siemens Japan Holding K. K.,
Positions outside Germany:1
> Siemens Healthcare GmbH,
Munich
German positions:
> Siemens Schweiz AG, Switzerland
(Chairman)
> Siemens (Proprietary) Ltd.,
South Africa (Chairman)
> Siemens AB, Sweden (Chairman)
> Siemens Aktiengesellschaft
Österreich, Austria (Chairman)
> Siemens Corp., USA (Chairman)
Positions outside Germany:
Positions outside Germany:
(Deputy Chairman)
Positions outside Germany:
> Atos SE, France
> Siemens Ltd., India
Positions outside Germany:
> Siemens Ltd., India
Positions outside Germany:
(as of September 30, 2015)
Group Company positions
> Deutsche Messe AG, Hannover
German positions:
> Software AG, Darmstadt
German positions:1
> EOS Holding AG, Krailling
> inpro Innovationsgesellschaft
für fortgeschrittene Produk-
tionssysteme in der Fahrzeug-
industrie mbH, Berlin
> Spectris plc, United Kingdom
German positions:
> Siemens Ltd., China (Chairman)
Hermann Requardt,
As of September 30, 2015 the Managing Board comprised the
following members:
February 1,
2015
As of September 30, 2015, the committee comprised Joe Kaeser
(chairman), Janina Kugel and Dr. Ralf P. Thomas.
Currently, there is one Managing Board committee, the Equity
and Employee Stock Committee. This committee oversees, in
particular, the utilization of authorized capital in connection
with the issuance of employee stock and the implementation
of certain capital measures. It also determines the scope and
conditions of the share-based compensation components and/
or programs for employees and managers (with the exception
of the Managing Board). In fiscal 2015, the committee made
seven decisions by notational voting using written circulations.
The Managing Board prepares the Company's interim reports,
the Annual Financial Statements of Siemens AG, the Consoli-
dated Financial Statements of the Siemens Group and the Com-
bined Management Report of Siemens AG and the Siemens
Group. In addition, the Managing Board must ensure that the
Company adheres to statutory requirements, official regula-
tions and internal Company policies (compliance) and works to
achieve compliance with these provisions and policies within
the Siemens Group. The Managing Board and the Supervisory
Board cooperate closely for the benefit of the Company. The
Managing Board informs the Supervisory Board regularly, com-
prehensively and without delay on all issues of importance to
the Company with regard to strategy, planning, business devel-
opment, financial position, earnings, compliance and risks.
When filling managerial positions at the Company, the Manag-
ing Board takes diversity into consideration and, in particular,
aims for an appropriate consideration of women and inter-
nationality. The Managing Board defines targets for the propor-
tion of women at the two management levels below the
Managing Board.
As the Company's top management body, the Managing Board
is committed to serving the interests of the Company and
achieving sustainable growth in Company value. The members
of the Managing Board are jointly responsible for the entire
management of the Company and decide on the basic issues of
business policy and corporate strategy as well as on the Com-
pany's annual and multi-year plans.
C.4.1.2 MANAGING BOARD
Information on the work of the Supervisory Board is provided
in chapter → c.3 REPORT OF THE SUPERVISORY BOARD. The compen-
sation paid to the members of the Supervisory Board is explained
in chapter A.10 COMPENSATION REPORT.
As of September 30, 2015, the Innovation and Finance Commit-
tee comprised Dr. Gerhard Cromme (chairman), Robert Kens-
bock, Harald Kern, Jürgen Kerner, Dr. Norbert Reithofer, Jim
Hagemann Snabe, Birgit Steinborn and Werner Wenning.
-
The Innovation and Finance Committee discusses, in partic-
ular, based on the Company's overall strategy, the Company's
focuses of innovation and prepares the Supervisory Board's dis-
cussions and resolutions regarding questions relating to the
Company's financial situation and structure – including annual
planning (budget) – as well as the Company's fixed asset in-
vestments and its financial measures. In addition, the Innova-
tion and Finance Committee has been authorized by the Super-
visory Board to decide on the approval of transactions and
measures that require Supervisory Board approval and have a
value of less than €600 million.
As of September 30, 2015, the Mediation Committee comprised
Dr. Gerhard Cromme (chairman), Jürgen Kerner, Birgit Stein-
born and Werner Wenning.
The Mediation Committee submits proposals to the Supervi-
sory Board in the event that the Supervisory Board cannot
reach the two-thirds majority required for the appointment or
dismissal of a Managing Board member.
Information on the compensation paid to the members of the
Managing Board is provided in chapter → A.10 COMPENSATION
As of September 30, 2015, the Nominating Committee com-
prised Dr. Gerhard Cromme (chairman), Dr. Hans Michael Gaul,
Dr. Leibinger-Kammüller and Werner Wenning.
As of September 30, 2015, the Compliance Committee com-
prised Dr. Gerhard Cromme (chairman), Dr. Hans Michael Gaul,
Bettina Haller, Harald Kern, Dr. Nicola Leibinger-Kammüller,
Jim Hagemann Snabe, Birgit Steinborn and Sibylle Wankel.
131
Additional Information
The Compliance Committee concerns itself, in particular, with
monitoring the Company's adherence to statutory provisions,
official regulations and internal Company policies.
As of September 30, 2015, the Audit Committee comprised
Dr. Hans Michael Gaul (chairman), Dr. Gerhard Cromme, Bettina
Haller, Robert Kensbock, Jürgen Kerner, Dr. Nicola Leibin-
ger-Kammüller, Jim Hagemann Snabe and Birgit Steinborn.
According to the German Stock Corporation Act, the Audit
Committee must include at least one independent Supervisory
Board member with knowledge and experience in the applica-
tion of accounting principles or the auditing of financial state-
ments. The Chairman of the Audit Committee, Dr. Hans
Michael Gaul, fulfills these statutory requirements.
The Audit Committee oversees, in particular, the accounting
process and conducts a preliminary review of the Annual Fi-
nancial Statements of Siemens AG, the Consolidated Financial
Statements of the Siemens Group and the Combined Manage-
ment Report. On the basis of the independent auditors' report
on their audit of the annual financial statements, the Audit
Committee makes, after its preliminary review, recommenda-
tions regarding Supervisory Board approval of the Annual Fi-
nancial Statements of Siemens AG and the Consolidated Finan-
cial Statements of the Siemens Group. In addition to the work
performed by the independent auditors, the Audit Committee
discusses the Company's interim reports, which are prepared
by the Managing Board, as well as the report on the auditors'
review of interim reports. It concerns itself with the Company's
risk monitoring system and oversees the effectiveness of the
internal control system as this relates, in particular, to financial
reporting, the risk management system and the internal audit
system. The Audit Committee receives regular reports from the
Internal Audit Department. It prepares the Supervisory Board's
recommendation to the Annual Shareholders' Meeting con-
cerning the election of the independent auditors and submits
the corresponding proposal to the Supervisory Board. It awards
the audit contract to the independent auditors elected by the
Annual Shareholders' Meeting and monitors the independent
audit of the financial statements - including, in particular, the
auditors' independence, professional expertise and services.
As of September 30, 2015, the Compensation Committee com-
prised Werner Wenning (chairman), Dr. Gerhard Cromme,
Michael Diekmann, Robert Kensbock, Jürgen Kerner and Birgit
Steinborn.
appropriateness of the total compensation of individual
Managing Board members and the approval of the annual
Compensation Report.
The Compensation Committee prepares, in particular, the
proposals for decisions by the Supervisory Board's plenary meet-
ings regarding the system of Managing Board compensation,
including the implementation of this system in Managing Board
contracts, the definition of the targets for variable Managing
Board compensation, the determination and review of the
As of September 30, 2015, the Chairman's Committee comprised
Dr. Gerhard Cromme (chairman), Jürgen Kerner, Birgit Stein-
born and Werner Wenning.
The Chairman's Committee makes proposals, in particular,
regarding the appointment and dismissal of Managing Board
members and handles contracts with members of the Manag-
ing Board. When making recommendations for first-time ap-
pointments, it takes into account that the terms of these ap-
pointments shall not, as a rule, exceed three years. In preparing
recommendations on the appointment of Managing Board
members, the Chairman's Committee takes into account the
candidates' professional qualifications, international experi-
ence and leadership qualities, the age limit specified for Man-
aging Board members, the Managing Board's long-range plans
for succession as well as its diversity. It also takes into account
the targets for the proportion of women on the Managing
Board specified by the Supervisory Board. The Chairman's Com-
mittee concerns itself with questions regarding the Company's
corporate governance and prepares the resolutions to be ap-
proved by the Supervisory Board regarding the Declaration of
Conformity with the Code – including the explanation of devia-
tions from the Code - and regarding the approval of the Corpo-
rate Governance Report as well as the Report of the Supervisory
Board to the Annual Shareholders' Meeting. Furthermore, the
Chairman's Committee submits recommendations to the
Supervisory Board regarding the composition of the Super-
visory Board committees and decides whether to approve
contracts and business transactions with Managing Board
members and parties related to them.
The Nominating Committee is responsible for making recom-
mendations to the Supervisory Board on suitable candidates for
election as shareholder representatives on the Supervisory
Board by the Annual Shareholders' Meeting. In preparing these
recommendations, the objectives specified by the Supervisory
Board regarding its composition – including, in particular, inde-
pendence and diversity - are to be taken into account as well as
the required knowledge, abilities and professional experience
of the proposed candidates. Attention shall also be paid to an
appropriate participation of women and men in accordance
with the legal requirements relating to the gender quota.
January 31,
2020
REPORT.
Japan (Chairman)
January 12,
1970
Janina Kugel
March 31,
2021
April 1,
2011
May 24,
1958
Klaus Helmrich
July 31,
2019
August 1,
2014
October 15,
1963
Lisa Davis
March 31,
2021
Additional Information
April 1,
2011
Dr. rer. nat.
Roland Busch,
July 31,
2018
May 1,
2006
June 23,
1957
President and Chief
Executive Officer
Joe Kaeser
Term expires
First
appointed
Date of birth
Name
November
22, 1964
> Siemens S. A., Colombia (Chairman)
C.4.1.4 ANNUAL SHAREHOLDERS' MEETING AND
INVESTOR RELATIONS
> Siemens Healthcare GmbH,
Munich
Fax
Phone
Address
IS AVAILABLE FROM:
FURTHER INFORMATION ON THE
CONTENTS OF THIS ANNUAL REPORT
+49 7237-1736
siemens@bek-gmbh.de
Fax
E-mail
CAN BE ORDERED AT:
COPIES OF THE ANNUAL REPORT
E-mail
Further information and
information resources
For technical reasons, there may be differences between the
accounting records appearing in this document and those pub-
lished pursuant to legal requirements.
This document is an English language translation of the German
document. In case of discrepancies, the German language doc-
ument is the sole authoritative and universally valid version.
Due to rounding, numbers presented throughout this and other
documents may not add up precisely to the totals provided and
percentages may not precisely reflect the absolute figures.
This document includes - in IFRS not clearly defined - supple-
mental financial measures that are or may be non-GAAP financial
measures. These supplemental financial measures should not be
viewed in isolation or as alternatives to measures of Siemens' net
assets and financial positions or results of operations as pre-
sented in accordance with IFRS in its Consolidated Financial
Statements. Other companies that report or describe similarly
titled financial measures may calculate them differently.
This document contains statements related to our future busi-
ness and financial performance and future events or develop-
ments involving Siemens that may constitute forward-looking
statements. These statements may be identified by words such
as "expect," "look forward to," "anticipate" "intend," "plan,"
"believe," "seek," "estimate," "will," "project" or words of similar
meaning. We may also make forward-looking statements in
other reports, in presentations, in material delivered to share-
holders and in press releases. In addition, our representatives
may from time to time make oral forward-looking statements.
Such statements are based on the current expectations and
certain assumptions of Siemens' management, of which many
are beyond Siemens' control. These are subject to a number of
risks, uncertainties and factors, including, but not limited to
those described in disclosures, in particular in the chapter Risks
in this Annual Report. Should one or more of these risks or
uncertainties materialize, or should underlying expectations
not occur or assumptions prove incorrect, actual results, per-
formance or achievements of Siemens may (negatively or
positively) vary materially from those described explicitly or
implicitly in the relevant forward-looking statement. Siemens
neither intends, nor assumes any obligation, to update or
revise these forward-looking statements in light of develop-
ments which differ from those anticipated.
C.5 Notes and forward-looking statements
135
Additional Information
WWW.
SIEMENS.COM/289A
This information and these documents, including the Code
and the Business Conduct Guidelines, are available at:
136 Additional Information
Siemens AG
Wittelsbacherplatz 2
80333 Munich
Order no. CGXX-C10013-00-7600
0101011100101
0100010
001
101 010111
0 1 0 1 1 1 0 0 10
10 10 10
1 0 0 0 1 0 1 1 0 0 0 1 0
0 1 1 1 0 1 0 0 1
0010
siemens.com
© 2015 by Siemens AG, Berlin and Munich
WWW.SIEMENS.COM/INVESTORS
The "Sustainability Information 2015" which reports on
Sustainability and Citizenship at Siemens is available at:
Employees should include their postal address and complete
order data (Org-ID and cost center information) when ordering.
Order no. CGXX-C10013-00-7600
Order no. CGXX-C10013-00
English
German
ORDER-ANNUALREPORT
HTTPS://INTRANET.SIEMENS.COM/
Intranet
COPIES AT:
SIEMENS EMPLOYEES MAY OBTAIN
WWW.SIEMENS.COM/ORDER-ANNUALREPORT
Internet
investorrelations@siemens.com
+49 89 636-33443 (Media Relations)
+49 89 636-32474 (Investor Relations)
+49 89 636-30085 (Media Relations)
+49 89 636-32830 (Investor Relations)
press@siemens.com
Germany
A general description of the functions and operation of the
Managing Board and the Supervisory Board can be found in
chapter → c.4.1 MANAGEMENT AND CONTROL STRUCTURE. Further
details can be derived from the bylaws for the corporate bodies
concerned.
German positions:
C.4.2.3 OPERATION OF THE MANAGING BOARD
AND THE SUPERVISORY BOARD, AND COMPOSITION
AND OPERATION OF THEIR COMMITTEES
The Business Conduct Guidelines provide the ethical and legal
framework within which we want to maintain our successful
activities. They contain the basic principles and rules for our
conduct within our Company and in relation to our external
partners and the general public. They set out how we meet our
ethical and legal responsibility as a Company and give expres-
sion to our corporate values of being "Responsible" - "Excel-
lent" "Innovative".
The Supervisory Board has seven committees, whose duties,
responsibilities and procedures fulfill the requirements of the
German Stock Corporation Act (Aktiengesetz) and the Code.
The chairmen of these committees provide the Supervisory
Board with regular reports on their committees' activities.
WWW.SIEMENS.COM/DIRECTORS-DEALINGS
Pursuant to Section 15a of the German Securities Trading Act
(Wertpapierhandelsgesetz), members of the Managing Board
and the Supervisory Board are legally required to disclose the
purchase or sale of shares of Siemens AG or of financial instru-
ments based thereon if the total value of such transactions
entered into by a board member or any closely associated per-
son reaches or exceeds €5,000 in any calendar year. All trans-
actions reported to Siemens AG in accordance with this re-
quirement have been duly published and are available on the
Company's website at:
-
As of the same date, the Supervisory Board's current members
held Siemens shares representing less than 0.01% of the capital
stock of Siemens AG, which totaled 881,000,000 shares. These
figures do not include the 10,878,836 shares (as of Septem-
ber 30, 2015) or 1.23% of the capital stock of Siemens AG, which
totaled 881,000,000 shares, over which the von Siemens-
Vermögensverwaltung GmbH (vSV) has voting control under
powers of attorney based on an agreement between among
others - members of the Siemens family, including Dr. Natalie
von Siemens, and VSV. These shares are voted together by vSV,
taking into account the proposals of a family partnership estab-
lished by the family's members or of one of its governing bodies.
As of September 30, 2015, the Managing Board's current mem-
bers held a total of 161,167 Siemens shares representing 0.02%
of the capital stock of Siemens AG, which totaled 881,000,000
shares.
C.4.1.3 SHARE OWNERSHIP AND SHARE TRANS-
ACTIONS BY MEMBERS OF THE MANAGING AND
SUPERVISORY BOARDS
134
133
Additional Information
As of January 31, 2015.
Shareholders exercise their rights in the Annual Shareholders'
Meeting. An ordinary Annual Shareholders' Meeting normally
takes place within the first four months of each fiscal year. The
Annual Shareholders' Meeting decides, among other things,
on the appropriation of unappropriated net income, the ratifi-
cation of the acts of the Managing and Supervisory Boards,
and the appointment of the independent auditors. Amend-
ments to the Articles of Association and measures that change
the Company's capital stock are approved at the Annual Share-
holders' Meeting and are implemented by the Managing Board.
The Managing Board facilitates shareholder participation in
this meeting through electronic communications – in particu-
lar, via the Internet – and enables shareholders who are un-
able to attend the meeting to vote by proxy. Furthermore,
shareholders may exercise their right to vote in writing or by
means of electronic communications (absentee voting). The
Managing Board may enable shareholders to participate in the
Annual Shareholders' Meeting without the need to be present
1
> Siemens Corp., USA
> Siemens Aktiengesellschaft
Österreich, Austria
Positions outside Germany:
> Siemens Healthcare GmbH,
Munich
German positions:
Saudi Arabia
> VA TECH T&D Co. Ltd.,
> Siemens W.L.L., Qatar
> Siemens Ltd., Saudi Arabia
> Arabia Electric Ltd. (Equipment),
Saudi Arabia
Positions outside Germany:
(Deputy Chairman)
-
at the venue and without a proxy and to exercise some or all of
their rights fully or partially by means of electronic communi-
cations. Shareholders may submit proposals regarding the pro-
posals of the Managing and Supervisory Boards and may con-
test decisions of the Annual Shareholders' Meeting.
Shareholders owning Siemens stock with an aggregate no-
tional value of €100,000 or more may also demand the judicial
appointment of special auditors to examine specific issues.
The reports, documents and information required by law, in-
cluding the Annual Report, may be downloaded from our web-
site. The same applies to the agenda for the Annual Sharehold-
ers' Meeting and to any counterproposals or shareholders'
nominations that require disclosure.
As part of our investor relations activities, we inform our inves-
tors comprehensively about developments within the Company.
For communication purposes, Siemens makes extensive use of
the Internet. We publish interim and annual reports, earnings
releases, ad hoc announcements, analyst presentations, letters
to shareholders and press releases as well as the financial calen-
dar for the current year, which contains the publication dates of
significant financial communications and the date of the Annual
Shareholders' Meeting, at: ☐ WWW.SIEMENS.COM/INVESTORS
In the 168 years of its existence, our Company has built an ex-
cellent reputation around the world. Technical performance,
innovation, quality reliability, and international engagement
have made Siemens one of the leading companies in electron-
ics and electrical engineering. It is top performance with the
highest ethics that has made Siemens strong. This is what the
Company should continue to stand for in the future.
Our Company's values and
Business Conduct Guidelines
lines.
Further corporate governance practices applied beyond legal
requirements are contained in our Business Conduct Guide-
Securities Acquisition and Takeover Act (Wertpapiererwerbs-
und Übernahmegesetz) – is an organizational challenge for
large publicly listed companies. It appears doubtful whether
the associated effort is justified in cases where no relevant
decisions by the shareholders' meeting are intended. There-
fore, extraordinary shareholders' meetings shall be convened
only in appropriate cases.
-
-
Pursuant to Section 3.7 para. 3 of the Code, in the case of a
takeover offer, a management board should convene an
extraordinary general meeting at which shareholders dis-
cuss the takeover offer and may decide on corporate actions.
The convening of a shareholders' meeting – even taking into
account the shortened time limits stipulated in the German
Siemens voluntarily complies with the Code's non-binding
suggestions, with the following exception:
Suggestions of the Code
C.4.2.2 INFORMATION ON CORPORATE
GOVERNANCE PRACTICES
The Managing Board The Supervisory Board"
Siemens Aktiengesellschaft
Berlin and Munich, October 1, 2015
Since making its last Declaration of Conformity dated Octo-
ber 1, 2014, Siemens AG has complied with the recommen-
dations of the Code in the prior version of June 24, 2014.
Siemens AG fully complies and will continue to comply
with the recommendations of the German Corporate
Governance Code ("Code") in the version of May 5, 2015,
published by the Federal Ministry of Justice in the official
section of the Federal Gazette ("Bundesanzeiger").
"Declaration of Conformity by the Managing Board and the
Supervisory Board of Siemens Aktiengesellschaft with the
German Corporate Governance Code
The Managing Board and the Supervisory Board of Siemens AG
approved the following Declaration of Conformity pursuant to
Section 161 of the German Stock Corporation Act as of Octo-
ber 1, 2015:
C.4.2.1 DECLARATION OF CONFORMITY WITH THE
GERMAN CORPORATE GOVERNANCE CODE
The Corporate Governance statement pursuant to Section 289a
of the German Commercial Code (Handelsgesetzbuch) is an in-
tegral part of the Combined Management Report. In accord-
ance with Section 317 para. 2 sentence 3 of the German Com-
mercial Code, the disclosures made within the scope of
Section 289a of the German Commercial Code are not subject
to the audit by the auditors.
C.4.2 Corporate Governance statement
pursuant to Section 289a of the German
Commercial Code
Additional Information
WWW.SIEMENS.COM/CORPORATE-GOVERNANCE
website at:
Our Articles of Association, the Bylaws for the Supervisory
Board, the Bylaws for the most important Supervisory Board
committees, the Bylaws for the Managing Board, all our
Declarations of Conformity with the Code and a variety of other
corporate-governance-related documents are posted on our
-
Board decisions such as those regarding major acquisitions,
divestments, fixed asset investments and financial measures -
require Supervisory Board approval, unless the Bylaws for the
Supervisory Board specify that such authority be delegated to
the Innovation and Finance Committee of the Supervisory
Board. In the Bylaws for the Managing Board, the Supervisory
Board has established the rules that govern the Managing
Board's work.
132
130 Additional Information
Gérard Mestrallet
Chairman of the Board and Chief
Executive Officer of ENGIE
April 1,
1949
January 23,
2013
Membership in supervisory boards whose establishment
is required by law or in comparable domestic or foreign
controlling bodies of business enterprises
(as of September 30, 2015)
January 25,
2012
German positions:
> Airbus Operations GmbH, Hamburg
> MAN SE, Munich (Deputy Chairman)
> Premium Aerotec GmbH, Augsburg
(Deputy Chairman)
German positions:
> Axel Springer SE, Berlin
> Deutsche Lufthansa AG, Cologne
> Voith GmbH, Heidenheim
Positions outside Germany:
> Electrabel S.A., Belgium (Chairman)
> GDF Suez Energy Management Trading CVBA,
Belgium (Chairman)
> GDF Suez Energie Services S.A., France
(Chairman)
> International Power Ltd., United Kingdom
> Société Générale, France
> Suez Environnement Company S.A., France
(Chairman)
German positions:
> Bayerische Motoren Werke AG, Munich (Chairman)
January 24,
2008
December
15, 1959
of the Managing Board of
TRUMPF GmbH + Co. KG
President and Chairwoman
-
Name
Bettina Haller*
Hans-Jürgen Hartung*
Robert Kensbock*
Harald Kern*
Jürgen Kerner*
Nicola Leibinger-
Kammüller, Dr. phil.
Occupation
Chairwoman of the Combine Works
Council of Siemens AG
Chairman of the Works Council of
Siemens Erlangen Süd, Germany
Deputy Chairman of the Central
Works Council of Siemens AG
> Henkel AG & Co. KGaA, Düsseldorf²
Chairman of the Siemens Europe
Committee
Date of birth
Member since
March 14,
1959
April 1,
2007
March 10,
1952
January 27,
2009
March 13,
1971
January 23,
2013
March 16,
1960
January 24,
2008
January 22,
1969
Executive Managing Board Member
of IG Metall
Norbert Reithofer, Dr.-Ing.
Dr.-Ing. E.h.
> Audi AG, Ingolstadt
May 29,
1956
Positions outside Germany:
> Unify Holdings B. V., Netherlands
German positions:
> Allianz SE, Munich
> SAP SE, Walldorf
Positions outside Germany:
> Bang & Olufsen A/S, Denmark
(Deputy Chairman)
> Danske Bank A/S, Denmark
German positions:
> Vaillant GmbH, Remscheid
Additional Information
129
The composition of the Supervisory Board is to be such that its
members as a group have the knowledge, skills and profes-
sional experience necessary to carry out its proper functions.
At its meeting on September 23, 2015, the Supervisory Board
adjusted taking into account the recommendations of the
German Corporate Governance Code (Code) - the concrete ob-
jectives for its composition most recently defined in fiscal 2013
and made the following decisions in this regard:
-
> The composition of the Supervisory Board of Siemens AG
shall be such that qualified control and advising for the Man-
aging Board is ensured. The candidates proposed for election
to the Supervisory Board shall have the expertise, skills and
professional experience necessary to carry out the functions
of a Supervisory Board member in a multinational company
and safeguard the reputation of Siemens in public. In partic-
ular, care shall be taken in regard to the personality, integrity,
commitment, professionalism and independence of the indi-
viduals proposed for election. The goal is to ensure that,
in the Supervisory Board, as a group, all know-how and expe-
rience is available that is considered essential in view of
Siemens' activities.
> Taking the Company's international orientation into account,
care shall also be taken to ensure that the Supervisory Board
has an adequate number of members with extensive inter-
national experience. Our goal is to make sure that the pres-
ent considerable share of Supervisory Board members with
extensive international experience is maintained.
> In its election proposals, the Supervisory Board shall also pay
particular close attention to ensuring diversity. In accordance
with the German Law for Equal Participation of Women and
Men in Management Positions in the Private and Public
Sectors, the Supervisory Board is composed of at least 30 per-
cent women and at least 30 percent men. The Nominating
Committee shall continue to include at least one female
member. Qualified women shall be included during the
initial process of selecting potential candidates for new elec-
tions or for the filling of Supervisory Board positions that
have become vacant, and they shall be given appropriate
consideration in nominations.
> An adequate number of independent members shall belong
to the Supervisory Board. Material and not only temporary
conflicts of interest, such as organizational functions or advi-
sory capacities with major competitors of the Company, shall
be avoided. Under the presumption that the mere exercise of
Supervisory Board duties as an employee representative
gives no cause to doubt the compliance with the independ-
ence criteria pursuant to Section 5.4.2 of the Code, the
Supervisory Board shall have a minimum of sixteen members
who are independent in the meaning of the Code. In any
case, the Supervisory Board shall be composed in such a
way that a number of at least six independent shareholder
representatives in the meaning of Section 5.4.2 of the Code
is achieved. In addition, the Supervisory Board members
shall have sufficient time to be able to devote the necessary
regularity and diligence to their mandate.
These objectives for the Supervisory Board's composition have
been fully achieved: a considerable number of Supervisory
Board members are currently engaged in international activi-
ties and/or have many years of international experience. Since
the Supervisory Board election in 2015, the Supervisory Board
has had six female members. Dr. Nicola Leibinger-Kammüller is
a member of the Nominating Committee. The Supervisory
Board has an adequate number of independent members. In
the opinion of the Supervisory Board, a minimum of 16 Super-
visory Board members are independent in the meaning of Sec-
tion 5.4.2 of the Code. Some Supervisory Board members
hold or have held in the past fiscal year - high-ranking posi-
tions at other companies with which Siemens does business.
Transactions between Siemens and such companies are carried
out on an arm's-length basis. We believe that these transactions
do not compromise the independence of the Supervisory Board
members in question. The regulations establishing limits on
age and limiting membership in the Supervisory Board to three
full terms of office (15 years) are complied with.
Chairman of the Supervisory Board
of Bayerische Motoren Werke AG
The Supervisory Board oversees and advises the Managing
Board in its management of the Company's business. At regular
intervals, the Supervisory Board discusses business develop-
ment, planning, strategy and strategy implementation. It re-
views the Annual Financial Statements of Siemens AG and the
Consolidated Financial Statements of the Siemens Group, the
Combined Management Report of Siemens AG and the Siemens
Group, and the proposal for the appropriation of net income. It
approves the Annual Financial Statements of Siemens AG as
well as the Consolidated Financial Statements of the Siemens
Group, based on the results of the preliminary review con-
ducted by the Audit Committee and taking into account the re-
ports of the independent auditors. The Supervisory Board de-
cides on the Managing Board's proposal for the appropriation
of net income and the Report of the Supervisory Board to the
Annual Shareholders' Meeting. In addition, the Supervisory
Board or the Compliance Committee, which is described in
more detail below, concern themselves with monitoring the
Company's adherence to statutory provisions, official regu-
lations and internal Company policies (compliance). The Super-
visory Board also appoints the members of the Managing Board
and determines each member's portfolios. Important Managing
> Siemens Healthcare GmbH, Munich
> Messer Group GmbH, Sulzbach
> The limits on age and length of membership established in
the Bylaws for the Supervisory Board will be taken into con-
sideration. In addition, no more than two former members of
the Managing Board of Siemens AG shall belong to the
Supervisory Board.
Shareholders' Committee.
German positions:
January 27,
2015
August 14,
1955
January 23,
2013
Nathalie von Siemens,
Dr. phil.
Managing Director and
Spokesperson of Siemens Stiftung
July 14,
1971
January 27,
2015
Michael Sigmund*
Jim Hagemann Snabe
Chairman of the Committee of
Spokespersons of the Siemens
Group; Chairman of the Central
Committee of Spokespersons of
Siemens AG
Chairwoman and Managing
Director of Hacı Ömer Sabancı
Holding A.Ş.
September
13, 1957
2
Supervisory Board Member
As of January 27, 2015.
1
April 1,
2009
Güler Sabancı
Attorney, Bavarian Regional
Headquarters of IG Metall
Sibylle Wankel*
October 1,
2013
October 27,
1965
March 3,
1964
March 1,
2014
FINANCIAL STATEMENTS.
Off-balance-sheet commitments
As of September 30, 2015 the undiscounted amount of maxi-
mum potential future payments related to credit guarantees,
guarantees of third-party performance and HERKULES obliga-
tions amounted to €4.2 billion (September 30, 2014: €4.3 billion).
Other commitments, including indemnifications issued in con-
nection with dispositions of businesses, amounted to €1.9 bil-
lion (September 30, 2014: €1.3 billion) to the extent future
claims are not considered remote. The increase in other com-
mitments related mainly to transactions closed in fiscal 2015.
Future payment obligations under non-cancellable operating
leases amounted to €3.4 billion (September 30, 2014: €3.2 bil-
lion).
Irrevocable loan commitments amounted to €3.6 billion (Sep-
tember 30, 2014: €3.4 billion). A considerable portion of these
commitments resulted from asset-based lending transactions,
meaning that the respective loans can be drawn only after the
borrower has provided sufficient collateral.
Combined Management Report
17
18
(in millions of €)
Cash flows from operating activities
Net income
Fiscal year
7,380
Change in operating net working capital
(936)
Other reconciling items to cash flows from operating activities - continuing operations
For further information about our debt see →NOTE 15 in
→ B.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. For further
information about functions and objectives of the financial
management see NOTE 24 in B.6 NOTES TO CONSOLIDATED
437
A.5.2 Cash flows
2015
945
In order to optimize the Company's position with regard to
interest income and interest expense, and to manage the asso-
ciated interest rate risk relating to the Group excluding SFS'
business, we use derivative financial instruments under a port-
folio-based approach to manage interest risk actively relative to
a benchmark. The interest rate management relating to the SFS
business is managed separately, considering the term structure
of SFS' financial assets and liabilities on a portfolio basis.
Cash flows from operating activities – continuing operations
Mainly the following transactions led to the decrease in assets
classified as held for disposal: Completion of the contribu-
tion of the metals technologies business into a joint venture
with Mitsubishi-Hitachi Metals Machinery Inc. (the new invest-
ment in Primetals Technologies Ltd. is recognized as invest-
ments accounted for using the equity method); completion of
the sale of our 50% stake in the joint venture BSH to Robert
Bosch GmbH and completion of the sale of the hospital infor-
mation business to Cerner Corp.
Higher loans receivable driven by asset growth at SFS in fiscal
2015 resulted in the increases in other current financial assets
and in other financial assets.
In fiscal 2015, the acquisitions of Dresser-Rand and Rolls-Royce
Energy aero-derivative gas turbine and compressor business
were the major factors related to the increases in goodwill and
other intangible assets with a total amount of €4.5 billion and
€3.7 billion, respectively, and the largest factors related to the
increase in inventories and trade and other receivables with
a total amount of €1.0 billion and €0.6 billion, respectively.
Apart from these acquisitions, the increase in inventories was
also driven by a substantial build-up in other businesses from
the Power and Gas and in the Mobility Divisions, while the
Wind Power and Renewables Division contributed significantly
to the increase in trade and other receivables.
Our total assets in fiscal 2015 were influenced by positive cur-
rency translation effects of €3.6 billion, led by the U.S. dollar.
15%
104,879
120,348
21%
56,803
68,906
16%
1,094
(22)%
3,334
2,591
Total assets
Our capital structure ratio as of September 30, 2015 increased
to 0.6 from 0.1 a year earlier, which is within our target ratio of
up to 1.0. The change was due to the increase in industrial
net debt compared to the prior year, reflecting the above-
mentioned issuance of long-term debt and the impact of our
share buybacks.
After the end of fiscal 2015 we repurchased additional 2,370,869
treasury shares. We thus completed the share buyback program
in October 2015 with a total volume of €4.0 billion and an aver-
age costs per share of €92.75 (including incidental transaction
charges).
Debt and credit facilities
As of September 30, 2015 we recorded, in total, €26.0 billion in
notes and bonds (maturing until 2066), €1.8 billion in loans
from banks (maturing until 2023), €1.8 billion in other financial
indebtedness (maturing until 2027), primarily consisting of
US$-commercial paper, and €0.1 billion in obligations under
finance leases. Notes, bonds and loans from banks were is-
sued mainly in Euro and U.S. dollar, and to a lower extent in
British pound.
We have three credit facilities at our disposal for general corpo-
rate purposes. These credit facilities amounted to €7.1 billion
and were unused as of September 30, 2015.
6,881
(1,667)
(270)
(8,716)
2,889
(5,827)
(2,700)
7,213
(354)
351
(596)
(2,728)
(135)
1,051
5
1,056
The conversion of profit into cash inflows from operating
activities was mainly driven by Healthcare as well as the
Digital Factory and Power and Gas Divisions.
The cash outflows due to the build-up of operating net work-
ing capital were primarily driven by the Mobility Division, due
mainly to an increase in the line item inventories. Significant
cash inflows in the Power and Gas and in Wind Power and
Renewables Divisions related to increases in the line item bill-
ings in excess of costs and estimated earnings on uncompleted
contract and related advances. These cash inflows were offset
in the Power and Gas Division particularly by an increase in the
line item inventories and in the Wind Power and Renewables
Division particularly by an increase in the line item trade and
other receivables.
The cash outflows for acquisitions of businesses, net of cash
acquired, primarily included payments totaling €6.8 billion
related to the acquisition of Dresser-Rand and €1.3 billion re-
lated to the acquisition of Rolls-Royce Energy aero-derivative
gas turbine and compressor business.
The cash outflows for other purchases of assets primarily
included additions of assets eligible as central-bank-collateral
and additional funding to Unify.
The cash inflows from other disposals of assets included
€2.8 billion from the sale of Siemens' stake in BSH, disposals
from above-mentioned eligible collateral, proceeds from the
sale of businesses and real estate disposals at SRE.
The cash inflows from investing activities - discontinued
operations - included €1.9 billion from the sale of the hearing
aid business and €1.2 billion from the sale of the hospital infor-
mation business.
Combined Management Report
Total non-current assets
4,570
Cash flows from operating activities - discontinued operations
(1,467)
(8,254)
Cash flows from operating activities - continuing and discontinued operations
6,612
Cash flows from investing activities
Additions to intangible assets and property, plant and equipment
Acquisitions of businesses, net of cash acquired
Change in receivables from financing activities of SFS
Other purchases of assets
Other disposals of assets
Cash flows from investing activities - continuing operations
Cash flows from investing activities - discontinued operations
Cash flows from investing activities - continuing and discontinued operations
Cash flows from financing activities
Purchase of treasury shares
Issuance of long-term debt
Repayment of long-term debt (including current maturities of long-term debt)
Change in short-term debt and other financing activities
Interest paid
Dividends paid to shareholders of Siemens AG
Other cash flows from financing activities - continuing operations
Cash flows from financing activities - continuing operations
Cash flows from financing activities - discontinued operations
Cash flows from financing activities - continuing and discontinued operations
(1,897)
Combined Management Report
15
1,828
A.5.1 Capital structure
16%
73,365
85,292
24%
36,767
45,730
23%
1,874
2,297
71%
Debt ratio
Total non-current liabilities
Other liabilities
(9)%
1,620
1,466
20%
4,071
4,865
552
Total liabilities
70%
Total equity attributable to shareholders of Siemens AG
Equity ratio
Non-controlling interests
Capital structure ratio
€9.1 billion). Within these figures, the underfunding for pension
benefit plans amounted to €9.0 billion (September 30, 2014:
€8.5 billion) and the underfunding of other post-employment
benefit plans amounted to €0.5 billion (September 30, 2014:
€0.5 billion).
Combined Management Report
16
The funded status of our defined benefit plans - meaning de-
fined benefit obligation (DBO) less fair value of plan assets -
showed an underfunding of €9.5 billion (September 30, 2014:
Post-employment benefits
The main factors relating to the increase in total equity attrib-
utable to shareholders of Siemens AG were €7.3 billion in net
income attributable to shareholders of Siemens AG and €1.0 bil-
lion in other comprehensive income, net of income taxes. This
increase was partly offset by dividend payments of €2.7 billion
(paid for fiscal 2014) and the repurchase of 29,419,671 treasury
shares at an average costs per share of €91.89, totaling €2.7 bil-
lion (including incidental transaction charges).
The issuance of instruments totaling US$7.75 billion in six
tranches with different maturities up to 30 years was the main
factor for the increase in long-term debt.
The contribution of the metals technologies business into a
joint venture with Mitsubishi-Hitachi Metals Machinery Inc.
led mainly to the decrease in liabilities associated with assets
classified as held for disposal.
The project business of the Divisions Power and Gas, including
additions related to the acquisitions of Dresser-Rand and Rolls-
Royce Energy aero-derivative gas turbine and compressor busi-
ness, and Wind Power and Renewables was the main factor for
an increase in higher billings in excess of costs and estimated
earnings on uncompleted contracts and related advances,
which drove mainly the increase in other current liabilities.
The classification of US$ 500 million long-term fixed-rate in-
struments as current maturity and the issuance of commercial
paper were the main factors for the increase in short-term
debt and current maturities of long-term debt.
15%
104,879
120,348
4%
560
30%
11%
30,954
34,474
29%
581
Total liabilities and equity
609
A.5 Financial position
5%
9,811
4,489
Current provisions
21%
1,717
2,085
Other current financial liabilities
2%
7,594
7,774
4,354
Trade payables
1,620
2,979
Short-term debt and current maturities of long-term debt
2014
2015
(in millions of €)
% Change
Sep 30,
Our capital structure developed as follows:
84%
3%
Current income tax liabilities
1,762
38%
19,326
26,682
Other financial liabilities
Provisions
Deferred tax liabilities
Post-employment benefits
Long-term debt
8%
36,598
39,562
Total current liabilities
(98)%
1,597
39
Liabilities associated with assets classified as held for disposal
13%
17,954
20,368
Other current liabilities
4%
9,324
10%
Net income
18,416
(26)%
(3)%
Profit
160
6
>200%
Profit margin
2.8%
0.1%
|
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 2015, 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 €192 million, charges of €106 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 €73 million gain on the sale of the
Division's turbo fan business and a positive €72 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
2016, 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 2015, profit margin for Power and Gas would
have been 10.5%.
Order intake was down year-over-year, due mainly to a sharply
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
2014, when the Division recorded charges of €272 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
2%
% Change
Comp.
9%
2015
Fiscal year
2014
Revenue
12,956
11,922
11,210
10,708
Actual
16%
11%
5%
Profit
Profit margin
570
4.8%
(86)
n/a
(in millions of €)
Orders
(0.8)%
5,567
Revenue
A.3.2 Segment information analysis
A.3.2.1 POWER AND GAS
A.3.2.2 WIND POWER AND RENEWABLES
Fiscal year
% Change
(in millions of €)
2015
2014
Actual
Comp.
(in millions of €)
2015
5,660
Fiscal year
2014
Orders
6,136
7,759
(21)%
Orders
15,666
Revenue
13,193
Profit
Profit margin
Actual
13,996
12% (1)%
12,720
4% (11)%
1,426 2,215 (36)%
10.8% 17.4%
Comp.
% Change
Combined Management Report
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
11
10,262
9,280
Revenue
7,508
7,249
Profit
Profit margin
588
7.8%
532
Actual
11%
4%
11%
7.3%
% Change
Comp.
6%
(1)%
Orders
Mobility again won a number of large orders, driving order
growth year-over-year. Contract wins in fiscal 2015 included an
order worth €1.7 billion for regional trains and maintenance in
Germany and a €1.6 billion long-term order for maintenance in
Russia. For comparison, large orders in fiscal 2014 included a
contract worth €1.6 billion for two driverless subway-lines in
Saudi Arabia. Revenue for Mobility grew moderately compared
to the prior fiscal year. The Division's rail infrastructure and
turnkey project businesses increased revenue year-over-year in
(in millions of €)
Orders
2015
2014
10,014
9,233
Actual
8%
% Change
Comp.
3%
9,956
9,201
8%
3%
1,738
Fiscal year
Combined Management Report
2014
(in millions of €)
low or negligible margins. The Division recorded €88 million in
severance charges in fiscal 2015. In fiscal 2014, the Division
took charges totaling €298 million related to two high voltage
direct current (HVDC) transmission line projects in Canada. It
also recorded charges of €240 million in fiscal 2014 primarily
related to grid connections to offshore wind-farms in the North
Sea, which were handed over to the customer in fiscal 2015.
A.3.2.4 BUILDING TECHNOLOGIES
(in millions of €)
2015
Fiscal year
2014
Orders
6,099
5,587
Actual
9%
Revenue
5,999
5,569
2015
Profit
511
8%
8%
Profit margin
9.2%
9.2%
% Change
Comp.
2%
1%
every quarter. In contrast, the Division's rolling stock busi-
nesses generated lower revenue in the second half of fiscal
2015 due to timing of large rail projects following completion of
older projects while new large projects are beginning to ramp
up. This held back full-year revenue development for Mobility
overall. On a geographic basis, revenue growth was stron-
gest in Asia, Australia. Revenue and order development ben-
efited strongly from currency translation effects. In fiscal 2015,
Mobility continued its solid project execution. Profit for the
Division rose significantly year-over-year, despite €68 million in
severance charges. The profit improvement was driven by a
more favorable business mix compared to fiscal 2014, particu-
larly including a higher share from the rail infrastructure busi-
ness. For comparison, profit in the prior fiscal year benefited
from a €55 million net effect from the release of accruals
related to the "Siemens 2014" program.
A.3.2.6 DIGITAL FACTORY
Due largely to positive currency translation effects, orders and
revenue for Building Technologies grew in all regions, particu-
larly the Americas and Asia, Australia. The Division further in-
creased its productivity and continued to improve its business
mix to include a larger share of higher-margin product and
service businesses year-over-year. These factors contributed to
a clear increase in profit and the Division kept its profitability
stable year-over-year despite impacts from a substantial appre-
ciation of the Swiss franc early in the second quarter of the
fiscal year and €24 million in severance charges.
A.3.2.5 MOBILITY
|
Fiscal year
553
1,681
10
Reported orders related to external customers in the region
Europe, C.I.S., Africa, Middle East increased moderately,
as substantial growth in Mobility, including among others a
€1.7 billion order in Germany, and in Power and Gas, more than
offset a sharp decline in Wind Power and Renewables due to
a lower volume of large orders. Key growth drivers in the
Americas included Power and Gas and Energy Management,
both with a strong increase due to a higher volume of large
orders in the region, and Healthcare which reported substantial
growth in the U.S. Orders declined in the region Asia, Australia
due mainly to a lower volume from large orders in Power and
Gas and in Mobility that could only be partially offset by growth
in Wind Power and Renewables, Energy Management, and in
Digital Factory. The development in China showed a similar
pattern, with a sharp order decline in Mobility offset by growth
in the three Divisions just mentioned.
263
295
Less: Interest adjustments
(discontinued operations)
1
Less: Taxes on interest adjustments
(tax rate (flat) 30%)
(104)
(96)
(I) Income before interest after tax
7,623
5,732
post-employment benefits
(II) Average capital employed
33,238
(1)/(II) ROCE
19.6%
17.2%
1
Item Other interest expenses/income, net primarily consists of interest relating to
corporate debt, and related hedging activities, as well as interest income on
corporate assets.
Combined Management Report 9
A.3 Results of operations
A.3.1 Orders and revenue by region
The increase in orders and revenue year-over-year was due
mostly to favorable currency translation effects that added six
percentage points to volume development. The resulting ratio
of orders to revenue (book-to-bill) for Siemens in fiscal 2015
was 1.09, again well above 1. The order backlog (defined as the
sum of order backlogs of the Industrial Business) was €110 bil-
lion as of September 30, 2015.
| Orders (location of customer)
| Revenue (location of customer)
38,833
(in millions of €)
Europe, C.I.S., Africa,
Middle East
Plus: Net interest expenses from
746
A.2.5 Dividend
We intend to continue providing an attractive return to our
shareholders. Therefore, we intend to realize a dividend payout
range, of 40% to 60% of net income, which we may adjust for
this purpose to exclude selected exceptional non-cash effects.
As in the past, we intend to fund the dividend payout from Free
cash flow.
At the Annual Shareholders' Meeting, the Managing Board, in
agreement with the Supervisory Board, will submit the follow-
ing proposal to allocate the unappropriated net income of
Siemens AG for the fiscal year 2015: to distribute a dividend of
€3.50 on each share of no par value entitled to the dividend for
fiscal year 2015 existing at the date of the Annual Shareholders'
Meeting, with the remaining amount to be carried forward. Pay-
ment of the proposed dividend is contingent upon approval by
Siemens shareholders at the Annual Shareholders' Meeting on
January 26, 2016. The prior-year dividend was €3.30 per share.
The proposed dividend of €3.50 per share for fiscal 2015 rep-
resents a total payout of €2.8 billion based on the estimated
number of shares entitled to dividend at the date of the Annual
Shareholders' Meeting. Based on net income of €7.4 billion for
fiscal 2015, the dividend payout percentage is 38%.
A.2.6 Calculation of return
on capital employed
| Calculation of ROCE
Average capital employed for a fiscal year is determined as a
five-point average in capital employed of the respective quar-
ters, starting with the capital employed as of September 30 of
the previous fiscal year.
| Calculation of capital employed
Total equity
Plus: Long-term debt
Plus: Short-term debt and current maturities of long-term debt
Less: Cash and cash equivalents
Less: Current available-for-sale financial assets
Plus: Post-employment benefits
Less: SFS Debt
630
Less: Fair value hedge accounting adjustment
Beginning with fiscal 2016, deferred taxes on actuarial gains
and losses within equity will be eliminated in the calculation of
capital employed. By making this adjustment, we treat actuarial
gains and losses consistently in the ROCE calculation.
Fiscal year
(in millions of €)
2015
2014
Other assets
7,380
5,507
Less: Other interest expenses/income, net¹
(662)
(606)
Plus: SFS Other interest expenses/income
Plus: Adjustments from assets classified as held for disposal and
liabilities associated with assets classified as held for disposal
Capital employed (continuing and discontinued operations)
As expected, given our complex business environment in fiscal
2015, organic revenue was flat year-over-year, including a
mixed picture for our industrial businesses. Reported revenue
related to external customers in Europe, C.I.S., Africa, Middle
East came in near the prior-year level, as growth in Energy
Management and in Healthcare offset declines in Mobility
and in Power and Gas. Moderate revenue growth in Germany
was driven by a sharp increase in Wind Power and Renewables
resulting from the continuing execution of large offshore con-
tracts won in prior periods. In the Americas, revenue came in
higher year-over-year, driven by double-digit increases in the
U.S. across our industrial businesses, due mainly to currency
translation tailwinds. The major contributions to growth in the
U.S. as well as in the region came from Healthcare and Power
and Gas. Revenue growth in Asia, Australia resulted mainly
from solid increases in Digital Factory, Mobility and Healthcare
that more than offset declines in Power and Gas and Wind
Power and Renewables. Growth in China included nearly all of
our industrial businesses, due in part to positive currency
translation effects, while revenue in Power and Gas decreased
substantially.
Asia, Australia
% Change
(3)%
2015
Fiscal year
2014
% Change
Actual
Comp.
(in millions of €)
Europe, C.I.S., Africa,
Middle East
42,539
41,259
3%
5%
1%
11,991 10,910
10%
Americas
therein: U.S.
Asia, Australia
therein: China
6,623
Siemens
therein: emerging markets
82,340
29,769
24,769 20,619
17,357 14,613
15,033 15,779
6,605
77,657
27,345
10%
20%
5%
19% (1)%
(5)% (14)%
0% (12)%
6% (1)%
9%
2%
therein: Germany
Fiscal year
(1)%
(4)%
2015
2014
Actual
Comp.
therein: Germany
Americas
therein: U.S.
38,799
11,244 10,781
21,702 18,494
15,263 12,647
38,449
1%
(2)%
4%
4%
6%
17%
21%
1%
15,135
14,283
6%
(4)%
therein: China
Siemens
therein: emerging markets
6,938
75,636 71,227
25,285 24,146
6,405
8%
1%
13%
3%
18.3%
(1,138)
(862)
(32)%
7,218
7,306
(1)%
(1,869)
(2,014)
7%
5,349
5,292
1%
29%
2,031
>200%
7,380
5,507
8.84
19.6%
6.37
34%
39%
17.2%
As a result of the development described for the segments,
Income from continuing operations before income taxes
decreased 1%. This amount also included higher expenses - as
planned for selling and research and development, primarily
at Power and Gas and to a lesser degree at Digital Factory and
Healthcare. Severance charges for continuing operations were
€804 million, of which €566 million were in the Industrial Busi-
ness. The tax rate of 26% was lower than in the prior year, due
mainly to the disposition of the stake in BSH, which was mostly
tax-free. For this reason, Income from continuing operations
increased 1%.
Income from discontinued operations, net of income taxes,
primarily included gains from the disposal of the hearing aid
and hospital information businesses, totaling €1.7 billion and
€0.2 billion, respectively.
The increase in Basic earnings per share benefited substan-
tially from the disposal gains mentioned above. The percentage
increase was higher than for Net income due mainly to share buy-
backs which reduced the number of average shares outstanding.
Despite a significant increase in average capital employed with
the acquisitions at Power and Gas, ROCE rose due to the dis-
posal gains and was at the upper end of our target range.
Combined Management Report
215
A.4 Net assets position
466
10.6%
(36)%
160
6
>200%
570
(86)
n/a
553
511
8%
588
532
600
11%
1,681
3%
536
773
(31)%
2,184
2,072
5%
7,755
7,703
1%
10.1%
1,738
2,215
Sep 30,
(in millions of €)
1,151
1,290
(11)%
122
3,935
(97)%
51,442
48,076
7%
23,166
17,783
30%
12%
Other intangible assets
4,560
77%
Property, plant and equipment
10,210
9,638
6%
Investments accounted for using the equity method
2,947
2,127
39%
Other financial assets
20,821
8,077
% Change
577
14%
2015
2014
Cash and cash equivalents
9,957
8,013
24%
Available-for-sale financial assets
1,175
925
27%
Trade and other receivables
15,982
644
14,526
Other current financial assets
5,157
3,710
39%
Inventories
Current income tax assets
Other current assets
Assets classified as held for disposal
Total current assets
Goodwill
17,253
15,100
10%
17.5%
1,426
2015
(in millions of €)
Fiscal year
2015
2014
Income before income taxes
ROE (after taxes)
600
466
20.9%
18.1%
Sep 30,
2015
24,970
2014
A.3.2.9 FINANCIAL SERVICES (SFS)
21,970
SFS recorded a higher income contribution from the equity
business, primarily relating to a net gain in connection with the
sale of renewable energy projects. Higher interest results asso-
ciated with growth in total assets were largely offset by a higher
level of credit hits related mainly to business in China. Despite
substantial early terminations of financings, total assets have
increased since the end of fiscal 2014, including positive cur-
rency translation effects.
A.3.2.10 RECONCILIATION TO CONSOLIDATED
FINANCIAL STATEMENTS
| Profit
Fiscal year
(in millions of €)
2015
2014
Centrally managed portfolio activities
714
280
Siemens Real Estate
205
(in millions of €)
Total assets
242
benefited from currency translation effects, most notably in the
Americas. Profit growth was driven mainly by the imaging and
therapy systems business and benefited from currency tail-
winds mainly due to the greater strength of the US$ compared
to fiscal 2014. In fiscal 2015, Healthcare recorded €62 million in
severance charges and a €64 million gain from the divestment
of the microbiology business. For comparison, profit in fiscal
2014 included a €66 million positive effect related to the sale of
a particle therapy installation in Germany.
The weak market environment for process industries in fiscal
2015 was particularly evident in commodity-related markets and
those influenced by low oil prices. As a result, the Division saw
a sharp decrease in orders in its oil & gas and marine business
and a moderate order decline in its large drives business, due
mainly to a lower volume from large orders. Reported revenue
increased in nearly all businesses, driven by currency trans-
lation effects. In the Division's largest business, large drives,
revenue was flat and comparable revenue decreased moder-
ately. On a regional basis, the order decline was due largely to a
double-digit decrease in Europe, C.I.S., Africa, Middle East and
lower orders in Asia, Australia. Reported revenue increased in all
three regions, however, in the Americas and in Asia, Australia
growth was driven by favorable currency translation effects. De-
spite currency tailwinds, fiscal 2015 profit margin declined, due
in part to ongoing operational challenges in the large drives and
the oil & gas and marine businesses. In addition, profitability
was held back by a warranty charge of €96 million in the large
drives business and €74 million in severance charges for the
Division overall. Beginning with fiscal 2016, parts of the Divi-
sion's business activities are reported within other Divisions,
as previously described for the Power and Gas and the Digital
Factory Division. If these changes had already been effective in
fiscal 2015, profit margin would have been 6.1%.
Revenue
Profit
Profit margin
The softening market environment for production equipment,
particularly including the industrial deceleration in China during
fiscal 2015, limited growth opportunities for Digital Factory's
high-margin factory automation business, which reported flat
revenue and orders on a comparable basis. Conditions were
more favorable for the Division's software and motion control
businesses, which delivered clear comparable growth in both
revenue and orders. On a regional basis, orders and revenue in-
creased in all three reporting regions, led by Asia, Australia and
the Americas, due largely to positive currency translation ef-
fects. Despite currency tailwinds, profitability was held back by
the less favorable revenue mix and higher expenses for R&D
and selling targeted at future growth. In addition, Division profit
included €54 million in severance charges for the fiscal year.
Beginning with fiscal 2016, the Division includes the geared
motors segment that was previously reported in the Process
Industries and Drives Division. In addition, minor business ac-
tivities of the Division were bundled centrally and are reported
within Corporate Items. If these changes had already been
effective in fiscal 2015, profit margin would have been 16.9%.
12 Combined Management Report
A.3.2.7 PROCESS INDUSTRIES AND DRIVES
Fiscal year
% Change
(in millions of €)
2015
2014
Actual
Orders
9,337
A.3.2.8 HEALTHCARE
9,968
Comp.
(10)%
Revenue
9,894
9,645
3%
(3)%
Profit
536
773 (31)%
Profit margin
5.4%
8.0%
(6)%
2014
(in millions of €)
Revenue
14
Centrally managed portfolio activities (CMPA) included a gain
of €1.4 billion on the disposal of Siemens' stake in BSH Bosch
und Siemens Hausgeräte GmbH (BSH). This was partly offset
by an equity investment loss of €275 million related to Unify
Holdings B.V. (Unify), an impairment of €138 million related to
Siemens' stake in Primetals Technologies Ltd. and losses from
other businesses. For comparison, fiscal 2014 included equity
investment income from BSH.
As in the past, income from Siemens Real Estate continues to
be highly dependent on disposals of real estate. In fiscal 2015,
the disposals of real estate were lower than in the prior-year.
Corporate items were influenced by a number of items, includ-
ing €196 million in severance charges for corporate reorganiza-
tion of support functions.
The change in Eliminations, Corporate Treasury and other rec-
onciling items included primarily negative effects related to the
change in fair value of interest rate derivatives.
A.3.3 Income
(in millions of €, earnings per share in €)
Power and Gas
Wind Power and Renewables
Energy Management
Building Technologies
Mobility
13
Digital Factory
Healthcare
Industrial Business
Profit margin Industrial Business
Financial Services (SFS)
Reconciliation to Consolidated Financial Statements
Income from continuing operations before income taxes
Income tax expenses
Income from continuing operations
Income from discontinued operations, net of income taxes
Net income
Basic earnings per share
ROCE
Fiscal year
% Change
Process Industries and Drives
Orders
Combined Management Report
(862)
Profit
Profit margin
2015
13,349 12,126
12,930 11,736
2,184 2,072
16.9% 17.7%
Fiscal year
2014
% Change
Actual
Comp.
Corporate items
(709)
(446)
10%
10%
5%
3%
All businesses posted order and revenue growth, with the
largest increase coming from the imaging and therapy sys-
tems business. All regions contributed to volume growth and
Centrally carried pension expense
(393)
3%
Amortization of intangible assets
acquired in business combinations
(543)
(498)
Eliminations, Corporate Treasury
and other reconciling items
(366)
(48)
Reconciliation to Consolidated
Financial Statements
(1,138)
(440)
Deferred tax assets
Operational failures and quality problems in our value
chain processes: Our value chain comprises all steps, from
research and development to supply chain management, pro-
duction, marketing, sales and services. Operational failures in
our value chain processes could result in quality problems or
potential product, labor safety, regulatory or environmental
risks. Such risks are particularly present in our Industrial Busi-
ness in relation to our production and construction facilities,
which are located all over the world and have a high degree of
organizational and technological complexity. From time to
time, some of the products we sell might have quality issues
resulting from the design or manufacture of such products or
of the commissioning of such products or from the software
integrated into them. Our Healthcare business, for example, is
subject to regulatory authorities including the U.S. Food and
Drug Administration and the European Commission's Health
and Consumer Policy Department, which require us to make
specific efforts to safeguard our product quality. If we are not
able to comply with these requirements, also our reputation
may be adversely affected. Several measures for quality im-
provement and claim prevention are established and the in-
creased use of quality management tools is improving visibil-
ity and assists us strengthen the root cause and prevention
process.
28 Combined Management Report
6,612
Capital structure
Capital efficiency
We do not expect significant effects from discontinued opera-
tions in fiscal 2016. For comparison, income from discontinued
operations of €2.0 billion in fiscal 2015 included the €1.7 billion
gain from the sale of our hearing aid business. We anticipate
our tax rate for fiscal 2016 to be in the range of 26% to 30%.
year level despite higher interest expense related primarily to
issuance of bonds in fiscal 2015.
Combined Management Report
24
Within our Reconciliation to Consolidated Financial Statements
we expect CMPA to turn negative in fiscal 2016 and results to
be volatile during the year. Expenses for Corporate items are
expected to be approximately €0.5 billion, with costs in the
second half-year higher than in the first half. While we antici-
pate that SRE will continue with real estate disposals depend-
ing on market conditions, we expect gains from disposals to be
lower in fiscal 2016 than in fiscal 2015. Centrally carried pen-
sion expenses are expected to total approximately €0.5 billion
in fiscal 2016. Amortization of intangible assets acquired in
business combinations rose substantially to €168 million in the
fourth quarter of fiscal 2015 and we expect a similar level in the
four quarters of fiscal 2016. Eliminations, Corporate Treasury
and other reconciling items are anticipated to be on the prior-
Overall, we expect an aggregate profit margin for our Industrial
Business of 10% to 11%, compared to 10.1% in fiscal 2015. We
expect SFS, which is reported outside Industrial Business, to
continue to be highly profitable and achieve a return on equity
(ROE) within its target range in fiscal 2016.
For fiscal 2016, we expect all our industrial businesses to be in
or at least close to their target ranges for profit margin as de-
fined in our financial performance system (see → A.2 FINANCIAL
PERFORMANCE SYSTEM) excluding severance charges and integra-
tion costs.
Our forecast for net income and corresponding basic EPS is
based on a number of other assumptions: We assume that
momentum in the market environment for our high-margin
short-cycle businesses will pick up in the second half of fiscal
2016. As part of our One Siemens framework, we target a total
cost productivity improvement of 3% to 4% in fiscal 2016.
Therein, we expect execution of »Vision 2020«< measures to im-
prove our cost position by an additional approximately €0.4 bil-
lion to €0.5 billion in fiscal 2016, following cost savings of ap-
proximately €0.4 billion already achieved in fiscal 2015. Also,
we assume continued solid project execution. Furthermore, we
expect modest positive currency effects on income in the first
half of fiscal 2016. Offsetting effects include pricing pressure
on our offerings estimated at around 2% in fiscal 2016, with the
Power and Gas Division, the Wind Power and Renewables Divi-
sion and Healthcare being affected the most. Furthermore, we
expect upward pressure on costs from wage inflation of around
3% to 4%. Also, we plan for continued targeted investments in
selling and R&D expenses aimed at organic volume growth
and strengthening our capacities for innovation.
from net income in the range of €5.90 to €6.20 as compared to
€5.18, which we achieved in fiscal 2015 excluding €3.66 per
share in portfolio gains from the divestments of the hearing aid
business and our stake in BSH.
We expect net income in fiscal 2016 to increase significantly
compared to €4.4 billion, which we achieved in fiscal 2015 ex-
cluding €3.0 billion in portfolio gains from the divestment of
the hearing aid business and our stake in BSH. Including those
gains in the basis of comparison, we expect net income in fiscal
2016 to decline significantly year-over-year. We expect basic EPS
Profitability
We anticipate that orders in fiscal 2016 will materially exceed
revenue for a book-to-bill ratio clearly above 1. In particular, we
expect order growth driven by substantial increases in the
Power and Gas and Wind Power and Renewables Divisions,
with particularly Power and Gas benefiting from a large con-
tract win in Egypt, among other factors.
We expect revenue growth to benefit from conversion of our
order backlog (defined as the sum of order backlogs of our
Industrial Business) which totaled €110 billion as of Septem-
ber 30, 2015. From this backlog, we expect to convert approxi-
mately €39 billion of past orders into current revenue in fiscal
2016. Within this amount, we expect for fiscal 2016 approxi-
mately €11 billion in revenue conversion from the €42 billion
backlog of the Power and Gas Division, approximately €8 billion
in revenue conversion from the €12 billion backlog of the En-
ergy Management Division, approximately €6 billion in revenue
conversion from the €27 billion backlog of the Mobility Divi-
sion, approximately €5 billion in revenue conversion from the
€14 billion backlog of the Wind Power and Renewables Division,
approximately €4 billion in revenue conversion from the €6 bil-
lion backlog of the Process Industries and Drives Division, ap-
proximately €2 billion in revenue conversion from the €3 billion
backlog of the Building Technologies Division, approximately
€2 billion in revenue conversion from the €4 billion backlog of
Healthcare and approximately €2 billion in revenue conversion
from the €2 billion backlog of the Digital Factory Division.
We expect all industrial businesses to contribute to organic rev-
enue growth, except for the Process Industries and Drives Divi-
sion, which has been impacted by lower order intake in previ-
ous quarters. We assume that Mobility will be a main growth
driver, with a clear increase in organic revenue. We also expect
low to mid single-digit organic growth at the other industrial
businesses, led by Wind Power and Renewables. Furthermore,
we expect that Power and Gas will increase its reported revenue
significantly, benefiting from the acquisition of Dresser-Rand.
portfolio effects, particularly the acquisition of Dresser-Rand at
the end of the third quarter of fiscal 2015, to add approximately
2 percentage points to our revenue growth rate in fiscal 2016.
Furthermore, we assume that momentum in the market environ-
ment for our high-margin short-cycle businesses will pick up in
the second half of fiscal 2016.
For fiscal 2016, we expect markets for the Digital Factory Divi-
sion to be slow, with momentum picking up in the second half
of the fiscal year. Differences in growth rates between Siemens'
reporting regions are expected to be less pronounced than in
prior years. Overall, we expect market growth to benefit from
consumer-oriented manufacturing industries, especially in in-
dustrialized countries. The trend towards digitalization related
businesses is expected to continue and drives the industry soft-
ware market, which is forecast to grow clearly. As for China, we
expect the decline of growth in industrial output to take a toll
on our business development, but expect the local market to
continue to be attractive in the mid and long-term. While we
expect the current decline in raw material prices to reach a bot-
tom in fiscal 2016, we do not expect a rebound in the short
term. We therefore anticipate demand from the mining and the
oil and gas industries to continue to be weak in fiscal 2016.
The markets served by the Process Industries and Drives
Division are expected to be flat in fiscal 2016. In general, we ob-
serve a trend towards increased demand for technology to im-
prove competitiveness through increased productivity, flexibility
and reliability. We expect growth to be driven by the food and
beverage sector as well as the chemical and pharmaceuticals in-
dustries. Demand from the oil and mining industries is expected
to decline further year-over-year, mostly in upstream markets.
For fiscal 2016, we expect markets for Healthcare to continue its
growth based on demographic trends. In emerging markets, we
expect continued demand, in particular for entry-level products
and solutions, as these countries build up their healthcare infra-
structure to provide their populations with affordable access to
modern medical technology, including cost efficient solutions
in rural areas. On a regional basis we expect healthcare markets
to grow moderately in the U.S. and in major emerging markets
such as China, India and Brazil, while demand in Europe, largely
consisting of replacement business, is anticipated to stay on the
prior-year level. The market for imaging products and solutions
is expected to remain on the prior-year level as growing demand
for imaging procedures is largely absorbed by higher utilization
of existing systems, while continued price aggressiveness in
the market affects revenue growth from new systems. The trend
to expand healthcare access is expected to benefit markets for
clinical products and suppliers with a broad spectrum of prod-
ucts and services. For diagnostics solutions, we expect consoli-
dation to continue leading to an increasing industrialization of
laboratories, playing into suppliers with experience in automa-
tion and digitalization.
Our SFS Division is geared to Siemens' Industrial Business and
its markets. As such SFS is, among other factors, influenced by
the overall business development of the markets served by our
Industrial Business and will continue to focus its business
scope on those areas of intense domain know-how limiting risk
and exposure going forward.
A.8.1.3 SIEMENS GROUP
Following the financing measures executed during fiscal 2015,
we expect our capital structure ratio in fiscal 2016 to be below
but near 1.0. In November 2015, we announced a new share
buyback of up to €3 billion ending at the latest on Novem-
ber 15, 2018. The buybacks will be made under the current
authorization granted at the Annual Shareholders' Meeting on
January 27, 2015. Shares repurchased may be used for cancel-
ling and reducing capital stock; for issuing shares to employ-
ees, to members of the Managing Board and board members of
affiliated companies; and for meeting obligations from or in
connection with convertible bonds or warrant bonds.
We are basing our outlook for fiscal 2016 for the Siemens Group
and its segments on the above-mentioned expectations and
assumptions regarding the overall economic situation and spe-
cific market conditions for the next fiscal year.
matters.
We are exposed to currency translation effects, particularly in-
volving the US$ and currencies of emerging markets, particu-
larly the Chinese Yuan. During fiscal 2015, the average exchange
rate conversion for our large volume of US$-denominated reve-
nue was US$1.15 per €. While we expect volatility in global cur-
rency markets to continue in fiscal 2016, we have improved our
natural hedge on a global basis through geographic distribu-
tion of our production facilities during the past. Nevertheless,
Siemens is still a net exporter from the Euro zone to the rest of
the world, so a weak Euro is principally favorable for our busi-
ness and a strong Euro is principally unfavorable. In addition to
the natural hedging strategy just mentioned, we also hedge
currency risk in our export business using derivative financial
instruments. We expect these steps to help us limit effects on
income related to currency in fiscal 2016.
Revenue growth
Despite anticipated further softening in the macroeconomic
environment and continuing complexity in the geopolitical
environment in fiscal 2016, we expect moderate revenue
growth, net of effects from currency translation. We expect
Combined Management Report
23
This outlook excludes charges related to legal and regulatory
For fiscal 2016, we expect markets served by the Mobility Divi-
sion to continue to grow moderately. Investments by rail oper-
ators in Germany are expected to stay on a high level. Market
growth in Russia depends on improvement of economic condi-
tions and geopolitical ease. For the Middle East and Africa,
we expect tenders of further large turnkey and infrastructure
projects. In China, we expect investments in high-speed trains,
urban transport and rail infrastructure to continue to drive
growth. In India, market growth should continue from planned
projects for commuter and high-speed passenger lines, freight
rail, and related infrastructure as part of the infrastructure
build out and reforms by the Government. Overall, local rail
transport is expected to gain importance as urbanization is pro-
gressing. In emerging countries, rising incomes are expected
to result in greater demand for public transport solutions.
A.8.1.4 OVERALL ASSESSMENT
Overall, the actual development for Siemens and its Segments
may vary, positively or negatively, from our outlook due to the
risks and opportunities described below or if our expectations
and assumptions do not materialize.
IT security: Our business portfolio is dependent on digital tech-
nologies. We observe a global increase of IT security threats and
higher levels of professionalism in computer crime, which pose
a risk to the security of products, systems and networks and the
confidentiality, availability and integrity of data. We are facing
active cyber threats from sophisticated adversaries that are
supported by organized crime and nation states engaged in
economic espionage. We attempt to mitigate these risks by
employing a number of measures, including employee training,
comprehensive monitoring of our networks and systems, and
maintenance of backup and protective systems such as fire-
walls and virus scanners. Our contractual arrangements with
service providers aim to ensure that these risks are reduced in
an adequate manner. Nonetheless, our systems, products, solu-
tions and services, as well as those of our service providers re-
main potentially vulnerable to attacks. Such attacks could po-
tentially lead to the publication, manipulation, espionage or
leakage of information, improper use of our systems, defective
products, production downtimes and supply shortages, with
potential adverse effects on our reputation, our competitive-
ness and results of our operations.
A.8.3.2 OPERATIONAL RISKS
areas of mergers, acquisitions, divestments and carve outs.
This includes post closing actions as well as claim management
and centrally managed portfolio activities.
Portfolio measures, at-equity investments, other invest-
ments and strategic alliances: Our strategy includes divesting
activities in some business areas and strengthening others
through portfolio measures, including mergers and acquisi-
tions. With respect to divestments, we may not be able to divest
some of our activities as planned, and the divestitures we
do carry out could have a negative impact on our business,
financial condition, results of operations and our reputation.
Mergers and acquisitions are inherently risky because of diffi-
culties that may arise when integrating people, operations,
technologies and products. There can be no assurance that any
of the businesses we acquired recently can be integrated suc-
cessfully and in a timely manner as originally planned, or that
they will perform as anticipated once integrated. In addition,
we may incur significant acquisition, administrative and other
costs in connection with these transactions, including costs
related to integration of acquired businesses. Furthermore,
portfolio measures may result in additional financing needs
and adversely affect our capital structure. Acquisitions led to
substantial addition to intangible assets, including goodwill in
our Statements of Financial Position. If we were to encounter
continuing adverse business developments or if we were other-
wise to perform worse than expected at acquisition activities,
then these intangible assets, including goodwill, might have to
be impaired, which could adversely affect our business, finan-
cial condition and results of operations. Our investment port-
folio consists of investments held for purposes other than trad-
ing. Furthermore, we hold other investments, for example,
Atos SE and OSRAM Licht AG. Any factors negatively influenc-
ing the financial condition and results of operations of our
at-equity investments and other investments, could have an
adverse effect on our equity pick-up related to these invest-
ments or may result in a related write-off. In addition, our busi-
ness, financial condition and results of operations could also be
adversely affected in connection with loans, guarantees or
non-compliance with financial covenants related to these
at-equity investments and other investments. Furthermore,
such investments are inherently risky as we may not be able to
sufficiently influence corporate governance processes or busi-
ness decisions taken by our equity investments, other invest-
ments and strategic alliances that may have a negative effect
on our business. In addition, joint ventures bear the risk of dif-
ficulties that may arise when integrating people, operations,
technologies and products. Strategic alliances may also pose
risks for us because we compete in some business areas with
companies with which we have strategic alliances. Besides
other measures, we handle these risks with standardized pro-
cesses as well as dedicated roles and responsibilities in the
and by our ability to sustain them. We constantly control and
monitor the progress of these projects and initiatives using
standardized controlling and milestone tracking approaches.
27
Combined Management Report
Strategic alignments and cost-cutting initiatives: We are in a
continuous process of strategic alignments and constantly
engage in cost-cutting initiatives, including ongoing capacity
adjustment measures and structural initiatives. Consolidation
of business activities and manufacturing facilities, and the
streamlining of product portfolios are also part of these cost
reduction efforts. These measures may not be implemented as
planned, may turn out to be less effective than anticipated, may
become effective later than estimated or may not become effec-
tive at all. Any future contribution of these measures to our
profitability will be influenced by the actual savings achieved
Changes of regulations, laws and policies: As a diversified
company with global businesses we are exposed to various
product-related regulations, laws and policies influencing our
processes. Some jurisdictions around the world have adopted
certain regulations, laws and policies requiring us to extend
our recycling efforts, limit the sourcing and usage of certain
raw materials, and request that suppliers provide additional
due diligence and disclosures on sourcing and usage of the reg-
ulated raw materials. We exercise our duty within the supply
chain, as our customers request transparency in the supply
chain and as the obligation to do so already forms an element
of customer contracts. If we are unable to achieve sufficient
confidence throughout our supply chain, or if any risks associ-
ated with these kinds of regulations, laws and policies were to
materialize, our reputation could also be adversely affected.
velopment of macroeconomic conditions and their impact on
our financial results. In contrast, many activities of the Digital
Factory Division and parts of Process Industries and Drives Divi-
sion and in the Energy Management Division, react quickly to
volatility in market demand. If the moderate recovery of macro-
economic growth stalls again and if we are not successful in
adapting our production and cost structure to subsequent
changes to conditions in the markets in which we operate,
there can be no assurance that we will not experience adverse
effects. For example, it may become more difficult for our cus-
tomers to obtain financing and as a result they may modify, de-
lay or cancel plans to purchase our products and services or to
follow through on purchases or contracts already executed.
Furthermore, prices may decline as a result of adverse market
conditions to a greater extent than currently anticipated. In ad-
dition, contracted payment terms, especially regarding the
level of advance payments by our customers relating to long-
term projects, may become less favorable, which could nega-
tively impact our financial condition. Siemens' global setup
with operations in almost all relevant economies, the wide
variety of our offerings following different business cycles as
well as different business models (e.g. product, software, solu-
tion, project and service-business) help us to soften the impact
of an adverse development in a single market.
In general, due to the significant proportion of long-cycle busi-
nesses in our Divisions and the importance of long-term con-
tracts for Siemens, there is usually a time lag between the de-
Economic and political conditions (macroeconomic environ-
ment): We still see a high level of uncertainty regarding the
global economic outlook. The main downside risks stem from
the weakening growth in China and potential corrections or
even a collapse in real estate, the banking sectors or the stock
markets. The downturn could get worse, if Chinese authorities
fail to reform the state-owned enterprises in the industry and
banking sector as well, to liberalize and open the economy fur-
ther. A rapid tightening of monetary policy by the U.S. Federal
Reserve could cause a depreciation spiral among emerging
market currencies. This could lead to a renewed emerging mar-
ket crisis as debt levels of emerging market enterprises have
risen, making them dependent on favorable global financial
conditions to service foreign currency-denominated debts. Fur-
ther risks stem from increased global danger of terrorism, polit-
ical tensions (e.g. Syria and Ukraine), raw material prices, con-
fidence in the automotive sector, and low oil and gas prices.
With the closing of the acquisition of Dresser-Rand we are
further exposed to volatility in global oil and gas markets.
in our relative market position. Furthermore, we see a risk that
suppliers (and to some extent even customers), especially from
emerging countries (e.g. China), could develop into serious
competitors for Siemens. We address this risk with various mea-
sures, for example, benchmarking, strategic initiatives, sales
push initiatives, executing productivity measures and target
cost projects, rightsizing of factories, exporting from low-cost
countries to price sensitive markets, and optimizing our product
portfolio. The markets in which our businesses operate experi-
ence rapid and significant changes due to the introduction of
innovative technologies. Our operating results depend to a sig-
nificant extent on our ability to anticipate and adapt to changes
in our markets and to reduce the costs of producing our prod-
ucts. Introducing new products and technologies requires a sig-
nificant commitment to research and development, which in
return requires expenditure of considerable financial resources
that may not always result in success. Our results of opera-
tions may suffer if we invest in technologies that do not oper-
ate or may not be integrated as expected, or that are not ac-
cepted in the market place as anticipated, or if our products or
systems are not introduced to the market in a timely manner,
particularly compared to our competitors, or become obsolete.
We constantly apply for new patents and actively manage our
intellectual property portfolio to secure our technological posi-
tion. However, our patents and other intellectual property may
not prevent competitors from independently developing or
selling products and services that are similar to or duplicates
of ours.
Combined Management Report
Competitive markets and technology changes: The world-
wide markets for our products and solutions are highly compet-
itive in terms of pricing, product and service quality, product
development and introduction time, customer service, financing
terms, disruptive technologies and shifts in market demands.
We face strong existing competitors and also competitors from
emerging markets, which may have a better cost structure.
Some industries in which we operate are undergoing consoli-
dation, which may result in stronger competition and a change
A.8.3.1 STRATEGIC RISKS
Below we describe the risks that could have a material adverse
effect on our business, financial condition (including effects on
assets, liabilities and cash flows), results of operations and rep-
utation. The order in which the risks are presented in each of
the four categories reflects the currently estimated relative ex-
posure for Siemens associated with these risks and thus pro-
vides an indication of the risks' current importance to us. Addi-
tional risks not known to us or that we currently consider
immaterial may also negatively impact our business objectives
and operations. Unless otherwise stated, the risks described
below relate to all of our segments.
A.8.2 Risk management
A.8.2.1 BASIC PRINCIPLES OF RISK MANAGEMENT
Our risk management policy stems from a philosophy of pursu-
ing sustainable growth and creating economic value while
managing appropriate risks or opportunities and avoiding inap-
propriate risks. As risk management is an integral part of how
we plan and execute our business strategies, our risk manage-
ment policy is set by the Managing Board. Our organizational
and accountability structure as of September 30, 2015 requires
each of the respective managements of our Industrial Business,
SFS, regions and Corporate Units to implement risk manage-
ment programs that are tailored to their specific industries and
responsibilities, while being consistent with the overall policy.
A.8.2.2 ENTERPRISE RISK MANAGEMENT PROCESS
We have implemented and coordinated a set of risk manage-
ment and control systems which support us in the early recog-
nition of developments that could jeopardize the continuity of
our business. The most important of these systems include our
enterprise-wide processes for strategic planning and manage-
ment reporting. Strategic planning is intended to support us in
considering potential risks well in advance of major business
decisions, while management reporting is intended to enable
us to monitor such risks more closely as our business pro-
gresses. Our internal auditors regularly review the adequacy
and effectiveness of our risk management system. Accordingly,
if deficits are detected, it is possible to adopt appropriate mea-
sures for their elimination. This coordination of processes and
procedures is intended to help ensure that the Managing Board
and the Supervisory Board are fully informed about significant
risks in a timely manner.
Risk management at Siemens builds on a comprehensive, inter-
active and management-oriented Enterprise Risk Management
(ERM) approach that is integrated into the organization and
that addresses both risks and opportunities. Our ERM approach
is based on the worldwide accepted Enterprise Risk Manage-
ment - Integrated Framework (2004) developed by the Commit-
tee of Sponsoring Organizations of the Treadway Commission
(COSO). The framework connects the ERM process with our
financial reporting process and our internal control system. It
considers a company's strategy, the efficiency and effective-
ness of its business operations, the reliability of its financial
reporting as well as compliance with relevant laws and regula-
tions to be equally important.
The ERM process aims for early identification and evaluation
of, and response regarding, risks and opportunities that could
materially affect the achievement of our strategic, operational,
financial and compliance objectives. The time horizon covered
by ERM is typically three years. Our ERM is based on a net risk
Combined Management Report
We anticipate further softening in the macroeconomic environ-
ment and continuing complexity in the geopolitical environ-
ment in fiscal 2016. Nevertheless, we expect moderate revenue
growth, net of effects from currency translation. We anticipate
that orders will materially exceed revenue for a book-to-bill ratio
clearly above 1. For our Industrial Business, we expect a profit
margin of 10% to 11%. Furthermore, we expect basic EPS from
net income in the range of €5.90 to €6.20 as compared to €5.18,
which we achieved in fiscal 2015 excluding €3.66 per share in
portfolio gains from the divestments of the hearing aid business
and our stake in BSH. This outlook assumes that momentum in
the market environment for our high-margin short-cycle busi-
nesses will pick up in the second half of fiscal 2016. Additionally,
it excludes charges related to legal and regulatory matters.
25
approach, addressing risks and opportunities remaining after
the execution of existing control measures. In order to provide
a comprehensive view on our business activities, risks and
opportunities are identified in a structured way combining ele-
ments of both top-down and bottom-up approaches. Risks and
opportunities are generally reported on a quarterly basis. This
regular reporting process is complemented by an ad-hoc report-
ing process that aims to escalate critical issues in a timely man-
ner. Relevant risks and opportunities are prioritized in terms of
impact and likelihood, considering different perspectives, in-
cluding business objectives, reputation and regulatory matters.
The bottom-up identification and prioritization process is sup-
ported by workshops with the respective managements of the
Industrial Business, SFS, regions and Corporate Units. This top-
down element ensures that potential new risks and opportuni-
ties are discussed at management level and are included in the
subsequent reporting process, if found to be relevant. Reported
risks and opportunities are analyzed regarding potential cumu-
lative effects and are aggregated within and for each of the
organizations mentioned above.
Responsibilities are assigned for all relevant risks and opportu-
nities with the hierarchical level of responsibility depending on
the significance of the respective risk or opportunity. In a first
step, assuming responsibility for a specific risk or opportunity
involves deciding upon one of our general response strategies.
Our general response strategies with respect to risks are avoid-
ance, transfer, reduction or acceptance of the relevant risk. Our
general response strategies with respect to opportunities are
partial or complete realization of the relevant opportunity. In a
second step, responsibility for a risk or opportunity also involves
the development, initiation and monitoring of appropriate re-
sponse measures corresponding to the chosen response strat-
egy. These response measures have to be specifically tailored to
allow for effective risk management. Accordingly, we have de-
veloped a variety of response measures with different charac-
teristics. For example, we mitigate the risk of fluctuations in
currency and interest rates by engaging in hedging activities.
Regarding our long-term projects, systematic and comprehen-
sive project management with standardized project milestones,
including provisional acceptances during project execution, and
complemented by clearly defined approval processes assists us
in identifying and responding to project risks at an early stage,
even before entering the bidding phase. Furthermore, we main-
tain appropriate insurance levels for potential cases of damage
and liability risks in order to reduce our exposure to such risks
and to avoid or minimize potential losses. Among others, we
address the risk of fluctuation in economic activity and cus-
tomer demand by closely monitoring the macroeconomic con-
ditions and developments in relevant industries, and by adjust-
ing capacity and implementing cost-reduction measures in a
timely and consistent manner, if deemed necessary.
A.8.2.3 RISK MANAGEMENT ORGANIZATION
AND RESPONSIBILITIES
To oversee the ERM process and to further drive the integration
and harmonization of existing control activities to align with
legal and operational requirements, the Managing Board estab-
lished a Risk Management and Internal Control Organization,
headed by the Chief Risk & Internal Control Officer, and a Corpo-
rate Risk and Internal Control Committee (CRIC). The CRIC ob-
tains risk and opportunity information from the Risk Commit-
tees established at the Industrial Business, SFS, and regional
organizations and from the heads of Corporate Units. In order
to allow for a meaningful discussion on Siemens group level
individual risk and opportunities of similar cause-and-effect
nature are aggregated into risk and opportunity themes. This
aggregation naturally results in a mixture of risks with a pri-
marily qualitative and primarily quantitative risk assessment.
Accordingly, a purely quantitative assessment of risk themes is
not foreseen. This information then forms the basis for the
evaluation of the company-wide risk and opportunity situation.
The CRIC reports to and supports the Managing Board on mat-
ters relating to the implementation, operation and oversight of
the risk and internal control system and assists the Managing
Board for example in reporting to the Audit Committee of the
Supervisory Board. The CRIC is composed of the Chief Risk &
Internal Control Officer, as the chairperson, members of the
Managing Board and selected heads of Corporate Units.
A.8.3 Risks
26
price pressure, particularly in its solutions business, mainly
due to aggressive competition.
Within our One Siemens financial framework, we in general
aim to achieve a ROCE in the range of 15% to 20%. For fiscal
2016, we expect ROCE to show a double-digit result but to come
in substantially below the amount reached in fiscal 2015, which
benefited from the sale of businesses described earlier.
For the markets served by the Building Technologies Division,
we expect solid growth in fiscal 2016. On a geographic basis,
we expect the U.S., China, India and the Middle East to be the
main growth drivers. Most of the European countries are antic-
ipated to continue their recovery, led by Germany and some of
the Northern European countries. In countries with relatively
strong dependence on the development of commodity mar-
kets, we anticipate growth in the Division's markets to slow
down in fiscal 2016. We expect the Division to see continuing
Investing activities
Additions to intangible assets and property, plant and equip-
ment from continuing operations was €1.9 billion in fiscal 2015.
Within the Industrial Business ongoing investments related
mainly to technological innovations; extending our capacities
for designing, manufacturing and marketing new solutions; im-
proving productivity and our global footprint, such as in Brazil,
Egypt and India; and replacements of fixed assets. These invest-
ments amounted to €1.4 billion in fiscal 2015. The remaining
portion in fiscal 2015, €0.5 billion, related mainly to SRE, includ-
ing significant amounts related to office projects, such as new
corporate office buildings in Germany. SRE is responsible for
uniform and comprehensive management of Company real es-
tate worldwide, and supports the Industrial Business and cor-
porate activities with customer-specific real estate solutions.
With regard to capital expenditures for continuing operations,
we expect a spending increase year-over-year in fiscal 2016.
Focus areas of ongoing investing activities of the Industrial
Business are:
The investments of Power and Gas are focused on enhancing
productivity and strategic localization, mainly relating to our
large gas turbines and generators business, including a burner
test center for gas turbines in Germany.
The investments of Wind Power and Renewables are focused
on the extension, modernization and optimization of existing
plants to allow for the large-scale manufacturing of innovative
products, including new production and service facilities for
blades in the U.K. and an offshore wind power turbines plant in
Germany.
With our ability to generate positive operating cash flows, our
total liquidity (defined as cash and cash equivalents as well
as available-for-sale financial assets) of €11.1 billion, and our
€7.1 billion in unused lines of credit, and given our credit ratings
at year-end, we believe that we have sufficient flexibility to fund
our capital requirements. Also in our opinion, our operating net
working capital is sufficient for our present requirements.
Energy Management is spending the larger portion of its cap-
ital expenditures for innovation, particularly in the low voltage
and product business. Further investments are related to re-
placement of fixed assets and expansion of factories and tech-
nical equipment.
Mobility is spending large portions of its capital expenditures
for improving its respective positions in growing market seg-
ments, including investments into its infrastructure, capital-
ized R&D expenses as well as project related investments.
Major spending of Digital Factory relates to the factory auto-
mation and control products businesses, including investments
in production facilities in China.
The investments of Process Industries and Drives are focused
on upgrading production machines and replacement of fixed
assets, particularly relating to the large drives business.
Healthcare's investments are mainly driven by the diagnostics
business, including large amounts relating to intangible assets,
particularly capitalized R&D expenses for new platforms.
Combined Management Report
19
The investments of Building Technologies mainly relate to the
control products and systems business, particularly innovation
projects.
A.6 Overall assessment of the economic position
(1,938)
4,674
(40)
The change in short-term debt and other financing activi-
ties included the net proceeds from the issuance of commer-
cial paper, partly offset by cash outflows related to the settle-
ment of financial derivatives used to hedge currency exposure
in our financing activities.
22 Combined Management Report
| Free cash flow
(in millions of €)
Cash flows from operating activities
Additions to intangible assets and property, plant and equipment
Free cash flow
(310)
Continuing
operations
Fiscal year 2015
Continuing and
6,881
operations
(270)
discontinued operations
(1,897)
4,984
Discontinued
In fiscal 2015, we accomplished numerous objectives included
in our "Vision 2020" concept. We started the fiscal year with a
leaner organizational setup more geared towards our growth
markets. We got closer to customers and enhanced our innova-
tion capacity with targeted spending increases for selling and
R&D. This has already improved customer satisfaction. Further-
more, we made significant progress in adjusting our portfolio.
With the acquisitions of Dresser-Rand and Roll-Royce's aero-de-
rivative gas turbine and compressor business, we strengthened
our position in the area of distributed power generation. Mean-
while we sold our hearing aid business and our stake in BSH,
among others. Our market environment in fiscal 2015 was soft-
ening towards the end of the fiscal year. While we saw growth,
such as in consumer-oriented markets, and continued strong
demand for infrastructure solutions, some of our key industries
like the oil and gas industry and mining were under severe pres-
sure, and a number of emerging economies that were growth
drivers in recent years showed signs of weakness. Thus strin-
gent execution of "Vision 2020" became even more important.
In fiscal 2015, we began to implement measures to reduce costs
by €1 billion on a sustainable basis. With cost savings of approx-
imately €0.4 billion already achieved in fiscal 2015, we are
ahead of our plans. Also we improved our project execution,
resulting in sharply lower project charges year-over-year. While
we have already successfully addressed several businesses that
were not fulfilling our expectations regarding profitability, we
have completed a review of our remaining underperforming
businesses during fiscal 2015 and decided to restructure those
businesses primarily through our own efforts, with clear goals
and timetables. At the end of October 2015, shortly after the
end of fiscal 2015, we completed the share buyback program we
launched in May 2014. Between these dates we repurchased
43.1 million Siemens shares in the amount of €4.0 billion.
Within this total, during fiscal 2015 we repurchased 29.4 million
Siemens shares in the amount of €2.7 billion.
We report Free cash flow as a supplemental liquidity measure:
Revenue for fiscal 2015 was €75.6 billion, up 6% compared to
the prior fiscal year. While all industrial businesses posted
increases, growth was due primarily to strong currency trans-
lation effects. On an organic basis, excluding currency trans-
lation and portfolio effects, revenue came in 1% lower year-
over-year, with half of the industrial businesses increasing
revenue and the other half reporting a decline year-over-year.
Combined Management Report
21
A.8 Report on expected developments
and associated material opportunities and risks
A.8.1 Report on expected developments
A.8.1.1 WORLDWIDE ECONOMY
Deceleration in emerging markets and especially China weigh
on the outlook for 2016 as well. Global GDP is expected to ex-
pand by 2.9%, with fixed investments growing by 3.4%. Fixed
investments in advanced countries (+3.6%) are expected to
grow more strongly than in emerging countries (+3.3%) be-
cause of some investment backlog in the former and over-
capacities in the latter.
Also in November 2015, Siemens announced the sale of its 49%
stake in Unify to Atos. While ownership of the Unify stake has
adversely affected Siemens' financial results in fiscal 2015 and
prior fiscal years, the transaction is not expected to result in a
material effect. Closing of the transaction, which is subject to
the approvals of the regulatory and antitrust authorities, is
expected in the second quarter of fiscal 2016.
The Chinese economy is expected to continue its rebalancing
path towards a more consumption- and service-driven econ-
omy, with GDP growth of 6.3%, which is lower than in calendar
2015. In this view, industries that have been driving the econ-
omy in the past will keep on consolidating while consump-
tion-oriented sectors and the service sector gain importance.
Meanwhile, fixed investments are likely to grow more slowly
than the overall economy, at around 4.4% in calendar 2016. For
other emerging markets the outlook is mixed. While Brazil and
Russia are expected to remain in recession, the Indian economy
is expected to continue developing strongly, with GDP growth
rates forecast at 7.5% to 8% in the coming years. Europe is ex-
pected to remain on a moderate recovery path, with Italy and
France again the slowest-growing among the larger economies
and Spain and the U.K. growing the fastest. The German econ-
omy is expected to benefit from the ongoing European recov-
ery, and growth should accelerate compared to calendar 2015.
For the U.S., GDP growth should also pick up slightly. While the
negative effects of low oil prices on oil and gas-related invest-
ments should start to ease, the positive effects, especially on
private consumption, should support economic growth in that
sector. The U.S. housing recovery is expected to continue.
The forecasts presented here for GDP and fixed investments are
based on a report from IHS Global Insight dated October 15,
2015.
A.8.1.2 MARKET DEVELOPMENT
Following weak demand in fiscal 2015, we expect markets for
the Power and Gas Division to pick up in fiscal 2016, particu-
larly with regard to fossil power generation markets, which are
anticipated to grow year-over-year due to large projects in
emerging countries. For the compression market, we expect
demand in fiscal 2016 to stay on the low level of fiscal 2015 due
mainly to continuously low capital expenditures for up- and
downstream applications in the oil and gas industry. Overall,
we assume a shift to more flexible, decentralized power gener-
ation and stronger demand for combined heat and power gen-
eration and off-grid oil and gas applications, particularly in
Europe, China and the U.S.
For the markets served by the Wind Power and Renewables
Division, we expect a slight decline in fiscal 2016 with long-
term outlook still intact. Within this change, we expect lower
demand in the larger market for onshore wind power, particu-
larly in the U.S. and Brazil, only partly offset by substantial
growth in the smaller market for offshore wind power, which is
driven by Europe. Market development depends strongly on
energy policy, including tax incentives in the U.S. and regula-
tory frameworks in Germany and the U.K. While we expect Asia
and the Americas to offer good growth prospects for offshore
wind power in the medium term, we expect only limited mar-
ket volume in these markets in the short term. Overall, we ex-
pect a continuation of the trend towards an increasing share of
renewable energy within the energy mix. Within the onshore
wind power market, we expect a continued rise in demand in
the low-wind segment.
From a financial perspective, in fiscal 2015, we reached all our
targets set for our primary measures in the Annual Report for
fiscal 2014. Revenue on an organic basis remained nearly on the
prior-year level, and net income and basic earnings per share
(EPS) (net income) rose by more than a third year-over-year.
Return on capital employed (ROCE) reached the upper end of
our target range and our capital structure ratio came in below 1.
Despite some positive developments expected for the world
economy in 2016, the risk assessment is clearly biased to the
downside (see → A.8.3. RISKS) due to a number of factors. First
and foremost geopolitical risks can dampen the mood for capi-
tal expenditures. China is on a long-term rebalancing path, and
some emerging markets are vulnerable to further capital flight
and exposed to considerable foreign currency debt.
In November 2015, Siemens announced the extension of its ex-
isting seven-year IT outsourcing contract with Atos SE (AtoS)
through December 2021, with minimum committed volumes
increasing by €3.23 billion to €8.73 billion. Furthermore,
Siemens announced the extension of its current lock-up share-
holder commitment in Atos through September 2020.
For the markets served by the Energy Management Division,
we expect slight overall growth in fiscal 2016. The Division's
markets are experiencing rising power consumption due to on-
going urbanization and electrification in emerging countries.
Also the energy mix is changing, with a rising share of renew-
able energy. Furthermore, there is a trend towards decentral-
ized power generation, including an increasing number of
energy consumers who are also energy producers via solar
technology and other means. Within the Division's key indus-
tries we expect demand from utilities in fiscal 2016 to remain
on the prior-year level. Demand from the oil driven industry is
anticipated to decline further in fiscal 2016, as we expect addi-
tional cuts in investments, particularly in the Americas. For
minerals and mining markets we expect slight growth, with all
regions contributing. However, there is a risk that a further
slowdown in growth in China may impact investment activities
in the minerals and mining industry.
We intend to continue providing an attractive return to share-
holders. As in the past, we intend to fund the dividend payout
from Free cash flow. The Siemens Managing Board, in agree-
ment with the Supervisory Board, proposes a dividend of €3.50
per share, up from €3.30 a year earlier.
A.7 Subsequent events
Overall, revenue thus matched the forecast for fiscal 2015 that
revenue on an organic basis would be flat year-over-year.
Orders for fiscal 2015 were €82.3 billion, fulfilling our expecta-
tion for a book-to-bill ratio above one, which came in at 1.09. As
with revenue, orders rose 6% year-over-year, due mostly to
strong currency translation effects while declining 1% on an
organic basis. Except for Wind Power and Renewables and Pro-
cess Industries and Drives, all our industrial businesses re-
ported nominal order growth. The majority increased their
orders year-over-year on an organic basis.
Industrial Business profit was €7.8 billion in fiscal 2015, up
slightly from €7.7 billion a year earlier despite €0.6 billion in
severance charges. Healthcare, Digital Factory, Mobility and
Building Technologies continued to operate very successfully
in their markets and increased their profits compared to fiscal
2014. The Energy Management Division achieved the largest
profit improvement year-over-year, following a loss on substan-
tial project charges in the prior year. The Wind Power and Re-
newables Division sharply improved profit compared to fiscal
2014, but profit came in below our expectations as the Division
faced reduced margins in the offshore business due partly to
increased competition and expenses for ramping up commer-
cial-scale production of turbine offerings. The profit improve-
ments mentioned above were largely offset by declines in the
Power and Gas and the Process Industries and Drives Divisions.
Profit outside Industrial Business included a gain of €1.4 billion
from the sale of our stake in BSH, which was more than offset
by a number of factors. Burdens from Centrally managed port-
folio activities included losses from equity investments com-
pared to income a year earlier, and Corporate Treasury activities
posted a loss.
Net income rose by 34% to €7.4 billion and basic EPS from net
income climbed 39% year-over-year to €8.84. We thus achieved
our forecast, which was to increase net income significantly
and to grow EPS from net income by at least 15%. As we fore-
cast for fiscal 2015, these increases include gains from divest-
ments. In particular net income included a gain of €1.7 billion
The profit margin of the Industrial Business was 10.1%. We thus
reached the range of 10% to 11% forecast for fiscal 2015. As ex-
pected, the Wind Power and Renewables Division and the
Energy Management Division improved their profit margins
year-over-year but remained below their target ranges. Process
Industries and Drives and Power and Gas, which reached their
targets in the prior year, came in below their respective ranges
in fiscal 2015. SFS, which is outside our Industrial Business,
achieved a return on equity after tax of 20.9%, above the upper
end of its target range.
20
Combined Management Report
from the sale of our hearing aid business and the above-men-
tioned gain from the sale of our stake in BSH. Basic EPS from
net income also benefited from execution of our share buyback
program. Overall, our continuous efforts to increase our pro-
ductivity contributed positively. Our total cost productivity im-
provement reached the upper end of our target for fiscal 2015,
which was to increase total cost productivity by 3% to 4%.
ROCE for continuing and discontinued operations increased to
19.6% in fiscal 2015, up from 17.2% in the prior fiscal year. We
thus reached the upper end of our forecast for fiscal 2015,
which was to achieve a ROCE for continuing and discontinued
operations in our target range of 15% to 20%. The main driver of
the improvement was higher net income, which more than off-
set an increase in average capital employed.
We evaluate our capital structure using the ratio of industrial
net debt to EBITDA. For fiscal 2015, this ratio was 0.6. We thus
achieved our forecast, which was to achieve a ratio below 1.0
but clearly above the fiscal 2014 level of 0.1.
Free cash flow from continuing and discontinued operations
for fiscal 2015 came in at €4.7 billion, 10% lower than in the
prior fiscal year.
20
This report is based on the recommendations of the German
Corporate Governance Code (Code) and the requirements of the
German Commercial Code (Handelsgesetzbuch), the German
Accounting Standards (Deutsche Rechnungslegungs Standards)
and the International Financial Reporting Standards (IFRS).
RATE GOVERNANCE STATEMENT PURSUANT TO SECTION 289A OF THE
GERMAN COMMERCIAL CODE.
Combined Management Report
37
A.10 Compensation Report
A.10.1 Remuneration of Managing Board
members
Long-term stock-based compensation
The remuneration system for the Siemens Managing Board is
intended to provide an incentive for successful corporate man-
agement with an emphasis on sustainability. Managing Board
members are expected to make a long-term commitment to
and on behalf of the Company and may benefit from any sus-
tained increase in the Company's value. For this reason, a sub-
stantial portion of their total remuneration is linked to the
long-term performance of Siemens stock. Their remuneration
is to be commensurate with the Company's size and economic
position. Exceptional achievements are to be rewarded ade-
quately, while falling short of targets is to result in an apprecia-
ble reduction in remuneration. The compensation is also struc-
tured so as to be attractive in comparison to that of competitors,
with a view to attracting outstanding managers to the Company
and retaining them for the long term.
The system and levels for the Managing Board's remuneration
are determined and regularly reviewed by the full Supervisory
Board, based on proposals by the Compensation Committee.
The Supervisory Board reviews remuneration levels annually to
ensure that they are appropriate. In this process, the Company's
economic situation, performance and outlook as well as the
tasks and performance of the individual Managing Board mem-
bers are taken into account. In addition, the Supervisory Board
considers the common level of remuneration in comparison
with peer companies and with the compensation structure in
place in other areas of the Company. It also takes due account
of the relationship between the Managing Board's remunera-
tion and that of senior management and staff, both overall and
with regard to its development over time. For this purpose, the
Supervisory Board has also determined how senior manage-
ment and the relevant staff are to be differentiated. The remu-
neration system that was in place for Managing Board members
in fiscal 2015 was approved by a majority of 92.79% at the Annual
Shareholders' Meeting on January 27, 2015. The individual com-
ponents of compensation - base compensation, variable com-
pensation (Bonus) and long-term stock-based compensation
are weighted equally, and each comprises about one-third of
target compensation. This equal weighting is also applied to
the three target parameters of variable compensation.
| Remuneration system for Managing Board members as of fiscal 2015
Target compensation
Maximum amounts of compensation
Share Ownership Guidelines
32,494
367
71,880
A.10.1.1 REMUNERATION SYSTEM
The Corporate Governance statement pursuant to Section 289a
of the German Commercial Code is an integral part of the Com-
bined Management Report and is presented in → c.4.2 CORPO-
The increase in Receivables and other assets was due primar-
ily to higher receivables from affiliated companies as a result of
intra-group financing activities.
The increase in Trade payables, liabilities to affiliated com-
panies and other liabilities was due primarily to higher liabil-
ities to affiliated companies as a result of intra-group financing
activities.
The increase in Other provisions was due primarily to an in-
crease of €0.5 billion in provisions for probable losses for guar-
antees. This was partly offset by a decline of €0.2 billion in pro-
visions for outstanding deliveries and services.
The increase in Pension and similar commitments included
interest and service costs amounting to €0.7 billion and nega-
tive effects amounting to €0.8 billion from adjustment of the
discount rate. These factors were partly offset by pension pay-
ments amounting to €0.6 billion and a transfer of pension
obligations, net to Siemens Healthcare GmbH amounting to
€0.4 billion.
The increase in Equity was attributable to net income for the
year of €5.6 billion and issuance of treasury stock of €0.3 bil-
lion in conjunction with our share-based payments. These fac-
tors were partly offset by dividends paid in fiscal 2015 (for fiscal
2014) of €2.7 billion. In addition, the equity was reduced due to
share buybacks during the year amounting to €2.7 billion. The
equity ratios at September 30, 2015 and 2014 were 27% and
29%, respectively.
Cash and cash equivalents and marketable securities
are significantly affected by the liquidity management of
Siemens AG. The liquidity management is based on the finance
strategy of the Siemens Group. Therefore, the change in liquid-
ity of Siemens AG was not driven only from business activities
of Siemens AG.
Combined Management Report
36
The increase in Financial assets was due primarily to the addi-
tion of Siemens' 49% stake in the Primetals Technologies Ltd.
joint venture amounting to €0.7 billion - less a €0.1 billion
impairment in fiscal 2015 - and the addition of the newly
founded Siemens Healthcare GmbH amounting to €0.6 billion.
The Siemens Medical Solutions Health Services GmbH
was transferred into this newly founded company with a
carrying amount of €0.3 billion. In addition, a capital increase
of €0.3 billion relating to Siemens Beteiligungsverwaltung
GmbH & Co. OHG was included. Loans and securities within
non-current assets increased by €0.2 billion and €0.2 billion,
respectively.
10%
24%
296
65,400
20%
27,075
> Target parameter: stock price
A.9.3 Corporate Governance statement
compared to 5 competitors
compensation
Variable compensation (Bonus)
20%
2 times
base com-
pensation
Managing
Board
member:
President
and CEO:
3 times
base com-
pensation
Combined Management Report
38
Obligation to hold shares during term of office on the Managing Board
Performance-based component
Performance-based component with deferred payout
Non-performance-based component
target amount
max. 300% of
(Stock Awards):
component
Stock-based
> Variability: 0-200%
ודי"
add. +20%
Bonus: 0-200%
Max. 1.7 times target
Compensation overall
compensation
Base
compensation
Base
compensation
Base
add. ±20% adjustment
> Variability: 0-200%
one-third each
> 3 targets
adjustment
26,190
Cost overruns or additional payment obligations related to
the management of our long-term, fixed-price or turnkey
projects: Particularly our Divisions Power and Gas, Wind Power
and Renewables, Mobility as well as parts of Energy Manage-
ment and Process Industries and Drives perform business, es-
pecially large projects, under long-term contracts that are
awarded on a competitive bidding basis. Some of these con-
tracts are inherently risky because we may assume substan-
tially all of the risks associated with completing a project and
meeting post-completion warranty obligations. For example,
we face the risk that we must satisfy technical requirements of
a project even though we may not have gained experience with
those requirements before we win the project. The profit mar-
gins realized on fixed-priced contracts may vary from original
estimates as a result of changes in costs and productivity over
their term. We sometimes bear the risk of unanticipated project
modifications, shortage of key personnel, quality problems,
financial difficulties of our customers, cost overruns or contrac-
tual penalties caused by unexpected technological problems,
unforeseen developments at the project sites, unforeseen
changes or difficulties in the regulatory or political environ-
ment, performance problems with our suppliers, subcontrac-
tors and consortium partners or other logistical difficulties.
Some of our multi-year contracts also contain demanding in-
stallation and maintenance requirements in addition to other
performance criteria relating to timing, unit cost and compli-
ance with government regulations requirements, which, if not
satisfied, could subject us to substantial contractual penalties,
damages, non-payment and contract termination. There can be
no assurance that contracts and projects, in particular those
with long-term duration and fixed-price calculation, can be
completed profitably. To tackle those risks we implemented a
global project management organization to systematically im-
prove the know-how of the project management personnel. For
very complex technical projects we conduct dedicated techni-
cal risk assessments in very early stages of the sales phase be-
fore we decide to hand over a binding offer to our customer.
Deferred income
Total liabilities and equity
26,454
2014
2015
% Change
Fiscal year
expenses
Cost of Sales
Gross profit
(in millions of €)
Revenue
Statement of Income of Siemens AG in accordance
| with German Commercial Code (condensed)
A.9.1 Results of operations
Siemens AG is the parent company of the Siemens Group.
Results for Siemens AG are significantly influenced by directly
or indirectly owned subsidiaries and investments. The business
development of Siemens AG is fundamentally subject to the
same risks and opportunities as the Siemens Group. Due to the
interrelations between Siemens AG and its subsidiaries and the
relative size of Siemens AG within the Group, the outlook of
the Group also largely reflects our expectations for Siemens AG.
Therefore, the above mentioned explanations for the Siemens
Group apply also for the Siemens AG. We expect that income
from investments will significantly influence the profit of
Siemens AG.
The Annual Financial Statements of Siemens AG have been pre-
pared in accordance with the rules set out in the German Com-
mercial Code (Handelsgesetzbuch).
A.9 Siemens AG
34 Combined Management Report
Our internal audit function systematically evaluates our finan-
cial reporting integrity, the effectiveness of the control system
and the risk management system, and the adherence to our
compliance policies. In addition, the Audit Committee is inte-
grated into our control system. In particular, it oversees the
accounting process and the effectiveness of the control system,
the risk management system and the internal audit system.
Furthermore, we have set up a Disclosure Committee which is
responsible for reviewing certain financial and non-financial
information prior to publication. Moreover, we have rules for
accounting-related complaints.
On a quarterly basis, an internal certification process is exe-
cuted. Management of different levels of our organization, sup-
ported by confirmations of management of entities under their
responsibility, confirms the accuracy of the financial data that
has been reported to Siemens' corporate headquarters and re-
ports on the effectiveness of the related control systems.
Qualification of employees involved in the accounting process
is ensured through appropriate selection processes and regular
training. As a fundamental principle, based on materiality con-
siderations, the four eyes principle applies and specific proce-
dures must be adhered to for data authorization. Additional
control mechanisms include target-performance comparisons
and analyses of the composition of and changes in individual
line items, both in the closing data submitted by reporting
units and in the Consolidated Financial Statements. In line with
our information security requirements, accounting-related IT
systems contain defined access rules protecting them from un-
authorized access. The manual and system-based control
mechanisms referred to above generally also apply when rec-
onciling the IFRS closing data to the Annual Financial State-
ments of Siemens AG.
33
Combined Management Report
The base data used in preparing our financial statements
consists of the closing data reported by the operations of
Siemens AG and its subsidiaries. The preparation of the closing
data of most of our entities is supported by an internal shared
services organization. Furthermore, other accounting activi-
ties, such as governance and monitoring related activities, are
usually bundled on regional level. In particular cases, such as
valuations relating to post-employment benefits, external
experts are used. The reported closing data is used to prepare
the financial statements in the consolidation system. The steps
necessary to prepare the financial statements are subject to
both manual and automated controls.
Our Consolidated Financial Statements are prepared on the ba-
sis of a centrally issued conceptual framework which primarily
consists of uniform Financial Reporting Guidelines and a chart
of accounts. For Siemens AG and other companies within the
Siemens group required to prepare financial statements in ac-
cordance with German Commercial Code, this conceptual
framework is complemented by mandatory regulations specific
to the German Commercial Code. The need for adjustments in
the conceptual framework due to regulatory changes is ana-
lyzed on an ongoing basis. Accounting departments are in-
formed quarterly about current topics and deadlines from an
accounting and closing process perspective.
30,934
(20,161)
(22,109)
(14)%
9%
2,242
6,122
ments 8,142 (prior year 2,870)
thereof Income from invest-
Financial income, net
(20) >(200)%
(270)
Other operating income
(expenses), net
6%
(4,036)
At the end of each fiscal year, our management performs an
evaluation of the effectiveness of the implemented control sys-
tem, both in design and operating effectiveness. We have a
standardized procedure under which necessary controls are
defined, documented in accordance with uniform standards,
and tested regularly on their effectiveness. Nevertheless, there
are inherent limitations on the effectiveness of any control sys-
tem, and no system, including one determined to be effective,
may prevent or detect all misstatements.
(3,810)
Selling and general
13%
(2,781)
(2,417)
29%
24%
as percentage of revenue
Research and development
(29)%
8,824
6,293
administrative expenses
Our ERM approach is based on COSO's "Enterprise Risk Manage-
ment - Integrated Framework". As one of the objectives of this
framework is reliability of a company's financial reporting, it
includes an accounting-related perspective. Our accounting-
related internal control system (control system) is based on
the internationally recognized "Internal Control - Integrated
Framework" also developed by COSO. The two systems are com-
plementary.
The overarching objective of our accounting-related internal
control and risk management system is to ensure that financial
reporting is conducted in a proper manner, such that the Con-
solidated Financial Statements and the Combined Management
Report of Siemens group as well as the Annual Financial State-
ments of Siemens AG as the parent company are prepared in
accordance with all relevant regulations.
The following discussion describes information required pursu-
ant to Section 289 (5) and Section 315 (2) no. 5 of the German
Commercial Code (Handelsgesetzbuch) and explanatory report.
Current and future investigations regarding allegations of
corruption, antitrust violations and other illegal acts: Cor-
ruption, antitrust and related proceedings may lead to criminal
and civil fines as well as penalties, sanctions, injunctions
against future conduct, profit disgorgements, disqualifications
from directly and indirectly engaging in certain types of busi-
ness, the loss of business licenses or permits or other restric-
tions. Accordingly, we may be required to comply with poten-
tial liabilities arising in connection with such investigations
and proceedings, including potential tax penalties. Moreover,
any findings related to public corruption that are not covered
Environmental and other governmental regulations: Some
of the industries in which we operate are highly regulated. Cur-
rent and future environmental and other governmental regula-
tions or changes thereto may require us to change the way we
run our operations and could result in significant increases in
our operating or production costs. In addition, while we have
procedures in place to ensure compliance with applicable gov-
ernmental regulations in the conduct of our business opera-
tions, it cannot be excluded that violations of applicable gov-
ernmental regulations may be caused either by us or by third
parties that we contract with, including suppliers or service
providers, whose activities may be attributed to us. Any such
violations expose us to the risk of liability, reputational damage
or loss of licenses or permits that are important to our business
operations. In particular, we could also face liability for damage
or remediation for environmental contamination at the facili-
ties we design or operate. With regard to certain environmental
risks, we maintain liability insurance at levels that our manage-
ment believes are appropriate and consistent with industry
practice. We may incur environmental losses beyond the limits,
or outside the coverage, of such insurance, and such losses
may have an adverse effect on our business, financial condition
and results of our operations.
Our business naturally evolves and develops in nations and re-
gions around the world, increasing their demand for our offer-
ings. Emerging market operations involve various risks, includ-
ing civil unrest, health concerns, cultural differences such as
employment and business practices, volatility in gross domes-
tic product, economic and governmental instability, the poten-
tial for nationalization of private assets and the imposition of
exchange controls. The Asian markets, in particular, are impor-
tant for our long-term growth strategy, and our sizeable activi-
ties in China operate under a legal system that is still develop-
ing and is subject to change. Our long-term growth strategy
could be limited by governments preferentially supporting local
competitors. With our dedicated regional organizations we
tackle these risks by constantly monitoring the latest trends
and defining our response strategies which include an ongoing
evaluation of our localization approach.
Combined Management Report
30
As a globally operating organization, we conduct business with
customers in countries which are subject to export control reg-
ulations, embargoes, economic sanctions or other forms of
trade restrictions (hereafter referred to as "sanctions") imposed
by the U.S., the European Union or other countries or organiza-
tions. New or expanded sanctions in countries in which we do
business may result in a curtailment of our existing business in
such countries or indirectly in other countries. We are also
aware of initiatives by institutional investors, such as pension
funds or other companies, to adopt or consider adopting poli-
cies prohibiting investment in and transactions with, or requir-
ing divestment of interests in entities doing business with,
countries identified as state sponsors of terrorism by the U.S.
Secretary of State. It is possible that such initiatives may result
in us being unable to gain or retain investors, customers or sup-
pliers. In addition, the termination of our activities in sanc-
tioned countries may expose us to customer claims and other
actions. Our reputation could also suffer due to our activities
with counterparties in or affiliated with these countries. Due to
the political agreement based on the Joint Comprehensive Plan
of Action (JCPOA) regarding the Iranian nuclear program,
Siemens has revised its internal guidelines in October 2015
which stated that apart from certain limited exceptions no new
business activities with customers in Iran are permitted. New
business activities with customers or end customers in Iran
that are not designated on the EU or U.S. sanctions lists are
now allowed, provided that these activities do not breach the
EU sanctions regulations or the U.S. Secondary Sanctions (if
applicable). Siemens has issued group-wide policies establish-
ing the details of its general decision.
Regulatory risks and potential sanctions: Protectionist trade
policies and changes in the political and regulatory environ-
ment in the markets in which we operate, such as import and
export controls, tariffs and other trade barriers including de-
barment from certain markets and price or exchange controls,
could affect our business in several national markets, impact
our business, financial position and results of operations, and
may expose us to penalties, other sanctions and reputational
damage. In addition, the uncertainty of the legal environment
in some regions could limit our ability to enforce our rights and
subject us to increasing costs related to appropriate compliance
programs.
A.8.3.4 COMPLIANCE RISKS
For further information on post-employment benefits, deriva-
tive financial instruments, hedging activities, financial risk
management and measurements, see → NOTE 16, 23 AND 24 in
→ B.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
by tax authorities in various jurisdictions and we continuously
identify and assess resulting risks.
by the 2008 and 2009 corruption charge settlements, which
were concluded with American and German authorities, may
endanger our business with government agencies and inter-
governmental and supranational organizations. Further moni-
tors could be appointed to review future business practices and
we may otherwise be required to further modify our business
practices and our compliance program.
Examinations by tax authorities and changes in tax regula-
tions: We operate in nearly all countries of the world and there-
fore are subject to many different tax regulations. Changes in
tax law in any of these jurisdictions could result in higher tax
expense and payments. Furthermore, legislative changes could
impact our tax receivables and liabilities as well as deferred tax
assets and deferred tax liabilities. In addition, the uncertain tax
environment in some regions could limit our ability to enforce
our rights. As a globally operating organization, we conduct
business in countries subject to complex tax rules, which may
be interpreted in different ways. Future interpretations or de-
velopments of tax regimes may affect our business, financial
condition and results of operations. We are regularly examined
Credit Risks: We provide our customers with various forms of
direct and indirect financing of orders and projects. Particularly
SFS bears credit risks out of its financing activities. In part, we
take a security interest in the assets we finance or we receive
additional collateral. Our business, financial condition and re-
sults of operations may be adversely affected if the credit qual-
ity of our customers deteriorates or if they default on their pay-
ment obligation to us, if the value of the assets in which we
have taken a security interest or additional collateral declines
or if the projects in which we invest are unsuccessful. Positive
market values from derivatives and deposits with banks induce
credit risk against these banks. We monitor these market value
developments very closely. A default of a major trading partner
may have negative impact on our financial position and the
results of financial operations.
assets, in particular concerning our derivative financial instru-
ments. Negative developments could also further increase
the costs for buying protection against credit risks due to a
potential increase of counterparty risks. Through diversifica-
tion into different funding instruments, currencies, markets
and investor groups, Siemens reduces funding risks. Liquidity
risks are mitigated by depositing cash into different categories
of instruments and with a range of counterparties of invest-
ment grade credit quality, at which counterparty risks are cen-
trally and closely monitored (including risks resulting from
derivatives).
Combined Management Report
Liquidity and financing risks: The ongoing euro zone sover-
eign debt crisis continues to have an impact on global capital
markets. Regarding our treasury and financing activities, nega-
tive developments related to financial markets such as (1) lim-
ited availability of funds (particularly U.S. dollar funds) and
hedging instruments, (2) an updated evaluation of our sol-
vency, particularly from rating agencies and (3) impacts from
enhanced regulations of the financial sector/central bank pol-
icy or financial instruments, could result in adverse deposit
and/or financing conditions. Widening credit spreads due to
uncertainty and risk aversion in the financial markets might
lead to adverse changes of fair market values of our financial
Market price risks: We are exposed to fluctuations in exchange
rates, especially between the U.S. dollar and the euro, because
a high percentage of our business volume is conducted in the
U.S. and as exports from Europe. In addition, we are exposed to
currency effects involving the currencies of emerging markets,
in particular the Chinese yuan. A strengthening of the euro
(particularly against the U.S. dollar) may change our competi-
tive position, as many of our competitors may benefit from hav-
ing a substantial portion of their costs based in weaker curren-
cies, enabling them to offer their products at lower prices. As a
result, a strong euro in relation to the U.S. dollar and other cur-
rencies could have an adverse impact on our results of opera-
tions. We are also exposed to fluctuations in interest rates. Neg-
ative developments in the financial markets and changes in the
central bank policies may negatively impact our results. Certain
currency risks as well as interest rate risks are hedged using
derivative financial instruments. Depending on the develop-
ment of foreign currency exchange and interest rates, hedging
activities could have significant effects on our business, finan-
cial condition and results of operations.
A.8.3.3 FINANCIAL RISKS
Skilled personnel: Competition for highly qualified personnel
remains intense in the industries and regions in which our
businesses operate. We have an ongoing demand in highly
skilled employees. Our future success depends in part on our
continued ability to hire, integrate, develop and retain engi-
neers and other qualified personnel. We address this risk for
example with structured succession planning, employer brand-
ing, retention and career management.
raw materials due to market shortages or other reasons could
also adversely affect the performance. Furthermore, we may be
exposed to the risk of delays and interruptions of the supply
chain as a consequence of catastrophic events in case we are
unable to identify alternative sources of supply or ways of
transportation in a timely manner or at all. Besides other mea-
sures, we mitigate fluctuation in the global raw material mar-
kets with various hedging instruments.
Interruption of the supply chain: The financial performance
of our Industrial Business depends on reliable and effective
supply chain management for components, sub-assemblies
and other materials. Capacity constraints and supply shortages
resulting from ineffective supply chain management may lead
to delays and additional cost. We rely on third parties to supply
us with parts, components and services. Using third parties to
manufacture, assemble and test our products reduces our con-
trol over manufacturing yields, quality assurance, product de-
livery schedules and costs. Although we work closely with our
suppliers to avoid supply-related problems, there can be no
assurance that we will not encounter supply problems in the
future. Shortages and delays could materially harm our busi-
ness. Unanticipated increases in the price of components or
31,545
Risks from pension obligations: The funded status of our
pension plans may be affected by change in actuarial assump-
tions, including the discount rate, as well as movements in
financial markets or a change in the portfolio mix of invested
assets. A significant increase in the underfunding may have a
negative effect on our capital structure and rating and thus
may tighten refinancing options and increase costs. In order to
comply with local pension regulations in selected foreign coun-
tries, we may face a risk of increasing cash outflows to reduce
an underfunding of our pension plans in these countries.
173%
A considerable part of our business activities involve govern-
ments and companies with a public shareholder. We also partic-
ipate in a number of projects funded by government agencies
and intergovernmental and supranational organizations such
as multilateral development banks. Ongoing or potential future
investigations into allegations of corruption, antitrust or other
law violations could also impair relationships with such busi-
ness partners or could result in the exclusion of public con-
tracts. Such investigations may also adversely affect existing
private business relationships and our ability to pursue poten-
tially important strategic projects and transactions, such as
strategic alliances, joint ventures or other business coopera-
tion, or could result in the cancellation of certain of our exist-
ing contracts and third parties, including our competitors,
could initiate significant third-party litigation.
Besides other measures, Siemens established a global compli-
ance organization including compliance risk mitigation pro-
cesses such as Compliance Risk Assessments which has been
reviewed recently by external compliance experts.
A.8.5 Significant characteristics of
the accounting-related internal control
and risk management system
Even though the assessment of individual opportunities have
changed during fiscal year 2015 due to developments in the
external environment as well as the effects of our endeavors to
harvest them, the overall opportunity situation did not change
significantly as compared to the prior year.
Localizing value chain activities: Localizing certain value
chain activities, such as procurement, manufacturing, mainte-
nance and service in emerging markets, could enable us to re-
duce costs and strengthen our global competitive position, in
particular compared to competitors based in countries with a
more favorable cost structure. Moreover, our local footprint in
many countries might help us to take advantage of a possible
recovery of markets and leverage a shift in markets, resulting in
increased market penetration and market share.
Excellent project execution: By expanding project manage-
ment efforts as well as learning from our mistakes in project
execution through a formalized lessons learned approach, we
see an opportunity to continuously reduce non-conformance
costs and ensure on-time delivery of our projects and solutions.
Furthermore, stringent project risk and opportunity manage-
ment, time schedule management, performance bonuses and
highly professional management of consortium partners and
suppliers help us to avoid liquidated damages and ultimately
improve our profit position. In addition, improvements of our
claim management processes enable us to reduce costs in-
curred as a result of customer claims by finding a consensus
with customers while also improving customer relationship
management. At the same time, we reduce quality problems by
proactively addressing supplier issues up front.
competitive cost structure complements the competitive ad-
vantage of being innovative. We believe that further improve-
ments in our cost position can strengthen our global competi-
tive position and secure our market presence against emerging
and incumbent competitors. For example, we expect to create
sustainable value from productivity measures in connection
with our "Vision 2020" concept. Moreover, establishing a strin-
gent claim management process can help materialize opportu-
nities by enforcing our claims towards our contract partners
even stronger.
Combined Management Report
Continuously developing and implementing initiatives to
reduce costs, boost sales efforts, adjust capacities, improve
our processes, realize synergies and streamline our port-
folio: In an increasingly competitive market environment, a
Political stabilization of critical countries and recovery of
worldwide economic environment: We see an opportunity
that political stabilization of critical countries may lead to
higher volume because it gives us the opportunity to catch up
revenue that was unavailable in past years. Furthermore, a
rapid worldwide recovery of the economic environment could
also lead to additional volume and profit for Siemens.
Success from innovation: Innovation is a central part of
Siemens "Vision 2020", an entrepreneurial concept, leading
Siemens into the future in the three stages: first we "drive per-
formance", then we "strengthen core" and finally we "scale up”
to attain our goals. We do this by investing significantly in R&D
in order to develop innovative, sustainable solutions for our
customers and to simultaneously safeguard our competitive-
ness. We are an innovative company and invent new technolo-
gies that we expect will meet future demands in accordance
with the megatrends of demographic change, urbanization,
climate change and globalization. We are granted thousands of
new patents every year and continuously develop new con-
cepts and convincing business models. We open up access to
new markets and customers through new marketing and sales
strategies as well as Divisional master plans.
Electrification, automation and digitalization: Siemens is
positioned along the value chains of electrification, automa-
tion and digitalization in order to increase future market
penetration. Along these value chains, we have identified sev-
eral growth fields in which we see our greatest long-term
potential. We are orienting our resource allocation toward these
growth fields and have announced concrete measures in this
direction. For example, we see an opportunity to leverage busi-
ness analytics across verticals and introduce cloud-enabled soft-
ware and IT services (e.g. predictive maintenance) resulting in
additional business volume, market share and customer reten-
tion. We intend to fully exploit the potential of increasing digita-
lization not just in manufacturing. Utilizing software and simu-
lations, the Digital Factory Division makes product development
considerably faster and more efficient. Data-driven services,
software and IT solutions are of decisive importance as they
have a substantial influence on all of our future growth fields.
In addition, future developments in ongoing and potential
future investigations, such as responding to the requests of
governmental authorities and cooperating with them, could
divert management's attention and resources from other issues
facing our business. Furthermore, we might be exposed to
compliance risks in connection with recently acquired opera-
tions that are in the ongoing process of integration.
could help us to strengthen our position in our existing mar-
kets, provide access to new markets or complement our techno-
logical portfolio in selected areas. Opportunities might also
arise from well executed divestments further optimizing our
portfolio and generating divestment gains.
Within our Enterprise Risk Management (ERM) we regularly
identify, evaluate and respond to opportunities that present
themselves in our various fields of activity. Below we describe
our most significant opportunities. Unless otherwise stated,
the opportunities described below relate to all of our segments.
The order in which the opportunities are presented reflects the
currently estimated relative exposure for Siemens associated
with these opportunities and thus provides an indication of the
opportunities' current importance to us. The described oppor-
tunities are not necessarily the only ones we encounter. In ad-
dition, our assessment of opportunities is subject to change as
our Company, our markets and technologies are constantly de-
veloping. It is also possible that opportunities we see today will
never materialize.
A.8.4 Opportunities
concern.
The most significant challenges have been mentioned first in
each of the four categories - Strategic, Operations, Financial
and Compliance – with the risks caused by highly competitive
markets and technology changes currently being the most sig-
nificant. Even though the assessments of individual risk expo-
sures have changed during fiscal 2015 due to developments in
the external environment as well as the effects of our own mit-
igation measures, the overall risk situation for Siemens did not
change significantly as compared to the prior year. At pres-
ent, no risks have been identified that either individually or in
combination could endanger our ability to continue as a going
A.8.3.5 ASSESSMENT OF THE
OVERALL RISK SITUATION
materially harm our business, financial condition and results of
operations. Moreover, even if we ultimately prevail on the mer-
its in any such proceedings, we may have to incur substantial
legal fees and other costs defending ourselves against the un-
derlying allegations. We maintain liability insurance for certain
legal risks at levels our management believes are appropriate
and consistent with industry practice. Our insurance policy,
however, does not protect us against reputational damage.
Moreover, we may incur losses relating to legal proceedings
beyond the limits, or outside the coverage, of such insurance
or exceeding any provisions made for legal proceedings related
losses. Finally, there can be no assurance that we will be able
to maintain adequate insurance coverage on commercially rea-
sonable terms in the future.
32
31
Combined Management Report
Current or future litigation: We are subject to numerous risks
relating to legal, governmental and regulatory proceedings
to which we are currently a party or to which we may become a
party in the future. We routinely become subject to legal, gov-
ernmental and regulatory investigations and proceedings in-
volving, among other things, requests for arbitration, allega-
tions of improper delivery of goods or services, product liability,
product defects, quality problems, intellectual property infringe-
ment, non-compliance with tax regulations and/or alleged or
suspected violations of applicable laws. In addition, we may
face further claims in connection with the circumstances that
led to the corruption charges. For additional information with
respect to specific proceedings, see → NOTE 21 in → B.6 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS. There can be no assur-
ance that the results of these or any other proceedings will not
Acquisitions, equity investments, partnerships and divest-
ments: We constantly monitor our current and future markets
for opportunities for strategic acquisitions, equity investments
or partnerships to complement organic growth. Such activities
Result from ordinary activities
Income taxes
29
4,230
18,798
19,247
Liabilities and equity
Equity
Prepaid expenses
Deferred tax assets
Active difference resulting
from offsetting
Total assets
10%
65,400
71,880
(28)%
40
29
2%
5%
26%
18,488
111
2,222
2,333
23,308
83
43%
2,672
3,816
23%
15,816
19,492
(25)%
Receivables and other assets
Cash and cash equivalents,
securities
Special reserve
with an equity portion
Provisions
759
to affiliated companies
and other liabilities
5,918
Trade payables, liabilities
31%
677
887
208
62
Liabilities to banks
Advance payments received
Liabilities
708
3%
19,064
2%
7,369
7,511
Other provisions
4%
11,103
11,553
Pensions and similar
commitments
(7)%
18,472
Current assets
(70)%
44,540
As of September 30, 2015, the number of employees was
100,900.
As part of the carve-out of Healthcare, Siemens AG transferred
its healthcare business to the newly founded Siemens Health-
care GmbH by way of singular succession. Beginning with fiscal
2015, the results of the Siemens Healthcare GmbH are trans-
ferred to Siemens AG based on the profit-and-loss transfer
agreement between the Siemens AG and the Siemens Health-
care GmbH.
We intend to continue providing an attractive return to share-
holders. Therefore, in the years ahead we intend to propose a
dividend payout of 40% to 60% of net income of Siemens
Group, which for this purpose we may adjust to exclude se-
lected exceptional non-cash effects.
6%
2,907
(175)%
(988)
(2,714)
3,084
Unappropriated net income
Allocation to other retained
earnings
64%
110
179
Profit carried forward
48%
3,786
40%
5,618
32%
(444)
4%
The decrease in Revenue is due primarily to the carve-out of
Healthcare, which posted €4.8 billion in revenue in fiscal 2014.
In fiscal 2015, the highest contributions to revenue came from
Digital Factory amounting to €6.1 billion, Energy Management
amounting to €5.4 billion, Power and Gas amounting to €5.4 bil-
lion and Process Industries and Drives amounting to €5.2 bil-
lion. On a geographical basis, 74% of revenue was generated in
the Europe, C.I.S., Africa, Middle East region, 19% in the Asia,
Australia region and 7% in the Americas region. Exports from
Germany accounted for 62% of overall revenue. In fiscal 2015,
orders for Siemens AG amounted to €31.8 billion.
Combined Management Report
Net income
The decrease in Gross profit resulted primarily from the above
mentioned carve-out of Healthcare, which contributed €2.1 bil-
lion to Gross Profit in fiscal 2014. In fiscal 2015, the strongest
contributions to Gross Profit came from Digital Factory, Power
and Gas as well as Process Industries and Drives. Fiscal 2015
included lower project charges compared to the prior year.
In fiscal 2014, in particular, the Energy Management Division
took charges including €0.4 billion related primarily to grid-
connections to offshore wind-farms and €0.2 billion related to
onshore HVDC transmission line projects. In fiscal 2015,
Siemens handed over the four North Sea grid connection plat-
forms to the customer.
46,127
35
4%
42,121
43,688
1%
2,419
2,439
Intangible and tangible assets
Financial assets
Non-current assets
% Change
Sep 30,
2014
(300)
Research and development (R&D) expenses decreased due
primarily to the above mentioned carve-out of Healthcare. R&D
expenses as a percentage of revenue (R&D intensity) remained
at 9%. On an average basis, we employed 11,700 people in R&D
in fiscal 2015. For additional information see A.1.1.3 RESEARCH
2015
The decrease in Other operating income (expenses), net re-
sulted from an increase of €0.5 billion in other operating ex-
penses, only partly offset by an increase in other operating
income of €0.2 billion. Within other operating expenses, nega-
tive effects included additions to post-closing provisions in
connection with the disposal of businesses.
The primary factors for the increase in income from investments
was a gain of €2.8 billion on the disposal of Siemens' stake in
BSH and higher income from profit transfers of €2.6 billion, in
particular €1.7 billion from Siemens Beteiligungen Inland GmbH
and €0.8 billion from Siemens Healthcare GmbH.
The decrease in other financial income (expenses), net resulted
mainly from a higher realized loss related to interest and for-
eign currency derivatives of €0.7 billion and from higher ex-
penses from compounding of pension provisions of €0.4 bil-
lion. In addition, impairments of loan receivables of Unify
Holdings B.V. and Unify Germany Holdings B.V. amounting to
€0.2 billion were included. For comparison, fiscal 2014 included
€0.2 billion reversals of impairments of shares in investments.
The improvement in Financial income, net was primarily at-
tributable to higher income from investments, which increased
by €5.3 billion. Other financial income (expenses), net was
€1.4 billion lower compared to the prior year.
A.9.2 Net assets and financial position
Statement of Financial Position of Siemens AG in accordance
with German Commercial Code (condensed)
(in millions of €)
Assets
The decline in Income tax expenses was due mainly to higher
deferred tax assets resulting from provisions. This was partly
offset by prior-year tax effects.
AND DEVELOPMENT.
1,010
998
53
1,010
166
1,010
998
102
95
Other4
227
15
1,845
62
1,980
1,940
1,063
1,049
1,238
181
51
42
2015
2014
Total
1,052
Service cost
Total (Code)
1 Fringe benefits include the costs, or the cash equiva-
lent, of non-monetary benefits and other perquisites,
such as the provision of company cars in the amount
of €158,131 (2014: €181,638), contributions toward the
cost of insurance in the amount of €134,170 (2014:
€71,776), the reimbursement of expenses for legal
advice and tax advice, accommodation and moving
expenses, including any taxes due in this regard,
currency adjustment payments and costs relating to
preventive medical examinations in the amount of
€330,620 (2014: €194,498).
2 The cash component of one-year variable compensa-
tion (Bonus) presented above therefore represents the
amount awarded for fiscal 2015, which will be paid out
in January 2016.
46 Combined Management Report
Joe Kaeser
President and CEO
Dr. Roland Busch
Managing Board member
Managing Board member
Klaus Helmrich
Managing Board member
2015
2014
2015
2014
2014
2015
1,878
Lisa Davis
0
2,683
0
0
0
0
0
0
203
0
0
0
0
0
0
0
66
0
11
Siemens Stock Awards (restriction period: 2010-2013)
Share Matching Plan (vesting period: 2012 - 2014)
Share Matching Plan (vesting period: 2011-2013)
0
1,098
0
0
0
366
2,016
1,444
1,210
1,477
125
1,376
1,046
0
1,595
0
269
0
0
0
367
0
1,392
0
269
0
0
1,061
One-year variable compensation (Bonus) - Cash component²
Multi-year variable compensation³
1,078
604
Total
-
340
-
480
-
480
-
600
665
349
0 2,080
998
-
1,942
651 3,307
103
2,045
103
103
754 3,410
2,963
560
3,523
3,097 1,088
603
603
3,700 1,691
0 3,120
5,203
603
5,806
335
335
-
=
0
0
1,502
665
0 2,080
749
1,172
1,010
998
0
2,425
357
0 3,120
1,010
998
0
2,425
749
337
0 3,120
1,359
333
-
749
1,164
998
2,972 3,086
230
604
3,202 3,690 1,682
419
333
Non-performance-
based components
Performance-based
components
Fixed compensation (base compensation)
Fringe benefits¹
Total
without long-term incentive effect, non-stock-based
with long-term incentive effect, stock-based
One-year variable compensation (Bonus) - Cash component²
Multi-year variable compensation³
Siemens Stock Awards (restriction period: 2010-2013)
Share Matching Plan (vesting period: 2012 - 2014)
Share Matching Plan (vesting period: 2011 - 2013)
(Amounts in thousands of €)
Other4
Service cost
Total (Code)
| Managing Board members serving as of September 30, 2015
(Amounts in thousands of €)
Non-performance-
based components
Performance-based
components
Fixed compensation (base compensation)
Fringe benefits¹
Total
| Managing Board members serving as of September 30, 2015
multi-year variable compensation granted for fiscal 2015 and
shown above, this table includes the actual figure for multi-
year variable compensation granted in previous years and allo-
cated in fiscal 2015. Due to rounding, the figures presented in
the table may not add up precisely to the totals provided.
The following table shows allocations for fiscal 2015 for fixed
compensation, fringe benefits, one-year variable compensation
and multi-year variable compensation -by reference year - as
well as the expense of pension benefits. In deviation from the
3,190
1,035
604
540
5,807
3,730
580
1,615
832
2,148
3,284
1,070 1,376
3,463
1,046
3,270
1,410
3,486
1,021
3,463
451
1,149
Lisa Davis €1,040,036 (2014: €907,076), Klaus Helmrich
€1,040,036 (2014: €500,027), Janina Kugel €693,357 (2014:
€0), Prof. Dr. Siegfried Russwurm €1,040,036 (2014:
€500,027), and Dr. Ralf P. Thomas €1,040,036 (2014:
€500,027). The corresponding monetary values for former
Managing Board members were as follows: Barbara Kux €0
(2014: €63,913), Prof. Dr. Hermann Requardt €346,679 (2014:
€625,034), Peter Y. Solmssen €0 (2014: €125,007) and
Dr. Michael Süß €0 (2014: €299,756). Because Janina Kugel
joined the Managing Board during the fiscal year, the mone-
tary value relating to 100% target achievement was prorated
and, instead of Stock Awards, she received an equivalent
amount of Phantom Stock Awards. At the end of the restric-
tion period, these awards will be settled in cash rather than
via a stock transfer. Otherwise, the regulations are the same
as those for Stock Awards.
6 Total maximum compensation for fiscal 2015 represents the
contractual maximum amount for overall compensation,
excluding fringe benefits and pension benefit commitments.
At 1.7 times target compensation (base compensation, target
amount for the Bonus and the target amount for long-term
stock-based compensation), the maximum amount is less
than the total of the individual contractual caps for perfor-
mance-based components.
7 Total compensation reflects the current fair value of stock-
based compensation components on the award date. On
the basis of the current monetary values of stock-based
compensation components, total compensation amounted
to €27,756,633 (2014: €29,109,709).
8 Ms. Davis's compensation is paid out in Germany in euros.
It has been agreed that any tax liability that arises due to
tax rates that are higher in Germany than in the U.S. will be
reimbursed. For base compensation of calendar year 2014 as
well as for the cash Bonus of fiscal 2014, a currency-adjust-
ment payment was granted.
9 Prof. Dr. Hermann Requardt resigned from the Managing
Board effective the end of the day on January 31, 2015. His
employment contract ended effective September 30, 2015.
In addition to the total compensation shown above for his
work as a member of the Managing Board, Prof. Dr. Requardt
received the following compensation for the remaining term
of his contract from February 1 to September 30, 2015: fixed
compensation of €673,600, fringe benefits of €68,203,
variable compensation (Bonus) of €902,624 and Siemens
Stock Awards in the amount of €665,258. In accordance
with the provisions of his contract, his Stock Awards will be
settled in cash at the closing price of Siemens stock in Xetra
trading on September 30, 2015.
Allocations
without long-term incentive effect, non-stock-based
with long-term incentive effect, stock-based
15
22
5,617
47
Pension benefit commitments
For fiscal 2015, the members of the Managing Board were
granted contributions under the BSAV totaling €4.8 million
(2014: €5.1 million), based on a resolution of the Supervisory
Board dated November 11, 2015. Of this amount, €0.1 million
(2014: €0.1 million) related to the funding of pension commit-
ments earned prior to transfer to the BSAV.
The contributions under the BSAV are added to the personal
pension accounts each January, following the close of the fiscal
year. Until a beneficiary's date of retirement, his or her pension
account is credited with an annual interest payment (guaran-
teed interest) on January 1 of each year. The interest rate is cur-
rently 1.25%.
The following table shows individualized details of the contri-
butions (allocations) under the BSAV for fiscal 2015 as well as
the defined benefit obligations for pension commitments.
(Amounts in €)
2015
Total contributions' for
Defined benefit obligation² for all pension
commitments excluding deferred compensation³
Combined Management Report
2014
2014
Managing Board members
serving as of September 30, 2015
Joe Kaeser
1,051,680
1,033,200
8,056,153
7,174,641
Dr. Roland Busch
2015
565,824
employment contract ended effective September 30, 2015.
In addition to the total compensation shown above for his
work as a member of the Managing Board, Prof. Dr. Requardt
received the following compensation for the remaining term
of his contract from February 1 to September 30, 2015: fixed
compensation of €673,600, fringe benefits of €68,203, and
variable compensation (Bonus) of €902,624.
with Section 23 and Section 125 of the German Transforma-
tion Act (Umwandlungsgesetz) due to the spin-off of
OSRAM. For Ms. Davis, "Other" represents the cash compo-
nent of the compensatory payment made in December 2014
for the forfeiture of benefits from her former employer.
56
0
0
62
1,482
103
1,586
2,465
3,560
2,665
5 Prof. Dr. Hermann Requardt resigned from the Managing
Board effective the end of the day on January 31, 2015. His
2,662
3,684
603
3,068
560
4,120
604
3,269
230
2,892
580
1,397
540
4,224
3 Starting with the Siemens Stock Awards tranche of 2011, the
restriction period was extended from three to four years.
Shares from the Siemens Stock Awards for 2011 will thus only
be transferred in November 2015. Therefore, no allocation
for Siemens Stock Awards was made in fiscal 2015.
4 "Other" includes the adjustment of the Siemens Stock
Awards for 2010 (transfer in November 2013) in accordance
817
0
559,104
2,769,337
3,225,678
2,742,051
565,824
4,797,184
559,104
3,921,904
6,977,620
33,415,101
6,273,529
29,216,559
559,104
1
2 The defined benefit obligations reflect one-time special
contributions to the BSAV of €279,552 (2014:
€3,558,315) for new appointments from outside the
Company and for special contributions in connection
with departures from the Managing Board. These
obligations amounted to €0 (2014: €2,745,615) for
Lisa Davis, €279,552 (2014: €0) for Prof. Dr. Hermann
Requardt and €0 (2014: €812,700) for Dr. Michael Süß.
3 Deferred compensation totals €4,947,717 (2014:
€10,057,923), including €3,207,002 for Joe Kaeser (2014:
€3,171,486), €305,023 for Klaus Helmrich (2014: €302,595)
and €49,794 for Dr. Ralf P. Thomas (2014: €49,732). De-
ferred compensation for former Managing Board members
is as follows: €0 for Barbara Kux (2014: €4,697,955),
€1,385,898 for Prof. Dr. Hermann Requardt (2014:
€1,381,365) and €0 for Peter Y. Solmssen (2014: €454,790).
4 Janina Kugel was elected a full member of the Managing
Board effective February 1, 2015.
5 Prof. Dr. Hermann Requardt resigned from the Managing
Board effective the end of the day on January 31, 2015.
His employment contract ended effective September 30,
2015.
In fiscal 2015, former members of the Managing Board and
their surviving dependents received emoluments within the
meaning of Section 314 para. 1 No. 6 b of the German Commer-
cial Code totaling €30.5 million (2014: €24.2 million). This fig-
ure includes the compensation for former Managing Board
member Peter Y. Solmssen for the remaining period of his em-
ployment contract from October 2014 through March 2015, the
cash compensation for Bonus Awards granted in the past as
well as the pro rata contribution to the BSAV. It also includes
the compensatory payment connected with the mutually
agreed-upon termination of the Managing Board membership
of Prof. Dr. Hermann Requardt as of January 31, 2015, the com-
pensation for the remaining term of his employment contract -
that is, from February 1 to September 30, 2015 - and a special
contribution to the BSAV. For the period from February 1
through September 30, 2015, Prof. Dr. Hermann Requardt received
9,590 Stock Awards, which will be settled in cash in accordance
with the provisions of his employment contract and in connec-
tion with the mutually agreed-upon termination of his Manag-
ing Board membership. Mr. Solmssen received 7,193 Stock
Awards for the period from October 2014 through March 2015.
Other than this, former Managing Board members and their
surviving dependents received 0 (2014: 18,912) Stock Awards.
626
The expenses (service cost) recognized in accordance
with the IFRS in fiscal 2015 for Managing Board
members' entitlements under the BSAV in fiscal 2015
amounted to €4,804,639 (2014: €7,913,201).
3,243,101
565,824
4,824,749
Lisa Davis
565,824
93,184
3,126,396
2,818,722
Klaus Helmrich
565,824
559,104
3,522,681
4,390,368
3,047,911
Prof. Dr. Siegfried Russwurm
Dr. Ralf P. Thomas
Former members of the Managing Board
Prof. Dr. Hermann Requardt 5
Total
350,560
438,713
565,824
559,104
Janina Kugel 4
0
127
0
Managing Board member
Dr. Ralf P. Thomas
CFO
Prof. Dr. Hermann Requardt5
Managing Board member
since February 1, 2015
until January 31, 2015
2015
2014
Managing Board member
2015
2015
2014
2015
2014
626
1,010
998
1,010
998
2014
337
Prof. Dr. Siegfried Russwurm
3,009
2,507
2,539
2,715
1,404
2,429
2,488
1,096
1,059
604
Janina Kugel
5,760
3,111
561
3,100
611
2,819
604
521
3,326
4,223
3,032
6,676
998
25
78
1,519
0
0
1,392
0
520
0
1,392
0
0
0
177
0
0
0
0
0
0
0
15
0
535
177
1,392
44
67
61
28
84
651
1,088
1,042
1,078
1,060
365
1,082
832
1,376
1,070
1,410
1,046
451
1,021
0
0
4,664
_
(max)
1,082
Non-performance-
based components
Performance-based
components
Fixed compensation (base compensation)
Fringe benefits¹
Total
without long-term incentive
effect, non-stock-based
with long-term incentive effect,
stock-based
One-year variable compensation (Bonus) -
Cash component (Code)
(Amounts in thousands of €)
Multi-year variable compensation 2,3
Siemens Stock Awards (restriction period: 4 years)
Target achievement depending on EPS for past three fiscal years 4
Target achievement depending on future stock performance 5
Total 6
Service cost
Total (Code)7
Total compensation of all Managing Board members for fiscal 2015, in accordance with the applicable reporting standards, amounted to €27.42 million
(2014: €28.57 million). The granted payout amount presented below is to be used instead of the target value according to the Code for one-year variable
compensation. Service costs for pension benefits are not included.
Performance-based
components
Total compensation
Variable compensation (Bonus) - Bonus Awards 4
without long-term incentive
effect, non-stock-based
| Managing Board members serving as of September 30, 2015
effect, non-stock-based
Fixed compensation (base compensation)
Fringe benefits¹
Total
without long-term incentive
effect, non-stock-based
with long-term incentive effect,
stock-based
One-year variable compensation (Bonus) -
Cash component (Code)
Multi-year variable compensation 2,3
Variable compensation (Bonus) - Bonus Awards 4
One-year variable compensation (Bonus) -
Cash component
Siemens Stock Awards (restriction period: 4 years)
Target achievement depending on future stock performance 5
Total 6
Service cost
Total (Code)7
Total compensation of all Managing Board members for fiscal 2015, in accordance with the applicable reporting standards, amounted to €27.42 million
(2014: €28.57 million). The granted payout amount presented below is to be used instead of the target value according to the Code for one-year variable
compensation. Service costs for pension benefits are not included.
Performance-based
components
Total compensation
without long-term incentive
Target achievement depending on EPS for past three fiscal years 4
Performance-based
components
One-year variable compensation (Bonus) -
Cash component
2 The figures for individual maximums for multi-year
variable compensation reflect the possible maximum
value in accordance with the maximum amount agreed
upon for fiscal 2015, that is, 300% of the applicable
target amount.
(min)
(max)
(min)
(max)
(min)
2015
(max)
2014
2015
2015
(min)
2015
2015
1,845
1,878
1,878
1,878
998
1,010
1,010
1,010
166
48
1 Fringe benefits include the costs, or the cash equiva-
lent, of non-monetary benefits and other perquisites,
such as the provision of company cars in the amount
of €158,131 (2014: €181,638), contributions toward
the cost of insurance in the amount of €134,170 (2014:
€71,776), the reimbursement of expenses for legal
advice and tax advice, accommodation and moving
expenses, including any taxes due in this regard,
currency adjustment payments and costs relating to
preventive medical examinations in the amount of
€330,620 (2014: €194,498).
2015
2015
3 The expenses recognized for stock-based compensa-
tion for members of the Managing Board in accordance
with the IFRS in fiscal 2015 and fiscal 2014 amounted
to €8,109,155 and €16,141,235, respectively. The fol-
lowing amounts pertained to the members of the
Managing Board in fiscal 2015: Joe Kaeser €2,003,783
(2014: €1,822,932), Dr. Roland Busch €1,129,224 (2014:
€922,535), Lisa Davis €284,928 (2014: €1,337,996),
Klaus Helmrich €1,076,237 (2014: €949,521), Janina
Kugel €140,185 (2014: €0), Prof. Dr. Siegfried Russ-
wurm €1,239,596 (2014: €1,118,839), and Dr. Ralf P.
Thomas €516,915 (2014: €446,570). The corresponding
expense, determined in the same way, for former
Managing Board members was as follows: Brigitte
Ederer €105,227 (2014: €35,373), Barbara Kux €105,227
(2014: €1,971,611), Peter Löscher €230,387 (2014:
€107,733), Prof. Dr. Hermann Requardt €1,107,522
4
5
(2014: €1,254,756), Peter Y. Solmssen €141,258 (2014:
€3,430,484), and Dr. Michael Süẞ €28,666 (2014:
€2,742,885).
For Stock Awards granted in fiscal 2014 for which the
target attainment depends on the EPS for the past
three fiscal years and for Bonus Awards granted in
fiscal 2014, the fair value at the date of award is equiva-
lent to the respective monetary value. As of fiscal 2015,
the Bonus is granted entirely in cash; Stock Awards are
linked solely to the performance of Siemens stock in
comparison to its competitors.
The monetary values relating to 100% target achieve-
ment were €8,190,219 (2014: €4,970,916). The amounts
for individual Managing Board members were as
follows: Joe Kaeser €1,950,003 (2014: €950,022),
Dr. Roland Busch €1,040,036 (2014: €500,027),
Joe Kaeser
President and CEO
Dr. Roland Busch
2014
Managing Board member
Managing Board member
Klaus Helmrich
Managing Board member
2014
2015
2015
2015
2014
2015
2015
Lisa Davis 8
based components
Non-performance-
(Amounts in thousands of €)
Base compensation
1/3
Variable compensation
(Bonus)
1/3
1/3
1/3
ROCE
Earnings
per share
Individual
targets
1/3
1/3
stock-based compensation
(Siemens Stock Awards)
Performance of Siemens stock
compared to 5 competitors
Maximum amount for compensation overall
In addition to the maximum amounts of compensation for
variable compensation and long-term stock-based compensa-
tion, a maximum amount for compensation overall has been
defined. Since fiscal 2014, this amount cannot be more than
1.7 times higher than target compensation. Target compensa-
tion comprises base compensation, the target amount for
variable compensation and the target amount for long-term
stock-based compensation, excluding fringe benefits and pen-
sion benefit commitments. When fringe benefits and pension
benefit commitments for a given fiscal year are included, the
maximum amount of compensation overall for that year will
increase accordingly.
Share Ownership Guidelines
-
-
The Siemens Share Ownership Guidelines are an integral part
of the remuneration system for the Managing Board and senior
executives. These guidelines require that – after a specified
buildup phase - Managing Board members hold Siemens stock
worth a multiple of their base compensation 300% for the
President and CEO, 200% for the other members of the Manag-
ing Board - throughout their terms of office on the Managing
Board. The determining figure in this context is the average
base compensation that a member of the Managing Board has
received over the four years before the applicable dates of proof
of compliance. Changes that have been made to base compen-
sation in the meantime are included. Non-forfeitable stock
commitments (Bonus Awards) which were granted until fiscal
2014 are taken into account in determining compliance with
the Share Ownership Guidelines.
Compliance with these guidelines must be proven for the first
time after a four-year buildup phase. Thereafter, it must be
proven annually. If the value of a Managing Board member's
accrued holdings declines below the required minimum due to
fluctuations in the market price of Siemens stock, he or she
must acquire additional shares.
Long-term
Pension benefit commitments
Three equally balanced components within the remuneration system and three equally balanced targets within the Bonus
With regard to the further terms of the Stock Awards, the same
principles apply in general to the Managing Board and to sen-
ior managers. These principles are discussed in more detail in
→ NOTE 25 in → B.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
In fiscal 2015, the Managing Board's remuneration system had
the following components:
Non-performance-based components
Base compensation
Base compensation is paid as a monthly salary. Since October 1,
2014, the base compensation of President and CEO Joe Kaeser
has amounted to €1,878,000 per year. The base compensation
of the CFO and of those members of the Managing Board who
are responsible for Divisions (including Healthcare) has been
€1,010,400 per year. For the other members of the Managing
Board, it has been €939,000 per year.
Fringe benefits
Fringe benefits include the costs, or the cash equivalent, of non-
monetary benefits and other perquisites, such as the provision
of a company car, contributions toward the cost of insurance,
the reimbursement of expenses for legal advice and tax advice,
accommodation and moving expenses, including a gross-up for
any taxes due in this regard, currency adjustment payments
and costs relating to preventive medical examinations.
Performance-based components
Variable compensation (Bonus)
Variable compensation (Bonus) is based on the Company's busi-
ness performance in the past fiscal year. The Bonus depends on
an equal one-third weighting of target achievement of the tar-
get parameters return on capital employed, earnings per share
and individual targets. To achieve a consistent target system
Company-wide, corresponding targets - in addition to other fac-
- also apply to senior managers.
tors
For 100% target achievement (target amount), the amount of
the Bonus equals the amount of base compensation. The Bonus
is subject to a ceiling (cap) of 200%. If targets are substantially
missed, variable compensation may not be paid at all (0%).
Transparency through simplicity:
At its duty-bound discretion, the Supervisory Board may revise
the amount resulting from target achievement upward or down-
ward by as much as 20%; the adjusted amount of the bonus paid
can thus be as much as 240% of the target amount. In choosing
the factors to be considered in deciding on possible revisions of
the bonus payouts (±20%), the Supervisory Board takes account
of incentives for sustainable corporate management. Decisions
to make discretionary adjustments may take factors such as the
results of an employee survey or a customer satisfaction survey
into account as well as the Company's economic situation. The
revision option may also be exercised in recognition of Manag-
ing Board members' individual achievements. The Bonus is paid
entirely in cash.
Long-term stock-based compensation consists of a grant of for-
feitable stock commitments (Stock Awards) at the beginning of
the fiscal year. Beneficiaries receive one free share of Siemens
stock per Stock Award after an approximately four-year restric-
tion period. In the event of extraordinary unforeseen develop-
ments that impact the share price, the Supervisory Board may
decide to reduce the number of promised Stock Awards retro-
actively, or it may decide that in lieu of a transfer of Siemens
stock only a cash settlement in a defined and limited amount
will be paid, or it may decide to postpone transfers of Siemens
stock for payable Stock Awards until the developments have
ceased to impact the share price.
In the event of 100% target achievement, the annual target
amount for the monetary value of the Stock Awards commit-
ment is €1,950,000 for the President and CEO (effective Octo-
ber 1, 2014) and €1,040,000 for each of the other members of
the Managing Board. Since fiscal 2015, the Supervisory Board
has had the option of increasing the target amount for each
member of the Managing Board, on an individual basis, by as
much as 75% for one fiscal year at a time. This option enables
the Supervisory Board to take account of each Managing Board
member's individual accomplishments and experience as well
as the scope and demands of his or her position.
-
Long-term stock-based compensation is linked to the perfor-
mance of Siemens stock compared to its competitors. The Super-
visory Board will decide on a target system (target value for
100% and target line) for the performance of Siemens stock
relative to the stock of - at present five competitors (ABB,
General Electric, Rockwell, Schneider Electric and Toshiba). If
significant changes occur among these competitors during the
period under consideration, the Supervisory Board may take
these changes into account, as appropriate, in determining the
values for comparison and/or calculating the relevant stock
prices of those competitors.
Changes in the share price are measured on the basis of a
twelve-month reference period (compensation year) over three
years (performance period), while Stock Awards are restricted
for a period of four years. When this restriction period expires,
the Supervisory Board determines how much better or worse
Siemens stock has performed relative to the stock of its com-
petitors. This determination yields a target achievement of be-
tween 0% and 200% (cap). If target attainment is above 100%,
an additional cash payment corresponding to the outperfor-
mance will be made. If target attainment is less than 100%, a
number of stock commitments equivalent to the shortfall from
the target will expire without replacement.
Combined Management Report
39
40
The value of the Siemens stock to be transferred for Stock
Awards after the end of the restriction period is subject to a
ceiling of 300% of the respective target amount. If this maxi-
mum amount of compensation is exceeded, the correspond-
ing entitlement to stock commitments will be forfeited without
replacement.
Long-term stock-based compensation
Like employees of Siemens AG, the members of the Managing
Board are included in the Siemens Defined Contribution Benefit
Plan (BSAV). Under the BSAV, Managing Board members re-
ceive contributions that are credited to their personal pension
accounts. The amount of these annual contributions is based
on a predetermined percentage related to their base compensa-
tion and the target amount for their Bonuses. This percentage is
decided upon annually by the Supervisory Board. Most recently
it was set at 28%. In making its decisions, the Supervisory Board
takes account of the intended level of provision for each individ-
ual and the length of time he or she has been a Managing Board
member as well as the annual and long-term expense to the
Company resulting from that provision. The non-forfeitability
Combined Management Report
of pension benefit commitments is determined in compliance
with the provisions of the German Company Pensions Act
(Betriebsrentengesetz). Special contributions may be granted to
Managing Board members on the basis of individual decisions
by the Supervisory Board. If a member of the Managing Board
earned a pension benefit entitlement from the Company before
the BSAV was introduced, a portion of his or her contributions
went toward financing that prior commitment.
Target achievement²
€6.76
128.00%
190.67%
2 Calculative target achievement ROCE was 200% (cap). The Supervisory Board adjusted this target achievement due to the sale of the hearing aid business (Audiology).
The achievement of individual targets was also taken into
account when determining overall target achievement. In its
overall assessment, the Supervisory Board decided not to make
any discretionary adjustments to the Bonus payout amounts. In
fiscal 2015, Bonus-related target achievement by Managing
Board members was between 132.89% and 146.22%.
42
42
Combined Management Report
Actual FY 2015 figure
19.63%
Long-term stock-based compensation
Benefits related to the termination of Managing
Board membership
In connection with the mutually agreed-upon termination of
Prof. Dr. Hermann Requardt's activity on the Managing Board as
of January 31, 2015, it was agreed that his current employment
contract with the Company would terminate as of Septem-
ber 30, 2015. The entitlements agreed upon under the contract
remained in effect until that date. A gross compensatory pay-
ment of €1,888,566 and a one-time special contribution of
€279,552 to the BSAV were agreed upon with Prof. Dr. Hermann
Requardt in connection with the mutually agreed-upon prema-
ture termination of his Managing Board membership. The Stock
Awards already granted and for which the restriction period is
still in effect will be maintained in accordance with the terms
of his employment contract and will be settled in cash at the
closing price of Siemens stock in Xetra trading on Septem-
ber 30, 2015 (€79.94). Pursuant to the terms of his employment
contract, Prof. Dr. Hermann Requardt's base compensation for
fiscal 2015 as well as the variable compensation and long-term
stock-based compensation that he received for fiscal 2014 were
used to determine the amount of his compensatory payment
and limited to a total of his compensation for the remaining
term of his appointment. In addition, non-monetary benefits
were covered by a payment amounting to 5% of the compensa-
tory payment. The Company also reimbursed Prof. Dr. Hermann
Requardt for out-of-pocket expenses of €5,000 plus value-
added tax.
Total compensation
On the basis of the Supervisory Board's decisions described
above, Managing Board compensation for fiscal 2015 totaled
€27.42 million, a decrease of 4% (2014: €28.57 million). Of this
total amount, €19.56 million (2014: €17.89 million) was attribut-
able to cash compensation and €7.86 million (2014: €10.68 mil-
lion) to stock-based compensation.
The compensation presented on the following pages was
granted to the members of the Managing Board for fiscal 2015
(individualized disclosure). Due to rounding, the figures pre-
sented in the table may not add up precisely to the totals
provided.
Combined Management Report
43
| Managing Board members serving as of September 30, 2015
Since beneficiaries are not entitled to receive dividends, the
number of stock commitments granted was based on the clos-
ing price of Siemens stock in Xetra trading on the date of award
less the present value of dividends expected during the restric-
tion period. The share price used to determine the number of
stock commitments was €72.30 for 2015 as well as for 2014.
15.96%
€5.40
100% of target
1 Continuing and discontinued operations.
Managing Board members are eligible to receive benefits under
the BSAV at the age of 60 or - in the case of benefit commit-
ments made on or after January 1, 2012 – the age of 62. As a
rule, the accrued pension benefit balance is paid out to Manag-
ing Board members in twelve annual installments. A Managing
Board member or his or her surviving dependents may also re-
quest that his or her pension benefit balance be paid out in
fewer installments or as a lump sum, subject to the Company's
consent. The accrued pension benefit balance may also be paid
out as a pension. As a further alternative, Managing Board
members may choose to combine pension payments with pay-
ments in one to twelve installments. If the pension option is
chosen, a decision must be made as to whether the payout
should include pensions for surviving dependents. If a member
of the Managing Board dies while receiving a pension, benefits
will be paid to his or her surviving dependents if the member
has chosen such benefits. The Company will then provide a
limited-term pension to surviving children until they reach the
age of 27 or, in the case of benefit commitments made on or
after January 1, 2007, until they reach the age of 25.
Benefits from the retirement benefit system that was in place
before the BSAV was established are normally granted as pen-
sion benefits with a surviving dependent's pension. In this case
also, payout in installments or a lump sum payment may be
chosen instead of pension payments.
Managing Board members who were employed by the Company
on or before September 30, 1983, are entitled to receive transi-
tion payments for the first six months after retirement, equal to
the difference between their final base compensation and the
retirement benefits payable under the corporate pension plan.
Commitments in connection with the termination
of Managing Board membership
Managing Board employment contracts provide for a compen-
satory payment if membership on the Managing Board is termi-
nated prematurely by mutual agreement and without serious
cause. The amount of this payment must not exceed the value
of two years' compensation and compensate no more than the
remaining term of the contract (cap). The amount of the com-
pensatory payment is calculated on the basis of base compen-
sation, together with the variable compensation and the long-
term stock-based compensation actually received during the
last fiscal year before termination. The compensatory payment
is payable in the month when the member leaves the Managing
Board. In addition, a one-time special contribution is made to
the BSAV. The amount of this contribution is based on the BSAV
contribution that the Managing Board member received in the
previous year and on the remaining term of his or her appoint-
ment, but is limited to not more than two years' contributions
(cap). The above benefits are not paid if an amicable termina-
tion of the member's activity on the Managing Board is agreed
upon at the member's request, or if there is serious cause for
the Company to terminate the employment relationship.
-
In the event of a change of control that results in a substantial
change in a Managing Board member's position – for example,
due to a change in corporate strategy or a change in the Man-
aging Board member's duties and responsibilities – the Manag-
ing Board member has the right to terminate his or her contract
with the Company. A change of control exists if one or more
shareholders acting jointly or in concert acquire a majority of
the voting rights in Siemens AG and exercise a controlling in-
fluence or if Siemens AG becomes a dependent enterprise as a
result of entering into an intercompany agreement within the
meaning of Section 291 of the German Stock Corporation Act
(Aktiengesetz) or if Siemens AG is to be merged into an existing
corporation or other entity. If this right of termination is exer-
cised, the Managing Board member is entitled to a severance
payment in the amount of not more than two years' compensa-
tion. The calculation of the annual compensation will include
not only the base compensation and the target amount for the
Bonus, but also the target amount for Stock Awards, in each
case based on the most recent fiscal year completed prior to
the termination of the member's contract. The stock-based
components for which a firm commitment already exists will
remain unaffected. There is no entitlement to a severance pay-
ment if the Managing Board member receives benefits from
third parties in connection with a change of control. Moreover,
there is no right to terminate if the change of control occurs
within a period of twelve months prior to a Managing Board
member's retirement.
Compensatory or severance payments also cover non-mone-
tary benefits by including an amount of 5% of the total com-
pensation or severance amount. Compensatory or severance
payments will be reduced by 10% as a lump-sum allowance for
discounted values and for income earned elsewhere. However,
this reduction will apply only to the portion of the compensa-
tory or severance payment that was calculated without taking
into account the first six months of the remaining term of the
Managing Board member's employment contract.
Combined Management Report
41
Stock commitments that were made as long-term stock-based
compensation and for which the restriction period is still in
effect will be forfeited without replacement if the employment
agreement is not extended after the end of an appointment
period, either at the Managing Board member's request or
because there is serious cause that would have entitled the
Company to revoke the appointment or terminate the contract.
However, once granted, Stock Awards are not forfeited if the
employment agreement is terminated by mutual agreement at
the Company's request, or because of retirement, disability or
death or in connection with a spinoff, the transfer of an opera-
tion or a change of activity within the corporate group. In these
cases, the Stock Awards will remain in effect upon termination
of the employment agreement and will be honored on expira-
tion of the restriction period.
A.10.1.2 REMUNERATION OF MANAGING BOARD
MEMBERS FOR FISCAL 2015
At the beginning of the fiscal year, the Supervisory Board set
the target parameters return on capital employed (ROCE) and
earnings per share (EPS), in each case on the basis of continu-
ing and discontinued operations. The target values for the EPS
component were defined on a multi-year basis. In defining the
target for variable compensation, the Supervisory Board also
defined individual targets for all members of the Managing
Board so as to take fuller account of their individual perfor-
mance. As a rule, up to five individual targets were defined for
this purpose. These targets take account of business-related
targets such as market coverage and business performance as
well as targets such as customer and employee satisfaction, in-
novation and sustainability. An internal review of the appropri-
ateness of Managing Board compensation for fiscal 2015 has
confirmed that the remuneration of the Managing Board result-
ing from target achievement for fiscal 2015 is to be considered
appropriate. In light of this review and following a review of the
achievement of the targets defined at the beginning of the fis-
cal year, the Supervisory Board has decided to define the
amounts of variable compensation, stock commitments and
pension benefit contributions as follows:
Variable compensation (Bonus)
The following targets were set and attained with respect to the
two target parameters ROCE and EPS for variable compensation:
|
Target parameter
Return on capital employed, ROCE¹
Earnings per share, basic EPS1 (02013-2015)
1,010
1,010
1,010
95
6,535
1,210
3,478
1,444
3,505
125
1,826
1,477
3,713
1,046 1,376
3,271 3,427
Janina Kugel
Managing Board member
6,177
since February 1, 2015
Dr. Ralf P. Thomas
Prof. Dr. Hermann Requardt⁹
CFO
Managing Board member
until January 31, 2015
2014
2015
2015
2015
Prof. Dr. Siegfried Russwurm
Managing Board member
2014
2,683
5,807
1,826
604
1,667
5,807
604 2,819
4,645
3,246
611
3,857
1,238
5,203
2,973
3,061
2,016
1,052
611
1,848
611
5,814 3,494
521
604
604
604
3,664
1,656
5,203
2015
(min)
(max)
25
25
44
651
651
651
1,042
78
1,088
78
1,088
25
78
1,088
1,060
67
1,078
67
67
84
28
1,078
1,078
61
337
998
1,010
2015
(min)
2015
2014
2015
2015
2015
2014
2015
(max)
(min)
(max)
626
626
626
998
1,010
1,010
1,010
998
1,010
1,010
5,203
365
1,063
3,076
42
42
1,052
1,052
1,384
1,878
0
4,507
749
1,010
1,010
2,425
125
1,010
0
2,425
749
1,010
0
2,425
0
2,221
1,010
1,238
102
102
102
51
53
53
53
15
227
998 1,010
62
42
1,061 1,052
227
1,940
1,980 1,980
1,980
1,049
1,063 1,063
1,063
181
1,238
1,238
227
1,871
0
5,850
5,850
335
998
0
3,120
608
998
0
3,120
0
335
0
3,120
5,545
5,729
1,980
1,059
1,096
1,096
6,603 6,825
998
1,871
637
480
1,218
998
0
3,120
1,520
998
0
3,120 1,164
998
0
3,120
672
403
42
-
349
912
480
-
871
-
9,700 3,017 3,071
1,096
561
604
10,796 3,578 3,675
Combined Management Report
0 3,120
5,203
to show proof as of March 13, 2015
Joe Kaeser
Dr. Nathalie von Siemens³
105,000
4,500
109,500
Michael Sigmund
140,000
9,000
149,000
81,667
9,000
90,667
Jim Hagemann Snabe
132,222
113,333
28,500
274,056
124,444
140,130
97,778
10,500
149,000
134,944
Gérard Mestrallet
140,000
9,000
149,000
119,259
5,679
7,500
132,438
Dr. Norbert Reithofer³
93,333
14,815
4,500
112,648
Güler Sabancı
140,000
9,000
129,630
10,500
19,500
Sibylle Wankel¹
Berthold Huber 1,2
Total4
73,333
3,093,704
26,667
1,609,630
7,500
10,500
415,500
67,500
110,500 211,852
5,118,833 2,847,778
134,815
35,309
15,000
as of September 30, 2015, and required
77,037
25,500
314,389
1,533,580
462,000
4,843,358
1 These employee representatives on the Supervisory
Board and the representatives of the trade unions on
the Supervisory Board have declared their willingness
to transfer their compensation to the Hans Boeckler
Foundation, in accordance with the guidelines of the
Confederation of German Trade Unions (DGB).
13,333
241,722
46,667
250,000
132,222
37,778
13,500
183,500
140,000
40,000
21,000
201,000
Former Supervisory Board members
Gerd von Brandenstein³
41,481
23,704
9,000
74,185
140,000
80,000
30,000
Prof. Dr. Peter Gruss³
2 Reinhard Hahn was appointed to the Supervisory Board
by court order effective the end of the Annual Shareholders'
Meeting on January 27, 2015, succeeding Berthold Huber,
who resigned from the Supervisory Board effective the
same date.
124,444
15,000
Dr. Hans Michael Gaul
140,000
160,000
27,000
327,000
140,000
160,000
30,000
330,000
Reinhard Hahn 1,2
105,000
4,500
109,500
Bettina Haller¹
140,000
80,000
24,000
205,778
244,000
18,000
134,815
393,000
211,852
134,815
39,000
385,667
Olaf Bolduan¹
140,000
9,000
149,000
35,000
4,500
39,500
Michael Diekmann
132,222
56,667
13,500
202,389
52,963
188,333
140,000
28,500
241,000
140,000
76,667
25,500
242,167
Jürgen Kerner¹
132,222
170,000
31,500
333,722
140,000
120,000
28,500
288,500
Dr. Nicola Leibinger-Kammüller
140,000
33,333
21,000
80,000
80,000
Harald Kern¹
248,500
Hans-Jürgen Hartung
140,000
9,000
149,000
140,000
13,500
153,500
Robert Kensbock1
140,000
180,000
30,000
350,000
140,000
106,667
27,000
273,667
140,000
3 Dr. Norbert Reithofer and Dr. Nathalie von Siemens were
elected to the Supervisory Board effective the end of the
Annual Shareholders' Meeting on January 27, 2015. They
succeed Gerd von Brandenstein and Prof. Dr. Peter Gruss,
who resigned from the Supervisory Board effective the
same date.
4 The total figure, compared to the amount presented in
the 2014 Compensation Report, does not include the total
compensation of €289,833 paid to former Supervisory
Board members Lothar Adler and Prof. Dr. Rainer Sieg.
Income from investments accounted for using the equity method, net
4
1,235
582
Interest income
1,260
1,058
Interest expenses
(818)
(764)
Other financial income (expenses), net
(500)
(177)
Income from continuing operations before income taxes
7,218
7,306
Income tax expenses
(194)
7
(389)
Other operating expenses
2014
75,636
71,227
(53,789)
(50,869)
21,847
20,357
Research and development expenses
(4,483)
(4,020)
Selling and general administrative expenses
(11,409)
(10,190)
Other operating income
5
476
654
6
2015
(1,869)
Income from continuing operations
6.12
2.47
0.25
8.84
6.37
Diluted earnings per share
Income from continuing operations
Income from discontinued operations
Net income
58 Consolidated Financial Statements
27
6.30
6.06
2.44
0.25
8.74
6.31
6.38
(2,014)
27
7,282
5,349
5,292
Income from discontinued operations, net of income taxes
3
2,031
215
Net income
7,380
5,507
Attributable to:
Non-controlling interests
Shareholders of Siemens AG
Basic earnings per share
Income from continuing operations
Income from discontinued operations
Net income
98
134
5,373
Note
Gross profit
Cost of sales
A.11.4 Powers of the Managing Board
to issue and repurchase shares
The Managing Board is authorized to increase, with the ap-
proval of the Supervisory Board, the capital stock until Janu-
ary 24, 2016 by up to €90 million through the issuance of up to
30 million registered shares of no par value against contribu-
tions in cash (Authorized Capital 2011). Subscription rights of
existing shareholders are excluded. The new shares shall be
issued under the condition that they are offered exclusively to
employees of Siemens AG and its consolidated subsidiaries. To
the extent permitted by law, employee shares may also be is-
sued in such a manner that the contribution to be paid on such
Combined Management Report
53
54
shares is covered by that part of the annual net income which
the Managing Board and the Supervisory Board may allocate to
other retained earnings under Section 58 para. 2 of the German
Stock Corporation Act.
Furthermore, the Managing Board is authorized to increase,
with the approval of the Supervisory Board, the capital stock
until January 27, 2019 by up to €528.6 million through the
issuance of up to 176.2 million registered shares of no par value
against cash contributions and/or contributions in kind
(Authorized Capital 2014).
As of September 30, 2015, the total unissued authorized capital
of Siemens AG therefore consisted of €618.6 million nominal
that may be issued, with varying terms by issuance, in install-
ments of up to 206.2 million registered shares of no par value.
By resolutions of the Shareholders' Meetings of January 28,
2014 and January 27, 2015, the Managing Board is authorized to
issue bonds with conversion rights or with warrants attached,
or a combination of these instruments, each entitling the
holders to subscribe to up to 80 million registered shares of
Siemens AG of no par value. Based on these two authorizations
the Company or consolidated subsidiaries of the Company
may issue bonds until January 27, 2019 and January 26, 2020,
respectively, each in an aggregate principal amount of up to
€15 billion. In order to grant shares of stock to holders/creditors
of such convertible bonds or warrant bonds, the capital stock
was conditionally increased by resolutions of the Shareholders'
Meetings 2014 and 2015, each by up to 80 million registered
shares of no par value (Conditional Capitals 2014 and 2015), i.e.
in total by up to €480 million through the issuance of up to
160 million shares of no par value.
The new shares under Authorized Capital 2014 and the bonds
under these authorizations are to be issued against cash or
non-cash contributions. They are, as a matter of principle, to be
offered to shareholders for subscription. The Managing Board is
authorized to exclude, with the approval of the Supervisory
Board, subscription rights of shareholders in the event of capi-
tal increases against contributions in kind. In the event of cap-
ital increases against contributions in cash, the Managing
Board is authorized to exclude shareholders' subscription
rights with the approval of the Supervisory Board in the follow-
ing cases:
> The issue price of the new shares/bonds is not significantly
lower than the stock market price of the Siemens shares
already listed or the theoretical market price of the bonds
computed in accordance with generally accepted actuarial
methods (exclusion of subscription rights, limited to 10% of
the capital stock, in accordance with or by mutatis mutandis
application of Section 186 para. 3 sentence 4 German Stock
Corporation Act).
> The exclusion is necessary with regard to fractional amounts
resulting from the subscription ratio.
> The exclusion is necessary in order to grant holders of con-
version or option rights or conversion or option obligations
on Siemens shares a compensation for the effects of dilution.
The total amount of new shares issued or to be issued under
Authorized Capital 2014 or in accordance with the bonds men-
tioned above, in exchange for contributions in cash and in kind
and with shareholders' subscription rights excluded, may in
certain cases be subject to further restrictions, such as the
restriction that they may not exceed 20% of the capital stock.
The details of those restrictions are described in the relevant
authorization.
In February 2012, Siemens issued bonds with warrant units
with a volume of US$3 billion. Siemens exchanged the major
part of the warrants issued in 2012 against new warrants in
September 2015; for this purpose, Siemens issued new bonds
with warrants. At exchange, the new warrants resulted in op-
tion rights entitling their holders to receive approximately
20.3 million Siemens shares. The terms and conditions of the
warrants enable Siemens to service exercised option rights
using either conditional capital or treasury stock, and also
enable Siemens to buy back the warrants.
The Company may not repurchase its own shares unless so
authorized by a resolution duly adopted by the shareholders at
a general meeting or in other very limited circumstances set
forth in the German Stock Corporation Act. On January 27,
2015, the Shareholders' Meeting authorized the Company to
acquire until January 26, 2020 up to 10% of its capital stock ex-
isting at the date of adopting the resolution or – if this value is
lower - as of the date on which the authorization is exercised.
The aggregate of shares of stock of Siemens AG repurchased
under this authorization and any other Siemens shares previ-
ously acquired and still held in treasury by the Company or at-
tributable to the Company pursuant to Sections 71d and 71e of
the German Stock Corporation Act may at no time exceed 10%
of the then existing capital stock. Any repurchase of Siemens
shares shall be accomplished at the discretion of the Managing
Board either (1) by acquisition over the stock exchange or
(2) through a public share repurchase offer. The Managing
Board is additionally authorized to complete, with the approval
of the Supervisory Board, the repurchase of Siemens shares in
accordance with the authorization described above by using
certain derivatives (put and call options, forward purchases
and any combination of these derivatives). In exercising this
authorization, all stock repurchases based on the derivatives
are limited to a maximum volume of 5% of Siemens' capital
Resolutions of the Shareholders' Meeting require a simple ma-
jority vote, unless a greater majority is required by law. Pursu-
ant to Section 179 para. 2 of the German Stock Corporation Act,
amendments to the Articles of Association require a majority of
at least three-quarters of the capital stock represented at the
time of the casting of the votes, unless another capital majority
is prescribed by the Articles of Association.
Combined Management Report
According to Section 179 of the German Stock Corporation
Act, any amendment to the Articles of Association requires a
resolution of the Shareholders' Meeting. The authority to adopt
purely formal amendments to the Articles of Association was
transferred to the Supervisory Board under Section 13 para. 2 of
the Articles of Association. In addition, by resolutions of the
Shareholders' Meetings on January 25, 2011, January 28, 2014
and January 27, 2015, the Supervisory Board has been autho-
rized to amend Section 4 of the Articles of Association in accord-
ance with the utilization of the Authorized Capitals 2011 and
2014, Conditional Capitals 2014 and 2015, and after expiration
of the then-applicable authorization period.
A.11.3 Legislation and provisions
of the Articles of Association applicable
to the appointment and removal
of members of the Managing Board and
governing amendment to the Articles
of Association
A.10.3 Other
The Company provides a group insurance policy for Supervisory
and Managing Board members and certain other employees of
the Siemens Group. The policy is taken out for one year at a
time and renewed annually. It covers the personal liability of
the insured in cases of financial loss associated with their activ-
ities on behalf of the Company. The insurance policy for fiscal
2015 includes a deductible for the members of the Managing
Board and the Supervisory Board that complies with the re-
quirements of the German Stock Corporation Act and the Code.
62
52
Combined Management Report
A.11 Takeover-relevant information
(pursuant to Sections 289 para. 4 and 315 para. 4 of the German Commercial Code)
and explanatory report
A.11.1 Composition of common stock
As of September 30, 2015, the Company's common stock to-
taled €2.643 billion. The capital stock is divided into 881 million
registered shares with no par value and a notional value of
€3.00 per share. The shares are fully paid in. All shares confer
the same rights and obligations. The shareholders' rights and
obligations are governed in detail by the provisions of the Ger-
man Stock Corporation Act, in particular by Sections 12, 53a et
seq., 118 et seq. and 186 of the German Stock Corporation Act.
A.11.2 Restrictions on voting rights
or transfer of shares
At the Shareholders' Meeting, each share of stock has one vote
and accounts for the shareholders' proportionate share in the
Company's net income. An exception from this rule applies
with regard to treasury shares held by the Company, which do
not entitle the Company to any rights. Under Section 136 of the
German Stock Corporation Act the voting right of the affected
shares is excluded by law.
Shares issued to employees worldwide under the employee
share program implemented since the beginning of fiscal 2009,
in particular the Share Matching Plan, are freely transferable
unless applicable local laws provide otherwise. Under the rules
of the program, however, in order to receive one matching
share free of charge for each three shares purchased, partici-
pants are required to hold the shares purchased by them for a
vesting period of several years, during which the participants
have to be continuously employed by Siemens AG or another
Siemens company. The right to receive matching shares is for-
feited if the purchased shares are sold, transferred, hedged on,
pledged or hypothecated in any way during the vesting period.
The von Siemens-Vermögensverwaltung GmbH (VSV) has, on a
sustained basis, powers of attorney allowing it to exercise the
voting rights for 10,878,836 shares (as of September 30, 2015)
on behalf of members of the Siemens family. These shares
are part of the total number of shares held by the family's
members. The powers of attorney are based on an agreement
between the VSV and, among others, members of the Siemens
family. The shares are voted together by VSV, taking into account
the proposals of a family partnership established by the family's
members or of one of this partnership's governing bodies.
The appointment and removal of members of the Managing
Board is subject to the provisions of Sections 84 and 85 of the
German Stock Corporation Act and Section 31 of the German
Codetermination Act (Mitbestimmungsgesetz). According to
Section 8 para. 1 of the Articles of Association, the Managing
Board is comprised of several members, the number of which
is determined by the Supervisory Board.
stock existing at the date of adopting the resolution at the
Shareholders' Meeting. A derivative's term of maturity may not,
in any case, exceed 18 months and must be chosen in such a
way that the repurchase of Siemens shares upon exercise of
the derivative will take place no later than January 26, 2020.
In addition to selling them over the stock exchange or through
a public sales offer to all shareholders, the Managing Board
is authorized by resolution of the Shareholders' Meeting on
January 27, 2015 to also use Siemens shares repurchased on the
basis of this or any previously given authorization for every
permissible purpose, in particular as follows: Such Siemens
shares may be
> retired
Combined Management Report
B.
Consolidated Financial Statements
0010010
0 1 1 1 0 1 0 0 1 1 0
011000101001110
0111001010001
1% 1
1 0 1 0 1 0 1 1 1 0 10
011010
1001
0101011100101
0100010
B.1 Consolidated Statements of Income
Fiscal year
(in millions of €, per share amounts in €)
Revenue
We are not aware of, nor have we during the last fiscal year
been notified of, any shareholder directly or indirectly holding
10% or more of the voting rights. There are no shares with spe-
cial rights conferring powers of control. Shares of stock issued
by Siemens AG to employees under its employee share pro-
gram and/or as share-based compensation are transferred di-
rectly to the employees. The beneficiary employees who hold
shares of employee stock may exercise their control rights in
the same way as any other shareholder directly in accordance
with applicable laws and the Articles of Association.
A.11.7 Other takeover-relevant
information
awards, in each case based on the most recent completed fiscal
year prior to termination of the contract. The stock-based com-
pensation components for which a firm commitment already
exists will remain unaffected. Additionally, the severance pay-
ments cover non-monetary benefits by including an amount of
5% of the total severance amount. Severance payments will be
reduced by 10% as a lump-sum allowance for discounted values
and for income earned elsewhere. However, this reduction will
apply only to the portion of the severance payment that was
calculated without taking account of the first six months of the
remaining term of the Managing Board member's contract.
There is no entitlement to a severance payment if the Manag-
ing Board member receives benefits from third parties in con-
nection with a change of control. A right to terminate the con-
tract does not exist if the change of control occurs within a
period of twelve months prior to a Managing Board member's
retirement.
In the event of a change of control that results in a substantial
change in the position of a Managing Board member (for exam-
ple, due to a change in corporate strategy or a change in the
Managing Board member's duties and responsibilities), the
member of the Managing Board has the right to terminate his
or her contract with the Company for good cause. A change of
control exists if one or several shareholders acting jointly or in
concert acquire a majority of the voting rights in Siemens AG
and exercise a controlling influence, or if Siemens AG becomes
a dependent enterprise as a result of entering into an intercom-
pany agreement within the meaning of Section 291 of the Ger-
man Stock Corporation Act, or if Siemens AG is to be merged
into an existing corporation or other entity. If this right of ter-
mination is exercised, the Managing Board member is entitled
to a severance payment in the amount of no more than two
years' compensation. The calculation of the annual compensa-
tion includes not only the base compensation and the target
amount for the bonus, but also the target amount for the stock
> used in connection with share-based compensation pro-
grams and/or employee share programs of the Company or
any of its affiliated companies and issued to individuals cur-
rently or formerly employed by the Company or any of its
affiliated companies as well as to board members of any of
the Company's affiliated companies
> offered and transferred, with the approval of the Supervisory
Board, to third parties against non-cash contributions
> sold, with the approval of the Supervisory Board, to third par-
ties against payment in cash if the price at which such
Siemens shares are sold is not significantly lower than the
market price of Siemens stock (exclusion of subscription
rights, limited to 10% of the capital stock, by mutatis mutan-
dis application of Section 186 para. 3 sentence 4 German
Stock Corporation Act) or
> used to service or secure obligations or rights to acquire
Siemens shares arising particularly from or in connection
with convertible bonds or warrant bonds issued by the Com-
pany or any of its consolidated subsidiaries (exclusion of
subscription rights, limited to 10% of the capital stock, by
mutatis mutandis application of Section 186 para. 3 sen-
tence 4 German Stock Corporation Act).
Furthermore, the Supervisory Board is authorized to use shares
acquired on the basis of this or any previously given authoriza-
tion to meet obligations or rights to acquire Siemens shares
that were or will be agreed with members of the Managing
Board within the framework of rules governing Managing
Board compensation.
In November 2013, the Company announced that it would carry
out a share buyback of up to €4 billion in volume within the
following up to 24 months. The buyback commenced on
May 12, 2014 using the authorizations given by the Annual
Shareholders' Meeting on January 25, 2011 and continued on
January 29, 2015 based on the authorizations resolved by the
Annual Shareholders' Meeting on January 27, 2015. Under this
share buyback Siemens repurchased 40,751,593 shares by
September 30, 2015. The total consideration paid for these
shares amounted to about €3.782 billion (excluding incidental
transaction charges). The buyback may serve only to cancel
and reduce the capital stock, issue shares to employees, board
members of affiliated companies and members of the Manag-
ing Board of Siemens AG, or service convertible bonds and
warrant bonds. As of September 30, 2015, the Company held
72,376,759 shares of stock in treasury.
For details on the authorizations referred to above, especially
with the restrictions to exclude subscription rights and the
terms to include shares when calculating such restrictions,
please refer to the relevant resolution and to Section 4 of the
Articles of Association.
33,000
A.11.5 Significant agreements which
take effect, alter or terminate upon
a change of control of the Company
following a takeover bid
In March 2013, a consolidated subsidiary as borrower and
Siemens AG as guarantor entered into two bilateral loan agree-
ments, each of which has been drawn in the full amount of
US$500 million. Both agreements provide their respective lend-
ers with a right of termination in the event that (1) Siemens AG
becomes a subsidiary of another company or (2) a person or a
group of persons acting in concert acquires effective control
over Siemens AG by being able to exercise decisive influence
over its activities (Art. 3(2) of Council Regulation (EC) 139/2004).
Framework agreements concluded by Siemens AG under Inter-
national Swaps and Derivatives Association Inc. documenta-
tion (ISDA Agreements) grant the counterparty a right of termi-
nation when Siemens AG consolidates with, merges into, or
transfers substantially all its assets to a third party. However,
this right of termination exists only, if (1) the resulting entity's
creditworthiness is materially weaker than Siemens AG's im-
mediately prior to such event or (2) the resulting entity fails to
simultaneously assume Siemens AG's obligations under the
ISDA Agreement. Additionally, some ISDA Agreements grant
Combined Management Report
55
56
the counterparty a right of termination if a third party acquires
beneficial ownership of equity securities that enable it to elect a
majority of Siemens AG's Supervisory Board or otherwise acquire
the power to control Siemens AG's material policy-making deci-
sions and if the creditworthiness of Siemens AG is materially
weaker than it was immediately prior to such an event. In ei-
ther situation, ISDA Agreements are designed such that upon
termination all outstanding payment claims documented un-
der them are to be netted.
In February 2012, Siemens issued bonds with warrant units
with a volume of US$3 billion. Siemens exchanged the major
part of the warrants issued in 2012 against new warrants in
September 2015. In case of a change of control, the terms and
conditions of each warrant enable their holders to receive a
higher number of Siemens shares in accordance with an ad-
justed strike price if they exercise their option rights within a
certain period of time after the change of control. This period
of time shall end either (1) not less than 30 days and no more
than 60 days after publication of the notice of the issuer re-
garding the change of control, as determined by the issuer or
(2) 30 days after the change of control first becomes publicly
known. The strike price adjustment decreases depending on
the remaining term of the warrants and is determined in detail
in the terms and conditions of the warrants. In this context, a
change of control occurs if control of Siemens AG is acquired
by a person or by persons acting in concert.
A.11.6 Compensation agreements with
members of the Managing Board or
employees in the event of a takeover bid
Siemens AG maintains two lines of credit in an amount of
€4 billion and an amount of US$3 billion, respectively, which
provide its lenders with a right of termination in the event that
(1) Siemens AG becomes a subsidiary of another company or
(2) a person or a group of persons acting in concert acquires
effective control over Siemens AG by being able to exercise de-
cisive influence over its activities (Art. 3(2) of Council Regula-
tion (EC) 139/2004).
140,000
185,123
Percentage
of base
compensation¹
72,383
129,425
41,025
27,122
23,030
186,268
8,299
60,178
4,709
34,741
54,952
303,543
32,403
138,794
of the Managing Board
Prof. Dr. Hermann Requardt4
Total
Former members
21,301
6,639
4,824
23,184
206
Dr. Ralf P. Thomas
21,301
6,639
4,934
54,952
30,503
Prof. Dr. Siegfried Russwurm
-
10,992
664
3,999
Janina Kugel³
21,301
6,639
576
4,824
38,975
27,233
445,000
140,000
186,667
43,500
370,167
Werner Wenning
220,000
Managing Board members serving
(Amounts in number of units or €)
The deadlines by which the individual Managing Board mem-
bers must provide first-time proof of compliance with the
Siemens Share Ownership Guidelines vary from member to
member, depending on when he or she was appointed to the
Managing Board. The following table shows the number of
Siemens shares that were held by Managing Board members in
office at September 30, 2015, as of the March 2015 deadline for
proving compliance with the Share Ownership Guidelines as
well as the number that are to be held permanently with a view
to future deadlines.
Share Ownership Guidelines
shares, Dr. Ralf P. Thomas. During fiscal 2015, no entitlements
to matching shares were forfeited. Entitlements to matching
shares at the end of fiscal 2015 show the following balance:
Janina Kugel, 3 shares and Dr. Ralf P. Thomas, 780 shares. These
entitlements have the following fair values: Janina Kugel, €174
(2014: €0) and Dr. Ralf P. Thomas, €42,657 (2014: €133,392).
Fiscal 2011 was the last year in which Managing Board members
were entitled to participate in the Siemens Share Matching
Plan. Under the plan, they were entitled to invest up to 50% of
the annual gross amount of their variable cash compensation,
as determined for fiscal 2010, in Siemens shares. After the expi-
ration of a vesting period of approximately three years, plan
participants are entitled to receive one free matching share of
Siemens stock for every three Siemens shares acquired and
continuously held under the plan, provided the participants
were employed without interruption at Siemens AG or a
Siemens company until the end of the vesting period. At the
beginning of fiscal 2015, the following members of the Manag-
ing Board had entitlements to matching shares, which they ac-
quired before joining the Managing Board: Dr. Ralf P. Thomas,
2,685 shares. In fiscal 2015 the following entitlements to match-
ing shares were acquired: Janina Kugel, 3 shares. In fiscal 2015
the following entitlements to matching shares were due: 1,905
Shares from the Share Matching Plan
49
Combined Management Report
Prof. Dr. Hermann Requardt resigned from the Managing
Board effective the end of the day on January 31, 2015.
His employment contract ended effective September 30,
2015. In accordance to the provisions of his contract, the
Siemens Stock Awards will be settled in cash at the
closing price of Siemens stock in Xetra trading on Sep-
tember 30, 2015.
4
3 Janina Kugel was elected a full member of the Managing
Board effective February 1, 2015. Because she joined the
Managing Board during the fiscal year, the target
amount for her stock-based compensation was prorated
and, instead of Stock Awards, she received an equivalent
amount of Phantom Stock Awards. At the end of the
restriction period, these awards will be settled in cash
rather than via a stock transfer. Otherwise, the regula-
tions are the same as those for Stock Awards.
2 Amounts also include stock commitments (Stock Awards
and Phantom Stock Awards) granted in November 2014
for fiscal 2015. These amounts may further include stock
commitments received as compensation by the Manag-
ing Board member before joining the Managing Board.
1 The weighted average fair value as of the grant date for
fiscal 2015 was €66.20 per granted share.
37,112 86,281
173,535 549,989
-
51,124
82,892
35,437
5,030
15,655
-
73,254
-
45,000
45,314
Klaus Helmrich
(Target
attainment
depending
fiscal year
Forfeited
during
fulfilled
during
fiscal year
Vested and
depending
(Target
attainment
Forfeitable commitments
of Stock Awards
Granted during
fiscal year¹
Forfeitable
commit-
ments
of Stock
Awards
Dr. Roland Busch
Joe Kaeser
September 30, 2015
serving as of
Managing Board members
Awards
(Amounts in number of units)
Bonus
Non-
forfeitable
commit-
ments of
of fiscal 2015
Balance at beginning
The following table shows the changes in the balance of the
stock commitments held by Managing Board members in fiscal
2015:
Stock commitments
IN FISCAL 2015
STOCK-BASED COMPENSATION INSTRUMENTS
A.10.1.3 ADDITIONAL INFORMATION ON
No loans or advances from the Company are provided to mem-
bers of the Managing Board.
Other
The defined benefit obligation (DBO) of all pension commit-
ments to former members of the Managing Board and their
surviving dependents as of September 30, 2015, amounted to
€228.3 million (2014: €234.4 million). This figure is included in
→ NOTE 16 in → B.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
Commit-
ments
22,409
of Bonus
Non-
forfeitable
commit-
ments of
26,931
12,044
576
Lisa Davis
21,301
6,639
5,578
44,443
21,544
40,111
12,615
9,296
76,699
31,729
Awards
Stock
Forfeitable
commit-
ments of
of fiscal 2015²
Balance at end
Commit-
ments
stock
on EPS for
mance)
fiscal years)
perfor-
past three
Non-
forfeitable
commit-
ments of
Bonus
Awards
on future
of Stock
Awards
Awards
and Stock
Awards
200,000
Bonus
Awards
Birgit Steinborn¹
If a Supervisory Board member does not attend a meeting of
the Supervisory Board, one-third of the aggregate compensa-
tion due to that member is reduced by the percentage of Super-
visory Board meetings not attended by the member in relation
to the total number of Supervisory Board meetings held during
the fiscal year. In the event of changes in the composition of
the Supervisory Board and/or its committees, compensation is
paid on a pro rata basis, rounding up to the next full month.
Innovation and Finance Committee receives €80,000, and
each of the other members of the Committee receives €40,000;
the Chairman of the Compliance Committee receives €80,000,
and each of the other members of the Committee receives
€40,000. However, no additional compensation is paid for
work on the Compliance Committee if a member of that Com-
mittee is already entitled to compensation for work on the
Audit Committee.
The members of the Supervisory Board committees receive the
following additional fixed compensation for their committee
work: the Chairman of the Audit Committee receives €160,000,
and each of the other members of the Committee receives
€80,000; the Chairman of the Chairman's Committee receives
€120,000, and each of the other members of the Committee
receives €80,000; the Chairman of the Compensation Commit-
tee receives €100,000, and each of the other members of the
Committee receives €60,000 (compensation for any work on
the Chairman's Committee counts toward compensation for
work on the Compensation Committee); the Chairman of the
Under current rules, the members of the Supervisory Board
receive an annual base compensation of €140,000; the Chair-
man of the Supervisory Board receives a base compensation of
€280,000, and each of the Deputy Chairmen receives €220,000.
The current remuneration policies for the Supervisory Board
were authorized at the Annual Shareholders' Meeting held on
January 28, 2014, and are effective as of fiscal 2014. Details are
set out in Section 17 of the Articles of Association of Siemens AG.
The remuneration of the Supervisory Board consists entirely of
fixed compensation; it reflects the responsibilities and scope of
the work of the Supervisory Board members. The Chairman and
Deputy Chairmen of the Supervisory Board as well as the Chair-
men and members of the Audit Committee, the Chairman's Com-
mittee, the Compensation Committee, the Compliance Commit-
tee and the Innovation and Finance Committee receive additional
compensation.
A.10.2 Remuneration of Supervisory
Board members
As of March 13, 2015 (date of proof), including
Bonus Awards.
3
2 Based on the average Xetra opening price of €89.98 for
the fourth quarter of 2014 (October-December).
105,041
84,789
189,830
9,451,589
7,629,314
17,080,903
732%
801%
43,062
21,182
64,244
In addition, the members of the Supervisory Board are entitled
to receive a fee of €1,500 for each meeting of the Supervisory
Board and its committees that they attend.
3,874,688
1,905,950
5,780,638
Number of
shares³
Value²
Percentage
of base
compensation¹
Number of
shares²
Value¹
Proven
Obligations under Share Ownership Guidelines
Required
Combined Management Report
50
1 The amount of the obligation is based on the average
base compensation for the four years prior to the respec-
tive dates of proof.
Total
200,000
300%
200%
The members of the Supervisory Board are reimbursed for out-
of-pocket expenses incurred in connection with their duties
and for any value-added taxes to be paid on their remuneration.
For the performance of his duties, the Chairman of the Super-
visory Board is also entitled to an office with secretarial support
and the use of a carpool service.
Prof. Dr. Siegfried Russwurm
Combined Management Report
No loans or advances from the Company are provided to mem-
bers of the Supervisory Board.
55,500
280,000
280,000
608,000
48,000
280,000
280,000
615,500
serving as of September 30, 2015
Total
Meeting
attend-
ance fee
work
committee
Dr. Gerhard Cromme
Additional
51
compen-
sation for
(Amounts in €)
Supervisory Board members
2015
Additional
Base com-
pensation
The compensation shown below was determined for each of
the members of the Supervisory Board for fiscal 2015 (individu-
alized disclosure).
work
2014
Meeting
attend-
ance fee
Total
Base com-
pensation
compen-
sation for
committee
Total liabilities
Total non-current liabilities
Other liabilities
Other financial liabilities
4,071
17
552
609
9,324
9,811
Equity
4,865
Issued capital
Other components of equity
1,620
2,297
1,874
45,730
36,767
85,292
73,365
18
2,643
2,643
Capital reserve
Retained earnings
16
Treasury shares, at cost
1,466
19,326
17,954
15
Trade payables
Non-controlling interests
7,774
7,594
Other current financial liabilities
2,085
1,717
Current provisions
17
4,489
4,354
Current income tax liabilities
1,828
1,762
Other current liabilities
14
20,368
Liabilities associated with assets classified as held for disposal
3
39
1,597
Total current liabilities
39,562
36,598
Long-term debt
Post-employment benefits
Deferred tax liabilities
Provisions
5677
26,682
Total equity
2,549
5,733
Other non-cash (income) expenses
Change in operating net working capital
1,869
2,014
(442)
(294)
(1,603)
(1,054)
366
90
Inventories
(793)
335
Trade and other receivables
(811)
201
Trade payables
(247)
204
Billings in excess of costs and estimated earnings on uncompleted contracts and related advances
Additions to assets leased to others in operating leases
914
(657)
(451)
(371)
Change in other assets and liabilities
Income taxes paid
Dividends received
Interest received
Cash flows from operating activities - continuing operations
(Income) loss related to investing activities
Total liabilities and equity
Interest (income) expenses, net
2,387
5,525
30,152
25,729
2,163
803
(6,218)
(3,747)
Total equity attributable to shareholders of Siemens AG
34,474
30,954
581
35,056
120,348
560
31,514
104,879
|
60 Consolidated Financial Statements
B.4 Consolidated Statements of Cash Flows
(in millions of €)
Fiscal year
2015
2014
Cash flows from operating activities
Net income
7,380
5,507
Adjustments to reconcile net income to cash flows from operating activities - continuing operations
Income from discontinued operations, net of income taxes
(2,031)
(215)
Amortization, depreciation and impairments
1,620
Income tax expenses
2,979
12
Short-term debt and current maturities of long-term debt
852
(42)
(37)
1,089
940
354
(56)
(7)
(13)
22, 23
(43)
(316)
(7)
288
102
569
149
(85)
1,029
857
8,408
6,364
133
8,275
165
6,199
Consolidated Financial Statements 59
B.3 Consolidated Statements of Financial Position
(in millions of €)
1,399
(370)
249
(107)
Note
B.2 Consolidated Statements of Comprehensive Income
(in millions of €)
Net income
Remeasurements of defined benefit plans
therein: Income tax effects
Items that will not be reclassified to profit or loss
therein: Income (loss) from investments accounted for using the equity method, net
Currency translation differences
Available-for-sale financial assets
therein: Income tax effects
Derivative financial instruments
therein: Income tax effects
Items that may be reclassified subsequently to profit or loss
therein: Income (loss) from investments accounted for using the equity method, net
Other comprehensive income, net of income taxes
Total comprehensive income
Attributable to:
Non-controlling interests
Shareholders of Siemens AG
Fiscal year
Note
2015
2014
7,380
5,507
16
(370)
288
Assets
Cash and cash equivalents
Available-for-sale financial assets
Trade and other receivables
17,783
8,077
4,560
Property, plant and equipment
12
10,210
9,638
Investments accounted for using the equity method
4
2,947
2,127
Other financial assets
13
20,821
18,416
Deferred tax assets
Other assets
Total non-current assets
7
2,591
3,334
1,094
945
68,906
56,803
Total assets
120,348
104,879
Liabilities and equity
23,166
15
11
51,442
Other current financial assets
Inventories
Current income tax assets
2015
2014
9,957
8,013
1,175
925
8
15,982
14,526
9
5,157
3,710
10
17,253
15,100
644
577
1,151
1,290
Assets classified as held for disposal
3
122
3,935
Total current assets
Goodwill
Other intangible assets
48,076
(558)
(2,306)
(1,809)
354
1,049
7,380
98
7,282
-
31,514
560
30,954
(3,747)
(314)
373
745
31,514
560
(42)
993
35
1,029
1,794
129
33
96
289
289
256
30,954
Other current assets
(2,703)
(2,703)
233
36
36
(2,873)
(145)
(2,728)
(2,703)
(3,747)
(314)
373
905
5,507
134
5,373
28,625
514
28,111
(56)
(2,946)
Non controlling
interests
of Siemens AG
able to shareholders
Total equity attribut-
Treasury
shares at cost
(1)
428
Total equity
726
(314)
31
745
5
(6)
(37)
(3)
(34)
310
825
310
(1,080)
(1,080)
279
(13)
(2,654)
(121)
(2,533)
857
(13)
(1,080)
(357)
(6,218)
34,474
Discontinued operations and non-current assets held for
disposal - Discontinued operations are reported when a com-
ponent of an entity is classified as held for disposal or has been
disposed of, if the component represents a separate major line
of business or geographical area of operations and is part of
a single co-ordinated plan to dispose of a separate major line of
business or geographical area of operations. In the Consoli-
dated Statements of Income, income (loss) from discontinued
operations is reported separately from income and expenses
from continuing operations; prior periods are presented on
a comparable basis. In the Consolidated Statements of Cash
Flow, the cash flows from discontinued operations are pre-
sented separately from cash flows of continuing operations;
prior periods are presented on a comparable basis. The disclo-
sures in the Notes to the Consolidated Financial Statements
outside → NOTE 3 ACQUISITIONS, DISPOSITIONS AND DISCONTINUED
OPERATIONS that refer to the Consolidated Statements of Income
and the Consolidated Statements of Cash Flow relate to con-
tinuing operations.
estimates in determining the assets' recoverable amount which
can have a material impact on the respective values and ulti-
mately the amount of any impairment.
66 Consolidated Financial Statements
Impairment of property, plant and equipment and other
intangible assets - The Company reviews property, plant and
equipment and other intangible assets for impairment when-
ever events or changes in circumstances indicate that the car-
rying amount of an asset may not be recoverable. In addition,
intangible assets not yet available for use are subject to an an-
nual impairment test. Impairment testing of property, plant
and equipment and other intangible assets involves the use of
generally 5 years
generally 3 to 5 years
5 to 10 years
5 to 10 years
Siemens classifies a non-current asset or a disposal group as
held for disposal if its carrying amount will be recovered princi-
pally through a sale transaction rather than through continu-
ing use. The disclosures in the Notes to Consolidated Financial
Statements outside NOTE 3 ACQUISITIONS, DISPOSITIONS AND
DISCONTINUED OPERATIONS that refer to the Consolidated State-
ments of Financial Position generally relate to assets that are
not held for disposal. Siemens reports non-current assets or
disposal groups held for disposal separately in → NOTE 3 ACQUI-
SITIONS, DISPOSITIONS AND DISCONTINUED OPERATIONS. Non-current
20 to 50 years
Factory and office buildings
Other buildings
Property, plant and equipment - Property, plant and equip-
ment, is valued at cost less accumulated depreciation and im-
pairment losses. Depreciation expense is recognized using the
straight-line method. The following useful lives are assumed:
Other intangible assets - The Company amortizes intangible
assets with finite useful lives on a straight-line basis over their
respective estimated useful lives. Estimated useful lives for pat-
ents, licenses and other similar rights generally range from
three to five years, except for intangible assets with finite use-
ful lives acquired in business combinations. Intangible assets
acquired in business combinations primarily consist of cus-
tomer relationships and trademarks as well as technology. Use-
ful lives in specific acquisitions ranged from four to 20 years
for customer relationships and trademarks and from seven to
25 years for technology.
The outcome predicted by these estimates is influenced e.g. by
the successful integration of acquired entities, volatility of cap-
ital markets, interest rate developments, foreign exchange rate
fluctuations and the outlook on economic trends. In determin-
ing recoverable amounts, discounted cash flow calculations
use five-year projections that are based on financial forecasts.
Cash flow projections take into account past experience and
represent management's best estimate about future develop-
ments. Cash flows after the planning period are extrapolated
using individual growth rates. Key assumptions on which man-
agement has based its determination of fair value less costs
to sell and value in use include estimated growth rates and
weighted average cost of capital. These estimates, including
the methodology used, can have a material impact on the
respective values and ultimately the amount of any goodwill
impairment.
The determination of the recoverable amount of a cash-gener-
ating unit or a group of cash-generating units to which good-
will is allocated involves the use of estimates by management.
For the purpose of impairment testing, goodwill acquired in a
business combination is allocated to the cash-generating unit
or the group of cash-generating units that is expected to bene-
fit from the synergies of the business combination. If the carry-
ing amount of the cash-generating unit or the group of
cash-generating units, to which the goodwill is allocated, ex-
ceeds its recoverable amount, an impairment loss on goodwill
allocated to this cash-generating unit or this group of cash-gen-
erating units is recognized. The recoverable amount is the
higher of the cash-generating unit's or the group of cash-gen-
erating units' fair value less costs to sell and its value in use. If
either of these amounts exceeds the carrying amount, it is not
always necessary to determine both amounts. These values are
generally determined based on discounted cash flow calcula-
tions. Impairment losses on goodwill are not reversed in future
periods.
The goodwill impairment test is performed at the level of a
cash-generating unit or a group of cash-generating units gen-
erally represented by a segment and for Healthcare one level
below the segment. This is the lowest level at which goodwill
is monitored for internal management purposes.
Technical machinery & equipment
Furniture & office equipment
Equipment leased to others
Goodwill - Goodwill is not amortized, but instead tested for
impairment annually, as well as whenever there are events or
changes in circumstances (triggering events) which suggest
that the carrying amount may not be recoverable. Goodwill is
carried at cost less accumulated impairment losses.
assets classified as held for disposal and disposal groups are
measured at the lower of their carrying amount and fair value
less costs to sell. Depreciation and amortization ceases. The
determination of the fair value less costs to sell includes the
use of estimates and assumptions that tend to be uncertain.
existing taxable temporary differences and established tax
planning opportunities. As of each period-end, Siemens evalu-
ates the recoverability of deferred tax assets, based on pro-
jected future taxable profits. Based upon the level of historical
taxable income and projections for future taxable income over
the periods in which the deferred tax assets are deductible,
Siemens believes it is probable the Company will realize the
benefits of these deductible differences. As future develop-
ments are uncertain and partly beyond Siemens's control,
assumptions are necessary to estimate future taxable profits as
well as the period in which deferred tax assets will recover.
Estimates are revised in the period in which there is sufficient
evidence to revise the assumption.
68 Consolidated Financial Statements
Available-for-sale financial assets - Investments in equity
instruments, debt instruments and fund shares are measured
at fair value, if reliably measurable. Unrealized gains and
losses, net of applicable deferred income tax expenses, are rec-
ognized in line item Other comprehensive income, net of in-
come taxes. Provided that fair value cannot be reliably deter-
mined, Siemens measures available-for-sale financial assets at
cost. This applies to equity instruments that do not have a
Cash and cash equivalents - The Company considers all
highly liquid investments with less than three months matu-
rity from the date of acquisition to be cash equivalents. Cash
and cash equivalents are measured at cost.
Financial instruments - A financial instrument is any con-
tract that gives rise to a financial asset of one entity and a fi-
nancial liability or equity instrument of another entity. Siemens
does not use the category held to maturity and does not use
the option to designate financial assets or financial liabilities at
fair value through profit or loss at inception (Fair Value Option).
Based on their nature, financial instruments are classified as
financial assets and financial liabilities measured at cost or
amortized cost and financial assets and financial liabilities
measured at fair value and as receivables from finance leases.
Regular way purchases or sales of financial assets are ac-
counted for at the trade date. Initially, financial instruments are
recognized at their fair value. Transaction costs are only in-
cluded in determining the carrying amount, if the financial in-
struments are not measured at fair value through profit or loss.
Receivables from finance leases are recognized at an amount
equal to the net investment in the lease. Subsequently, finan-
cial assets and liabilities are measured according to the cate-
gory to which they are assigned-cash and cash equivalents,
available-for-sale financial assets, loans and receivables, finan-
cial liabilities measured at amortized cost or financial assets
and liabilities classified as held for trading.
Termination benefits - Termination benefits are provided as
a result of an entity's offer made in order to encourage volun-
tary redundancy before the normal retirement date or from an
entity's decision to terminate the employment. Termination
benefits in accordance with IAS 19, Employee Benefits, are rec-
ognized as a liability and an expense when the entity can no
longer withdraw the offer of those benefits.
necessary, to record a provision for an ongoing Legal Proceed-
ing or to adjust the amount of a previously recognized provi-
sion. Upon resolution of a Legal Proceeding, Siemens may incur
charges in excess of the recorded provisions for such matters.
The outcome of Legal Proceedings may have a material effect
on Siemens' financial position, its results of operations and/or
its cash flows.
Legal Proceedings often involve complex legal issues and are
subject to substantial uncertainties. Accordingly, considerable
judgment is part of determining whether it is probable that
there is a present obligation as a result of a past event at the
end of the reporting period, whether it is probable that such a
Legal Proceeding will result in an outflow of resources and
whether the amount of the obligation can be reliably esti-
mated. Internal and external counsels are generally part of the
determination process. Due to new developments, it may be
Income taxes - Tax positions under respective local tax laws
and tax authorities' views can be complex and subject to differ-
ent interpretations of tax payers and local tax authorities.
Different interpretations of tax laws may result in additional tax
payments for prior years and are taken into account based on
management's considerations. Under the liability method, de-
ferred tax assets and liabilities are recognized for future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets are recog-
nized if sufficient future taxable profit is available, including
income from forecasted operating earnings, the reversal of
Significant estimates are involved in the determination of pro-
visions related to onerous contracts, warranty costs, asset re-
tirement obligations, legal and regulatory proceedings as well
as governmental investigations (Legal Proceedings). Siemens
records a provision for onerous sales contracts when current
estimates of total contract costs exceed expected contract rev-
enue. Onerous sales contracts are identified by monitoring the
progress of the project and updating the estimate of total con-
tract costs which also requires significant judgment relating to
achieving certain performance standards as well as estimates
involving warranty costs and estimates regarding project de-
lays including the assessment of responsibility splits between
the contract partners for these delays. Uncertainties regarding
asset retirement obligations include the estimated costs of de-
commissioning and final storage because of the long time
frame over which future cash outflows are expected to occur
including the respective interest accretion. Amongst others,
the estimated cash outflows could alter significantly if, and
when, political developments affect the government's plans to
develop the final storage.
-
Actuarial valuations rely on key assumptions including dis-
count rates, expected compensation increases, rate of pension
progression and mortality rates. Discount rates used are deter-
mined by reference to yields on high-quality corporate bonds of
appropriate duration and currency at the end of the reporting
period. In case such yields are not available discount rates are
based on government bonds yields. Due to changing market,
economic and social conditions the underlying key assump-
tions may differ from actual developments.
Consolidated Financial Statements 67
Remeasurements comprise actuarial gains and losses as well as
the difference between the return on plan assets and the
amounts included in net interest on the net defined benefits
liability (asset) and are recognized in Other comprehensive
income, net of income taxes.
Service cost and past service cost for post-employment benefits
and administration costs unrelated to the management of plan
assets are allocated among functional costs. Past service cost
and settlement gains (losses) are recognized immediately in
profit or loss. For unfunded plans, the amount of line item
Post-employment benefits equals the DBO. For funded plans,
Siemens offsets the fair value of the plan assets with the DBO.
Siemens recognizes the net amount, after adjustments for
effects relating to any asset ceiling.
Defined benefit plans - Siemens measures the entitlements
by applying the projected unit credit method. The approach re-
flects an actuarially calculated net present value of the future
benefit entitlement for services already rendered. In determin-
ing the net present value of the future benefit entitlement for
service already rendered (Defined Benefit Obligation (DBO)),
the expected rates of future salary increase and expected rates
of future pension progression are considered. The assumptions
used for the calculation of the DBO as of the period-end of the
preceding fiscal year are used to determine the calculation of
service cost and interest income and expense of the following
year. The net interest income or expense for the fiscal year will
be based on the discount rate for the respective year multiplied
by the net liability (asset) at the preceding fiscal year's peri-
od-end date.
Inventories - Inventories are valued at the lower of acquisi-
tion or production costs and net realizable value, costs being
generally determined on the basis of an average or first-in, first-
out method.
Provisions
A provision is recognized in the Statement of
Financial Position when it is probable that the Company has a
present legal or constructive obligation as a result of a past
event, it is probable that an outflow of economic benefits will
be required to settle the obligation and a reliable estimate can
be made of the amount of the obligation. If the effect is mate-
rial, provisions are recognized at present value by discounting
the expected future cash flows at a pretax rate that reflects cur-
rent market assessments of the time value of money. When a
contract becomes onerous, the present obligation under the
contract is recognized as a provision.
(160)
Earnings per share - Basic earnings per share are computed
by dividing income from continuing operations, income from
discontinued operations and net income, all attributable to or-
dinary shareholders of Siemens AG by the weighted average
number of shares outstanding during the year. Diluted earn-
ings per share are calculated by assuming conversion or exer-
cise of all potentially dilutive securities and share-based pay-
ment plans.
Product-related expenses
Provisions for estimated costs
related to product warranties are recorded in line item Cost of
sales at the time the related sale is recognized.
the Consolidated Statements of Income, and its share of
post-acquisition changes in equity that have not been recog-
nized in the associate's profit or loss is recognized directly in
equity. The cumulative post-acquisition changes are adjusted
against the carrying amount of the investment in the associ-
ate. When Siemens' share of losses in an associate equals or
exceeds its interest in the associate, Siemens does not recog-
nize further losses, unless it incurs obligations or makes pay-
ments on behalf of the associate. The interest in an associate is
the carrying amount of the investment in the associate to-
gether with any long-term interests that, in substance, form
part of Siemens' net investment in the associate.
Business combinations - Cost of an acquisition is measured
at the fair value of the assets given and liabilities incurred or
assumed at the date of exchange. Identifiable assets acquired
and liabilities assumed in a business combination (including
contingent liabilities) are measured initially at their fair
values at the acquisition date, irrespective of the extent of
Basis of consolidation - The Consolidated Financial State-
ments include the accounts of Siemens AG and its subsidiaries
over which the Company has control. Siemens controls an in-
vestee if it has power over the investee. In addition, Siemens is
exposed to, or has rights to, variable returns from the involve-
ment with the investee and Siemens has the ability to use its
power over the investee to affect the amount of Siemens' return.
Certain of these accounting policies require critical accounting
estimates that involve complex and subjective judgments and
the use of assumptions, some of which may be for matters that
are inherently uncertain and susceptible to change. Such criti-
cal accounting estimates could change from period to period
and have a material impact on the Company's results of opera-
tions, financial positions and cash flows. Critical accounting
estimates could also involve estimates where Siemens reason-
ably could have used a different estimate in the current account-
ing period. Siemens cautions that future events often vary from
forecasts and that estimates routinely require adjustment.
policies and critical accounting estimates
NOTE 2 Summary of significant accounting its associate's post-acquisition profits or losses is recognized in
Associates - Associates are companies over which Siemens
has the ability to exercise significant influence over operating
and financial policies (generally through direct or indirect own-
ership of 20% to 50% of the voting rights). These are recorded
in the Consolidated Financial Statements using the equity
method and are initially recognized at cost. Siemens' share of
Joint ventures - Joint ventures are entities over which
Siemens and one or more parties have joint control. Joint con-
trol requires unanimous consent of the parties sharing control
in decision making on relevant activities.
any non-controlling interest. Non-controlling interests are
measured at the proportional fair value of assets acquired and
liabilities assumed (partial goodwill method). If there is no loss
of control, transactions with non-controlling interests are ac-
counted for as equity transactions not affecting profit and loss.
At the date control is lost, any retained equity interests are
remeasured to fair value. In case of a written put option on
non-controlling interests the Company assesses whether the
prerequisites for the transfer of present ownership interest are
fulfilled at the balance sheet date. If the Company is not the
beneficial owner of the shares underlying the put option, the
exercise of the put option will be assumed at each balance
sheet date and treated as equity transaction between share-
holders with the recognition of a purchase liability at the re-
spective exercise price. The non-controlling interests partici-
pate in profits and losses during the reporting period.
Siemens prepares and reports its Consolidated Financial State-
ments in euros (€). Due to rounding, numbers presented may
not add up precisely to totals provided.
The accompanying Consolidated Financial Statements present
the operations of Siemens AG with registered offices in Berlin
and Munich, Germany, and its subsidiaries (the Company or
Siemens). They have been prepared in accordance with Interna-
tional Financial Reporting Standards (IFRS), as adopted by the
European Union as well as with the additional requirements set
forth in Section 315a (1) of the German Commercial Code (HGB).
The financial statements are also in accordance with IFRS as
issued by the International Accounting Standards Board (IASB).
The Consolidated Financial Statements were authorized for is-
sue by the Managing Board on November 30, 2015.
NOTE 1 Basis of presentation
B.6 Notes to Consolidated Financial Statements
Consolidated Financial Statements 63
35,056
581
Siemens is a German based multinational technology company
with core activities in the fields of electrification, automation
and digitalization.
Research and development costs - Costs of research activi-
ties are expensed as incurred. Costs of development activities
are capitalized when the recognition criteria in IAS 38 are met.
Capitalized development costs are stated at cost less accumu-
lated amortization and impairment losses with an amortization
period of generally three to ten years.
Foreign currency translation - assets and liabilities of for-
eign subsidiaries, where the functional currency is other than
the euro, are translated using the spot exchange rate at the end
of the reporting period, while the Consolidated Statements of
Income are translated using average exchange rates during the
period. Differences arising from such translations are recog-
nized within equity and reclassified to net income when the
gain or loss on disposal of the foreign subsidiary is recognized.
The Consolidated Statements of Cash Flow are translated at
average exchange rates during the period, whereas cash and
cash equivalents are translated at the spot exchange rate at the
end of the reporting period.
-
Consolidated Financial Statements 65
Functional costs - In general, operating expenses by types
are assigned to the functions following the functional area of
the corresponding profit and cost centers. Amortization, depre-
ciation and impairment of intangible assets and property, plant
and equipment are included in functional costs depending on
the use of the assets.
Income from operating leases: operating lease income for
equipment rentals is recognized on a straight-line basis over
the lease term.
ment.
Income from royalties: royalties are recognized on an accrual
basis in accordance with the substance of the relevant agree-
Income from interest: interest is recognized using the effective
interest method.
64 Consolidated Financial Statements
Sales from multiple element arrangements: Sales of goods and
services as well as software arrangements sometimes involve
the provision of multiple elements. In these cases, the Com-
pany determines whether the contract or arrangement con-
tains more than one unit of accounting. If certain criteria are
met, foremost if the delivered element(s) has (have) value to
the customer on a stand-alone basis, the arrangement is sepa-
rated and the appropriate revenue recognition convention is
then applied to each separate unit of accounting. Generally, the
total arrangement consideration is allocated to the separate
units of accounting based on their relative fair values. If the
criteria for the separation of units of accounting are not met,
revenue is deferred until such criteria are met or until the pe-
riod in which the last undelivered element is delivered.
assess whether the contract is expected to continue or to be
terminated. In determining whether the continuation or termi-
nation of a contract is expected to be the most likely scenario,
all relevant facts and circumstances relating to the contract are
considered on an individual basis. For contracts expected to be
continued, amounts already included in revenue for which col-
lectability ceases to be probable are recognized as an expense.
For contracts expected to be terminated, including termina-
tions due to expected payment defaults of our customers or
terminations due to force majeure events, the estimates on the
scope of deliveries and services provided under the contracts
are revised accordingly, typically resulting in a decrease of rev-
enue in the respective reporting period.
The percentage-of-completion method places considerable im-
portance on accurate estimates of the extent of progress to-
wards completion and may involve estimates on the scope of
deliveries and services required for fulfilling the contractually
defined obligations. These significant estimates include total
contract costs, total contract revenues, contract risks, including
technical, political and regulatory risks, and other judgments.
Under the percentage-of-completion method, changes in esti-
mates may lead to an increase or decrease of revenue. The cred-
itworthiness of our customers is taken into account in estimat-
ing the probability that economic benefits associated with a
contract will flow to the Company. In addition, we need to
Sales from construction contracts: When the outcome of a con-
struction contract can be estimated reliably, revenues from
construction-type projects are recognized under the percent-
age-of-completion method, based on the percentage of costs
incurred to date compared to the total estimated contract costs.
An expected loss on the construction contract is recognized as
an expense immediately. Siemens applies the requirements of
IAS 11 regarding contract variations to contract terminations,
since contract terminations are also changes to the agreed de-
livery and service scope.
Sale of goods: Revenue is recognized when the significant risks
and rewards of ownership of the goods have passed to the
buyer, usually on delivery of the goods.
Revenue recognition - Under the condition that persuasive
evidence of an arrangement exists revenue is recognized to the
extent that it is probable that the economic benefits will flow to
the Company and the revenue can be reliably measured, re-
gardless of when the payment is being made. In cases where
the inflow of economic benefits is not probable due to cus-
tomer related credit risks the revenue recognized is subject to
the amount of payments irrevocably received.
Foreign currency transaction Transactions that are de-
nominated in a currency other than the functional currency of
an entity, are recorded at that functional currency applying the
spot exchange rate at the date when the underlying transac-
tions are initially recognized. At the end of the reporting
period, foreign currency-denominated monetary assets and lia-
bilities are revalued to functional currency applying the spot
exchange rate prevailing at that date. Gains and losses arising
from these foreign currency revaluations are recognized in net
income. Those foreign currency-denominated transactions
which are classified as non-monetary are remeasured using the
historical spot exchange rate.
-
Rendering of services: for long-term service contracts, reve-
nues are recognized on a straight-line basis over the term of
the contract or, if the performance pattern is other than
straight-line, as the services are provided, i.e. under the per-
centage-of-completion method as described above.
instruments
256
differences
7,213
Issuance of long-term debt
(20)
10
Other transactions with owners
(1,066)
(2,700)
Purchase of treasury shares
Cash flows from financing activities
(4,026)
(5,827)
Cash flows from investing activities - continuing and discontinued operations
314
2,889
Cash flows from investing activities - discontinued operations
527
Repayment of long-term debt (including current maturities of long-term debt)
(354)
(1,452)
Cash flows from financing activities - discontinued operations
(4,485)
1,051
Cash flows from financing activities - continuing operations
(125)
(145)
Dividends attributable to non-controlling interests
(4,340)
(2,533)
Dividends paid to shareholders of Siemens AG
(617)
(596)
Interest paid
801
351
Change in short-term debt and other financing activities
(2,728)
(8,716)
Cash flows from investing activities - continuing operations
317
(1,813)
(1,897)
Additions to intangible assets and property, plant and equipment
Cash flows from investing activities
7,100
6,612
Cash flows from operating activities - continuing and discontinued operations
Acquisitions of businesses, net of cash acquired
9
Cash flows from operating activities - discontinued operations
7,090
6,881
977
1,138
333
495
financial assets
5
(8,254)
Purchase of investments
651
112
445
517
3,474
Disposal of investments, intangibles and property, plant and equipment
(2,501)
(23)
(1,667)
(899)
(335)
(568)
Disposal of current available-for-sale financial assets
Disposal of businesses, net of cash disposed
Change in receivables from financing activities
Purchase of current available-for-sale financial assets
(613)
Cash flows from financing activities - continuing and discontinued operations
Effect of changes in exchange rates on cash and cash equivalents
(270)
(2)
(4,487)
25,729
5,525
2,643
(6)
(34)
-
31
2,643
(24)
(2,533)
290
22,663
5,373
5,484
2,643
Retained earnings
Capital reserve
11
Issued capital
5,525
-
1,056
Derivative financial
Available-for-sale
Currency translation
30,152
5,733
2,643
25,729
(10)
289
23
(43)
79
(2,728)
(367)
7,282
106
Consolidated Financial Statements
September, 30
62
B.5 Consolidated Statements of Changes in Equity
Consolidated Financial Statements 61
21
8,013
9,957
Cash and cash equivalents at end of period (Consolidated Statements of Financial Position)
Less: Cash and cash equivalents of assets classified as held for disposal and discontinued
operations at end of period
8,034
(in millions of €)
9,958
9,234
8,034
Cash and cash equivalents at beginning of period
214
(1,199)
Change in cash and cash equivalents
62
83
Cash and cash equivalents at end of period
Balance as of October 1, 2013
1,923
Other comprehensive income, net of income taxes
Net income
Balance as of September 30, 2015
Re-issuance of treasury shares
Purchase of treasury shares
Share-based payment
Dividends
Other comprehensive income, net of income taxes
Net income
Transactions with non-controlling interests
Balance as of September 30, 2014
Dividends
Balance as of October 1, 2014
Share-based payment
Other changes in equity
Re-issuance of treasury shares
Transactions with non-controlling interests
Other changes in equity
Purchase of treasury shares
10
2014
2015
Sep 30,
Liabilities associated with assets classified as held for disposal
Post-employment benefits
Other current liabilities
Trade payables
Assets classified as held for disposal
Other assets
Other financial assets
606
Other non-current liabilities
Current provisions
1,156
479
Investments previously accounted for using the equity method
381
15
3,935
122
158
17
6
1
311
76
246
846
12
132
Property, plant and equipment
Consolidated Financial Statements
Goodwill
The following pronouncements, issued by the IASB, are not yet
effective and have not yet been adopted by the Company:
RECENT ACCOUNTING PRONOUNCEMENTS,
NOT YET ADOPTED
The presentation of certain pri-
or-year information has been reclassified to conform to the cur-
rent year presentation.
-
Prior-year information
Share-based payment Share-based payment awards at
Siemens are predominately designed as equity-settled. Fair
value is measured at grant date and is expensed over the vest-
ing period. Fair value is determined as the market price of
Siemens shares, considering dividends during the vesting
period the grantees are not entitled to and market conditions
and non-vesting conditions, if applicable.
In July 2014, the IASB issued IFRS 9, Financial Instruments.
IFRS 9 introduces a single approach for the classification and
measurement of financial assets according to their cash flow
characteristics and the business model they are managed in,
and provides a new impairment model based on expected
credit losses. IFRS 9 also includes new regulations regarding
the application of hedge accounting to better reflect an entity's
risk management activities especially with regard to managing
non-financial risks. The new standard is effective for annual re-
porting periods beginning on or after January 1, 2018, while
early application is permitted. The Company is currently assess-
ing the impacts of adopting IFRS 9 on the Company's Consoli-
dated Financial Statements.
-
corresponding gain or loss recognized in net income. For
hedged items carried at amortized cost, the adjustment is
amortized until maturity of the hedged item. For hedged firm
commitments the initial carrying amount of the assets or liabil-
ities that result from meeting the firm commitments are ad-
justed to include the cumulative changes in the fair value that
were previously recognized as separate financial assets or lia-
bilities.
Fair value hedges: The carrying amount of the hedged item is
adjusted by the gain or loss attributable to the hedged risk.
Where an unrecognized firm commitment is designated as
hedged item, the subsequent cumulative change in its fair
value is recognized as a separate financial asset or liability with
Derivative financial instruments - Derivative financial in-
struments, such as foreign currency exchange contracts and
interest rate swap contracts are measured at fair value and clas-
sified as held for trading unless they are designated as hedging
instruments, for which hedge accounting is applied. Changes
in the fair value of derivative financial instruments are recog-
nized either in net income or, in the case of a cash flow hedge,
in line item Other comprehensive income, net of income taxes
(applicable deferred income tax). Certain derivative instru-
ments embedded in host contracts are also accounted for sep-
arately as derivatives.
Financial liabilities - Siemens measures financial liabilities,
except for derivative financial instruments, at amortized cost
using the effective interest method.
Loans and receivables - Financial assets classified as loans
and receivables are measured at amortized cost using the ef-
fective interest method less any impairment losses. Impair-
ment losses on trade and other receivables are recognized us-
ing separate allowance accounts. The allowance for doubtful
accounts involves significant management judgment and re-
view of individual receivables based on individual customer
creditworthiness, current economic trends and analysis of his-
torical bad debts on a portfolio basis. For the determination of
the country-specific component of the individual allowance,
Siemens also considers country credit ratings, which are cen-
trally determined based on information from external rating
agencies. Regarding the determination of the valuation allow-
ance derived from a portfolio-based analysis of historical bad
debts, a decline of receivables in volume results in a corre-
sponding reduction of such provisions and vice versa. As of
September 30, 2015 and 2014, Siemens recorded a valuation
allowance for trade and other receivables (including leases) of
€1,123 million and €1,073 million, respectively.
quoted market price in an active market, and decisive parame-
ters cannot be reliably estimated to be used in valuation mod-
els for the determination of fair value. Siemens considers all
available evidence such as market conditions and prices, in-
vestee-specific factors and the duration as well as the extent to
which fair value is less than acquisition cost in evaluating po-
tential impairment of its available-for-sale financial assets. The
Company considers a decline in fair value as objective evidence
of impairment, if the decline exceeds 20% of costs or continues
for more than six months.
Cash flow hedges: The effective portion of changes in the fair
value of derivative instruments designated as cash flow hedges
are recognized in line item Other comprehensive income, net
of income taxes (applicable deferred income tax), and any inef-
fective portion is recognized immediately in net income.
Amounts accumulated in equity are reclassified into net in-
come in the same periods in which the hedged item affects net
income.
Other intangible assets
In May 2014, the IASB issued IFRS 15, Revenue from Contracts
with Customers. According to the new standard, revenue is rec-
ognized to depict the transfer of promised goods or services to
69
Inventories
Trade and other receivables
(in millions of €)
| Carrying amounts of major classes of assets and liabilities held-for-disposal
DISPOSITIONS AND DISCONTINUED OPERATIONS
Revenue and net income of the combined entity in fiscal 2015
would have been €77,474 million and €7,227 million, respec-
tively, had both acquired businesses been included as of Octo-
ber 1, 2014.
5
Consolidated Financial Statements
In December 2014, 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 derivative gas turbines business, Siemens closed
a technology gap in its gas turbine portfolio. The acquired
business will be integrated in the Division Power and Gas. The
contractually agreed purchase price amounts to £785 million
(€990 million as of the acquisition date). That amount was
subject to post-closing adjustments amounting to £29 million
(€37 million as of the acquisition date). The purchase price
was paid in cash. In addition, as part of the transaction,
Siemens paid Rolls-Royce £200 million (€252 million as of the
acquisition date) for a 25 year technology licensing agreement
granting exclusive access to future Rolls-Royce aero-turbine
technology developments in the four to 85 megawatt power
output range as well as preferred access to supply and engi-
neering services of Rolls-Royce. The following figures result
from the preliminary purchase price allocation as of the acqui-
sition date: Other intangible assets €764 million, Property,
plant and equipment €134 million, Trade and other receivables
€238 million, Inventories €463 million, Deferred tax assets
€103 million, Provisions €316 million, Trade payables €156 mil-
lion and Other current liabilities €322 million. Other intangible
assets mainly relate to technology including licences and sim-
ilar rights of €459 million and customer relationships of
€292 million. Preliminary goodwill amounts to €437 million
and is largely based on synergies, such as cost synergies, espe-
cially in manufacturing, purchasing, research and develop-
ment, as well as general administration functions, and sales
synergies mainly resulting from the extension of the gas tur-
bine portfolio. Including pre-tax earnings effects from amor-
tization of intangible assets acquired in the business combina-
tion (€42 million) and integration costs (€33 million), the
acquired business contributed revenues of €786 million and
a net income of €(29) million to Siemens for the period from
acquisition to September 30, 2015.
liabilities €989 million. Intangible assets mainly relate to tech-
nology of €426 million, customer relationships of €2,275 mil-
lion and trademarks of €256 million. The gross contractual
amount of the trade and other receivables acquired is €455 mil-
lion. Preliminary goodwill amounts to €4,058 million and is
largely based on synergies, such as sales synergies mainly
resulting from the extended portfolio and enhanced service
opportunities, and cost synergies, especially in research and
development, purchasing, general administration functions, as
well as manufacturing. Including pre-tax earnings effects from
amortization of intangible assets acquired in the business com-
bination (€44 million) and integration costs (€19 million), the
acquired business contributed revenues of €533 million and a
net income of €(33) million to Siemens for the period from
acquisition to September 30, 2015.
In June 2015, Siemens acquired all shares of Dresser-Rand
Group Inc., Houston, Texas (U.S.) and Paris (France), a
world-leading supplier for the oil and gas industry and for dis-
tributed power generation. With Dresser-Rand on board,
Siemens has a comprehensive portfolio of equipment and ca-
pability for the oil and gas industry and a much expanded in-
stalled base, allowing Siemens to address the needs of the mar-
ket with products, solutions and services. The acquired business
will be integrated in the Division Power and Gas. The purchase
price amounts to US$6,692 million (€5,981 million as of the ac-
quisition date) paid in cash. It comprises US$6,555 million
(€5,858 million as of the acquisition date) for all outstanding
shares and US$138 million (€123 million as of the acquisition
date) to settle the outstanding equity-based compensation pro-
grams. Siemens assumed cash amounting to US$197 million
(€176 million as of the acquisition date). Further, Siemens set-
tled outstanding financial debt of US$1,142 million (€1,021 mil-
lion as of the acquisition date). The following figures result
from the preliminary purchase price allocation as of the acqui-
sition date: Other intangible assets €2,957 million, Property,
plant and equipment €352 million, Trade and other receivables
€352 million, Inventories €538 million, Other current financial
assets €131 million, Cash and cash equivalents €176 million,
Deferred tax assets €201 million, Debt including outstanding
financial debt settled €1,033 million, Trade payables €229 mil-
lion, Other current liabilities €382 million and Deferred tax
ACQUISITIONS
NOTE 3 Acquisitions, dispositions
and discontinued operations
a customer in an amount that reflects the consideration to
which the Company expects to be entitled in exchange for
those goods or services. Revenue is recognized when, or as,
the customer obtains control of the goods or services. IFRS 15
also includes guidance on the presentation of contract bal-
ances, that is, assets and liabilities arising from contracts with
customers, depending on the relationship between the entity's
performance and the customer's payment. In addition, the new
standard requires a set of quantitative and qualitative disclo-
sures to enable users of the Company's Consolidated Financial
Statements to understand the nature, amount, timing, and un-
certainty of revenue and cash flows arising from contracts with
customers. IFRS 15 supersedes IAS 11, Construction Contracts
and IAS 18, Revenue as well as related interpretations. In
July 2015 the IASB deferred the standard's effective date to an-
nual periods beginning on or after January 1, 2018; early appli-
cation is permitted. The Company is currently assessing the
impact of adopting IFRS 15 on the Company's Consolidated
Financial Statements and will determine the adoption date as
well as the transition method.
70
126
(in millions of €)
856
the discontinued operations
(196)
9
Income from discontinued operations,
net of income taxes
2,031
215
Thereof attributable to the
shareholders of Siemens AG
2,031
215
The total consideration received for all above-described dispo-
sitions and discontinued operations amounts to €6.8 billion
(thereof €6 billion in cash). The carrying amounts of the major
classes of assets and liabilities derecognized were as follows:
Trade and other receivables €732 million, Inventories €508 mil-
lion, Goodwill €867 million, Other intangible assets €293 mil-
lion, Property, Plant & Equipment €294 million, Investments
accounted for using the equity method €1.2 billion, Deferred
tax assets €114 million, Miscellaneous assets €339 million,
Trade payables €437 million, Current provisions €143 million,
Other current liabilities €790 million, Miscellaneous liabilities
€313 million.
NOTE 4 Interests in other entities
Investments accounted for using the equity method
(in millions of €)
Fiscal year
2014
575
2015
In January 2015, Siemens committed itself to provide additional
funding of €293 million to Unify Holdings B.V. disclosed in Cen-
trally managed portfolio activities. Part of the funding was paid
out to Unify in fiscal 2015. As a consequence of the commit-
ment, Siemens recognized proportionate losses of €275 million
in fiscal 2015.
|
582
1,235
for using the equity method, net
Income (loss) from investments accounted
Income taxes on the income on the measure-
1
Impairment and reversals of impairment
6
1,477
Gains (losses) on sales, net
(87)
Share of profit (loss), net
(155)
27
(14)
Income taxes on ordinary activities
Consolidated Financial Statements 71
The results presented in Income (loss) from discontinued oper-
ations in the Company's Consolidated Statements of Income
also include the results of businesses that have been disposed
of prior to fiscal 2015.
In February 2015, Siemens completed the sale of its hospital
information business – formerly included in Healthcare – to
Cerner Corp. Siemens recognized a pretax gain on disposal of
€516 million in fiscal 2015.
Industries Ltd.). Siemens initially recognized the new invest-
ment in Primetals Technologies Ltd. at fair value.
-
In January 2015, Siemens completed the contribution of its
metals technologies business - formerly included in the former
Industry Sector into a joint venture with Mitsubishi-Hitachi
Metals Machinery Inc. (majority-owned by Mitsubishi Heavy
| Income (loss) from discontinued operations
In January 2015, Siemens completed the sale of its hearing aid
business formerly included in Healthcare - to the investment
company EQT and the German entrepreneurial family Strüng-
mann as co-investors. The sold entities are allowed to continue
using the Siemens product brand for the hearing aid business
over the medium term. The consideration includes contingent
components. Siemens recognized a pretax gain on disposal of
€1.7 billion in fiscal 2015.
DISPOSITIONS NOT QUALIFYING FOR DISCON-
TINUED OPERATIONS CLOSED TRANSACTIONS
In January 2015, Siemens completed the sale of its 50% stake in
the joint venture BSH Bosch und Siemens Hausgeräte GmbH
(BSH) - formerly included in Centrally managed portfolio activi-
ties to Robert Bosch GmbH. Siemens recognized a pretax gain
on disposal of €1.4 billion in Income (expenses) from invest-
ments accounted for using the equity method, net in fiscal 2015.
-
1,597
39
123
110
DISCONTINUED OPERATIONS
18
Fiscal year
2015
178
2,241
operations
Pretax income from discontinued
25
2,243
2014
3,643
(3,491)
the discontinued operations
value less costs to sell or on the disposal
Income on the measurement to fair
(924)
Expenses
922
Revenue
of the disposal groups constituting
ment to fair value less costs to sell or on the
disposal of the disposal groups constituting
(1)
Consolidated Financial Statements
Consolidated Financial Statements 75
NOTE 11 Goodwill
(in millions of €)
Cost
Fiscal Year
2015
2014
Construction contracts, here and as follows, include service
contracts accounted for under the percentage of completion
method. The aggregate amount of costs incurred and recog-
nized profits less recognized losses for construction contracts
in progress, as of September 30, 2015 and 2014 amounted to
€81,341 million and €86,542 million, respectively. Revenue
from construction contracts amounted to €30,288 million and
€29,765 million, respectively, for fiscal 2015 and 2014. Advance
payments received on construction contracts in progress were
€8,644 million and €7,707 million as of September 30, 2015 and
2014. Retentions in connection with construction contracts
were €225 million and €245 million in fiscal 2015 and 2014,
respectively.
Balance at beginning of year
19,564
Translation differences and other
1,187
777
Acquisitions and purchase accounting adjustments
4,599
60
19,546
Dispositions and reclassifications to assets classified as held for disposal
Cost of sales include inventories recognized as expense
amounting to €51,735 million and €49,177 million, respectively,
in fiscal 2015 and 2014. Compared to prior year write-downs in-
creased by €97 million and €1 million as of September 30, 2015
and 2014.
2014
2,013
3,037
215
5,266
2015
2014
2015
Within one year
2,492
2,433
2,072
Investments in finance leases primarily relate to industrial ma-
chinery, medical equipment, transportation systems, equip-
ment for information technology and office machines. Actual
cash flows will vary from contractual maturities due to future
sales of finance receivables, prepayments and write-offs.
One to five years
Thereafter
3,449
2,965
263
242
6,129
6,124
228
5,265
3,374
(261)
(856)
Balance at year-end
17,883
17,783
As of October 1, 2014, Siemens realigned its organizational and
reporting structure. Goodwill has been reallocated to the reor-
ganized reporting structure generally based on relative values.
The reallocation did not result in goodwill impairments.
The Siemens' groups of cash-generating units to which good-
will is allocated are generally represented by a segment and for
Healthcare one level below the segment. Prior year disclosures
are based on the reporting structure before reorganization.
Siemens performs the mandatory annual impairment test
in the three months ended September 30. The recoverable
amounts for the annual impairment test 2015 for Siemens'
groups of cash-generating units were generally estimated to be
higher than the carrying amounts. Key assumptions on which
Siemens based its determinations of the fair value less costs to
sell for the groups of cash-generating units include terminal
value growth rates up to 2.5% in fiscal 2015 and 2.9% in fiscal
2014, respectively and after-tax discount rates of 6.0% to 9.5%
in fiscal 2015 and 6.5% to 9.0% in fiscal 2014. Where possible,
reference to market prices is made.
For the purpose of estimating the fair value less costs to sell of
the groups of cash-generating units, cash flows were projected
for the next five years based on past experience, actual operat-
ing results and management's best estimate about future de-
velopments as well as market assumptions. The determined
fair value of the groups of cash-generating units is assigned to
level 3 of the fair value hierarchy.
The fair value less costs to sell is mainly driven by the terminal
value which is particularly sensitive to changes in the assump-
tions on the terminal value growth rate and discount rate. Both
assumptions are determined individually for each group of
cash-generating units. Discount rates are based on the weighted
average cost of capital (WACC) for the groups of cash-generat-
ing units (for SFS the discount rate represents cost of equity).
The discount rates are calculated based on a risk-free rate of in-
terest and a market risk premium. In addition, the discount rates
reflect the current market assessment of the risks specific to
each group of cash-generating units by taking into account spe-
cific peer group information on beta factors, leverage and cost
of debt. The parameters for calculating the discount rates are
based on external sources of information. The peer group is
subject to an annual review and adjusted, if necessary. Terminal
value growth rates take into consideration external macroeco-
nomic sources of data and industry specific trends.
17,783
23,166
76
The following table presents key assumptions used to deter-
mine fair value less costs to sell for impairment test purposes
for the groups of cash-generating units to which a significant
amount of goodwill is allocated:
(in millions of €)
Diagnostics of Healthcare
Power and Gas (without part of Power Generation Services)
Digital Factory
Imaging & Therapy Systems of Healthcare
Power Generation Services (part of Power and Gas)
Consolidated Financial Statements
Balance at beginning of year
Balance at year-end
Carrying amount
1,763
25,071
19,546
Accumulated impairment losses and other changes
Balance at beginning of year
Translation differences and other
Impairment losses recognized during the period
Dispositions and reclassifications to assets classified as held for disposal
Balance at year-end
1,763
1,681
140
82
3
5
(1)
(5)
1,905
(in millions of €)
Revenue figures in the 5-year planning period of the groups of
cash-generating units to which a significant amount of good-
will is allocated include average revenue organic growth rates
of between 2.6% and 5.9%.
Sep 30,
Gross investment
2014
6,033
The following table shows a reconciliation of minimum future
lease payments to the gross and net investment in leases and
to the present value of the minimum future lease payments
receivable:
(in millions of €)
NOTE 9 Other current financial assets
As of September 30, 2015 and 2014, Other current financial as-
sets include loans receivables of €3,128 million and €2,111 mil-
lion, respectively and derivative financial instruments of
€830 million and €458 million, respectively.
NOTE 10 Inventories
Plus: Unguaranteed residual values
6,042
87
Gross investment in leases
6,129
6,124
Less: Unearned finance income
(601)
(643)
Sep 30,
91
Net investment in leases
Minimum future lease payments
Sep 30,
Minimum future lease payments to be received are as follows:
Sep 30,
(in millions of €)
2015
2014
Within one year
2,474
2015
2,406
3,322
3,393
More than five years
246
233
6,042
6,033
After one year but not more than five years
5,527
5,481
(in millions of €)
5,266
Finished goods and products held for resale
3,046
2,312
Advances to suppliers
551
528
5,265
19,807
Advance payments received
(2,554)
(1,895)
The gross investment in leases and the present value of mini-
mum future lease payments receivable are due as follows:
17,253
15,100
Present value of minimum
future lease payments
receivable
Sep 30,
16,994
8,329
9,162
of billings on uncompleted contracts
2015
2014
Less: Allowance for doubtful accounts
(190)
(135)
Raw materials and supplies
2,631
2,389
Less: Present value of unguaranteed
Work in progress
4,417
3,436
residual value
855
(80)
Costs and earnings in excess
Present value of minimum future
lease payments receivable
in leases
(in millions of €)
Diagnostics of the Healthcare Sector
Industry Automation of the Industry Sector
(778)
Land and bulidings
7,356
169
143
199
135
8,077
(257)
(3,656)
4,089
(256)
Technical machinery and
equipment
7,140
167
7,745
172
(7,185)
(444)
(231)
Customer relationships
and trademarks
4,552
293
2,873
(176)
15,262
7,542
4,827
(370)
Other intangible assets
10,826
693
3,796
390
(2,715)
282
263
(252)
(4)
(521)
3,033
(1,746)
1,287
(345)
Advances to suppliers and
457
construction in progress
5
66
66
500
(467)
(7)
856
760
57
117
2,927
7,770
(5,111)
2,660
(513)
Furniture and office
equipment
5,786
109
49
580
73
(768)
5,829
(4,510)
1,319
(662)
Equipment leased to others
1,874
(2,851)
4,725
34
8.0%
Sep 30, 2014
Goodwill
Terminal value
growth rate
After-tax
discount rate
4,765
2.4%
1.7%
6.5%
1.7%
8.5%
2,603
2.2%
7.5%
Consolidated Financial Statements
77
3,105
2,613
6.5%
2.0%
Imaging & Therapy Systems of the Healthcare Sector
The sensitivity analysis for the groups of cash-generating units
to which a significant amount of goodwill is allocated was
based on an increase in after-tax discount rates of one percent-
age point or a reduction in the terminal value growth rate of
one percentage point. Siemens concluded that no impairment
loss would need to be recognized on goodwill in any of the
groups of cash-generating units.
Sep 30, 2015
Goodwill
Terminal value
growth rate
After-tax
discount rate
5,108
2.5%
6.5%
3,587
1.7%
8.0%
3,328
1.7%
8.5%
2,790
NOTE 12 Other intangible assets and
property, plant and equipment
Consolidated Financial Statements
(in millions of €)
Additions
(302)
2,995
(1,619)
1,376
(176)
Internally generated
technology
337
2,750
Acquired technology
including patents, licenses
and similar rights
3,525
190
923
53
211
in fiscal
2015
Deprecia-
tion/amorti-
zation and
impairment
tion/amorti-
zation and
impairment
Additions
Reclassi-
differences
through
fications
Retire-
ments¹
Gross
Accumu-
Carrying
amount
business
10/01/2014
combi-
carrying
amount
09/30/2015
lated
deprecia-
amount
09/30/2015
nations
Gross Translation
carrying
74
(72)
933
in fiscal
2014
impairment
zation and
Deprecia-
tion/amorti-
938
09/30/2014
deprecia-
tion/amorti-
zation and
impairment
312
nations
combi-
10/01/2013
Carrying
Accumu-
lated
Gross
carrying
amount
business
amount
09/30/2014
Retire-
ments¹
(1,019)
(1,526)
(2,461)
3,525
(204)
78
16
130
3,505
2,750
and similar rights
Acquired technology
111
3,346
technology
Internally generated
(174)
1,224
including patents, licenses
Reclassi-
fications
through
differences
Income (loss) from continuing operations
Income (loss) from discontinued operations
Other comprehensive income,
net of income taxes
Total comprehensive income
Fiscal year
2015
2014
(in millions of €)
38
1
22
20
58
(52)
71
Item Share of profit (loss), net, includes Siemens' share in BWI
Informationstechnik GmbH's (BWI IT) earnings of €27 million
and €55 million, respectively, in fiscal 2015 and 2014. The car-
rying amount of all individually not material associates in-
cludes the carrying amount of BWI IT, amounting to €114 mil-
lion and €131 million, respectively, as of September 30, 2015
and 2014. Siemens holds a 50.05% stake in BWI IT. BWI IT is not
controlled by Siemens due to significant participating rights of
the two other shareholders. Together with the HERKULES obli-
gations the Company's maximum exposure to loss from BWI IT
as of September 30, 2015 and 2014 amounts to €1,204 million
and €1,621 million, respectively. BWI IT finances its operations
on its own.
72
102
As of September 30, 2015 and 2014, the carrying amount of all
individually not material associates amounts to €2,046 million
and €1,417 million, respectively. Summarized financial informa-
tion for all individually not material associates adjusted for the
percentage of ownership held by Siemens, is presented below.
Items included in the Statements of Comprehensive Income
are presented for the twelve month period applied under the
equity method.
Item Impairment and Reversals of impairments includes an
impairment loss of € 138 million relating to Siemens' invest-
ment in Primetals presented within Centrally Managed Port-
folio Activities. The adverse development of the market envi-
ronment triggered an impairment test of the investment. The
recoverable amount of €524 million was determined based on
a discounted cash flow calculation (level 3 of the fair value
hierarchy). To determine the recoverable amount, cash flow
projections were used that take into account past experience
and represent management's best estimate about future devel-
opments. The calculation is based on a terminal value growth
rate of 1.5% and an after-tax discount rate of 8.3%.
6
carrying
Additions
Additions
Gross Translation
(in millions of €)
│1 Included assets reclassified to Assets classified as held for disposal and dispositions of those entities.
(1,769)
10,210
(15,024)
25,234
(1,805)
2,018
487
566
23,968
and equipment
Property, plant
1,064
22
(246)
and trademarks
Advances to suppliers and
(316)
1,222
(645)
1,347
(4,440)
(1,705)
5,786
2,927
construction in progress
(485)
371
-
104
2,936
Equipment leased to others
(751)
81
1
608
710
516
78
│1 Included assets reclassified to Assets classified as held for disposal and dispositions of those entities.
9,638 (1,652)
(14,330)
23,968
(2,515)
1,927
7
475
and equipment
Property, plant
750
(10)
760
(25)
(449)
24,083
2
106
5,740
7,677
Land and bulidings
(730)
(6,266) 4,560
(309)
2,273
(2,280)
136
(166) 4,552
(1,389) 10,826
21
388
11,415
Other intangible assets
5
148
4,565
390
(7)
155
128
equipment
Furniture and office
(453)
2,453
(4,687)
(521) 7,140
239
277
4
122
7,020
equipment
Technical machinery and
(238)
(3,489) 3,868
7,356
(733)
Customer relationships
Consolidated Financial Statements
amount
In fiscal 2015 and 2014, Other operating income includes
gains on sales of property, plant and equipment and intangi-
ble assets of €232 million and €355 million, respectively, and
gains from the sale of businesses of €80 million and €143 mil-
lion, respectively.
2014
Deductible temporary differences
Tax loss carryforward
192
155
Trade receivables from the sale
of goods and services
13,909
12,537
2015
1,142
760
2,073
1,988
1,334
915
15,982
14,526
Receivables from finance leases
As of September 30, 2015 and 2014, €458 and €152 million of
the unrecognized tax loss carryforwards expire over the peri-
ods to 2028.
(in millions of €)
2015
280
Deferred tax liabilities
8,339
7,133
Total deferred tax assets, net
1,983
2,782
2014
|
Consolidated Financial Statements 73
Deferred tax assets have not been recognized with respect of
the following items (gross amounts):
NOTE 8 Trade and other receivables
Sep 30,
(in millions of €)
Sep 30,
As of September 30, 2015, the Company has certain tax losses
subject to significant limitations. For those losses deferred tax
assets are not recognized, as it is not probable that gains will be
generated to offset those losses.
Siemens has not recognized deferred tax liabilities for income
taxes or foreign withholding taxes on the cumulative earnings
of subsidiaries of €27,507 million and €21,115 million, respec-
tively in fiscal 2015 and 2014 because the earnings are intended
to be permanently reinvested in the subsidiaries.
Including items charged or credited directly to equity and the
expense (benefit) from continuing and discontinued operations,
the income tax expense (benefit) consists of the following:
In fiscal 2015 and 2014, the long-term portion of receivables
from finance leases is reported in Other financial assets and
amounts to €3,264 million and €3,357 million, respectively.
2,014
(37)
Income and expenses recognized
directly in equity
139
(346)
2,218
1,632
210
Write-offs charged against the allowance
Recoveries of amounts previously written-off
Foreign exchange translation differences
Reclassifications to line item Assets held for
disposal and dispositions of those entities
Valuation allowance as of fiscal year-end
(126)
7
6
(9)
5
(26)
(33)
(145)
Discontinued operations
1,869
Continuing operations
Changes to the valuation allowance of current and long-term
receivables which belong to the class of financial assets mea-
sured at (amortized) cost are as follows (excluding receivables
from finance leases):
(in millions of €)
Fiscal year
2015
2014
Valuation allowance as of
beginning of fiscal year
938
1,023
Increase in valuation allowances
recorded in the Consolidated Statements
NOTE 5 Other operating income
2015
Fiscal year
2014
of Income in the current period
168
62
336
Other
(in millions of €)
732
79
Change in realizability of deferred
tax assets and tax credits
8
11
Change in tax rates
(43)
(20)
(1)
(107)
(222)
Tax effect of investments accounted
for using the equity method
26
(163)
Other, net
Foreign tax rate differential
Taxes for prior years
(235)
(709)
787
NOTE 6 Other operating expenses
Other operating expenses in fiscal 2015 and 2014 include losses
on sales of property, plant and equipment and intangible as-
sets, and effects from insurance, legal and regulatory matters.
NOTE 7 Income taxes
Income tax expense (benefit) consists of the following:
Income tax expense (current and deferred) differs from the
amounts computed by applying a combined statutory German
income tax rate of 31% as follows:
(in millions of €)
Fiscal year
2015
2014
2,238
2,265
Expected income tax expenses
Increase (decrease) in income
taxes resulting from:
474
280
Tax-free income
2
1
Non-deductible losses and expenses
1,869
1,936
1,878
Liabilities and Post-employment benefits
Other
7,539
7,103
237
229
Non-current and current assets
610
9,915
Tax loss and credit carryforward
Deferred tax assets
Liabilities
Non-current and current assets
Liabilities
7,272
Actual income tax expenses
6,067
706
2014
10,322
Sep 30,
(in millions of €)
2,014
2015
Current tax
Deferred tax
Income tax expenses
2015
2014
2,014
Fiscal year
(145)
1,869
305
(in millions of €)
Assets
In Germany, the calculation of current tax is based on a com-
bined tax rate of 31%, consisting of a corporate tax rate of 15%,
a solidarity surcharge thereon of 5.5% and an average trade tax
rate of 15%. For foreign subsidiaries, current taxes are calcu-
lated based on the local tax laws and applicable tax rates in the
individual foreign countries. Deferred tax assets and liabilities
in Germany and abroad are measured at the tax rates that are
expected to apply to the period when the asset is realized or
the liability is settled.
2,014
Deferred income tax assets and liabilities on a gross basis are
summarized as follows:
1,710
The current income tax expenses in fiscal 2015 and 2014 in-
clude adjustments recognized for current tax of prior years in
the amount of €79 million and €107 million, respectively. The
deferred tax expense (benefit) in fiscal 2015 and 2014 includes
tax effects of the origination and reversal of temporary differ-
ences of €(30) million and €120 million, respectively.
20,821
18,416
Item Loans receivable primarily relate to long-term loan trans-
actions of SFS.
CREDIT FACILITIES
As of September 30, 2015 and 2014, €7.1 billion and €6.8 billion
of lines of credit are unused. The facilities are for general corpo-
rate purposes. The €4.0 billion syndicated credit facility was
extended by one year until June 26, 2020 with one extension
option remaining. The US$ 3.0 billion syndicated credit facility
was extended by one year until September 27, 2020 with no
more extension option remaining. The €450 million revolving
bilateral credit facility is unused and has been extended to Sep-
tember 30, 2016.
Sep 30,
NOTE 14 Other current liabilities
226
(in millions of €)
Interest rates in this Note are per annum. In fiscal 2015 and
2014, weighted-average interest rates for loans from banks,
other financial indebtedness and obligations under finance
leases were 2.8% (2014: 3.5%), 0.2% (2014: 0.1%) and 4.7%
(2014: 4.3%), respectively.
217
3,264
1,803
2,464
Available-for-sale financial assets
2,111
2,398
Derivative financial instruments
Receivables from finance leases
10,919
12,477
Loans receivable
2015
Sep 30,
2014
Other
2014
NOTES AND BONDS
estimated earnings on uncompleted
2015
Currency
Carrying
amount in
millions of €1
(in millions)
5.625%/2006/March 2016/US$ fixed-rate instruments
(interest/issued/maturity)
notional amount
Currency
Sep 30, 2015
Consolidated Financial Statements 79
17,954
Billings in excess of costs and
20,368
2,708
Other
1,059
1,242
Accruals for pending invoices
4,880
5,437
Liabilities to personnel
9,559
10,982
contracts and related advances
2,455
3,357
Loans from banks
|
indebtedness
Sep 30,
Other financial
968
1,000
773
755
(maturing until 2023)
18,165
25,498
-
(maturing until 2027)
456
2015
Sep 30,
Sep 30,
2014
2015
Non-current debt
Current debt
(in millions of €)
Notes and bonds
(maturing until 2066)
NOTE 15 Debt
Minimum future lease payments under operating leases are:
The gross carrying amount of Advances to suppliers and con-
struction in progress includes €787 million and €670 million,
respectively of property, plant and equipment under construc-
tion in fiscal 2015 and 2014. As of September 30, 2015 and 2014,
contractual commitments for purchases of property, plant and
equipment are €474 million and €351 million, respectively.
notional amount
2014
1,737
825
68
NOTE 13 Other financial assets
1,045
1,063
117
92
19,326
134
115
23
1,620 26,682
2,979
31
More than five years
Total debt
590
652
After one year but not more than five years
finance leases
Obligations under
338
319
Within one year
2014
2015
(in millions of €)
60
(in millions of €)
Sep 30, 2014
4,718
(in millions)
(1,441)
4,216
Corporate bonds
10,488
10,479
Alternative investments
3,526
3,174
Hedge Funds
1,403
1,211
Private Equity
772
626
1,351
1,337
Multi strategy funds'
733
Derivatives
1,590
(1,379)
1,717
Government bonds
2,380
(2,100)
decrease
2,361
European equities
1,783
2,030
Emerging markets
1,143
1,611
491
Rate of compen-
sation increase
Rate of pension
progression
1,993
1,947
101
(93)
95
(90)
Fixed income securities
15,206
14,694
Global equities
(2,121)
646
1,079
84 Consolidated Financial Statements
DEFINED CONTRIBUTION PLANS AND STATE PLANS
The amount recognized as expense for defined contribution
plans amounts to €594 million and €535 million in fiscal 2015
and 2014, respectively. Contributions to state plans amount to
€1,372 million and €1,317 million in fiscal 2015 and 2014, respec-
tively.
NOTE 17 Provisions
(in millions of €)
Balance as of October 1, 2014
Thereof non-current
Additions
Usage
Reversals
Translation differences
Accretion expense and effect of changes in discount rates
Other changes
Balance as of September 30, 2015
Thereof non-current
Warranties
Order related
losses and risks
Asset
retirement
obligations
Other
2015 and 2014.
Employer contributions expected to be paid to defined benefit
plans in fiscal 2016 are €667 million. Over the next ten fiscal
years, average annual benefit payments of €1,912 million and
€1,751 million, respectively, are expected as of September 30,
2015 and 2014. The weighted average duration of the DBO for
Siemens defined benefit plans was 13 years as of September 30,
Future cash flows
Virtually all equity securities have quoted prices in active mar-
kets. The fair value of fixed income securities is based on prices
provided by price service agencies. The fixed income securities
are traded in highly liquid markets and almost all fixed income
securities are investment grade.
1,149
26
(45)
(614)
(458)
Cash and cash equivalents
Other assets
483
456
572
Interest risk
485
26,505
The DBO effect of a 10% reduction in mortality rates for all
beneficiaries would be an increase of €1,021 million and
€1,027 million, respectively, as of September 30, 2015 and 2014.
As in prior year, sensitivity determinations apply the same
methodology as applied for the determination of the post-em-
ployment benefit obligation. Sensitivities reflect changes in the
DBO solely for the assumption changed.
Asset Liability Matching Strategies
As a significant risk, the Company considers a decline in the
plans' funded status due to adverse developments of plan as-
sets and/or defined benefit obligations resulting from chang-
ing parameters. Accordingly, Siemens implemented a risk man-
agement concept aligned with the defined benefit obligations
(Asset Liability Matching). Risk management is based on a
worldwide defined risk threshold (value-at-risk). The concept,
the value at risk and the asset development including the in-
vestment strategy are monitored and adjusted on an ongoing
basis under consultation of senior external experts. Indepen-
dent asset managers are selected based on quantitative and
qualitative analysis, which includes their performance and risk
evaluation. Derivatives are used to reduce risks as part of risk
management.
Real estate
Foreign currency risk
Credit/Inflation/Price risks
Total
1 Multi strategy funds comprise absolute return funds and diversified growth funds
that invest in various asset classes within a single fund and aim to stabilize return
and reduce volatility.
27,296
Total
increase
increase
1,602
Experience (gains) losses
(59)
Total
(41)
1,972
Heubeck Richttafeln 2005G (modified)
RP-2014 mortality table with MP-2014
generational projection
SAPS S2 (Standard mortality tables
for Self Administered Pension Schemes
with allowance for future mortality
improvements)
BVG 2010 G
Actuarial assumptions
The weighted-average discount rate used for the actuarial valu-
ation of the DBO at period-end was as follows:
The rates of compensation increase and pension progression
for countries with significant effects are shown in the following
table. Inflation effects, if applicable, are included in the assump-
tions below.
Discount rate
Germany
U.S.
U.K.
CH
|
2015
(8)
Changes in financial assumptions
CH
370
2,673
66
59
551
170
1 Includes past service benefit/costs, settlement gains/losses and administration costs related to liabilities.
82 Consolidated Financial Statements
The net defined benefit balance of €9,737 million and €9,288 mil-
lion as of September 30, 2015 and 2014 comprised €9,811 million
and €9,324 million net defined benefit liability and €75 million
and €36 million net defined benefit asset, respectively. Net in-
terest expenses amounted to €263 million and €295 million,
respectively, in fiscal 2015 and 2014. Consistent with prior year,
the DBO is attributable to active employees 32%, to former em-
ployees with vested rights 14% and to retirees and surviving
dependants 54%.
The remeasurements comprise actuarial (gains) and losses
resulting from:
Sep 30,
2014
The discount rate was derived from high-quality corporate
bonds with an issuing volume of more than 100 million units in
the respective currency zones, which have been awarded an AA
rating (or equivalent) by at least one of the three rating agen-
cies Moody's Investor Service, Standard & Poor's Rating Services
or Fitch Ratings.
Germany
U.S.
U.K.
Fiscal year
(in millions of €)
2015
2014
Changes in demographic assumptions
26
Applied mortality tables are:
decrease
Sep 30,
2015
|
Consolidated Financial Statements 83
Sensitivity analysis
A one-half-percentage-point change of the above assumptions
would result in the following increase (decrease) of the DBO:
Disaggregation of plan assets
Sep 30,
(in millions of €)
2015
2014
Effect on DBO due to a one-half percentage-point
Equity securities
6,285
7,050
Sep 30, 2015
Sep 30, 2014
U.S. equities
1,366
1,463
(in millions of €)
Discount rate
1.8%
1.0%
3.2%
2.9%
2014
U.K.
3.6%
4.8%
3.0%
3.0%
CH
1.5%
1.5%
Compensation increase
2.7%
Pension progression
4.3%
4.6%
Germany
3.9%
4.5%
U.K.
1.7%
1.7%
2.4%
2,947
3,721
1,398
2015
2,417
21,198
8.77
18,663
8.69
Equity allocated to SFS differs from the carrying amount of
equity as it is mainly allocated based on the risks of the under-
lying business.
Siemens' current corporate credit ratings are:
Standard &
Poor's Ratings
Services
Sep 30, 2015
Sep 30, 2014
Moody's
Investors
Standard &
Poor's Ratings
Service
Services
Moody's
Investors
Service
Long-term debt
Short-term debt
A1
P-1
A+
2,148
Sep 30,
2014
Debt to equity ratio
SFS debt
1,390
Income from continuing operations
before income taxes
7,218
7,306
Plus/Less: Interest income, interest expenses
and other financial income (expenses), net
Plus: Amortization,
depreciation and impairments
EBITDA
58
(117)
2,549
2,387
Aa3
9,825
0.62
0.15
Industrial net debt/EBITDA
1 The adjustment considers that both Moody's and S&P view SFS as a captive
finance company. These rating agencies generally recognize and accept higher
levels of debt attributable to captive finance subsidiaries in determining credit
ratings. Following this concept, Siemens excludes SFS Debt in order to derive an
industrial net debt which is not affected by SFS's financing activities.
2 Debt is generally reported with a value representing approximately the amount
to be repaid. However, for debt designated in a hedging relationship (fair value
hedges), this amount is adjusted for changes in market value mainly due to changes
in interest rates. Accordingly, Siemens deducts these changes in market value in
order to end up with an amount of debt that approximately will be repaid.
86 Consolidated Financial Statements
The SFS business is capital intensive and requires a larger
amount of debt to finance its operations compared to the in-
dustrial business.
(in millions of €)
Allocated equity
9,576
6,107
A-1+
A+
A-1+
773
After one year but not more than five years
More than five years
1,662
Sep 30,
2014
815
1,574
993
3,428
828
3,217
Total operating rental expenses for the years ended Septem-
ber 30, 2015 and 2014 were €1,118 million and €1,105 million,
respectively.
The Company is jointly and severally liable and has capital con-
tribution obligations as a partner in commercial partnerships
and as a participant in various consortiums.
NOTE 21 Legal proceedings
PROCEEDINGS OUT OF OR IN CONNECTION
WITH ALLEGED BREACHES OF CONTRACT
As previously reported, Siemens AG is a member of a supplier
consortium that has been contracted to construct the nuclear
power plant "Olkiluoto 3″ in Finland for Teollisuuden Voima Oyj
(TVO) on a turnkey basis. The agreed completion date for the
nuclear power plant was April 30, 2009. Siemens AG's share of
the contract value is approximately 27%. The other member of
the supplier consortium is a further consortium consisting of
Areva NP S.A.S. and its wholly-owned subsidiary, Areva GmbH.
Completion of the power plant has been delayed for reasons
which are in dispute. In December 2008, the supplier consor-
tium filed a request for arbitration against TVO demanding an
extension of the construction time, additional compensation,
milestone payments, damages and interest. In August 2015, the
supplier consortium updated its monetary claims in the
amount of approximately €3.4 billion. TVO rejected the claims
and asserted counterclaims against the supplier consortium
consisting primarily of damages due to the delay. Also in Au-
gust 2015, TVO increased its counterclaims to approximately
€2.3 billion. The arbitration proceedings may continue for sev-
eral years. Partial Awards on certain aspects could be rendered
during fiscal year 2016. The amounts claimed by the parties do
not cover the total period of delay and may be updated further.
As previously reported, Essent Wind Nordsee Ost Planungs- und
Betriebsgesellschaft mbH filed a request for arbitration against
Siemens AG in October 2013 alleging breaches of a contract for
the delivery of a high-voltage substation entered into by the par-
ties in 2010. The parties settled the dispute in December 2014.
As previously reported, during fiscal year 2014, Siemens Indus-
trial Turbomachinery Ltd., United Kingdom, was sued before an
Iranian Court. The alleged damage claims are not quantified.
Siemens is defending itself against the action.
PROCEEDINGS OUT OF OR IN CONNECTION
WITH ALLEGED COMPLIANCE VIOLATIONS
As previously reported, Siemens AG agreed on a settlement
with nine out of eleven former members of the Managing and
Supervisory Board in January 2010 relating to claims of
breaches of organizational and supervisory duties. In Janu-
ary 2013, Siemens AG agreed on a settlement with Dr. Thomas
Ganswindt. In August 2014, Siemens AG reached a settlement
with Mr. Joachim Neubürger. The Annual Shareholders' Meet-
ing of Siemens AG approved the proposed settlement between
the Company and Mr. Neubürger on January 27, 2015.
As previously reported, in July 2008, Hellenic Telecommunica-
tions Organization S.A. (OTE) filed a lawsuit against Siemens AG
with the district court of Munich, Germany, seeking to compel
Siemens AG to disclose the outcome of its internal investiga-
tions with respect to OTE. OTE seeks to obtain information with
respect to allegations of undue influence and/or acts of bribery
in connection with contracts concluded between Siemens AG
and OTE from calendar 1992 to 2006. At the end of July 2010,
OTE expanded its claim and requested payment of damages by
Siemens AG of at least €57 million to OTE for alleged bribery
payments to OTE employees. In October 2014 OTE increased its
damage claim to the amount of at least €68 million. Siemens AG
continues to defend itself against the expanded claim.
As previously reported, in June 2008, the Republic of Iraq filed
an action requesting unspecified damages against 93 named
defendants with the United States District Court for the South-
ern District of New York on the basis of findings made in the
"Report of the Independent Inquiry Committee into the United
Nations Oil-for-Food Program". Siemens S.A.S., France, Siemens
Sanayi ve Ticaret A.S., Turkey, and the former Siemens subsidi-
ary OSRAM Middle East FZE, Dubai, are among the 93 named
defendants. In February 2013, the trial court dismissed the Re-
public of Iraq's action. The Republic of Iraq appealed the deci-
sion, which was then affirmed by the court of appeals. The Re-
public of Iraq thereafter petitioned for an "en banc" review of
the appellate decision. The court of appeals rejected the Repub-
lic of Iraq's request in December 2014. In March 2015, the Re-
public of Iraq filed a petition for U.S. Supreme Court review,
which was denied in June 2015.
Carrying
amount in
Consolidated Financial Statements
Within one year
2015
(in millions of €)
Future payment obligations under non-cancellable operating
leases are:
NOTE 20 Commitments and contingencies
The following table presents the undiscounted amount of maxi-
mum potential future payments for major groups of guarantees:
Sep 30,
(in millions of €)
2015
Credit guarantees
859
2014
774
Guarantees of third-party performance
HERKULES obligations
P-1
2,292
1,090
4,241
1,490
4,325
Item Credit guarantees cover the financial obligations of third
parties generally in cases where Siemens is the vendor and (or)
contractual partner or Siemens is liable for obligations of asso-
ciated companies accounted for using the equity method. Addi-
tionally, credit guarantees are issued in the course of the SFS
business. Credit guarantees generally provide that in the event
of default or non-payment by the primary debtor, Siemens will
be required to settle such financial obligations. The maximum
amount of these guarantees is equal to the outstanding bal-
ance of the credit or, in case where a credit line is subject to
variable utilization, the nominal amount of the credit line.
These guarantees have terms up to 18 years and 19 years, re-
spectively, in fiscal 2015 and 2014. For credit guarantees
amounting to €271 million and €260 million as of Septem-
ber 30, 2015 and 2014, respectively, the Company held collateral
mainly in the form of inventories and trade receivables. The
Company accrued €93 million and €49 million relating to credit
guarantees as of September 30, 2015 and 2014, respectively.
Furthermore, Siemens issues guarantees of third-party perfor-
mance, which mainly include performance bonds and guaran-
tees of advanced payments in a consortium. In the event of
non-fulfillment of contractual obligations by the consortium
partner(s), Siemens will be required to pay up to an agreed-
upon maximum amount. These agreements typically have
terms of up to ten years. Generally, consortium agreements
provide for fallback guarantees as a recourse provision among
the consortium partners. As of September 30, 2015 and 2014,
the Company accrued €3 million relating to performance guar-
antees at each year-end date.
In fiscal 2007, The Federal Republic of Germany commissioned
a consortium consisting of Siemens and IBM Deutschland
GmbH (IBM) to modernize and operate the non-military infor-
mation and communications technology of the German Federal
Armed Forces (Bundeswehr). This project is called HERKULES.
A project company, BWI Informationstechnik GmbH (BWI), pro-
vides the services required by the terms of the contract.
Siemens is a shareholder in the project company. Siemens is-
sued several guarantees connected to each other legally and
economically in favor of the Federal Republic of Germany and
of the consortium member IBM. The guarantees ensure that
BWI has sufficient resources to provide the required services
and to fulfill its contractual obligations. Future payments po-
tentially required by Siemens will be reduced successively over
the remaining two-year contract period.
In addition to guarantees described above, the Company issued
other commitments. To the extent future claims are not consid-
ered remote, maximum future payments from these obliga-
tions amount to €1,912 million and €1,305 million as of Sep-
tember 30, 2015 and 2014, respectively. These commitments
include indemnifications issued in connection with disposi-
tions of businesses. Such indemnifications may protect the
buyer from potential tax, legal and other risks in conjunction
with the purchased business. As of September 30, 2015 and
2014, the accrued amount for such other commitments is
€559 million and €168 million, respectively.
Consolidated Financial Statements 87
88
2,061
1,745
(1,121)
(932)
3
(17)
71
1
(13)
300
3
291
53
342
3
102
500
4,220
1,829
1,981
689
1,415
1,393
1,888
801
6
80
(1,629)
(278)
1,561
8,425
1,423
580
1,377
691
4,071
2,101
911
9,353
2
3,845
(1,023)
(807)
(8)
(313)
(2,150)
(713)
(355)
(283)
830
(936)
4,865
Except for asset retirement obligations, the majority of the
Company's provisions are generally expected to result in cash
outflows during the next one to 15 years.
26,682
Less: Cash and cash equivalents
(9,957)
(8,013)
Less: Current available-for-sale financial assets
Net debt
(1,175)
(925)
18,528
12,008
Less: SFS Debt¹
(21,198)
(18,663)
Plus: Post-employment benefits
Plus: Credit guarantees
9,811
9,324
859
774
Less: 50% nominal amount hybrid bond
Less: Fair value hedge accounting adjustment²
Industrial net debt
(958)
Plus: Long-term debt
1,620
2,979
Short-term debt and current maturities of
long-term debt
Warranties mainly relate to products sold. Order related losses
and risks are provided for anticipated losses and risks on un-
completed construction, sales and leasing contracts.
The Company is subject to asset retirement obligations related
to certain items of property, plant and equipment. Such asset
retirement obligations are primarily attributable to environ-
mental clean-up costs and to costs primarily associated with
the removal of leasehold improvements at the end of the
lease term.
Environmental clean-up costs relate to remediation and envi-
ronmental protection liabilities which have been accrued based
on the estimated costs of decommissioning facilities for the
production of uranium and mixed-oxide fuel elements in
Hanau, Germany (Hanau facilities), as well as a nuclear re-
search and service center in Karlstein, Germany (Karlstein facil-
ities). According to the German Atomic Energy Act, when such
a facility is closed, the resulting radioactive waste must be col-
lected and delivered to a government-developed final storage
facility. In this regard, the Company has developed a plan to
decommission the Hanau and Karlstein facilities in the follow-
ing steps: clean-out, decontamination and disassembly of
equipment and installations, decontamination of the facilities
and buildings, sorting of radioactive materials, and intermedi-
ate and final storage of the radioactive waste. This process will
be supported by continuing engineering studies and radioac-
tive sampling under the supervision of German federal and state
authorities. The decontamination, disassembly and final waste
conditioning are planned to continue until 2018; thereafter,
the Company is responsible for intermediate storage of the ra-
dioactive materials until they are handed over to a final storage
facility. With respect to the Hanau facility, the asset retirement
has been completed and intermediate storage has been set up.
On September 21, 2006, the Company received official notifica-
tion from the authorities that the Hanau facility has been re-
leased from the scope of application of the German Atomic
Energy Act and that its further use is unrestricted. The ulti-
mate costs of the remediation are contingent on the decision
of the federal government on the location of the final storage
facilities and the date of their availability. Several parameters
relating to the development of a final storage facility for radio-
active waste are based on the assumptions for the so called
Schacht Konrad final storage. Parameters related to the life-
span of the German nuclear reactors assume a phase-out until
2022. The valuation uses assumptions to reflect the current
and detailed cost estimates, price inflation and discount rates
as well as a continuous outflow until the 2070's related to the
costs for dismantling as well as intermediate and final storage.
Amongst others, the estimated cash outflows related to the
asset retirement obligation could alter significantly if, and
when, political developments affect the government's plans to
develop the so called Schacht Konrad. For discounting the
cash outflows, the Company uses current interest rates as of
the balance sheet date.
As of September 30, 2015 and 2014, the provision totals
€1,359 million and €1,347 million, respectively, and is recorded
net of a present value discount of €594 million and €977 mil-
lion, respectively, reflecting the assumed continuous outflow
of the total expected payments until the 2070's. Declined dis-
count rates increased the carrying amount of provisions by
€283 million as of September 30, 2015 and by €242 million as
of September 30, 2014. At the same time, the provisions were
Consolidated Financial Statements 85
decreased by €282 million as of September 30, 2015, mainly
due to reduced assumed inflation rates.
Other includes transaction-related and post-closing provisions
in connection with portfolio activities as well as provisions for
Legal Proceedings, as far as the risks that are subject to such
Legal Proceedings are not already covered by project account-
ing. Provisions for Legal Proceedings amounted to €398 mil-
lion and €433 million as of September 30, 2015 and 2014,
respectively.
NOTE 19 Additional capital disclosures
|
A key consideration of our capital structure management is to
maintain ready access to capital markets through various debt
instruments and to sustain our ability to repay and service our
debt obligations over time. In order to achieve this, Siemens
intends to maintain an Industrial net debt divided by EBITDA
(continuing operations) ratio of up to 1.0, commencing with
fiscal 2015. The ratio indicates the approximate number of
years that would be needed to cover the Industrial net debt
through continuing income, without taking into account inter-
est, taxes, depreciation and amortization.
Equity
Siemens' issued capital is divided into 881 million registered
shares with no par value and a notional value of €3.00 per
share. The shares are fully paid in. At the Shareholders' Meet-
ing, each share has one vote and accounts for the shareholders'
proportionate share in the Company's net income. All shares
confer the same rights and obligations.
In fiscal 2015 and 2014, Siemens repurchased 29,419,671 and
11,331,922 shares, respectively. In fiscal 2015 and 2014, Siemens
transferred 2,788,059 and 3,584,370 treasury shares, respec-
tively, in connection with share-based payments. As of Septem-
ber 30, 2015 and 2014, the Company has treasury shares of
72,376,759 and 45,745,147, respectively.
As of September 30, 2015, total authorized capital of Siemens AG
is €618.6 million nominal, issuable in installments based on var-
ious time-limited authorizations, by issuance of up to 206.2 mil-
lion registered shares of no par value. In addition, as of Septem-
ber 30, 2015, Siemens AG's conditional capital is €1,080.6 million
nominal or 360.2 million shares. It can primarily be used for
serving convertible bonds or warrants under warrant bonds
that could or can be issued based on various time-limited autho-
rizations approved by the Shareholders' Meetings.
Dividends paid per share were €3.30 and €3.00, respectively, in
fiscal 2015 and 2014. The Managing Board and the Supervisory
Board I propose to distribute a dividend of €3.50 per share enti-
tled to the dividend, in total representing approximately €2.8
billion in expected payments. Payment of the proposed divi-
dend is contingent upon approval at the Shareholders' Meeting
on January 26, 2016.
The carrying amount of a liability resulting from a non-con-
trolling interest holder's option to put its interest to Siemens
decreased by €287 million in fiscal 2015 and increased Retained
earnings, accordingly.
(in millions of €)
2015
Sep 30,
2014
NOTE 18
2,784
19,326
125
US$
1,000
889
2.90%/2015/May 2022/US$-fixed-rate-instruments
US$
1,750
1,557
3.25%/2015/May 2025/US$-fixed-rate-instruments
US$
1,500
1,331
4.40%/2015/May 2045/US$-fixed-rate-instruments
Total US$ Bonds
US$
1,750
1,539
10,497
3,301
5.25%/2006/September 2066/EUR fixed-rate instruments
6.125%/2006/September 2066/GBP fixed-rate instruments
€
2.15%/2015/May 2020/US$-fixed-rate-instruments
1,114
1,250
US$
5.75%/2006/October 2016/US$ fixed-rate instruments
US$
1,750
1,600
US$
1,750
1,457
6.125%/2006/August 2026/US$ fixed-rate instruments
US$
900
1,750
US$
1,750
1,843
US$ 3m LIBOR+0.28%/2015/May 2018/US$ floating-rate instruments
US$
500
US$
446
1.45%/2015/May 2018/US$-fixed-rate-instruments
2,023
10,582
934
959
33
33
€
31
31
2,670
25,955
2,298
18,165
1 Includes adjustments for fair value hedge accounting.
Debt Issuance Program - The Company has a program for
the issuance of debt instruments in place under which instru-
ments up to €15.0 billion can be issued as of September 30,
2015 and 2014, respectively. As of September 30, 2015 and 2014
€10.5 billion and €10.2 billion in notional amounts were issued
and are outstanding.
US$ Bonds - In May 2015, Siemens issued instruments total-
ing US$7.75 billion (€6.92 billion as of September 30, 2015) in
six tranches.
Hybrid Capital Bond - Siemens may call the option on the
hybrid bond in 2016 or thereafter. The instruments bear fixed-
rate interests until September 14, 2016; thereafter, floating-rate
interest is applied according to the conditions of the bond.
80 Consolidated Financial Statements
Bond with Warrant Units - Each of the US$1.5 billion instru-
ments were issued with 6,000 detachable warrants. In the
three months ended September 30, 2015, Siemens made an ex-
change offer to institutional investors to replace the existing
warrants relating to Siemens and OSRAM Licht AG (OSRAM)
shares with new warrants relating only to Siemens shares;
10,661 warrants were offered for exchange by warrant holders
and accepted by Siemens; the previous warrants submitted
for exchange were cancelled. Since September 11, 2015, holders
of the new warrants are entitled, at their option, to receive
1,902.0024 Siemens AG shares per warrant at an exercise price
per share of €98.7606. To facilitate the exchange, in total, float-
ing-rate instruments of €64 million were issued. 1,339 warrants
were not exchanged and retain the original rights to receive
1,811.9349 Siemens AG shares per warrant and 160.4987 OSRAM
shares at an exercise price of €187,842.81 (since February 26,
2015). The number of shares remains subject to the adjustment
provisions under the terms and conditions of the warrants. As
of September 30, 2015 and 2014, respectively, the warrants of-
fer option rights to 22.7 million and 21.7 million Siemens AG
shares. The new warrants are classified as equity instruments
with a fair value of €108 million at issuance; they are presented
in Capital reserve in line item Other changes in equity. The pre-
vious warrants not exchanged continue to be recognized as
other financial liability.
ASSIGNABLE AND TERM LOANS
In fiscal 2015, the two bilateral US$500 million term loan facili-
ties (in aggregate €893 million) were extended by one year un-
til March 26, 2020 with no extension option remaining. In
June 2015, Siemens redeemed a €333 million assignable loan.
COMMERCIAL PAPER PROGRAM
Siemens has a US$ 9.0 billion (€8.0 billion as of September 30,
2015) commercial paper program in place including US$ ex-
tendible notes capabilities. As of September 30, 2015 and 2014,
US$ 1.7 billion (€1.5 billion) and US$ 1.0 billion (€0.8 billion),
respectively, were outstanding. Siemens' commercial papers
have a maturity of generally less than 90 days. Interest rates
ranged from 0.11% to 0.32% in fiscal 2015 and from 0.1% to 0.2%
in fiscal 2014.
NOTE 16 Post-employment benefits
Siemens provides post-employment defined benefit plans or
defined contribution plans to almost all of the Company's do-
mestic employees and the majority of the Company's foreign
employees.
€
3m EURIBOR+0.2%/2015/September 2017/EUR floating-rate instruments
3m EURIBOR+0.2% /2015/September 2017/EUR floating-rate instruments
Total Bonds with Warrant Units
1,140
1,500
£
750
1,055
£
750
1,025
Total Hybrid Capital Bonds
1,989
1,984
€
1.05%/2012/August 2017 US$ fixed-rate instruments
1.65%/2012/August 2019 US$ fixed-rate instruments
1,500
1,314
US$
1,500
1,158
US$
1,500
1,292
US$
US$
DEFINED BENEFIT PLANS
10,799
400
US$
400
318
1.5%/2012/March 2020/EUR fixed-rate instruments
€
1,000
996
€
1,000
995
2.75%/2012/September 2025/GBP fixed-rate instruments
£
350
472
£
350
448
3.75%/2012/September 2042/GBP fixed-rate instruments
£
357
400
US$
US$ 3m LIBOR+1.4%/2012/February 2019/US$ floating-rate instruments
3,432
500
456
US$
500
425
5.625%/2008/June 2018/EUR fixed-rate instruments
€
1,600
650
1,779
1,600
1,839
5.125%/2009/February 2017/EUR fixed-rate instruments
€
2,000
2,090
€
2,000
2,122
€
317
863
650
US$
100
77
US$
400
356
US$
400
317
US$
300
267
US$
300
238
US$
400
357
US$
87
100
US$
396
819
1.75%/2013/March 2021/EUR fixed-rate instruments
2.875%/2013/March 2028/EUR fixed-rate instruments
1.5%/2013/March 2018/US$ fixed-rate instruments
3.5%/2013/March 2028/US$ fixed-rate instruments
2013/June 2020/US$ floating-rate instruments
2014/March 2019/US$ floating-rate instruments
2014/September 2021/US$ floating-rate instruments
Total Debt Issuance Program
€
1,250
1,278
€
1,250
1,276
£
€
996
€
1,000
996
US$
500
445
US$
500
1,000
The defined benefit plans open to new entrants are based pre-
dominantly on contributions made by the Company. Only to a
certain extent, those plans are affected by longevity, inflation
and compensation increases and take into account country
specific differences. The Company's major plans are funded
with assets in segregated entities. In accordance with local
laws and bilateral agreements with benefit trusts (trust agree-
ment) those plans are managed in the interest of the beneficia-
ries. The defined benefit plans cover 500,000 participants, in-
cluding 218,000 active employees, 80,000 former employees
with vested benefits and 202,000 retirees and surviving depen-
dents.
900
In Germany, Siemens AG provides pension benefits through
the plan BSAV (Beitragsorientierte Siemens Altersversorgung),
frozen legacy plans and deferred compensation plans. The ma-
jority of Siemens' active employees participate in the BSAV.
Those benefits are predominantly based on contributions made
by the Company and returns earned on such contributions,
subject to a minimum return guaranteed by the Company. In
connection with the implementation of the BSAV, benefits pro-
vided under the frozen legacy plans were modified to substan-
tially eliminate the effects of compensation increases. How-
ever, these frozen plans still expose the Company to investment
risk, interest rate risk and longevity risk. The pension plans are
funded via contractual trust arrangements (CTA). In Germany
no legal or regulatory minimum funding requirements apply.
(1,616)
(1,514)
(137)
(134)
Settlement payments
(47)
(7)
(47)
(7)
Business combinations, disposals and other
602
(224)
515
(122)
1
88
(102)
Foreign currency translation effects
897
(1,649)
(1,753)
Benefits paid
122
in the Consolidated Statements
of Comprehensive Income
(41)
1,972
(245)
2,098
1
43
33
635
Employer contributions
533
205
(83)
(611)
(533)
Plan participants' contributions
133
122
133
611
Germany:
525
(1)
CH
21,469
22,414
14,539
15,105
6,930
7,309
4,597
3,730
U.K.
3,162
1,435
842
5,612
4,845
5,696
4,818
107
97
22
2,888
Remeasurements recognized
U.S.
thereof:
6
103
115
Other reconciling items
(167)
(1,123)
390
(463)
6
Germany
(557)
Balance at fiscal year-end
36,818
35,591
27,296
26,505
214
202
9,737
9,288
(654)
43
793
43
2015
2014
2015
2014
Balance at begin of fiscal year
35,591
33,173
26,505
24,078
202
146
9,288
9,241
Current service cost
536
477
-
536
477
2015
2014
2015
(in millions of €)
U.S.:
1
Siemens Corporation sponsors the Siemens Pension Plan,
which is vastly frozen to new entrants and accretion of new
benefits. Most of the plan participants' benefits are calculated
using a cash balance formula. The plan assets are held in a
Master Trust. Siemens Corporation has delegated investment
oversight of the assets to the Investment Committee. The
trustee of the Master Trust, who is responsible for the safe-
keeping of the trust, acts only by direction of the Investment
Committee. Annual contributions are determined by indepen-
dent actuaries. There is a regulatory requirement to maintain a
minimum funding level of 80% in the defined benefit plans in
order to avoid benefit restrictions.
Consolidated Financial Statements 81
U.K.:
Siemens plc offers benefits through the Siemens Benefit Scheme
for which, until the start of retirement, an inflation increase of
the accrued benefits is mandatory. The required funding is de-
termined by a funding valuation carried out every third year
based on legal requirements. Due to deviating guidelines for the
determination of the discount rates, the technical funding defi-
cit is usually larger than the IFRS funding deficit. To reduce the
deficit Siemens entered into an agreement with the trustees to
provide annual payments of GBP 31 (€42) million until fiscal
2033. The agreement also provides for a cumulative advance
payment by Siemens AG compensating the remaining annual
payments at the date of early termination of the agreement due
to cancellation or insolvency.
Switzerland:
Following the Swiss law of occupational benefits (BVG) each em-
ployer has to grant post-employment benefits for qualifying em-
ployees. Accordingly Siemens in Switzerland sponsors several
cash balance plans. These plans are administered by founda-
tions. The board of the main foundation is composed of equally
many employer and employee representatives. The board of the
foundation is responsible for investment policy and the asset
management, as well as for any changes in the plan rules and the
determination of contributions to finance the benefits. The Com-
pany is required to make total contributions at least as high as
the sum of the employee contributions set out in the plan rules.
In case of an underfunded plan the Company together with the
employees may be asked to pay supplementary contributions ac-
cording to a well defined framework of recovery measures.
Development of the defined benefit plans
in fiscal 2015 and 2014
Interest expenses
Defined benefit
obligation (DBO)
(1)
(11)
Effects of asset
ceiling
(III)
Net defined
benefit balance
(1 - 11 + 111)
Fiscal year
Fiscal year
Fiscal year
Fiscal year
Fair value of
plan assets
1,076
2014
1,089
793
11
7
801
784
Return on plan assets excluding
amounts included in net interest
Actuarial (gains) losses
(245)
millions of €1
2,098
1,972
Effects of asset ceiling
-
245
(2,098)
-
(41)
1,972
1
(41)
646
income and net interest expenses
4
7
1,570
1,087
1,096
Interest income
Other¹
(177)
825
(179)
802
11
-
(802)
(8)
2
12
Components of defined benefit
costs recognized in the
Consolidated Statements of income
1,436
(825)
A.8
P 22
Notes to Consolidated
A.6
Report on expected developments
p 62
and associated material opportunities
and risks
Financial Statements
B.6
P 20
P 21
A.7
of Changes in Equity
Consolidated Statements
of the economic position
p 60
B.5
Overall assessment
A.9
Subsequent events
p 35
A.1.1.2 BUSINESS DESCRIPTION
A.10
of Cash Flows
The Power and Gas Division offers a broad spectrum of products
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, compressor trains, integrated power plant
solutions, and instrumentation and control systems for power
generation. Customers are public utilities and independent power
producers; companies in engineering, procurement and construc-
tion that serve these companies; international and national oil
companies; and industrial customers 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 re-
porting 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.
Our reportable segments may do business with each other, lead-
ing to corresponding orders and revenue. Such orders and reve-
nue are eliminated on the Group level.
Siemens has the following reportable segments: the Divisions
Power and Gas; Wind Power and Renewables; Energy Man-
agement; Building Technologies; Mobility; Digital Factory;
and Process Industries and Drives as well as the separately
managed business Healthineers (formerly called Healthcare),
which together form our Industrial Business. The Division Finan-
cial Services (SFS) supports the activities of our Industrial Busi-
ness and also conducts its own business with external customers.
As "global entrepreneurs" our Divisions and Healthineers carry
business responsibility worldwide, including with regard to their
operating results.
We are a technology company with core activities in the fields of
electrification, automation and digitalization, and activities 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 incorpo-
rated in Germany, with our corporate headquarters situated in
Munich. As of September 30, 2016, Siemens had around 351,000
employees.
A.1.1.1 ORGANIZATION AND BASIS
OF PRESENTATION
A.1.1 The Siemens Group
A.1 Business and economic environment
MANAGEMENT REPORT
Siemens AG
COMBINED
p 133
Corporate Governance
p 124
Report of the Supervisory Board
Takeover-relevant information
p 51
A.11
Compensation Report
p 37
Notes and forward-looking
statements
Consolidated Statements
Annual Report
2016
C.5
Consolidated Statements
of Income
Business and economic environment
p 118
C.1
p 56
B.1
p2
A.1
Independent Auditor's Report
A.2
Responsibility Statement
Consolidated Financial Statements
C.
B.
Combined Management Report
A.
Table of contents
siemens.com
SIEMENS
Ingenuity for life
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 each for onshore and offshore applications. The Division
Additional Information
p 8
A.3
Financial performance system
P 10
p 59
B.4
p 16
A.5
of Financial Position
Net assets position
C.4
Consolidated Statements
P 15
A.4
p 58
B.3
P 121
Results of operations
C.3
of Comprehensive Income
Consolidated Statements
p 57
B.2
p 119
C.2
Financial position
primarily serves large utilities and independent power producers.
Due to the significant offshore business of the Division and its
activities in the Northern hemisphere, production and installa-
tions are typically higher during spring and summer months be-
cause of the more favorable weather and marine conditions
during those seasons. The Division's revenue mix may vary from
reporting period to reporting period depending on the project
mix between onshore and offshore projects in the respective
period. The Division also includes a minority stake in a hydro
power business.
A.1.1.3 RESEARCH AND DEVELOPMENT
The Power Generation Services Division offers a comprehensive
set of services for products, solutions and technologies of the
Power and Gas and Wind Power and Renewables Divisions, cov-
ering performance enhancements, maintenance services, cus-
tomer training and professional consulting. Financial results of
these two Divisions include the corresponding financial results of
the Power Generation Services Division, which itself is not a re-
portable segment. Based on this business model, all discussions
of the services business for Power and Gas as well as Wind Power
and Renewables concern the Power Generation Services Division.
Within the framework of One Siemens, we aim to grow our reve-
nue faster than the average weighted revenue growth of our most
relevant competitors. Our primary measure for managing and
controlling our revenue growth is comparable growth, because it
shows the development in our business net of currency transla-
tion effects, which arise from the external environment outside
of our control, and portfolio effects, which involve business activ-
ities which are either new to or no longer a part of our business.
A.2.2 Revenue growth
Within One Siemens, we have established a financial framework –
for revenue growth, for profitability and capital efficiency, for our
capital structure, and for our dividend policy.
A.2.1 Overview
A.2 Financial performance system
7
Combined Management Report
Markets served by Healthineers grew moderately in fiscal 2016
as growth in the U.S. and in Europe more than offset weakness
in Latin America. Growth in China was stabilizing, though growth
rates came in lower than at the beginning of the decade. The
diagnostic imaging market segment grew slightly. While demand
for imaging procedures continued to grow, this trend was partly
offset by price pressure and increased utilization rates. The mar-
kets for ultrasound and in-vitro diagnostics grew moderately.
Development in the ultrasound market segment benefits from
increasing access to healthcare services. The market for in-vitro
diagnostics is expanding due to population and income growth
in emerging markets and the rising importance of diagnostics
in improving healthcare quality. For the healthcare industry as
a whole, the trend towards consolidation continues. Competi-
tion among the leading companies is strong, including with re-
spect to price.
Market volume for the markets addressed by the Process Indus-
tries and Drives Division declined moderately in fiscal 2016. This
was due mainly to reductions in capital expenditures by custom-
ers in commodity-related industries such as oil and gas, mining,
cement and metals. Towards the end of the fiscal year, demand
from those industries began to stabilize. As described for Digital
Factory above, global manufacturing production grew only mod-
estly while the consumer-oriented industries served by Process
Industries and Drives, such as food and beverage and pharma-
ceuticals continued their growth path. Competitors of the Divi-
sion's business activities can be grouped into two categories:
multinational companies that offer a relatively broad portfolio
and companies that are active only in certain geographic or prod-
uct markets. Consolidation is taking place mostly in particular
market segments and not across the broad base of the Division's
portfolio. In particular, consolidation in solution-driven markets
is going in the direction of in-depth niche market expertise. Most
major competitors have established global bases for their busi-
nesses. In addition, the competition has become increasingly
focused on technological improvements and cost position.
Currency translation effects are the difference between revenue
for the current period calculated using the exchange rates of
the current period and revenue for the current period calculated
using the exchange rates of the comparison period. For calculat-
ing the percentage change year-over-year, this absolute differ-
ence is divided by revenue for the comparison period. A portfolio
effect arises in the case of an acquisition or a disposition and is
calculated as the change year-over-year in revenue of the relevant
business resulting specifically from the acquisition or disposition.
For calculating the percentage change, this absolute change is
divided by revenue for the comparison period. For orders, we
apply the same calculations for currency translation and portfolio
effects as described above.
2015. Global manufacturing production grew only modestly
but showed some signs of growth stabilization towards the end
of the fiscal year. Consumer-oriented industries and the global
automotive industry, which is one of the most important end-
customer industries of the Division, remained on a stable growth
path. In contrast, mining- and oil-related industries continued to
suffer from low raw material prices. Demand from the machine-
building industry declined modestly year-over-year as invest-
ments were held back due mainly to uncertainties in the global
political and economic environment. The competition for Digital
Factory's business activities can be grouped into two categories:
multinational companies that offer a relatively broad portfolio
and companies that are active only in certain geographic or prod-
uct markets.
Markets for the Mobility Division grew moderately in fiscal 2016,
with all regions contributing to growth. Market development in
the Europe, C.I.S., Africa, Middle East region was characterized by
continuous investment and awards of large orders. This was par-
ticularly evident in Germany and the U.K. Demand in the Middle
East and in Africa was mainly driven by turnkey and rail infrastruc-
ture projects. In the Americas region, growth continued to bene-
fit from demand for passenger locomotives and urban transport
products in the U.S. Within the Asia, Australia region, Chinese
markets saw ongoing investments in high-speed trains, urban
transport and rail infrastructure, while India awarded large orders
as part of the country's transportation infrastructure build-out.
The Division's principal competitors are multinational companies.
Consolidation among Mobility's competitors is continuing.
Markets for the Building Technologies Division grew moderately
in fiscal 2016. Growth was driven by solid demand from the U.S.
and Asia, despite softening growth rates in China. Within the
Europe, C.I.S., Africa, Middle East region, markets in the Middle
East grew stronger than the region overall. The recovery of the
European market was weaker than expected but included sta-
ble growth in Germany. The Division's principal competitors are
multinational companies. Its solutions and services business also
competes with system integrators and small local companies.
The Division faces continuing price pressure, particularly in its
solutions business, due to strong competition from system houses
and some larger competitors.
Markets addressed by the Energy Management Division grew
moderately in fiscal 2016. The utilities market, the Division's single
largest customer segment, showed clear growth, benefiting from
major energy transmission investments in Egypt and Qatar and
from large interconnection projects, particularly in China and
India. The chemicals and the construction industries grew slightly.
Growth in the chemicals industry was driven by the Americas,
where some process industries showed a trend towards re-indus-
trialization in the U.S. and a build-up of capacities within the
region overall. Within the construction industry, increased invest-
ments in North America were largely offset by a slow-down in
investing activities in Asia, particularly in China. Demand from
the metals industry remained on the prior-year level, while the
oil and gas industry continued to reduce capital expenditures due
to low oil prices. Competitors of the Energy Management Division
consist mainly of a small number of large multinational compa-
nies. International competition is increasing from manufacturers
in emerging countries such as China, India and Korea.
and cost reduction, dependency on subsidy schemes is expected
to decrease in the long term.
Combined Management Report
6
Following strong demand in fiscal 2015, market volume for the
markets served by the Wind Power and Renewables Division
declined moderately in fiscal 2016. The decline was due to the
onshore wind power market segment, only partly offset by
growth in the relatively smaller offshore wind power market seg-
ment. On a regional basis, the decline was most evident in the
Americas, particularly including Brazil and the U.S., and in Asia,
Australia, particularly including China, where the largest national
wind market in the world remains largely closed to foreign man-
ufacturers. In Europe, in contrast, demand for wind power grew
in both the onshore and the offshore market segments. The com-
petitive situation in wind power differs in the two major market
segments. In the markets for onshore wind farms, competition is
widely dispersed without any one company holding a dominant
share of the market, while markets for offshore wind farms con-
tinue to consist of a few experienced players. Consolidation is
moving forward in both on- and offshore segments, including
exits of smaller players. The key drivers of consolidation are in-
creasing price pressure as well as technology challenges and
market access challenges, which increase development costs and
the importance of risk-sharing in offshore wind power. Market
development continues to depend strongly on energy policy, in-
cluding tax incentives in the U.S. and regulatory frameworks in
Germany and the U.K. With continued technological progress
The markets of the Power and Gas Division remained challeng-
ing in fiscal 2016. This was again particularly evident in the mar-
ket for steam turbines, where volume shrank substantially year-
over-year due to an ongoing shift from coal-fired to gas-fired
power generation in the U.S. and emission regulation such as in
China. Demand in compression markets also fell year-over-year
due to continued reduction in capital expenditure for oil and gas
upstream applications. In contrast, demand in the gas turbine
market continued to grow in fiscal 2016, driven by rising demand
for energy in emerging countries, demand for replacement of
aged, inefficient and inflexible power plants; the above-men-
tioned shift from coal to gas, particularly in the U.S.; an energy
market reform in Mexico; large projects in Egypt; diversification
towards gas power plants in China and countries in Latin America
and the Middle East. The Division's competition consists mainly
of two groups: a relatively small number of equipment manufac-
turers, some with very strong positions in their domestic markets,
and on the other hand a large number of engineering, procure-
ment and construction contractors. The gas turbine market is
experiencing overcapacity among original equipment manufac-
turers and engineering, procurement and construction contrac-
tors, which is leading to market consolidation.
A.1.2.2 MARKET DEVELOPMENT
In fiscal 2016, market volume for the markets addressed by the
Digital Factory Division came in slightly below the level in fiscal
The partly estimated figures presented here for GDP and fixed
investments are calculated by Siemens based on an IHS Markit
report dated October 15, 2016.
A.2.3 Profitability and capital
efficiency
Profit margin ranges
In June 2016, Siemens and Gamesa Corporación Tecnológica, S.A.
(Gamesa) signed binding agreements to merge the Siemens wind
power business, including service, with Gamesa. The two busi-
nesses are highly complementary regarding global footprint, ex-
isting product portfolios and technologies. The combined busi-
ness is expected to have a global reach across all relevant regions
and manufacturing footprints on all continents. Accordingly, the
transaction will result in a product offering covering all wind
classes and addressing all key market segments. Siemens will own
59% of the shares of the combined entity. As part of the merger,
Siemens will fund a cash payment of €1 billion which will be dis-
tributed to Gamesa's shareholders (excluding Siemens) immedi-
ately following the completion of the merger. Closing of the trans-
action is subject to the approvals of the antitrust and regulatory
authorities.
8 Combined Management Report
Within the framework of One Siemens, we seek to work as prof-
itably and efficiently as possible with the capital provided by our
shareholders and lenders. For purposes of managing and con-
trolling our capital efficiency, we use return on capital employed,
or ROCE, as our primary measure. We aim to achieve a range of
15% to 20%.
To emphasize and evaluate our continuous efforts to improve
productivity, we incorporated a measure called total cost produc-
tivity into our One Siemens framework. We define this measure
as the ratio of cost savings from defined productivity improve-
ment measures to the aggregate of functional costs for the
Siemens Group. We aim to achieve an annual value of 3% to 5%
for total cost productivity.
For purposes of managing and controlling profitability at the
Group level, we use net income as our primary measure. This
measure is the main driver of basic earnings per share (EPS)
from net income, which we use in communication to the capital
markets.
In line with common practice in the financial services business,
our financial indicator for measuring capital efficiency at the
Financial Services Division (SFS) is return on equity after tax, or
ROE after tax. ROE is defined as SFS' profit after tax, divided by
the Division's average allocated equity.
SFS (ROE after tax)
Digital Factory
15-19%
Within the framework of One Siemens, we aim to achieve margins
through the entire business cycle that are comparable to those of
our relevant competitors. Therefore, we have defined profit mar-
gin ranges for our industrial businesses, which are based on the
profit margins of the respective relevant competitors.
8-12%
14-20%
6-9%
8-11%
7-10%
5-8%
11-15%
Margin range
Wind Power and Renewables
Energy Management
Building Technologies
Mobility
Power and Gas
Process Industries and Drives
Healthineers
All in all, the negative effects outweighed the positive ones.
During the course of the fiscal year, growth forecasts for global
gross domestic product (GDP) for calendar 2016 declined from
2.9% in October 2015 to 2.4% in October 2016. Fixed investments
are expected to expand by 1.7% in calendar 2016, down from
3.4% previously forecast in October 2015.
15-20%
In Europe, economic activity also decelerated considerably in the
second and third quarters of fiscal 2016. Risks in the European
banking system resurfaced. The largely unexpected Brexit vote in
June 2016 added uncertainty - though the consequences in the
following months did not match the initial concerns.
> creating the highly flexible, connected factories of tomorrow
using advanced automation and digitalization technologies;
> promoting the efficient utilization of energy, especially in
buildings, industry and transportation, e.g. through highly
efficient drives for production facilities or for local and long-
distance trains;
➤ finding novel solutions for smart grids and for the storage of
energy from renewable sources with irregular availability;
enabling energy supplies that are economically sustainable;
> further enhancing efficiency in the generation of renewable
and conventional power and minimizing losses during power
transmission;
Our research and development (R&D) activities are ultimately
geared to developing innovative, sustainable solutions for our
customers and the Siemens businesses - and simultaneously
safeguarding our competitiveness. For these reasons, we focus
in particular on
structured financing in the form of debt and equity investments.
Based on its comprehensive financing know-how and specialist
technology expertise in the areas of Siemens businesses, SFS pro-
vides financial solutions for Siemens customers as well as other
companies, and also manages financial risks of Siemens. SFS op-
erates the Corporate Treasury of the Siemens Group, which in-
cludes managing liquidity, cash and interest risks as well as cer-
tain foreign exchange, credit and commodities risks. Business
activities and tasks of Corporate Treasury are reported in the seg-
ment information within Reconciliation to Consolidated Financial
Statements.
Combined Management Report 3
The Financial Services (SFS) Division supports its customers'
investments with leasing solutions and equipment, project and
-
> turning unstructured data into value-adding information, e.g.
when providing services such as preventive maintenance;
> advancing the integration of medical imaging technology, in
vitro diagnostics and IT for medical engineering to support
improved patient outcomes.
Healthineers ("Healthcare" before renaming in May 2016) is one
of the world's largest suppliers of technology to the healthcare
industry and a leader in medical imaging and laboratory diagnos-
tics. We provide medical technology and software solutions as
well as clinical consulting services, supported by a complete set of
training and service offerings. Therefore, we offer our customers
a comprehensive portfolio of medical solutions along the contin-
uum of care from prevention and early detection to diagnosis,
treatment and follow-up care. Because large portions of our rev-
enue stem from recurring business, our business activities are to
a certain extent resilient to short-term economic trends. They are,
however, dependent on regulatory and public policy develop-
ments around the world. Healthineers is organized into six busi-
ness areas: Diagnostic Imaging, Laboratory Diagnostics, Advanced
Therapies, Ultrasound, Point of Care Diagnostics and Services.
CONSOLIDATED FINANCIAL STATEMENTS.
expanded its software business by acquiring CD-adapco, a U.S.-
based provider of simulation software. For more information on
the acquisition of CD-adapco, see NOTE 3 in → B.6 NOTES TO
The Digital Factory Division offers a comprehensive product
portfolio and system solutions used in manufacturing industries,
complemented by lifecycle and data-driven services. These offer-
ings enable customers to optimize entire value chains from prod-
uct design and development to production and services. With its
comprehensive offering, the Division supports manufacturing
companies with the transformation towards the "Digital Enter-
prise," resulting in increased flexibility and efficiency of produc-
tion processes and reduced time to market for new products.
The Division supplies customers in discrete, process and hybrid
manufacturing industries. Changes in the level of demand are
strongly driven by macroeconomic cycles, and can lead to signif-
icant short-term variation in market performance. In the third
quarter of fiscal 2016, Digital Factory further strengthened and
The Mobility Division combines all Siemens businesses in the
area of passenger and freight transportation, including rail vehi-
cles, rail automation systems, rail electrification systems, road
traffic technology, IT solutions and related services. The Division
provides its customers with consulting, planning, financing, con-
struction, service and operation of turnkey mobility systems.
Mobility also provides integrated mobility solutions for network-
ing of different types of traffic systems. The principal customers
of the Mobility Division are public and state-owned companies
in the transportation and logistics sectors. Markets served by
Mobility are driven primarily by public spending. Customers usu-
ally have multi-year planning and implementation horizons, and
their contract tenders therefore tend to be independent of short-
term economic trends.
vertical IT software applications that link energy consumers and
producers. In addition, the Division's portfolio includes power
supply solutions for conventional power plants and renewable
energy systems as well as substations for urban and rural distri-
bution networks. The Division also offers energy-efficient solu-
tions for heavy industry, the oil and gas industry and the process
industries.
Combined Management Report
2
While raw material prices increased following a slump in the sec-
ond quarter of fiscal 2016, commodity exporting countries still
were burdened with overcapacities due to former investment
overhangs in extractive sectors. Associated reductions in govern-
ment spending further weighed on economic activity.
The Energy Management Division offers a wide spectrum of
products, systems, solutions, software and services for transmit-
ting and distributing power and for developing intelligent grid
infrastructure. The Division's customers include power providers,
network operators, industrial companies, infrastructure develop-
ers and construction companies. The offerings are used to pro-
cess and transmit electrical power from the source down to var-
ious 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 information, which is
required for the integration of more renewable energy sources
into conventional power transmission and distribution networks.
The Division also offers solutions and energy storage systems for
integrating renewable energy into power grids, together with
The Process Industries and Drives Division offers a comprehen-
sive product, software, solution and service portfolio for moving,
measuring, controlling and optimizing all kinds of mass flows.
With its know-how in vertical industries including oil and gas,
shipbuilding, mining, cement, fiber, chemicals, food and bever-
age, and pharmaceuticals, the Division increases productivity,
reliability and flexibility of machinery and installations along
their entire life cycle jointly with its customers. Based on data
models and analysis methods, Process Industries and Drives
paves the way together with its customers to create a "Digital
Enterprise," from process simulation via plant design and docu-
mentation through to asset and performance management. The
Division's offerings include an integrated portfolio with prod-
ucts, components and systems such as couplings, gears, motors
and converters, process instrumentation systems, process ana-
lytics devices, wired and wireless communication, industrial
identification and power supplies up to systems level with de-
centralized control systems, industrial software as well as cus-
tomized, application-specific systems and solutions. It also sells
gears, couplings and drive solutions to other Siemens Divisions,
which use them in rail transport and wind turbines. Demand
within the industries served by the Division generally shows a
delayed response to changes in the overall economic environ-
ment. Even so, the Division is strongly dependent on invest-
ment cycles in its key industries. In commodity-based process
industries such as oil and gas or mining, these cycles are driven
mainly by commodity price fluctuations rather than changes in
produced volumes.
Beyond these points of focus, we recognize how important
highly sophisticated software solutions are for all the fields of
business in which Siemens is active. R&D activities are carried
out by our businesses as well as our Corporate Technology (CT)
department.
The Building Technologies Division is a leading provider of au-
tomation technologies and digital services for safe, secure and
efficient buildings and infrastructures throughout their lifecycles.
The Division offers products, solutions, services and software for
fire safety, security, building automation, heating, ventilation,
air conditioning and energy management. The large customer
base is widely dispersed. It includes owners, operators and ten-
ants for both public and commercial buildings; building construc-
tion general contractors; and system houses. Changes in the
overall economic environment generally have a delayed effect on
the Division's business activities. Particularly in the solutions and
service businesses, Building Technologies is affected by changes
in the non-residential construction markets with a time lag of two
to four quarters.
In fiscal 2016, Siemens announced the creation of an autono-
mous unit that will place the Company's partnership with start-
ups on a much higher level: next47. The unit went into operation
in October 2016. It has been given a budget of €1 billion for its
first five years. With the creation of next47, Siemens plans to
further enhance its innovativeness and speed up the introduction
of innovations to the marketplace. next47 is focusing on five in-
novation fields: artificial intelligence, distributed electrification,
autonomous machines, blockchain applications and connected
electric mobility. Electrically powered flight is an example of a
disruptive development being pursued by next47. In cooperation
with Airbus, Siemens intends to demonstrate by 2020 that elec-
tricity can be used to power large planes.
Corporate Technology is both a creative driver of disruptive inno-
vations and a partner to the Siemens businesses. Its R & D activi-
ties are focused on the Company's core activities in the fields of
electrification, automation and digitalization. In many research
projects, CT works closely with scholars from leading universities
and research institutions. These partnerships, along with close
collaborations with start-ups, are an important part of Siemens'
open innovation concept, which is designed to make the Com-
pany even more innovative.
As in recent years, sluggish aggregate demand, particularly for
investment goods, held back growth. This was influenced signifi-
cantly by high levels of political and economic uncertainty arising
from conflicts in Syria and Iraq, the failed coup in Turkey and
U.K.'s vote to leave the European Union, among other factors.
A.1.2 Economic environment
5
The Chinese economy continued its path of rebalancing toward
a more consumption- and domestic-demand-driven economy,
which has so far been accompanied by a steady decline in eco-
nomic growth rates. However, the stability of China's economy
was partly caused by stimulus measures which have slowed the
country's progress on this path.
Combined Management Report
The R&D activities of Healthineers are directed toward our
growth fields in therapy, molecular diagnostics, and services. We
want to tap the full potential of imaging solutions in therapy and
to establish a closer connection between diagnostics and therapy
in cardiology, interventional clinical disciplines, surgery, and ra-
diation oncology. Strategic partnerships are an essential part of
our strategy to reach this goal. Expanding our innovation map
beyond our established portfolio, and investing in new ideas will
help us tap new business fields. For example, we will extend our
activities in the highly dynamic growth field of molecular diag-
nostics. We will expand our services business beyond product-
related services by adding a digital services portfolio and increas-
ing enterprise transformation services to help customers in their
transition to value-based care within more and more provider
organizations across geographical borders.
The focus of R & D activities in the Process Industries and Drives
Division is on the digital transformation of products, solutions
and services for all sectors in the process industry, such as oil and
gas, chemicals and pharmaceuticals. Information and communi-
cation technologies (ICT) play a crucial role in areas such as im-
provements in instrumentation, analytics, industrial communi-
cation and process control systems. The end-to-end use of ICT is
as essential a prerequisite for the expansion of drive and trans-
mission platforms by means of integrated condition monitoring
and service cloud connections as it is for the commissioning and
operation of processing plants or the use of computer-assisted
simulations to support their operators. The same applies for new
service offerings that complement operational engineering data
with additional condition-related data (condition monitoring)
and use it for purposes such as asset management. The digitali-
zation of our comprehensive process automation and industrial
communication portfolio includes a holistic industrial security
concept. Another central objective of our R&D activities is to fur-
ther increase energy efficiency while reducing the consump-
tion of raw materials and cutting emissions. This applies to our
own product creation processes as well as to our customers' pro-
cesses that are facilitated by our products (systems, solutions
and services).
less link to simulation tools enhances the benefits of virtual com-
missioning, which is used to identify flaws at an early stage and
in a cost-effective manner. Data-based services are another field
of research. Siemens offers MindSphere, an industry cloud that
industrial companies can use to develop and provide their own
digital services. As a result, new types of services such as predic-
tive maintenance and resource optimization can be provided.
Machinery and plant builders can use it to monitor production
operations around the world. MindSphere helps them reduce
downtimes and offer new business models.
through planning and engineering to production and service. In
addition, the TIA (Totally Integrated Automation) Portal engi-
neering platform is being intensively improved. Thanks to its
open interfaces, it exchanges data with other systems. The seam-
A.1.2.1 WORLDWIDE ECONOMIC ENVIRONMENT
The development of the world economy in fiscal 2016 again
resulted in diminished expectations through the course of the
year. After a slight improvement in sentiment indicators in the
first quarter, economic activity unexpectedly slowed down in
the second and third quarters of fiscal 2016. The growth slow-
down was also evident in the development of international
trade volume.
One of the R&D priorities at the Digital Factory Division is the
Digital Enterprise Software Suite. It includes Teamcenter software.
Serving as a data backbone, Teamcenter digitizes the entire prod-
uct lifecycle management (PLM) process from product design
In fiscal 2016, we reported research and development expenses
of €4.7 billion, compared to €4.5 billion in fiscal 2015. The result-
ing R&D intensity, defined as the ratio of R&D expenses and
revenue, was 5.9% - the same level as in fiscal 2015. Additions to
capitalized development expenses amounted to €0.3 billion in
both fiscal 2016 and 2015, mainly at Healthineers. As of Septem-
ber 30, 2016, Siemens held approximately 59,800 granted patents
worldwide in its continuing operations. As of September 30,
2015, it held approximately 56,200 granted patents. On average,
we had 33,000 R&D employees in fiscal 2016.
-
Research and Development in our Businesses
R&D at the Power and Gas Division concentrates on developing
products and solutions for enhancing efficiency, flexibility and
economy in power generation and in the oil and gas industry.
These products and solutions include turbomachinery - primarily
high-performance, low-emission gas turbines for single operation
or for combined cycle power plants - and compressor solutions
for various process industries. The Division's current technology
initiative, which started in fiscal 2015, is aimed at intensifying
R&D in innovative materials, advanced manufacturing methods
and plant optimization. Along with promoting digitalization in
overall product lifecycles, Power and Gas is on track preparing for
changing energy markets and their increasingly diversified cen-
tralized and decentralized structures.
At the Wind Power and Renewables Division, our R&D efforts
are focused on innovative products and solutions that allow us to
take the lead in performance, improve our competitiveness, and
build a stronger business case for customers. This includes find-
ing ways to more intelligently monitor and analyze turbine con-
ditions, and smart diagnostic services. Our R&D efforts also fo-
cus on digitalization. At our remote diagnostics center in Brande,
Denmark, we collect digital data from more than 10,000 turbines
in more than 30 countries, which total more than 24 million data
sets annually. We use this data to provide value for our custom-
ers: in 85% of cases, issues can be corrected and turbines re-
started without sending out a service team.
The growth slowdown was especially evident in the U.S. econ-
omy in the second and third quarters of fiscal 2016, followed by
modest acceleration of economic activity in the fourth quarter.
The main reason for this development was an inventory reduc-
tion which was substantially resolved by the end of the fiscal
year. In addition, the strong US$ weighed on U.S. exports and
improved conditions for imports.
Combined Management Report
The R&D activities of our Energy Management Division focus
on preparing our portfolio for changes on all voltage levels in the
world of electricity. The increasing infeed of renewable energy
to power grids requires that those grids become more flexible
and efficient, particularly with distributed generation on the rise.
The digitalization of future grids will enable intelligent grid oper-
ation and data-driven services. Cost-out programs and optimiza-
tion of our footprint are improving the competitiveness of our
product portfolio on global markets. Our innovations are cen-
tered on power electronics, digitalization or grid stabilization.
The full integration of energy supply systems with process auto-
mation is a core portfolio element for industrial applications and
infrastructures.
R&D work at the Building Technologies Division focuses on op-
timizing comfort, operational and energy efficiency in buildings
and infrastructures, protecting against fire and security hazards,
and minimizing related risks. We aim to create a portfolio of prod-
ucts and services ranging from the field to the cloud, based on
open standards wherever possible. This includes data-based ser-
vices for new ways of optimizing energy consumption, easily
scalable and reasonably priced services, a new and harmonized
system landscape with effective integration of electrical con-
sumption, fire detection and HVAC (heating, ventilation, air con-
ditioning) systems, and a complete range of products tailored
specifically to growing markets.
4
The Mobility Division's R&D strategy addresses customers'
demand for maximum availability, high throughput and en-
hanced passenger experience. Although there is a growing need
for mobility worldwide, possibilities for building new roads and
railways are limited. Meeting the demand for mobility requires
intelligent solutions that make transport more efficient, safe and
environmentally friendly. Reflecting this, Mobility's R&D activi-
ties emphasize digitalization in developing state-of-the art rail
vehicles, automation solutions for rail and road traffic, and rail
electrification systems. Most of these goals can be achieved only
with intelligent IT solutions such as WLAN-based control systems
for driverless and conductorless metro train operation, decentral-
ized wayside architecture for rail automation, cloud-based prod-
uct solutions, and Integrated Mobility Platforms that intelli-
gently network passengers, mobility service providers and traffic
management centers.
2,044,213
(834,605)
(1,029,991)
(57,437)
6,171,430
Fiscal year
2015
2016
Consolidated Financial Statements
94
94
Resulting Matching Shares
Under the Base Share Program employees of Siemens AG and par-
ticipating domestic Siemens companies may invest a fixed amount
of their compensation in Siemens shares, sponsored by Siemens.
The shares are bought at market price at a predetermined date in
the second quarter and grant the right to receive matching shares
under the same conditions applying to the Share Matching Plan
described above. The fair value of the Base Share Program amounted
to €35 million and €33 million in fiscal 2016 and 2015, respectively.
Under the Monthly Investment Plan employees other than senior
managers may invest a specified part of their compensation in
Siemens shares on a monthly basis over a period of twelve
months. Shares are purchased at market price at a predetermined
date once a month. If the Managing Board decides that shares
acquired under the Monthly Investment Plan are transferred to the
Share Matching Plan, plan participants will receive the right to
matching shares under the same conditions applying to the Share
Matching Plan described above with a vesting period of about two
years since fiscal 2016 (previously about three years). The Manag-
ing Board decided that shares acquired under the tranches issued
in fiscal 2015 and 2014 are transferred to the Share Matching Plan
as of February 2016 and February 2015, respectively.
Monthly Investment Plan
Under the Share Matching Plan senior managers may invest a
specified part of their variable compensation in Siemens shares
(investment shares). The shares are purchased at the market
price at a predetermined date in the second quarter. Plan partic-
ipants receive the right to one Siemens share without payment
of consideration (matching share) for every three investment
shares continuously held over a period of about three years (vest-
ing period) provided the plan participant has been continuously
employed by Siemens until the end of the vesting period.
In fiscal 2016, Siemens issued a new tranche under each of the
plans of the Share Matching Program.
AND ITS UNDERLYING PLANS
SHARE MATCHING PROGRAM
(159,754)
(305,951)
6,049,250
Outstanding, beginning of period
Base Share Program
Share Matching Plan
1,767,980
Granted
Continuing
Non-vested, end of period
Continuing and
(in thousands)
For their 25th and 40th service anniversary eligible employees re-
ceive jubilee shares. There were 4.39 million and 4.46 million
entitlements to jubilee shares outstanding as of September 30,
2016 and 2015, respectively.
JUBILEE SHARE PROGRAM
The Managing Board decides annually on the issuance of a new
Siemens Profit Sharing tranche and determines the targets to be
met for the current fiscal year. At fiscal year-end, based on the
actual target achievement, the Managing Board decides in its
discretion on the amount to be transferred to the Profit-Shar-
ing-Pool; this transfer is limited to a maximum of €400 million
annually. If the Pool amounts to a minimum of €400 million after
one or more fiscal years, it will be transferred to eligible employ-
ees below senior management in full or partially through the
grant of free Siemens shares. As of September 30, 2016,
€200 million are in the Profit-Sharing-Pool. Expense is recognized
pro rata over the estimated vesting period.
SIEMENS PROFIT SHARING
The weighted average fair value of matching shares granted in
fiscal 2016 and 2015 amounting to €64.56 and €69.43 per share
was determined as the market price of Siemens shares less the
present value of expected dividends taking into account non-vest-
ing conditions.
1,655,780
Outstanding, end of period
(71,164)
(85,056)
(95,658)
(38,304)
Forfeited
1,750,176
785,000
610,771
(538,837) (548,947)
Vested and fulfilled
1,655,780
Settled
Corporate Treasury has established the Siemens Credit Ware-
house to which numerous operating units from the Siemens
Group regularly transfer business partner data as a basis for a
centralized rating process. Furthermore, the Siemens Credit
Warehouse purchases trade receivables from numerous operat-
ing units with a remaining term up to one year. Due to the iden-
tification, quantification and active management of the credit
risk the Siemens Credit Warehouse increases the transparency
with regard to credit risk. In addition, the Siemens Credit Ware-
house may provide Siemens with an additional source of liquidity
and strengthens Siemens' funding flexibility.
Vested and fulfilled
specialists, are continuously updated and considered by invest-
ments in cash and cash equivalents, and in determining the con-
ditions under which direct or indirect financing will be offered to
customers.
Consolidated Financial Statements
92
22
Ratings, defined and analyzed by SFS, and individually defined
credit limits are based on generally accepted rating method-
ologies, with the input consisting of information obtained from
the customer, external rating agencies, data service providers
and Siemens' credit default experiences. Ratings and credit limits
for financial institutions as well as Siemens' public and private
customers, which are determined by internal risk assessment
The effective monitoring and controlling of credit risk through
credit evaluations and ratings is a core competency of our risk
management system. In this context, Siemens has implemented
a binding credit policy for all entities.
Siemens provides its customers with various forms of direct and
indirect financing particularly in connection with large projects.
Hence, credit risks arise are determined by the solvency of the
debtors, the recoverability of the collaterals and the global eco-
nomic development.
Credit risk is defined as an unexpected loss in financial instru-
ments if the contractual partner is failing to discharge its obliga-
tions in full and on time or if the value of collateral declines.
CREDIT RISK
2 A considerable portion result from asset-based lending transactions meaning that the respective
loans can only be drawn after sufficient collateral has been provided by the borrower.
1 Based on the maximum amounts Siemens could be required to settle in the event of default
by the primary debtor.
11
125
184
3,068
Irrevocable loan commitments²
discontinued
reflect losses incurred within the respective portfolios. When sub-
stantial expected payment delays become evident, overdue
financial instruments are assessed individually for additional
impairment and are further allowed for as appropriate.
For analysis and monitoring of the credit risk the Company
applies different systems and processes. A central IT application
processes data from the operating units together with rating
and default information and calculates an estimate which may
be used as a basis for individual bad debt provisions. In addition
to this automated process, qualitative information is considered,
in particular to incorporate the latest developments.
The maximum exposure to credit risk of financial assets, without
taking account of any collateral, is represented by their carrying
amount. As of September 30, 2016 and 2015 the collateral for
financial instruments classified as financial assets measured at
fair value in the form of netting agreements for derivatives in the
event of insolvency of the respective counterparty amounted to
€994 million and €1,065 million, respectively. As of Septem-
ber 30, 2016 and 2015 the collateral held for financial instru-
ments classified as receivables from finance leases amounted to
€1,949 million and €2,003 million, respectively, mainly in the
form of the leased equipment. As of September 30, 2016 and
2015 the collateral held for financial instruments classified as fi-
nancial assets measured at cost or amortized cost amounted to
€3,590 million and €3,165 million, respectively. The collateral
mainly consisted of property, plant and equipment. Credit risks
arising from irrevocable loan commitments are equal to the ex-
pected future pay-offs resulting from these commitments. As of
September 30, 2016 and 2015 the collateral held for these com-
mitments amounted to €1,177 million and €1,445 million, respec-
tively, mainly in the form of inventories and receivables.
Concerning trade receivables and other receivables, as well as
loans or receivables included in line item Other financial assets
that are neither impaired nor past due, there were no indications
that defaults in payment obligations will occur, which lead to
a decrease in the net assets of Siemens. Overdue financial instru-
ments are generally impaired on a portfolio basis in order to
Granted
6,049,250
Non-vested, beginning of period
Fiscal year
2015
2016
4,985,998
1,528,957
Changes in the stock awards held by members of the senior man-
agement and other eligible employees are:
In fiscal 2016 and 2015, 2,044,213 and 1,162,028 stock awards,
respectively, were granted contingent upon attaining the pro-
spective performance-based target of Siemens stock relative to
five competitors. The fair value of equity-settled stock awards
amounting to €117 million and €57 million, respectively, in fiscal
2016 and 2015, was calculated by applying a valuation model. In
fiscal 2016 and 2015, inputs to that model include an expected
weighted volatility of Siemens shares of 22% and 22%, respec-
tively, and a market price of €92.86 and €88.03 per Siemens
share. Expected volatility was determined by reference to historic
volatilities. The model applies a risk-free interest rate of up to
0.1% in fiscal 2016 and up to 0.3% in fiscal 2015 and an expected
dividend yield of 3.8% in fiscal 2016 and 3.8% in fiscal 2015. As-
sumptions concerning share price correlations were determined
by reference to historic correlations.
Forfeited
Commitments to members of the senior
management and other eligible employees
Consolidated Financial Statements 93
Commitments to members of the Managing Board
In fiscal 2016 and 2015, agreements were entered into which en-
title members of the Managing Board to stock awards contingent
upon attaining the prospective performance-based target of
Siemens stock relative to five competitors. The fair value of these
entitlements amounting to €9 million and €9 million, respectively,
in fiscal 2016 and 2015, was calculated by applying a valuation
Until fiscal 2014, additionally one portion of the variable compen-
sation component (bonus) for members of the Managing Board
was granted in the form of non-forfeitable awards of Siemens
stock (Bonus Awards) subject to a vesting period of one year.
Beneficiaries will receive one Siemens share without payment of
consideration for each Bonus Award, following an additional
waiting period of four years.
Stock awards are tied to performance criteria. The annual target
amount for stock awards can be bound to the average of earnings
per share (EPS, basic) of the past three fiscal years and/or to the
share price performance of Siemens relative to the share price
performance of five important competitors during the four-year
restriction period. The target attainment for the performance
criteria ranges between 0% and 200%. If the target attainment
of the prospective performance-based target of Siemens stock
relative to five competitors exceeds 100%, an additional cash pay-
ment results corresponding to the outperformance. The vesting
period is four years and five years for stock awards granted to
members of the Managing Board until fiscal 2014.
The Company grants stock awards to members of the Managing
Board, members of the senior management and other eligible em-
ployees. Stock awards are subject to a restriction period of about
four years and entitle the beneficiary to Siemens shares without
payment of consideration following the restriction period.
STOCK AWARDS
Share-based payment awards may be settled in newly issued
shares of capital stock of Siemens AG, in treasury shares or in
cash. Share-based payment awards may forfeit if the employ-
ment of the beneficiary terminates prior to the expiration of the
vesting period. Total pretax expense for share-based payment
amounted to €332 million and €203 million for the years ended
September 30, 2016 and 2015, respectively, and refers primarily
to equity-settled awards.
NOTE 25 Share-based payment
model. In fiscal 2016 and 2015, inputs to that model include an
expected weighted volatility of Siemens shares of 22% and 22%,
respectively, and a market price of €92.86 and €88.03 per
Siemens share. Expected volatility was determined by reference
to historic volatilities. The model applies a risk-free interest rate
of up to 0.1% and 0.3% in fiscal 2016 and 2015, respectively and
an expected dividend yield of 3.8% in fiscal 2016 and 2015. As-
sumptions concerning share price correlations were determined
by reference to historic correlations.
operations
NOTE 26 Personnel costs
Fiscal year
Wages and salaries
2015
2016
(in millions of €)
6.30
6.42
(from continuing operations)
Fiscal year
Diluted earnings per share
6.38
6.51
(from continuing operations)
Basic earnings per share
832,832
819,914
Weighted average shares outstanding - diluted
799
23,431
22,611
Statutory social welfare contributions
and expenses for optional support
Fiscal year
Fiscal year
Total revenue
Intersegment Revenue
External revenue
Orders¹
Segment information
NOTE 28
9,425
Consolidated Financial Statements 95
Severance charges amount to €598 million and €804 million
(thereof at segment Process Industries and Drives €254 million
and €74 million) in fiscal 2016 and 2015, respectively. Item
Expenses relating to post-employment benefits includes service
costs for the period. Personnel costs for continuing and discon-
tinued operations amount to €28,232 million and €27,584 million,
respectively, in fiscal 2016 and 2015. Employees were engaged
in (averages; part time employees are included proportionally):
1,163
27,177
28,210
1,218
post-employment benefits
Expenses relating to
3,404
3,562
The dilutive earnings per share computation in fiscal 2016 and
2015 does not contain 22,8 million and 22,7 million shares, re-
spectively, relating to warrants issued with bonds. The inclusion
of those shares would have been antidilutive in the years pre-
sented. In the future, the warrants could potentially dilute basic
earnings per share.
operations
11,228
808,686
33
32
33
68
65
67
65
214
216
212
216
Manufacturing and services
Sales and marketing
Research and development
Administration
and general services
2015
2016
2015
2016
Fiscal year
33
35
34
35
5,251
5,262
Income from continuing operations
attributable to shareholders of Siemens AG
Weighted average shares outstanding - basic
Effect of dilutive share-based payment
(98)
(134)
5,349
5,396
2015
823,408
2016
(shares in thousands; earnings per share in €)
Income from continuing operations
Less: Portion attributable to
non-controlling interest
Earnings per share
NOTE 27
349
349
345
349
35
Fiscal year
177
LIQUIDITY RISK
277
Asset
Sep 30, 2016
Liability
Asset
(in millions of €)
1,297
713
880
570
Fair values of each type of derivative financial instruments recorded
as financial assets or financial liabilities are:
instruments and hedging activities
NOTE 23 Derivative financial
843
1,604
1,065
1,032
1,874
11
1,885
Sep 30, 2015
Liability
Financial liabilities - Derivative financial liabilities
Foreign currency
Interest rate swaps
Periods in which the hedged forecast transactions or the firm
commitments denominated in foreign currency are expected to
impact profit or loss:
The Company's operating units apply hedge accounting for cer-
tain significant forecast transactions and firm commitments de-
nominated in foreign currencies. Particularly, the Company has
entered into foreign currency exchange contracts to reduce the
risk of variability of future cash flows resulting from forecast sales
and purchases as well as firm commitments. This risk results
mainly from contracts denominated in US$ both from Siemens'
operating units entering into long-term contracts e.g. project
business and from standard product business.
Cash flow hedges
Consolidated Financial Statements 89
not designated in a hedging relationship
The Company manages its risks associated with fluctuations in
foreign currency denominated receivables, payables, debt, firm
commitments and forecast transactions primarily through a
Company-wide portfolio approach. Under this approach the
Company-wide risks are aggregated centrally, and various deriv-
ative financial instruments, primarily foreign currency exchange
contracts, foreign currency swaps and options, are utilized to
minimize such risks. Such a strategy does not qualify for hedge
accounting treatment. The Company also accounts for foreign
currency derivatives, which are embedded in sale and purchase
contracts.
Derivative financial instruments
FOREIGN CURRENCY EXCHANGE RATE
RISK MANAGEMENT
241
1,919
3,228
691
129
1,500
596
3,051
381
1,824
491
1,885
and combined interest
and currency swaps
Other (embedded
derivatives, options,
commodity swaps)
exchange contracts
2,668
10
2,678
2,641
1,440
Net
Financial
Position
Related
amounts not
set off in the
Statement of
Net amounts
in the
Statement of
Financial
Position
Position
amounts
Financial
Gross
Amounts set
off in the
Statement of
Sep 30, 2016
Financial liabilities - Derivative financial liabilities
Financial assets
(in millions of €)
Siemens enters into master netting agreements and similar agree-
ments for derivative financial instruments. The requirements to
offset recognized financial instruments are usually not met. The
following table reflects financial assets and financial liabilities that
are subject to netting agreements and similar agreements:
OFFSETTING
Fiscal year
7
2,634
994
6
amounts
Net
amounts not
set off in the
Statement of
Financial
Position
Related
in the
Statement of
Financial
Position
off in the
Statement of
Net amounts
Amounts set
(in millions of €)
Position
Financial assets
(in millions of €)
Financial
Gross
Sep 30, 2015
amounts
1,640
595
838
1,433
amounts
2017
2018
2019
to
2021
941
89
414
Loans from banks
Other financial
15,570
9,585
4,271
5,793
Notes and bonds
Non-derivative financial
liabilities
and
there-
after
to
2021
2018
2017
2019
2022
Fiscal year
6
indebtedness
818
22
768
25
84
118
1,264
Other financial liabilities
Derivative financial liabilities
Credit guarantees¹
5
6
(in millions of €)
31
107
30
56
23
Trade payables
Obligations under
finance leases
50
15
8,006
526
are determined based on each particular settlement date of an
instrument and based on the earliest date on which Siemens
could be required to pay. Cash outflows for financial liabilities
(including interest) without fixed amount or timing are based on
the conditions existing at September 30, 2016.
In addition, Siemens constantly monitors funding options avail-
able in the capital markets, as well as trends in the availability
and costs of such funding, with a view to maintaining financial
flexibility and limiting repayment risks.
90 Consolidated Financial Statements
Increasing market fluctuations may result in significant earnings
and cash flow volatility risk for Siemens. The Company's operat-
ing business as well as its investment and financing activities are
affected particularly by changes in foreign exchange rates, inter-
est rates and equity prices. In order to optimize the allocation of
the financial resources across the Siemens segments and entities,
as well as to achieve its aims, Siemens identifies, analyzes and
manages the associated market risks. The Company seeks to
manage and control these risks primarily through its regular op-
erating and financing activities, and uses derivative financial in-
struments when deemed appropriate.
NOTE 24 Financial risk management
The Company had interest rate swap contracts to pay variable
rates of interest of an average of (0.2)% and 0.1% as of Septem-
ber 30, 2016 and 2015, respectively and received fixed rates of
interest (average rate of 3.3% and 4.3%, as of September 30,
2016 and 2015, respectively). The notional amount of indebted-
ness hedged as of September 30, 2016 and 2015 was €3,650 mil-
lion and €6,012 million, respectively. This changed 14% and 26%
of the Company's underlying notes and bonds from fixed interest
rates into variable interest rates as of September 30, 2016 and
2015, respectively. The notional amounts of these contracts ma-
ture at varying dates based on the maturity of the underlying
hedged items. The net fair value of interest rate swap contracts
(excluding accrued interest) used to hedge indebtedness as of
September 30, 2016 and 2015 was €93 million and €242 million,
respectively.
Fair value hedges of fixed-rate debt obligations
Under the interest rate swap agreements outstanding during the
years ended September 30, 2016 and 2015, the Company has
agreed to pay a variable rate of interest multiplied by a notional
principle amount, and to receive in return an amount equal to a
specified fixed rate of interest multiplied by the same notional
principal amount. These interest rate swap agreements offset an
impact of future changes in interest rates designated as the
hedged risk on the fair value of the underlying fixed-rate debt
obligations. Carrying amount adjustments to debt for fair value
changes attributable to the respective interest rate risk being
hedged are included in Other financial income (expenses),
net resulted in a gain (loss) of €149 million and €103 million,
respectively, in fiscal 2016 and 2015; the related swap agreements
resulted in a gain (loss) of €(152) million and €(135) million,
respectively. Net cash receipts and payments relating to such
interest rate swap agreements are recorded as interest expenses.
Since fiscal 2015, Siemens applies cash flow hedge accounting to
a revolving portfolio of floating-rate commercial papers of nom-
inal US$700 million. To benefit from low interest rates in the USA,
Siemens pays a fixed rate of interest and receives a variable rate
of interest, offsetting future changes in interest payments of the
underlying floating-rate commercial papers. Net cash receipts
and payments are recorded as interest expenses.
Cash flow hedges of floating-rate commercial
papers
Interest rate risk management relating to the Group, excluding
SFS' business, uses derivative financial instruments under a port-
folio-based approach to manage interest risk actively relative to
a benchmark. The interest rate management relating to the SFS
business remains to be managed separately, considering the
term structure of SFS' financial assets and liabilities on a portfolio
basis. Neither approach qualifies for hedge accounting treat-
ment. Net cash receipts and payments in connection with inter-
est rate swap agreements are recorded as interest expense in
Other financial income (expenses), net.
INTEREST RATE RISK MANAGEMENT
Derivative financial instruments not designated
in a hedging relationship
30
67
6
(22)
2022
and
there-
after
Fiscal year
Other comprehensive income,
net of income taxes into
revenue or cost of sales
Expected gain (loss) to be
reclassified from line item
In order to quantify market risks Siemens has implemented a sys-
tem based on parametric variance-covariance Value at Risk (VAR),
which is also used for internal management of the Corporate
Treasury activities. The VaR figures are calculated based on his-
torical volatilities and correlations of various risk factors, a ten
day holding period, and a 99.5% confidence level.
Actual results that are included in the Consolidated Statements
of Income or Consolidated Statements of Comprehensive Income
may differ substantially from VaR figures due to fundamental
conceptual differences. While the Consolidated Statements of
Income and Consolidated Statements of Comprehensive Income
are prepared in accordance with IFRS, the VaR figures are the
output of a model with a purely financial perspective and repre-
sent the potential financial loss which will not be exceeded
within ten days with a probability of 99.5%. Although VaR is an
important tool for measuring market risk, the assumptions on
which the model is based give rise to some limitations including
the following. A ten day holding period assumes that it is possible
to dispose of the underlying positions within this period. This
may not be valid during continuing periods of illiquidity markets.
A 99.5% confidence level means, that there is a 0.5% statistical
probability that losses could exceed the calculated VaR. The use
of historical data as a basis for estimating the statistic behavior
of the relevant markets and finally determining the possible
range of the future outcomes on the basis of this statistic behav-
ior may not always cover all possible scenarios, especially those
of an exceptional nature.
Any market sensitive instruments, including equity and inter-
est bearing investments, that our Company's pension plans
hold are not included in the following quantitative and quali-
tative disclosures.
FOREIGN CURRENCY EXCHANGE RATE RISK
Transaction risk
Liquidity risk results from the Company's inability to meet its finan-
cial liabilities. Siemens follows a deliberated financing policy that
is aimed towards a balanced financing portfolio, a diversified
maturity profile and a comfortable liquidity cushion. Siemens
mitigates liquidity risk by the implementation of an effective
working capital and cash management, arranged credit facilities
with highly rated financial institutions, via a debt issuance pro-
gram and via a global multi-currency commercial paper program.
Liquidity risk may also be mitigated by the Siemens Bank GmbH,
which increases the flexibility of depositing cash or refinancing.
These investments are monitored based on their current market
value, affected primarily by fluctuations in the volatile technol-
ogy-related markets worldwide. As of September 30, 2016 and
2015 the market value of Siemens' portfolio in publicly traded
companies was €2,169 million compared to €1,814 million in the
prior year. As of September 30, 2016 and 2015, the VaR relating
to the equity price was €227 and €189 million. The increases in
the market value and of the VaR were due mainly to higher mar-
ket values of our stakes in OSRAM and Atos.
Siemens' investment portfolio consists of direct and indirect in-
vestments in publicly traded companies held for purposes other
than trading. The direct participations result mainly from strate-
gic partnerships, strengthening Siemens' focus on its core busi-
ness activities or compensation from merger and acquisitions
transactions; indirect investments in fund shares are mainly
transacted for financial reasons.
EQUITY PRICE RISK
As of September 30, 2016 and 2015 the VaR relating to the inter-
est rate was €485 million and €500 million.
If there are no conflicting country-specific regulations, all Siemens
operating units generally obtain any required financing through
Corporate Treasury in the form of loans or intercompany clearing
accounts. The same concept is adopted for deposits of cash gen-
erated by the units.
separately, considering the term structure of SFS's financial
assets and liabilities. The Company's interest rate risk results
primarily from the funding in U.S. dollar, British pound and euro.
Consolidated Financial Statements 91
The following table reflects the contractually fixed pay-offs for
settlement, repayments and interest. The disclosed expected
undiscounted net cash outflows from derivative financial liabilities
Interest rate risk is the risk that the fair value or future cash flows
of a financial instrument will fluctuate because of changes in
market interest rates. This risk arises whenever interest terms of
financial assets and liabilities are different. In order to manage
the Company's position with regard to interest rate risk, interest
income and interest expenses, Corporate Treasury performs a
comprehensive corporate interest rate risk management by using
fixed or variable interest rates from bond issuances and deriva-
tive financial instruments when appropriate. The interest rate risk
relating to the Group, excluding SFS' business, is mitigated by
managing interest rate risk actively relatively to a benchmark.
The interest rate risk relating to the SFS' business is managed
Many Siemens units are located outside the euro zone. Since the
financial reporting currency of Siemens is the euro, the financial
statements of these subsidiaries are translated into euro for the
preparation of the Consolidated Financial Statements. To con-
sider the effects of foreign currency translation in the risk man-
agement, the general assumption is that investments in for-
eign-based operations are permanent and that reinvestment is
continuous. Effects from foreign currency exchange rate fluctu-
ations on the translation of net asset amounts into euro are re-
flected in the Company's consolidated equity position.
Translation risk
As of September 30, 2016 and 2015 the VaR relating to foreign
currency exchange rates was €86 million and €179 million. This
VaR was calculated under consideration of items of the Consoli-
dated Statement of Financial Position in addition to firm commit-
ments which are denominated in foreign currencies, as well as
foreign currency denominated cash flows from forecast transac-
tions for the following twelve months. A lower volatility between
the U.S. dollar and the euro in comparison to the prior year re-
sulted in a decrease of the VaR.
Generally, the operating units conclude their hedging activities
internally with Corporate Treasury. By applying a cost-optimizing
portfolio approach Corporate Treasury itself hedges foreign cur-
rency exchange rate risks with external counterparties and limits
them Company-wide.
According to the company policy each Siemens unit is responsi-
ble for recording, assessing and monitoring its foreign currency
transaction exposure. The net foreign currency position of each
unit serves as a central performance measure and has to be
hedged within a band of at least 75% but no more than 100%.
units are preferably carried out in their functional currency or on
a hedged basis.
Operating units (Industrial business and SFS) are prohibited
from borrowing or investing in foreign currencies on a specula-
tive basis. Intercompany financing or investments of operating
Each Siemens unit conducting businesses with international
counterparties leading to future cash flows denominated in a
currency other than its functional currency is exposed to risks
from changes in foreign currency exchange rates. In the ordinary
course of business Siemens units are exposed to foreign currency
exchange rate fluctuations, particularly between the U.S. dollar
and the euro. Foreign currency exchange rate exposure is partly
balanced by purchasing of goods, commodities and services in
the respective currencies as well as production activities and
other contributions along the value chain in the local markets.
INTEREST RATE RISK
Fiscal year
Settled
2016
1,409
1,521
7,446
7,493
34,527
36,145
7,737
8,744
545
563
346
392
2,048
2,154
11,153
11,211
2,184
2,191
1,990
653
600
471
597
(3,346)
4,984
(2,640)
5,533
120,348
125,717
60,851
63,126
2,325
(1,119)
7,218
219
216
17
18
884
680
24,970
26,446
(1,994)
7,404
357
240
165
497
2,526
2,868
588
678
86
85
57
66
546
598
1,337
1,324
553
577
230
218
118
99
127
132
160
591
618
2,152
1,800
581
243
281
231
304
179
1,790
1,771
4,906
5,731
1,685
1,690
126
184
185
341
1,897
2015
2016
(in millions of €)
Sep 30,
Assets
In fiscal 2016 and 2015, Profit of SFS includes interest income of
€1,161 million and €1,086 million, respectively and interest ex-
penses of €377 million and €340 million, respectively.
Consolidated Financial Statements
(1,119)
(366)
(349)
(543)
(674)
acquired in business combinations
Eliminations, Corporate Treasury,
and other reconciling items
Reconciliation to
Amortization of intangible assets
(440)
(439)
Centrally carried pension expense
Assets Centrally managed portfolio activities
Assets Siemens Real Estate
1,812
1,322
4,964
(in millions of €)
98 Consolidated Financial Statements
60,851
63,126
(34,315)
(35,423)
42,282
42,086
(690)
Liability-based adjustments
Eliminations, Corporate Treasury, other items
Reconciliation to Consolidated Financial
Statements
4,089
45,576
47,072
Intragroup financing receivables
Tax-related assets
(2,012)
(1,474)
Assets Corporate items and pensions
Asset-based adjustments:
4,895
3,103
2,135
(449)
132
Profit of the segment SFS:
ments.
performance. This may also be the case for items that refer to
more than one reportable segment, SRE and (or) Centrally man-
aged portfolio activities or have a corporate or central character.
Costs for support functions are primarily allocated to the seg-
Consolidated Financial Statements 97
Amortization expenses of intangible assets acquired in business
combinations are not part of Profit. Furthermore, income taxes
are excluded from Profit since income tax is subject to legal
structures, which typically do not correspond to the structure of
the segments. The effect of certain litigation and compliance
issues is excluded from Profit, if such items are not indicative of
Decisions on essential pension items are made centrally. Accord-
ingly, Profit primarily includes amounts related to service cost of
pension plans only, while all other regularly recurring pension
related costs are included in reconciliations in line item Centrally
carried pension expense.
Financing interest, excluded from Profit, is any interest income or
expense other than interest income related to receivables from
customers, from cash allocated to the segments and interest ex-
penses on payables to suppliers. Financing interest is excluded
from Profit because decision-making regarding financing is typi-
cally made at the corporate level.
earnings before financing interest, certain pension costs, income
taxes and amortization expenses of intangible assets acquired in
business combinations as determined by the chief operating de-
cision maker (Profit). The major categories of items excluded
from Profit are presented below.
Siemens' Managing Board is responsible for assessing the perfor-
Imance of the segments (chief operating decision maker). The
Company's profitability measure of the segments except for SFS is
Profit
Accounting policies for Segment information are generally the
same as those used for the Consolidated Financial Statements.
Lease transactions, however, are classified as operating leases for
internal and segment reporting purposes. Intersegment transac-
tions are based on market prices.
SEGMENTS
MEASUREMENT
Eliminations, Corporate Treasury and other reconciling
items - comprise consolidation of transactions within the seg-
ments, certain reconciliation and reclassification items and the
activities of the Company's Corporate Treasury. It also includes
interest income and expense, such as, for example, interest not
allocated to segments or Centrally managed portfolio activities
(referred to as financing interest), interest related to Corporate
Treasury activities or resulting consolidation and reconciliation
effects on interest.
Pensions - includes the Company's pension related income (ex-
pense) not allocated to the segments, SRE or Centrally managed
portfolio activities.
2,549
2,764
Profit of the segment SFS is Income before income taxes. In con-
trast to performance measurement principles applied to other
segments, interest income and expenses is an important source
of revenue and expense of SFS.
Asset measurement principles:
Management determined Assets (Net capital employed) as a
measure to assess capital intensity of the segments except for
SFS. Its definition corresponds to the Profit measure except for
amortization expenses of intangible assets acquired in business
combinations which are not part of Profit, however, the related
intangible assets are included in the segments' Assets. Segment
Assets is based on Total assets of the Consolidated Statements
of Financial Position, primarily excluding intragroup financing
receivables, tax related assets and assets of discontinued opera-
tions, since the corresponding positions are excluded from Profit.
Assets of Mobility include the project-specific intercompany
financing of a long-term project. The remaining assets are re-
duced by non-interest-bearing liabilities other than tax related
liabilities, e.g. trade payables, to derive Assets. In contrast, Assets
of SFS is Total assets.
Orders:
714
(215)
Centrally managed portfolio activities
Siemens Real Estate
Corporate items
2015
2016
Fiscal year
(in millions of €)
Profit
205
CONSOLIDATED FINANCIAL STATEMENTS
Centrally managed portfolio activities follow the measurement
principles of the segments except for SFS. SRE applies the mea-
surement principles of SFS.
CENTRALLY MANAGED
PORTFOLIO ACTIVITIES AND SRE
-
MEASUREMENT
Amortization, depreciation and impairments:
Amortization, depreciation and impairments includes deprecia-
tion and impairments of property, plant and equipment as well
as amortization and impairments of intangible assets each net of
reversals of impairment.
Free cash flow of the segments, except for SFS, constitutes cash
flows from operating activities less additions to intangible assets
and property, plant and equipment. It excludes financing inter-
est, except for cases where interest on qualifying assets is capi-
talized or classified as contract costs and it also excludes income
tax as well as certain other payments and proceeds. Free cash
flow of SFS includes related financing interest payments and pro-
ceeds; income tax payments and proceeds of SFS are excluded.
Free cash flow definition:
Orders are determined principally as estimated revenue of ac-
cepted purchase orders and order value changes and adjust-
ments, excluding letters of intent.
RECONCILIATION TO
195
(1,994)
375
10,172
847
781
9,140
9,390
10,036
10,332
Digital Factory
7,508
7,825
31
31
7,477
7,794
10,262
7,875
Mobility
9,988
Process Industries and Drives
8,939
9,144
83,723
87,802
Industrial Business
12,930
13,535
35
38
12,896
5,999
13,497
13,830
Healthineers
9,553
9,038
1,777
1,753
7,777
7,285
13,349
77,573
6,156
174
13,418
16,471
88
58
13,330
16,412
15,742
19,454
Power and Gas
2015
2016
2015
2016
2015
691
2016
2015
7,973
6,136
5,974
5,658
5,860
5,982
6,099
6,435
Building Technologies
11,922
11,940
578
139
702
11,238
12,956
12,963
Energy Management
5,660
5,976
2
2
11,344
73,481
Wind Power and Renewables
Financial Services (SFS)
1,415
1,872
2015
2016
2015
2016
2015
2016
Sep 30, 2015
Sep 30, 2016
2015
2016
Fiscal year
Amortization,
depreciation & impairments
Additions to intangible assets
and property, plant & equipment
Fiscal year
Fiscal year
Fiscal year
9,066
8,871
1,149
1,272
570
3,539
4,335
3,929
895
132
137
119
Free cash flow
223
330
(190)
160
464
350
522
225
206
389
Assets
(346)
96 Consolidated Financial Statements
1,247
79,644
82,340
86,480
Siemens (continuing operations)
(2,432)
(2,300)
Consolidated Financial Statements
Reconciliation to
1,299
75,636
1,048
81,112
3,497
193
154
979
Profit
855
824
1,048
979
(3,694)
76,978
(2,447)
79,644
(3,690)
RECONCILIATION TO
the equity method or as available-for-sale financial assets and
that for strategic reasons are not allocated to a segment, Siemens
Real Estate (SRE), Corporate items or Corporate Treasury. CMPA
also includes activities generally intended for divestment or clo-
sure as well as activities remaining from divestments and discon-
tinued operations.
> Financial Services (SFS) supports its customers' investments
with leasing solutions and equipment, project and structured
financing in the form of debt and equity investments.
> Healthineers, a supplier of technology to the healthcare indus-
try and a leader in medical imaging and laboratory diagnostics,
Siemens Real Estate (SRE) - manages the Group's entire real
estate business portfolio, operates the properties, and is respon-
sible for building projects and the purchase and sale of real estate.
> Digital Factory (DF) offers a comprehensive product portfolio
and system solutions used in manufacturing industries, com-
plemented by lifecycle and data-driven services,
> Mobility (MO) combines all Siemens businesses in the area of
passenger and freight transportation, including rail vehicles,
rail automation systems, rail electrification systems, road traf-
fic technology, IT solutions and related services,
Corporate items - includes corporate costs, such as group man-
aging costs, basic research of Corporate Technology, corporate
projects and non-operating investments or results of corpo-
rate-related derivative activities.
> Process Industries and Drives (PD) offers a comprehensive
product, software, solution and service portfolio for moving,
measuring, controlling and optimizing all kinds of mass flows,
CONSOLIDATED FINANCIAL STATEMENTS
Centrally managed portfolio activities (CMPA) – in general,
comprises equity stakes held by Siemens that are accounted for
> Energy Management (EM) offers a wide spectrum of prod-
ucts, systems, solutions, software and services for transmit-
ting and distributing power and for developing intelligent grid
infrastructure,
> Power and Gas (PG), which offers a broad spectrum of prod-
ucts, solutions and services for generating electricity from
fossil fuels and for producing and transporting oil and gas,
> Wind Power and Renewables (WP) designs, manufactures and
installs wind turbines and provides services for onshore and
offshore applications,
DESCRIPTION OF REPORTABLE SEGMENTS
Siemens has nine reportable segments, being:
It is not part of the Consolidated Financial Statements subject to the audit opinion.
(2,391)
75,636
> Building Technologies (BT) is a provider of automation tech-
nologies and digital services for safe, secure and efficient
buildings and infrastructures throughout their lifecycles,
1 This supplemental information on Orders is provided on a voluntary basis.
Arabia Electric Ltd. (Equipment), Jeddah/Saudi Arabia
100
Siemens AS, Oslo/Norway
1008
Technologies of Rail Transport Limited Liability Company,
Moscow/Russian Federation
100
Dresser-Rand AS, Kongsberg/Norway
100
Siemens Ltd., Lagos/Nigeria
Moscow/Russian Federation
51
100
100
Siemens L.L.C., Muscat/Oman
100
75
Siemens Pakistan Engineering Co. Ltd., Karachi/Pakistan
51
VA TECH T&D Co. Ltd., Riyadh/Saudi Arabia
Dresser-Rand (Nigeria) Limited, Lagos/Nigeria
Siemens Ltd., Riyadh/Saudi Arabia
100
Siemens Healthcare (Private) Limited, Lahore/Pakistan
51
ISCOSA Industries and Maintenance Ltd.,
Riyadh/Saudi Arabia
51
1008
Siemens Wind Power AS, Oslo/Norway
501
Dresser-Rand Arabia LLC, Al Khobar/Saudi Arabia
Siemens Healthcare AS, Oslo/Norway
Siemens Healthcare Limited Liability Company,
100
The Hague/Netherlands
100
St. Petersburg/Russian Federation
Siemens Industry Software B.V.,
000 Siemens Elektroprivod,
100
Siemens Healthcare Nederland B.V., The Hague/Netherlands
's-Hertogenbosch/Netherlands
100
65
The Hague/Netherlands
51
Siemens Gas Turbine Technologies Holding B.V.,
100
000 Legion II, Moscow/Russian Federation
000 Siemens, Moscow/Russian Federation
501
100
Siemens International Holding B.V., The Hague/Netherlands
100
100
000 Siemens Transformers, Voronezh/Russian Federation
Siemens Finance LLC, Vladivostok/Russian Federation
Termotron Rail Automation Holding B.V.,
100
Siemens Nederland N.V., The Hague/Netherlands
000 Siemens Gas Turbine Technologies, Leningrad
100
100
The Hague/Netherlands
000 Siemens Industry Software,
Siemens Medical Solutions Diagnostics Holding I B.V.,
100
Oblast/Russian Federation
Moscow/Russian Federation
AXIT Sp. z o.o., Wroclaw/Poland
Bucharest/Romania
Siemens d.o.o. Beograd, Belgrade/Serbia
Midrand/South Africa
100
Siemens Industry Software S.R.L., Brasov/Romania
Dresser-Rand Southern Africa (Pty) Ltd.,
100
Siemens Healthcare S.R.L., Bucharest/Romania
100
100
100
Siemens Convergence Creators S.R.L., Brasov/Romania
100
Dresser-Rand Property (Pty) Ltd., Midrand/South Africa
100
100
Dresser-Rand Service Centre (Pty) Ltd., Midrand/South Africa
Siemens Healthcare d.o.o, Ljubljana/Slovenia
1 Control due to a majority of voting rights.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
September 30, 2016
Equity interest
100
Equity interest
Consolidated Financial Statements
106
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
11 Exemption pursuant to Section 264 (3) German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances
6 No significant influence due to contractual arrangements or legal circumstances.
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
10 Exemption pursuant to Section 264b German Commercial Code.
100
SIEMENS (AUSTRIA) PROIECT SPITAL COLTEA SRL,
Siemens d.o.o., Ljubljana/Slovenia
SAT Systémy automatizacnej techniky spol. s.r.o.,
Bratislava/Slovakia
100
Siemens Sp. z o.o., Warsaw/Poland
100
Siemens Industry Software Sp. z o.o., Warsaw/Poland
100
60
OEZ Slovakia, spol. s r.o., Bratislava/Slovakia
Siemens Healthcare Sp. z o.o., Warsaw/Poland
100
Siemens Healthcare d.o.o. Beograd, Belgrade/Serbia
100
Siemens Finance Sp. z o.o., Warsaw/Poland
100
100
100
Siemens Healthcare, Lda., Amadora/Portugal
Siemens Convergence Creators, s. r. o., Bratislava/Slovakia
402
Siemens W.L.L., Doha/Qatar
100
SIPRIN s.r.o., Bratislava/Slovakia
100
Siemens S.A., Amadora/Portugal
100
100
100
Lisbon/Portugal
100
Siemens Healthcare s.r.o., Bratislava/Slovakia
Siemens Postal, Parcel & Airport Logistics, Unipessoal Lda,
100
Siemens s.r.o., Bratislava/Slovakia
"Dresser-Rand", Moscow/Russian Federation
100
The Hague/Netherlands
Siemens Healthcare Medical Solutions Limited,
Swords, County Dublin/Ireland
100
Siemens Plant Operations Tahaddart SARL, Tangier/Morocco
Siemens S.A., Casablanca/Morocco
100
100
Siemens Limited, Dublin/Ireland
100
Siemens Wind Power Blades, SARL AU, Tangier/Morocco
100
Siemens Concentrated Solar Power Ltd., Rosh HaAyin/Israel
100
Siemens Lda., Maputo/Mozambique
100
Siemens HealthCare Ltd., Rosh HaAyin/Israel
100
Siemens Pty. Ltd., Windhoek/Namibia
100
Dresser-Rand B.V., Spijkenisse/Netherlands
Siemens Product Lifecycle Management Software 2 (IL) Ltd.,
100
Amsterdam/Netherlands
1008
1008
Siemens Israel Projects Ltd., Rosh HaAyin/Israel
Siemens Israel Ltd., Rosh HaAyin/Israel
100
Castor III B.V., Amsterdam/Netherlands
100
Siemens Industry Software Ltd., Airport City/Israel
100
D-R International Holdings (Netherlands) B.V.,
Siemens Healthcare SARL, Casablanca/Morocco
97
97
100
Luxembourg/Luxembourg
100
Dresser-Rand Holding (Delaware) LLC, SARL,
Siemens Healthcare Industrial and Commercial Société
Anonyme, Athens/Greece
100
evosoft Hungary Szamitastechnikai Kft.,
D-R Luxembourg Partners 1 SCS, Luxembourg/Luxembourg
100
Luxembourg/Luxembourg
Siemens A.E., Elektrotechnische Projekte und Erzeugnisse,
Athens/Greece
100
in %
100
100
Airport City/Israel
TFM International S.A. i.L., Luxembourg/Luxembourg
Budapest/Hungary
Teheran/Iran, Islamic Republic of
100
Casablanca/Morocco
SCIENTIFIC MEDICAL SOLUTION DIAGNOSTICS S.A.R.L.,
100
100
100
Guascor Maroc, S.A.R.L., Agadir/Morocco
Siemens Sherkate Sahami (Khass),
Siemens Zrt., Budapest/Hungary
Siemens Healthcare Kft., Budapest/Hungary
100
Siemens d.o.o., Podgorica/Montenegro
100
100
100
Dresser-Rand International B.V., Spijkenisse/Netherlands
100
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances
6 No significant influence due to contractual arrangements or legal circumstances.
Consolidated Financial Statements
5 No control due to contractual arrangements or legal circumstances.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
100
Siemens Diagnostics Holding II B.V., The Hague/Netherlands
100
4 No control due to substantive removal or participation rights held by other parties.
Trench Italia S.r.I., Savona/Italy
105
Equity interest
Obschestwo s ogranitschennoj Otwetstwennostju (in parts)
Siemens Financieringsmaatschappij N.V.,
100
SIMEA SIBIU S. R.L., Sibiu/Romania
100
Siemens Finance B.V., The Hague/Netherlands
Equity interest
100
100
Siemens D-R Holding B.V., The Hague/Netherlands
in %
September 30, 2016
in %
September 30, 2016
Siemens S.R.L., Bucharest/Romania
100
100
100
100
Siemens Healthcare S.r.I., Milan/Italy
100
Ellessrob 3-VIII B.V., Amsterdam/Netherlands
100
Samtech Italia S.r.I., Milan/Italy
Ellessrob 5-VI B.V., Amsterdam/Netherlands
100
100
Dresser-Rand Italia S.r.I., Tribogna/Italy
100
Dresser-Rand Services B.V., Spijkenisse/Netherlands
100
UGS Israeli Holdings (Israel) Ltd., Airport City/Israel
Ellessrob 20-V B.V., Amsterdam/Netherlands
Pollux III B.V., Amsterdam/Netherlands
100
100
Siemens Transformers S.p.A., Trento/Italy
100
Omnetric B.V., The Hague/Netherlands
100
Siemens S.p.A., Milan/Italy
1008
Siemens Industry Software S.r.I., Milan/Italy
next47 B.V., The Hague/Netherlands
Siemens Renting s.r.l. in Liquidazione, Milan/Italy
100
100
Ellessrob 5-VII B.V., Amsterdam/Netherlands
NEM Energy B.V., The Hague/Netherlands
100
Siemens Postal, Parcel & Airport Logistics S.r.I., Milan/Italy
100
September 30, 2016
Gulf Steam Generators L.L.C.,
Linacre Investments (Pty) Ltd., Kenilworth/South Africa
Siemens Healthcare L.L.C., Dubai/United Arab Emirates
492
Siemens Healthcare Diagnostics Products Ltd,
Siemens LLC, Abu Dhabi/United Arab Emirates
492
Frimley, Surrey/United Kingdom
100
Siemens Middle East Limited,
Siemens Healthcare Limited, Frimley, Surrey/United Kingdom
100
Masdar City/United Arab Emirates
100
Siemens Holdings plc, Frimley, Surrey/United Kingdom
100
CD-adapco New Hampshire Co., Ltd.,
Siemens Industrial Turbomachinery Ltd.,
Frimley, Surrey/United Kingdom
100
D-R Holdings (UK) Ltd., Frimley, Surrey/United Kingdom
Siemens Industry Software Simulation and Test Limited,
100
D-R Dormant Ltd., Frimley, Surrey/United Kingdom
100
100
Frimley, Surrey/United Kingdom
Frimley, Surrey/United Kingdom
Siemens Industry Software Limited,
Computational Dynamics Limited,
100
Frimley, Surrey/United Kingdom
100
100
Frimley, Surrey/United Kingdom
100
Siemens Healthcare FZ LLC, Dubai/United Arab Emirates
SIEMENS HEALTHCARE LIMITED LIABILITY COMPANY,
Kiev/Ukraine
573
SBS Pension Funding (Scotland) Limited Partnership,
Edinburgh/United Kingdom
100
100% foreign owned subsidiary "Siemens Ukraine",
Kiev/Ukraine
in %
Siemens Financial Services Holdings Ltd., Stoke Poges,
September 30, 2016
September 30, 2016
Equity interest
Equity interest
107
Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
in %
Frimley, Surrey/United Kingdom
100
100
Siemens Healthcare Diagnostics Manufacturing Ltd,
492
SD (Middle East) LLC, Dubai/United Arab Emirates
Frimley, Surrey/United Kingdom
100
Dubai/United Arab Emirates
Buckinghamshire/United Kingdom
Siemens Healthcare Diagnostics Ltd.,
100
Stoke Poges, Buckinghamshire/United Kingdom
492
Abu Dhabi/United Arab Emirates
Siemens Financial Services Ltd.,
Dresser-Rand Field Operations Middle East LLC,
100
100
Dresser-Rand (U.K.) Limited,
Siemens Pension Funding (General) Limited,
100
Frimley, Surrey/United Kingdom
Project Ventures Rail Investments | Limited,
Siemens Rail Systems Project Limited,
100
Frimley, Surrey/United Kingdom
Frimley, Surrey/United Kingdom
100
Preactor International Limited,
Siemens Rail Systems Project Holdings Limited,
100
Frimley, Surrey/United Kingdom
100
Frimley, Surrey/United Kingdom
Frimley, Surrey/United Kingdom
Materials Solutions Limited,
100
Samtech UK Limited, Frimley, Surrey/United Kingdom
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances
6 No significant influence due to contractual arrangements or legal circumstances.
Siemens Transmission & Distribution Limited,
5 No control due to contractual arrangements or legal circumstances.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
100
Frimley, Surrey/United Kingdom
100
4 No control due to substantive removal or participation rights held by other parties.
10 Exemption pursuant to Section 264b German Commercial Code.
Siemens Rail Automation Limited,
Frimley, Surrey/United Kingdom
100
Siemens plc, Frimley, Surrey/United Kingdom
100
Electrium Sales Limited, Frimley, Surrey/United Kingdom
100
Frimley, Surrey/United Kingdom
GYM Renewables Limited, Frimley, Surrey/United Kingdom
100
Siemens Pension Funding Limited,
Dresser-Rand Company Ltd.,
100
Frimley, Surrey/United Kingdom
100
Frimley, Surrey/United Kingdom
Frimley, Surrey/United Kingdom
100
100
GYM Renewables ONE Limited,
100
Frimley, Surrey/United Kingdom
Materials Solutions Holdings Limited,
Siemens Rail Automation Holdings Limited,
100
Frimley, Surrey/United Kingdom
Siemens Postal, Parcel & Airport Logistics Limited,
100
Industrial Turbine Company (UK) Limited,
Siemens Protection Devices Limited,
100
Frimley, Surrey/United Kingdom
100
Frimley, Surrey/United Kingdom
Frimley, Surrey/United Kingdom
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances
100
Grupo Guascor, S.L., Vitoria-Gasteiz/Spain
Siemens Industrial Turbomachinery AB,
100
Fábrica Electrotécnica Josa, S.A., Barcelona/Spain
100
Finspång/Sweden
Siemens Healthcare AB, Stockholm/Sweden
Enviroil Vasca, S.A., Vitoria-Gasteiz/Spain
100
Siemens Financial Services AB, Stockholm/Sweden
678
100
Siemens AB, Upplands Väsby/Sweden
100
100
100
708
Guascor Isolux AIE, Vitoria-Gasteiz/Spain
100
Huba Control AG, Würenlos/Switzerland
100
Guascor Ingenieria S.A., Vitoria-Gasteiz/Spain
100
Guascor Borja AIE, Zumaia/Spain
Dresser-Rand Sales Company S.A., Freiburg/Switzerland
Vitoria-Gasteiz/Spain
100
SKR Lager 20 KB, Finspång/Sweden
Guascor Explotaciones Energéticas, S.A.,
100
Siemens Industry Software AB, Kista/Sweden
100
608
Madrid/Spain
ay
Siemens Rail Automation S.A.U., Madrid/Spain
100
Halfway House/South Africa
100
SIEMENS POSTAL, PARCEL & AIRPORT LOGISTICS, S.L.
Sociedad Unipersonal, Madrid/Spain
Siemens Healthcare Proprietary Limited,
100
03
100
Siemens Industry Software S.L., Barcelona/Spain
Siemens Employee Share Ownership Trust,
100
Siemens Holding S.L., Madrid/Spain
03
Johannesburg/South Africa
100
Siemens Proprietary Limited, Midrand/South Africa
Siemens Renting S.A., Madrid/Spain
Telecomunicación, Electrónica y Conmutación S.A.,
1008
Sistemas y Nuevas Energias, S.A, Vitoria-Gasteiz/Spain
70
100
Desimpacte de Purines Altorricón S.A., Altorricón/Spain
Desimpacto de Purines Turégano, S.A., Turégano/Spain
Dresser-Rand Holdings Spain S. L. U., Vitoria-Gasteiz/Spain
Empresa de Reciclajes de Residuos Ambientales, S.A.,
Vitoria-Gasteiz/Spain
100
70
Siemens Wind HoldCo, S.L., Zamudio/Spain
B2B Energía, S.A., Vitoria-Gasteiz/Spain
100
Siemens S.A., Madrid/Spain
100
Axastse Solar, S. L., Vitoria-Gasteiz/Spain
100
858
in %
Komykrieng AG, Gossau/Switzerland
Guascor Postensa AIE, Zumaia/Spain
Microenergía Vasca, S.A., Vitoria-Gasteiz/Spain
100
Siemens S.A., Tunis/Tunisia
1008
Microenergía 21, S.A., Zumaia/Spain
100
100
Siemens Tanzania Ltd., Dar es Salaam/Tanzania,
United Republic of
Inversiones Analcima 6 S.L., Vitoria-Gasteiz/Spain
100
Guascor Wind, S. L., Vitoria-Gasteiz/Spain
100
systransis AG, Risch/Switzerland
100
100
Guascor Solar S.A., Vitoria-Gasteiz/Spain
Siemens Finansal Kiralama A.S., Istanbul/Turkey
Samtech Iberica Engineering & Software Services S.L.,
Barcelona/Spain
6 No significant influence due to contractual arrangements or legal circumstances.
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
100
100
100
SIEMENS HEALTHCARE, S.L.U., Getafe/Spain
100
100
Siemens Healthcare Saglik Anonim Sirketi, Istanbul/Turkey
Siemens Sanayi ve Ticaret A.S., Istanbul/Turkey
100
Dresser-Rand Turkmen Company, Ashgabat/Turkmenistan
100
100
100
Guascor Promotora Solar, S.A., Vitoria-Gasteiz/Spain
100
Siemens Healthcare AG, Zurich/Switzerland
100
Guascor Power, S.A., Zumaia/Spain
100
100
Zug/Switzerland
Vitoria-Gasteiz/Spain
Siemens Fuel Gasification Technology Holding AG,
Guascor Power Investigacion y Desarollo, S.A.,
100
Polarion AG, Gossau/Switzerland
898
100
Siemens Schweiz AG, Zurich/Switzerland
Siemens Healthcare Diagnostics GmbH, Zurich/Switzerland
Guascor Proyectos, S.A., Madrid/Spain
Vitoria-Gasteiz/Spain
100
Siemens Power Holding AG, Zug/Switzerland
Guascor Solar Operacion and Mantenimiento, S.L.,
100
Zurich/Switzerland
100
100
Siemens Postal, Parcel & Airport Logistics AG,
100
Guascor Servicios, S.A., Madrid/Spain
100
Siemens Industry Software AG, Zurich/Switzerland
1008
Guascor Solar Corporation, S.A., Vitoria-Gasteiz/Spain
D-R Luxembourg Holding 1, SARL, Luxembourg/Luxembourg
D-R Luxembourg Holding 2, SARL, Luxembourg/Luxembourg
D-R Luxembourg Holding 3, SARL, Luxembourg/Luxembourg
D-R Luxembourg International SARL,
5 No control due to contractual arrangements or legal circumstances.
Siemens Oil & Gas Equipment Limited, Accra/Ghana
Alpha Verteilertechnik GmbH, Cham
10011
Anlagen- und Rohrleitungsbau Ratingen GmbH, Ratingen
1008
RISICOM Rückversicherung AG, Grünwald
Samtech Deutschland GmbH, Hamburg
100
100
Atecs Mannesmann GmbH, Erlangen
100
AXIT GmbH, Frankenthal
100
Berliner Vermögensverwaltung GmbH, Berlin
10011
Siemens Automotive ePowertrain Systems GmbH, Erlangen
Siemens Automotive ePowertrain Systems Holding GmbH,
Erlangen
100
100
BWI Services GmbH, Meckenheim
10011
Siemens Beteiligungen USA GmbH, Berlin
100
1008
Siemens Beteiligungen Management GmbH, Grünwald
100
10011
Capta Grundstücks-Verwaltungsgesellschaft mbH, Grünwald
DA Creative GmbH, Munich
Siemens Beteiligungen Inland GmbH, Munich
10010
CAPTA Grundstücksgesellschaft mbH & Co. KG i.L., Grünwald
100
Siemens Bank GmbH, Munich
100
10011
REMECH Systemtechnik GmbH, Kamsdorf
10011
Airport Munich Logistics and Services GmbH, Hallbergmoos
NEO New Oncology GmbH, Cologne
100
Mannesmann Demag Krauss-Maffei GmbH, Munich
in %
September 30, 2016
Equity interest
100
NOTE 34 List of subsidiaries and
associated companies pursuant to
Section 313 para. 2 of the German
Commercial Code
Consolidated Financial Statements
In November 2016, Siemens announced its intention to further
strengthen Healthineers in Siemens for the future and is there-
fore planning to publicly list its healthcare business. Siemens will
announce more precise details regarding the date and scope of
the placement when plans for the public listing are further ad-
vanced. The listing will also depend, among other things, on the
stock market environment.
In November 2016, Siemens announced the acquisition of Mentor
Graphics (U.S.), a design automation and industrial software pro-
vider. The purchase price is US$37.25 per share in cash, which
represents an enterprise value of US$4.5 billion. Mentor Graphics
will be integrated in the Digital Factory Division. Closing of the
transaction is subject to customary conditions and is expected in
the third quarter of fiscal 2017.
In June 2016, Siemens and Gamesa Corporación Tecnológica, S.A.
(Gamesa) signed binding agreements to merge the Siemens
wind power business, including service, with Gamesa. Siemens
will own 59% of the shares of the combined entity. As part of the
merger, Siemens will fund a cash payment of €1 billion, which
will be distributed to Gamesa's shareholders (excluding Siemens)
immediately following the completion of the merger. In Octo-
ber 2016, the Gamesa shareholders approved the merger. Closing
of the transaction is subject to the approvals of the antitrust and
regulatory authorities.
Subsequent events
NOTE 33
101
Dade Behring Beteiligungs GmbH, Eschborn
next47 GmbH, Munich
Omnetric GmbH, Munich
100
R&S Restaurant Services GmbH, Munich
Germany (117 companies)
10011
10011
Project Ventures Butendiek Holding GmbH, Erlangen
Projektbau-Arena-Berlin GmbH, Grünwald
10011
SUBSIDIARIES
Partikeltherapiezentrum Kiel Holding GmbH, Erlangen
Equity interest
in %
September 30, 2016
10010
OPTIO Grundstücks-Vermietungsgesellschaft mbH & Co.
Objekt Tübingen KG, Grünwald
51
10011
100
Siemens Beteiligungsverwaltung GmbH & Co. OHG, Grünwald
10010
4 No control due to substantive removal or participation rights held by other parties.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
1008
Siemens Campus Erlangen Objektmanagement GmbH,
Grünwald
5 No control due to contractual arrangements or legal circumstances.
100
1008
Kyros 52 GmbH, Munich
10010
Siemens Campus Erlangen Objekt 7 GmbH & Co. KG,
Grünwald
1008
Kyros 51 GmbH, Munich
Lincas Electro Vertriebsgesellschaft mbH, Hamburg
10011
6 No significant influence due to contractual arrangements or legal circumstances.
8 Not consolidated due to immateriality.
10011
Siemens Technology Accelerator GmbH, Munich
1008
in %
September 30, 2016
in %
7 Significant influence due to contractual arrangements or legal circumstances
Equity interest
September 30, 2016
Equity interest
102 Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
Siemens Campus Erlangen Verwaltungs-GmbH, Grünwald
Siemens Convergence Creators GmbH & Co. KG, Hamburg
WWW.SIEMENS.COM/GCG-CODE
Kyra 1 GmbH, Erlangen
Siemens Campus Erlangen Objekt 6 GmbH & Co. KG,
Grünwald
Siemens Campus Erlangen Objekt 2 GmbH & Co. KG,
Grünwald
HanseCom Gesellschaft für Informations- und
10010
10010
Siemens Campus Erlangen Objekt 1 GmbH & Co. KG,
Grünwald
FACTA Grundstücks-Entwicklungsgesellschaft mbH & Co. KG,
Munich
10010
10011
10010
Siemens Campus Erlangen Grundstücks-GmbH & Co. KG,
Grünwald
10011
Dresser-Rand GmbH, Oberhausen
100
Dade Behring Grundstücks GmbH, Marburg
evosoft GmbH, Nuremberg
10010
Kommunikationsdienstleistungen mbH, Hamburg
HanseCom Public Transport Ticketing Solutions GmbH,
Hamburg
Siemens Campus Erlangen Objekt 3 GmbH & Co. KG,
Grünwald
10011
KompTime GmbH, Munich
10011
10010
Siemens Campus Erlangen Objekt 5 GmbH & Co. KG,
Grünwald
100
74
85
10010
Siemens Campus Erlangen Objekt 4 GmbH & Co. KG,
Grünwald
10011
HSP Hochspannungsgeräte GmbH, Troisdorf
74
10010
ILLIT Grundstücksverwaltungs-Management GmbH, Grünwald
IPGD Grundstücksverwaltungs-Gesellschaft mbH, Grünwald
Jawa Power Holding GmbH, Erlangen
The Managing Board and the Supervisory Board of Siemens
Aktiengesellschaft provided the declaration required by Sec-
tion 161 of the German stock corporation law (AktG) as of Octo-
ber 1, 2016, which is available on the Company's website at:
Corporate Governance
NOTE 32
18,579
61,065
64,392
68,905
10,739
2,791
41,453
75,636
18,443
79,644
18,577
21,702
20,085
Sep 30,
2015
assets
42,057
15,118
75,636
57,194
15,263
2016
(in millions of €)
Purchases of goods
and services
and other expenses
Fiscal year
2015
Sales of goods
and services and
other income
Siemens has relationships with many joint ventures and associ-
ates in the ordinary course of business whereby Siemens buys
and sells a wide variety of products and services generally on
arm's length terms.
JOINT VENTURES AND ASSOCIATES
16,769
NOTE 30 Related party transactions
7,511
11,244
6,748
34,705
17,296
34,546
17,576
16,540
17,776
Non-current assets consist of property, plant and equipment,
goodwill and other intangible assets.
Fiscal year
2015
11,765
11,959
Revenue by location
Revenue by location
of customers
41,819
2016
therein U.S.
thereof foreign countries
22,707
thereof Germany
Asia, Australia
Americas
Europe, C.I.S., Africa, Middle East
(in millions of €)
NOTE 29 Information about geographies
108
Siemens
79,644
Fiscal year
38,799
15,135
111
Non-current
19,013
3,132
19,912
2016
2015
21,440
2015
Fiscal year
of companies
22,360
45,325
2016
42,432
10010
2016
1,052
2016
(in millions of €)
Fiscal year
Fees related to professional services rendered by the Company's
principal accountant, EY, for fiscal 2016 and 2015 are:
Principal accountant fees
and services
NOTE 31
2015
Some of our board members hold, or in the last year have held,
positions of significant responsibility with other entities. We have
relationships with almost all of these entities in the ordinary
course of our business whereby we buy and sell a wide variety of
products and services on arm's length terms.
Information regarding the remuneration of the members of the
Managing Board and Supervisory Board is disclosed on an indi-
vidual basis in the Compensation Report, which is part of the
combined management report.
Compensation attributable to members of the Supervisory Board
comprises in fiscal 2016 and 2015 of a base compensation and
additional compensation for committee work and amounted to
€5.2 million and €5.1 million (including meeting fees), respectively.
The defined benefit obligation (DBO) of all pension commitments
to former members of the Managing Board and their survivors as
of September 30, 2016 and 2015 amounted to €216.3 million and
€228.3 million, respectively.
Former members of the Managing Board and their surviving
dependents received emoluments within the meaning of Sec-
tion 314 para. 1 No. 6 b of the German Commercial Code totaling
€52.3 million and €30.5 million (including €9.6 million in con-
nection with the departure from members of the Managing
Board) in fiscal 2016 and 2015, respectively.
In fiscal 2016 and 2015, expense related to share-based pay-
ment and to the Share Matching Program amounted to
€8.3 million and 8.1 million (including Stock Awards in connec-
tion with the departure from members of the Managing Board),
respectively.
Therefore in fiscal 2016 and 2015, compensation and benefits,
attributable to members of the Managing Board amounted to
€33.5 million and €32.2 million in total, respectively.
In fiscal 2016 and 2015, no other major transactions took place
between the Company and the members of the Managing Board
and the Supervisory Board.
In fiscal 2016 and 2015, members of the Managing Board
received cash compensation of €20.2 million and €19.6 million.
The fair value of stock-based compensation amounted to
€8.7 million and €7.9 million for 113,230 and 113,281 Stock
Awards, respectively, in fiscal 2016 and 2015. In fiscal 2016 and
2015, the Company granted contributions under the BSAV to
members of the Managing Board totaling €4.6 million and
€4.8 million, respectively.
Audit services
43.7
Audit Services relate primarily to services provided by EY for au-
diting Siemens' Consolidated Financial Statements and for audit-
ing the statutory financial statements of Siemens AG and its sub-
sidiaries. Other Attestation Services include primarily audits of
financial statements in connection with M&A activities, comfort
letters and other attestation services required under regulatory
requirements, agreements or requested on a voluntary basis.
Consolidated Financial Statements
100
In fiscal 2016 and 2015, 41% and 45%, respectively, of the total
fees related to Ernst & Young GmbH Wirtschaftsprüfungsgesell-
schaft, Germany.
51.0
49.5
45.9
0.1
0.1
0.4
Tax services
7.1
3.2
Other attestation services
Other services
Joint ventures
RELATED INDIVIDUALS
As of September 30, 2016 and 2015, guarantees to joint ventures
and associates amounted to €1,500 million and €2,145 million,
respectively, including the HERKULES obligations of €600 million
and €1,090 million, respectively. As of September 30, 2016 and
2015, guarantees to joint ventures amounted to €553 million and
€472 million, respectively. As of September 30, 2016 and 2015,
loans given to joint ventures and associates amounted to €82 mil-
lion and €68 million, therein €78 million and €54 million related
to joint ventures, respectively. As of September 30, 2016 and
2015, the Company had commitments to make capital contribu-
tions of €48 million and €38 million to its joint ventures and as-
sociates, therein €39 million and €26 million related to joint ven-
tures, respectively. For a loan raised by a joint venture, which is
secured by a Siemens guarantee, Siemens granted an additional
collateral. As of September 30, 2016 and 2015 the outstanding
amount totaled to €116 million and €124 million, respectively.
As of September 30, 2016 and 2015 there were loan commit-
ments to joint ventures and associates amounting to €72 million
and €134 million, respectively, therein €72 million and €58 mil-
lion, respectively related to joint ventures.
(in millions of €)
Sep 30,
Liabilities
Receivables
39
197
236
223
2016
1,052
174
687
1,379
Associates
48
365
2,431
Consolidated Financial Statements 99
2015
Sep 30,
2015
1,015
569
280
447
638
343
2016
113
Associates
377
227
167
333
Joint ventures
114
90
Siemens Technopark Mülheim GmbH & Co. KG, Grünwald
Siemens Convergence Creators Management GmbH,
Hamburg
100
Siemens Electric Machines s.r.o., Drasov/Czech Republic
Siemens Healthcare, s.r.o., Prague/Czech Republic
100
100
Siemens Healthcare Diagnostics GmbH, Vienna/Austria
Siemens Industry Software GmbH, Linz/Austria
Siemens Konzernbeteiligungen GmbH, Vienna/Austria
Siemens Liegenschaftsverwaltung GmbH, Vienna/Austria
Siemens Metals Technologies Vermögensverwaltungs
GmbH, Vienna/Austria
100
100
Siemens Industry Software, s.r.o., Prague/Czech Republic
Siemens, s.r.o., Prague/Czech Republic
100
100
100
Siemens A/S, Ballerup/Denmark
100
100
Siemens Healthcare A/S, Ballerup/Denmark
100
Siemens Industry Software A/S, Ballerup/Denmark
Steiermärkische Medizinarchiv GesmbH, Graz/Austria
Trench Austria GmbH, Leonding/Austria
100
Siemens Healthcare S.A.E., Cairo/Egypt
75
1008
Siemens Health Care LLC, Cairo/Egypt
Siemens Gebäudemanagement & -Services G.m.b.H.,
Vienna/Austria
100
100
Siemens Personaldienstleistungen GmbH, Vienna/Austria
Siemens Urban Rail Technologies Holding GmbH,
Vienna/Austria
100
Siemens Wind Power A/S, Brande/Denmark
100
100
NEM Energy Egypt LLC, Alexandria/Egypt
100
Prague/Czech Republic
100
KDAG Beteiligungen GmbH, Vienna/Austria
Omnetric GmbH, Vienna/Austria
51
Koncar-Energetski Transformatori, d.o.o., Zagreb/Croatia
69
100
Siemens Healthcare EOOD, Sofia/Bulgaria
100
ITH icoserve technology for healthcare GmbH,
Innsbruck/Austria
100
100
Siemens d.o.o. Sarajevo, Sarajevo/Bosnia and Herzegovina
Siemens Medicina d.o.o, Sarajevo/Bosnia and Herzegovina
Siemens EOOD, Sofia/Bulgaria
100
Hochquellstrom-Vertriebs GmbH, Vienna/Austria
100
100
52
100
100
100
Polarion Software s.r.o., Prague/Czech Republic
Siemens Convergence Creators, s.r.o.,
Siemens Convergence Creators Holding GmbH,
Vienna/Austria
100
100
100
Siemens Convergence Creators d.o.o., Zagreb/Croatia
Siemens d.d., Zagreb/Croatia
J. N. Kelly Security Holding Limited, Larnaka/Cyprus
OEZ s.r.o., Letohrad/Czech Republic
100
100
Siemens Healthcare d.o.o., Zagreb/Croatia
100
Priamos Grundstücksgesellschaft m.b.H., Vienna/Austria
Siemens Aktiengesellschaft Österreich, Vienna/Austria
Siemens Convergence Creators GmbH, Eisenstadt/Austria
Siemens Convergence Creators GmbH, Vienna/Austria
100
100
Siemens Limited for Trading, Cairo/Egypt
100
100
Siemens Healthcare Limited Liability Partnership,
100
Siemens Financial Services SAS, Saint-Denis/France
Siemens France Holding SAS, Saint-Denis/France
Siemens Healthcare SAS, Saint-Denis/France
in %
September 30, 2016
in %
100
September 30, 2016
Equity interest
104 Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
Equity interest
7 Significant influence due to contractual arrangements or legal circumstances
Almaty/Kazakhstan
100
100
Trench France SAS, Saint-Louis/France
100
Siemens SAS, Saint-Denis/France
100
SIEMENS Postal Parcel Airport Logistics SAS, Paris/France
100
492
100
Siemens Lease Services SAS, Saint-Denis/France
100
Siemens Industry Software SAS, Châtillon/France
100
Siemens TOO, Almaty/Kazakhstan
Siemens Electrical & Electronic Services K.S.C.C.,
Kuwait City/Kuwait
ETM professional control GmbH, Eisenstadt/Austria
6 No significant influence due to contractual arrangements or legal circumstances.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
D-R Holdings (France) SAS, Le Havre/France
Limited Liability Company Siemens Technologies,
100
CD-adapco France SAS, Bobigny/France
51
Siemens W.L.L., Manama/Bahrain
100
100
100
100
Siemens Healthcare Oy, Espoo/Finland
VVK Versicherungs-Vermittlungs- und Verkehrs-Kontor
GmbH, Vienna/Austria
90
Siemens Technologies S.A.E., Cairo/Egypt
Siemens Osakeyhtiö, Espoo/Finland
4 No control due to substantive removal or participation rights held by other parties.
5 No control due to contractual arrangements or legal circumstances.
Minsk/Belarus
Dresser-Rand SAS, Le Havre/France
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
100
Samtech France SAS, Massy/France
79
Samtech SA, Angleur/Belgium
100
100
100
Antwerp/Belgium
100
Flender-Graffenstaden SAS, Illkirch-Graffenstaden/France
Dresser-Rand Machinery Repair Belgie N.V.,
100
PETNET Solutions SAS, Lisses/France
51
Siemens S.A., Luanda/Angola
100
100
SILLIT Grundstücks-Verwaltungsgesellschaft mbH,
Munich
10010
100
Siemens Immobilien Chemnitz-Voerde GmbH, Grünwald
Siemens Immobilien GmbH & Co. KG, Grünwald
100
Siemens Immobilien Management GmbH, Grünwald
Siemens-Fonds S-8, Munich
100
Siemens-Fonds S-7, Munich
100
100
Siemens-Fonds Principals, Munich
100
10011
Siemens Healthcare Diagnostics Holding GmbH, Eschborn
Siemens Healthcare Diagnostics Products GmbH, Marburg
Siemens Healthcare GmbH, Erlangen
1008
10011
SIMAR Ost Grundstücks-GmbH, Grünwald
10010
Siemens Insulation Center GmbH & Co. KG, Zwönitz
10011
SIMAR Nordwest Grundstücks-GmbH, Grünwald
10011
Siemens Industriegetriebe GmbH, Penig
Siemens Industry Software GmbH, Cologne
10010
SIM 2. Grundstücks-GmbH & Co. KG, Grünwald
SIMAR Nordost Grundstücks-GmbH, Grünwald
10010
Siemens Industriepark Karlsruhe GmbH & Co. KG,
Grünwald
10010
SIM 16. Grundstücksverwaltungs- und -beteiligungs-
GmbH & Co. KG, Munich
10011
10011
100
100
Siemens Fuel Gasification Technology GmbH & Co. KG,
Freiberg
100
Siemens Technopark Nürnberg Verwaltungs GmbH,
Grünwald
10011
Siemens Fonds Invest GmbH, Munich
10011
Siemens Treasury GmbH, Munich
Siemens Financial Services GmbH, Munich
Siemens Technopark Nürnberg GmbH & Co. KG, Grünwald
10011
Siemens Finance & Leasing GmbH, Munich
100
Siemens Technopark Mülheim Verwaltungs GmbH,
Grünwald
1008
10010
Siemens-Fonds Pension Captive, Munich
10011
Siemens Turbomachinery Equipment GmbH, Frankenthal
Siemens Healthcare Diagnostics GmbH, Eschborn
100
Siemens-Fonds C-1, Munich
1008
1008
Siemens Wind Power Management GmbH, Hamburg
10010
Siemens Global Innovation Partners Management GmbH,
Munich
Siemens Wind Power GmbH & Co. KG, Hamburg
1008
10011
Siemens Venture Capital GmbH, Munich
Siemens Fuel Gasification Technology Verwaltungs GmbH,
Freiberg
10011
1008
10010
Siemens Insulation Center Verwaltungs-GmbH, Zwönitz
SIMAR Süd Grundstücks-GmbH, Grünwald
Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances
103
6 No significant influence due to contractual arrangements or legal circumstances.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
10011
100
Weiss Spindeltechnologie GmbH, Maroldsweisach
100
4 No control due to substantive removal or participation rights held by other parties.
VVK Versicherungsvermittlungs- und Verkehrskontor GmbH,
Munich
Equity interest
September 30, 2016
Siemens S.A./N.V., Beersel/Belgium
100
Siemens Product Lifecycle Management Software II (BE)
BVBA, Anderlecht/Belgium
51
100
Siemens Spa, Algiers/Algeria
ESTEL Rail Automation SPA, Algiers/Algeria
Equity interest
100
100
Siemens Healthcare SA/NV, Beersel/Belgium
Europe, Commonwealth of Independent States
(C.I.S.), Africa, Middle East (without Germany)
(310 companies)
in %
September 30, 2016
in %
Siemens Industry Software NV, Leuven/Belgium
1008
1008
943
Siemens Postal, Parcel & Airport Logistics GmbH, Constance
10011
SYKATEC Systeme, Komponenten, Anwendungstechnologie
GmbH, Erlangen
100
Siemens Nixdorf Informationssysteme GmbH, Grünwald
100
10011
10011
Siemens Medical Solutions Health Services GmbH,
Grünwald
10011
SIMAR West Grundstücks-GmbH, Grünwald
100
Siemens Liquidity One, Munich
10011
SIMOS Real Estate GmbH, Munich
Siemens Real Estate Management GmbH, Grünwald
Siemens Spezial-Investmentaktiengesellschaft mit TGV,
Munich
Trench Germany GmbH, Bamberg
Siemens Power Control GmbH, Langen
VR-LEASING IKANA GmbH & Co. Immobilien KG, Eschborn
10010
Siemens Real Estate GmbH & Co. KG, Grünwald
100
51
VIB Verkehrsinformationsagentur Bayern GmbH, Munich
VMZ Berlin Betreibergesellschaft mbH, Berlin
10011
10011
10011
gesellschaft mbH, Munich
100
Verwaltung SeaRenergy Offshore Projects GmbH i.L.,
Hamburg
Siemens Private Finance Versicherungsvermittlungs-
10011
Siemens Project Ventures GmbH, Erlangen
Consolidated Financial Statements
100
Dresser-Rand Comercio e Industria Ltda., Campinas/Brazil
Dresser-Rand do Brasil, Ltda., Santa Bárbara D'Oeste/Brazil
100
100
100
Exemplar Health (SCUH) Trust 4, Bayswater/Australia
Siemens Healthcare Pty. Ltd., Melbourne/Australia
Siemens Ltd., Bayswater/Australia
100
Siemens USA Holdings, Inc., Wilmington, DE/United States
Siemens Wind Power Inc., Wilmington, DE/United States
100
Siemens Public, Inc., Wilmington, DE/United States
100
1008
100
Siemens Product Lifecycle Management Software Inc.,
Wilmington, DE/United States
100
Exemplar Health (SCUH) Holdings 4 Pty Limited,
Bayswater/Australia
100
Wilmington, DE/United States
Siemens Power Generation Service Company, Ltd.,
100
Exemplar Health (SCUH) Holdings 3 Pty Limited,
Bayswater/Australia
100
Exemplar Health (SCUH) Trust 3, Bayswater/Australia
Wilmington, DE/United States
SMI Holding LLC, Wilmington, DE/United States
Wheelabrator Air Pollution Control Inc.,
100
100
Beijing Siemens Cerberus Electronics Ltd., Beijing/China
100
60
Beijing Siemens Automotive E-Drive Systems Co., Ltd.,
Changzhou, Changzhou/China
100
1008
Siemens Healthcare Ltd., Dhaka/Bangladesh
Synchrony, Inc., Salem, VA/United States
100
100
1008
100
SIEMENS RAIL AUTOMATION PTY. LTD., Bayswater/Australia
Siemens Wind Power Pty. Ltd., Bayswater/Australia
100
Siemens S.A., Montevideo/Uruguay
Engines Rental, S.A., Montevideo/Uruguay
Winergy Drive Systems Corporation,
Wilmington, DE/United States
Baltimore, MD/United States
Siemens Bangladesh Ltd., Dhaka/Bangladesh
100
Siemens Postal, Parcel & Airport Logistics LLC,
Exemplar Health (SCUH) 4 Pty Limited, Bayswater/Australia
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
100
100
Siemens Industry, Inc., Wilmington, DE/United States
100
Wilmington, DE/United States
Los Angeles, CA/United States
4 No control due to substantive removal or participation rights held by other parties.
Dresser-Rand International Holdings, LLC,
100
Wilmington, DE/United States
100
Wilmington, DE/United States
Dresser-Rand Holding (Luxembourg) LLC,
Siemens Government Technologies, Inc.,
100
Dresser-Rand Group Inc., Wilmington, DE/United States
100
Siemens Healthcare Diagnostics Inc.,
1008
5 No control due to contractual arrangements or legal circumstances.
7 Significant influence due to contractual arrangements or legal circumstances
100
Siemens Molecular Imaging, Inc., Wilmington, DE/United States
1008
Exemplar Health (SCUH) 3 Pty Limited, Bayswater/Australia
100
Wilmington, DE/United States
100
Exemplar Health (NBH) Trust 2, Bayswater/Australia
Siemens Medical Solutions USA, Inc.,
6 No significant influence due to contractual arrangements or legal circumstances.
in %
in %
September 30, 2016
Equity interest
Equity interest
110 Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
September 30, 2016
Camstar Systems, Software (Shanghai) Company Limited,
Shanghai/China
100
Via Stylos S.A., Montevideo/Uruguay
in %
Equity interest
Siemens Power Plant Automation Ltd., Nanjing/China
100
Siemens Electrical Drives (Shanghai) Ltd., Shanghai/China
September 30, 2016
in %
September 30, 2016
Equity interest
100
111
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances
6 No significant influence due to contractual arrangements or legal circumstances.
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
Consolidated Financial Statements
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
Siemens Electrical Drives Ltd., Tianjin/China
Siemens Factory Automation Engineering Ltd.,
Siemens Gas Turbine Parts Ltd., Shanghai, Shanghai/China
Siemens Healthcare Diagnostics (Shanghai) Co. Ltd.,
Shanghai/China
70
100
Siemens Signalling Co. Ltd., Xi'an, Xi'an/China
100
Shenzhen/China
Siemens Gas Turbine Components (Jiangsu) Co., Ltd.,
Yixing/China
Siemens Shenzhen Magnetic Resonance Ltd.,
100
85
Siemens Financial Services Ltd., Beijing/China
Siemens Shanghai Medical Equipment Ltd., Shanghai/China
100
Siemens Finance and Leasing Ltd., Beijing/China
100
Siemens Sensors & Communication Ltd., Dalian/China
100
Beijing/China
100
Siemens Real Estate Management (Beijing) Ltd., Co.,
Beijing/China
100
1 Control due to a majority of voting rights.
100
Siemens Electrical Apparatus Ltd., Suzhou, Suzhou/China
Siemens Rail Automation, C.A.,
100
IBS Industrial Business Software (Shanghai), Ltd.,
Shanghai/China
1008
Caracas/Venezuela, Bolivarian Republic of
Siemens Healthcare S.A.,
100
Shanghai/China
100
MWB (Shanghai) Co Ltd., Shanghai/China
Caracas/Venezuela, Bolivarian Republic of
Guascor Venezuela S.A.,
100
DPC (Tianjin) Co., Ltd., Tianjin/China
100
Maracaibo/Venezuela, Bolivarian Republic of
100
CD-adapco Software Technology (Shanghai) Co.,Ltd.,
Shanghai/China
Dresser-Rand de Venezuela, S.A.,
100
Dresser-Rand Engineered Equipment (Shanghai) Ltd.,
65
Caracas/Venezuela, Bolivarian Republic of
100
100
60
Siemens Eco-City Innovation Technologies (Tianjin) Co.,
Ltd., Tianjin/China
1008
75
Siemens Circuit Protection Systems Ltd., Shanghai,
Shanghai/China
100
100
Australia Hospital Holding Pty Limited, Bayswater/Australia
CD-ADAPCO AUSTRALIA PTY LTD, Melbourne/Australia
Exemplar Health (NBH) 2 Pty Limited, Bayswater/Australia
Exemplar Health (NBH) Holdings 2 Pty Limited,
Bayswater/Australia
100
Siemens Business Information Consulting Co., Ltd,
Beijing/China
Asia, Australia (140 companies)
10
70
Siemens Building Technologies (Tianjin) Ltd.,
Tianjin/China
100
Dade Behring Hong Kong Holdings Corporation,
Tortola/Virgin Islands, British
100
Siemens Automotive ePowertrain Systems (Shanghai) Co.,
Ltd., Shanghai/China
100
Siemens S.A., Caracas/Venezuela, Bolivarian Republic of
Wilmington, DE/United States
100
Wilmington, DE/United States
Siemens Generation Services Company,
6 No significant influence due to contractual arrangements or legal circumstances.
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
100
100
Siemens S.A., San Salvador/El Salvador
7 Significant influence due to contractual arrangements or legal circumstances
89
Antiguo Cuscatlán/El Salvador
100
Siemens Healthcare, Sociedad Anonima,
Iriel Indústria e Comercio de Sistemas Eléctricos Ltda.,
Canoas/Brazil
1008
100
100
Siemens-Healthcare Cia. Ltda., Quito/Ecuador
90
Jaguarí Energética, S.A., Jaguari/Brazil
Guascor Wind do Brasil, Ltda., São Paulo/Brazil
8 Not consolidated due to immateriality.
10 Exemption pursuant to Section 264b German Commercial Code.
Dresser-Rand de Mexico S.A. de C.V., Mexico City/Mexico
100
Siemens S.A., Tegucigalpa/Honduras
100
Siemens S.A., Guatemala/Guatemala
100
Wilmington, DE/United States
100
Guatemala/Guatemala
9 Not accounted for using the equity method due to immateriality.
Dresser-Rand International Inc.,
in %
Equity interest
September 30, 2016
in %
September 30, 2016
Equity interest
109
Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
SIEMENS HEALTHCARE DIAGNOSTICS GUATEMALA, S.A.,
Siemens S.A., Quito/Ecuador
90
Guascor Solar do Brasil, Taboão da Serra/Brazil
100
Cinco Rios Geracao de Energia Ltda., Manaus/Brazil
100
Siemens S.A., Santiago de Chile/Chile
100
Rio de Janeiro/Brazil
100
Acciones, Santiago de Chile/Chile
Chemtech Servicos de Engenharia e Software Ltda.,
Dresser-Rand Colombia S.A.S., Bogotá/Colombia
Siemens Healthcare Equipos Médicos Sociedad por
São Paulo/Brazil
100
Grand Cayman/Cayman Islands
CD-adapco Solucoes Cae Suporte de Programas Ltda.,
Siemens Healthcare Diagnostics Manufacturing Limited,
100
Santa Cruz de la Sierra/Bolivia, Plurinational State of
100
Ontario/Canada
100
100
Transrapid International Verwaltungsgesellschaft mbH i.L.,
Berlin
100
Higüey/Dominican Republic
60
Guascor Serviços Ltda., Taboão da Serra/Brazil
Sociedad Energética Del Caribe, S.R.L.,
90
100
Siemens, S.R.L., Santo Domingo/Dominican Republic
Guascor Empreendimentos Energéticos, Ltda.,
Taboão da Serra/Brazil
100
Siemens S.A., San José/Costa Rica
85
Guascor do Brasil Ltda., São Paulo/Brazil
100
Siemens Healthcare Diagnostics S.A., San José/Costa Rica
100
Dresser-Rand Participações Ltda., São Paulo/Brazil
100
Siemens S.A., Tenjo/Colombia
100
100
Siemens Healthcare S.A.S., Tenjo/Colombia
100
51
Grupo Siemens S.A. de C.V., Mexico City/Mexico
Indústria de Trabajos Eléctricos S.A. de C.V.,
Wilmington, DE/United States
Analysis & Design Application Co. Ltd.,
Siemens Demag Delaval Turbomachinery, Inc.,
100
Couva/Trinidad and Tobago
100
Wilmington, DE/United States
Dresser-Rand Trinidad & Tobago Limited,
Siemens Credit Warehouse, Inc.,
100
100
100
Siemens Corporation, Wilmington, DE/United States
100
Siemens Healthcare S.A.C., Surquillo/Peru
100
Wilmington, DE/United States
100
Siemens S.A., Panama City/Panama
Siemens Convergence Creators Corp.,
Siemens S.A.C., Lima/Peru
100
Melville, NY/United States
Siemens Electrical, LLC, Wilmington, DE/United States
Dresser-Rand Global Services, Inc.,
100
Siemens Fossil Services, Inc., Wilmington, DE/United States
100
Dresser-Rand Company, Bath, NY/United States
100
Siemens Financial, Inc., Wilmington, DE/United States
100
D-R Steam LLC, Wilmington, DE/United States
100
100
100
Wilmington, DE/United States
Siemens Financial Services, Inc.,
D-R International Sales Inc.,
100
Siemens Energy, Inc., Wilmington, DE/United States
502
CD-adapco Battery Design LLC, Dover, DE/United States
100
Wilmington, DE/United States
Panama City/Panama
100
Siemens Capital Company LLC, Wilmington, DE/United States
100
Mexico City/Mexico
100
Bingham Farms, MI/United States
Siemens Healthcare Servicios S. de R.L. de C.V.,
Nimbus Technologies, LLC,
100
Mexico City/Mexico
100
Omnetric Corp., Wilmington, DE/United States
NEM USA Corp., Wilmington, DE/United States
100
100
100
100
100
100
Dresser-Rand LLC, Wilmington, DE/United States
Dresser-Rand Power LLC, Wilmington, DE/United States
Dresser-Rand Services, LLC, Wilmington, DE/United States
eMeter Corporation, Wilmington, DE/United States
Guascor Inc., Baton Rouge, LA/United States
Mannesmann Corporation, New York, NY/United States
100
Ciudad Juárez/Mexico
Siemens Healthcare Diagnostics, S. de R.L. de C.V.,
100
Siemens Industry Software, S.A. de C.V., Mexico City/Mexico
100
Siemens Healthcare Diagnostics Panama, S.A.,
100
Red Cedar Technology, Inc., East Lansing, MI/United States
100
Siemens S.A., Managua/Nicaragua
100
PETNET Solutions, Inc., Knoxville, TN/United States
100
63
Wilmington, DE/United States
100
Siemens Servicios S.A. de C.V., Mexico City/Mexico
Siemens, S.A. de C.V., Mexico City/Mexico
PETNET Solutions Cleveland, LLC,
100
Siemens Innovaciones S.A. de C.V., Mexico City/Mexico
501
PETNET Indiana LLC, Indianapolis, IN/United States
100
Siemens Inmobiliaria S.A. de C.V., Mexico City/Mexico
51
P.E.T.NET Houston, LLC, Austin, TX/United States
100
Siemens Special Electrical Machines Co. Ltd.,
Changzhi/China
77
100
Siemens Healthcare Limited, Bangkok/Thailand
60
100
Dresser-Rand (Thailand) Limited, Rayong/Thailand
100
PT Dresser-Rand Services Indonesia, Cilegon/Indonesia
PT. Siemens Industrial Power, Kota Bandung/Indonesia
100
Siemens Ltd., Taipei/Taiwan, Province of China
Acrorad Co., Ltd., Okinawa/Japan
100
100
Taipei/Taiwan, Province of China
100
Siemens Industry Software (TW) Co., Ltd.,
Siemens Technology and Services Private Limited,
Mumbai/India
100
Siemens Healthcare Limited, Taipei/Taiwan, Province of China
100
Siemens Rail Automation Pvt. Ltd., Mumbai/India
P.T. Siemens Indonesia, Jakarta/Indonesia
100
63
99
259
ATS Projekt Grevenbroich GmbH, Schüttorf
100
Siemens K.K., Tokyo/Japan
Germany (27 companies)
100
Siemens Japan Holding K.K., Tokyo/Japan
ASSOCIATED COMPANIES AND JOINT VENTURES
100
Siemens Limited, Bangkok/Thailand
Siemens Healthcare K.K., Tokyo/Japan
Siemens Healthcare Diagnostics K.K., Tokyo/Japan
100
Siemens Ltd., Ho Chi Minh City/Viet Nam
100
Dresser Rand Japan K.K., Tokyo/Japan
100
Siemens Healthcare Limited, Ho Chi Minh City/Viet Nam
100
CD-adapco Co., Ltd., Yokohama/Japan
100
Siemens Pte. Ltd., Singapore/Singapore
100
100
509
ubimake GmbH, Berlin
50
Buitengaats Management B.V., Eemshaven/Netherlands
Infraspeed Maintainance B.V., Zoetermeer/Netherlands
209
50
Veja Mate Offshore Project GmbH, Gadebusch
41
Voith Hydro Holding GmbH & Co. KG, Heidenheim
Voith Hydro Holding Verwaltungs GmbH, Heidenheim
WERKBLIQ GmbH, Bielefeld
207
35
50
359
Windpark Monarch C.V., Amsterdam/Netherlands
259
g|
50
Windpark Monarch Management B.V.,
Amsterdam/Netherlands
259
Ural Locomotives Holding Besloten Vennootschap,
The Hague/Netherlands
100
Mumbai/India
100
Siemens Postal, Parcel & Airport Logistics PTE. LTD.,
Singapore/Singapore
Siemens Postal Parcel & Airport Logistics Private Limited,
Mumbai/India
1008
100
Siemens Industry Software Pte. Ltd., Singapore/Singapore
Siemens Postal and Parcel Logistics Technologies Private
Limited, Mumbai/India
100
Siemens Healthcare Pte. Ltd., Singapore/Singapore
75
Siemens Ltd., Mumbai/India
100
CSI Services Pte. Ltd., Singapore/Singapore
100
100
CD-adapco S.E.A. Pte. Ltd., Singapore/Singapore
Siemens Industry Software (India) Private Limited,
New Delhi/India
100
100
Siemens Power Operations, Inc., Manila/Philippines
Siemens, Inc., Manila/Philippines
100
Siemens Healthcare Private Limited, Mumbai/India
CD-adapco Korea, Ltd., Seoul/Korea, Republic of
Europe, Commonwealth of Independent States
(C.I.S.), Africa, Middle East (without Germany)
(58 companies)
100
499
MeVis BreastCare Verwaltungsgesellschaft mbH, Bremen
865,9
VAL 208 Torino GEIE, Milan/Italy
49
MeVis BreastCare GmbH & Co. KG, Bremen
499
Transfima S.p.A., Milan/Italy
26
Maschinenfabrik Reinhausen GmbH, Regensburg
499
429
50
Magazino GmbH, Munich
20
Rosh HaAyin/Israel
259
Ludwig Bölkow Campus GmbH, Taufkirchen
Metropolitan Transportation Solutions Ltd.,
509
LIB Verwaltungs-GmbH, Leipzig
Transfima GEIE, Milan/Italy
575,9
Temir Zhol Electrification LLP, Astana/Kazakhstan
OWP Butendiek GmbH & Co. KG, Bremen
339
Admiraal De Ruyter Windpark Management B.V.,
Amsterdam/Netherlands
29
thinkstep AG, Leinfelden-Echterdingen
655,9
Symeo GmbH, Neubiberg
339
Amsterdam/Netherlands
329
49
Sternico GmbH, Wendeburg
1005,9
Siemens Venture Capital Fund 1 GmbH, Munich
20
Energie Electrique de Tahaddart S.A., Tangier/Morocco
67
Siemens EuroCash, Munich
33
Electrogas Malta Limited, Marsaskala/Malta
23
Admiraal de Ruyter Windpark C.V.,
Parallel Graphics Ltd., Dublin/Ireland
409
Infineon Technologies Bipolar Verwaltungs-GmbH, Warstein
7 Significant influence due to contractual arrangements or legal circumstances
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
6 No significant influence due to contractual arrangements or legal circumstances.
1 Control due to a majority of voting rights.
499
DKS Dienstleistungsgesellschaft f. Kommunikationsanlagen
des Stadt- und Regionalverkehrs mbH, Cologne
8 Not consolidated due to immateriality.
100
Siemens Industry Software Ltd., Seoul/Korea, Republic of
Siemens Ltd. Seoul, Seoul/Korea, Republic of
50
Caterva GmbH, Pullach i. Isartal
100
Siemens Healthcare Limited, Seoul/Korea, Republic of
505
BWI Informationstechnik GmbH, Meckenheim
100
Dresser-Rand Korea, Ltd., Seoul/Korea, Republic of
100
9 Not accounted for using the equity method due to immateriality.
10 Exemption pursuant to Section 264b German Commercial Code.
11 Exemption pursuant to Section 264 (3) German Commercial Code.
48
Eviop-Tempo A.E. Electrical Equipment Manufacturers,
Vassiliko/Greece
40
Infineon Technologies Bipolar GmbH & Co. KG, Warstein
50
25
TRIXELL SAS, Moirans/France
499
40
Compagnie Electrique de Bretagne SAS, Paris/France
in %
September 30, 2016
in %
IFTEC GmbH & Co. KG, Leipzig
FEAG Fertigungscenter für Elektrische Anlagen GmbH,
Erlangen
September 30, 2016
Equity interest
Equity interest
114
113
Consolidated Financial Statements
BELLIS GmbH, Braunschweig
Siemens Soluciones Tecnologicas S.A.,
ZeeEnergie C.V., Amsterdam/Netherlands
ZeeEnergie Management B.V., Eemshaven/Netherlands
100
Samtech HK Limited, Hong Kong/Hong Kong
100
100
Camstar Systems (Hong Kong) Limited,
Hong Kong/Hong Kong
Siemens Mechanical Drive Systems (Tianjin) Co., Ltd.,
Tianjin/China
51
Shanghai/China
1008
Siemens Medium Voltage Switching Technologies (Wuxi)
Ltd., Wuxi/China
Asia Care Holding Limited, Hong Kong/Hong Kong
51
Yangtze Delta Manufacturing Co. Ltd., Hangzhou,
Hangzhou/China
100
Siemens Ltd., China, Beijing/China
100
65
Trench High Voltage Products Ltd., Shenyang,
Shenyang/China
Siemens Logistics Automation Systems (Beijing) Co., Ltd,
Beijing/China
100
Siemens Manufacturing and Engineering Centre Ltd.,
Siemens Investment Consulting Co., Ltd., Beijing/China
Siemens Healthcare Limited, Hong Kong/Hong Kong
85
112 Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances
6 No significant influence due to contractual arrangements or legal circumstances.
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
100
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
1 Control due to a majority of voting rights.
100
100
Siemens Ltd., Hong Kong/Hong Kong
100
Hong Kong/Hong Kong
80
Siemens Numerical Control Ltd., Nanjing, Nanjing/China
Siemens Power Automation Ltd., Nanjing/China
Siemens Industry Software Limited,
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
60
100
Siemens X-Ray Vacuum Technology Ltd., Wuxi, Wuxi/China
Smart Metering Solutions (Changsha) Co. Ltd.,
Changsha/China
63
Siemens Transformer (Guangzhou) Co., Ltd.,
Guangzhou/China
Siemens High Voltage Switchgear Guangzhou Ltd.,
51
Shanghai, Shanghai/China
90
90
Siemens Technology Development Co., Ltd. of Beijing,
Beijing/China
Siemens High Voltage Switchgear Co., Ltd.,
Guangzhou/China
51
Siemens Switchgear Ltd., Shanghai, Shanghai/China
Siemens High Voltage Circuit Breaker Co., Ltd., Hangzhou,
Hangzhou/China
100
Siemens Surge Arresters Ltd., Wuxi/China
100
Siemens Healthcare Ltd., Shanghai/China
100
Siemens Standard Motors Ltd., Yizheng/China
100
55
94
Siemens Transformer (Jinan) Co., Ltd, Jinan/China
90
100
Shanghai/China
Siemens International Trading Ltd., Shanghai,
100
Shanghai/China
100
Siemens Wiring Accessories Shandong Ltd., Zibo/China
Siemens Industry Software (Shanghai) Co., Ltd.,
100
Siemens Wind Power Blades (Shanghai) Co., Ltd.,
Shanghai/China
100
Siemens Industry Software (Beijing) Co., Ltd., Beijing/China
84
100
Siemens Venture Capital Co., Ltd., Beijing/China
Siemens Industrial Turbomachinery (Huludao) Co. Ltd.,
Huludao/China
100
Siemens Transformer (Wuhan) Company Ltd.,
Wuhan City/China
100
Chengdu, Chengdu/China
Siemens Industrial Automation Products Ltd.,
Equity interest
207
September 30, 2016
CD-adapco India Private Limited, Bangalore/India
Dresser-Rand India Private Limited, Mumbai/India
46
A2SEA A/S, Fredericia/Denmark
Kriegers Flak ApS, Copenhagen/Denmark
Noliac A/S, Kvistgaard/Denmark
BioMensio Oy, Tampere/Finland
49
339
ZAO Systema-Service, St. Petersburg/Russian Federation
Impilo Consortium (Pty.) Ltd., La Lucia/South Africa
26
ZAO Interautomatika, Moscow/Russian Federation
31
Ardora, S.A., Vigo/Spain
359
239
Desgasificación de Vertederos, S.A, Madrid/Spain
509
1 Control due to a majority of voting rights.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to substantive removal or participation rights held by other parties.
249
5 No control due to contractual arrangements or legal circumstances.
479
40
209
Wirescan AS, Trollaasen/Norway
339
Arelion GmbH in Liqu., Pasching b. Linz/Austria
259
Rousch (Pakistan) Power Ltd., Lahore/Pakistan
26
Aspern Smart City Research GmbH, Vienna/Austria
449
Meomed s.r.o., Prerov/Czech Republic
000 Transconverter, Moscow/Russian Federation
Aspern Smart City Research GmbH & Co KG, Vienna/Austria
44
OIL AND GAS PROSERV LLC, Baku/Azerbaijan
259
OOO VIS Automation mit Zusatz »>Ein Gemeinschafts-
unternehmen von VIS und Siemens<<,
T-Power NV, Brussels/Belgium
20
Moscow/Russian Federation
49
359
6 No significant influence due to contractual arrangements or legal circumstances.
7 Significant influence due to contractual arrangements or legal circumstances
8 Not consolidated due to immateriality.
Siemens Financial Services Private Limited,
100
Mumbai/India
Siemens Convergence Creators Private Limited,
100
Preactor Software India Private Limited, Bangalore/India
501
New Delhi/India
Powerplant Performance Improvement Ltd.,
Dresser-Rand Asia Pacific Sdn. Bhd., Kuala Lumpur/Malaysia
HRSG Systems (Malaysia) SDN. BHD., Kuala Lumpur/Malaysia
Reyrolle (Malaysia) Sdn. Bhd., Kuala Lumpur/Malaysia
Siemens Healthcare Sdn. Bhd., Petaling Jaya/Malaysia
Siemens Industry Software Sdn. Bhd., Penang/Malaysia
Siemens Malaysia Sdn. Bhd., Petaling Jaya/Malaysia
VA TECH Malaysia Sdn. Bhd., Kuala Lumpur/Malaysia
Siemens (N.Z.) Limited, Auckland/New Zealand
Siemens Healthcare Limited, Auckland/New Zealand
Siemens Healthcare Inc., Manila/Philippines
100
100
100
492,8
Dresser-Rand & Enserv Services Sdn. Bhd.,
Kuala Lumpur/Malaysia
100
in %
Equity interest
September 30, 2016
in %
PETNET Radiopharmaceutical Solutions Pvt. Ltd.,
New Delhi/India
100
100
100
9 Not accounted for using the equity method due to immateriality.
10 Exemption pursuant to Section 264b German Commercial Code.
11 Exemption pursuant to Section 264 (3) German Commercial Code.
Consolidated Financial Statements
Equity interest
Equity interest
September 30, 2016
in %
September 30, 2016
in %
Explotaciones y Mantenimientos Integrales, S.L.,
Getxo/Spain
509
Siemens First Capital Commercial Finance, LLC,
Wilmington, DE/United States
515
Gate Solar Gestión, S.L. Unipersonal, Vitoria-Gasteiz/Spain
Hydrophytic, S.L., Vitoria-Gasteiz/Spain
100
100
100
100
100
100
Siemens Postal, Parcel & Airport Logistics Limited,
Hong Kong/Hong Kong
Wheelabrator Air Pollution Control (Canada) Inc.,
Buitengaats C.V., Amsterdam/Netherlands
Buenos Aires/Argentina
8 Not consolidated due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances
6 No significant influence due to contractual arrangements or legal circumstances.
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
409
Bangkok/Thailand
309
9 Not accounted for using the equity method due to immateriality.
Rether networks, Inc., Berkeley, CA/United States
219
Powerit Holdings, Inc., Seattle, WA/United States
49
Power Automation Pte. Ltd., Singapore/Singapore
33
PhSiTh LLC, New Castle, DE/United States
43
50
Yaskawa Siemens Automation & Drives Corp., Tokyo/Japan
Advance Gas Turbine Solutions SDN. BHD.,
Kuala Lumpur/Malaysia
37
Wilmington, DE/United States
Modern Engineering and Consultants Co. Ltd.,
10 Exemption pursuant to Section 264b German Commercial Code.
11 Exemption pursuant to Section 264 (3) German Commercial Code.
Consolidated Financial Statements
0
206
125
5
1005,6
INPRO Innovationsgesellschaft für fortgeschrittene Produktionssysteme in der Fahrzeugindustrie mbH, Berlin
Kyros Beteiligungsverwaltung GmbH, Grünwald
BSAV Kapitalbeteiligungen und Vermögensverwaltungs Management GmbH, Grünwald
(36)
3
1005,6
BOMA Verwaltungsgesellschaft mbH & Co. KG, Grünwald
1
0
1005,6
Paderborn
Ausbildungszentrum für Technik, Informationsverarbeitung und Wirtschaft gemeinnützige GmbH (ATIW),
Germany (10 companies)
OTHER INVESTMENTS 12
in millions of €
in millions of €
Equity
Net income
Equity interest
in %
September 30, 2016
115
Panda Stonewall Intermediate Holdings I, LLC,
3
32
40
40
40
Shanghai Electric Power Generation Equipment Co., Ltd.,
Shanghai/China
RWG (Repair & Overhauls) Limited,
49
Primetals Technologies, Limited, London/United Kingdom
509
Nanjing/China
509
Plessey Holdings Ltd., Frimley, Surrey/United Kingdom
Saitong Railway Electrification (Nanjing) Co., Ltd.,
Aberdeen/United Kingdom
509
50
GSP China Technology Co., Ltd., Beijing/China
50
London/United Kingdom
25
Beijing/China
Lincs Renewable Energy Holdings Limited,
DBEST (Beijing) Facility Technology Management Co., Ltd.,
25
309
Shanghai/China
Odos Imaging Ltd., Edinburgh/United Kingdom
50
Siemens Traction Equipment Ltd., Zhuzhou,
Joint Venture Service Center, Chirchik/Uzbekistan
PT Asia Care Indonesia, Jakarta/Indonesia
Panda Hummel Station Intermediate Holdings I LLC,
50
259
26
Bangalore International Airport Ltd., Bangalore/India
Transparent Energy Systems Private Limited, Pune/India
P.T. Jawa Power, Jakarta/Indonesia
219
Frustum, Inc., New York, NY/United States
32
Echogen Power Systems, Inc., Wilmington, DE/United States
329
Cyclos Semiconductor, Inc., Wilmington, DE/United States
50
Zhenjiang Siemens Busbar Trunking Systems Co. Ltd.,
Yangzhong/China
27
CEF-L Holding, LLC, Wilmington, DE/United States
23
Bytemark Inc., New York, NY/United States
43
50
Tianjin ZongXi Traction Motor Ltd., Tianjin/China
Xi'An X-Ray Target Ltd., Xi'an/China
Americas (15 companies)
50
Zhuzhou/China
499
Wilmington, DE/United States
Galloper Wind Farm Holding Company Limited, Swindon,
Wiltshire/United Kingdom
1005,6
452
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances
6 No significant influence due to contractual arrangements or legal circumstances.
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
78
3
10
100
(3)
9
16
(4)
19
N/A
N/A
506
Atlantis Resources Limited, Singapore/Singapore
Asia, Australia (1 company)
¡BAHN Corporation, South Jordan, UT/United States
34
Exemption pursuant to Section 264b German Commercial Code.
11
Exemption pursuant to Section 264 (3) German Commercial Code.
118 Additional Information
1.1
Dr. Ralf P. Thomas
Prof.Dr Siegfried Russwurm
Janina Kuge
да пошел
Klaus Helmrich
Alaus Helmch
Sha
for Siemens Aktiengesellschaft, includes a fair review of the
development and performance of the business and the position
of the Group, together with a description of the material oppor-
tunities and risks associated with the expected development
of the Group.
Lisa Davis
Dr. Roland Busch
2.гл
Joe Kaeser
An
Siemens Aktiengesellschaft
The Managing Board
Munich, November 28, 2016
To the best of our knowledge, and in accordance with the appli-
cable reporting principles, the Consolidated Financial Statements
give a true and fair view of the assets, liabilities, financial posi-
tion and profit or loss of the Group, and the Group Management
Report, which has been combined with the Management Report
C.1 Responsibility Statement
INFORMATION
ADDITIONAL
C.
116 Consolidated Financial Statements
N/A No financial data available.
12 Values according to the latest available local GAAP financial statements;
the underlying fiscal year may differ from the Siemens fiscal year.
BuildingIQ, Inc., San Mateo, CA/United States
47
Guascor México S.A. de CV, Mexico City/Mexico
0
Oceanic Global Investment Funds PLC, Dublin/Ireland
ATOS SE, Bezons/France
SMATRICS GmbH & Co KG, Vienna/Austria
Europe, Commonwealth of Independent States (C.I.S.),
Africa, Middle East (without Germany) (9 companies)
SIM 9. Grundstücksverwaltungs- und -beteiligungs-GmbH, Munich
Siemens Pensionsfonds AG, Grünwald
6
(2)
1005,6
8
0
Medical Systems S.p.A., Genoa/Italy
100 5,6
7
506
2,488
157
18
(89)
5
975,6
Siemens Global Innovation Partners | GmbH & Co. KG, Munich
OSRAM Licht AG, Munich
MAENA Grundstücks-Verwaltungsgesellschaft mbH & Co. KG, Grünwald
80
506
(3)
4
0
744,6
Siemens Benefits Scheme Limited, Frimley, Surrey/United Kingdom
(6)
(4)
236
0
0
1005,6
Dresser-Rand Company Retirement Plan Trustees Limited, Frimley, Surrey/United Kingdom
Pyreos Limited, Edinburgh/United Kingdom
1005,6
MEASD SPC DWC-LLC, Dubai/United Arab Emirates
7,402
14
1005,6
Corporate XII S.A. (SICAV-FIS), Luxembourg/Luxembourg
98
6
456
1,312
(56)
1005,6
4,097
437
12
Americas (3 companies)
ChinaInvent (Shanghai) Instrument Co., Ltd,
8
Ethos Energy Group Limited, Aberdeen/United Kingdom
100
Dresser-Rand Canada, ULC, Vancouver/Canada
VTW Anlagen UK Ltd., Banbury,
1008
Siemens Wind Power Ergia Eolica LTDA, São Paulo/Brazil
100
VA TECH T&D UK Ltd., Frimley, Surrey/United Kingdom
100
100
100
Siemens Healthcare Diagnósticos S.A., São Paulo/Brazil
Siemens Industry Software Ltda., São Caetano do Sul/Brazil
Siemens Ltda., São Paulo/Brazil
100
Frimley, Surrey/United Kingdom
VA Tech Reyrolle Distribution Ltd.,
100
VA TECH (UK) Ltd., Frimley, Surrey/United Kingdom
100
Siemens Eletroeletronica Limitada, Manaus/Brazil
100
100
75
Minuano Participações Eólicas Ltda., São Paulo/Brazil
OMNETRIC Group Tecnologia e Servicos de Consultoria
Ltda., Belo Horizonte/Brazil
The Preactor Group Limited,
1008
in %
September 30, 2016
in %
Siemens Wind Power Limited,
Frimley, Surrey/United Kingdom
September 30, 2016
Oxfordshire/United Kingdom
100
Siemens Canada Limited, Oakville/Canada
100
49
100
1008
100
Trench Ltd., Saint John/Canada
VA TECH International Argentina SA,
Siemens Wind Power Limited, Oakville/Canada
100
Siemens S.A., Buenos Aires/Argentina
Trois-Rivières, Québec/Canada
100
Siemens IT Services S.A., Buenos Aires/Argentina
Siemens Transformers Canada Inc.,
100
Equity interest
Siemens Healthcare S.A., Buenos Aires/Argentina
Siemens Postal, Parcel & Airport Logistics Ltd.,
Oakville/Canada
100
Guascor Argentina, S.A., Buenos Aires/Argentina
100
Artadi S.A., Buenos Aires/Argentina
100
Siemens Industry Software Ltd., Oakville/Canada
Americas (129 companies)
100
Siemens Healthcare Limited, Oakville/Canada
100
Siemens Financial Ltd., Oakville/Canada
100
Zenco Systems Limited, Frimley, Surrey/United Kingdom
100
Equity interest
Frimley, Surrey/United Kingdom
Innovex Capital En Tecnologia, C.A.,
50
50
PHM Technology Pty Ltd, Melbourne/Australia
33
Exemplar Health (SCUH) Partnership, Sydney/Australia
Exemplar Health (NBH) Partnership, Melbourne/Australia
Cross London Trains Holdco 2 Limited,
London/United Kingdom
50
509
509
USARAD Holdings, Inc., Fort Lauderdale, FL/United States
Veo Robotics, Inc., Cambridge, MA/United States
309
279
Nertus Mantenimiento Ferroviario y Servicios S.A.,
Barcelona/Spain
515
Empresa Nacional De Maquinas Eléctricas ENME, S.A.,
Caracas/Venezuela, Bolivarian Republic of
409
Soleval Renovables S.L., Sevilla/Spain
50
Asia, Australia (20 companies)
Solucia Renovables 1, S.L., Lebrija/Spain
Tusso Energía, S.L., Sevilla/Spain
Certas AG, Zurich/Switzerland
Interessengemeinschaft TUS, Männedorf/Switzerland
50
Caracas/Venezuela, Bolivarian Republic of
207,9
509
259
50
> Fresenius SE & Co. KGaA, Bad Homburg
(Deputy Chairman)
Pursuant to Sec. 322 (3) Sentence 1 HGB, we state that our audit
of the consolidated financial statements has not led to any reser-
vations.
Audit Opinion
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
An audit involves performing audit procedures to obtain audit
evidence about the amounts and disclosures in the consolidated
financial statements. The selection of audit procedures depends
on the auditor's professional judgment. This includes the assess-
ment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In assessing
those risks, the auditor considers the internal control system rel-
evant to the entity's preparation of the consolidated financial
statements that give a true and fair view. The aim of this is to plan
and perform audit procedures that are appropriate in the given
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the group's internal control system. An
audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates
made by management, as well as evaluating the overall presen-
tation of the consolidated financial statements.
Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. We conducted our audit
in accordance with Sec. 317 HGB and German generally accepted
standards for the audit of financial statements promulgated by
the Institut der Wirtschaftsprüfer [Institute of Public Auditors in
Germany] (IDW) as well as in supplementary compliance with
International Standards on Auditing (ISA). Accordingly, we are
required to comply with ethical requirements and plan and per-
form the audit to obtain reasonable assurance about whether the
consolidated financial statements are free from material mis-
statement.
Auditor's Responsibility
The management of Siemens Aktiengesellschaft is responsible
for the preparation of these consolidated financial statements.
This responsibility includes preparing these consolidated finan-
cial statements in accordance with International Financial Re-
porting Standards (IFRS) as adopted by the European Union (EU),
the supplementary requirements of German law pursuant to
Sec. 315a (1) HGB ["Handelsgesetzbuch": German Commercial
Code] and full IFRS as issued by the International Accounting
Standards Board (IASB), to give a true and fair view of the net
assets, financial position and results of operations of the group
in accordance with these requirements. The company's manage-
ment is also responsible for the internal controls that manage-
ment determines are necessary to enable the preparation of
consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
Management's Responsibility for the
Consolidated Financial Statements
We have audited the accompanying consolidated financial state-
ments of Siemens Aktiengesellschaft, Berlin and Munich, and its
subsidiaries, which comprise the consolidated statements of in-
come, comprehensive income, financial position, cash flow and
changes in equity, and notes to the consolidated financial state-
ments for the business year from October 1, 2015 to Septem-
ber 30, 2016.
REPORT ON THE CONSOLIDATED
FINANCIAL STATEMENTS
To Siemens Aktiengesellschaft, Berlin and Munich
C.2 Independent Auditor's Report
> Siemens Postal, Parcel & Airport
Logistics GmbH, Constance
Positions outside Germany:
> Siemens Ltd., China (Chairman)
> Siemens Ltd., India
Positions outside Germany:
> Siemens Corp., USA (Chairwoman)
Positions outside Germany:
> Siemens AB, Sweden (Chairman)
> Siemens Aktiengesellschaft
Österreich, Austria (Chairman)
> Siemens Proprietary Ltd., South
Africa (Chairman)
> Siemens Schweiz AG, Switzerland
(Chairman)
German positions:
> Siemens Healthcare GmbH, Munich
In our opinion, based on the findings of our audit, the consoli-
dated financial statements comply in all material respects with
IFRS as adopted by the EU, the supplementary requirements of
German commercial law pursuant to Sec. 315a (1) HGB and full
IFRS as issued by the IASB and give a true and fair view of the net
assets and financial position of the Group as at September 30,
2016 as well as the results of operations for the business year
then ended, in accordance with these requirements.
Additional Information
119
> HSBC Trinkaus & Burkhardt AG, Düsseldorf
January 27,
2009
March 10,
1952
April 1,
2007
March 14,
1959
> Siemens Healthcare GmbH, Munich
(Deputy Chairman)
> Pfleiderer GmbH, Neumarkt
German positions:
Memberships in supervisory boards whose establish-
ment is required by law or in comparable domestic
or foreign controlling bodies of business enterprises
(as of September 30, 2016)
January 27,
2015
Member since
June 24,
1956
German positions:
Date of birth
Chairman of the Siemens Europe
Committee
Chairman of the Works Council
of Siemens Erlangen Süd, Germany
Deputy Chairman of the Central
Works Council of Siemens AG
Chairwoman of the Combine Works
Council of Siemens AG
Jürgen Kerner*
Harald Kern*
Robert Kensbock*
Hans-Jürgen Hartung*
Bettina Haller*
Trade Union Secretary of
the Managing Board of IG Metall
Occupation
Reinhard Hahn*
Name
Executive Managing Board Member
of IG Metall
> Siemens Healthcare GmbH, Munich
Positions outside Germany:
>Arabia Electric Ltd. (Equipment),
Saudi Arabia
> ISCOSA Industries and Maintenance
Ltd., Saudi Arabia (Deputy Chairman)
> Siemens Ltd., Saudi Arabia
January 23,
2003
March 26,
1960
January 24,
2008
October 21,
1946
January 23,
2013
Chairman of the Works Council
of Siemens Dynamowerk, Berlin,
Germany
July 24,
1952
July 11,
2014
Supervisory Board Member
German positions:
Member since
Hans Michael Gaul, Dr. iur. Supervisory Board Member
126 Additional Information
Memberships in supervisory boards whose establish-
ment is required by law or in comparable domestic
or foreign controlling bodies of business enterprises
(as of September 30, 2016)
German positions:
➤ Bayer AG, Leverkusen (Chairman)
> Henkel AG & Co. KGaA, Düsseldorf¹
> Henkel Management AG, Düsseldorf
December 23, January 24,
1954
March 2,
1942
2008
January 24,
2008
German positions:
> BASF SE, Ludwigshafen am Rhein
(Deputy Chairman)
> Fresenius Management SE, Bad Homburg
1 Shareholders' Committee.
> Linde AG, Munich (Deputy Chairman)
Date of birth
February 25,
1943
Olaf Bolduan*
> Siemens W.L.L., Qatar
> VA TECH T&D Co. Ltd., Saudi Arabia
German positions:
> Siemens Healthcare GmbH, Munich
Positions outside Germany:
> Siemens Aktiengesellschaft
Österreich, Austria
> Siemens Corp., USA
(Deputy Chairman)
Additional Information
125
C.4.1.2 SUPERVISORY BOARD
Michael Diekmann
The Supervisory Board oversees and advises the Managing Board
in its management of the Company's business. At regular inter-
vals, the Supervisory Board discusses business development,
planning, strategy and strategy implementation. It reviews the
Annual Financial Statements of Siemens AG, the Consolidated
Financial Statements and the Combined Management Report of
Siemens AG and the Siemens Group, and the proposal for the
appropriation of net income. It approves the Annual Financial
Statements of Siemens AG as well as the Consolidated Financial
Statements, based on the results of the preliminary review con-
ducted by the Audit Committee and taking into account the re-
ports of the independent auditors. The Supervisory Board de-
cides on the Managing Board's proposal for the appropriation of
net income and the Report of the Supervisory Board to the An-
nual Shareholders' Meeting. In addition, the Supervisory Board
or the Compliance Committee, which is described in more detail
below, concern themselves with monitoring the Company's
adherence to statutory provisions, official regulations and inter-
nal Company policies (compliance). The Supervisory Board also
appoints the members of the Managing Board and determines
each member's portfolios. Important Managing Board deci-
sions - such as those regarding major acquisitions, divestments,
fixed asset investments or financial measures require Super-
visory Board approval, unless the Bylaws for the Supervisory
Information on the work of the Supervisory Board is provided in
chapter c.3 REPORT OF THE SUPERVISORY BOARD. The compensa-
tion paid to the members of the Supervisory Board is explained
in chapter A.10 COMPENSATION REPORT.
The Supervisory Board of Siemens AG has 20 members. As stipu-
lated by the German Codetermination Act (Mitbestimmungs-
gesetz), half of the members represent Company shareholders,
and half represent Company employees. The employee represen-
tatives' names are marked below with an asterisk (*). The terms
of office of the Supervisory Board members will, as a general rule,
expire at the conclusion of the Annual Shareholders' Meeting in
2018. The terms of office of Dr. Leibinger-Kammüller, Mr. Snabe
and Mr. Wenning will expire at the conclusion of the Annual
Shareholders' Meeting in 2021.
Members of the Supervisory Board and positions
held by Supervisory Board members
In fiscal 2016, the Supervisory Board comprised the following
members:
Name
Gerhard Cromme, Dr. iur.
Chairman
Birgit Steinborn*
First Deputy Chairwoman
Werner Wenning
Second Deputy Chairman
Occupation
Chairman of the Supervisory Board
of Siemens AG
Chairwoman of the Central Works
Council of Siemens AG
Chairman of the Supervisory Board
of Bayer AG
> BDO AG Wirtschaftsprüfungsgesellschaft,
Hamburg (Deputy Chairman)
Board specify that such authority be delegated to the Innovation
and Finance Committee of the Supervisory Board. In the Bylaws
for the Managing Board, the Supervisory Board has established
the rules that govern the Managing Board's work.
May 24,
1958
Positions outside Germany:
C.4.1 Management
C.4 Corporate Governance
123
Additional Information
Dr. Gerhard Cromme
Chairman
Gerhard Comme
For the Supervisory Board
On behalf of the Supervisory Board, I would like to thank the
members of the Managing Board as well as the employees and
employee representatives of Siemens AG and all Group compa-
nies for their outstanding commitment and constructive cooper-
ation in fiscal 2016.
CHANGES IN THE COMPOSITION OF THE
SUPERVISORY AND MANAGING BOARDS
The Annual Shareholders' Meeting on January 26, 2016, approved
the early reelection of Dr. Nicola Leibinger-Kammüller, Jim Hage-
mann Snabe and Werner Wenning for additional five-year terms
as shareholder representatives on the Supervisory Board. There
were no changes in the Managing Board in fiscal 2016.
The Supervisory Board concurs with the results of the audit.
Following the definitive findings of the Audit Committee's exam-
ination and our own examination, we have no objections. The
Managing Board prepared the Annual Financial Statements of
Siemens AG and the Consolidated Financial Statements of the
Siemens Group. We approved the Annual Financial Statements
and the Consolidated Financial Statements. In view of our ap-
proval, the Annual Financial Statements of Siemens AG are ad-
opted as submitted. We endorsed the Managing Board's proposal
that the net income available for distribution be used to pay out
a dividend of €3.60 per share entitled to a dividend and that the
amount of net income attributable to shares of stock not entitled
to receive a dividend for fiscal 2016 be carried forward.
of Siemens AG, the Consolidated Financial Statements of the
Siemens Group and the Combined Management Report in detail
at its meeting on November 29, 2016. The audit reports prepared
by the independent auditors were distributed to all members of
the Supervisory Board and comprehensively reviewed at the
Supervisory Board's meeting on November 30, 2016, in the pres-
ence of the independent auditors, who reported on the scope,
focal points and main findings of their audit. No major weak-
nesses in the Company's internal control or risk management
systems were reported. At this meeting, the Managing Board ex-
plained the financial statements of Siemens AG and the Siemens
Group as well as the Company's risk management system.
The independent auditors, Ernst & Young GmbH Wirtschaftsprü-
fungsgesellschaft, audited the Annual Financial Statements of
Siemens AG, the Consolidated Financial Statements of the
Siemens Group and the Combined Management Report for
Siemens AG and the Siemens Group for fiscal 2016 and issued an
unqualified opinion. Ernst & Young GmbH Wirtschaftsprüfungs-
gesellschaft, of Stuttgart, Germany, has served as independent
auditors of Siemens AG and the Siemens Group since fiscal 2009.
Katharina Breitsameter has signed as auditor since fiscal 2016, and
Thomas Spannagl has signed as auditor responsible for the audit
since fiscal 2014. The Annual Financial Statements of Siemens AG
and the Combined Management Report for Siemens AG and the
Siemens Group were prepared in accordance with the require-
ments of German law. The Consolidated Financial Statements of
the Siemens Group were prepared in accordance with the Inter-
national Financial Reporting Standards (IFRS) as adopted by the
EU and with the additional requirements of German law set out
in Section 315a (1) of the German Commercial Code (Handels-
gesetzbuch). The Consolidated Financial Statements of the
Siemens Group also comply with the IFRS as issued by the Inter-
national Accounting Standards Board (IASB). The independent
auditors conducted their audit in accordance with Section 317 of
the German Commercial Code and German generally accepted
standards for the audit of financial statements promulgated by
the Institut der Wirtschaftsprüfer (IDW) as well as in supplemen-
tary compliance with the International Standards on Auditing
(ISA). The abovementioned documents as well as the Managing
Board's proposal for the appropriation of net income were sub-
mitted to us by the Managing Board in advance. The Audit Com-
mittee discussed the dividend proposal in detail at its meeting on
November 8, 2016. It discussed the Annual Financial Statements
DETAILED DISCUSSION OF THE AUDIT
OF THE FINANCIAL STATEMENTS
and control structure
for Siemens AG and the Siemens Group. The Audit Committee
discussed the Half-year Financial Report and the quarterly state-
ments with the Managing Board and the independent auditors.
In the presence of the independent auditors, it also discussed the
report on the auditors' review of the Company's Half-year Con-
solidated Financial Statements and of its Interim Group Manage-
ment Report. The Committee recommended that the Supervisory
Board propose to the Annual Shareholders' Meeting the election
of Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft as the
independent auditors. The Committee appointed the indepen-
dent auditors for fiscal 2016, defined the audit focal points and
determined the auditors' fee. The Committee monitored the se-
lection, independence, qualification, rotation and efficiency of
the independent auditors. Furthermore, the Audit Committee
dealt with the Company's accounting process, risk management
system and the effectiveness, resources and findings of the inter-
nal audit as well as with reports concerning potential and pend-
ing legal disputes.
The Audit Committee met six times. In the presence of the inde-
pendent auditors as well as the President and Chief Executive
Officer and the Chief Financial Officer, the Committee dealt with
the financial statements and the Combined Management Report
The Innovation and Finance Committee met four times. The
focuses of its meetings included the Committee's recommenda-
tion regarding the budget for fiscal 2016, the discussion of the
Company's strategy and pension system as well as the prepara-
tion and approval of investment and divestment projects. The
Committee also concerned itself intensively with the Company's
innovation and technology focuses. For example, at the Commit-
tee's meeting on December 1, 2015, the Managing Board re-
ported as part of a technology focus - on Germany's Energy
Transition 2.0. At this meeting, the Committee also received a
report on the organization of and business situation at the Wind
Power and Renewables Division. At the Committee's meeting on
May 2, 2016, the Managing Board reported in detail on the Com-
pany's participation in the 2016 Hannover Messe. Finally, at its
meeting on August 2, 2016, the Innovation and Finance Commit-
tee discussed the technology focus "decentralized energy sys-
tems" and the next47 initiative, the establishment of a separately
managed unit for startups.
-
The Compensation Committee met three times. It also made
one decision by written circulation. The Compensation Commit-
tee prepared, in particular, proposals for the full Supervisory
Board regarding the determination of targets for variable com-
pensation, the determination and review of the appropriateness
of Managing Board compensation and the approval of the Com-
pensation Report.
The Mediation Committee did not have to meet.
The Compliance Committee met four times. It primarily dis-
cussed the quarterly reports and the annual report of the Chief
Compliance Officer.
The Nominating Committee met once. It concerned itself with
the long-term succession planning for the Supervisory Board and
prepared the Supervisory Board's proposal to the Annual Share-
holders' Meeting on January 26, 2016, regarding the early reelec-
tion of three shareholder representatives on the Supervisory
Board. The Nominating Committee based this decision on the
consideration that a high degree of continuity beyond the year
2018 and the regular election of Supervisory Board members
scheduled for that year would also have to be guaranteed in the
work of the Supervisory Board in order to ensure the successful
implementation of Siemens "Vision 2020".
the assumption by Managing Board members of positions at
other companies and institutions.
The Chairman's Committee met five times. It also made five
decisions by written circulation. Between meetings, I discussed
topics of major importance with the members of the Chairman's
Committee. The Committee concerned itself, in particular, with
personnel topics and corporate governance issues as well as with
AND CONTROL STRUCTURE.
WORK IN THE SUPERVISORY BOARD COMMITTEES
The Supervisory Board has established seven standing commit-
tees, which prepare proposals and issues to be dealt with at its
plenary meetings. Some of the Supervisory Board's decision-
making powers have also been delegated to these committees
within the permissible legal framework. The committee chairper-
sons report to the Supervisory Board on their committees' work
at the subsequent Board meetings. A list of the members and a
detailed explanation of the tasks of the individual Supervisory
Board committees are contained in chapter c.4.1 MANAGEMENT
SECTION 289A OF THE GERMAN COMMERCIAL CODE.
At our meeting on September 23, 2016, we approved an unqual-
ified Declaration of Conformity in accordance with Section 161 of
the German Stock Corporation Act (Aktiengesetz). Information
on corporate governance at Siemens is available in chapter
→ C.4 CORPORATE GOVERNANCE. Our Declaration of Conformity has
been made permanently available to our shareholders on our
website. The current Declaration of Conformity is also available
in chapter c.4.2 CORPORATE GOVERNANCE STATEMENT PURSUANT TO
122 Additional Information
Siemens AG is subject to German corporate law. Therefore, it has
a two-tier board structure, consisting of a Managing Board and a
Supervisory Board.
C.4.1.1 MANAGING BOARD
As the Company's top management body, the Managing Board is
committed to serving the interests of the Company and achieving
sustainable growth in company value. The members of the Man-
aging Board are jointly responsible for the entire management of
the Company and decide on the basic issues of business policy
and corporate strategy as well as on the Company's annual and
multi-year plans.
Klaus Helmrich
July 31,
2019
August 1,
2014
October 15,
1963
Lisa Davis
March 31,
2021
2011
1964
Dr. rer. nat.
November 22, April 1,
Roland Busch,
July 31,
2018
Term expires
First
appointed
May 1,
2006
June 23,
1957
Date of birth
Chief Executive Officer
President and
Joe Kaeser
Name
In fiscal 2016, the Managing Board comprised the following
members:
Members of the Managing Board and positions
held by Managing Board members
124 Additional Information
REPORT.
Information on the compensation paid to the members of the
Managing Board is provided in chapter → A.10 COMPENSATION
In fiscal 2016, the committee comprised Joe Kaeser (Chairman),
Janina Kugel and Dr. Ralf P. Thomas.
Currently, there is one Managing Board committee, the Equity
and Employee Stock Committee. This committee oversees, in par-
ticular, the utilization of authorized capital in connection with
the issuance of employee stock and the implementation of cer-
tain capital measures. It also determines the scope and condi-
tions of the share-based compensation components and/or pro-
grams for employees and managers (with the exception of the
Managing Board).
Board cooperate closely for the benefit of the Company. The
Managing Board informs the Supervisory Board regularly, com-
prehensively and without delay on all issues of importance to the
Company with regard to strategy, planning, business develop-
ment, financial position, earnings, compliance and risks. When
filling managerial positions at the Company, the Managing Board
takes diversity into consideration and, in particular, aims for an
appropriate consideration of women and internationality. The
Managing Board has defined targets for the proportion of women
at the two management levels below the Managing Board.
The Managing Board prepares the Company's Quarterly State-
ments and Half-year Financial Report, the Annual Financial State-
ments of Siemens AG, the Consolidated Financial Statements
and the Combined Management Report of Siemens AG and the
Siemens Group. In addition, the Managing Board must ensure
that the Company adheres to statutory requirements, official reg-
ulations and internal Company policies (compliance) and works
to achieve compliance with these provisions and policies within
the Siemens Group. The Managing Board and the Supervisory
CORPORATE GOVERNANCE CODE
April 1,
2011
At our meeting on September 23, 2016, the Managing Board re-
ported to us on the state of the Company and on the business
position of the Energy Management, Power and Gas, and Power
Generation Services Divisions. As part of our regular review, we
adjusted - following preparation by the Compensation Commit-
tee - the amount of Managing Board compensation for fiscal 2017.
After the Supervisory Board and Prof. Dr. Siegfried Russwurm had
mutually agreed that his contract, which expires on March 31,
2017, would not be renewed, the Supervisory Board decided, as
recommended by the Chairman's Committee, not to extend
Prof. Dr. Siegfried Russwurm's Managing Board appointment,
which is in effect until March 31, 2017. Finally, we discussed the
efficiency review of our activities.
121
June 27,
1963
January 1,
2008
March 31,
2017
Ralf P. Thomas,
Dr. rer. pol.
March 7,
1961
March 13,
1971
September 18, September 17,
2013
2018
Memberships in supervisory boards whose establishment is required by law
or in comparable domestic or foreign controlling bodies of business enterprises
External positions
(as of September 30, 2016)
German positions:
> Allianz Deutschland AG, Munich
> Daimler AG, Stuttgart
Siegfried Russwurm,
Prof. Dr.-Ing.
Positions outside Germany:
German positions:
> OSRAM Licht AG, Munich
(Deputy Chairman)
> OSRAM GmbH, Munich
(Deputy Chairman)
Positions outside Germany:
> Atos SE, France
German positions:
> EOS Holding AG, Krailling
> inpro Innovationsgesellschaft
für fortgeschrittene Produktions-
systeme in der Fahrzeugindustrie
mbH, Berlin
German positions:
> Pensions-Sicherungs-Verein
Versicherungsverein auf Gegen-
seitigkeit, Cologne
Positions outside Germany:
> Konecranes Plc., Finland
German positions:
> Deutsche Messe AG, Hanover
Group company positions
(as of September 30, 2016)
> NXP Semiconductors B.V.,
Netherlands
January 31,
2020
February 1,
2015
January 12,
1970
Additional Information
At our meeting on August 3, 2016, the Managing Board reported
to us on the Company's business and financial position follow-
ing the conclusion of the third quarter - in particular, on the
status of the planned merger of Siemens Wind Power with the
publicly-listed Spanish company Gamesa Corporación Tecno-
lógica, S.A. as well as on the status of the implementation of
Siemens "Vision 2020". We also dealt with the business model and
At our meeting on May 3, 2016, the Managing Board reported to
us on the Company's current business and financial position fol-
lowing the conclusion of the second quarter. We also discussed
the strategic orientation of the Digital Factory Division. In addi-
tion, the Managing Board reported in detail on the Company's
participation in the 2016 Hannover Messe. The Managing Board
also provided a report on the personnel strategy that the Com-
pany was pursuing in order to foster leadership development.
Following preparation by the Audit Committee, the Supervisory
Board concerned itself with the changed legal requirements re-
sulting from the European Union (EU) rules on statutory audits
and the German Audit Reform Act and, in this context, approved
an amendment to the Bylaws for the Audit Committee.
At our extraordinary meeting on February 9, 2016, we approved
the planned merger of Siemens' wind power business with the
publicly-listed Spanish company Gamesa Corporación Tecno-
lógica, S.A.
At our meeting on January 25, 2016, the Managing Board re-
ported to us on the Company's business and financial position
following the conclusion of the first quarter. The Supervisory
Board approved the acquisition of the U.S.-based simulation soft-
ware company CD-adapco Ltd. The Managing Board also reported
on the further development of the organizational setup of the
Process Industries and Drives Division.
On December 2, 2015, we discussed the financial statements and
the Combined Management Report for Siemens AG and the
Siemens Group as of September 30, 2015, and the Annual Report
for 2015, including the Report of the Supervisory Board, the Cor-
porate Governance Report and the Compensation Report as well
as the agenda for the Annual Shareholders' Meeting on Janu-
ary 26, 2016. The Managing Board reported on the current status
of acquisitions and divestments – in particular, on the status of
the integration of the Dresser Rand Group Inc., which had been
acquired, and of the aeroderivative gas turbine and compressor
business acquired from Rolls-Royce plc as well as on the status of
the implementation of the Siemens "Vision 2020" strategy. We
also discussed the annual report of the Chief Compliance Officer.
the Company's stake in Unify Holdings B.V. At this meeting, we
also approved a share buyback with a volume of up to €3 billion
extending through November 15, 2018 at the latest.
At our meeting on November 11, 2015, we discussed the Compa-
ny's key financial figures for fiscal 2015 and approved the budget
for 2016. On the basis of reported target achievement, we also
defined the compensation of the Managing Board members for
fiscal 2015. The appropriateness of this compensation was con-
firmed by an internal review. On the recommendation of the
Compensation Committee, we also approved the targets for Man-
aging Board compensation for fiscal 2016. The remuneration sys-
tem for the Managing Board members for fiscal 2016 is un-
changed vis-à-vis the remuneration system for fiscal 2015, which
the Annual Shareholders' Meeting approved by a majority of
more than 92% on January 27, 2015. At our meeting on Novem-
ber 11, 2015, the Managing Board also informed us about the
Company's business position, plans for the future setup of
Siemens' Process Industries and Drives Division, and the sale of
We held a total of six regular plenary meetings and one extraor-
dinary Supervisory Board meeting in fiscal 2016. Topics of discus-
sion at our regular plenary meetings were revenue, profit and
employment development at Siemens AG, at the Company's op-
erating units and at the Siemens Group as well as the Company's
financial position and the results of its operations. We also con-
cerned ourselves as required with major investment and divest-
ment projects and with particular risks to the Company.
TOPICS AT THE PLENARY MEETINGS
OF THE SUPERVISORY BOARD
In fiscal 2016, the Supervisory Board performed, in accordance
with its obligations, the duties assigned to it by law, the Siemens
Articles of Association and the Bylaws for the Supervisory Board.
We regularly advised the Managing Board on the management
of the Company and monitored the Managing Board's activities.
We were directly involved at an early stage in all major decisions
regarding the Company. In written and oral reports, the Manag-
ing Board regularly provided us with timely and comprehensive
information on Company planning and business operations as
well as on the strategic development and current state of the
Company. On the basis of reports submitted by the Managing
Board, we considered in detail business development and all de-
cisions and transactions of major significance to the Company.
Deviations from business plans were explained to us in detail and
intensively discussed. The Managing Board coordinated the Com-
pany's strategic orientation with us. The proposals made by the
Managing Board were approved by the Supervisory Board and/or
the relevant Supervisory Board committees after in-depth exam-
ination and consultation. In my capacity as Chairman of the Su-
pervisory Board, I was also in regular contact with the Managing
Board and, in particular, with the President and Chief Executive
Officer and was kept up-to-date on current developments in the
Company's business situation and on key business transactions.
Berlin and Munich, November 30, 2016
C.3 Report of the Supervisory Board
120 Additional Information
[German Public Auditor]
Wirtschaftsprüferin
Breitsameter
Buiber
[German Public Auditor]
Spannagl
Wirtschaftsprüfer
дашия
Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft
Munich, November 28, 2016
In our opinion, based on the findings of our audit of the consol-
idated financial statements and group management report, the
group management report is consistent with the consolidated
financial statements, and as a whole provides a suitable view of
the Group's position and suitably presents the opportunities and
risks of future development.
Pursuant to Sec. 322 (3) Sentence 1 HGB, we state that our audit
of the group management report has not led to any reservations.
We have audited the accompanying group management report,
which is combined with the management report of Siemens
Aktiengesellschaft, for the business year from October 1, 2015 to
September 30, 2016. The management of the company is respon-
sible for the preparation of the group management report in
compliance with the applicable requirements of German commer-
cial law pursuant to Sec. 315a (1) HGB. We are required to conduct
our audit in accordance with Sec. 317 (2) HGB and German gener-
ally accepted standards for the audit of the group management
report promulgated by the IDW. Accordingly, we are required to
plan and perform the audit of the group management report to
obtain reasonable assurance about whether the group manage-
ment report is consistent with the consolidated financial state-
ments and the audit findings, and as a whole provides a suitable
view of the Group's position and suitably presents the opportuni-
ties and risks of future development.
REPORT ON THE GROUP MANAGEMENT REPORT
March 31,
2021
Janina Kugel
business situation of the Financial Services Division. In addition,
the Managing Board informed us in detail about regional busi-
ness developments in the U.S. At the same meeting, the Super-
visory Board also approved various Managing Board proposals
regarding financing measures. Finally, as part of a focus on tech-
nology, the Supervisory Board concerned itself with the next47
initiative, the establishment of a separate unit for startups, and
with the activities and recommendations of the Siemens Tech-
nology & Innovation Council.
January 23,
2013
German positions:
January 24,
2008
Sibylle Wankel*
October 1,
2013
October 27,
1965
Supervisory Board Member
September 13, March 1,
1957
2014
1971
Chairman of the Committee
of Spokespersons of the Siemens
Group; Chairman of the Central
Committee of Spokespersons
of Siemens AG
Chairwoman and Managing Director
of Hacı Ömer Sabancı Holding A.Ş.
Managing Director and Spokesperson July 14,
of Siemens Stiftung
January 27,
2015
January 23,
2013
Jim Hagemann Snabe
Michael Sigmund*
General Counsel, Managing Board
of IG Metall
Nathalie von Siemens,
Dr. phil.
> Henkel AG & Co. KGaA, Düsseldorf¹
Aktiengesellschaft, Munich (Chairman)
Bayerische Motoren Werke
> ENGIE S.A., France (Chairman)
> Société Générale S.A., France
> Suez S.A., France (Chairman)
German positions:
> Voith GmbH, Heidenheim
Positions outside Germany:
> Axel Springer SE, Berlin
German positions:
> Premium Aerotec GmbH, Augsburg
(Deputy Chairman)
> Airbus Operations GmbH, Hamburg
> MAN SE, Munich (Deputy Chairman)
German positions:
January 27,
2015
May 29,
1956
Güler Sabancı
March 3,
1964
April 1,
2009
1 Shareholders' Committee.
March 16,
1960
> Siemens Ltd., India
128 Additional Information
The Chairman's Committee makes proposals, in particular,
regarding the appointment and dismissal of Managing Board
members and handles contracts with members of the Managing
Board. When making recommendations for first-time appoint-
ments, it takes into account that the terms of these appoint-
ments shall not, as a rule, exceed three years. In preparing rec-
ommendations on the appointment of Managing Board members,
the Chairman's Committee takes into account the candidates'
professional qualifications, international experience and leader-
ship qualities, the age limit specified for Managing Board mem-
bers, the Managing Board's long-range plans for succession as
well as its diversity. It also takes into account the targets for the
proportion of women on the Managing Board specified by the
Supervisory Board. The Chairman's Committee concerns itself
with questions regarding the Company's corporate governance
and prepares the resolutions to be approved by the Supervisory
Board regarding the Declaration of Conformity with the Code -
The Supervisory Board has seven committees, whose duties, re-
sponsibilities and procedures fulfill the requirements of the Ger-
man Stock Corporation Act (Aktiengesetz) and the Code. The
chairmen of these committees provide the Supervisory Board
with regular reports on their committees' activities.
Supervisory Board Committees
-
These objectives for the Supervisory Board's composition have
been fully achieved: a considerable number of Supervisory Board
members are currently engaged in international activities and/or
have many years of international experience. Since the Super-
visory Board election in 2015, the Supervisory Board has had six
female members. Dr. Nicola Leibinger-Kammüller is a member of
the Nominating Committee. The Supervisory Board has an ade-
quate number of independent members. In the opinion of the
Supervisory Board, a minimum of 16 Supervisory Board members
are independent in the meaning of Section 5.4.2 of the Code.
Some Supervisory Board members hold – or have held in the past
fiscal year high-ranking positions at other companies with
which Siemens does business. Transactions between Siemens
and such companies are carried out on an arm's-length basis. We
believe that these transactions do not compromise the indepen-
dence of the Supervisory Board members in question. The regu-
lations establishing limits on age and limiting membership in the
Supervisory Board to three full terms of office (15 years) are com-
plied with.
> The limits on age and length of membership established in the
Bylaws for the Supervisory Board will be taken into consider-
ation. In addition, no more than two former members of the
Managing Board of Siemens AG shall belong to the Super-
visory Board.
be able to devote the necessary regularity and diligence to
their mandate.
> An adequate number of independent members shall belong to
the Supervisory Board. Material and not only temporary con-
flicts of interest, such as organizational functions or advisory
capacities with major competitors of the Company, shall be
avoided. Under the presumption that the mere exercise of
Supervisory Board duties as an employee representative gives
no cause to doubt the compliance with the independence cri-
teria pursuant to Section 5.4.2 of the Code, the Supervisory
Board shall have a minimum of sixteen members who are in-
dependent in the meaning of the Code. In any case, the Super-
visory Board shall be composed in such a way that a number
of at least six independent shareholder representatives in the
meaning of Section 5.4.2 of the Code is achieved. In addition,
the Supervisory Board members shall have sufficient time to
> In its election proposals, the Supervisory Board shall also pay
particular close attention to ensuring diversity. In accordance
with the German Law for Equal Participation of Women and
Men in Management Positions in the Private and Public Sec-
tors, the Supervisory Board is composed of at least 30 percent
women and at least 30 percent men. The Nominating Commit-
tee shall continue to include at least one female member.
Qualified women shall be included during the initial process
of selecting potential candidates for new elections or for the
filling of Supervisory Board positions that have become va-
cant, and they shall be given appropriate consideration in
nominations.
> The composition of the Supervisory Board of Siemens AG shall
be such that qualified control and advice for the Managing
Board is ensured. The candidates proposed for election to the
Supervisory Board shall have the expertise, skills and profes-
sional experience necessary to carry out the functions of a
Supervisory Board member in a multinational company and
safeguard the reputation of Siemens in public. In particular,
care shall be taken in regard to the personality, integrity, com-
mitment, professionalism and independence of the individuals
proposed for election. The goal is to ensure that, in the Super-
visory Board, as a group, all know-how and experience is avail-
able that is considered essential in view of Siemens' activities.
➤ Taking the Company's international orientation into account,
care shall also be taken to ensure that the Supervisory Board
has an adequate number of members with extensive inter-
national experience. Our goal is to make sure that the present
considerable share of Supervisory Board members with exten-
sive international experience is maintained.
Objectives of the Supervisory Board's composition
The composition of the Supervisory Board is to be such that its
members as a group have the knowledge, skills and professional
experience necessary to perform its duties properly. In fiscal
2015, the Supervisory Board - taking into account the recom-
mendations of the German Corporate Governance Code (Code)
– approved the following concrete objectives for its composition:
127
Additional Information
> Daimler AG, Stuttgart
German positions:
Bang & Olufsen A/S, Denmark
(Deputy Chairman)
> A.P. Møller-Mærsk A/S, Denmark
Positions outside Germany:
> SAP SE, Walldorf
> Allianz SE, Munich
German positions:
> Siemens Healthcare GmbH, Munich
> Messer Group GmbH, Sulzbach
German positions:
Chairman of the Supervisory Board
of Bayerische Motoren Werke
Aktiengesellschaft
January 23,
2013
August 14,
1955
Chairman of the Board of Directors
of ENGIE S.A.
President and Chairwoman of the
Managing Board of TRUMPF GmbH
+ Co. KG
Norbert Reithofer, Dr.-Ing.
Dr.-Ing. E.h.
Gérard Mestrallet
Nicola Leibinger-
Kammüller, Dr. phil.
January 25,
2012
1969
January 22,
April 1,
1949
2008
December 15, January 24,
1959
Gérard Mestrallet
17
17
Bettina Haller
100%
7
5
7
100%
100%
18
71%
11
10
91%
-
Reinhard Hahn
7
Hans-Jürgen Hartung
7
100%
18
18
Nicola Leibinger-Kammüller, Dr. phil.
88%
22
25
Jürgen Kerner
100%
15
15
Harald Kern
100%
20
including the explanation of deviations from the Code and
regarding the approval of the Corporate Governance Report as
well as the Report of the Supervisory Board to the Annual Share-
holders' Meeting. Furthermore, the Chairman's Committee sub-
mits recommendations to the Supervisory Board regarding the
composition of the Supervisory Board committees and decides
whether to approve contracts and business transactions with
Managing Board members and parties related to them.
Robert Kensbock
100%
7
20
The Compensation Committee prepares, in particular, the pro-
posals for decisions by the Supervisory Board's plenary meetings
regarding the system of Managing Board compensation, includ-
ing the implementation of this system in Managing Board con-
tracts, the definition of the targets for variable Managing Board
compensation, the determination and review of the appropriate-
ness of the total compensation of individual Managing Board
members and the approval of the annual Compensation Report.
In fiscal 2016, the Compensation Committee comprised Werner
Wenning (Chairman), Dr. Gerhard Cromme, Michael Diekmann,
Robert Kensbock, Jürgen Kerner and Birgit Steinborn.
30
100%
29
29
Güler Sabancı
100%
(Second Deputy Chairman)
20
20
30
100%
7
6
86%
Michael Diekmann
10
9
90%
Hans Michael Gaul, Dr. iur.
18
Olaf Bolduan
Presence
Participation
and Committee meetings
The Audit Committee oversees, in particular, the accounting
process and conducts a preliminary review of the Annual Finan-
cial Statements of Siemens AG, the Consolidated Financial State-
ments and the Combined Management Report of Siemens AG
and the Siemens Group. On the basis of the independent audi-
tors' report on their audit of the annual financial statements, the
Audit Committee makes, after its preliminary review, recom-
mendations regarding Supervisory Board approval of the Annual
Financial Statements of Siemens AG and the Consolidated Finan-
cial Statements. The Audit Committee discusses the Quarterly
Statements and Half-year Financial Report with the Managing
Board and independent auditors and deals with the auditors' re-
port on the review of the Half-year Consolidated Financial State-
ments and Interim Group Management Report. It concerns itself
with the Company's risk monitoring system and oversees the
effectiveness of the internal control, risk management and the
internal audit systems. The Audit Committee receives regular re-
ports from the Internal Audit Department. It prepares the Super-
visory Board's recommendation to the Annual Shareholders'
Meeting concerning the election of the independent auditors and
submits the corresponding proposal to the Supervisory Board. It
awards the audit contract to the independent auditors elected by
the Annual Shareholders' Meeting and monitors the independent
audit of the financial statements as well as the auditors' selec-
tion, independence, qualification, rotation and efficiency.
In fiscal 2016, the Audit Committee comprised Dr. Hans Michael
Gaul (Chairman), Dr. Gerhard Cromme, Bettina Haller, Robert
Kensbock, Jürgen Kerner, Dr. Nicola Leibinger-Kammüller, Jim
Hagemann Snabe and Birgit Steinborn. Pursuant to the German
Stock Corporation Act, the Audit Committee must include at least
one Supervisory Board member with knowledge and experience
in the areas of accounting or the auditing of financial statements.
Pursuant to the Code, the chairman or chairwoman of the Audit
Committee shall have specialist knowledge and experience in the
application of accounting principles and internal control pro-
cesses, shall be independent and may not be a former Managing
Board member whose appointment ended less than two years
ago. The Chairman of the Audit Committee, Dr. Hans Michael
Gaul, fulfills these requirements.
The Compliance Committee concerns itself, in particular, with
monitoring the Company's adherence to statutory provisions,
official regulations and internal Company policies.
In fiscal 2016, the Compliance Committee comprised Dr. Gerhard
Cromme (Chairman), Dr. Hans Michael Gaul, Bettina Haller, Harald
Kern, Dr. Nicola Leibinger-Kammüller, Jim Hagemann Snabe,
Birgit Steinborn and Sibylle Wankel.
The Nominating Committee is responsible for making recom-
mendations to the Supervisory Board on suitable candidates for
election as shareholder representatives on the Supervisory Board
by the Annual Shareholders' Meeting. In preparing these recom-
mendations, the objectives specified by the Supervisory Board
regarding its composition - including, in particular, indepen-
dence and diversity – are to be taken into account as well as the
required knowledge, abilities and professional experience of the
proposed candidates. Attention shall also be paid to an appropri-
ate participation of women and men in accordance with the legal
requirements relating to the gender quota.
In fiscal 2016, the Nominating Committee comprised Dr. Gerhard
Cromme (Chairman), Dr. Hans Michael Gaul, Dr. Leibinger-
Kammüller and Werner Wenning.
The Mediation Committee submits proposals to the Supervisory
Board in the event that the Supervisory Board cannot reach the
two-thirds majority required for the appointment or dismissal of
a Managing Board member.
In fiscal 2016, the Mediation Committee comprised Dr. Gerhard
Cromme (Chairman), Jürgen Kerner, Birgit Steinborn and Werner
Wenning.
The Innovation and Finance Committee discusses, in particular,
based on the Company's overall strategy, the Company's focuses
of innovation and prepares the Supervisory Board's discussions
Additional Information
129
―
and resolutions regarding questions relating to the Company's
financial situation and structure - including annual planning
(budget) - as well as the Company's fixed asset investments and
its financial measures. In addition, the Innovation and Finance
Committee has been authorized by the Supervisory Board to
decide on the approval of transactions and measures that require
Supervisory Board approval and have a value of less than
€600 million.
In fiscal 2016, the Innovation and Finance Committee comprised
Dr. Gerhard Cromme (Chairman), Robert Kensbock, Harald Kern,
Jürgen Kerner, Dr. Norbert Reithofer, Jim Hagemann Snabe, Birgit
Steinborn and Werner Wenning.
Disclosure of participation by individual Super-
visory Board members in meetings of the Super-
visory Board of Siemens AG and its Committees
in fiscal 2016
Supervisory Board Members
Gerhard Cromme, Dr. iur.
(Chairman)
Birgit Steinborn
(First Deputy Chairwoman)
Werner Wenning
Supervisory Board
In fiscal 2016, the Chairman's Committee comprised Dr. Gerhard
Cromme (Chairman), Jürgen Kerner, Birgit Steinborn and Werner
Wenning.
7
131
100%
For technical reasons, there may be differences between the
accounting records appearing in this document and those pub-
lished pursuant to legal requirements.
This document is an English language translation of the German
document. In case of discrepancies, the German language docu-
ment is the sole authoritative and universally valid version.
Due to rounding, numbers presented throughout this and other
documents may not add up precisely to the totals provided and
percentages may not precisely reflect the absolute figures.
This document includes - in the applicable financial reporting
framework not clearly defined – supplemental financial mea-
sures that are or may be alternative performance measures
(non-GAAP-measures). These supplemental financial measures
should not be viewed in isolation or as alternatives to measures
of Siemens' net assets and financial positions or results of opera-
tions as presented in accordance with the applicable financial
reporting framework in its Consolidated Financial Statements.
Other companies that report or describe similarly titled alterna-
tive performance measures may calculate them differently.
-
This document contains statements related to our future business
and financial performance and future events or developments
involving Siemens that may constitute forward-looking state-
ments. These statements may be identified by words such as
"expect," "look forward to," "anticipate," "intend," "plan," "believe,"
"seek," "estimate," "will," "project" or words of similar meaning.
We may also make forward-looking statements in other reports,
in presentations, in material delivered to shareholders and in
press releases. In addition, our representatives may from time to
time make oral forward-looking statements. Such statements are
based on the current expectations and certain assumptions of
Siemens' management, of which many are beyond Siemens' con-
trol. These are subject to a number of risks, uncertainties and
factors, including, but not limited to those described in disclo-
sures, in particular in the chapter Risks in this Annual Report.
Should one or more of these risks or uncertainties materialize,
or should underlying expectations not occur or assumptions
prove incorrect, actual results, performance or achievements of
Siemens may (negatively or positively) vary materially from those
described explicitly or implicitly in the relevant forward-looking
statement. Siemens neither intends, nor assumes any obligation,
to update or revise these forward-looking statements in light of
developments which differ from those anticipated.
C.5 Notes and forward-looking statements
Additional Information
The "Sustainability Information 2016” which reports on Sustain-
ability and Citizenship at Siemens is available at:
132
At Siemens AG, the target for the share of women on the Manag-
ing Board has been set at a minimum of 2/7 and the correspond-
ing target for each of the two management levels immediately
below the Managing Board has been set at 10%, applicable in
each case until June 30, 2017.
C.4.2.4 TARGETS FOR THE QUOTA OF WOMEN
ON THE MANAGING BOARD AND AT THE TWO
MANAGEMENT LEVELS IMMEDIATELY BELOW
THE MANAGING BOARD; INFORMATION ON SUPER-
VISORY BOARD COMPLIANCE WITH MINIMUM
GENDER QUOTA REQUIREMENTS
This information and these documents, including the Code and
the Business Conduct Guidelines, are available at: www.
SIEMENS.COM/289A
A general description of the functions and operation of the Man-
aging Board and the Supervisory Board can be found in chapter
C.4.1 MANAGEMENT AND CONTROL STRUCTURE. Further details can
be derived from the bylaws for the corporate bodies concerned.
C.4.2.3 OPERATION OF THE MANAGING BOARD
AND THE SUPERVISORY BOARD, AND COMPOSITION
AND OPERATION OF THEIR COMMITTEES
The Business Conduct Guidelines provide the ethical and legal
framework within which we want to maintain our successful ac-
tivities. They contain the basic principles and rules for our con-
duct within our Company and in relation to our external partners
and the general public. They set out how we meet our ethical and
legal responsibility as a Company and give expression to our cor-
porate values of being "Responsible" - "Excellent" - "Innovative".
Our Company's values and Business Conduct
Guidelines
Further corporate governance practices applied beyond legal
requirements are contained in our Business Conduct Guidelines.
The composition of the Supervisory Board fulfilled the legal re-
quirements regarding the minimum gender quota in the report-
ing period.
COM/INVESTOR/EN/
WWW.SIEMENS.
Additional Information
Order no. CGXX-C10020-00-7600
siemens.com
AUTOMATION
ELECTRIFICATION
DIGITALIZATION
© 2016 by Siemens AG, Berlin and Munich
investorrelations@siemens.com
+49 89 636-33443 (Media Relations)
+49 89 636-32474 (Investor Relations)
+49 89 636-30085 (Media Relations)
+49 89 636-1332474 (Investor Relations)
press@siemens.com
E-mail
Fax
Phone
WWW.SIEMENS.COM
Germany
80333 Munich
Wittelsbacherplatz 2
Siemens AG
Internet
Address
133
Pursuant to Section 3.7 para. 3 of the Code, in the case of a take-
over offer, a management board should convene an extraordi-
nary general meeting at which shareholders discuss the takeover
offer and may decide on corporate actions. The convening of a
shareholders' meeting – even taking into account the shortened
time limits stipulated in the German Securities Acquisition and
Takeover Act (Wertpapiererwerbs- und Übernahmegesetz) - is an
organizational challenge for large publicly listed companies. It
appears doubtful whether the associated effort is justified in
cases where no relevant decisions by the shareholders' meeting
are intended. Therefore, extraordinary shareholders' meetings
shall be convened only in appropriate cases.
7
Siemens voluntarily complies with the Code's non-binding sug-
gestions, with the following exception:
C.4.2.2 INFORMATION ON CORPORATE
GOVERNANCE PRACTICES
Additional Information
130
100%
11
11
Sibylle Wankel
100%
21
C.4.1.3 SHARE OWNERSHIP AND SHARE TRANS-
ACTIONS BY MEMBERS OF THE MANAGING AND
SUPERVISORY BOARDS
21
100%
7
7
Michael Sigmund
100%
7
7
Nathalie von Siemens, Dr. phil.
Jim Hagemann Snabe
As of September 30, 2016, the Managing Board's current mem-
bers held a total of 205,009 Siemens shares, representing 0.02%
of the capital stock of Siemens AG, which totaled 850,000,000
shares.
As of the same date, the Supervisory Board's current members
held Siemens shares representing less than 0.01% of the capital
stock of Siemens AG, which totaled 850,000,000 shares. These
figures do not include the 10,878,800 shares (as of Septem-
ber 30, 2016) or 1.28% of the capital stock of Siemens AG, which
totaled 850,000,000 shares, over which the von Siemens-
Vermögensverwaltung GmbH (vSV) has voting control under
powers of attorney based on an agreement between among
others - members of the Siemens family, including Dr. Natalie
von Siemens, and VSV. These shares are voted together by vSV,
taking into account the proposals of a family partnership estab-
lished by the family's members or of one of its governing bodies.
-
The Managing Board The Supervisory Board"
Siemens Aktiengesellschaft
Berlin and Munich, October 1, 2016
Since making its last Declaration of Conformity dated Octo-
ber 1, 2015, Siemens AG has complied with the recommenda-
tions of the Code.
Siemens AG fully complies and will continue to comply with
the recommendations of the German Corporate Governance
Code ("Code") in the version of May 5, 2015, published by the
Federal Ministry of Justice in the official section of the Fed-
eral Gazette ("Bundesanzeiger").
"Declaration of Conformity by the Managing Board and the
Supervisory Board of Siemens Aktiengesellschaft with the
German Corporate Governance Code
THE GERMAN CORPORATE GOVERNANCE CODE
The Managing Board and the Supervisory Board of Siemens AG
approved the following Declaration of Conformity pursuant to
Section 161 of the German Stock Corporation Act as of Octo-
ber 1, 2016:
C.4.2.1 DECLARATION OF CONFORMITY WITH
Additional Information
The Corporate Governance statement pursuant to Section 289a
of the German Commercial Code (Handelsgesetzbuch) is an inte-
gral part of the Combined Management Report. In accordance
with Section 317 para. 2 sentence 3 of the German Commercial
Code, the disclosures made within the scope of Section 289a
of the German Commercial Code are not subject to the audit by
the auditors.
C.4.2 Corporate Governance
statement pursuant to Section 289a
of the German Commercial Code
C.4.1.4 ANNUAL SHAREHOLDERS' MEETING
AND INVESTOR RELATIONS
Shareholders exercise their rights in the Annual Shareholders'
Meeting. An ordinary Annual Shareholders' Meeting normally
takes place within the first four months of each fiscal year. The
Annual Shareholders' Meeting decides, among other things, on
the appropriation of unappropriated net income, the ratification
of the acts of the Managing and Supervisory Boards, and the
appointment of the independent auditors. Amendments to the
Articles of Association and measures that change the Company's
capital stock are approved at the Annual Shareholders' Meeting
and are implemented by the Managing Board. The Managing
Board facilitates shareholder participation in this meeting
through electronic communications – in particular, via the Inter-
net and enables shareholders who are unable to attend the
WWW.SIEMENS.COM/CORPORATE-GOVERNANCE
Our Articles of Association, the Bylaws for the Supervisory Board,
the Bylaws for the most important Supervisory Board commit-
tees, the Bylaws for the Managing Board, all our Declarations
of Conformity with the Code and a variety of other corporate-
governance-related documents are posted on our website at:
WWW.SIEMENS.COM/INVESTORS
As part of our investor relations activities, we inform our inves-
tors comprehensively about developments within the Company.
For communication purposes, Siemens makes extensive use of
the Internet. We publish quarterly statements, half-year financial
and annual reports, earnings releases, ad hoc announcements,
analyst presentations, letters to shareholders and press releases
as well as the financial calendar for the current year, which con-
tains the publication dates of significant financial communica-
tions and the date of the Annual Shareholders' Meeting, at:
meeting to vote by proxy. Furthermore, shareholders may exer-
cise their right to vote in writing or by means of electronic com-
munications (absentee voting). The Managing Board may enable
shareholders to participate in the Annual Shareholders' Meeting
without the need to be present at the venue and without a proxy
and to exercise some or all of their rights fully or partially by
means of electronic communications. Shareholders may submit
proposals regarding the proposals of the Managing and Super-
visory Boards and may contest decisions of the Annual Share-
holders' Meeting. Shareholders owning Siemens stock with an
aggregate notional value of €100,000 or more may also demand
the judicial appointment of special auditors to examine specific
issues. The reports, documents and information required by law,
including the Annual Report, may be downloaded from our web-
site. The same applies to the agenda for the Annual Shareholders'
Meeting and to any counterproposals or shareholders' nomina-
tions that require disclosure.
WWW.SIEMENS.COM/DIRECTORS-DEALINGS
Pursuant to Article 19 of EU Regulation No. 596/2014 of the Euro-
pean Parliament and Council on market abuse (Market Abuse
Regulation), members of the Managing Board and the Super-
visory Board are legally required to disclose all transactions con-
ducted on their own account relating to the shares or debt instru-
ments of Siemens AG or to derivatives or financial instruments
linked thereto if the total value of such transactions entered into
by a board member or any closely associated person reaches or
exceeds €5,000 in any calendar year. All transactions reported to
Siemens AG in accordance with this requirement have been duly
published and are available on the Company's website at:
Suggestions of the Code
In the 169 years of its existence, our Company has built an excel-
lent reputation around the world. Technical performance, inno-
vation, quality, reliability, and international engagement have
made Siemens one of the leading companies in electronics and
electrical engineering. It is top performance with the highest eth-
ics that has made Siemens strong. This is what the Company
should continue to stand for in the future.
Norbert Reithofer, Dr.-Ing. Dr.-Ing. E.h.
0%
16,769 15,263
therein: U.S.
Orders (location of customer)
1%
5%
(5)%
(4)%
8%
10%
8%
therein: Germany
Americas
Europe, C.I.S., Africa,
Middle East
% Change
Comp.
Actual
Fiscal year
2015
2016
(in millions of €)
Revenue (location of customer)
41,819 38,799
10,739 11,244
22,707
21,702
and in Healthineers. These increases were partly offset by de-
creases in Mobility, in Wind Power and Renewables and in Process
Industries and Drives.
3%
15,118
5%
75,636
79,644
Siemens
Comp.
Actual
(6)%
(7)%
Asia, Australia
6,938
therein: China
% Change
Fiscal year
2015
2016
(in millions of €)
(1)%
0%
15,135
6,439
4%
Negative currency translation effects took one percentage point
each from order and revenue development; portfolio effects
added one percentage point to order development and two per-
centage points to revenue growth. The resulting ratio of orders
to revenue (book-to-bill) for Siemens in fiscal 2016 was 1.09,
again well above 1. The order backlog (defined as the sum of
order backlogs of the industrial businesses) was €113 billion as of
September 30, 2016.
A.3 Results of operations
Less: Taxes on interest adjustments
Less: Interest adjustments
(discontinued operations)
The proposed dividend of €3.60 per share for fiscal 2016 rep-
resents a total payout of €2.9 billion based on the estimated
number of shares entitled to dividend at the date of the Annual
Shareholders' Meeting. Based on net income of €5.6 billion for
fiscal 2016, the dividend payout percentage is 52%.
At the Annual Shareholders' Meeting, the Managing Board, in
agreement with the Supervisory Board, will submit the follow-
ing proposal to allocate the unappropriated net income of
Siemens AG for fiscal 2016: to distribute a dividend of €3.60 on
each share of no par value entitled to the dividend for fiscal year
2016 existing at the date of the Annual Shareholders' Meeting,
with the remaining amount to be carried forward. Payment of the
proposed dividend is contingent upon approval by Siemens
shareholders at the Annual Shareholders' Meeting on February 1,
2017. The prior-year dividend was €3.50 per share.
We intend to continue providing an attractive return to our share-
holders. Therefore, we intend to propose a dividend whose dis-
tribution volume is within a dividend payout range of 40% to
60% of net income, which we may adjust for this purpose to ex-
clude selected exceptional non-cash effects. As in the past, we
intend to fund the dividend payout from Free cash flow.
A.2.5 Dividend
263
282
(tax rate (flat) 30%)
746
(662)
(544)
7,380
5,584
2015
2016
Fiscal year
Less: Other interest expenses/income, net¹
Plus: SFS Other interest expenses/income
Plus: Net interest expenses from
post-employment benefits
784
A.3.1 Orders and revenue by region
(156)
(I) Income before interest after tax
Combined Management Report 9
Capital employed (continuing and discontinued operations)
Plus: Adjustments from assets classified as held for disposal and
liabilities associated with assets classified as held for disposal
Less: Adjustment for deferred taxes on net accumulated
actuarial gains/losses on post-employment benefits
Less: Fair value hedge accounting adjustment
Less: Current available-for-sale financial assets
Plus: Post-employment benefits
Less: SFS Debt
Plus: Short-term debt and current maturities of long-term debt
Less: Cash and cash equivalents
Plus: Long-term debt
Total equity
(104)
Calculation of capital employed
1 Item Other interest expenses/income, net primarily consists of interest relating to corporate
debt, and related hedging activities, as well as interest income on corporate assets.
(II) Average capital employed
(I)/(II) ROCE
21.0%
14.3%
36,367
41,573
7,623
5,949
Average capital employed is determined using the average of the
respective balances as of the quarterly reporting dates in the
period under review.
Europe, C.I.S., Africa,
Middle East
46,185
therein: Germany
Other liabilities
Other financial liabilities
Provisions
Deferred tax liabilities
Post-employment benefits
(7)%
23%
13,418
Total non-current liabilities
16,471
16%
24%
15,742
19,454
Comp.
Actual
% Change
Fiscal year
2015
Revenue
2016
Total liabilities
Total equity attributable to shareholders of Siemens AG
Equity ratio
47,986
8%
2,297
2,471
(22)%
1,466
1,142
5%
Debt ratio
4,865
36%
609
829
40%
9,811
13,695
Total liabilities and equity
Non-controlling interests
5,087
(in millions of €)
Orders
A.3.2.1 POWER AND GAS
A.3.2 Segment information analysis
Asia, Australia
(2)%
5%
18,162 17,357
therein: U.S.
(3)%
0%
(13)%
15,501 15,033
9%
25,239
27,268
markets¹
therein: emerging
9%
9%
42,539
10,525 11,991 (12)%
24,794 24,769
Americas
8%
3%
3%
therein: China
Reported revenue related to external customers went up moder-
ately year-over-year and increased in most industrial businesses.
Key growth drivers in Europe, C.I.S., Africa, Middle East in-
cluded Power and Gas, Wind Power and Renewables and Mobility
due to strong conversion from their respective order backlogs.
These increases were partly offset by declines in Energy Manage-
ment and in Process Industries and Drives. In Germany, revenues
decreased moderately, primarily due to Wind Power and Renew-
ables. In the Americas, revenue came in higher year-over-year,
driven primarily by increases in Power and Gas, in Healthineers
and in Mobility. Wind Power and Renewables reported a substan-
tial decline. The pattern in the U. S. was nearly the same as for
the region. Revenue in Asia, Australia came in near the prior-
year level, as declines in Mobility and Process Industries and
Drives offset growth in all other industrial businesses. In China,
only Power and Gas, Healthineers and Building Technologies were
able to increase revenue for the fiscal year.
1 As defined by the International Monetary Fund.
Despite further softening in the macroeconomic environment
in fiscal 2016, reported orders related to external customers in-
creased moderately year-over-year. Within the regions, order de-
velopment depended strongly on the timing and location of large
contract wins in the Divisions that typically take in such orders.
In the Europe, C.I.S., Africa, Middle East region, orders in-
creased clearly, as substantial growth in Wind Power and Renew-
ables and in Power and Gas more than offset a substantial decline
in Mobility. All three results were due to changes in the volume
from large orders. Orders came in significantly lower in Germany,
due to lower levels of large orders in Wind Power and Renewables
and in Mobility compared to fiscal 2015. Orders in the Americas
region were flat year-over-year, as growth primarily in Power and
Gas, in Building Technologies and in Healthineers offset double-
digit declines in Wind Power and Renewables and in Energy Man-
agement, both due to a lower volume of large orders. U.S. orders
increased moderately, supported by portfolio and currency trans-
lation effects, and mainly followed the pattern for the region,
with the exception that Energy Management came in near the
prior-year level. Orders went up in the Asia, Australia region due
mainly to a higher volume from large orders in Energy Manage-
ment and a clear increase in Healthineers, only partially offset by
declines primarily in Power and Gas and in Wind Power and Re-
newables. China increased orders moderately, in particular with
double-digit growth in Power and Gas, in Energy Management
1 As defined by the International Monetary Fund.
5%
3%
29,730
30,512
markets¹
therein: emerging
4%
5%
82,340
86,480
Siemens
7%
3%
6,623
6,850
(in millions of €)
Net income
Calculation of ROCE
A.2.6 Calculation of return
on capital employed
Sustainable revenue and profit development is supported by a
healthy capital structure. Accordingly, a key consideration within
the framework of One Siemens is to maintain ready access to the
capital markets through various debt products and preserve our
ability to repay and service our debt obligations over time. Our
primary measure for managing and controlling our capital struc-
ture is the ratio of industrial net debt to EBITDA. This financial
measure indicates the approximate amount of time in years that
would be needed to cover industrial net debt through income
from continuing operations, without taking into account inter-
est, taxes, depreciation and amortization. We aim to achieve a
ratio of up to 1.0.
1,828
2,085
Current income tax liabilities
(7)%
4,489
4,166
Current provisions
(7)%
14%
2,085
Other current financial liabilities
4%
7,774
8,048
Trade payables
108%
2,979
6,206
1,933
Short-term debt and current maturities of long-term debt
Other current liabilities
20,368
55,329
51,442
8%
24,159
23,166
4%
26,682
24,761
20,437
Long-term debt
39,562
42,916
Total current liabilities
5%
39
40
Liabilities associated with assets classified as held for disposal
0%
8%
% Change
2015
2016
3,431
Total non-current assets
Total assets
Other assets
Deferred tax assets
(1)%
20,821
20,610
Other financial assets
2,591
2%
3,012
Investments accounted for using the equity method
(1)%
10,210
10,157
Property, plant and equipment
(4)%
8,077
2,947
32%
1,279
1,094
(in millions of €)
Sep 30,
Our capital structure developed as follows:
A.5.1 Capital structure
A.5 Financial position
16
15
Combined Management Report
Deferred tax assets increased mainly due to income tax effects
related to remeasurement of defined benefits plans.
The increase in goodwill included the acquisition of CD-adapco.
The increase in inventories was driven mainly by a build-up in
Energy Management, Power and Gas and Wind Power and
Renewables.
The increase in other current financial assets was driven by
higher loans receivable at SFS. These higher current loans receiv-
ables were mainly due to new business and the reclassification of
non-current loans receivables.
Our total assets in fiscal 2016 were influenced by negative cur-
rency translation effects of €1.1 billion, primarily involving the
British pound.
4%
120,348
2%
68,906
70,388
125,717
17%
56%
45,730
122
5%
Income tax expenses
(2,008)
(1,869)
(7)%
Income from continuing operations
5,396
5,349
1%
3%
Income from discontinued operations, net of income taxes
Net income
2,031
(91)%
5,584
7,380
(24)%
Basic earnings per share
ROCE
6.74
14.3%
8.84
188
(24)%
7,218
Income from continuing operations before income taxes
A.2.4 Capital structure
581
(58)%
2,325
2,184
6%
8,744
7,737
7,404
13%
10.8%
10.1%
Financial Services (SFS)
653
Reconciliation to Consolidated Financial Statements
(1,994)
600
(1,119)
9%
(78)%
Profit margin Industrial Business
21.0%
-
As a result of the development described for the segments,
Income from continuing operations before income taxes
increased 3%. This amount also included higher expenses - as
planned for selling and R&D, primarily at Digital Factory and
Healthineers, as we continued targeted investments aimed at
organic volume growth and strengthening our capacities for
innovation. Severance charges for continuing operations were
€598 million, of which €541 million were in the Industrial Busi-
ness. In fiscal 2015, severance charges for continuing operations
were €804 million, of which €564 million were in the Industrial
Business.
Other current financial assets
Inventories
Current income tax assets
Other current assets
Assets classified as held for disposal
Total current assets
Goodwill
6,800
2%
5,157
18,160
17,253
5%
790
644
23%
1,204
1,151
32%
15,982
16,287
Trade and other receivables
The tax rate of 27% was positively influenced by successful ap-
peals of tax decisions for prior years. In fiscal 2015, the tax rate
was lower, due mainly to the disposition of the stake in BSH
which was mostly tax-free. As a result, Income from continuing
operations increased 1%.
Income from discontinued operations, net of income taxes
was substantially lower compared to the prior year. In fiscal 2016,
it primarily included a gain of €102 million from the sale of the
remaining assets in the hearing aid business and €76 million re-
lated to the former Siemens IT Solutions and Services activities.
In the prior year, the line item primarily included gains from the
disposal of the hearing aid and hospital information businesses,
totaling €1.7 billion and €0.2 billion, respectively.
The decrease in Basic earnings per share reflects the lower net
income compared to fiscal 2015, which included the substantial
disposal gains related to the sale of the hearing aid business and
the BSH stake that added €3.66 to basic earnings per share.
At 14.3%, ROCE was below the range established in our One
Siemens financial framework, as expected. ROCE declined com-
pared to fiscal 2015 due to lower net income and a significant
increase in average capital employed with the acquisition of
Dresser-Rand at the end of the third quarter of fiscal 2015.
14
Combined Management Report
A.4 Net assets position
Sep 30,
(in millions of €)
Cash and cash equivalents
2016
2015
% Change
10,604
9,957
6%
Available-for-sale financial assets
1,293
1,175
10%
190
7,742
5%
85,292
Profit
Profit margin
(4)%
(5)%
9,553
9,038
(1)%
(2)%
9,144
243
8,939
Actual
2015
2016
(in millions of €)
Orders
% Change
Fiscal year
Orders in Mobility declined due mainly to a sharply lower volume
from large orders year-over-year. The largest contract wins in fis-
cal 2016 included an order for light rail vehicles in the U.S., a
commuter rail contract in Germany and a rail automation order in
Algeria, totaling €1.2 billion. Large orders in fiscal 2015 included
an order worth €1.7 billion for regional trains and maintenance
in Germany and a €1.6 billion long-term order for maintenance
in Russia. Revenue grew in all businesses except for the rail infra-
structure business where revenue was down moderately year-
over-year. The strongest contribution to revenue growth came
from execution of large rolling stock projects. On a geographic
basis, strong revenue increases in Europe, C.I.S., Africa, Middle
East and the Americas more than offset a decline in Asia, Austra-
lia, which reported a sharp drop in China. Profit development
benefited from positive effects related to solid project execution
on large contracts, and from a sharp reduction in severance
charges which fell to €16 million from €68 million a year earlier.
A.3.2.7 PROCESS INDUSTRIES AND DRIVES
Comp.
Despite challenging market conditions, Digital Factory increased
orders, revenue and profit year-over-year. The driving force for all
three was the Division's PLM software business, which achieved
double-digit growth in orders and revenue, supported by the ac-
quisition of CD-adapco which closed in the third quarter of fiscal
2016. The Division's high-margin factory automation business
contributed to order and revenue growth to a significantly lesser
extent, while volume in the motion control business declined
slightly year-over-year. On a regional basis, orders and revenue
increased in all regions, with the strongest growth coming from
the Europe, C.I.S., Africa, Middle East region. Profit came in
slightly above the prior-year level as a double-digit increase in the
PLM business and a slight increase in the factory automation
business were largely offset by declines in other businesses. Prof-
itability in fiscal 2016 was held back by deferred revenue adjust-
ments and transaction and integration costs related to the acqui-
sition of CD-adapco, totaling €43 million. In addition, Division
profit included severance charges in both periods, €49 million in
fiscal 2016 compared to €53 million in fiscal 2015.
581
2.7%
205
132
714
(215)
Centrally managed portfolio activities
Siemens Real Estate
2015
2016
Fiscal year
(58)%
(in millions of €)
A.3.2.10 RECONCILIATION TO CONSOLIDATED
FINANCIAL STATEMENTS
Financial Services (SFS) recorded stable results in the debt busi-
ness. Results from the equity investments business came in above
the high level of fiscal 2015, due primarily to a positive effect of
€92 million resulting from an at-equity investment. Fiscal 2015
included a net gain in connection with the sale of renewable
energy projects. Despite substantial early terminations of financ-
ings, total assets have increased since the end of fiscal 2015.
A.3.2.8 HEALTHINEERS
partly offset by growth from the wind power components busi-
ness. On a regional basis, orders were down in Asia, Australia,
particularly in China, and in Europe, C.I.S., Africa, Middle East,
while they increased in the Americas, due mainly to strong de-
Imand for the Division's offerings for the wind power industry.
Revenue was down in all three reporting regions. Underutiliza-
tion and a shift in demand particularly in the large drives and the
oil & gas and marine businesses heavily impacted the Division's
profit in fiscal 2016. To reduce the size of its manufacturing ca-
pacity and align its global footprint to changed market demand,
the Division took €254 million in severance charges. For compar-
ison, profit in the prior fiscal year was burdened by a warranty
charge of €96 million and severance charges of €74 million.
12 Combined Management Report
The global weakness in oil and gas and other commodity-related
markets continued to impact Process Industries and Drives. This
was particularly evident in the Division's oil & gas and marine busi-
ness, where orders fell by a quarter compared to fiscal 2015, and
in its large drives business, which saw a moderate decline in or-
ders. These decreases were only partly offset by order growth in
the Division's wind power components business. Revenue shows
a similar development, as both the oil & gas and marine and the
large drives businesses saw considerable declines in revenue only
Revenue
6.1%
Profit
7.8%
8.7%
Profit margin
1,690
Profit
Profit margin
9.2%
9.4%
Profit margin
5%
553
577
1,685
Profit
2%
9,988
10,172
Revenue
3%
3%
5,999
6,156
2%
0%
16.6%
16.9%
6%
Comp.
(22)%
(23)%
4%
15%
588
678
Profit
7,508
7,825
Revenue
10,262
7,875
Orders
Actual
Fiscal year
2015
2016
(in millions of €)
% Change
A.3.2.5 MOBILITY
Orders and revenue in Building Technologies increased in both
the solutions and service business and the product and systems
business. On a geographic basis, orders were up in all regions,
while revenue rose in the Americas and Asia, Australia but de-
clined slightly in the Europe, C.I.S., Africa, Middle East region.
Growth was particularly strong in the U.S., for both orders and
revenue. Profit improvement was due to an increase in the Divi-
sion's product business, only partly offset by a modest decline in
profit in the solutions and service business. Profit in both periods
included severance charges, which were €16 million in fiscal
2016, down from €24 million in fiscal 2015.
(in millions of €)
Revenue
2016
13,830
32%
1,415
1,872
Power and Gas
% Change
2015
2016
(in millions of €, earnings per share in €)
Wind Power and Renewables
Fiscal year
13
Combined Management Report
Expenses in Eliminations, Corporate Treasury and other rec-
onciling items were lower despite an increase in interest ex-
penses mainly associated with US$7.75 billion in bonds issued
end of May 2015. For comparison, fiscal 2015 was burdened even
more by negative effects from changes in the fair value of inter-
est rate derivatives related to interest rate management at Cor-
porate Treasury.
Corporate items were influenced by a number of items, includ-
ing €43 million in severance charges for corporate reorganization
of support functions compared to €198 million in such charges in
fiscal 2015.
Income from Siemens Real Estate continues to be highly depen-
dent on the disposals of real estate. In fiscal 2016, the profit of
disposals of real estate were lower than in the prior year.
Centrally managed portfolio activities (CMPA) included pri-
marily a loss from at-equity investments (including impairments)
after a positive result in the prior year. In particular, fiscal 2015
included a gain of €1.4 billion on the disposal of Siemens' stake
in BSH Bosch und Siemens Hausgeräte GmbH (BSH). This was
partly offset by an equity investment loss of €275 million related
to Unify Holdings B.V. (Unify), an impairment of €138 million re-
lated to Siemens' stake in Primetals Technologies Ltd. and losses
from other businesses.
24,970
26,446
A.3.3 Income
Sep 30,
2015
464
190%
1,685
1,690
15%
588
678
5%
553
577
160
57%
895
Industrial Business
Healthineers
Process Industries and Drives
Digital Factory
Mobility
Building Technologies
Energy Management
570
2016
Fiscal year
2015
600
20.9%
Total assets
13,535
Revenue
(543)
(674)
acquired in business combinations
4%
4%
Amortization of intangible assets
12,930
(440)
Centrally carried pension expense
Comp.
Actual
(690)
(449)
Corporate items
% Change
Fiscal year
2015
13,349
(439)
5%
5%
Profit
(in millions of €)
21.6%
ROE (after taxes)
653
Income before income taxes
2016
(in millions of €)
A.3.2.9 FINANCIAL SERVICES
All businesses posted order increases and nearly all recorded rev-
enue growth, led by the diagnostic imaging business. Orders
grew in the Asia, Australia region, most notably in China, and in
the Americas region, due to the U.S. All regions contributed to
revenue growth, particularly the Americas region, due to the U.S,
and the Asia, Australia region. Profit growth was driven by the
diagnostic imaging business, which continued to account for the
largest share of Healthineers profit overall. Profit was burdened
by severance charges in both periods, totaling €61 million in fis-
cal 2016 and €62 million in fiscal 2015. Profit development in
fiscal 2016 benefited from currency tailwinds. For comparison,
fiscal 2015 included a €64 million gain from divestment of the
microbiology business.
(1,119)
(1,994)
(366)
(349)
Eliminations, Corporate Treasury
and other reconciling items
Reconciliation to Consolidated
Financial Statements
16.9%
6%
2,184
2,325
17.2%
Profit margin
Orders
90,901
3%
10,036
Cash flows from investing activities - continuing operations
1,417
Other disposals of assets
(1,409)
Other purchases of assets
(1,356)
Change in receivables from financing activities of SFS
(922)
(4,406)
Acquisitions of businesses, net of cash acquired
Additions to intangible assets and property, plant and equipment
243
Cash flows from investing activities
7,611
Cash flows from operating activities - continuing and discontinued operations
(57)
Cash flows from operating activities - discontinued operations
7,668
(2,135)
Cash flows from operating activities – continuing operations
Cash flows from investing activities – discontinued operations
Cash flows from investing activities - continuing and discontinued operations
Cash flows from financing activities - continuing operations
(2,710)
(249)
Other cash flows from financing activities - continuing operations
(2,827)
(809)
(1,408)
Dividends paid to shareholders of Siemens AG
262
Interest paid
(2,253)
5,300
Repayment of long-term debt (including current maturities of long-term debt)
Issuance of long-term debt
(463)
Purchase of treasury shares
Cash flows from financing activities
(4,144)
Change in short-term debt and other financing activities
3,324
Other reconciling items to cash flows from operating activities – continuing operations
(1,241)
The funded status of our defined benefit plans - meaning de-
fined benefit obligation (DBO) less fair value of plan assets -
showed an underfunding of €13.4 billion as of September 30,
2016 (€9.5 billion as of September 30, 2015). Within these fig-
ures, the underfunding for pension benefit plans amounted to
€12.8 billion as of September 30, 2016 (€9.0 billion as of Septem-
ber 30, 2015) and the underfunding of other post-employment
benefit plans amounted to €0.5 billion (€0.5 billion as of Sep-
tember 30, 2015). The increase in the underfunding of our de-
fined benefit plans was mainly due to lower discount rate as-
sumptions. This effect was partly offset by a significant increase
in return on plan assets and a lower pension progression assump-
tion in Germany.
Post-employment benefits
Combined Management Report
The main factors relating to the change in total equity attribut-
able to shareholders of Siemens AG were a negative €2.9 bil-
lion in other comprehensive income, net of income taxes, mainly
due to remeasurements of defined benefit plans, and dividend
payments of €2.8 billion (for fiscal 2015). These negative factors
were nearly offset by fiscal 2016 net income attributable to share-
holders of Siemens AG of €5.5 billion.
Long-term debt decreased mainly due to the above mentioned
reclassifications and the redemption of hybrid capital bonds to-
taling €1.8 billion. This decrease was partly offset by the issu-
ance in September 2016 of instruments totaling US$6.0 billion
(€5.4 billion) in six tranches with different maturities up to
30 years.
The increase in short-term debt and current maturities of
long-term debt was due mainly to reclassifications of long-term
fixed-rate instruments totaling €5.0 billion. This increase was
partly offset by repayments of commercial paper of €0.9 billion
and fixed-rate instruments of €0.5 billion.
4%
120,348
Capital structure ratio
125,717
581
29%
(1)%
34,474
34,211
28%
605
71%
72%
7%
4%
Our capital structure ratio as of September 30, 2016 increased
from 0.6 a year earlier to 1.0, which was in line with our target
established in our One Siemens financial framework. The change
was due primarily to the increase in post-employment benefits
compared to the prior year, reflecting the above-mentioned in-
crease in the underfunding of our defined benefit plans.
In November 2015, we announced a share buyback of up to €3 bil-
lion ending at the latest on November 15, 2018. The buybacks will
be made under the current authorization granted at the Annual
Shareholders' Meeting on January 27, 2015. Shares repurchased
may be used solely for cancelling and reducing capital stock; for
issuing shares to employees, to members of the Managing Board
and board members of affiliated companies; and for meeting ob-
ligations from or in connection with convertible bonds or warrant
bonds. Under the program we repurchased 2,517,727 treasury
shares at an average cost per share of €91.24, totaling €0.2 bil-
lion (including incidental transaction charges).
Debt and credit facilities
Change in operating net working capital
5,584
Net income
2016
Fiscal year
Cash flows from operating activities
(in millions of €)
A.5.2 Cash flows
17
Combined Management Report
Irrevocable loan commitments amounted to €3.4 billion (Septem-
ber 30, 2015: €3.6 billion). A considerable portion of these com-
mitments resulted from asset-based lending transactions, mean-
ing that the respective loans can be drawn only after the borrower
has provided sufficient collateral.
Future payment obligations under non-cancellable operating
leases amounted to €3.5 billion (September 30, 2015: €3.4 bil-
lion).
In addition to these commitments, we issued other guarantees.
To the extent future claims are not considered remote, maximum
future payments from these commitments amounting to €0.9 bil-
lion (September 30, 2015: €1.8 billion). The decrease in other
guarantees is related to indemnifications issued in connection
with dispositions of businesses.
As of September 30, 2016 the undiscounted amount of maximum
potential future payments related to credit guarantees, guaran-
tees of third-party performance and HERKULES obligations
amounted to €3.7 billion (September 30, 2015: €4.2 billion).
Off-balance-sheet commitments
STATEMENTS.
For further information about our debt see → NOTE 15 in → B.6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. For further informa-
tion about the functions and objectives of our financial manage-
ment see NOTE 24 in →B.6 NOTES TO CONSOLIDATED FINANCIAL
We have three credit facilities at our disposal for general corpo-
rate purposes. These credit facilities amounted to €7.1 billion and
were unused as of September 30, 2016.
As of September 30, 2016 we recorded, in total, €28.6 billion in
notes and bonds (maturing until 2046), €1.4 billion in loans from
banks (maturing until 2023), €0.9 billion in other financial in-
debtedness (maturing until 2027) and €0.1 billion in obligations
under finance leases. Notes, bonds and loans from banks were
issued mainly in the euro and U.S. dollar, and to a lower extent
in the British pound.
Cash flows from financing activities - discontinued operations
3%
Cash flows from financing activities - continuing and discontinued operations
The conversion of profit into cash inflows from operating activ-
ities was mainly driven by Healthineers as well as the Digital Fac-
tory and Power and Gas Divisions. This conversion was affected
by a build-up of operating net working capital primarily driven
by an increase in the line items Inventories and Trade and other
receivables in the Industrial Business, which was primarily due to
Power and Gas and Energy Management.
A.3.2.4 BUILDING TECHNOLOGIES
Combined Management Report 11
Order intake reached a new high for a fiscal year, due mainly to
a higher volume from large orders, particularly in the offshore
business, which for Siemens means primarily in Europe. As a
result, orders more than doubled in the Europe, C.I.S., Africa,
Middle East reporting region and included, among others, a
Order intake was flat year-over-year, burdened by negative cur-
rency translation effects, as a decline in the solutions business
was offset by growth in the Division's other businesses. On a re-
gional basis, a substantial increase in Asia, Australia and slight
growth in Europe, C.I.S., Africa, Middle East were offset by a sig-
nificant decline in the Americas. Revenue was also burdened by
negative currency translation effects. A decline in the medium
voltage and system business was offset by growth in the Divi-
sion's other businesses, in particular in the solutions, high volt-
age products and transformer businesses. On a regional basis,
moderate growth in the Americas was offset by a moderate de-
cline in Europe, C.I.S., Africa, Middle East, while revenue in Asia,
Australia was flat year-over-year. Stronger profitability in a major-
ity of the Division's businesses compared to the prior-year in-
cluded significant improvements in the high voltage products
business and in the solutions business due to stringent project
execution. The prior year included a higher proportion of projects
with low margins. Severance charges were €71 million and
€88 million in fiscal 2016 and fiscal 2015, respectively.
Profit
Revenue
2%
0%
57%
A.3.2.6 DIGITAL FACTORY
11,922
570
4.8%
Profit margin
11,940
2%
0%
12,956
12,963
Comp.
Actual
895
7.5%
% Change
Fiscal year
Fiscal year
10,332
Orders
6%
6%
6,099
6,435
Orders
Comp.
% Change
Actual
2016
(in millions of €)
Comp.
Actual
2015
2016
(in millions of €)
% Change
2015
Fiscal year
2015
2016
(in millions of €)
Orders
10
10
10.5%
11.4%
Profit margin
32%
1,415
1,872
Combined Management Report
Profit
Combined Management Report
18
The change in short-term debt and other financing activities
included the net cash outflows related to commercial paper and
from loans to banks.
The cash inflows from investing activities
operations - included proceeds from the sale of the remaining
assets in the hearing aid business.
discontinued
The cash inflows from other disposals of assets primarily in-
cluded disposals from above-mentioned eligible collateral, pro-
ceeds from the sale of shares in a fund at Corporate Treasury, and
real estate disposals at SRE.
The cash outflows for other purchases of assets primarily in-
cluded additions of assets eligible as central bank collateral and
to a lesser extent payments related to equity investments.
The cash outflows for acquisitions of businesses, net of cash
acquired, primarily included payments totaling €0.9 billion re-
lated to the acquisition of CD-adapco.
12%
(2,710)
Revenue and orders benefited from portfolio effects. Dresser-
Rand and the Rolls-Royce Energy aero-derivative gas turbine and
compressor business, which were both acquired in fiscal 2015,
contributed nine and 12 percentage points to fiscal 2016 order
and revenue growth, respectively. Orders increased year-over-
year, due mainly to a higher volume from large orders in the
solutions business, including in particular large orders for power
plants, including service, from Egypt totaling €4.7 billion. The
regional picture was mixed; order intake increased substantially
in the reporting regions Europe, C.I.S., Africa, Middle East and
the Americas and declined clearly in Asia, Australia. Revenue was
also up, due mainly to growth in the solutions and large gas tur-
bine businesses. On a regional basis, strong order execution led
to substantial revenue growth in Europe, C.I.S., Africa, Middle
East, particularly including in Egypt. Revenue also increased in
the other two reporting regions. Profit was substantially higher
year-over-year and included a continuing strong contribution
from the service business. In fiscal 2016, profit benefited from
positive effects totaling €118 million from the measurement of
inventories. Both years included positive and negative effects
related to large projects. In total, the effect in fiscal 2016 was
positive, including €130 million from revised estimates related to
resumption of long-term construction and service contracts in
Iran following the ending or easing of EU and U.S. sanctions. In
contrast, it was negative in fiscal 2015, including charges of
€106 million related to a project which incurred higher costs for
materials and from customer delays. Costs for the integration of
Dresser-Rand were €59 million in fiscal 2016 compared to
€19 million in fiscal 2015. Finally, severance charges were sharply
lower in fiscal 2016, at €69 million compared to €192 million in
fiscal 2015. The Division continues to face challenges in an ag-
gressively competitive market for large gas turbines arising from
overcapacities across the industry, which results in increased
price pressure.
(in millions of €)
A.3.2.3 ENERGY MANAGEMENT
number of orders for large offshore wind-farms in the U.K., in-
cluding service. Order intake in the Americas and Asia, Australia
showed a double-digit decline year-over-year. Revenue was up
clearly due to strong conversion from the backlog, which resulted
in increases in all of the Division's businesses. On a regional basis,
substantial increases in Europe, C.I.S., Africa, Middle East and
Asia, Australia more than offset a substantial decline in the Amer-
icas. Strong profitability in fiscal 2016 included a more favorable
revenue mix including a higher share from the offshore and ser-
vice businesses, lower production and installation costs, and pos-
itive effects from project execution and completion. In fiscal 2015,
profit was held back by expenses from ramping up commercial-
scale production of certain turbine offerings.
% Change
Comp.
35%
9%
2.8%
7.8%
Profit margin
Actual
30%
6%
190%
160
A.3.2.2 WIND POWER AND RENEWABLES
464
5,660
5,976
Revenue
6,136
7,973
Orders
Fiscal year
2015
2016
Profit
Other intangible assets
We report Free cash flow as a supplemental liquidity measure:
Free cash flow
uation of the company-wide risk and opportunity situation. The
CRIC reports to and supports the Managing Board on matters
relating to the implementation, operation and oversight of the
risk and internal control system and assists the Managing Board
for example in reporting to the Audit Committee of the Super-
visory Board. The CRIC is composed of the Chief Risk & Internal
Control Officer, as the chairperson, members of the Managing
Board and selected heads of Corporate Units.
In general, due to the significant proportion of long-cycle busi-
nesses in our Divisions and the importance of long-term con-
tracts for Siemens, there is usually a time lag between the devel-
opment of macroeconomic conditions and their impact on our
financial results. In contrast, short-cycle business activities of the
Digital Factory Division and parts of Process Industries and Drives
Division and in the Energy Management Division react quickly to
volatility in market demand. If the moderate recovery of macro-
economic growth stalls again and if we are not successful in
adapting our production and cost structure to subsequent
changes in conditions in the markets in which we operate, there
can be no assurance that we will not experience adverse effects.
For example, it may become more difficult for our customers
to obtain financing. As a result, they may modify, delay or cancel
plans to purchase our products and services, or fail to follow
through on purchases or contracts already executed. Further-
more, the prices for our products and services may decline, as a
result of adverse market conditions, to a greater extent than we
currently anticipate. In addition, contracted payment terms, es-
pecially regarding the level of advance payments by our custom-
ers relating to long-term projects, may become less favorable,
which could negatively impact our financial condition. Siemens'
global setup with operations in almost all relevant economies,
the wide variety of our offerings following different business
cycles, and our varying business models (e.g. product, software,
solution, project and service-business) help us to absorb the im-
pact of an adverse development in a single market.
Disruptive Technologies (incl. Digitalization): The markets in
which our businesses operate experience rapid and significant
changes due to the introduction of innovative and disruptive tech-
nologies. In the fields of digitalization (e.g. internet of things,
web of systems, Industrie 4.0), there are risks of new competi-
tors, substitutions of existing products/solutions/services, new
business models (e.g. in terms of pricing) and finally the risk that
our competitors may have faster time-to-market strategies and
introduce their digital products and solutions faster than
Siemens. Our operating results depend to a significant extent on
our ability to anticipate and adapt to changes in our markets and
to reduce the costs of producing our products. Introducing new
products and technologies requires a significant commitment to
research and development, which in return requires expenditure
of considerable financial resources that may not always result in
success. Our results of operations may suffer if we invest in tech-
nologies that do not operate or may not be integrated as ex-
pected, or that are not accepted in the marketplace as antici-
pated, or if our products or systems are not introduced to the
market in a timely manner, particularly compared to our compet-
itors, or become obsolete. We constantly apply for new patents
and actively manage our intellectual property portfolio to secure
our technological position. However, our patents and other intel-
lectual property may not prevent competitors from independently
developing or selling products and services that are similar to or
duplicates of ours.
Continuous low Oil/Commodity Prices: The longer than ex-
pected low oil price could reduce demand for Oil & Gas products.
Additionally, countries depending on high oil and commodity
prices (e.g. Russia, Venezuela, Middle East) might reduce public
spending. Both would result in a decline in order intake and reve-
nue for our businesses that serve oil and gas markets, as well as
underutilization of resources. We attempt to mitigate these risks
by close monitoring of the market situation, especially in the oil
and gas business. We consistently strive to adjust our capacity,
improve our cost structure, and increase our competitiveness in
this market.
Footprint: The risk is that we are not flexible enough in adjusting
our manufacturing footprint to quickly respond to changing mar-
kets, resulting in a non-competitive cost position and a loss of
business. To mitigate this risk, we continuously monitor and
analyze competitive and market information. Furthermore, we
closely monitor the implementation of the planned measures,
Combined Management Report
27
maintain strict cost management, and conduct ongoing discus-
sions with all concerned interest groups.
Portfolio measures, at-equity investments, other investments
and strategic alliances: Our strategy includes divesting activi-
ties in some business areas and strengthening others through
portfolio measures, including mergers and acquisitions. With
respect to divestments, we may not be able to divest some of our
activities as planned, and the divestitures we do carry out could
have a negative impact on our business, financial condition, re-
sults of operations and our reputation. Mergers and acquisitions
are inherently risky because of difficulties that may arise when
integrating people, operations, technologies and products. There
can be no assurance that any of the businesses we acquired can
be integrated successfully and in a timely manner as originally
planned, or that they will perform as anticipated once integrated.
In addition, we may incur significant acquisition, administrative,
tax and other expenditure in connection with these transactions,
including costs related to integration of acquired businesses. Fur-
thermore, portfolio measures may result in additional financing
needs and adversely affect our capital structure. Acquisitions led
to substantial addition to intangible assets, including goodwill in
our Statements of Financial Position. If we were to encounter
continuing adverse business developments or if we were other-
wise to perform worse than expected at acquisition activities,
then these intangible assets, including goodwill, might have to
be impaired, which could adversely affect our business, financial
condition and results of operations. Our investment portfolio
consists of investments held for purposes other than trading.
Furthermore, we hold other investments, for example, Atos SE
and OSRAM Licht AG. Any factors negatively influencing the fi-
nancial condition and results of operations of our at-equity in-
vestments and other investments, could have an adverse effect
on our equity pick-up related to these investments or may result
in a related write-off. In addition, our business, financial condi-
tion and results of operations could also be adversely affected in
connection with loans, guarantees or non-compliance with fi-
nancial covenants related to these at-equity investments and
other investments. Furthermore, such investments are inherently
risky as we may not be able to sufficiently influence corporate
governance processes or business decisions taken by our equity
investments, other investments and strategic alliances that may
have a negative effect on our business. In addition, joint ventures
bear the risk of difficulties that may arise when integrating peo-
ple, operations, technologies and products. Strategic alliances
may also pose risks for us because we compete in some business
areas with companies with which we have strategic alliances.
Besides other measures, we handle these risks with standardized
processes as well as dedicated roles and responsibilities in the
areas of mergers, acquisitions, divestments and carve outs. This
includes post closing actions as well as claim management and
centrally managed portfolio activities.
A.8.3.2 OPERATIONAL RISKS
IT security: Our business portfolio is dependent on digital tech-
nologies. We observe a global increase of IT security threats and
higher levels of professionalism in computer crime, which pose a
risk to the security of products, systems and networks and the
confidentiality, availability and integrity of data. Like other large
multinational companies we are facing active cyber threats from
sophisticated adversaries that are supported by organized crime
and nation states engaged in economic espionage. We attempt
to mitigate these risks by employing a number of measures, in-
cluding employee training, comprehensive monitoring of our
networks and systems through Cyber Security Operation Centers,
and maintenance of backup and protective systems such as fire-
walls and virus scanners. Our contractual arrangements with ser-
vice providers, aim to ensure that these risks are reduced. None-
theless, our systems, products, solutions and services, as well as
those of our service providers remain potentially vulnerable to
attacks. Such attacks could potentially lead to the publication,
manipulation, espionage or leakage of information, improper use
of our systems, defective products, production downtimes and
supply shortages, with potential adverse effects on our reputa-
tion, our competitiveness and results of our operations.
Operational failures and quality problems in our value chain
processes: Our value chain comprises all steps, from research
and development to supply chain management, production, mar-
keting, sales and services. Operational failures in our value chain
processes could result in quality problems or potential product,
labor safety, regulatory or environmental risks. Such risks are par-
ticularly present in our Industrial Business in relation to our pro-
duction and manufacturing facilities, which are located all over
the world and have a high degree of organizational and techno-
logical complexity. From time to time, some of the products we
sell might have quality issues resulting from the design or man-
ufacture of the products or of the commissioning of the products
or from the software integrated into them. Our Healthineers
business, for example, is subject to regulatory authorities includ-
ing the U.S. Food and Drug Administration and the European
Commission's Health and Consumer Policy Department, which
require us to make specific efforts to safeguard our product
safety. If we are not able to comply with these requirements, our
business and reputation may be adversely affected. Several mea-
sures for quality improvement and claim prevention are estab-
lished and the increased use of quality management tools is im-
proving visibility and assists us strengthen the root cause and
prevention process.
Operational optimization alignments and cost reduction ini-
tiatives: We are in a continuous process of operational optimiza-
tion alignments and constantly engage in cost-reduction initia-
tives, including ongoing capacity adjustment measures and
structural initiatives. Consolidation of business activities and
We expect higher net income year-over-year, and basic EPS from
net income in the range of €6.80 to €7.20 as compared to €6.74
in fiscal 2016 which included €0.23 from discontinued operations.
process could heighten business and consumer uncertainty, re-
duce investment in the U.K., pose risks to financial markets and
may increase the uncertainties about the future of the EU in the
course of the U.K. exit negotiations. A further and massive loss
of economic confidence and a prolonged period of reluctance in
investment decisions and awarding of new orders would hit our
businesses. We continuously monitor the exit process and es-
tablished, for example, a task force team coordinating our local
and global mitigation measures. Further, a substantial business
risk stems from a significant weakening of Chinese economic
growth and the potential for corrections or even a collapse in
the country's real estate market, banking sector or stock market.
The downturn could get worse, if Chinese authorities fail to re-
form the state-owned enterprises in the industry and banking
sector and to further liberalize and open the economy. Both
global and regional investment climates could collapse due to
political upheavals, further independence debates within coun-
tries in the European Union, or sustained success for protection-
ist, anti-EU and anti-business parties and policy. A rapid tighten-
ing of monetary policy by the U.S. Federal Reserve could cause
a depreciation spiral among emerging market currencies. This
could lead to a renewed emerging market crisis because debt
levels of emerging market enterprises have risen, making them
dependent on favorable global financial conditions to ser-
vice debts denominated in foreign currencies. A terrorist mega-
attack, or a series of such attacks in major economies, could
depress economic activity globally and undermine consumer
and business confidence. Further risks stem from political ten-
sions (e.g. Syria, Turkey, Ukraine) and a loss of confidence in the
automotive sector.
Profitability
We expect revenue growth to benefit from conversion of our or-
der backlog (defined as the sum of order backlogs of our indus-
trial businesses) which totaled €113 billion as of September 30,
2016. From this backlog, we expect to convert approximately
€39 billion of past orders into current revenue in fiscal 2017.
Within this amount, we expect for fiscal 2017 approximately
€12 billion in revenue conversion from the €44 billion backlog of
the Power and Gas Division, approximately €7 billion in revenue
conversion from the €12 billion backlog of the Energy Manage-
ment Division, approximately €7 billion in revenue conversion
from the €26 billion backlog of the Mobility Division, approxi-
mately €4 billion in revenue conversion from the €15 billion
backlog of the Wind Power and Renewables Division, approxi-
mately €3 billion in revenue conversion from the €5 billion back-
log of the Process Industries and Drives Division, approximately
€2 billion in revenue conversion from the €3 billion backlog of
the Building Technologies Division, approximately €2 billion in
revenue conversion from the €2 billion backlog of the Digital Fac-
tory Division and approximately €2 billion in revenue conversion
from the €5 billion backlog of Healthineers.
In fiscal 2016, most of our industrial businesses contributed to
organic revenue growth, and we expect a similar development in
fiscal 2017. The principle exception is the Power and Gas Division,
which contributed double-digit growth in fiscal 2016.
complex geopolitical environment. Therefore, we expect modest
growth in revenue, net of effects from currency translation and
portfolio transactions.
23
Combined Management Report
We continue to anticipate headwinds for macroeconomic growth
and investment sentiment in our markets in fiscal 2017 due to the
Revenue growth
We are exposed to currency translation effects, particularly involv-
ing the US$, the British £ and currencies of emerging markets,
particularly the Chinese yuan. During fiscal 2016, the average ex-
change rate conversion for our large volume of US$-denominated
revenue was US$1.11 per €. While we expect volatility in global
currency markets to continue in fiscal 2017, we have improved
our natural hedge on a global basis through geographic distribu-
tion of our production facilities during the past. Nevertheless,
Siemens is still a net exporter from the Euro zone to the rest of
the world, so a weak Euro is principally favorable for our business
and a strong Euro is principally unfavorable. In addition to the
natural hedging strategy just mentioned, we also hedge currency
risk in our export business using derivative financial instruments.
We expect these steps to help us limit effects on income related
to currency in fiscal 2017.
We are basing our outlook for fiscal 2017 for the Siemens Group
and its segments on the above-mentioned expectations and
assumptions regarding the overall economic situation and spe-
cific market conditions for the next fiscal year. Furthermore, this
outlook is based on the current business portfolio of Siemens,
excluding potential burdens associated with pending portfolio
matters in fiscal 2017. An acquisition of Mentor Graphics to ex-
pand our digital industrial leadership and a merger of our wind
power business, including service with Gamesa would among
other things result in additional revenue, purchase price allo-
cation effects, integration costs as well as assets and liabilities.
The merger with Gamesa would also result in increases in
non-controlling interests. In addition, we are further strengthening
Healthineers in Siemens for the future and are therefore planning
to publicly list our healthcare business. We will announce more
precise details regarding the date and scope of the placement
when plans for the public listing are further advanced. The listing
will also depend, among other things, on the stock market
environment.
A.8.1.3 SIEMENS GROUP
Our SFS Division is geared to Siemens' Industrial Business and its
markets. As such SFS is, among other factors, influenced by the
business development of the markets served by our Industrial
Business. SFS will continue to focus its business scope on areas
of intense domain know-how, thereby limiting risk and exposure
going forward.
such as centralized tendering and reimbursement budget con-
trol. For Brazil, the recession is expected to continue to impact
healthcare investments.
For fiscal 2017, we expect markets for Healthineers to stay on a
moderate growth path. Healthineers' markets continue to benefit
from long-term trends such as growing and aging populations
and from broader access to healthcare, but are restricted by
public spending constraints and by consolidation of healthcare
providers. On a geographic basis, we expect slight to moderate
growth in the U.S., held back by continued pressure to increase
utilization of existing equipment and to reduce reimbursement
rates. For Europe, we expect slight growth, with equipment re-
placement and business with large customers such as hospital
chains gaining further importance. For China, we expect health-
care spending to rise, due to an aging population, urbanization,
growing chronic disease incidence and expanded access to
health insurance, partly held back by governmental restrictions
In fiscal 2017, market volume for the markets served by the Pro-
cess Industries and Drives Division is expected to come in
slightly below the level of fiscal 2016. While this decline is fore-
cast to be driven by an ongoing fall in investments in the oil and
gas and the mining markets, we expect this downturn to gradu-
ally come to an end during fiscal 2017.
We anticipate that orders will exceed revenue for a book-to-bill
ratio above 1.
Combined Management Report
Economic, political and geopolitical conditions (macroeco-
nomic environment): We see a high level of uncertainty regard-
ing the global economic outlook. Significant downside risks stem
e.g. from consequences of the Brexit vote in June of 2016, from
political uncertainty in the wake of the U.S. presidential election
and from an increasing trend towards populism. The U.K. exit
Competitive environment: The worldwide markets for our prod-
ucts and solutions are highly competitive in terms of pricing,
product and service quality, product development and introduc-
tion time, customer service, financing terms and shifts in market
demands. We face strong existing competitors and also compet-
itors from emerging markets, which may have a better cost struc-
ture. Some industries in which we operate are undergoing con-
solidation, which may result in stronger competition and a
change in our relative market position. Furthermore, we notice
that suppliers (and to some extent even customers), especially
from emerging countries (e.g. China), could develop into serious
competitors for Siemens. We address these risks with various
measures, for example, benchmarking, strategic initiatives, sales
push initiatives, executing productivity measures and target cost
projects, rightsizing of our factory footprint, exporting from low-
cost countries to price-sensitive markets, and optimizing our
product portfolio. We continuously monitor and analyze compet-
itive and market information in order to be able to anticipate
unfavorable changes in the competitive environment rather than
reacting to such changes.
Our forecast for net income and corresponding basic EPS is based
on a number of assumptions: We assume stabilization in the mar-
ket environment for our high-margin short-cycle businesses in
fiscal 2017. As part of our One Siemens framework, we target a
total cost productivity improvement of 3% to 5% in fiscal 2017.
Also, we assume continued solid project execution. Furthermore,
we anticipate no material currency-related effects on income.
Along with these assumptions, we anticipate pricing pressure on
our offerings of around 2% to 3% in fiscal 2017 along the lines of
fiscal 2016, with the Power and Gas Division and the Wind Power
and Renewables Division being affected the most. Furthermore,
we expect wage inflation of around 3% to 4%. Also, we plan to
increase R&D and selling expenses aimed at strengthening our
capacities for innovation and organic growth. Our forecast for net
income and corresponding basic EPS further excludes charges
related to legal and regulatory matters.
For fiscal 2017, we expect all but one of our industrial businesses
to be in their ranges for profit margin as defined in our financial
performance system (see → A.2 FINANCIAL PERFORMANCE SYSTEM).
The exception is Process Industries and Drives, which initiated
measures during fiscal 2016 to reduce the size of its manufactur-
ing capacity and align its global footprint to changed market
demand. We expect these measures to become effective largely
after fiscal 2017. Overall, we expect a profit margin for our Indus-
trial Business of 10.5% to 11.5%, compared to 10.8% in fiscal 2016,
in part due to our ongoing initiative to improve profitability of
low-margin businesses. We expect SFS, which is reported outside
Industrial Business, to achieve a return on equity (ROE) within its
margin range in fiscal 2017 and to keep its profit near the prior-
year level excluding the positive effect of €92 million, which re-
sulted from an at-equity investment.
Within our Reconciliation to Consolidated Financial Statements,
we expect results related to CMPA to continue to be highly vola-
tile from quarter to quarter during fiscal 2017. Expenses for Cor-
porate items are expected to be approximately €0.6 billion, with
costs in the second half-year higher than in the first half and
to include expenses related to our newly founded next47 startup
unit. While we anticipate that SRE will continue with real estate
disposals depending on market conditions, we expect gains from
disposals to be lower in fiscal 2017 than in fiscal 2016. Centrally
carried pension expenses are expected to total approximately
€0.5 billion in fiscal 2017. Amortization of intangible assets ac-
quired in business combinations was €674 million in fiscal 2016
and we expect a similar level in fiscal 2017, based on our current
business portfolio. Eliminations, Corporate Treasury and other
reconciling items are also anticipated to be on the prior-year level
despite higher interest expense related primarily to bonds issued
in fiscal 2016.
We do not expect material influence on financial results from
discontinued operations in fiscal 2017. For comparison, income
from discontinued operations in fiscal 2016 was €0.2 billion. We
anticipate our tax rate for fiscal 2017 to be in the range of 26%
to 30%.
Capital efficiency
Within our One Siemens financial framework, we aim in general
to achieve a ROCE in the range of 15% to 20%. We expect ROCE
for fiscal 2017 to come close to or reach the lower end of our
target range, compared to 14.3% for fiscal 2016. Burdens from
pending portfolio matters, which are excluded from our outlook,
could materially reduce our expectation for ROCE for fiscal 2017.
24
Combined Management Report
Capital structure
We aim in general for a capital structure, defined as the ratio of
industrial net debt to EBITDA, of up to 1.0, and expect to achieve
this in fiscal 2017.
A.8.1.4 OVERALL ASSESSMENT
We continue to anticipate headwinds for macroeconomic growth
and investment sentiment in our markets due to the complex
geopolitical environment. Therefore, we expect modest growth
in revenue, net of effects from currency translation and portfolio
transactions. We further anticipate that orders will exceed reve-
nue for a book-to-bill ratio above 1. For our Industrial Business,
we expect a profit margin of 10.5% to 11.5%. We expect basic
EPS from net income in the range of €6.80 to €7.20, compared
to €6.74 in fiscal 2016 which included €0.23 from discontinued
operations.
This outlook assumes stabilization in the market environment
for our high-margin short-cycle businesses. It further excludes
charges related to legal and regulatory matters as well as poten-
tial burdens associated with pending portfolio matters.
Overall, the actual development for Siemens and its Segments
may vary, positively or negatively, from our outlook due to the
risks and opportunities described below or if our expectations
and assumptions do not materialize.
A.8.2 Risk management
A.8.2.1 BASIC PRINCIPLES OF RISK MANAGEMENT
Our risk management policy stems from a philosophy of pursuing
sustainable growth and creating economic value while managing
appropriate risks and opportunities and avoiding inappropriate
risks. As risk management is an integral part of how we plan and
execute our business strategies, our risk management policy is
set by the Managing Board. Our organizational and accountabil-
ity structure requires each of the respective managements of our
Industrial Business, SFS, regions and Corporate Units to imple-
ment risk management programs that are tailored to their spe-
cific industries and responsibilities, while being consistent with
the overall policy.
A.8.3.1 STRATEGIC RISKS
Below we describe the risks that could have a material adverse
effect on our business, financial condition (including effects on
assets, liabilities and cash flows), results of operations and repu-
tation. The order in which the risks are presented in each of the
four categories reflects the currently estimated relative exposure
for Siemens associated with these risks and thus provides an in-
dication of the risks' current importance to us. Additional risks
not known to us or that we currently consider immaterial may
also negatively impact our business objectives and operations.
Unless otherwise stated, the risks described below relate to all of
our segments.
A.8.3 Risks
To oversee the ERM process and to further drive the integration
and harmonization of existing control activities to align with legal
and operational requirements, the Managing Board established
a Risk Management and Internal Control Organization, headed by
the Chief Risk & Internal Control Officer, and a Corporate Risk and
Internal Control Committee (CRIC). The CRIC obtains risk and op-
portunity information from the Risk Committees established at
the Industrial Business, SFS, and regional organizations and from
the heads of Corporate Units. In order to allow for a meaningful
discussion on Siemens group level individual risk and opportuni-
ties of similar cause-and-effect nature are aggregated into risk
and opportunity themes. This aggregation naturally results in a
mixture of risks, including those with a primarily qualitative as-
sessment and those with a primarily quantitative risk assessment.
Accordingly, we do not foresee a purely quantitative assessment
of risk themes. This information then forms the basis for the eval-
A.8.2.3 RISK MANAGEMENT ORGANIZATION
AND RESPONSIBILITIES
Responsibilities are assigned for all relevant risks and opportuni-
ties, with the hierarchical level of responsibility depending on the
significance of the respective risk or opportunity. In a first step,
assuming responsibility for a specific risk or opportunity involves
choosing one of our general response strategies. Our general
response strategies with respect to risks are avoidance, transfer,
reduction or acceptance of the relevant risk. Our general re-
sponse strategy with respect to opportunities is to 'seize' the rel-
evant opportunity. In a second step, responsibility for a risk or
opportunity also involves the development, initiation and moni-
toring of appropriate response measures corresponding to the
chosen response strategy. These response measures have to be
specifically tailored to allow for effective risk management.
Accordingly, we have developed a variety of response measures
with different characteristics. For example, we mitigate the risk
of fluctuations in currency and interest rates by engaging in
hedging activities. Regarding our long-term projects, systematic
and comprehensive project management with standardized proj-
ect milestones, including provisional acceptances during project
execution and complemented by clearly defined approval pro-
cesses, assists us in identifying and responding to project risks at
an early stage, even before the bidding phase. Furthermore, we
maintain appropriate insurance levels for potential cases of dam-
age and liability risks in order to reduce our exposure to such risks
and to avoid or minimize potential losses. Among others, we ad-
dress the risk of fluctuation in economic activity and customer
demand by closely monitoring the macroeconomic conditions
and developments in relevant industries, and by adjusting capac-
ity and implementing cost-reduction measures in a timely and
consistent manner, if deemed necessary.
Conditions for the markets addressed by the Digital Factory
Division are expected to improve modestly in fiscal 2017. Global
manufacturing production is forecasted to grow slightly in fiscal
2017, though global political and economic uncertainties are ex-
pected to continue to restrain investment decisions of key cus-
tomers. Market growth is expected to benefit from ongoing rising
demand from consumer-oriented manufacturing industries, es-
pecially in industrialized countries. Also, price stabilization in
some raw material markets is anticipated to end the economic
downturn in a number of emerging countries. Overall, we see
potential for the machine-building industry to return to slight
growth during the course of fiscal 2017, and the trend towards
digitalization is expected to continue to drive growth in the
industry software market.
effects and are aggregated within and for each of the organiza-
tions mentioned above.
25
Combined Management Report
The ERM process aims for early identification and evaluation of,
and response regarding, risks and opportunities that could mate-
rially affect the achievement of our strategic, operational, finan-
cial and compliance objectives. The time horizon covered by ERM
is typically three years. Our ERM is based on a net risk approach,
addressing risks and opportunities remaining after the execution
of existing control measures. If risks have already been consid-
ered in plans, budgets, forecasts or the financial statements (e.g.
as a provision or risk contingency), they are supposed to be in-
corporated with their financial impact in the entity's business
objectives. As a consequence, only additional risks arising from
the same subject (e.g. deviations from business objectives, dif-
ferent impact perspectives) should be considered for the ERM. In
order to provide a comprehensive view on our business activities,
risks and opportunities are identified in a structured way combin-
ing elements of both top-down and bottom-up approaches. Risks
and opportunities are generally reported on a quarterly basis.
This regular reporting process is complemented by an ad-hoc
reporting process that aims to escalate critical issues in a timely
manner. Relevant risks and opportunities are prioritized in terms
of impact and likelihood, considering different perspectives, in-
cluding business objectives, reputation and regulatory matters.
The bottom-up identification and prioritization process is supple-
mented by workshops with the respective managements of the
Industrial Business, SFS, regions and Corporate Units. This top-
down element ensures that potential new risks and opportunities
are discussed at management level and are included in the sub-
sequent reporting process, if found to be relevant. Reported risks
and opportunities are analyzed regarding potential cumulative
Risk management at Siemens builds on a comprehensive, inter-
active and management-oriented Enterprise Risk Management
(ERM) approach that is integrated into the organization and that
addresses both risks and opportunities. Our ERM approach is
based on the worldwide accepted Enterprise Risk Management -
Integrated Framework (2004) developed by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
The framework connects the ERM process with our financial re-
porting process and our internal control system. It considers a
company's strategy, the efficiency and effectiveness of its busi-
ness operations, the reliability of its financial reporting as well
as compliance with relevant laws and regulations to be equally
important.
tor such risks more closely as our business progresses. Our inter-
nal auditors regularly review the adequacy and effectiveness of
our risk management system. Accordingly, if deficits are de-
tected, it is possible to adopt appropriate measures for their elim-
ination. This coordination of processes and procedures is in-
tended to help ensure that the Managing Board and the
Supervisory Board are fully informed about significant risks in a
timely manner.
A.8.2.2 ENTERPRISE RISK MANAGEMENT PROCESS
We have implemented and coordinated a set of risk manage-
ment and control systems which support us in the early recogni-
tion of developments that could jeopardize the continuity of our
business. The most important of these systems include our en-
terprise-wide processes for strategic planning and management
reporting. Strategic planning is intended to support us in consid-
ering potential risks well in advance of major business decisions,
while management reporting is intended to enable us to moni-
26
For fiscal 2017, we expect markets served by the Mobility Divi-
sion to continue to grow moderately. We anticipate that rail op-
erators in Germany will continue to make significant invest-
ments. In the Middle East and Africa, we expect tenders of
further large turnkey and rolling stock projects. In China, we
expect investments in high-speed trains, urban transport and
rail infrastructure to continue to drive growth. In India, market
growth should continue from planned projects for commuter
and high-speed passenger lines, freight rail, and related infra-
structure as part of the transportation infrastructure build-out.
Overall, local rail transport is expected to gain importance as
urbanization is progressing. In emerging countries, rising in-
comes are expected to result in greater demand for public trans-
port solutions.
28 Combined Management Report
For the markets served by the Building Technologies Division,
we expect solid growth in fiscal 2017. The regional differences in
growth dynamics are narrowing further, with modestly increas-
ing growth rates in developed countries and slowing growth in
emerging markets. Above-average growth is anticipated in the
Middle East, China, India and the U.S. A majority of the European
countries are anticipated to continue their recovery, led by Ger-
many, Spain and some of the Northern European countries. On
the other hand, growth might be impacted in countries with sig-
nificant exposure to weak commodity markets and in countries
with geopolitical uncertainties.
A.6 Overall assessment of the economic position
19
Combined Management Report
Healthineers' investments are mainly driven by enhancing com-
petitiveness and innovation notably in the diagnostics busi-
nesses, including large amounts relating to intangible assets,
particularly capitalized development expenses for new platforms
and to upcoming spending for factories, especially in China.
Process Industries and Drives makes most of its capital expen-
ditures for the purpose of rationalization, replacement and mod-
ification required for transition to innovative products, particu-
larly relating to the large drives business.
Major spending of Digital Factory relates to the factory automa-
tion, motion control systems and control products businesses,
including investments in production facilities in China.
Mobility's investments mainly focus on meeting project de-
mands and maintaining or enhancing its production and service
facilities, including capital expenditures for improving its respec-
tive positions in growing market segments.
The investments of Building Technologies mainly relate to the
products and systems business, particularly innovation projects,
such as control and service platforms.
Energy Management is spending the larger portion of its capital
expenditures for innovation, particularly in the low voltage and
products business. Further investments are primarily related to
the expansion of factories and technical equipment and to the
replacement of fixed assets.
The investments of Wind Power and Renewables are focused
on the extension, modernization and optimization of existing
plants to allow for the large-scale manufacturing of innovative
products, including construction of production and service facil-
ities such as in the U.K., Germany, Morocco and Egypt. To a lesser
extent, Wind Power and Renewables also focuses on transporta-
tion solutions particularly for delivering large turbines.
The investments of Power and Gas are focused on replacement,
enhancing productivity and innovation, mainly relating to our
large gas turbines and generators business, including upcoming
spending for a new technology platform.
Focus areas of ongoing investing activities of the Industrial
Business are:
With regard to capital expenditures for continuing operations, we
expect a moderate spending increase in fiscal 2017. In addition
we plan to invest significant amounts in coming years in attrac-
tive innovation fields in connection with next47.
Additions to intangible assets and property, plant and equipment
from continuing operations totaled €2.1 billion in fiscal 2016.
Within the Industrial Business ongoing investments related
mainly to technological innovations; extending our capacities for
designing, manufacturing and marketing new solutions; improv-
ing productivity and our global footprint; and replacements of
fixed assets. These investments amounted to €1.5 billion in fiscal
2016. The remaining portion in fiscal 2016, €0.6 billion, related
mainly to SRE, including significant amounts related to office proj-
ects, such as new corporate office buildings in Germany, and to
support investing activities particularly at Wind Power and Renew-
ables. SRE is responsible for uniform and comprehensive manage-
ment of Company real estate worldwide, and supports the Indus-
trial Business and corporate activities with customer-specific real
estate solutions.
Investing activities
22 Combined Management Report
(2,135)
5,476
(in millions of €)
Cash flows from operating activities
Additions to intangible assets and property, plant and equipment
Free cash flow
Continuing
operations
Discontinued
operations
7,668
In fiscal 2016, we successfully continued implementing our "Vision
2020" concept. We made further significant steps to strengthen
our business focus in electrification, automation and digitaliza-
tion by acquiring CD-adapco, a U.S.-based provider of simulation
software, and by signing binding agreements to merge our wind
power business, including service, with Gamesa to strengthen
our wind power business both regionally and in the global on-
shore market. We sold our remaining financial assets in the hear-
ing aid business and our share in Unify Holdings B.V. to Atos SE.
For Process Industries and Drives we implemented measures to
address the Division's structural challenges with regard to adjust-
ing regional footprint and reducing overcapacities. We also
made substantial progress in our ongoing initiative to improve
profitability of low-margin businesses throughout our Industrial
Business. Beginning with fiscal 2017 we founded next47, a sepa-
rate unit that pools our existing startup activities to foster disrup-
tive ideas more vigorously and accelerate the development of
new technologies.
(57)
5,533
(57)
Fiscal year 2016
Continuing and
discontinued operations
7,611
(2,135)
We also made further progress in streamlining our management
structures and processes. Following cost savings of approximately
€0.4 billion in fiscal 2015, we reduced cost by an additional
€0.6 billion in fiscal 2016, thus achieving cost savings of €1.0 bil-
lion compared to fiscal 2014.
With our ability to generate positive operating cash flows, our
total liquidity (defined as cash and cash equivalents as well as
available-for-sale financial assets) of €11.9 billion, our €7.1 billion
in unused lines of credit, and given our credit ratings at year-end,
we believe that we have sufficient flexibility to fund our capital
requirements. Also in our opinion, our operating net working
capital is sufficient for our present requirements.
Orders increased 5% year-over-year to €86.5 billion, for a book-
to-bill ratio of 1.09, thus fulfilling our expectation for a ratio
clearly above 1.0. All industrial businesses contributed to order
growth except for the Mobility Division, which recorded lower
volume from large orders year-over-year, and the Process Indus-
tries and Drives Division, which is suffering from weak demand
in commodity-related markets. Order growth was particularly
impressive in the Power and Gas and the Wind Power and Renew-
ables Divisions. While Power and Gas recorded among others
large orders for power plants in Egypt, Wind Power and Renew-
ables won among others a number of contracts for large offshore
wind-farms including service in the U.K.
A.8 Report on expected developments
and associated material opportunities and risks
A.8.1 Report on expected
developments
A.8.1.1 WORLDWIDE ECONOMY
In fiscal year 2017, the world economy is expected to grow only
slightly faster than in fiscal 2016, but still well below the long-
term historical trend. Global GDP is expected to expand by 2.8%,
with fixed investments growing by 3.2%. Fixed investments in
emerging countries (+4.4%) are expected to grow faster than in
advanced economies (+1.9%).
In China, economic growth is projected to slow to 6.3% in 2017
after 6.6% in 2016. Some questions exist about the sustainability
of development in the country's financial and real estate sectors.
With China's debt-to-GDP ratio rising strongly in recent years,
the risks of a financial imbalance have increased. In addition,
large housing price increases in several large cities have raised
concerns about another real estate bubble.
21
In Europe, economic activity is expected to remain hampered by
political risks. Negotiations between the U.K. and the European
Union regarding the U.K.'s exit from the EU have been announced
for spring 2017 and could become contentious. The exit process
could heighten business and consumer uncertainty, reduce in-
vestment in the U.K., and pose some risk to financial markets.
This is also true for the banking sector which in some countries
suffers from non-performing loans and a capital shortage. GDP
growth is forecast at 1.5% in 2017 after 1.8% in 2016.
The forecasts presented here for GDP and fixed investments are
based on a report from IHS Markit dated October 15, 2016.
A.8.1.2 MARKET DEVELOPMENT
For fiscal 2017, we expect market volume for the markets served
by the Power and Gas Division to remain near the level of fiscal
2016. We anticipate a decline in the gas turbine market and a
slight recovery in the compression market. Our expectation for
the compression market is based on the assumptions that oil
prices will continue to recover and replacement demand will
grow, particularly to support enhanced extraction techniques
employed in partially depleted fields. We expect flat demand in
the steam turbine market, and a decline in demand for coal-fired
power plants in China. Overall, we assume a shift to more flexible
power generation and stronger demand for combined heat and
power generation.
We expect the markets served by the Wind Power and Renew-
ables Division to return to moderate growth in fiscal 2017.
Growth is expected to be driven by the Americas, particularly the
U.S. and continued growth in the offshore wind power market
segment. Overall, we expect a continuation of the trend towards
an increasing share of renewable energy within the energy mix.
Within the onshore wind power market, we expect demand in
the low-wind segment to remain significant.
For the markets served by the Energy Management Division, we
expect slight overall growth in fiscal 2017. The Division's markets
are experiencing rising power consumption due to urbanization
and electrification in emerging countries. Also the energy mix is
changing, with a rising share of renewable energy. Furthermore,
there is a trend towards decentralized power generation. Within
the Division's key industries, we expect moderate growth in de-
mand from the metals markets, driven by the Europe, C.I.S.,
Africa, Middle East and the Asia, Australia regions and from the
construction markets. For the oil and gas market, a slight recov-
ery is expected. Demand from data centers is also expected to
contribute to growth. The base market for utilities is expected
to continue to grow, but with large investments such as in the
Middle East not reaching the level of fiscal 2016.
In fiscal 2016, we were particularly successful in executing on our
financial target system, enabling us to twice raise our forecast for
basic earnings per share (EPS) (net income) and to gain market
share in most of our businesses. Despite an unfavorable economic
environment and rising global uncertainties, we reached or ex-
ceeded the targets set for our primary measures for fiscal 2016.
We achieved revenue growth of 6%, net of effects from currency
translation, including two percentage points from portfolio
effects. Net income and basic earnings per share (EPS) (net
income) rose by more than a quarter compared to fiscal 2015
excluding the portfolio gains from the divestment of the hearing
aid business and our stake in BSH. As forecast, Return on capital
employed (ROCE) was double-digit. Our capital structure ratio
was 1.0, close to our forecast.
Despite the positive developments expected for the world econ-
omy in 2017, first and foremost the acceleration of the U.S. econ-
omy, the risks remain substantial, particularly in the geopolitical
sphere (see A.8.3. RISKS). In addition, central banks raising
interest rates might induce financial turbulence, substantial
swings in capital flows, and readjustment of exchange rates.
Emerging markets might be especially vulnerable to these
shocks.
Combined Management Report
The U.S. has substantially resolved its inventory reduction, en-
abling GDP to grow substantially faster (+2.2%) than in 2016
(+1.4%). The good shape of the country's labor markets and in-
creasing wage growth support consumer spending, which is ex-
pected to remain the mainstay of the economy. Improved trends
in housing and capital spending are also expected to support
growth. In particular, business fixed investment is expected to
pick up, as a recovery in commodity prices is increasing capital
spending in resource extraction and related industries. Never-
theless, potential impacts resulting from political uncertainty in
the wake of the U.S. presidential election have to be monitored.
20 Combined Management Report
In November 2016, Siemens announced the acquisition of Mentor
Graphics (U.S.), a design automation and industrial software pro-
vider. The purchase price is US$37.25 per share in cash, which
represents an enterprise value of US$4.5 billion. Mentor Graphics
will be integrated in the Digital Factory Division. Closing of the
transaction is subject to customary conditions and is expected in
the third quarter of fiscal 2017.
In October 2016, the shareholders of Gamesa approved binding
agreements to merge Siemens's wind power business, including
service, with Gamesa. Closing of the transaction is subject to the
approval of the antitrust and regulatory authorities.
We intend to continue providing an attractive return to share-
holders. As in the past, we intend to fund our dividend payout
from Free cash flow. The Siemens Managing Board, in agreement
with the Supervisory Board, proposes a dividend of €3.60 per
share, up from €3.50 a year earlier.
Free cash flow from continuing and discontinued operations
for fiscal 2016 rose to €5.5 billion, up 17% compared to the prior
fiscal year.
We evaluate our capital structure using the ratio of industrial net
debt to EBITDA. For fiscal 2016, this ratio was 1.0, up from 0.6 in
fiscal 2015. This was close to our forecast, which was to reach a
ratio below but near 1.0.
ROCE was 14.3% in fiscal 2016. We thus reached our forecast for
fiscal 2016, which was to achieve a double-digit ROCE but to
come in substantially below the amount of fiscal 2015, which
was 21.0%. This decline was due to a combination of lower net
income, which in the prior fiscal year benefited from the
above-mentioned divestment gains, and an increase in average
capital employed, resulting mainly from the acquisition of
Dresser-Rand.
Net income in fiscal 2016 was €5.6 billion and basic EPS from net
income was €6.74 both down 24% compared to the prior fiscal
year, which included a gain of €3.0 billion within net income and
€3.66 within earnings per share from the sale of our hearing aid
business and our stake in BSH. Excluding these gains, net income
rose 28%. We thus exceeded our fiscal 2016 forecast for a signif-
icant increase in net income excluding these gains. This in turn
enabled us to exceed our forecast for basic EPS from net income,
which we raised twice during fiscal 2016: first from the range of
€5.90 to €6.20 to the range of €6.00 to €6.40, and then from the
latter range to €6.50 to €6.70. Net income development bene-
fited from our continuous efforts to increase productivity. In fiscal
2016, total cost productivity improved by 5%, above our fiscal
2016 target of 3% to 4%.
A.7 Subsequent events
Outside the Industrial Business, the loss was higher than in fiscal
2015, which included a gain of €1.4 billion from the sale of our
stake in BSH. In contrast, the loss from other at-equity invest-
ments was lower and costs related to Corporate Items declined
substantially compared to the prior year.
Revenue rose to €79.6 billion, also up 5% compared to fiscal
2015. All our industrial businesses increased revenue year-over-
year, except for the Process Industries and Drives Division. Exclud-
ing currency translation effects, overall revenue rose 6%. Our
forecast was to achieve moderate revenue growth excluding cur-
rency translation effects. As expected, portfolio effects added
2 percentage points to growth. The strongest contribution to
revenue growth came from the Power and Gas Division, which
achieved a double-digit growth rate even after excluding positive
portfolio effects, primarily related to the acquisition of Dresser-
Rand at the end of the third quarter of fiscal 2015. Revenue
growth at Power and Gas included strong contributions from
project execution on orders from Egypt.
The profit margin of the Industrial Business increased to 10.8%,
up from 10.1% in fiscal 2015. We thus reached the upper end of
the range of 10% to 11% that was forecast for fiscal 2016. All
industrial businesses except for Process Industries and Drives
reached their margin ranges, with three Divisions that were
below their margin ranges in fiscal 2015, entering their ranges
in fiscal 2016: Power and Gas, Wind Power and Renewables and
Energy Management. SFS, which is outside our Industrial Business,
achieved a return on equity after tax of 21.6%, again above the
upper end of its margin range.
Industrial Business profit grew 13% to €8.7 billion. As with reve-
nue, all industrial businesses except for Process Industries and
Drives increased their profit year-over-year. Wind Power and Re-
newables nearly tripled its profit compared to fiscal 2015, sup-
ported by a number of factors including successful implementa-
tion of measures for ramping up commercial-scale production of
turbine offerings. The Energy Management Division continued
its strong turnaround, with high double-digit profit growth.
Power and Gas achieved double-digit profit growth, benefiting
from among others a positive effect following the ending or eas-
ing of sanctions on Iran; Power and Gas took significant project
charges and higher severance in the prior year. Mobility contin-
ued its solid project execution and also achieved double-digit
profit growth. Healthineers and our Digital Factory and Building
Technologies Divisions exceeded the already high profit levels
they had reached in fiscal 2015. The decline in profit at Process
Industries and Drives was due to the above-mentioned market
conditions and charges related to measures taken to address
those challenges.
In November 2016, Siemens announced its intention to further
strengthen Healthineers in Siemens for the future and is there-
fore planning to publicly list its healthcare business. Siemens will
announce more precise details regarding the date and scope of
the placement when plans for the public listing are further ad-
vanced. The listing will also depend, among other things, on the
stock market environment.
35
Total assets
20,359
29
71,880
resulting from offsetting
23%
(3)%
69,814
Active difference
Prepaid expenses
(5)%
(13)%
3,816
23,308
83
2,333
2,256
Deferred tax assets
81
3,642
Liabilities and equity
(3)%
(3)%
Equity
Advance payments received
19,247
(78)%
(30)%
securities
62
887
619
14
Liabilities to banks
Liabilities
Other provisions
commitments
Pensions and similar
Provisions
(1)%
708
700
with an equity portion
Special reserve
1%
19,368
Cash and cash equivalents,
Cash and cash equivalents and marketable securities are sig-
nificantly affected by the liquidity management of Siemens AG.
The liquidity management is based on the finance strategy of the
Siemens Group. Therefore, the change in liquidity of Siemens AG
was not driven only by business activities of Siemens AG.
19,492
Combined Management Report
The improvement in other financial income (expenses), net re-
sulted mainly from a €0.8 billion reduction in expenses from accre-
tion of pension provisions – due to a regulatory change which in-
creased the weighted average discount rate - and from a €0.7 billion
decrease in the realized loss related to interest and foreign currency
derivatives. These positive factors were only partly offset by €0.3
billion lower gains on the realization of monetary balance sheet
items denominated in foreign currencies and provisions for risks in
-
-
Income from investments, net declined due to a decrease of
€2.1 billion in income from profit transfers - in particular from
Siemens Beteiligungen Inland GmbH, which came in €2.0 billion
lower and an increase of €0.1 billion from losses from the dis-
posal of investments. These factors were only partly offset by an
increase of €0.5 billion from profit distribution - in particular
from Siemens Beteiligungsverwaltung GmbH & Co. OHG amount-
ing to €0.9 billion and a decline of €0.2 billion from impair-
ments on investments. For comparison, fiscal 2015 included a
gain of €2.8 billion on the disposal of Siemens' stake in BSH.
The decrease in Financial income, net was primarily attributable
to lower income from investments, net which decreased by
€4.4 billion. Other financial income (expenses), net increased by
€1.3 billion compared to the prior year.
Other operating income (expenses), net came in higher year-
over-year due to a decrease of €0.5 billion in other operating
expenses, only partly offset by a decline of €0.1 billion in other
operating income. The increase is explained mainly by factors in
the prior year. For comparison, fiscal 2015 included, within other
operating expenses, additions to post-closing provisions in con-
nection with the disposal of businesses.
Research and development (R&D) expenses as a percentage
of revenue (R&D intensity) increased by one percentage point
year-over year, to 10%. On an average basis, we employed 10,100
people in R&D in fiscal 2016. For additional information see
→ A.1.1.3 RESEARCH AND DEVELOPMENT.
ment.
Gross profit was lower year-over-year due mainly to declines of
€0.5 billion in Power and Gas and €0.1 billion in Energy Manage-
Revenue decreased moderately as declines of €1.3 billion in En-
ergy Management and €0.2 billion in Power and Gas more than
offset a sharp increase of €0.9 billion in Wind Power and Renew-
ables. On a geographical basis, 73% of revenue was generated in
the Europe, C.I.S., Africa, Middle East region, 18% in the Asia,
Australia region and 9% in the Americas region. Exports from Ger-
many accounted for 64% of overall revenue. In fiscal 2016, orders
for Siemens AG amounted to €28.9 billion. Within Siemens AG,
the development of revenue, primarily in connection with large
orders, depends strongly on the completion of contracts.
93%
(1)%
(2,714)
3,084
3,060
Unappropriated net income
(195)
Trade payables, liabilities
35
(14)%
derivatives, which were €0.2 billion higher. For comparison, fiscal
2015 included impairments of loan receivables of Unify Holdings
B.V. and Unify Germany Holdings B.V. amounting to €0.2 billion.
A.9.2 Net assets and financial position
16,717
Receivables and other assets
Current assets
1%
2%
2%
2,439
43,688
46,127
47,083
44,611
Financial assets
2,472
Intangible and tangible assets
Non-current assets
Assets
(in millions of €)
% Change
Sep 30,
2015
2016
Statement of Financial Position of Siemens AG in accordance
with German Commercial Code (condensed)
The decline in Income taxes resulted from lower income tax ex-
penses due to the absence of burdens of tax audits from the prior
year as well as tax refunds that arose from positive appeal deci-
sions for prior years in fiscal 2016. That was partly offset by changes
in deferred taxes due primarily to an adjusted discount rate ap-
plied for the provision for Pensions and similar commitments.
to affiliated companies
Fringe benefits
11,250
8,360
President
and CEO:
Obligation to hold shares during term of office on the Managing Board
יו
compensation
Base
Performance-based component
compensation
Managing
Board
member:
Base
compensation
Base
target compensation
overall
max. 1.7 times
Compensation
Bonus: 0-200%
add. +20%
adjustment
add. ±20% adjustment
Performance-based component with deferred payout
Non-performance-based component
2 times
base com-
pensation
Combined Management Report
37
Combined Management Report
Changes in the share price are measured on the basis of a twelve-
month reference period (compensation year) over three years
(performance period), while Stock Awards are restricted for a
period of four years. When this restriction period expires, the
Supervisory Board determines how much better or worse
Siemens stock has performed relative to the stock of its compet-
itors. This determination yields a target achievement of between
Long-term stock-based compensation is linked to the performance
of Siemens stock compared to its competitors. The Supervisory
Board will decide on a target system (target value for 100% and
target line) for the performance of Siemens stock relative to the
stock of - at present – five competitors (ABB, General Electric,
Rockwell, Schneider Electric and Toshiba). If significant changes
occur among these competitors during the period under consid-
eration, the Supervisory Board may take these changes into ac-
count, as appropriate, in determining the values for comparison
and/or calculating the relevant stock prices of those competitors.
-
In the event of 100% target achievement, the annual target
amount for the monetary value of the Stock Awards commitment
is €2,120,000 for the President and CEO (effective October 1,
2015). For the CFO and for those members of the Managing
Board who are responsible for Divisions (including Healthineers)
it is €1,080,000. For the other member of the Managing Board,
it is €1,040,000. Since fiscal 2015, the Supervisory Board has had
the option of increasing the target amount for each member of
the Managing Board, on an individual basis, by as much as 75%
for one fiscal year at a time. This option enables the Supervisory
Board to take account of each Managing Board member's indi-
vidual accomplishments and experience as well as the scope and
demands of his or her position.
Long-term stock-based compensation consists of a grant of for-
feitable stock commitments (Stock Awards) at the beginning of
the fiscal year. Beneficiaries receive one free share of Siemens
stock per Stock Award after an approximately four-year restriction
period and subject to target achievement. If the employment
agreement begins during the fiscal year, an equivalent number
of Siemens Phantom Stock Awards will be granted instead of
Stock Awards. In lieu of a transfer of shares, only a cash equiva-
lent is given at the end of the restriction period for Siemens Phan-
tom Stock Awards. Beyond that, the same provisions agreed upon
for Siemens Stock Awards apply. In the event of extraordinary
unforeseen developments that impact the share price, the Super-
visory Board may decide to reduce the number of promised Stock
Awards retroactively, or it may decide that in lieu of a transfer of
Siemens stock only a cash settlement in a defined and limited
amount will be paid, or may decide to postpone transfers of
Siemens stock for payable Stock Awards until the developments
have ceased to impact the share price.
Long-term stock-based compensation
At its duty-bound discretion, the Supervisory Board may revise
the amount resulting from target achievement upward or down-
ward by as much as 20%; the adjusted amount of the Bonus paid
can thus be as much as 240% of the target amount. In choosing
the factors to be considered in deciding on possible revisions of
the Bonus payouts (±20%), the Supervisory Board takes account
of incentives for sustainable corporate management. Decisions
to make discretionary adjustments may take factors such as the
results of an employee survey or a customer satisfaction survey
into account as well as the Company's economic situation. The
revision option may also be exercised in recognition of Managing
Board members' individual achievements. The Bonus is paid en-
tirely in cash.
For 100% target achievement (target amount), the amount of the
Bonus equals the amount of base compensation. The Bonus is
subject to a ceiling (cap) of 200%. If targets are substantially
missed, variable compensation may not be paid at all (0%).
Variable compensation (Bonus) is based on the Company's busi-
ness performance in the past fiscal year. The Bonus depends on
an equal one-third weighting of target achievement of the target
parameters return on capital employed, earnings per share and
individual targets. To achieve a consistent target system Compa-
ny-wide, corresponding targets - in addition to other factors -
also apply to senior managers.
Performance-based components
Variable compensation (Bonus)
Fringe benefits include the costs, or the cash equivalent, of non-
monetary benefits and other perquisites, such as the provision of
a company car, contributions toward the cost of insurance, the
reimbursement of expenses for legal advice and tax advice, ac-
commodation and moving expenses, including a gross-up
for
any
taxes due in this regard, currency adjustment payments and costs
relating to preventive medical examinations.
retained earnings
Base compensation is paid as a monthly salary. Since October 1,
2015, the base compensation of President and CEO Joe Kaeser
has amounted to €2,034,000 per year. The base compensation
of the CFO and of those members of the Managing Board who
are responsible for Divisions (including Healthineers) has been
€1,042,800 per year. For the other member of the Managing
Board, it has been €988,800 per year.
Non-performance-based components
Base compensation
In fiscal 2016, the Managing Board's remuneration system had
the following components:
38
> Variability: 0-200%
one-third each
> 3 targets
Variable compensation (Bonus)
(8)%
(8)%
31,545
32,494
29,118
29,752
385
69,814
Total liabilities and equity
Deferred income
GOVERNANCE STATEMENT PURSUANT TO SECTION 289A OF THE GERMAN
COMMERCIAL CODE.
The Corporate Governance statement pursuant to Section 289a
of the German Commercial Code is an integral part of the Com-
bined Management Report and is presented in → C.4.2 CORPORATE
A.9.3 Corporate Governance
statement
The decrease in Trade payables, liabilities to affiliated compa-
nies and other liabilities was due primarily to lower liabilities to
affiliated companies as a result of intra-group financing activities.
Other provisions increased due primarily to higher provisions for
losses from derivative financial transactions, increased tax provi-
sions and higher provisions for personnel costs, each of which
increased by €0.3 billion.
The decrease in Pension and similar commitments resulted
mainly from a €0.8 billion reduction related to the above-men-
tioned adjustments of the discount rate and from lower interest
and service costs, which declined €0.3 billion, partly offset by a
decrease of €0.4 billion in transfers of pension obligations.
The increase in Equity was attributable to net income for the year
of €3.0 billion and issuance of treasury stock of €0.4 billion in
conjunction with our share-based compensation program. These
factors were partly offset by dividends paid in fiscal 2016 (for
fiscal 2015) of €2.8 billion. In addition, equity was reduced due
to share buybacks during the year amounting to €0.4 billion. The
equity ratios at September 30, 2016 and 2015 were 28% and 27%,
respectively.
The decrease in Receivables and other assets was due primarily
to lower receivables from affiliated companies as a result of intra-
group financing activities.
Financial assets went up due to a €0.5 billion increase in loans
and an increase of €0.3 billion in shares in affiliated companies.
(3)%
11%
3%
11,553
7,511
19,064
19,610
367
and other liabilities
71,880
36
> Variability: 0-200%
compared to 5 competitors
> Target parameter: stock price
Long-term stock-based compensation
(Stock Awards):
max. 300% of
target amount
Stock-based
component
Share Ownership Guidelines
Maximum amounts of compensation
Target compensation
Remuneration system for Managing Board members
The system and levels for the Managing Board's remuneration are
determined and regularly reviewed by the full Supervisory Board,
based on proposals by the Compensation Committee. The Super-
visory Board reviews remuneration levels annually to ensure that
they are appropriate. In this process, the Company's economic
situation, performance and outlook as well as the tasks and per-
formance of the individual Managing Board members are taken
into account. In addition, the Supervisory Board considers the
common level of remuneration in comparison with peer compa-
nies and with the compensation structure in place in other areas
of the Company. It also takes due account of the relationship
between the Managing Board's remuneration and that of senior
management and staff, both overall and with regard to its devel-
opment over time. For this purpose, the Supervisory Board has
also determined how senior management and the relevant staff
are to be differentiated. The remuneration system that has been
in place for Managing Board members since fiscal 2015 was ap-
proved at the Annual Shareholders' Meeting on January 27, 2015.
The individual components of compensation - base compensa-
tion, variable compensation (Bonus) and long-term stock-based
compensation - are weighted equally, and each comprises about
one-third of target compensation. This equal weighting is also
applied to the three target parameters of variable compensation.
The remuneration system for the Siemens Managing Board is in-
tended to provide an incentive for successful corporate manage-
ment with an emphasis on sustainability. Managing Board mem-
bers are expected to make a long-term commitment to and on
behalf of the Company and may benefit from any sustained in-
crease in the Company's value. For this reason, a substantial
portion of their total remuneration is linked to the long-term
performance of Siemens stock. Their remuneration is to be com-
mensurate with the Company's size and economic position. Ex-
ceptional achievements are to be rewarded adequately, while
falling short of targets is to result in an appreciable reduction in
remuneration. Their compensation is also structured so as to be
attractive in comparison to that of competitors, with a view to
attracting outstanding managers to the Company and retaining
them for the long term.
A.10.1.1 REMUNERATION SYSTEM
A.10.1 Remuneration of Managing
Board members
This report is based on the recommendations of the German
Corporate Governance Code (Code) and the requirements of the
German Commercial Code (Handelsgesetzbuch), the German
Accounting Standards (Deutsche Rechnungslegungs Standards)
and the International Financial Reporting Standards (IFRS).
A.10 Compensation Report
Combined Management Report
5%
(3)%
Allocation to other
3 times base
compensation
179
32
losses may have an adverse effect on our business, financial con-
dition and results of our operations.
Protectionism (incl. Localization): Protectionist trade policies
and changes in the political and regulatory environment in the
markets in which we operate, such as import and export controls,
tariffs and other trade barriers including debarment from certain
markets and price or exchange controls, could affect our business
in several national markets; could impact our business, financial
position and results of operations; and may expose us to penal-
ties, other sanctions and reputational damage. In addition, the
uncertainty of the legal environment in some regions could limit
our ability to enforce our rights and subject us to increasing costs
related to appropriate compliance programs.
Current or future litigation: Siemens is and will be in the course
of its normal business operations involved in numerous legal dis-
putes and proceedings in various jurisdictions. These legal dis-
putes and proceedings could result, in particular, in Siemens
being subject to payment of damages and punitive damages,
equitable remedies or criminal or civil sanctions, fines or dis-
gorgement of profit. In individual cases this may also lead to for-
mal or informal exclusion from tenders or the revocation or loss
of business licenses or permits. In addition, further legal disputes
and proceedings may be commenced or the scope of pending
legal disputes and proceedings may be expanded. Asserted
claims are generally subject to interest rates.
Some of these legal disputes and proceedings could result in ad-
verse decisions for Siemens that may have material effects on our
financial position, the results of operations and/or cash flows.
Siemens maintains liability insurance for certain legal risks at lev-
els our management believes are appropriate and consistent with
industry practice. The insurance policy, however, does not protect
Siemens against reputational damage. Moreover, Siemens may
incur losses relating to legal proceedings beyond the limits, or out-
side the coverage, of such insurance or exceeding any provisions
made for legal proceedings related losses. Finally, there can be no
assurance that Siemens will be able to maintain adequate insur-
ance coverage on commercially reasonable terms in the future.
For additional information with respect to specific proceedings, see
NOTE 21 in B.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
A.8.3.5 ASSESSMENT OF THE
OVERALL RISK SITUATION
The most significant challenges have been mentioned first in
each of the four categories Strategic, Operations, Financial and
Compliance. The risks caused by highly competitive environment
continue to be the most significant as in the prior year.
Even though the assessments of individual risk exposures have
changed during fiscal 2016 due to developments in the external
environment, effects of our own mitigation measures and the
revision of our plans, the overall risk situation for Siemens did not
change significantly as compared to the prior year.
At present, no risks have been identified that either individually
or in combination could endanger our ability to continue as a
going concern.
A.8.4 Opportunities
Within our Enterprise Risk Management (ERM) we regularly iden-
tify, evaluate and respond to opportunities that present them-
selves in our various fields of activity. Below we describe our most
significant opportunities. Unless otherwise stated, the opportu-
nities described below relate to all of our segments. The order in
which the opportunities are presented reflects the currently esti-
mated relative exposure for Siemens associated with these oppor-
tunities and thus provides an indication of the opportunities'
current importance to us. The described opportunities are not
necessarily the only ones we encounter. In addition, our assess-
ment of opportunities is subject to change as our Company, our
markets and technologies are constantly developing. It is also
possible that opportunities we see today will never materialize.
Success from innovation along electrification, automation
and digitalization: Innovation is a central part of Siemens "Vision
2020," an entrepreneurial concept leading Siemens into the
future in three stages: first we "drive performance," then we
"strengthen core," and finally we "scale up" to attain our Vision
2020 goals. We do this by investing significantly in R&D in order
to develop innovative, sustainable solutions for our customers and
to simultaneously safeguard our competitiveness. We are an in-
novative company and invent new technologies that we expect
will meet future demands arising from the megatrends of demo-
graphic change, urbanization, climate change and globalization.
We are granted thousands of new patents every year and contin-
uously develop new concepts and convincing business models.
We open up access to new markets and customers through new
marketing and sales strategies as well as Divisional master plans.
For example, we established next47, an independent unit de-
signed to found, partner with and invest in start-ups with innova-
tive ideas for shaping the future of electrification, automation and
digitalization, and thereby turn those ideas into viable businesses.
This will help Siemens create the next generation of path-break-
ing innovations in such fields as artificial intelligence, decentral-
ized electrification, autonomous machines, block chain applica-
tions and connected e-mobility. Siemens is positioned along the
value chains of electrification, automation and digitalization in
order to increase future market penetration. Along these value
Combined Management Report
chains, we have identified several growth fields in which we see
our greatest long-term potential. We are orienting our resource
allocation toward these growth fields and have announced con-
crete measures in this direction. Across all Divisions, Siemens is
profiting from its undisputed strength in the digital enterprise. For
example, the company's new cloud based MindSphere platform
enhances the availability of customers' digital products and sys-
tems and improves their productivity and efficiency.
Mergers, acquisitions, equity investments, partnerships di-
vestments and streamline our portfolio: We constantly monitor
our current and future markets for opportunities for strategic
mergers and acquisitions, equity investments or partnerships to
complement our organic growth. Such activities may help us to
strengthen our position in our existing markets, provide access to
new markets or complement our technological portfolio in selected
areas. Opportunities might also arise from well executed divest-
ments that further optimize our portfolio while generating gains.
Continuously developing and implementing initiatives to
reduce costs, boost sales efforts, adjust capacities, improve
our processes, realize synergies: In an increasingly competitive
market environment, a competitive cost structure complements
the competitive advantage of being innovative. We believe that
further improvements in our cost position can strengthen our
global competitive position and secure our market presence
against emerging and incumbent competitors. For example, we
expect to create sustainable value from productivity measures in
connection with our "Vision 2020" concept. Moreover, establish-
ing a stringent claim management process can help us realize
opportunities by enforcing our claims on our contract partners
even more strongly.
Political stabilization of certain critical countries and resil-
ience of worldwide economic environment: We see an oppor-
tunity that political stabilization of certain critical countries and
lifting of sanctions (e.g. Iran) may lead to higher revenue volume
that was unavailable in past years. Furthermore, a return to more
robust macroeconomic growth could also lead to additional vol-
ume and profit for Siemens.
Excellent project execution: By expanding project management
efforts as well as learning from our mistakes in project execution
through a formalized lessons learned approach, we see an oppor-
tunity to continuously reduce non-conformance costs and ensure
on-time delivery of our projects and solutions. Furthermore, strin-
gent project risk and opportunity management, time schedule
management, performance bonuses and highly professional man-
agement of consortium partners and suppliers all help us to avoid
liquidated damages and ultimately improve our profit position. In
addition, improvements of our claim management processes en-
able us to reduce costs incurred as a result of customer claims by
finding a consensus with customers while also improving cus-
tomer relationship management. At the same time, we reduce
quality problems by proactively addressing supplier issues up front.
Localizing value chain activities: Localizing certain value chain
activities, such as procurement, manufacturing, maintenance
and service in emerging markets, could enable us to reduce costs
and strengthen our global competitive position, in particular
compared to competitors based in countries where they can op-
erate with more favorable cost structures. Moreover, our local
footprint in many countries might help us to take advantage of a
possible growth of markets and leverage a shift in markets, re-
sulting in increased market penetration and market share.
Climate change: While climate change is widely considered a
risk, we consider climate change mitigation an opportunity for
Siemens. In line with the global agreement in Paris (COP21) which
entered into force in November 2016. Siemens strives to support
a trend towards reducing CO2 emissions both in own operations
as well as for our customers based on technologies from our en-
vironmental portfolio, such as low-carbon power generation
from renewable energy sources.
Assessment of the overall opportunities situation: The most
significant opportunity for Siemens is "Success from innovation
along electrification, automation and digitalization" compared to
"Mergers, acquisitions, equity investments, partnerships and di-
vestments" as disclosed in our prior year reporting. Even though
our assessment of individual opportunities has changed during
fiscal year 2016 due to developments in the external environ-
ment, our endeavors to profit from them and the revision of our
plans, the overall opportunity situation did not change signifi-
cantly compared to the prior year.
A.8.5 Significant characteristics of
the accounting-related internal
control and risk management system
The following discussion describes information required pursu-
ant to Section 289 (5) and Section 315 (2) no. 5 of the German
Commercial Code (Handelsgesetzbuch) and explanatory report.
The overarching objective of our accounting-related internal con-
trol and risk management system is to ensure that financial re-
porting is conducted in a proper manner, such that the Consoli-
dated Financial Statements and the Combined Management
Report of Siemens group as well as the Annual Financial State-
ments of Siemens AG as the parent company are prepared in
accordance with all relevant regulations.
31
Combined Management Report
Combined Management Report
Environmental, health & safety and other governmental reg-
ulations: Some of the industries in which we operate are highly
regulated. Current and future environmental, health & safety and
other governmental regulations or changes thereto may require
us to change the way we run our operations and could result in
significant increases in our operating or production costs. Fur-
thermore, we see the risk of potential environment, health & safety
incidents as well as potential non-compliance with environment,
health & safety regulations affecting Siemens and our contractors
or sub-suppliers, resulting in e.g. serious injuries, penalties, loss
of reputation and internal or external investigations.
(47)%
47%
(47)%
43%
manufacturing facilities, and the streamlining of product port-
folios, are also part of these cost-reduction efforts. These mea-
sures may not be implemented as planned, may turn out to be
less effective than anticipated, may become effective later than
estimated or may not become effective at all. Any future contri-
bution of these measures to our profitability will be influenced
by the actual savings achieved and by our ability to sustain them.
Furthermore, a delay in critical R&D projects could lead to nega-
tive impacts in running projects. We constantly control and mon-
itor the progress of these projects and initiatives using standard-
ized controlling and milestone tracking approaches.
Cost overruns or additional payment obligations related to
the management of our long-term, fixed-price or turnkey proj-
ects: A number of our industrial businesses conduct activities,
especially large projects, under long-term contracts that are
awarded on a competitive bidding basis. Such contracts typically
arise in Power and Gas, Wind Power and Renewables, Mobility,
and parts of Energy Management and Process Industries and
Drives. Some of these contracts are inherently risky because we
may assume substantially all of the risks associated with complet-
ing a project and meeting post-completion warranty obligations.
For example, we may face the risk that we must satisfy technical
requirements of a project even though we have not gained expe-
rience with those requirements before we win the project. The
profit margins realized on fixed-priced contracts may vary from
original estimates as a result of changes in costs and productivity
over the contract's term. We sometimes bear the risk of unantic-
ipated project modifications, shortage of key personnel, quality
problems, financial difficulties of our customers and/or signifi-
cant partners, cost overruns or contractual penalties caused by
unexpected technological problems, unforeseen developments
at the project sites, unforeseen changes or difficulties in the reg-
ulatory or political environment, performance problems with our
suppliers, subcontractors and consortium partners or other logis-
tical difficulties. Some of our multi-year contracts also contain
demanding installation and maintenance requirements in addi-
tion to other performance criteria relating to timing, unit cost
and compliance with government regulations requirements,
which, if not satisfied, could subject us to substantial contractual
penalties, damages, non-payment and contract termination.
There can be no assurance that contracts and projects, in partic-
ular those with long-term duration and fixed-price calculation,
can be completed profitably. To tackle those risks we imple-
mented a global project management organization to systemat-
ically improve the know-how of the project management person-
nel. For very complex projects we conduct dedicated risk
assessments in very early stages of the sales phase before we
decide to hand over a binding offer to our customer.
Shortage of Skilled Personnel: Competition for highly qualified
personnel (e.g. specialists, experts, "digital" talents) remains in-
tense in the industries and regions in which our businesses oper-
ate. We have ongoing demand for highly skilled employees. Our
future success depends in part on our continued ability to hire,
integrate, develop and retain engineers and other qualified per-
sonnel. We address this risk for example with structured succes-
sion planning, employer branding, retention and career manage-
ment. Furthermore the company is strengthening the capabilities
and skills of our Talent Acquisition teams and has defined a strat-
egy of pro-active search for people with the required skills in our
respective industries and markets.
A.8.3.3 FINANCIAL RISKS
Market price risks: We are exposed to fluctuations in exchange
rates, especially between the U.S. dollar and the euro, because a
high percentage of our business volume is conducted in U.S. dol-
lar and as exports from Europe. In addition, we are exposed to
currency effects involving the currencies of emerging markets, in
particular the Chinese yuan. A strengthening of the euro (partic-
ularly against the U.S. dollar) may change our competitive posi-
tion, as many of our competitors may benefit from having a
substantial portion of their costs based in weaker currencies,
enabling them to offer their products at lower prices. As a result,
a strong euro in relation to the U.S. dollar and other currencies
could have an adverse impact on our results of operations. We
are also exposed to fluctuations in interest rates. Negative devel-
opments in the financial markets and changes in the central bank
policies may negatively impact our results. Certain currency risks
as well as interest rate risks are hedged using derivative financial
instruments. Depending on the development of foreign cur-
rency exchange and interest rates, hedging activities could have
Combined Management Report
29
significant effects on our business, financial condition and results
of operations.
Liquidity and financing risks: Political and economic develop-
ments in the EU as well as the ongoing euro zone sovereign debt
crisis continue to influence global capital markets. Our treasury
and financing activities could face adverse deposit and/or financ-
ing conditions from negative developments related to financial
markets, such as (1) limited availability of funds (particularly U.S.
dollar funds) and hedging instruments; (2) an updated evalua-
tion of our solvency, particularly from rating agencies; (3) nega-
tive interest rates; and (4) impacts arising from more restrictive
regulation of the financial sector, central bank policy, or financial
instruments. Widening credit spreads due to uncertainty and risk
aversion in the financial markets might lead to adverse changes
of fair market values of our financial assets, in particular our de-
rivative financial instruments. Negative developments could also
further increase the costs for buying protection against credit risks
due to a potential increase in counterparty risks. Siemens reduces
funding risks through diversification into different funding instru-
ments, currencies, markets and investor groups. Liquidity risks are
mitigated by depositing cash into different categories of instru-
ments and with a range of counterparties of investment grade
credit quality; the associated counterparty risks are centrally and
closely monitored (including risks resulting from derivatives).
Credit Risks: We provide our customers with various forms of
direct and indirect financing of orders and projects. SFS in partic-
ular bears credit risks due to its financing activities. In part, we
take a security interest in the assets we finance, or we receive
additional collateral. Our business, financial condition and results
of operations may be adversely affected if the credit quality of
our customers deteriorates or if they default on their payment
obligation to us, if the value of the assets in which we have taken
a security interest or additional collateral declines, or if the proj-
ects in which we invest are unsuccessful. Positive market values
from derivatives and deposits with banks induce credit risk
against these banks. We monitor these market value develop-
ments very closely. A default by a major trading partner may have
negative impact on our financial position and the results of finan-
cial operations.
Risks from pension obligations: The funded status of our pen-
sion plans may be affected by change in actuarial assumptions,
including the discount rate, as well as movements in financial
markets or a change in the mix of assets in our investment port-
folio. A significant increase in the underfunding may have a neg-
ative effect on our capital structure and rating, and thus may
tighten refinancing options and increase costs. In order to com-
ply with local pension regulations in selected foreign countries,
we may face a risk of increasing cash outflows to reduce an
underfunding of our pension plans in these countries.
Examinations by tax authorities and changes in tax regula-
tions: We operate in nearly all countries of the world and there-
fore are subject to many different tax regulations. Changes in tax
law in any of these jurisdictions could result in higher tax ex-
pense and payments. Furthermore, legislative changes could
impact our tax receivables and liabilities as well as deferred tax
assets and deferred tax liabilities. In addition, the uncertain tax
environment in some regions could limit our ability to enforce
our rights. As a globally operating organization, we conduct busi-
ness in countries subject to complex tax rules, which may be
interpreted in different ways. Future interpretations or develop-
ments of tax regimes may affect our business, financial condi-
tion and results of operations. We are regularly examined by tax
authorities in various jurisdictions and we continuously identify
and assess resulting risks.
For further information on post-employment benefits, derivative
financial instruments, hedging activities, financial risk manage-
ment and measurements, see → NOTE 16, 23 AND 24 in → B.6 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS.
A.8.3.4 COMPLIANCE RISKS
Regulatory risks and potential sanctions: As a globally operat-
ing organization, we conduct business with customers in coun-
tries which are subject to export control regulations, embargoes,
economic sanctions or other forms of trade restrictions (hereaf-
ter referred to as "sanctions") imposed by the U.S., the European
Union or other countries or organizations. New or expanded
sanctions in countries in which we do business may result in a
curtailment of our existing business in such countries or indirectly
in other countries. We are also aware of initiatives by institutional
investors, such as pension funds or insurance companies, to
adopt or consider adopting policies prohibiting investment in and
transactions with, or requiring divestment of interests in entities
doing business with, countries identified as state sponsors of ter-
rorism by the U.S. Department of State. It is possible that such
initiatives may result in us being unable to gain or retain inves-
tors, customers or suppliers. In addition, the termination of our
activities in sanctioned countries may expose us to customer
claims and other actions. Our reputation could also suffer due to
our activities with counterparties in or affiliated with these coun-
tries. Due to the political agreement based on the Joint Compre-
hensive Plan of Action (JCPOA) regarding the Iranian nuclear
program, Siemens has revised its group-wide policies to allow
new business activities with customers or end customers in Iran
that are not designated on the EU or U.S. sanctions lists, provided
that these activities do not breach the EU sanctions regulations
or the U.S. Secondary Sanctions (if applicable).
Emerging market operations involve various risks, including civil
unrest, health concerns, cultural differences such as employ-
ment and business practices, volatility in gross domestic prod-
30 Combined Management Report
uct, economic and governmental instability, the potential for
nationalization of private assets and the imposition of exchange
controls. Asian markets in particular are important for our long-
term growth strategy, and our sizeable activities in China operate
under a legal system that is still developing and is subject to
change. Our long-term growth strategy could be limited by gov-
ernments preferentially supporting local competitors. With our
dedicated regional organizations we tackle these risks by con-
stantly monitoring the latest trends and defining our response
strategies which include an ongoing evaluation of our localiza-
tion approach.
Current and future investigations regarding allegations of
corruption, of antitrust violations and of other violations of
law: Proceedings against us regarding allegations of corruption,
of antitrust violations and of other violations of law may lead to
criminal and civil fines as well as penalties, sanctions, injunctions
against future conduct, profit disgorgements, disqualifications
from directly and indirectly engaging in certain types of business,
the loss of business licenses or permits or other restrictions and
legal consequences. Accordingly, we may among other things be
required to comply with potential obligations and liabilities
arising in connection with such investigations and proceedings,
including potential tax penalties. Moreover, any findings related
to public corruption that are not covered by the 2008 and
2009 corruption charge settlements, which we concluded with
American and German authorities, may endanger our business
with government agencies and intergovernmental and supra-
national organizations. Monitors could again be appointed to
review future business practices and we may otherwise be
required to further modify our business practices and our com-
pliance program.
A considerable part of our business activities involve govern-
ments and companies with public shareholders. We also partici-
pate in a number of projects funded by government agencies and
intergovernmental and supranational organizations, such as mul-
tilateral development banks. Ongoing or potential future investi-
gations into allegations of corruption, of antitrust violations or of
other violations of law could also impair relationships with such
business partners or could result in the exclusion of public con-
tracts. Such investigations may also adversely affect existing pri-
vate business relationships and our ability to pursue potentially
important strategic projects and transactions, such as strategic
alliances, joint ventures or other business cooperation, or could
result in the cancellation of certain of our existing contracts.
Moreover, third parties, including our competitors, could initiate
significant litigation.
In addition, future developments in ongoing and potential future
investigations, such as responding to the requests of governmen-
tal authorities and cooperating with them, could divert manage-
ment's attention and resources from other issues facing our busi-
ness. Furthermore, we might be exposed to compliance risks in
connection with recently acquired operations that are in the
ongoing process of integration.
Besides other measures, Siemens established a global compliance
organization which conducts among others compliance risk miti-
gation processes such as Compliance Risk Assessments, and which
has been reviewed by external compliance experts.
Changes of regulations, laws and policies: As a diversified com-
pany with global businesses we are exposed to various product-
and country-related regulations, laws and policies influencing our
processes. We exercise our duty within the supply chain, as our
customers request transparency in the supply chain and as the
obligation to do so already forms an element of customer con-
tracts. If we are unable to achieve sufficient confidence through-
out our supply chain, or if any risks associated with these kinds
of regulations, laws and policies were to materialize, our reputa-
tion could also be adversely affected. We continuously monitor
the political and regulatory landscape in all our key markets to
anticipate potential problem areas, so that we are able to quickly
adjust our business activities accordingly upon any change in
conditions.
In addition, while we have procedures in place to ensure compli-
ance with applicable governmental regulations in the conduct of
our business operations, it cannot be excluded that violations of
applicable governmental regulations may be caused either by us
or by third parties that we contract with, including suppliers or
service providers, whose activities may be attributed to us. Any
such violations expose us to the risk of liability, reputational dam-
age or loss of licenses or permits that are important to our busi-
ness operations. In particular, we could also face liability for
damage or remediation for environmental contamination at
the facilities we design or operate. With regard to certain envi-
ronmental risks, we maintain liability insurance at levels that
our management believes are appropriate and consistent with
industry practice. We may incur environmental losses beyond the
limits, or outside the coverage, of such insurance, and such
33
Interruption of the supply chain: The financial performance of
our Industrial Business depends on reliable and effective supply
chain management for components, sub-assemblies and materi-
als. Capacity constraints and supply shortages resulting from
ineffective supply chain management may lead to delays and
additional cost. We rely on third parties to supply us with parts,
components and services. Using third parties to manufacture,
assemble and test our products reduces our control over manu-
facturing yields, quality assurance, product delivery schedules
and costs. Although we work closely with our suppliers to avoid
supply-related problems, there can be no assurance that we will
not encounter supply problems in the future. Shortages and de-
lays could materially harm our business. Unanticipated increases
in the price of components or raw materials due to market short-
ages or other reasons could also adversely affect performance.
Furthermore, we may be exposed to the risk of delays and inter-
ruptions in the supply chain as a consequence of catastrophic
events, particularly if we are unable to identify alternative sources
of supply or means of transportation in a timely manner or at all.
Besides other measures, we mitigate fluctuation in the global raw
material markets with various hedging instruments.
At the end of each fiscal year, our management performs an eval-
uation of the effectiveness of the implemented control system,
both in design and operating effectiveness. We have a standard-
ized procedure under which necessary controls are defined, doc-
umented in accordance with uniform standards, and tested reg-
ularly on their effectiveness. Nevertheless, there are inherent
limitations on the effectiveness of any control system, and no
system, including one determined to be effective, may prevent
or detect all misstatements.
(2,454)
(2,417)
(2)%
Selling and general
administrative expenses
(3,558) (3,810)
7%
134
(270)
n/a
Other operating income
(expenses), net
Financial income, net
thereof Income from invest-
development expenses
ments 3,732 (prior year 8,142)
6,122
(49)%
Result from ordinary activities
3,158
5,918
Income taxes
(160)
(300)
256
2,999
5,618
Profit carried forward
Our ERM approach is based on COSO's "Enterprise Risk Manage-
ment - Integrated Framework". As one of the objectives of
this framework is reliability of a company's financial reporting, it
includes an accounting-related perspective. Our accounting-
related internal control system (control system) is based on
the internationally recognized "Internal Control - Integrated
Framework" also developed by COSO. The two systems are com-
plementary.
3,092
Research and
Net income
6,293
24%
2%
(6)%
The base data used in preparing our financial statements consists
of the closing data reported by the operations of Siemens AG and
its subsidiaries. The preparation of the closing data of most of our
entities is supported by an internal shared services organization.
Furthermore, other accounting activities, such as governance
and monitoring related activities, are usually bundled on regional
Qualification of employees involved in the accounting process is
ensured through appropriate selection processes and regular
training. As a fundamental principle, based on materiality con-
siderations, the four eyes principle applies and specific proce-
dures must be adhered to for data authorization. Additional con-
trol mechanisms include target-performance comparisons and
analyses of the composition of and changes in individual line
items, both in the closing data submitted by reporting units and
in the Consolidated Financial Statements. In line with our infor-
mation security requirements, accounting-related IT systems
contain defined access rules protecting them from unauthorized
access. The manual and system-based control mechanisms re-
ferred to above generally also apply when reconciling the IFRS
closing data to the Annual Financial Statements of Siemens AG.
On a quarterly basis, an internal certification process is executed.
Management of different levels of our organization, supported
by confirmations of management of entities under their respon-
sibility, confirms the accuracy of the financial data that has been
reported to Siemens' corporate headquarters and reports on the
effectiveness of the related control systems.
Our internal audit function systematically evaluates our financial
reporting integrity, the effectiveness of the control system and
the risk management system, and the adherence to our compli-
ance policies. In addition, the Audit Committee is integrated into
our control system. In particular, it oversees the accounting pro-
cess and the effectiveness of the control system, the risk manage-
ment system and the internal audit system. Furthermore, we have
set up a Disclosure Committee which is responsible for reviewing
certain financial and non-financial information prior to publica-
tion. Moreover, we have rules for accounting-related complaints.
34
Combined Management Report
A.9 Siemens AG
The Annual Financial Statements of Siemens AG have been pre-
pared in accordance with the rules set out in the German Com-
mercial Code (Handelsgesetzbuch).
Siemens AG is the parent company of the Siemens Group. Results
for Siemens AG are significantly influenced by directly or indi-
rectly owned subsidiaries and investments. The business devel-
opment of Siemens AG is fundamentally subject to the same risks
and opportunities as the Siemens Group. Due to the interrela-
tions between Siemens AG and its subsidiaries and the relative
size of Siemens AG within the Group, the outlook of the Group
also largely reflects our expectations for Siemens AG. Therefore,
the foregoing explanations for the Siemens Group apply also for
Siemens AG. We expect that income from investments will sig-
nificantly influence the profit of Siemens AG.
We intend to continue providing an attractive return to share-
holders. Therefore, we intend to propose a dividend whose distri-
bution volume is within a dividend payout range of 40% to 60%
of net income of the Siemens Group, which we may adjust for this
purpose to exclude selected exceptional non-cash effects.
As of September 30, 2016, the number of employees was 94,363.
A.9.1 Results of operations
level. In particular cases, such as valuations relating to post-
employment benefits, external experts are used. The reported
closing data is used to prepare the financial statements in the
consolidation system. The steps necessary to prepare the financial
statements are subject to both manual and automated controls.
2016
23%
Statement of Income of Siemens AG in accordance
with German Commercial Code (condensed)
as percentage of revenue
5,945
Gross profit
Cost of Sales
Our Consolidated Financial Statements are prepared on the basis
of a centrally issued conceptual framework which primarily con-
sists of uniform Financial Reporting Guidelines and a chart of
accounts. For Siemens AG and other companies within the
Siemens group required to prepare financial statements in accor-
dance with German Commercial Code, this conceptual frame-
work is complemented by mandatory regulations specific to the
German Commercial Code. The need for adjustments in the con-
ceptual framework due to regulatory changes is analyzed on an
ongoing basis. Accounting departments are informed quarterly
about current topics and deadlines from an accounting and clos-
ing process perspective.
(in millions of €)
25,763 26,454
(19,818) (20,161)
Revenue
% Change
Fiscal year
2015
(3)%
2,034 2,034
102
102
2,136 2,136 2,136
2,034
102
1,878
102
2015
2016
2016
(min) (max)
1,010
53
2016
2015
2016
1,980
2016
2015
2016
Klaus Helmrich
Managing Board member
Managing Board member
Lisa Davis'
Dr. Roland Busch
President and CEO
Joe Kaeser
Combined Management Report
€105,227), Barbara Kux - €42,052 (2015: €105,227), Peter
Löscher - €103,403 (2015: €230,387), Prof. Dr. Hermann
Requardt - €5,624 (2015: €1,107,522), Peter Y. Solmssen -
€35,857 (2015: €141,258), and Dr. Michael Süß - €248
(2015: €28,666). In fiscal 2016, the development of the
OSRAM share price lead to a respective adjustment of the
OSRAM cash compensation and thus to earnings in the
amount of €301,027. Especially for former Managing
Board members those earnings are evident, since they
were set off against the usual liabilities arising from other
share based payments and with respect to former Manag-
ing Board members, no essential amount of accruals has
been built up for the remaining tranches.
1,043
2 The figures for individual maximums for multi-year vari-
able compensation reflect the possible maximum value in
accordance with the maximum amount agreed upon for
fiscal 2016 - that is, 300% of the applicable target amount.
3 The expenses recognized for stock-based compensation
for members of the Managing Board in accordance with
the IFRS in fiscal 2016 and fiscal 2015 amounted to
€8,294,921 and €8,109,155, respectively. The following
amounts pertained to the members of the Managing
Board in fiscal 2016: Joe Kaeser €2,378,584 (2015:
€2,003,783), Dr. Roland Busch €1,283,779 (2015:
€1,129,224), Lisa Davis €698,432 (2015: €284,928), Klaus
Helmrich €1,284,349 (2015: €1,076,237), Janina Kugel
€704,026 (2015: €140,185), Prof. Dr. Siegfried Russwurm
€1,302,593 (2015: €1,239,596), and Dr. Ralf P. Thomas
€872,394 (2015: €516,915). The corresponding expense,
determined in the same way, for former Managing Board
members was as follows: Brigitte Ederer - €42,052 (2015:
2016
(min) (max)
Managing Board member
2016
2016
(min) (max)
1,043
683
1,726
1,043
1,091
1,091
48
48
48
1,043
1,043
1,043
1,010
42
1,052
(max)
2016 (min)
2015
2016
2016
1,043 1,043
683
1,726
683
1,726
227
1,238
1,098
1,098
1,098
1,063
55
55
55
1,010
1,043
1 Fringe benefits include the costs, or the cash equivalent,
of non-monetary benefits and other perquisites, such as
the provision of company cars in the amount of €159,687
(2015: €158,131), contributions toward the cost of insur-
ance in the amount of €139,795 (2015: €134,170), the
reimbursement of expenses for legal advice and tax advice,
accommodation and moving expenses, including any
taxes due in his regard, currency adjustment payments
and costs relating to preventive medical examinations
in the amount of €765,327 (2015: €330,620).
Total (Code) 6
One-year variable compensation
(Bonus) Payout amount
without long-term incentive effect,
non-stock-based
Total
Fixed compensation (base compensation)
Fringe benefits¹
components
Performance-based
based components
Non-performance-
(Amounts in thousands of €)
Managing Board members serving as of September 30, 2016
42
41
Combined Management Report
The compensation presented on the following pages was granted
to the members of the Managing Board for fiscal 2016 (individual
disclosure). Due to rounding, the figures presented in the table
may not add up precisely to the totals provided.
On the basis of the Supervisory Board's decisions described
above, Managing Board compensation for fiscal 2016 totaled
€28.90 million, an increase of 5.4% (2015: €27.42 million). Of this
total amount, €20.19 million (2015: €19.56 million) was attribut-
able to cash compensation and €8.71 million (2015: €7.86 mil-
lion) to stock-based compensation.
Total compensation
Since beneficiaries are not entitled to receive dividends, the num-
ber of stock commitments granted was based on the closing
price of Siemens stock in Xetra trading on the date of award less
the present value of dividends expected during the restriction
period. The share price used to determine the number of stock
commitments was €75.60 (2015: €72.30).
Long-term stock-based compensation
The achievement of individual targets was also taken into ac-
count when determining overall target achievement. In its overall
assessment, the Supervisory Board decided not to make any dis-
cretionary adjustments to the Bonus payout amounts. In fiscal
2016, Bonus-related target achievement by Managing Board
members was between 126.34% and 136.33%.
Target achievement
151.67%
137.33%
14.31%
€7.32
Actual FY 2016 figure
100% of target
12.76%
€6.76
1 Continuing and discontinued operations.
1,091
Earnings per share, basic EPS1 (02014-2016)
with long-term incentive effect,
stock-based
Total 5
Service Cost
One-year variable compensation
without long-term incentive effect,
non-stock-based
components
Performance-based
Total compensation of all Managing Board members for fiscal 2016, in accordance with the applicable reporting standards, amounted to €28.90 million
(2015: €27.42 million). The payout amount presented below is to be used instead of the target value according to the Code for one-year variable
compensation. Service costs for pension benefits are not included.
Multi-year variable compensation 2,3
Siemens Stock Awards4
(restriction period: 4 years)
One-year variable compensation
(Bonus) - Target amount
Total (Code) 6
Service Cost
Total 5
with long-term incentive effect,
stock-based
without long-term incentive effect,
non-stock-based
Total
Total compensation
Fixed compensation (base compensation)
Fringe benefits¹
Performance-based
Non-performance-
based components
(Amounts in thousands of €)
Managing Board members serving as of September 30, 2016
One-year variable compensation
(Bonus) - Payout amount
without long-term incentive effect,
non-stock-based
Total compensation
components
Performance-based
Total compensation of all Managing Board members for fiscal 2016, in accordance with the applicable reporting standards, amounted to €28.90 million
(2015: €27.42 million). The payout amount presented below is to be used instead of the target value according to the Code for one-year variable
compensation. Service costs for pension benefits are not included.
Multi-year variable compensation 2,3
Siemens Stock Awards 4
(restriction period: 4 years)
(Bonus) - Target amount
components
1,878
2015
0
1,043
1,043
(max)
(min)
2016
1,043
61
1,010
67
1,078
2015
2016
2016
CFO
Managing Board member
2016
2016
2016 (min) (max)
1,043
1,043 1,043
78
78
78
1,121 1,121 1,121
1,010
78
1,088
1,027 1,027
1,027
651
989
39
39
39
25
989
989
626
2015
2016
2016
(min) (max)
2016
61
Return on capital employed, ROCE¹
61
1,104
5,984
603
5,382
1,104
603
3,240
0
998 1,099
3,086 3,246
604
603
3,690 3,849 1,707
0 3,240
1,121 5,382
602
602
1,723 5,983
998 1,099
3,097 3,263
603
602
3,700 3,865
3,120
1,027 5,130
530 530
1,557 5,660
0
1,059
1,942 3,075
103
530
2,045 3,604
665
2,503
0
1,010 1,043
2,503
0
1,043
1,010
2,373
0
989
626
1,104
1,104
Managing Board member
Dr. Ralf P. Thomas
Prof. Dr. Siegfried Russwurm
603
604
998
3,246
5,382
1,098
3,240
3,071
3,240
0
1,099
998
0 6,360
5,729 6,328 2,136 10,520
1,096 1,101 1,101 1,101
6,825 7,428 3,236 11,620
1,871 2,158
2,503
0
1,010 1,043
2,503
0
1,043
1,010
2,503
0
1,043
1,010
4,882
603
603
3,675
3,843
Janina Kugel
1,376 1,370
3,427 3,560
1,477 1,387
3,713 4,212
3,505 3,584
1,387
1,444
2,683 2,773
6,535 7,066
5,984
1,693
3,664 3,835
602
602
2,034
602
5,382
1,091
3,233
3,061
3,240
0
1,099
998
0 3,240
1,726 5,382
576
576
2,301 5,957
1,099
3,868
611
576
3,857 4,443
5,984
1,700
604
Target parameter
4,824,749
Variable compensation (Bonus)
Joe Kaeser
to show proof as of March 11, 2016
as of September 30, 2016, and required
Managing Board members serving
of shares 3
Value²
Number
Percentage
of base
compensation¹
Number
of shares²
Value¹
Percentage
of base
compensation¹
(Amounts in number of units or €)
Proven
Required
41,025
129,425
28,043
25,273
8,666
25,631
138,923
Dr. Roland Busch
27,122
72,383
14,286
Dr. Roland Busch
13,773
Klaus Helmrich
Total
10,526,888
81,702
7,354,814
747%
21,861
1,967,900
200%
37,637
3,388,083
350%
21,486
1,934,150
200%
35,446
3,190,849
324%
21,861
1,967,900
200%
104,110
9,371,982
604%
51,732
4,656,938
300%
Prof. Dr. Siegfried Russwurm
116,940
5,330
75,263
463,708
57,250
5,030
3,813
832 1,282
2,148 3,368
4,347
14,286
51,124
5,030
136,423
Total
Dr. Ralf P. Thomas
78,633
20,043
8,666
25,273
14,286
82,892
35,437
Prof. Dr. Siegfried Russwurm
29,412
13,757
15,655
Janina Kugel
75,263
19,536
113,230
19,425
82,903
90,241
Lisa Davis
576
38,975
14,286
576
53,261
Klaus Helmrich
27,233
73,254
14,286
14,237
5,737
Obligations under Share Ownership Guidelines
Board. The following table shows the number of Siemens shares
that were held by Managing Board members in office at Septem-
ber 30, 2016, as of the March 2016 deadline for proving compli-
ance with the Share Ownership Guidelines as well as the number
that are to be held permanently with a view to future deadlines.
The deadlines by which the individual Managing Board members
must provide first-time proof of compliance with the Siemens
Share Ownership Guidelines vary from member to member, de-
pending on when he or she was appointed to the Managing
Share Ownership Guidelines
47
Combined Management Report
the end of the vesting period. At the beginning of fiscal 2016, the
following members of the Managing Board had entitlements to
matching shares, which they had acquired before joining the
Managing Board: Dr. Ralf P. Thomas, 780 shares and Janina Kugel,
three shares. In fiscal 2016, no entitlements to matching shares
were acquired. In fiscal 2016, the following entitlements to
matching shares were due: 780 shares, Dr. Ralf P. Thomas. During
fiscal 2016, no entitlements to matching shares were forfeited.
Entitlements to matching shares at the end of fiscal 2016 show
the following balance: Janina Kugel, three shares with a fair value
of €174.
Shares from the Share Matching Plan
Fiscal 2011 was the last year in which Managing Board members
were entitled to participate in the Siemens Share Matching Plan.
Under the plan, they were entitled to invest up to 50% of the
annual gross amount of their variable cash compensation, as de-
termined for fiscal 2010, in Siemens shares. After the expiration
of a vesting period of approximately three years, plan partici-
pants are entitled to receive one free matching share of Siemens
stock for every three Siemens shares acquired and continuously
held under the plan, provided the participants were employed
without interruption at Siemens AG or a Siemens company until
3 Amounts also include stock commitments (Stock Awards)
granted in November 2015 for fiscal 2016. These amounts
may further include stock commitments received as com-
pensation by the Managing Board member before joining
the Managing Board.
was linked to the performance of Siemens stock compared
to defined competitors during the four-year vesting period.
It amounted to 0%. Siemens Stock Awards 2011 that had
already been granted were thus forfeited without replace-
ment in accordance with the plan rules.
2 For one half of the Stock Awards 2011, target attainment
depended on the EPS value for the past three fiscal years
and amounted to 114%. For the other half, target attainment
1 The weighted average fair value as of the grant date for
fiscal 2016 was €76.95 per granted share.
508,005
32,212
23,305,728
258,895
1 The amount of the obligation is based on the average base
compensation for the four years prior to the respective dates
of proof.
1/3
Individual
targets
Earnings
per share
ROCE
1/3
1/3
1/3
Variable compensation
(Bonus)
Base compensation
13
1/3
Three equally balanced components within the remuneration system and three equally balanced targets within the Bonus
Transparency through simplicity:
With regard to the further terms of the Stock Awards, the same
principles apply in general to the Managing Board and to senior
managers. These principles are discussed in more detail in
→ NOTE 25 in B.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
300% of the respective target amount. If this maximum amount
of compensation is exceeded, the corresponding entitlement to
stock commitments will be forfeited without replacement.
The value of the Siemens stock to be transferred for Stock Awards
after the end of the restriction period is subject to a ceiling of
0% and 200% (cap). If target attainment is above 100%, an addi-
tional cash payment corresponding to the outperformance will
be made. If target attainment is less than 100%, a number of
stock commitments equivalent to the shortfall from the target
will expire without replacement.
3,126,396
583,968
565,824
4,607,800
3,522,681
553,728
350,560
1,084,971
Long-term
438,713
stock-based compensation
(Siemens Stock Awards)
Maximum amount for compensation overall
In addition to the maximum amounts of compensation for vari-
able compensation and long-term stock-based compensation, a
maximum amount for compensation overall has been defined.
Since fiscal 2014, this amount cannot be more than 1.7 times
higher than target compensation. Target compensation comprises
base compensation, the target amount for variable compensation
and the target amount for long-term stock-based compensation,
excluding fringe benefits and pension benefit commitments.
When fringe benefits and pension benefit commitments for a
given fiscal year are included, the maximum amount of compen-
sation overall for that year will increase accordingly.
ings per share (EPS) for all members of the Managing Board, in
each case on the basis of continuing and discontinued opera-
tions. The target values for the EPS component were defined on
a multi-year basis. In defining the target for variable compensa-
tion, the Supervisory Board also defined individual targets so as
to take fuller account of the individual performance of each Man-
aging Board member. As a rule, up to five individual targets were
defined for this purpose. These targets take account of business-
related targets such as market coverage and business perfor-
mance as well as targets such as customer and employee satis-
faction, innovation and sustainability. An internal review of the
appropriateness of Managing Board compensation for fiscal 2016
has confirmed that the remuneration of the Managing Board re-
sulting from target achievement for fiscal 2016 is to be consid-
ered appropriate. In light of this review and following a review of
the achievement of the targets defined at the beginning of the
fiscal year, the Supervisory Board has decided to define the
amounts of variable compensation, stock commitments and pen-
sion benefit contributions as follows:
At the beginning of the fiscal year, the Supervisory Board set the
target parameters return on capital employed (ROCE) and earn-
A.10.1.2 REMUNERATION OF MANAGING BOARD
MEMBERS FOR FISCAL 2016
Stock commitments that were made as long-term stock-based
compensation and for which the restriction period is still in effect
will be forfeited without replacement if the employment agree-
ment is not extended after the end of an appointment period,
either at the Managing Board member's request or because there
is serious cause that would have entitled the Company to revoke
the appointment or terminate the contract. However, once
granted, Stock Awards are not forfeited if the employment agree-
ment is terminated by mutual agreement at the Company's re-
quest, or because of retirement, disability or death or in connec-
tion with a spinoff, the transfer of an operation, or a change of
activity within the corporate group. In these cases, the Stock
Awards will remain in effect upon termination of the employ-
ment agreement and will be honored on expiration of the restric-
tion period.
payment that was calculated without taking into account the first
six months of the remaining term of the Managing Board mem-
ber's employment contract.
Combined Management Report
Compensatory or severance payments also cover non-monetary
benefits by including an amount of 5% of the total compensation
or severance amount. Compensatory or severance payments will
be reduced by 10% as a lump-sum allowance for discounted val-
ues and for income earned elsewhere. However, this reduction
will apply only to the portion of the compensatory or severance
In the event of a change of control that results in a substantial
change in a Managing Board member's position - for example,
due to a change in corporate strategy or a change in the Manag-
ing Board member's duties and responsibilities - the Managing
Board member has the right to terminate his or her contract with
the Company. A change of control exists one or more share-
holders acting jointly or in concert acquire a majority of the vot-
ing rights in Siemens AG and exercise a controlling influence or if
Siemens AG becomes a dependent enterprise as a result of enter-
ing into an intercompany agreement within the meaning of Sec-
tion 291 of the German Stock Corporation Act (Aktiengesetz) or
if Siemens AG is to be merged into an existing corporation or
other entity. If this right of termination is exercised, the Manag-
ing Board member is entitled to a severance payment in the
amount of not more than two years' compensation. The calcula-
tion of the annual compensation will include not only the base
compensation and the target amount for the Bonus, but also the
target amount for Stock Awards, in each case based on the most
recent fiscal year completed prior to the termination of the mem-
ber's contract. The stock-based components for which a firm
commitment already exists will remain unaffected. There is no
entitlement to a severance payment if the Managing Board mem-
ber receives benefits from third parties in connection with a
change of control. Moreover, there is no right to terminate if the
change of control occurs within a period of twelve months prior
to a Managing Board member's retirement.
nated prematurely by mutual agreement and without serious
cause. The amount of this payment must not exceed the value of
two years' compensation and compensate no more than the re-
maining term of the contract (cap). The amount of the compen-
satory payment is calculated on the basis of base compensation,
together with the variable compensation and the long-term
stock-based compensation actually received during the last fiscal
year before termination. The compensatory payment is payable
in the month when the member leaves the Managing Board. In
addition, a one-time special contribution is made to the BSAV.
The amount of this contribution is based on the BSAV contribu-
tion that the Managing Board member received in the previous
year and on the remaining term of his or her appointment, but
is limited to not more than two years' contributions (cap). The
above benefits are not paid if an amicable termination of the
member's activity on the Managing Board is agreed upon at the
member's request, or if there is serious cause for the Company
to terminate the employment relationship.
Managing Board employment contracts provide for a compensa-
tory payment if membership on the Managing Board is termi-
Commitments in connection with the termination
of Managing Board membership
Like other eligible employees of Siemens AG, Managing Board
members who were employed by the Company on or before Sep-
tember 30, 1983, are entitled to receive transition payments for
the first six months after retirement, equal to the difference be-
tween their final base compensation and the retirement benefits
payable under the corporate pension plan if they retire immedi-
ately after the termination of their Managing Board membership.
The provisions of the German Company Pensions Act (Betriebs-
rentengesetz) do not apply to this benefit.
Benefits from the retirement benefit system that was in place
before the BSAV was established are normally granted as pension
benefits with a surviving dependent's pension. In this case also,
payout in installments or a lump-sum payment may be chosen
instead of pension payments.
Managing Board members are eligible to receive benefits under
the BSAV at the age of 60 or - in the case of benefit commitments
made on or after January 1, 2012 - the age of 62. As a rule, the
accrued pension benefit balance is paid out to Managing Board
members in twelve annual installments. A Managing Board mem-
ber or his or her surviving dependents may also request that his
or her pension benefit balance be paid out in fewer installments
or as a lump sum, subject to the Company's consent. The accrued
pension benefit balance may also be paid out as a pension. As a
further alternative, Managing Board members may choose to
combine pension payments with payments in one to twelve install-
ments. If the pension option is chosen, a decision must be made
as to whether the payout should include pensions for surviving
dependents. If a member of the Managing Board dies while receiv-
ing a pension, benefits will be paid to his or her surviving depen-
dents if the member has chosen such benefits. The Company will
then provide a limited-term pension to surviving children until
they reach the age of 27 or, in the case of benefit commitments
made on or after January 1, 2007, until they reach the age of 25.
the length of time he or she has been a Managing Board member
as well as the annual and long-term expense to the Company
resulting from that provision. The non-forfeitability of pension
benefit commitments is determined in compliance with the pro-
visions of the German Company Pensions Act (Betriebsrentenge-
setz). Special contributions may be granted to Managing Board
members on the basis of individual decisions by the Supervisory
Board. If a member of the Managing Board earned a pension ben-
efit entitlement from the Company before the BSAV was intro-
duced, a portion of his or her contributions went toward
financing that prior commitment.
40
39
Combined Management Report
Like employees of Siemens AG, the members of the Managing
Board are included in the Siemens Defined Contribution Benefit
Plan (BSAV). Under the BSAV, Managing Board members receive
contributions that are credited to their personal pension accounts.
The amount of these annual contributions is based on a pre-
determined percentage related to their base compensation and
the target amount for their Bonuses. This percentage is decided
upon annually by the Supervisory Board. Most recently it was
set at 28%. In making its decisions, the Supervisory Board takes
account of the intended level of provision for each individual and
Pension benefit commitments
Compliance with these guidelines must be proven for the first
time after a four-year buildup phase. Thereafter, it must be proven
annually. If the value of a Managing Board member's accrued
holdings declines below the required minimum due to fluctua-
tions in the market price of Siemens stock, he or she must acquire
additional shares.
Changes that have been made to base compensation in the mean-
time are included. Non-forfeitable stock commitments (Bonus
Awards) which were granted until fiscal 2014 are taken into
account in determining compliance with the Share Ownership
Guidelines.
The Siemens Share Ownership Guidelines are an integral part of
the remuneration system for the Managing Board and senior ex-
ecutives. These guidelines require that – after a specified buildup
phase Managing Board members hold Siemens stock worth a
multiple of their base compensation – 300% for the President
and CEO, 200% for the other members of the Managing Board -
throughout their terms of office on the Managing Board. The
determining figure in this context is the average base compensa-
tion that a member of the Managing Board has received over the
four years before the applicable dates of proof of compliance.
-
Share Ownership Guidelines
Performance of Siemens stock
compared to 5 competitors
583,968
565,824
6,083,534
of Bonus
Awards
of Stock
Awards
Forfeitable
commitments
of Stock
Vested and
fulfilled
during
fiscal year
Commitments
Forfeited
during
fiscal year²
Commitments
of Bonus
Awards and
Stock Awards
of Stock
Awards
Non-
forfeitable
commitments
of Bonus
Awards
Balance at end of
fiscal 20163
Forfeitable
commitments
of Stock
Awards
(Amounts in number of units)
Awards
Managing Board members
serving as of September 30, 2016
Joe Kaeser
3 As of March 11, 2016 (date of proof), including Bonus
Awards.
48 Combined Management Report
2 Based on the average Xetra opening price of €90.02 for the
fourth quarter of 2015 (October-December).
Forfeitable
commitments
commitments
Non-
forfeitable
Granted
during
fiscal year¹
583,968
4,612,608
565,824
4,231,360
4,297,199
3,225,678
34,624,669
26,437,481
1 Compared to the amount presented in the 2015 Compensa-
tion Report, the total figure for 2015 does not include the
contribution of €565,824 for former Managing Board
member Prof. Dr. Hermann Requardt or this defined benefit
obligation of €6,977,620.
2 The expenses (service cost) recognized in accordance with
the IFRS in fiscal 2016 for Managing Board members' entitle-
ments under the BSAV in fiscal 2016 amounted to
€4,615,543 (2015: €4,804,639).
3 The defined benefit obligations reflect one-time special
contributions to the BSAV for new appointments from
outside the Company and for special contributions in
connection with departures from the Managing Board,
amounting to €0 (2015: €279,552).
4 Deferred compensation totals €3,829,397 (2015: €4,947,717),
including €3,428,243 for Joe Kaeser (2015: €3,207,002),
€343,953 for Klaus Helmrich (2015: €305,023) and €57,201
for Dr. Ralf P. Thomas (2015: €49,794) as well as €0 (2015:
€1,385,898) for former Managing Board member
Prof. Dr. Hermann Requardt.
The following targets were set and attained with respect to the
two target parameters ROCE and EPS for variable compensation:
In fiscal 2016, former members of the Managing Board and their
surviving dependents received emoluments within the meaning
of Section 314 para. 1 No. 6 b of the German Commercial Code
totaling €52.3 million (2015: €30.5 million). This figure includes
the lump-sum payments of the pension benefit balance of the
former Managing Board members Prof. Dr. Hermann Requardt
and Peter Y. Solmssen. In the case of Mr. Solmssen, the special
contribution to the pension benefit balance allocated in Janu-
ary 2009 in the amount of €10.518 million takes effect. This
special contribution was promised at appointment to compen-
sate him for short-term and long-term pecuniary disadvantages
with his former employer. The figure also includes the agreed-
upon cash settlement for Stock Awards granted in the past to
Prof. Dr. Hermann Requardt.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
Other
No loans or advances from the Company are provided to mem-
bers of the Managing Board.
46
Combined Management Report
A.10.1.3 ADDITIONAL INFORMATION ON
STOCK-BASED COMPENSATION INSTRUMENTS
IN FISCAL 2016
Stock commitments
The following table shows the changes in the balance of the
stock commitments held by Managing Board members in fiscal
2016:
Balance at beginning of
fiscal 2016
The defined benefit obligation (DBO) of all pension commitments
to former members of the Managing Board and their surviving
dependents as of September 30, 2016, amounted to €216,3 (2015:
€228.3) million. This figure is included in → NOTE 16 in → B.6
1,376
3,463
903
1,410
3,486
39
25
78
78
61
67
1,027
651
1,121
1,088
1,104
1,078
1,282
832
1,317
1,376
1,370
0
0
397
0
903
0
1,010
0
465
0
2,310
0
0
1,410
177
0
1,043
626
2,507
0
3,113
2,715
3,816
2,429
1,101
1,096
603
8,416
5,760
4,399
604
3,111
576
3,688
611
3,326
602
4,418
604
989
2015
2016
2015
2016
2015
1,043
2016
Managing Board member
Managing Board member
Dr. Ralf P. Thomas
Prof. Dr. Siegfried Russwurm
Janina Kugel
3,032
CFO
3,797
1,407
0
Pension benefit commitments
For fiscal 2016, the members of the Managing Board were granted
contributions under the BSAV totaling €4.6 million (2015: €4.8 mil-
lion), based on a resolution of the Supervisory Board dated No-
vember 9, 2016. Of this amount, €0.1 million (2015: €0.1 million)
related to the funding of pension commitments earned prior to
transfer to the BSAV.
The contributions under the BSAV are added to the personal pen-
sion accounts each January, following the close of the fiscal year.
Until a beneficiary's date of retirement, his or her pension ac-
count is credited with an annual interest payment (guaranteed
interest) on January 1 of each year. The interest rate is currently
1.25%.
The following table shows individualized details of the contribu-
tions (allocations) under the BSAV for fiscal 2016 as well as the
defined benefit obligations for pension commitments.
(Amounts in €)
Managing Board members
serving as of September 30, 2016
Joe Kaeser
Dr. Roland Busch
Lisa Davis
Klaus Helmrich
Janina Kugel
Prof. Dr. Siegfried Russwurm
Dr. Ralf P. Thomas
Total¹
2016
Total
contributions² for
2015
1,317
3,538
565,824
583,968
3,243,101
4,342,427
565,824
45
583,968
10,391,542
1,051,680
1,139,040
2015
2016
Defined benefit obligation³ for all pension
commitments excluding deferred compensation4
8,056,163
0
Combined Management Report
4 One half of the Bonus for fiscal 2011 was granted in the
form of non-forfeitable awards of Siemens stock (Bonus
Awards). After the expiration of the four-year waiting
period in November 2015, the beneficiaries received one
share of Siemens stock for each Bonus Award.
0
0
0
0
0
67
0
0
0
0
0
0
177
0
0
97
0
amounted to 114%. For the other half, target attainment
was linked to the performance of Siemens stock compared
to defined competitors during the four-year vesting period.
It amounted to 0%. Siemens Stock Awards 2011 that had
already been granted were thus forfeited without replace-
ment in accordance with the plan rules.
604
3,269
603
3,561
603
3,068
602
5,447
103
1,586
5 "Other" includes the adjustment of the Siemens Stock
Awards 2011 and Bonus Awards 2011 (transfer in Novem-
ber 2015) in accordance with Section 23 and Section 125 of
the German Transformation Act (Umwandlungsgesetz)
due to the spin-off of OSRAM.
530
2,839
2,958
2,465
4,845
1,482
2,309
20
0
2,665
4,664
1,010
0
Total
Service Cost
Total (Code)
1 Fringe benefits include the costs, or the cash equivalent,
of non-monetary benefits and other perquisites, such as
the provision of company cars in the amount of €159,687
(2015: €158,131), contributions toward the cost of insur-
ance in the amount of €139,795 (2015: €134,170), the
reimbursement of expenses for legal advice and tax
advice, accommodation and moving expenses, including
any taxes due in this regard, currency adjustment pay-
ments and costs relating to preventive medical examina-
tions in the amount of €765,327 (2015: €330,620).
2 The payout amount of one-year variable compensation
(Bonus) presented above therefore represents the amount
awarded for fiscal 2016, which will be paid out in January
2017.
3 Starting with the Siemens Stock Awards tranche of 2011,
the restriction period was extended from three to four
years. Shares from the Siemens Stock Awards 2011 were
thus only transferred in November 2015. Therefore, no
allocation for Siemens Stock Awards was made in fiscal
2015. For one half of these Stock Awards target attainment
depended on the EPS for the past three fiscal years and
44 Combined Management Report
Joe Kaeser
President and CEO
Dr. Roland Busch
Managing Board member
Lisa Davis
Managing Board member
Klaus Helmrich
Managing Board member
2016
2015
1,010
1,043
1,010
1,043
1,010
1,043
Other5
1,878
2015
2016
2015
2016
2015
2016
2,034
102
7,316
without long-term incentive effect, non-stock-based
with long-term incentive effect, stock-based
1,370
3,573
4 For Stock Awards granted in fiscal 2016, target attainment
depends solely on the performance of Siemens stock compared
to defined competitors. The monetary values relating to 100%
target achievement were €8,560,190 (2015: €8,190,219). The
amounts for individual Managing Board members were as
follows: Joe Kaeser €2,120,051 (2015: €1,950,003), Dr. Roland
Busch €1,080,022 (2015: €1,040,036), Lisa Davis €1,080,022
(2015: €1,040,036), Klaus Helmrich €1,080,022 (2015:
€1,040,036), Janina Kugel €1,040,029 (2015: €693,357),
Prof. Dr. Siegfried Russwurm €1,080,022 (2015: €1,040,036),
Dr. Ralf P. Thomas €1,080,022 (2015: €1,040,036) and for former
Managing Board member Prof. Dr. Hermann Requardt €0 (2015:
€346,679).
5 Total maximum compensation for fiscal 2016 represents the
contractual maximum amount for overall compensation, exclud-
ing fringe benefits and pension benefit commitments. At 1.7
times target compensation (base compensation, target amount
for the Bonus and the target amount for long-term stock-based
compensation), the maximum amount is less than the total of
the individual contractual caps for performance-based compo-
nents.
6 Total compensation reflects the current fair value of stock-based
compensation components on the award date. On the basis of
the current monetary values of stock-based compensation
components, total compensation amounted to €28,747,477
(2015: €27,756,633).
7 Ms. Davis's compensation is paid out in Germany in euros. It has
been agreed that any tax liability that arises due to tax rates that
are higher in Germany than in the U.S. will be reimbursed. For
base compensation of calendar year 2015 as well as for the
Bonus of fiscal 2015, a currency-adjustment payment was
granted.
Combined Management Report
43
Allocations
The following table shows allocations for fiscal 2016 for fixed
compensation, fringe benefits, one-year variable compensation
and multi-year variable compensation - by reference year - as
well as the expense of pension benefits. In deviation from the
multi-year variable compensation granted for fiscal 2016 and
shown above, this table includes the actual figure for multi-year
variable compensation granted in previous years and allocated in
fiscal 2016. Due to rounding, the figures presented in the table
may not add up precisely to the totals provided.
Managing Board members serving as of September 30, 2016
(Amounts in thousands of €)
Non-performance-
based components
Performance-based
components
Fixed compensation (base compensation)
Fringe benefits¹
Total
Fixed compensation (base compensation)
Fringe benefits¹
Performance-based
components
Non-performance-
based components
(Amounts in thousands of €)
Managing Board members serving as of September 30, 2016
One-year variable compensation (Bonus) - Payout amount²
Multi-year variable compensation
Total (Code)
Total
Other5
Siemens Stock Awards (restriction period: 2011-2015)³
Bonus Awards (waiting period: 2011-2015)4
Share Matching Plan (vesting period: 2013-2015)
Share Matching Plan (vesting period: 2012 - 2014)
One-year variable compensation (Bonus) - Payout amount²
Multi-year variable compensation
without long-term incentive effect, non-stock-based
with long-term incentive effect, stock-based
Total
Service Cost
102
Siemens Stock Awards (restriction period: 2011-2015)³
Bonus Awards (waiting period: 2011 - 2015)4
Share Matching Plan (vesting period: 2013-2015)
Share Matching Plan (vesting period: 2012 - 2014)
53
1,407
0
703
0
0
0
703
0
0
0
0
0
0
0
0
0
0
55
55
0
0
0
53
0
0
0
0
0
0
0
0
97
598
0
0
1,387
2,683
2,773
1,052
1,091
1,726
1,444
1,063
1,980
2,136
42
48
227
683
1,098
1,387
1,238
1,477
0
0
555
0
3,817,196
0
0
1,301
1,259
0
2,310
1,376
1,370
0
45,000
43,500
200,000
200,000
463,500
200,000
280,000
Werner Wenning
Birgit Steinborn¹
608,000
48,000
605,000
280,000
445,000
220,000
220,000
Michael Diekmann
30,000
45,000
133,333
57,143
149,000
9,000
140,000
142,333
9,000
133,333
Olaf Bolduan¹
393,000
33,000
140,000
220,000
390,000
140,000
280,000
Under current rules, the members of the Supervisory Board re-
ceive an annual base compensation of €140,000; the Chair-
man of the Supervisory Board receives a base compensation of
€280,000, and each of the Deputy Chairmen receives €220,000.
Total
Supervisory Board members
(Amounts in €)
The compensation shown below was determined for each of the
members of the Supervisory Board for fiscal 2016 (individualized
disclosure).
49
Combined Management Report
No loans or advances from the Company are provided to mem-
bers of the Supervisory Board.
serving as of
The members of the Supervisory Board are reimbursed for out-
of-pocket expenses incurred in connection with their duties and
for any value-added taxes to be paid on their remuneration. For
the performance of his duties, the Chairman of the Supervisory
Board is also entitled to an office with secretarial support and the
use of a carpool service.
If a Supervisory Board member does not attend a meeting of the
Supervisory Board, one-third of the aggregate compensation due
to that member is reduced by the percentage of Supervisory
Board meetings not attended by the member in relation to the
total number of Supervisory Board meetings held during the fis-
cal year. In the event of changes in the composition of the Super-
visory Board and/or its committees, compensation is paid on a
pro rata basis, rounding up to the next full month.
the Compensation Committee); the Chairman of the Innovation
and Finance Committee receives €80,000, and each of the other
members of the Committee receives €40,000; the Chairman of
the Compliance Committee receives €80,000, and each of the
other members of the Committee receives €40,000. However, no
additional compensation is paid for work on the Compliance
Committee if a member of that Committee is already entitled to
compensation for work on the Audit Committee.
The members of the Supervisory Board committees receive the
following additional fixed compensation for their committee
work: the Chairman of the Audit Committee receives €160,000,
and each of the other members of the Committee receives
€80,000; the Chairman of the Chairman's Committee receives
€120,000, and each of the other members of the Committee re-
ceives €80,000; the Chairman of the Compensation Committee
receives €100,000, and each of the other members of the Com-
mittee receives €60,000 (compensation for any work on the
Chairman's Committee counts toward compensation for work on
The current remuneration policies for the Supervisory Board were
authorized at the Annual Shareholders' Meeting held on Janu-
ary 28, 2014, and are effective as of fiscal 2014. Details are set out
in Section 17 of the Articles of Association of Siemens AG. The
remuneration of the Supervisory Board consists entirely of fixed
compensation; it reflects the responsibilities and scope of the
work of the Supervisory Board members. The Chairman and Dep-
uty Chairmen of the Supervisory Board as well as the Chairmen
and members of the Audit Committee, the Chairman's Commit-
tee, the Compensation Committee, the Compliance Committee
and the Innovation and Finance Committee receive additional
compensation.
A.10.2 Remuneration of Supervisory
Board members
13,500
In addition, the members of the Supervisory Board are entitled to
receive a fee of €1,500 for each meeting of the Supervisory Board
and its committees that they attend.
September 30, 2016
Dr. Gerhard Cromme
Additional
fee
attendance
Meeting
compen-
sation for
committee
work
Base
compen-
sation
Total
fee
Meeting
attendance
compen-
sation for
committee
work
sation
compen-
Base
2015
Additional
2016
280,000
203,976
140,000
56,667
Furthermore, the Managing Board is authorized to increase, with
the approval of the Supervisory Board, the capital stock until Jan-
uary 27, 2019 by up to €528.6 million through the issuance of up
to 176.2 million registered shares of no par value against cash con-
tributions and/or contributions in kind (Authorized Capital 2014).
As of September 30, 2016, the total unissued authorized capital
of Siemens AG therefore consisted of €618.6 million nominal
that may be issued, with varying terms by issuance, in install-
ments of up to 206.2 million registered shares of no par value.
By resolutions of the Shareholders' Meetings of January 28, 2014
and January 27, 2015, the Managing Board is authorized to issue
bonds with conversion rights or with warrants attached, or a
combination of these instruments, each entitling the holders to
subscribe to up to 80 million registered shares of Siemens AG of
no par value. Based on these two authorizations the Company or
consolidated subsidiaries of the Company may issue bonds until
January 27, 2019 and January 26, 2020, respectively, each in an
aggregate principal amount of up to €15 billion. In order to grant
shares of stock to holders/creditors of such convertible bonds or
warrant bonds, the capital stock was conditionally increased by
resolutions of the Shareholders' Meetings 2014 and 2015, each
by up to 80 million registered shares of no par value (Condi-
tional Capitals 2014 and 2015), i.e. in total by up to €480 million
through the issuance of up to 160 million shares of no par value.
The new shares under Authorized Capital 2014 and the bonds
under the aforementioned authorizations are to be issued
against cash or non-cash contributions. They are, as a matter of
principle, to be offered to shareholders for subscription. The
Managing Board is authorized to exclude, with the approval of
the Supervisory Board, subscription rights of shareholders in the
event of capital increases against contributions in kind. In the
event of capital increases against contributions in cash, the Man-
aging Board is authorized to exclude shareholders' subscription
rights with the approval of the Supervisory Board in the follow-
ing cases:
> The issue price of the new shares/bonds is not significantly
lower than the stock market price of the Siemens shares al-
ready listed or the theoretical market price of the bonds com-
puted in accordance with generally accepted actuarial meth-
ods (exclusion of subscription rights, limited to 10% of the
capital stock, in accordance with or by mutatis mutandis
application of Section 186 para. 3 sentence 4 German Stock
Corporation Act).
> The exclusion is necessary with regard to fractional amounts
resulting from the subscription ratio.
> The exclusion is necessary in order to grant holders of conver-
sion or option rights or conversion or option obligations on
Siemens shares a compensation for the effects of dilution.
The total amount of new shares issued or to be issued under
Authorized Capitals or in accordance with the bonds mentioned
above, in exchange for contributions in cash and in kind and with
shareholders' subscription rights excluded, may in certain cases
be subject to further restrictions, such as the restriction that they
may not exceed 20% of the capital stock. The details of those
restrictions are described in the relevant authorization.
In February 2012, Siemens issued bonds with warrant units with
a volume of US$3 billion. Siemens exchanged the major part of
the warrants issued in 2012 against new warrants in Septem-
ber 2015; for this purpose, Siemens issued new bonds with war-
rants. At exchange, the new warrants resulted in option rights
entitling their holders to receive approximately 20.3 million
Siemens shares. The terms and conditions of the warrants enable
Siemens to service exercised option rights using either condi-
tional capital or treasury stock, and also enable Siemens to buy
back the warrants.
The Company may not repurchase its own shares unless so au-
thorized by a resolution duly adopted by the shareholders at a
general meeting or in other very limited circumstances set forth
in the German Stock Corporation Act. On January 27, 2015, the
Shareholders' Meeting authorized the Company to acquire until
January 26, 2020 up to 10% of its capital stock existing at the
date of adopting the resolution or - if this value is lower - as of
the date on which the authorization is exercised. The aggregate
of shares of stock of Siemens AG repurchased under this autho-
rization and any other Siemens shares previously acquired and
still held in treasury by the Company or attributable to the Com-
pany pursuant to Sections 71d and 71e of the German Stock Cor-
poration Act may at no time exceed 10% of the then existing
capital stock. Any repurchase of Siemens shares shall be accom-
plished at the discretion of the Managing Board either (1) by ac-
quisition over the stock exchange or (2) through a public share
repurchase offer. The Managing Board is additionally authorized
to complete the repurchase of Siemens shares in accordance with
the authorization described above by using certain derivatives
(put and call options, forward purchases and any combination of
these derivatives). In exercising this authorization, all stock re-
purchases based on the derivatives are limited to a maximum
volume of 5% of Siemens' capital stock existing at the date of
adopting the resolution at the Shareholders' Meeting. A deriva-
tive's term of maturity may not, in any case, exceed 18 months
and must be chosen in such a way that the repurchase of Siemens
shares upon exercise of the derivative will take place no later
than January 26, 2020.
62
52
Combined Management Report
In addition to selling them over the stock exchange or through a
public sales offer to all shareholders, the Managing Board is au-
thorized by resolution of the Shareholders' Meeting on Janu-
ary 27, 2015 to also use Siemens shares repurchased on the basis
of this or any previously given authorization for every permissible
purpose, in particular as follows: Such Siemens shares may be
> retired
used in connection with share-based compensation programs
and/or employee share programs of the Company or any of its
affiliated companies and issued to individuals currently or for-
merly employed by the Company or any of its affiliated com-
panies as well as to board members of any of the Company's
affiliated companies
> offered and transferred, with the approval of the Supervisory
Board, to third parties against non-cash contributions
> sold, with the approval of the Supervisory Board, to third par-
ties against payment in cash if the price at which such Siemens
shares are sold is not significantly lower than the market price
of Siemens stock (exclusion of subscription rights, limited to
10% of the capital stock, by mutatis mutandis application of
Section 186 para. 3 sentence 4 German Stock Corporation
Act) or
> used to service or secure obligations or rights to acquire
Siemens shares arising particularly from or in connection with
convertible bonds or warrant bonds issued by the Company or
any of its consolidated subsidiaries (exclusion of subscription
rights, limited to 10% of the capital stock, by mutatis mutandis
application of Section 186 para. 3 sentence 4 German Stock
Corporation Act).
Furthermore, the Supervisory Board is authorized to use shares
acquired on the basis of this or any previously given authorization
to meet obligations or rights to acquire Siemens shares that were
or will be agreed with members of the Managing Board within the
framework of rules governing Managing Board compensation.
In November 2015, the Company announced that it would carry
out a share buyback of up to €3 billion in volume within the fol-
lowing up to 36 months. The buyback commenced on Febru-
ary 2, 2016 using the authorizations given by the Annual Share-
holders' Meeting on January 27, 2015. Under this share buyback
Siemens repurchased 2,517,727 shares by September 30, 2016.
The total consideration paid for these shares amounted to about
€230 million (excluding incidental transaction charges). The buy-
back has the sole purposes of retirement, of issuing shares to
employees, board members of affiliated companies and mem-
bers of the Managing Board of Siemens AG, as well as of servic-
ing/securing the obligations or rights to acquire Siemens shares
arising particularly from or in connection with convertible bonds
and warrant bonds. As of September 30, 2016, the Company held
41,721,682 shares of stock in treasury.
For details on the authorizations referred to above, especially
with the restrictions to exclude subscription rights and the terms
to include shares when calculating such restrictions, please re-
fer to the relevant resolution and to Section 4 of the Articles of
Association.
A.11.5 Significant agreements which
take effect, alter or terminate upon
a change of control of the Company
following a takeover bid
Siemens AG maintains two lines of credit in an amount of €4 bil-
lion and an amount of US$3 billion, respectively, which provide its
lenders with a right of termination in the event that (1) Siemens AG
becomes a subsidiary of another company or (2) a person or a
group of persons acting in concert acquires effective control over
Siemens AG by being able to exercise decisive influence over its
activities (Art. 3(2) of Council Regulation (EC) 139/2004).
In March 2013, a consolidated subsidiary as borrower and
Siemens AG as guarantor entered into two bilateral loan agree-
ments, each of which has been drawn in the full amount of
US$500 million. Both agreements provide their respective lend-
ers with a right of termination in the event that (1) Siemens AG
becomes a subsidiary of another company or (2) a person or a
group of persons acting in concert acquires effective control over
Siemens AG by being able to exercise decisive influence over its
activities (Art. 3(2) of Council Regulation (EC) 139/2004).
Framework agreements concluded by Siemens AG under Interna-
tional Swaps and Derivatives Association Inc. documentation
(ISDA Agreements) grant the counterparty a right of termination
when Siemens AG consolidates with, merges into, or transfers
substantially all its assets to a third party. However, this right of
termination exists only, if (1) the resulting entity's creditworthi-
ness is materially weaker than Siemens AG's immediately prior to
such event or (2) the resulting entity fails to simultaneously as-
sume Siemens AG's obligations under the ISDA Agreement. Addi-
tionally, some ISDA Agreements grant the counterparty a right of
termination if a third party acquires beneficial ownership of eq-
uity securities that enable it to elect a majority of Siemens AG's
Supervisory Board or otherwise acquire the power to control
Siemens AG's material policy-making decisions and if the credit-
worthiness of Siemens AG is materially weaker than it was imme-
diately prior to such an event. In either situation, ISDA Agree-
ments are designed such that upon termination all outstanding
payment claims documented under them are to be netted.
In February 2012, Siemens issued bonds with warrant units with
a volume of US$3 billion. Siemens exchanged the major part of
and the Supervisory Board may allocate to other retained earnings
under Section 58 para. 2 of the German Stock Corporation Act.
51
Combined Management Report
The Managing Board is authorized to increase, with the approval
of the Supervisory Board, the capital stock until January 25, 2021
by up to €90 million through the issuance of up to 30 million
registered shares of no par value against contributions in cash
(Authorized Capital 2016). Subscription rights of existing share-
holders are excluded. The new shares shall be issued under the
condition that they are offered exclusively to employees of
Siemens AG and any of its affiliated companies. To the extent
permitted by law, employee shares may also be issued in such a
manner that the contribution to be paid on such shares is covered
by that part of the annual net income which the Managing Board
13,500
388,500
183,500
4,866,648
1 These employee representatives on the Supervisory Board
and the representatives of the trade unions on the Super-
visory Board have declared their willingness to transfer their
compensation to the Hans Boeckler Foundation, in accor-
dance with the guidelines of the Confederation of German
Trade Unions (DGB).
2 The total figure, compared to the amount presented in the
2015 Compensation Report, does not include the total
compensation of €252,185 paid to former Supervisory Board
members Gerd von Brandenstein, Prof. Dr. Peter Gruss and
Berthold Huber.
A.10.3 Other
The Company provides a group insurance policy for Supervisory
and Managing Board members and certain other employees of
the Siemens Group. The policy is taken out for one year at a time
renewed annually. It covers the personal liability of the insured
in cases of financial loss associated with their activities on behalf
of the Company. The insurance policy for fiscal 2016 includes a
deductible for the members of the Managing Board and the
Supervisory Board that complies with the requirements of the
German Stock Corporation Act and the Code.
50
Combined Management Report
A.11 Takeover-relevant information
Combined Management Report
(pursuant to Sections 289 para. 4 and 315 para. 4 of the German Commercial Code)
and explanatory report
A.11.3 Legislation and provisions of
the Articles of Association applicable
to the appointment and removal
of members of the Managing Board
and governing amendment to the
rights and obligations. The shareholders' rights and obligations Articles of Association
As of September 30, 2016, the Company's common stock totaled
€2.550 billion. The capital stock is divided into 850 million regis-
tered shares with no par value and a notional value of €3.00 per
share. The shares are fully paid in. All shares confer the same
are governed in detail by the provisions of the German Stock Cor-
poration Act, in particular by Sections 12, 53a et seq., 118 et seq.
and 186 of the German Stock Corporation Act.
A.11.2 Restrictions on voting rights
or transfer of shares
At the Shareholders' Meeting, each share of stock has one vote
and accounts for the shareholders' proportionate share in the
Company's net income. An exception from this rule applies with
regard to treasury shares held by the Company, which do not
entitle the Company to any rights. Under Section 136 of the Ger-
man Stock Corporation Act the voting right of the affected shares
is excluded by law.
Shares issued to employees worldwide under the employee share
program implemented since the beginning of fiscal 2009, in par-
ticular the Share Matching Plan, are freely transferable unless
applicable local laws provide otherwise. Under the rules of the
program, however, in order to receive one matching share free
of charge for each three shares purchased, participants are re-
quired to hold the shares purchased by them for a vesting period
of several years, during which the participants have to be contin-
uously employed by Siemens AG or another Siemens company.
The right to receive matching shares is forfeited if the purchased
shares are sold, transferred, hedged on, pledged or hypothecated
in any way during the vesting period.
The von Siemens-Vermögensverwaltung GmbH (VSV) has, on a
sustained basis, powers of attorney allowing it to exercise the
voting rights for 10,878,800 shares (as of September 30, 2016) on
The appointment and removal of members of the Managing
Board is subject to the provisions of Sections 84 and 85 of the
German Stock Corporation Act and Section 31 of the German
Codetermination Act (Mitbestimmungsgesetz). According to Sec-
tion 8 para. 1 of the Articles of Association, the Managing Board
is comprised of several members, the number of which is deter-
mined by the Supervisory Board.
According to Section 179 of the German Stock Corporation Act,
any amendment to the Articles of Association requires a resolu-
tion of the Shareholders' Meeting. The authority to adopt purely
formal amendments to the Articles of Association was trans-
ferred to the Supervisory Board under Section 13 para. 2 of the
Articles of Association. In addition, by resolutions of the Share-
holders' Meetings the Supervisory Board has been authorized to
amend Section 4 of the Articles of Association in accordance with
the utilization of the Authorized and Conditional Capitals, and
after expiration of the then-applicable authorization and utiliza-
tion period.
Resolutions of the Shareholders' Meeting require a simple major-
ity vote, unless a greater majority is required by law. Pursuant to
Section 179 para. 2 of the German Stock Corporation Act, amend-
ments to the Articles of Association require a majority of at least
three-quarters of the capital stock represented at the time of the
casting of the votes, unless another capital majority is prescribed
by the Articles of Association.
A.11.4 Powers of the Managing Board
behalf of members of the Siemens family. These shares are part to issue and repurchase shares
of the total number of shares held by the family's members. The
powers of attorney are based on an agreement between the VSV
and, among others, members of the Siemens family. The shares
are voted together by VSV, taking into account the proposals of a
family partnership established by the family's members or of one
of this partnership's governing bodies.
A.11.1 Composition of common stock
37,778
1,545,926
53
the warrants issued in 2012 against new warrants in Septem-
ber 2015. In case of a change of control, the terms and conditions
of each warrant enable their holders to receive a higher number
of Siemens shares in accordance with an adjusted strike price if
they exercise their option rights within a certain period of time
after the change of control. This period of time shall end either
(1) not less than 30 days and no more than 60 days after publica-
tion of the notice of the issuer regarding the change of control,
as determined by the issuer or (2) 30 days after the change
of control first becomes publicly known. The strike price adjust-
ment decreases depending on the remaining term of the war-
rants and is determined in detail in the terms and conditions of
the warrants. In this context, a change of control occurs if control
of Siemens AG is acquired by a person or by persons acting in
5
328
476
Other operating expenses
6
(427)
(389)
Income (loss) from investments accounted for using the equity method, net
4
134
1,235
Interest income
1,314
1,260
Interest expenses
(989)
(818)
Other financial income (expenses), net
(373)
(500)
Income from continuing operations before income taxes
7,404
7,218
Income tax expenses
7
(2,008)
(1,869)
Other operating income
(11,409)
(11,669)
Selling and general administrative expenses
concert.
A.11.6 Compensation agreements
with members of the Managing
Board or employees in the event
of a takeover bid
In the event of a change of control that results in a substantial
change in the position of a Managing Board member (for exam-
ple, due to a change in corporate strategy or a change in the
Managing Board member's duties and responsibilities), the
member of the Managing Board has the right to terminate his or
her contract with the Company for good cause. A change of con-
trol exists if one or several shareholders acting jointly or in con-
cert acquire a majority of the voting rights in Siemens AG and
exercise a controlling influence, or if Siemens AG becomes a de-
pendent enterprise as a result of entering into an intercompany
agreement within the meaning of Section 291 of the German
Stock Corporation Act, or if Siemens AG is to be merged into an
existing corporation or other entity. If this right of termination is
exercised, the Managing Board member is entitled to a severance
payment in the amount of no more than two years' compensa-
tion. The calculation of the annual compensation includes not
only the base compensation and the target amount for the bo-
nus, but also the target amount for the stock awards, in each case
based on the most recent completed fiscal year prior to termina-
tion of the contract. The stock-based compensation components
for which a firm commitment already exists will remain un-
affected. Additionally, the severance payments cover non-mone-
tary benefits by including an amount of 5% of the total severance
amount. Severance payments will be reduced by 10% as a lump-
sum allowance for discounted values and for income earned else-
where. However, this reduction will apply only to the portion of
the severance payment that was calculated without taking ac-
count of the first six months of the remaining term of the Man-
aging Board member's contract. There is no entitlement to a
severance payment if the Managing Board member receives ben-
efits from third parties in connection with a change of control.
A right to terminate the contract does not exist if the change
of control occurs within a period of twelve months prior to a
Managing Board member's retirement.
A.11.7 Other takeover-relevant
information
We are not aware of, nor have we during the last fiscal year been
notified of, any shareholder directly or indirectly holding 10%
or more of the voting rights. There are no shares with special
rights conferring powers of control. Shares of stock issued by
Siemens AG to employees under its employee share program
and/or as share-based compensation are transferred directly to
the employees. The beneficiary employees who hold shares of
employee stock may exercise their control rights in the same way
as any other shareholder directly in accordance with applicable
laws and the Articles of Association.
Combined Management Report
B.
CONSOLIDATED
FINANCIAL
STATEMENTS
B.1 Consolidated Statements of Income
Fiscal year
54
(in millions of €, per share amounts in €)
Cost of sales
Note
2016
2015
79,644
75,636
(55,826)
(53,789)
23,819
21,847
Research and development expenses
(4,732)
(4,483)
Revenue
132,222
132,222
2,932,221
429,000
9,000
149,000
Robert Kensbock¹
140,000
180,000
30,000
350,000
140,000
180,000
30,000
350,000
Harald Kern¹
140,000
80,000
22,500
242,500
80,000
21,000
241,000
Jürgen Kerner¹
140,000
200,000
33,000
373,000
132,222
170,000
31,500
140,000
150,500
10,500
140,000
13,500
202,389
Dr. Hans Michael Gaul
140,000
160,000
27,000
327,000
140,000
160,000
27,000
327,000
Reinhard Hahn¹
140,000
333,722
10,500
105,000
4,500
109,500
Bettina Haller¹
140,000
80,000
25,500
245,500
140,000
80,000
24,000
244,000
Hans-Jürgen Hartung
150,500
5,150,905
Dr. Nicola Leibinger-Kammüller
80,000
150,500
105,000
4,500
109,500
Michael Sigmund
140,000
10,500
150,500
140,000
9,000
149,000
Jim Hagemann Snabe
140,000
120,000
31,500
291,500
132,222
113,333
28,500
274,056
Sibylle Wankel¹
Total²
140,000
3,066,667
40,000
16,500
196,500
1,655,238
10,500
140,000
Dr. Nathalie von Siemens
149,000
27,000
247,000
140,000
33,333
15,000
188,333
Gérard Mestrallet
126,667
7,500
134,167
140,000
9,000
149,000
140,000
Dr. Norbert Reithofer
38,095
15,000
186,429
93,333
14,815
4,500
112,648
Güler Sabancı
140,000
10,500
150,500
140,000
9,000
133,333
Gross profit
5,349
Shareholders of Siemens AG
68,906
125,717
120,348
Liabilities and equity
Short-term debt and current maturities of long-term debt
15
6,206
2,979
Trade payables
8,048
7,774
Other current financial liabilities
70,388
1,933
Current provisions
17
4,166
4,489
Current income tax liabilities
2,085
1,828
Other current liabilities
14
20,437
20,368
Liabilities associated with assets classified as held for disposal
2,085
1,094
1,279
2,591
6,800
5,157
10
18,160
17,253
790
644
1,204
1,151
3
190
122
55,329
51,442
11
122437
24,159
23,166
7,742
8,077
10,157
10,210
3,012
2,947
20,610
20,821
3,431
3
40
39
Total current liabilities
18
Issued capital
Capital reserve
Retained earnings
Other components of equity
Treasury shares, at cost
2,550
2,643
5,890
5,733
27,454
30,152
1,921
2,163
(3,605)
(6,218)
Total equity attributable to shareholders of Siemens AG
34,211
34,474
Non-controlling interests
Total equity
Total liabilities and equity
605
34,816
125,717
581
35,056
120,348
58 Consolidated Financial Statements
85,292
9
90,901
47,986
42,916
39,562
Long-term debt
15
Post-employment benefits
16
Deferred tax liabilities
Provisions
Other financial liabilities
Other liabilities
Total non-current liabilities
Total liabilities
Equity
17
5677
24,761
26,682
13,695
9,811
829
609
5,087
4,865
1,142
1,466
2,471
2,297
45,730
(107)
15,982
8
2.44
0.23
6.30
6.42
27
8.84
6.74
2.47
0.23
6.38
6.51
7,282
6.65
98
22
27
56 Consolidated Financial Statements
Income from continuing operations
Income from discontinued operations
Net income
Diluted earnings per share
Net income
Income from discontinued operations
Income from continuing operations
Basic earnings per share
Shareholders of Siemens AG
Non-controlling interests
Attributable to:
134
5,450
8.74
B.2 Consolidated Statements of Comprehensive Income
(in millions of €)
1,065
(370)
(2,636)
16
7,380
5,584
2015
2016
Note
Fiscal year
(370)
Non-controlling interests
Attributable to:
Total comprehensive income
Other comprehensive income, net of income taxes
therein: Income (loss) from investments accounted for using the equity method, net
Items that may be reclassified subsequently to profit or loss
therein: Income tax effects
Derivative financial instruments
therein: Income tax effects
Available-for-sale financial assets
Currency translation differences
therein: Income (loss) from investments accounted for using the equity method, net
Items that will not be reclassified to profit or loss
therein: Income tax effects
Remeasurements of defined benefit plans
Net income
Net income
Income from discontinued operations, net of income taxes
Income from continuing operations
7,380
Assets
Cash and cash equivalents
Available-for-sale financial assets
Trade and other receivables
Other current financial assets
Inventories
Current income tax assets
Other current assets
Assets classified as held for disposal
Total current assets
Goodwill
Other intangible assets
Property, plant and equipment
Investments accounted for using the equity method
Other financial assets
Deferred tax assets
Other assets
Total non-current assets
Total assets
September 30,
Note
2016
2015
10,604
9,957
1,293
1,175
(in millions of €)
16,287
B.3 Consolidated Statements of Financial Position
40
5,584
2,031
188
3
(42)
(888)
1,089
434
354
4
(7)
22, 23
210
(43)
(89)
(7)
(244)
1,399
(141)
149
(2,879)
1,029
2,705
8,408
134
2,571
133
8,275
Consolidated Financial Statements 57
5,396
(2,636)
(98)
5,584
134
5,450
35,056
581
34,474
(6,218)
(357)
726
1,794
35,056
581
34,474
(6,218)
(357)
726
1,794
129
33
(885)
434
208
(2,879)
1,160
909
36
37
51
92
(42)
2,668
390
96
390
(446)
(446)
(446)
91
91
(3,066)
(239)
(2,827)
(2,879)
391
(148)
289
256
Total equity
attributable to
shareholders
of Siemens AG
(3,747)
(314)
373
745
Treasury
shares at cost
Derivative financial
instruments
financial assets
Available-for-sale
Currency trans-
lation differences
27,454
5,890
2,550
(2,575)
(42)
(93)
(1)
(67)
158
(2,827)
30,954
Non controlling
interests
Total equity
256
(2,703)
(2,703)
(2,703)
233
36
36
(2,873)
(145)
(2,728)
289
1,029
993
(42)
354
1,049
7,380
98
7,282
31,514
560
35
(2,637)
(3,605)
605
66 Consolidated Financial Statements
Loans and receivables - Financial assets classified as loans and
receivables are measured at amortized cost using the effective
interest method less any impairment losses. Impairment losses on
trade and other receivables are recognized using separate allow-
ance accounts. The allowance for doubtful accounts involves
significant management judgment and review of individual re-
ceivables based on individual customer creditworthiness, current
Available-for-sale financial assets - Investments in equity instru-
ments, debt instruments and fund shares are measured at fair
value, if reliably measurable. Unrealized gains and losses, net of
applicable deferred income tax expenses, are recognized in line
item Other comprehensive income, net of income taxes. Pro-
vided that fair value cannot be reliably determined, Siemens
measures available-for-sale financial assets at cost. This applies
to equity instruments that do not have a quoted market price in
an active market, and decisive parameters cannot be reliably es-
timated to be used in valuation models for the determination of
fair value. Siemens considers all available evidence such as mar-
ket conditions and prices, investee-specific factors and the dura-
tion as well as the extent to which fair value is less than acquisi-
tion cost in evaluating potential impairment of its available-for-sale
financial assets. The Company considers a decline in fair value as
objective evidence of impairment, if the decline exceeds 20% of
costs or continues for more than six months.
Cash and cash equivalents - The Company considers all highly
liquid investments with less than three months maturity from the
date of acquisition to be cash equivalents. Cash and cash equiv-
alents are measured at cost.
Financial instruments - A financial instrument is any contract
that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity. Siemens does not
use the category held to maturity and does not use the option to
designate financial assets or financial liabilities at fair value
through profit or loss at inception (Fair Value Option). Based on
their nature, financial instruments are classified as financial as-
sets and financial liabilities measured at cost or amortized cost
and financial assets and financial liabilities measured at fair value
and as receivables from finance leases. Regular way purchases or
sales of financial assets are accounted for at the trade date. Ini-
tially, financial instruments are recognized at their fair value.
Transaction costs are only included in determining the carrying
amount, if the financial instruments are not measured at fair
value through profit or loss. Receivables from finance leases are
recognized at an amount equal to the net investment in the
lease. Subsequently, financial assets and liabilities are measured
according to the category to which they are assigned cash and
cash equivalents, available-for-sale financial assets, loans and
receivables, financial liabilities measured at amortized cost or
financial assets and liabilities classified as held for trading.
Termination benefits - Termination benefits are provided as a
result of an entity's offer made in order to encourage voluntary
redundancy before the normal retirement date or from an enti-
ty's decision to terminate the employment. Termination benefits
in accordance with IAS 19, Employee Benefits, are recognized as
a liability and an expense when the entity can no longer with-
draw the offer of those benefits.
Legal Proceedings often involve complex legal issues and are
subject to substantial uncertainties. Accordingly, considerable
judgment is part of determining whether it is probable that
there is a present obligation as a result of a past event at the
end of the reporting period, whether it is probable that such a
Legal Proceeding will result in an outflow of resources and
whether the amount of the obligation can be reliably estimated.
Internal and external counsels are generally part of the deter-
mination process. Due to new developments, it may be neces-
sary, to record a provision for an ongoing Legal Proceeding or
to adjust the amount of a previously recognized provision. Upon
resolution of a Legal Proceeding, Siemens may incur charges in
excess of the recorded provisions for such matters. The out-
come of Legal Proceedings may have a material effect on
Siemens' financial position, its results of operations and/or its
cash flows.
Significant estimates are involved in the determination of provi-
sions related to onerous contracts, warranty costs, asset retire-
ment obligations, legal and regulatory proceedings as well as
governmental investigations (Legal Proceedings). Siemens re-
cords a provision for onerous sales contracts when current esti-
mates of total contract costs exceed expected contract revenue.
Onerous sales contracts are identified by monitoring the prog-
ress of the project and updating the estimate of total contract
costs which also requires significant judgment relating to
achieving certain performance standards as well as estimates
involving warranty costs and estimates regarding project delays
including the assessment of responsibility splits between the
contract partners for these delays. Uncertainties regarding asset
retirement obligations include the estimated costs of decom-
missioning and final waste storage because of the long time
frame over which future cash outflows are expected to occur
including the respective interest accretion. Amongst others, the
estimated cash outflows could alter significantly if, and when,
political developments affect the government's plans to develop
the final storage.
amount of the obligation. If the effect is material, provisions are
recognized at present value by discounting the expected future
cash flows at a pretax rate that reflects current market assess-
ments of the time value of money. When a contract becomes
onerous, the
present obligation under the contract is recognized
as a provision.
Consolidated Financial Statements 65
Provisions - A provision is recognized in the Statement of Finan-
cial Position when it is probable that the Company has a present
legal or constructive obligation as a result of a past event, it is
probable that an outflow of economic benefits will be required
to settle the obligation and a reliable estimate can be made of the
Actuarial valuations rely on key assumptions including discount
rates, expected compensation increases, rate of pension progres-
sion and mortality rates. Discount rates used are determined
by reference to yields on high-quality corporate bonds of appro-
priate duration and currency at the end of the reporting period.
In case such yields are not available discount rates are based on
government bonds yields. Due to changing market, economic
and social conditions the underlying key assumptions may differ
from actual developments.
Remeasurements comprise actuarial gains and losses as well as
the difference between the return on plan assets and the
amounts included in net interest on the net defined benefit lia-
bility (asset). They are recognized in Other comprehensive in-
come, net of income taxes.
Service cost and past service cost for post-employment benefits
and administration costs unrelated to the management of plan
assets are allocated among functional costs. Past service cost and
settlement gains (losses) are recognized immediately in profit or
loss. For unfunded plans, the amount of line item Post-employ-
ment benefits equals the DBO. For funded plans, Siemens offsets
the fair value of the plan assets with the DBO. Siemens recog-
nizes the net amount, after adjustments for effects relating to
any asset ceiling.
Defined benefit plans - Siemens measures the entitlements by
applying the projected unit credit method. The approach reflects
an actuarially calculated net present value of the future benefit
entitlement for services already rendered. In determining the
net present value of the future benefit entitlement for service
already rendered (Defined Benefit Obligation (DBO)), the ex-
pected rates of future salary increase and expected rates of fu-
ture pension progression are considered. The assumptions used
for the calculation of the DBO as of the period-end of the preced-
ing fiscal year are used to determine the calculation of service
cost and interest income and expense of the following year. The
net interest income or expense for the fiscal year will be based
on the discount rate for the respective year multiplied by the net
defined benefit liability (asset) at the preceding fiscal year's pe-
riod-end date.
Inventories - Inventories are valued at the lower of acquisition
or production costs and net realizable value, costs being gener-
ally determined on the basis of an average or first-in, first-out
method.
Income taxes - Tax positions under respective local tax laws
and tax authorities' views can be complex and subject to differ-
ent interpretations of tax payers and local tax authorities.
Different interpretations of tax laws may result in additional tax
payments for prior years and are taken into account based on
management's considerations. Under the liability method,
deferred tax assets and liabilities are recognized for future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets are recog-
nized if sufficient future taxable profit is available, including
income from forecasted operating earnings, the reversal of
existing taxable temporary differences and established tax
planning opportunities. As of each period-end, Siemens evalu-
ates the recoverability of deferred tax assets, based on pro-
jected future taxable profits. Based upon the level of historical
taxable income and projections for future taxable income over
the periods in which the deferred tax assets are deductible,
Siemens believes it is probable the Company will realize the
benefits of these deductible differences. As future develop-
ments are uncertain and partly beyond Siemens's control,
assumptions are necessary to estimate future taxable profits as
well as the period in which deferred tax assets will recover.
Estimates are revised in the period in which there is sufficient
evidence to revise the assumption.
Siemens classifies a non-current asset or a disposal group as held
for disposal if its carrying amount will be recovered principally
through a sale transaction rather than through continuing use.
The disclosures in the Notes to Consolidated Financial State-
ments outside NOTE 3 ACQUISITIONS, DISPOSITIONS AND DISCON-
TINUED OPERATIONS that refer to the Consolidated Statements of
Financial Position generally relate to assets that are not held for
disposal. Siemens reports non-current assets or disposal groups
held for disposal separately in → NOTE 3 ACQUISITIONS, DISPOSITIONS
AND DISCONTINUED OPERATIONS. Non-current assets classified as
held for disposal and disposal groups are measured at the lower
of their carrying amount and fair value less costs to sell. Depreci-
ation and amortization ceases. The determination of the fair
value less costs to sell includes the use of estimates and assump-
tions that tend to be uncertain.
separately from income and expenses from continuing opera-
tions; prior periods are presented on a comparable basis. In the
Consolidated Statements of Cash Flow, the cash flows from dis-
continued operations are presented separately from cash flows
of continuing operations; prior periods are presented on a com-
parable basis. The disclosures in the Notes to the Consolidated
Financial Statements outside NOTE 3 ACQUISITIONS, DISPOSITIONS
AND DISCONTINUED OPERATIONS that refer to the Consolidated State-
ments of Income and the Consolidated Statements of Cash Flow
relate to continuing operations.
economic trends and analysis of historical bad debts on a port-
folio basis. For the determination of the country-specific compo-
nent of the individual allowance, Siemens also considers country
credit ratings, which are centrally determined based on informa-
tion from external rating agencies. Regarding the determination
of the valuation allowance derived from a portfolio-based analy-
sis of historical bad debts, a decline of receivables in volume re-
sults in a corresponding reduction of such provisions and vice
versa. As of September 30, 2016 and 2015, Siemens recorded a
valuation allowance for trade and other receivables (including
leases) of €1,211 million and €1,123 million, respectively.
Financial liabilities - Siemens measures financial liabilities, ex-
cept for derivative financial instruments, at amortized cost using
the effective interest method.
Derivative financial instruments - Derivative financial instru-
ments, such as foreign currency exchange contracts and interest
rate swap contracts are measured at fair value and classified as
held for trading unless they are designated as hedging instru-
ments, for which hedge accounting is applied. Changes in the fair
value of derivative financial instruments are recognized either in
net income or, in the case of a cash flow hedge, in line item Other
comprehensive income, net of income taxes (applicable deferred
income tax). Certain derivative instruments embedded in host
contracts are also accounted for separately as derivatives.
Fair value hedges: The carrying amount of the hedged item is
adjusted by the gain or loss attributable to the hedged risk.
Where an unrecognized firm commitment is designated as
hedged item, the subsequent cumulative change in its fair value
is recognized as a separate financial asset or liability with corre-
sponding gain or loss recognized in net income. For hedged
items carried at amortized cost, the adjustment is amortized un-
til maturity of the hedged item. For hedged firm commitments
the initial carrying amount of the assets or liabilities that result
from meeting the firm commitments are adjusted to include the
cumulative changes in the fair value that were previously recog-
nized as separate financial assets or liabilities.
Consolidated Financial Statements
68
In fiscal 2016 and 2015, Income from discontinued operations,
net of income taxes, includes gains related to the sale of the
hearing aid business of €102 million and €1.7 billion, respec-
tively; in fiscal 2015, Siemens recognized a pretax gain on
disposal for the sale of its hospital information business of
€516 million.
DISCONTINUED OPERATIONS
In December 2014, Siemens acquired the Rolls-Royce Energy aero-
derivative gas turbine and compressor business of Rolls-Royce
plc, U.K. (Rolls-Royce). The purchase price allocation was final-
ized in the first quarter of fiscal 2016. The contractually agreed
purchase price amounts to £785 million (€990 million as of the
acquisition date) paid in cash. That amount was subject to
post-closing adjustments amounting to £29 million (€37 million
as of the acquisition date). In addition, as part of the transaction,
Siemens paid Rolls-Royce £200 million (€252 million as of the
acquisition date) for a 25 year exclusive technology licensing
agreement and for preferred access to supply and engineering
services of Rolls-Royce. Goodwill amounts to €408 million and is
largely based on synergies, such as cost synergies, especially in
manufacturing, purchasing, research and development, as well
as general administration functions, and sales synergies mainly
resulting from the extension of the gas turbine portfolio.
In June 2015, Siemens acquired all shares of Dresser-Rand Group
Inc., Houston, Texas (U.S.) and Paris (France). The purchase price
allocation was finalized in the third quarter of fiscal 2016. The
purchase price amounts to US$6,692 million (€5,981 million as
of the acquisition date) paid in cash. The following figures result
from the purchase price allocation as of the acquisition date:
Other intangible assets €2,839 million, Property, plant and equip-
ment €240 million, Trade and other receivables €318 million,
Inventories €480 million, Other current financial assets €145 mil-
lion, Cash and cash equivalents €175 million, Debt including out-
standing financial debt settled €1,043 million, Trade payables
€219 million, Provisions €118 million, Other current liabilities
€386 million and Deferred tax liabilities €935 million. Intangible
assets mainly relate to customer relationships of €2,383 million
and technology of €393 million. The gross contractual amount of
the trade and other receivables acquired is €469 million. Good-
will amounts to €4,580 million and is largely based on synergies,
such as sales synergies mainly resulting from the extended port-
folio and enhanced service opportunities, and cost synergies,
especially in research and development, purchasing, general ad-
ministration functions, as well as manufacturing.
In April 2016, Siemens acquired all shares of CD-adapco Ltd.,
U.S., a global engineering simulation company with software
solutions covering a wide range of engineering disciplines. The
acquisition supplements Siemens' industry software portfolio
and delivers on Siemens' strategy to further expand the digital
enterprise portfolio. The acquired business will be integrated in
the Digital Factory Division. The purchase price amounts to
US$971 million (€853 million as of the acquisition date) paid in
cash and is subject to customary cash/debt and working capital
adjustments. The preliminary purchase price allocation as of the
acquisition date resulted in Other intangible assets of €395 mil-
lion and Deferred tax liabilities of €105 million. Other intangible
assets mainly relate to technology of €273 million and customer
relationships of €118 million. Preliminary goodwill of €569 mil-
lion comprises intangible assets that are not separable such as
employee know-how and expected synergy effects. Including
earnings effects from purchase price allocation and integration
costs, the acquired business contributed revenue of €63 million
and a net income of €(27) million to Siemens for the period from
acquisition to September 30, 2016. Revenue and net income of
the combined entity in fiscal 2016 would have been €79,722 mil-
lion and €5,566 million, respectively, had CD-adapco been in-
cluded as of October 1, 2015.
ACQUISITIONS
NOTE 3 Acquisitions, dispositions
and discontinued operations
64 Consolidated Financial Statements
In January 2016, the IASB issued IFRS 16, Leases. IFRS 16 elimi-
nates the current classification model for lessee's lease contracts
as either operating or finance leases and, instead, introduces a
single lessee accounting model requiring lessees to recognize
right-of-use assets and lease liabilities for leases with a term of
more than twelve months. This brings the previous off-balance
leases on the balance sheet in a manner largely comparable to
current finance lease accounting. IFRS 16 is effective for annual
periods beginning on or after January 1, 2019; earlier application
is permitted if IFRS 15 is already applied. The Company is cur-
rently assessing the impact of adopting IFRS 16 on the Company's
Consolidated Financial Statements and will adopt the standard
for the fiscal year beginning as of October 1, 2019.
Consolidated Financial Statements 67
In May 2014, the IASB issued IFRS 15, Revenue from Contracts with
Customers. According to the new standard, revenue is recog-
nized to depict the transfer of promised goods or services to a
customer in an amount that reflects the consideration to which
the Company expects to be entitled in exchange for those goods
or services. Revenue is recognized when, or as, the customer ob-
tains control of the goods or services. IFRS 15 also includes guid-
ance on the presentation of contract balances, that is, assets and
liabilities arising from contracts with customers, depending on
the relationship between the entity's performance and the cus-
tomer's payment. IFRS 15 supersedes IAS 11, Construction Con-
tracts and IAS 18, Revenue as well as related interpretations. The
standard is effective for annual periods beginning on or after
January 1, 2018; early application is permitted. The Company will
adopt the standard for the fiscal year beginning as of October 1,
2017 retrospectively, i.e. the comparable period will be presented
in accordance with IFRS 15. Currently, it is expected that changes
in the total amount of revenue to be recognized for a customer
contract will be very limited. In addition, for certain types of con-
tracts, the timing for recognizing revenue will change, in partic-
ular revenue may be recognized earlier if variable consideration
components exist, re-allocations of the transaction price be-
tween performance obligations take place or licenses are trans-
ferred to the customer. Based on analyses performed, the vast
majority of construction-type contracts currently accounted for
In July 2014, the IASB issued IFRS 9, Financial Instruments. IFRS 9
introduces a single approach for the classification and measure-
ment of financial assets according to their cash flow characteris-
tics and the business model they are managed in, and provides a
new impairment model based on expected credit losses. IFRS 9
also includes new regulations regarding the application of hedge
accounting to better reflect an entity's risk management activi-
ties especially with regard to managing non-financial risks. The
new standard is effective for annual reporting periods beginning
on or after January 1, 2018, while early application is permitted.
The Company will adopt IFRS 9 for the fiscal year beginning as of
October 1, 2018 and is currently assessing the impacts of its adop-
tion on the Company's Consolidated Financial Statements.
The following pronouncements, issued by the IASB, are not yet
effective and have not yet been adopted by the Company:
RECENT ACCOUNTING PRONOUNCEMENTS,
NOT YET ADOPTED
Prior-year information - The presentation of certain prior-year
information has been reclassified to conform to the current year
presentation.
considering dividends during the vesting period the grantees are
not entitled to and market conditions and non-vesting condi-
tions, if applicable.
Share-based payment - Share-based payment awards at Siemens
are predominately designed as equity-settled. Fair value is mea-
sured at grant date and is expensed over the vesting period.
Fair value is determined as the market price of Siemens shares,
Cash flow hedges: The effective portion of changes in the fair
value of derivative instruments designated as cash flow hedges
are recognized in line item Other comprehensive income, net of
income taxes (applicable deferred income tax), and any ineffec-
tive portion is recognized immediately in net income. Amounts
accumulated in equity are reclassified into net income in the
same periods in which the hedged item affects net income.
under the percentage-of-completion method is expected to fulfill
the requirements for revenue recognition over time. Besides,
changes to the Statement of Financial Position are expected, e.g.
separate line items for contract assets and contract liabilities are
required, and quantitative and qualitative disclosures are added.
The Company does not expect significant impacts on its Consol-
idated Financial Statements.
34,211
Discontinued operations and non-current assets held for dis-
posal - Discontinued operations are reported when a component
of an entity is classified as held for disposal or has been disposed
of, if the component represents a separate major line of business
or geographical area of operations and is part of a single co-ordi-
nated plan to dispose of a separate major line of business or geo-
graphical area of operations. In the Consolidated Statements of
Income, income (loss) from discontinued operations is reported
5 to 10 years
generally 5 years
generally 3 to 5 years
Sales from construction contracts: When the outcome of a con-
struction contract can be estimated reliably, revenues from con-
struction-type projects are recognized under the percent-
age-of-completion method, based on the percentage of costs
incurred to date compared to the total estimated contract costs.
An expected loss on the construction contract is recognized as an
expense immediately. Siemens applies the requirements of IAS 11
regarding contract variations to contract terminations, since con-
tract terminations are also changes to the agreed delivery and
service scope.
Sale of goods: Revenue is recognized when the significant risks
and rewards of ownership of the goods have passed to the buyer,
usually on delivery of the goods.
Revenue recognition - Under the condition that persuasive
evidence of an arrangement exists, revenue is recognized to the
extent that it is probable that the economic benefits will flow to
the Company and the revenue can be reliably measured, regard-
less of when the payment is being made. In cases where the in-
flow of economic benefits is not probable due to customer re-
lated credit risks, the revenue recognized is subject to the amount
of payments irrevocably received.
Foreign currency transaction - Transactions that are denomi-
nated in a currency other than the functional currency of an en-
tity, are recorded at that functional currency applying the spot
exchange rate at the date when the underlying transactions are
initially recognized. At the end of the reporting period, foreign
currency-denominated monetary assets and liabilities are reval-
ued to functional currency applying the spot exchange rate pre-
vailing at that date. Gains and losses arising from these foreign
currency revaluations are recognized in net income. Those for-
eign currency-denominated transactions which are classified as
non-monetary are remeasured using the historical spot ex-
change rate.
62 Consolidated Financial Statements
Foreign currency translation - Assets and liabilities of foreign
subsidiaries, where the functional currency is other than the
euro, are translated using the spot exchange rate at the end of
the reporting period, while the Consolidated Statements of In-
come are translated using average exchange rates during the
period. Differences arising from such translations are recognized
within equity and reclassified to net income when the gain or loss
on disposal of the foreign subsidiary is recognized. The Consoli-
dated Statements of Cash Flow are translated at average ex-
change rates during the period, whereas cash and cash equiva-
lents are translated at the spot exchange rate at the end of the
reporting period.
Joint ventures - Joint ventures are entities over which Siemens
and one or more parties have joint control. Joint control requires
unanimous consent of the parties sharing control in decision
making on relevant activities.
Associates - Associates are companies over which Siemens has
the ability to exercise significant influence over operating and
financial policies (generally through direct or indirect ownership
of 20% to 50% of the voting rights). These are recorded in the
Consolidated Financial Statements using the equity method and
are initially recognized at cost. Siemens' share of its associate's
post-acquisition profits or losses is recognized in the Consolidated
Statements of Income, and its share of post-acquisition changes
in equity that have not been recognized in the associate's profit
or loss is recognized directly in equity. The cumulative post-acqui-
sition changes are adjusted against the carrying amount of the
investment in the associate. When Siemens' share of losses in an
associate equals or exceeds its interest in the associate, Siemens
does not recognize further losses, unless it incurs obligations or
makes payments on behalf of the associate. The interest in an
associate is the carrying amount of the investment in the associ-
ate together with any long-term interests that, in substance, form
part of Siemens' net investment in the associate.
tional fair value of assets acquired and liabilities assumed (partial
goodwill method). If there is no loss of control, transactions with
non-controlling interests are accounted for as equity transactions
not affecting profit and loss. At the date control is lost, any re-
tained equity interests are remeasured to fair value. In case of a
written put option on non-controlling interests the Company as-
sesses whether the prerequisites for the transfer of present own-
ership interest are fulfilled at the balance sheet date. If the Com-
pany is not the beneficial owner of the shares underlying the put
option, the exercise of the put option will be assumed at each
balance sheet date and treated as equity transaction between
shareholders with the recognition of a purchase liability at the
respective exercise price. The non-controlling interests partici-
pate in profits and losses during the reporting period.
Business combinations - Cost of an acquisition is measured at
the fair value of the assets given and liabilities incurred or as-
sumed at the date of exchange. Identifiable assets acquired and
liabilities assumed in a business combination (including contin-
gent liabilities) are measured initially at their fair values at the
acquisition date, irrespective of the extent of any non-controlling
interest. Non-controlling interests are measured at the propor-
Basis of consolidation - The Consolidated Financial Statements
include the accounts of Siemens AG and its subsidiaries over
which the Company has control. Siemens controls an investee if
it has power over the investee. In addition, Siemens is exposed
to, or has rights to, variable returns from the involvement with
the investee and Siemens has the ability to use its power over the
investee to affect the amount of Siemens' return.
Certain of these accounting policies require critical accounting
estimates that involve complex and subjective judgments and
the use of assumptions, some of which may be for matters that
are inherently uncertain and susceptible to change. Such critical
accounting estimates could change from period to period and
have a material impact on the Company's results of operations,
financial positions and cash flows. Critical accounting estimates
could also involve estimates where Siemens reasonably could
have used a different estimate in the current accounting period.
Siemens cautions that future events often vary from forecasts
and that estimates routinely require adjustment.
NOTE 2 Significant accounting policies
and critical accounting estimates
Siemens prepares and reports its Consolidated Financial State-
ments in euros (€). Due to rounding, numbers presented may not
add up precisely to totals provided. Siemens is a German based
multinational technology company with core activities in the
fields of electrification, automation and digitalization.
The accompanying Consolidated Financial Statements present
the operations of Siemens AG with registered offices in Berlin
and Munich, Germany, and its subsidiaries (the Company or
Siemens). They have been prepared in accordance with Interna-
tional Financial Reporting Standards (IFRS), as adopted by the
European Union as well as with the additional requirements set
forth in Section 315a (1) of the German Commercial Code (HGB).
The financial statements are also in accordance with IFRS as is-
sued by the International Accounting Standards Board (IASB).
The Consolidated Financial Statements were authorized for issue
by the Managing Board on November 28, 2016.
NOTE 1 Basis of presentation
B.6 Notes to Consolidated Financial Statements
Consolidated Financial Statements 61
34,816
The percentage-of-completion method places considerable im-
portance on accurate estimates of the extent of progress to-
wards completion and may involve estimates on the scope of
deliveries and services required for fulfilling the contractually
defined obligations. These significant estimates include total
contract costs, total contract revenues, contract risks, including
technical, political and regulatory risks, and other judgments.
Under the percentage-of-completion method, changes in esti-
mates may lead to an increase or decrease of revenue. The cred-
itworthiness of our customers is taken into account in estimating
the probability that economic benefits associated with a contract
will flow to the Company. In addition, we need to assess whether
the contract is expected to continue or to be terminated. In de-
termining whether the continuation or termination of a contract
is expected to be the most likely scenario, all relevant facts and
circumstances relating to the contract are considered on an in-
dividual basis.
Rendering of services: For long-term service contracts, revenues
are recognized on a straight-line basis over the term of the con-
tract or, if the performance pattern is other than straight-line, as
the services are provided, i.e. under the percentage-of-comple-
tion method as described above.
Sales from multiple element arrangements: Sales of goods and
services as well as software arrangements sometimes involve the
provision of multiple elements. In these cases, the Company de-
termines whether the contract or arrangement contains more
than one unit of accounting. If certain criteria are met, foremost
if the delivered element(s) has (have) value to the customer on
a stand-alone basis, the arrangement is separated and the appro-
priate revenue recognition convention is then applied to each
separate unit of accounting. Generally, the total arrangement
consideration is allocated to the separate units of accounting
based on their relative fair values. If the criteria for the separation
of units of accounting are not met, revenue is deferred until such
criteria are met or until the period in which the last undelivered
element is delivered.
5 to 10 years
20 to 50 years
Technical machinery & equipment
Furniture & office equipment
Equipment leased to others
Factory and office buildings
Other buildings
Property, plant and equipment - Property, plant and equip-
ment, is valued at cost less accumulated depreciation and impair-
ment losses. Depreciation expense is recognized using the
straight-line method. The following useful lives are assumed:
Other intangible assets - The Company amortizes intangible
assets with finite useful lives on a straight-line basis over their
respective estimated useful lives. Estimated useful lives for pat-
ents, licenses and other similar rights generally range from three
to five years, except for intangible assets with finite useful lives
acquired in business combinations. Intangible assets acquired in
business combinations primarily consist of customer relation-
ships and trademarks as well as technology. Useful lives in spe-
cific acquisitions ranged from four to 20 years for customer rela-
tionships and trademarks and from seven to 25 years for
technology.
its determination of fair value less costs to sell and value in use
include estimated growth rates and weighted average cost of
capital. These estimates, including the methodology used, can
have a material impact on the respective values and ultimately
the amount of any goodwill impairment.
The determination of the recoverable amount of a cash-generat-
ing unit or a group of cash-generating units to which goodwill
is allocated involves the use of estimates by management. The
outcome predicted by these estimates is influenced e.g. by the
successful integration of acquired entities, volatility of capital
markets, interest rate developments, foreign exchange rate fluc-
tuations and the outlook on economic trends. In determining
recoverable amounts, discounted cash flow calculations use five-
year projections that are based on financial forecasts. Cash flow
projections take into account past experience and represent
management's best estimate about future developments. Cash
flows after the planning period are extrapolated using individual
growth rates. Key assumptions on which management has based
For the purpose of impairment testing, goodwill acquired in a
business combination is allocated to the cash-generating unit or
the group of cash-generating units that is expected to benefit
from the synergies of the business combination. If the carrying
amount of the cash-generating unit or the group of cash-gener-
ating units, to which the goodwill is allocated, exceeds its recov-
erable amount, an impairment loss on goodwill allocated to this
cash-generating unit or this group of cash-generating units is
recognized. The recoverable amount is the higher of the
cash-generating unit's or the group of cash-generating units' fair
value less costs to sell and its value in use. If either of these
amounts exceeds the carrying amount, it is not always necessary
to determine both amounts. These values are generally deter-
mined based on discounted cash flow calculations. Impairment
losses on goodwill are not reversed in future periods.
Impairment of property, plant and equipment and other
intangible assets - The Company reviews property, plant and
equipment and other intangible assets for impairment whenever
events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. In addition, intangi-
ble assets not yet available for use are subject to an annual im-
pairment test. Impairment testing of property, plant and equip-
ment and other intangible assets involves the use of estimates in
determining the assets' recoverable amount which can have a
material impact on the respective values and ultimately the
amount of any impairment.
The goodwill impairment test is performed at the level of a cash-
generating unit or a group of cash-generating units, generally
represented by a segment. As of fiscal 2016, this also applies to
Healthineers as a result of a change in the organization of the
business and the related reporting structure. In fiscal 2015, the
impairment tests for Healthineers were performed one level be-
low the segment. This is the lowest level at which goodwill is
monitored for internal management purposes.
Earnings per share - Basic earnings per share are computed by
dividing income from continuing operations, income from dis-
continued operations and net income, all attributable to ordinary
shareholders of Siemens AG by the weighted average number of
shares outstanding during the year. Diluted earnings per share
are calculated by assuming conversion or exercise of all poten-
tially dilutive securities and share-based payment plans.
Consolidated Financial Statements 63
Research and development costs - Costs of research activities
are expensed as incurred. Costs of development activities are
capitalized when the recognition criteria in IAS 38 are met. Capi-
talized development costs are stated at cost less accumulated
amortization and impairment losses with an amortization period
of generally three to ten years.
Product-related expenses - Provisions for estimated costs re-
lated to product warranties are recorded in line item Cost of sales
at the time the related sale is recognized.
Functional costs - In general, operating expenses by types are
assigned to the functions following the functional area of the cor-
responding profit and cost centers. Amortization, depreciation and
impairment of intangible assets and property, plant and equipment
are included in functional costs depending on the use of the assets.
term.
Income from operating leases: Operating lease income for equip-
ment rentals is recognized on a straight-line basis over the lease
Income from royalties: Royalties are recognized on an accrual ba-
sis in accordance with the substance of the relevant agreement.
Income from interest: Interest is recognized using the effective
interest method.
Goodwill - Goodwill is not amortized, but instead tested for im-
pairment annually, as well as whenever there are events or
changes in circumstances (triggering events) which suggest that
the carrying amount may not be recoverable. Goodwill is carried
at cost less accumulated impairment losses.
5,450
30,152
5,733
(2,135)
(1,897)
660
Purchase of investments
Purchase of current available-for-sale financial assets
Change in receivables from financing activities
Disposal of businesses, net of cash disposed
(922)
(8,254)
(271)
(568)
(1,139)
(899)
(1,356)
(1,667)
Disposal of investments, intangibles and property, plant and equipment
377
3,474
9
Additions to intangible assets and property, plant and equipment
Cash flows from investing activities
6,612
7,611
(451)
Change in other assets and liabilities
(281)
852
Income taxes paid
Dividends received
(1,718)
(2,306)
302
445
495
1,219
1,138
Cash flows from operating activities - continuing operations
7,668
6,881
Cash flows from operating activities - discontinued operations
(57)
(270)
Cash flows from operating activities - continuing and discontinued operations
Interest received
(484)
Disposal of current available-for-sale financial assets
651
351
Interest paid
(809)
(596)
Dividends paid to shareholders of Siemens AG
(2,827)
(2,728)
Dividends attributable to non-controlling interests
(236)
(145)
Cash flows from financing activities - continuing operations
(2,710)
1,051
Cash flows from financing activities - discontinued operations
5
Cash flows from financing activities - continuing and discontinued operations
(2,710)
1,056
Effect of changes in exchange rates on cash and cash equivalents
Change in cash and cash equivalents
(1,408)
Change in short-term debt and other financing activities
(2,253)
Cash flows from investing activities - continuing operations
(4,406)
(8,716)
Cash flows from investing activities - discontinued operations
262
2,889
Cash flows from investing activities - continuing and discontinued operations
(4,144)
(5,827)
1,031
Cash flows from financing activities
(463)
(2,700)
Other transactions with owners
(13)
10
Issuance of long-term debt
5,300
7,213
Repayment of long-term debt (including current maturities of long-term debt)
Purchase of treasury shares
914
20
Billings in excess of costs and estimated earnings on uncompleted contracts and related advances
Additions to assets leased to others in operating leases
Share-based payment
Dividends
Other comprehensive income, net of income taxes
Net income
Balance as of October 1, 2015
Balance as of September 30, 2015
Other changes in equity
Transactions with non-controlling interests
Re-issuance of treasury shares
Purchase of treasury shares
Share-based payment
Dividends
Other comprehensive income, net of income taxes
Net income
Balance as of October 1, 2014
(in millions of €)
B.5 Consolidated Statements of Changes in Equity
Consolidated Financial Statements 59
9,957
Purchase of treasury shares
Re-issuance of treasury shares
Cancellation of treasury shares
Transactions with non-controlling interests
2,643
30,152
5,733
2,643
(10)
106
289
23
(43)
10,604
79
(367)
7,282
25,729
Retained earnings
Capital reserve
5,525
Issued capital
2,643
60 Consolidated Financial Statements
Balance as of September 30, 2016
Other changes in equity
(2,728)
13
Cash and cash equivalents at end of period (Consolidated Statements of Financial Position)
Less: Cash and cash equivalents of assets classified as held for disposal and discontinued
operations at end of period
2,008
1,869
(325)
(442)
(373)
(1,603)
400
366
(Income) loss related to investing activities
Interest (income) expenses, net
Other non-cash (income) expenses
Inventories
(1,009)
(793)
Trade and other receivables
(579)
(811)
Trade payables
327
(247)
Change in operating net working capital
83
Income tax expenses
2,764
9,958
10,618
Cash and cash equivalents at end of period
8,034
9,958
Cash and cash equivalents at beginning of period
1,923
B.4 Consolidated Statements of Cash Flows
(in millions of €)
2,549
Fiscal year
2015
Cash flows from operating activities
Net income
5,584
7,380
Adjustments to reconcile net income to cash flows from operating activities - continuing operations
Income from discontinued operations, net of income taxes
(188)
(2,031)
Amortization, depreciation and impairments
2016
Acquisitions of businesses, net of cash acquired
(354)
457
2015
2016
2015
Balance at begin of fiscal year
36,818
35,591
2016
27,296
214
202
9,737
9,288
Current service cost
Interest expenses
26,505
2015
2016
2015
Development of the defined benefit plans
Defined benefit
obligation (DBO)
Fair value of
plan assets
Effects of
asset ceiling
Net defined
benefit balance
(1)
(11)
(III)
Fiscal year
Fiscal year
Fiscal year
(1 - 11 + 111)
Fiscal year
(in millions of €)
2016
523
1,078
Following the Swiss law of occupational benefits (BVG) each em-
ployer has to grant post-employment benefits for qualifying em-
ployees. Accordingly Siemens in Switzerland sponsors several
cash balance plans. These plans are administered by foundations.
The board of the main foundation is composed of equally many
employer and employee representatives. The board of the foun-
dation is responsible for investment policy and the asset manage-
ment, as well as for any changes in the plan rules and the deter-
mination of contributions to finance the benefits. The Company
is required to make total contributions at least as high as the sum
of the employee contributions set out in the plan rules. In case of
an underfunded plan the Company together with the employees
may be asked to pay supplementary contributions according to a
well defined framework of recovery measures.
536
1,076
536
1,605
1,436
818
646
7
11
Consolidated Statements of income
795
Return on plan assets excluding
amounts included in net interest
income and net interest expenses
Actuarial (gains) losses
2,473
(245)
801
costs recognized in the
Components of defined benefit
2
7
11
1,085
1,087
Interest income
809
825
(809)
(825)
Other¹
5
(177)
8
(179)
(4)
523
Switzerland:
Siemens plc offers benefits through the Siemens Benefit Scheme
for which, until the start of retirement, an inflation increase of
the accrued benefits is mandatory. The required funding is deter-
mined by a funding valuation carried out every third year based
on legal requirements. Due to deviating guidelines for the deter-
mination of the discount rates, the technical funding deficit is
usually larger than the IFRS funding deficit. To reduce the deficit
Siemens entered into an agreement with the trustees to provide
annual payments of GB£31 (€42) million until fiscal 2033. The
agreement also provides for a cumulative advance payment by
Siemens AG compensating the remaining annual payments at
the date of early termination of the agreement due to cancella-
tion or insolvency.
U.K.:
1,055
1,989
1.05%/2012/August 2017 US$ fixed-rate instruments
1.65%/2012/August 2019 US$ fixed-rate instruments
US$
US$
1,500
750
1,332
1,500
1,314
1,500
1,309
US$
1,500
US$
£
6.125%/2006/September 2066/GBP fixed-rate instruments
Total Hybrid Capital Bonds
Investments accounted for using the equity method
US$
750
666
US$
1,700
1,517
US$
1,000
887
15,801
10,497
5.25%/2006/September 2066/EUR fixed-rate instruments
€
900
934
1,292
3m EURIBOR+0.2%/2015/September 2017/EUR floating-rate instruments
3m EURIBOR+0.2% /2015/September 2017/EUR floating-rate instruments
Total Bonds with Warrant Units
€
33
Bond with Warrant Units - Each of the US$1.5 billion instru-
ments were issued with 6,000 detachable warrants. As of Sep-
tember 30, 2016 and 2015, terms for 10,661 warrants exchanged
in fiscal 2015 entitle the holder to receive 1,914.0511 and
1,902.0024 Siemens AG shares, respectively, per warrant at an
exercise price of €98.1389 and €98.7606, respectively, per share;
terms for the 1,339 not exchanged warrants entitle the holder to
receive 1,823.4130 and 1,811.9349 Siemens AG shares, respec-
tively, per warrant as well as 151.5630 and 160.4987 OSRAM
shares, respectively, at an exercise price of €187,842.81. As of
September 30, 2016, one warrant was exercised. The number of
shares may be adjusted under the terms of the warrants. As of
September 30, 2016 and 2015, the warrants offer option rights to
22.8 million and 22.7 million Siemens AG shares, respectively.
ASSIGNABLE AND TERM LOANS
As of September 30, 2016 and 2015, two bilateral US$500 million
term loan facilities (in aggregate €896 million and €893 million
respectively) are outstanding until March 26, 2020.
COMMERCIAL PAPER PROGRAM
Siemens has a US$9.0 billion (€8.1 billion as of September 30,
2016) commercial paper program in place including US$ extend-
ible notes capabilities. As of September 30, 2016 and 2015,
US$700 million (€627 million) and US$1.7 billion (€1.5 billion),
respectively, were outstanding. Siemens' commercial papers
have a maturity of generally less than 90 days. Interest rates
ranged from 0.13% to 0.74% in fiscal 2016 and from 0.11% to
0.32% in fiscal 2015.
NOTE 16
Post-employment benefits
Siemens provides post-employment defined benefit plans or de-
fined contribution plans to almost all of the Company's domestic
employees and the majority of the Company's foreign employees.
DEFINED BENEFIT PLANS
The defined benefit plans open to new entrants are based pre-
dominantly on contributions made by the Company. Only to a
certain extent, those plans are affected by longevity, inflation
and compensation increases and take into account country spe-
cific differences. The Company's major plans are funded with
assets in segregated entities. In accordance with local laws and
bilateral agreements with benefit trusts (trust agreement) those
plans are managed in the interest of the beneficiaries. The de-
fined benefit plans cover 509,000 participants, including 214,000
active employees, 93,000 former employees with vested benefits
and 202,000 retirees and surviving dependents.
Germany:
In Germany, Siemens AG provides pension benefits through the
plan BSAV (Beitragsorientierte Siemens Altersversorgung), fro-
zen legacy plans and deferred compensation plans. The majority
of Siemens' active employees participate in the BSAV. Those ben-
efits are predominantly based on contributions made by the
Company and returns earned on such contributions, subject to a
minimum return guaranteed by the Company. In connection with
the implementation of the BSAV, benefits provided under the
frozen legacy plans were modified to substantially eliminate the
effects of compensation increases. However, these frozen plans
still expose the Company to investment risk, interest rate risk and
longevity risk. The pension plans are funded via contractual trust
arrangements (CTA). In Germany no legal or regulatory minimum
funding requirements apply.
U.S.:
Siemens Corporation sponsors the Siemens Pension Plans, which
for the most part have been frozen to new entrants and to future
benefit accruals, except for interest credits on cash balance ac-
counts. Siemens Corporation has appointed the Investment Com-
mittee as the named fiduciary for the management of the assets
of the Plans. The Plans' assets are held in a Master Trust and the
trustee of the Master Trust is responsible for the administration
of the assets of the trust, taking directions from the Investment
Committee. The Plans are subject to the funding requirements
under the Employee Retirement Income Security Act of 1974 as
amended, (ERISA). There is a regulatory requirement to maintain
a minimum funding level of 80% in the defined benefit plans in
order to avoid benefit restrictions. At its discretion, Siemens Cor-
poration may contribute in excess of this regulatory requirement.
Annual contributions are calculated by independent actuaries.
Consolidated Financial Statements 77
Hybrid Capital Bond - On August 1, 2016 Siemens has irrevoca-
bly called for redemption of the hybrid bonds and redeemed
them at face value on September 14, 2016.
6,284
US$ Bonds - In September 2016, Siemens issued instruments
totaling US$6 billion (€5.4 billion as of September 30, 2016) in
six tranches.
Consolidated Financial Statements
33
€
33
33
€
31
31
€
31
31
2,705
2,670
28,554
25,955
1 Includes adjustments for fair value hedge accounting.
Debt Issuance Program - The Company has a program for the
issuance of debt instruments in place under which instruments
up to €15.0 billion can be issued as of September 30, 2016 and
2015, respectively. As of September 30, 2016 and 2015 €9.9 bil-
lion and €10.5 billion in notional amounts were issued and are
outstanding. Siemens redeemed the 5.625% US$ 500 million
fixed-rate instrument at face value on March 16, 2016 as due.
(41)
Effects of asset ceiling
(2,473)
151
22
3,671
3,432
3,064
2,947
107
68
675
551
1 Includes past service benefit/costs, settlement gains/losses and administration costs related to liabilities.
117
2,927
Equipment leased to others
66
9
5,696
6,047
CH
25,460
21,469
15,275
14,539
10,184
6,930
4,859
4,597
3,347
3,162
1,512
1,435
6,188
5,612
(662)
1,319
(4,510)
5,829
Technical machinery
(256)
4,089
(3,656)
7,745
(257)
135
199
143
169
7,356
Land and bulidings
(778)
8,077
(7,185)
and equipment
U.K.
7,140
172
(768)
73
580
49
109
5,786
equipment
Furniture and office
(513)
2,660
(5,111)
7,770
(252)
263
282
167
2.00%/2016/September 2023/US$-fixed-rate-instruments
2.35%/2016/October 2026/US$-fixed-rate-instruments
3.30%/2016/September 2046/US$-fixed-rate-instruments
Total US$ Bonds
U.S.
thereof:
618
611
(618)
(611)
Plan participants' contributions
144
Employer contributions
133
133
Benefits paid
(1,854)
(1,753)
(1,694)
(1,616)
144
205
3,703
1
245
6,284
(41)
(109)
1
(109)
1
Remeasurements recognized
in the Consolidated Statements
of Comprehensive Income
6,284
(41)
2,473
(245)
(109)
(160)
(137)
Settlement payments
(53)
103
Other reconciling items
(2,531)
Balance at fiscal year-end
42,176
(167) (1,777)
36,818 28,809
390
7
(749)
(557)
27,296
119
214
13,486
9,737
40
Germany
(1)
793
(47)
(45)
(47)
(8)
Business combinations, disposals and other
(10)
602
(9)
515
(2)
88
Foreign currency translation effects
(758)
897
(792)
7
(370)
983
US$
2,293
2,398
Available-for-sale financial assets
2,662
2,464
Other
Derivative financial instruments
260
20,821
Item Loans receivable primarily relate to long-term loan trans-
actions of SFS.
NOTE 14 Other current liabilities
(in millions of €)
Sep 30,
2016
20,610
3,557
Receivables from finance leases
12,477
85
92
1,099
1,063
NOTE 13 Other financial assets
Sep 30,
2015
3,264
217
Interest rates in this Note are per annum. In fiscal 2016 and 2015,
weighted-average interest rates for loans from banks, other finan-
cial indebtedness and obligations under finance leases were
3.9% (2015: 2.8%), 0.5% (2015: 0.2%) and 4.8% (2015: 4.7%),
respectively.
CREDIT FACILITIES
As of September 30, 2016 and 2015, €7.1 billion and €7.1 billion
of lines of credit are unused. The facilities are for general corpo-
rate purposes. The €4.0 billion syndicated credit facility was
extended by one year until June 25, 2021. The US$3.0 billion
syndicated credit facility matures on September 27, 2020. The
€450 million revolving bilateral credit facility is unused and was
extended from September 30, 2016 to September 30, 2017.
(in millions of €)
2016
Loans receivable
11,838
2015
More than five years
Billings in excess of costs and
contracts and related advances
amount
(in millions)
Sep 30, 2016
Carrying
amount
in millions
of €¹
notional
Currency
notional
Currency
Carrying
amount
amount
in millions
(in millions)
of €¹
US$
Sep 30, 2015
5.625%/2006/March 2016/US$ fixed-rate instruments
(interest/issued/maturity)
NOTES AND BONDS
10,892
10,982
Liabilities to personnel
5,401
5,437
Accruals for pending invoices
1,175
1,242
Other
2,968
2,708
20,437
20,368
Consolidated Financial Statements 75
76
estimated earnings on uncompleted
26,682
2,979 24,761
6,206
and equipment
23,968
566
487
2,018
(1,805) 25,234
Property, plant
(15,024) 10,210
1 Included assets reclassified to Assets classifed as held for disposal and dispositions of those entites.
74
Consolidated Financial Statements
The gross carrying amount of Advances to suppliers and con-
struction in progress includes €677 million and €787 million, re-
spectively of property, plant and equipment under construction
in fiscal 2016 and 2015. As of September 30, 2016 and 2015, con-
tractual commitments for purchases of property, plant and
equipment are €643 million and €474 million, respectively.
Minimum future lease payments under operating leases are:
NOTE 15 Debt
(1,769)
6
855
(1)
(4)
(521)
3,033
(1,746)
1,287
(345)
Advances to suppliers and
construction in progress
760
5
66
500
(467)
(7)
856
(in millions of €)
Notes and bonds
(maturing until 2046)
Loans from banks
(maturing until 2023)
Current debt
Sep 30,
Non-current debt
Sep 30,
2016
2015
Obligations under
Within one year
326
319
finance leases
After one year but not more than five years
689
652
Total debt
15
31
123
115
(in millions of €)
500
68
1,737
2016
2015
2016
2015
4,994
456 23,560
25,498
380
755
992
1,000
Other financial indebted-
Sep 30,
ness (maturing until 2027)
817
87
456
5.625%/2008/June 2018/EUR fixed-rate instruments
€
1,750
1,982 US$
1,750
2,023
US$3m LIBOR+0.28%/2015/May 2018/US$ floating-rate instruments
US$
US$
500
500
446
1.45%/2015/May 2018/US$-fixed-rate-instruments
US$
1,250
1,119
448 US$
6.125%/2006/August 2026/US$ fixed-rate instruments
1,600
1,750
US$
300
267
US$
400
358
US$
400
357
10,048
10,799
5.75%/2006/October 2016/US$ fixed-rate instruments
US$
1,750
1,570 US$
US$
1,250
1,114
2.15%/2015/May 2020/US$-fixed-rate-instruments
1,750
1,546
US$
1,750
1,539
57
US$3m LIBOR+0.32%/2016/September 2019/US$ floating-rate instruments
US$
350
308
1.30%/2016/September 2019/US$-fixed-rate-instruments
US$
1,100
984
1.70%/2016/September 2021/US$-fixed-rate-instruments
US$
268
4.40%/2015/May 2045/US$-fixed-rate-instruments
1,500
US$
1,000
893 US$
1,000
889
2.90%/2015/May 2022/US$-fixed-rate-instruments
US$
1,750
1,564 US$
1,750
1,557
3.25%/2015/May 2025/US$-fixed-rate-instruments
US$
1,500
1,336 US$
1,331
1,100
300
356
1.5%/2012/March 2020/EUR fixed-rate instruments
€
1,000
997
€
1,000
357
996
£
350
405
£
350
472
2.75%/2012/September 2025/GBP fixed-rate instruments
400
US$
358
1,600
1,719
€
1,600
1,779
5.125%/2009/February 2017/EUR fixed-rate instruments
€
2,000
2,028
€
2,000
2,090
US$3m LIBOR+1.4%/2012/February 2019/US$ floating-rate instruments
US$
400
3.75%/2012/September 2042/GBP fixed-rate instruments
£
650
740
447
US$
500
445
US$
100
87
US$
100
87
US$
400
358
US$
400
500
US$
US$
1,000
£
650
863
1.75%/2013/March 2021/EUR fixed-rate instruments
2.875%/2013/March 2028/EUR fixed-rate instruments
1.5%/2013/March 2018/US$ fixed-rate instruments
3.5%/2013/March 2028/US$ fixed-rate instruments
2013/June 2020/US$ floating-rate instruments
2014/March 2019/US$ floating-rate instruments
2014/September 2021/US$ floating-rate instruments
Total Debt Issuance Program
€
1,250
1,285
€
1,250
1,278
€
1,000
996
€
996
4,827
NOTE 4 Interests in other entities
7,542
(444) 15,262
3,374
3,405
2,072
1,952
2,492
2,397
2,940
Within one year
One to five years
Thereafter
933
2015
2016
2015
2016
(in millions of €)
938
2,965
1,038
263
(181)
Write-offs charged against the allowance
Recoveries of amounts previously written-off
Foreign exchange translation differences
Reclassifications to line item Assets held for
disposal and dispositions of those entities
Valuation allowance as of fiscal year-end
168
284
of Income in the current period
recorded in the Consolidated Statements
Increase in valuation allowances
beginning of fiscal year
Valuation allowance as of
5,265
5,457
6,129
6,840
228
564
2015
(145)
2016
Sep 30,
2016
(in millions of €)
1,983
2,602
Total deferred tax assets, net
8,339
Sep 30,
2015
8,638
336
120
Other
732
930
Liabilities
Deferred tax liabilities
Trade receivables from the sale
of goods and services
14,280
13,909
Fiscal year
(in millions of €)
Present value of
minimum future lease
payments receivable
in leases
Gross investment
The gross investment in leases and the present value of minimum
future lease payments receivable are due as follows:
Changes to the valuation allowance of current and long-term re-
ceivables which belong to the class of financial assets measured
at (amortized) cost are as follows (excluding receivables from
finance leases):
In fiscal 2016 and 2015, the long-term portion of receivables from
finance leases is reported in Other financial assets and amounts
to €3,557 million and €3,264 million, respectively.
Consolidated Financial Statements
15,982
16,287
2,073
2,007
Receivables from finance leases
As of September 30, 2016, the Company has certain tax losses
subject to significant limitations. For those losses deferred tax
assets are not recognized, as it is not probable that gains will be
generated to offset those losses.
Sep 30,
9
7
(33)
Advance payments received
87
353
Plus: Unguaranteed residual values
19,807
20,666
(2,506)
551
3,046
3,261
Finished goods and products held for resale
Advances to suppliers
6,042
6,488
Minimum future lease payments
591
(2,554)
Gross investment in leases
6,840
(108)
residual value
Less: Present value of unguaranteed
(190)
(198)
Less: Allowance for doubtful accounts
5,527
5,762
Net investment in leases
(601)
(1,078)
Less: Unearned finance income
17,253
18,160
6,129
Sep 30,
2015
2016
(in millions of €)
9,162
After one year but not more than five years
More than five years
2,378
Within one year
2016
(in millions of €)
Sep 30,
As of September 30, 2016 and 2015, Other current financial as-
sets include loans receivables of €4,910 million and €3,128 mil-
lion, respectively and derivative financial instruments of
€758 million and €830 million, respectively.
NOTE 9 Other current financial assets
Investments in finance leases primarily relate to industrial ma-
chinery, medical equipment, transportation systems, equipment
for information technology and office machines. Actual cash
flows will vary from contractual maturities due to future sales of
finance receivables, prepayments and write-offs.
2015
Minimum future lease payments to be received are as follows:
933
1,013
(26)
(9)
3,358
NOTE 8 Trade and other receivables
752
2,474
3,322
246
6,042
10,046
of billings on uncompleted contracts
Costs and earnings in excess
4,417
4,281
Work in progress
2,631
2,487
Raw materials and supplies
2015
2016
Sep 30,
(in millions of €)
The following table shows a reconciliation of minimum future lease
payments to the gross and net investment in leases and to the
present value of the minimum future lease payments receivable:
NOTE 10 Inventories
6,488
7,272
7,588
Non-current and current assets
1,869
2,008
(145)
235
2,014
1,773
The current income tax expenses in fiscal 2016 and 2015 include
adjustments recognized for current tax of prior years in the
amount of €(29) million and €79 million, respectively. The de-
ferred tax expense (benefit) in fiscal 2016 and 2015 includes tax
effects of the origination and reversal of temporary differences
of €54 million and €(30) million, respectively.
2015
Fiscal year
Income tax expenses
Deferred tax
(in millions of €)
Current tax
Income tax expense (benefit) consists of the following:
NOTE 7 Income taxes
2016
In Germany, the calculation of current tax is based on a com-
bined tax rate of 31%, consisting of a corporate tax rate of 15%,
a solidarity surcharge thereon of 5.5% and an average trade tax
rate of 15%. For foreign subsidiaries, current taxes are calculated
based on the local tax laws and applicable tax rates in the indi-
vidual foreign countries. Deferred tax assets and liabilities in
Germany and abroad are measured at the tax rates that are ex-
pected to apply to the period when the asset is realized or the
liability is settled.
Consolidated Financial Statements 69
70
2,238
2,295
192
188
Deductible temporary differences
2015
2016
2015
2016
(in millions of €)
Fiscal year
Sep 30,
(in millions of €)
Deferred tax assets have not been recognized with respect of the
following items (gross amounts):
Income tax expense (current and deferred) differs from the
amounts computed by applying a combined statutory German
income tax rate of 31% as follows:
Other operating expenses in fiscal 2016 and 2015 include losses
on sales of property, plant and equipment, and effects from in-
surance, legal and regulatory matters.
NOTE 6 Other operating expenses
In fiscal 2016 and 2015, Other operating income includes gains
on sales of property, plant and equipment of €177 million and
€232 million, respectively.
NOTE 5 Other operating income
investments accounted for
Income (loss) from
(155)
(129)
Impairment and reversals of impairment
1,477
(53)
Gains (losses) on sales, net
316
Share of profit (loss), net
2016
(87)
2015
Fiscal year
(in millions of €)
using the equity method, net
Tax loss carryforward
134
In fiscal 2015, Siemens recognized proportionate losses of
€275 million as a consequence of a funding commitment pro-
vided to Unify Holdings B.V. The investment was sold in the
second quarter of fiscal 2016.
Item Income (loss) from investments accounted for using the eq-
uity method, net, includes Siemens' share in BWI Informations-
technik GmbH's (BWI) earnings of €16 million and €27 million,
respectively, in fiscal 2016 and 2015. The carrying amount of all
individually not material associates includes the carrying amount
of BWI, amounting to €95 million and €114 million, respectively,
as of September 30, 2016 and 2015. Siemens holds a 50.05%
stake in BWI. BWI is not controlled by Siemens due to significant
participating rights of the two other shareholders. Together with
the HERKULES obligations the Company's maximum exposure to
loss from BWI as of September 30, 2016 and 2015 amounts to
€695 million and €1,204 million, respectively. BWI finances its
operations on its own.
20
58
(31)
257
Total comprehensive income
net of income taxes
Other comprehensive income,
1
Income (loss) from discontinued operations
38
288
2016
Fiscal year
2015
Income (loss) from continuing operations
(in millions of €)
As of September 30, 2016 and 2015, the carrying amount of all
individually not material associates amounts to €2,242 million
and €2,046 million, respectively. Summarized financial infor-
mation for all individually not material associates adjusted for
the percentage of ownership held by Siemens, is presented be-
low. Items included in the Statements of Comprehensive In-
come are presented for the twelve month period applied under
the equity method.
1,235
(72)
2,013
2,201
1,836
Non-current and current assets
210
(2)
Discontinued operations
Assets
1,936
1,869
Continuing operations
2015
2016
(in millions of €)
Sep 30,
2015
2016
2,008
Liabilities and Post-employment benefits
8,742
7,539
Liabilities
10,322
11,240
Deferred tax assets
610
547
Tax loss and credit carryforward
237
114
Other
2,218
1,010
139
(996)
Income and expenses recognized
directly in equity
(in millions of €)
Fiscal year
Including items charged or credited directly to equity and the
expense (benefit) from continuing and discontinued operations,
the income tax expense (benefit) consists of the following:
Siemens has not recognized deferred tax liabilities for income
taxes or foreign withholding taxes on the cumulative earnings of
subsidiaries of €26,585 million and €27,507 million, respectively
in fiscal 2016 and 2015 because the earnings are intended to be
permanently reinvested in the subsidiaries.
deferred tax assets and tax credits
Change in realizability of
(20)
(223)
Taxes for prior years
(709)
(227)
Tax-free income
474
600
Non-deductible losses and expenses
income taxes resulting from:
Increase (decrease) in
Expected income tax expenses
1,334
(44)
1,142
Change in tax rates
8
(43)
As of September 30, 2016 and 2015, €953 and €458 million of the
unrecognized tax loss carryforwards expire over the periods to 2031.
Deferred income tax assets and liabilities on a gross basis are
summarized as follows:
1,869
2,008
Actual income tax expenses
2
(6)
Other, net
26
(92)
for using the equity method
Tax effect of investments accounted
(107)
(280)
Foreign tax rate differential
(15)
Present value of minimum future
lease payments receivable
5,457
85
632
22
(29)
5,829
equipment
(448)
Furniture and office
2,539
(5,412)
7,950
(271)
270
288
(542)
6,092
(4,764)
1,328
856
construction in progress
Advances to suppliers and
(348)
1,305
(1,710)
3,015
(452)
10
484
23
(83)
3,033
Equipment leased to others
(690)
(39)
(67)
7,770
and equipment
15,262
Other intangible assets
(490)
4,341
(3,191)
7,532
68
(77)
7,542
and trademarks
Customer relationships
(253)
1,896
(2,974)
4,870
(115)
(16)
328
(395)
Technical machinery
(253)
4,186
(3,673)
7,859
(333)
218
274
20
(65)
7,745
Land and bulidings
(932)
(7,727) 7,742
15,469
388
(143)
(40)
(582)
3,525
and similar rights
including patents, licenses
Acquired technology
(176)
1,376
190
(1,619)
(302)
337
211
2,750
technology
Internally generated
2,995
923
53
34
390
3,796
693
10,826
Other intangible assets
(176)
2,873
293
4,552
and trademarks
Customer relationships
(231)
1,874
(2,851)
4,725
ment in
fiscal 2015
and impair-
Deprecia-
tion/amor-
tization
Carrying
amount
09/30/2015
10,157
(15,560)
25,717
(1,516)
2,273
(14)
(260)
25,234
and equipment
Property, plant
2
799
(2)
801
(12)
(1,831)
595
1 Included assets reclassified to Assets classifed as held for disposal and dispositions of those entites.
Gross
carrying
Accumu-
lated depre-
ciation/
amortiza-
tion and
impairment
Gross
carrying
Retire-
amount
ments¹ 09/30/2015
nations Additions fications
rences
78
10/01/2014
(in millions of €)
Reclassi-
combi-
diffe-
amount
business
lation
through
Trans-
Additions
(2,715)
64
(37)
For the purpose of estimating the fair value less costs to sell of
the groups of cash-generating units, cash flows were projected
for the next five years based on past experience, actual operating
results and management's best estimate about future develop-
ments as well as market assumptions. The determined fair value
of the groups of cash-generating units is assigned to level 3 of
the fair value hierarchy.
cash-generating units include terminal value growth rates up to
1.7% in fiscal 2016 and 2.5% in fiscal 2015, respectively and af-
ter-tax discount rates of 5.0% to 9.0% in fiscal 2016 and 6.0% to
9.5% in fiscal 2015. Where possible, reference to market prices is
made.
Siemens performs the mandatory annual impairment test in the
three months ended September 30. The recoverable amounts for
the annual impairment test 2016 for Siemens' groups of cash-
generating units were estimated to be higher than the carrying
amounts. Key assumptions on which Siemens based its determi-
nations of the fair value less costs to sell for the groups of
The goodwill impairment test is performed at the level of a
cash-generating unit or a group of cash-generating units, gener-
ally represented by a segment. As of fiscal 2016, this also applies
to Healthineers as a result of a change in the organization of the
business and the related reporting structure. In fiscal 2015, the
impairment tests for Healthineers were performed one level be-
low the segment.
23,166
17,783
72
23,166
24,159
1,909
(1)
1
3
1
140
1,905
Consolidated Financial Statements
The fair value less costs to sell is mainly driven by the terminal
value which is particularly sensitive to changes in the assump-
tions on the terminal value growth rate and discount rate. Both
assumptions are determined individually for each group of
cash-generating units. Discount rates are based on the weighted
average cost of capital (WACC) for the groups of cash-generating
units (for SFS the discount rate represents cost of equity). The
discount rates are calculated based on a risk-free rate of interest
and a market risk premium. In addition, the discount rates reflect
the current market assessment of the risks specific to each group
of cash-generating units by taking into account specific peer
group information on beta factors, leverage and cost of debt.
The parameters for calculating the discount rates are based on
external sources of information. The peer group is subject to an
annual review and adjusted, if necessary. Terminal value growth
rates take into consideration external macroeconomic sources of
data and industry specific trends.
1.7%
3,933
6.5%
1.7%
8,301
Sep 30, 2016
After-tax
discount rate
growth rate
Goodwill
Terminal value
Revenue figures in the five-year planning period of the groups of
cash-generating units to which a significant amount of goodwill
is allocated include average revenue growth rates (excluding
portfolio effects) of between 0.3% and 5.3% (2.6% and 5.9% in
fiscal 2015).
Power and Gas (without part of Power Generation Services)
Power Generation Services (part of Power and Gas)
Digital Factory
Healthineers
(in millions of €)
The following table presents key assumptions used to determine
fair value less costs to sell for impairment test purposes for the
groups of cash-generating units to which a significant amount of
goodwill is allocated:
2
8.0%
1,763
Balance at beginning of year
Balance at year-end
2015
2016
Fiscal year
Translation differences and other
Balance at beginning of year
Cost
25,071
(in millions of €)
The aggregate amount of costs incurred and recognized profits
less recognized losses for construction contracts in progress, as
of September 30, 2016 and 2015 amounted to €83,556 million
and €82,196 million, respectively. Revenue from construction
contracts amounted to €32,635 million and €30,261 million, re-
spectively, for fiscal 2016 and 2015. Advance payments received
on construction contracts in progress were €8,705 million and
€8,674 million as of September 30, 2016 and 2015. Retentions in
connection with construction contracts were €288 million and
€225 million in fiscal 2016 and 2015, respectively.
Construction contracts, here and as follows, include service con-
tracts accounted for under the percentage of completion method.
In the second quarter of fiscal 2016, Siemens revised project calcu-
lations related to the resumption of long-term contracts with cus-
tomers in Iran following the ending or easing of EU and U.S. sanc-
tions in accordance with accounting guidance for construction
and service contracts. The resulting adjustments increased reve-
nue by €174 million as well as profit at Power and Gas and Income
from continuing operations before income taxes by €130 million.
Consolidated Financial Statements 71
Cost of sales include inventories recognized as expense amount-
ing to €54,706 million and €51,735 million, respectively, in fiscal
2016 and 2015. Compared to prior year, write-downs increased
(decreased) by €(3) million and €97 million as of September 30,
2016 and 2015.
5,265
NOTE 11 Goodwill
19,546
(127)
1,187
Carrying amount
Dispositions and reclassifications to assets classified as held for disposal
Balance at year-end
Impairment losses recognized during the period
Translation differences and other
Balance at beginning of year
Accumulated impairment losses and other changes
25,071
26,068
Balance at year-end
(261)
(20)
Dispositions and reclassifications to assets classified as held for disposal
4,599
1,144
Acquisitions and purchase accounting adjustments
1,905
260
3,552
8.0%
nations Additions
rences
10/01/2015
(in millions of €)
combi-
diffe-
Reclassi-
fications
amount
tization
tion/amor-
Deprecia-
ciation/
amortiza-
lated depre-
Accumu-
Carrying and impair-
Retire-
amount
ments¹ 09/30/2016
tion and
impairment
amount
09/30/2016
4,725
and similar rights
including patents, licenses
Acquired technology
(189)
1,505
(1,562)
3,067
(252)
324
2,995
technology
Internally generated
fiscal 2016
ment in
carrying
1.7%
business
carrying
Digital Factory
8.0%
1.7%
3,587
Power and Gas (without part of Power Generation Services)
6.5%
2.5%
Sep 30, 2015
After-tax
discount rate
Terminal value
growth rate
Goodwill
5,108
Diagnostics of Healthineers
(in millions of €)
8.0%
1.7%
3,158
3,328
lation
1.7%
Imaging & Therapy Systems of Healthineers
Gross
through
Trans-
Gross
Additions
NOTE 12 Other intangible assets and
property, plant and equipment
Consolidated Financial Statements 73
8.5%
The sensitivity analysis for the groups of cash-generating units
to which a significant amount of goodwill is allocated was based
on a reduction in after-tax future cash flows by 10% or an in-
crease in after-tax discount rates by one percentage point or a
reduction in the terminal value growth rate by one percentage
point. Siemens concluded that no impairment loss would need
to be recognized on goodwill in any of the groups of cash-gen-
erating units.
1.7%
2,613
Power Generation Services (part of Power and Gas)
6.5%
2.0%
2,790
8.0%
Consolidated Financial Statements
Consolidated Financial Statements
88
2016
Consolidated Financial Statements 83
Future payment obligations under non-cancellable operating
leases are:
(in millions of €)
Sep 30,
Thereof non-current
2015
Within one year
882
773
After one year but not more than five years
More than five years
1,707
870
3,458
1,662
993
3,428
In addition to guarantees disclosed in the table above, the Com-
pany issued other guarantees. To the extent future claims are not
considered remote, maximum future payments from these obli-
gations amount to €853 million and €1,755 million as of Septem-
ber 30, 2016 and 2015, respectively. These commitments include
indemnifications issued in connection with dispositions of busi-
nesses. Such indemnifications may protect the buyer from po-
tential tax, legal and other risks in conjunction with the pur-
chased business. As of September 30, 2016 and 2015, the
accrued amount for such other commitments is €456 million
and €559 million, respectively.
Total operating rental expenses for the years ended September 30,
2016 and 2015 were €1,158 million and €1,118 million, respectively.
NOTE 21
Legal proceedings
PROCEEDINGS OUT OF OR IN CONNECTION
WITH ALLEGED BREACHES OF CONTRACT
As previously reported, Siemens AG is a member of a supplier con-
sortium that has been contracted to construct the nuclear power
plant "Olkiluoto 3" in Finland for Teollisuuden Voima Oyj (TVO) on
a turnkey basis. The agreed completion date for the nuclear power
plant was April 30, 2009. Siemens AG's share of the contract value
is approximately 27%. The other member of the supplier consor-
tium is a further consortium consisting of Areva NP S.A.S. and its
wholly-owned subsidiary, Areva GmbH. Completion of the power
plant has been delayed for reasons which are in dispute. In De-
cember 2008, the supplier consortium filed a request for arbitra-
tion against TVO demanding an extension of the construction
time, additional compensation, milestone payments, damages
and interest. TVO rejected the claims and asserted counterclaims
against the supplier consortium consisting primarily of damages
due to the delay. In August 2015, TVO updated its counterclaims
to approximately €2.3 billion. In February 2016, the supplier con-
sortium updated its monetary claims to approximately €3.5 bil-
lion. The amounts claimed by the parties do not cover the total
period of delay and may be updated further. On November 7, 2016
a partial award on certain preliminary questions identified for
early treatment was issued. The majority of the facts underlying
the claims regarding delay and disruption that occurred during
project execution are not covered by the partial award. A further
partial award on additional preliminary questions for early treat-
ment is expected during the first half of calendar year 2017. A final
arbitration judgment on the claims and counterclaims is expected
at the earliest during the second half of calendar year 2017.
As previously reported, during fiscal year 2014, Siemens Indus-
trial Turbomachinery Ltd., United Kingdom, was sued before an
Iranian Court. The Parties have finalized their dispute at the end
of calendar year 2015.
PROCEEDINGS OUT OF OR IN CONNECTION
WITH ALLEGED COMPLIANCE VIOLATIONS
As previously reported, in July 2008, Hellenic Telecommunications
Organization S.A. (OTE) filed a lawsuit against Siemens AG with the
district court of Munich, Germany, seeking to compel Siemens AG to
disclose the outcome of its internal investigations with respect to
OTE. OTE seeks to obtain information with respect to allegations of
undue influence and/or acts of bribery in connection with contracts
concluded between Siemens AG and OTE from calendar 1992 to
2006. At the end of July 2010, OTE expanded its claim and requested
payment of damages by Siemens AG of at least €57 million to OTE
for alleged bribery payments to OTE employees. In October 2014 OTE
increased its damage claim to the amount of at least €68 million.
Siemens AG continues to defend itself against the expanded claim.
As previously reported, in September 2011, the Israeli Antitrust
Authority requested that Siemens present its legal position regard-
ing an alleged anti-competitive arrangement between April 1988
and April 2004 in the field of gas-insulated switchgear. In Septem-
ber 2013, the Israeli Antitrust Authority concluded that Siemens AG
was a party to an illegal restrictive arrangement regarding the
Israeli gas-insulated switchgear market between 1988 and 2004,
with an interruption from October 1999 to February 2002. The
Company appealed against this decision in May 2014.
Based on the above mentioned conclusion of the Israeli Antitrust
Authority, two electricity consumer groups filed motions to certify
a class action for cartel damages against a number of companies
including Siemens AG with an Israeli State Court in Septem-
ber 2013. One of the class actions has been dismissed by the court
in fiscal year 2015. The remaining class action seeks compensation
for alleged damages amounting to ILS2.8 billion (approximately
€667 million as of September 2016). In addition, the Israel Electric
Corporation (IEC) filed at the end of December 2013 with an Israeli
State Court a separate ILS3.8 billion (approximately €898 million as
of September 2016) claim for damages against Siemens AG and
other companies that allegedly formed a cartel in the Israeli gas-
insulated switchgear market. Siemens AG is defending itself against
the actions.
As previously reported, the Israeli Exchange Supervisory Authority
(ISA) concluded its investigation regarding potentially illegal
payments that were allegedly paid to Israeli Electric Company-
representatives in the early 2000's, and transferred the investigation
files to the Israeli District Attorney (DA) in August 2015, in order to
decide whether or not to take any legal steps against any of the
suspects named in the ISA investigation. Siemens fully cooperated
84 Consolidated Financial Statements
with the Israeli authorities. On May 2, 2016, the DA filed criminal
charges versus Siemens Israel Ltd. Siemens AG was not indicted, as
it was possible for Siemens AG to conclude a non-prosecution
agreement with the DA that obliged Siemens AG to pay an amount
in the mid double-digit euro million range.
As previously reported, in May 2013, Siemens Ltda., Brazil, (Siemens
Ltda.) entered into a leniency agreement with the Administrative
Council for Economic Defense (CADE) and other relevant Brazilian
authorities relating to possible antitrust violations in connection with
alleged anticompetitive irregularities in metro and urban train proj-
ects, in which Siemens Ltda. and partially Siemens AG, as well as a
number of other companies participated as contractor. In March 2014,
CADE commenced administrative proceedings, confirming Siemens
Ltda.'s immunity from administrative fines for the reported potential
misconduct. In connection with the above mentioned metro and
urban train projects, several Brazilian authorities initiated investiga-
tions relating to alleged criminal acts (corruptive payments, anti-
competitive conduct, undue influence on public tenders).
As previously reported, in March 2014, Siemens was informed that
in connection with the above mentioned metro and urban train proj-
ects the Public Prosecutor's Office São Paulo has requested criminal
proceedings at court into alleged violations of Brazilian antitrust law
against a number of individuals including current and former
Siemens employees. The proceedings continue; the Public Prosecu-
tor's Office São Paulo has, in the meantime, appealed all decisions
where the courts denied opening criminal trials.
As previously reported, in May 2014, the Public Affairs Office
(Ministério Público) São Paulo initiated a lawsuit against Siemens
Ltda. as well as other companies and several individuals claiming,
inter alia, damages in an amount of BRL2.5 billion (approximately
€687 million as of September 2016) plus adjustments for inflation
and related interest in relation to train refurbishment contracts en-
tered into between 2008 and 2011. A technical note issued by the
Brazilian cartel authority CADE earlier in 2014 had not identified ev-
idence suggesting Siemens Ltda.'s involvement in anticompetitive
conduct in relation to these refurbishment contracts. In January 2015
the district court of São Paulo admitted a lawsuit of the State of São
Paulo and two customers against Siemens Ltda., Siemens AG and
other companies and individuals claiming damages in an unspeci-
fied amount. In March 2015, the district court of São Paulo admitted
a lawsuit of the Public Affairs Office (Ministério Público) São Paulo
against Siemens Ltda. and other companies claiming, inter alia, dam-
ages in an amount of BRL487 million (approximately €134 million as
of September 2016) plus adjustments for inflation and related inter-
est in relation to train maintenance contracts entered into in 2000
and 2002. In September 2015, the district court of São Paulo admit-
ted another lawsuit of the Public Affairs Office (Ministério Público)
São Paulo against Siemens Ltda. and other companies claiming,
inter alia, damages in an amount of BRL918 million (approximately
The Company is jointly and severally liable and has capital contri-
bution obligations as a partner in commercial partnerships and
as a participant in various consortiums.
In fiscal 2007, The Federal Republic of Germany commissioned
a consortium consisting of Siemens and IBM Deutschland
GmbH (IBM) to modernize and operate the non-military infor-
mation and communications technology of the German Federal
Armed Forces (Bundeswehr). This project is called HERKULES.
A project company, BWI Informationstechnik GmbH, provides
the services required by the terms of the contract. Siemens is
a shareholder in the project company. The guarantees issued
by Siemens in connection with the project are connected to
each other legally and economically. The guarantees ensure
that BWI has sufficient resources to provide the required ser-
vices and to fulfill its contractual obligations. After expiration
of the contract in December 2016, there will be a maximum
remaining guarantee amount of €200 million until April 2019
at the latest.
Furthermore, Siemens issues guarantees of third-party perfor-
mance, which mainly include performance bonds and guaran-
tees of advanced payments in a consortium. In the event of
non-fulfillment of contractual obligations by the consortium
partner(s), Siemens will be required to pay up to an agreed-upon
maximum amount. These agreements typically have terms of up
to ten years. Generally, consortium agreements provide for fall-
back guarantees as a recourse provision among the consortium
partners. As of September 30, 2016 and 2015, the Company ac-
crued €4 million and €3 million, respectively, relating to perfor-
mance guarantees.
default or non-payment by the primary debtor, Siemens will be
required to settle such financial obligations. The maximum
amount of these guarantees is equal to the outstanding balance
of the credit or, in case where a credit line is subject to variable
utilization, the nominal amount of the credit line. These guaran-
tees have terms up to 22 years and 18 years, respectively, in fiscal
2016 and 2015. For credit guarantees amounting to €270 million
and €271 million as of September 30, 2016 and 2015, respec-
tively, the Company held collateral mainly in the form of inven-
tories and trade receivables. The Company accrued €73 million
and €93 million relating to credit guarantees as of September 30,
2016 and 2015, respectively.
Poor's
Service
Ratings
Services
Moody's
Investors
Service
Standard &
Poor's
Ratings
Services
Long-term debt
A1
A+
A1
Short-term debt
P-1
A-1+
P-1
A+
A-1+
NOTE 20 Commitments and
contingencies
The following table presents the undiscounted amount of maxi-
mum potential future payments for major groups of guarantees:
Item Credit guarantees covers the financial obligations of third
parties generally in cases where Siemens is the vendor and (or)
contractual partner or Siemens is liable for obligations of associ-
ated companies accounted for using the equity method. Addi-
tionally, credit guarantees are issued in the course of the SFS
business. Credit guarantees generally provide that in the event of
1,090
4,241
3,718
600
2,292
2,319
€252 million as of September 2016) plus adjustments for inflation
and related interest in relation to train maintenance contracts
entered into in 2006 and 2007. Siemens will defend itself against
these actions. It cannot be excluded that further significant damage
claims will be brought by customers or the state against Siemens.
Guarantees of third-party performance
HERKULES obligations
799
Credit guarantees
2015
2016
Sep 30,
(in millions of €)
859
As previously reported, CADE is conducting unrelated to the
above mentioned proceedings two further investigations into
possible antitrust behavior in the field of gas-insulated and air-
insulated switchgear from the 1990's to 2006. Siemens is cooperat-
ing with the authorities.
As previously reported, in June 2015, Siemens Ltda. once again
appealed to the Supreme Court against a decision confirming the
decision of the previous court to suspend Siemens Ltda. from par-
ticipating in public tenders and signing contracts with public ad-
ministrations in Brazil for a five year term based on alleged irregu-
larities in calendar 1999 and 2004 public tenders with the Brazilian
Postal authorities. In July 2015, the court suspended enforcement
of the debarment decision pending the appeal.
As previously reported, the Vienna public prosecutor in Austria is
conducting an investigation into payments between calendar 1999
and calendar 2006 relating to Siemens Aktiengesellschaft Österre-
ich, Austria, for which adequate services rendered could not be iden-
tified. In September 2011, the Vienna public prosecutor extended the
investigations to include a tax evasion matter for which Siemens AG
Österreich is potentially liable. In November 2016, the proceedings
against Siemens Aktiengesellschaft Österreich were stopped.
1,383
310
42,091
536
40,986
1 Reported in the following line items of the Statements
of Financial Position: Trade and other receivables, Other
current financial assets and Other financial assets, except
for separately disclosed €2,662 million and €2,464 million
available-for-sale financial assets and €3,051 million
and €3,228 million derivative financial instruments as
of September 30, 2016 and 2015, respectively. Includes
€14,280 million and €13,909 million trade receivables from
the sale of goods and services in fiscal 2016 and 2015,
thereof €665 million and €726 million with a term of more
than twelve months.
2 Includes equity instruments classified as available-for-sale,
for which a fair value could not be reliably measured and
which are therefore recognized at cost.
3 Reported in the following line items of the Statements of
Financial Position: Short-term debt and current maturities
of long-term debt, Trade payables, Other current financial
liabilities, Long-term debt and Other financial liabilities,
except for separately disclosed derivative financial instru-
ments of €1,500 million and €1,919 million, respectively,
as of September 30, 2016 and 2015.
4 Reported in line items Other current financial liabilities and
Other financial liabilities.
Cash and cash equivalents includes €330 million and €378 million
as of September 30, 2016 and 2015, respectively, which are not
available for use by Siemens mainly due to minimum reserve re-
quirements with banks. As of September 30, 2016 and 2015, the
carrying amount of financial assets Siemens has pledged as col-
lateral amounted to €214 million and €345 million, respectively.
The following table presents the fair values and carrying amounts
of financial assets and financial liabilities measured at cost or
amortized cost for which the carrying amounts do not approxi-
mate fair value:
(in millions of €)
Notes and bonds
Loans from banks and other financial indebtedness
Obligations under finance leases
86 Consolidated Financial Statements
Sep 30, 2016
Fixed-rate and variable-rate receivables with a remaining term of
more than twelve months, including receivables from finance
leases, are evaluated by the Company based on parameters such
as interest rates, specific country risk factors, individual credit-
worthiness of the customer, and the risk characteristics of the
financed project. Based on this evaluation, allowances for these
receivables are recognized.
147
207
3,559
25,955
26,516
3,544
1,190
2,276
138
amount
Fair value
Carrying
Sep 30, 2015
Carrying
amount
Fair value
30,235
2,270
203
28,554
Moody's
Investors
39,067
53,092
Siemens is in the course of its normal business operations involved
in numerous Legal Proceedings in various jurisdictions. These Legal
Proceedings could result, in particular, in Siemens being subject to
payment of damages and punitive damages, equitable remedies or
criminal or civil sanctions, fines or disgorgement of profit. In individ-
ual cases this may also lead to formal or informal exclusion from
tenders or the revocation or loss of business licenses or permits. In
addition, further Legal Proceedings may be commenced or the scope
of pending Legal Proceedings may be expanded. Asserted claims are
generally subject to interest rates.
Some of these Legal Proceedings could result in adverse decisions
for Siemens that may have material effects on its financial position,
the results of its operations and/or its cash flows in the respective
reporting period. At present, Siemens does not expect any matters
not described in this Note to have material effects on its financial
position, the results of its operations and/or its cash flows.
For Legal Proceedings information required under IAS 37, Provisions,
Contingent Liabilities and Contingent Assets is not disclosed if the
Company concludes that disclosure can be expected to seriously
prejudice the outcome of the matter.
Consolidated Financial Statements 85
NOTE 22 Additional disclosures
on financial instruments
The following table discloses the carrying amounts of each
category of financial assets and financial liabilities:
(in millions of €)
Loans and receivables¹
Cash and cash equivalents
Derivatives designated in a hedge accounting relationship
Financial assets held for trading
Available-for-sale financial assets²
Financial assets
Financial liabilities measured at amortized cost³
Financial liabilities held for trading4
55,594
3,639
3,955
2,620
2,518
608
40,591
534
10,604
2015
36,268
37,984
2016
Sep 30,
Derivatives designated in a hedge accounting relationship4
Financial liabilities
9,957
The fair value of notes and bonds is based on prices provided
by price service agencies at the period-end date (Level 2). The fair
value of loans from banks and other financial indebtedness, ob-
ligations under finance leases as well as other non-current finan-
cial liabilities is estimated by discounting future cash flows using
rates currently available for debt of similar terms and remaining
maturities (Level 2).
Sep 30, 2016
Standard &
(175)
(391)
(1,781)
(21)
(24)
5
(41)
(2)
3
369
9
378
15
23
(393)
5
77
4,249
2,022
1,517
675
1,611
1,593
1,877
796
9,253
5,087
Except for asset retirement obligations, the majority of the Com-
pany's provisions are generally expected to result in cash out-
flows during the next one to 15 years.
Warranties mainly relate to products sold. Order related losses
and risks are provided for anticipated losses and risks on uncom-
pleted construction, sales and leasing contracts.
In fiscal 2016, order related losses and risks include project
charges for the construction of a power plant mainly due to in-
creased cost estimates which reduced earnings by €172 million
(primarily presented in cost of sales).
The Company is subject to asset retirement obligations related to
certain items of property, plant and equipment. Such asset retire-
ment obligations are primarily attributable to environmental
clean-up costs and to costs primarily associated with the removal
of leasehold improvements at the end of the lease term.
Environmental clean-up costs relate to remediation and environ-
mental protection liabilities which have been accrued based on
the estimated costs of decommissioning facilities for the produc-
tion of uranium and mixed-oxide fuel elements in Hanau, Ger-
many (Hanau facilities), as well as a nuclear research and service
center in Karlstein, Germany (Karlstein facilities). According to
the German Atomic Energy Act, when such a facility is closed, the
resulting radioactive waste must be collected and delivered to a
government-developed final storage facility. In this regard, the
Company has developed a plan to decommission the Hanau and
Karlstein facilities in the following steps: clean-out, decontami-
nation and disassembly of equipment and installations, decon-
tamination of the facilities and buildings, sorting of radioactive
materials, and intermediate and final storage of the radioactive
waste. This process will be supported by continuing engineering
studies and radioactive sampling under the supervision of Ger-
man federal and state authorities. The decontamination, disas-
sembly and final waste conditioning are planned to continue
until 2018; thereafter, the Company is responsible for intermedi-
ate storage of the radioactive materials until they are handed
over to a final storage facility. With respect to the Hanau facility,
the asset retirement has been completed and intermediate stor-
age has been set up. On September 21, 2006, the Company re-
ceived official notification from the authorities that the Hanau
facility has been released from the scope of application of the
German Atomic Energy Act and that its further use is unrestricted.
The ultimate costs of the remediation are contingent on the de-
cision of the federal government on the location of the final stor-
age facilities and the date of their availability. Several parameters
relating to the development of a final storage facility for radioac-
tive waste are based on the assumptions for the so called Schacht
Konrad final storage. Parameters related to the life-span of the
German nuclear reactors assume a phase-out until 2022. The val-
uation uses assumptions to reflect the current and detailed cost
estimates, price inflation and discount rates as well as a continu-
ous outflow until the 2070's related to the costs for dismantling
as well as intermediate and final storage. Amongst others, the
estimated cash outflows related to the asset retirement obliga-
tion could alter significantly if, and when, political developments
affect the government's plans to develop the so called Schacht
Konrad. For discounting the cash outflows, the Company uses
current interest rates as of the balance sheet date.
As of September 30, 2016 and 2015, the provision totals
€1,551 million and €1,359 million, respectively, and is recorded
net of a present value discount of €206 million and €594 million,
respectively, reflecting the assumed continuous outflow of the
34
(822)
(1,891)
(364)
Reversals
Translation differences
Accretion expense and effect of changes in discount rates
Other changes
Balance as of September 30, 2016
Thereof non-current
Asset
Order related
retirement
Warranties
losses and risks
obligations
Other
Total
4,220
1,829
1,415
1,888
(7)
(493)
(1,027)
3,158
696
4
Consolidated Financial Statements 81
572
4,865
801
1,393
689
1,981
9,353
1,887
total expected payments until the 2070's. Declined discount rates
increased the carrying amount of the provision by €355 million
as of September 30, 2016 and by €283 million as of Septem-
ber 30, 2015. At the same time, the provision was decreased by
€170 million as of September 30, 2016, due to reduced cost esti-
mates, and €282 million as of September 30, 2015, mainly due to
reduced assumed inflation rates.
Other includes transaction-related and post-closing provisions in
connection with portfolio activities as well as provisions for Legal
Proceedings, as far as the risks that are subject to such Legal
Proceedings are not already covered by project accounting. Pro-
visions for Legal Proceedings amounted to €430 million and
€398 million as of September 30, 2016 and 2015, respectively.
NOTE 19 Additional capital disclosures
Plus: Post-employment benefits
Plus: Credit guarantees
Less: 50% nominal amount hybrid bond
Less: Fair value hedge accounting adjustment²
Industrial net debt
Income from continuing operations
before income taxes
Plus/Less: Interest income, interest expenses
and other financial income (expenses), net
Plus: Amortization,
depreciation and impairments
EBITDA
Industrial net debt/EBITDA
7,404
7,218
48
58
2,764
10,216
2,549
9,825
1.0
0.6
1 The adjustment considers that both Moody's and S&P view SFS as a captive finance company.
These rating agencies generally recognize and accept higher levels of debt attributable to
captive finance subsidiaries in determining credit ratings. Following this concept, Siemens
excludes SFS Debt in order to derive an industrial net debt which is not affected by SFS's
financing activities.
2 Debt is generally reported with a value representing approximately the amount to be repaid.
However, for debt designated in a hedging relationship (fair value hedges), this amount is
adjusted for changes in market value mainly due to changes in interest rates. Accordingly,
Siemens deducts these changes in market value in order to end up with an amount of debt
that approximately will be repaid.
82 Consolidated Financial Statements
Siemens' current corporate credit ratings are:
ness.
Equity allocated to SFS differs from the carrying amount of equity
as it is mainly allocated based on the risks of the underlying busi-
8.77
2,417
21,198
2015
Less: SFS Debt¹
Sep 30,
2016
2,623
Debt to equity ratio
SFS debt
Allocated equity
(in millions of €)
The SFS business is capital intensive and operates a larger
amount of debt to finance its operations compared to the indus-
trial business.
22,418
8.55
Sep 30, 2015
6,107
(936)
A key consideration of our capital structure management is to
maintain ready access to capital markets through various debt
instruments and to sustain our ability to repay and service our
debt obligations over time. In order to achieve this, Siemens in-
tends to maintain an Industrial net debt divided by EBITDA (con-
tinuing operations) ratio of up to 1.0. The ratio indicates the ap-
proximate number of years that would be needed to cover the
Industrial net debt through continuing income, without taking
into account interest, taxes, depreciation and amortization.
NOTE 18
Equity
Siemens' issued capital is divided into 850 million and 881 million
registered shares with no par value and a notional value of €3.00
per share as of September 30, 2016 and 2015, respectively;
31 million shares were retired in fiscal 2016. The shares are fully
paid in. At the Shareholders' Meeting, each share has one vote
and accounts for the shareholders' proportionate share in the
Company's net income. All shares confer the same rights and
obligations.
In fiscal 2016 and 2015, Siemens repurchased 4,888,596 and
29,419,671 shares, respectively. In fiscal 2016 and 2015, Siemens
transferred 4,543,673 and 2,788,059 treasury shares, respec-
tively, in connection with share-based payments. As of Septem-
ber 30, 2016 and 2015, the Company has treasury shares of
41,721,682 and 72,376,759, respectively.
As of September 30, 2016 and 2015, total authorized capital of
Siemens AG is €618.6 million nominal, issuable in installments
based on various time-limited authorizations, by issuance of up
to 206.2 million registered shares of no par value. In addition, as
of September 30, 2016 and 2015, Siemens AG's conditional capi-
tal is €1,080.6 million nominal or 360.2 million shares. It can
primarily be used for serving convertible bonds or warrants un-
der warrant bonds that could or can be issued based on various
time-limited authorizations approved by the respective Share-
holders' Meeting.
Dividends paid per share were €3.50 and €3.30, respectively, in
fiscal 2016 and 2015. The Managing Board and the Supervisory
Board propose to distribute a dividend of €3.60 per share entitled
to the dividend, in total representing approximately €2.9 billion
in expected payments. Payment of the proposed dividend is con-
tingent upon approval at the Shareholders' Meeting on Febru-
ary 1, 2017.
(in millions of €)
2016
Sep 30,
2015
Short-term debt and current maturities
of long-term debt
6,206
2,979
Plus: Long-term debt
24,761
26,682
Less: Cash and cash equivalents
(643)
(958)
859
799
9,811
13,695
10,505
(22,418) (21,198)
19,071
(1,175)
(1,293)
Less: Current available-for-sale financial assets
Net debt
(9,957)
(10,604)
18,528
Usage
The following table allocates financial assets and financial liabil-
ities measured at fair value to the three levels of the fair value
hierarchy:
Financial assets measured at fair value:
Available-for-sale financial assets: equity instruments
Available-for-sale financial assets: debt instruments
Derivative financial instruments
6,285
5,206
Equity securities
2016
DEFINED CONTRIBUTION PLANS AND STATE PLANS
The amount recognized as expense for defined contribution
plans amounts to €676 million and €594 million in fiscal 2016
and 2015, respectively. Contributions to state plans amount to
€1,423 million and €1,372 million in fiscal 2016 and 2015, respec-
tively.
Employer contributions expected to be paid to defined benefit
plans in fiscal 2017 are €690 million. Over the next ten fiscal
years, average annual benefit payments of €1,908 million and
€1,912 million, respectively, are expected as of September 30,
2016 and 2015. The weighted average duration of the DBO for
Siemens defined benefit plans was 14 years as of September 30,
2016 and 13 years as of September 30, 2015.
Future cash flows
Virtually all equity securities have quoted prices in active mar-
kets. The fair value of fixed income securities is based on prices
provided by price service agencies. The fixed income securities
are traded in highly liquid markets and almost all fixed income
securities are investment grade.
2015
Sep 30,
(in millions of €)
Disaggregation of plan assets
As a significant risk, the Company considers a decline in the
plans' funded status due to adverse developments of plan assets
and/or defined benefit obligations resulting from changing pa-
rameters. Accordingly, Siemens implemented a risk management
concept aligned with the defined benefit obligations (Asset Lia-
bility Matching). Risk management is based on a worldwide de-
fined risk threshold (value-at-risk). The concept, the value at risk
and the asset development including the investment strategy are
monitored and adjusted on an ongoing basis under consultation
of senior external experts. Independent asset managers are se-
lected based on quantitative and qualitative analysis, which in-
cludes their performance and risk evaluation. Derivatives are
used to reduce risks as part of risk management.
Asset Liability Matching Strategies
U.S. equities
Consolidated Financial Statements 79
The DBO effect of a 10% reduction in mortality rates for all ben-
eficiaries would be an increase of €1,395 million and €1,021 mil-
lion, respectively, as of September 30, 2016 and 2015.
The discount rate was derived from high-quality corporate bonds
with an issuing volume of more than 100 million units in the re-
spective currency zones, which have been awarded an AA rating
(or equivalent) by at least one of the three rating agencies
Moody's Investor Service, Standard & Poor's Rating Services or
Fitch Ratings.
(1,379)
1,717
(1,858)
2,107
Rate of pension
progression
1.0%
0.4%
(93)
101
(105)
113
sation increase
As in prior year, sensitivity determinations apply the same meth-
odology as applied for the determination of the post-employ-
ment benefit obligation. Sensitivities reflect changes in the DBO
solely for the assumption changed.
872
1,366
European equities
1,696
Multi strategy funds'
1,351
721
Real estate
772
827
Private Equity
1,403
2,074
Hedge Funds
3,526
3,622
Alternative investments
10,488
10,899
Corporate bonds
1,610
1,783
Emerging markets
821
1,143
Global equities
3.9%
1,903
Fixed income securities
16,395
15,206
Government bonds
5,496
4,718
1,993
733
2.4%
4.3%
Actuarial assumptions
The changes in financial assumptions include a reduction of the
pension progression rate for a German frozen legacy plan from
1.8% as of September 30, 2015 to 1.5% as of September 30, 2016
due to a lower inflation assumption which reduced the DBO by
€487 million.
2015
2016
Sep 30,
The rates of compensation increase and pension progression for
countries with significant effects are shown in the following table.
Inflation effects, if applicable, are included in the assumptions below.
(41)
6,284
Total
(59)
(93)
Experience (gains) losses
(8)
6,506
The weighted-average discount rate used for the actuarial valua-
tion of the DBO at period-end was as follows:
Changes in financial assumptions
(129)
Changes in demographic assumptions
Fiscal year
2015
2016
(in millions of €)
BVG 2015 G
SAPS S2 (Standard mortality tables
for Self Administered Pension Schemes
with allowance for future mortality
improvements)
CH
U.K.
Heubeck Richttafeln 2005G (modified)
RP-2015 mortality table with MP-2015
generational projection
Germany
U.S.
Applied mortality tables are:
The remeasurements comprise actuarial (gains) and losses result-
ing from:
The net defined benefit balance of €13,486 million and
€9,737 million as of September 30, 2016 and 2015 comprised
€13,695 million and €9,811 million net defined benefit liability
and €209 million and €75 million net defined benefit asset, re-
spectively. Net interest expenses amounted to €282 million and
€263 million, respectively, in fiscal 2016 and 2015. Similar to the
prior year, the DBO is attributable to active employees 33%, to
former employees with vested rights 15% and to retirees and sur-
viving dependants 52%.
26
Compensation increase
U.K.
3.6%
3.6%
3.6%
Sep 30, 2015
decrease
2,380
increase
(2,121)
Sep 30, 2016
decrease
3,174
(2,774)
increase
(in millions of €)
Discount rate
2.7%
1.0%
3.0%
1.7%
2015
2016
Effect on DBO due to a one-half percentage-point
Sep 30,
CH
U.K.
CH
1.5%
1.5%
Pension progression
Germany
U.K.
Sensitivity analysis
Rate of compen-
1.4%
2.9%
2.9%
A one-half-percentage-point change of the above assumptions
would result in the following increase (decrease) of the DBO:
Discount rate
Germany
U.S.
1.7%
(in millions of €)
Derivatives
491
305
Sep 30, 2015
(in millions of €)
Level 1
Level 2
Level 3
Total
Financial assets measured at fair value:
Available-for-sale financial assets: equity instruments
Available-for-sale financial assets: debt instruments
Derivative financial instruments
1,980
4,313
374
6,667
1,980
318
305
2,299
10
1,141
3,181
46
3,228
Not designated in a hedge accounting relationship
(including embedded derivatives)
In connection with fair value hedges
In connection with cash flow hedges
Financial liabilities measured at fair value -
Derivative financial instruments
Not designated in a hedge accounting relationship
(including embedded derivatives)
In connection with cash flow hedges
2,574
46
1,131
1,190
1,190
1,500
Not designated in a hedge accounting relationship
(including embedded derivatives)
In connection with fair value hedges
In connection with cash flow hedges
Financial liabilities measured at fair value -
Derivative financial instruments
Not designated in a hedge accounting relationship
(including embedded derivatives)
In connection with cash flow hedges
Sep 30, 2016
Level 1
Level 2
Level 3
Total
2,191
4,311
310
6,812
2,191
1,500
371
371
163
163
2,518
2,620
2,518
3,051
1,269
10
1,259
2,492
301
3,051
497
329
279
Fiscal year
2016
2015
1,291
1,248
(874)
(739)
In fiscal 2016 and 2015, gains (losses) reclassified from Other
comprehensive income to the Consolidated Statements of In-
come relating to cash flow hedges were €(61) million and €(268)
million, respectively; unrealized gains (losses) recognized in
Other comprehensive income amounted to €149 million and
€(311) million, respectively.
Balance as of October 1, 2015
(in millions of €)
NOTE 17 Provisions
80 Consolidated Financial Statements
1 Multi strategy funds comprise absolute return funds and diversified growth funds that invest
in various asset classes within a single fund and aim to stabilize return and reduce volatility.
27,296
28,809
Total
572
Interest risk
1,022
1,079
Foreign currency risk
47
26
Total interest income on financial assets
Total interest expenses on financial liabilities
Credit/Inflation/Price risks
(614)
Cash and cash equivalents
465
483
Other assets
928
(572)
(in millions of €)
Interest income (expense) includes interest from financial assets
and financial liabilities not at fair value through profit or loss:
Net gains (losses) in fiscal 2016 and 2015, on financial liabilities
measured at amortized cost are comprised of gains (losses) from
derecognition and the ineffective portion of fair value hedges.
Net gains (losses) in fiscal 2016 and 2015 on financial assets and
financial liabilities held for trading consist of changes in the fair
value of derivative financial instruments, including interest in-
come and expense, for which hedge accounting is not applied.
The amounts presented include foreign currency gains and losses
from the realization and valuation of the financial assets and lia-
bilities mentioned above.
Net gains (losses) of financial instruments are:
The unquoted equity instrument allocated to level 3 of the fair
value hierarchy relates to an investment in an offshore wind
farm. The fair value is determined based on discounted cash flow
calculations. The most significant unobservable input used to
determine the fair value is the cash flow forecast which is mainly
based on the future power generation income. This income is
generally subject to future market developments and thus price
volatility. Since a long-term power purchase agreement is in
place that mitigates price volatility, significant changes to the
cash flow forecast are unlikely and thus, no significant effects on
Other comprehensive income, net of income taxes, are expected.
The Company limits default risks resulting from derivative finan-
cial instruments by generally transacting with financial institu-
tions with a minimum credit rating of investment grade. Based
on Siemens' net risk exposure towards the counterparty, the re-
sulting credit risk is taken into account via a credit valuation ad-
justment.
Siemens determines the fair values of derivative financial instru-
ments depending on the specific type of instrument. Fair values
of derivative interest rate contracts are estimated by discounting
expected future cash flows using current market interest rates
and yield curves over the remaining term of the instrument. In-
terest rate futures are valued on the basis of quoted market
prices, if available. Fair values of foreign currency derivatives are
based on forward exchange rates. Options are generally valued
based on quoted market prices or based on option pricing mod-
els. In determining the fair values of the derivative financial in-
struments, no compensating effects from underlying transac-
tions (e.g. firm commitments and forecast transactions) are
taken into consideration.
Non-current available-for-sale financial assets measured at
fair value include interests in Atos SE (Atos) and OSRAM of
€2,156 million and €1,703 million, respectively, as of Septem-
ber 30 2016 and 2015. Unrealized gains (losses) in fiscal 2016 and
2015 resulting from non-current available-for-sale financial as-
sets measured at fair value are €445 million and €367 million
and, respectively.
The fair value of available-for-sale financial equity instruments
quoted in an active market is based on price quotations at the
period-end date. The fair value of debt instruments is either based
on prices provided by price service agencies or estimated by dis-
counting future cash flows using current market interest rates.
(in millions of €)
Consolidated Financial Statements 87
534
1,383
1,383
1,919
1,919
279
534
329
Fiscal year
(42)
Financial assets and financial
liabilities held for trading
(945)
(211)
(1,049)
168
Financial liabilities measured
at amortized cost
2016
Additions
39
70
(24)
(19)
Cash and cash equivalents
Available-for-sale financial assets
Loans and receivables
2015
(442)
C.2
p 127
SIEMENS
Ingenuity for life
Report of the Supervisory Board
Financial Statements
Notes to Consolidated
p 64
B.6
Takeover-relevant information
p 53
Corporate Governance
A.11
P 39
A.10
Siemens AG
p 36
A.9
and associated material opportunities
and risks
Report on expected developments
Compensation Report
Notes and forward-looking
statements
A.
Combined
In September 2017, Siemens and Alstom SA, France (Alstom)
signed a memorandum of understanding to combine Siemens'
mobility business including the rail traction drives business,
which is included in the Process Industries and Drives Division,
with the publicly listed company Alstom. The two businesses are
largely complementary in terms of activities and geographies.
The combined entity is expected to offer a significantly increased
range of diversified product and solution offerings to meet
multi-facetted, customer-specific needs. According to the mem-
orandum, Siemens will receive newly issued shares in the com-
bined company representing 50% of Alstom's share capital as-
suming full dilution through exercise of all potentially dilutive
securities and share-based payment plans. Further, Siemens will
receive warrants allowing it to acquire Alstom shares represent-
ing 2% of its share capital, which can be exercised earliest four
years after closing of the transaction. The transaction will be sub-
The Mobility Division combines all Siemens businesses in the
area of passenger and freight transportation, including rail vehi-
cles, rail automation systems, rail electrification systems, road
traffic technology, digital solutions and related services. The Di-
vision also provides its customers with consulting, planning, fi-
nancing, construction, service and operation of turnkey mobility
systems. Moreover, Mobility offers integrated mobility solutions
for networking of different types of traffic systems. The principal
customers of the Mobility Division are public and state-owned
companies in the transportation and logistics sectors. Markets
served by Mobility are driven primarily by public spending. Cus-
tomers usually have multi-year planning and implementation
horizons, and their contract tenders therefore tend to be inde-
pendent of short-term economic trends.
The Building Technologies Division is a leading provider of au-
tomation technologies and digital services for safe, secure and
efficient buildings and infrastructures throughout their lifecycles.
The Division offers products, solutions, services and software for
fire safety, security, building automation, heating, ventilation, air
conditioning and energy management. The large customer base
is widely dispersed. It includes owners, operators and tenants for
both public and commercial buildings; building construction gen-
eral contractors; and system houses. Changes in the overall eco-
nomic environment generally have a delayed effect on the Divi-
sion's business activities. Particularly in the solutions and service
businesses, Building Technologies is affected by changes in the
non-residential construction markets with a time lag of two to
four quarters.
storage and other intermittent or distributed energy resources
into highly efficient and reliable power networks. The digitaliza-
tion trend involves providing intelligent solutions for connectiv-
ity, the management of complex energy networks, and services
that are enabled by digital technologies.
Combined Management Report
2
The Energy Management Division offers a wide spectrum of
software, products, systems, solutions, and services for transmit-
ting, distributing and managing electrical power and for provid-
ing intelligent power infrastructure. The Division's customers
encompass a wide range of direct customers and channel part-
ners including power providers, transmission and distribution
system operators, industrial companies, infrastructure develop-
ers, construction companies, distributors and OEMs. Its activities
across many regional and vertical markets as well as its participa-
tion in long-cycle and short-cycle businesses provide a balanced
and resilient business mix. The Division's revenue and portfolio
mix may vary across reporting periods. In particular, orders, rev-
enue and profit development can be influenced by the relative
contribution from its transmission solutions business. End cus-
tomers and OEMs use the Division's offerings to process, transmit
and manage electrical power from the source down to various
load points along multiple voltage levels. The Division's distrib-
uted, intelligent solutions for smart grids enable a bidirectional
flow of energy and information, which, among other things, is
required for integrating fluctuating renewable energy sources,
electrical storage or manageable loads. Energy Management
generally benefits from major trends and changes in global elec-
trical power systems, in particular decarbonization, decentraliza-
tion and digitalization. Decarbonization involves the buildup of
generation capacities from renewable sources and the electrifi-
cation of heat and transport sectors. Another trend is decentral-
ization - the integration of wind power, photovoltaics, biomass,
The Power Generation Services Division offers a comprehensive
set of services for products, solutions and technologies of the
Power and Gas Division, covering performance enhancements,
maintenance services, customer training and professional con-
sulting. Financial results of the Power and Gas Division include
the financial results of the Power Generation Services Division,
which itself is not a reportable segment. Based on this business
model, all discussions of the services business for Power and Gas
concern the Power Generation Services Division.
execution of large projects increasingly requires financing by the
original equipment manufacturer (OEM), including equity partic-
ipation, particularly in Latin America, the Middle East and Africa.
For the Division, this role is fulfilled by Financial Services, which
can offer customers a range of financing and equity options
backed by domain know-how. In addition, the markets of the
Division are strongly affected by changes in national energy reg-
ulations, such as support of renewable energy, the security of
supply through capacity markets or strategic reserve capacity,
carbon pricing and climate change targets, and energy and elec-
tricity market design. After years of strong public sector support
for renewable energy, the cost of energy and electricity as a com-
petitive factor is gaining more relevance in investment decisions
involving choices between renewable and fossil generation.
The Power and Gas Division offers a broad spectrum of products
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, compressor trains, integrated power plant
solutions, and instrumentation and control systems for power
generation. Customers include public utilities and independent
power producers; companies in engineering, procurement and
construction that serve utilities and power producers; sovereign
and multinational oil companies; and industrial customers that
generate power for their own consumption (prosumers). 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 rev-
enue sources, the revenue mix in a reporting period accordingly
affects Division profit for that period. Several trends are affecting
the Division's businesses. The ongoing strong growth in demand
for renewable power generation and the associated volatility in
power generation shift market demand from fossil baseload
generation to highly flexible, highly efficient and affordable
gas power plants with low emissions, in particularly in Europe,
China, and the U.S. A second trend is that the development and
A.1.1.2 BUSINESS DESCRIPTION
Our reportable segments may do business with each other, lead-
ing to corresponding orders and revenue. Such orders and reve-
nue are eliminated on the Group level.
Siemens has the following reportable segments: the Divisions
Power and Gas; Energy Management; Building Technologies;
Mobility; Digital Factory and Process Industries and Drives;
as well as the Strategic Units Healthineers and Siemens Gamesa
Renewable Energy, which together form our Industrial Business.
The Division Financial Services (SFS) supports the activities of
our Industrial Business and also conducts its own business with
external customers. As "global entrepreneurs” our Divisions and
Strategic Units carry business responsibility worldwide, including
with regard to their operating results.
A.1.1.1 ORGANIZATION AND BASIS
OF PRESENTATION
A.1.1 The Siemens Group
A.1 Business and economic environment
Management Report
p24
ject to Alstom's shareholders' approval, anticipated in the second
quarter of calendar 2018. The transaction is also subject to clear-
ance from relevant antitrust and regulatory authorities. Closing
of the transaction is expected at the end of calendar 2018.
A.8
p 23
C.4
Consolidated Statements
p 17
A.4
p 60
B.3
Results of operations
p 137
p 133
of Comprehensive Income
p 11
A.3
Consolidated Statements
p 59
B.2
Financial performance system
C.3
Net assets position
of Financial Position
A.5
A.7
of Changes in Equity
Consolidated Statements
of the economic position
Overall assessment
p 62
B.5
p22
A.6
of Cash Flows
Consolidated Statements
Financial position
p 147
C.5
p 61
B.4
P 18
Non-financial matters
The Digital Factory Division offers a comprehensive product
portfolio and system solutions used in manufacturing industries,
complemented by product lifecycle and data-driven services.
These offerings enable customers to optimize entire value chains
from product design and development to production and ser-
vices. This is supplemented by the MindSphere platform that
connects machines and physical infrastructure to the digital
world. With its comprehensive offering, the Division supports
manufacturing companies with their transformation towards the
"Digital Enterprise," resulting in increased flexibility and effi-
ciency of production processes and reduced time to market for
new products. The Division supplies customers mainly in discrete
and hybrid manufacturing industries. Changes in the level of cus-
tomer demand are strongly driven by macroeconomic cycles, and
can lead to significant short-term variation in the Division's prof-
itability. In the second quarter of fiscal 2017, Digital Factory fur-
ther strengthened and expanded its industrial software business
by acquiring Mentor Graphics Corporation (Mentor Graphics),
a U.S.-based provider of electronic design automation software.
For more information on the acquisition of Mentor Graphics, see
→ NOTE 3 in B.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. In
the first quarter of fiscal 2017, Digital Factory contributed its eCar
business to a newly formed joint venture, Valeo Siemens eAuto-
motive; Siemens' share in the joint venture is reported within
Centrally managed portfolio activities (CMPA).
We are a technology company with core activities in the fields of
electrification, automation and digitalization, and activities 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 incorpo-
rated in Germany, with our corporate headquarters situated in
Munich. As of September 30, 2017, Siemens had around 372,000
employees (part time employees are included proportionally).
Combined Management Report 3
8 Combined Management Report
Following a decline in market volume in fiscal 2016, the market
served by SGRE grew in fiscal 2017 due to higher demand in both
the onshore and the offshore markets, with the latter growing
faster. On a regional basis, growth was driven by the U.S. Market
growth in the region Asia, Australia, was held back by lower de-
mand in China, where the largest national wind market in the
world remains largely closed to foreign manufacturers, as well as
by a halt in the Indian market during the fiscal year following the
introduction of an auction system for new power generation con-
tracts. Market volume in the region Europe, C.I.S., Africa, Middle
East came in slightly lower year-over-year. The competitive situ-
ation in wind power differs in the two major market segments.
In the markets for onshore wind farms, competition is widely
dispersed without any one company holding a dominant share of
the market, while markets for offshore wind farms continue to be
served by a few experienced players. Consolidation is moving
forward in both on- and offshore segments, including exits of
smaller players. The key drivers of consolidation are increasing
price pressure as well as technology challenges and market ac-
cess challenges, which increase development costs and the im-
portance of risk-sharing in offshore wind power. Market develop-
ment continues to depend strongly on energy policy, including
tax incentives in the U.S. and regulatory frameworks in Germany
and the U.K. With continued technological progress and cost re-
duction, dependency on subsidy schemes is expected to decrease
even further.
Markets served by Healthineers grew moderately in fiscal 2017
driven by growth in Latin America and Asia, Australia, including
further stabilization in China. In contrast, market volume in Eu-
rope and the U.S. remained near prior-year levels. The diagnostic
imaging market segment grew moderately. While demand for
imaging procedures continued to grow, this trend was partly off-
set by price pressure on new purchases and increased utilization
rates for installed systems. The markets for ultrasound and in-vi-
tro diagnostics grew even more strongly. The development in the
ultrasound market segment benefits from a wider range of appli-
cations and increasing patient access to diagnostic imaging tech-
nology. The market for in-vitro diagnostics is expanding due to
population and income growth in emerging markets and the
rising importance of diagnostics in improving healthcare quality.
Growth in the area of molecular diagnostics was particularly
strong, driven by technological advances and a broader spectrum
of applications. For the healthcare industry as a whole, the trend
towards consolidation continues. Competition among the lead-
ing companies is strong, including with respect to price.
The Process Industries and Drives Division offers a comprehen-
sive product, software, solution and service portfolio for moving,
measuring, controlling and optimizing all kinds of mass flows.
With its know-how in vertical industries including oil and gas,
shipbuilding, mining, cement, fiber, chemicals, food and bever-
age, and pharmaceuticals, the Division increases productivity,
reliability and flexibility of machinery and installations along their
entire life cycle jointly with its customers. Based on data models
and analysis methods, Process Industries and Drives paves the
way together with its customers to create a "Digital Enterprise,"
from process simulation via plant design and documentation
through to asset and performance management. The Division's
offerings include an integrated portfolio with products, compo-
nents and systems such as couplings, gears, motors and convert-
ers, process instrumentation systems, process analytics devices,
wired and wireless communication, industrial identification and
power supplies up to systems level with decentralized control sys-
tems, industrial software as well as customized, application-spe-
cific systems and solutions. It also sells gears, couplings and drive
solutions to other Siemens Divisions and Strategic Units, which
use them in rail transport and wind turbines. Demand within the
Market volume for the markets addressed by the Process Indus-
tries and Drives Division grew moderately in fiscal 2017. This
was due mainly to improved market conditions in global manu-
facturing production, particularly in China. Consumer-related
industries, such as food and beverage and pharmaceuticals, con-
tinued on their growth path. Growth in the Division's markets
overall continued to be held back by weakness in commodity-re-
lated industries such as oil and gas, metals and mining. Following
a recovery in raw materials prices at low levels in the first half of
fiscal 2017 and stable price development thereafter, the environ-
ment for capital expenditures began to improve towards the end
of the fiscal year in mining, oil and gas and, to a lesser extent, the
metals industry. The Division's competitors can be grouped into
two categories: multinational companies that offer a relatively
broad portfolio and companies that are active only in certain geo-
graphic or product markets. Consolidation is taking place mostly
in particular market segments and not across the broad base of
the Division's portfolio. In particular, consolidation in solu-
tion-driven markets is going in the direction of in-depth niche
Markets served by the Digital Factory Division returned to growth
in fiscal 2017. Within its main markets, global manufacturing pro-
duction grew moderately in real terms, driven mainly by consum-
er-related industries such as electronics and automotive and by
demand from infrastructure-related production industries.
Growth in the machine-building and equipment industries bene-
fited from a growing investment propensity. On a geographic
basis, the Division's markets grew in all three reporting regions,
with the highest growth rates in the region Asia, Australia, par-
ticularly including China, where strong market growth also ben-
efited from governmental investment programs. The competition
for Digital Factory's business activities can be grouped into two
categories: multinational companies that offer a relatively broad
portfolio and companies that are active only in certain geo-
graphic or product markets.
and Africa was held back by ongoing uncertainties related to
budget constraints and political climates. In the Americas region,
stable investment activities were driven by demand for urban
transport, especially in the U.S. Within the Asia, Australia region,
Chinese markets saw ongoing investments in high-speed trains,
urban transport and rail infrastructure, while India continues to
invest in modernizing the country's transportation infrastruc-
ture. The Division's principal competitors are multinational com-
panies. Consolidation among Mobility's competitors is continu-
ing. This has already led to the formation of a strong market
leader in China, which is changing global market dynamics.
p9
Combined Management Report 7
Markets for the Building Technologies Division grew solidly in
fiscal 2017. Growth was driven by solid demand from the U.S. and
Asia. Within the Europe, C.I.S., Africa, Middle East region, mar-
kets in the Middle East grew more strongly than the region over-
all. The recovery of the European market was weaker than ex-
pected but included stable growth in Germany. The Division's
principal competitors are multinational companies. Its solutions
and services business also competes with system integrators and
small local companies. The Division faces continuing price pres-
sure, particularly in its solutions business, due to strong compe-
tition from system houses and some larger competitors.
Global markets addressed by the Energy Management Division
grew slightly in fiscal 2017. Weaknesses in the Middle East and
global commodity markets including oil and gas, metals and min-
ing were offset by growth in transmission interconnections, in-
telligent energy and storage solutions and critical infrastructure
such as data centers. North America and Asia were key growth
contributors. Markets in Europe showed stable development,
with pockets of growth such as integration of renewable energy
sources into the grid. Competitors of the Energy Management
Division consist mainly of a small number of large multinational
companies. International competition is increasing from manu-
facturers in emerging countries including China, India and Korea.
In a highly competitive market environment, markets served by
the Power and Gas Division declined significantly in fiscal 2017.
This development was again particularly evident in the market for
steam turbines where volume shrank substantially year-over-year
due to an ongoing shift from coal-fired to gas-fired and renew-
able power generation and due to emission regulation such as in
China. Volume in the market segment for large gas turbines also
declined substantially due mainly to delays of large projects in
the Middle East and customer restraint due to ongoing uncer-
tainty regarding changes in the market design and weak power
demand growth. Volume in compression markets remained on
a low level as customers continued to hold back investments.
The Division's competition consists mainly of two groups: a rela-
tively small number of equipment manufacturers, some with
very strong positions in their domestic markets, and on the other
hand a large number of engineering, procurement and construc-
tion contractors. The gas turbine market is experiencing overca-
pacity among OEMs and engineering, procurement and con-
struction contractors, which is leading to market consolidation.
A.1.2.2 MARKET DEVELOPMENT
The partly estimated figures presented here for GDP and fixed
investments are based on an IHS Markit report dated Octo-
ber 15, 2017.
Uncertainties mainly stemming from (geo) political risks had very
limited effects on the global economy: International tensions
with North Korea and Iran increased; negotiations regarding the
U.K. leaving the European Union are complicated and separatist
tensions in Spain added significant uncertainty. These develop-
ments potentially weigh on investment decisions but this barely
materialized in fiscal 2017.
From a structural perspective, all components of GDP – private
consumption, fixed investment, trade and to a lesser extent
government expenditure - contributed to growth, giving the
acceleration of the global economy a solid and well balanced
foundation.
Overall, markets for the Mobility Division remained strong in fis-
cal 2017, with different dynamics among the regions. Market
development in the Europe, C.I.S., Africa, Middle East region was
characterized by continuing awards of mid-size and large orders,
particularly in Germany and the U.K. Demand in the Middle East
A.2
Consolidated Statements
of Income
Business and economic environment
Annual Report
2017
siemens.com
Table of contents
A.
Combined Management Report
B.
C.
Consolidated Financial Statements
Additional Information
P 126
Responsibility Statement
Independent Auditor's Report
A.1
p2
B.1
p 58
C.1
-
The global upswing was broad-based on a regional and structural
basis. In both emerging markets and advanced countries, eco-
nomic activity gained strength. Growth forecasts for 2017 im-
proved in particular for Europe from 1.5% at the beginning of
fiscal 2017 to 2.3% and for China from 6.3% to 6.8%. The only
negative surprise was the Middle East region. The 2017 growth
projection decreased to 1.4% after starting at 2.8% at the begin-
ning of fiscal 2017. Lower oil prices and oil production cuts had
bigger impact than anticipated.
market expertise. Most major competitors have established
global bases for their businesses. In addition, the competition has
become increasingly focused on technological improvements
and cost position.
A.1.2 Economic environment
> An example of a disruptive development is electrically pow-
ered flight. In cooperation with Airbus, Siemens intends to
demonstrate by 2020 that electricity can be used to power
large planes.
> Future mobility systems will be increasingly electrified and
connected. Amongst others, our R&D efforts are aiming for
ubiquitous electric charging as well as the digitally supported
integration and management of multi-modal transportation
systems.
> Automation technologies continue to evolve. Our R & D activ-
ities aim to reduce engineering efforts, enhance flexibility and
increase our customers' productivity.
> Turbo machinery, switching gear and other power equipment
stand to benefit from novel materials enabling higher gener-
ation efficiency and fewer losses in power transmission and
distribution. In particular, the ability to print parts with novel
topologies using 3D printers embedded in an integrated, dig-
ital tool chain is a key innovation driver.
units. These are also key ingredients for distributed energy
systems, which combine onsite generation with local con-
sumption to offer secure power supply at lower cost.
4 Combined Management Report
The stable operating of power grids in the presence of inter-
mittent, renewable power generation depends, amongst
other factors, on further advances in power electronics as well
as the availability of economically viable large energy storage
> We are continuously adopting and developing foundational
digital technologies, such as data analytics and artificial intel-
ligence or modeling and simulation technologies. The former
are essential to generate value and impact out of the growing
amount of data generated in the field; the latter enable the
creation of a digital twin for physical products, systems and
infrastructures, e.g. for the purpose of virtually testing and
commissioning a system prior to building it.
Our research and development (R&D) activities are ultimately
geared to developing innovative, sustainable solutions for our
customers - and the Siemens businesses - and simultaneously
safeguarding our competitiveness. To this end, we are focusing
our R&D activities on a number of selected technologies and in-
novation fields. Examples include the following:
The Financial Services (SFS) Division supports its customers'
investments with leasing solutions and equipment, project and
structured financing in the form of debt and equity investments.
Based on its comprehensive financing know-how and specialist
technology expertise in the areas of Siemens businesses, SFS
provides financial solutions for Siemens customers as well as
other companies, and also manages financial risks of Siemens.
SFS operates the Corporate Treasury of the Siemens Group,
which includes managing liquidity, cash and interest risks as well
as certain foreign exchange, credit and commodities risks. Busi-
ness activities and tasks of Corporate Treasury are reported in
the segment information within Reconciliation to Consolidated
Financial Statements.
of the combined entity. For more information on the merger, see
→ NOTE 3 in B.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. The
merged businesses are highly complementary regarding global
footprint, existing product portfolios and technologies. SGRE of-
fers wind turbines utilizing various pitch and speed technologies,
and is active in the development, construction and sale of wind
farms. The current product offering comprises geared as well as
direct drive turbines, both for onshore and offshore application.
In addition, SGRE provides services for the management, opera-
tion and maintenance of wind farms. Its primary customers are
large utilities and independent power producers. SGRE's revenue
mix may vary from reporting period to reporting period depend-
ing on the mix of onshore and offshore projects in the respective
periods. The share of renewable energy in the global energy mix
will continue to increase, but the trend toward evaluating com-
peting power sources using life-cycle costs will continue to put
pressure on the prices of wind power providers. To address this
trend, SGRE focuses on improving its supply chain and signifi-
cantly decreasing costs by leveraging synergies in the manufac-
turing footprint subsequent to the merger. A higher share of re-
newable energy in electrical grids also increases the demand for
predictability of the energy supply and increased capability for
integrating it into the overall energy mix, which SGRE addresses
by pursuing innovation areas such as digitalization.
Siemens Gamesa Renewable Energy (SGRE) - In April 2017,
Siemens contributed its wind power business, including service,
into the publicly listed company Gamesa Corporación Tecnológica,
S.A., Spain (Gamesa), and in return received newly issued shares
of the combined entity Siemens Gamesa Renewable Energy, S.A.,
Spain. Siemens as majority shareholder holds 59% of the shares
A.1.2.1 WORLDWIDE ECONOMIC ENVIRONMENT
The global economy started to accelerate at the beginning of
fiscal 2017 and gained further momentum in the subsequent
quarters. Expansion of world gross domestic product (GDP),
which in 2016 was the weakest since the global financial crisis at
2.5%, is projected to rise to 3.1% in 2017 (based on market ex-
change rates).
-
As part of the above-mentioned memorandum of understanding
to combine Siemens' mobility businesses with Alstom, Process
Industries and Drives will transfer its rail traction drives business
to the combined company.
industries served by the Division generally shows a delayed re-
sponse to changes in the overall economic environment. Even so,
the Division is strongly dependent on investment cycles in its key
industries. In commodity-based process industries such as oil and
gas or mining, these cycles are driven mainly by commodity price
fluctuations rather than changes in produced volumes.
A.1.1.3 RESEARCH AND DEVELOPMENT
> The growing connectivity of field devices gives rise to the In-
dustrial Internet of Things (IoT), and hence to the potential
for massively distributed industrial systems. With MindSphere,
we have introduced an open, cloud-based operating system
for this IIoT. MindSphere allows our businesses, customers
and partners to develop and deploy applications and digital
services based on data gathered from assets, such as a prod-
uct or in the field, e.g. to predict equipment failure, increase
asset availability, improve product designs or increase product
or plant performances.
Healthineers is one of the world's largest suppliers of technol-
ogy to the healthcare industry and a leader in diagnostic imaging
and laboratory diagnostics. It provides medical technology and
software solutions as well as clinical consulting services, sup-
ported by a complete set of training and service offerings. This
comprehensive portfolio supports customers along the contin-
uum of care from prevention and early detection to diagnosis,
treatment and follow-up care. Its business activities are to a cer-
tain extent resilient to short-term economic trends as large por-
tions of its revenue stem from recurring business. They are, how-
ever, dependent on regulatory and public policy developments
around the world. The global healthcare market served by
Healthineers is transforming, putting healthcare providers under
pressure for better outcomes at lower cost. Drivers of this trans-
formation include increasing societal resistance to healthcare
costs, payers becoming more professional, a shift to value-based
reimbursement, chronic disease burdens, and rapid scientific
progress. As a result, healthcare providers are consolidating into
networked structures, resulting in larger clinic and laboratory
chains often internationally - which act increasingly like large
enterprises. Applying this industrial logic to the healthcare mar-
ket can lead to systematic improvements in quality, while at the
same time reducing costs. To capture these benefits, regulatory
schemes around the world increasingly seek to shift healthcare
incentive systems away from a basis in number of procedures to
a basis in outcomes achieved. In fiscal 2017, Healthineers was
organized into six business areas: Diagnostic Imaging, Laboratory
Diagnostics, Advanced Therapies, Ultrasound, Point of Care Diag-
nostics and Services. During fiscal 2017, the Managing Board of
Siemens AG announced that it intends to publicly list a minority
stake in the Healthineers business in the first half of calendar
2018, depending on market conditions.
Both within and beyond these focus areas, R&D activities are
carried out by cross-functional teams involving both our busi-
nesses and our central R&D department Corporate Technology
(CT). In addition, we work closely with scholars from leading
universities and research institutions. These partnerships, along
with close collaborations with start-up companies and the use of
crowd innovation methods, are an important part of Siemens'
open innovation concept.
> We also invest in industrial cyber security - a key enabler for
the digitalization of industries as well as a growing source of
competitive advantage - and test the emerging blockchain
technology in various application scenarios.
The R&D efforts of Siemens Gamesa Renewable Energy are
focused on innovative products and solutions that allow it to take
the lead in wind power performance, improve competitiveness,
and build a stronger business case for its customers. Using digi-
talization, among other efforts, includes more intelligent moni-
toring and analysis of turbine conditions as well as smart diag-
nostic services.
to outcome-focused care. A major step forward is the Digital Eco-
system platform to link healthcare providers and solution provid-
ers with one another as well as to bring together their data, ap-
plications and services. Users gain new insights through data
analytics and use it to network with their peers.
6
Healthineers' R&D activities are strongly focused on the devel-
opment of innovative product lines which use new technologies
such as artificial intelligence. This will, amongst other results,
enable faster handling of medical information and can lead to
more precise and personalized clinical decisions. It also promises
added value: New computer algorithms can detect hidden pat-
terns in the data and give physicians valuable support for diagno-
sis and therapy decisions. Besides constantly innovating its port-
folio, Healthineers continuously extends existing products and
solutions. Diagnostics performance for customers improves with
systems such as the recently launched Atellica. This laboratory
diagnostics platform transports samples ten times faster than pre-
vious systems and it is also more flexible. Expanding the innova-
tion map beyond the established portfolio, and investing in new
ideas, strengthen the ability to tap opportunities in new fields.
The services business is expanding beyond product related ser-
vices by adding a digital services portfolio and increasing enter-
prise transformation services to help customers in their transition
The R & D activities in the Process Industries and Drives Division
are continuously concentrating on the digital transformation of
products, solutions and services, especially via focused integra-
tion of information and communication technologies. The digital
enhancement of automation and drives platforms is a key en-
abler for additional customer value for all verticals in the process
industry, such as oil & gas, chemicals and pharmaceuticals. Exam-
ples are connecting motors to MindSphere and Digital Enterprise
for process industries. Increased operational efficiency and digi-
tal services such as condition monitoring or predictive mainte-
nance are examples for benefits in process plant operation. The
digitalization of our process automation and industrial commu-
nication portfolio includes a holistic industrial security concept.
Another central objective of our R&D activities is to further in-
crease energy efficiency while reducing the consumption of raw
materials and cutting emissions.
tion of Mentor Graphics further extends the possibilities of the
digital twin: In addition to designing and testing the mechanics
and software of new products, it is now also possible to develop
and simulate electrical and electronic systems in an integrated
way. A further core area of development is MindSphere, the
open, cloud-based operating system for the Industrial Internet of
Things (IoT). MindSphere is used as a basis for innovative appli-
cations (MindApps) and new digital services based on these
apps, such as predictive maintenance. Open application pro-
gramming interfaces (APIs) enable MindSphere users to easily
and efficiently develop and sell their own apps. MindSphere
therefore makes it possible for customers to clearly expand their
portfolios and tap into the additional business potential offered
by their installed base. A network of partners in the fields of app
development, connectivity and technology further enriches the
open ecosystem.
R&D activities at the Digital Factory Division are aimed at fur-
ther enhancing speed, flexibility, quality and efficiency within
companies of the discrete manufacturing industry. The key lever
is to automate and digitalize the entire value-added process -
from product development through production design to actual
production - with the highest possible IT security. The focus of
research lies on further developing the Digital Enterprise portfo-
lio. This involves preparing an integrated digital twin for physical
products, production processes and production facilities and
then implementing these facilities and efficiently manufacturing
the products in the real world. This close dovetailing between the
virtual and real worlds enables customers to simulate and opti-
mize their products, their machinery and facilities at an early
stage, while assuring high-performance production. The acquisi-
The Mobility Division's R&D strategy aims to fulfill customers'
demand for maximum availability, high throughput and en-
hanced
passenger experience. Although there is a growing need
for mobility worldwide, possibilities for building new roads and
railways are limited. Meeting the demand for mobility requires
intelligent solutions that make transport more efficient, safe and
environmentally friendly. Decarbonization and seamlessly con-
nected intermodal (e)mobility are key factors for the future of
transportation. Reflecting this, Mobility's R&D activities empha-
size digitalization in developing state-of-the art mobility solu-
tions for rail and road combined with new business models such
as availability-as-a-service (AaaS) via our data analytics platform
Railigent and other MindSphere based applications. Together
with next47, Mobility invests in the future mobility landscape
together with other partners in areas such as sensor technolo-
gies, connectivity/loT solutions, software for intermodal trans-
port and additive manufacturing.
Combined Management Report
of new technologies, e.g. Process Bus communication for appli-
cations in energy management or NCITS (Non-Conventional
Instrument Transformer), enables a cost-effective investment
and economic operation of digital substations as well as a secure
and reliable grid operation.
5
Combined Management Report
The R&D activities of our Energy Management Division focus on
preparing our portfolio for changes on all voltage levels in the
world of electricity. The increasing infeed of renewable energy to
power grids requires that those grids become more flexible and
efficient, particularly with distributed generation on the rise. The
digitalization of future grids will enable intelligent grid operation
and data-driven services. Our innovations are centered on power
electronics, digitalization and grid stabilization. The development
Research and Development in our Businesses
R&D at the Power and Gas Division concentrates on developing
products and solutions for enhancing efficiency, flexibility and
economy in power generation as well as in the oil and gas indus-
try. These products and solutions include turbomachinery – pri-
marily high-performance, low-emission gas turbines for single
operation or for combined cycle power plants - and compressor
solutions for various process industries. The Division's current
technology initiative, which started in fiscal 2015, is aimed at
intensifying R & D in innovative materials, advanced manufactur-
ing methods and plant optimization. In fiscal 2017, Siemens
introduced a new 44-megawatt aeroderivative gas turbine for
mobile power generation which currently is the most powerful
mobile unit on the market. The Division announced that it
will test and validate its largest gas turbine (HL-class) under re-
al-world conditions. This will pave the way for achieving the next
level of efficiency; we aim for 63 percent efficiency near-term,
with a mid-term goal to reach 65 percent.
In fiscal 2017, we reported research and development expenses
of €5.2 billion, compared to €4.7 billion in fiscal 2016. The result-
ing R&D intensity, defined as the ratio of R&D expenses and
revenue, was 6.2%, thus above the R & D intensity of 5.9% in fiscal
2016. Additions to capitalized development expenses amounted
to €0.4 billion in fiscal 2017, compared to €0.3 billion in fiscal
2016. As of September 30, 2017, Siemens held approximately
63,000 granted patents worldwide in its continuing operations.
As of September 30, 2016, we held approximately 59,800 granted
patents. On average, we had 37,800 R&D employees in fiscal
2017.
R&D work at the Building Technologies Division focuses on op-
timizing comfort and operational and energy efficiency in build-
ings and infrastructures, protecting against fire and security
hazards, and minimizing related risks. We drive the digital trans-
formation of the building industry by creating open-standards-
based Building Information Modeling (BIM)-ready products and
services. Digitalization improves productivity across the entire
building life cycle, enabling new product ordering and configu-
ration options through our online store Siemens Industry Mall.
New mobile device apps close the feedback loop to building oc-
cupants, enabling increased comfort and safety with lower en-
ergy consumption. The digitalization portfolio will expand on the
basis of Siemens MindSphere.
Siemens' unit for partnership with start-ups, next47, is focusing
on three pillars: Capital, Catalyst and Create. The unit provides
capital to help start-ups expand and scale. As a catalyst, next47
can accelerate growth for start-ups by making it easy to access
and use the powerful Siemens ecosystem. And next47 serves as
the creator of next-generation businesses for Siemens by build-
ing, buying and partnering with start-ups at any stage. The
next47 unit is focused on anticipating how technologies includ-
ing 3D printing, robotics and drones, artificial intelligence and
virtual reality will impact and potentially disrupt our end markets.
This intelligence enables Siemens and Siemens' customers to
grow and thrive in the age of digitalization.
The fair value of notes and bonds is based on prices provided by price
service agencies at the period-end date (Level 2). The fair value of
loans from banks and other financial indebtedness, obligations
under finance leases as well as other non-current financial liabil-
ities is estimated by discounting future cash flows using rates
currently available for debt of similar terms and remaining ma-
turities (Level 2).
The following table allocates financial assets and financial liabil-
ities measured at fair value to the three levels of the fair value
hierarchy:
(in millions of €)
Financial assets measured at fair value
Available-for-sale financial assets: equity instruments
Level 2
3,587
Level 1
2,877
Level 3
Total
346
Fixed-rate and variable-rate receivables with a remaining term of
more than twelve months, including receivables from finance leases,
are evaluated by the Company based on parameters such as interest
rates, specific country risk factors, individual creditworthiness of the
customer, and the risk characteristics of the financed project. Based
on this evaluation, allowances for these receivables are recognized.
6,810
Sep 30, 2017
2,276
138
Fair value
3,312
115
28,554
30,235
28,797
32,303
3,299
178
Carrying
amount
Sep 30, 2016
Carrying
amount
Fair value
Sep 30, 2017
Loans from banks and other financial indebtedness
Obligations under finance leases
Notes and bonds
(in millions of €)
2,877
2,270
203
95
Fiscal year
3,253
Sales and marketing
66
65
66
65
Research and development
Administration
and general services
216
38
38
33
36
35
36
35
33
363
223
223
For their 25th and 40th service anniversary eligible employees re-
ceive jubilee shares. There were 4.26 million and 4.39 million
entitlements to jubilee shares outstanding as of September 30,
2017 and 2016, respectively.
NOTE 26 Personnel costs
Continuing
operations
Continuing and
discontinued
operations
216
Fiscal year
(in thousands)
2017
2016
2017
2016
Manufacturing and services
Fiscal year
349
363
349
829,164
819,914
(from continuing operations)
7.38
6.51
Basic earnings per share
Weighted average shares outstanding - diluted
Diluted earnings per share
(from continuing operations)
6.42
Fiscal year
(in millions of €)
2017
2016
Wages and salaries
7.23
3,392
11,228
13,591
NOTE 27
Earnings per share
(shares in thousands; earnings per share in €)
Income from continuing operations
Less: Portion attributable to
non-controlling interest
Fiscal year
2017
2016
6,126
5,396
(133)
(134)
Income from continuing operations
attributable to shareholders of Siemens AG
Weighted average shares outstanding - basic
Effect of dilutive share-based payment
Effect of dilutive warrants
5,993
5,262
812,180
808,686
JUBILEE SHARE PROGRAM
The Managing Board decides annually on the issuance of a new
Siemens Profit Sharing tranche and determines the targets to be
met for the current fiscal year. At fiscal year-end, based on the
actual target achievement, the Managing Board decides in its
discretion on the amount to be transferred to the Profit-Shar-
ing-Pool; this transfer is limited to a maximum of €400 million
annually. If the Pool amounts to a minimum of €400 million after
one or more fiscal years, it will be transferred to eligible employ-
ees below senior management in full or partially through the
grant of free Siemens shares. As of September 30, 2017, €300 mil-
lion are in the Profit-Sharing-Pool. Expense is recognized pro rata
over the estimated vesting period. In November 2017, €100 mil-
lion were transferred to the Profit-Sharing-Pool; it was decided
that the Pool amounting to €400 million will be transferred to
eligible employees in March 2018.
The weighted average fair value of matching shares granted in
fiscal 2017 and 2016 amounting to €92.68 and €64.56 per share
was determined as the market price of Siemens shares less the
present value of expected dividends taking into account non-vest-
ing conditions.
(38,304)
1,767,980
Commitments to members of the senior
management and other eligible employees
In fiscal 2017 and 2016, 2,078,828 and 2,044,213 stock awards,
respectively, were granted contingent upon attaining the pro-
spective performance-based target of Siemens stock relative to
five competitors. The fair value of equity-settled stock awards
amounted to €138 million and €117 million, respectively, in fiscal
2017 and 2016; fair value was calculated by applying a valuation
model. In fiscal 2017 and 2016 inputs to that model include an
expected weighted volatility of Siemens shares of 22.79% and
22%, respectively, and a market price of €107.95 and €92.86 per
Siemens share. Expected volatility was determined by reference
to historic volatilities. The model applies a risk-free interest rate
of up to 0.03% in fiscal 2017 and up to 0.1% in fiscal 2016 and an
expected dividend yield of 3.33% and 3.8% in fiscal 2017 and
2016, respectively. Assumptions concerning share price correla-
tions were determined by reference to historic correlations.
Changes in the stock awards held by members of the senior man-
agement and other eligible employees are:
Fiscal year
2016
SHARE MATCHING PROGRAM
AND ITS UNDERLYING PLANS
In fiscal 2017 and 2016, agreements were entered into which en-
title members of the Managing Board to stock awards most of
which are contingent upon attaining the prospective perfor-
mance-based target of Siemens stock relative to five competitors.
The fair value of these entitlements amounting to €13 million
and €9 million, respectively, in fiscal 2017 and 2016, was calcu-
lated by applying a valuation model. In fiscal 2017 and 2016, in-
puts to that model include for the majority of the stock awards
granted an expected weighted volatility of Siemens shares of
22.72% and 22%, respectively, and a market price of €106.40 and
€92.86 per Siemens share. Expected volatility was determined by
reference to historic volatilities. The model applies a risk-free in-
terest rate of up to (0.02)% and 0.1% in fiscal 2017 and 2016, re-
spectively and an expected dividend yield of 3.38% in fiscal 2017
and 3.8% in fiscal 2016. Assumptions concerning share price cor-
relations were determined by reference to historic correlations.
In fiscal 2017, Siemens issued a new tranche under each of the
plans of the Share Matching Program.
Under the Share Matching Plan senior managers may invest a
specified part of their variable compensation in Siemens shares
(investment shares). The shares are purchased at the market
price at a predetermined date in the second quarter. Plan partic-
ipants receive the right to one Siemens share without payment
of consideration (matching share) for every three investment
shares continuously held over a period of about three years (vest-
ing period) provided the plan participant has been continuously
employed by Siemens until the end of the vesting period.
Monthly Investment Plan
Under the Monthly Investment Plan employees other than senior
managers may invest a specified part of their compensation in
Siemens shares on a monthly basis over a period of twelve
months. Shares are purchased at market price at a predetermined
date once a month. If the Managing Board decides that shares
acquired under the Monthly Investment Plan are transferred to
the Share Matching Plan, plan participants will receive the right
to matching shares under the same conditions applying to the
Share Matching Plan described above with a vesting period of
about two years since fiscal 2016 (previously about three years).
The Managing Board decided that shares acquired under the
tranches issued in fiscal 2016 and 2015 are transferred to the
Share Matching Plan as of February 2017 and February 2016, re-
spectively.
Base Share Program
Under the Base Share Program employees of Siemens AG and
participating domestic Siemens companies may invest a fixed
amount of their compensation in Siemens shares, sponsored by
Siemens. The shares are bought at market price at a predeter-
mined date in the second quarter and grant the right to receive
matching shares under the same conditions applying to the
Share Matching Plan described above. The fair value of the Base
Share Program amounted to €36 million and €35 million in fiscal
2017 and 2016, respectively.
2017
Share Matching Plan
Commitments to members of the Managing Board
Consolidated Financial Statements 95
Since related taxation is not yet entirely certain, Stock Awards of
Siemens AG that vested in November 2016 were settled in cash
rather than in equity instruments. The fair value of €107 million
at modification date was reclassified from equity to liabilities.
Ratings, defined and analyzed by SFS, and individually defined
credit limits are based on generally accepted rating methodolo-
gies, with the input consisting of information obtained from the
customer, external rating agencies, data service providers and
Siemens' credit default experiences. Ratings and credit limits for
financial institutions as well as Siemens' public and private cus-
tomers, which are determined by internal risk assessment spe-
cialists, are continuously updated and considered by investments
in cash and cash equivalents, and in determining the conditions
under which direct or indirect financing will be offered to cus-
tomers.
94
94
Consolidated Financial Statements
For analysis and monitoring of the credit risk the Company ap-
plies different systems and processes. A central IT application
processes data from operating units together with rating and
default information and calculates an estimate which may be
used as a basis for individual bad debt provisions. In addition to
this automated process, qualitative information is considered, in
particular to incorporate the latest developments.
Corporate Treasury has established the Siemens Credit Ware-
house to which numerous operating units from the Siemens
Group regularly transfer business partner data as a basis for a
centralized rating and credit limit recommendation process. Fur-
thermore, the Siemens Credit Warehouse purchases trade receiv-
ables from numerous operating units with a remaining term up
to one year. Due to the identification, quantification and active
management of the credit risk the Siemens Credit Warehouse
increases the transparency with regard to credit risk. In addition,
the Siemens Credit Warehouse may provide Siemens with an ad-
ditional source of liquidity and strengthens Siemens' funding
flexibility.
The maximum exposure to credit risk of financial assets, without
taking account of any collateral, is represented by their carrying
amount. As of September 30, 2017 and 2016 the collateral for fi-
nancial instruments classified as financial assets measured at fair
value in the form of netting agreements for derivatives in the
event of insolvency of the respective counterparty amounted to
€647 million and €994 million, respectively. As of September 30,
2017 and 2016 the collateral held for financial instruments classi-
fied as receivables from finance leases amounted to €1,967 mil-
lion and €1,949 million, respectively, mainly in the form of the
leased equipment. As of September 30, 2017 and 2016 the collat-
eral held for financial instruments classified as financial assets
measured at cost or amortized cost amounted to €3,347 million
and €3,590 million, respectively. The collateral mainly consisted
of property, plant and equipment. Credit risks arising from irre-
vocable loan commitments are equal to the expected future pay-
offs resulting from these commitments. As of September 30,
2017 and 2016 the collateral held for these commitments
amounted to €843 million and €1,177 million, respectively,
mainly in the form of inventories and receivables.
Concerning trade receivables and other receivables, as well as
loans or receivables included in line item Other financial assets
that are neither impaired nor past due, there were no indications
that defaults in payment obligations will occur, which lead to a
decrease in the net assets of Siemens. Overdue financial instru-
ments are generally impaired on a portfolio basis in order to re-
flect losses incurred within the respective portfolios. When sub-
stantial expected payment delays become evident, overdue
financial instruments are assessed individually for additional
impairment and are further allowed for as appropriate.
NOTE 25 Share-based payment
Share-based payment awards may be settled in newly issued
shares of capital stock of Siemens AG, in treasury shares or in
cash. Share-based payment awards may forfeit if the employ-
ment of the beneficiary terminates prior to the expiration of the
vesting period. Total pretax expense for share-based payment
amounted to €512 million and €332 million for the years ended
September 30, 2017 and 2016, respectively, €416 million and
€287 million relate to equity-settled awards in fiscal 2017 and
2016. The carrying amount of liabilities from share-based pay-
ment transactions is €124 million and €65 million as of Septem-
ber 30, 2017 and 2016.
STOCK AWARDS
The Company grants stock awards to members of the Managing
Board, members of the senior management and other eligible em-
ployees. Stock awards are subject to a restriction period of about
four years and entitle the beneficiary to Siemens shares without
payment of consideration following the restriction period.
Stock awards are tied to performance criteria. The annual target
amount for stock awards can be bound to the average of earnings
per share (EPS, basic) of the past three fiscal years and/or to the
share price performance of Siemens relative to the share price
performance of five important competitors during the four-year
restriction period. The target attainment for the performance
criteria ranges between 0% and 200%. If the target attainment
of the prospective performance-based target of Siemens stock
relative to five competitors exceeds 100%, an additional cash pay-
ment results corresponding to the outperformance. The vesting
period is four years and five years for stock awards granted to
members of the Managing Board until fiscal 2014.
Until fiscal 2014, additionally one portion of the variable compen-
sation component (bonus) for members of the Managing Board
was granted in the form of non-forfeitable awards of Siemens
stock (Bonus Awards) subject to a vesting period of one year.
Beneficiaries will receive one Siemens share without payment of
consideration for each Bonus Award, following an additional
waiting period of four years.
Non-vested, beginning of period
24,632
6,171,430
2,078,828
Severance charges amount to €466 million and €598 million in
fiscal 2017 and 2016, respectively. Item Expenses relating to
post-employment benefits includes service costs for the period.
Personnel costs for continuing and discontinued operations
amount to €29,622 million and €28,232 million, respectively, in
fiscal 2017 and 2016.
Employees were engaged in (averages; part time employees are
included proportionally):
2017
Outstanding, beginning of period
1,767,980
Granted
2016
Vested and fulfilled
Settled
710,356
(473,113) (538,837)
(106,160)
(49,011)
1,655,780
785,000
(95,658)
Outstanding, end of period
1,850,052
Forfeited
Fiscal year
Resulting Matching Shares
96 Consolidated Financial Statements
6,049,250
2,044,213
Vested and fulfilled
(724,504)
(834,605)
Forfeited
(224,952) (1,029,991)
Modified from equity-settled
to cash-settled
(856,355)
Settled
(27,501)
(57,437)
Non-vested, end of period
6,416,946
6,171,430
Granted
The effective monitoring and controlling of credit risk through
credit evaluations and ratings is a core competency of our risk
management system. In this context, Siemens has implemented
a binding credit policy.
23,431
and expenses for optional support
7,973
7,919
5,974
3
2
7,922
8,768
5,976
86,477
87,802
81,009
Financial Services (SFS)
921
979
Industrial Business
774
Siemens Gamesa Renewable Energy
13,789
8,939
7,195
7,285
1,681
1,753
8,876
13,535
9,038
14,218
13,830
13,748
13,497
42
38
Healthineers
77,573
824
3,321
3,539
DESCRIPTION OF REPORTABLE SEGMENTS
Siemens has nine reportable segments, being:
> Power and Gas, which offers a broad spectrum of products,
solutions and services for generating electricity from fossil
fuels and for producing and transporting oil and gas,
> Energy Management offers a wide spectrum of software,
products, systems, solutions, and services for transmitting,
distributing and managing electrical power and for providing
intelligent power infrastructure,
> Building Technologies is a provider of automation technolo-
gies and digital services for safe, secure and efficient build-
ings and infrastructures throughout their lifecycles,
> Mobility combines all Siemens businesses in the area of pas-
senger and freight transportation, including rail vehicles, rail
automation systems, rail electrification systems, road traffic
technology, digital solutions and related services,
> Digital Factory offers a comprehensive product portfolio and
system solutions used in manufacturing industries, comple-
mented by product lifecycle and data-driven services,
It is not part of the Consolidated Financial Statements subject to the audit opinion.
> Process Industries and Drives offers a comprehensive product,
software, solution and service portfolio for moving, measur-
ing, controlling and optimizing all kinds of mass flows,
> Siemens Gamesa Renewable Energy offers wind turbines uti-
lizing various pitch and speed technologies, and is active in
the development, construction and sale of wind farms; it pro-
vides services including management, operation and mainte-
nance of wind farms,
> Financial Services (SFS) supports its customers' investments
with leasing solutions and equipment, project and structured
financing in the form of debt and equity investments.
RECONCILIATION TO
CONSOLIDATED FINANCIAL STATEMENTS
Centrally managed portfolio activities (CMPA) – in general,
comprises equity stakes held by Siemens that are accounted for
by the equity method or as available-for-sale financial assets and
that for strategic reasons are not allocated to a segment, Siemens
Real Estate (SRE), Corporate items or Corporate Treasury. CMPA
also includes activities generally intended for divestment or clo-
sure as well as activities remaining from divestments and discon-
tinued operations.
Siemens Real Estate (SRE) - except for SGRE, SRE manages the
Group's entire real estate business portfolio, operates the prop-
erties, and is responsible for building projects and the purchase
and sale of real estate.
98 Consolidated Financial Statements
> Healthineers, a supplier of technology to the healthcare in-
dustry and a leader in diagnostic imaging and laboratory di-
agnostics,
1 This supplemental information on Orders is provided on a voluntary basis.
(2,447)
79,644
(2,202)
83,049
147
154
84,331
921
81,112
979
Reconciliation to
Consolidated Financial Statements
(1,730)
Siemens (continuing operations)
85,669
(2,300)
86,480
1,266
83,049
1,247
79,644
(3,468)
(3,694)
9,034
Process Industries and Drives
10,172
11,378
2016
2017
Fiscal year
2016
2017
Fiscal year
2016
Fiscal year
2017
2017
Power and Gas
13,422
19,454
15,413
16,412
53
2016
(in millions of €)
Fiscal year
Total revenue
3,766
3,562
Expenses relating to
post-employment benefits
1,214
1,218
29,613
28,210
40
Consolidated Financial Statements 97
NOTE 28
Segment information
Orders¹
External revenue
Intersegment Revenue
58
Statutory social welfare contributions
15,467
Energy Management
7,875
8,081
7,794
18
31
8,099
8,963
7,825
11,532
10,332
10,658
9,390
720
781
Digital Factory
Mobility
6,156
6,523
13,628
12,963
11,639
11,238
638
702
12,277
11,940
Building Technologies
6,913
6,435
6,356
5,982
166
174
16,471
281
Siemens provides its customers with various forms of direct and
indirect financing particularly in connection with large projects.
Hence, credit risks are determined by the solvency of the debtors,
the recoverability of the collaterals, the success of projects we
invested in and the global economic development.
CREDIT RISK
Financial assets and financial
liabilities held for trading
(163)
(211)
Amounts presented include foreign currency gains and losses
from realizing and measuring financial assets and liabilities; in
particular, fiscal 2017 includes net gains from financial liabilities
measured at amortized cost due to foreign currency changes on
issued bonds denominated in US$ due to an appreciation of the
EUR as well as an increase in nominal amounts outstanding due
to newly issued US$ bonds, which are offset in the income state-
ment by compensating measurement effects on the correspond-
ing internal foreign currency financing transactions. Net gains
(losses) in fiscal 2017 and 2016 on financial assets and financial
liabilities held for trading consist of changes in the fair value of
derivative financial instruments, including interest income and
expense, for which hedge accounting is not applied.
Interest income (expense) includes interest from financial assets
and financial liabilities not at fair value through profit or loss:
(in millions of €)
168
Total interest income on financial assets
Total interest expenses on financial liabilities
2017
2016
1,467
1,291
(901)
(874)
Fiscal year
In fiscal 2017 and 2016, gains (losses) reclassified from Other
comprehensive income to the Consolidated Statements of In-
come relating to cash flow hedges were €54 million and €(61)
million, respectively; unrealized gains (losses) recognized in
Other comprehensive income amounted to €232 million and
€149 million, respectively.
1,662
Financial liabilities measured
The Company limits default risks resulting from derivative finan-
cial instruments by generally transacting with financial institu-
tions with a minimum credit rating of investment grade. Based
on Siemens' net risk exposure towards the counterparty, the re-
sulting credit risk is taken into account via a credit valuation ad-
justment.
The unquoted equity instrument allocated to level 3 of the fair
value hierarchy relates to an investment in an offshore wind
farm. The fair value is determined based on discounted cash flow
calculations. The most significant unobservable input used to
determine the fair value is the cash flow forecast which is mainly
based on the future power generation income. This income is
generally subject to future market developments and thus price
volatility. Since a long-term power purchase agreement is in
place that mitigates price volatility, significant changes to the
cash flow forecast are unlikely and thus, no significant effects on
Other comprehensive income, net of income taxes, are expected.
Net gains (losses) of financial instruments are:
(in millions of €)
2017
at amortized cost
2016
(5)
(19)
(4)
70
(174)
(442)
Cash and cash equivalents
Available-for-sale financial assets
Loans and receivables
90 Consolidated Financial Statements
OFFSETTING
Siemens enters into master netting agreements and similar
agreements for derivative financial instruments. The require-
ments to offset recognized financial instruments are usually not
met. The following table reflects financial assets and financial
liabilities that are subject to netting agreements and similar
agreements:
5
691
538
153
Sep 30, 2016
Amounts set
697
off in the
Statement of
Financial assets
Gross
amounts
Financial
Position
Net amounts
in the
Statement of
Financial
Position
Related
amounts not
set off in the
Statement of
(in millions of €)
1,383
647
2,030
(in millions of €)
Financial assets
Financial liabilities - Derivative financial liabilities
Sep 30, 2017
Gross
amounts
Financial
Position
Amounts set
off in the
Statement of
Net amounts
in the
Statement of
Financial
Position
Related
amounts not
set off in the
Statement of
Financial
Position
Net
amounts
2,035
5
Siemens determines the fair values of derivative financial instru-
ments depending on the specific type of instrument. Fair values
of derivative interest rate contracts are estimated by discounting
expected future cash flows using current market interest rates
and yield curves over the remaining term of the instrument. In-
terest rate futures are valued on the basis of quoted market
prices, if available. Fair values of foreign currency derivatives are
based on forward exchange rates. Options are generally valued
based on quoted market prices or based on option pricing mod-
els. In determining the fair values of the derivative financial in-
struments, no compensating effects from underlying transac-
tions (e.g. firm commitments and forecast transactions) are
taken into consideration.
Available-for-sale financial assets measured at fair value include
interests in Atos SE (Atos) and OSRAM Licht AG (Osram) of
€2,871 million and €2,156 million, respectively, as of Septem-
ber 30, 2017 and 2016. Unrealized pre-tax gains (losses) in fiscal
2017 and 2016 resulting from non-current available-for-sale fi-
nancial assets measured at fair value are €700 million and
€445 million, respectively. In September 2017, 18.155 million
shares in Osram representing a 17.34% stake in Osram met the
criteria for asset held for disposal classification. Those Osram
shares were previously reported as non-current available-for-sale
equity instruments and are held in Centrally managed portfolio
activities. Upon the sale of the shares for €1.2 billion in cash in
October 2017, €649 million accumulated fair value changes rec-
ognized in equity will be reclassified through Other comprehen-
sive income, net of income taxes to Net income. Siemens retains
108,414 shares in Osram to service the warrants relating to
Siemens and Osram shares.
The fair value of available-for-sale financial equity instruments
quoted in an active market is based on price quotations at the
period-end date. The fair value of debt instruments is either based
on prices provided by price service agencies or estimated by dis-
counting future cash flows using current market interest rates.
Consolidated Financial Statements 89
Financial liabilities measured at fair value - Derivative financial instruments
823
Not designated in a hedge accounting relationship
(including embedded derivatives)
In connection with cash flow hedges
823
In connection with cash flow hedges
682
140
140
(in millions of €)
Financial assets measured at fair value
Available-for-sale financial assets: equity instruments
Available-for-sale financial assets: debt instruments
Derivative financial instruments
682
In connection with fair value hedges
(including embedded derivatives)
Not designated in a hedge accounting relationship
1,232
11
1,243
2,261
54
2,314
1,882
54
1,935
46
46
333
333
Available-for-sale financial assets: debt instruments
Derivative financial instruments
Not designated in a hedge accounting relationship
Financial
Position
(including embedded derivatives)
In connection with cash flow hedges
163
163
371
371
Financial liabilities measured at fair value - Derivative financial instruments
1,500
2,518
1,500
(including embedded derivatives)
1,190
1,190
In connection with cash flow hedges
305
305
Not designated in a hedge accounting relationship
2,518
3,051
3,051
Sep 30, 2016
Level 1
Level 2
Level 3
Total
2,191
4,311
310
6,812
2,191
301
2,492
1,259
10
1,269
In connection with fair value hedges
Credit risk is defined as an unexpected loss in financial instru-
ments if the contractual partner is failing to discharge its obliga-
tions in full and on time or if the value of collateral declines.
Net
amounts
7
In addition, Siemens constantly monitors funding options avail-
able in the capital markets, as well as trends in the availability
and costs of such funding, with a view to maintaining financial
flexibility and limiting repayment risks.
The following table reflects the contractually fixed pay-offs for
settlement, repayments and interest. The disclosed expected un-
discounted net cash outflows from derivative financial liabilities
are determined based on each particular settlement date of an
instrument and based on the earliest date on which Siemens
could be required to pay. Cash outflows for financial liabilities
(including interest) without fixed amount or timing are based on
the conditions existing at September 30, 2017.
(in millions of €)
Fiscal year
2023
2020
Liquidity risk results from the Company's inability to meet its fi-
nancial liabilities. Siemens follows a deliberated financing policy
that is aimed towards a balanced financing portfolio, a diversified
maturity profile and a comfortable liquidity cushion. Siemens
mitigates liquidity risk by the implementation of an effective
working capital and cash management, arranged credit facilities
with highly rated financial institutions, via a debt issuance pro-
gram and via a global multi-currency commercial paper program.
Liquidity risk may also be mitigated by the Siemens Bank GmbH,
which increases the flexibility of depositing cash or refinancing.
and
2019
to
2022
there-
after
Non-derivative financial
liabilities
Notes and bonds
4,328
2018
3,790
LIQUIDITY RISK
Siemens' investment portfolio consists of direct and indirect in-
vestments in publicly traded companies held for purposes other
than trading. The direct participations result mainly from strate-
gic partnerships, strengthening Siemens' focus on its core busi-
ness activities or compensation from merger and acquisitions
transactions; indirect investments in fund shares are mainly
transacted for financial reasons.
FOREIGN CURRENCY EXCHANGE RATE RISK
Transaction risk
Each Siemens unit conducting businesses with international
counterparties leading to future cash flows denominated in a
currency other than its functional currency is exposed to risks
from changes in foreign currency exchange rates. In the ordinary
course of business Siemens units are exposed to foreign currency
exchange rate fluctuations, particularly between the U.S. dollar
and the euro. Foreign currency exchange rate exposure is partly
balanced by purchasing of goods, commodities and services in
the respective currencies as well as production activities and
other contributions along the value chain in the local markets.
Operating units (Industrial business and SFS) are prohibited from
borrowing or investing in foreign currencies on a speculative basis.
Intercompany financing or investments of operating units are pref-
erably carried out in their functional currency or on a hedged basis.
According to the company policy Siemens units are responsible
for recording, assessing and monitoring its foreign currency trans-
action exposure. The net foreign currency position of Siemens
units serves as a central performance measure and has to be
hedged within a band of at least 75% but no more than 100%.
Generally, the operating units conclude their hedging activities
internally with Corporate Treasury. By applying a cost-optimiz-
ing portfolio approach Corporate Treasury itself hedges foreign
currency exchange rate risks with external counterparties and
limits them.
As of September 30, 2017 and 2016 the VaR relating to foreign
currency exchange rates was €87 million and €86 million. This
VaR was calculated under consideration of items of the Consoli-
dated Statement of Financial Position in addition to firm commit-
ments which are denominated in foreign currencies, as well as
foreign currency denominated cash flows from forecast transac-
tions for the following twelve months.
These investments are monitored based on their current market
value, affected primarily by fluctuations in the volatile technolo-
gy-related markets worldwide. As of September 30, 2017 and
2016 the market value of Siemens' portfolio in publicly traded
companies was €2,875 million compared to €2,169 million in the
prior year. As of September 30, 2017 and 2016, the VaR relating
to the equity price was €208 and €227 million. The increase in
the market values, due mainly to our stakes in Atos and OSRAM,
was more than offset by a decline in the volatilities of these
stakes, resulting in an overall decrease of the VaR. The major part
of our stake in OSRAM has been sold in October 2017.
Translation risk
INTEREST RATE RISK
Interest rate risk is the risk that the fair value or future cash flows
of a financial instrument will fluctuate because of changes in
market interest rates. This risk arises whenever interest terms of
financial assets and liabilities are different. In order to manage
the Company's position with regard to interest rate risk, interest
income and interest expenses, Corporate Treasury performs a
comprehensive corporate interest rate risk management by using
fixed or variable interest rates from bond issuances and deriva-
tive financial instruments when appropriate. The interest rate risk
relating to the Group, excluding SFS' and SGRE' businesses, is
mitigated by managing interest rate risk actively relatively to a
benchmark. The interest rate risk relating to the SFS's and SGRE's
businesses is managed separately, considering the term structure
of financial assets and liabilities. The Company's interest rate risk
results primarily from the funding in U.S. dollar, British pound
and euro.
If there are no conflicting country-specific regulations, all Siemens
operating units generally obtain any required financing through
Corporate Treasury in the form of loans or intercompany clearing
accounts. The same concept is adopted for deposits of cash gen-
erated by the units.
As of September 30, 2017 and 2016 the VaR relating to the inter-
est rate was €479 million and €485 million.
Consolidated Financial Statements 93
EQUITY PRICE RISK
Many Siemens units are located outside the euro zone. Since the
financial reporting currency of Siemens is the euro, the financial
statements of these subsidiaries are translated into euro for the
preparation of the Consolidated Financial Statements. To con-
sider the effects of foreign currency translation in the risk man-
agement, the general assumption is that investments in for-
eign-based operations are permanent and that reinvestment is
continuous. Effects from foreign currency exchange rate fluctu-
ations on the translation of net asset amounts into euro are re-
flected in the Company's consolidated equity position.
11,102
Loans from banks
1,303
290
13
420
205
176
61
129
639
2,875
303
177
2
1 Based on the maximum amounts Siemens could be required to settle in the event of default
by the primary debtor.
2 A considerable portion result from asset-based lending transactions meaning that the respective
loans can only be drawn after sufficient collateral has been provided by the borrower.
Irrevocable loan commitments²
1,079
Other financial liabilities
Derivative financial liabilities
Credit guarantees¹
3
328 1,037
17,659
3
Other financial
indebtedness
Obligations under
finance leases
677
27
23
61
Trade payables
35
18
36
112
9,730
19
3
Any market sensitive instruments, including equity and interest
bearing investments, that our Company's pension plans hold are not
included in the following quantitative and qualitative disclosures.
Actual results that are included in the Consolidated Statements
of Income or Consolidated Statements of Comprehensive Income
may differ substantially from VaR figures due to fundamental
conceptual differences. While the Consolidated Statements of
Income and Consolidated Statements of Comprehensive Income
are prepared in accordance with IFRS, the VaR figures are the
output of a model with a purely financial perspective and repre-
sent the potential financial loss which will not be exceeded
within ten days with a probability of 99.5%. Although VaR is an
important tool for measuring market risk, the assumptions on
which the model is based give rise to some limitations including
the following. A ten day holding period assumes that it is possible
to dispose of the underlying positions within this period. This
may not be valid during continuing periods of illiquid markets. A
99.5% confidence level means, that there is a 0.5% statistical
probability that losses could exceed the calculated VaR. The use
of historical data as a basis for estimating the statistic behavior
of the relevant markets and finally determining the possible
range of the future outcomes on the basis of this statistic behav-
ior may not always cover all possible scenarios, especially those
of an exceptional nature.
volatilities and correlations of various risk factors, a ten day hold-
ing period, and a 99.5% confidence level.
Consolidated Financial Statements
Sep 30, 2017
Liability
Asset
Foreign currency
exchange contracts
Interest rate swaps
and combined interest
and currency swaps
Other (embedded
Asset
1,350
1,885
491
derivatives, options,
commodity swaps)
311
192
2,314
156
(in millions of €)
880
Sep 30, 2016
Liability
2,634
994
1,640
Financial liabilities - Derivative financial liabilities
1,440
6
1,433
838
595
NOTE 23 Derivative financial
instruments and hedging activities
Fair values of each type of derivative financial instruments recorded
as financial assets or financial liabilities are:
653
475
570
823
2,641
596
3,051
FOREIGN CURRENCY EXCHANGE RATE
87
38
INTEREST RATE RISK MANAGEMENT
Derivative financial instruments not designated
in a hedging relationship
Interest rate risk management relating to the Group, excluding
SFS' business, uses derivative financial instruments under a port-
folio-based approach to manage interest risk actively relative to
a benchmark. The interest rate management relating to the SFS
business remains to be managed separately, considering the
term structure of SFS' financial assets and liabilities on a portfolio
basis. Neither approach qualifies for hedge accounting treat-
ment. Net cash receipts and payments in connection with inter-
est rate swap agreements are recorded as interest expense in
Other financial income (expenses), net.
Cash flow hedges of floating-rate
commercial papers
15
Since fiscal 2015, Siemens applies cash flow hedge accounting
to a revolving portfolio of floating-rate commercial papers of
nominal US$700 million. To benefit from low interest rates in the
USA, Siemens pays a fixed rate of interest and receives a variable
rate of interest, offsetting future changes in interest payments of
the underlying floating-rate commercial papers. Net cash receipts
and payments are recorded as interest expenses.
The Company had interest rate swap contracts to pay variable
rates of interest of an average of (0.3)% and (0.2)% as of Septem-
ber 30, 2017 and 2016, respectively and received fixed rates of
interest (average rate of 1.1% and 3.3%, as of September 30, 2017
and 2016, respectively). The notional amount of indebtedness
hedged as of September 30, 2017 and 2016 was €1,650 million
and €3,650 million, respectively. This changed 7% and 14% of the
Company's underlying notes and bonds from fixed interest rates
into variable interest rates as of September 30, 2017 and 2016,
respectively. The notional amounts of these contracts mature at
varying dates based on the maturity of the underlying hedged
items. The net fair value of interest rate swap contracts (excluding
accrued interest) used to hedge indebtedness as of September 30,
2017 and 2016 was €37 million and €93 million, respectively.
NOTE 24 Financial risk management
Increasing market fluctuations may result in significant earnings
and cash flow volatility risk for Siemens. The Company's operat-
ing business as well as its investment and financing activities are
affected particularly by changes in foreign exchange rates, inter-
est rates and equity prices. In order to optimize the allocation of
the financial resources across the Siemens segments and entities,
as well as to achieve its aims, Siemens identifies, analyzes and
manages the associated market risks. The Company seeks to man-
age and control these risks primarily through its regular operating
and financing activities, and uses derivative financial instruments
when deemed appropriate.
In order to quantify market risks Siemens has implemented a sys-
tem based on parametric variance-covariance Value at Risk (VaR),
which is also used for internal management of the Corporate Trea-
sury activities. The VaR figures are calculated based on historical
92
22
Fair value hedges of fixed-rate debt obligations
Under the interest rate swap agreements outstanding during the
years ended September 30, 2017 and 2016, the Company has
agreed to pay a variable rate of interest multiplied by a notional
principal amount, and to receive in return an amount equal to a
specified fixed rate of interest multiplied by the same notional
principal amount. These interest rate swap agreements offset an
impact of future changes in interest rates designated as the
hedged risk on the fair value of the underlying fixed-rate debt
obligations. Carrying amount adjustments to debt for fair value
changes attributable to the respective interest rate risk being
hedged are included in Other financial income (expenses), net
and resulted in a gain (loss) of €57 million and €149 million, re-
spectively, in fiscal 2017 and 2016; the related swap agreements
resulted in a gain (loss) of €(57) million and €(152) million, re-
spectively. Net cash receipts and payments relating to such inter-
est rate swap agreements are recorded as interest expenses.
80
2023
and
there-
after
Fiscal year
RISK MANAGEMENT
Derivative financial instruments not designated
in a hedging relationship
The Company manages its risks associated with fluctuations in
foreign currency denominated receivables, payables, debt, firm
commitments and forecast transactions primarily through a
Company-wide portfolio approach. Under this approach the
Company-wide risks are aggregated centrally, and various deriv-
ative financial instruments, primarily foreign currency exchange
contracts, foreign currency swaps and options, are utilized to
minimize such risks. Such a strategy does not qualify for hedge
accounting treatment. The Company also accounts for foreign
currency derivatives, which are embedded in sale and purchase
contracts.
Consolidated Financial Statements 91
Cash flow hedges
The Company's operating units apply hedge accounting for cer-
tain significant forecast transactions and firm commitments de-
nominated in foreign currencies. Particularly, the Company has
entered into foreign currency exchange contracts to reduce the
risk of variability of future cash flows resulting from forecast sales
and purchases as well as firm commitments. This risk results
mainly from contracts denominated in US$ both from Siemens'
operating units entering into long-term contracts e.g. project
business and from standard product business.
Periods in which the hedged forecast transactions or the firm
commitments denominated in foreign currency are expected to
impact profit or loss:
(in millions of €)
2018
2019
2020
to
2022
Expected gain (loss) to be
reclassified from line item
Other comprehensive income,
net of income taxes into
revenue or cost of sales
129
1,500
SIEMENS PROFIT SHARING
100
Siemens Industry Software SAS, Châtillon/France
ETM professional control GmbH, Eisenstadt/Austria
100
Siemens Healthcare SA/NV, Beersel/Belgium
100
Hochquellstrom-Vertriebs GmbH, Vienna/Austria
100
Siemens Industry Software NV, Leuven/Belgium
100
ITH icoserve technology for healthcare GmbH,
Innsbruck/Austria
Siemens S.A./N.V., Beersel/Belgium
100
69
Siemens Wind Power BVBA, Beersel/Belgium
100
100
100
Siemens d.o.o. Sarajevo, Sarajevo/Bosnia and Herzegovina
100
100
Siemens Medicina d.o.o., Sarajevo/Bosnia and Herzegovina
100
Priamos Grundstücksgesellschaft m.b.H., Vienna/Austria
Siemens Aktiengesellschaft Österreich, Vienna/Austria
Siemens Convergence Creators GmbH, Eisenstadt/Austria
Siemens Convergence Creators GmbH, Vienna/Austria
100
Gamesa Wind Bulgaria, EOOD, Sofia/Bulgaria
100
100
Siemens EOOD, Sofia/Bulgaria
100
KDAG Beteiligungen GmbH, Vienna/Austria
Omnetric GmbH, Vienna/Austria
Siemens Gamesa Renewable Energy Belgium, SPRL,
Brussels/Belgium
100
Mentor Graphics Development Services Closed Joint Stock
Company, Yerevan/Armenia
Windfarm Groß Haßlow GmbH, Oldenburg
100
Siemens Gamesa Renevable Energy Limited Liability
Company, Baku/Azerbaijan
100
Windfarm Ringstedt II GmbH, Oldenburg
100
Siemens W.L.L., Manama/Bahrain
51
Limited Liability Company Siemens Technologies,
Minsk/Belarus
100
Europe, Commonwealth of Independent States
(C.I.S.), Africa, Middle East (without Germany)
Dresser-Rand Machinery Repair Belgie N.V.,
(519 companies)
Antwerp/Belgium
1007
ESTEL Rail Automation SPA, Algiers/Algeria
51
Flender S.P.R.L., Beersel/Belgium
1007
Siemens Spa, Algiers/Algeria
100
Mentor Graphics (Belgium) BVBA, Brussels/Belgium
100
Siemens S.A., Luanda/Angola
51
Samtech SA, Angleur/Belgium
77
100
100
Siemens Healthcare EOOD, Sofia/Bulgaria
Siemens SARL, Abidjan/Côte d'Ivoire
100
75
Prague/Czech Republic
100
Siemens Wind Power GmbH, Vienna/Austria
100
Siemens Electric Machines s.r.o., Drasov/Czech Republic
100
1 Control due to a majority of voting rights.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to contractual arrangements or legal circumstances.
5 No significant influence due to contractual arrangements or legal circumstances.
6 Significant influence due to contractual arrangements or legal circumstances.
7 Not consolidated due to immateriality.
8 Not accounted for using the equity method due to immateriality.
9
Exemption pursuant to Section 264b German Commercial Code.
10 Exemption pursuant to Section 264 (3) German Commercial Code.
Siemens AG is a shareholder with unlimited liability of this company.
11
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
106 Consolidated Financial Statements
Equity interest
Equity interest
September 30, 2017
in %
September 30, 2017
in %
Siemens Healthcare, s.r.o., Prague/Czech Republic
Siemens Convergence Creators, s.r.o.,
100
100
100
100
Siemens Convergence Creators Holding GmbH,
Vienna/Austria
Koncar-Energetski Transformatori, d.o.o., Zagreb/Croatia
51
100
Siemens Gebäudemanagement & -Services G.m.b.H.,
Vienna/Austria
Siemens Convergence Creators d.o.o., Zagreb/Croatia
Siemens d.d., Zagreb/Croatia
100
100
100
Siemens Healthcare Diagnostics GmbH, Vienna/Austria
Siemens Industry Software GmbH, Linz/Austria
100
Siemens Gamesa Renewable Energy d.o.o., Zagreb/Croatia
Siemens Healthcare d.o.o., Zagreb/Croatia
100
100
100
Mentor Graphics (Netherlands Antilles) N.V.,
Siemens Konzernbeteiligungen GmbH, Vienna/Austria
Siemens Liegenschaftsverwaltung GmbH, Vienna/Austria
Siemens Metals Technologies Vermögensverwaltungs
GmbH, Vienna/Austria
100
Willemstad/Curaçao
100
100
Siemens Gamesa Renewable Energy Limited,
Nicosia/Cyprus
100
100
OEZ s.r.o., Letohrad/Czech Republic
100
Siemens Personaldienstleistungen GmbH, Vienna/Austria
Siemens Urban Rail Technologies Holding GmbH,
Vienna/Austria
Polarion Software s.r.o., Prague/Czech Republic
100
Windfarm Ganderkesee-Lemwerder GmbH, Oldenburg
VVK Versicherungs-Vermittlungs- und Verkehrs-Kontor
GmbH, Vienna/Austria
100
SILLIT Grundstücks-Verwaltungsgesellschaft mbH, Munich
100
Siemens Healthcare GmbH, Erlangen
10010
SIM 2. Grundstücks-GmbH & Co. KG, Grünwald
1009
Siemens Immobilien GmbH & Co. KG, Grünwald
1009
Siemens Immobilien Management GmbH, Grünwald
1007
Siemens Industriegetriebe GmbH, Penig
100
Siemens Healthcare Diagnostics Products GmbH, Marburg
Siemens Industriepark Karlsruhe GmbH & Co. KG, Grünwald
SIMAR Nordost Grundstücks-GmbH, Grünwald
SIMAR Nordwest Grundstücks-GmbH, Grünwald
SIMAR Ost Grundstücks-GmbH, Grünwald
SIMAR Süd Grundstücks-GmbH, Grünwald
10010
10010
10010
10010
Siemens Industry Software GmbH, Cologne
100
SIMAR West Grundstücks-GmbH, Grünwald
10010
Siemens Insulation Center GmbH & Co. KG, Zwönitz
1009
SIMOS Real Estate GmbH, Munich
10010
100⁹
100
Siemens-Fonds S-8, Munich
100
10010
Siemens Technopark Nürnberg GmbH & Co. KG, Grünwald
Siemens Technopark Nürnberg Verwaltungs GmbH,
Grünwald
1009
100
Siemens Fonds Invest GmbH, Munich
10010
Siemens Treasury GmbH, Munich
10010
Siemens Fuel Gasification Technology GmbH & Co. KG,
Freiberg
1009
Siemens Turbomachinery Equipment GmbH, Frankenthal
Siemens Wind Power GmbH & Co. KG, Hamburg
10010
1009
Siemens Fuel Gasification Technology Verwaltungs GmbH,
Freiberg
1007
Siemens Wind Power Management GmbH, Hamburg
Siemens-Fonds C-1, Munich
1007
100
Siemens Global Innovation Partners Management GmbH,
Munich
Siemens-Fonds Pension Captive, Munich
100
1007
Siemens-Fonds Principals, Munich
100
Siemens Healthcare Diagnostics GmbH, Eschborn
100
Siemens-Fonds S-7, Munich
100
Siemens Healthcare Diagnostics Holding GmbH, Eschborn
Siemens Insulation Center Verwaltungs-GmbH, Zwönitz
1007
Siemens Liquidity One, Munich
100
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to contractual arrangements or legal circumstances.
5 No significant influence due to contractual arrangements or legal circumstances.
6 Significant influence due to contractual arrangements or legal circumstances.
7 Not consolidated due to immateriality.
8 Not accounted for using the equity method due to immateriality.
9
Exemption pursuant to Section 264b German Commercial Code.
10 Exemption pursuant to Section 264 (3) German Commercial Code.
11
Siemens AG is a shareholder with unlimited liability of this company.
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
Consolidated Financial Statements
105
September 30, 2017
Windfarm 33 GmbH, Oldenburg
Windfarm 35 GmbH, Oldenburg
Equity interest
in %
Equity interest
September 30, 2017
in %
100
Steiermärkische Medizinarchiv GesmbH, Graz/Austria
52
100
Trench Austria GmbH, Leonding/Austria
100
Windfarm 40 GmbH, Oldenburg
100
Windfarm 41 GmbH, Oldenburg
100
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
100
1 Control due to a majority of voting rights.
Weiss Spindeltechnologie GmbH, Maroldsweisach
SYKATEC Systeme, Komponenten, Anwendungstechnologie
GmbH, Erlangen
10010
Siemens Medical Solutions Health Services GmbH,
Grünwald
TASS International GmbH, Wiesbaden
100
100
Trench Germany GmbH, Bamberg
10010
Siemens Middle East Holding GmbH & Co. KG, Grünwald
1007
Siemens Middle East Management GmbH, Grünwald
Siemens Nixdorf Informationssysteme GmbH, Grünwald
Siemens Postal, Parcel & Airport Logistics GmbH, Constance
Siemens Power Control GmbH, Langen
1007
Verwaltung SeaRenergy Offshore Projects GmbH i.L.,
Hamburg
100
100
10010
VIB Verkehrsinformationsagentur Bayern GmbH, Munich
VMZ Berlin Betreibergesellschaft mbH, Berlin
517
100
10010
VR-LEASING IKANA GmbH & Co. Immobilien KG, Eschborn
943
Siemens Private Finance Versicherungsvermittlungs-
gesellschaft mbH, Munich
10010
VVK Versicherungsvermittlungs- und Verkehrskontor GmbH,
Munich
10010
Siemens Project Ventures GmbH, Erlangen
10010
100
Siemens Industry Software, s.r.o., Prague/Czech Republic
Siemens, s.r.o., Prague/Czech Republic
100
Societe d'Exploitation du Parc Eolien de Champsevraine,
SARL, Saint-Priest/France
100
Societe d'Exploitation du Parc Eolien de Savoisy SARL,
Saint-Priest/France
100
Societe d'Exploitation du Parc Eolien de Sceaux SARL,
Siemens Oil & Gas Equipment Limited, Accra/Ghana
Elliniki Eoliki Attikis Energiaki S.A., Athens/Greece
Elliniki Eoliki Energiaki Pirgos S.A., Athens/Greece
Elliniki Eoliki Kopriseza S.A., Athens/Greece
Elliniki Eoliki Kseropousi S.A., Athens/Greece
Elliniki Eoliki Likourdi S.A., Athens/Greece
Energiaki Arvanikou M.E.P.E., Athens/Greece
90
86
86
86
86
86
100
Saint-Priest/France
Saint-Priest/France
Societe d'Exploitation du Parc Eolien de Sommesous SARL,
Saint-Priest/France
100
Eoliki Peloponnisou Lakka Energiaki S.A., Athens/Greece
Siemens A.E., Elektrotechnische Projekte und Erzeugnisse,
Athens/Greece
86
100
Societe d'Exploitation du Parc Eolien de Songy SARL,
Saint-Priest/France
100
Societe d'Exploitation du Parc Eolien de Soude SARL,
Siemens Gamesa Renewable Energy AE, Athens/Greece
Siemens Gamesa Renewable Energy Greece E.P.E.,
Athens/Greece
100
100
100
Societe d'Exploitation du Parc Eolien de Sambourg SARL,
100
Societe d'Exploitation du Parc Eolien de Saint-Lumier en
Champagne SARL, Saint-Priest/France
September 30, 2017
in %
Societe d'Exploitation du Parc Eolien de Pringy SARL,
Saint-Priest/France
100
Siemens Gamesa Renewable Energy France SAS,
Saint-Priest/France
100
Societe d'Exploitation du Parc Eolien de Romigny SARL,
Saint-Priest/France
Siemens Gamesa Renewable Energy S.A.S.,
Saint-Denis Cedex/France
100
Societe d'Exploitation du Parc Eolien de Saint Amand SARL,
Siemens Healthcare SAS, Saint-Denis/France
100
Saint-Priest/France
100
100
Societe d'Exploitation du Parc Eolien de Saint Bon SARL,
Siemens Lease Services SAS, Saint-Denis/France
100
Saint-Priest/France
100
Societe d'Exploitation du Parc Eolien de Saint Loup de
Saintonge SAS, Saint-Priest/France
SIEMENS Postal Parcel Airport Logistics SAS, Paris/France
Siemens SAS, Saint-Denis/France
100
100
100
Trench France SAS, Saint-Louis/France
100
Saint-Priest/France
100
Siemens Healthcare Industrial and Commercial Société
Societe d'Exploitation du Parc Eolien de Source de Seves
SARL, Saint-Priest/France
Mentor Graphics (Holdings) Unlimited Company,
Societe d'Exploitation du Parc Eolien du Vireaux SAS,
Shannon, County Clare/Ireland
10012
Saint-Priest/France
100
Mentor Graphics (Ireland) Limited,
Siemens Financial Services SAS,
Shannon, County Clare/Ireland
100
Saint-Denis/France
100
Siemens France Holding SAS, Saint-Denis/France
100
Mentor Graphics Development Services Limited,
Shannon, County Clare/Ireland
100
1 Control due to a majority of voting rights.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to contractual arrangements or legal circumstances.
5 No significant influence due to contractual arrangements or legal circumstances.
6 Significant influence due to contractual arrangements or legal circumstances.
7 Not consolidated due to immateriality.
8 Not accounted for using the equity method due to immateriality.
9
Exemption pursuant to Section 264b German Commercial Code.
10 Exemption pursuant to Section 264 (3) German Commercial Code.
11
Siemens AG is a shareholder with unlimited liability of this company.
100
in %
Saint-Priest/France
Gamesa Ireland Limited, Dublin/Ireland
Anonyme, Athens/Greece
100
100
Societe d'Exploitation du Parc Eolien de Souvans SARL,
Saint-Priest/France
100
Societe d'Exploitation du Parc Eolien de Trepot SARL,
Saint-Priest/France
100
Societe d'Exploitation du Parc Eolien de Vaudrey SARL,
Saint-Priest/France
100
888
evosoft Hungary Szamitastechnikai Kft., Budapest/Hungary
Mentor Graphics Magyarország Kft., Budapest/Hungary
Siemens Gamesa Megújuló Energia Hungary Kft,
Budapest/Hungary
100
100
100
Siemens Healthcare Kft., Budapest/Hungary
100
Siemens Wind Power Kft., Budapest/Hungary
100
Siemens Zrt., Budapest/Hungary
100
Societe d'Exploitation du Parc Eolien de Vernierfontaine
SARL, Saint-Priest/France
Siemens Sherkate Sahami (Khass),
100
Teheran/Iran, Islamic Republic of
97
Societe d'Exploitation du Parc Eolien d'Orchamps SARL,
100
September 30, 2017
Equity interest
Equity interest
100
90
Societe d'Exploitation du Parc Eolien de Guerfand SARL,
100
Saint-Priest/France
100
Mentor Graphics (Finland) OY, Espoo/Finland
100
Mentor Graphics Development (Finland) OY, Turku/Finland
100
Societe d'Exploitation du Parc Eolien de la Brie des Etangs
SARL, Saint-Priest/France
100
Siemens Gamesa Renewable Energy Oy, Helsinki/Finland
100
Siemens Healthcare Oy, Espoo/Finland
100
Societe d'Exploitation du Parc Eolien de la Côte du Cerisat
SAS, Saint-Priest/France
100
Siemens Osakeyhtiö, Espoo/Finland
Adwen France SAS, Puteaux/France
D-R Holdings (France) SAS, Le Havre/France
Dresser-Rand SAS, Le Havre/France
Flender-Graffenstaden SAS, Illkirch-Graffenstaden/France
Gamesa Eolica France, S.A.R.L., Saint-Priest/France
100
Societe d'Exploitation du Parc Eolien de la Loye SARL,
100
Saint-Priest/France
100
100
Saint-Priest/France
100
100
Siemens Limited for Trading, Cairo/Egypt
100
100
Societe d'Exploitation du Parc Eolien de Chepniers SARL,
Siemens A/S, Ballerup/Denmark
100
Saint-Priest/France
100
Siemens Gamesa Renewable Energy A/S, Brande/Denmark
100
Societe d'Exploitation du Parc Eolien de Clamanges SARL,
Siemens Healthcare A/S, Ballerup/Denmark
100
Saint-Priest/France
100
Siemens Industry Software A/S, Ballerup/Denmark
100
Societe d'Exploitation du Parc Eolien de Coupetz SARL,
Mentor Graphics Egypt Company (A Limited Liability
Saint-Priest/France
100
Company - Private Free Zone), Cairo/Egypt
100
Societe d'Exploitation du Parc Eolien de Dampierre
NEM Energy Egypt LLC, Alexandria/Egypt
Siemens Healthcare S.A.E., Cairo/Egypt
100
Prudemanche SAS, Saint-Priest/France
100
100
Societe d'Exploitation du Parc Eolien de Germainville SAS,
Siemens Technologies S.A.E., Cairo/Egypt
Siemens Wind Power LLC, Cairo/Egypt
Siemens Financial Services GmbH, Munich
Societe d'Exploitation du Parc Eolien de la Tete des Boucs
SARL, Saint-Priest/France
100
100
Societe d'Exploitation du Parc Eolien de Orge et Ornain
SARL, Saint-Priest/France
100
Societe d'Exploitation du Parc Eolien de Cernon SARL,
Saint-Priest/France
100
Societe d'Exploitation du Parc Eolien de Plancy l'Abbaye
SARL, Saint-Priest/France
100
Societe d'Exploitation du Parc Eolien de Chaintrix Bierges
SARL, Saint-Priest/France
100
Societe d'Exploitation du Parc Eolien de
Pouilly-sur-Vingeanne SARL, Saint-Priest/France
100
1 Control due to a majority of voting rights.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
6 Significant influence due to contractual arrangements or legal circumstances.
7 Not consolidated due to immateriality.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to contractual arrangements or legal circumstances.
5 No significant influence due to contractual arrangements or legal circumstances.
8 Not accounted for using the equity method due to immateriality.
9
Exemption pursuant to Section 264b German Commercial Code.
10 Exemption pursuant to Section 264 (3) German Commercial Code.
11
Siemens AG is a shareholder with unlimited liability of this company.
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
Consolidated Financial Statements
107
108
Saint-Priest/France
100
Societe d'Exploitation du Parc Eolien de Broyes SARL,
Societe d'Exploitation du Parc Eolien de Moulins du Puits
SAS, Saint-Priest/France
Societe d'Exploitation du Parc Eolien de Landresse SARL,
100
Saint-Priest/France
100
Mentor Graphics (France) SARL, Meudon La Forêt/France
Mentor Graphics Development (France) SAS, Paris/France
100
100
Societe d'Exploitation du Parc Eolien de Longueville sur
Aube SARL, Saint-Priest/France
100
Mentor Graphics Development Crolles SARL, Monbon-
not-Saint-Martin/France
100
Societe d'Exploitation du Parc Eolien de Mailly-le-Camp
SARL, Saint-Priest/France
100
Meta Systems SARL, Meudon La Forêt/France
100
Societe d'Exploitation du Parc Eolien de Mantoche SARL,
PETNET Solutions SAS, Lisses/France
100
Saint-Priest/France
100
Societe d'Exploitation du Parc Eolien de Bonboillon SARL,
Societe d'Exploitation du Parc Eolien de Margny SARL,
Saint-Priest/France
100
Saint-Priest/France
Societe d'Exploitation du Parc Eolien de Bouclans SARL,
Saint-Priest/France
100
100
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
10010
1007
Centrally managed portfolio activities
Siemens Real Estate
488
(215)
187
132
Corporate items
(714)
(449)
Centrally carried pension expense
Amortization of intangible assets
acquired in business combinations
Eliminations, Corporate Treasury,
and other reconciling items
Reconciliation to
Consolidated Financial Statements
(407)
(439)
(1,016)
(674)
2016
(323)
(1,785)
(1,994)
In fiscal 2017 and 2016, Profit of SFS includes interest income of
€1,241 million and €1,161 million, respectively and interest ex-
penses of €442 million and €377 million, respectively. In fiscal
2017, CMPA includes the following effects from asset retirement
obligations for environmental clean-up costs: €543 million gains
due to changes in interest rates, €312 million gains due to re-
duced assumed inflation rates and a loss of €179 million from
interest rate swaps not designated in a hedge relationship in con-
nection with those asset retirement obligations.
Assets
(in millions of €)
2017
Sep 30,
2016
Assets Centrally managed portfolio activities
Assets Siemens Real Estate
3,448
1,812
4,533
4,964
Assets Corporate items and pensions
(349)
2017
(in millions of €)
Fiscal year
3,211
2,764
Corporate items - includes corporate costs, such as group man-
aging costs, basic research of Corporate Technology, corporate
projects and non-operating investments or results of corpo-
rate-related derivative activities.
Pension - includes the Company's pension related income (ex-
pense) not allocated to the segments, SRE or CMPA.
Eliminations, Corporate Treasury and other reconciling
items - comprise consolidation of transactions within the seg-
ments, certain reconciliation and reclassification items and the
activities of the Company's Corporate Treasury. It also includes
interest income and expense, such as, for example, interest not
allocated to segments or CMPA (referred to as financing interest),
interest related to Corporate Treasury activities or resulting con-
solidation and reconciliation effects on interest.
MEASUREMENT - SEGMENTS
Accounting policies for Segment information are generally the
same as those used for the Consolidated Financial Statements.
Lease transactions, however, are classified as operating leases for
internal and segment reporting purposes. Intersegment transac-
tions are based on market prices.
Profit
Siemens' Managing Board is responsible for assessing the perfor-
Imance of the segments (chief operating decision maker). The
Company's profitability measure of the segments except for SFS
is earnings before financing interest, certain pension costs,
income taxes and amortization expenses of intangible assets
acquired in business combinations as determined by the chief
operating decision maker (Profit). The major categories of items
excluded from Profit are presented below.
Financing interest, excluded from Profit, is any interest income or
expense other than interest income related to receivables from
customers, from cash allocated to the segments and interest ex-
penses on payables to suppliers. Financing interest is excluded
from Profit because decision-making regarding financing is typi-
cally made at the corporate level.
Decisions on essential pension items are made centrally. Accord-
ingly, Profit primarily includes amounts related to service cost of
pension plans only, while all other regularly recurring pension
related costs are included in reconciliations in line item Centrally
carried pension expense.
Consolidated Financial Statements 99
Amortization expenses of intangible assets acquired in business
combinations are not part of Profit. Furthermore, income taxes
are excluded from Profit since income tax is subject to legal struc-
tures, which typically do not correspond to the structure of the
segments. The effect of certain litigation and compliance issues
is excluded from Profit, if such items are not indicative of perfor-
mance. This may also be the case for items that refer to more
than one reportable segment, SRE and (or) CMPA or have a cor-
porate or central character. Costs for support functions are pri-
marily allocated to the segments.
Profit of the segment SFS:
Profit of the segment SFS is Income before income taxes. In con-
trast to performance measurement principles applied to other
segments, interest income and expenses is an important source
of revenue and expense of SFS.
Asset measurement principles:
Management determined Assets (Net capital employed) as a
measure to assess capital intensity of the segments except for
SFS. Its definition corresponds to the Profit measure except for
amortization expenses of intangible assets acquired in business
combinations which are not part of Profit, however, the related
intangible assets are included in the segments' Assets. Segment
Assets is based on Total assets of the Consolidated Statements of
Financial Position, primarily excluding intragroup financing re-
ceivables, tax related assets and assets of discontinued opera-
tions, since the corresponding positions are excluded from Profit.
The remaining assets are reduced by non-interest-bearing liabili-
ties other than tax related liabilities, e.g. trade payables, to derive
Assets. In contrast, Assets of SFS is Total assets. Assets of Mobility
include the project-specific intercompany financing of a long-
term project. Assets of SGRE include real estate, while real estate
of all other Siemens segments is carried at SRE.
Orders:
Orders are determined principally as estimated revenue of ac-
cepted purchase orders and order value changes and adjust-
ments, excluding letters of intent.
Free cash flow definition:
Free cash flow of the segments, except for SFS, constitutes cash
flows from operating activities less additions to intangible assets
and property, plant and equipment. It excludes financing inter-
est, except for cases where interest on qualifying assets is capi-
talized or classified as contract costs and it also excludes income
tax as well as certain other payments and proceeds. Free cash
flow of SFS includes related financing interest payments and pro-
ceeds; income tax payments and proceeds of SFS are excluded.
Amortization, depreciation and impairments:
Amortization, depreciation and impairments includes deprecia-
tion and impairments of property, plant and equipment as well
as amortization and impairments of intangible assets each net of
reversals of impairment.
MEASUREMENT – CENTRALLY MANAGED
-
PORTFOLIO ACTIVITIES AND SRE
Centrally managed portfolio activities follow the measurement
principles of the segments except for SFS. SRE applies the mea-
surement principles of SFS.
RECONCILIATION TO
CONSOLIDATED FINANCIAL STATEMENTS
Profit
(1,346)
(1,474)
Asset-based adjustments:
Intragroup financing receivables
47,355
22,607
of companies
Fiscal year
2016
45,325
22,360
2017
25,574
19,886
111
13,088
83,049
11,959
Non-current
assets
Sep 30,
2016
19,912
41,819
23,516
22,707
19,013
16,166
15,118
4,349
3,132
83,049
79,644
42,057
11,142
2017
2,135
2016
43,367
45,475
47,072
Tax-related assets
3,258
4,089
Liability-based adjustments
43,161
42,082
Eliminations, Corporate Treasury, other items
(36,100)
(35,419)
Reconciliation to Consolidated Financial
Statements
62,430
63,126
100
Consolidated Financial Statements
NOTE 29 Information about geographies
(in millions of €)
Europe, C.I.S., Africa, Middle East
Americas
Asia, Australia
Siemens
thereof Germany
thereof foreign countries
therein U.S.
Revenue by location
of customers
Revenue by location
2017
Fiscal year
10,739
2,406
354
1,002
375
198
195
213
218
784
577
1,241
1,324
820
598
47
4,335
66
85
743
678
2,734
2,868
1,046
497
105
99
135
132
2,135
1,690
89
4,178
895
932
Profit
Assets
Free cash flow
Additions to intangible assets
and property, plant & equipment
Amortization,
depreciation & impairments
Fiscal year
Fiscal year
Fiscal year
Fiscal year
2017
2016
Sep 30, 2017
Sep 30, 2016
2017
2016
2017
2016
2017
2016
1,591
1,872
9,976
9,066
392
1,149
222
206
501
522
9,217
5,731
1,963
1,771
137
9,453
8,744
44,984
36,145
7,471
7,493
1,835
1,521
2,649
2,191
639
653
26,390
26,446
734
680
29
18
207
216
(1,785)
8,306
(1,994)
7,404
62,430
133,804
63,126
125,717
(3,386)
4,819
(2,640)
5,533
543
597
510
357
223
330
195
179
450
304
440
243
2,002
1,800
373
618
164
160
213
231
2,490
2,325
10,973
11,211
2,153
2,154
427
392
538
563
338
464
4,663
(190)
(279)
476
19,876
71,907
68,905
100
Dade Behring Grundstücks GmbH, Marburg
100
Siemens Beteiligungen Inland GmbH, Munich
10010
Dresser-Rand GmbH, Oberhausen
10010
EBV Holding Verwaltung GmbH, Oldenburg
100
Siemens Beteiligungen Management GmbH, Grünwald
Siemens Beteiligungen USA GmbH, Berlin
1007
10010
evosoft GmbH, Nuremberg
Siemens Bank GmbH, Munich
10010
Siemens Beteiligungsverwaltung GmbH & Co. OHG,
Grünwald
1009,11
1009
Flender GmbH, Bocholt
100
Siemens Campus Erlangen Grundstücks-GmbH & Co. KG,
Grünwald
1009
Flowmaster GmbH, Frankfurt
100
Fluence Energy GmbH, Erlangen
1007
Siemens Campus Erlangen Objekt 1 GmbH & Co. KG,
Grünwald
1009
FACTA Grundstücks-Entwicklungsgesellschaft mbH & Co. KG,
Munich
100
100
RISICOM Rückversicherung AG, Grünwald
100
Omnetric GmbH, Munich
51
Adwen GmbH, Bremerhaven
100
Adwen Verwaltungs GmbH, Bremerhaven
100
OPTIO Grundstücks-Vermietungsgesellschaft mbH & Co.
Objekt Tübingen KG, Grünwald
1009
Airport Munich Logistics and Services GmbH, Hallbergmoos
10010
Partikeltherapiezentrum Kiel Holding GmbH, Erlangen
10010
Alpha Verteilertechnik GmbH, Cham
10010
Atecs Mannesmann GmbH, Erlangen
100
Project Ventures Butendiek Holding GmbH, Erlangen
Projektbau-Arena-Berlin GmbH, Grünwald
10010
10010
AXIT GmbH, Frankenthal
100
R&S Restaurant Services GmbH, Munich
100
Berliner Vermögensverwaltung GmbH, Berlin
10010
REMECH Systemtechnik GmbH, Kamsdorf
10010
Capta Grundstücks-Verwaltungsgesellschaft mbH,
Grünwald
Gamesa Energie Deutschland GmbH, Oldenburg
100
Gamesa Wind GmbH, Aschaffenburg
100
10 Exemption pursuant to Section 264 (3) German Commercial Code.
11
Siemens AG is a shareholder with unlimited liability of this company.
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
104 Consolidated Financial Statements
Equity interest
September 30, 2017
in %
September 30, 2017
Siemens Campus Erlangen Objekt 7 GmbH & Co. KG,
Grünwald
1009
Siemens Campus Erlangen Objektmanagement GmbH,
Grünwald
1007
Siemens Real Estate GmbH & Co. KG, Grünwald
Siemens Real Estate Management GmbH, Grünwald
Siemens Spezial-Investmentaktiengesellschaft mit TGV,
Munich
Equity interest
in %
1009
1007
100
Siemens Campus Erlangen Verwaltungs-GmbH, Grünwald
Siemens Compressor Systems GmbH, Leipzig
1007
10010
Siemens Convergence Creators GmbH & Co. KG, Hamburg
1009
Siemens Convergence Creators Management GmbH,
Hamburg
Siemens Technology Accelerator GmbH, Munich
Siemens Technopark Mülheim GmbH & Co. KG, Grünwald
Siemens Technopark Mülheim Verwaltungs GmbH,
Grünwald
10010
1009
100
Exemption pursuant to Section 264b German Commercial Code.
Adwen Blades GmbH, Stade
9
7 Not consolidated due to immateriality.
Siemens Campus Erlangen Objekt 2 GmbH & Co. KG,
Grünwald
1009
HaCon Ingenieurgesellschaft mbH, Hanover
100
HSP Hochspannungsgeräte GmbH, Troisdorf
10010
Siemens Campus Erlangen Objekt 3 GmbH & Co. KG,
Grünwald
1009
ILLIT Grundstücksverwaltungs-Management GmbH,
Grünwald
59
85
Siemens Campus Erlangen Objekt 4 GmbH & Co. KG,
Grünwald
1009
IPGD Grundstücksverwaltungs-Gesellschaft mbH,
Grünwald
100
Siemens Campus Erlangen Objekt 5 GmbH & Co. KG,
Grünwald
1009
Jawa Power Holding GmbH, Erlangen
KompTime GmbH, Munich
10010
10010
Siemens Campus Erlangen Objekt 6 GmbH & Co. KG,
Grünwald
1009
1 Control due to a majority of voting rights.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to contractual arrangements or legal circumstances.
5 No significant influence due to contractual arrangements or legal circumstances.
6 Significant influence due to contractual arrangements or legal circumstances.
8 Not accounted for using the equity method due to immateriality.
10010
next47 Services GmbH, Munich
100
2,632
2,442
336
316
As of September 30, 2017 and 2016, guarantees to joint ventures
and associates amounted to €726 million and €1,500 million, re-
spectively. As of September 30, 2017 and 2016, guarantees to
joint ventures amounted to €488 million and €553 million, re-
spectively. As of September 30, 2017 and 2016, loans given to
joint ventures and associates amounted to €222 million and
€82 million, therein €218 million and €78 million related to joint
ventures, respectively. As of September 30, 2017 and 2016, the
Company had commitments to make capital contributions of
€76 million and €48 million to its joint ventures and associates,
therein €16 million and €39 million related to joint ventures, re-
spectively. For a loan raised by a joint venture, which is secured
by a Siemens guarantee, Siemens granted an additional collat-
eral. As of September 30, 2017 and 2016 the outstanding amount
totaled to €113 million and €116 million, respectively. As of Sep-
tember 30, 2017 and 2016 there were loan commitments to joint
ventures amounting to €147 million and €72 million, respectively.
Receivables
Liabilities
Sep 30,
Sep 30,
(in millions of €)
2017
2016
2017
2016
Joint ventures
277
333
126
236
Associates
43
114
266
343
320
447
392
579
Consolidated Financial Statements 101
174
RELATED INDIVIDUALS
218
538
63,173
61,065
41,485
16,976
16,769
17,934
17,776
18,108
7,511
34,546
17,576
79,644
18,579
49,809
8,324
Non-current assets consist of property, plant and equipment,
goodwill and other intangible assets.
NOTE 30 Related party transactions
JOINT VENTURES AND ASSOCIATES
Siemens has relationships with many joint ventures and associ-
ates in the ordinary course of business whereby Siemens buys
and sells a wide variety of products and services generally on
arm's length terms.
Sales of goods
and services and
other income
Purchases of goods
and services
and other expenses
Fiscal year
2016
(in millions of €)
2017
Fiscal year
2016
2017
Joint ventures
2,094
1,062
119
142
Associates
1,379
Siemens Finance & Leasing GmbH, Munich
In fiscal 2017 and 2016, members of the Managing Board received
cash compensation of €20.7 million and €20.2 million. The fair
value of stock-based compensation amounted to €13.2 million
and €8.7 million for 132,831 and 113,230 Stock Awards, respec-
tively, in fiscal 2017 and 2016. In fiscal 2017 and 2016, the Com-
pany granted contributions (including one-time special contribu-
tions) under the BSAV to members of the Managing Board
totaling €6.6 million and €4.6 million, respectively.
In fiscal 2017 and 2016, expense related to share-based payment
and to the Share Matching Program amounted to €19.0 million
and 8.3 million, respectively.
as well as the potential sale of locations.
Consolidated Financial Statements
103
NOTE 34 List of subsidiaries and
associated companies pursuant to
Section 313 para. 2 of the German
Commercial Code
September 30, 2017
Kyra 1 GmbH, Erlangen
Kyros 52 GmbH, Hanover
Kyros 53 GmbH, Munich
Equity interest
in %
10010
1007
1007
Kyros 54 GmbH, Munich
1007
Lincas Electro Vertriebsgesellschaft mbH, Grünwald
100
Equity interest
Mentor Graphics (Deutschland) GmbH, Munich
100
September 30, 2017
in %
Mentor Graphics Development (Deutschland) GmbH,
Villingen-Schwenningen
100
SUBSIDIARIES
Germany (129 companies)
AD 8MW GmbH & Co. KG, Bremerhaven
NEO New Oncology GmbH, Cologne
100
next47 GmbH, Munich
10010
In November 2017, Siemens announced its plans for capacity
adjustment measures at Power and Gas, SGRE and Process
Industries and Drives, which are expected to result in significant
severance charges and also include the closure, consolidation
Therefore in fiscal 2017 and 2016, compensation and benefits,
attributable to members of the Managing Board amounted to
€40.5 million and €33.5 million in total, respectively.
Subsequent events
WWW.SIEMENS.
Former members of the Managing Board and their surviving
dependents received emoluments within the meaning of Sec-
tion 314 para. 1 No. 6 b of the German Commercial Code totaling
€34.1 million and €52.3 million in fiscal 2017 and 2016, respec-
tively.
The defined benefit obligation (DBO) of all pension commit-
ments to former members of the Managing Board and their sur-
viving dependents as of September 30, 2017 and 2016 amounted
to €191.5 million and €216.3 million, respectively.
Compensation attributable to members of the Supervisory Board
comprises in fiscal 2017 and 2016 of a base compensation and
additional compensation for committee work and amounted
€5.2 million (including meeting fees), which is unchanged com-
pared to prior year.
Information regarding the remuneration of the members of the
Managing Board and Supervisory Board is disclosed on an indi-
vidual basis in the Compensation Report, which is part of the
combined management report.
In fiscal 2017 and 2016, no other major transactions took place
between the Company and the members of the Managing Board
and the Supervisory Board.
Some of our board members hold, or in the last year have held,
positions of significant responsibility with other entities. We have
relationships with almost all of these entities in the ordinary
course of our business whereby we buy and sell a wide variety of
products and services on arm's length terms.
NOTE 31
Principal accountant fees
and services
Fees related to professional services rendered by the Company's
principal accountant, EY, for fiscal 2017 and 2016 are:
Fiscal year
(in millions of €)
2017
2016
Audit services
52.6
45.9
Other attestation services
Tax services
3.7
3.2
0.2
0.4
56.5
49.5
In fiscal 2017 and 2016, 40% and 41%, respectively, of the total
fees related to Ernst & Young GmbH Wirtschaftsprüfungsgesell-
schaft, Germany.
Audit Services relate primarily to services provided by EY for au-
diting Siemens' Consolidated Financial Statements and for audit-
ing the statutory financial statements of Siemens AG and its sub-
sidiaries. Other attestation services include primarily audits of
financial statements in connection with M&A activities, comfort
letters and other attestation services required under regulatory
requirements, agreements or requested on a voluntary basis.
102 Consolidated Financial Statements
NOTE 32 Corporate Governance
The Managing Board and the Supervisory Board of Siemens Ak-
tiengesellschaft provided the declaration required by Section 161
of the German stock corporation law (AktG) as of October 1, 2017,
which is available on the Company's website at:
COM/GCG-CODE
NOTE 33
Consolidated Financial Statements
100
100
1 Control due to a majority of voting rights.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to contractual arrangements or legal circumstances.
5 No significant influence due to contractual arrangements or legal circumstances.
6 Significant influence due to contractual arrangements or legal circumstances.
7 Not consolidated due to immateriality.
8 Not accounted for using the equity method due to immateriality.
9
Exemption pursuant to Section 264b German Commercial Code.
10 Exemption pursuant to Section 264 (3) German Commercial Code.
Siemens AG is a shareholder with unlimited liability of this company.
11
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
110 Consolidated Financial Statements
Equity interest
September 30, 2017
in %
September 30, 2017
100
Siemens Healthcare Limited Liability Company,
Moscow/Russian Federation
100
100
100
000 Siemens Elektroprivod,
Siemens L.L.C., Muscat/Oman
51
St. Petersburg/Russian Federation
100
Gamesa Pakistan (Private) Limited, Karachi/Pakistan
1007
000 Siemens Gas Turbine Technologies,
Mentor Graphics Pakistan Development (Private) Limited,
Lahore/Pakistan
Leningrad Oblast/Russian Federation
100
100
000 Siemens Industry Software,
Siemens Healthcare (Private) Limited, Lahore/Pakistan
Siemens Pakistan Engineering Co. Ltd., Karachi/Pakistan
AXIT Sp. z o.o., Wroclaw/Poland
100
Moscow/Russian Federation
100
75
000 Siemens Transformers, Voronezh/Russian Federation
Siemens Finance LLC, Vladivostok/Russian Federation
Siemens Wind Power AS, Oslo/Norway
Aljaraque Solar, S.L., Madrid/Spain
in %
51
Convertidor Solar G.F. Tres, S. L.U, Madrid/Spain
100
Siemens Ltd., Riyadh/Saudi Arabia
51
Convertidor Solar G.F. Uno S. L. U., Madrid/Spain
100
VA TECH T&D Co. Ltd., Riyadh/Saudi Arabia
51
Convertidor Solar Trescientos Diecinueve, S.L.U.,
Siemens d.o.o. Beograd, Belgrade/Serbia
100
Madrid/Spain
100
Siemens Healthcare d.o.o. Beograd, Belgrade/Serbia
100
Convertidor Solar Trescientos Dieciocho, S.L.U.,
OEZ Slovakia, spol. s r.o., Bratislava/Slovakia
100
Siemens Healthcare Limited, Riyadh/Saudi Arabia
Equity interest
100
51
100
100
Convertidor Solar Ciento Veintisiete, S.L.U.,
Technologies of Rail Transport Limited Liability Company,
Moscow/Russian Federation
Madrid/Spain
100
1007
Convertidor Solar Doscientos Noventa y Nueve, S.L.U.,
Arabia Electric Ltd. (Equipment), Jeddah/Saudi Arabia
51
Madrid/Spain
100
Dresser-Rand Arabia LLC, Al Khobar/Saudi Arabia
501
Convertidor Solar Doscientos Noventa y Siete, S.L.U.,
ISCOSA Industries and Maintenance Ltd.,
Madrid/Spain
100
Riyadh/Saudi Arabia
Convertidor Solar G.F. Dos, S.L.U., Madrid/Spain
Madrid/Spain
100
100
100
Siemens Medical Solutions Diagnostics Holding | B.V.,
Siemens Postal, Parcel & Airport Logistics, Unipessoal Lda,
The Hague/Netherlands
100
Siemens Nederland N.V., The Hague/Netherlands
100
Siemens Wind Power B.V., The Hague/Netherlands
100
TASS International B.V., Rijswijk/Netherlands
100
TASS International Homologations B.V.,
Helmond/Netherlands
100
TASS International Mobility Center B.V.,
Helmond/Netherlands
100
888888
Lisbon/Portugal
100
Siemens Healthcare, Lda., Amadora/Portugal
Siemens S.A., Amadora/Portugal
100
100
The Hague/Netherlands
100
Siemens Sp. z o.o., Warsaw/Poland
100
Siemens Healthineers Holding III B.V.,
Siemens Wind Power Sp. z o.o., Warsaw/Poland
100
The Hague/Netherlands
100
Smardzewo Windfarm Sp. z o.o., Slawno/Poland
100
Siemens Industry Software B.V.,
Ujazd Sp. z o.o., Warsaw/Poland
100
's-Hertogenbosch/Netherlands
100
Siemens Gamesa Renewable Energy, S.A.,
Siemens International Holding B.V.,
Venda do Pinheiro/Portugal
The Hague/Netherlands
000 Siemens, Moscow/Russian Federation
100
402
100
100
Dresser-Rand (Nigeria) Limited, Lagos/Nigeria
100
Siemens Industry Software S.R.L., Brasov/Romania
100
Siemens Ltd., Lagos/Nigeria
100
Siemens S.R.L., Bucharest/Romania
100
Dresser-Rand AS, Kongsberg/Norway
100
SIMEA SIBIU S.R.L., Sibiu/Romania
100
Siemens AS, Oslo/Norway
100
000 Legion II, Moscow/Russian Federation
100
Siemens Healthcare AS, Oslo/Norway
Siemens Convergence Creators S.R.L., Brasov/Romania
Siemens Healthcare S.R.L., Bucharest/Romania
Siemens W.L.L., Doha/Qatar
100
100
Gamesa Energy Romania, S.R.L., Bucharest/Romania
100
Gamesa Wind Romania, S.R.L., Bucharest/Romania
100
GER Baneasa, S.R.L., Bucharest/Romania
100
GER Baraganu, S.R.L, Bucharest/Romania
100
TASS International Safety Center B.V.,
GER Independenta, S.R.L., Bucharest/Romania
Mentor Graphics Romania SRL, Bucharest/Romania
100
100
Helmond/Netherlands
100
SIEMENS (AUSTRIA) PROIECT SPITAL COLTEA SRL,
TASS International Software and Services B.V.,
Bucharest/Romania
100
Rijswijk/Netherlands
TASS International Software B.V., Rijswijk/Netherlands
100
100
60
Guascor Power, S.A., Zumaia/Spain
100
Guascor Promotora Solar, S.A., Vitoria-Gasteiz/Spain
100
Siemens Gamesa Renewable Finance, S.A., Zamudio/Spain
SIEMENS HEALTHCARE, S. L. U., Getafe/Spain
100
100
Guascor Solar Corporation, S.A., Vitoria-Gasteiz/Spain
Guascor Solar S.A., Vitoria-Gasteiz/Spain
100
Siemens Holding S.L., Madrid/Spain
100
100
Guascor Wind, S. L., Vitoria-Gasteiz/Spain
1007
International Wind Farm Development IV, S.L.,
Zamudio/Spain
100
International Wind Farm Development V, S.L.,
Zamudio/Spain
100
Siemens Industry Software S.L., Barcelona/Spain
SIEMENS POSTAL, PARCEL & AIRPORT LOGISTICS,
S.L. Sociedad Unipersonal, Madrid/Spain
Siemens Rail Automation S.A.U., Madrid/Spain
Siemens Renting S.A., Madrid/Spain
Siemens S.A., Madrid/Spain
100
100
Siemens Gamesa Renewable Energy Wind Farms, S.A.,
Zamudio/Spain
Vitoria-Gasteiz/Spain
September 30, 2017
Guascor Borja AIE, Zumaia/Spain
in %
September 30, 2017
in %
707,12
Guascor Explotaciones Energéticas, S.A.,
Vitoria-Gasteiz/Spain
Siemens Gamesa Renewable Energy Invest, S.A.,
Zamudio/Spain
100
100
Guascor Ingenieria S.A., Vitoria-Gasteiz/Spain
100
Siemens Gamesa Renewable Energy Latam, S.L.,
Sarriguren/Spain
100
Guascor Isolux AIE, Vitoria-Gasteiz/Spain
607,12
Siemens Gamesa Renewable Energy S.A., Zamudio/Spain
59
Guascor Power Investigacion y Desarollo, S.A.,
100
Equity interest
100
100
Microenergía 21, S.A., Zumaia/Spain
1007
Parque Eolico Dos Picos, S. L. U., Zamudio/Spain
100
Sistemas Energéticos Arinaga, S.A. Unipersonal,
Las Palmas de Gran Canaria/Spain
100
Samtech Iberica Engineering & Software Services S.L.,
Barcelona/Spain
100
Sistemas Energéticos Balazote, S.A. Unipersonal,
Zamudio/Spain
100
Siemens Gamesa Renewable Energy 9REN, S.L.,
Sistemas Energéticos Barandon, S.A., Valladolid/Spain
100
Madrid/Spain
100
Sistemas Energéticos Boyal, S.L., Zaragoza/Spain
60
Siemens Gamesa Renewable Energy Apac, S.L.,
Sarriguren/Spain
100
100
Sistemas Energéticos Argañoso, S. L. Unipersonal,
Zamudio/Spain
Mentor Graphics (Espana) SL, Madrid/Spain
100
International Wind Farm Development VI, S.L.,
Zamudio/Spain
Siemens Wind Power, S.L., Tres Cantos/Spain
100
100
International Wind Farm Development VII, S.L.,
Zamudio/Spain
Sistema Eléctrico de Conexión Montes Orientales, S.L.,
Granada/Spain
83
100
International Wind Farm Developments II, S.L.,
Sistemas Energéticos Alcohujate, S.A. Unipersonal,
Toledo/Spain
100
Zamudio/Spain
100
International Wind Farm Developments IX, S.L.,
Sistemas Energéticos Alto da Croa, S.A. Unipersonal,
Santiago de Compostela/Spain
100
Zamudio/Spain
100
100
SAT Systémy automatizacnej techniky spol. s.r.o.,
Bratislava/Slovakia
Equity interest
Consolidated Financial Statements
Crabtree South Africa Pty. Limited, Midrand/South Africa
1007
San Cristóbal de La Laguna/Spain
100
Dresser-Rand Property (Pty) Ltd., Midrand/South Africa
1007
Dresser-Rand Service Centre (Pty) Ltd.,
Midrand/South Africa
100
Convertidor Solar Trescientos Veinte, S.L.U., Madrid/Spain
Convertidor Solar Trescientos, S. L. U., Madrid/Spain
Convertidor Solar Uno, S. L. U., Madrid/Spain
100
100
100
Dresser-Rand Southern Africa (Pty) Ltd.,
Midrand/South Africa
100
Gamesa Wind South Africa (Proprietary) Limited,
Cape Town/South Africa
100
Convertidor Solar Trescientos Setenta, S.L.U.,
Linacre Investments (Pty) Ltd., Kenilworth/South Africa
100
100
60
Convertidor Solar Trescientos Diecisiete, S.L.U.,
Madrid/Spain
100
Siemens Convergence Creators, s. r. o.,
Bratislava/Slovakia
100
Convertidor Solar Trescientos Sesenta y Nueve, S.L.U.,
San Cristóbal de La Laguna/Spain
100
Siemens Healthcare s.r.o., Bratislava/Slovakia
100
Siemens s.r.o., Bratislava/Slovakia
100
Convertidor Solar Trescientos Sesenta y Ocho, S.L.U.,
San Cristóbal de La Laguna/Spain
100
SIPRIN s.r.o., Bratislava/Slovakia
100
Siemens d.o.o., Ljubljana/Slovenia
100
Convertidor Solar Trescientos Sesenta y Siete, S.L.U.,
San Cristóbal de La Laguna/Spain
Siemens Healthcare d.o.o., Ljubljana/Slovenia
111
03
70
Gerr Grupo Energético XXI, S.A. Unipersonal,
Barcelona/Spain
Adwen Offshore, S.L., Zamudio/Spain
100
Grupo Guascor, S.L., Vitoria-Gasteiz/Spain
100
100
1 Control due to a majority of voting rights.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to contractual arrangements or legal circumstances.
5 No significant influence due to contractual arrangements or legal circumstances.
6 Significant influence due to contractual arrangements or legal circumstances.
7 Not consolidated due to immateriality.
8 Not accounted for using the equity method due to immateriality.
9
Exemption pursuant to Section 264b German Commercial Code.
10 Exemption pursuant to Section 264 (3) German Commercial Code.
11
Siemens AG is a shareholder with unlimited liability of this company.
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
03
Desimpacto de Purines Altorricón S.A., Altorricón/Spain
Desimpacto de Purines Turégano, S.A., Turégano/Spain
Dresser-Rand Holdings Spain S.L.U., Vitoria-Gasteiz/Spain
Empresa de Reciclajes de Residuos Ambientales, S.A.,
Vitoria-Gasteiz/Spain
Siemens Wind Power Employee Share Ownership Trust,
Midrand/South Africa
Gamesa Energy Transmission, S.A. Unipersonal,
Zamudio/Spain
100
100
677
Siemens Employee Share Ownership Trust,
Johannesburg/South Africa
03
Estructuras Metalicas Singulares, S.A. Unipersonal,
Tajonar/Spain
100
Siemens Healthcare Proprietary Limited, Halfway
Fábrica Electrotécnica Josa, S.A., Barcelona/Spain
100
House/South Africa
100
Gamesa Electric, S.A. Unipersonal, Zamudio/Spain
100
Siemens Proprietary Limited, Midrand/South Africa
70
SIEMENS WIND POWER (PTY) LTD, Midrand/South Africa
100
100
Siemens Industry Software Sp. z o.o., Warsaw/Poland
Siemens Healthcare Nederland B.V.,
100
Camstar Systems Software (Shanghai) Company Limited,
Shanghai/China
100
Siemens Uruguay S.A., Montevideo/Uruguay
100
Siemens S.A., Montevideo/Uruguay
100
Beijing Siemens Cerberus Electronics Ltd., Beijing/China
100
Gamesa Uruguay S.R.L., Montevideo/Uruguay
100
Siemens Healthcare Ltd., Dhaka/Bangladesh
1007
Engines Rental, S.A., Montevideo/Uruguay
100
Siemens Bangladesh Ltd., Dhaka/Bangladesh
100
100
SIEMENS RAIL AUTOMATION PTY. LTD., Bayswater/Australia
Winergy Drive Systems Corporation,
Wilmington, DE/United States
100
in %
Dresser-Rand de Venezuela, S.A.,
100
Gamesa Blade (Tianjin) Co., Ltd., Tianjin/China
1007
Caracas/Venezuela, Bolivarian Republic of
100
Gamesa (Beijing) Wind Energy System Development Co,
Ltd, Beijing/China
Siemens Healthcare S.A.,
1007
Caracas/Venezuela, Bolivarian Republic of
100
Shanghai/China
Guascor Venezuela S.A.,
Dresser-Rand Engineered Equipment (Shanghai) Ltd.,
100
Caracas/Venezuela, Bolivarian Republic of
100
DPC (Tianjin) Co., Ltd., Tianjin/China
Gamesa Eólica VE, C.A.,
100
CD-adapco Software Technology (Shanghai) Co.,Ltd.,
Shanghai/China
Maracaibo/Venezuela, Bolivarian Republic of
100
September 30, 2017
September 30, 2017
100
Wilmington, DE/United States
100
Baltimore, MD/United States
Siemens Demag Delaval Turbomachinery, Inc.,
Wheelabrator Air Pollution Control Inc.,
100
Wilmington, DE/United States
100
TASS International Inc., Livonia, MI/United States
Siemens Credit Warehouse, Inc.,
100
100
SMI Holding LLC, Wilmington, DE/United States
Synchrony, Inc., Salem, VA/United States
100
Siemens Corporation, Wilmington, DE/United States
100
Wilmington, DE/United States
100
Whitehall Wind, LLC, Missoula, MT/United States
in %
100
100
Equity interest
Equity interest
117
Consolidated Financial Statements
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
Siemens AG is a shareholder with unlimited liability of this company.
11
10 Exemption pursuant to Section 264 (3) German Commercial Code.
Exemption pursuant to Section 264b German Commercial Code.
9
8 Not accounted for using the equity method due to immateriality.
6 Significant influence due to contractual arrangements or legal circumstances.
7 Not consolidated due to immateriality.
5 No significant influence due to contractual arrangements or legal circumstances.
4 No control due to contractual arrangements or legal circumstances.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
100
Wind Portfolio Memberco, LLC, Dover, DE/United States
Siemens Electrical, LLC, Wilmington, DE/United States
100
Siemens Rail Automation, C.A.,
100
100
MRX Rail Services Pty Ltd, Bayswater/Australia
85
100
100
Siemens Electrical Apparatus Ltd., Suzhou, Suzhou/China
Siemens Electrical Drives (Shanghai) Ltd., Shanghai/China
Siemens Electrical Drives Ltd., Tianjin/China
100
J.R.B. Engineering Pty Ltd, Bayswater/Australia
100
Gamesa Australia Pty. Ltd., Melbourne/Australia
100
Exemplar Health (SCUH) Trust 4, Bayswater/Australia
60
Siemens Eco-City Innovation Technologies (Tianjin) Co.,
Ltd., Tianjin/China
100
Exemplar Health (SCUH) Trust 3, Bayswater/Australia
100
Bayswater/Australia
75
Siemens Gamesa Renewable Pty Ltd, Bayswater/Australia
Siemens Healthcare Pty. Ltd., Melbourne/Australia
Siemens Ltd., Bayswater/Australia
15
100
100
118 Consolidated Financial Statements
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
Siemens AG is a shareholder with unlimited liability of this company.
11
10 Exemption pursuant to Section 264 (3) German Commercial Code.
9 Exemption pursuant to Section 264b German Commercial Code.
8 Not accounted for using the equity method due to immateriality.
7 Not consolidated due to immateriality.
6 Significant influence due to contractual arrangements or legal circumstances.
5 No significant influence due to contractual arrangements or legal circumstances.
4 No control due to contractual arrangements or legal circumstances.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
100
100
100
Siemens Finance and Leasing Ltd., Beijing/China
Siemens Financial Services Ltd., Beijing/China
100
Siemens Factory Automation Engineering Ltd.,
Beijing/China
Gamesa Wind (Tianjin) Co., Ltd., Tianjin/China
Shanghai, Shanghai/China
Siemens Circuit Protection Systems Ltd.,
Mentor Graphics Technology (Shenzhen) Co., Ltd.,
Shenzhen/China
100
CD-ADAPCO AUSTRALIA PTY LTD, Melbourne/Australia
100
Australia Hospital Holding Pty Limited, Bayswater/Australia
100
Mentor Graphics (Shanghai) Electronic Technology Co.,
Ltd., Shanghai/China
Asia, Australia (218 companies)
100
100
Inner Mongolia Gamesa Wind Co., Ltd., Wulanchabu/China
Jilin Gamesa Wind Co., Ltd., Da'an/China
100
Dade Behring Hong Kong Holdings Corporation,
Tortola/Virgin Islands, British
100
IBS Industrial Business Software (Shanghai), Ltd.,
Shanghai/China
100
Siemens S.A., Caracas/Venezuela, Bolivarian Republic of
100
Caracas/Venezuela, Bolivarian Republic of
100
Exemplar Health (SCUH) Holdings 4 Pty Limited,
Exemplar Health (NBH) 2 Pty Limited, Bayswater/Australia
MWB (Shanghai) Co Ltd., Shanghai/China
100
Bayswater/Australia
100
Siemens Business Information Consulting Co., Ltd,
Beijing/China
Exemplar Health (SCUH) Holdings 3 Pty Limited,
1007
70
70
Siemens Building Technologies (Tianjin) Ltd.,
Tianjin/China
1007
Exemplar Health (SCUH) 3 Pty Limited, Bayswater/Australia
Exemplar Health (SCUH) 4 Pty Limited, Bayswater/Australia
100
Exemplar Health (NBH) Trust 2, Bayswater/Australia
100
Shuangpai Majiang Wuxingling Wind Power Co., Ltd,
Yongzhou/China
100
Bayswater/Australia
Exemplar Health (NBH) Holdings 2 Pty Limited,
65
1007
Siemens Public, Inc., Wilmington, DE/United States
Siemens USA Holdings, Inc., Wilmington, DE/United States
Siemens Convergence Creators Corp.,
100
7 Not consolidated due to immateriality.
6 Significant influence due to contractual arrangements or legal circumstances.
116 Consolidated Financial Statements
5 No significant influence due to contractual arrangements or legal circumstances.
4 No control due to contractual arrangements or legal circumstances.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
100
100
D-R International Sales Inc., Wilmington, DE/United States
D-R Steam LLC, Wilmington, DE/United States
1007
100
Salem, OR/United States
100
80
Dedicated2Imaging LLC, Wilmington, DE/United States
Diversified Energy Transmissions, LLC,
100
1007
8 Not accounted for using the equity method due to immateriality.
100
9 Exemption pursuant to Section 264b German Commercial Code.
Exemption pursuant to Section 264 (3) German Commercial Code.
Siemens Financial Services, Inc.,
100
Siemens Energy, Inc., Wilmington, DE/United States
100
in %
September 30, 2017
in %
100
100
Dresser-Rand Group Inc., Wilmington, DE/United States
Dresser-Rand Global Services, Inc.,
Dresser-Rand Company, Bath, NY/United States
September 30, 2017
Wilmington, DE/United States
Equity interest
Equity interest
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
Siemens AG is a shareholder with unlimited liability of this company.
11
10
Dresser-Rand Holding (Luxembourg) LLC,
502
100
Siemens Finance B.V., The Hague/Netherlands
100
Gamesa Energia Polska Sp. z o.o., Warsaw/Poland
Lichnowy Windfarm Sp. z o.o., Warsaw/Poland
100
100
Siemens Financieringsmaatschappij N.V.,
Mentor Graphics Polska Sp. z o.o., Poznan/Poland
100
The Hague/Netherlands
100
Osiek Sp. z o.o., Warsaw/Poland
100
Siemens Gas Turbine Technologies Holding B.V.,
Siemens Finance Sp. z o.o., Warsaw/Poland
100
The Hague/Netherlands
65
65
Siemens Healthcare Sp. z o.o., Warsaw/Poland
100
CD-adapco Battery Design LLC, Dover, DE/United States
Cedar Cap Wind, LLC, Dover, DE/United States
Siemens D-R Holding II B.V., The Hague/Netherlands
September 30, 2017
Central Eólica de México S.A. de C.V., Mexico City/Mexico
Dresser-Rand de Mexico S.A. de C.V., Mexico City/Mexico
Gesa Energia, S. de R.L. de C.V., Mexico City/Mexico
Gesa Eólica Mexico, S.A. de C.V., Mexico City/Mexico
Gesa Oax | Sociedad Anomima de Capital Variable,
Mexico City/Mexico
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to contractual arrangements or legal circumstances.
5 No significant influence due to contractual arrangements or legal circumstances.
6 Significant influence due to contractual arrangements or legal circumstances.
7 Not consolidated due to immateriality.
8 Not accounted for using the equity method due to immateriality.
9
Exemption pursuant to Section 264b German Commercial Code.
10 Exemption pursuant to Section 264 (3) German Commercial Code.
11
Siemens AG is a shareholder with unlimited liability of this company.
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
Consolidated Financial Statements
109
Equity interest
Equity interest
September 30, 2017
in %
in %
Wilmington, DE/United States
100
888
PETNET Indiana LLC, Indianapolis, IN/United States
Siemens Molecular Imaging, Inc.,
51
P.E.T.NET Houston, LLC, Austin, TX/United States
100
Wilmington, DE/United States
100
Omnetric Corp., Wilmington, DE/United States
Siemens Medical Solutions USA, Inc.,
100
100
Siemens Industry, Inc., Wilmington, DE/United States
Nimbus Technologies, LLC, Bingham Farms,
MI/United States
100
Wilmington, DE/United States
100
NEM USA Corp., Wilmington, DE/United States
Siemens Healthcare Laboratory, LLC,
97
501
Navitas Energy Inc, Minneapolis, MN/United States
Wilmington, DE/United States
PETNET Solutions Cleveland, LLC,
Wilmington, DE/United States
100
Wilmington, DE/United States
Siemens Capital Company LLC,
Siemens Product Lifecycle Management Software Inc.,
100
Pocahontas Wind, LLC, Dover, DE/United States
100
Wilmington, DE/United States
100
Pocahontas Prairie Wind, LLC, Wilmington, DE/United States
Siemens Power Generation Service Company, Ltd.,
100
PETNET Solutions, Inc., Knoxville, TN/United States
100
Wilmington, DE/United States
63
Wilmington, DE/United States
Siemens Postal, Parcel & Airport Logistics LLC,
100
100
Los Angeles, CA/United States
100
Siemens Gamesa Renewable Energy USA, INC,
100
Wilmington, DE/United States
100
Wilmington, DE/United States
Dresser-Rand International Inc.,
Siemens Gamesa Renewable Energy PA, LLC,
100
Wilmington, DE/United States
100
Wilmington, DE/United States
Dresser-Rand International Holdings, LLC,
Siemens Gamesa Renewable Energy Inc.,
100
Siemens Fossil Services, Inc., Wilmington, DE/United States
100
Siemens Financial, Inc., Wilmington, DE/United States
100
Wilmington, DE/United States
Dresser-Rand LLC, Wilmington, DE/United States
100
Dover, DE/United States
100
Wilmington, DE/United States
Siemens Healthcare Diagnostics Inc.,
Mentor Graphics Global Holdings, LLC,
100
Wilmington, DE/United States
100
Wilsonville, OR/United States
Siemens Government Technologies, Inc.,
Mentor Graphics Corporation,
100
100
100
Siemens Generation Services Company,
100
eMeter Corporation, Wilmington, DE/United States
Mannesmann Corporation, New York, NY/United States
100
Dover, DE/United States
100
Siemens Gamesa Renewable Energy Wind, LLC,
EcoHarmony West Wind, LLC, Minneapolis, MN/United
States
Wilmington, DE/United States
D-R International Holdings (Netherlands) B.V.,
Sistemas Energéticos Cabanelas, S.A. Unipersonal,
Santiago de Compostela/Spain
Siemens Gamesa Renewable Energy Eolica, S.L.,
Siemens Healthcare Diagnostics Manufacturing Limited,
Grand Cayman/Cayman Islands
100
Gesa Oax III Sociedad Anomima de Capital Variable,
Mexico City/Mexico
1007
Gamesa Chile SpA, Santiago de Chile/Chile
100
Nimbic Chile S.p.A., Las Condes/Chile
100
Gesacisa Desarolladora, S.A. de C.V., Mexico City/Mexico
Gesan I S.A.P.I de C.V., Mexico City/Mexico
100
100
Siemens Healthcare Equipos Médicos Sociedad por
Grupo Siemens S.A. de C.V., Mexico City/Mexico
100
Acciones, Santiago de Chile/Chile
100
Siemens S.A., Santiago de Chile/Chile
100
Indústria de Trabajos Eléctricos S.A. de C.V.,
Ciudad Juárez/Mexico
1007
100
Gesa Oax II Sociedad de Responsabilidad Limitada de
Capital Variable, Mexico City/Mexico
Ontario/Canada
5 No significant influence due to contractual arrangements or legal circumstances.
6 Significant influence due to contractual arrangements or legal circumstances.
7 Not consolidated due to immateriality.
8 Not accounted for using the equity method due to immateriality.
9
Exemption pursuant to Section 264b German Commercial Code.
10 Exemption pursuant to Section 264 (3) German Commercial Code.
11
Siemens AG is a shareholder with unlimited liability of this company.
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
Consolidated Financial Statements
115
Equity interest
Equity interest
September 30, 2017
in %
September 30, 2017
in %
Wheelabrator Air Pollution Control (Canada) Inc.,
100
4 No control due to contractual arrangements or legal circumstances.
Siemens Wind Power SpA, Santiago de Chile/Chile
Dresser-Rand Colombia S.A.S., Bogotá/Colombia
Santo Domingo/Dominican Republic
100
Siemens Inmobiliaria S.A. de C.V., Mexico City/Mexico
100
Parques Eólicos del Caribe, S.A.,
Santo Domingo/Dominican Republic
57
Siemens Postal, Parcel & Airport Logistics S. de R.L. de C.V.,
Mexico City/Mexico
1007
Siemens, S.R.L., Santo Domingo/Dominican Republic
100
Siemens Servicios S.A. de C.V., Mexico City/Mexico
100
Sociedad Energética Del Caribe, S.R.L.,
Siemens, S.A. de C.V., Mexico City/Mexico
100
Higüey/Dominican Republic
100
Gamesa Eólica Nicaragua S.A., Managua/Nicaragua
100
100
Mexico City/Mexico
Siemens Industry Software, S.A. de C.V.,
100
Servicios Eólicos Globales S. de R.L. de C.V.,
Mexico City/Mexico
100
Siemens Healthcare S.A.S., Tenjo/Colombia
100
Siemens S.A., Tenjo/Colombia
100
Siemens Healthcare Diagnostics, S. de R.L. de C.V.,
Mexico City/Mexico
100
Gamesa Eólica Costa Rica, S.R.L., San Rafael/Costa Rica
100
Siemens Healthcare Servicios S. de R.L. de C.V.,
Siemens Healthcare Diagnostics S.A., San José/Costa Rica
100
Mexico City/Mexico
1 Control due to a majority of voting rights.
100
Siemens S.A., San José/Costa Rica
100
Gamesa Dominicana, S.A.S.,
100
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
1 Control due to a majority of voting rights.
Siemens Rail Systems Project Limited,
Siemens Eletroeletronica Limitada, Manaus/Brazil
100
Frimley, Surrey/United Kingdom
100
Siemens Transmission & Distribution Limited,
Siemens Gamesa Energia Renovável Ltda., Camaçari/Brazil
Siemens Healthcare Diagnósticos Ltda., São Paulo/Brazil
100
100
Frimley, Surrey/United Kingdom
100
The Preactor Group Limited,
Siemens Industry Software Ltda., São Caetano do Sul/Brazil
Siemens Ltda., São Paulo/Brazil
100
100
Frimley, Surrey/United Kingdom
100
VA TECH (UK) Ltd., Frimley, Surrey/United Kingdom
100
100
Siemens Wind Power Energia Eólica Ltda., São Paulo/Brazil
10367079 CANADA INC., Oakville/Canada
OMNETRIC Group Tecnologia e Servicos de Consultoria
Ltda., Belo Horizonte/Brazil
Frimley, Surrey/United Kingdom
100
Siemens Protection Devices Limited,
Industrial Turbine Brasil Geracao de Energia Ltda.,
São Luís/Brazil
100
Frimley, Surrey/United Kingdom
100
Siemens Rail Automation Holdings Limited,
Iriel Indústria e Comercio de Sistemas Eléctricos Ltda.,
Canoas/Brazil
100
Frimley, Surrey/United Kingdom
100
Jaguarí Energética, S.A., Jaguari/Brazil
89
Siemens Rail Automation Limited,
Frimley, Surrey/United Kingdom
100
MINUANO PROMOÇÕES E PARTICIPAÇÕES EÓLICAS LTDA.,
Belém/Brazil
1007
Siemens Rail Systems Project Holdings Limited,
100
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
100
VA Tech Reyrolle Distribution Ltd.,
100
Siemens Healthcare S.A., Buenos Aires/Argentina
100
Siemens Postal, Parcel & Airport Logistics Ltd.,
Oakville/Canada
100
Siemens IT Services S.A., Buenos Aires/Argentina
100
Siemens Transformers Canada Inc., Trois-Rivières,
Siemens S.A., Buenos Aires/Argentina
100
Québec/Canada
100
VA TECH International Argentina SA,
Siemens Wind Power Limited, Oakville/Canada
100
Buenos Aires/Argentina
100
Trench Limited, Saint John/Canada
100
Guascor Argentina, S.A., Buenos Aires/Argentina
100
100
100
Dresser-Rand Canada, ULC, Vancouver/Canada
10012
Frimley, Surrey/United Kingdom
100
Gamesa Canada ULC, Halifax/Canada
10012
VA TECH T&D UK Ltd.,
Mentor Graphics (Canada) Limited, Kanata/Canada
100
Frimley, Surrey/United Kingdom
100
Siemens Canada Limited, Oakville/Canada
100
Siemens Financial Ltd., Oakville/Canada
100
Americas (165 companies)
Siemens Healthcare Limited, Oakville/Canada
100
Artadi S.A., Buenos Aires/Argentina
Siemens Industry Software Ltd., Oakville/Canada
Frimley, Surrey/United Kingdom
Siemens S.A., Quito/Ecuador
Siemens Healthcare Diagnostics Panama, S.A.,
100
Mentor Graphics (Israel) Limited, Herzilya Pituah/Israel
100
D-R Luxembourg Partners 1 SCS, Luxembourg/Luxembourg
100
Mentor Graphics Development Services (Israel) Ltd.,
Rehovot/Israel
Dresser-Rand Holding (Delaware) LLC, SARL,
100
Luxembourg/Luxembourg
100
Siemens Concentrated Solar Power Ltd., Rosh HaAyin/Israel
100
TFM International S.A. i.L., Luxembourg/Luxembourg
100
Siemens HealthCare Ltd., Rosh HaAyin/Israel
100
Siemens Industry Software Ltd., Airport City/Israel
100
Siemens Gamesa Renewable Energy, SARL,
Nouakchott/Mauritania
Luxembourg/Luxembourg
100
100
D-R Luxembourg International SARL,
Siemens Electrical & Electronic Services K.S.C.C.,
Kuwait City/Kuwait
492
Siemens Healthcare Medical Solutions Limited,
Swords, County Dublin/Ireland
D-R Luxembourg Holding 1, SARL, Luxembourg/Luxembourg
100
100
D-R Luxembourg Holding 2, SARL,
Siemens Limited, Dublin/Ireland
100
Luxembourg/Luxembourg
100
Mentor Graphics International Unlimited,
D-R Luxembourg Holding 3, SARL,
Douglas/Isle of Man
10012
Luxembourg/Luxembourg
100
9REN Israel Ltd., Tel Aviv/Israel
100
Gamesa Israel, Ltd, Tel Aviv/Israel
100
Siemens Israel Ltd., Rosh HaAyin/Israel
Siemens Gamesa Renewable Energy, Ltd,
100
Parco Eolico Banzy S.r.I., Rome/Italy
100
Siemens Plant Operations Tahaddart SARL, Tangier/Morocco
Siemens S.A., Casablanca/Morocco
100
100
Parco Eolico Manca Vennarda S.r.I., Rome/Italy
100
Siemens Wind Energy, SARL, Casablanca/Morocco
100
Samtech Italia S.r.I., Milan/Italy
100
Siemens Wind Power Blades, SARL AU, Tangier/Morocco
100
Siemens Gamesa Renewable Energy Italy, S.P.A., Rome/Italy
100
Castor III B.V., Amsterdam/Netherlands
100
Siemens Gamesa Renewable Energy Wind S.R.L., Rome/Italy
Mentor Graphics Torino S.R.L., Turin/Italy
100
100
Mentor Graphics Morocco SARL, Sala Al Jadida/Morocco
Siemens Healthcare SARL, Casablanca/Morocco
Siemens Israel Projects Ltd., Rosh HaAyin/Israel
1007
Cybercity/Mauritius
100
Siemens Product Lifecycle Management Software 2 (IL)
Siemens d.o.o., Podgorica/Montenegro
100
Ltd., Airport City/Israel
100
Gamesa Morocco, SARL, Tangier/Morocco
100
UGS Israeli Holdings (Israel) Ltd., Airport City/Israel
100
Guascor Maroc, S.A.R.L., Agadir/Morocco
1007
9REN Services Italia S.r.I., Milan/Italy
100
Dresser-Rand Italia S.r.I., Tribogna/Italy
100
100
100
Dublin/Ireland
in %
Dresser-Rand Trinidad & Tobago Limited,
Guatemala/Guatemala
100
Couva/Trinidad and Tobago
100
Siemens S.A., Guatemala/Guatemala
100
Advanced Airfoil Components LLC,
GESA Eólica Honduras, S.A., Tegucigalpa/Honduras
Siemens S.A., Tegucigalpa/Honduras
100
Wilmington, DE/United States
51
100
100
100
Siemens D-R Holding B.V., The Hague/Netherlands
100
The Hague/Netherlands
Siemens Gamesa Renewable Energy Limited,
Nairobi/Kenya
SIEMENS HEALTHCARE DIAGNOSTICS GUATEMALA, S.A.,
Siemens Diagnostics Holding II B.V.,
100
1007
Siemens-Healthcare Cia. Ltda., Quito/Ecuador
100
Panama City/Panama
100
Siemens Healthcare, Sociedad Anonima,
Siemens S.A., Panama City/Panama
100
Antiguo Cuscatlán/El Salvador
100
Siemens Healthcare S.A.C., Surquillo/Peru
100
Siemens S.A., Antiguo Cuscatlán/El Salvador
100
Siemens S.A.C., Lima/Peru
100
SIEMENS GAMESA RENEWABLE ENERGY INSTALLATION &
Siemens Wind Power Sociedad Anonima Cerrada, Lima/Peru
100
MAINTENANCE COMPAÑÍA LIMITADA, Guatemala/Guatemala
Gamesa Puerto Rico, CRL, San Juan/Puerto Rico
Siemens Gamesa Renewable Energy Limited,
100
100
100
Siemens Renting s.r.l. in Liquidazione, Milan/Italy
100
Dresser-Rand International B.V., Spijkenisse/Netherlands
100
Siemens Postal, Parcel & Airport Logistics S.r.I., Milan/Italy
100
Dresser-Rand B.V., Spijkenisse/Netherlands
100
Siemens Industry Software S.r.I., Milan/Italy
100
Spijkenisse/Netherlands
100
Siemens Healthcare S.r.I., Milan/Italy
Equity interest
Equity interest
September 30, 2017
in %
September 30, 2017
Dresser-Rand Services B.V., Spijkenisse/Netherlands
Siemens TOO, Almaty/Kazakhstan
100
100
100
100
100
Pollux III B.V., Amsterdam/Netherlands
100
Almaty/Kazakhstan
Omnetric B.V., The Hague/Netherlands
Siemens Healthcare Limited Liability Partnership,
NEM Energy B.V., Zoeterwoude/Netherlands
100
Trench Italia S.r.I., Savona/Italy
Eindhoven/Netherlands
100
Siemens Wind Power S.r.I., Milan/Italy
Mentor Graphics (Netherlands) B.V.,
100
Siemens Transformers S. p.A., Trento/Italy
100
Flowmaster Group NV, Eindhoven/Netherlands
Siemens S.p.A., Milan/Italy
1007
Guascor Wind do Brasil, Ltda., São Paulo/Brazil
Siemens Postal, Parcel & Airport Logistics Limited,
Siemens Healthcare AG, Zurich/Switzerland
100
Sistemas Energéticos Ladera Negra, S.A. Unipersonal,
Las Palmas de Gran Canaria/Spain
Siemens Healthcare Diagnostics GmbH, Zurich/Switzerland
100
100
Siemens Industry Software AG, Zurich/Switzerland
100
Sistemas Energéticos Loma del Reposo, S.L. Unipersonal,
Zamudio/Spain
Siemens Postal, Parcel & Airport Logistics AG,
100
Zurich/Switzerland
100
Sistemas Energéticos Loma del Viento, S.A. Unipersonal,
Sevilla/Spain
Siemens Power Holding AG, Zug/Switzerland
100
100
Siemens Schweiz AG, Zurich/Switzerland
100
90
Sistemas Energéticos Mansilla, S.L.,
Villanueva de Gállego/Spain
100
100
Sistemas Energeticos Islas Canarias, S.L.U.,
Siemens Wind Power AB, Upplands Väsby/Sweden
100
Las Palmas de Gran Canaria/Spain
100
Dresser Rand Sales Company GmbH, Zurich/Switzerland
100
Sistemas Energéticos Jaralón, S.A. Unipersonal,
Huba Control AG, Würenlos/Switzerland
100
Zamudio/Spain
100
Komykrieng AG, Zurich/Switzerland
100
Sistemas Energéticos La Cámara, S.L., Sevilla/Spain
100
Sistemas Energéticos La Plana, S.A.,
Mentor Graphics (Schweiz) AG, Kilchberg/Switzerland
Polarion AG, Zurich/Switzerland
100
Siemens Industry Software AB, Kista/Sweden
systransis AG, Risch/Switzerland
Villarcayo de Merindad de Castilla la Vieja/Spain
100
Zamudio/Spain
100
Sistemas Energéticos Sierra del Carazo, S.L.U.,
Zamudio/Spain
100
Siemens Sanayi ve Ticaret Anonim Sirketi, Istanbul/Turkey
Siemens Wind Power Rüzgar Enerjisi Anonim Sirketi,
Kartal/Istanbul/Turkey
100
100
1 Control due to a majority of voting rights.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to contractual arrangements or legal circumstances.
5 No significant influence due to contractual arrangements or legal circumstances.
6 Significant influence due to contractual arrangements or legal circumstances.
7 Not consolidated due to immateriality.
8 Not accounted for using the equity method due to immateriality.
9 Exemption pursuant to Section 264b German Commercial Code.
10
Exemption pursuant to Section 264 (3) German Commercial Code.
Siemens Healthcare Saglik Anonim Sirketi, Istanbul/Turkey
100
Sistemas Energéticos Sierra de Valdefuentes, S.L.U.,
Company, Istanbul/Turkey
78
28
Sistemas Energéticos Monte Genaro, S.L.U.,
Siemens Tanzania Ltd., Dar es Salaam/Tanzania,
United Republic of
100
Zamudio/Spain
100
Mentor Graphics Tunisia SARL, Tunis/Tunisia
100
Sistemas Energéticos Serra de Lourenza, S.A. Unipersonal,
Zamudio/Spain
Siemens S.A., Tunis/Tunisia
100
100
Siemens Finansal Kiralama A.S., Istanbul/Turkey
100
Sistemas Energéticos Sierra de Las Estancias,
Siemens Gamesa Turkey Renewable Energy Limited
S.A. Unipersonal, Sevilla/Spain
100
100
11
100
100
6 Significant influence due to contractual arrangements or legal circumstances.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to contractual arrangements or legal circumstances.
5 No significant influence due to contractual arrangements or legal circumstances.
7 Not consolidated due to immateriality.
8 Not accounted for using the equity method due to immateriality.
9
Exemption pursuant to Section 264b German Commercial Code.
10 Exemption pursuant to Section 264 (3) German Commercial Code.
Siemens AG is a shareholder with unlimited liability of this company.
11
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
112 Consolidated Financial Statements
Equity interest
September 30, 2017
in %
September 30, 2017
Equity interest
1 Control due to a majority of voting rights.
in %
100
100
Sistemas Energéticos Cabezo Negro, S.A. Unipersonal,
Sarriguren/Spain
100
Zaragoza/Spain
100
Siemens Gamesa Renewable Energy Europa S.L.,
Sistemas Energéticos Campoliva, S.A. Unipersonal,
Zamudio/Spain
100
Zaragoza/Spain
100
Siemens Gamesa Renewable Energy
Sistemas Energéticos Carril, S.L. Unipersonal,
Innovation & Technology, S.L., Sarriguren/Spain
100
Zamudio/Spain
100
Siemens Gamesa Renewable Energy
International Wind Services, S.A., Zamudio/Spain
Sistemas Energéticos Cuerda Gitana, S.A. Unipersonal,
Sevilla/Spain
San Cristóbal de La Laguna/Spain
Sistemas Energéticos Cuntis, S.A. Unipersonal,
Santiago de Compostela/Spain
Sistemas Energéticos Tablero Tabordo, S.L.,
Las Palmas de Gran Canaria/Spain
100
Lingbo SPW AB, Solna/Sweden
100
Sistemas Energéticos Finca San Juan, S.L.U.,
Mentor Graphics (Scandinavia) AB, Kista/Sweden
100
Las Palmas de Gran Canaria/Spain
100
Siemens AB, Upplands Väsby/Sweden
100
Sistemas Energéticos Fonseca, S.A. Unipersonal,
Siemens Financial Services AB, Stockholm/Sweden
100
Zamudio/Spain
100
Siemens Healthcare AB, Stockholm/Sweden
100
Sistemas Energéticos Fuerteventura, S.A. Unipersonal,
Siemens Industrial Turbomachinery AB, Finspång/Sweden
Sistemas Energéticos El Valle, S.L., Sarriguren/Spain
100
100
100
100
Sistemas Energéticos de Tarifa, S.L. Unipersonal,
Zamudio/Spain
100
Sistemas Energéticos Tomillo, S.A. Unipersonal,
Las Palmas de Gran Canaria/Spain
100
Sistemas Energéticos del Sur S.A., Sevilla/Spain
70
Sistemas Energéticos del Umia, S.A. Unipersonal,
Telecomunicación, Electrónica y Conmutación S.A.,
Madrid/Spain
100
Santiago de Compostela/Spain
100
Fanbyn2 Vindenergi AB, Solna/Sweden
100
Sistemas Energéticos Edreira, S.A. Unipersonal,
Gamesa Wind Sweden AB, Stockholm/Sweden
100
Santiago de Compostela/Spain
Lindom Vindenergi AB, Solna/Sweden
Siemens AG is a shareholder with unlimited liability of this company.
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
Consolidated Financial Statements
100
Siemens Healthcare Limited,
GYM Renewables ONE Limited,
Frimley, Surrey/United Kingdom
100
Frimley, Surrey/United Kingdom
100
Industrial Turbine Company (UK) Limited,
Siemens Holdings plc, Frimley, Surrey/United Kingdom
Siemens Industrial Turbomachinery Ltd.,
100
Frimley, Surrey/United Kingdom
100
Frimley, Surrey/United Kingdom
100
1 Control due to a majority of voting rights.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to contractual arrangements or legal circumstances.
5 No significant influence due to contractual arrangements or legal circumstances.
GYM Renewables Limited, Frimley, Surrey/United Kingdom
6 Significant influence due to contractual arrangements or legal circumstances.
100
100
Electrium Sales Limited, Frimley, Surrey/United Kingdom
100
Siemens Gamesa Renewable Energy Wind Limited,
London/United Kingdom
100
Flomerics Group Limited,
Siemens Healthcare Diagnostics Ltd.,
Hampton Court, Surrey/United Kingdom
100
Frimley, Surrey/United Kingdom
100
Flowmaster Limited,
Siemens Healthcare Diagnostics Manufacturing Ltd,
Alderton, Northamptonshire/United Kingdom
100
Frimley, Surrey/United Kingdom
100
Glenouther Renewables Energy Park Limited,
Siemens Healthcare Diagnostics Products Ltd,
London/United Kingdom
Frimley, Surrey/United Kingdom
100
7 Not consolidated due to immateriality.
9 Exemption pursuant to Section 264b German Commercial Code.
Siemens Pension Funding (General) Limited,
Cinco Rios Geracao de Energia Ltda., Manaus/Brazil
Dresser-Rand do Brasil, Ltda., Santa Bárbara D'Oeste/Brazil
Dresser-Rand Participações Ltda., Belém/Brazil
1007
100
1007
Frimley, Surrey/United Kingdom
100
Guascor do Brasil Ltda., São Paulo/Brazil
100
Siemens Pension Funding Limited,
Frimley, Surrey/United Kingdom
100
Guascor Empreendimentos Energéticos, Ltda., Belém/Brazil
Guascor Serviços Ltda., Taboão da Serra/Brazil
100
100
Siemens plc, Frimley, Surrey/United Kingdom
100
Guascor Solar do Brasil Ltda., Manaus/Brazil
907
100
8 Not accounted for using the equity method due to immateriality.
Frimley, Surrey/United Kingdom
100
10 Exemption pursuant to Section 264 (3) German Commercial Code.
11
Siemens AG is a shareholder with unlimited liability of this company.
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
Consolidated Financial Statements
Equity interest
September 30, 2017
in %
September 30, 2017
Equity interest
in %
Siemens Industry Software Computational Dynamics
Limited, Frimley, Surrey/United Kingdom
Siemens Soluciones Tecnologicas S.A.,
100
Siemens Industry Software Limited,
Frimley, Surrey/United Kingdom
100
Santa Cruz de la Sierra/Bolivia, Plurinational State of
Chemtech Servicos de Engenharia e Software Ltda.,
Rio de Janeiro/Brazil
100
Siemens Industry Software Simulation and Test Limited,
Frimley, Surrey/United Kingdom
100
London/United Kingdom
100
Kiev/Ukraine
100
MRX Rail Services UK Limited,
Dresser-Rand Field Operations Middle East LLC,
Abu Dhabi/United Arab Emirates
Frimley, Surrey/United Kingdom
100
492
MRX Technologies Limited, Frimley, Surrey/United Kingdom
100
Gulf Steam Generators L.L.C., Dubai/United Arab Emirates
100
Preactor International Limited,
SD (Middle East) LLC, Dubai/United Arab Emirates
492
Frimley, Surrey/United Kingdom
100
Siemens Healthcare FZ LLC, Dubai/United Arab Emirates
Siemens Healthcare L.L.C., Dubai/United Arab Emirates
Siemens LLC, Abu Dhabi/United Arab Emirates
100
Newbury, Berkshire/United Kingdom
Project Ventures Rail Investments | Limited,
SIEMENS HEALTHCARE LIMITED LIABILITY COMPANY,
Gamesa Ukraine, LLC, Kiev/Ukraine
113
114
September 30, 2017
Equity interest
in %
September 30, 2017
Equity interest
in %
Dresser-Rand Turkmen Company,
Ashgabat/Turkmenistan
100
Materials Solutions Holdings Limited,
Frimley, Surrey/United Kingdom
100
100% foreign owned subsidiary "Siemens Ukraine",
Materials Solutions Limited,
Kiev/Ukraine
100
Frimley, Surrey/United Kingdom
100
100
492
Frimley, Surrey/United Kingdom
100
Conworx Medical IT Ltd.,
Stoke Poges, Buckinghamshire/United Kingdom
100
Marlow, Buckinghamshire/United Kingdom
100
D-R Dormant Ltd., Frimley, Surrey/United Kingdom
1007
Siemens Gamesa Renewable Energy B9 Limited,
Larne/United Kingdom
100
D-R Holdings (UK) Ltd., Frimley, Surrey/United Kingdom
100
Siemens Gamesa Renewable Energy Limited,
Dresser-Rand (U.K.) Limited,
Frimley, Surrey/United Kingdom
100
Frimley, Surrey/United Kingdom
100
Siemens Gamesa Renewable Energy UK Limited,
Dresser-Rand Company Ltd.,
Siemens Financial Services Ltd.,
100
Frimley, Surrey/United Kingdom
100
492
Samtech UK Limited, Frimley, Surrey/United Kingdom
100
Siemens Middle East Limited,
SBS Pension Funding (Scotland) Limited Partnership,
Masdar City/United Arab Emirates
100
Edinburgh/United Kingdom
573
100
Adwen UK Limited, London/United Kingdom
Sellafirth Renewable Energy Park Limited,
Bargrennan Renewable Energy Park Limited,
London/United Kingdom
100
London/United Kingdom
100
Siemens Financial Services Holdings Ltd.,
CD-adapco New Hampshire Co., Ltd.,
Stoke Poges, Buckinghamshire/United Kingdom
100
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
Mentor Graphics (UK) Limited,
Equity interest
ASSOCIATED COMPANIES AND JOINT VENTURES
492,7
100
100
Siemens Healthcare Limited, Ho Chi Minh City/Viet Nam
Siemens Ltd., Ho Chi Minh City/Viet Nam
100
TASS International Co. Ltd., Seoul/Korea, Republic of
Dresser-Rand & Enserv Services Sdn. Bhd.,
Kuala Lumpur/Malaysia
100
Siemens Wind Power Limited, Seoul/Korea, Republic of
1007
City/Viet Nam
100
Siemens Gamesa Renewable Energy LLC, Ho Chi Minh
100
Siemens Industry Software Ltd., Seoul/Korea, Republic of
Siemens Ltd. Seoul, Seoul/Korea, Republic of
100
Siemens Wind Power Limited, Bangkok/Thailand
Dresser-Rand Asia Pacific Sdn. Bhd., Kuala Lumpur/Malaysia
Reyrolle (Malaysia) Sdn. Bhd., Kuala Lumpur/Malaysia
Siemens Healthcare Sdn. Bhd., Petaling Jaya/Malaysia
Siemens Industry Software Sdn. Bhd., Penang/Malaysia
Siemens Malaysia Sdn. Bhd., Petaling Jaya/Malaysia
100
100
100
Siemens Gamesa Renewable Energy New Zealand Limited,
Auckland/New Zealand
100
50
Caterva GmbH, Pullach i. Isartal
100
VA TECH Malaysia Sdn. Bhd., Kuala Lumpur/Malaysia
Siemens (N.Z.) Limited, Auckland/New Zealand
338
Blitz F17-813 GmbH, Frankfurt
100
33
Blitz F17-814 GmbH & Co. KG, Frankfurt
100
498
BELLIS GmbH, Braunschweig
100
258
ATS Projekt Grevenbroich GmbH, Schüttorf
Germany (32 companies)
Siemens Healthcare Limited, Seoul/Korea, Republic of
99
100
Taipei/Taiwan, Province of China
100
Siemens Healthcare K.K., Tokyo/Japan
Siemens Healthcare Limited,
100
Siemens Healthcare Diagnostics K.K., Tokyo/Japan
100
Colombo/Sri Lanka
100
Mentor Graphics Japan Co., Ltd., Tokyo/Japan
Siemens Gamesa Renewable Energy Lanka Pvt. Ltd.,,
100
Gamesa Japan K.K., Kanagawa/Japan
100
Siemens Pte. Ltd., Singapore/Singapore
1007
Dresser Rand Japan K.K., Tokyo/Japan
100
Siemens Japan Holding K.K., Tokyo/Japan
100
Siemens Industry Software (TW) Co., Ltd.,
100
Gamesa (Thailand) Co. Ltd., Bangkok/Thailand
Siemens Healthcare Limited, Bangkok/Thailand
Siemens Limited, Bangkok/Thailand
100
Seongnam-si, Gyeonggi-do/Korea, Republic of
Mentor Graphics (Korea) Co., Limited, Bundang-gu,
100
TASS International K.K., Yokohama/Japan
100
DKS Dienstleistungsgesellschaft f. Kommunikationsanlagen
des Stadt- und Regionalverkehrs mbH, Cologne
Dresser-Rand (Thailand) Limited, Rayong/Thailand
Yokohama/Japan
100
Siemens Ltd., Taipei/Taiwan, Province of China
Siemens PLM Software Computational Dynamics K.K.,
100
Taipei/Taiwan, Province of China
100
Siemens K.K., Tokyo/Japan
100
498
100
Siemens Healthcare Limited, Auckland/New Zealand
26
Maschinenfabrik Reinhausen GmbH, Regensburg
50
Magazino GmbH, Munich
50
Frontline P.C.B. Solutions Limited Partnership,
Rehovot/Israel
258
Ludwig Bölkow Campus GmbH, Taufkirchen
508
LIB Verwaltungs-GmbH, Leipzig
508
in %
Equity interest
Frontline P.C.B. Solutions (1998) Ltd, Rehovot/Israel
408
Infineon Technologies Bipolar Verwaltungs-GmbH, Warstein
September 30, 2017
Metropolitan Transportation Solutions Ltd.,
Rosh HaAyin/Israel
20
MeVis BreastCare GmbH & Co. KG, Bremen
49
864,8,11,12
VAL 208 Torino GEIE, Milan/Italy
1004,8
Siemens Venture Capital Fund 1 GmbH, Munich
498
Transfima S.p.A., Milan/Italy
66
Siemens EuroCash, Munich
in %
428,12
23
OWP Butendiek GmbH & Co. KG, Bremen
50
Trickster Howell LTD, Ramat/Israel
498
MeVis BreastCare Verwaltungsgesellschaft mbH, Bremen
33
Reindeer Energy Ltd., Kokhav Ya'ir-Tzur Yigal/Israel
Transfima GEIE, Milan/Italy
100
September 30, 2017
Consolidated Financial Statements 121
498
FEAG Fertigungscenter für Elektrische Anlagen GmbH,
Erlangen
100
Siemens, Inc., Manila/Philippines
100
Siemens Wind Power, Inc., Manila/Philippines
624
EOS Uptrade GmbH, Hamburg
100
Siemens Power Operations, Inc., Manila/Philippines
498
egrid applications & consulting GmbH, Kempten
100
Siemens Healthcare Inc., Manila/Philippines
644,8
EBV Windpark Almstedt-Breinum GmbH & Co. Betriebs-KG,
Bremen
100
CD-adapco S.E.A. Pte. Ltd., Singapore/Singapore
100
IFTEC GmbH & Co. KG, Leipzig
50
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
Siemens AG is a shareholder with unlimited liability of this company.
11
10 Exemption pursuant to Section 264 (3) German Commercial Code.
Exemption pursuant to Section 264b German Commercial Code.
9
8 Not accounted for using the equity method due to immateriality.
7 Not consolidated due to immateriality.
Equity interest
6 Significant influence due to contractual arrangements or legal circumstances.
4 No control due to contractual arrangements or legal circumstances.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
40
Infineon Technologies Bipolar GmbH & Co. KG, Warstein
100
Gamesa Singapore Private Limited, Singapore/Singapore
5 No significant influence due to contractual arrangements or legal circumstances.
Siemens Postal, Parcel & Airport Logistics PTE. LTD.,
Singapore/Singapore
63
Acrorad Co., Ltd., Okinawa/Japan
Preactor Software India Private Limited, Bangalore/India
100
501
Powerplant Performance Improvement Ltd.,
New Delhi/India
100
Beed Renewable Energy Private Limited, Chennai/India
Berkely Design Automation India Private Limited,
New Delhi/India
100
Poovani Wind Farms Pvt. Ltd., Chennai/India
100
Bapuram Renewable Private Limited, Chennai/India
100
PETNET Radiopharmaceutical Solutions Pvt. Ltd.,
New Delhi/India
100
Anantapur Wind Farms Private Limited, Chennai/India
100
Hong Kong/Hong Kong
100
100
Bhuj Renewable Private Limited, Chennai/India
Bidwal Renewable Private Limited, Chennai/India
CALYPTO DESIGN SYSTEMS INDIA PRIVATE LIMITED,
New Delhi/India
100
Pugalur Renewable Private Limited, Chennai/India
100
1007
100
100
Sanchore Renewable Private Limited, Chennai/India
Sankanur Renewable Private Limited, Chennai/India
Saunshi Renewable Private Limited, Chennai/India
Siemens Convergence Creators Private Limited,
Navi Mumbai/India
100
100
100
1007
1007
Channapura Renewable Private Limited, Chennai/India
Chikkodi Renewable Private Limited, Chennai/India
Devarabanda Renewable Energy Pvt. Ltd., Chennai/India
Dhone Renewable Private Limited, Chennai/India
Dresser-Rand India Private Limited, Mumbai/India
Flomerics India Private Limited, Mumbai/India
100
100
99
Rajgarh Wind Park Private Limited, Chennai/India
Rangareddy Renewable Pvt Ltd, Chennai/India
RSR Power Private Limited, Chennai/India
100
100
100
100
100
Nirlooti Renewable Private Limited, Chennai/India
Osmanabad Renewable Private Limited, Chennai/India
100
8 Not accounted for using the equity method due to immateriality.
7 Not consolidated due to immateriality.
6 Significant influence due to contractual arrangements or legal circumstances.
5 No significant influence due to contractual arrangements or legal circumstances.
4 No control due to contractual arrangements or legal circumstances.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
1007
Hong Kong/Hong Kong
100
International Wind Farm Development VII Limited,
100
Siemens Sensors & Communication Ltd., Dalian/China
Siemens Shanghai Medical Equipment Ltd., Shanghai/China
1007
Hong Kong/Hong Kong
100
9
Exemption pursuant to Section 264b German Commercial Code.
10 Exemption pursuant to Section 264 (3) German Commercial Code.
11
Siemens Ltd., Hong Kong/Hong Kong
100
1007
Neelagund Renewable Private Limited, Chennai/India
Nellore Renewable Pvt Ltd, Chennai/India
100
Siemens Industry Software Limited, Hong Kong/Hong Kong
100
Siemens Healthcare Limited, Hong Kong/Hong Kong
Siemens Postal, Parcel & Airport Logistics Limited,
in %
in %
September 30, 2017
Equity interest
Equity interest
119
Consolidated Financial Statements
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
Siemens AG is a shareholder with unlimited liability of this company.
September 30, 2017
Sternico GmbH, Wendeburg
SIEMENS FACTORING PRIVATE LIMITED, Mumbai/India
Gadag Renewable Private Limited, Chennai/India
Gagodar Renewable Energy Pvt. Ltd., Chennai/India
Ghatpimpri Renewable Pvt. Ltd., Chennai/India
10 Exemption pursuant to Section 264 (3) German Commercial Code.
Exemption pursuant to Section 264b German Commercial Code.
9
8 Not accounted for using the equity method due to immateriality.
7 Not consolidated due to immateriality.
6 Significant influence due to contractual arrangements or legal circumstances.
5 No significant influence due to contractual arrangements or legal circumstances.
4 No control due to contractual arrangements or legal circumstances.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
100
100
1007
100
100
100
Siemens AG is a shareholder with unlimited liability of this company.
11
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
120 Consolidated Financial Statements
60
100
Siemens Industry Software Pte. Ltd., Singapore/Singapore
100
PT Dresser-Rand Services Indonesia, Cilegon/Indonesia
PT. Siemens Industrial Power, Kota Bandung/Indonesia
100
100
Mentor Graphics Asia Pte Ltd, Singapore/Singapore
Siemens Healthcare Pte. Ltd., Singapore/Singapore
100
100
1007
Zalki Renewable Private Limited, Chennai/India
in %
September 30, 2017
in %
September 30, 2017
Equity interest
Equity interest
P.T. Siemens Indonesia, Jakarta/Indonesia
100
Siemens Wind Power Private Limited, Navi Mumbai/India
Thoothukudi Renewable Private Limited, Chennai/India
Tirupur Renewable Private Limited, Chennai/India
Tuljapur Wind Farms Private Limited, Chennai/India
Umrani Renewable Private Limited, Chennai/India
Uppal Renewable Private Limited, Chennai/India
VIRALIPATTI RENEWABLE Pvt. Ltd., Chennai/India
100
1007
100
Siemens Industry Software Computational Dynamics India
Pvt. Ltd., Bangalore/India
1007
1007
100
Siemens Industry Software (India) Private Limited,
New Delhi/India
1007
100
GM Navarra Wind Energy Private Limited, Chennai/India
Gudadanal Renewable Private Limited, Chennai/India
Hattarwat Renewable Private Limited, Chennai/India
Haveri Renewable Private Limited, Chennai/India
Hungund Renewable Private Limited, Chennai/India
Jalore Wind Park Private Limited, Chennai/India
Jodhpur Wind Farms Private Limited, Chennai/India
Kadapa Wind Farms Private Limited, Chennai/India
Kod Renewable Pvt. Ltd., Chennai/India
100
100
100
Siemens Financial Services Private Limited, Mumbai/India
Siemens Gamesa Renewable Private Limited, Chennai/India
Siemens Healthcare Private Limited, Mumbai/India
100
100
100
Siemens Ltd., Mumbai/India
75
100
100
100
Mathak Wind Farms Private Limited, Chennai/India
Mentor Graphics (India) Private Limited, New Delhi/India
Mentor Graphics (Sales and Services) Private Limited,
Bangalore/India
100
Latur Renewable Private Limited, Chennai/India
100
Kutch Renewable Pvt Ltd, Chennai/India
100
100
100
Mumbai/India
Koppal Renewable Private Limited, Chennai/India
Kurnool Wind Farms Private Limited, Chennai/India
Siemens Technology and Services Private Limited,
100
100
Siemens Rail Automation Pvt. Ltd., Navi Mumbai/India
100
100
Siemens Postal Parcel & Airport Logistics Private Limited,
Navi Mumbai/India
100
As part of our substantive audit procedures, we evaluated man-
agement's estimates and assumptions based on a risk-based se-
lection of a sample of contracts. Our sample particularly included
projects that are subject to significant future uncertainties and
risks, such as fixed-price or turnkey projects, projects with com-
plex technical requirements or with a large portion of materials
and services to be provided by suppliers, subcontractors or con-
sortium partners, cross-border projects, and projects with
changes in cost estimates, delays and/or low or negative mar-
gins. Our audit procedures included, among others, review of
the sample contracts and their terms and conditions including
contractually agreed partial deliveries and services, termination
328
49
OSRAM Licht AG, Munich
BSAV Kapitalbeteiligungen und Vermögensverwaltungs Management GmbH, Grünwald
Kyros Beteiligungsverwaltung GmbH, Grünwald
Germany (3 companies)
OTHER INVESTMENTS11
September 30, 2017
123
Consolidated Financial Statements
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
Siemens AG is a shareholder with unlimited liability of this company.
11
10 Exemption pursuant to Section 264 (3) German Commercial Code.
Exemption pursuant to Section 264b German Commercial Code.
9
8 Not accounted for using the equity method due to immateriality.
7 Not consolidated due to immateriality.
6 Significant influence due to contractual arrangements or legal circumstances.
5 No significant influence due to contractual arrangements or legal circumstances.
Europe, Commonwealth of Independent States (C.I.S.),
4 No control due to contractual arrangements or legal circumstances.
Africa, Middle East (without Germany) (5 companies)
ATOS SE, Bezons/France
315
17
485
33
167
7
1004,5
1004,5
in millions of €
in millions of €
Equity
Net income
Equity interest
in %
Bentley Systems, Incorporated, Wilmington, DE/United States
Americas (1 company)
Unincorporated Joint Venture Gwynt y Mor, Swindon, Wiltshire/United Kingdom
Automotive Facilities Brainport Holding N.V., Helmond/Netherlands
Medical Systems S.p.A., Genoa/Italy
Uhre Vindmollelaug I/S, Brande/Denmark
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
Kintech Santalpur Wind Park Private Limited, Chennai/India
Transparent Energy Systems Private Limited, Pune/India
P.T. Jawa Power, Jakarta/Indonesia
27
CEF-L Holding, LLC, Wilmington, DE/United States
46
Bytemark Inc., New York, NY/United States
508
Baja Wind US LLC, Wilmington, DE/United States
26
Bangalore International Airport Ltd., Bangalore/India
50
Energia Eólica de Mexico S.A. de C.V., Mexico City/Mexico
50
Zhi Dao Railway Equipment Ltd., Taiyuan/China
Americas (17 companies)
50
Zhenjiang Siemens Busbar Trunking Systems Co. Ltd.,
Yangzhong/China
498
49
258
50
Cyclos Semiconductor, Inc., Wilmington, DE/United States
Echogen Power Systems, Inc., Wilmington, DE/United States
First State Marine Wind LLC, Newark, DE/United States
Frustum, Inc., New York, NY/United States
408
Modern Engineering and Consultants Co. Ltd.,
Bangkok/Thailand
32
Panda Hummel Station Intermediate Holdings I LLC,
Wilmington, DE/United States
49
Power Automation Pte. Ltd., Singapore/Singapore
206
Hickory Run Holdings, LLC, Wilmington, DE/United States
2,473
43
218
318
50
Yaskawa Siemens Automation & Drives Corp., Tokyo/Japan
32
40
PT Asia Care Indonesia, Jakarta/Indonesia
328
Advance Gas Turbine Solutions SDN. BHD.,
Kuala Lumpur/Malaysia
1913
0
1
> the accompanying consolidated financial statements comply,
in all material respects, with International Financial Reporting
Standards (IFRS) as adopted by the European Union (EU) and
the supplementary provisions of German law pursuant to
Sec. 315 a (1) HGB ["Handelsgesetzbuch": German Commercial
Code] and full IFRS as issued by the International Accounting
Standards Board (IASB), and give a true and fair view of the
net assets and financial position of the Group as of Septem-
ber 30, 2017 and its results of operations for the fiscal year
from October 1, 2016 to September 30, 2017 in accordance
with these requirements, and
In our opinion, based on the findings of our audit,
We have audited the consolidated financial statements of Siemens
Aktiengesellschaft, Berlin and Munich, and its subsidiaries (the
Group), which comprise the consolidated statements of income
and comprehensive income for the fiscal year from October 1,
2016 to September 30, 2017, the consolidated statements of
financial position as of September 30, 2017, the consolidated
statements of cash flows and changes in equity for the fiscal year
then ended, and the notes to the consolidated financial state-
ments, including a summary of significant accounting policies.
We have also audited the group management report of Siemens
Aktiengesellschaft, which is combined with the management
report of Siemens Aktiengesellschaft, for the fiscal year from
October 1, 2016 to September 30, 2017.
OPINIONS
Report on the audit of the Consoli-
dated Financial Statements and
the Group Management Report
To Siemens Aktiengesellschaft, Berlin and Munich
C.2 Independent Auditor's Report
126 Additional Information
Michael Sen
بایستیار
Klaus Helmrich
Mans Muril
for Siemens Aktiengesellschaft, includes a fair review of the
development and performance of the business and the position
of the Group, together with a description of the material oppor-
tunities and risks associated with the expected development
of the Group.
Cedrik Neike
Lisa Davis
Dr. Ralf P. Thomas
Momen
➤ the accompanying group management report as a whole pro-
vides a suitable view of the Group's position. In all material
respects, this group management report is consistent with the
consolidated financial statements, complies with the provi-
sions of German law and suitably presents the opportunities
and risks of future development.
In accordance with Sec. 322 (3) Sentence 1 HGB, we hereby state
that our audit has not led to any reservations regarding the com-
pliance of the consolidated financial statements and the group
management report.
BASIS FOR OPINIONS
We conducted our audit of the consolidated financial statements
and the group management report in accordance with Sec. 317
HGB and Regulation (EU) No 537/2014 (EU Audit Regulation)
as well as German generally accepted standards on auditing
promulgated by the Institut der Wirtschaftsprüfer [Institute of
Public Auditors in Germany] (IDW). We conducted the audit of
the consolidated financial statements in supplementary compli-
ance with International Standards on Auditing (ISA). Our respon-
sibilities under those laws, rules and standards are further
described in the "Auditor's responsibilities for the audit of the
consolidated financial statements and the group management
report" section of our report. We are independent of the group
companies in accordance with European and German commer-
cial law and professional provisions, and we have fulfilled our
other German ethical responsibilities in accordance with these
requirements. Furthermore, in accordance with Art. 10 (2) f) of
the EU Audit Regulation, we declare that we have not provided
any prohibited non-audit services referred to in Art. 5 (1) of the
EU Audit Regulation. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinions on the consolidated financial statements and on the
group management report.
Audit approach: As part of our audit, we obtained an under-
standing of the Group's internally established methods, pro-
cesses and control mechanisms for project management in the
bid and execution phase of construction contracts. We also as-
sessed the design and operating effectiveness of the account-
ing-related internal controls by examining business transactions
specific to construction contracts, from the initiation of the trans-
action through recognition in the consolidated financial state-
ments, and testing internal controls over these processes.
Revenue recognition on construction contracts
Reasons why the matter was determined to be a key audit
matter: The Group conducts a significant portion of its business
under construction contracts, particularly in the Divisions Power
and Gas, Energy Management and Mobility as well as in the Stra-
tegic Unit Siemens Gamesa Renewable Energy. Revenue from
long-term construction contracts is recognized in accordance
with IAS 11, Construction Contracts, based on the extent of prog-
ress towards completion. We consider the accounting for con-
struction contracts to be an area posing a significant risk of ma-
terial misstatement (including the potential risk of management
override of internal controls) and accordingly a key audit matter,
because management's assessments significantly impact the de-
termination of the extent of progress towards completion. These
assessments include, in particular, the scope of deliveries and
services required to fulfill contractually defined obligations, total
contract costs, remaining costs to completion and total contract
revenues, as well as contract risks including technical, political,
regulatory and legal risks. Revenues, contract costs and profit
recognition may deviate significantly from original estimates
based on new knowledge about cost overruns and changes in
project scope over the term of a construction contract.
CONSOLIDATED FINANCIAL STATEMENTS.
refer to NOTE 2 SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL
ACCOUNTING ESTIMATES in the NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS. Explanations of the transaction as well as disclosures
on the preliminary purchase price allocation are included in
→ NOTE 3 ACQUISITIONS AND DISPOSITIONS in the NOTES TO THE
Reference to related disclosures: With regard to the account-
ing and measurement policies applied in connection with
the merger of the Siemens wind power business with Gamesa,
Our audit procedures did not lead to any reservations relating to
the accounting for the merger of the Siemens wind power busi-
ness with Gamesa.
Furthermore, we analyzed the application of uniform accounting
policies of the entities of the wind power business, the tax effects
of the merger, and the processing of the initial consolidation of
the Gamesa entities, including non-controlling interests, in the
Siemens consolidation system. In addition, we evaluated the dis-
closures in the notes to the consolidated financial statements
regarding the merger of the Siemens wind power business with
Gamesa in terms of their compliance with the requirements
defined in IFRS 3.
An area of focus was the determination of the fair values of tech-
nologies and the measurement of warranty obligations associ-
ated with projects. In this regard, among other procedures, we
assessed the appropriateness as audit evidence of the valuation
report as well as the reports of the external experts in the wind
power sector engaged by management through inquiries of the
experts, and evaluated whether the assumptions used reflect
the perspective of an external market participant as of the acqui-
sition date.
Janina Kugel
Our audit procedures in relation to the preliminary purchase price
allocation included, in addition to assessing the consideration
transferred by Siemens, the evaluation of the methodological
approach of the external expert engaged by management with
respect to the identification of assets acquired as well as the con-
ceptual evaluation of valuation models considering the require-
ments of IFRS 3. With the assistance of our internal valuation
specialists, we examined the valuation methods applied in terms
of the requirements defined in IFRS 13, Fair Value Measurement.
Furthermore, we analyzed whether assumptions and estimates
(such as growth rates, cost of capital, royalty rates or remaining
useful lives) used in determining the fair value of identifiable
assets acquired and liabilities assumed (including contingent
liabilities) as of the acquisition date correspond to general and
industry-specific market expectations. Additionally, we reper-
formed the calculations in the models and reconciled the expected
future cash flows underlying the measurements with, inter alia,
internal business plans.
128
127
Additional Information
Reasons why the matter was determined to be a key audit
matter: On April 3, 2017, the merger of the Siemens wind power
business with Gamesa Corporación Tecnológica S.A., Spain
("Gamesa") was completed. The Siemens Group holds 59% of the
shares while Gamesa's former shareholders hold 41% of the
shares in the combined entity. Siemens accounts for the business
combination in accordance with IFRS 3, Business Combinations.
Due to the complexity of the transaction and the associated
significant risk of material misstatement, and considering the
assumptions and estimates required to be made by management
as part of the purchase price allocation, the accounting for this
business combination was a key audit matter.
Merger of the Siemens wind power business
with Gamesa
Below, we describe what we consider to be the key audit matters:
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the consoli-
dated financial statements for the fiscal year from October 1,
2016 to September 30, 2017. These matters were addressed in
the context of our audit of the consolidated financial statements
as a whole, and in forming our auditor's opinion thereon, and we
do not provide a separate opinion on these matters.
KEY AUDIT MATTERS IN THE AUDIT OF THE
CONSOLIDATED FINANCIAL STATEMENTS
Audit approach: As part of our group audit, among other pro-
cedures, we analyzed management's assertion that Siemens has
control over the combined entity based on agreements under
corporate law and the criteria defined in IFRS 10, Consolidated
Financial Statements.
Joint Venture Service Center, Chirchik/Uzbekistan
Hel
27
? 
Pul
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
(5)
80
7
N/A
N/A
10
0
0
19
101
4
455
4,835
632
12
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to contractual arrangements or legal circumstances.
5 No significant influence due to contractual arrangements or legal circumstances.
6 Significant influence due to contractual arrangements or legal circumstances.
7 Not consolidated due to immateriality.
Joe Kaeser
Ни
Siemens Aktiengesellschaft
The Managing Board
Munich, November 27, 2017
To the best of our knowledge, and in accordance with the appli-
cable reporting principles, the Consolidated Financial Statements
give a true and fair view of the assets, liabilities, financial posi-
tion and profit or loss of the Group, and the Group Management
Report, which has been combined with the Management Report
C.1 Responsibility Statement
Additional Information
C.
Dr. Roland Busch
124 Consolidated Financial Statements
A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
13
12 Siemens AG is a shareholder with unlimited liability of this company.
Values according to the latest available local GAAP financial statements; the underlying
fiscal year may differ from the Siemens fiscal year.
11
이 의
10 Exemption pursuant to Section 264 (3) German Commercial Code.
8 Not accounted for using the equity method due to immateriality.
9 Exemption pursuant to Section 264b German Commercial Code.
N/A = No financial data available.
43
50
50
238
BioMensio Oy, Tampere/Finland
45
Energías Renovables San Adrián de Juarros, S.A.,
San Adrián de Juarros/Spain
478
Meomed s.r.o., Prerov/Czech Republic
20
T-Power NV, Brussels/Belgium
508
Desgasificación de Vertederos, S.A, Madrid/Spain
258
OIL AND GAS PROSERV LLC, Baku/Azerbaijan
358
31
26
46
ZAO Interautomatika, Moscow/Russian Federation
ZAO Systema-Service, St. Petersburg/Russian Federation
Impilo Consortium (Pty.) Ltd., La Lucia/South Africa
Ardora, S.A., Vigo/Spain
Compagnie Electrique de Bretagne SAS, Paris/France
40
Explotaciones y Mantenimientos Integrales, S.L.,
Getxo/Spain
508
5 No significant influence due to contractual arrangements or legal circumstances.
4 No control due to contractual arrangements or legal circumstances.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
508
Hydrophytic, S.L., Vitoria-Gasteiz/Spain
574,8
44
Parallel Graphics Ltd., Dublin/Ireland
Generación Eólica Extremeña, S.L., Plasencia/Spain
48
508
Vitoria-Gasteiz/Spain
Eviop-Tempo A.E. Electrical Equipment Manufacturers,
Vassiliko/Greece
Gate Solar Gestión, S.L. Unipersonal,
25
TRIXELL SAS, Moirans/France
308
6 Significant influence due to contractual arrangements or legal circumstances.
Vienna/Austria
448
41
Veja Mate Offshore Project GmbH, Gadebusch
50
Valeo Siemens eAutomotive GmbH, Erlangen
508
ubimake GmbH i.L., Berlin
508
206,12
20
Energie Electrique de Tahaddart S.A., Tangier/Morocco
Buitengaats C.V., Amsterdam/Netherlands
Transrapid International Verwaltungsgesellschaft mbH i.L.,
Berlin
29
thinkstep AG, Leinfelden-Echterdingen
33
Electrogas Malta Limited, Marsaskala/Malta
554,8
Symeo GmbH, Neubiberg
Buitengaats Management B.V., Eemshaven/Netherlands
Infraspeed Maintainance B.V., Zoetermeer/Netherlands
Ural Locomotives Holding Besloten Vennootschap,
The Hague/Netherlands
208
50
50
258
Arelion GmbH in Liqu., Pasching b. Linz/Austria
Aspern Smart City Research GmbH, Vienna/Austria
49
358
26
Rousch (Pakistan) Power Ltd., Lahore/Pakistan
000 Transconverter, Moscow/Russian Federation
000 VIS Automation mit Zusatz „Ein Gemeinschafts-
unternehmen von VIS und Siemens",
Moscow/Russian Federation
(C.I.S.), Africa, Middle East (without Germany)
(61 companies)
Europe, Commonwealth of Independent States
Aspern Smart City Research GmbH & Co KG,
50
208
ZeeEnergie Management B.V., Eemshaven/Netherlands
Wirescan AS, Trollaasen/Norway
358
Voith Hydro Holding Verwaltungs GmbH, Heidenheim
Windkraft Trinwillershagen Entwicklungsgesellschaft mbH,
Wiepkenhagen
206,12
ZeeEnergie C.V., Amsterdam/Netherlands
35
Voith Hydro Holding GmbH & Co. KG, Heidenheim
338
Temir Zhol Electrification LLP, Astana/Kazakhstan
7 Not consolidated due to immateriality.
9
Swindon, Wiltshire/United Kingdom
308
ChinaInvent (Shanghai) Instrument Co., Ltd,
Shanghai/China
Galloper Wind Farm Holding Company Limited,
49
Ethos Energy Group Limited, Aberdeen/United Kingdom
298
PHM Technology Pty Ltd, Melbourne/Australia
33
London/United Kingdom
50
50
Exemplar Health (NBH) Partnership, Melbourne/Australia
Exemplar Health (SCUH) Partnership, Sydney/Australia
Cross London Trains Holdco 2 Limited,
5012
Interessengemeinschaft TUS, Männedorf/Switzerland
Asia, Australia (21 companies)
25
Lincs Renewable Energy Holdings Limited,
DBEST (Beijing) Facility Technology Management Co., Ltd.,
Beijing/China
25
Siemens Traction Equipment Ltd., Zhuzhou, Zhuzhou/China
Tianjin ZongXi Traction Motor Ltd., Tianjin/China
Xi'An X-Ray Target Ltd., Xi'an/China
50
Aberdeen/United Kingdom
RWG (Repair & Overhauls) Limited,
49
London/United Kingdom
40
Shanghai Electric Power Generation Equipment Co., Ltd.,
Shanghai/China
50
Primetals Technologies, Limited,
Plessey Holdings Ltd., Frimley, Surrey/United Kingdom
508
Saitong Railway Electrification (Nanjing) Co., Ltd.,
Nanjing/China
508
Odos Imaging Limited, Edinburgh/United Kingdom
50
London/United Kingdom
25
508
8 Not accounted for using the equity method due to immateriality.
Certas AG, Zurich/Switzerland
WS Tech Energy Global S.L., Viladecans/Spain
Panda Stonewall Intermediate Holdings I, LLC,
Wilmington, DE/United States
514
Equity interest
Barcelona/Spain
in %
September 30, 2017
in %
Nertus Mantenimiento Ferroviario y Servicios S.A.,
September 30, 2017
Equity interest
Equity interest
122 Consolidated Financial Statements
12 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability
of this company.
11
Siemens AG is a shareholder with unlimited liability of this company.
10 Exemption pursuant to Section 264 (3) German Commercial Code.
Exemption pursuant to Section 264b German Commercial Code.
37
Nuevas Estrategias de Mantenimiento, S.L.,
PhSiTh LLC, New Castle, DE/United States
33
408
278
308
308
218
Powerit Holdings, Inc., Seattle, WA/United States
Rether networks, Inc., Berkeley, CA/United States
USARAD Holdings, Inc., Fort Lauderdale, FL/United States
Veo Robotics, Inc., Cambridge, MA/United States
Empresa Nacional De Maquinas Eléctricas ENME, S.A.,
Caracas/Venezuela, Bolivarian Republic of
32
Windar Renovables, S.L., Avilés/Spain
49
508
50
Solucia Renovables 1, S.L., Lebrija/Spain
50
Soleval Renovables S.L., Sevilla/Spain
50
Sistemes Electrics Espluga, S.A., Barcelona/Spain
50
San Sebastián/Spain
Tusso Energía, S.L., Sevilla/Spain
International Wind Farm Development V Limited,
Beijing/China
1007
90
94
94
Siemens Industrial Automation Products Ltd., Chengdu,
Chengdu/China
Siemens Transformer (Wuhan) Company Ltd.,
Wuhan City/China
100
100
Siemens Venture Capital Co., Ltd., Beijing/China
100
Siemens Industrial Turbomachinery (Huludao) Co. Ltd.,
Huludao/China
84
Siemens Wind Power Blades (Shanghai) Co., Ltd.,
Shanghai/China
100
Siemens Industry Software (Beijing) Co., Ltd.,
Siemens Transformer (Jinan) Co., Ltd, Jinan/China
Beijing/China
Siemens Industry Software (Shanghai) Co., Ltd.,
Shanghai/China
100
Siemens Wiring Accessories Shandong Ltd., Zibo/China
Siemens X-Ray Vacuum Technology Ltd., Wuxi, Wuxi/China
Smart Metering Solutions (Changsha) Co. Ltd.,
Changsha/China
100
100
Siemens International Trading Ltd., Shanghai,
TASS International Co. Ltd., Shanghai/China
60
100
Shanghai/China
100
Trench High Voltage Products Ltd., Shenyang,
Siemens Investment Consulting Co., Ltd., Beijing/China
100
100
Siemens High Voltage Switchgear Guangzhou Ltd.,
Guangzhou/China
63
Siemens Transformer (Guangzhou) Co., Ltd.,
Guangzhou/China
September 30, 2017
Siemens Gas Turbine Components (Jiangsu) Co., Ltd.,
Yixing/China
in %
September 30, 2017
in %
100
Siemens Shenzhen Magnetic Resonance Ltd.,
Shenzhen/China
100
Siemens Gas Turbine Parts Ltd., Shanghai, Shanghai/China
Siemens Healthcare Diagnostics (Shanghai) Co. Ltd.,
Shanghai/China
51
Siemens Signalling Co. Ltd., Xi'an, Xi'an/China
70
Siemens Special Electrical Machines Co. Ltd.,
100
Changzhi/China
77
Siemens Healthcare Diagnostics Manufacturing Ltd.,
Shanghai, Shanghai/China
51
Siemens High Voltage Switchgear Co., Ltd., Shanghai,
Shanghai/China
90
Siemens Technology Development Co., Ltd. of Beijing,
Beijing/China
51
Siemens High Voltage Circuit Breaker Co., Ltd., Hangzhou,
Hangzhou/China
Shenyang/China
55
100
Siemens Healthcare Ltd., Shanghai/China
100
100
Siemens Standard Motors Ltd., Yizheng/China
Siemens Surge Arresters Ltd., Wuxi/China
1007
Siemens Switchgear Ltd., Shanghai, Shanghai/China
Siemens Real Estate Management (Beijing) Ltd., Co.,
Additional Information
Siemens Ltd., China, Beijing/China
International Wind Farm Development II Limited,
85
1007
International Wind Farm Development | Limited,
Hong Kong/Hong Kong
Siemens Medium Voltage Switching Technologies (Wuxi)
Ltd., Wuxi/China
100
100
1007
Asia Care Holding Limited, Hong Kong/Hong Kong
Camstar Systems (Hong Kong) Limited,
Hong Kong/Hong Kong
Siemens Numerical Control Ltd., Nanjing, Nanjing/China
Siemens Mechanical Drive Systems (Tianjin) Co., Ltd.,
Tianjin/China
Siemens Logistics Automation Systems (Beijing) Co., Ltd,
Beijing/China
XS Embedded (Shanghai) Co., Ltd., Shanghai/China
100
100
Yangtze Delta Manufacturing Co. Ltd.,
51
100
Hangzhou, Hangzhou/China
51
65
80
Hong Kong/Hong Kong
1007
Siemens Manufacturing and Engineering Centre Ltd.,
100
Hong Kong/Hong Kong
Shanghai/China
International Wind Farm Development IV Limited,
100
Siemens Power Automation Ltd., Nanjing/China
Siemens Power Plant Automation Ltd., Nanjing/China
> Siemens Ltd., India
> Siemens AB, Sweden (Chairman)
Positions outside Germany:
> Siemens Gamesa Renewable Energy
S.A., Spain
> Siemens Corp., USA
(Chairwoman and CEO)
Positions outside Germany:
> VA TECH T&D Co. Ltd., Saudi Arabia
> Siemens Ltd., Saudi Arabia
Ltd., Saudi Arabia (Deputy Chairman)
> ISCOSA Industries and Maintenance
Logistics GmbH, Constance
Positions outside Germany:
> Siemens Postal, Parcel & Airport
German positions:
> Siemens W.L.L., Qatar
>Arabia Electric Ltd. (Equipment),
Saudi Arabia
If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are re-
quired to report that fact. We have nothing to report in this regard.
Positions outside Germany:
German positions:
(as of September 30, 2017)
External positions
or in comparable domestic or foreign controlling bodies of business enterprises
Memberships in supervisory boards whose establishment is required by law
138 Additional Information
March 7,
1961
Ralf P. Thomas,
Dr. rer. pol.
March 31,
2022
April 1,
2017
November
17, 1968
Michael Sen
(until March 31, 2017)
March 31,
2017
January 1,
2008
> Allianz Deutschland AG, Munich
> Siemens Aktiengesellschaft
> Daimler AG, Stuttgart
> NXP Semiconductors B.V., Netherlands
Group company positions
(as of September 30, 2017)
> Konecranes Plc., Finland
> Pensions-Sicherungs-Verein
Versicherungsverein auf Gegen-
seitigkeit, Cologne
Positions outside Germany:
German positions:
> Deutsche Messe AG, Hanover
> EOS Holding AG, Krailling
>inpro Innovationsgesellschaft für
fortgeschrittene Produktions-
systeme in der Fahrzeugindustrie
mbH, Berlin
German positions:
> Penske Automotive Group Inc., USA
Positions outside Germany:
> Atos SE, France
Positions outside Germany:
(Deputy Chairman)
> OSRAM GmbH, Munich
(Deputy Chairman)
> OSRAM Licht AG, Munich
German positions:
Positions outside Germany:
Österreich, Austria (Chairman)
> Siemens Aktiengesellschaft
South Africa (Chairman)
129
management, evaluating the valuation methods used by drawing
on the expertise of our valuation specialists, and assessing the
significant estimates resulting from the long-term nature.
Through inquiries of persons entrusted with the matter and in-
spections of internal and external documents, we evaluated man-
agement's assessment that Siemens is, as of September 30, 2017,
not covered by the regulations for nuclear waste disposal which
were partly amended in fiscal year 2017 ("Gesetz zur Neuordnung
der Verantwortung in der kerntechnischen Entsorgung"), and
therefore continues to adhere to the German Atomic Energy Act
("deutsches Atomgesetz"), whereby radioactive waste resulting
from the closure of the nuclear facility must be collected and de-
livered to a government-developed final storage facility. In addi-
tion, we assessed the adjustments to the assumed inflation rates
and the changes to the applied interest yield curve in fiscal year
2017 by inquiring of management and, with the assistance of our
internal valuation specialists, by comparing the above-mentioned
changes to publicly available market data.
Furthermore, we evaluated the disclosures on proceedings out of
or in connection with alleged breaches of contract and compli-
ance violations as well as on asset retirement obligations in the
notes to the consolidated financial statements.
Our audit procedures did not lead to any reservations relating
to the accounting for proceedings out of or in connection with
alleged breaches of contract and compliance violations as well as
for asset retirement obligations.
Reference to related disclosures: With regard to the account-
ing and measurement policies applied in accounting for provi-
sions, refer to → NOTE 2 SIGNIFICANT ACCOUNTING POLICIES AND CRIT-
ICAL ACCOUNTING ESTIMATES in the NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS. With respect to proceedings out of or in
connection with alleged breaches of contract and compliance
violations, refer to → NOTE 21 LEGAL PROCEEDINGS. With respect to
the uncertainties and estimates relating to asset retirement obli-
gations, refer to → NOTE 17 PROVISIONS.
Uncertain tax positions and deferred taxes
Reasons why the matter was determined to be a key audit
matter: Siemens operates in numerous countries and is subject
to different local tax regulations. The accounting for uncertain
tax positions as well as deferred taxes requires management to
exercise considerable judgment and make estimates and assump-
tions, and was therefore a key audit matter. This particularly per-
tains to the measurement and completeness of uncertain tax
positions, the recoverability of deferred tax assets and the mea-
surement and completeness of deferred tax liabilities.
Audit approach: With the assistance of internal tax specialists
who have knowledge of relevant tax regulations, we assessed
management's processes and tested internal controls imple-
mented for the identification, recognition and measurement of
tax positions. As part of our audit procedures for uncertain tax
positions, we evaluated whether management's assessment of
the tax effects of significant business transactions and events in
fiscal year 2017, which could result in uncertain tax positions or
impact the measurement of existing uncertain tax positions,
comply with applicable tax law. This includes, in particular, tax
effects from the acquisition or disposal of businesses, corporate
(intragroup) restructuring activities, results of examinations by
tax authorities, and cross-border transactions including the de-
termination of transfer prices. In order to assess measurement
and completeness, we also obtained confirmations from external
tax advisors and inspected expert tax reports commissioned by
Siemens for individual matters. Further, we evaluated manage-
ment's assessments with respect to the prospects of success of
appeal and tax court proceedings by inquiring of the Siemens tax
department and by considering current tax case law.
In assessing the recoverability of deferred tax assets, we particu-
larly analyzed management's assumptions with respect to pro-
jected future taxable income and compared them to internal
business plans. As part of our audit procedures for deferred tax
liabilities, we especially assessed management's assumptions
regarding the permanent reinvestment of undistributed earnings
of subsidiaries considering the dividend plans.
Our audit procedures did not lead to any reservations relating to
the accounting for uncertain tax positions and deferred taxes.
Reference to related disclosures: With regard to the account-
ing and measurement policies applied in accounting for uncer-
tain tax positions and deferred taxes, refer to → NOTE 2 SIGNIFI-
CANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES in
the NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS. With respect
to disclosures for deferred tax assets and liabilities, refer to
→ NOTE 7 INCOME TAXES in the NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS.
Additional Information
Other information
➤ the Responsibility Statement in chapter → c.1 of the Annual
Report 2017, and
> is materially inconsistent with the consolidated financial
statements, the group management report or our knowledge
obtained in the audit, or
> Corporate Governance in chapter c.4 of the Annual Report
2017.
The Supervisory Board is responsible for the following other
information:
> the Report of the Supervisory Board in chapter
Annual Report 2017.
C.3 of the
130
Additional Information
Our opinions on the consolidated financial statements and the
group management report do not cover the other information
and we do not express an opinion or any other form of assurance
conclusion thereon.
In connection with our audit, our responsibility is to read the
other information, and, in doing so, consider whether the other
information
> otherwise appears to be materially misstated.
Management is responsible for the following other information:
> Siemens Proprietary Ltd.,
Based on the above described uncertainties, our audit proce-
dures with respect to asset retirement obligations focused on the
remediation and environmental protection liabilities for the de-
commissioning of the facilities in Hanau, Germany (Hanau facil-
ities), as well as for the nuclear research and service center in
Karlstein, Germany (Karlstein facilities). Our audit procedures
included, among others, assessing the appropriateness as audit
evidence of an independent expert's report commissioned by
Audit approach: During our audit of the financial reporting of
proceedings out of or in connection with alleged breaches of
contract and compliance violations, we analyzed the processes
and internal controls implemented by Siemens for the identifica-
tion, assessment and accounting of legal and regulatory proceed-
ings. To determine what potentially significant pending legal
proceedings or claims asserted are known and whether manage-
ment's estimates of the expected cash outflows are reasonable,
our audit procedures included inquiries of management and
other persons within the Group entrusted with these matters,
obtaining written statements from in-house legal counsels with
respect to the assessment of estimated cash outflows and their
probability, obtaining confirmations from external legal advisors
and evaluating internal statements concerning the accounting in
the consolidated financial statements. Furthermore, we exam-
ined legal consulting expense accounts for any indications of
legal matters not yet considered, and inspected additional appro-
priate evidence.
Siemens Schweiz AG, Switzerland
(Chairman)
German positions:
> Siemens Healthcare GmbH, Munich
Positions outside Germany:
> Siemens Ltd., China (Chairman)
> Siemens Ltd., India
September 18, September 17,
2013
2023
> Siemens Healthcare GmbH, Munich
Positions outside Germany:
> Siemens Gamesa Renewable Energy
S.A., Spain
German positions:
We further considered alleged or substantiated non-compliance
with statutory provisions, official regulations and internal com-
pany policies (compliance violations) by inspecting internal and
external statements on specific matters, obtaining written state-
ments from external legal advisors, and by inquiring of the com-
pliance organization. In this regard, we, among other procedures,
evaluated the conduct and results of internal investigations by
inspecting internal reports and the measures taken to remediate
identified weaknesses, and assessed whether any risks are to be
reflected in the consolidated financial statements.
> Siemens Healthcare GmbH, Munich
June 27,
1963
Österreich, Austria
> Siemens Corp., USA (Deputy Chairman)
> Siemens Gamesa Renewable Energy
S.A., Spain
rights, penalties for delay and breach of contract as well as liqui-
dated damages. In order to evaluate whether revenues were rec-
ognized on an accrual basis for the selected projects, we ana-
lyzed billable revenues and corresponding cost of sales to be
recognized in the statement of income in the reporting period
considering the extent of progress towards completion, and ex-
amined the accounting for the associated positions in the state-
ment of financial position. Considering the requirements of
IAS 11, we also assessed the accounting for contract amendments
or contractually agreed options. We further performed inquiries
of project management (both commercial and technical project
managers) with respect to the development of the projects, the
reasons for deviations between planned and actual costs, the
current estimated costs to complete the projects, and manage-
ment's assessments on probabilities that contract risks will mate-
rialize. In designing our audit procedures, we also considered
results from project audits conducted by the internal audit func-
tion. Furthermore, we obtained evidence from third parties for
selected projects (e.g. project acceptance documentation, con-
tractual terms and conditions, and legal confirmations regarding
alleged breaches of contract and asserted claims) and inspected
plant and project locations. To identify anomalies in margin de-
velopment throughout the projects' execution, we also applied
data analysis procedures.
Due to the large contract volume and risk profile, our audit pro-
cedures especially focused on large contracts for the construc-
tion of power plants on a turnkey basis, high-voltage-direct-cur-
rent solutions, the delivery of high-speed and commuter trains,
and the construction of offshore wind farms.
Our audit procedures did not lead to any reservations relating to
revenue recognition on construction contracts.
Reference to related disclosures: With regard to the account-
ing and measurement policies applied in accounting for con-
structing contracts, refer to → NOTE 2 SIGNIFICANT ACCOUNTING
POLICIES AND CRITICAL ACCOUNTING ESTIMATES in the NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS. With respect to provisions for
order related losses and risks, refer to NOTE 17 PROVISIONS in
the NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
Provisions for proceedings out of or in connection
with alleged breaches of contract and compliance
violations as well as provisions for asset retirement
obligations
Reasons why the matter was determined to be a key audit
matter: We considered the accounting for provisions for pro-
ceedings out of or in connection with alleged breaches of contract
and compliance violations, including allegations of corruption
and antitrust violations, and for asset retirement obligations to
be a key audit matter. These matters are subject to inherent un-
certainties and require estimates that could have a significant
impact on the recognition and measurement of the respective
provision and, accordingly, on net assets and results of opera-
tions. Proceedings out of or in connection with alleged breaches
of contract and compliance violations are subject to uncertain-
ties because they frequently involve complex legal issues and
accordingly, considerable management judgment, in particular
when determining whether and in what amount a provision is
required to account for the risks. The uncertainties and estimates
with respect to asset retirement obligations pertain especially to
the estimated costs of decommissioning, the estimated time
frame over which cash outflows are expected, and the relevant
discount rates.
Positions outside Germany:
Prof. Dr.-Ing.
German positions:
May 31,
2020
On November 30, 2016, we discussed the financial statements
and the Combined Management Report for Siemens AG and the
Siemens Group as of September 30, 2016, the Annual Report for
2016 (including the Report of the Supervisory Board, the Corpo-
rate Governance Report and the Compensation Report) and the
agenda for the Annual Shareholders' Meeting on February 1,
2017. The Managing Board informed us about the current status
of acquisitions and divestments in particular, the planned
merger of Siemens' wind power business with the publicly listed
company Gamesa Corporación Tecnológica S.A. (Spain) and the
status of the integration of the two previously acquired compa-
nies Dresser Rand Group Inc. and CD-adapco Ltd. In addition, the
Managing Board reported on the status of the implementation of
the "Vision 2020" strategy. We also discussed the annual report
of the Chief Compliance Officer and the pension system. In addi-
tion, the Managing Board informed us about the Mobility Divi-
sion's business position and business development. Finally, at
this meeting, the Supervisory Board approved the recommenda-
tion of the Chairman's Committee that Michael Sen and Cedrik
Neike be appointed full members of the Managing Board, effec-
tive April 1, 2017.
-
At our meeting on November 9, 2016, we discussed the Compa-
ny's key financial figures for fiscal 2016 and approved the budget
for 2017. On the basis of reported target achievement, we also
defined the compensation of the Managing Board members for
fiscal 2016. The appropriateness of this compensation was con-
firmed by an internal review. On the recommendation of the
Compensation Committee, we also approved the targets for
Managing Board compensation for fiscal 2017. The remuneration
system for the Managing Board members for fiscal 2017 is un-
changed vis-à-vis the remuneration system for fiscal 2015, which
the Annual Shareholders' Meeting approved by a majority of
more than 92% on January 27, 2015. At our meeting on Novem-
ber 9, 2016, we also approved the preparation of the public list-
ing of the strategic unit Healthineers as well as the acquisition of
Mentor Graphics Corporation.
We held a total of six regular plenary meetings and one extraor-
dinary meeting in fiscal 2017. Topics of discussion at our regular
plenary meetings were revenue, profit and employment develop-
ment at Siemens AG, the Company's operating units and the
Siemens Group as well as the Company's financial position and
the results of its operations. We also concerned ourselves as re-
quired with major investment and divestment projects and with
certain risks to the Company.
OF THE SUPERVISORY BOARD
TOPICS AT THE PLENARY MEETINGS
At our meeting on January 31, 2017, the Managing Board reported
to us on the Company's business and financial position following
the conclusion of the first quarter. The Supervisory Board ap-
proved Managing Board decisions regarding financing measures.
In addition, the Supervisory Board was informed about the Nom-
inating Committee's decision that Jim Hagemann Snabe be nom-
inated as a candidate for election by the Supervisory Board to the
position of Supervisory Board Chairman on January 31, 2018.
In fiscal 2017, the Supervisory Board performed, in accordance
with its obligations, the duties assigned to it by law, the Siemens
Articles of Association and the Bylaws for the Supervisory Board.
We regularly advised the Managing Board on the management
of the Company and monitored the Managing Board's activities.
We were directly involved at an early stage in all major decisions
regarding the Company. In written and oral reports, the Managing
Board regularly provided us with timely and comprehensive
information on Company planning and business operations as
well as on the strategic development and current state of the
Company. On the basis of reports submitted by the Managing
Board, we considered in detail business development and all de-
cisions and transactions of major significance to the Company.
Deviations from business plans were explained to us in detail and
intensively discussed. The Managing Board coordinated the Com-
pany's strategic orientation with us. The proposals made by the
Managing Board were approved by the Supervisory Board and/or
the relevant Supervisory Board committees after in-depth exam-
ination and consultation. In my capacity as Chairman of the Super-
visory Board, I was also in regular contact with the Managing
Board and, in particular, with the President and Chief Executive
Officer and was kept up-to-date on current developments in the
Company's business situation and on key business transactions.
C.3 Report of the Supervisory Board
Additional Information
[German Public Auditor]
Wirtschaftsprüferin
Breitsameter
Buits an
Berlin and Munich, November 29, 2017
[German Public Auditor]
At our meeting on May 3, 2017, the Managing Board reported to
us on the Company's current business and financial position fol-
lowing the conclusion of the second quarter. The Supervisory
Board defined the target – effective from July 1, 2017 - for the
proportion of women on the Managing Board by June 30, 2022,
as explained in greater detail in chapter c.4.2 CORPORATE GOVER-
NANCE STATEMENT PURSUANT TO SECTIONS 289 A AND 315 PARA. 5 OF THE
The Chairman's Committee met seven times. It also made one
decision by written circulation. Between meetings, I discussed
topics of major importance with the members of the Chairman's
Committee. The Committee concerned itself, in particular, with
personnel topics and corporate governance issues, including the
assumption by Managing Board members of positions at other
companies and institutions.
CONTROL STRUCTURE.
WORK IN THE SUPERVISORY BOARD COMMITTEES
The Supervisory Board has established seven standing commit-
tees, which prepare proposals and issues to be dealt with at its
plenary meetings. Some of the Supervisory Board's decision-mak-
ing powers have also been delegated to these committees within
the permissible legal framework. The committee chairpersons
report to the Supervisory Board on their committees' work at the
subsequent Board meetings. A list of the members and a detailed
explanation of the tasks of the individual Supervisory Board
committees are contained in chapter c.4.1 MANAGEMENT AND
SECTIONS 289 A AND 315 PARA. 5 OF THE GERMAN COMMERCIAL CODE.
At our meeting on September 20, 2017, we approved an unqual-
ified Declaration of Conformity in accordance with Section 161 of
the German Stock Corporation Act (Aktiengesetz). Information
on corporate governance at Siemens is available in chapter
→ C.4 CORPORATE GOVERNANCE. Our Declaration of Conformity has
been made permanently available to our shareholders on our
website. The current Declaration of Conformity is also available
in chapter c.4.2 CORPORATE GOVERNANCE STATEMENT PURSUANT TO
CORPORATE GOVERNANCE CODE
-
At an extraordinary meeting on September 26, 2017, the Super-
visory Board approved the planned merger of Siemens' mobility
business with the publicly listed company Alstom SA (France).
At our meeting on September 20, 2017, the Managing Board
reported to us on the state of the Company and on the business
position of the Process Industries and Drives Division and on the
business position of next47, the separate unit for startups. On the
recommendation of the Chairman's Committee, we extended
Dr. Ralf Thomas's term of office as a member of the Managing
Board, effective from September 18, 2018, until September 17,
2023. In addition, we discussed the Mobility Division's strategic
orientation. As part of our regular review, we adjusted - follow-
ing preparation and a recommendation by the Compensation
Committee the amount of Managing Board compensation for
fiscal 2018. In a further continuation of the strategy focus of
May 3, 2017, the Supervisory Board also concerned itself with the
Company's strategic orientation. Finally, we discussed the effi-
ciency review of our activities.
The Supervisory Board considered in detail the strategic setup of
the Mobility Division and discussed the further actions planned
regarding the preparation of the public listing of the strategic
unit Healthineers. In addition, the Supervisory Board concerned
itself with the recommendations of the Siemens Technology &
Innovation Council and, in a continuation of the strategy focus
of May 3, 2017, discussed the Company's strategic orientation.
133
Additional Information
At our meeting on August 2, 2017, the Managing Board reported
to us on the Company's business and financial position following
the conclusion of the third quarter. On the recommendation of
the Chairman's Committee, we extended Joe Kaeser's term of
office as a member of the Managing Board and as President and
CEO, effective from August 1, 2018, until the end of the Annual
Shareholders' Meeting that will decide on the ratification of
the acts of the members of the Managing Board for fiscal 2020.
GERMAN COMMERCIAL CODE. As part of a strategy focus, we con-
cerned ourselves comprehensively and in detail with the Compa-
ny's strategic orientation, taking into account current technology
and innovation topics and the status of the implementation of
the "Vision 2020" strategy.
-
The Nominating Committee met six times. Outside these
meetings, it also concerned itself intensively with the long-term
succession planning for the Supervisory Board and, in particu-
lar, with succession to the Chairmanship of the Supervisory
Board and to the Chairmanship of the Audit Committee. At its
meeting on January 31, 2017, the Nominating Committee ap-
proved the nomination of Jim Hagemann Snabe as a candidate
for election by the Supervisory Board to the position of Super-
visory Board Chairman, with the election to take place at the
Supervisory Board's constituent meeting after the elections to
the Supervisory Board at the Annual Shareholders' Meeting on
January 31, 2018. The Nominating Committee prepared the Su-
pervisory Board's proposal to the Annual Shareholders' Meeting
on January 31, 2018, regarding the upcoming regular election
of seven shareholder representatives on the Supervisory Board.
When searching for and evaluating candidates, the Nominating
Committee took into consideration - in addition to the require-
ments of the German Stock Corporation Act, the German Cor-
porate Governance Code and the Bylaws for the Supervisory
Board - the targets established by the Supervisory Board for its
composition and the profile of skills and expertise defined by
the Supervisory Board for its composition. The Nominating
Committee was supported in its activities by an external person-
nel consultant.
Spannagl
Wirtschaftsprüfer
Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft
> conclude on the appropriateness of management's use of the
going concern basis of accounting and, based on the audit evi-
dence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the
Group's ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw
attention in our auditor's report to the related disclosures in
the consolidated financial statements and the group manage-
ment report or, if such disclosures are inadequate, to modify
our respective opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor's report.
132
131
Additional Information
> obtain an understanding of internal control relevant to the au-
dit of the consolidated financial statements and the arrange-
ments and measures relevant to the audit of the group man-
agement report in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of these systems;
> evaluate the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related dis-
closures made by management;
> identify and assess the risks of material misstatement of the
consolidated financial statements and the group manage-
ment report, whether due to fraud or error, design and per-
form audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a
basis for our opinions. The risk of not detecting a material
misstatement resulting from fraud is higher than for one re-
sulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal control;
other matters that may reasonably be thought to bear on our
independence, and related safeguards.
We exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT
OF THE CONSOLIDATED FINANCIAL STATEMENTS
AND THE GROUP MANAGEMENT REPORT
Our objectives are to obtain reasonable assurance about whether
the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
whether the group management report as a whole provides a
suitable view of the Group's position and, in all material respects,
is consistent with the consolidated financial statements and our
audit findings, complies with the provisions of German law and
suitably presents the opportunities and risks of future develop-
ment, and to issue an independent auditor's report that includes
our opinions on the consolidated financial statements and the
group management report.
Siegfried Russwurm,
In addition, management is responsible for the preparation of
the group management report that as a whole provides a suitable
view of the Group's position and, in all material respects, is con-
sistent with the consolidated financial statements, complies with
the provisions of German law and suitably presents the opportu-
nities and risks of future development and for such arrangements
and measures (systems) as management deems necessary to
enable the preparation of a group management report in accor-
dance with the applicable provisions of German law and to fur-
nish sufficient appropriate evidence for the statements in the
group management report.
In preparing the consolidated financial statements, management
is responsible for assessing the Group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
management either intends to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Management is responsible for the preparation of consolidated
financial statements that comply, in all material respects, with
IFRSS as adopted by the EU and the supplementary provisions of
German law pursuant to Sec. 315 a (1) HGB and full IFRS as issued
by the IASB, for the preparation of consolidated financial state-
ments that give a true and fair view of the net assets, financial
position and results of operations of the Group in accordance
with these requirements and for such internal control as manage-
ment determines is necessary to enable the preparation of con-
solidated financial statements that are free from material mis-
statement, whether due to fraud or error.
RESPONSIBILITIES OF MANAGEMENT AND THE
SUPERVISORY BOARD FOR THE CONSOLIDATED
FINANCIAL STATEMENTS AND THE GROUP
MANAGEMENT REPORT
Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with Sec. 317
HGB and the EU Audit Regulation as well as generally accepted
standards on auditing promulgated by the IDW and in supple-
mentary compliance with ISA will always detect a material mis-
statement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggre-
gate, they could reasonably be expected to influence the eco-
nomic decisions of users taken on the basis of these consolidated
financial statements and the group management report.
дения
From the matters communicated with those charged with gover-
nance, we determine those matters that were of most signi-
ficance in the audit of the consolidated financial statements of
the current period and are therefore the key audit matters. We
describe each key audit matter in our auditor's report unless laws
or regulations preclude public disclosure about the matter.
cease to continue as a going concern;
Munich, November 27, 2017
The auditor responsible for the audit is Thomas Spannagl.
We provide those charged with governance with a statement that
we have complied with relevant ethical requirements regarding
independence and communicate with them all relationships and
We communicate with those charged with governance regard-
ing, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant de-
ficiencies in internal control that we identify during our audit.
> perform procedures on the forward-looking statements made
by management in the group management report. In partic-
ular, on the basis of sufficient appropriate audit evidence, we
walk through the significant assumptions underlying manage-
ment's forward-looking statements and assess whether the
forward-looking statements were appropriately derived from
these assumptions. We do not provide a separate opinion on
the forward-looking statements and underlying assumptions.
There is a significant unavoidable risk that future events will
differ materially from the forward-looking statements.
legal provisions and the view it gives of the Group's position;
However, future events or conditions may cause the Group to Report on other legal and regulatory
consolidated financial statements, its compliance with the Responsible auditor
We were elected as auditor of the consolidated financial state-
ments by the Annual Shareholders' Meeting on February 1, 2017.
We were engaged by the Supervisory Board on February 1, 2017.
We have been the auditor of Siemens Aktiengesellschaft for an
uninterrupted period since the audit of the consolidated financial
statements for the fiscal year from October 1, 2008 to Septem-
ber 30, 2009.
OTHER REPORTING ITEMS IN ACCORDANCE WITH
ART. 10 OF THE EU AUDIT REGULATION
requirements
> evaluate the group management report's consistency with the
> obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities
within the Group to express opinions on the consolidated
financial statements and the group management report.
We are responsible for the direction, supervision and perfor-
mance of the group audit. We remain solely responsible for
our audit opinions;
> evaluate the overall presentation, structure and content of the
consolidated financial statements, including the disclosures,
and whether the consolidated financial statements represent
the underlying transactions and events in a manner that
achieves a true and fair view of the net assets, financial posi-
tion and results of operations of the Group in accordance with
IFRS as adopted by the EU and the supplemental provisions of
German law applicable pursuant to Sec. 315 a (1) HGB and full
IFRS as issued by the IASB;
We confirm that the audit opinions included in this auditor's
report are consistent with the additional report to the Audit
Committee in accordance with Art. 11 of the EU Audit Regulation
(audit report).
The Compliance Committee met four times. It primarily dis-
cussed the quarterly reports and the annual report of the Chief
Compliance Officer.
The Supervisory Board is responsible for overseeing the Group's
financial reporting process for the preparation of the consoli-
dated financial statements and the group management report.
The Compensation Committee met three times. It also made
one decision by written circulation. The Compensation Commit-
tee prepared, in particular, proposals for the Supervisory Board
regarding the determination of targets for variable compensa-
tion, the determination and review of the appropriateness of
Managing Board compensation and the approval of the Compen-
sation Report.
1964
Dr. rer. nat.
November 22, April 1,
Roland Busch,
Term expires
At the
end of the
2021 Annual
Sharehold-
ers' Meeting
First
appointed
May 1,
2006
2011
June 23,
1957
President and
Joe Kaeser
Date of birth
Name
In fiscal 2017, the Managing Board comprised the following
members:
Members of the Managing Board and positions
held by Managing Board members
Chief Executive Officer
137
March 31,
2021
October 15,
1963
The Mediation Committee had no need to meet.
April 1,
2017
March 7,
1973
January 31,
2020
February 1,
2015
January 12,
1970
Lisa Davis
Janina Kugel
April 1,
2011
May 24,
1958
Klaus Helmrich
2019
July 31,
August 1,
2014
March 31,
2021
Additional Information
Cedrik Neike
The Equity and Compensation Committee comprises Joe Kaeser
(Chairman), Dr. Ralf P. Thomas, Janina Kugel and, as a consultative
member, Mariel von Schumann (as of September 30, 2017).
134
Information on the areas of responsibility and the curricula vitae of
the members of the Managing Board are available on the Siemens
Global Website at www.SIEMENS.COM/COMPANY-STRUCTURE. Infor-
mation on the compensation paid to the members of the Managing
Board is provided in chapter → A.10 COMPENSATION REPORT.
including portfolio measures, as well as the preparation and ap-
proval of investment and divestment projects. For example, the
Committee prepared proposals for the Supervisory Board regard-
ing the acquisition of Mentor Graphics Corporation, regarding
the preparation of the public listing of the strategic unit Health-
ineers and regarding actions relating to the strategic orientation
of the Mobility Division. At its meeting on September 19, 2017,
the Committee also approved the Managing Board decision con-
cerning an investment in a combined cycle power plant project
in the United Arab Emirates and prepared the proposal for the
Supervisory Board regarding Managing Board decisions relating
to financial measures. In addition, the Innovation and Finance
Committee intensively discussed the Company's strategic orien-
tation and its innovation and technology focuses. In particular,
it discussed the activities and recommendations of the Siemens
Technology & Innovation Council.
The Audit Committee met six times. In the presence of the inde-
pendent auditors as well as the President and Chief Executive
Officer and the Chief Financial Officer, the Committee dealt with
the financial statements and the Combined Management Report
for Siemens AG and the Siemens Group. The Audit Committee
discussed the Half-year Financial Report and the quarterly state-
ments with the Managing Board and the independent auditors.
In the presence of the independent auditors, it also discussed the
report on the auditors' review of the Company's Half-year Con-
solidated Financial Statements and of its Interim Group Manage-
ment Report. The Committee recommended that the Supervisory
Board propose to the Annual Shareholders' Meeting the election
of Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft (Stutt-
gart, Germany) as the independent auditors. The Committee
appointed the independent auditors for fiscal 2017, defined the
audit focal points and determined the auditors' fee. The Commit-
tee monitored the selection, independence, qualification, rota-
tion and efficiency of the independent auditors. Furthermore,
the Audit Committee dealt with the Company's accounting and
accounting process, the effectiveness of its internal control sys-
tem, its risk management system and the effectiveness, re-
sources and findings of the internal audit as well as with reports
concerning potential and pending legal disputes.
DETAILED DISCUSSION OF THE AUDIT
OF THE FINANCIAL STATEMENTS
The independent auditors, Ernst & Young GmbH Wirtschaftsprü-
fungsgesellschaft (Stuttgart, Germany), audited the Annual Finan-
cial Statements of Siemens AG, the Consolidated Financial State-
ments of the Siemens Group and the Combined Management
Report for Siemens AG and the Siemens Group for fiscal 2017 and
issued an unqualified opinion. Ernst & Young GmbH Wirtschafts-
prüfungsgesellschaft (Stuttgart, Germany) has served as inde-
pendent auditors of Siemens AG and the Siemens Group since
fiscal 2009. Katharina Breitsameter has signed as auditor since
fiscal 2016, and Thomas Spannagl has signed as auditor respon-
sible for the audit since fiscal 2014. The Annual Financial State-
ments of Siemens AG and the Combined Management Report for
Siemens AG and the Siemens Group were prepared in accordance
with the requirements of German law. The Consolidated Financial
Statements of the Siemens Group were prepared in accordance
with the International Financial Reporting Standards (IFRS) as
adopted by the EU and with the additional requirements of Ger-
man law set out in Section 315 a (1) of the German Commercial
Code (Handelsgesetzbuch). The Consolidated Financial State-
ments of the Siemens Group also comply with the IFRS as issued
by the International Accounting Standards Board (IASB). The in-
dependent auditors conducted their audit in accordance with
Section 317 of the German Commercial Code, the EU Audit Regu-
lation (Regulation (EU) No. 537/2014 of the European Parliament
and of the Council of 16 April 2014 on specific requirements re-
garding statutory audit of public-interest entities and repealing
Commission Decision 2005/909/EC, "EU Audit Regulation") and
German generally accepted standards for the audit of financial
statements promulgated by the Institut der Wirtschaftsprüfer
(IDW) as well as in supplementary compliance with the Interna-
tional Standards on Auditing (ISA). The abovementioned docu-
ments as well as the Managing Board's proposal for the appropri-
ation of net income were submitted to us by the Managing Board
in advance. The Audit Committee discussed the dividend proposal
in detail at its meeting on November 7, 2017. It discussed the
Annual Financial Statements of Siemens AG, the Consolidated
Financial Statements of the Siemens Group and the Combined
Management Report in detail at its meeting on November 28,
2017. In this context, the Audit Committee concerned itself, in
particular, with key audit matters, including the audit procedures
implemented. The audit reports prepared by the independent au-
ditors were distributed to all members of the Supervisory Board
and comprehensively reviewed at the Supervisory Board's meet-
ing on November 29, 2017, in the presence of the independent
auditors, who reported on the scope, focal points and main find-
ings of their audit, addressing, in particular, key audit matters and
the audit procedures implemented. No major weaknesses in the
Company's internal control or risk management systems were
reported. At this meeting, the Managing Board explained the
financial statements of Siemens AG and the Siemens Group as
well as the Company's risk management system. At its meeting
on November 29, 2017, the Supervisory Board also approved the
proposal to the Annual Shareholders' Meeting, taking into ac-
count the Audit Committee's recommendation regarding the
election of the independent auditors. This proposal was based on
the Audit Committee's declaration that its recommendation was
free of undue influence by third parties and that it had not en-
tered into any contractual clause that could restrict the choice
within the meaning of Art. 16, para. 6 of the EU Audit Regulation.
Additional Information
135
The Supervisory Board concurs with the results of the audit.
Following the definitive findings of the Audit Committee's exam-
ination and our own examination, we have no objections. The
Managing Board prepared the Annual Financial Statements of
Siemens AG and the Consolidated Financial Statements of the
Siemens Group. We approved the Annual Financial Statements
and the Consolidated Financial Statements. In view of our ap-
proval, the Annual Financial Statements of Siemens AG are
adopted as submitted. We endorsed the Managing Board's pro-
posal that the net income available for distribution be used to pay
out a dividend of €3.70 per share entitled to a dividend and that
the amount of net income attributable to shares of stock not
entitled to receive a dividend for fiscal 2017 be carried forward.
CHANGES IN THE COMPOSITION OF THE
SUPERVISORY AND MANAGING BOARDS
Prof. Dr. Siegfried Russwurm left the Managing Board, effective
March 31, 2017. The Supervisory Board appointed Michael Sen
and Cedrik Neike full members of the Managing Board, effective
April 1, 2017. There were no changes in the composition of the
Supervisory Board during the year under review. Effective at the
end of the day on September 30, 2017, Hans-Jürgen Hartung left
the Supervisory Board. Dorothea Simon was appointed a mem-
ber of the Supervisory Board by order of the district court of Char-
lottenburg, Germany, effective from October 1, 2017 until the end
of the Annual Shareholders' Meeting on January 31, 2018.
On behalf of the Supervisory Board, I would like to thank the
members of the Managing Board as well as the employees and
employee representatives of Siemens AG and all Group compa-
nies for their outstanding commitment and constructive cooper-
ation in fiscal 2017.
For the Supervisory Board
Gerhard Comme
Additional Information
не
The Managing Board has one committee, the Equity and Com-
pensation Committee. This committee, to which the former
Equity and Employee Stock Committee has been transferred,
comprises the President and CEO, the Chief Financial Officer,
the Chief Human Resources Officer and, as a consultative mem-
ber, the Chief of Staff of Siemens AG. It is responsible for the
duties assigned to it by decision of the Managing Board and has
assumed the duties previously assigned to the Equity and Em-
ployee Stock Committee - including, in particular, duties in con-
nection with capital measures and equity-linked financial instru-
ments, relating to the compensation of the employees and
managers of the Siemens Group (except for the compensation
of the members of the Managing Board and Top Management)
and relating to share-based compensation components and em-
ployee share plans.
BOARD.
Dr. Gerhard Cromme
Chairman
The Supervisory Board has defined for a second time a target for
the proportion of women in the Managing Board of Siemens AG
and has set a deadline for its attainment. The Managing Board
has defined again targets for the proportion of women at the
two management levels below the Managing Board and has set
a deadline for their attainment. Details are set out in chapter
→ C.4.2.4 TARGETS FOR THE QUOTA OF WOMEN ON THE MANAGING BOARD
AND AT THE TWO MANAGEMENT LEVELS IMMEDIATELY BELOW THE MANAGING
The Managing Board and the Supervisory Board cooperate
closely for the benefit of the Company. The Managing Board in-
forms the Supervisory Board regularly, comprehensively and
without delay on all issues of importance to the Company with
regard to strategy, planning, business development, financial
position, earnings, compliance and risks. When filling managerial
positions at the Company, the Managing Board takes diversity
into consideration and, in particular, aims for an appropriate con-
sideration of women and internationality.
SIEMENS.COM/SUSTAINABILITY-FIGURES
The Managing Board prepares the Company's Quarterly State-
ments and Half-year Financial Report, the Annual Financial
Statements of Siemens AG, the Consolidated Financial State-
ments of the Siemens Group and the Combined Management
Report of Siemens AG and the Siemens Group. In addition, the
Managing Board ensures that the Company adheres to statutory
requirements, official regulations and internal Company policies
and works to achieve compliance with these provisions and pol-
icies within the Siemens Group. The Managing Board has estab-
lished a comprehensive compliance management system. De-
tails are available on the Siemens Global Website at www.
The Innovation and Finance Committee held three ordinary
and two extraordinary meetings. The focuses of its meetings
included the Committee's recommendation regarding the bud-
get for fiscal 2017 and the discussion of the Company's strategy,
C.4.1.1 MANAGING BOARD
Siemens AG is subject to German corporate law. Therefore, it has
a two-tier board structure, consisting of a Managing Board and a
Supervisory Board.
and control structure
C.4 Corporate Governance
C.4.1 Management
136 Additional Information
As the Company's top management body, the Managing Board
is committed to serving the interests of the Company and achiev-
ing sustainable growth in company value. The members of the
Managing Board are jointly responsible for the entire manage-
ment of the Company and decide on the basic issues of business
policy and corporate strategy as well as on the Company's annual
and multi-year plans.
11
12
Norbert Reithofer, Dr.-Ing. Dr.-Ing. E.h.
100%
Gérard Mestrallet
7
96%
22
23
Nicola Leibinger-Kammüller, Dr. phil.
96%
7
92%
7
7
95%
21
27
22
Sibylle Wankel
Jim Hagemann Snabe
Güler Sabancı
100%
7
Michael Sigmund
100%
7
Nathalie von Siemens, Dr. phil.
100%
7
7
82%
Jürgen Kerner
7
11
100%
Michael Diekmann
10
9
90%
Hans Michael Gaul, Dr. iur.
23
23
100%
Reinhard Hahn
7
7
28
100%
17
14
Hans-Jürgen Hartung
7
7
100%
Robert Kensbock
21
21
100%
Harald Kern
16
13
81%
Bettina Haller
11
A general description of the functions and operation of the
Managing Board and the Supervisory Board can be found in chapter
→ C.4.1 MANAGEMENT AND CONTROL STRUCTURE. Further details can
be derived from the bylaws for the corporate bodies concerned.
C.4.1.3 SHARE TRANSACTIONS BY MEMBERS
OF THE MANAGING AND SUPERVISORY BOARDS
Pursuant to Article 19 of EU Regulation No. 596/2014 of the Euro-
pean Parliament and Council on market abuse (Market Abuse
Regulation), members of the Managing Board and the Super-
visory Board are legally required to disclose all transactions con-
ducted on their own account relating to the shares or debt instru-
ments of Siemens AG or to derivatives or financial instruments
linked thereto, if the total value of such transactions entered into
by a board member or any closely associated person reaches or
exceeds €5,000 in any calendar year. All transactions reported
to Siemens AG in accordance with this requirement have been
duly published and are available on the Company's website at:
C.4.2.4 TARGETS FOR THE QUOTA OF WOMEN
ON THE MANAGING BOARD AND AT THE
TWO MANAGEMENT LEVELS IMMEDIATELY
BELOW THE MANAGING BOARD; INFORMATION
ON SUPERVISORY BOARD COMPLIANCE WITH
MINIMUM GENDER QUOTA REQUIREMENTS
At Siemens AG, the target for the share of women on the Managing
Board has been set at a minimum of 2/8, and the corresponding
target for each of the two management levels immediately
below the Managing Board has been set at 20%, applicable in
each case until June 30, 2022. Due to the appointment of
Mr. Neike and Mr. Sen to the expanded Managing Board, which
now has eight members, the target for the Managing Board of
2/7 until June 30, 2017 has been missed since April 1, 2017. The
target for the share of women for each of the two management
levels immediately below the Managing Board at 10% was ful-
filled until June 30, 2017. Until June 30, 2017, assignments to
those two management levels were based on a global system of
position levels. At the end of the reporting period, the company
completely abolished this global system of position levels. As a
result, the management levels on which the new targets are
based have been redefined, and the new targets are not compa-
rable to those in effect up to June 30, 2017.
The composition of the Supervisory Board fulfilled the legal re-
quirements regarding the minimum gender quota in the report-
ing period.
146
Additional Information
C.5 Notes and forward-looking statements
This document contains statements related to our future business
and financial performance and future events or developments
involving Siemens that may constitute forward-looking state-
ments. These statements may be identified by words such as "ex-
pect," "look forward to," "anticipate,” “intend," "plan," "believe,"
"seek," "estimate," "will," "project" or words of similar meaning.
We may also make forward-looking statements in other reports,
in presentations, in material delivered to shareholders and in
press releases. In addition, our representatives may from time to
time make oral forward-looking statements. Such statements are
based on the current expectations and certain assumptions of
Siemens' management, of which many are beyond Siemens' con-
trol. These are subject to a number of risks, uncertainties and
factors, including, but not limited to those described in disclo-
sures, in particular in the chapter Risks in this Annual Report.
Should one or more of these risks or uncertainties materialize, or
should underlying expectations not occur or assumptions prove
incorrect, actual results, performance or achievements of Siemens
may (negatively or positively) vary materially from those de-
scribed explicitly or implicitly in the relevant forward-looking
statement. Siemens neither intends, nor assumes any obligation,
to update or revise these forward-looking statements in light of
developments which differ from those anticipated.
-
This document includes - in the applicable financial reporting
framework not clearly defined – supplemental financial mea-
sures that are or may be alternative performance measures
(non-GAAP-measures). These supplemental financial measures
should not be viewed in isolation or as alternatives to measures
of Siemens' net assets and financial positions or results of opera-
tions as presented in accordance with the applicable financial
reporting framework in its Consolidated Financial Statements.
Other companies that report or describe similarly titled alterna-
tive performance measures may calculate them differently.
Due to rounding, numbers presented throughout this and other
documents may not add up precisely to the totals provided and
percentages may not precisely reflect the absolute figures.
This document is an English language translation of the German
document. In case of discrepancies, the German language docu-
ment is the sole authoritative and universally valid version.
For technical reasons, there may be differences between the
accounting records appearing in this document and those pub-
lished pursuant to legal requirements.
The "Sustainability Information 2017" which reports on Sustain-
ability and Citizenship at Siemens is available at:
COM/INVESTOR/EN/
WWW.SIEMENS.
SIEMENS.COM/289A
Additional Information
Address
Internet
Phone
Fax
E-mail
Siemens AG
Werner-von-Siemens-Str. 1
80333 Munich
Germany
WWW.SIEMENS.COM
+49 89 636-33443 (Media Relations)
+49 89 636-32474 (Investor Relations)
+49 89 636-30085 (Media Relations)
+49 89 636-1332474 (Investor Relations)
press@siemens.com
investorrelations@siemens.com
© 2017 by Siemens AG, Berlin and Munich
7
147
100%
This information and these documents, including the Code and
the Business Conduct Guidelines, are available at: www.
The Business Conduct Guidelines provide the ethical and legal
framework within which we want to maintain our successful ac-
tivities. They contain the basic principles and rules for our con-
duct within our Company and in relation to our external partners
and the general public. They set out how we meet our ethical and
legal responsibility as a Company and give expression to our cor-
porate values of being "Responsible" - "Excellent" - "Innovative".
WWW.SIEMENS.COM/DIRECTORS-DEALINGS
C.4.1.4 ANNUAL SHAREHOLDERS' MEETING
AND INVESTOR RELATIONS
Shareholders exercise their rights in the Annual Shareholders'
Meeting. An ordinary Annual Shareholders' Meeting normally
takes place within the first four months of each fiscal year. The
Annual Shareholders' Meeting decides, among other things, on
the appropriation of unappropriated net income, the ratification
of the acts of the Managing and Supervisory Boards, and the
appointment of the independent auditors. Amendments to the
Articles of Association and measures that change the Company's
capital stock are approved at the Annual Shareholders' Meeting
and are implemented by the Managing Board. The Managing
Board facilitates shareholder participation in this meeting
through electronic communications – in particular, via the Inter-
net and enables shareholders who are unable to attend the
meeting to vote by proxy. Furthermore, shareholders may exer-
cise their right to vote in writing or by means of electronic com-
munications (absentee voting). The Managing Board may enable
shareholders to participate in the Annual Shareholders' Meeting
144
Additional Information
without the need to be present at the venue and without a proxy
and to exercise some or all of their rights fully or partially by
means of electronic communications. Shareholders may submit
proposals regarding the proposals of the Managing and Supervi-
sory Boards and may contest decisions of the Annual Sharehold-
ers' Meeting. Shareholders owning Siemens stock with an aggre-
gate notional value of €100,000 or more may also demand the
judicial appointment of special auditors to examine specific is-
sues. The reports, documents and information required by law for
the Annual Shareholders' Meeting, including the Annual Report,
may be downloaded from our website. The same applies to the
agenda for the Annual Shareholders' Meeting and to any counter-
proposals or shareholders' nominations that require disclosure.
As part of our investor relations activities, we inform our investors
comprehensively about developments within the Company. For
communication purposes, Siemens makes extensive use of the
Internet. We publish Quarterly Statements, Half-year Financial
and Annual Reports, earnings releases, ad hoc announcements,
analyst presentations, letters to shareholders and press releases
as well as the financial calendar for the current year, which con-
tains the publication dates of significant financial communica-
tions and the date of the Annual Shareholders' Meeting, at:
WWW.SIEMENS.COM/INVESTORS
Our Articles of Association, the Bylaws for the Supervisory Board,
the Bylaws for the most important Supervisory Board commit-
tees, the Bylaws for the Managing Board, all our Declarations of
Conformity with the Code and a variety of other corporate-
governance-related documents are posted on our website at:
WWW.SIEMENS.COM/CORPORATE-GOVERNANCE
C.4.2 Corporate Governance
statement pursuant to Sections
289 a and 315 para. 5 of
the German Commercial Code
The Corporate Governance statement pursuant to Sections 289 a
and 315 para. 5 of the German Commercial Code (Handelsgesetz-
buch) is an integral part of the Combined Management Report.
In accordance with Section 317 para. 2 sentence 4 of the German
Commercial Code, the disclosures made within the scope of Sec-
tions 289 a and 315 para. 5 of the German Commercial Code are
not subject to the audit by the auditors.
C.4.2.1 DECLARATION OF CONFORMITY WITH
C.4.2.3 OPERATION OF THE MANAGING BOARD
AND THE SUPERVISORY BOARD, AND COMPOSITION
AND OPERATION OF THEIR COMMITTEES
THE GERMAN CORPORATE GOVERNANCE CODE
The Managing Board and the Supervisory Board of Siemens AG
approved the following Declaration of Conformity pursuant to
Section 161 of the German Stock Corporation Act as of October 1,
2017:
Siemens AG fully complies and will continue to comply with
the recommendations of the German Corporate Governance
Code ("Code") in the version of February 7, 2017, published
by the Federal Ministry of Justice in the official section of the
Federal Gazette ("Bundesanzeiger").
Since making its last Declaration of Conformity dated Octo-
ber 1, 2016, Siemens AG has complied with the recommen-
dations of the Code.
Berlin and Munich, October 1, 2017
Siemens Aktiengesellschaft
The Managing Board The Supervisory Board"
C.4.2.2 INFORMATION ON
CORPORATE GOVERNANCE PRACTICES
Suggestions of the Code
Siemens voluntarily complies with the Code's non-binding sug-
gestions, with the following exception:
Pursuant to Section 3.7 para. 3 of the Code, in the case of a take-
over offer, a management board should convene an extraordinary
general meeting at which shareholders discuss the takeover offer
and may decide on corporate actions. The convening of a share-
holders' meeting - even taking into account the shortened time
limits stipulated in the German Securities Acquisition and Take-
over Act (Wertpapiererwerbs- und Übernahmegesetz) - is an
organizational challenge for large publicly listed companies. It
appears doubtful whether the associated effort is justified in
cases where no relevant decisions by the shareholders' meeting
are intended. Therefore, extraordinary shareholders' meetings
shall be convened only in appropriate cases.
Further corporate governance practices applied beyond legal
requirements are contained in our Business Conduct Guidelines.
Additional Information
145
Our Company's values and
Business Conduct Guidelines
In the 170 years of its existence, our Company has built an excel-
lent reputation around the world. Technical performance, inno-
vation, quality, reliability, and international engagement have
made Siemens one of the leading companies in electronics and
electrical engineering. It is top performance with the highest eth-
ics that has made Siemens strong. This is what the Company
should continue to stand for in the future.
"Declaration of Conformity by the Managing Board and the
Supervisory Board of Siemens Aktiengesellschaft with the
German Corporate Governance Code
Olaf Bolduan
Chairwoman and Managing Director
of Hacı Ömer Sabancı Holding A.Ş.
Managing Director and Spokesperson
of Siemens Stiftung
28
January 27,
2009
March 10,
1952
April 1,
2007
March 14,
1959
January 27,
2015
June 24,
1956
March 2,
1942
Date of birth
> Siemens Healthcare GmbH, Munich
March 13,
1971
> HSBC Trinkaus & Burkhardt AG, Düsseldorf
German positions:
Memberships in supervisory boards whose establish-
ment is required by law or in comparable domestic
or foreign controlling bodies of business enterprises
(as of September 30, 2017)
January 24,
2008
Member since
Chairman of the Siemens Europe
Committee
Member of the Works Council of
Siemens Erlangen Süd, Germany
Deputy Chairman of the Central
Works Council of Siemens AG
Chairwoman of the Combine Works
Council of Siemens AG
Trade Union Secretary of
the Managing Board of IG Metall
Supervisory Board Member
Occupation
German positions:
January 23,
2013
March 16,
1960
January 24,
2008
> Premium Aerotec GmbH, Augsburg
(Deputy Chairman)
> MAN SE, Munich (Deputy Chairman)
> Airbus Operations GmbH, Hamburg
> MAN Diesel & Turbo SE, Augsburg
German positions:
January 27,
2015
May 29,
1956
Chairman of the Supervisory Board
of Bayerische Motoren Werke
Aktiengesellschaft
January 23,
2013
April 1,
1949
Chairman of the Board of Directors
of ENGIE S.A.
2008
December 15, January 24,
1959
President and Chairwoman of the
Managing Board of TRUMPF GmbH
+ Co. KG
Nathalie von Siemens,
Dr. phil.
Güler Sabancı
Norbert Reithofer, Dr.-Ing.
Dr.-Ing. E.h.
Gérard Mestrallet
Nicola Leibinger-
Kammüller, Dr. phil.
January 25,
2012
1969
January 22,
Jürgen Kerner*
Harald Kern*
Hans-Jürgen Hartung*
(until September 30, 2017)
Robert Kensbock*
Bettina Haller*
Chairman of the Works Council
of Siemens Dynamowerk, Berlin,
Germany
Olaf Bolduan*
January 23,
2013
October 21,
1946
January 24,
2008
March 26,
1960
Chairman of the Supervisory Board
of Bayer AG
Chairwoman of the Central Works
Council of Siemens AG
Birgit Steinborn*
First Deputy Chairwoman
Werner Wenning
Second Deputy Chairman
Member since
January 23,
2003
Date of birth
February 25,
1943
Chairman of the Supervisory Board
of Siemens AG
Gerhard Cromme, Dr. iur.
Chairman
Occupation
Name
In fiscal 2017, the Supervisory Board comprised the following
members:
Members of the Supervisory Board and positions
held by Supervisory Board members
The Supervisory Board of Siemens AG has 20 members. As stipu-
lated by the German Codetermination Act (Mitbestimmungs-
gesetz), half of the members represent Company shareholders, and
half represent Company employees. The employee representatives'
names are marked below with an asterisk (*). In general, the terms
of office of the current Supervisory Board members will expire at
the conclusion of the Annual Shareholders' Meeting in 2018. The
terms of office of Dr. Nicola Leibinger-Kammüller, Jim Hagemann
Snabe and Werner Wenning will expire at the conclusion of the
Annual Shareholders' Meeting in 2021. Effective from October 1,
2017, until the end of the ordinary Annual Shareholders' Meeting
on January 31, 2018, Dorothea Simon has been appointed by court
order as employee representative on the Supervisory Board. She
succeeds Hans-Jürgen Hartung, who left the Supervisory Board at
the end of September 30, 2017. The future Supervisory Board's em-
ployee representatives were newly elected on October 5, 2017, in
accordance with the provisions of the German Codetermination Act
(Mitbestimmungsgesetz). Their election will take effect at the end
of the ordinary Annual Shareholders' Meeting on January 31, 2018.
Information on the work of the Supervisory Board is provided in
chapter c.3 REPORT OF THE SUPERVISORY BOARD. The curricula vitae
of the members of the Supervisory Board are available on the
Siemens Global Website at www.SIEMENS.COM/SUPERVISORY-
BOARD. The compensation paid to the members of the Supervi-
sory Board is provided in chapter → A.10 COMPENSATION REPORT.
The Supervisory Board oversees and advises the Managing Board
in its management of the Company's business. At regular inter-
vals, the Supervisory Board discusses business development,
planning, strategy and strategy implementation. It reviews the
Annual Financial Statements of Siemens AG, the Consolidated
Financial Statements of the Siemens Group and the Combined
Management Report of Siemens AG and the Siemens Group, and
the proposal for the appropriation of net income. It approves the
Annual Financial Statements of Siemens AG as well as the Consol-
idated Financial Statements of the Siemens Group, based on the
results of the preliminary review conducted by the Audit Commit-
tee and taking into account the reports of the independent audi-
tors. The Supervisory Board decides on the Managing Board's
proposal for the appropriation of net income and the Report of
the Supervisory Board to the Annual Shareholders' Meeting. In
addition, the Supervisory Board or the Compliance Committee,
which is described in more detail below, concern themselves with
monitoring the Company's adherence to statutory provisions, of-
ficial regulations and internal Company policies (compliance). The
Supervisory Board also appoints the members of the Managing
Board and determines each member's portfolios. Important
Managing Board decisions – such as those regarding major acqui-
sitions, divestments, fixed asset investments or financial meas-
ures - require Supervisory Board approval, unless the Bylaws for
the Supervisory Board specify that such authority be delegated to
the Innovation and Finance Committee of the Supervisory Board.
In the Bylaws for the Managing Board, the Supervisory Board has
established the rules that govern the Managing Board's work.
C.4.1.2 SUPERVISORY BOARD
July 24,
1952
German positions:
July 11,
2014
Chairman of the Supervisory Board
of Allianz SE
Reinhard Hahn*
Hans Michael Gaul, Dr. iur.
Name
139
Additional Information
(Deputy Chairman)
> Fresenius SE & Co. KGaA, Bad Homburg
> Fresenius Management SE, Bad Homburg
(Deputy Chairman)
> BASF SE, Ludwigshafen am Rhein
> Allianz SE, Munich (Chairman)
German positions:
December 23, January 24,
1954
2008
> Henkel Management AG, Düsseldorf
➤ Bayer AG, Leverkusen (Chairman)
> Henkel AG & Co. KGaA, Düsseldorf¹
German positions:
> ODDO BHF SCA, France (Co-Chairman)
> AUTO1 N.V., Netherlands (Chairman)
Positions outside Germany:
Memberships in supervisory boards whose establish-
ment is required by law or in comparable domestic
or foreign controlling bodies of business enterprises
(as of September 30, 2017)
1 Shareholders' Committee.
Michael Diekmann
100%
> Axel Springer SE, Berlin
> ENGIE S.A., France (Chairman)
> Société Générale S.A., France
The Nominating Committee is responsible for making recom-
mendations to the Supervisory Board on suitable candidates for
election by the Annual Shareholders' Meeting as shareholder
representatives on the Supervisory Board. In preparing these rec-
ommendations, the objectives defined by the Supervisory Board
for its composition – in particular, independence and diversity -
are to be appropriately considered, as are the proposed candi-
dates' required knowledge, abilities and professional experience.
Fulfillment of the required profile of skills and expertise is also to
be aimed at. Attention shall be paid to an appropriate participa-
tion of women and men in accordance with the legal require-
ments relating to the gender quota as well as to ensuring that the
members of the Supervisory Board are, as a group, familiar with
the sector in which the Company operates.
In fiscal 2017, the Compliance Committee comprised Dr. Gerhard
Cromme (Chairman), Dr. Hans Michael Gaul, Bettina Haller, Har-
ald Kern, Dr. Nicola Leibinger-Kammüller, Jim Hagemann Snabe,
Birgit Steinborn and Sibylle Wankel.
The Compliance Committee concerns itself, in particular, with
monitoring the Company's adherence to statutory provisions,
official regulations and internal Company policies (compliance).
In fiscal 2017, the Audit Committee comprised Dr. Hans Michael
Gaul (Chairman), Dr. Gerhard Cromme, Bettina Haller, Robert
Kensbock, Jürgen Kerner, Dr. Nicola Leibinger-Kammüller, Jim
Hagemann Snabe and Birgit Steinborn. The members of the Audit
Committee are, as a group, familiar with the sector in which the
Company operates. Pursuant to the German Stock Corporation
Act, the Audit Committee must include at least one Supervisory
Board member with knowledge and experience in the areas of
accounting or the auditing of financial statements. Pursuant to
the Code, the chairman or chairwoman of the Audit Committee
shall have specialist knowledge and experience in the application
of accounting principles and internal control processes, shall be
independent and may not be a former Managing Board member
whose appointment ended less than two years ago. The Chair-
man of the Audit Committee, Dr. Hans Michael Gaul, fulfills these
requirements.
auditors and submits the corresponding proposal to the Super-
visory Board. It awards the audit contract to the independent
auditors elected by the Annual Shareholders' Meeting and moni-
tors the independent audit of the financial statements as well as
the auditors' selection, independence, qualification, rotation and
efficiency.
142 Additional Information
The Audit Committee oversees, in particular, the accounting
and the accounting process and conducts a preliminary review of
the Annual Financial Statements of Siemens AG, the Consoli-
dated Financial Statements of the Siemens Group and the Com-
bined Management Report of Siemens AG and the Siemens
Group. On the basis of the independent auditors' report on their
audit of the annual financial statements, the Audit Committee
makes, after its preliminary review, recommendations regarding
Supervisory Board approval of the Annual Financial Statements
of Siemens AG and the Consolidated Financial Statements of the
Siemens Group. The Audit Committee discusses the Quarterly
Statements and Half-year Financial Report with the Managing
Board and the independent auditors and deals with the auditors'
report on the review of the Half-year Consolidated Financial
Statements and Interim Group Management Report. It concerns
itself with the Company's risk monitoring system and oversees
the effectiveness of the internal control, risk management and
the internal audit systems. The Audit Committee receives regular
reports from the Internal Audit Department. It prepares the
Supervisory Board's recommendation to the Annual Share-
holders' Meeting concerning the election of the independent
In fiscal 2017, the Compensation Committee comprised Werner
Wenning (Chairman), Dr. Gerhard Cromme, Michael Diekmann,
Robert Kensbock, Jürgen Kerner and Birgit Steinborn.
The Compensation Committee prepares, in particular, the pro-
posals for decisions by the Supervisory Board's plenary meetings
regarding the system of Managing Board compensation, includ-
ing the implementation of this system in Managing Board con-
tracts, the definition of the targets for variable Managing Board
compensation, the determination and review of the appropriate-
ness of the total compensation of individual Managing Board
members and the approval of the annual Compensation Report.
In fiscal 2017, the Chairman's Committee comprised Dr. Gerhard
Cromme (Chairman), Jürgen Kerner, Birgit Steinborn and Werner
Wenning.
of women on the Managing Board specified by the Supervisory
Board. The Chairman's Committee concerns itself with questions
regarding the Company's corporate governance and prepares the
resolutions to be approved by the Supervisory Board regarding
the Declaration of Conformity with the Code - including the ex-
planation of deviations from the Code - and regarding the ap-
proval of the Corporate Governance Report as well as the Report
of the Supervisory Board to the Annual Shareholders' Meeting.
Furthermore, the Chairman's Committee submits recommenda-
tions to the Supervisory Board regarding the composition of the
Supervisory Board committees and decides whether to approve
contracts and business transactions with Managing Board mem-
bers and parties related to them.
The Chairman's Committee makes proposals, in particular, re-
garding the appointment and dismissal of Managing Board mem-
bers and handles contracts with members of the Managing
Board. When making recommendations for first-time appoint-
ments, it takes into account that the terms of these appoint-
ments shall not, as a rule, exceed three years. In preparing rec-
ommendations on the appointment of Managing Board
members, the Chairman's Committee takes into account the
candidates' professional qualifications, international experience
and leadership qualities, the age limit specified for Managing
Board members, the long-range plans for succession as well as
diversity. It also takes into account the targets for the proportion
The Supervisory Board has seven committees, whose duties,
responsibilities and procedures fulfill the requirements of the
German Stock Corporation Act (Aktiengesetz) and the Code. The
chairmen of these committees provide the Supervisory Board
with regular reports on their committees' activities.
Supervisory Board Committees
The Supervisory Board also has an adequate number of indepen-
dent members. In the opinion of the Supervisory Board, there are
currently at least 17 Supervisory Board members who are indepen-
dent in the meaning of Section 5.4.2 of the Code. Of these inde-
pendent members, at least seven - namely, Michael Diekmann,
Dr. Hans Michael Gaul, Gérard Mestrallet, Dr. Norbert Reithofer,
Güler Sabancı, Jim Hagemann Snabe and Werner Wenning - are
shareholder representatives. The regulations establishing limits
on age and limiting membership in the Supervisory Board to three
full terms of office (15 years) are complied with.
With its current membership, the Supervisory Board meets all the
above-mentioned objectives for its composition and fulfills the
profile of required skills and expertise. The Supervisory Board
members have the specialist and personal qualifications consid-
ered necessary. As a group, they are familiar with the sector in
which the Company operates and have the knowledge, skills and
experience essential for Siemens. A considerable number of Super-
visory Board members are engaged in international activities
and/or have many years of international experience. Appropriate
consideration has been given to diversity in the Supervisory
Board. In fiscal 2017, the Supervisory Board had six female mem-
bers. Since October 1, 2017, it has had seven female members,
of whom three are shareholder representatives and four are em-
ployee representatives. The mandatory minimum quota stipu-
lated in Section 96, para. 2, sent. 1 of the German Stock Corpo-
ration Act (Aktiengesetz) has therefore been met. Dr. Nicola
Leibinger-Kammüller is a member of the Nominating Committee.
Status of implementation of the objectives of the
Supervisory Board's composition and profile of
required skills and expertise; independent Super-
visory Board members
Additional Information 141
In compliance with the age limit stipulated by the Supervisory
Board in its Bylaws, only individuals who are no older than
70 years of age shall, as a rule, be nominated for election to the
Supervisory Board. Nominations shall take into account the reg-
ular limit established by the Supervisory Board, which restricts
membership on the Supervisory Board to a maximum of three
full terms of office (15 years). The aim is to ensure that the
Supervisory Board has an appropriate age structure and range of
experience.
Limits on age and on length of membership
The Supervisory Board members shall have sufficient time to be
able to exercise their mandates with the necessary regularity and
diligence.
In fiscal 2017, the Nominating Committee comprised Dr. Gerhard
Cromme (Chairman), Dr. Hans Michael Gaul, Dr. Nicola Leibin-
ger-Kammüller and Werner Wenning.
> Voith GmbH, Heidenheim
Positions outside Germany:
The Mediation Committee submits proposals to the Supervisory
Board in the event that the Supervisory Board cannot reach the
two-thirds majority required for the appointment or dismissal of
a Managing Board member on the first ballot.
The Innovation and Finance Committee discusses, in particular,
based on the Company's overall strategy, the Company's fo-
cuses of innovation and prepares the Supervisory Board's discus-
sions and resolutions regarding questions relating to the Com-
pany's financial situation and structure including annual
planning (budget) - as well as the Company's fixed asset invest-
ments and its financial measures. In addition, the Innovation
and Finance Committee has been authorized by the Supervisory
Board to decide on the approval of transactions and measures
that require Supervisory Board approval and have a value of less
than €600 million.
28
(Second Deputy Chairman)
100%
32
32
100%
38
38
Presence
Participation
and Committee meetings
Supervisory Board
Werner Wenning
(First Deputy Chairwoman)
Birgit Steinborn
Gerhard Cromme, Dr. iur
(Chairman)
Supervisory Board Members
Disclosure of participation by individual
Supervisory Board members in meetings
of the Supervisory Board of Siemens AG
and its committees in fiscal 2017
143
Additional Information
In fiscal 2017, the Innovation and Finance Committee comprised
Dr. Gerhard Cromme (Chairman), Robert Kensbock, Harald Kern,
Jürgen Kerner, Dr. Norbert Reithofer, Jim Hagemann Snabe, Birgit
Steinborn and Werner Wenning.
In fiscal 2017, the Mediation Committee comprised Dr. Gerhard
Cromme (Chairman), Jürgen Kerner, Birgit Steinborn and Werner
Wenning.
An adequate number of independent members shall belong to
the Supervisory Board. Material and not merely temporary con-
flicts of interest, such as governing or advisory body functions at
major competitors of the Company shall be avoided. Under the
presumption that the mere exercise of Supervisory Board duties
as an employee representative gives no cause to doubt compli-
ance with the independence criteria pursuant to Section 5.4.2 of
the Code, the Supervisory Board shall have a minimum of sixteen
members who are independent in the meaning of the Code. In
any case, the Supervisory Board shall be composed in such a way
that a number of at least six independent shareholder represen-
tatives in the meaning of Section 5.4.2 of the Code is achieved.
No more than two former members of the Managing Board of
Siemens AG shall belong to the Supervisory Board.
In accordance with the German Law for Equal Participation of
Women and Men in Management Positions in the Private and
Public Sectors (Gesetz für die gleichberechtigte Teilhabe von
Frauen und Männern an Führungspositionen in der Privatwirt-
schaft und im öffentlichen Dienst), the Supervisory Board is com-
posed of at least 30 percent women and at least 30 percent men.
The Nominating Committee shall continue to include at least one
female member.
October 1,
2013
October 27,
1965
Chairman of the Board of Directors
of A.P. Møller-Mærsk A/S
October 1,
2017
August 3,
1969
Chairwoman of the Central Works
Council of Siemens Healthcare GmbH
September 13, March 1,
1957
2014
Jim Hagemann Snabe
Dorothea Simon*
(since October 1, 2017)
Chairman of the Committee
of Spokespersons of the Siemens
Group; Chairman of the Central
Committee of Spokespersons
of Siemens AG
Michael Sigmund*
> Messer Group GmbH, Sulzbach
German positions:
January 27,
2015
July 14,
1971
January 23,
2013
August 14,
1955
> Henkel AG & Co. KGaA, Düsseldorf¹
Aktiengesellschaft, Munich (Chairman)
➤ Bayerische Motoren Werke
> Suez S.A., France (Chairman)
German positions:
Independence
General Counsel, Managing Board
of IG Metall
Sibylle Wankel*
April 1,
2009
With regard to the composition of the Supervisory Board, atten-
tion shall be paid to achieving sufficient diversity. Not only is
appropriate consideration to be given to women. Diversity of
cultural heritage, religion and ethnic background and a wide
range of different professional backgrounds, experiences and
ways of thinking are also to be promoted. When considering pos-
sible candidates for new elections or for filling Supervisory Board
positions that have become vacant, the Supervisory Board shall
give appropriate consideration to diversity at an early stage in the
selection process.
Diversity
Taking the Company's international orientation into account,
care shall be taken to ensure that the Supervisory Board has an
adequate number of members with extensive international expe-
rience. The goal is to make sure that the present considerable
share of Supervisory Board members with extensive international
experience is maintained.
Internationality
When a new member is to be appointed, a review shall be per-
formed to determine which of the areas of expertise deemed
desirable for the Supervisory Board are to be strengthened.
The goal is to ensure that, in the Supervisory Board, as a group,
all knowhow and experience is available that is considered essen-
tial in view of Siemens' activities. This includes, for instance,
knowledge and experience in the areas of technology (including
information technology and digitalization), procurement, manu-
facturing and sales, finance, law (including compliance) and hu-
man resources. In addition, the members of the Supervisory
Board shall collectively have knowledge and experience in the
business areas that are important for Siemens, in particular in the
areas of industry, energy, healthcare and infrastructure. As a
group, the members of the Supervisory Board are to be familiar
with the sector in which the Company operates. At least one in-
dependent member of the Supervisory Board shall have knowl-
edge and expertise in the areas of accounting or the auditing of
financial statements and specific knowledge and experience in
applying accounting principles and internal control processes.
In particular, the Supervisory Board shall also include members
who have leadership experience as senior executives or members
of a supervisory board (or comparable body) at a major company
with international operations.
The candidates proposed for election to the Supervisory Board
shall have the knowledge, skills and experience necessary to
carry out the functions of a Supervisory Board member in a mul-
tinational company and safeguard the reputation of Siemens in
public. In particular, care shall be taken in regard to the person-
ality, integrity, commitment and professionalism of the individu-
als proposed for election.
Profile of required skills and expertise
On September 20, 2017, the Supervisory Board - taking into ac-
count the recommendations of the German Corporate Gover-
nance Code (Code) - newly approved the objectives of its com-
position, including a profile of the skills and expertise that the
Supervisory Board should possess. The composition of the Super-
visory Board of Siemens AG shall be such that qualified control
and advice for the Managing Board is ensured.
March 3,
1964
Objectives of the Supervisory Board's
composition and profile of required skills
and expertise of the Supervisory Board
German positions:
> A.P. Møller-Mærsk A/S, Denmark (Chairman)
Positions outside Germany:
> Allianz SE, Munich
German positions:
> Siemens Healthcare GmbH, Munich
German positions:
> Siemens Healthcare GmbH, Munich
140 Additional Information
1 Shareholders' Committee.
> Daimler AG, Stuttgart
Treasurer and full-time member
of the Executive Committee of
IG Metall
Order no. CGXX-C10029-00-7600
siemens.com
Comp.
Orders
Corporate items
(714)
(449)
Centrally carried pension expense
(407)
(439)
Amortization of intangible assets
acquired in business combinations
Eliminations, Corporate Treasury
and other reconciling items
Reconciliation to Consolidated
Financial Statements
(1,016)
(674)
(323)
(349)
(1,785)
(1,994)
The positive swing at Centrally managed portfolio activities
(CMPA) related primarily to the measurement of a major asset
retirement obligation, including a net gain of €364 million result-
ing from interest rate effects and €312 million attributable mainly
to a reduced expected inflation rate. These positive effects were
partly offset by higher losses from at-equity investments includ-
ing a €230 million impairment of Siemens' stake in Primetals
Technologies Ltd. in fiscal 2017, related to continuing adverse
conditions in the market environment. Additionally in the current
Combined Management Report
15
A.3.3 Income
Fiscal year
(in millions of €, earnings per share in €)
2017
2016
132
187
Siemens Real Estate
(215)
ROE (after taxes)
19.9%
653
21.6%
(in millions of €)
Total assets
Sep 30,
2016
2017
26,390
26,446
Financial Services (SFS) again delivered strong earnings includ-
ing lower credit hits. Within the equity business, the current year
included a gain from the sale of SFS's stake in an offshore wind-
farm project, while the prior year included a larger positive ef-
fect, €92 million, resulting from an at-equity investment. Despite
growth in new business, total assets were on the level of the end
of fiscal 2016, due mainly to substantial early terminations of fi-
nancings along with negative currency translation effects.
% Change
A.3.2.10 RECONCILIATION TO
period we recorded gains from reversals of provisions for guaran-
tees related to a previous divestment. Effective with the begin-
ning of fiscal 2018, CMPA includes the Olkiluoto project in Finland
which was formerly part of Power and Gas.
Corporate items were influenced by a number of factors, includ-
ing severance charges of €71 million (€43 million in fiscal 2016)
for corporate reorganization of support functions as well as ex-
penses in connection with creation of next47 beginning in Octo-
ber 2016.
The increase of Amortization of intangible assets acquired in
business combinations related mainly to the merger with
Gamesa and the acquisition of Mentor Graphics.
Profit
Fiscal year
(in millions of €)
2017
2016
Centrally managed portfolio activities
488
CONSOLIDATED FINANCIAL STATEMENTS
Power and Gas
1,591
1,872
7%
338
464
(27)%
9,453
8,744
8%
Profit margin Industrial Business
11.2%
10.8%
2,325
Financial Services (SFS)
653
(2)%
Reconciliation to Consolidated Financial Statements
(1,785)
(1,994)
10%
Income from continuing operations before income taxes
8,306
7,404
12%
639
639
2,490
243
(15)%
Energy Management
Building Technologies
Mobility
Digital Factory
Process Industries and Drives
Healthineers
Siemens Gamesa Renewable Energy
Industrial Business
932
81%
895
784
577
36%
743
678
10%
2,135
1,690
26%
440
4%
Income tax expenses
Income before income taxes
(in millions of €)
(in millions of €)
2017
2016
Actual
Comp.
9,034
8,939
1%
2%
Revenue
8,876
9,038
(2)%
(1)%
Profit
440
243
81%
Profit margin
5.0%
2.7%
Fiscal year
A.3.2.8 SIEMENS GAMESA RENEWABLE ENERGY
imaging business, which continued to account for the largest
share of Healthineers profit overall, and by the advanced thera-
pies business. Profit benefited from currency tailwinds in both
periods. Severance charges were €57 million in fiscal 2017 and
€61 million in fiscal 2016.
% Change
Actual
% Change
Comp.
11,532
10,332
12%
8%
Revenue
11,378
10,172
12%
Orders for Process Industries and Drives increased slightly, as
growth in the process automation and solution businesses and
stabilization in demand for the Division's offerings in oil and gas
and other commodity-related markets towards the end of the
fiscal year more than offset a decline in demand for wind power
components during the course of fiscal 2017. A decline in reve-
nue in the solutions and the large drives businesses more than
offset revenue growth in the process automation business. On a
geographic basis, order growth came mainly from China, while
the decline in revenue was due to the Americas region. Profit for
the Division increased due primarily to sharply lower severance
charges year-over-year, which were €48 million in fiscal 2017,
down from €254 million in fiscal 2016. Within the Division's busi-
nesses, the process automation business showed a strong oper-
ating performance. Overall, profit and profitability for the Divi-
sion were held back by ongoing operational challenges,
particularly in the large drives business, and by charges related
to capacity adjustments.
9%
2,135
1,690
26%
18.8%
16.6%
In a more favorable market environment, Digital Factory in-
creased order intake and revenue in all its businesses year-over-
year. Improvements in the market conditions were most notable
in the automotive and the machine building industries, support-
ing an excellent performance by the Division's short-cycle busi-
nesses, which expanded their leading market positions during
the fiscal year. Orders and revenue in the product lifecycle man-
agement software (PLM) business grew substantially due to
strong demand combined with new volume resulting from the
acquisition of Mentor Graphics at the end of the second quarter
of fiscal 2017. On a geographic basis, orders and revenue were up
in all reporting regions, with the strongest increase from Asia,
Australia, particularly including China. The Division's profit im-
provement was driven by the short-cycle businesses. Profit in the
PLM business was held back by ongoing expenses related to fur-
ther advancing Siemens' MindSphere platform. Furthermore, the
business' profitability was impacted by deferred revenue adjust-
ments and transaction and integration costs related to the acqui-
sition of Mentor Graphics, totaling €104 million. In fiscal 2016,
deferred revenue adjustments and transaction and integration
costs related to the acquisition of CD-adapco totaled €43 million.
Profit for the Division benefited from a gain of €175 million re-
lated to the eCar business, which Digital Factory contributed to
the joint venture Valeo Siemens eAutomotive. This positive effect
was partly offset by higher severance charges, which increased
to €134 million in fiscal 2017, up from €49 million in fiscal 2016.
Combined Management Report
13
14
A.3.2.6 PROCESS INDUSTRIES AND DRIVES
Profit
Profit margin
A.3.2.7 HEALTHINEERS
Fiscal year
% Change
Orders
14,218
13,830
3%
4%
Revenue
13,789
13,535
2%
3%
Comp.
Profit
2,325
7%
Profit margin
18.1%
17.2%
Order intake grew moderately on increases in a majority of the
businesses, led by the diagnostic imaging business. On a re-
gional basis, Europe, C.I.S., Africa and Middle East posted the
highest increase, followed by growth in Asia, Australia, driven by
China. Revenue was also up in a majority of the businesses,
again led by the diagnostic imaging business. On a geographic
basis, China accounted for more than half of the revenue in-
crease year-over-year. Profit growth was driven by the diagnostic
Combined Management Report
A.3.2.9 FINANCIAL SERVICES
Fiscal year
2016
2,490
2017
Actual
Fiscal year
2016
(in millions of €)
Orders
2017
2016
Actual
Comp.
8,768
7,973
10%
(2)%
Revenue
Profit
Profit margin
% Change
7,922
33%
7%
338
464
(27)%
4.3%
7.8%
Portfolio effects from the merger added 13 percentage points
to order growth and 28 percentage points to revenue growth.
Reported orders were up year-over-year on growth in Asia,
Australia, while orders in Europe, C.I.S., Africa, Middle East and
the Americas were close to the prior-year level. Order intake in
the major onshore market India was impacted by the introduc-
tion of an auction system for new wind-farm tenders. Reported
revenue was up in all three reporting regions. Lower profit year-
over-year included burdens of €134 million, primarily from in-
ventory write-downs, and €103 million for integration costs and
capacity adjustments including severance. Profitability was held
back by sharp price declines in India and the U.S.
(in millions of €)
2017
5,976
Fiscal year
2016
(2,180)
(9)%
2,355
2,085
13%
Other current liabilities
20,049
20,437
(2)%
Liabilities associated with assets classified as held for disposal
97
40
139%
Total current liabilities
43,394
42,916
1%
Long-term debt
26,777
24,761
8%
Provisions for pensions and similar obligations
9,582
Current income tax liabilities
2%
4,166
4,247
17
A.5 Financial position
A.5.1 Capital structure
Our capital structure developed as follows:
Sep 30,
(in millions of €)
2017
2016
% Change
Short-term debt and current maturities of long-term debt
13,695
5,447
(12)%
Trade payables
9,755
8,048
21%
Other current financial liabilities
1,444
1,933
(25)%
Current provisions
6,206
(30)%
Deferred tax liabilities
1,599
Non-controlling interests
Total liabilities and equity
43,089
34,211
26%
33%
28%
1,438
133,804
605
138%
Total equity attributable to shareholders of Siemens AG
Equity ratio
125,717
The decrease in short-term debt and current maturities of
long-term debt was due mainly to the repayment of fixed-rate
instruments totaling €4.9 billion. This was partly offset by reclas-
sifications of long-term fixed-/floating-rate instruments totaling
€3.7 billion.
The increase in trade payables was due mainly to the merger
with Gamesa.
Long-term debt increased mainly due to the issuance of fixed-/
floating-rate instruments totaling US$7.5 billion (€7.0 billion)
in seven tranches with different maturities of up to 30 years.
This was partly offset by the above mentioned reclassifications to
short-term debt and current maturities of long-term debt.
Provisions for pensions and similar obligations fell on a reduc-
tion of Siemens' defined benefit obligation (DBO) mainly due to
increased discount rate assumptions.
The merger with Gamesa and the acquisition of Mentor Graphics
were the primary factors in the increase in deferred tax liabili-
ties. While the merger with Gamesa also brought substantial
new provisions, this effect was more than offset by positive
factors mainly related to a major asset retirement obligation -
resulting in a net decrease.
-
The main factors for the change in total equity attributable to
shareholders of Siemens AG were €6.0 billion in net income
attributable to shareholders of Siemens AG, €2.5 billion in other
comprehensive income, net of income taxes, mainly due to
remeasurements of defined benefit plans, and €2.5 billion in
changes in equity resulting from the merger with Gamesa. This
increase was partly offset by dividend payments of €2.9 billion
(for fiscal 2016).
The increase in non-controlling interests was due mainly to
the merger with Gamesa.
18
Combined Management Report
6%
Combined Management Report
72%
(2)%
829
93%
Provisions
4,579
5,087
(10)%
Other financial liabilities
Other liabilities
Total non-current liabilities
Total liabilities
67%
Debt ratio
1,142
(21)%
2,445
2,471
(1)%
45,884
47,986
(4)%
89,278
90,901
902
(2,008)
Deferred tax assets decreased mainly due to income tax effects
related to remeasurement of defined benefits plans.
The increase in other current financial assets was driven by
higher loans receivable at SFS, which were mainly due to new
business and reclassification of non-current loans receivable.
Cash and cash equivalents
8,375
10,604
(21)%
Available-for-sale financial assets
1,242
1,293
(4)%
Trade and other receivables
17,160
16,287
5%
Other current financial assets
7,664
6,800
13%
Inventories
Current income tax assets
Other current assets
Assets classified as held for disposal
Total current assets
% Change
Sep 30,
2016
2017
(in millions of €)
Income from continuing operations
6,126
5,396
14%
Income from discontinued operations, net of income taxes
Net income
53
188
(72)%
6,179
5,584
Goodwill
11%
7.44
13.5%
6.74
14.3%
10%
As a result of the development described for the segments,
Income from continuing operations before income taxes
increased 12%. This amount also included higher expenses - as
planned - for selling and R&D, primarily at Digital Factory and
Healthineers, as we continued targeted investments aimed at
organic volume growth and strengthening our capacities for in-
novation, such as for MindSphere at Digital Factory and Atellica
at Healthineers. Severance charges for continuing operations
were €466 million, of which €385 million were in the Industrial
Business. In fiscal 2016, severance charges for continuing opera-
tions were €598 million, of which €541 million were in the Indus-
trial Business.
The tax rate for fiscal 2017 was 26%, positively influenced by uti-
lization of previously impaired tax loss carryforwards and by de-
cisions arising from tax audits. The tax rate 27% in the prior year
was positively influenced by successful appeals of tax decisions
for prior years. As a result, Income from continuing operations
increased 14%.
Income from discontinued operations, net of income taxes
was sharply lower compared to the prior year. In fiscal 2016, it
primarily included a gain of €102 million from the sale of the re-
maining assets in the hearing aid business and €76 million re-
lated to the former Siemens IT Solutions and Services activities.
The increase in Basic earnings per share reflects the higher net
income compared to fiscal 2016, while the weighted average
number of shares outstanding increased slightly year-over-year.
At 13.5%, ROCE was below the range established in our One
Siemens financial framework, as expected. The decline year-over-
year was due primarily to the merger with Gamesa and the acqui-
sition of Mentor Graphics, which led to a significant increase in
average capital employed (the denominator for ROCE). Net in-
come, the main component for the numerator, was also nega-
tively affected by burdens related to these transactions.
16
Combined Management Report
A.4 Net assets position
Basic earnings per share
ROCE
19,942
18,160
10%
(9)%
Other financial assets
19,044
20,610
(8)%
Deferred tax assets
Other assets
Total non-current assets
Total assets
2,297
3,012
3,431
1,498
1,279
75,375
70,388
17%
7%
133,804
125,717
6%
Our total assets in fiscal 2017 were influenced by negative cur-
rency translation effects of €4.7 billion, led by the U.S. dollar.
In fiscal 2017, the acquisition of Mentor Graphics and the merger
with Gamesa were the major factors related to the increase in
trade and other receivables, partly offset by the Power and Gas
Division due to declining business volume. While these transac-
tions were also the largest factors for the increased goodwill and
other intangible assets, the increase in inventories was mainly
driven by the merger with Gamesa.
(33)%
Assets classified as held for disposal increased mainly due to
reclassification of shares in OSRAM Licht AG (OSRAM) in an
amount of €1.2 billion from other financial assets.
2,727
8%
1,098
790
39%
1,467
1,204
22%
1,482
190
> 200%
58,429
Investments accounted for using the equity method
55,329
27,906
24,159
16%
Other intangible assets
10,926
7,742
41%
Property, plant and equipment
10,977
10,157
6%
2017
13,422
A.3.2.5 DIGITAL FACTORY
45,048
Middle East
therein: Germany
Europe, C.I.S., Africa,
Comp.
Actual
Europe, C.I.S., Africa,
Middle East
% Change
Fiscal year
2016
2017
(in millions of €)
Actual
2016
2017
46,185
% Change
(in millions of €)
Orders (location of customer)
Revenue (location of customer)
Orders were up significantly in the Asia, Australia region due to
growth in all industrial businesses other than Power and Gas, with
SGRE and Digital Factory recording the largest increases. A num-
ber of countries within the region posted significant growth.
China posted the largest increase, with order growth at Digital
Factory, SGRE and Process Industries and Drives partly offset by a
substantial decline in Energy Management.
Negative currency translation effects took one percentage point
each from order development and revenue growth; portfolio
transactions, primarily the merger of the wind power business
with Gamesa and the acquisition of Mentor Graphics, added two
percentage points to order development and three percentage
points to revenue growth. The resulting ratio of orders to revenue
(book-to-bill) for Siemens in fiscal 2017 was 1.03.
A.3.1 Orders and revenue by region
A.3 Results of operations
Combined Management Report
10
Capital employed (continuing and discontinued operations)
Plus: Adjustments from assets classified as held for disposal and
liabilities associated with assets classified as held for disposal
Less: Adjustment for deferred taxes on net accumulated
actuarial gains/losses on post-employment benefits
Less: Fair value hedge accounting adjustment
Less: SFS Debt
Less: Current available-for-sale financial assets
Plus: Post-employment benefits
Fiscal year
(2)%
(2)%
Americas
18,162
16,905
17,700 15,501
Asia, Australia
therein: U.S.
6%
7%
15,118
16,166
Asia, Australia
(10)%
(8)%
(1)%
1%
16,769
16,976
therein: U.S.
32%
43,367
11,142
23,516 22,707
41,819
4%
4%
10,739
4%
Plus: Short-term debt and current maturities of long-term debt
Less: Cash and cash equivalents
2%
(1)%
therein: Germany
Americas
13,943
22,921 24,794
10,525
32%
4%
(7)%
Plus: Long-term debt
Calculation of capital employed
A.2.4 Capital structure
Combined Management Report 9
Within the framework of One Siemens, we seek to work profit-
ably and as efficiently as possible with the capital provided by our
shareholders and lenders. For purposes of managing and con-
trolling our capital efficiency, we use return on capital employed,
or ROCE, as our primary measure. We aim to achieve ROCE within
a range of 15% to 20%.
To emphasize and evaluate our continuous efforts to improve
productivity, we incorporated a measure called total cost produc-
tivity into our One Siemens framework. We define this measure
as the ratio of cost savings from defined productivity improve-
ment measures to the aggregate of functional costs for the
Siemens Group. We aim to achieve an annual value of 3% to 5%
for total cost productivity.
For purposes of managing and controlling profitability at the
Group level, we use net income as our primary measure. This mea-
sure is the main driver of basic earnings per share (EPS) from net
income, which we use in communication to the capital markets.
In line with common practice in the financial services business,
our financial indicator for measuring capital efficiency at the Fi-
nancial Services Division (SFS) is return on equity after tax, or
ROE after tax. ROE is defined as SFS' profit after tax, divided by
the Division's average allocated equity.
15-20%
5-8%
15-19%
8-12%
14-20%
6-9%
8-11%
7-10%
Sustainable revenue and profit development is supported by a
healthy capital structure. Accordingly, a key consideration within
the framework of One Siemens is to maintain ready access to the
capital markets through various debt products and preserve our
ability to repay and service our debt obligations over time. Our
primary measure for managing and controlling our capital struc-
ture is the ratio of industrial net debt to EBITDA. This financial
measure indicates the approximate amount of time in years that
would be needed to cover industrial net debt through income
from continuing operations, without taking into account inter-
est, taxes, depreciation and amortization. We aim to achieve a
ratio of up to 1.0.
11-15%
Siemens Gamesa Renewable Energy
SFS (ROE after tax)
Process Industries and Drives
Healthineers
Digital Factory
Energy Management
Building Technologies
Mobility
Power and Gas
Profit margin ranges
Within the framework of One Siemens, we aim to achieve mar-
gins through the entire business cycle that are comparable to
those of our relevant competitors. Therefore, we have defined
profit margin ranges for our industrial businesses, which are
based on the profit margins of the respective relevant competi-
tors. Profit margin is defined as profit of the respective business
divided by its revenue.
A.2.3 Profitability and capital
efficiency
Currency translation effects are the difference between revenue
for the current period calculated using the exchange rates of the
current period and revenue for the current period calculated us-
ing the exchange rates of the comparison period. For calculating
the percentage change year-over-year, this absolute difference is
divided by revenue for the comparison period. A portfolio effect
arises in the case of an acquisition or a disposition and is calcu-
lated as the change year-over-year in revenue of the relevant
business resulting specifically from the acquisition or disposition.
For calculating the percentage change, this absolute change is
divided by revenue for the comparison period. For orders, we
apply the same calculations for currency translation and portfolio
effects as described above.
Within the framework of One Siemens, we aim to grow our rev-
enue faster than the average weighted revenue growth of our
most relevant competitors. Our primary measure for managing
and controlling our revenue growth is comparable growth, be-
cause it shows the development in our business net of currency
translation effects, which arise from the external environment
outside of our control, and portfolio effects, which involve busi-
ness activities which are either new to or no longer a part of our
business.
A.2.2 Revenue growth
Within One Siemens, we have established a financial frame-
work - for revenue growth, for profitability and capital efficiency,
for our capital structure, and for our dividend policy.
A.2.1 Overview
A.2 Financial performance system
Margin range
A.2.6 Calculation of return
on capital employed
Calculation of ROCE
(in millions of €)
Net income
For purposes of calculating ROCE in interim periods, income be-
fore interest after tax is annualized. Average capital employed is
determined using the average of the respective balances as of
the quarterly reporting dates in the period under review.
1 Item Other interest expenses/income, net primarily consists of interest relating to corporate
debt, and related hedging activities, as well as interest income on corporate assets.
(II) Average capital employed
(1)/(II) ROCE
14.3%
13.5%
41,573
47,836
5,949
6,479
(I) Income before interest after tax
(156)
(129)
(tax rate (flat) 30%)
Less: Taxes on interest adjustments
The proposed dividend of €3.70 per share for fiscal 2017 repre-
sents a total payout of €3.0 billion based on the estimated
number of shares entitled to dividend at the date of the Annual
Shareholders' Meeting. Based on net income of €6.2 billion for
fiscal 2017, the dividend payout percentage is 49%.
At the Annual Shareholders' Meeting, the Managing Board, in
agreement with the Supervisory Board, will submit the follow-
ing proposal to allocate the unappropriated net income of
Siemens AG for fiscal 2017: to distribute a dividend of €3.70 on
each share of no par value entitled to the dividend for fiscal year
2017 existing at the date of the Annual Shareholders' Meeting,
with the remaining amount to be carried forward. Payment of the
proposed dividend is contingent upon approval by Siemens
shareholders at the Annual Shareholders' Meeting on January 31,
2018. The prior-year dividend was €3.60 per share.
We intend to continue providing an attractive return to our share-
holders. Therefore, we intend to propose a dividend whose dis-
tribution volume is within a dividend payout range of 40% to
60% of net income, which we may adjust for this purpose to ex-
clude selected exceptional non-cash effects. As in the past, we
intend to fund the dividend payout from Free cash flow.
(in millions of €)
Orders
Less: Interest adjustments
(discontinued operations)
Fiscal year
2017
2016
6,179
Total equity
5,584
(544)
799
784
198
282
A.2.5 Dividend
(568)
(9)%
Less: Other interest expenses/income, net'
Plus: SFS Other interest expenses/income
Plus: Net interest expenses from
post-employment benefits
7,209
7%
6,435
6,913
Orders
Actual
2016
2017
(in millions of €)
Fiscal year
A.3.2.3 BUILDING TECHNOLOGIES
12 Combined Management Report
Orders grew moderately year-over-year, due mainly to a higher
volume from large orders in the solutions business, including an
order totaling €0.8 billion for an offshore grid connection project
in Germany, an order totaling €0.6 billion for substations in Qatar
and a high-voltage direct current (HVDC) order totaling €0.4 bil-
lion in India. The medium voltage and systems business and the
low voltage and products business also posted higher orders
year-over-year. These increases were partly offset by declines in
the Division's other businesses. On a regional basis, orders were
up in all three reporting regions, predominantly in Europe, C.I.S.,
Africa, Middle East. Revenue was also up moderately with most
of the Division's businesses recording moderate to clear in-
creases. On a regional basis, revenue increased in all three re-
porting regions, with significant growth in Asia, Australia. All of
the Division's businesses delivered a positive contribution to
profit, benefiting from lower severance charges that were
€39 million and €71 million in fiscal 2017 and fiscal 2016, respec-
tively. The high voltage products and transformer businesses
showed significant improvement year-over-year.
Orders declined substantially year-over-year, due mainly to a
sharply lower volume from large orders in the solutions business,
which had recorded large orders for power plants, including ser-
vice, from Egypt totaling €4.7 billion in fiscal 2016. In contracting
markets for the Division's offerings, order intake was down in all
businesses and in all three reporting regions. As a result of this
continuing market weakness, revenue declined clearly and in all
reporting regions, as a decrease in the new-unit business was
only partly offset by an increase in the service business. Profit
was significantly lower year-over-year despite a continuing
strong contribution from the service business, on reduced capac-
ity utilization following the weaker order intake, price declines,
and higher net charges related to project execution and comple-
tion year-over-year. In addition, profit in fiscal 2016 benefited
from positive effects totaling €130 million from revised estimates
related to resumption of long-term construction and service con-
tracts in Iran following the ending or easing of EU and U.S. sanc-
tions and €118 million from the measurement of inventories.
Costs for the integration of Dresser-Rand were €33 million in
fiscal 2017 compared to €59 million in fiscal 2016. Finally, sever-
ance charges were lower in fiscal 2017, at €19 million compared
to €69 million in fiscal 2016. Global energy trends continue to
structurally reduce overall demand in markets for the Division's
offerings, resulting in declining new-unit business and corre-
sponding price pressure due to current overcapacities.
11.4%
Revenue
10.3%
4%
895
7.5%
7.6%
932
Profit
Profit margin
(5)%
(6)%
(15)%
1,872
1,591
Profit
16,471
15,467
Revenue
(30)%
Profit margin
6,523
6,156
Profit
therein: China
rolling stock business in the second half. The Division's rail infra-
structure business also contributed to revenue growth for the
whole fiscal year. On a geographic basis, revenue increases in
Europe, C.I.S., Africa, Middle East and the Americas more than
offset a decline in Asia, Australia, which reported a sharp drop in
China. Profit improved in the majority of the businesses, driven
by higher revenue and successful project execution. The increase
in severance charges, which were €46 million in the current pe-
riod up from €16 million a year earlier, was largely offset by a
€28 million gain related to pension plan amendments.
Order growth at Mobility was driven primarily by the rolling stock
business and supported by a higher volume from large orders.
The current period included a number of significant contract
wins in all three reporting regions, most notably in the region
Europe, C.I.S. Africa, Middle East region, including an order for
commuter rail and an order for a driverless metro, both in Austria,
and large orders for the Division's new commuter rail platform
Mireo in Germany. In the Asia, Australia region, the Division won
a large turnkey project for the extension of a rapid transit system
in Thailand. The largest contract wins in fiscal 2016 included an
order for light rail vehicles in the U.S., a commuter rail contract
in Germany and a rail automation order in Algeria. While revenue
in the rolling stock business declined in the first half of the fiscal
year due mainly to timing factors related to large rail projects,
Mobility successfully executed on its large rolling stock and loco-
motive orders, resulting in double-digit revenue growth in the
% Change
Comp.
16%
6%
8.7%
9.2%
Profit margin
Actual
14%
4%
10%
678
743
Profit
7,825
8,099
Revenue
7,875
8,963
Orders
784
577
6%
36%
Profit margin
12.0%
9.4%
(31)%
% Change
8%
7%
Successfully executing its growth initiatives in both the regions
and across its businesses, Building Technologies increased orders
and revenue and grew faster than its market and major compet-
itors. On a geographic basis, orders and revenue were up in all
three reporting regions with the strongest growth contribution
coming from the U.S. Profit and profitability increased due mainly
to higher revenue and improvements in productivity. Profit devel-
opment in fiscal 2017 benefited from a €94 million gain related
to pension plan amendments. Severance charges were similar in
both periods, at €18 million in fiscal 2017 and €16 million a year
earlier.
A.3.2.4 MOBILITY
(in millions of €)
Fiscal year
2016
Comp.
19,454
2017
3%
Orders related to external customers came in only slightly below
the high level a year ago despite substantial, ongoing contraction
in markets for Power and Gas. The Division reported a sharply
lower volume from large orders compared to the prior year, when
it had won large contracts totaling €4.7 billion in Egypt. This fac-
tor also influenced the decline in emerging markets. All other
industrial businesses took in higher orders year-over-year. Digital
Factory and Mobility recorded double-digit order growth, while
higher orders at SGRE benefited from significant portfolio effects.
1 As defined by the International Monetary Fund.
1 As defined by the International Monetary Fund.
(11)%
27,239 30,448 (11)%
therein: emerging
markets¹
(2)%
(1)%
3%
5%
27,195
28,464
markets¹
therein: emerging
In the Europe, C.I.S., Africa, Middle East region, with the excep-
tion of Power and Gas, all industrial businesses posted order
growth, including double-digit growth in Mobility and Energy
Management. Orders came in substantially higher in Germany,
due to higher levels of large orders in SGRE, Energy Management
and Mobility compared to fiscal 2016.
10%
6,850
86,480
7,484
85,669
Siemens
3%
4%
79,644
83,049
Siemens
13%
14%
13%
12%
Orders
6,439
9%
Orders in the Americas region were down clearly year-over-year
on a substantial decline in Power and Gas. In addition, order intake
at Mobility declined significantly, while Building Technologies and
Digital Factory posted double-digit growth, the latter primarily due
to portfolio effects from the acquisition of Mentor Graphics. The
pattern of order development in the U.S. was roughly the same as
in the Americas region, with double-digit growth at Building Tech-
nologies and Digital Factory more than offset by substantial de-
clines in Power and Gas, Mobility and SGRE.
therein: China
2017
% Change
Revenue related to external customers went up moderately year-
over-year and increased in the majority of industrial businesses,
offsetting declines in Power and Gas and Process Industries and
Drives. Higher revenue at SGRE benefited from substantial port-
folio effects following the merger.
13,628
12,963
5%
5%
Fiscal year
(in millions of €)
Actual
Comp.
Revenue
12,277
11,940
3%
2016
Comp.
Orders
A.3.2 Segment information analysis
Revenue in Asia, Australia was up clearly year-over-year,
as growth in Digital Factory, SGRE, Energy Management and
Healthineers was partly offset by declines in Power and Gas and
Mobility. China's growth outpaced the region overall, as all in-
dustrial businesses except Mobility recorded higher revenue,
with Digital Factory, SGRE and Energy Management posting the
highest increases.
Combined Management Report
11
Actual
A.3.2.1 POWER AND GAS
In the Americas, revenue came in higher year-over-year, driven
primarily by the merger with Gamesa, which brought new vol-
ume in Latin America, and revenue growth in Digital Factory and
Building Technologies. In the U.S., increases in Digital Factory,
Building Technologies and Mobility were offset by declines in
Power and Gas and in Process Industries and Drives.
A.3.2.2 ENERGY MANAGEMENT
% Change
(in millions of €)
2017
2016
Growth drivers in Europe, C.I.S., Africa, Middle East included
SGRE, Digital Factory and Mobility. These increases were partly
offset by a clear revenue decline in Power and Gas. In Germany,
revenue was up with increases in the majority of industrial busi-
nesses partly offset by declines at Energy Management and
Power and Gas.
Fiscal year
Capital structure ratio
Our capital structure ratio as of September 30, 2017 decreased to
0.9 from 1.0 a year earlier, both results being in line with the
target established in our One Siemens financial framework. The
change was due primarily to the above-mentioned decrease of
provisions for pensions and similar obligations.
Process Industries and Drives makes most of its capital expen-
ditures for the purpose of rationalization, replacement, and ad-
justment of innovative new or successor products, particularly
in Europe.
A.6 Overall assessment of the economic position
The investments of Siemens Gamesa Renewable Energy con-
tinue to focus on the expansion of production capacity in Germany
for offshore wind turbines as well as in Morocco for onshore
blades, while in parallel the production capacities in other regions
are reduced to address changing market conditions. Further
investments relate to the emerging markets India and China to
allow for the production of the next turbine generation.
Combined Management Report
21
In fiscal 2017, we continued to stringently execute on our "Vision
2020" concept. We reached significant milestones for the stra-
tegic development of Siemens and initiated important measures
to further strengthen our portfolio. At the beginning of fiscal
2017, we founded next47, which pools our existing startup activ-
ities to foster disruptive ideas more vigorously and accelerate the
development of new technologies. In the second quarter, we
acquired Mentor Graphics, an electronic design automation soft-
ware provider, to further strengthen and expand our industrial
software portfolio. At the beginning of the third quarter we
closed the merger of our wind power business with Gamesa to
form SGRE, a leading global wind power player in the onshore
and offshore markets. In the fourth quarter, we announced our
plans to publicly list a minority stake in the Healthineers business
in the first half of calendar year 2018, depending on market
conditions, in order to strengthen this Strategic Unit within
Siemens by increasing the entrepreneurial and capital flexibility
it needs to drive its strategic growth plans. Also in the fourth
quarter, we signed a memorandum of understanding to combine
our mobility business, including the rail traction drives business,
with Alstom SA, France, in order to provide our customers around
the world with an even more innovative and competitive product
and solution portfolio. This transaction is expected to close at the
end of calendar year 2018.
Healthineers' investments are driven mainly by enhancing com-
petitiveness and innovation notably in the diagnostics busi-
nesses, including large amounts relating to intangible assets,
particularly capitalized development expenses for new platforms.
Healthineers is also spending for factories, especially in China
and the United States.
In November 2015, we announced a share buyback of up to
€3 billion ending at the latest on November 15, 2018. The buy-
backs will be made under the current authorization granted at
the Annual Shareholders' Meeting on January 27, 2015. Shares
repurchased may be used solely for retirement; for issuing shares
to employees, to members of the Managing Board and board
members of affiliated companies; and for servicing/securing the
obligations or rights from or in connection with convertible
bonds or warrant bonds. In fiscal 2017 we repurchased 7,922,129
treasury shares under the program at an average cost per share
of €117.85, totaling €0.9 billion (including incidental transaction
charges).
The expansion in Europe is expected to continue, with GDP fore-
cast to grow 2.5%; especially the Eurozone should proceed with
its recovery after a prolonged period of stagnation and recession.
Supportive factors include continued monetary stimulus, re-
duced headwinds from fiscal policy and improving confidence of
companies and households.
As of September 30, 2017 we recorded, in total, €28.8 billion in
notes and bonds (maturing until 2047), €2.5 billion in loans from
banks (maturing until 2027), €0.8 billion in other financial in-
debtedness (maturing until 2029) and €0.1 billion in obligations
under finance leases. Notes, bonds and loans from banks were
issued mainly in U.S. dollar and euro, and to a lower extent in the
British pound.
We have credit facilities totaling €7.8 billion which were unused
as of September 30, 2017.
For further information about our debt see NOTE 15 in B.6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. For further informa-
tion about the functions and objectives of our financial risk man-
agement see NOTE 24 in B.6 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS.
Off-balance-sheet commitments
As of September 30, 2017 the undiscounted amount of maximum
potential future payments related primarily to credit guarantees
and guarantees of third-party performance amounted to €3.1 bil-
lion (September 30, 2016: €3.7 billion).
In addition to these commitments, we issued other guarantees.
To the extent future claims are not considered remote, maximum
future payments from these commitments amount to €0.6 bil-
lion (September 30, 2016: €0.9 billion). The decrease in other
guarantees is related to indemnifications issued in connection
with dispositions of businesses.
Also with regard to executing our financial target system, fiscal
2017 was another very successful year for Siemens and for most
of our industrial businesses and SFS. We raised our guidance for
basic earnings per share (EPS) from net income after the first
quarter. After the second quarter, we confirmed this raised fore-
cast and included in the EPS guidance previously excluded bur-
dens resulting from portfolio changes. We reached or exceeded
all the targets set for our primary measures for fiscal 2017. We
achieved revenue growth of 3% net of currency translation and
portfolio effects. Net income and basic EPS from net income rose
11% and 10%, respectively. Excluding burdens related to the
acquisition of Mentor Graphics and the merger with Gamesa,
Return on capital employed (ROCE) was slightly above the lower
end of our target range of 15% to 20%. Our capital structure ratio
came in slightly below 1.
Future payment obligations under non-cancellable operating
leases amounted to €3.3 billion (September 30, 2016: €3.5 bil-
lion).
Irrevocable loan commitments amounted to €3.4 billion (Sep-
tember 30, 2016: €3.4 billion). A considerable portion of these
commitments resulted from asset-based lending transactions,
meaning that the respective loans can be drawn only after the
borrower has provided sufficient collateral.
Combined Management Report
Debt and credit facilities
Orders for fiscal 2017 were €85.7 billion, down 1% year-over-year.
The decline was due to contracting markets for Power and Gas,
which in the prior fiscal year had recorded large orders for power
plants in Egypt. All other industrial businesses recorded increases.
Orders grew at double-digit rates at Mobility and Digital Factory,
the latter on the particular strength of its short-cycle businesses
and supported by new volume from the Mentor Graphics acqui-
sition. Order growth at SGRE was due to new volume from the
merger with Gamesa. At 1.03, our book-to-bill ratio fulfilled our
expectation of a ratio above 1.0.
TEMBER 30, 2017. These disclosures are - contrary to the disclo-
sures in our separately available "Sustainability Information 2017"
document - not subject to a specific framework to inform the
users of the financial reports in a focused manner.
Industrial Business profit rose 8% to €9.5 billion. All industrial
businesses except Power and Gas and SGRE increased their profit
year-over-year. The strongest increases came from Digital Factory
and Building Technologies, which together with Healthineers and
Mobility achieved excellent results for the fiscal year. Energy
Management continued its solid improvement. While profit at
Process Industries and Drives grew, this increase was due pri-
marily to lower severance charges year-over-year. As planned, we
increased R&D and selling expenses in our industrial businesses,
with a strong emphasis on digitalization, including the further
advancement of our MindSphere platform.
GDP growth in China is expected to moderate further in calendar
2018 to 6.5%, down from 6.8% in 2017. However, the near-term
strength masks longer-term fragilities, especially very high debt
levels. Also, the government has made only slow progress in re-
ducing overcapacities.
The U.S. economy is anticipated to see moderate growth of 2.4%
even without stimulus in the form of substantial tax cuts or a big
infrastructure program. GDP growth is driven by consumer spending,
which is supported by declining unemployment, rising incomes and
household wealth. Fixed investments are expected to increase by
2.7% and should benefit from firming global markets. Interest rates
are anticipated to continue to gradually rise led by central bank rates.
19
In fiscal 2018, the world economy is expected to grow slightly
faster than in fiscal 2017. Global GDP is projected to expand by
3.2% in calendar 2018, the highest growth rate since 2010. Fixed
investments are anticipated to grow by 3.6%, with a higher rate
in emerging countries than in advanced economies. Emerging
markets are forecast to benefit from stronger global growth and
rising commodity prices.
A.8.1.1 WORLDWIDE ECONOMY
A.8.1 Report on expected
developments
A.8 Report on expected developments
and associated material opportunities and risks
24
23
Combined Management Report
Revenue rose to €83.0 billion, up 4% year-over-year. Except for
Power and Gas and Process Industries and Drives, all industrial
businesses contributed to revenue growth. Revenue growth was
led by substantial growth at SGRE, due mainly to new volume
from the merger with Gamesa, and by significant growth at
Digital Factory due to the strength of the Division's short-cycle
businesses and to the Mentor Graphics acquisition. Excluding
currency translation and portfolio effects, overall revenue grew
3%. For fiscal 2017, we had forecast modest growth in revenue,
net of currency translation and portfolio effects.
Siemens has policies for environmental, employee and social
matters, for the respect of human rights, and anti-corruption and
bribery matters, among others. Reportable information which
also relates to these non-financial matters is included in the
→ COMBINED MANAGEMENT REPORT, in → NOTES 16, 17, 21, 25, and 26
OF B.6 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, and in
NOTES 16, 17, 20, 21, and 25 OF THE NOTES TO THE FINANCIAL STATE-
MENTS in the ANNUAL FINANCIAL STATEMENTS OF SIEMENS AG AS OF SEP-
Free cash flow from continuing and discontinued operations for
fiscal 2017 was €4.8 billion, down 13% compared to the prior
fiscal year.
We evaluate our capital structure using the ratio of industrial net
debt to EBITDA. For fiscal 2017, this ratio was 0.9, compared to
1.0 in fiscal 2016. We thus reached our forecast, which was to
achieve a ratio of up to 1.0.
ROCE for fiscal 2017 was 13.5%, down from 14.3% in fiscal 2016.
This decline was due primarily to burdens related to the merger
with Gamesa and the acquisition of Mentor Graphics, which we
had excluded from our ROCE forecast for fiscal 2017. Excluding
these burdens, ROCE reached the lower end of the 15% to 20%
range that we generally aim to achieve. We thus reached our
forecast, which was to come close to or reach the lower end of
our target range.
A.7 Non-financial matters
Combined Management Report
72
22
Net income in fiscal 2017 rose 11% to €6.2 billion, and basic EPS
from net income was up 10% to €7.44. We thus reached our
raised forecast, which was for an increase in basic EPS from net
income in the range of €7.20 to €7.70, up from the range of
€6.80 to €7.20 that was forecast in our Annual Report for fiscal
2016. Net income development benefited from our continuous
efforts to increase productivity. In fiscal 2017, total cost produc-
tivity improved 5%, reaching the upper end of our fiscal 2017
target of 3% to 5%.
The loss outside the Industrial Business came in lower year-over-
year. This was due mainly to positive effects related to the mea-
surement of a major asset retirement. These effects were partly
offset by higher amortization of intangible assets acquired in
business combinations, mainly related to the merger with
Gamesa and to the Mentor Graphics acquisition.
The profit margin of our Industrial Business increased to 11.2%,
up from 10.8% in the prior fiscal year. We thus reached our fore-
cast as of the end of the first quarter of fiscal 2017, which was
raised from a range of between 10.5% and 11.5% to a range of
between 11.0% and 12.0%. Six of our eight industrial businesses
improved their margins year-over-year, and five reached or
exceeded their margin ranges. In challenging market environ-
ments, Power and Gas, SGRE and Process Industries and Drives
missed their target ranges in fiscal 2017. With a return on equity
after tax of 19.9%, SFS, which is reported outside our Industrial
Business, reached the upper end of its margin range.
We intend to continue providing an attractive return to share-
holders. As in the past, we intend to fund our dividend payout
from Free cash flow. The Siemens Managing Board, in agreement
with the Supervisory Board, proposes a dividend of €3.70 per
share, up from €3.60 a year earlier.
A.5.2 Cash flows
Cash flows from financing activities
Cash flows from operating activities
(1)
Cash flows from investing activities - continuing and discontinued operations
(7,457)
Purchase of treasury shares
Re-issuance of treasury shares and other transactions with owners
Issuance of long-term debt
Repayment of long-term debt (including current maturities of long-term debt)
(931)
1,123
6,958
Cash flows from investing activities – discontinued operations
(4,868)
260
Interest paid
Dividends paid to shareholders of Siemens AG
Dividends attributable to non-controlling interests
Cash flows from financing activities - continuing operations
Cash flows from financing activities - discontinued operations
Cash flows from financing activities - continuing and discontinued operations
The forecasts presented here for GDP and fixed investments are
based on a report from IHS Markit dated October 15, 2017.
(1,000)
(2,914)
(187)
Change in short-term debt and other financing activities
(in millions of €)
1,404
(7,456)
Cash flows from investing activities - continuing operations
Net income
Change in operating net working capital
Other reconciling items to cash flows from operating activities – continuing operations
Cash flows from operating activities – continuing operations
Cash flows from operating activities - discontinued operations
Cash flows from operating activities - continuing and discontinued operations
Cash flows from investing activities
Additions to intangible assets and property, plant and equipment
Acquisitions of businesses, net of cash acquired
Change in receivables from financing activities of SFS
Fiscal year
(1,382)
2017
(1,595)
2,641
7,225
(50)
7,176
(2,406)
(4,385)
(686)
Other purchases of assets
Other disposals of assets
6,179
A.8.1.2 MARKET DEVELOPMENT
The investments of Building Technologies relate mainly to the
products and systems business, particularly innovation projects
such as control and digital platforms.
For fiscal 2018, we expect the markets served by our Power and
Gas Division to remain challenging with market volume poten-
tially declining again, even below the low level of fiscal 2017.
However, the need for small and medium gas turbines, particu-
larly in countries with a less developed energy infrastructure,
is anticipated to continue. Volume in the compression market
is expected to remain on a low level but we expect to see growing
signs of a recovery during fiscal 2018 as some customers in the
oil and gas industry revive investment plans. The steam turbine
market is expected to continue to be impacted by the shift from
coal to gas and renewable sources for power generation.
7,176
(2,406)
4,769
With our ability to generate positive operating cash flows, our
total liquidity (defined as cash and cash equivalents as well as
available-for-sale financial assets) of €9.6 billion, our €7.8 billion
in unused lines of credit, and our credit ratings at year-end, we
believe that we have sufficient flexibility to fund our capital re-
quirements. Also in our opinion, our operating net working cap-
ital is sufficient for our present requirements.
Investing activities
Additions to intangible assets and property, plant and equipment
from continuing operations totaled €2.4 billion in fiscal 2017.
Within the Industrial Business, ongoing investments related
mainly to technological innovations; extending our capacities for
designing, manufacturing and marketing new solutions; improv-
ing productivity; and replacements of fixed assets. These invest-
ments amounted to €1.8 billion in fiscal 2017. The remaining
portion in fiscal 2017 related mainly to SRE, including significant
amounts related to office projects such as new office buildings in
Germany. SRE is responsible for uniform and comprehensive
management of Company real estate worldwide (except for
SGRE), and supports the Industrial Business and corporate activ-
ities with customer-specific real estate solutions.
With regard to capital expenditures for continuing operations, we
expect a significant spending increase in fiscal 2018. In addition,
we plan to invest significant amounts in coming years in attrac-
tive innovation fields in connection with next47.
Focus areas of ongoing investing activities of the Industrial Busi-
ness are:
The investments of Power and Gas are focused on the enhance-
ment of productivity and selective strategic localization. Invest-
ing activities mainly relate to our gas turbines and turbine com-
ponents.
Energy Management is spending the larger portion of its capital
expenditures for innovation, particularly in digital and low-volt-
age grid edge products and solutions. Further investments are
primarily related to the replacement of fixed assets, the expan-
sion or relocation of factories and technical equipment.
discontinued operations
Combined Management Report
Economic, political and geopolitical conditions (macroeco-
nomic environment): We see a high level of uncertainty regard-
ing the global economic outlook. Significant downside risks stem
e.g. from an increasing trend towards populism and from the
consequences of the Brexit negotiations. The U.K. exit process
could heighten business and consumer uncertainty, reduce in-
vestment in the U.K., pose risks to financial markets and may
increase the uncertainties about the future of the European
Union (EU) in general. A further and massive loss of economic
confidence and a prolonged period of reluctance in investment
Competitive environment: The worldwide markets for our
products, solutions and services are highly competitive in terms
of pricing, product and service quality, product development and
introduction time, customer service, financing terms and shifts
in market demands. We face strong existing competitors and also
competitors from emerging markets, which may have a better
cost structure. Some industries in which we operate are under-
going consolidation, which may result in stronger competition,
a change in our relative market position, or unexpected price
erosion. Furthermore, there is a risk of take-overs of crucial sup-
pliers by competitors and a risk that competitors are increasingly
offering services for our installed base. We address these risks
with various measures, for example benchmarking, strategic
initiatives, sales push initiatives, executing productivity measures
and target cost projects, rightsizing of our footprint, outsourc-
ings, mergers and joint ventures, exporting from low-cost
countries to price-sensitive markets, and optimizing our product
portfolio. We continuously monitor and analyze competitive and
market information in order to be able to anticipate unfavorable
changes in the competitive environment rather than merely
reacting to such changes.
A.8.3.1 STRATEGIC RISKS
Below we describe the risks that could have a material adverse
effect on our business, financial condition (including effects on
assets, liabilities and cash flows), results of operations and repu-
tation. The order in which the risks are presented in each of the
four categories reflects the currently estimated relative exposure
for Siemens associated with these risks and thus provides an in-
dication of the risks' current importance to us. Additional risks
not known to us or that we currently consider immaterial may
also negatively impact our business objectives and operations.
Unless otherwise stated, the risks described below relate to all of
our segments.
A.8.3 Risks
Audit Committee of the Supervisory Board. The CRIC is composed
of the Chief Risk & Internal Control Officer, as the chairperson,
members of the Managing Board and selected heads of Corpo-
rate Units.
To oversee the ERM process and to further drive the integration
and harmonization of existing control activities to align with legal
and operational requirements, the Managing Board established
a Risk Management and Internal Control Organization, headed by
the Chief Risk & Internal Control Officer, and a Corporate Risk and
Internal Control Committee (CRIC). The CRIC obtains risk and op-
portunity information from the Risk Committees established at
the Industrial Business, SFS, regions and Corporate Units. In order
to allow for a meaningful discussion on Siemens group level in-
dividual risk and opportunities of similar cause-and-effect nature
are aggregated into risk and opportunity themes. This aggrega-
tion naturally results in a mixture of risks, including those with
a primarily qualitative assessment and those with a primarily
quantitative risk assessment. Accordingly, we do not foresee a
purely quantitative assessment of risk themes. This information
then forms the basis for the evaluation of the company-wide risk
and opportunity situation. The CRIC reports to and supports the
Managing Board on matters relating to the implementation,
operation and oversight of the risk and internal control system
and assists the Managing Board for example in reporting to the
A.8.2.3 RISK MANAGEMENT ORGANIZATION
AND RESPONSIBILITIES
Responsibilities are assigned for all relevant risks and opportuni-
ties, with the hierarchical level of responsibility depending on the
significance of the respective risk or opportunity. In a first step,
assuming responsibility for a specific risk or opportunity involves
choosing one of our general response strategies. Our general re-
sponse strategies with respect to risks are avoidance, transfer,
reduction or acceptance of the relevant risk. Our general response
strategy with respect to opportunities is to 'seize' the relevant
opportunity. In a second step, responsibility for a risk or opportu-
nity also involves the development, initiation and monitoring of
appropriate response measures corresponding to the chosen re-
sponse strategy. These response measures have to be specifically
tailored to allow for effective risk management. Accordingly, we
have developed a variety of response measures with different
characteristics. For example, we mitigate the risk of fluctuations
in currency and interest rates by engaging in hedging activities.
Regarding our long-term projects, systematic and comprehensive
project management with standardized project milestones, in-
cluding provisional acceptances during project execution and
complemented by clearly defined approval processes, assists us
in identifying and responding to project risks at an early stage,
even before the bidding phase. Furthermore, we maintain appro-
priate insurance levels for potential cases of damage and liability
risks in order to reduce our exposure to such risks and to avoid
or minimize potential losses. Among others, we address the risk
of fluctuation in economic activity and customer demand by
closely monitoring the macroeconomic conditions and develop-
ments in relevant industries, and by adjusting capacity and im-
plementing cost-reduction measures in a timely and consistent
manner, if deemed necessary.
27
28
Combined Management Report
Continuing and
(50)
(1,560)
Mobility's investments focus mainly on meeting project de-
mands and maintaining or enhancing its production facilities.
The conversion of profit into cash inflows from operating activ-
ities was mainly driven by Healthineers and the Digital Factory
Division. This conversion was held back by a build-up of operat-
ing net working capital primarily due to an increase in invento-
ries at SGRE and a decrease in billings in excess of costs and esti-
mated earnings on uncompleted contracts and related advances
at the Power and Gas Division.
The cash outflows for acquisitions of businesses, net of cash
acquired, primarily included payments totaling €4.1 billion re-
lated to the acquisition of Mentor Graphics.
The cash outflows for other purchases of assets primarily in-
cluded additions of assets eligible as central bank collateral and
to payments related to several investments such as in connection
with our Bentley Systems strategic alliance and the Valeo Siemens
eAutomotive joint venture.
The cash inflows from other disposals of assets primarily in-
cluded disposals from above-mentioned eligible collateral, pro-
ceeds from real estate disposals at SRE and from the sale of invest-
ments such as the stake in an offshore windfarm project at SFS.
The cash inflows from the re-issuance of treasury shares and
other transactions with owners resulted from the exercise of
warrants in connection with the redemption of the US$1.5 billion
bonds with warrant units.
20
20
Fiscal year 2017
Combined Management Report
Free cash flow
(in millions of €)
Cash flows from operating activities
Additions to intangible assets and property, plant and equipment
Free cash flow
Continuing
operations
Discontinued
operations
7,225
(50)
(2,406)
4,819
We report Free cash flow as a supplemental liquidity measure:
In fiscal 2018, market volume measured in Euro is expected to be
held back by negative currency translation effects.
Our ERM process aims for early identification and evaluation of,
and response regarding, risks and opportunities that could mate-
rially affect the achievement of our strategic, operational, financial
and compliance objectives. The time horizon covered by ERM is
typically three years. Our ERM is based on a net risk approach,
addressing risks and opportunities remaining after the execution
of existing control measures. If risks have already been considered
in plans, budgets, forecasts or the financial statements (e.g. as a
provision or risk contingency), they are supposed to be incorpo-
rated with their financial impact in the entity's business objectives.
As a consequence, only additional risks arising from the same sub-
ject (e.g. deviations from business objectives, different impact
perspectives) should be considered for the ERM. In order to pro-
vide a comprehensive view on our business activities, risks and
opportunities are identified in a structured way combining ele-
ments of both top-down and bottom-up approaches. Reporting
generally follows a quarterly cycle while this regular reporting
process is complemented by an ad-hoc reporting process that aims
to escalate critical issues in a timely manner. Relevant risks and
opportunities are prioritized in terms of impact and likelihood,
considering different perspectives, including business objectives,
reputation and regulatory matters. The bottom-up identification
and prioritization process is supplemented by workshops with the
respective managements of the Industrial Business, SFS, regions
and Corporate Units. This top-down element ensures that poten-
tial new risks and opportunities are discussed at the management
level and are included in the subsequent reporting process, if
found to be relevant. Reported risks and opportunities are ana-
lyzed regarding potential cumulative effects and are aggregated
within and for each of the organizations mentioned above.
while management reporting is intended to enable us to monitor
such risks more closely as our business progresses. Our internal
auditors regularly review the adequacy and effectiveness of our
risk management system. Accordingly, if deficits are detected,
it is possible to adopt appropriate measures for their elimination.
This coordination of processes and procedures is intended to help
ensure that the Managing Board and the Supervisory Board are
fully informed about significant risks in a timely manner.
Revenue growth
Based on these assumptions and exclusions, our outlook is as
follows:
Business, eliminations for transactions between the businesses,
and changes arising from the adoption of IFRS 15.
25
Combined Management Report
We are basing this outlook on our preliminary numbers under
IFRS 15, Revenue from Contracts with Customers, which we will
adopt beginning with fiscal 2018 retrospectively, i.e. results for fis-
cal 2017 will be presented on a comparable basis. We do not expect
the adoption of IFRS 15 to have a significant effect on Siemens'
Consolidated Financial Statements. On a preliminary basis, the
adoption of IFRS 15 is expected to reduce reported revenue for fiscal
2017 by approximately €0.2 billion and reported basic EPS for fiscal
2017 by approximately €0.10, resulting mainly from Profit Industrial
Business. Reported Industrial Business profit margin for fiscal 2017
is expected to decline by approximately 0.1 percentage points. As
a result of the IFRS 15 adoption, below we report the backlog of the
Siemens Group which, compared to the previous definition, now
also includes the order backlog in businesses outside the Industrial
We are exposed to currency translation effects, particularly involv-
ing the US$, the British £ and currencies of emerging markets,
particularly the Chinese yuan. While we expect volatility in global
currency markets to continue in fiscal 2018, we have improved our
natural hedge on a global basis through geographic distribution
of our production facilities during the past. Nevertheless, Siemens
is still a net exporter from the Euro zone to the rest of the world,
so a weak Euro is principally favorable for our business and a
strong Euro is principally unfavorable. In addition to the natural
hedging strategy just mentioned, we also hedge currency risk in
our export business using derivative financial instruments. We
expect these steps to help us limit effects on income related to
currency in fiscal 2018. Based on currency exchange rates as of
beginning of November 2017, we nevertheless expect negative
currency effects to significantly influence nominal order and
revenue development, and to adversely affect Industrial Business
profit with an impact in the mid-triple-digit millions of Euros.
For fiscal 2018, we expect market-driven headwinds to continue
to significantly impact volume development and profitability of
Power and Gas, SGRE and Process Industries and Drives. These
units are in the process of preparing capacity adjustment mea-
sures, which we expect to result in significant severance charges.
There are high uncertainties regarding the extent of the financial
burdens for fiscal 2018, as these depend on the results of consul-
tations with the relevant employee representatives and the im-
plementation of the planned measures is expected to take seve-
ral years. Therefore, we exclude all severance charges from this
outlook. Severance charges in fiscal 2017 were €385 million for
our Industrial Business and €466 million (pre-tax) for Siemens.
We assume that severance charges in fiscal 2018 will be higher
than in fiscal 2017. Furthermore, this outlook excludes potential
effects which may follow the introduction of a new strategic pro-
gram, which we expect to announce during fiscal 2018.
ers and corresponding EPS. Effects on EPS associated with minori-
ties holding shares in Healthineers following the planned IPO are
excluded from this outlook. Furthermore, charges related to legal
and regulatory matters are excluded from this outlook.
We are basing our outlook for fiscal 2018 for the Siemens Group and
its segments on the above-mentioned expectations and assump-
tions regarding the overall economic situation and specific market
conditions for the next fiscal year. We plan to publicly list a minority
stake in Healthineers in the first half of calendar 2018, depending
on market conditions, to further strengthen Healthineers in Siemens
for the future. The public listing of a minority stake in Healthineers
will among others result in an increase in non-controlling interests,
which reduces net income attributable to Siemens AG's sharehold-
We expect a mixed picture in our market environment in fiscal 2018,
ranging from strong markets for our short-cycle businesses to un-
favorable dynamics in our energy generation markets, as well as
geopolitical uncertainties that may restrict investment sentiment.
Therefore, for fiscal 2018 we expect modest growth in revenue, net
of effects from currency translation and portfolio transactions.
A.8.1.3 SIEMENS GROUP
For SGRE, we expect global wind installations to grow in fiscal
2018, with growth driven by higher demand for onshore installa-
tions, while offshore installations are expected to remain near
the prior-year level. Some of the SGRE more relevant onshore
markets like India and the U.S. will continue to experience higher
than normal levels of volatility driven by the transition to fully
competitive wind markets. This transition is expected to result in
a low double-digit price decline in the onshore markets in fiscal
2018. As a result volume for SGRE's markets measured in Euro is
expected to decline year-over-year.
For fiscal 2018, markets for Healthineers are expected to stay on
a moderate growth path. Healthineers' markets continue to ben-
efit from long-term trends such as growing and aging populations
and from broader access to healthcare, but are restricted by pub-
lic spending constraints and by consolidation of healthcare pro-
viders. On a geographic basis, we expect slight growth in the U.S.,
held back by continued pressure to increase utilization of existing
equipment, reduced reimbursement rates and policy uncertainty.
For Europe, we also expect slight growth, with equipment re-
placement and business with large customers such as hospital
chains gaining further importance. For China, we expect moder-
ate growth due to continuously growing government spending on
healthcare, promoting the private segment and expanding access
on county level, pronounced effects of aging and growing inci-
dence of chronic disease, partly held back by governmental re-
strictions such as centralized tendering and regulatory oversight
of large-scale equipment allocation and use. Governments in a
number of countries show the intention to establish protectionist
initiatives and policies which support local suppliers.
we expect challenging market conditions for our wind-related
components due to higher pricing pressure resulting from the on-
going transition towards mature, fully competitive wind energy
markets. On a geographic basis, the market growth momentum
in China is expected to moderate in fiscal 2018 year-over-year,
while markets in Europe and in the U.S. are expected to improve.
Combined Management Report
In fiscal 2018, nominal volume for the markets served by the
Process Industries and Drives Division is expected to decline
slightly due to currency translation effects. Excluding this effect,
market volume is anticipated to grow slightly. Within commodity-
related markets (e.g. oil and gas, mining, minerals), a gradual re-
covery in capital expenditures is expected to continue on a low
level. Chemicals market is expected to further stabilize, whereas
For fiscal 2018, markets addressed by the Digital Factory Division
are expected to continue to grow. Global manufacturing produc-
tion is forecast to grow moderately again, although growth rates
in the automotive industries are expected to slow following
strong growth in prior years. The machine-building industry is
also forecast to grow as customers upgrade and modernize pro-
duction facilities in an increasingly dynamic market environment.
The trend towards digitalization is expected to continue to drive
growth in the industrial software market. On a geographic basis,
the strong growth rates experienced in China in fiscal 2017 are
not expected to continue in fiscal 2018.
For fiscal 2018, we expect markets served by the Mobility Divi-
sion to grow moderately. We anticipate that rail operators in
Europe, particularly in Germany and the U.K., will continue to
make significant investments. Markets in the Americas region are
expected to remain strong, especially due to ongoing invest-
ments in urban transport and infrastructure in the U.S. as well as
demand for commuter transport in Argentina. In the Middle East
and Africa, we expect tenders of further rolling stock and turnkey
projects. In China, we expect investments in high-speed trains,
urban transport and rail infrastructure to continue to drive
growth. In India, market growth should continue from projects
for commuter and urban transport as well as high-speed passen-
ger lines, freight rail, and related infrastructure as part of the
country's transportation infrastructure modernization. Overall,
local rail transport and intermodal mobility solutions are ex-
pected to gain importance as urbanization continues to progress
around the world. In emerging countries, rising incomes are ex-
pected to result in greater demand for public transport solutions.
For the markets served by the Building Technologies Division, we
expect solid growth again in fiscal 2018. Highest growth dynamics
are forecast for Asia, with above-average growth in China and
India. Markets in the Middle East are also expected to grow faster
than the Division's markets overall. The U.S. is expected to grow in
line with the global average and the majority of European coun-
tries are anticipated to continue their recovery, led by Spain and
some Eastern European countries.
currency translation effects. We expect negative currency trans-
lation effects from a weaker US$ and related currencies. Customers
are expected to continue their effort to strengthen transmission and
distribution grids to integrate the growing amount of decentralized
renewable energy. We expect first signs of stabilization in the oil and
gas and the metals and mining markets, though from low levels.
In fiscal 2018, markets served by the Energy Management Division
are expected to provide moderate, low single-digit growth excluding
Our SFS Division is geared to Siemens' Industrial Business and its
markets. As such SFS is influenced by the business development
of the markets served by our Industrial Business, among other
factors. SFS will continue to focus its business scope on areas of
intense domain know-how.
Risk management at Siemens builds on a comprehensive, interac-
tive and management-oriented Enterprise Risk Management
(ERM) approach that is integrated into the organization and that
addresses both risks and opportunities. Our ERM approach is based
on the globally accepted COSO (Committee of Sponsoring Organi-
zations of the Treadway Commission) 'Enterprise Risk Manage-
ment - Integrated Framework' (2004) and is adapted to Siemens
requirements. It additionally conforms to ISO (International Orga-
nization for Standardization) Standard 31000 (2009). The frame-
work connects the ERM process with our financial reporting pro-
cess and our internal control system. It considers a company's
strategy, the efficiency and effectiveness of its business opera-
tions, the reliability of its financial reporting as well as compliance
with relevant laws and regulations to be equally important.
In fiscal 2017, most of our industrial businesses contributed to or-
ganic revenue growth, and we expect a similar development in fis-
cal 2018. The principal exceptions are Power and Gas and SGRE,
which continue to be impacted by market headwinds.
We anticipate that orders in fiscal 2018 will exceed revenue for a
book-to-bill ratio above 1.
A.8.2.2 ENTERPRISE RISK MANAGEMENT PROCESS
We have implemented and coordinated a set of risk management
and control systems which support us in the early recognition of
developments that could jeopardize the continuity of our busi-
ness. The most important of these systems include our enter-
prise-wide processes for strategic planning and management
reporting. Strategic planning is intended to support us in consid-
ering potential risks well in advance of major business decisions,
A.8.2.1 BASIC PRINCIPLES OF RISK MANAGEMENT
Our risk management policy stems from a philosophy of pursuing
sustainable growth and creating economic value while managing
appropriate risks and opportunities and avoiding inappropriate
risks. As risk management is an integral part of how we plan and
execute our business strategies, our risk management policy is
set by the Managing Board. Our organizational and accountabil-
ity structure requires each of the respective managements of
our Industrial Business, Financial Services (SFS), regions and
Corporate Units to implement risk management programs that
are tailored to their specific industries and responsibilities, while
being consistent with the overall policy.
A.8.2 Risk management
Overall, the actual development for Siemens and its Segments
may vary, positively or negatively, from our outlook due to the
risks and opportunities described below or if our expectations
and assumptions do not materialize.
This outlook excludes charges related to legal and regulatory
matters, effects on EPS associated with minorities holding shares
in Healthineers following the planned IPO, and potential effects
which may follow the introduction of a new strategic program.
We expect a mixed picture in our market environment in fiscal
2018, ranging from strong markets for our short-cycle businesses
to unfavorable dynamics in our energy generation markets, as
well as geopolitical uncertainties that may restrict investment
sentiment. For fiscal 2018 we expect modest growth in revenue,
net of effects from currency translation and portfolio transac-
tions, and anticipate that orders will exceed revenue for a book-
to-bill ratio above 1. We expect a profit margin of 11.0% to 12.0%
for our Industrial Business and basic EPS from net income in the
range of €7.20 to €7.70, both excluding severance charges.
A.8.1.4 OVERALL ASSESSMENT
We aim in general for a capital structure, defined as the ratio of
industrial net debt to EBITDA, of up to 1.0, and expect to achieve
this in fiscal 2018.
Capital structure
Gamesa, we expect ROCE to show a double-digit result in fiscal
2018 but to come in below the lower end of our target range.
As of September 30, 2017, our order backlog totaled €126 billion.
Thereof Power and Gas had an order backlog of €40 billion, Mo-
bility of €26 billion, SGRE of €21 billion, Healthineers of €15 bil-
lion, Energy Management of €13 billion, Process Industries and
Drives and Building Technologies of €5 billion each and Digital
Factory of €3 billion. We expect revenue growth in fiscal 2018 to
benefit from conversion of our order backlog. From Siemens' back-
log, we expect to convert approximately €44 billion of past orders
into current revenue in fiscal 2018. Within this amount, we expect
our segments involved in large long-term project business to con-
tribute the following conversions of backlog into revenue for fiscal
2018: For Power and Gas we expect approximately a €9 billion in
revenue conversion, for Mobility, Energy Management and SGRE
approximately €7 billion in revenue conversion each.
Combined Management Report
26
Within our One Siemens financial framework, we aim in general
to achieve a ROCE in the range of 15% to 20%. Due mainly to
burdens on net income and average capital employed resulting
from the acquisition of Mentor Graphics and the merger with
Capital efficiency
We do not expect material influence on financial results from
discontinued operations in fiscal 2018. We anticipate our tax rate
for fiscal 2018 to be in the range of 27% to 33%, up from 26% in
fiscal 2017. We expect the increase in the tax rate to be driven by
tax burdens related to the preparations of the initial public offer-
ing of a minority stake in Healthineers and the merger of our
mobility business with Alstom.
Within our Reconciliation to Consolidated Financial Statements, we
expect expenses for Corporate items to be approximately €0.6 bil-
lion and to include significant centrally carried expenses related to
innovation and digitalization. Despite burdens such as carve-out
related expenses stemming from portfolio measures, particularly
including the planned public listing of a minority share in Healthi-
neers in the first half of calendar 2018 and the planned merger of
our mobility business with Alstom by the end of calendar 2018, we
expect results related to CMPA to be positive due among other fac-
tors to a €0.6 billion (after-tax) gain from the sale of our shares in
OSRAM Licht AG at the beginning of fiscal 2018. Results related to
CMPA are also expected to be highly volatile from quarter to quar-
ter during the fiscal year. We anticipate that SRE will continue with
real estate disposals depending on market conditions and generate
results near the prior-year level. Centrally carried pension expenses
are expected to total approximately €0.4 billion in fiscal 2018.
Amortization of intangible assets acquired in business combina-
tions are expected to rise to approximately €1.2 billion in fiscal 2018
due primarily to the merger with Gamesa and the acquisition of
Mentor Graphics. Eliminations, Corporate Treasury and other rec-
onciling items, which were a negative €0.3 billion in fiscal 2017, are
expected to increase by approximately €0.1 billion in fiscal 2018
due mainly to higher interest expenses.
For fiscal 2018, taking into account the above-mentioned as-
sumptions and exclusions, we expect all but two of our industrial
businesses to be in or above their ranges for profit margin as
defined in our financial performance system (see → A.2 FINAN-
CIAL PERFORMANCE system). The exceptions are Power and Gas and
Process Industries and Drives. Overall, we expect a profit margin
for our Industrial Business of 11.0% to 12.0%. Taking into account
the retrospective adoption of IFRS 15 as mentioned above, Indus-
trial Business profit margin was 11.1% in fiscal 2017. We expect
SFS, which is reported outside Industrial Business, to achieve a
return on equity (ROE) within its margin range in fiscal 2018 and
to keep its profit near the prior-year level.
tion of around 3% to 4%. Also, we plan to increase R&D expenses
aimed at strengthening our capacities for innovation.
Our forecast for net income and corresponding basic EPS is based
on a number of additional assumptions: As part of our One
Siemens framework, we target a total cost productivity improve-
ment of 3% to 5% in fiscal 2018. Also, we assume continued solid
project execution. Furthermore, we anticipate clear currency-re-
lated impacts on net income. Along with these assumptions, we
anticipate pricing pressure on our offerings of around 2.5% over-
all in fiscal 2018, with SGRE and the Power and Gas Division
clearly above this average. Furthermore, we expect wage infla-
For fiscal 2018, we expect net income to result in basic EPS from
net income in the range of €7.20 to €7.70. Net income and basic
EPS from net income for fiscal 2017 were €6.1 billion and €7.34,
respectively, taking into account the retrospective adoption of
IFRS 15 as mentioned above.
Profitability
26
Major spending of Digital Factory in fiscal 2017 related to the
factory automation, motion control systems, software and con-
trol products businesses, including investments in production
facilities in China. The portion of capital expenditures associated
with software is expected to increase considerably in fiscal 2018.
(1,560)
resulting from offsetting
Selling and general
(7)%
(2,454)
(2,619)
development expenses
Research and
23%
26%
as percentage of revenue
16%
5,945
6,909
Gross profit
4%
(1)%
(19,979) (19,818)
Cost of Sales
25,763
26,888
Revenue
% Change
2016
administrative expenses
(3,627)
(3,558)
(2)%
146
Profit carried forward
2,999
4,076
Net income
(160)
(385)
Income taxes
3,158
4,462
2017
Income from business activity
3,092
3,828
ments 3,798 (prior year 3,732)
thereof Income from invest-
Financial income, net
n/a
134
(30)
(expenses), net
Other operating income
24%
(in millions of €)
Fiscal year
Statement of Income of Siemens AG in accordance
with German Commercial Code (condensed)
Excellent project execution: By expanding project manage-
ment efforts as well as learning from our mistakes in project ex-
ecution through a formalized lessons learned approach, we see
Continuously developing and implementing initiatives to
reduce costs, boost sales efforts, adjust capacities, improve
our processes, realize synergies: In an increasingly competi-
tive market environment, a competitive cost structure comple-
ments the competitive advantage of being innovative. We be-
lieve that further improvements in our cost position can
strengthen our global competitive position and secure our mar-
ket presence against emerging and incumbent competitors. For
example, we expect to create sustainable value from productivity
measures in connection with our "Vision 2020" concept. More-
over, in course of the digital transformation, we seek to standard-
ize, automate and digitize our processes and make them leaner
and more efficient.
Economic/political stabilization of certain (critical) coun-
tries and resilience of worldwide economic environment:
We see an opportunity that political stabilization of certain criti-
cal countries and (further) lifting of sanctions may lead to higher
revenue volume that was unavailable in past years. Furthermore,
a return to more robust macroeconomic growth could also lead
to additional volume and profit for the company.
Favorable political and regulatory environment: Govern-
ment initiatives and subsidies (including tax benefits etc.) may
lead to more government spending (investments in new projects,
modernization of projects etc.) and ultimately result in an in-
crease of revenue and profit for the company.
Increased market penetration: Through divisional sales initia-
tives and masterplans, we continuously strive to grow and ex-
pand our business in established markets, open up new markets
for existing portfolio elements and strengthen our installed base
in order to gain a higher market share and increased profits.
Mergers, acquisitions, equity investments, partnerships,
divestments and streamlining our portfolio: We constantly
monitor our current and future markets for opportunities for stra-
tegic mergers and acquisitions, equity investments or partner-
ships to complement our organic growth. Such activities may help
us to strengthen our position in our existing markets, provide
access to new or underserved markets or complement our tech-
nological portfolio in selected areas. Opportunities might also
arise from well executed divestments, carve outs and joint ven-
tures which further optimize our portfolio while generating gains.
applications for an optimization of energy consumption, opera-
tion of highly efficient energy grids as well as scalable solutions
for distributed and renewable energy generation.
Success from innovation along electrification, automation
and digitalization: Innovation is a central part of our "Vision
2020," an entrepreneurial concept leading Siemens into the future
in three stages: first we "drive performance," then we "strengthen
core," and finally we "scale up" to attain our Vision 2020 goals.
We do this by investing significantly in R&D in order to develop
innovative, sustainable solutions for our customers and to simul-
taneously safeguard our competitiveness. We are an innovative
company and invent new technologies that we expect will meet
future demands arising from the megatrends of demographic
change, urbanization, climate change and globalization. We are
granted thousands of new patents every year and continuously
develop new concepts and convincing business models. We open
up access to new markets and customers through new marketing
and sales strategies as well as Divisional master plans. In 2016
we established next47, an independent unit designed to found,
partner with and invest in start-ups with innovative ideas for
shaping the future of electrification, automation and digitaliza-
tion, and thereby turn those ideas into viable businesses. This will
help Siemens create the next generation of path-breaking inno-
vations in such fields as artificial intelligence, decentralized elec-
trification, autonomous machines, block chain applications and
connected e-mobility. Siemens is positioned along the value
chains of electrification, automation and digitalization in order to
increase future market penetration. Along these value chains,
we have identified several growth fields in which we see our
greatest long-term potential. We are orienting our resource allo-
cation toward these growth fields and have announced concrete
measures in this direction. Across all Divisions, Siemens is profit-
ing from its undisputed strength in the digital enterprise. For
example, the Company's cloud based MindSphere platform en-
hances the availability of customers' digital products and systems
and improves their productivity and efficiency. In addition, we try
to generate additional volume and profit from new and innova-
tive digital products, services and solutions, including cyber secu-
rity for our customers, preventive maintenance, data analytics,
Within our Enterprise Risk Management (ERM) we regularly iden-
tify, evaluate and respond to opportunities that present them-
selves in our various fields of activity. Below we describe our most
significant opportunities. Unless otherwise stated, the opportu-
nities described below relate to all of our segments. The order in
which the opportunities are presented reflects the currently esti-
mated relative exposure for Siemens associated with these op-
portunities and thus provides an indication of the opportunities'
current importance to us. The described opportunities are not
necessarily the only ones we encounter. In addition, our assess-
ment of opportunities is subject to change as the Company, our
markets and technologies are constantly developing. It is also
possible that opportunities we see today will never materialize.
A.8.4 Opportunities
Combined Management Report
34
Combined Management Report
At present, no risks have been identified that either individually
or in combination could endanger our ability to continue as a
going concern.
Even though the assessments of individual risk exposures have
changed during fiscal 2017 due to developments in the external
environment, effects of our own mitigation measures and the
revision of our plans, the overall risk situation for Siemens did not
change significantly as compared to the prior year.
The most significant challenges have been mentioned first in
each of the four categories strategic, operational, financial and
compliance risks. The risks caused by highly competitive environ-
ment continue to be the most significant, as in the prior year.
THE OVERALL RISK SITUATION
A.8.3.5 ASSESSMENT OF
STATEMENTS.
For additional information with respect to specific proceed-
ings, see NOTE 21 in B.6 NOTES TO CONSOLIDATED FINANCIAL
Siemens maintains liability insurance for certain legal risks at lev-
els our management believes are appropriate and consistent with
industry practice. The insurance policy, however, does not pro-
tect Siemens against reputational damage. Moreover, Siemens
may incur losses relating to legal proceedings beyond the limits,
or outside the coverage, of such insurance or exceeding any pro-
visions made for losses related to legal proceedings. Finally, there
can be no assurance that Siemens will be able to maintain ade-
quate insurance coverage on commercially reasonable terms in
the future.
Some of these legal disputes and proceedings could result in ad-
verse decisions for Siemens that may have material effects on our
financial position, the results of operations and cash flows.
33
256
an opportunity to continuously reduce non-conformance costs
and ensure on-time delivery of our projects and solutions. Fur-
thermore, stringent project risk and opportunity management,
time schedule management, performance bonuses and highly
professional management of consortium partners and suppliers
all help us to avoid liquidated damages and ultimately improve
our profit position. In addition, improvements of our claim man-
agement processes enable us to reduce costs incurred as a result
of customer claims by finding a consensus with customers while
also improving customer relationship management. At the same
time, we reduce quality problems by proactively addressing sup-
plier issues up front.
Climate change: While climate change is widely considered a
risk, we consider climate change mitigation an opportunity for
Siemens. In line with the global agreement in Paris (COP21) that
entered into force in November 2016, Siemens strives to support
a trend towards reducing CO2 emissions both in own operations
as well as for our customers based on technologies from our en-
vironmental portfolio, such as low-carbon power generation
from renewable energy sources.
A.9.1 Results of operations
Combined Management Report
As of September 30, 2017, the number of employees was 92,300.
In the first quarter of fiscal 2017, as part of the merger with
Gamesa, Siemens AG transferred its Siemens wind power busi-
ness to entities held by Siemens AG.
We intend to continue providing an attractive return to share-
holders. Therefore, we intend to propose a dividend whose dis-
tribution volume is within a dividend payout range of 40% to
60% of net income of the Siemens Group, which we may adjust
for this purpose to exclude selected exceptional non-cash effects.
For fiscal 2018, we expect a net income of Siemens AG sufficient
to fund the distribution of a corresponding dividend.
Siemens AG is the parent company of the Siemens Group. Results
for Siemens AG comprise the fields of business activities mainly of
Power and Gas, Energy Management, Building Technologies, Mo-
bility, Digital Factory, Process Industries and Drives as well as the
activities of Siemens Real Estate and are significantly influenced
by directly or indirectly owned subsidiaries and investments. The
business development of Siemens AG is fundamentally subject to
the same risks and opportunities as the Siemens Group. Due to
the interrelations between Siemens AG and its subsidiaries and
the relative size of Siemens AG within the Group, the outlook of
the Group also largely reflects our expectations for Siemens AG.
Therefore, the foregoing explanations for the Siemens Group ap-
ply also for Siemens AG. We expect that income from investments
will significantly influence the profit of Siemens AG.
The Annual Financial Statements of Siemens AG have been pre-
pared in accordance with the rules set out in the German Com-
mercial Code (Handelsgesetzbuch).
Our internal audit function systematically evaluates our financial
reporting integrity, the effectiveness of the control system and
the risk management system, and the adherence to our compli-
ance policies. In addition, the Audit Committee is integrated into
our control system. In particular, it oversees the accounting and
the accounting process and the effectiveness of the internal con-
trol system, the risk management system and the internal audit
system. Furthermore, we have set up a Disclosure Committee
which is responsible for reviewing certain financial and non-
financial information prior to publication. Moreover, we have
rules for accounting-related complaints.
On a quarterly basis, an internal certification process is executed.
Management of different levels of our organization, supported
by confirmations of management of entities under their respon-
sibility, confirms the accuracy of the financial data that has been
reported to Siemens' corporate headquarters and reports on the
effectiveness of the related control systems.
Qualification of employees involved in the accounting process is
ensured through appropriate selection processes and regular
training. As a fundamental principle, based on materiality con-
siderations, the "four eyes" principle applies and specific proce-
dures must be adhered to for data authorization. Additional con-
trol mechanisms include target-performance comparisons and
analyses of the composition of and changes in individual line
items, both in the closing data submitted by reporting units and
in the Consolidated Financial Statements. In line with our infor-
mation security requirements, accounting-related IT systems
contain defined access rules protecting them from unauthorized
access. The manual and system-based control mechanisms re-
ferred to above generally also apply when reconciling the IFRS
closing data to the Annual Financial Statements of Siemens AG.
Localizing value chain activities: Localizing certain value
chain activities, such as procurement, manufacturing, mainte-
nance and service in emerging markets could enable us to reduce
costs and strengthen our global competitive position, in particu-
lar compared to competitors based in countries where they can
operate with more favorable cost structures. Moreover, our local
footprint in many countries might help us to take advantage of a
possible growth of markets and leverage a shift in markets, result-
ing in increased market penetration and market share.
A.9 Siemens AG
35
Combined Management Report
Our Consolidated Financial Statements are prepared on the basis
of a centrally issued conceptual framework which primarily con-
sists of uniform Financial Reporting Guidelines and a chart of
accounts. For Siemens AG and other companies within the
Siemens group required to prepare financial statements in accor-
dance with German Commercial Code, this conceptual frame-
work is complemented by mandatory regulations specific to the
German Commercial Code. The need for adjustments in the con-
ceptual framework due to regulatory changes is analyzed on an
ongoing basis. Accounting departments are informed quarterly
about current topics and deadlines from an accounting and clos-
ing process perspective.
After the merger of the Siemens wind power business with
Gamesa, we have commenced to integrate the former Gamesa
entities into our accounting-related internal control and risk
management system. These integration efforts will continue in
fiscal 2018.
At the end of each fiscal year, our management performs an eval-
uation of the effectiveness of the implemented control system,
both in design and operating effectiveness. We have a standard-
ized procedure under which necessary controls are defined, doc-
umented in accordance with uniform standards, and tested reg-
ularly on their effectiveness. Nevertheless, there are inherent
limitations on the effectiveness of any control system, and no
system, including one determined to be effective, may prevent
or detect all misstatements.
Our ERM approach is based on COSO's "Enterprise Risk Manage-
ment - Integrated Framework". As one of the objectives of this
framework is reliability of a company's financial reporting, it in-
cludes an accounting-related perspective. Our accounting-related
internal control system (control system) is based on the interna-
tionally recognized "Internal Control - Integrated Framework"
also developed by COSO. The two systems are complementary.
Report of Siemens group as well as the Annual Financial State-
ments of Siemens AG as the parent company are prepared in
accordance with all relevant regulations.
The overarching objective of our accounting-related internal con-
trol and risk management system is to ensure that financial
reporting is conducted in a proper manner, such that the Consol-
idated Financial Statements and the Combined Management
A.8.5 Significant characteristics of
the accounting-related internal
control and risk management system
Assessment of the overall opportunities situation: The most
significant opportunity for Siemens continues to be success from
innovation along electrification, automation and digitalization as
disclosed in our prior year reporting. Even though our assess-
ment of individual opportunities has changed during fiscal year
2017 due to developments in the external environment, our en-
deavors to profit from them and the revision of our plans, the
overall opportunity situation did not change significantly com-
pared to the prior year.
36
Current or future litigation: Siemens is and will be in the
course of its normal business operations involved in numerous
legal disputes and proceedings in various jurisdictions. These le-
gal disputes and proceedings could result, in particular, in
Siemens being subject to payment of damages and punitive dam-
ages, equitable remedies or criminal or civil sanctions, fines or
disgorgement of profit. In individual cases this may also lead to
formal or informal exclusion from tenders or the revocation or
loss of business licenses or permits. In addition, further legal dis-
putes and proceedings may be commenced or the scope of pend-
ing legal disputes and proceedings may be expanded. Asserted
claims are generally subject to interest rates.
Allocation to other
Unappropriated net income
11,250
8,360
19,610
19,178
11,761
7,417
Other provisions
commitments
Pensions and similar
Provisions
(3)%
700
681
with an equity portion
Special reserve
9%
19,368
21,123
Equity
Liabilities and equity
1%
69,814
70,239
Total assets
5%
(11)%
(2)%
Liabilities
Liabilities to banks
81
Combined Management Report
38
The Corporate Governance statement pursuant to Sections 289 a
and 315 para. 5 of the German Commercial Code is an integral
part of the Combined Management Report and is presented in
→ C.4.2 CORPORATE GOVERNANCE STATEMENT PURSUANT TO SECTIONS
289 A AND 315 PARA. 5 OF THE GERMAN COMMERCIAL CODE.
A.9.3 Corporate Governance
statement
The decrease in Trade payables, liabilities to affiliated compa-
nies and other liabilities was due primarily to lower liabilities to
affiliated companies as a result of intra-group financing activities.
Other provisions decreased due to several factors. The largest
was a decrease of €0.5 billion in provisions for losses from deri-
vative financial transactions. Additionally, provisions for post-
closing guarantees decreased by €0.2 billion and provisions for a
major asset retirement obligation decreased by €0.2 billion, due
primarily to reduced inflation rate assumptions.
The increase in Pension and similar commitments resulted
mainly from a €0.7 billion increase related to interest and service
costs and a €0.4 billion increase related to an adjustment of the
discount rate from 4.08% in fiscal 2016 to 3.77% in fiscal 2017.
This increase was partly offset by €0.6 billion for payments of
pension obligations.
The Increase in Receivables and other assets was due primarily
to higher receivables from affiliated companies as a result of in-
tra-group financing activities, including higher receivables from
SFS companies and higher receivables resulting from profit trans-
fer agreements.
1%
(4)%
(3)%
(6)%
69%
29,118
29,752
385
69,814
Total liabilities and equity
Deferred income
28,065
and other liabilities
to affiliated companies
Trade payables, liabilities
>200%
21%
14
619
750
Advance payments received
28,896
361
70,239
35
60
Active difference
Non-current assets
Assets
(in millions of €)
% Change
Sep 30,
2016
2017
with German Commercial Code (condensed)
Statement of Financial Position of Siemens AG in accordance
A.9.2 Net assets and financial position Cash, cash equivalents and securities are significantly affected
37
Intangible and tangible assets
Combined Management Report
The increase in Financial income, net was primarily attributable
to an improvement in other financial income (expenses), from a
negative €0.9 billion in the prior-year period to a negative
€0.3 billion. This was mainly due to a positive effect of €0.8 bil-
lion from changes in provisions for risks in derivative financial
instruments. This factor was partly offset by a negative effect of
€0.4 billion from changes in provision for pensions and similar
commitments related to changes in the discount rate assump-
tions. Income from investments was slightly higher compared to
the prior-year period, which included an increase in income from
profit transfer agreements with affiliated companies by €1.0 bil-
lion. However, positive results from investments were nearly off-
set by impairments of investments, which included primarily an
impairment of Siemens AG's investment at Siemens Gamesa
Renewable Energy, S.A., Spain, of €1.2 billion.
Despite an increase of €0.2 billion in Research and develop-
ment (R&D) expenses year-over-year, the R&D intensity (R&D
as a percentage of revenue) increased only slightly by 0.2 per-
centage point year-over-year due to the above-mentioned
changes in presentation according to BiIRUG. On an average ba-
sis, we employed 9,600 people in R&D in fiscal 2017.
Gross profit was higher year-over-year due mainly to increases
of €0.3 billion in Digital Factory, €0.2 billion in Mobility and
€0.2 billion in Power and Gas.
Increases in Revenue at Mobility and Power and Gas, of €1.0 bil-
lion and €0.5 billion respectively, were more than offset by the
effect of the above-mentioned carve-out of the Siemens Wind
Power business. In fiscal 2016, we recorded revenue of €2.1 bil-
lion at Wind Power and Renewables. On a geographical basis,
75% of revenue was generated in the Europe, C.I.S., Africa, Mid-
dle East region, 18% in the Asia, Australia region and 7% in the
Americas region. Exports from Germany accounted for 71% of
overall revenue. In fiscal 2017, orders for Siemens AG amounted
to €25.6 billion. Within Siemens AG, the development of revenue
depends strongly on the completion of contracts, primarily in
connection with large orders.
The initial application of the Accounting Directive Implementa-
tion Act (Bilanzrichtlinie-Umsetzungsgesetz, BilRUG) resulted in
changes in presentation in the income statement in fiscal 2017.
Prior periods are not reported on a comparable basis. Compara-
ble amounts for fiscal 2016 are: revenue €27,043 million, cost of
sales €20,920 million and other operating income (expenses),
net €(44) million.
3%
41%
(141)%
36%
(43)%
>(200)%
(195)
3,060
(1,077)
3,145
The change in Income taxes resulted from higher income tax
expenses, corresponding to a higher taxable share of Income
from business activity and increased burdens from withholding
taxes. In addition, this item included deferred tax expenses and
income resulting from the generation and reversal of temporary
differences between the accounting and tax-based valuation and
the use of loss carry-forwards.
retained earnings
2,348
44,802
Deferred tax assets
Prepaid expenses
The increase in Equity was attributable to net income for the year
of €4.1 billion, the settlement of exercised warrants of €1.1 bil-
lion and issuance of treasury stock of €0.4 billion in conjunction
with our share-based payments and employee share programs.
These factors were partly offset by dividends paid in fiscal 2017
(for fiscal 2016) of €2.9 billion. In addition, equity was reduced
due to share buybacks during the year amounting to €0.9 billion.
The equity ratios at September 30, 2017 and 2016 were 30% and
28%, respectively. For explanations relating to treasury shares we
refer to NOTE 15 in NOTES TO OUR ANNUAL FINANCIAL STATEMENTS
OF SIEMENS AG.
by the liquidity management of the Corporate Treasury of
Siemens AG. The liquidity management is based on the financing
policy of the Siemens Group, which is aimed towards a balanced
financing portfolio, a diversified maturity profile and a comfort-
able liquidity cushion. Therefore, the change in liquidity of
Siemens AG was not only driven by business activities of
Siemens AG.
(76)%
2%
8%
(4)%
19%
81
2,256
2,174
87
3,642
20,359
Financial assets
20,769
securities
Cash and cash equivalents,
16,717
19,884
Receivables and other assets
Current assets
(5)%
0%
0%
47,083
47,150
2,472
44,611
884
may have an adverse effect on our business, financial condition
and results of our operations.
The base data used in preparing our financial statements consists
of the closing data reported by the operations of Siemens AG and
its subsidiaries. The preparation of the closing data of most of our
entities is supported by an internal shared services organization.
Furthermore, other accounting activities, such as governance
and monitoring related activities, are usually bundled on regional
level. In particular cases, such as valuations relating to post-em-
ployment benefits, external experts are used. The reported clos-
ing data is used to prepare the financial statements in the con-
solidation system. The steps necessary to prepare the financial
statements are subject to both manual and automated controls.
Environmental, health & safety and other governmental
regulations: Some of the industries in which we operate are
highly regulated. Current and future environmental, health & safety
and other governmental regulations or changes thereto may re-
quire us to change the way we run our operations and could re-
sult in significant increases in our operating or production costs.
Furthermore, we see the risk of potential environmental and
health & safety incidents as well as potential non-compliance
with environmental and health & safety regulations affecting
Siemens and our contractors or sub-suppliers, resulting in e.g.
serious injuries, penalties, loss of reputation and internal or ex-
ternal investigations.
Cost overruns or additional payment obligations related to
the management of our long-term, fixed-price or turnkey
and service projects: A number of our Industrial Businesses
conduct activities, especially large projects, under long-term con-
tracts that are awarded on a competitive bidding basis. Such con-
tracts typically arise in Power and Gas, Siemens Gamesa Renew-
able Energy, Mobility, and in various activities of Energy
Management and Process Industries and Drives. Some of these
contracts are inherently risky because we may assume substan-
tially all of the risks associated with completing a project and
meeting post-completion warranty obligations. For example, we
may face the risk that we must satisfy technical requirements of
a project even though we have not gained experience with those
requirements before we win the project. The profit margins real-
ized on fixed-priced contracts may vary from original estimates
as a result of changes in costs and productivity over the contract's
term. We sometimes bear the risk of unanticipated project mod-
ifications, shortage of key personnel, quality problems, financial
difficulties of our customers and/or significant partners, cost
overruns or contractual penalties caused by unexpected techno-
logical problems, unforeseen developments at the project sites,
unforeseen changes or difficulties in the regulatory or political
environment, performance problems with our suppliers, subcon-
tractors and consortium partners or other logistical difficulties.
Some of our multi-year contracts also contain demanding instal-
lation and maintenance requirements in addition to other perfor-
mance criteria relating to timing, unit cost and compliance with
government regulations, which, if not satisfied, could subject us
to substantial contractual penalties, damages, non-payment and
contract termination. There can be no assurance that contracts
and projects, in particular those with long-term duration and
fixed-price calculation, can be completed profitably. To tackle
those risks we implemented a global project management orga-
nization to systematically improve the know-how of our project
management personnel. For very complex projects we conduct
dedicated risk assessments in very early stages of the sales phase
before we decide to hand over a binding offer to our customer.
progress of these projects and initiatives using standardized con-
trolling and milestone tracking approaches.
Combined Management Report
Operational optimization and cost reduction initiatives:
We are in a continuous process of operational optimization and
constantly engage in cost-reduction initiatives, including ongo-
ing capacity adjustment measures and structural initiatives. Con-
solidation of business activities and manufacturing facilities,
outsourcings/carve outs, joint ventures and the streamlining of
product portfolios are all part of these cost-reduction efforts.
These measures may not be implemented as planned, may turn
out to be less effective than anticipated, may become effective
later than estimated or may not become effective at all. Any fu-
ture contribution of these measures to our profitability will be
influenced by the actual savings achieved and by our ability to
sustain them. In case of restructuring and outsourcing activities,
there can be no assurance that there are no delays in product
deliveries or we might even experience delivery failures. Further-
more, a delay in critical R&D projects could lead to negative im-
pacts in running projects. We constantly control and monitor the
Operational failures and quality problems in our value
chain processes: Our value chain comprises all steps, from re-
search and development to supply chain management, produc-
tion, marketing, sales and services. Operational failures in our
value chain processes could result in quality problems or poten-
tial product, labor safety, regulatory or environmental risks. Such
risks are particularly present in our Industrial Business in relation
to our production and manufacturing facilities, which are located
all over the world and have a high degree of organizational and
technological complexity. From time to time, some of the prod-
ucts we sell might have quality issues resulting from the design
or manufacture of these products or the commissioning of these
products or the software integrated into them. Our Healthineers'
business, for example, is subject to regulatory authorities includ-
ing the U.S. Food and Drug Administration and the European
Commission's Health and Consumer Policy Department, which
require us to make specific efforts to safeguard our product
safety. If we are not able to comply with these requirements, our
business and reputation may be adversely affected. We have es-
tablished multiple measures for quality improvement and claim
prevention. The increased use of quality management tools is
improving visibility and enables us to strengthen our root cause
and prevention processes.
through Cyber Security Operation Centers, and maintenance of
backup and protective systems such as firewalls and virus scan-
ners. Our contractual arrangements with service providers, aim
to ensure that these risks are reduced. Nonetheless our systems,
products, solutions and services, as well as those of our service
providers, remain potentially vulnerable to attacks. Such attacks
could potentially lead to the publication, manipulation or leakage
information such as through industrial espionage, improper use
of our systems, defective products, production downtimes and
supply shortages, with potential adverse effects on our reputa-
tion, our competitiveness and results of our operations.
Cyber/Information security: Our business portfolio is depen-
dent on digital technologies. We observe a global increase of IT
security threats and higher levels of professionalism in computer
crime, which pose a risk to the security of products, systems and
networks and the confidentiality, availability and integrity of
data. Like other large multinational companies we are facing ac-
tive cyber threats from sophisticated adversaries that are sup-
ported by organized crime and nation-states engaged in eco-
nomic espionage or even sabotage. We attempt to mitigate these
risks by employing a number of measures, including employee
training, comprehensive monitoring of our networks and systems
A.8.3.2 OPERATIONAL RISKS
Interruption of the supply chain: The financial performance of
our Industrial Business depends on reliable and effective supply
chain management for components, sub-assemblies and materi-
als. Capacity constraints and supply shortages resulting from
ineffective supply chain management may lead to delays and
additional cost. We rely on third parties to supply us with parts,
components and services. Using third parties to manufacture,
assemble and test our products reduces our control over manu-
facturing yields, quality assurance, product delivery schedules
and costs. Although we work closely with our suppliers to avoid
supply-related problems, there can be no assurance that we will
not encounter supply problems in the future, especially if we use
when integrating people, operations, technologies and products.
There can be no assurance that any of the businesses we ac-
quired can be integrated successfully and in a timely manner as
originally planned, or that they will perform as anticipated once
integrated. In addition, we may incur significant acquisition, ad-
ministrative, tax and other expenditures in connection with these
transactions, including costs related to integration of acquired
businesses. Furthermore, portfolio measures may result in addi-
tional financing needs and adversely affect our capital structure.
Acquisitions lead to substantial additions to intangible assets,
including goodwill in our statements of financial position. If we
were to encounter continuing adverse business developments or
if we were otherwise to perform worse than expected at acquisi-
tion activities, then these intangible assets, including goodwill,
might have to be impaired, which could adversely affect our busi-
ness, financial conditions and results of operations. Our invest-
ment portfolio consists of investments held for purposes other
than trading. Furthermore, we hold other investments, for exam-
ple, Atos SE. Any factors negatively influencing the financial con-
dition and results of operations of our at-equity investments and
other investments, could have an adverse effect on our equity
pick-up related to these investments or may result in a related
write-off. In addition, our business, financial condition and re-
sults of operations could also be adversely affected in connection
with loans, guarantees or non-compliance with financial cove-
nants related to these at-equity investments and other invest-
ments. Furthermore, such investments are inherently risky as we
may not be able to sufficiently influence corporate governance
processes or business decisions taken by our equity investments,
other investments and strategic alliances that may have a nega-
tive effect on our business. In addition, joint ventures bear the
risk of difficulties that may arise when integrating people, oper-
ations, technologies and products. Strategic alliances may also
pose risks for us because we compete in some business areas
with companies with which we have strategic alliances. Besides
other measures, we handle these risks with standardized pro-
cesses as well as dedicated roles and responsibilities in the areas
of mergers, acquisitions, divestments and carve outs. This in-
cludes post-closing actions as well as claim management and
centrally managed portfolio activities.
Combined Management Report
Portfolio measures, at-equity investments, other invest-
ments and strategic alliances: Our strategy includes divesting
activities in some business areas and strengthening others
through portfolio measures, including mergers and acquisitions.
With respect to divestments, we may not be able to divest some
of our activities as planned, and the divestitures we do carry out
could have a negative impact on our business, financial condi-
tion, results of operations and our reputation. Mergers and acqui-
sitions are inherently risky because of difficulties that may arise
Footprint: The risk is that we are not flexible enough in adjusting
our organizational and manufacturing footprint in order to
quickly respond to changing markets, resulting in a non-compet-
itive cost position and consequent loss of business. To mitigate
this risk, we continuously monitor and analyze competitive and
market information. Furthermore, we closely monitor the imple-
mentation of the planned measures, maintain strict cost man-
agement, and conduct ongoing discussions with all concerned
interest groups.
Disruptive technologies: The markets in which our businesses
operate experience rapid and significant changes due to the in-
troduction of innovative and disruptive technologies. In the fields
of digitalization (e.g. internet of things, web of systems, cloud
offerings, Industry 4.0), there are risks of new competitors, sub-
stitutions of existing products/solutions/services, niche players,
new business models (e.g. in terms of pricing, financing, ex-
tended scopes for project business or subscription models in soft-
ware business) and finally the risk that our competitors may have
faster time-to-market strategies and introduce their digital prod-
ucts and solutions faster than Siemens. Our operating results
depend to a significant extent on our technological leadership,
our ability to anticipate and adapt to changes in our markets and
to reduce the costs of producing our products. Introducing new
products and technologies requires a significant commitment to
research and development, which in return requires expenditure
of considerable financial resources that may not always result in
success. Our results of operations may suffer if we invest in tech-
nologies that do not operate or may not be integrated as ex-
pected, or that are not accepted in the marketplace as antici-
pated, or if our products, solutions or systems are not introduced
to the market in a timely manner, particularly compared to our
competitors, or even become obsolete. We constantly apply for
new patents and actively manage our intellectual property port-
folio to secure our technological position. However, our patents
and other intellectual property may not prevent competitors from
independently developing or selling products and services that
are similar to or duplicates of ours.
economies, the wide variety of our offerings following different
business cycles, and our varying business models (e.g. products,
software, solutions, projects and services) help us to absorb the
impact of an adverse development in a single market.
In general, due to the significant proportion of long-cycle busi-
nesses in our Industrial Business and the importance of long-term
contracts for Siemens, there is usually a time lag between the
development of macroeconomic conditions and their impact on
our financial results. In contrast, short-cycle business activities of
the Digital Factory Division and parts of Process Industries and
Drives Division and of the Energy Management Division react
quickly to volatility in market demand. If the moderate recovery
of macroeconomic growth stalls again and if we are not success-
ful in adapting our production and cost structure to subsequent
changes in conditions in the markets in which we operate, there
can be no assurance that we will not experience adverse effects.
For example, it may become more difficult for our customers to
obtain financing. As a result, they may modify, delay or cancel
plans to purchase our products, solutions and services, or fail to
follow through on purchases or contracts already executed. Fur-
thermore, the prices for our products, solutions and services may
decline, as a result of adverse market conditions, to a greater
extent than we currently anticipate. In addition, contracted pay-
ment terms, especially regarding the level of advance payments
by our customers relating to long-term projects, may become less
favorable, which could negatively impact our financial condi-
tions. Siemens' global setup with operations in almost all relevant
decisions and awarding of new orders would hit our businesses.
We continuously monitor the exit process and established, for
example, a task force coordinating our local and global mitiga-
tion measures. Significant business risk stems from an abrupt
weakening of Chinese economic growth. Both global and re-
gional investment climates could collapse due to political up-
heavals, further independence debates within countries in the
EU (e.g. the Catalan endeavor for independence), or sustained
success of protectionist, anti EU and anti-business parties and
policy. A rapid tightening of monetary policy by the U.S. Federal
Reserve could cause a depreciation spiral among emerging mar-
ket currencies. This could lead to a renewed emerging market
crisis because debt levels of emerging market enterprises have
risen, making them dependent on favorable global financial con-
ditions to service debts denominated in foreign currencies.
Emerging market operations involve further various risks, includ-
ing civil unrest, health concerns, cultural differences such as em-
ployment and business practices, volatility in gross domestic
product, economic and governmental instability, the potential
for nationalization of private assets and the imposition of ex-
change controls. A terrorist mega-attack or a significant cyber-
crime incident, or a series of such attacks or incidents in major
economies, could depress economic activity globally and under-
mine consumer and business confidence. Further risks stem from
geopolitical tensions (e.g. in Syria, Ukraine, Turkey, and North
Korea), and from an increasing vulnerability of the connected
global economy to natural disasters. In addition we are depend-
ing on the economic momentum of specific industries, especially
on the continued confidence in the automotive sector.
In addition, while we have procedures in place to ensure compli-
ance with applicable governmental regulations in the conduct of
our business operations, it cannot be excluded that violations of
applicable governmental regulations may be caused either by us
or by third parties that we contract with, including suppliers or
service providers, whose activities may be attributed to us. Any
such violations expose us to the risk of liability, reputational dam-
age or loss of licenses or permits that are important to our busi-
ness operations. In particular, we could also face liability for dam-
age or remediation for environmental contamination at the
facilities we design or operate. With regard to certain environ-
mental risks, we maintain liability insurance at levels that our
management believes are appropriate and consistent with indus-
try practice. We may incur environmental losses beyond the lim-
its, or outside the coverage, of such insurance, and such losses
30
single-source suppliers for critical components. Shortages and de-
lays could materially harm our business. Unanticipated increases
in the price of components or raw materials due to market short-
ages or other reasons could also adversely affect performance.
Furthermore, we may be exposed to the risk of delays and inter-
ruptions in the supply chain as a consequence of catastrophic
events or suppliers' financial difficulties, particularly if we are
unable to identify alternative sources of supply or means of trans-
portation in a timely manner or at all. Besides other measures,
we mitigate fluctuation in the global raw material markets with
various hedging instruments.
29
A.8.3.3 FINANCIAL RISKS
Protectionism (incl. localization): Protectionist trade policies
and changes in the political and regulatory environment in the
markets in which we operate, such as import and export controls,
tariffs and other trade barriers including debarment from certain
markets and price or exchange controls, could affect our business
in several national markets and could impact our business, finan-
cial position and results of operations; and may expose us to pen-
alties, other sanctions and reputational damage. In addition, the
uncertainty of the legal environment in some regions could limit
our ability to enforce our rights and subject us to increasing costs
related to appropriate compliance programs.
Shortage of skilled personnel: Competition for highly quali-
fied personnel (e.g. specialists, experts, "digital" talents) remains
intense in the industries and regions in which our businesses
operate. We have ongoing demand for highly skilled employees.
Our future success depends in part on our continued ability to
hire, integrate, develop and retain engineers and other qualified
personnel. We address this risk for example with structured suc-
cession planning, employer branding, retention and career man-
agement. Furthermore, the company is strengthening the capa-
bilities and skills of our talent acquisition teams and has defined
a strategy of pro-active search for people with the required skills
in our respective industries and markets. A strong focus on im-
plementing a technology for talent acquisition helps us to sup-
port efficient processes and effective search for key talent.
Changes of regulations, laws and policies: As a diversified
company with global businesses we are exposed to various prod-
uct- and country-related regulations, laws and policies influenc-
ing our business activities and processes. We monitor the political
and regulatory landscape in all our key markets to anticipate po-
tential problem areas, with the aim to quickly adjust our business
activities and processes to changed conditions. However, any
changes of regulations, laws and policies can adversely affect our
business activities and processes as well as our financial condi-
tion and results of operations.
32 Combined Management Report
Regulatory risks and potential sanctions: As a globally oper-
ating organization, we conduct business with customers in coun-
tries which are subject to export control regulations, embargoes,
economic sanctions or other forms of trade restrictions (hereafter
referred to as "sanctions") imposed by the U.S., the European
Union or other countries or organizations. New or expanded sanc-
tions in countries in which we do business may result in a curtail-
ment of our existing business in such countries or indirectly in
other countries. We are also aware of initiatives by institutional
investors, such as pension funds or insurance companies, to
adopt or consider adopting policies prohibiting investment in and
transactions with, or requiring divestment of interests in entities
doing business with, countries identified as state sponsors of ter-
rorism by the U.S. Department of State. It is possible that such
initiatives may result in us being unable to gain or retain investors,
customers or suppliers. In addition, the termination of our activi-
ties in sanctioned countries may expose us to customer claims
and other actions. Our reputation could also suffer due to our
activities with counterparties in or affiliated with these countries.
Besides other measures, Siemens established a global compli-
ance organization that conducts among others compliance risk
mitigation processes such as Compliance Risk Assessments, and
which has been reviewed by external compliance experts.
A considerable part of our business activities involve govern-
ments and companies with public shareholders. We also partici-
pate in a number of projects funded by government agencies and
intergovernmental and supranational organizations, such as mul-
tilateral development banks. Ongoing or potential future investi-
gations into allegations of corruption, of antitrust violations or of
other violations of law could as well impair relationships with
such business partners or could result in the exclusion of public
contracts. Such investigations may also adversely affect existing
private business relationships and our ability to pursue poten-
tially important strategic projects and transactions, such as stra-
tegic alliances, joint ventures or other business cooperations, or
could result in the cancellation of certain of our existing con-
tracts. Moreover, third parties, including our competitors, could
initiate significant litigation.
organizations. Monitors could again be appointed to review fu-
ture business practices and we may otherwise be required to fur-
ther modify our business practices and our compliance program.
Current and future investigations regarding allegations of
corruption, of antitrust violations and of other violations of
law: Proceedings against us regarding allegations of corruption,
of antitrust violations and of other violations of law may lead to
criminal and civil fines as well as penalties, sanctions, injunctions
against future conduct, profit disgorgements, disqualifications
from directly and indirectly engaging in certain types of business,
the loss of business licenses or permits or other restrictions and
legal consequences. Accordingly, we may, among other things,
be required to comply with potential obligations and liabilities
arising in connection with such investigations and proceedings,
including potential tax penalties. Moreover, any findings related
to public corruption that are not covered by the 2008 and 2009
corruption charge settlements, which we concluded with Ameri-
can and German authorities, may endanger our business with
government agencies and intergovernmental and supranational
In addition, future developments in ongoing and potential future
investigations, such as responding to the requests of governmen-
tal authorities and cooperating with them, could divert manage-
ment's attention and resources from other issues facing our busi-
ness. Furthermore, we might be exposed to compliance risks in
connection with recently acquired operations that are in the
ongoing process of integration.
Audits by tax authorities and changes in tax regulations:
We operate in nearly all countries of the world and therefore are
subject to many different tax regulations. Changes in tax laws in
any of these jurisdictions could result in higher tax expense and
payments. Furthermore, legislative changes could impact our tax
receivables and liabilities as well as deferred tax assets and de-
ferred tax liabilities. In addition, the uncertain tax environment in
some regions could limit our ability to enforce our rights. As a
globally operating organization, we conduct business in countries
subject to complex tax rules, which may be interpreted in differ-
ent ways. Future interpretations or developments of tax regimes
may affect our business, financial condition and results of opera-
tions. We are regularly audited by tax authorities in various juris-
dictions and we continuously identify and assess resulting risks.
TO CONSOLIDATED FINANCIAL STATEMENTS.
For further information on post-employment benefits, derivative
financial instruments, hedging activities, financial risk manage-
ment and related measures, see → NOTES 16, 23 and 24 in B.6 NOTES
Risks from pension obligations: The funded status of our pen-
sion plans may be affected by change in actuarial assumptions,
including the discount rate, as well as movements in financial
markets or a change in the mix of assets in our investment port-
folio. A significant increase in the underfunding may have a neg-
ative effect on our capital structure and rating, and thus may
tighten refinancing options and increase costs. In order to com-
ply with local pension regulations in selected foreign countries,
we may face a risk of increasing cash outflows to reduce an un-
derfunding of our pension plans in these countries.
Credit Risks: We provide our customers with various forms of
direct and indirect financing of orders and projects. SFS in partic-
ular bears credit risks due to its financing activities.
31
Combined Management Report
A.8.3.4 COMPLIANCE RISKS
Market price risks: We are exposed to fluctuations in exchange
rates, especially between the U.S. dollar and the euro, because a
high percentage of our business volume is conducted as exports
from Europe to areas using the U.S. dollar. In addition, we are
exposed to currency effects involving the currencies of emerging
markets, in particular the Chinese yuan. A strengthening of the
euro may change our competitive position. We are also exposed
to fluctuations in interest rates. Negative developments in the
financial markets and changes in the central bank policies may
negatively impact our results. Depending on the development of
foreign currency exchange and interest rates, hedging activities
could have significant effects on our business, financial condition
and results of operations.
Liquidity and financing risks: Our treasury and financing activ-
ities could face adverse deposit and/or financing conditions from
negative developments related to financial markets, such as (1)
limited availability of funds (particularly U.S. dollar funds) and
hedging instruments; (2) an updated evaluation of our solvency,
particularly from rating agencies; (3) negative interest rates; and
(4) impacts arising from more restrictive regulation of the finan-
cial sector, central bank policy, or financial instruments. Widening
credit spreads due to uncertainty and risk aversion in the financial
markets might lead to adverse changes of fair market values of our
financial assets, in particular our derivative financial instruments.
9,643
97
200
Total
1,407
0
0
7,316
0
0
Other6
Service Cost
Total (Code)
1/3 ROCE
1,101
Target parameter
> Performance of Siemens stock
compared to five competitors
Restriction period
four years
2/3
1/3 Variable compensation (Bonus)
> Variability of target achievement:
0-200% add. ±20% adjustment
Performance-
based
compensation
Target parameter:
1/3
Earnings
per share
1/3
1,028
1,193
10,835
Bonus Awards (waiting period: 2012-2016)5
Bonus Awards (waiting period: 2011-2015)5
Share Matching Plan (vesting period: 2013-2015)
2016
0
Fixed compensation (base compensation)
Fringe benefits¹
Total
without long-term incentive effect,
non-stock-based
Joe Kaeser
President and CEO
2017
Individual
targets
2,130
2,034
104
102
2,234
2,136
One-year variable compensation
(Bonus) Payout amount²
2,639
2,773
with long-term incentive effect, stock-based
Multi-year variable compensation
4,570
2,310
Siemens Stock Awards (restriction period: 2012-2016)³
Siemens Stock Awards (restriction period: 2011-2015)4
3,542
0
903
1 Plus fringe benefits and pension benefit commitments.
At its duty-bound discretion, the Supervisory Board may revise
the amount resulting from target achievement downward or up-
ward by as much as 20%; the adjusted amount of the Bonus paid
can thus be as much as 240% of the target amount. In choosing
the factors to be considered in deciding on possible revisions of
the Bonus payouts (±20%), the Supervisory Board takes account
of incentives for sustainable corporate management. Decisions
to make discretionary adjustments may take factors such as the
results of an employee survey or a customer satisfaction survey
into account as well as the Company's economic situation. The
revision option may also be exercised in recognition of Managing
Board members' individual achievements. The Bonus is paid en-
tirely in cash.
240%
Variable compensation (Bonus) and long-term stock-based compensation
Remuneration
component
Variable
Share of target
compensation
compensation ~ 33%
(Bonus)
Long-term
stock-based
compensation
~ 34%
Target
parameter
1/3 Return on capital
employed (ROCE)
1/3 Earnings
per share, basic EPS
1/3 Individual
targets
With regard to the further terms of the Stock Awards, the same
principles apply in general to the Managing Board and to senior
managers. These principles are discussed in more detail in
NOTE 25 in B.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
Performance of
Siemens stock
compared to
5 competitors
Annual
basis
0 3 years
Annual
basis
Change in share price
measured on the basis of
a twelve-month reference
period (compensation
year) over three years
(performance period)
Target
achievement
Maximum
amounts of
compensation
Value at allo-
cation/transfer
0-200
add. +/- 20%
adjustment
240% of the
respective
target amount
Dependent
Basis for
assessment
as a percentage of the respective target amount
If an employment contract begins during the fiscal year, an equiv-
alent number of Siemens Phantom Stock Awards will be granted
instead of Stock Awards. In lieu of a transfer of shares, only a cash
equivalent is given at the end of the restriction period for Siemens
Phantom Stock Awards. Beyond that, the same provisions agreed
upon for Siemens Stock Awards apply.
If a member of the Managing Board violates compliance regu-
lations, the Supervisory Board is entitled at its duty-bound
1.7 times
target compensation¹
300%
Variable
compensation (Bonus)
Long-term
stock-based compensation
Compensation
overall
Combined Management Report
39
40
In fiscal 2017, the Managing Board's remuneration system had
the following components:
Non-performance-based components
Base compensation
discretion to revoke without replacement all or some of the
Siemens Stock Awards, depending on the gravity of the compli-
ance violation.
Base compensation is paid as a monthly salary. Since October 1,
2016, the base compensation of President and CEO Joe Kaeser
has amounted to €2,130,000 per year. The base compensation of
the CFO and of those members of the Managing Board who are
responsible for Divisions or for Healthineers has been €1,065,000
per year. For the other member of the Managing Board, it has
been €1,011,000 per year.
Fringe benefits include the costs, or the cash equivalent, of non-
monetary benefits and other perquisites, such as the provision
of a company car, contributions toward the cost of insurance,
the reimbursement of expenses for legal advice and tax advice,
accommodation and moving expenses, including a gross-up for
any taxes due in this regard, currency adjustment payments and
costs relating to preventive medical examinations.
Performance-based components
Variable compensation (Bonus)
Variable compensation (Bonus) is based on the Company's busi-
ness performance in the past fiscal year. The Bonus depends on
an equal one-third weighting of target achievement of the target
parameters return on capital employed, earnings per share and
individual targets. To achieve a consistent target system Compa-
ny-wide, corresponding targets - in addition to other factors -
also apply to senior managers.
For 100% target achievement (target amount), the amount of the
Bonus equals the amount of base compensation. The Bonus is
subject to a ceiling (cap) of 200%. If targets are substantially
missed, variable compensation may not be paid at all (0%).
Performance-based
components
Long-term stock-based compensation
Long-term stock-based compensation consists of a grant of for-
feitable stock commitments (Stock Awards) at the beginning of
the fiscal year. In the event of 100% target achievement, the an-
nual target amount for the monetary value of the Stock Awards
commitment is €2,200,000 for the President and CEO (effective
October 1, 2016). For the CFO and for those members of the Man-
aging Board who are responsible for Divisions and for Health-
ineers it is €1,100,000. For the other member of the Managing
Board, it is €1,055,000. Since fiscal 2015, the Supervisory Board
has had the option of increasing the target amount for each
member of the Managing Board, on an individual basis, by as
much as 75% for one fiscal year at a time. This option enables the
Supervisory Board to take account of each Managing Board mem-
ber's individual accomplishments and experience as well as the
scope and demands of his or her function.
Beneficiaries receive one free share of Siemens stock per Stock
Award after an approximately four-year restriction period and
subject to target attainment. The value of the Siemens shares
to be transferred for Stock Awards after the end of the restric-
tion period depends on the price of the Siemens share at the
time of transfer and on target attainment as defined by the
underlying target system. If target attainment is above 100%,
the members of the Managing Board will receive - in addition
to the Siemens shares committed - a cash payment correspond-
ing to the outperformance. If target attainment is less than
100%, a number of stock commitments equivalent to the short-
fall from the target will be forfeited without replacement. The
total value of the Siemens stock and of the cash payment is
subject to a ceiling of 300% of the relevant target amount. If
this maximum amount of compensation is exceeded, the corre-
sponding entitlement to stock commitments will be forfeited
without replacement.
-
Target attainment relating to long-term stock-based compensa-
tion is linked to the performance of Siemens stock compared to its
competitors. At the beginning of the fiscal year, the Supervisory
Board decides on a target system (target value for 100% and target
line) for the performance of Siemens stock relative to the stock
of – at present – five competitors (ABB, General Electric, Mitsu-
bishi Heavy Industries, Rockwell and Schneider Electric). Changes
in the share price are measured on the basis of a twelve-month
reference period (compensation year) over three years (perfor-
mance period), while Stock Awards are restricted for a period of
four years. When this restriction period expires, the Supervisory
Board determines how much better or worse Siemens stock has
performed relative to the stock of its competitors. This determina-
tion yields a target attainment of between 0% and 200% (cap).
Combined Management Report
If significant changes occur among the relevant competitors
during the period under consideration, the Supervisory Board
may take these changes into account, as appropriate, in deter-
mining the values for comparison and/or calculating the relevant
stock prices of those competitors. In the event of extraordinary
unforeseen developments that impact the share price, the Super-
visory Board may decide to reduce the number of committed
Stock Awards retroactively, or it may decide that in lieu of a trans-
fer of Siemens stock only a cash settlement in a defined and lim-
ited amount will be paid, or it may decide to postpone transfers
of Siemens stock for payable Stock Awards until the develop-
ments have ceased to impact the share price.
Fringe benefits
based components
624
2,619
(Amounts in thousands of €)
(Max)
2016
2017
533
533
533
533
533
533
1,043
15
15
15
115
115
115
548
548
548
648
648
648
61
1,104
1,065
69
1,134
1,065
2017
2017
(Min)
2017
2016
on target
achievement
Base compensation
100%
Maximum amounts of compensation
Managing Board
member
and CEO
President
base
compensation
2 times
base
compensation
3 times
1/3 Base compensation
1,065
Structure of target compensation
Share Ownership Guidelines
Remuneration system for Managing Board members
The system and levels for the Managing Board's remuneration are
determined and regularly reviewed by the full Supervisory Board,
based on proposals by the Compensation Committee. The Super-
visory Board reviews remuneration levels annually to ensure that
they are appropriate. In this process, the Company's economic
situation, performance and outlook as well as the tasks and per-
formance of the individual Managing Board members are taken
into account. In addition, the Supervisory Board considers the
common level of remuneration in comparison with peer compa-
nies and with the compensation structure in place in other areas
of the Company. It also takes due account of the relationship
between the Managing Board's remuneration and that of senior
management and staff, both overall and with regard to its devel-
opment over time. For this purpose, the Supervisory Board has
also determined how senior management and the relevant staff
are to be differentiated. The remuneration system that has been
in place for Managing Board members since fiscal 2015 was ap-
proved at the Annual Shareholders' Meeting on January 27, 2015.
The individual components of compensation - base compensa-
tion, variable compensation (Bonus) and long-term stock-based
compensation - are weighted equally, and each comprises about
one-third of target compensation. This equal weighting is also
applied to the three target parameters of variable compensation
(Bonus).
The remuneration system for the Siemens Managing Board is in-
tended to provide an incentive for successful corporate manage-
ment with an emphasis on sustainability. Managing Board mem-
bers are expected to make a long-term commitment to and on
behalf of the Company and may benefit from any sustained in-
crease in the Company's value. For this reason, a substantial
portion of their total remuneration is linked to the long-term
performance of Siemens stock. Their remuneration is to be com-
mensurate with the Company's size and economic position.
Exceptional achievements are to be rewarded adequately, while
falling short of targets is to result in an appreciable reduction in
remuneration. Their compensation is also structured so as to be
attractive in comparison to that of competitors, with a view to
attracting outstanding managers to the Company and retaining
them for the long term.
A.10.1.1 REMUNERATION SYSTEM
A.10.1 Remuneration of Managing
Board members
This report is based on the recommendations of the German
Corporate Governance Code (Code) and the requirements of the
German Commercial Code (Handelsgesetzbuch), the German
Accounting Standards (Deutsche Rechnungslegungs Standards)
and the International Financial Reporting Standards (IFRS).
A.10 Compensation Report
2016
2017
(Min)
(Max)
Requirement to hold Siemens stock
as a multiple of base compensation
throughout the terms of office
1,043
533
69
1,134
1,628
602
621
6,113
3,865
2,249
606
5,233
1,370 1,284
3,573 3,466
1,317
3,538
606
1,702
8 To compensate for the forfeiture of stock at his previous em-
ployer, the Supervisory Board has granted Mr. Neike a one-time
sum of €4,200,000. Seventy-five percent of this amount was
awarded in the form of Siemens Phantom Stock Awards and the
remaining 25% as a special pension benefit contribution. One
half of the total amount of these granted Siemens Phantom
Stock Awards fell due and was honored in September 2017. The
other half will fall due and be honored in September 2018. The
value of these Siemens Phantom Stock Awards depends solely
on the performance of Siemens stock. As compensation for
the forfeiture of stock at his previous employer, these Siemens
Phantom Stock Awards are not taken into account when deter-
mining target compensation and hence are not included in
the individual minimum and maximum amounts specified.
9 Mr. Neike was appointed Executive Chairman of the Board of
Directors of Siemens Ltd. China, effective May 1, 2017. Of the
fixed compensation and one-year (payout amount) and multi-
year variable compensation reported here, an amount of
€359,769 was granted and paid by Siemens Ltd. China and set
off against the remuneration for his Managing Board activities at
Siemens AG. Of the fringe benefits reported here, an amount of
€7,778 was granted and paid by Siemens Ltd. China. In addition,
it has been agreed that Siemens AG will offset, as a net amount,
any personal tax burden that, due to Mr. Neike's two employ-
ment relationships, exceeds the burden that he would incur
if he paid tax solely on the benefits granted to him under his
employment contract with Siemens AG in Germany. Siemens AG
will also offset any burdens due to charges and contributions
3,263
to social insurance or comparable statutory systems in China
additional to those he incurs in Germany.
11 Prof. Dr. Russwurm left the Managing Board effective the end
of March 31, 2017.
Combined Management Report
45
46
Allocations
The following table shows allocations for fiscal 2017 for
fixed compensation, fringe benefits, one-year variable
compensation and multi-year variable compensation - by
reference year - as well as the expense of pension benefits.
In deviation from the multi-year variable compensation
granted for fiscal 2017 and shown above, this table in-
cludes the actual figure for multi-year variable compensa-
tion granted in previous years and allocated in fiscal 2017.
Managing Board members serving as of September 30, 2017
(Amounts in thousands of €)
Non-performance-
based components
1/3 Long-term
stock-based compensation
Siemens Stock Awards
> Variability of target
achievement:
0-200%
Performance-based
components
Combined Management Report
Managing Board members serving as of September 30, 2017
10 To compensate for the forfeiture of stock and pension contri-
butions at his previous employer, the Supervisory Board has
granted Mr. Sen a one-time sum of €950,000. One half of this
amount was awarded in the form of Siemens Phantom Stock
Awards and the other half as a special pension benefit contri-
bution.
Non-performance-
524
0
69
78
39
1,134
1,121
572
533
0 1,278
533
0
1,278
1,043
1,099
1,065
1,043
533
4,079
0
1,650
1,347
5,159 548 2,746
1,214 1,214 1,214
6,373 1,762 3,959
2,528
703
3,231
0 3,075
648 2,746
703 703
1,351 3,449
1,099 1,048
3,300
3,246 3,247 1,134 5,491
603
622
622 622
3,849 3,869 1,756
0 2,556
0-200%
0
Dependent on
(Max)
1,065 1,065 1,065
512
512
512
1,577 1,577 1,577
1,043
1,065
1,065
1,065
989
1,011 1,011
1,011
48
52
52
52
1,091
1,117
1,117
1,117
39
1,027
40
40
1,051 1,051
40
1,051
1,043
1,065
2,556
2017 (Min)
2016
(Max)
(Min)
Managing Board member
Klaus Helmrich
Managing Board member
Janina Kugel
Managing Board member
2016
2017
2017
2017
(Min) (Max)
1,043
1,065
1,065 1,065
55
1,098
1,043
55
55
1,120
1,120 1,120
2016
1,043
683
1,726
2017
2017
2017
(Min) (Max)
2017
2017
2017
2017
2016
2017
55
Lisa Davis?
1,065
2,556
3,584
3,452
4,212
1,248
3,873
1,370
3,560
1,284
3,448
1,282
3,368
1,151
3,207
Cedrik Neike 8,9
Managing Board member
Michael Sen 10
Dr. Ralf P. Thomas
Managing Board member
since April 1, 2017
Prof. Dr. Siegfried Russwurm¹¹
Managing Board member
since April 1, 2017
CFO
until March 31, 2017
2017
2017
2017
2017
2016
2017
1,387
1,387 1,284
1,643 5,823
593
1,043
1,065
0
2,556
989
1,011
0
2,426
1,099 1,048
3,300
3,240 3,233 1,120 5,491
603 622
622
622
3,843
0
1,099 1,048
3,868 3,690
576 566
0
0
3,300 1,099 1,048
1,577 5,491 3,233 3,230
566 566
602
621
2,143 6,057 3,835 3,851
0 3,300
1,117 5,491
621
621
1,738 6,112
1,059
1,005
0
3,165
3,075
530
3,604 3,659
3,067
1,051
5,231
593
593
3,855 1,742 6,113 4,443 4,256
Managing Board member
Dr. Roland Busch
7 Ms. Davis's compensation is paid out in Germany in euros. It
has been agreed that any tax liability that arises due to tax rates
that are higher in Germany than in the U.S. will be reimbursed.
For base compensation of calendar years 2015 and 2016 as well
as for the Bonus for fiscal years 2015 and 2016, a currency-ad-
justment payment was granted.
Variable compensation (Bonus)
The following targets were set and attained with respect to the
target parameters for variable compensation:
Target parameter
Return on capital employed, ROCE¹
Earnings per share, basic EPS1 (02015-2017)
Individual targets
1 Continuing and discontinued operations.
100% of target
15.00%
€7.32
Actual FY 2017 figure
13.54%
€7.67
Target achievement²
118.33%
123.33%
Focus topics 2017: Growth, Innovation,
Digitalization and Excellence
2 Calculative target achievement for ROCE was 51.33%. The Supervisory Board adjusted this figure to reflect the acquisition of
Mentor Graphics and the merger of Siemens' wind power business with Gamesa Corporación Tecnológica S.A. (Gamesa).
In fiscal 2017, Bonus-related target attainment by Managing
Board members was between 113.89% and 123.89%. In its overall
100-130%
assessment, the Supervisory Board decided not to make any dis-
cretionary adjustments to the Bonus payout amounts.
Combined Management Report
43
Long-term stock-based compensation
Since beneficiaries are not entitled to receive dividends, the
number of stock commitments granted was based on the
closing price of Siemens stock in Xetra trading on the date
of award less the present value of dividends expected during
the restriction period. The share price used to determine the
number of stock commitments was €91.32 (2016: €75.60).
Commitments in connection with the
termination of Managing Board membership
Because Prof. Dr. Russwurm left the Managing Board at the
end of his term of office on March 31, 2017, no commit-
ments were agreed upon in connection with the termina-
tion of his Managing Board membership. In accordance with
his contract with the Company, the previously granted Stock
Awards, for which the restriction period is still in effect, will
be absolutely maintained.
Total compensation
On the basis of the Supervisory Board's decisions described
above, Managing Board compensation for fiscal 2017 totaled
€33.97 million (2016: €28.90 million), an increase of 17.5%.
Of this total amount, €20.73 million (2016: €20.19 million)
was attributable to cash compensation and €13.24 million
(2016: €8.71 million) to stock-based compensation.
The compensation presented on the following pages was
granted to the members of the Managing Board for fiscal
2017 (individual disclosure).
Managing Board members serving as of September 30, 2017
(Amounts in thousands of €)
Non-performance-
based components
At the beginning of the fiscal year, the Supervisory Board set the
target parameters return on capital employed (ROCE) and earn-
ings per share (EPS) for the variable compensation (Bonus) for all
members of the Managing Board, in each case on the basis of
continuing and discontinued operations. The target values for
the EPS component were defined on a multi-year basis. In defin-
ing the target for variable compensation, the Supervisory Board
also defined individual targets so as to take fuller account of the
individual performance of each Managing Board member. As a
rule, up to five individual targets were defined for this purpose.
An internal review of the appropriateness of Managing Board
compensation for fiscal 2017 has confirmed that the remunera-
tion of the Managing Board resulting from target achievement
for fiscal 2017 is to be considered appropriate. In light of this re-
view and following a review of the achievement of the targets
defined at the beginning of the fiscal year, the Supervisory Board
has decided to define the amounts of variable compensation,
stock commitments and pension benefit contributions as follows:
A.10.1.2 REMUNERATION OF MANAGING BOARD
MEMBERS FOR FISCAL 2017
compensation for secondary activities. The holding of positions
in Siemens companies is considered to be covered by contractual
Managing Board remuneration. As a rule, Managing Board mem-
bers are obligated to waive any compensation that may be due
to them in connection with such positions. Should a waiver not
be possible under the legal or tax regulations applicable to a
Siemens company, the compensation paid to a Managing Board
member in connection with such a position will be set off against
the remuneration due to him or her in connection with his or her
Managing Board activities. Memberships in supervisory boards
whose establishment is required by law or in comparable domes-
tic or foreign controlling bodies of business enterprises are listed
in Section c.4.1 in c.4 CORPORATE GOVERNANCE.
Secondary activities of Managing Board members
Members of the Managing Board may take on secondary activi-
ties – in particular, supervisory board positions outside the
Company - only with the approval of the Chairman's Committee
of the Supervisory Board. The full Supervisory Board remains
responsible for decisions regarding any adjustments to Manag-
ing Board compensation necessary to take account of possible
- Target
achievement
- Stock price
at transfer
Maximum amount for compensation overall
In addition to the maximum amounts of compensation for vari-
able compensation and long-term stock-based compensation,
a maximum amount for compensation overall has been defined.
Since fiscal 2014, this amount cannot be more than 1.7 times
higher than target compensation. Target compensation com-
prises base compensation, the target amount for variable com-
pensation and the target amount for long-term stock-based com-
pensation, excluding fringe benefits and pension benefit
commitments. When fringe benefits and pension benefit commit-
ments for a given fiscal year are included, the maximum amount
of compensation overall for that year will increase accordingly.
Share Ownership Guidelines
The Siemens Share Ownership Guidelines are an integral part of
the remuneration system for the Managing Board and senior
executives. These guidelines require that after a specified
-
buildup phase Managing Board members hold Siemens stock
worth a multiple of their base compensation 300% for the
President and CEO, 200% for the other members of the Managing
Board - throughout their terms of office on the Managing Board.
The determining figure in this context is the average base com-
pensation that a member of the Managing Board has received
over the four years before the applicable dates of proof of com-
pliance. Hence, changes that have been made to base compensa-
tion in the meantime are included. Non-forfeitable stock commit-
ments (Bonus Awards) which were granted until fiscal 2014 are
taken into account in determining compliance with the Share
Ownership Guidelines.
Compliance with these guidelines must be proven for the first
time after a four-year buildup phase. Thereafter, it must be
proven annually. If the value of a Managing Board member's
accrued holdings declines below the required minimum due to
fluctuations in the market price of Siemens stock, he or she must
acquire additional shares.
Combined Management Report
41
Performance-based
42
Like employees of Siemens AG, the members of the Managing
Board are included in the Siemens Defined Contribution Benefit
Plan (BSAV). Under the BSAV, Managing Board members receive
contributions that are credited to their personal pension ac-
counts. The amount of these annual contributions is based on a
predetermined percentage related to their base compensation
and the target amount for their Bonuses. This percentage is de-
cided upon annually by the Supervisory Board. Most recently it
was set at 28%. In making its decisions, the Supervisory Board
takes account of the intended level of provision for each individ-
ual and the length of time he or she has been a Managing Board
member as well as the annual and long-term expense to the
Company resulting from that provision. The non-forfeitability of
pension benefit commitments is determined in compliance with
the provisions of the German Company Pensions Act (Betriebsren-
tengesetz). Special contributions may be granted to Managing
Board members on the basis of individual decisions by the Super-
visory Board. If a member of the Managing Board earned a pen-
sion benefit entitlement from the Company before the BSAV was
introduced, a portion of his or her contributions went toward
financing that prior commitment.
Managing Board members are eligible to receive benefits under
the BSAV at the age of 60 or - in the case of benefit commit-
ments made on or after January 1, 2012 – the age of 62. As a rule,
the accrued pension benefit balance is paid out to Managing
Board members in twelve annual installments. A Managing Board
member or his or her surviving dependents may also request that
his or her pension benefit balance will be paid out in fewer in-
stallments or as a lump sum, subject to the Company's consent.
The accrued pension benefit balance may also be paid out as a
pension. Furthermore, Managing Board members may choose a
combination of lump sum payments, installment payments (two
to twelve) and pension payments. If the pension option is chosen,
a decision must be made as to whether the payout should include
pensions for surviving dependents. If a member of the Managing
Board dies while receiving a pension, benefits will be paid to his
or her surviving dependents if the member has chosen such
benefits. The Company will then provide a limited-term pension
to surviving children until they reach the age of 27 or, in the case
of benefit commitments made on or after January 1, 2007, until
they reach the age of 25.
Benefits from the retirement benefit system that was in place
before the BSAV was established are normally granted as pension
benefits with a surviving dependent's pension. In this case also,
payout in installments or a lump-sum payment may be chosen
instead of pension payments.
Like other eligible employees of Siemens AG, Managing Board
members who were employed by the Company on or before
September 30, 1983, are entitled to receive transition payments
for the first six months after retirement, equal to the difference
between their final base compensation and the retirement ben-
efits payable under the corporate pension plan if they retire im-
mediately after the termination of their Managing Board mem-
bership. The provisions of the German Company Pensions Act
(Betriebsrentengesetz) do not apply to this benefit.
Commitments in connection with the termination
of Managing Board membership
Managing Board employment contracts provide for a compensa-
tory payment if membership on the Managing Board is termi-
nated prematurely by mutual agreement and without serious
cause. The amount of this payment must not exceed the value of
two years' compensation and must compensate no more than
the remaining term of the contract (cap). The amount of the
compensatory payment is calculated on the basis of base com-
pensation, together with the variable compensation and the
long-term stock-based compensation actually received during
the last fiscal year before termination. The compensatory pay-
ment is payable in the month when the member leaves the Man-
aging Board. In addition, a one-time special contribution is made
to the BSAV. The amount of this contribution is based on the
BSAV contribution that the Managing Board member received in
the previous year and on the remaining term of his or her ap-
pointment, but is limited to not more than two years' contribu-
tions (cap). The above benefits are not paid if an amicable termi-
nation of the member's activity on the Managing Board is agreed
upon at the member's request, or if there is serious cause for the
Company to terminate the employment relationship.
In the event of a change of control that results in a substantial
change in a Managing Board member's position - for example,
due to a change in corporate strategy or a change in the Manag-
ing Board member's duties and responsibilities – the Managing
Board member has the right to terminate his or her contract with
the Company. A change of control exists if one or more share-
holders acting jointly or in concert acquire a majority of the vot-
ing rights in Siemens AG and exercise a controlling influence or
if Siemens AG becomes a dependent enterprise as a result of
entering into an intercompany agreement within the meaning of
Section 291 of the German Stock Corporation Act (Aktiengesetz)
or if Siemens AG is to be merged into an existing corporation or
other entity. If this right of termination is exercised, the Manag-
ing Board member is entitled to a severance payment in the
amount of not more than two years' compensation. The calcula-
tion of the annual compensation will include not only the base
compensation and the target amount for the Bonus, but also the
target amount for Stock Awards, in each case based on the most
recent fiscal year completed prior to the termination of the mem-
ber's contract. The stock-based components for which a firm
commitment already exists will remain unaffected. There is no
Combined Management Report
entitlement to a severance payment if the Managing Board mem-
ber receives benefits from third parties in connection with a
change of control. Moreover, there is no right to terminate if the
change of control occurs within a period of twelve months prior
to a Managing Board member's retirement.
Compensatory or severance payments also cover non-monetary
benefits by including an amount of 5% of the total compensation
or severance amount. Compensatory or severance payments will
be reduced by 10% as a lump-sum allowance for discounted val-
ues and for income earned elsewhere. However, this reduction
will apply only to the portion of the compensatory or severance
payment that was calculated without taking into account the first
six months of the remaining term of the Managing Board mem-
ber's employment contract.
Stock commitments that were made as long-term stock-based
compensation and for which the restriction period is still in effect
will be forfeited without replacement if the employment contract
is not extended after the end of an appointment period, either at
the Managing Board member's request or because there is seri-
ous cause that would have entitled the Company to revoke the
appointment or terminate the contract. However, once granted,
Stock Awards are not forfeited if the employment contract is ter-
minated by mutual agreement at the Company's request, or be-
cause of retirement, disability or death or in connection with a
spinoff, the transfer of an operation, or a change of activity
within the corporate group. In these cases, the Stock Awards will
remain in effect upon termination of the employment contract
and will be honored on expiration of the restriction period.
Pension benefit commitments
components
Performance-based
components
Total compensation
without long-term incentive effect,
non-stock-based
One-year variable compensation
(Bonus) Payout amount
Fixed compensation (base compensation)
Fringe benefits'
Total
without long-term incentive effect,
non-stock-based
with long-term incentive effect,
stock-based
One-year variable compensation
(Bonus) Target amount
Multi-year variable compensation 2.3
Siemens Stock Awards4
(restriction period: four years)
Total5
Service Cost
Total (Code)6
Total compensation of all Managing Board members for fiscal 2017, in accordance with the applicable reporting
standards, amounted to €33,97 million (2016: €28.90 million). The payout amount presented below is to be used
instead of the target value according to the Code for one-year variable compensation. Service costs for pension
benefits are not included.
Total compensation of all Managing Board members for fiscal 2017, in accordance with the applicable reporting
standards, amounted to €33,97 million (2016: €28.90 million). The payout amount presented below is to be used
instead of the target value according to the Code for one-year variable compensation. Service costs for pension
benefits are not included.
without long-term incentive effect,
non-stock-based
0 6,600
6,328 6,460 2,234 10,982
1,101 1,193 1,193 1,193
7,428 7,653 3,427 12,175
2,773 2,639
7,066
6,969
1 Fringe benefits include the costs, or the cash equivalent, of non-monetary benefits
and other perquisites, such as the provision of company cars in the amount of
€159,957 (2016: €159,687), contributions toward the cost of insurance in the amount
of €94,581 (2016: €139,795), the reimbursement of expenses for legal advice and tax
advice, accommodation and moving expenses, including any taxes due in this regard,
currency adjustment payments and costs relating preventive medical examinations
in the amount of €746,537 (2016: €765,327).
2 The figures for individual maximums for multi-year variable compensation reflect the
possible maximum value in accordance with the maximum amount agreed upon for
fiscal 2017 - that is, 300% of the applicable target amount.
3 The expenses recognized for stock-based compensation for members of the
Managing Board in accordance with the IFRS in fiscal 2017 and fiscal 2016 amounted
to €19,031,892 and €8,294,921, respectively. The following amounts pertained
the members of the Managing Board in fiscal 2017: Joe Kaeser €3,344,690 (2016:
€2,378,584), Dr. Roland Busch €1,781,634 (2016: €1,283,779), Lisa Davis €1,301,296
(2016: €698,432), Klaus Helmrich €1,784,593 (2016: €1,284,349),
Janina Kugel €1,278,363 (2016: €704,026), Cedrik Neike
€2,978,584 (2016: €0), Michael Sen €135,659 (2016: €0) and
Dr. Ralf P. Thomas €1,393,673 (2016: €872,394). The correspond-
ing expense, determined in the same way, for former Managing
Board members was as follows: Brigitte Ederer €218,614 (2016:
- €42,052), Barbara Kux €218,614 (2016: - €42,052), Peter
Löscher €538,356 (2016: - €103,403), Prof. Dr. Hermann Requardt
€32,566 (2016: - €5,624), Prof. Dr. Siegfried Russwurm
€3,303,141 (2016: €1,302,593), Peter Y. Solmssen €692,506
(2016: €35,857), and Dr. Michael Süß €29,604 (2016: - €248).
4 Of the Stock Awards granted in fiscal 2017, most are contingent
upon attaining the prospective performance-based target for
Siemens stock relative to five competitors. The monetary values
relating to 100% target achievement were €12,930,417 (2016:
€8,560,190). The amounts for individual Managing Board mem-
bers were as follows: Joe Kaeser €2,200,081 (2016: 2,120,051),
Dr. Roland Busch €1,100,041 (2016: €1,080,022), Lisa Davis
€1,100,041 (2016: €1,080,022), Klaus Helmrich €1,100,041 (2016:
€1,080,022), Janina Kugel €1,055,020 (2016: €1,040,029),
Cedrike Neike €3,700,065 (2016: €0), Michael Sen €1,025,067
(2016: €0), Dr. Ralf P. Thomas €1,100,041 (2016: €1,080,022) and
for former Managing Board member Prof. Dr. Siegfried Russwurm
€550,020 (2016: €1,080,022).
5 Total maximum compensation for fiscal 2017 represents the con-
tractual maximum amount for overall compensation, excluding
fringe benefits and pension benefit commitments. At 1.7 times
target compensation (base compensation, target amount for the
Bonus and the target amount for long-term stock-based compen-
sation), the maximum amount is less than the total of the
individual contractual caps for performance-based components.
6 Total compensation reflects the current fair value of stock-based
compensation components on the grant date. On the basis of
the current monetary values of stock-based compensation
components, total compensation amounted to €33,657,370
(2016: €28,747,477).
One-year variable compensation
(Bonus) Payout amount
300% of the
respective
target amount
Total (Code) 6
Total5
Managing Board members serving as of September 30, 2017
44
Combined Management Report
(Amounts in thousands of €)
Non-performance-
based components
Performance-based
components
Performance-based
components
Total compensation
Fixed compensation (base compensation)
Fringe benefits¹
Total
without long-term incentive effect,
non-stock-based
Service Cost
8,416
Joe Kaeser
President and CEO
2016
2017
2017
2017
(Min) (Max)
2,034 2,130 2,130 2,130
102
104 104 104
2,136 2,234 2,234 2,234
2,034
2,130
0
5,112
One-year variable compensation
(Bonus) Target amount
Multi-year variable compensation 2.3
Siemens Stock Awards4
(restriction period: four years)
2,158 2,096
with long-term incentive effect,
stock-based
Fixed compensation (base compensation)
0
Total
0
0
0
1,028
0
0
0
0
903
0
397
0
0
0
0
0
0
0
1,407
4,363
2,958
3,347
1,272
2,556
97
133
2,024
20
0
1,402
0
67
0
0
0
39
4,845
0
0
39
61
69
115
15
1,043
533
1,043
1,065
533
533
2016
2017
2016
2017
78
548
648
1,134
0
2,310
3,052
465
891
0
0
891
1,317
1,370
1,284
624
606
1,121
572
1,104
606
2016
1,214
3,770
622
3,969
703,169
298,200
Dr. Ralf P. Thomas
Michael Sen 5
1,213,897
298,200
1,084,971
1,628,418
553,728
566,160
Cedrik Neike4
Janina Kugel
4,607,800
5,007,306
583,968
596,400
583,968
4,727,702
4,297,199
48 Combined Management Report
No loans or advances from the Company are provided to mem-
bers of the Managing Board.
Other
The defined benefit obligation (DBO) of all pension commit-
ments to former members of the Managing Board and their sur-
viving dependents as of September 30, 2017, amounted to
€191.5 million (2016: €216.3 million). This figure is included in
NOTE 16 in B.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
In fiscal 2017, former members of the Managing Board and their
surviving dependents received emoluments within the meaning
of Section 314 para. 1 No. 6 b of the German Commercial Code
totaling €34.1 million (2016: €52.3 million). The previous year's
figure includes the lump-sum payments of the former Managing
Board members Prof. Dr. Requardt and Mr. Solmssen.
6 Prof. Dr. Russwurm left the Managing Board effective the
end of March 31, 2017.
5 Mr. Sen was appointed a full member of the Managing
Board effective April 1, 2017.
596,400
4 Mr. Neike was appointed a full member of the Managing
Board effective April 1, 2017.
2 The defined benefit obligations reflect one-time special
contributions to the BSAV for new appointments from out-
side the Company, amounting to €1,525,000 (2016: €0).
1 The expenses (service cost) recognized in accordance with
the IFRS in fiscal 2017 for Managing Board members' entitle-
ments under the BSAV in fiscal 2017 amounted to
€6,754,665 (2016: €4,615,543).
6,083,534
34,624,669
6,317,937
40,069,078
583,968
4,612,608
298,200
5,039,160
Former members of the Managing Board
Prof. Dr. Siegfried Russwurm 6
Total
3 Deferred compensation totals €4,001,386 (2016: €3,829,397),
including €3,590,178 for Joe Kaeser (2016: €3,428,243),
€354,801 for Klaus Helmrich (2016: €343,953) and €56,407
for Dr. Ralf P. Thomas (2016: €57,201).
703
1,975
Klaus Helmrich
4,532,350
(Amounts in €)
The following table shows individualized details of the contribu-
tions (allocations) under the BSAV for fiscal 2017 as well as the
defined benefit obligations for pension commitments.
The contributions under the BSAV are added to the personal pen-
sion accounts each January, following the close of the fiscal year.
Until a beneficiary's date of retirement, his or her pension account
is credited with an annual interest payment (guaranteed interest)
on January 1 of each year. The interest rate is currently 0.90%.
For fiscal 2017, the members of the Managing Board were
granted contributions under the BSAV totaling €5.0 million
(2016: €4.6 million), based on a resolution of the Supervisory
Board dated November 8, 2017. Of this amount, €0.1 million
(2016: €0.1 million) related to the funding of pension commit-
ments earned prior to transfer to the BSAV.
Pension benefit commitments
47
Combined Management Report
10 Prof. Dr. Russwurm left the Managing Board effective the end
of March 31, 2017.
9 To compensate for the forfeiture of stock and pension contri-
butions at his previous employer, the Supervisory Board has
granted Mr. Sen a one-time sum of €950,000. Half of this
amount was awarded in the form of Siemens Phantom Stock
Awards and the other half as a special pension benefit contri-
bution.
fringe benefits reported here, an amount of €7,778 was granted
and paid by Siemens Ltd. China. In addition, it has been agreed
that Siemens AG will offset, as a net amount, any personal tax
burden that, due to Mr. Neike's two employment relationships,
exceeds the burden that he would incur if he paid tax solely
on the benefits granted to him in his employment contract
with Siemens AG in Germany. Siemens AG will also offset any
burdens due to charges and contributions to social insurance
or comparable statutory systems in China additional to those
he incurs in Germany.
8 Mr. Neike was appointed Executive Chairman of the Board of
Directors of Siemens Ltd. China, effective May 1, 2017. Of the
fixed compensation and one-year variable compensation (pay-
out amount) reported here, an amount of €222,802 was granted
and paid by Siemens Ltd. China and set off against the remune-
ration for his Managing Board activities at Siemens AG. Of the
Stock Awards fell due and was honored in September 2017. The
other half will fall due and be honored in September 2018. The
value of these Siemens Phantom Stock Awards depends solely
on the performance of Siemens stock.
602
5,447
621
4,984
Fringe benefits¹
Managing Board members
2017
Total
contributions' for
2016
Defined benefit obligation² for all pension
commitments excluding deferred compensation³
583,968
596,400
Lisa Davis
4,342,427
4,742,811
583,968
596,400
3,817,196
Dr. Roland Busch
11,195,488
1,139,040
1,192,800
Joe Kaeser
serving as of September 30, 2017
2016
2017
10,391,542
2017
603
3,561
2017
1,577
1,098
1,120
39
40
48
52
683
512
55
55
989
1,011
1,043
1,065
1,726
1,117
1,091
1,051
0
1,301
3,052
0
0
1,259
2,949
1,043
1,282
1,370
1,284
1,387
1,248
1,387
1,284
1,027
1,151
1,065
1,043
1,065
4 For one half of the Siemens Stock Awards 2011 target attainment
depended on the EPS for the past three fiscal years and amounted
3 For one half of the Siemens Stock Awards 2012, target attain-
ment depended on the EPS for the last three years and
amounted to 154%. For the other half, target attainment was
linked to the performance of Siemens stock compared to defined
competitors during the four-year restriction period. It amounted
to 87%. Of the Siemens Stock Awards 2012, which were granted
on the basis of 100% target attainment, a number equivalent to
the shortfall from that target expired without replacement in
accordance with plan rules.
therefore represents the amount awarded for fiscal 2017, which will be paid out in
January 2018.
2 The payout amount of one-year variable compensation (Bonus) presented above
in the amount of €746,537 (2016: €765,327).
1 Fringe benefits include the costs, or the cash equivalent, of non-monetary benefits
and other perquisites, such as the provision of company cars in the amount of
€159,957 (2016: €159,687), contributions toward the cost of insurance in the amount
of €94,581 (2016: €139,795), the reimbursement of expenses for legal advice and tax
advice, accommodation and moving expenses, including any taxes due in this regard,
currency adjustment payments and costs relating preventive medical examinations
Total (Code)
to 114%. For the other half, target attainment was linked to the
performance of Siemens stock compared to defined competitors
during the four-year vesting period. It amounted to 0%. There-
fore, Siemens Stock Awards 2011 that had already been granted
were forfeited without replacement in accordance with the plan
rules.
Service Cost
Other6
Siemens Stock Awards (restriction period: 2012-2016)³
Siemens Stock Awards (restriction period: 2011-2015)4
Bonus Awards (waiting period: 2012-2016)5
Bonus Awards (waiting period: 2011-2015)5
Share Matching Plan (vesting period: 2013-2015)
Multi-year variable compensation
One-year variable compensation
(Bonus) - Payout amount²
with long-term incentive effect, stock-based
without long-term incentive effect,
non-stock-based
2016
Total
0
5 One half of the Bonus for fiscal 2011 and fiscal 2012 was granted
in the form of non-forfeitable awards of Siemens stock (Bonus
Awards).After the expiration of the four-year waiting period in
November 2015 and November 2016, respectively, the beneficia-
ries received one share of Siemens stock for each Bonus Award.
7 To compensate for the forfeiture of stock at his previous em-
ployer, the Supervisory Board has granted Mr. Neike a one-time
sum of €4,200,000. Seventy-five percent of this amount was
awarded in the form of Siemens Phantom Stock Awards and the
remaining 25% as a special pension benefit contribution. One
half of the total amount of these granted Siemens Phantom
2016
2017
2016
2017
2016
2017
2016
6 "Other" includes the adjustment of the Siemens Stock Awards
2011 and 2012 and Bonus Awards 2011 and 2012 (transfer in
November 2015 and 2016, respectively) in accordance with
Section 23 and Section 125 of the German Transformation Act
(Umwandlungsgesetz) due to the spin-off of OSRAM.
2017
Janina Kugel
Managing Board member
Klaus Helmrich
Managing Board member
Lisa Davis
Managing Board member
Dr. Roland Busch
Managing Board member
2,024
(Max)
0
603
622
2,309
2,202
3,816
5,586
3,113
2,825
3,797
5,482
(Min)
0
55
133
0
6,104
566
3,391
576
3,688
0
until March 31, 2017
CFO
since April 1, 2017
since April 1, 2017
Prof. Dr. Siegfried Russwurm 10
Managing Board member
Managing Board member
0
Managing Board member
Michael Sen⁹
Cedrik Neike7,8
2,839
530
593
2,795
602
4,418
621
6,207
Dr. Ralf P. Thomas
53
4,399
0
0
0
925
0
0
0
0
0
0
0
0
0
0
0
129
2,024
555
1,028
598
0
0
0
0
0
0
0
0
0
0
0
0
0
703
0
0
0
703
Income (loss) from investments accounted for using the equity method, net
1,487
4
43
134
Interest income
1,314
8,306
(1,051)
(989)
Other financial income (expenses), net
135
(373)
Income from continuing operations before income taxes
(427)
Interest expenses
(595)
83,049
Other operating expenses
7,404
2016
79,644
(58,021)
(55,826)
25,029
23,819
Research and development expenses
(5,164)
(4,732)
Selling and general administrative expenses
(12,225)
(11,669)
Other operating income
5
647
328
6
Income tax expenses
0.23
(2,180)
5,450
27
2
7.38
6.51
0.07
0.23
134
7.44
27
7.23
6.42
0.06
2017
7.29
6.65
6.74
133
6,046
58 Consolidated Financial Statements
Income from continuing operations
Income from discontinued operations
Net income
(2,008)
6,126
5,396
53
188
6,179
5,584
Income from continuing operations
Income from discontinued operations, net of income taxes
Net income
Attributable to:
Non-controlling interests
Shareholders of Siemens AG
Basic earnings per share
Income from continuing operations
Income from discontinued operations
Net income
Diluted earnings per share
7
Note
> The exclusion is necessary in order to grant holders of conver-
sion or option rights or conversion or option obligations on
Siemens shares a compensation for the effects of dilution.
Cost of sales
A.11.2 Restrictions on voting rights
or transfer of shares
At the Shareholders' Meeting, each share of stock has one vote
and accounts for the shareholders' proportionate share in the
Company's net income. An exception to this rule applies with
regard to treasury shares held by the Company, which do not
entitle the Company to any rights. Under Section 136 of the Ger-
man Stock Corporation Act the voting right of the affected shares
is excluded by law.
Shares issued to employees worldwide under the employee share
program implemented since the beginning of fiscal 2009, in par-
ticular the Share Matching Plan, are freely transferable unless
applicable local laws provide otherwise. Under the rules of the
program, however, in order to receive one matching share free
of charge for each three shares purchased, participants are re-
quired to hold the shares purchased by them for a vesting period
of several years, during which the participants have to be contin-
uously employed by Siemens AG or another Siemens company.
The right to receive matching shares is forfeited if the purchased
shares are sold, transferred, hedged on, pledged or hypothecated
in any way during the vesting period.
The von Siemens-Vermögensverwaltung GmbH (VSV) has, on a
sustained basis, powers of attorney allowing it to exercise the
voting rights for 10,814,609 shares (as of September 30, 2017) on
behalf of members of the Siemens family. These shares are part
of the total number of shares held by the family's members. The
powers of attorney are based on an agreement between the VSV
and, among others, members of the Siemens family. The shares
are voted together by VSV, taking into account the proposals of a
family partnership established by the family's members or of one
of this partnership's governing bodies.
A.11.3 Legislation and provisions of
the Articles of Association applicable
to the appointment and removal
of members of the Managing Board
and governing amendment to the
Articles of Association
The appointment and removal of members of the Managing
Board is subject to the provisions of Sections 84 and 85 of the
German Stock Corporation Act and Section 31 of the German Co-
determination Act (Mitbestimmungsgesetz). According to Sec-
tion 8 para. 1 of the Articles of Association, the Managing Board
is comprised of several members, the number of which is deter-
mined by the Supervisory Board.
According to Section 179 of the German Stock Corporation Act,
any amendment to the Articles of Association requires a resolu-
tion of the Shareholders' Meeting. The authority to adopt purely
formal amendments to the Articles of Association was trans-
ferred to the Supervisory Board under Section 13 para. 2 of the
Articles of Association. In addition, by resolutions of the Share-
holders' Meetings the Supervisory Board has been authorized to
amend Section 4 of the Articles of Association in accordance with
the utilization of the Authorized and Conditional Capitals, and
after expiration of the then-applicable authorization and utiliza-
tion period.
As of September 30, 2017, the Company's common stock totaled
€2.550 billion. The capital stock is divided into 850 million regis-
tered shares with no par value. The shares are fully paid in. All
shares confer the same rights and obligations. The shareholders'
rights and obligations are governed in detail by the provisions of
the German Stock Corporation Act, in particular by Sections 12, 53 a
et seq., 118 et seq. and 186 of the German Stock Corporation Act.
Resolutions of the Shareholders' Meeting require a simple major-
ity vote, unless a greater majority is required by law. Pursuant to
Section 179 para. 2 of the German Stock Corporation Act, amend-
ments to the Articles of Association require a majority of at least
three-quarters of the capital stock represented at the time of the
casting of the votes, unless another capital majority is prescribed
by the Articles of Association.
The Managing Board is authorized to increase, with the approval
of the Supervisory Board, the capital stock until January 25, 2021
by up to €90 million through the issuance of up to 30 million reg-
istered shares of no par value against contributions in cash
(Authorized Capital 2016). Subscription rights of existing share-
holders are excluded. The new shares shall be issued under the
condition that they are offered exclusively to employees of
Siemens AG and any of its affiliated companies. To the extent per-
mitted by law, employee shares may also be issued in such a man-
ner that the contribution to be paid on such shares is covered by
that part of the annual net income which the Managing Board and
Combined Management Report
53
54
the Supervisory Board may allocate to other retained earnings
under Section 58 para. 2 of the German Stock Corporation Act.
Furthermore, the Managing Board is authorized to increase,
with the approval of the Supervisory Board, the capital stock
until January 27, 2019 by up to €528.6 million through the issu-
ance of up to 176.2 million registered shares of no par value
against cash contributions and/or contributions in kind (Autho-
rized Capital 2014).
As of September 30, 2017, the total unissued authorized capital
of Siemens AG therefore consisted of €618.6 million nominal
that may be issued, with varying terms by issuance, in install-
ments of up to 206.2 million registered shares of no par value.
A.11.4 Powers of the Managing Board
to issue and repurchase shares
A.11.1 Composition of common stock
(pursuant to Sections 289 para. 4 and 315 para. 4 of the German Commercial Code)
and explanatory report
A.11 Takeover-relevant information
196,500
140,000
40,000
16,500
5,176,595
3,066,667
1,655,238
429,000
5,150,905
1 These employee representatives on the Supervisory Board and the representatives of the trade unions on the Supervisory Board have declared their willingness to transfer their compensation to the
Hans Boeckler Foundation, in accordance with the guidelines of the Confederation of German Trade Unions (DGB).
A.10.3 Other
The Company provides a group insurance policy for Supervisory
and Managing Board members and certain other employees of
the Siemens Group. The policy is taken out for one year at a time
or renewed annually. It covers the personal liability of the insured
in cases of financial loss associated with their activities on behalf
of the Company. The insurance policy for fiscal 2017 includes a
deductible for the members of the Managing Board and the
Supervisory Board that complies with the requirements of the
German Stock Corporation Act and the Code.
62
52
Combined Management Report
By resolutions of the Shareholders' Meetings of January 28, 2014
and January 27, 2015, the Managing Board is authorized to issue
bonds with conversion rights or with warrants attached, or a
combination of these instruments, each entitling the holders to
subscribe to up to 80 million registered shares of Siemens AG of
no par value. Based on these two authorizations, the Company
or consolidated subsidiaries of the Company may issue bonds
until January 27, 2019 and January 26, 2020, respectively, each
in an aggregate principal amount of up to €15 billion. In order to
grant shares of stock to holders/creditors of such convertible
bonds or warrant bonds, the capital stock was conditionally in-
creased by resolutions of the Shareholders' Meetings 2014 and
2015, each by up to 80 million registered shares of no par value
(Conditional Capitals 2014 and 2015), i.e. in total by up to
€480 million through the issuance of up to 160 million shares of
no par value.
Gross profit
The new shares under Authorized Capital 2014 and the bonds
under the aforementioned authorizations are to be issued against
cash or non-cash contributions. They are, as a matter of principle,
to be offered to shareholders for subscription. The Managing
Board is authorized to exclude, with the approval of the Super-
visory Board, subscription rights of shareholders in the event of
capital increases against contributions in kind. In the event of
capital increases against contributions in cash, the Managing
Board is authorized to exclude shareholders' subscription rights
with the approval of the Supervisory Board in the following
> The issue price of the new shares/bonds is not significantly
lower than the stock market price of the Siemens shares al-
ready listed or the theoretical market price of the bonds com-
puted in accordance with generally accepted actuarial meth-
ods (exclusion of subscription rights, limited to 10% of the
capital stock, in accordance with or by mutatis mutandis ap-
plication of Section 186 para. 3 sentence 4 German Stock Cor-
poration Act).
55
such an event. In either situation, ISDA Agreements are designed
such that upon termination all outstanding payment claims docu-
mented under them are to be netted.
In case of a change of control, the terms and conditions of the
remaining warrants issued with the bonds with warrant units in
February 2012 enable their holders to receive a higher number of
Siemens shares in accordance with an adjusted strike price if they
exercise their option rights within a certain period of time after
the change of control. This period of time shall end either (1) not
less than 30 days and no more than 60 days after publication of
the notice of the issuer regarding the change of control, as deter-
mined by the issuer or (2) 30 days after the change of control first
becomes publicly known. The strike price adjustment decreases
depending on the remaining term of the warrants and is deter-
mined in detail in the terms and conditions of the warrants. In
this context, a change of control occurs if control of Siemens AG
is acquired by a person or by persons acting in concert.
A.11.6 Compensation agreements
with members of the Managing
Board or employees in the event
of a takeover bid
In the event of a change of control that results in a substantial
change in the position of a Managing Board member (for exam-
ple, due to a change in corporate strategy or a change in the
Managing Board member's duties and responsibilities), the
member of the Managing Board has the right to terminate his or
her contract with the Company for good cause. A change of con-
trol exists if one or several shareholders acting jointly or in con-
cert acquire a majority of the voting rights in Siemens AG and
exercise a controlling influence, or if Siemens AG becomes a de-
pendent enterprise as a result of entering into an intercompany
agreement within the meaning of Section 291 of the German
Stock Corporation Act, or if Siemens AG is to be merged into an
existing corporation or other entity. If this right of termination is
exercised, the Managing Board member is entitled to a severance
payment in the amount of no more than two years' compensa-
tion. The calculation of the annual compensation includes not
only the base compensation and the target amount for the bo-
nus, but also the target amount for the stock awards, in each case
based on the most recent completed fiscal year prior to termina-
tion of the contract. The stock-based compensation components
for which a firm commitment already exists will remain unaf-
fected. Additionally, the severance payments cover non-mone-
tary benefits by including an amount of 5% of the total severance
amount. Severance payments will be reduced by 10% as a lump-
sum allowance for discounted values and for income earned else-
where. However, this reduction will apply only to the portion of
the severance payment that was calculated without taking ac-
count of the first six months of the remaining term of the Man-
aging Board member's contract. There is no entitlement to a
severance payment if the Managing Board member receives ben-
efits from third parties in connection with a change of control.
A right to terminate the contract does not exist if the change of
control occurs within a period of twelve months prior to a Man-
aging Board member's retirement.
A.11.7 Other takeover-relevant
information
Combined Management Report
We are not aware of, nor have we during the last fiscal year been
notified of, any shareholder directly or indirectly holding 10% or
more of the voting rights. There are no shares with special rights
conferring powers of control. Shares of stock issued by
Siemens AG to employees under its employee share program
and/or as share-based compensation are transferred directly to
the employees. The beneficiary employees who hold shares of
employee stock may exercise their control rights in the same way
as any other shareholder directly in accordance with applicable
laws and the Articles of Association.
B.
Consolidated
Financial Statements
B.1 Consolidated Statements of Income
Fiscal year
(in millions of €, per share amounts in €)
Revenue
56 Combined Management Report
Framework agreements concluded by Siemens AG under Inter-
national Swaps and Derivatives Association Inc. documentation
(ISDA Agreements) grant the counterparty a right of termination
when Siemens AG consolidates with, merges into, or transfers sub-
stantially all its assets to a third party. However, this right of termi-
nation exists only, if (1) the resulting entity's creditworthiness is
materially weaker than Siemens AG's immediately prior to such
event or (2) the resulting entity fails to simultaneously assume
Siemens AG's obligations under the ISDA Agreement. Additionally,
some ISDA Agreements grant the counterparty a right of termina-
tion if a third party acquires beneficial ownership of equity securi-
ties that enable it to elect a majority of Siemens AG's Supervisory
Board or otherwise acquire the power to control Siemens AG's
material policy-making decisions and if the creditworthiness of
Siemens AG is materially weaker than it was immediately prior to
In addition, in March 2013, a consolidated subsidiary as borrower
and Siemens AG as guarantor entered into two bilateral loan
agreements, each of which has been drawn in the full amount of
US$500 million. Each agreement provides its respective lender
with a right of termination in the event that (1) Siemens AG be-
comes a subsidiary of another company or (2) a person or a group
of persons acting in concert acquires effective control over
Siemens AG by being able to exercise decisive influence over its
activities (Art. 3(2) of Council Regulation (EC) 139/2004).
Siemens AG maintains two lines of credit in an amount of €4 bil-
lion and an amount of US$3 billion, respectively, which provide
its lenders with a right of termination in the event that (1)
Siemens AG becomes a subsidiary of another company or (2) a
person or a group of persons acting in concert acquires effective
control over Siemens AG by being able to exercise decisive influ-
ence over its activities (Art. 3(2) of Council Regulation (EC)
139/2004).
> The exclusion is necessary with regard to fractional amounts
resulting from the subscription ratio.
The total amount of new shares issued or to be issued under
Authorized Capitals or in accordance with the bonds mentioned
above, in exchange for contributions in cash and in kind and with
shareholders' subscription rights excluded, may in certain cases
be subject to further restrictions, such as the restriction that they
may not exceed 20% of the capital stock. The details of those
restrictions are described in the relevant authorization.
In February 2012, Siemens issued bonds with warrant units with
a volume of US$3 billion. Siemens exchanged the major part of
the warrants issued in 2012 against new warrants in Septem-
ber 2015; for this purpose, Siemens issued new bonds with war-
rants. After redemption of the first tranche with a volume of
US$1.5 billion at maturity in August 2017, the remaining war-
rants correspond to option rights entitling their holders to receive
approximately 11.5 million Siemens shares. The terms and condi-
tions of the warrants enable Siemens to service exercised option
rights using either conditional capital or treasury stock, and also
enable Siemens to buy back the warrants.
The Company may not repurchase its own shares unless so au-
thorized by a resolution duly adopted by the shareholders at a
general meeting or in other very limited circumstances set forth
in the German Stock Corporation Act. On January 27, 2015, the
Shareholders' Meeting authorized the Company to acquire until
January 26, 2020 up to 10% of its capital stock existing at the date
of adopting the resolution or if this value is lower - as of the
date on which the authorization is exercised. The aggregate of
shares of stock of Siemens AG repurchased under this authoriza-
tion and any other Siemens shares previously acquired and still
held in treasury by the Company or attributable to the Company
pursuant to Sections 71 d and 71e of the German Stock Corpora-
tion Act may at no time exceed 10% of the then existing capital
stock. Any repurchase of Siemens shares shall be accomplished
at the discretion of the Managing Board either (1) by acquisition
over the stock exchange or (2) through a public share repurchase
offer. The Managing Board is additionally authorized to complete
the repurchase of Siemens shares in accordance with the autho-
rization described above by using certain derivatives (put and
call options, forward purchases and any combination of these
derivatives). In exercising this authorization, all stock repur-
chases based on the derivatives are limited to a maximum vol-
ume of 5% of Siemens' capital stock existing at the date of adopt-
ing the resolution at the Shareholders' Meeting. A derivative's
term of maturity may not, in any case, exceed 18 months and
must be chosen in such a way that the repurchase of Siemens
Combined Management Report
shares upon exercise of the derivative will take place no later
than January 26, 2020.
In addition to selling them over the stock exchange or through a
public sales offer to all shareholders, the Managing Board is au-
thorized by resolution of the Shareholders' Meeting on Janu-
ary 27, 2015 to also use Siemens shares repurchased on the basis
of this or any previously given authorization for every permissible
purpose, in particular as follows: Such Siemens shares may be
retired
> used in connection with share-based compensation programs
and/or employee share programs of the Company or any of its
affiliated companies and issued to individuals currently or for-
merly employed by the Company or any of its affiliated com-
panies as well as to board members of any of the Company's
affiliated companies
> offered and transferred, with the approval of the Supervisory
Board, to third parties against non-cash contributions
> sold, with the approval of the Supervisory Board, to third
parties against payment in cash if the price at which such
Siemens shares are sold is not significantly lower than the
market price of Siemens stock (exclusion of subscription
rights, limited to 10% of the capital stock, by mutatis mutan-
dis application of Section 186 para. 3 sentence 4 German
Stock Corporation Act) or
> used to service or secure obligations or rights to acquire
Siemens shares arising particularly from or in connection with
convertible bonds or warrant bonds issued by the Company or
any of its consolidated subsidiaries (exclusion of subscription
rights, limited to 10% of the capital stock, by mutatis mutandis
application of Section 186 para. 3 sentence 4 German Stock
Corporation Act).
Furthermore, the Supervisory Board is authorized to use shares
acquired on the basis of this or any previously given authoriza-
tion to meet obligations or rights to acquire Siemens shares that
were or will be agreed with members of the Managing Board
within the framework of rules governing Managing Board com-
pensation.
In November 2015, the Company announced that it would carry
out a share buyback of up to €3 billion in volume within the fol-
lowing up to 36 months. The buyback commenced on Febru-
ary 2, 2016 using the authorizations given by the Annual Share-
holders' Meeting on January 27, 2015. Under this share buyback
Siemens repurchased 10,439,856 shares by September 30, 2017.
The total consideration paid for these shares amounted to about
€1.163 billion (excluding incidental transaction charges). The
buyback has the exclusive purposes of retirement, of issuing
shares to employees, board members of affiliated companies and
members of the Managing Board of Siemens AG, and of servic-
ing/securing the obligations or rights to acquire Siemens shares
arising particularly from or in connection with convertible bonds
and warrant bonds. As of September 30, 2017, the Company held
34,481,120 shares of stock in treasury.
For details on the authorizations referred to above, especially
with the restrictions to exclude subscription rights and the
terms to include shares when calculating such restrictions, please
refer to the relevant resolution and to Section 4 of the Articles of
Association.
A.11.5 Significant agreements which
take effect, alter or terminate upon
a change of control of the Company
following a takeover bid
cases:
196,500
16,500
478,500
40,000
1,638,095
27,000
160,000
140,000
334,500
34,500
160,000
140,000
Dr. Hans Michael Gaul
13,500
57,143
133,333
203,976
13,500
57,143
133,333
Michael Diekmann
142,333
327,000
Reinhard Hahn¹
140,000
10,500
140,000
150,500
10,500
140,000
Hans-Jürgen Hartung
245,500
25,500
80,000
9,000
140,000
21,000
76,190
133,333
Bettina Haller¹
150,500
10,500
140,000
150,500
230,524
133,333
150,500
10,500
280,000
280,000
617,000
57,000
280,000
280,000
Total
fee
45,000
attendance
compen-
sation for
committee
work
compen-
sation
Total
fee
Base
Meeting
attendance
compen-
sation for
committee
work
sation
Meeting
10,500
605,000
Werner Wenning
140,000
Olaf Bolduan¹
390,000
30,000
140,000
220,000
402,000
42,000
Birgit Steinborn¹
140,000
463,500
43,500
200,000
220,000
468,000
48,000
200,000
220,000
220,000
compen-
150,500
140,000
150,500
10,500
140,000
Dr. Nathalie von Siemens
150,500
10,500
140,000
150,500
10,500
140,000
Güler Sabancı
186,429
15,000
38,095
133,333
187,929
16,500
140,000
10,500
150,500
Michael Sigmund
140,000
3,060,000
Total
Sibylle Wankel¹
291,500
31,500
120,000
140,000
279,119
38,095
31,500
133,333
Jim Hagemann Snabe
150,500
10,500
140,000
150,500
10,500
140,000
114,286
133,333
Dr. Norbert Reithofer
134,167
140,000
Jürgen Kerner¹
242,500
22,500
80,000
140,000
229,024
19,500
200,000
76,190
Harald Kern¹
350,000
30,000
180,000
140,000
351,500
31,500
180,000
133,333
Robert Kensbock¹
40,500
140,000
7,500
126,667
150,500
10,500
140,000
Gérard Mestrallet
247,000
27,000
380,500
80,000
242,524
33,000
76,190
133,333
Dr. Nicola Leibinger-Kammüller
373,000
33,000
200,000
140,000
Base
203,976
Additional
Janina Kugel
67,749
10,111
1,001
27,984
12,046
75,263
19,536
29,412
Klaus Helmrich
576
0
0
12,046
53,261
576
Lisa Davis
67,749
65,307
10,942
11,553
31,7547
8,166
12,046
57,250
5,030
Dr. Ralf P. Thomas
11,225
0
0
Cedrik Neike 4, 5, 6
0
Michael Sen 5,8
19,099
0
0
40,965
0
0
0
12,6557
11,225
440
1,001
12,046
Commitments
fiscal year
Vested and
fulfilled
during
of Stock
Awards
Forfeitable
commitments
fiscal year¹
Granted
during
of Stock
Awards
Forfeited
during
fiscal year²
of Bonus
Awards
commitments
Non-forfeitable
Balance at beginning of
fiscal 2017
The following table shows the changes in the balance of the stock
commitments held by Managing Board members in fiscal 2017:
Stock commitments
IN FISCAL 2017
STOCK-BASED COMPENSATION INSTRUMENTS
A.10.1.3 ADDITIONAL INFORMATION ON
Forfeitable
commitments
27,042
of Bonus
Awards and
Stock Awards
Non-forfeitable
commitments
75,263
19,425
Dr. Roland Busch
128,784
16,206
1,752
41,904
24,092
Commitments
of Stock
Awards
138,923
Joe Kaeser
serving as of September 30, 2017
Managing Board members
(Amounts in number of units)
of Stock
Awards
Forfeitable
commitments
Balance at end of
fiscal 20173
of Bonus
Awards
2016
5,030
25,631
Former members of the
1 The amount of the obligation is based on the average base
compensation for the four years prior to the respective dates
of proof.
152,392
28,619
3,093,142
16,470,527
88,419
308%
18,599
2,010,175
9,556,381
2 Based on the average Xetra opening price of €108.08 for the
fourth quarter of 2016 (October-December).
27,323
96,450
10,424,316
567%
291%
18,781
51,039
5,516,344
2,029,863
200%
200%
300%
2,953,070
Number
of shares 3
50 Combined Management Report
A.10.2 Remuneration of Supervisory
Board members
60,690
2017
Additional
Dr. Gerhard Cromme
September 30, 2017
serving as of
Supervisory Board members
(Amounts in €)
3 As of March 10, 2017 (date of proof), including Bonus
Awards.
The compensation shown below was determined for each of the
members of the Supervisory Board for fiscal 2017 (individualized
disclosure).
Combined Management Report
No loans or advances from the Company are provided to mem-
bers of the Supervisory Board.
The members of the Supervisory Board are reimbursed for out-
of-pocket expenses incurred in connection with their duties and
for any value-added taxes to be paid on their remuneration. For
the performance of his duties, the Chairman of the Supervisory
Board is also entitled to an office with secretarial support and the
use of a carpool service.
In addition, the members of the Supervisory Board are entitled
to receive a fee of €1,500 for each meeting of the Supervisory
Board and its committees that they attend.
If a Supervisory Board member does not attend a meeting of the
Supervisory Board, one-third of the aggregate compensation due
to that member is reduced by the percentage of Supervisory Board
meetings not attended by the member in relation to the total
number of Supervisory Board meetings held during the fiscal year.
In the event of changes in the composition of the Supervisory
Board and/or its committees, compensation is paid on a pro rata
basis, rounding up to the next full month.
the Compensation Committee); the Chairman of the Innovation
and Finance Committee receives €80,000, and each of the other
members of the Committee receives €40,000; the Chairman of
the Compliance Committee receives €80,000, and each of the
other members of the Committee receives €40,000. However, no
additional compensation is paid for work on the Compliance
Committee if a member of that Committee is already entitled to
compensation for work on the Audit Committee.
Under current rules, the members of the Supervisory Board re-
ceive an annual base compensation of €140,000; the Chairman
of the Supervisory Board receives a base compensation of
€280,000, and each of the Deputy Chairmen receives €220,000.
The current remuneration policies for the Supervisory Board
were authorized at the Annual Shareholders' Meeting held on
January 28, 2014, and are effective as of fiscal 2014. Details are
set out in Section 17 of the Articles of Association of Siemens AG.
The remuneration of the Supervisory Board consists entirely of
fixed compensation; it reflects the responsibilities and scope of
the work of the Supervisory Board members. The Chairman and
Deputy Chairmen of the Supervisory Board as well as the Chair-
men and members of the Audit Committee, the Chairman's Com-
mittee, the Compensation Committee, the Compliance Commit-
tee and the Innovation and Finance Committee receive additional
compensation.
51
Value²
The members of the Supervisory Board committees receive the
following additional fixed compensation for their committee
work: the Chairman of the Audit Committee receives €160,000,
and each of the other members of the Committee receives
€80,000; the Chairman of the Chairman's Committee receives
€120,000, and each of the other members of the Committee re-
ceives €80,000; the Chairman of the Compensation Committee
receives €100,000, and each of the other members of the Com-
mittee receives €60,000 (compensation for any work on the
Chairman's Committee counts toward compensation for work on
Number
of shares2
7 Amounts also include the non-forfeitable Stock Awards,
which Mr. Neike received as forfeiture of stock at his previous
employer. One half of the total amount of these granted
Siemens Phantom Stock Awards fell due and was honored in
September 2017. The other half will fall due and be honored
in September 2018. The value of these Siemens Phantom
Stock Awards depends solely on the performance of Siemens
stock.
6 The amounts shown include the Stock Awards granted to
Mr. Neike by Siemens Ltd. China in his capacity as Executive
Chairman of the Board of Directors of Siemens Ltd. China.
5 Since Mr. Neike und Mr. Sen were appointed full members
of the Managing Board during the fiscal year, the target
amount for their stock-based compensation was prorated
and, instead of Stock Awards, they received an equivalent
amount of Siemens Phantom Stock Awards. In lieu of a trans-
fer of shares, only a cash equivalent is given for these awards
at the end of the restriction period. Otherwise, the same
provisions agreed upon for Siemens Stock Awards apply.
4 Mr. Neike was appointed a full member of the Managing
Board effective April 1, 2017.
pensation by the relevant Managing Board member before
joining the Managing Board.
3 Amounts also include stock commitments (Stock Awards)
granted in November 2016 for fiscal 2017. These amounts
may further include stock commitments received as com-
2 For one half of the Siemens Stock Awards 2012, target
attainment depended on the EPS value for the past three
fiscal years and amounted to 154%. For the other half, target
attainment was linked to the performance of Siemens stock
compared to defined competitors during the four-year
restriction period. It amounted to 87%. Of the Siemens Stock
Awards 2012, which were granted on the basis of 100%
target attainment, a number equivalent to the shortfall from
that target expired, accordingly, without replacement in
accordance with plan rules
1 The weighted average fair value as of the grant date for
fiscal 2017 was €99.70 per granted share.
8 Mr. Sen was appointed a full member of the Managing
Board effective April 1, 2017.
65,096
526,664
27,984
145,735
6,023
132,831
78,633
508,005
20,043
90,241
Total
Prof. Dr. Siegfried Russwurm⁹
Percentage
of base
compensation¹
Managing Board
1,001
5,196
9 Prof. Dr. Siegfried Russwurm left the Managing Board
effective the end of March 31, 2017.
10,618
53,483
49
Percentage
of base
compensation'
Combined Management Report
Proven
Required
Obligations under Share Ownership Guidelines
Total
Value¹
Dr. Roland Busch
Joe Kaeser
Klaus Helmrich
Managing Board members serving
(Amounts in number of units or €)
The deadlines by which the individual Managing Board mem-
bers must provide first-time proof of compliance with the
Siemens Share Ownership Guidelines vary from member to
member, depending on when he or she was appointed to the
Managing Board. The following table shows the number of
Siemens shares that were held by Managing Board members in
office at September 30, 2017, as of the March 2017 deadline for
proving compliance with the Share Ownership Guidelines as
well as the number that are to be held permanently with a view
to future deadlines.
Share Ownership Guidelines
are forfeited. Entitlements to matching shares at the end of fiscal
2017 show the following balance: Janina Kugel, three shares with
a fair value of €174.
Shares from the Share Matching Plan
as of September 30, 2017, and required
to show proof as of March 10, 2017
Fiscal 2011 was the last year in which Managing Board members
were entitled to participate in the Siemens Share Matching Plan.
Under the plan, they were entitled to invest up to 50% of the
annual gross amount of their variable cash compensation, as de-
termined for fiscal 2010, in Siemens shares. After the expiration
of a vesting period of approximately three years, plan partici-
pants are entitled to receive one free matching share of Siemens
stock for every three Siemens shares acquired and continuously
held under the plan, provided the participants were employed
without interruption at Siemens AG or a Siemens company until
the end of the vesting period. At the beginning of fiscal 2017,
Janina Kugel had three entitlements to matching shares, which
she had acquired before joining the Managing Board. In fiscal
2017, no entitlements to matching shares were acquired, due or
Inventories
8
17,160
16,287
7,664
9
6,800
Other current assets
Current income tax assets
Other current financial assets
Trade and other receivables
Note
1,242
Available-for-sale financial assets
10,604
8,375
2016
2017
September 30,
Cash and cash equivalents
Assets
10
B.3 Consolidated Statements of Financial Position
(in millions of €)
1,293
19,942
24,159
1,098
4
Consolidated Financial Statements 59
10,157
10,977
12
7,742
10,926
12
27,906
11
WANNE
Other financial assets
Investments accounted for using the equity method
Property, plant and equipment
55,329
58,429
Other intangible assets
Goodwill
Total current assets
1,482
3,22
Assets classified as held for disposal
1,204
1,467
790
18,160
134
2,571
Available-for-sale financial assets
55
(2,636)
2,735
1,065
(1,070)
(2,636)
2,734
16
16
Derivative financial instruments
therein: Income tax effects
Currency translation differences
(1,118)
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plans
5,584
6,179
Net income
2016
2017
Note
(in millions of €)
Fiscal year
B.2 Consolidated Statements of Comprehensive Income
2,727
therein: Income tax effects
(796)
22
22
Shareholders of Siemens AG
Non-controlling interests
Attributable to:
Total comprehensive income
2,705
8,588
(2,879)
2,409
Other comprehensive income, net of income taxes
(244)
(326)
Items that may be reclassified subsequently to profit or loss
(141)
(30)
Income (loss) from investments accounted for using the equity method, net
(89)
(63)
therein: Income tax effects
256
136
22, 23
4
(7)
436
687
8,533
3,012
190
19,044
Total equity
interests
Non controlling
Total equity
attributable to
shareholders
of Siemens AG
Treasury
shares at cost
(357)
726
1,794
instruments
financial assets
Derivative financial
(6,218)
Available-for-sale
35,696
6,368
2,550
(3)
(11)
2,473
199
Consolidated Financial Statements
62
Balance as of September 30, 2017
Other changes in equity
Currency trans-
lation differences
34,474
581
35,056
36
37
51
92
(42)
2,668
390
390
391
(446)
(446)
(446)
91
91
(3,066)
(239)
(2,827)
(2,879)
(2,879)
208
434
(885)
5,584
134
5,450
Other transactions with non-controlling interests
Changes in equity resulting from major portfolio transactions
Re-issuance of treasury shares
Purchase of treasury shares
Other changes in equity
Transactions with non-controlling interests
Cancellation of treasury shares
Re-issuance of treasury shares
Purchase of treasury shares
Share-based payment
13
Other comprehensive income, net of income taxes
Net income
Balance as of October 1, 2015
(in millions of €)
B.5 Consolidated Statements of Changes in Equity
Consolidated Financial Statements 61
10,604
13
15
8,375
Cash and cash equivalents at end of period (Consolidated Statements of Financial Position)
Less: Cash and cash equivalents of assets classified as held for disposal and discontinued
operations at end of period
10,618
9,958
10,618
8,389
Cash and cash equivalents at end of period
Cash and cash equivalents at beginning of period
660
(2,228)
Balance as of September 30, 2016
909
Issued capital
2,643
Retained earnings
(86)
279
Share-based payment
(2,914)
Dividends
2,737
Other comprehensive income, net of income taxes
6,046
Net income
27,454
5,890
2,550
Balance as of October 1, 2016
27,454
5,890
2,550
(2,575)
(42)
(93)
(1)
(67)
158
(2,827)
(2,637)
5,450
30,152
Capital reserve
5,733
Change in cash and cash equivalents
1,160
(3,605)
have a material impact on the respective values and ultimately
the amount of any goodwill impairment.
The determination of the recoverable amount of a cash-generat-
ing unit or a group of cash-generating units to which goodwill is
allocated involves the use of estimates by management. The out-
come predicted by these estimates is influenced e.g. by the suc-
cessful integration of acquired entities, volatility of capital mar-
kets, interest rate developments, foreign exchange rate
fluctuations and the outlook on economic trends. In determining
recoverable amounts, discounted cash flow calculations use five-
year projections that are based on financial forecasts. Cash flow
projections take into account past experience and represent
management's best estimate about future developments. Cash
flows after the planning period are extrapolated using individual
growth rates. Key assumptions on which management has based
its determination of fair value less costs to sell and value in use
include estimated growth rates and weighted average cost of
capital. These estimates, including the methodology used, can
For the purpose of impairment testing, goodwill acquired in a
business combination is allocated to the cash-generating unit or
the group of cash-generating units that is expected to benefit
from the synergies of the business combination. If the carrying
amount of the cash-generating unit or the group of cash-gen-
erating units, to which the goodwill is allocated, exceeds its re-
coverable amount, an impairment loss on goodwill allocated to
this cash-generating unit or this group of cash-generating units
is recognized. The recoverable amount is the higher of the
cash-generating unit's or the group of cash-generating units' fair
value less costs to sell and its value in use. If either of these val-
ues exceeds the carrying amount, it is not always necessary to
determine both values. These values are generally determined
based on discounted cash flow calculations. Impairment losses
on goodwill are not reversed in future periods.
Goodwill - Goodwill is not amortized, instead, goodwill is tested
for impairment annually, as well as whenever there are events or
changes in circumstances (triggering events) which suggest that
the carrying amount may not be recoverable. Goodwill is carried
at cost less accumulated impairment losses. The goodwill impair-
ment test is performed at the level of a cash-generating unit or a
group of cash-generating units, generally represented by a seg-
ment and for Siemens Gamesa Renewable Energy one level be-
low the segment. This is the lowest level at which goodwill is
monitored for internal management purposes.
Earnings per share - Basic earnings per share are computed by
dividing income from continuing operations, income from dis-
continued operations and net income, all attributable to ordinary
shareholders of Siemens AG by the weighted average number of
shares outstanding during the year. Diluted earnings per share
are calculated by assuming conversion or exercise of all poten-
tially dilutive securities and share-based payment plans.
Consolidated Financial Statements 65
Research and development costs - Costs of research activities
are expensed as incurred. Costs of development activities are
capitalized when the recognition criteria in IAS 38 are met. Capi-
talized development costs are stated at cost less accumulated
amortization and impairment losses with an amortization period
of generally three to ten years.
Product-related expenses - Provisions for estimated costs re-
lated to product warranties are recorded in line item Cost of sales
at the time the related sale is recognized.
Functional costs - In general, operating expenses by types are
assigned to the functions following the functional area of the
corresponding profit and cost centers. Amortization, deprecia-
tion and impairment of intangible assets and property, plant and
equipment are included in functional costs depending on the use
of the assets.
term.
Income from operating leases: Operating lease income for equip-
ment rentals is recognized on a straight-line basis over the lease
Other intangible assets - The Company amortizes intangible
assets with finite useful lives on a straight-line basis over their
respective estimated useful lives. Estimated useful lives for pat-
ents, licenses and other similar rights generally range from
three to five years, except for intangible assets with finite useful
lives acquired in business combinations. Intangible assets ac-
quired in business combinations primarily consist of customer
relationships and trademarks as well as technology. Useful lives
in specific acquisitions ranged from four to 20 years for cus-
tomer relationships and trademarks and from five to 25 years for
technology.
Income from royalties: Royalties are recognized on an accrual
basis in accordance with the substance of the relevant agree-
ment.
Sales from multiple element arrangements: Sales of goods and
services as well as software arrangements sometimes involve the
provision of multiple elements. In these cases, the Company de-
termines whether the contract or arrangement contains more
than one unit of accounting. If certain criteria are met, foremost
if the delivered element(s) has (have) value to the customer on
a stand-alone basis, the arrangement is separated and the appro-
priate revenue recognition convention is then applied to each
separate unit of accounting. Generally, the total arrangement
consideration is allocated to the separate units of accounting
based on their relative fair values. If the criteria for the separation
of units of accounting are not met, revenue is deferred until such
criteria are met or until the period in which the last undelivered
element is delivered.
Rendering of services: For long-term service contracts, revenues
are recognized on a straight-line basis over the term of the con-
tract or, if the performance pattern is other than straight-line, as
the services are provided, i.e. under the percentage-of-comple-
tion method as described above.
circumstances relating to the contract are considered on an in-
dividual basis.
The percentage-of-completion method places considerable im-
portance on accurate estimates of the extent of progress to-
wards completion and may involve estimates on the scope of
deliveries and services required for fulfilling the contractually
defined obligations. These significant estimates include total
contract costs, total contract revenues, contract risks, including
technical, political and regulatory risks, and other judgments.
Under the percentage-of-completion method, changes in esti-
mates may lead to an increase or decrease of revenue. The cred-
itworthiness of our customers is taken into account in estimating
the probability that economic benefits associated with a contract
will flow to the Company. In addition, we need to assess whether
the contract is expected to continue or to be terminated. In de-
termining whether the continuation or termination of a contract
is expected to be the most likely scenario, all relevant facts and
Sales from construction contracts: When the outcome of a con-
struction contract can be estimated reliably, revenues from con-
struction-type projects are recognized under the percent-
age-of-completion method, based on the percentage of costs
incurred to date compared to the total estimated contract costs.
An expected loss on the construction contract is recognized as an
expense immediately. Siemens applies the requirements of IAS 11
regarding contract variations to contract terminations, since con-
tract terminations are also changes to the agreed delivery and
service scope.
Sale of goods: Revenue is recognized when the significant risks
and rewards of ownership of the goods have passed to the buyer,
usually on delivery of the goods.
Revenue recognition - Under the condition that persuasive
evidence of an arrangement exists, revenue is recognized to the
extent that it is probable that the economic benefits will flow to
the Company and the revenue can be reliably measured, regard-
less of when the payment is being made. In cases where the in-
flow of economic benefits is not probable due to customer re-
lated credit risks, the revenue recognized is subject to the amount
of payments irrevocably received.
Foreign currency transaction - Transactions that are denom-
inated in a currency other than the functional currency of an
entity, are recorded at that functional currency applying the spot
exchange rate at the date when the underlying transactions are
initially recognized. At the end of the reporting period, foreign
currency-denominated monetary assets and liabilities are reval-
ued to functional currency applying the spot exchange rate pre-
vailing at that date. Gains and losses arising from these foreign
currency revaluations are recognized in net income. Those for-
eign currency-denominated transactions which are classified
as non-monetary are remeasured using the historical spot ex-
change rate.
64 Consolidated Financial Statements
Foreign currency translation - Assets and liabilities of foreign
subsidiaries, where the functional currency is other than the
euro, are translated using the spot exchange rate at the end of
the reporting period, while the Consolidated Statements of In-
come are translated using average exchange rates during the
period. Differences arising from such translations are recognized
within equity and reclassified to net income when the gain or loss
on disposal of the foreign subsidiary is recognized. The Consoli-
dated Statements of Cash Flow are translated at average ex-
change rates during the period, whereas cash and cash equiva-
lents are translated at the spot exchange rate at the end of the
reporting period.
Joint ventures - Joint ventures are entities over which Siemens
and one or more parties have joint control. Joint control requires
unanimous consent of the parties sharing control in decision
making on relevant activities.
Income from interest: Interest is recognized using the effective
interest method.
Property, plant and equipment - Property, plant and equip-
ment, is valued at cost less accumulated depreciation and impair-
ment losses. Depreciation expense is recognized using the
straight-line method. The following useful lives are assumed:
Factory and office buildings
Other buildings
Technical machinery & equipment
Furniture & office equipment
Equipment leased to others
Derivative financial instruments - Derivative financial instru-
ments, such as foreign currency exchange contracts and interest
rate swap contracts are measured at fair value and classified as
held for trading unless they are designated as hedging instru-
ments, for which hedge accounting is applied. Changes in the fair
value of derivative financial instruments are recognized either in
net income or, in the case of a cash flow hedge, in line item Other
comprehensive income, net of income taxes (applicable deferred
income tax). Certain derivative instruments embedded in host
contracts are also accounted for separately as derivatives.
Financial liabilities - Siemens measures financial liabilities, ex-
cept for derivative financial instruments, at amortized cost using
the effective interest method.
Loans and receivables - Financial assets classified as loans and
receivables are measured at amortized cost using the effective
interest method less any impairment losses. Impairment losses
on trade and other receivables are recognized using separate al-
lowance accounts. The allowance for doubtful accounts involves
significant management judgment and review of individual re-
ceivables based on individual customer creditworthiness, current
economic trends and analysis of historical bad debts on a portfo-
lio basis. For the determination of the country-specific compo-
nent of the individual allowance, Siemens also considers country
credit ratings, which are centrally determined based on informa-
tion from external rating agencies. Regarding the determination
of the valuation allowance derived from a portfolio-based analy-
sis of historical bad debts, a decline of receivables in volume re-
sults in a corresponding reduction of such provisions and vice
versa. As of September 30, 2017 and 2016, Siemens recorded a
valuation allowance for trade and other receivables (including
leases) of €1,388 million and €1,211 million, respectively.
Available-for-sale financial assets - Investments in equity in-
struments, debt instruments and fund shares are measured at
fair value, if reliably measurable. Unrealized gains and losses, net
of applicable deferred income tax expenses, are recognized in
line item Other comprehensive income, net of income taxes. Pro-
vided that fair value cannot be reliably determined, Siemens
measures available-for-sale financial assets at cost. This applies
to equity instruments that do not have a quoted market price in
an active market, and decisive parameters cannot be reliably es-
timated to be used in valuation models for the determination of
fair value. Siemens considers all available evidence such as mar-
ket conditions and prices, investee-specific factors and the dura-
tion as well as the extent to which fair value is less than acquisi-
tion cost in evaluating potential impairment of its available-for-sale
financial assets. The Company considers a decline in fair value as
objective evidence of impairment, if the decline exceeds 20% of
costs or continues for more than six months.
Cash and cash equivalents - The Company considers all highly
liquid investments with less than three months maturity from the
date of acquisition to be cash equivalents. Cash and cash equiv-
alents are measured at cost.
Financial instruments - A financial instrument is any contract
that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity. Siemens does
not use the category held to maturity and does not use the op-
tion to designate financial assets or financial liabilities at fair
value through profit or loss at inception (Fair Value Option).
Based on their nature, financial instruments are classified as fi-
nancial assets and financial liabilities measured at cost or amor-
tized cost and financial assets and financial liabilities measured
at fair value and as receivables from finance leases. Regular way
purchases or sales of financial assets are accounted for at the
trade date. Initially, financial instruments are recognized at their
fair value. Transaction costs are only included in determining
the carrying amount, if the financial instruments are not mea-
sured at fair value through profit or loss. Receivables from fi-
nance leases are recognized at an amount equal to the net in-
vestment in the lease. Subsequently, financial assets and
liabilities are measured according to the category to which they
are assigned cash and cash equivalents, available-for-sale fi-
nancial assets, loans and receivables, financial liabilities mea-
sured at amortized cost or financial assets and liabilities classi-
fied as held for trading.
Termination benefits - Termination benefits are provided as a
result of an entity's offer made in order to encourage voluntary
redundancy before the normal retirement date or from an enti-
ty's decision to terminate the employment. Termination benefits
in accordance with IAS 19, Employee Benefits, are recognized as
a liability and an expense when the entity can no longer with-
draw the offer of those benefits.
Legal Proceedings often involve complex legal issues and are sub-
ject to substantial uncertainties. Accordingly, considerable judg-
ment is part of determining whether it is probable that there is a
present obligation as a result of a past event at the end of the
reporting period, whether it is probable that such a Legal Pro-
ceeding will result in an outflow of resources and whether the
amount of the obligation can be reliably estimated. Internal and
external counsels are generally part of the determination process.
Due to new developments, it may be necessary, to record a pro-
vision for an ongoing Legal Proceeding or to adjust the amount
of a previously recognized provision. Upon resolution of a Legal
Proceeding, Siemens may incur charges in excess of the recorded
provisions for such matters. The outcome of Legal Proceedings
may have a material effect on Siemens' financial position, its re-
sults of operations and/or its cash flows.
Consolidated Financial Statements 67
Significant estimates are involved in the determination of provi-
sions related to onerous contracts, warranty costs, asset retire-
ment obligations, legal and regulatory proceedings as well as
governmental investigations (Legal Proceedings). Siemens re-
cords a provision for onerous sales contracts when current esti-
mates of total contract costs exceed expected contract revenue.
Onerous sales contracts are identified by monitoring the prog-
ress of the project and updating the estimate of total contract
costs which also requires significant judgment relating to
achieving certain performance standards as well as estimates
involving warranty costs and estimates regarding project delays
including the assessment of responsibility splits between the
contract partners for these delays. Uncertainties regarding asset
retirement obligations include the estimated costs of decommis-
sioning and final waste storage because of the long time frame
over which future cash outflows are expected to occur including
the respective interest accretion. The estimated cash outflows
could be impacted significantly by changes of the regulatory
environment.
Provisions - A provision is recognized in the Statement of Finan-
cial Position when it is probable that the Company has a present
legal or constructive obligation as a result of a past event, it is
probable that an outflow of economic benefits will be required
to settle the obligation and a reliable estimate can be made of
the amount of the obligation. If the effect is material, provisions
are recognized at present value by discounting the expected fu-
ture cash flows at a pretax rate that reflects current market as-
sessments of the time value of money. When a contract becomes
onerous, the present obligation under the contract is recognized
as a provision.
Actuarial valuations rely on key assumptions including discount
rates, expected compensation increases, rate of pension progres-
sion and mortality rates. Discount rates used are determined by
reference to yields on high-quality corporate bonds of appropri-
ate duration and currency at the end of the reporting period. In
case such yields are not available, discount rates are based on
government bond yields. Due to changing market, economic and
social conditions, the underlying key assumptions may differ
from actual developments.
Remeasurements comprise actuarial gains and losses as well as
the difference between the return on plan assets and the amounts
included in net interest on the net defined benefit liability (asset).
They are recognized in Other comprehensive income, net of in-
come taxes.
obligations equals the DBO. For funded plans, Siemens offsets
the fair value of the plan assets with the DBO. Siemens recog-
nizes the net amount, after adjustments for effects relating to
any asset ceiling.
Service cost, past service cost and settlement gains (losses) for
pensions and similar obligations as well as administration costs
unrelated to the management of plan assets are allocated among
functional costs. Past service cost and settlement gains (losses)
are recognized immediately in profit or loss. For unfunded plans,
the amount of the line item Provisions for pensions and similar
Defined benefit plans – Siemens measures the entitlements by
applying the projected unit credit method. The approach reflects
an actuarially calculated net present value of the future benefit
entitlement for services already rendered. In determining the net
present value of the future benefit entitlement for service al-
ready rendered (Defined Benefit Obligation (DBO)), the expected
rates of future salary increase and expected rates of future pen-
sion progression are considered. The assumptions used for the
calculation of the DBO as of the period-end of the preceding fis-
cal I year are used to determine the calculation of service cost and
interest income and expense of the following year. The net inter-
est income or expense for the fiscal year will be based on the
discount rates for the respective year multiplied by the net de-
fined benefit liability (asset) at the preceding fiscal year's peri-
od-end date.
-
Inventories - Inventories are valued at the lower of acquisition
or production costs and net realizable value, costs being gener-
ally determined on the basis of an average or first-in, first-out
method.
Income taxes - Tax positions under respective local tax laws and
tax authorities' views can be complex and subject to different
interpretations of tax payers and local tax authorities. Different
interpretations of tax laws may result in additional tax payments
for prior years and are taken into account based on manage-
ment's considerations. Under the liability method, deferred tax
assets and liabilities are recognized for future tax consequences
attributable to differences between the financial statement car-
rying amounts of existing assets and liabilities and their respec-
tive tax bases. Deferred tax assets are recognized if sufficient
future taxable profit is available, including income from fore-
casted operating earnings, the reversal of existing taxable tem-
porary differences and established tax planning opportunities.
As of each period-end, Siemens evaluates the recoverability of
deferred tax assets, based on projected future taxable profits.
Based upon the level of historical taxable income and projections
for future taxable income over the periods in which the deferred
tax assets are deductible, Siemens believes it is probable the
Company will realize the benefits of these deductible differences.
As future developments are uncertain and partly beyond
Siemens's control, assumptions are necessary to estimate future
taxable profits as well as the period in which deferred tax assets
will recover. Estimates are revised in the period in which there is
sufficient evidence to revise the assumption.
66 Consolidated Financial Statements
Discontinued operations and non-current assets held for
disposal - Discontinued operations are reported when a compo-
nent of an entity is classified as held for disposal or has been
disposed of, if the component represents a separate major line of
business or geographical area of operations and is part of a single
coordinated plan to disposal. A non-current asset or a disposal
group is held for disposal if its carrying amount will be recovered
principally through a sale transaction rather than through con-
tinuing use.
Impairment of property, plant and equipment and other
intangible assets - The Company reviews property, plant and
equipment and other intangible assets for impairment whenever
events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. In addition, intangi-
ble assets not yet available for use are subject to an annual im-
pairment test. Impairment testing of property, plant and equip-
ment and other intangible assets involves the use of estimates in
determining the assets' recoverable amount which can have a
material impact on the respective values and ultimately the
amount of any impairment.
5 to 10 years
generally 5 years
generally 3 to 5 years
5 to 10 years
20 to 50 years
Associates - Associates are companies over which Siemens has
the ability to exercise significant influence over operating and
financial policies (generally through direct or indirect ownership
of 20% to 50% of the voting rights). These are recorded in the
Consolidated Financial Statements using the equity method and
are initially recognized at cost. Siemens' share of its associate's
post-acquisition profits or losses is recognized in the Consoli-
dated Statements of Income, and its share of post-acquisition
changes in equity that have not been recognized in the associ-
ate's profit or loss is recognized directly in equity. The cumula-
tive post-acquisition changes are adjusted against the carrying
amount of the investment in the associate. When Siemens'
share of losses in an associate equals or exceeds its interest in
the associate, Siemens does not recognize further losses, unless
it incurs obligations or makes payments on behalf of the associ-
ate. The interest in an associate is the carrying amount of the
investment in the associate together with any long-term inter-
ests that, in substance, form part of Siemens' net investment in
the associate.
interest. Non-controlling interests are measured at the propor-
tional fair value of assets acquired and liabilities assumed (partial
goodwill method). If there is no loss of control, transactions with
non-controlling interests are accounted for as equity transactions
not affecting profit and loss. At the date control is lost, any re-
tained equity interests are remeasured to fair value. In case of a
written put option on non-controlling interests the Company as-
sesses whether the prerequisites for the transfer of present own-
ership interest are fulfilled at the balance sheet date. If the Com-
pany is not the beneficial owner of the shares underlying the put
option, the exercise of the put option will be assumed at each
balance sheet date and treated as equity transaction between
shareholders with the recognition of a purchase liability at the
respective exercise price. The non-controlling interests partici-
pate in profits and losses during the reporting period.
Business combinations - Cost of an acquisition is measured at
the fair value of the assets given and liabilities incurred or as-
sumed at the date of exchange. Identifiable assets acquired and
liabilities assumed in a business combination (including contin-
gent liabilities) are measured initially at their fair values at the
acquisition date, irrespective of the extent of any non-controlling
Basis of consolidation - The Consolidated Financial Statements
include the accounts of Siemens AG and its subsidiaries over
which the Company has control. Siemens controls an investee if
it has power over the investee. In addition, Siemens is exposed
to, or has rights to, variable returns from the involvement with
the investee and Siemens has the ability to use its power over the
investee to affect the amount of Siemens' return.
(934)
193
193
(3,098)
(184)
(2,914)
2,409
(78)
2,487
149
685
(1,084)
6,179
133
6,046
34,816
605
34,211
(3,605)
(148)
1,160
909
34,816
605
34,211
(934)
(148)
(934)
1,541
Certain of these accounting policies require critical accounting
estimates that involve complex and subjective judgments and
the use of assumptions, some of which may be for matters that
are inherently uncertain and susceptible to change. Such critical
accounting estimates could change from period to period and
have a material impact on the Company's results of operations,
financial positions and cash flows. Critical accounting estimates
could also involve estimates where Siemens reasonably could
have used a different estimate in the current accounting period.
Siemens cautions that future events often vary from forecasts
and that estimates routinely require adjustment.
NOTE 2 Significant accounting policies
and critical accounting estimates
Siemens is a German based multinational technology company
with core activities in the fields of electrification, automation and
digitalization.
Siemens prepares and reports its Consolidated Financial State-
ments in euros (€). Due to rounding, numbers presented may not
add up precisely to totals provided.
The accompanying Consolidated Financial Statements present
the operations of Siemens Aktiengesellschaft with registered of-
fices in Berlin (registry number HRB 12300) and Munich (registry
number HRB 6684), Germany, and its subsidiaries (the Company
or Siemens). They have been prepared in accordance with Inter-
national Financial Reporting Standards (IFRS), as adopted by the
European Union as well as with the additional requirements set
forth in Section 315 a (1) of the German Commercial Code (HGB).
The financial statements are in accordance with IFRS as issued by
the International Accounting Standards Board (IASB). The Consol-
idated Financial Statements were authorized for issue by the
Managing Board on November 27, 2017.
NOTE 1 Basis of presentation
B.6 Notes to Consolidated Financial Statements
Consolidated Financial Statements 63
44,527
1,438
43,089
(3,196)
1
1,845
(175)
48
51
(3)
(20)
(8)
(11)
3,393
919
2,473
1,541
1,342
(98)
Dividends
Effect of changes in exchange rates on cash and cash equivalents
27,454
35,696
5,890
6,368
2,550
2,550
Treasury shares, at cost
Other components of equity
Retained earnings
Capital reserve
Issued capital
1,671
18
89,278
47,986
45,884
2,471
2,445
1,142
902
Equity
Total liabilities
Total non-current liabilities
Other liabilities
90,901
1,921
(3,196)
(3,605)
Interest (income) expenses, net
Income tax expenses
Amortization, depreciation and impairments
Adjustments to reconcile net income to cash flows from operating activities - continuing operations
Income from discontinued operations, net of income taxes
5,584
6,179
Net income
Cash flows from operating activities
2016
2017
Fiscal year
(in millions of €)
B.4 Consolidated Statements of Cash Flows
60 Consolidated Financial Statements
34,816
125,717
44,527
133,804
605
68 Consolidated Financial Statements
1,438
(387)
Total equity
Non-controlling interests
34,211
43,089
Total equity attributable to shareholders of Siemens AG
Other financial liabilities
5,087
4,579
829
1,933
1,444
Other current financial liabilities
8,048
9,755
Trade payables
6,206
5,447
15
Short-term debt and current maturities of long-term debt
Liabilities and equity
125,717
133,804
70,388
75,375
1,279
1,498
3,431
2,297
7
Total assets
Total non-current assets
Other assets
Deferred tax assets
20,610
Current provisions
(53)
17
4,166
1,599
13,695
42,916
24,761
26,777
9,582
5677
17
Provisions
Deferred tax liabilities
16
Provisions for pensions and similar obligations
15
Long-term debt
43,394
Total current liabilities
40
97
3
Liabilities associated with assets classified as held for disposal
20,437
20,049
14
Other current liabilities
2,085
2,355
Current income tax liabilities
4,247
(188)
Total liabilities and equity
2,764
(931)
Purchase of treasury shares
Cash flows from financing activities
(4,144)
(7,457)
3,211
262
(1)
Cash flows from investing activities – discontinued operations
(4,406)
(7,456)
(463)
Cash flows from investing activities - continuing operations
931
Disposal of current available-for-sale financial assets
9
(69)
377
542
Disposal of investments, intangibles and property, plant and equipment
(1,356)
(686)
(1,139)
(882)
1,031
Re-issuance of treasury shares and other transactions with owners
1,123
(13)
(2,710)
(1,560)
Cash flows from financing activities - continuing and discontinued operations
Cash flows from financing activities - discontinued operations
(2,710)
(1,560)
Cash flows from financing activities - continuing operations
(236)
(187)
Dividends attributable to non-controlling interests
(2,827)
(2,914)
Dividends paid to shareholders of Siemens AG
(809)
(1,000)
Interest paid
(1,408)
260
Change in short-term debt and other financing activities
(2,253)
(4,868)
Repayment of long-term debt (including current maturities of long-term debt)
5,300
6,958
Issuance of long-term debt
(271)
(500)
Cash flows from investing activities - continuing and discontinued operations
(4,385)
Change in other assets and liabilities
(484)
(482)
20
(799)
Billings in excess of costs and estimated earnings on uncompleted contracts and related advances
Additions to assets leased to others in operating leases
327
306
Trade payables
(1,009)
(579)
148
Trade and other receivables
(1,250)
Inventories
Change in operating net working capital
Other non-cash (income) expenses
(Income) loss related to investing activities
400
(922)
(373)
(329)
(325)
(436)
2,008
2,180
(1,719)
(281)
552
Dividends received
Income taxes paid
Disposal of businesses, net of cash disposed
Change in receivables from financing activities
Purchase of current available-for-sale financial assets
Acquisitions of businesses, net of cash acquired
(2,135)
(2,406)
Additions to intangible assets and property, plant and equipment
Cash flows from investing activities
7,611
7,176
Cash flows from operating activities - continuing and discontinued operations
(57)
Purchase of investments
Cash flows from operating activities - discontinued operations
(50)
(1,718)
(2,039)
302
Interest received
381
1,219
Cash flows from operating activities - continuing operations
7,225
7,668
1,375
15,801
19,737
Total US$ Bonds
1,257
1,500
US$
4.20%/2017/March 2047/US$-fixed-rate-instruments
1,054
1,250
US$
3.40%/2017/March 2027/US$-fixed-rate-instruments
843
1,000
3.125%/2017/March 2024/US$-fixed-rate-instruments
718
850
1.05%/2012/August 2017/US$ fixed-rate instruments
1.65%/2012/August 2019/US$ fixed-rate instruments
US$
US$
US$
31
1,332
US$3m LIBOR+0.61%/2017/March 2022/US$ floating-rate instruments
Consolidated Financial Statements
78
1 Includes adjustments for fair value hedge accounting.
28,554
28,797
2,705
1,249
31
€
33
33
€
3m EURIBOR+0.2% /2015/September 2017/EUR floating-rate instruments
3m EURIBOR+0.2%/2015/September 2017/EUR floating-rate instruments
Total Bonds with Warrant Units
1,309
1,500
1,249 US$
1,500
US$
1,500
8,410
(5,685)
US$
£
395
350
£
2.75%/2012/September 2025/GBP fixed-rate instruments
997
1,000
€
998
1,000
€
1.5%/2012/March 2020/EUR fixed-rate instruments
350
358
US$
339
400
US$
US$3 m LIBOR+1.4%/2012/February 2019/US$ floating-rate instruments
2,028
2,000
€
5.125%/2009/February 2017/EUR fixed-rate instruments
1,719
1,600
€
400
1,649
405
£
US$
447
500
US$
423
500
US$
996
1,000
€
997
1,000
3.75%/2012/September 2042/GBP fixed-rate instruments
€
1,250
€
1,274
1,250
€
2013/June 2020/US$ floating-rate instruments
2014/March 2019/US$ floating-rate instruments
2014/September 2021/US$ floating-rate instruments
Total Debt Issuance Program
1.75%/2013/March 2021/EUR fixed-rate instruments
2.875%/2013/March 2028/EUR fixed-rate instruments
1.5%/2013/March 2018/US$ fixed-rate instruments
3.5%/2013/March 2028/US$ fixed-rate instruments
740
650
£
723
650
1,285
100
1,600
5.625%/2008/June 2018/EUR fixed-rate instruments
1,470
Deferred Income
5,401
5,505
Liabilities to personnel
10,892
10,259
contracts and related advances
estimated earnings on uncompleted
Billings in excess of costs and
2016
2017
1,292
Sep 30,
NOTE 14 Other current liabilities
Item Loans receivable primarily relate to long-term loan transac-
tions of SFS.
260
20,610
19,044
208
Other
3,557
2,293
2,662
2,290
Available-for-sale financial assets
1,784
Derivative financial instruments
3,699
(in millions of €)
€
Accruals for pending invoices
1,175
of €1
(in millions)
of €1
in millions
amount
Carrying
amount
Sep 30, 2016
Currency
Notional
in millions
Carrying
amount
Sep 30, 2017
1,116
amount
(in millions)
(interest/issued/maturity)
NOTES AND BONDS
77
Consolidated Financial Statements
As of September 30, 2017 and 2016, €7.0 billion and €7.1 billion
of lines of credit are unused. The facilities are for general corpo-
rate purposes. The €4.0 billion syndicated credit facility matures
on June 25, 2021. The US$3.0 billion syndicated credit facility ma-
tures on September 27, 2020. The €450 million revolving bilateral
credit facility is unused and was extended from September 2017
to September 2018. As of September 30, 2017, a subsidiary has an
additional unused credit line of €750 million maturing in 2022.
CREDIT FACILITIES
Interest rates in this Note are per annum. In fiscal 2017 and 2016,
weighted-average interest rates for loans from banks, other fi-
nancial indebtedness and obligations under finance leases were
2.9% (2016: 3.9%), 1.0% (2016: 0.5%) and 5.8% (2016: 4.8%),
respectively.
20,437
20,049
1,676
1,698
Other
Currency
Notional
Receivables from finance leases
83
100
983
1,100
984
1,100
308
350
296 US$
930 US$
929 US$
630 US$
750
US$
2.00%/2016/September 2023/US$-fixed-rate-instruments
1,100
US$
750
1.70%/2016/September 2021/US$-fixed-rate-instruments
US$
1.30%/2016/September 2019/US$-fixed-rate-instruments
350
US$
US$3m LIBOR+0.32%/2016/September 2019/US$ floating-rate instruments
1,546
1,750
1,461 US$
1,750
US$
4.40%/2015/May 2045/US$-fixed-rate-instruments
1,336
1,100
1,500
666
US$
4,542
451
(250)
19,413
(8,487)
10,926
(1,281)
Land and bulidings
7,859
(184)
308
188
2.35%/2016/October 2026/US$-fixed-rate-instruments
205
8,129
(3,754)
4,374
(272)
Technical machinery
and equipment
7,950
(170)
323
334
207
(235)
(247)
US$
1,264 US$
US$
6.125%/2006/August 2026/US$ fixed-rate instruments
1,570
1,750
US$
5.75%/2006/October 2016/US$ fixed-rate instruments
10,048
7,812
358
400
US$
339
400
US$
US$
300
US$
254
300
US$
358
400
US$
338
400
US$
87
268
1,500
1,750
1,750
3.25%/2015/May 2025/US$-fixed-rate-instruments
1,564
1,750
1,479 US$
1,750
US$
2.90%/2015/May 2022/US$-fixed-rate-instruments
893
1,000
845 US$
1,000
US$
1,830 US$
2.15%/2015/May 2020/US$-fixed-rate-instruments
1,250
1,058 US$
1,250
US$
1.45%/2015/May 2018/US$-fixed-rate-instruments
448
500
423 US$
500
US$
US$3 m LIBOR+0.28%/2015/May 2018/US$ floating-rate instruments
1,982
1,119
11,838
11,062
Loans receivable
(143)
64
260
(37)
4,725
and similar rights
including patents, licenses
Acquired technology
(189)
1,505
(1,562)
3,067
4,870
(252)
2,995
technology
Internally generated
fiscal 2016
ment in
amount
09/30/2016
tion and
impairment
ments' 09/30/2016
nations Additions fications
amount
Retire-
Reclassi-
324
combi-
(2,974)
(253)
(333)
218
274
20
(65)
7,745
Land and bulidings
(932)
7,742
(7,727)
15,469
(395)
1,896
388
(115)
15,262
Other intangible assets
(490)
4,341
(3,191)
7,532
68
(77)
7,542
and trademarks
Customer relationships
328
7,859
diffe-
rences
(in millions of €)
construction in progress
Advances to suppliers and
(338)
1,295
(1,703)
2,998
(378)
10
443
(92)
3,015
Equipment leased to others
801
(729)
(4,898)
6,435
(532)
157
672
183
(136)
6,092
equipment
Furniture and office
(588)
2,724
1,537
10/01/2015
(25)
796
Carrying and impair-
Deprecia-
tion/amor-
tization
Accumu-
lated depre-
ciation/
amortiza-
Gross
carrying
business
lation
through
Trans-
Gross
carrying
amount
Additions
1 Included assets reclassified to Assets classifed as held for disposal and dispositions of those entites.
(1,930)
78
10,977
(1,416) 27,017
2,432
891
(607)
25,717
and equipment
Property, plant
(3)
1,047
1,046
(23)
(580)
(16,041)
(3,673)
4,186
(253)
817
675
ness (maturing until 2029)
Sep 30,
Other financial indebted-
992
1,334
380
1,191
(maturing until 2027)
Loans from banks
23,560
111
25,243
3,554
(maturing until 2047)
2016
2017
2016
2017
Sep 30,
Non-current debt
Current debt
Sep 30,
(in millions of €)
Notes and bonds
NOTE 15 Debt
Minimum future lease payments under operating leases are:
4,994
The gross carrying amount of Advances to suppliers and con-
struction in progress includes €908 million and €677 million, re-
spectively of property, plant and equipment under construction
in fiscal 2017 and 2016. As of September 30, 2017 and 2016, con-
tractual commitments for purchases of property, plant and
equipment are €665 million and €643 million, respectively.
87
2017
Sep 30,
2016
2017
(in millions of €)
NOTE 13 Other financial assets
1,099
1,124
85
101
More than five years
24,761
26,777
123
(in millions of €)
88
5,447
27
Total debt
689
679
After one year but not more than five years
finance leases
326
344
Within one year
Obligations under
2016
15
6,206
Consolidated Financial Statements
76
1 Included assets reclassified to Assets classifed as held for disposal and dispositions of those entites.
3,033
Equipment leased to others
(690)
1,328
(4,764)
6,092
(448)
85
632
22
(29)
5,829
(83)
equipment
(542)
2,539
(5,412)
7,950
(271)
270
288
(39)
(67)
7,770
and equipment
Technical machinery
Furniture and office
23
484
10
(1,831)
10,157
(15,560)
(1,516) 25,717
2,273
(14)
(260)
25,234
and equipment
Property, plant
2
799
(2)
801
(12)
(582)
595
(40)
(16)
856
construction in progress
Advances to suppliers and
(348)
1,305
(1,710)
3,015
(452)
(799)
1,000
15,469
(624)
2,295
As of September 30, 2017 and 2016, €1,361 million and €953 mil-
lion of the unrecognized tax loss carryforwards expire over the
periods to 2031.
Siemens has not recognized deferred tax liabilities for income
taxes or foreign withholding taxes on the cumulative earnings of
subsidiaries of €36,157 million and €26,585 million, respectively
in fiscal 2017 and 2016 because the earnings are intended to be
permanently reinvested in the subsidiaries.
Expected income tax expenses
Increase (decrease) in
income taxes resulting from:
Non-deductible losses and expenses
558
Tax-free income
(309)
600
(227)
Taxes for prior years
2,575
(8)
Change in realizability of
deferred tax assets and tax credits
(197)
Change in tax rates
(9)
Foreign tax rate differential
(371)
(44)
(15)
(280)
Tax effect of investments accounted
for using the equity method
(62)
Other, net
(223)
3
2,201
Fiscal year
2016
874
930
218
120
9,006
8,638
698
2,602
The current income tax expenses in fiscal 2017 and 2016 include
adjustments recognized for current tax of prior years in the
amount of €100 million and €(29) million, respectively. The de-
ferred tax expense (benefit) in fiscal 2017 and 2016 includes tax
effects of the origination and reversal of temporary differences
of €172 million and €54 million, respectively.
In Germany, the calculation of current tax is based on a combined
tax rate of 31%, consisting of a corporate tax rate of 15%, a solidar-
ity surcharge thereon of 5.5% and an average trade tax rate of
15%. For foreign subsidiaries, current taxes are calculated based
on the local tax laws and applicable tax rates in the individual for-
eign countries. Deferred tax assets and liabilities in Germany and
abroad are measured at the tax rates that are expected to apply to
the period when the asset is realized or the liability is settled.
Income tax expense (current and deferred) differs from the
amounts computed by applying a combined statutory German
income tax rate of 31% as follows:
Other
4,416
Deferred tax liabilities
Total deferred tax assets, net
Deferred tax assets have not been recognized with respect of the
following items (gross amounts):
(in millions of €)
Sep 30,
(in millions of €)
2017
2016
Deductible temporary differences
Tax loss carryforward
743
188
3,673
2,013
2017
As of September 30, 2017, the Company has certain tax losses
subject to significant limitations. For those losses deferred tax
assets are not recognized, as it is not probable that gains will be
generated to offset those losses.
7,588
Actual income tax expenses
(92)
(6)
2,008
1,084
(996)
3,269
1,010
NOTE 8
Trade and other receivables
The following table shows a reconciliation of minimum future
lease payments to the gross and net investment in leases and
to the present value of the minimum future lease payments
receivable:
Sep 30,
(in millions of €)
2017
Sep 30,
2016
(in millions of €)
Income and expenses recognized
directly in equity
2017
Minimum future lease payments
6,510
6,488
Trade receivables from the sale
of goods and services
Plus: Unguaranteed residual values
222
219
15,242
14,280
Gross investment in leases
6,732
6,706
2016
2,180
6,488
(2)
72
22
Consolidated Financial Statements
Including items charged or credited directly to equity and the
expense (benefit) from continuing and discontinued operations,
the income tax expense (benefit) consists of the following:
Minimum future lease payments to be received are as follows:
Sep 30,
(in millions of €)
2017
2016
Fiscal year
Within one year
2,340
6,510
2,378
2017
2016
Continuing operations
2,180
2,008
After one year but not more than five years
More than five years
3,436
3,358
734
752
Discontinued operations
5
(in millions of €)
Receivables from finance leases
7,914
Liabilities
periods beginning on or after January 1, 2019. Siemens will adopt
the standard for the fiscal year beginning as of October 1, 2019,
presumably by applying the modified retrospective approach, i.e.
comparative figures for the preceding year would not be ad-
justed. Currently, it is expected that the majority of the transition
effect relates to real estate leased by Siemens. The Company is
currently assessing the impact of adopting IFRS 16 on the Consol-
idated Financial Statements.
In May 2017, the IASB issued IFRIC 23, Uncertainty over Income
Tax Treatments. The interpretation clarifies the recognition and
measurement requirements when there is uncertainty over in-
come tax treatments. In assessing the uncertainty, an entity shall
consider whether it is probable that a taxation authority will ac-
cept the uncertain tax treatment. IFRIC23 is effective for annual
reporting periods beginning on or after January 1, 2019, while
earlier application is permitted. The Company is currently assess-
ing the impacts of adopting the interpretation on the Company's
Consolidated Financial Statements.
NOTE 3
Acquisitions and dispositions
ACQUISITIONS
In April 2017, Siemens contributed its wind power business, in-
cluding service, into the publicly listed company Gamesa Corpo-
ración Tecnológica, S.A., Spain (Gamesa), and in return received
newly issued shares of the combined entity Siemens Gamesa
Renewable Energy, S.A., Spain (SGRE). The two businesses are
highly complementary regarding global footprint, existing prod-
uct portfolios and technologies. Siemens as majority share-
holder holds 59% of the shares of the combined entity. As part of
the merger, Siemens paid €999 million in cash which was distrib-
uted to the Gamesa shareholders (without Siemens) following
the completion of the merger. The consideration transferred by
Siemens equals 59% of Gamesa's market capitalization at closing
of the merger and amounts to €3,669 million. The preliminary
purchase price allocation as of the acquisition date resulted in:
Other intangible assets €2,533 million, Property, plant and equip-
ment €628 million, Trade and other receivables €1,073 million,
Cash and cash equivalents €1,003 million, Inventories €1,116 mil-
lion, Other financial assets €413 million (current and non-cur-
rent), Other current assets €206 million, Current income tax as-
sets €179 million, Deferred tax assets €432 million, Long-term
debt €656 million, Provisions €1,229 million (current and non-cur-
rent), Other financial liabilities €217 million, Short-term debt and
current maturities of long-term debt €363 million, Trade payables
€1,745 million, Current income tax liabilities €118 million, Other
current liabilities €662 million and Deferred tax liabilities
€824 million. Intangible assets mainly relate to technology of
€1,147 million, customer relationships of €958 million and order
backlog of €429 million. The gross contractual amount of the
trade and other receivables acquired is €1,137 million. Goodwill
amounts to €2,625 million and comprises intangible assets that
are not separable such as employee know-how and expected syn-
ergy effects from highly complementary businesses entailing an
enhanced market position (including anticipated cost savings
mainly in R&D, procurement and administration as well as reve-
nue synergies). The purchase price allocation is preliminary as a
detailed analysis of the assets and liabilities has not been final-
ized. Goodwill is allocated within the segment SGRE to the units
Wind Turbines as well as Operation and Maintenance. Effects on
equity resulting from this transaction are included in line Changes
in equity resulting from major portfolio transactions. Including
earnings effects from purchase price allocation and integration
costs, the acquired business contributed revenue of €1,659 mil-
lion and a net income of €(209) million to Siemens for the period
from acquisition to September 30, 2017. The non-controlling in-
terests of 41% amount to €721 million at the acquisition date and
are measured at the proportionate share in the recognized
amounts of the acquired net assets (excluding goodwill).
In March 2017, Siemens acquired all shares of Mentor Graphics
Corporation, U.S., a design automation and industrial software
provider. The acquired business is integrated in the Digital Fac-
tory Division. The purchase price paid in cash amounts to
€4,063 million as of the acquisition date. The preliminary pur-
chase price allocation as of the acquisition date resulted in: Other
intangible assets €1,878 million, Property, plant and equipment
€252 million, Trade and other receivables €657 million, Cash and
cash equivalents €369 million, Deferred tax assets €86 million,
Current liabilities €809 million and Deferred tax liabilities
€318 million. Other intangible assets mainly relate to technology
of €1,482 million and customer-related intangible assets of
€362 million. Goodwill of €1,865 million comprises intangible
assets that are not separable such as employee know-how and
expected synergy effects from expanding our software business
and from expanding our role in the digital sector. The purchase
price allocation is preliminary as a detailed analysis of the assets
and liabilities has not been finalized. Compared to the status of
the purchase price allocation as of the end of the second quarter
of fiscal year 2017, the fair value of the acquired technology in-
creased at the amount of €472 million based on further analysis
on the underlying useful life and royalty rate. Including earnings
effects from purchase price allocation and integration costs, the
acquired business contributed revenue of €404 million and a net
income of €(239) million to Siemens for the period from acquisi-
tion to September 30, 2017.
Revenue and net income of the combined entity in fiscal 2017
Iwould have been €86,761 million and €5,774 million, respec-
tively, had both acquired businesses been included as of Octo-
ber 1, 2016.
70
Consolidated Financial Statements
DISPOSITIONS
Consolidated Financial Statements 69
Dispositions not qualifying for discontinued
operations closed transactions
In December 2016, Siemens contributed its eCar powertrain sys-
tems business - formerly included in the Digital Factory Division -
into a newly formed joint venture, Valeo Siemens eAutomotive
GmbH. Siemens recognized a pre-tax gain on disposal of €173 mil-
lion in Other operating income, thereof €159 million relating
to measuring Siemens' stake in the joint venture at fair value.
Siemens' 50% stake in the joint venture is disclosed in Centrally
managed portfolio activities.
NOTE 4 Interests in other entities
Investments accounted for using the equity method
(in millions of €)
Fiscal year
2016
316
2017
Share of profit (loss), net
224
Gains (losses) on sales, net
63
Impairment and reversals of impairment
(243)
-
(53)
(129)
In January 2016, the IASB issued IFRS 16, Leases. IFRS 16 elimi-
nates the current classification model for lessee's lease contracts
as either operating or finance leases and, instead, introduces a
single lessee accounting model requiring lessees to recognize
right-of-use assets and lease liabilities for leases with a term of
more than twelve months. This brings the previous off-balance
leases on the balance sheet in a manner largely comparable to
current finance lease accounting. IFRS 16 is effective for annual
the effects of the adoption of IFRS 9 and expects only limited
impact on the Consolidated Financial Statements: Debt instru-
ments that would not be eligible to be carried at amortized cost
are expected to occur only to an insignificant extent. The impact
of the new impairment model of IFRS 9 on the valuation allow-
ances on debt instruments is currently under evaluation. Based
on the analyses so far, Siemens does not expect the valuation
allowances to change significantly. Siemens will adopt the IFRS 9
hedge accounting rules prospectively from October 1, 2018. It is
expected that all existing hedge accounting relationships will
also meet the hedge accounting requirements under IFRS 9.
2.70%/2017/March 2022/US$-fixed-rate-instruments
930
1,100
US$
2.20%/2017/March 2020/US$-fixed-rate-instruments
677
800
US$
US$3m LIBOR+0.34%/2017/March 2020/US$ floating-rate instruments
887
1,000
838 US$
In May 2014, the IASB issued IFRS 15, Revenue from Contracts
with Customers. According to the new standard, revenue is rec-
ognized to depict the transfer of promised goods or services to a
customer in an amount that reflects the consideration to which
the Company expects to be entitled in exchange for those goods
or services. Revenue is recognized when, or as, the customer ob-
tains control of the goods or services. IFRS 15 supersedes IAS 11,
Construction Contracts and IAS 18, Revenue as well as related
interpretations. The standard is effective for annual periods be-
ginning on or after January 1, 2018; early application is permit-
ted. The Company will adopt the standard for the fiscal year be-
ginning as of October 1, 2017 retrospectively, i.e. the comparable
period will be presented in accordance with IFRS 15. Further as-
sessments resulting from the implementation of IFRS 15 con-
firmed that there will be no significant impacts on Siemens' Con-
solidated Financial Statements. Retained earnings as of October 1,
2016 will increase by €0.18 billion. The increase mainly results
from a change in the timing of recognizing revenue for certain
types of contracts, in particular, revenue may be recognized ear-
lier if variable consideration components exist, re-allocations of
the transaction price between performance obligations take
place or licenses are transferred to the customer. In the compa-
rable period fiscal 2017, changes in the total amount of revenue
to be recognized for a customer contract are very limited. The
vast majority of construction-type contracts currently accounted
for under the percentage-of-completion method fulfills the re-
quirements for revenue recognition over time. Besides, there will
be changes to the Statement of Financial Position, e.g. separate
line items for contract assets and contract liabilities are required,
and quantitative and qualitative disclosures are added.
1,000
3.30%/2016/September 2046/US$-fixed-rate-instruments
1,517
1,700
1,431 US$
1,700
Fair value hedges: The carrying amount of the hedged item is
adjusted by the gain or loss attributable to the hedged risk.
Where an unrecognized firm commitment is designated as
hedged item, the subsequent cumulative change in its fair value
is recognized as a separate financial asset or liability with corre-
sponding gain or loss recognized in net income. For hedged
items carried at amortized cost, the adjustment is amortized un-
til maturity of the hedged item. For hedged firm commitments
the initial carrying amount of the assets or liabilities that result
from meeting the firm commitments are adjusted to include the
cumulative changes in the fair value that were previously recog-
nized as separate financial assets or liabilities.
Cash flow hedges: The effective portion of changes in the fair
value of derivative instruments designated as cash flow hedges
are recognized in line item Other comprehensive income, net of
income taxes (applicable deferred income tax), and any ineffec-
tive portion is recognized immediately in net income. Amounts
accumulated in equity are reclassified into net income in the
same periods in which the hedged item affects net income.
Share-based payment Share-based payment awards at
Siemens are predominately designed as equity-settled. Fair value
is measured at grant date and is expensed over the vesting pe-
riod. Fair value is determined as the market price of Siemens
shares, considering dividends during the vesting period the
grantees are not entitled to and market conditions and non-vest-
ing conditions, if applicable.
Prior-year information - The presentation of certain prior-year
information has been reclassified to conform to the current year
presentation.
RECENT ACCOUNTING PRONOUNCEMENTS,
NOT YET ADOPTED
The following pronouncements, issued by the IASB, are not yet
effective and have not yet been adopted by the Company:
In July 2014, the IASB issued IFRS 9, Financial Instruments. IFRS 9
introduces a single approach for the classification and measure-
ment of financial assets according to their cash flow characteris-
tics and the business model they are managed in, and provides a
new impairment model based on expected credit losses. IFRS 9
also includes new regulations regarding the application of hedge
accounting to better reflect an entity's risk management activi-
ties especially with regard to managing non-financial risks. The
new standard is effective for annual reporting periods beginning
on or after January 1, 2018. The Company will adopt IFRS 9 for the
fiscal year beginning as of October 1, 2018 and will not adjust
comparative figures for the preceding fiscal year, in accordance
with IFRS 9 transitional provisions. Siemens is currently assessing
US$
Non-current and current assets
Liabilities
Income (loss) from
using the equity method, net
(in millions of €)
Sep 30,
2017
2016
2017
2016
Assets
2,042
1,773
Non-current and current assets
1,829
1,836
Fiscal year
138
2,180
Liabilities and Post-employment benefits
6,799
8,742
Other
288
114
Tax loss and credit carryforward
788
547
Deferred tax assets
9,704
11,240
235
2,008
investments accounted for
Income tax expenses
Current tax
43
134
Income from investments accounted for using the equity method
includes an impairment loss of €230 million in fiscal 2017 relat-
ing to Siemens' investment in Primetals Technologies Ltd., which
is disclosed within Centrally managed portfolio activities. The
continuing adverse conditions in the market environment trig-
gered an impairment test on the investment. The recoverable
amount of €204 million was determined based on a discounted
cash flow calculation (level 3 of the fair value hierarchy). To de-
termine the recoverable amount, cash flow projections were
used that take into account past experience and represent man-
agement's best estimate about future developments. The calcu-
lation is based on a terminal value growth rate of 1.5% and an
after-tax discount rate of 7.4%.
(in millions of €)
Income (loss) from continuing operations
Other comprehensive income,
net of income taxes
Total comprehensive income
SUBSIDIARIES WITH MATERIAL
NON-CONTROLLING INTERESTS
Fiscal year
2017
2016
227
288
8
Deferred tax
(31)
257
As of September 30, 2017, non-controlling interests of 41%
amounting to €788 million relate to SGRE, registered in Zamudio,
Spain. Net income attributable to non-controlling interests
for the six month period from acquisition to September 30, 2017
was €(39) million. Dividends paid to non-controlling interests
amounted to €31 million. Summarized financial information in
accordance with IFRS before inter-company eliminations are: As
of September 30, 2017 current assets €6,963 million, non-cur-
rent assets €9,504 million, current liabilities €6,891 million,
non-current liabilities €3,126 million and equity €6,450 million;
for the six month period from acquisition to September 30, 2017
revenue €5,022 million, income from continuing operations
€(135) million, other comprehensive income, net of income
taxes €(75) million, total comprehensive income €(210) million
and total cash flows €(1,611) million (including €999 million in
cash distribution to the Gamesa shareholders (without Siemens)
as part of the merger).
NOTE 5 Other operating income
In fiscal 2017 and 2016, Other operating income includes gains
related to the sale of businesses of €172 million and €1 million
and gains on sales of property, plant and equipment of €176 mil-
lion and €177 million, respectively. Fiscal 2017 includes gains of
€171 million from reversals of provisions for guarantees related
to a previous divestment.
As of September 30, 2017 and 2016, the carrying amount of all
individually not material associates amounts to €1,836 million
and €2,242 million, respectively. Summarized financial informa-
tion for all individually not material associates adjusted for the
percentage of ownership held by Siemens, is presented below.
Items included in the Statements of Comprehensive Income are
presented for the twelve month period applied under the equity
method.
NOTE 6 Other operating expenses
Other operating expenses in fiscal 2017 and 2016 include losses
on sales of property, plant and equipment, losses from the sale
of businesses, transaction costs and effects from insurance, legal
and regulatory matters.
Consolidated Financial Statements 71
NOTE 7 Income taxes
Income tax expense (benefit) consists of the following:
Deferred income tax assets and liabilities on a gross basis are
summarized as follows:
(in millions of €)
235
1,919
2,007
Less: Unearned finance income
1.7%
8.5%
5,575
1.7%
8.5%
Revenue figures in the five-year planning period of the groups of
cash-generating units to which a significant amount of goodwill is
allocated include average revenue growth rates (excluding portfolio
effects) of between 0.1% and 9.1% (0.3% and 5.3% in fiscal 2016).
(in millions of €)
Healthineers
Digital Factory
Power and Gas (without part of Power Generation Services)
Power Generation Services (part of Power and Gas)
Terminal value
6,440
Goodwill
Sep 30, 2016
After-tax
discount rate
8,301
1.7%
6.5%
3,933
1.7%
8.0%
3,552
1.7%
8.0%
3,158
1.7%
growth rate
8.0%
7.0%
7,992
2
Impairment losses recognized during the period
1
Dispositions and reclassifications to assets classified as held for disposal
Balance at year-end
(1)
1
1,847
1,909
Carrying amount
Balance at beginning of year
Balance at year-end
24,159
1.7%
23,166
24,159
74
Consolidated Financial Statements
Siemens performs the mandatory annual impairment test in the
three months ended September 30. The recoverable amounts for
the annual impairment test 2017 for Siemens' cash-generating
units or groups of cash-generating units were estimated to be
higher than the carrying amounts. Key assumptions on which
Siemens based its determinations of the fair value less costs to
sell for the cash-generating units or groups of cash-generating
units include terminal value growth rates up to 1.7% in fiscal 2017
and 1.7% in fiscal 2016, respectively and after-tax discount rates
of 6.0% to 8.5% in fiscal 2017 and 5.0% to 9.0% in fiscal 2016.
For the purpose of estimating the fair value less costs to sell of
the cash-generating units or groups of cash-generating units,
cash flows were projected for the next five years based on past
experience, actual operating results and management's best es-
timate about future developments as well as market assump-
tions. The determined fair value of the cash-generating units or
groups of cash-generating units is assigned to level 3 of the fair
value hierarchy.
The fair value less costs to sell is mainly driven by the terminal
value which is particularly sensitive to changes in the assump-
tions on the terminal value growth rate and discount rate. Both
assumptions are determined individually for each cash-gener-
ating unit or group of cash-generating units. Discount rates are
based on the weighted average cost of capital (WACC) for the
cash-generating units or groups of cash-generating units (for
SFS the discount rate represents cost of equity). The discount
rates are calculated based on a risk-free rate of interest and a
market risk premium. In addition, the discount rates reflect the
current market assessment of the risks specific to each
cash-generating unit or group of cash-generating units by tak-
ing into account specific peer group information on beta fac-
tors, leverage and cost of debt. The parameters for calculating
the discount rates are based on external sources of information.
The peer group is subject to an annual review and adjusted, if
necessary. Terminal value growth rates take into consideration
external macroeconomic sources of data and industry specific
trends.
The following table presents key assumptions used to determine
fair value less costs to sell for impairment test purposes for the
groups of cash-generating units to which a significant amount of
goodwill is allocated:
(in millions of €)
Healthineers
Power and Gas
Digital Factory
Goodwill
Terminal value
growth rate
Sep 30, 2017
After-tax
discount rate
27,906
(61)
The sensitivity analysis for the groups of cash-generating units to
which a significant amount of goodwill is allocated was based on
a reduction in after-tax future cash flows by 10% or an increase
in after-tax discount rates by one percentage point or a reduction
Consolidated Financial Statements 75
(138)
3,224
(1,594)
1,630
(203)
Acquired technology
including patents, licenses
and similar rights
4,870
(272)
2,717
77
374
(73)
(3,264)
4,056
(454)
Customer relationships
and trademarks
7,532
(447)
1,825
(39)
8,870
(3,629)
5,240
7,320
in the terminal value growth rate by one percentage point.
Siemens concluded that no impairment loss would need to be
recognized on goodwill in any of the groups of cash-generating
units.
(79)
technology
NOTE 12 Other intangible assets and
property, plant and equipment
Additions
Gross
carrying
Trans-
lation
through
business
Gross
carrying
amount
diffe-
(in millions of €)
10/01/2016
rences
3,067
combi-
nations Additions
Retire-
amount
ments¹ 09/30/2017
tion and
impairment
Accumu-
lated depre-
ciation/
amortiza-
Carrying
amount
09/30/2017
Deprecia-
tion/amor-
tization
and impair-
ment in
fiscal 2017
Internally generated
Reclassi-
fications
Other intangible assets
Translation differences and other
1,909
933
Increase in valuation allowances
recorded in the Consolidated Statements
(in millions of €)
Within one year
One to five years
Thereafter
2017
2016
2017
2016
2,358
2,397
1,924
1,952
1,013
3,481
3,010
2,940
893
904
566
564
of Income in the current period
404
284
6,732
6,706
5,500
3,405
5,457
beginning of fiscal year
Sep 30,
(934)
(944)
17,160
16,287
Net investment in leases
5,798
5,762
Less: Allowance for doubtful accounts
(180)
(198)
Less: Present value of unguaranteed
residual value
(118)
Valuation allowance as of
(108)
5,500
5,457
In fiscal 2017 and 2016, the long-term portion of receivables from
finance leases is reported in Other financial assets and amounts
to €3,699 million and €3,557 million, respectively.
Changes to the valuation allowance of current and long-term re-
ceivables which belong to the class of financial assets measured
at (amortized) cost are as follows (excluding receivables from
finance leases):
The gross investment in leases and the present value of minimum
future lease payments receivable are due as follows:
Gross investment
in leases
Present value of
minimum future lease
payments receivable
(in millions of €)
2017
Fiscal year
2016
Sep 30,
Present value of minimum future
lease payments receivable
Write-offs charged against the allowance
Recoveries of amounts previously written-off
Foreign exchange translation differences
Reclassifications to line item Assets held for
disposal and dispositions of those entities
Valuation allowance as of fiscal year-end
(155)
35
(181)
(2,506)
19,942
18,160
NOTE 11 Goodwill
(in millions of €)
Cost
Construction contracts, here and as follows, include service con-
tracts accounted for under the percentage of completion method.
The aggregate amount of costs incurred and recognized profits
less recognized losses for construction contracts in progress, as
of September 30, 2017 and 2016 amounted to €88,571 million
and €83,789 million, respectively. Revenue from construction
contracts amounted to €34,280 million and €32,695 million, re-
spectively, for fiscal 2017 and 2016. Advance payments received
on construction contracts in progress were €7,791 million and
€8,749 million as of September 30, 2017 and 2016. Retentions in
connection with construction contracts were €217 million and
€288 million in fiscal 2017 and 2016, respectively.
Fiscal year
2017
2016
Balance at beginning of year
Translation differences and other
(2,966)
26,068
(1,025)
(127)
Acquisitions and purchase accounting adjustments
4,757
1,144
Dispositions and reclassifications to assets classified as held for disposal
(46)
(20)
Balance at year-end
29,754
26,068
Accumulated impairment losses and other changes
Balance at beginning of year
25,071
Advance payments received
20,666
22,907
9
(80)
(33)
(9)
1,208
1,013
Investments in finance leases primarily relate to industrial ma-
chinery, medical equipment, transportation systems, equipment
for information technology and office machines. Actual cash
flows will vary from contractual maturities due to future sales of
finance receivables, prepayments and write-offs.
Consolidated Financial Statements 73
NOTE 9 Other current financial assets
As of September 30, 2017 and 2016, Other current financial assets
include loans receivables of €5,985 million and €4,910 million,
respectively, and derivative financial instruments of €530 million
and €758 million, respectively.
NOTE 10 Inventories
Cost of sales include inventories recognized as expense amount-
ing to €57,171 million and €54,706 million, respectively, in fiscal
2017 and 2016. Compared to prior year, write-downs increased
(decreased) by €15 million and €(3) million as of September 30,
2017 and 2016.
1,905
(in millions of €)
2017
2,955
Work in progress
4,242
Sep 30,
2016
2,487
4,281
Costs and earnings in excess
of billings on uncompleted contracts
10,970
Finished goods and products held for resale
3,951
Advances to suppliers
790
10,046
3,261
591
Raw materials and supplies
843
1,684
1,707
Other¹
Consolidated Financial Statements 81
As in prior year, sensitivity determinations apply the same meth-
odology as applied for the determination of the post-employ-
ment benefit obligation. Sensitivities reflect changes in the DBO
solely for the assumption changed.
The DBO effect of a 10% reduction in mortality rates for all ben-
eficiaries would be an increase of €1,103 million and €1,395 mil-
lion, respectively, as of September 30, 2017 and 2016.
(1,858)
2,107
(1,433)
1,620
(105)
113
(96)
102
Sep 30, 2016
decrease
3,174
(2,774)
increase
Sep 30, 2017
decrease
2,472
Asset Liability Matching Strategies
increase
(2,227)
As a significant risk, the Company considers a decline in the
plans' funded status due to adverse developments of plan assets
and/or defined benefit obligations resulting from changing pa-
rameters. Accordingly, Siemens implemented a risk management
concept aligned with the defined benefit obligations (Asset Lia-
bility Matching). Risk management is based on a worldwide de-
fined risk threshold (value-at-risk). The concept, the value at risk
and the asset development including the investment strategy are
monitored and adjusted on an ongoing basis under consultation
of senior external experts. Independent asset managers are se-
lected based on quantitative and qualitative analysis, which in-
cludes their performance and risk evaluation. Derivatives are
used to reduce risks as part of risk management.
Sep 30,
2016
Alternative investments
10,899
9,823
Corporate bonds
5,496
5,407
Government bonds
16,395
15,230
Fixed income securities
5,206
4,716
Equity securities
2017
(in millions of €)
Disaggregation of plan assets
(in millions of €)
Discount rate
Rate of compen-
sation increase
Rate of pension
progression
The discount rate was derived from high-quality corporate bonds
with an issuing volume of more than 100 million units in the re-
spective currency zones, which have been awarded an AA rating
(or equivalent) by at least one of the three rating agencies
Moody's Investor Service, Standard & Poor's Rating Services or
Fitch Ratings.
Effect on DBO due to a one-half percentage-point
13,486
Germany
21,986
25,460
14,622
15,275
7,364
10,184
U.S.
U.K.
CH
Other countries
4,189
4,859
3,031
9,265
119
62
28,809
A one-half-percentage-point change of the above assumptions
would result in the following increase (decrease) of the DBO:
Sensitivity analysis
2.9%
3.0%
1.4%
1.4%
U.K.
4,016
Germany
1.5%
1.5%
3.6%
3.7%
Compensation increase
U.K.
CH
42,176
27,668
Pension progression
3,347
3,622
2,028
(2,049)
(486)
(10)
(393)
(1,160)
Usage
3,069
585
6
658
1,820
Additions
5,087
796
1,593
Reversals
675
(972)
(316)
Other changes
(542)
(1)
(533)
(1)
(6)
Accretion expense and effect of changes in discount rates
(137)
(24)
(3)
(33)
(77)
Translation differences
(2,020)
(532)
(200)
2,022
9,253
1,877
Future cash flows
Virtually all equity securities have quoted prices in active markets.
The fair value of fixed income securities is based on prices pro-
vided by price service agencies. The fixed income securities are
traded in highly liquid markets and almost all fixed income securi-
ties are investment grade. Alternative investments mostly include
hedge funds; additionally, private equity and real estate invest-
ments are included. Multi strategy funds mainly comprise abso-
lute return funds and diversified growth funds that invest in vari-
ous asset classes within a single fund and aim to stabilize return
and reduce volatility. Derivatives predominantly consist of finan-
cial instruments for hedging interest rate risk and inflation risk.
28,809
27,668
Total
928
811
Other assets
465
578
Cash and cash equivalents
497
290
Derivatives
1,696
Employer contributions expected to be paid to defined benefit
plans in fiscal 2018 are €826 million. Over the next ten fiscal
years, average annual benefit payments of €1,843 million and
€1,908 million, respectively, are expected as of September 30,
2017 and 2016. The weighted average duration of the DBO for
Siemens defined benefit plans was 13 years as of September 30,
2017 and 14 years as of September 30, 2016.
DEFINED CONTRIBUTION PLANS AND STATE PLANS
The amount recognized as expense for defined contribution plans
amounts to €686 million and €676 million in fiscal 2017 and 2016,
respectively. Contributions to state plans amount to €1,450 mil-
lion and €1,423 million in fiscal 2017 and 2016, respectively.
62
82
1,611
1,517
4,249
Total
Other
obligations
losses and risks
Multi strategy funds
Warranties
Balance as of October 1, 2016
(in millions of €)
retirement
Order related
Asset
NOTE 17 Provisions
Consolidated Financial Statements
Thereof non-current
777
1,158
5,650
523
612
Current service cost
9,737
13,486
214
119
27,296
28,809
36,818
42,176
Balance at begin of fiscal year
Debt Issuance Program - The Company has a program for the
issuance of debt instruments in place under which instruments
up to €15.0 billion can be issued as of September 30, 2017 and
2016, respectively. As of September 30, 2017 and 2016 €7.8 bil-
lion and €9.9 billion in notional amounts were issued and are
outstanding. Siemens redeemed the 5.125% €2.0 billion fixed-
rate instrument at face value as due.
US$ Bonds - In March 2017, Siemens issued instruments totaling
US$7.5 billion (€6.4 billion as of September 30, 2017) in seven
tranches. Siemens redeemed the 5.75% US$1.75 billion fixed-rate
instrument at face value as due.
Bond with Warrant Units - Each of the US$1.5 billion instru-
ments were issued with 6,000 detachable warrants exercisable
until August 1, 2017 (Warrants 2017) and August 1, 2019 (Warrants
2019). As of September 30, 2017, almost all Warrants 2017 and no
Warrants 2019 were exercised. As of September 30, 2017 and
2016, terms for 5,236 Warrants 2019 and 10,661 Warrants, respec-
tively, entitle the holder to receive 1,924.1160 and 1,914.0511
Siemens AG shares per warrant at an exercise price of €97.6255
and €98.1389 per share, respectively; terms for 764 Warrants
2019 and 1,339 warrants, respectively entitle the holder to receive
1,833.0013 and 1,823.4130 Siemens AG shares per warrant as well
as 146.0092 and 151.5630 OSRAM shares, respectively, at an ex-
ercise price of €187,842.81. The number of shares may be ad-
justed under the terms of the warrants. As of September 30, 2017
and 2016, the Warrants 2019 offer option rights to 11.5 million
and the Warrants 2017 and 2019 to 22.8 million Siemens AG
shares, respectively. Siemens redeemed the 1.05% US$1.5 billion
fixed-rate instrument at face value as due. The 3 m EURIBOR+0.2%
€33 million and the 3m EURIBOR+0.2% €31 million floating-rate
instruments were redeemed at face value as due.
612
ASSIGNABLE AND TERM LOANS
523
672
2016
2.4%
1.7%
2.1%
1.0%
3.8%
3.6%
2.8%
2.4%
0.8%
0.4%
The rates of compensation increase and pension progression for
countries with significant effects are shown in the following table.
Inflation effects, if applicable, are included in the assumptions below.
Sep 30,
2017
2016
Interest expenses
As of September 30, 2017 and 2016, two bilateral US$500 million
term loan facilities (in aggregate €847 million and €896 million
respectively) are outstanding until March 26, 2020.
As of September 30, 2017, a subsidiary has loans of €424 million
outstanding maturing in 2018 and 2019 which were subject to
covenants, all of which were complied with.
COMMERCIAL PAPER PROGRAM
Net defined
benefit balance
(1)
(11)
(III)
Fiscal year
Fiscal year
Fiscal year
(1 - 11 +111)
Fiscal year
(in millions of €)
2017
2016
2017
2016
2017
2016
Effects of
asset ceiling
plan assets
Fair value of
Defined benefit
obligation (DBO)
Siemens has a US$9.0 billion (€7.6 billion as of September 30,
2017) commercial paper program in place including US$ extend-
ible notes capabilities. As of September 30, 2017 and 2016,
US$720 million (€610 million) and US$700 million (€627 mil-
lion), respectively, were outstanding. Siemens' commercial pa-
pers have a maturity of generally less than 90 days. Interest rates
ranged from 0.37% to 1.47% in fiscal 2017 and from 0.13% to
0.74% in fiscal 2016.
NOTE 16 Post-employment benefits
DEFINED BENEFIT PLANS
The defined benefit plans open to new entrants are based pre-
dominantly on contributions made by the Company. Only to a
certain extent, those plans are affected by longevity, inflation
and compensation increases and take into account country spe-
cific differences. The Company's major plans are funded with
assets in segregated entities. In accordance with local laws and
bilateral agreements with benefit trusts (trust agreement) those
plans are managed in the interest of the beneficiaries. The de-
fined benefit plans cover 506,000 participants, including 217,000
active employees, 89,000 former employees with vested benefits
and 200,000 retirees and surviving dependents.
Germany:
In Germany, Siemens AG provides pension benefits through the
plan BSAV (Beitragsorientierte Siemens Altersversorgung), fro-
zen legacy plans and deferred compensation plans. The majority
of Siemens' active employees participate in the BSAV. Those ben-
efits are predominantly based on contributions made by the
Company and returns earned on such contributions, subject to a
minimum return guaranteed by the Company. In connection with
the implementation of the BSAV, benefits provided under the
frozen legacy plans were modified to substantially eliminate the
effects of compensation increases. However, these frozen plans
still expose the Company to investment risk, interest rate risk and
longevity risk. The pension plans are funded via contractual trust
arrangements (CTA). In Germany no legal or regulatory minimum
funding requirements apply.
U.S.:
2017
Siemens Corporation sponsors the Siemens Pension Plans, which
for the most part have been frozen to new entrants and to future
benefit accruals, except for interest credits on cash balance ac-
counts. Siemens Corporation has appointed the Investment Com-
mittee as the named fiduciary for the management of the assets
of the Plans. The Plans' assets are held in a Master Trust and the
trustee of the Master Trust is responsible for the administration of
the assets of the trust, taking directions from the Investment Com-
mittee. The Plans are subject to the funding requirements under
the Employee Retirement Income Security Act of 1974 as amended,
(ERISA). There is a regulatory requirement to maintain a minimum
funding level of 80% in the defined benefit plans in order to avoid
benefit restrictions. At its discretion, Siemens Corporation may
contribute in excess of this regulatory requirement. Annual contri-
butions are calculated by independent actuaries.
Siemens plc offers benefits through the Siemens Benefit Scheme for
which, until the start of retirement, an inflation increase of the ma-
jority of accrued benefits is mandatory. The required funding is de-
termined by a funding valuation carried out every third year based
Consolidated Financial Statements 79
on legal requirements. Due to deviating guidelines for the determi-
nation of the discount rates, the technical funding deficit is usually
larger than the IFRS funding deficit. To reduce the deficit Siemens
entered into an agreement with the trustees to provide annual pay-
ments of GB£31 (€34) million until fiscal 2033. The agreement also
provides for a cumulative advance payment by Siemens AG com-
pensating the remaining annual payments at the date of early ter-
mination of the agreement due to cancellation or insolvency.
Switzerland:
Following the Swiss law of occupational benefits (BVG) each em-
ployer has to grant post-employment benefits for qualifying em-
ployees. Accordingly, Siemens in Switzerland sponsors several
cash balance plans. These plans are administered by foundations.
The board of the main foundation is composed of equally many
employer and employee representatives. The board of the foun-
dation is responsible for investment policy and the asset manage-
ment, as well as for any changes in the plan rules and the deter-
mination of contributions to finance the benefits. The Company
is required to make total contributions at least as high as the sum
of the employee contributions set out in the plan rules. In case of
an underfunded plan the Company together with the employees
may be asked to pay supplementary contributions according to a
well-defined framework of recovery measures.
Development of the defined benefit plans
U.K.:
1,512
Sep 30,
GBP
43
Total
36,871
42,176
27,668
28,809
62
32
42
831
964
119
9,265
13,486
thereof provisions for pensions
1,075
and similar obligations
1,126
1,914
6,188
5,883
6,047
14
9
(219)
151
3,131
3,671
3,007
3,064
6
68
130
675
1,997
9,582
13,695
thereof net defined benefit assets
(129)
Changes in financial assumptions
(3,714)
6,506
Experience (gains) losses
Total
(93)
(3,919)
(93)
6,284
Actuarial assumptions
The weighted-average discount rate used for the actuarial valua-
tion of the DBO at period-end was as follows:
Discount rate
EUR
USD
(112)
Changes in demographic assumptions
Fiscal year
2016
2017
(presented in Other assets)
1 Includes past service benefit/costs, settlement gains/losses and administration costs related to liabilities.
80
Consolidated Financial Statements
317
209
Net interest expenses related to provisions for pensions and sim-
ilar obligations amounted to €198 million and €282 million, re-
spectively, in fiscal 2017 and 2016. The DBO is attributable to ac-
tive employees 31% and 33%, to former employees with vested
rights 14% and 15%, to retirees and surviving dependents 54%
and 52%, respectively, in fiscal 2017 and 2016.
CHF
Fiscal 2017 includes a gain of €138 million (€137 million due to
plan amendments in the position "other") in connection with ad-
justed benefit levels for plan participants in Switzerland.
Applied mortality tables are:
Germany
U.S.
U.K.
CH
Heubeck Richttafeln 2005G (modified)
RP-2016 with generational projection from
the US Social Security Administration's
Long Range Demographic Assumptions
SAPS S2 (Standard mortality tables
for Self Administered Pension Schemes
with allowance for future mortality
improvements)
BVG 2015 G
(in millions of €)
The remeasurements comprise actuarial (gains) and losses result-
ing from:
285
5
186
Furthermore, Siemens issues guarantees of third-party perfor-
mance, which mainly include performance bonds and guaran-
tees of advanced payments in a consortium. In the event of
non-fulfillment of contractual obligations by the consortium
partner(s), Siemens will be required to pay up to an agreed-upon
maximum amount. These agreements typically have terms of up
to ten years. Generally, consortium agreements provide for fall-
back guarantees as a recourse provision among the consortium
partners. As of September 30, 2017 and 2016, the Company ac-
crued €3 million and €4 million, respectively, relating to perfor-
mance guarantees.
business. Credit guarantees generally provide that in the event of
default or non-payment by the primary debtor, Siemens will be
required to settle such financial obligations. The maximum
amount of these guarantees is equal to the outstanding balance
of the credit or, in case where a credit line is subject to variable
utilization, the nominal amount of the credit line. These guaran-
tees have residual terms of up to 14 years and 15 years, respec-
tively, in fiscal 2017 and 2016. For credit guarantees amounting
to €189 million and €270 million, respectively, as of Septem-
ber 30, 2017 and 2016, the Company held collateral mainly in the
form of inventories and trade receivables. The Company accrued
€33 million and €73 million relating to credit guarantees as of
September 30, 2017 and 2016, respectively.
(in millions of €)
The following table presents the undiscounted amount of maxi-
mum potential future payments for major groups of guarantees:
NOTE 20 Commitments and
contingencies
A+
A-1+
P-1
A-1+
P-1
Short-term debt
A1
A+
A1
Long-term debt
Service
In addition to guarantees disclosed in the table above, the Com-
pany issued other guarantees. To the extent future claims are not
considered remote, maximum future payments from these obli-
gations amount to €611 million and €853 million as of Septem-
ber 30, 2017 and 2016, respectively. These commitments include
indemnifications issued in connection with dispositions of busi-
nesses. Such indemnifications may protect the buyer from
potential tax, legal and other risks in conjunction with the
purchased business. As of September 30, 2017 and 2016, the ac-
crued amount for such other commitments is €243 million and
€456 million, respectively.
Moody's
Investors
Future payment obligations under non-cancellable operating
leases are:
2017
882
825
Within one year
2016
2017
(in millions of €)
Sep 30,
600
3,718
3,121
200
2016
799
2,319
2,283
Guarantees of third-party performance
Miscellaneous guarantees
639
Credit guarantees
Sep 30,
Ratings
Services
Service
Investors
1 The adjustment considers that both Moody's and S&P view SFS as a captive finance company.
These rating agencies generally recognize and accept higher levels of debt attributable to
captive finance subsidiaries in determining credit ratings. Following this concept, Siemens
excludes SFS Debt in order to derive an industrial net debt which is not affected by SFS's
financing activities.
1.0
0.9
2,764
10,216
3,211
10,946
48
(571)
7,404
8,306
Industrial net debt/EBITDA
Plus/Less: Interest income, interest expenses
and other financial income (expenses), net
Plus: Amortization,
depreciation and impairments
EBITDA
Income from continuing operations
before income taxes
Less: Fair value hedge accounting adjustment²
Industrial net debt
Plus: Credit guarantees
Plus: Provisions for pensions
and similar obligations
2 Debt is generally reported with a value representing approximately the amount to be repaid.
However, for debt designated in a hedging relationship (fair value hedges), this amount is
adjusted for changes in market value mainly due to changes in interest rates. Accordingly,
Siemens deducts these changes in market value in order to end up with an amount of debt
that approximately will be repaid.
84 Consolidated Financial Statements
The SFS business is capital intensive and operates a larger
amount of debt to finance its operations compared to the indus-
trial business.
(in millions of €)
Moody's
Ratings
Services
Sep 30, 2016
Standard &
Poor's
Poor's
Standard &
Sep 30, 2017
Siemens' current corporate credit ratings are:
Item Credit guarantees covers the financial obligations of third
parties generally in cases where Siemens is the vendor and (or)
contractual partner or Siemens is liable for obligations of associ-
ated companies accounted for using the equity method. Addi-
tionally, credit guarantees are issued in the course of the SFS
ness.
2,623
22,418
8.55
2016
Sep 30,
2017
2,607
22,531
8.64
Debt to equity ratio
SFS debt
Allocated equity
Equity allocated to SFS differs from the carrying amount of equity
as it is mainly allocated based on the risks of the underlying busi-
Less: SFS Debt¹
After one year but not more than five years
More than five years
The following table presents the fair values and carrying amounts
of financial assets and financial liabilities measured at cost or
amortized cost for which the carrying amounts do not approxi-
Imate fair value:
As previously reported, in March 2014, Siemens was informed
that in connection with the above mentioned metro and urban
train projects the Public Prosecutor's Office São Paulo has re-
quested criminal proceedings at court into alleged violations of
Brazilian antitrust law against a number of individuals including
current and former Siemens employees. The proceedings con-
tinue; the Public Prosecutor's Office São Paulo has, in the mean-
time, appealed all decisions where the courts denied opening
criminal trials.
As previously reported, in May 2014, the Public Affairs Office
(Ministério Público) São Paulo initiated a lawsuit against Siemens
Ltda. as well as other companies and several individuals claiming,
inter alia, damages in an amount of BRL2.5 billion (approximately
€665 million as of September 2017) plus adjustments for infla-
tion and related interest in relation to train refurbishment con-
tracts entered into between 2008 and 2011. A technical note is-
sued by the Brazilian cartel authority CADE earlier in 2014 had not
identified evidence suggesting Siemens Ltda.'s involvement in
anticompetitive conduct in relation to these refurbishment con-
tracts. In January 2015 the district court of São Paulo admitted a
lawsuit of the State of São Paulo and two customers against
Siemens Ltda., Siemens AG and other companies and individuals
claiming damages in an unspecified amount. In March 2015, the
district court of São Paulo admitted a lawsuit of the Public Affairs
Office (Ministério Público) São Paulo against Siemens Ltda. and
other companies claiming, inter alia, damages in an amount of
BRL487 million (approximately €130 million as of September 2017)
plus adjustments for inflation and related interest in relation to
train maintenance contracts entered into in 2000 and 2002. In
September 2015, the district court of São Paulo admitted another
lawsuit of the Public Affairs Office (Ministério Público) São Paulo
against Siemens Ltda. and other companies claiming, inter alia,
damages in an amount of BRL918 million (approximately €244 mil-
lion as of September 2017) plus adjustments for inflation and
related interest in relation to train maintenance contracts
entered into in 2006 and 2007. Siemens will defend itself against
these actions. It cannot be excluded that further significant
damage claims will be brought by customers or the state against
Siemens.
As previously reported, CADE conducted - unrelated to the above
mentioned proceedings - two further investigations into possible
antitrust behavior in the field of gas-insulated and air-insulated
switchgear from the 1990's to 2006. Siemens cooperated with
the authorities. In February 2017, Siemens AG entered into a set-
tlement agreement with CADE relating to alleged antitrust viola-
tions in the field of gas-insulated switchgear for an amount in a
low single-digit euro million range. In October 2017, Siemens
Ltda. entered into a settlement agreement with CADE relating to
alleged antitrust violations in the field of air-insulated switchgear
for an amount in a mid double-digit euro million range.
As previously reported, in June 2015, Siemens Ltda. once again
appealed to the Supreme Court against a decision confirming
the decision of the previous court to suspend Siemens Ltda.
from participating in public tenders and signing contracts with
public administrations in Brazil for a five year term based on
alleged irregularities in calendar 1999 and 2004 public tenders
with the Brazilian Postal authorities. In July 2015, the court sus-
pended enforcement of the debarment decision pending the
appeal.
As previously reported, the Vienna public prosecutor in Austria
conducted an investigation into payments between calendar
1999 and calendar 2006 relating to Siemens Aktiengesellschaft
Österreich, Austria, for which adequate services rendered could
not be identified. In September 2011, the Vienna public prosecu-
tor extended the investigations to include a tax evasion matter
for which Siemens Aktiengesellschaft Österreich is potentially
liable. In November 2016, the proceedings against Siemens
Aktiengesellschaft Österreich were stopped.
Siemens has received credible information that four gas turbines
intended for a project in Taman, Russia, which were delivered by
000 Siemens Gas Turbines Technologies (SGTT) to its customer
OAO VO TechnoPromExport in summer of 2016 had been al-
legedly brought to Crimea against contractual agreements with
SGTT. Allegedly, these four gas turbines had been sold by OAO
VO TechnoPromExport to OOO VO TechnoProm Export, had then
been locally modified and moved to Crimea, a location under
sanctions. Siemens AG together with SGTT and SGTT separately
have filed lawsuits before the Commercial State Court of Moscow
against OAO VO TechnoProm Export and OOO VO TechnoProm-
Export for the return of the gas turbines. The proceedings are
ongoing.
Consolidated Financial Statements 87
88
Siemens is in the course of its normal business operations in-
volved in numerous Legal Proceedings in various jurisdictions.
These Legal Proceedings could result, in particular, in Siemens
being subject to payment of damages and punitive damages,
equitable remedies or criminal or civil sanctions, fines or dis-
gorgement of profit. In individual cases this may also lead to
formal or informal exclusion from tenders or the revocation or
loss of business licenses or permits. In addition, further Legal
Proceedings may be commenced or the scope of pending Legal
Proceedings may be expanded. Asserted claims are generally
subject to interest rates.
Some of these Legal Proceedings could result in adverse decisions
for Siemens that may have material effects on its financial position,
the results of its operations and/or its cash flows in the respective
reporting period. At present, Siemens does not expect any matters
not described in this Note to have material effects on its financial
position, the results of its operations and/or its cash flows.
For Legal Proceedings information required under IAS 37, Provi-
sions, Contingent Liabilities and Contingent Assets is not dis-
closed if the Company concludes that disclosure can be expected
to seriously prejudice the outcome of the matter.
NOTE 22 Additional disclosures
on financial instruments
The following table discloses the carrying amounts of each cate-
gory of financial assets and financial liabilities:
As previously reported, in May 2013, Siemens Ltda., Brazil
(Siemens Ltda.) entered into a leniency agreement with the Ad-
ministrative Council for Economic Defense (CADE) and other rel-
evant Brazilian authorities relating to possible antitrust violations
in connection with alleged anticompetitive irregularities in metro
and urban train projects, in which Siemens Ltda. and partially
Siemens AG, as well as a number of other companies participated
as contractor. In March 2014, CADE commenced administrative
proceedings, confirming Siemens Ltda.'s immunity from admin-
istrative fines for the reported potential misconduct. In connec-
tion with the above mentioned metro and urban train projects,
several Brazilian authorities initiated investigations relating to
alleged criminal acts (corruptive payments, anti-competitive con-
duct, undue influence on public tenders).
(in millions of €)
misconduct of its former management and agreed to pay a fine
in a low double-digit euro million range.
As previously reported, the Israeli Exchange Supervisory Author-
ity (ISA) concluded its investigation regarding potentially illegal
payments that were allegedly paid to Israeli Electric Compa-
ny-representatives in the early 2000's, and transferred the inves-
tigation files to the Israeli District Attorney (DA) in August 2015,
in order to decide whether or not to take any legal steps against
any of the suspects named in the ISA investigation. Siemens fully
cooperated with the Israeli authorities. In May 2016, the DA filed
criminal charges versus Siemens Israel Ltd. Siemens AG was not
indicted, as it was possible for Siemens AG to conclude a non-
prosecution agreement with the DA that obliged Siemens AG to
pay an amount in the mid double-digit euro million range.
In November 2017, the Israeli Criminal court approved a plea
agreement proposed by the DA and Siemens Israel Ltd. Based on
the plea agreement, Siemens Israel Ltd. was convicted for the
832
870
3,341
3,458
Consolidated Financial Statements 85
86
Total operating rental expenses for the years ended Septem-
ber 30, 2017 and 2016 were €1,242 million and €1,158 million,
respectively.
The Company is jointly and severally liable and has capital contri-
bution obligations as a partner in commercial partnerships and
as a participant in various consortiums.
NOTE 21 Legal proceedings
PROCEEDINGS OUT OF OR IN CONNECTION
WITH ALLEGED BREACHES OF CONTRACT
As previously reported, Siemens AG is a member of a supplier
consortium that has been contracted to construct the nuclear
power plant "Olkiluoto 3" in Finland for Teollisuuden Voima Oyj
(TVO) on a turnkey basis. The agreed completion date for the
nuclear power plant was April 30, 2009. Siemens AG's share of
the contract value is approximately 27%. The other member of
the supplier consortium is a further consortium consisting of
Areva NP S.A.S. and its wholly-owned subsidiary, Areva GmbH.
Completion of the power plant has been delayed for reasons
which are in dispute. In December 2008, the supplier consortium
filed a request for arbitration against TVO demanding an exten-
sion of the construction time, additional compensation, mile-
stone payments, damages and interest. TVO rejected the claims
and asserted counterclaims against the supplier consortium con-
sisting primarily of damages due to the delay. In August 2015,
TVO updated its counterclaims to approximately €2.3 billion. The
supplier consortium's monetary claims as last updated amount
to approximately €3.6 billion. The amounts claimed by the par-
ties do not cover the total period of delay and may be updated
further. In November 2016 a partial award on certain preliminary
questions identified for early treatment was issued. A further par-
tial award on document handling issues was rendered in
July 2017. In this further partial award certain key facts underly-
ing the claims regarding delay and disruption that occurred
during project execution were decided in favor of TVO. Another
partial award on project management issues and the use of ad-
vanced construction methods was rendered in November 2017.
While the Tribunal granted some of TVO's requests, most of TVO's
material allegations in this respect were dismissed or their deci-
sion was deferred to a later stage. None of the partial awards have
dealt with the amounts claimed by the parties. A final arbitration
award on the merits of the claims and counterclaims is expected
during the first half of calendar year 2018.
PROCEEDINGS OUT OF OR IN CONNECTION
WITH ALLEGED COMPLIANCE VIOLATIONS
As previously reported, in July 2008, Hellenic Telecommunica-
tions Organization S.A. (OTE) filed a lawsuit against Siemens AG
with the district court of Munich, Germany, seeking to compel
Siemens AG to disclose the outcome of its internal investigations
with respect to OTE. OTE seeks to obtain information with respect
to allegations of undue influence and/or acts of bribery in con-
nection with contracts concluded between Siemens AG and OTE
from calendar 1992 to 2006. At the end of July 2010, OTE ex-
panded its claim and requested payment of damages by
Siemens AG of at least €57 million to OTE for alleged bribery pay-
ments to OTE employees. In October 2014 OTE increased its dam-
age claim to the amount of at least €68 million. Siemens AG
continues to defend itself against the expanded claim.
As previously reported, in September 2011, the Israeli Antitrust
Authority requested that Siemens present its legal position re-
garding an alleged anti-competitive arrangement between
April 1988 and April 2004 in the field of gas-insulated switchgear.
In September 2013, the Israeli Antitrust Authority concluded that
Siemens AG was a party to an illegal restrictive arrangement re-
garding the Israeli gas-insulated switchgear market between
1988 and 2004, with an interruption from October 1999 to Feb-
ruary 2002. The Company appealed against this decision in
May 2014.
Based on the above mentioned conclusion of the Israeli Antitrust
Authority, two electricity consumer groups filed motions to cer-
tify a class action for cartel damages against a number of compa-
nies including Siemens AG with an Israeli State Court in Septem-
ber 2013. One of the class actions has been dismissed by the
court in fiscal year 2015. The remaining class action seeks com-
pensation for alleged damages amounting to ILS2.8 billion (ap-
proximately €673 million as of September 2017). In addition, the
Israel Electric Corporation (IEC) filed at the end of December 2013
with an Israeli State Court a separate ILS3.8 billion (approxi-
mately €909 million as of September 2017) claim for damages
against Siemens AG and other companies that allegedly formed
a cartel in the Israeli gas-insulated switchgear market. Siemens AG
is defending itself against the actions.
Consolidated Financial Statements
Loans and receivables¹
Cash and cash equivalents
Derivatives designated in a hedge accounting relationship
55,594
43,502
40,591
682
1,190
140
44,325
310
42,091
1 Reported in the following line items of the Statements
of Financial Position: Trade and other receivables, Other
current financial assets and Other financial assets, except
for separately disclosed €2,290 million and €2,662 million
available-for-sale financial assets and €2,314 million and
€3,051 million derivative financial instruments as of
September 30, 2017 and 2016, respectively. Includes
€15,242 million and €14,280 million trade receivables from
the sale of goods and services in fiscal 2017 and 2016,
thereof €918 million and €665 million with a term of more
than twelve months.
2 Includes equity instruments classified as available-for-sale,
for which a fair value could not be reliably measured and
which are therefore recognized at cost.
3 Reported in the following line items of the Statements of
Financial Position: Short-term debt and current maturities of
long-term debt, Trade payables, Other current financial
liabilities, Long-term debt and Other financial liabilities,
except for separately disclosed derivative financial instru-
ments of €823 million and €1,500 million, respectively,
as of September 30, 2017 and 2016.
4 Reported in line items Other current financial liabilities and
Other financial liabilities.
Cash and cash equivalents includes €266 million and €330 mil-
lion as of September 30, 2017 and 2016, respectively, which are
not available for use by Siemens mainly due to minimum reserve
requirements with banks. As of September 30, 2017 and 2016, the
carrying amount of financial assets Siemens has pledged as col-
lateral amounted to €182 million and €214 million, respectively.
54,710
3,955
4,758
2,518
Financial assets held for trading
Available-for-sale financial assets²
Financial assets
Financial liabilities measured at amortized cost³
Financial liabilities held for trading4
Derivatives designated in a hedge accounting relationship4
Financial liabilities
Sep 30,
Consolidated Financial Statements
2017
39,264
37,984
8,375
10,604
379
534
1,935
2016
10,505
9,876
(643)
(1)
7
(134)
40
Other reconciling items
(2,520)
(2,531) (1,411)
(1,777)
(1)
7
(1,109)
(749)
Balance at fiscal year-end
36,871
(1,293)
(792)
(1,242)
(488)
(620)
(160)
Settlement payments
(6)
(53)
(6)
(45)
(8)
Business combinations, disposals and other
22
(10)
15
(9)
6
(2)
Foreign currency translation effects
(758)
Less: Current available-for-sale financial assets
Net debt
(8,375) (10,604)
Less: Cash and cash equivalents
storage, transport to and final storage of the radioactive waste.
This
process will be supported by continuing engineering studies
and radioactive sampling under the supervision of German fed-
eral and state authorities. The decontamination and disassembly
are planned to continue until 2018, whereas final waste condi-
tioning and packaging is planned to continue until the 2020's.
Thereafter, the Company is responsible for intermediate storage
of the radioactive materials until they are transported and
handed over to a final storage facility. With respect to the Hanau
facility, the asset retirement has been completed and inter-
mediate storage has been set up. On September 21, 2006, the
Company received official notification from the authorities that
the Hanau facility has been released from the scope of applica-
tion of the German Atomic Energy Act and that its further use is
unrestricted. The ultimate costs of the remediation are contin-
gent on the decision of the federal government on the location
of the final storage facilities and the date of their availability.
Several parameters relating to the development of a final storage
facility for radioactive waste are based on the assumptions for
the so called Schacht Konrad final storage. Parameters related to
the life-span of the German nuclear reactors assume a phase-out
until 2022. The valuation uses assumptions to reflect the current
and detailed cost estimates, price inflation and discount rates as
well as a continuous outflow until the 2060's related to the costs
for dismantling as well as intermediate and final storage. The
estimated cash outflows related to the asset retirement obliga-
tion could alter significantly if political developments affect the
government's timeline to finalize the so called Schacht Konrad.
For discounting the cash outflows, the Company uses current
interest rates as of the balance sheet date.
Environmental clean-up costs relate to remediation and environ-
mental protection liabilities which have been accrued based on
the estimated costs of decommissioning facilities for the produc-
tion of uranium and mixed-oxide fuel elements in Hanau, Ger-
many (Hanau facilities), as well as a nuclear research and service
center in Karlstein, Germany (Karlstein facilities). Whilst in fiscal
2017, parts of the regulation for nuclear waste disposal were
amended by way of law ("Gesetz zur Neuordnung der Verantwor-
tung in der kerntechnischen Entsorgung"), Siemens is not covered
by these regulations and consequently continues to adhere to the
German Atomic Energy Act ("deutsches Atomgesetz"), which
states that when a nuclear facility is closed, the resulting radioac-
tive waste must be collected and delivered to a government-de-
veloped final storage facility. In this regard, the Company has
developed a plan to decommission the Hanau and Karlstein facil-
ities in the following steps: asset retirement (including clean-out,
decontamination and disassembly of equipment and installa-
tions, decontamination of the facilities and buildings), waste con-
ditioning and packaging of nuclear waste, as well as intermediate
The Company is subject to asset retirement obligations related to
certain items of property, plant and equipment. Such asset retire-
ment obligations are primarily attributable to environmental
clean-up costs and to costs primarily associated with the removal
of leasehold improvements at the end of the lease term.
Warranties mainly relate to products sold. Order related losses
and risks are provided for anticipated losses and risks on uncom-
pleted construction, sales and leasing contracts.
Except for asset retirement obligations, the majority of the Com-
pany's provisions are generally expected to result in cash out-
flows during the next one to 15 years.
4,579
8,826
1,603
664
743
759
1,832
750
4,631
2,422
Thereof non-current
Balance as of September 30, 2017
1,252
As of September 30, 2017 and 2016, the provision totals €697 mil-
lion and €1,551 million, respectively, and is recorded net of a
Consolidated Financial Statements 83
present value discount of €359 million and €206 million, respec-
tively, reflecting the assumed continuous outflow of the total
expected payments until the 2060's (2070's in fiscal 2016). In-
creased discount rates decreased the carrying amount of the
provision by €543 million as of September 30, 2017, mainly due
to a change of the applied yield curve in order to more specifically
reflect interest rate expectations, particularly regarding long-
term interest rates; declined discount rates increased the carry-
ing amount by €355 million as of September 30, 2016. The pro-
vision was decreased by €312 million as of September 30, 2017,
mainly due to reduced assumed inflation rates, and €170 million
as of September 30, 2016, due to reduced cost estimates.
Other includes transaction-related and post-closing provisions in
connection with portfolio activities as well as provisions for Legal
Proceedings, as far as the risks that are subject to such Legal
Proceedings are not already covered by project accounting. Pro-
visions for Legal Proceedings amounted to €437 million and
€430 million as of September 30, 2017 and 2016, respectively.
6,206
24,761
5,447
26,777
Plus: Long-term debt
Short-term debt and current maturities
of long-term debt
Dividends paid per share were €3.60 and €3.50, respectively, in fis-
cal 2017 and 2016. The Managing Board and the Supervisory Board
propose to distribute a dividend of €3.70 per share entitled to the
As of September 30, 2017 and 2016, total authorized capital of
Siemens AG is €618.6 million nominal, issuable in installments
based on various time-limited authorizations, by issuance of up
to 206.2 million registered shares of no par value. In addition, as
of September 30, 2017 and 2016, Siemens AG's conditional capi-
tal is €1,080.6 million nominal or 360.2 million shares. It can
primarily be used for serving convertible bonds or warrants un-
der warrant bonds that could or can be issued based on various
time-limited authorizations approved by the respective Share-
holders' Meeting.
In fiscal 2017 and 2016, Siemens repurchased 7,922,129 shares
and 4,888,596 shares, respectively. In fiscal 2017 and 2016,
Siemens transferred 15,162,691 and 4,543,673 treasury shares,
respectively. As of September 30, 2017 and 2016, the Company
has treasury shares of 34,481,120 and 41,721,682, respectively.
(121)
Siemens' issued capital is divided into 850 million registered shares
with no par value and a notional value of €3.00 per share as of
September 30, 2017 and 2016, respectively. The shares are fully
paid in. At the Shareholders' Meeting, each share has one vote and
accounts for the shareholders' proportionate share in the Compa-
ny's net income. All shares confer the same rights and obligations.
NOTE 18
Sep 30,
2016
2017
(in millions of €)
A key consideration of our capital structure management is to
maintain ready access to capital markets through various debt
instruments and to sustain our ability to repay and service our
debt obligations over time. In order to achieve this, Siemens in-
tends to maintain an Industrial net debt divided by EBITDA (con-
tinuing operations) ratio of up to 1.0. The ratio indicates the ap-
proximate number of years that would be needed to cover the
Industrial net debt through continuing income, without taking
into account interest, taxes, depreciation and amortization.
NOTE 19 Additional capital disclosures
dividend, in total representing approximately €3.0 billion in ex-
pected payments. Payment of the proposed dividend is contingent
upon approval at the Shareholders' Meeting on January 31, 2018.
Equity
(1,694)
(1,924)
(1,854)
8
(112)
(4)
Components of defined benefit
costs recognized in the
Consolidated Statements of income
1,133
1,605
444
818
4
7
693
795
Return on plan assets excluding
(38)
5
(150)
(809)
(421)
799
13,695
9,582
639
(22,418)
19,071
22,607
(22,531)
amounts included in net interest
1,078
7
675
1,085
Interest income
482
809
(482)
4
2017
income and net interest expenses
Effects of asset ceiling
(109)
(3,805)
3,703
Employer contributions
861
618
(861)
(618)
Plan participants' contributions
130
144
130
144
Benefits paid
(2,045)
(60)
2,473
(174)
6,284
(174)
2,473
174
(2,473)
(3,919)
6,284
(3,919)
Actuarial (gains) losses
6,284
(109)
(60)
(109)
Remeasurements recognized
in the Consolidated Statements
of Comprehensive Income
(3,919)
(60)
2016
7
SIEMENS
Beginning with fiscal 2022, ROCE excludes defined acquisition-related effects for Varian Medical Systems, Inc. (Varian), which was acquired
by Siemens Healthineers in fiscal 2021, to further increase the transparency on our operating performance. Our goal is to achieve a ROCE
within a range of 15% to 20% over a cycle of three to five years.
We seek to work profitably and as efficiently as possible with the capital provided by our shareholders and lenders. For purposes of
managing and controlling our capital efficiency, we use return on capital employed, or ROCE, as our primary measure in our Siemens
Financial Framework.
Beginning with fiscal 2022, we will in addition report EPS before purchase price allocation accounting (EPS pre PPA) to increase
transparency regarding our operating performance. EPS pre PPA is defined as basic earnings per share from net income adjusted for
amortization of intangible assets acquired in business combinations and related income taxes. Like for EPS, EPS pre PPA includes the
amounts attributable to shareholders of Siemens AG. We aim to achieve high-single-digit annual growth in EPS pre PPA over a cycle of
three to five years. EPS pre PPA for fiscal 2021 was €8.32.
Combined Management Report
4
For purposes of managing and controlling profit and profitability at the Group level, we use net income as our primary measure. This
measure is the primary driver of basic earnings per share from net income (EPS).
In line with common practice in the financial services business, our financial indicator for measuring capital efficiency at Siemens Financial
Services is return on equity after tax, or ROE after tax. ROE is defined as Siemens Financial Services' profit after tax, divided by its average
allocated equity.
For Siemens Healthineers, we present the margin range we expect as that company's majority shareholder.
15-20%
17-21%
2.4 Capital structure
10-13%
17-23%
Margin range
Siemens Financial Services (ROE after tax)
Siemens Healthineers
Mobility
Smart Infrastructure
Digital Industries
Margin ranges from fiscal 2022
The margin ranges were set as follows:
Beginning with fiscal 2022, the profit definition no longer adjusts EBITA for operating financial income (expenses), net to present a more
transparent view on operating earnings. Operating financial income, net for Industrial Business was €23 million in fiscal 2021, without a
change to the reported margin.
11-16%
Sustainable revenue and profit development is supported by a healthy capital structure. Accordingly, a key consideration within the
Siemens Financial Framework is to maintain ready access to the capital markets through various debt products and preserve our ability to
repay and service our debt obligations over time. Our primary measure for managing and controlling our capital structure is the ratio of
Industrial net debt to EBITDA (continuing operations). This financial measure indicates the approximate amount of time in years that would
be needed to cover Industrial net debt through income from continuing operations, without taking into account interest, taxes,
depreciation and amortization. In fiscal 2021, we aimed to achieve a ratio of up to 1.0. Beginning with fiscal 2022, this ratio was raised to
up to 1.5.
2.5 Liquidity and dividend
We intend to continue providing an attractive return to our shareholders under the Siemens Financial Framework. Beginning with fiscal
2022, this includes striving for a dividend per share that exceeds the amount of the preceding year, or that at least matches the prior-year-
level.
3
1.
4
2.
Combined Management Report
Organization of the Siemens Group and basis of presentation
Financial performance system
Fiscal year
(1)/(II) ROCE
(II) Average capital employed
(I) Income before interest after tax
Less: Taxes on interest adjustments (tax rate (flat) 30%)
Less: Interest adjustments (discontinued operations)
Plus: Net interest expenses related to provisions for pensions and similar obligations
Plus: SFS Other interest expenses/income
Less: Other interest expenses/income, net¹
Net income
(in millions of €)
Calculation of ROCE
2.6 Calculation of return on capital employed
At the Annual Shareholders' Meeting, the Managing Board, in agreement with the Supervisory Board, will submit the following proposal
to allocate the unappropriated net income of Siemens AG for fiscal 2021: to distribute a dividend of €4.00 on each share of no par value
entitled to the dividend for fiscal 2021 existing at the date of the Annual Shareholders' Meeting; the remaining amount is to be carried
forward. Payment of the proposed dividend is contingent upon approval by Siemens shareholders at the Annual Shareholders' Meeting on
February 10, 2022. The prior-year dividend was €3.50 per share.
Beginning with fiscal 2022, we use the cash conversion rate for the Siemens Group to reinforce our commitment to cash generation on a
Group level. It is defined as the ratio of Free cash flow (continuing and discontinued operations) to Net income. We aim to achieve a cash
conversion rate of 1 minus the annual comparable revenue growth rate for the Group over a cycle of three to five years.
As in the past, we intend to fund the dividend payout from Free cash flow. To provide an assessment of our ability to generate cash, and
ultimately to pay dividends, in fiscal 2021 we used the cash conversion rate of Industrial Business, defined as the ratio of Free cash flow
from Industrial Business to Adjusted EBITA Industrial Business. Because growth requires investments, we aimed to achieve a cash
conversion rate of 1 minus the annual comparable revenue growth rate of Industrial Business.
17-22%
Table of contents
11-15%
9-12%
Siemens comprises Siemens Aktiengesellschaft (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 headquarters situated in Munich. As of
September 30, 2021, Siemens had around 303,000 employees.
Siemens is a technology group that is active in nearly all countries of the world, focusing on the areas of automation and digitalization in
the process and manufacturing industries, intelligent infrastructure for buildings and distributed energy systems, smart mobility solutions
for rail and road and medical technology and digital healthcare services.
1. Organization of the Siemens Group and basis of
presentation
Combined Management Report
Takeover-relevant information
10.
37
9. Siemens AG
Report on expected developments and associated material opportunities and risks
8.
As of September 30, 2021, Siemens has the following reportable segments: Digital Industries, Smart Infrastructure, Mobility and
Siemens Healthineers, which together form our "Industrial Business" and Siemens Financial Services (SFS), which supports the activities
of our industrial businesses and also conducts its own business with external customers. Furthermore, we report results for Portfolio
Companies, which comprises businesses that are managed separately to improve their performance.
Overall assessment of the economic position
Financial position
6.
20
2355 3
Net assets position
5.
19
Results of operations
4.
3.
7.
Our reportable segments and Portfolio Companies may do business with each other, leading to corresponding orders and revenue. Such
orders and revenue are eliminated on the Group level.
Non-financial matters of the Group and Siemens AG
Siemens has policies for environmental, employee and social matters, for the respect of human rights, and anti-corruption and bribery
matters, among others. Our business model is described in chapters 1 and 3 of this Combined Management Report. Reportable information
that is necessary for an understanding of the development, performance, position and the impact of our activities on these matters is
included in this Combined Management Report, in particular in chapters 3 through 7. Forward-looking information, including risk
disclosures, is presented in chapter 8. Chapter 9 includes additional information that is required to be reported in the Combined
Management Report related to the parent company Siemens AG. As supplementary information, amounts reported in the Consolidated
Financial Statements and the Annual Financial Statements of Siemens AG related to such non-financial matters, and additional
explanations thereto, are included in Notes to Consolidated Financial Statements for fiscal 2021, Notes 17, 18, 22, 26 and 27, and in the
Notes to the Annual Financial Statements for fiscal 2021, Notes 16, 17, 20, 21 and 25. In order to inform the users of the financial reports
in a focused manner, these disclosures are not subject to a specific non-financial framework – in contrast to the disclosures in our separate
"Sustainability Report 2021" document, which are based on the standards developed by the Global Reporting Initiative (GRI). Said
document also includes detailed information on DEGREE, Siemens' new sustainability framework which was introduced during fiscal 2021.
With DEGREE, Siemens intends to manage and track its progress on selected ambitions in the environmental, social and governance areas.
10-15%
17-23%
Margin range
Siemens Financial Services (ROE after tax)
Industrial Business
Siemens Healthineers
Mobility
Smart Infrastructure
Digital Industries
Margin ranges until fiscal 2021
For our industrial businesses, in fiscal 2021 profit represented EBITA adjusted for operating financial income (expenses), net, and
amortization of intangible assets not acquired in business combinations (Adjusted EBITA).
The margin ranges for our industrial businesses were as follows:
Within the Siemens Financial Framework, we aim to achieve margins that are comparable to those of our relevant competitors. Therefore,
we have defined profit margin ranges for our industrial businesses which also consider the profit margins of their respective relevant
competitors. Profit margin is defined as profit of the respective business divided by its revenue.
2.3 Profitability and capital efficiency
Under the modified framework, we aim to achieve comparable revenue growth in the range of 5% to 7% per year over a cycle of three to
five years.
Currency translation effects are the difference between revenue for the current period calculated using the exchange rates of the current
period and revenue for the current period calculated using the exchange rates of the comparison period. For calculating the percentage
change year-over-year, this absolute difference is divided by revenue for the comparison period. A portfolio effect arises in the case of an
acquisition or a disposition and is calculated as the change year-over-year in revenue related to the transaction. For calculating the
percentage change, this absolute change is divided by revenue for the comparison period. Any portfolio effect is excluded for the 12
months following the relevant transaction after which both current and past reporting periods fully reflect the portfolio change. For orders,
we apply the same calculations for currency translation and portfolio effects as described above.
Our primary measure for managing and controlling our revenue growth is comparable growth, because it shows the development in our
business net of currency translation effects, which arise from the external environment outside of our control, and portfolio effects, which
involve business activities which are either new to or no longer a part of the respective business.
In the Siemens Financial Framework, up to and including fiscal 2021, we aimed to achieve a revenue growth range of 4% to 5% per year
on a comparable basis.
2.2 Revenue growth
The Siemens Financial Framework includes targets that we aim to achieve over a cycle of three to five years. During fiscal 2021, we
modified this framework. The resulting changes became effective starting with fiscal 2022.
2.1 Overview
2. Financial performance system
Combined Management Report
3
17-21%
Segment information
16
Report
Plus: Adjustments from assets classified as held for disposal and liabilities associated with assets classified as held for disposal
Less: Adjustment for deferred taxes on net accumulated actuarial gains/losses on provisions for pensions and similar obligations
Capital employed (continuing and discontinued operations)
Less: SFS debt
Plus: Provisions for pensions and similar obligations
Less: Fair value of foreign currency and interest hedges relating to short- and long-term debt
Less: Current interest-bearing debt securities
Less: Cash and cash equivalents
Plus: Short-term debt and current maturities of long-term debt
Plus: Long-term debt
Total equity
Calculation of capital employed
Beginning with fiscal 2022, ROCE will exclude defined Varian-related acquisition effects. For that purpose, in the numerator, Income before
interest after tax is adjusted for effects resulting from purchase price allocation which are comprised of amortization of tangible and
intangible assets, inventory step-ups, deferred revenue adjustments and related income taxes. The denominator Average capital employed
is adjusted for goodwill and other intangible assets resulting from purchase price allocation. ROCE adjusted for Varian-related acquisition
effects was 15.1% in fiscal 2021.
purposes of calculating ROCE in interim periods, Income before interest after tax is annualized. Average capital employed is determined
using the average of the respective balances as of the quarterly reporting dates for the periods under review.
For
5
'Item Other interest expenses/income, net primarily consists of interest relating to corporate debt, and related hedging activities, as well as interest income on corporate assets.
7.8%
13.1%
56,190
51,723
4,397
6,778
(84)
Combined Management Report
FOR FISCAL 2021
6
3. Segment information
2020
Fiscal year
2021
Adjusted EBITA margin
Adjusted EBITA
therein: software business
Revenue
Orders
(in millions of €)
Research & Development (R&D) activities at Digital Industries are aimed at providing its customers with solutions that allow them to
exploit the potential of data in their businesses and to combine the real and the digital worlds. Digital Industries is developing and
integrating technologies such as artificial intelligence (AI), edge computing, cloud technologies, additive manufacturing and industrial 5G
wireless technology. For example, Digital Industries cooperated with Schaeffler Group by combining its lloT platform Sidrive IQ, which
augments drive systems with Al-based analytics and digital content, with Schaeffler's products and services in the area of designing,
manufacturing, and servicing bearings. Digital Industries introduced a new Industrial Edge Management system with which users can
remotely monitor the status of every connected device and remotely install edge apps and software functions on distributed edge devices.
Also in fiscal 2021, Digital Industries announced a cooperation with Google Cloud which aims at the integration of factory automation
systems from Digital Industries with Google's data cloud, Al and machine learning technologies. In the field of additive manufacturing,
Digital Industries worked with EOS and DyeMansion to present the first virtual additive manufacturing reference factory for selective laser
sintering and industrial post-processing. During the 2021 Hanover Fair, Digital Industries demonstrated its first industrial 5G router and
set up a private 5G campus network with a focus on industrial use cases such as automated guided vehicles, augmented reality, and
autonomous mobile robots. Major investments of Digital Industries in fiscal 2021 relate to its own factory automation, motion control
and process automation businesses, to further automate and digitalize facilities particularly in Germany, China and the Czech Republic.
Digital Industries sees three trends influencing its business and providing long-term growth opportunities. Producers of investment goods
in today's increasingly digital environment must modernize their production capacity, particularly to increase production flexibility and
reduce time to market. This environment also spurs producers to complement their core products with vertical solutions and service
offerings, which their customers either need or want in order to take full advantage of the investment goods. Finally, there is a trend from
globalization to regionalization, to support local economic development or to better adapt solutions to local needs. This is increasingly
accompanied by more differentiated regulatory requirements.
Combined Management Report
Combined Management Report
Taken together, Digital Industries' offerings enable customers to optimize entire value chains from product design and development
through production and post-sale services. With its advanced software solutions in particular, Digital Industries supports customers in their
evolution towards the "Digital Enterprise," resulting in increased flexibility and efficiency of production processes and reduced time to
market for new products. The most important markets include the automotive industry, the machine building industry, the pharmaceutical
and chemicals industry, the food and beverage industry and the electronics and semiconductor industry. Digital Industries serves its
customers through a common regional sales organization spanning all its businesses, using various sales channels depending on the type
of customer and industry and also enhancing customer choice across all channels. Changes in customer demand, especially for standard
products, are driven strongly by macroeconomic cycles, and can lead to significant short-term fluctuation in Digital Industries' profitability.
Volume from large contracts in the software business, particularly for EDA, may also result in strong fluctuations in quarterly volume and
profitability. Starting in fiscal 2022, Digital Industries intends to transition parts of its software business, particularly PLM, from largely
upfront revenue recognition towards Software as a Service (SaaS), which yields more predictable recurring revenue and offers growth
opportunities by opening access to new customers, especially small and medium-sized companies seeking to reduce costs associated with
owning complex IT infrastructure. During the transition, Digital Industries expects impacts on revenue growth rates and profit margin
development in the software business. Competition with Digital Industries' business activities comes primarily from multinational
corporations that offer a relatively broad portfolio and from smaller companies active only in certain geographic or product markets.
Digital Industries offers a comprehensive product portfolio and system solutions for automation used in discrete and process industries;
these offerings include automation systems and software for factories, numerical control systems, motors, drives and inverters and
integrated automation systems for machine tools and production machines. Digital Industries also provides process control systems,
machine-to-machine communication products, sensors (for measuring pressure, temperature, level, flow rate, distance or shape) and
radio frequency identification systems. Furthermore, Digital Industries offers production and product lifecycle management (PLM)
software, and software for simulation and testing of mechatronic systems. These leading software offerings are integrated with an
electronic design automation (EDA) software portfolio, and the open, cloud-based industrial internet of things (IoT) operating system
MindSphere, which connects machines and physical infrastructure to the digital world. All these software offerings are complemented by
the Mendix cloud-native low-code application development platform, which allows customers to significantly reduce app development
times through visual representation of underlying code. Digital Industries also provides customers with lifecycle and data-driven services.
During the first quarter of fiscal 2021, Digital Industries' stake in Bentley Systems, Inc. (Bentley) was transferred to Siemens Pension-Trust
e.V. In August 2021, Digital Industries closed the acquisition of Supplyframe, Inc. (Supplyframe), a marketplace for the global electronics
value chain, to significantly strengthen and accelerate growth of its offerings in digital marketplaces. For further information on the
acquisition see Note 3 in Notes to Consolidated Financial Statements for fiscal 2021.
3.2 Digital Industries
The partly estimated figures presented here for GDP are based on an IHS Markit report dated October 15, 2021.
Overall, the other major economies have experienced very strong economic rebounds and GDP is expected to grow strongly in calendar
2021: European Union (EU) 5.0%, U.S. 5.4%, Japan 2.3%, India 7.7%. For advanced countries in aggregate, calendar 2021 GDP is expected
to expand by 4.9%. For emerging markets, the increase in calendar 2021 GDP is estimated at 6.4%.
The Chinese economy - with the world's largest manufacturing sector - benefited particularly from the high global demand for goods and
is expected to grow by 8.2% in calendar 2021. However, tensions in the property sector and energy shortages weighed on economic
activity in the second half of calendar 2021.
However, momentum again weakened in the first half of calendar 2021, due to increasing infections in many countries. The new Delta
variant was more contagious than previous virus strains. Vaccine roll-out could not keep up with the spread of this new variant, especially
in emerging countries. In addition, supply disruptions, which were both caused and magnified by the pandemic, impaired the recovery.
Bottlenecks had impacts across the value chains from raw materials to high tech goods, especially semiconductors, and were exemplified
by extraordinary disruptions in global logistics systems. In addition, many companies were surprised by the strong recovery and high
demand for goods which often exceeded their production plans and short-term capacity. The extraordinarily high demand for goods was
caused by consumers with high excess savings and limited spending alternatives as many service offerings were still not available
("services-to-products shift"). Limited supply, logistics bottlenecks and record high consumer demand for goods caused substantial
increases of producer prices for many products, which partly translated to an increase of general inflation. In addition, energy prices
increased, and base effects from reduced 2020 price levels as well as temporary effects (e.g. provisional changes in taxation) contributed
to the elevated rate of inflation.
Global economic activity expanded at very high rates in the third quarter of calendar 2020 after the first wave of COVID-19 ebbed.
Subsequent infection waves in winter months caused fears of a new global recession. But economic activity had already adapted to the
pandemic and was supported by massive stimulus programs, especially in Europe and the U.S. Globally, governments allocated nearly USD
11 trillion in stimulus programs and more than USD 6 trillion in liquidity support to businesses and households in response to the pandemic.
Central banks gave support with expansionary measures, in particular new quantitative easing programs, while short-term interest rates
were at or near zero. Accordingly, the global economy continued to expand also in the fourth quarter of calendar 2020 and the first quarter
of calendar 2021, despite renewed outbreaks and lockdowns. In December 2020, the first countries approved new COVID-19 vaccines,
which were developed in a very short time and which are of paramount importance in order to solve the health crisis and economic
challenges.
The global economic development in fiscal 2021 was still dominated by the coronavirus pandemic (COVID-19) and its many repercussions.
After the recession in calendar 2020, in which global gross domestic product (GDP) contracted by 3.4%, calendar 2021 is expected to show
a very strong rebound with global GDP increasing by 5.5%.
3.1 Overall economic conditions
7
100
(34)
66
16%
15,896
18,427
Comp.
% Change
Actual
Siemens Report
FOR FISCAL 2021
SIEMENS
Table of contents
Combined Management Report
(11)
Consolidated Financial Statements
Independent Auditor's Report (Siemens Group)
Annual Financial Statements
Responsibility Statement (Siemens AG)
Independent Auditor's Report (Siemens AG)
Five-Year Summary
Compensation Report (including Auditor's Report)
Report of the Supervisory Board
Corporate Governance Statement
Notes and forward-looking statements
Combined Management
Responsibility Statement (Siemens Group)
16,514
18%
10%
842
(692)
(769)
4,200
6,697
2020
2021
8
14,997
In fiscal 2021 the market environment for Digital Industries improved strongly as global manufacturing production recovered throughout
the fiscal year from burdens related to COVID-19, which were most noticeable in the second and third quarter a year earlier. The rebound
was faster and stronger than assumed and led to constraints in global value chains over the course of the fiscal year. The main driver of
the upswing was China where the growth dynamic was extremely strong in the first half of the fiscal year. Other countries followed with
a delay of around three to six months, but their recovery was less pronounced than in China resulting in moderate growth in the regions
Americas and Europe, C.I.S., Africa, Middle East. Discrete industries recovered particularly quickly and strongly, benefiting in part from
restocking effects, while recovery in the more project-related process industries was delayed. The automotive industry started strongly
into fiscal 2021, but the recovery was held back by supply chain constraints which impacted production especially in the second half of
the fiscal year. This led to slowing or even limited contraction of production during the last months of the fiscal year. The machine building
industry also recovered faster than expected, with the recovery starting in China and benefiting from demand for general investment
goods. This development was evident in demand for automation equipment which in addition benefited from the trend towards
digitalization and from stock-building effects to mitigate risks from supply chain constraints. The pharmaceutical and the chemicals
industries expanded during the entire fiscal year. While the pharmaceuticals industry benefited from COVID-19 vaccine demand among
other factors, the chemicals industry steadily improved in line with the overall economic recovery. The development in the food and
beverage industry followed a similar pattern and grew steadily throughout the fiscal year. Global production of electronics and
semiconductors was not held back by effects related to COVID-19, and experienced strong growth during fiscal 2021. However, market
shifts within the semiconductor industry led to global shortages of semiconductors for certain customer segments that grew worse through
the fiscal year and increasingly affected the automotive and machine building industries. In addition, supply constraints for plastics, metals
and freight delivery impacted Digital Industries' market environment. Price increases affected all markets and were stronger than usually
experienced during periods of economic rebound. While prices started to surge in the first quarter of fiscal 2021 mainly in the raw material
sector (e. g. copper), they spread further to intermediate goods and to all markets, including electrical equipment, in the following
Significant order growth for Digital Industries was driven by the automation businesses, particularly factory automation and motion
control, on a recovery of their most important customer industries such as the automotive and machine building industries, which a year
earlier were strongly impacted by effects related to COVID-19. Orders in the software business came in lower compared to fiscal 2020,
which included a sharply higher volume from large orders, most notably in the EDA business. Revenue rose in all businesses, including
significant growth contributions from the factory automation and motion control businesses and successful mitigation of supply chain
risks primarily associated with electronics components. On a geographic basis, order and revenue were up in all regions with growth
mainly driven by the region Asia, Australia, due primarily to substantial increases in China, and the region comprising Europe,
Commonwealth of Independent States (C.I.S.), Africa, Middle East, including a strong growth contribution from Germany. Adjusted EBITA
rose moderately even though the prior fiscal year included a €767 million positive effect related to Digital Industries' former stake in
Bentley. The effect resulted mainly from revaluation of the stake following Bentley's public listing. Excluding this effect, Adjusted EBITA
rose on double-digit increases in all businesses and improved profitability compared to the prior fiscal year, with the strongest growth
contributions coming from the factory automation and motion control businesses. Adjusted EBITA improved also from successful execution
of the cost structure improvement program in prior periods, which strengthened current profitability. Furthermore, severance charges,
which resulted primarily from the ongoing program, fell substantially to €114 million from €210 million in the prior year. During the first
half of fiscal 2021, Adjusted EBITA development benefited from expense reductions year-over-year related to COVID-19 restrictions, such
as lower travel and marketing expenses. Digital Industries' order backlog was €7 billion at the end of the fiscal year, of which €6 billion are
expected to be converted into revenue in fiscal 2022.
21.7%
20.4%
3%
3,252
3,362
7%
4%
4,144
4,290
13%
806
53
Siemens Sensors & Communication Ltd., Dalian / China
Siemens Power Automation Ltd., Nanjing / China
100
100
Siemens Shanghai Medical Equipment Ltd., Shanghai / China
Siemens Malaysia Sdn. Bhd., Petaling Jaya Malaysia
Siemens Industry Software Sdn. Bhd., George Town, Penang / Malaysia
Siemens Healthcare Sdn. Bhd., Petaling Jaya / Malaysia
Varian Medical Systems Korea, Inc., Seoul / Korea, Republic of
Dresser-Rand Asia Pacific Sdn. Bhd., Kuala Lumpur / Malaysia
100
100
100
100
100
100
100
100
100
100
100
Siemens Mobility Sdn. Bhd., Kuala Lumpur / Malaysia
Varian Medical Systems Malaysia Sdn Bhd, Kuala Lumpur / Malaysia
Siemens (N.Z.) Limited, Auckland / New Zealand
Siemens Healthcare Limited, Auckland New Zealand
Consolidated Financial Statements
70
100
55
90
100
100
100
100
100
100
100
Acuson Singapore Pte. Ltd., Singapore / Singapore
Varian Medical Systems Philippines, Inc., City of Pasig / Philippines
Siemens, Inc., Manila / Philippines
Siemens Healthcare Inc., Manila / Philippines
_3
100
100
99
100
96
Siemens Process Systems Engineering Limited, Daejeon / Korea, Republic of
Siemens Mobility Ltd., Seoul / Korea, Republic of
Siemens Ltd. Seoul, Seoul / Korea, Republic of
Siemens Industry Software Ltd., Seoul / Korea, Republic of
Siemens Electronic Design Automation (Korea) LLC, Seoul / Korea, Republic of
Siemens Healthineers Ltd., Seoul / Korea, Republic of
100
Consolidated Financial Statements
1007
100
100
100
100
100
100
56
Acuson Korea Ltd., Seongnam-si / Korea, Republic of
100
100
100
100
100
100
100
100
100
100
100
100
100
1007
100
51
100
100
100
Varian Medical Systems K.K., Tokyo / Japan
Siemens PLM Software Computational Dynamics K.K., Yokohama / Japan
Siemens K.K., Tokyo / Japan
100
100
55
Siemens Signalling Co., Ltd., Xi'an / China
Siemens Standard Motors Ltd., Yizheng / China
Siemens Switchgear Ltd., Shanghai, Shanghai / China
Siemens Technology Development Co., Ltd. of Beijing, Beijing / China
100
Siemens Venture Capital Co., Ltd., Beijing / China
Siemens X-Ray Vacuum Technology Ltd., Wuxi, Wuxi / China
Suzhou Ling Dong Zhen GE Network Technology Co., Ltd., Suzhou / China
Varian Medical Systems China Co., Ltd., Beijing / China
Varian Medical Systems Trading (Beijing) Co., Ltd., Beijing / China
Yutraffic Technologies (Beijing) Co., Ltd., Beijing / China
Scion Medical Limited, Hong Kong / Hong Kong
Siemens Healthcare Limited, Hong Kong / Hong Kong
Siemens Wiring Accessories Shandong Ltd., Zibo / China
Siemens Industry Software Limited, Hong Kong / Hong Kong
100
100
Siemens Shenzhen Magnetic Resonance Ltd., Shenzhen / China
100
100
100
100
100
60
80
100
100
100
51
85
51
100
100
100
Siemens Numerical Control Ltd., Nanjing, Nanjing / China
Siemens Limited, Hong Kong / Hong Kong
Siemens Mobility Limited, Hong Kong / Hong Kong
SIEMENS HEALTHINEERS INDIA MANUFACTURING PRIVATE LIMITED, Mumbai / India
Siemens Industry Software (India) Private Limited, New Delhi / India
Siemens Limited, Mumbai / India
Siemens Logistics India Private Limited, Navi Mumbai / India
Siemens Rail Automation Pvt. Ltd., Navi Mumbai / India
Siemens Technology and Services Private Limited, Navi Mumbai / India
Varian Medical Systems International (India) Private Limited, Mumbai / India
Siemens Healthineers India LLP, Bangalore / India
P.T. Siemens Indonesia, Jakarta / Indonesia
PT Siemens Mobility Indonesia, Jakarta / Indonesia
Acrorad Co., Ltd., Okinawa / Japan
Avatar Integrated Systems Kabushiki Kaisha, Yokohama / Japan
OneSpin Solutions Japan K.K., Yokohama / Japan
Siemens Electronic Design Automation Japan K.K., Tokyo / Japan
Siemens Healthcare Diagnostics K.K., Tokyo / Japan
Siemens Healthcare K.K., Tokyo / Japan
PT Siemens Healthineers Indonesia, Jakarta / Indonesia
Siemens Logistics Limited, Hong Kong / Hong Kong
Siemens Healthcare Private Limited, Mumbai / India
Siemens Factoring Private Limited, Navi Mumbai / India
Supply Frame (Hong Kong) Limited, Hong Kong / Hong Kong
Vertice Investment Limited, Hong Kong / Hong Kong
YUTRAFFIC LTD., Hong Kong / Hong Kong
AIS Design Automation Private Limited, Bangalore / India
American Institute of Pathology and Laboratory Sciences Private Limited, Hyderabad / India
Artmed Healthcare Private Limited, Hyderabad / India
Bytemark India LLP, Bangalore / India
Siemens Financial Services Private Limited, Mumbai / India
Bytemark Technology Solutions India Pvt Ltd, Bangalore / India
Cancer Treatment Services Hyderabad Private Limited, Hyderabad / India
Enlighted Energy Systems Pvt Ltd, Chennai / India
Flomerics India Private Limited, Mumbai / India
Mentor Graphics (India) Private Limited, New Delhi / India
Mentor Graphics (Sales and Services) Private Limited, New Delhi / India
PETNET Radiopharmaceutical Solutions Pvt. Ltd., Mumbai / India
Preactor Software India Private Limited, Bangalore / India
C&S Electric Limited, New Delhi / India
Siemens Mobility Technologies (Beijing) Co., Ltd, Beijing / China
Micropower Comerc Energia S.A., São Paulo / Brazil
Siemens Mobility Equipment (China) Co., Ltd, Shanghai Pilot Free Trade Zone / China
50
5013
106
33
25
25
508
974
22
20
58
Consolidated Financial Statements
40
MPC Serviços Energéticos 1A S.A, Navegantes / Brazil
Union Temporal Recaudo y Tecnologia, Santiago de Cali / Colombia
Akuo Energy Dominicana, S.R.L, Santo Domingo / Dominican Republic
DELARO, S.A.P.I. DE C.V., Mexico City / Mexico
CEF-L Holding, LLC, Wilmington, DE / United States
DeepHow Corp., Princeton, NJ / United States
Fluence Energy, LLC, Wilmington, DE / United States
Hickory Run Holdings, LLC, Wilmington, DE / United States
MSS Energy Holdings, LLC, New York, NY / United States
Panda Stonewall Intermediate Holdings I, LLC, Wilmington, DE / United States
PhSiTh LLC, New Castle, DE / United States
PTG Holdings Company LLC, Dover, DE / United States
Rether networks, Inc., Berkeley, CA / United States
Software.co Technologies, Inc., Wilmington, DE / United States
USARAD Holdings, Inc., Fort Lauderdale, FL / United States
Wi-Tronix Group Inc., Dover, DE / United States
Asia, Australia (22 companies)
MPC Serviços Energéticos 1B S.A., Cabo de Santo Agostinho / Brazil
UTE GNA II GERAÇÃO DE ENERGIA S.A., Rio de Janeiro / Brazil
49
514
31
508, 13
50
Locomotive Workshop Rotterdam B.V., Zoetermeer / Netherlands
Ural Locomotives Holding Besloten Vennootschap, The Hague / Netherlands
ZeeEnergie C.V., Amsterdam / Netherlands
ZeeEnergie Management B.V., Eemshaven / Netherlands
50
50
206, 13
208
Rousch (Pakistan) Power Ltd., Islamabad / Pakistan
OOO Transconverter, Moscow / Russian Federation
Impilo Consortium (Pty.) Ltd., La Lucia / South Africa
Nertus Mantenimiento Ferroviario y Servicios S.A., Madrid / Spain
WS Tech Energy Global S.L., Viladecans / Spain
Stavro Holding | AB, Stockholm / Sweden
Certas AG, Zurich / Switzerland
Interessengemeinschaft TUS, Volketswil / Switzerland
Awel Y Môr Offshore Wind Farm Limited, Swindon, Wiltshire / United Kingdom
Cross London Trains Holdco 2 Limited, London / United Kingdom
Five Estuaries Offshore Wind Farm Limited, Swindon, Wiltshire / United Kingdom
Galloper Wind Farm Holding Company Limited, Swindon, Wiltshire / United Kingdom
Plessey Holdings Ltd., Frimley, Surrey / United Kingdom
Americas (21 companies)
Brasol Participações e Empreendimentos S.A., Brazil, São Paulo / Brazil
GNA 1 Geração de Energia S.A., São João da Barra / Brazil
Aimsun Pte Ltd, Singapore / Singapore
26
358
Exemplar Health (NBH) Partnership, Melbourne / Australia
Forest Wind Holdings Pty Limited, Sydney / Australia
Forest Wind Investment Company (1) Pty Limited, Sydney / Australia
PHM Technology Pty Ltd, Melbourne / Australia
50
Tieke Intelligent Signalling Railway Equipment Co., Ltd., Tianjin / China
Xi'An X-Ray Target Ltd., Xi'an / China
Zhenjiang Siemens Busbar Trunking Systems Co. Ltd., Yangzhong / China
Zhi Dao Railway Equipment Ltd., Taiyuan / China
Bangalore International Airport Ltd., Bangalore / India
HEALTH CONTINUUM PRIVATE LIMITED, Bangalore / India
Orange Sironj Wind Power Private Limited, New Delhi / India
Pune IT City Metro Rail Limited, Pune / India
P.T. Jawa Power, Jakarta / Indonesia
BE C&I Solutions Holding Pte. Ltd., Singapore / Singapore
Power Automation Pte. Ltd., Singapore / Singapore
SINGAPORE AQUACULTURE TECHNOLOGIES (SAT) PTE LTD, Singapore / Singapore
49
438
50
50
20
308
46
26
50
24
49
24
59
59
49
208
50
Smart Metering Solutions (Changsha) Co. Ltd., Changsha / China
DBEST (Beijing) Facility Technology Management Co., Ltd., Beijing / China
Guangzhou Suikai Smart Energy Co., Ltd., Guangzhou / China
Shanghai Electric Power Generation Equipment Co., Ltd., Shanghai / China
Siemens Traction Equipment Ltd., Zhuzhou, Zhuzhou / China
48
48
22
2013
33
29
27
238
43
206
20
37
33
26
308
24
308
30
50
50
50
378
25
35
40
TianJin ZongXi Traction Motor Ltd., Tianjin / China
Siemens Mobility Rail Equipment (Tianjin) Ltd., Tianjin / China
206,13
33
100
100
Varian Medical Systems Vietnam Co Ltd, Ho Chi Minh City / Viet Nam
Associated companies and joint ventures
Germany (24 companies)
Alchemist Accelerator Europe Fund I GmbH & Co. KG, Grünwald
ATS Projekt Grevenbroich GmbH, Schüttorf
BELLIS GmbH, Braunschweig
418
258
49
BentoNet GmbH, Baden-Baden
100
Caterva GmbH, Pullach i. Isartal
50
Curagita Holding GmbH, Heidelberg
DKS Dienstleistungsgesellschaft f. Kommunikationsanlagen des Stadt- und Regionalverkehrs mbH, Cologne
FEAG Fertigungscenter für Elektrische Anlagen GmbH, Erlangen
GuD Herne GmbH, Essen
30
498
498
50
IFTEC GmbH & Co. KG, Leipzig
50
INPRO Innovationsgesellschaft für fortgeschrittene Produktionssysteme in der Fahrzeugindustrie mbH, Berlin
338
50
100
100
100
Siemens Mobility Electrification Equipment (Shanghai) Co., Ltd., Shanghai / China
Siemens Medium Voltage Switching Technologies (Wuxi) Ltd., Wuxi / China
Siemens Manufacturing and Engineering Centre Ltd., Shanghai / China
Siemens Ltd., China, Beijing / China
Siemens Logistics Automation Systems (Beijing) Co., Ltd, Beijing / China
Siemens Investment Consulting Co., Ltd., Beijing / China
Siemens International Trading Ltd., Shanghai, Shanghai / China
Siemens Intelligent Signalling Technologies Co. Ltd., Foshan / China
Siemens Industry Software (Shanghai) Co., Ltd., Shanghai / China
Siemens Industry Software (Beijing) Co., Ltd., Beijing / China
100
Siemens Industrial Automation Products Ltd., Chengdu, Chengdu / China
Siemens Healthcare Diagnostics Manufacturing Ltd., Shanghai, Shanghai / China
Siemens Healthineers Diagnostics (Shanghai) Co., Ltd., Shanghai / China
Siemens Healthineers Digital Technology (Shanghai) Co., Ltd., Shanghai / China
Siemens Healthineers Ltd., Shanghai / China
Siemens Financial Services Ltd., Beijing / China
100
100
100
100
85
100
100
100
75
100
70
100
100
57
57
LIB Verwaltungs-GmbH, Leipzig
Ludwig Bölkow Campus GmbH, Taufkirchen
MetisMotion GmbH, Munich
508
258
238
49
498
33
338
35
46
498
50
20
458
40
448
44
478
674, 8, 12, 13
238
25
48
574,8
33
428, 13
498
498
49
Consolidated Financial Statements
20
Infraspeed Maintainance B.V., Dordrecht / Netherlands
Buitengaats Management B.V., Eemshaven / Netherlands
MeVis BreastCare GmbH & Co. KG, Bremen
MeVis BreastCare Verwaltungsgesellschaft mbH, Bremen
Nordlicht Holding GmbH & Co. KG, Frankfurt
Nordlicht Holding Verwaltung GmbH, Frankfurt
Siemens Energy AG, Munich
Siemens EuroCash, Munich
Sternico GmbH, Wendeburg
Valeo Siemens eAutomotive GmbH, Erlangen
Veja Mate Offshore Project GmbH, Oststeinbek
WUN H2 GmbH, Wunsiedel
Europe, Commonwealth of Independent States (C.I.S.), Africa, Middle East (without Germany) (37 companies)
Armpower CJSC, Yerevan / Armenia
Aspern Smart City Research GmbH, Vienna / Austria
Aspern Smart City Research GmbH & Co KG, Vienna / Austria
Meomed s.r.o., Prerov / Czech Republic
Siemens Aarsleff Konsortium I/S, Ballerup / Denmark
BioMensio Oy, Tampere / Finland
TRIXELL SAS, Moirans / France
EVIOP-TEMPO S.A. Electrical Equipment Manufacturers, Vassiliko / Greece
Parallel Graphics Ltd., Dublin Ireland
Reindeer Energy Ltd., Bnei Berak / Israel
Transfima GEIE, Milan / Italy
Transfima S.p.A., Milan / Italy
KACO New Energy Co., Amman / Jordan
Temir Zhol Electrification LLP, Astana / Kazakhstan
EGM Holding Limited, Marsaskala / Malta
Energie Electrique de Tahaddart S.A., Tangier / Morocco
Buitengaats C.V., Amsterdam / Netherlands
Infraspeed EPC Consortium V.O.F., Zoetermeer / Netherlands
Mentor Graphics Asia Pte Ltd, Singapore / Singapore
100
Siemens Industry Software Pte. Ltd., Singapore / Singapore
Iriel Indústria e Comercio de Sistemas Eléctricos Ltda., Canoas / Brazil
Siemens Mobility S.A., Munro / Argentina
Siemens IT Services S.A., Buenos Aires Argentina
Siemens Industrial S.A., Buenos Aires / Argentina
Siemens Healthcare S.A., Buenos Aires / Argentina
100
100
100
100
Americas (124 companies)
Yunex Limited, Poole, Dorset / United Kingdom
Varian Medical Systems UK Limited, Crawley, West Sussex / United Kingdom
Varian Medical Systems UK Holdings Limited, Crawley, West Sussex / United Kingdom
UltraSoc Technologies Limited, Frimley, Surrey / United Kingdom
100
Siemens Healthcare Diagnósticos Ltda., São Paulo / Brazil
Siemens Industry Software Ltda., São Caetano do Sul / Brazil
Siemens Infraestrutura e Indústria Ltda., São Paulo / Brazil
100
Siemens Mobility Soluções de Mobilidade Ltda., São Paulo/ Brazil
Varian Medical Systems Brasil Ltda., São Paulo / Brazil
EPOCAL INC., Toronto / Canada
10125032 CANADA INC, Mississauga / Canada
10262595 Canada Inc., Mississauga / Canada
12241510 CANADA INC., Mississauga / Canada
Bytemark Canada Inc., Saint John / Canada
62
52
100
100
100
100
100
100
100
100
100
100
100
Siemens Participações Ltda., São Paulo / Brazil
100
100
100
Siemens Healthcare Limited, Frimley, Surrey / United Kingdom
100
100
100
100
100
573
100
100
100
100
100
100
100
100
100
Siemens Holdings plc, Frimley, Surrey / United Kingdom
100
Siemens Industry Software Computational Dynamics Limited, Frimley, Surrey / United Kingdom
100
The Preactor Group Limited, Frimley, Surrey / United Kingdom
Siemens Rail Systems Project Holdings Limited, London / United Kingdom
Siemens Process Systems Engineering Limited, Frimley, Surrey / United Kingdom
Siemens Pension Funding Limited, Frimley, Surrey / United Kingdom
Siemens Rail Automation Limited, London / United Kingdom
Siemens plc, Frimley, Surrey / United Kingdom
Mentor Graphics (Canada) ULC, Vancouver / Canada
100
100
Siemens Mobility Limited, London / United Kingdom
100
Siemens Logistics Limited, Frimley, Surrey / United Kingdom
100
Siemens Industry Software Limited, Frimley, Surrey / United Kingdom
100
Siemens Pension Funding (General) Limited, Frimley, Surrey / United Kingdom
RAIL-TERM INC., Mississauga / Canada
RailTerm Systems Inc., Dorval / Canada
Siemens Canada Limited, Oakville / Canada
100
100
100
100
100
10013
100
100
100
100
100
10013
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Siemens Healthcare S.A.C., Surquillo / Peru
Siemens Healthcare S.A.S., Tenjo / Colombia
J. Restrepo Equiphos S.A.S, Bogotá / Colombia
Siemens S.A., Santiago de Chile / Chile
Siemens Mobility SpA, Santiago de Chile / Chile
Siemens Healthcare Equipos Médicos Sociedad por Acciones, Santiago de Chile / Chile
Nimbic Chile SpA, Las Condes / Chile
Talent Choice Investment Limited, George Town / Cayman Islands
Monarch Capital, Limited, Grand Cayman Cayman Islands
Varian Medical Systems Canada, Inc., Ottawa / Canada
TimeSeries Canada Inc., Montreal / Canada
SIEMENS MOBILITY LIMITED, Oakville / Canada
Siemens Logistics Ltd., Oakville / Canada
Siemens Industry Software ULC, Vancouver / Canada
Siemens Healthcare Limited, Oakville / Canada
Siemens Financial Ltd., Oakville / Canada
Siemens S.A., Tenjo / Colombia
YUNEX S.A.S., Bogotá / Colombia
Siemens Healthcare Diagnostics S.A., San José / Costa Rica
Siemens S.A., San José / Costa Rica
Siemens Large Drive Applications S.A., Panama City / Panama
Siemens, S.A. de C.V., Mexico City / Mexico
SIEMENS SERVICIOS COMERCIALES SA DE CV, SOFOM, ENR, Mexico City / Mexico
Siemens Mobility S. de R.L. de C.V., Mexico City / Mexico
Siemens Logistics S. de R.L. de C.V., Mexico City / Mexico
Siemens Inmobiliaria S.A. de C.V., Mexico City / Mexico
Siemens Healthcare Pte. Ltd., Singapore / Singapore
Consolidated Financial Statements
Siemens Healthcare Diagnostics, S. de R.L. de C.V., Mexico City / Mexico
Grupo Siemens S.A. de C.V., Mexico City / Mexico
Siemens S.A., Guatemala Guatemala
Siemens S.A., Antiguo Cuscatlán / El Salvador
Siemens Healthcare, Sociedad Anonima, Antiguo Cuscatlán / El Salvador
Siemens-Healthcare Cia. Ltda., Quito / Ecuador
Siemens S.A., Quito Ecuador
Siemens Mobility, S.R.L., Santo Domingo / Dominican Republic
Indústria de Trabajos Eléctricos S.A. de C.V., Ciudad Juárez / Mexico
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Mentor Graphics (Scandinavia) AB, Solna / Sweden
100
Siemens AB, Solna / Sweden
100
Siemens Financial Services AB, Solna / Sweden
70
100
Siemens Industry Software S.L., Tres Cantos / Spain
Siemens Logistics S.L. Unipersonal, Madrid / Spain
SIEMENS MOBILITY, S.L.U., Tres Cantos / Spain
Siemens Rail Automation S.A.U., Tres Cantos / Spain
Siemens Renting S.A., Madrid / Spain
Siemens S.A., Madrid / Spain
Telecomunicación, Electrónica y Conmutación S.A., Madrid / Spain
Varian Medical Systems Iberica SL, Alcobendas / Spain
100
100
_3
_3
_3
_3
90
75
Siemens Healthcare AB, Solna / Sweden
Siemens Industry Software AB, Solna / Sweden
100
100
100
100
100
100
Mentor Graphics Tunisia SARL, Tunis / Tunisia
100
Siemens Mobility S.A.R.L., Tunis / Tunisia
Siemens S.A., Tunis / Tunisia
KACO New Enerji Limited Sirketi, Pendik / Turkey
100
100
100
Siemens AG - Siemens Sanayi ve Ticaret AS Velaro Joint Venture, Kartal - Istanbul / Turkey
100
100
100
100
100
100
100
100
Siemens Mobility AB, Solna / Sweden
100
BlueWatt engineering Sàrl, Lausanne / Switzerland
Siemens Healthcare AG, Zurich / Switzerland
Siemens Holding S.L., Madrid / Spain
Siemens Industry Software GmbH, Zurich / Switzerland
Siemens Mobility AG, Wallisellen / Switzerland
Siemens Schweiz AG, Zurich / Switzerland
Varian Medical Systems Imaging Laboratory G.m.b.H., Dättwil / Switzerland
Varian Medical Systems International AG, Steinhausen / Switzerland
Yunex AG, Zurich / Switzerland
Siemens Tanzania Ltd. i.L., Dar es Salaam Tanzania, United Republic of
100
Siemens Logistics AG, Zurich / Switzerland
SIEMENS HEALTHCARE, S.L.U., Getafe / Spain
Fábrica Electrotécnica Josa, S.A.U., Tres Cantos / Spain
Aimsun S.L., Barcelona / Spain
Siemens Healthcare L.L.C., Dubai / United Arab Emirates
Consolidated Financial Statements
155
51
100
100
492
100
492
Siemens Capital Middle East Ltd, Abu Dhabi / United Arab Emirates
Siemens Healthcare FZ LLC, Dubai / United Arab Emirates
SD (Middle East) LLC, Dubai / United Arab Emirates
PSE Software and Consulting L.L.C., Abu Dhabi / United Arab Emirates
Samateq FZ LLC, UAE, Abu Dhabi / United Arab Emirates
100
100
100% foreign owned subsidiary "Siemens Ukraine", Kiev / Ukraine
SIEMENS HEALTHCARE LIMITED LIABILITY COMPANY, Kiev / Ukraine
Siemens Industrial LLC, Masdar City / United Arab Emirates
Siemens Middle East Limited, Masdar City / United Arab Emirates
SIEMENS MOBILITY LLC, Dubai United Arab Emirates
Acuson United Kingdom Ltd., Frimley, Surrey / United Kingdom
AIMSUN LIMITED, London / United Kingdom
100
100
100
100
1007
492
100
100
492
Siemens Healthcare Diagnostics Manufacturing Ltd, Frimley, Surrey / United Kingdom
Siemens Healthcare Diagnostics Products Ltd, Frimley, Surrey / United Kingdom
SBS Pension Funding (Scotland) Limited Partnership, Edinburgh / United Kingdom
Siemens Financial Services Holdings Ltd., Stoke Poges, Buckinghamshire / United Kingdom
Siemens Financial Services Ltd., Stoke Poges, Buckinghamshire / United Kingdom
Siemens Healthcare Diagnostics Ltd, Frimley, Surrey / United Kingdom
Project Ventures Rail Investments | Limited, Frimley, Surrey / United Kingdom
Samacsys Limited, London / United Kingdom
Next47 Fund 2022, L.P., Palo Alto, CA / United Kingdom
Next47 Fund 2021, L.P., Palo Alto, CA / United Kingdom
Data Sheet Archive Limited, London / United Kingdom
Electrium Sales Limited, Frimley, Surrey / United Kingdom
Flomerics Group Limited, Frimley, Surrey / United Kingdom
GYM Renewables Limited, Frimley, Surrey / United Kingdom
Mendix Technology Limited, Frimley, Surrey / United Kingdom
Mentor Graphics (UK) Limited, Frimley, Surrey / United Kingdom
MRX Technologies Limited, Frimley, Surrey / United Kingdom
Next47 Fund 2018, L.P., Palo Alto, CA / United Kingdom
Next47 Fund 2019, L.P., Palo Alto, CA / United Kingdom
Next47 Fund 2020, L.P., Palo Alto, CA / United Kingdom
ByteToken, Ltd, Edinburgh / United Kingdom
492
1007
YUNEX ULAŞIM TEKNOLOJILERI ANONIM ŞIRKETI, Kartal/Istanbul / Turkey
V.O.S.S. Varinak Onkoloji Sistemleri Satis Ve Servis Anonim Sirketi, Istanbul / Turkey
100
100
100
100
100
50
Consolidated Financial Statements
Crabtree South Africa Pty. Limited, Midrand / South Africa
KACO NEW ENERGY AFRICA (PTY) LTD, Midrand / South Africa
Linacre Investments (Pty) Ltd., Kenilworth/South Africa
S'Mobility Employee Stock Ownership Trust, Johannesburg / South Africa
Siemens Employee Share Ownership Trust, Johannesburg / South Africa
Siemens Healthcare Employee Share Ownership Trust, Midrand / South Africa
Siemens Healthcare Proprietary Limited, Halfway House / South Africa
SIEMENS INDUSTRY SOFTWARE SA (PTY) LTD, Centurion / South Africa
Siemens Mobility (Pty) Ltd, Randburg / South Africa
Siemens Proprietary Limited, Midrand / South Africa
Varian Medical Systems Africa (Pty) Ltd., Midrand / South Africa
100
100
100
60
100
Siemens Sanayi ve Ticaret Anonim Sirketi, Istanbul / Turkey
100
Siemens Mobility Ulasim Sistemleri Anonim Sirketi, Istanbul / Turkey
100
Siemens Healthcare Saglik Anonim Sirketi, Istanbul / Turkey
100
100
Siemens Finansal Kiralama A.S., Istanbul / Turkey
Siemens Mobility, s.r.o., Bratislava / Slovakia
Siemens s.r.o., Bratislava / Slovakia
SIPRIN s.r.o., Bratislava Slovakia
Yunex, s.r.o., Bratislava / Slovakia
Siemens Healthcare d.o.o., Ljubljana / Slovenia
Siemens Mobility d.o.o., Ljubljana / Slovenia
Siemens Trgovsko in storitveno podjetje, d.o.o., Ljubljana / Slovenia
100
100
Siemens Industry Software, S.A. de C.V., Mexico City / Mexico
100
Aimsun Pty Ltd, Sydney / Australia
Siemens Healthcare s.r.o., Bratislava / Slovakia
SAT Systémy automatizacnej techniky spol. s.r.o., Bratislava / Slovakia
Acuson Slovakia s. r. o., Bratislava / Slovakia
OEZ Slovakia, spol. s r.o., Bratislava / Slovakia
Yunex Traffic d.o.o. Beograd, Belgrade / Serbia
Supplyframe d.o.o, Beograd-Vracar, Belgrade / Serbia
1007
100
1007
100
100
100
75
51
51
ALDRIDGE TRAFFIC CONTROLLERS PTY. LTD, Sydney / Australia
Australia Hospital Holding Pty Limited, Bayswater / Australia
51
Exemplar Health (NBH) 2 Pty Limited, Bayswater / Australia
J.R.B. Engineering Pty Ltd, Bayswater / Australia
Siemens Healthcare Pty. Ltd., Melbourne / Australia
Siemens Business Information Consulting Co., Ltd, Beijing / China
Siemens Circuit Protection Systems Ltd., Shanghai, Shanghai / China
Siemens Building Technologies (Tianjin) Ltd., Tianjin / China
Scion Medical Technologies (Shanghai) Ltd., Shanghai / China
Mentor Graphics (Shanghai) Electronic Technology Co., Ltd., Shanghai / China
Hangzhou Alicon Pharm Sci & Tec Co., Ltd., Hangzhou / China
Green Matrix (Suzhou) Network Technology Co., Ltd., Suzhou / China
Beijing Siemens Cerberus Electronics Ltd., Beijing / China
Acuson (Shanghai) Co., Ltd., Shanghai / China
Siemens Industrial Limited, Dhaka / Bangladesh
Siemens Healthcare Ltd., Dhaka / Bangladesh
Varian Medical Systems Australasia Pty Ltd., Belrose / Australia
YUNEX PTY. LTD., Sydney / Australia
SIEMENS RAIL AUTOMATION PTY. LTD., Bayswater / Australia
Siemens Mobility Pty Ltd, Bayswater / Australia
Siemens Ltd., Bayswater / Australia
Siemens Industry Software Pty Ltd, Bayswater / Australia
Exemplar Health (NBH) Holdings 2 Pty Limited, Bayswater / Australia
Exemplar Health (NBH) Trust 2, Bayswater / Australia
51
Siemens Mobility d.o.o. Cerovac, Kragujevac / Serbia
Siemens Healthcare d.o.o. Beograd, Belgrade / Serbia
100
55
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Siemens d.o.o. Beograd, Belgrade / Serbia
Varian Medical Systems Arabia Commercial Limited, Riyadh / Saudi Arabia
Siemens Mobility Saudi Ltd, Al Khobar / Saudi Arabia
Siemens Ltd., Riyadh / Saudi Arabia
Siemens Healthcare Limited, Riyadh / Saudi Arabia
_3
100
Siemens Commercial Factoring Ltd., Shanghai / China
100
100
100
100
100
1007
100
100
100
75
Siemens Electrical Apparatus Ltd., Suzhou, Suzhou / China
Siemens Electrical Drives Ltd., Tianjin / China
100
100
100
100
100
100
100
100
1007
100
100
100
100
100
100
100
100
100
100
Siemens Logistics PTE. LTD., Singapore / Singapore
Siemens Mobility Pte. Ltd., Singapore / Singapore
Siemens Pte. Ltd., Singapore / Singapore
YUNEX PTE. LTD., Singapore / Singapore
Asiri A O I Cancer Centre (Private) Limited, Colombo/Sri Lanka
Fang Chi Health Management Co., Ltd, Taipei / Taiwan, Province of China
Hong Tai Health Management Co. Ltd., Taipei / Taiwan, Province of China
New Century Technology Co. Ltd., Taipei / Taiwan, Province of China
Siemens Healthcare Limited, Taipei / Taiwan, Province of China
Siemens Industry Software (TW) Co., Ltd., Taipei / Taiwan, Province of China
Siemens Limited, Taipei / Taiwan, Province of China
Varian Medical Systems Taiwan Co., Ltd., Taipei / Taiwan, Province of China
Siemens Healthcare Limited, Bangkok / Thailand
100
100
100
100
100
100
100
100
502
100
100
100
100
100
100
100
100
100
1007
100
100
100
Consolidated Financial Statements
Siemens Finance and Leasing Ltd., Beijing / China
Siemens Factory Automation Engineering Ltd., Beijing / China
100
100
100
100
100
100
100
100
100
100
Siemens Limited, Bangkok Thailand
Siemens Electrical Drives (Shanghai) Ltd., Shanghai / China
Siemens Logistics Automation Systems Ltd., Bangkok / Thailand
Siemens Healthcare Limited, Ho Chi Minh City I Viet Nam
Siemens Ltd., Ho Chi Minh City / Viet Nam
100
100
100
100
1007
Siemens Mobility Limited, Bangkok/Thailand
100
100
51
100
100
100
100
100
100
100
100
100
100
100
100
100
73
Siemens Corporation, Wilmington, DE / United States
100
51
100
Siemens Electrical, LLC, Wilmington, DE / United States
Siemens Rail Automation, C.A., Caracas / Venezuela, Bolivarian Republic of
Siemens Healthcare S.A., Caracas / Venezuela, Bolivarian Republic of
Siemens S.A., Montevideo / Uruguay
Varian Medical Systems Africa Holdings, Inc., Wilmington, DE / United States
Varian Medical Systems Canada Holdings, Inc., Wilmington, DE / United States
Varian Medical Systems India Private Limited, Wilmington, DE / United States
Varian Medical Systems International Holdings, Inc., Wilmington, DE / United States
Varian Medical Systems Latin America, Ltd., Wilmington, DE / United States
Varian Medical Systems Netherlands Holdings, Inc., Wilmington, DE / United States
Varian Medical Systems Pacific, Inc., Wilmington, DE / United States
Varian Medical Systems, Inc., Wilmington, DE / United States
Yunex LLC, Wilmington, DE / United States
Varian BioSynergy, Inc., Wilmington, DE / United States
TimeSeries US, Inc., Centennial, CO / United States
Supplyframe, Inc., Pasadena, CA / United States
Siemens Capital Company LLC, Wilmington, DE / United States
SMI Holding LLC, Wilmington, DE / United States
Siemens Process Systems Engineering Inc., Wilmington, DE / United States
Siemens Public, Inc., Iselin, NJ / United States
Siemens Mobility, Inc, Wilmington, DE / United States
Siemens Medical Solutions USA, Inc., Wilmington, DE / United States
Siemens Logistics LLC, Wilmington, DE / United States
Siemens Industry, Inc., Wilmington, DE / United States
Siemens Government Technologies, Inc., Wilmington, DE / United States
Siemens Healthcare Diagnostics Inc., Los Angeles, CA / United States
Siemens Healthcare Laboratory, LLC, Wilmington, DE / United States
Siemens Healthineers Holdings, LLC, Wilmington, DE / United States
Siemens Industry Software Inc., Wilmington, DE / United States
Siemens Financial Services, Inc., Wilmington, DE / United States
Siemens Financial, Inc., Wilmington, DE / United States
Siemens USA Holdings, Inc., Wilmington, DE / United States
Dade Behring Hong Kong Holdings Corporation, Tortola Virgin Islands, British
PETNET Solutions Cleveland, LLC, Wilmington, DE / United States
PETNET Solutions, Inc., Knoxville, TN / United States
PolyDyne Software Inc., Austin, TX / United States
Rail-Term Corp., Plymouth, MI / United States
Next47 Mid-Tier GP 2020, L.P., Wilmington, DE / United States
Next47 Mid-Tier GP 2021, L.P., Wilmington, DE / United States
Siemens S.A.C., Surquillo / Peru
Siemens Mobility S.A.C., Lima / Peru
100
100
97
100
100
1007
100
100
100
100
1007
100
100
Varian Medical Systems Puerto Rico, LLC, Guaynabo / Puerto Rico
Acuson, LLC, Wilmington, DE / United States
Aimsun Inc., New York, NY / United States
Building Robotics Inc., Wilmington, DE / United States
Next47 Mid-Tier GP 2018, L.P., Wilmington, DE / United States
Next47 Mid-Tier GP 2019, L.P., Wilmington, DE / United States
J2 Innovations, Inc., Los Angeles, CA / United States
Mannesmann Corporation, New York, NY / United States
Mansfield Insurance Company, Burlington, VT / United States
Next47 Inc., Wilmington, DE / United States
Executive Consulting Group, LLC, Wilmington, DE / United States
Enlighted, Inc., Wilmington, DE / United States
eMeter Corporation, Wilmington, DE / United States
ECG TopCo Holdings, LLC, Wilmington, DE / United States
100
Next47 Mid-Tier GP 2022, L.P., Wilmington, DE / United States
Next47 TTGP, L.L.C., Wilmington, DE / United States
Omnetric Corp., Wilmington, DE / United States
P.E.T.NET Houston, LLC, Austin, TX / United States
Page Mill Corporation, Boston, MA / United States
PETNET Indiana, LLC, Indianapolis, IN / United States
53
80
100
Dedicated 21maging LLC, Wilmington, DE / United States
ECG Acquisition, Inc., Wilmington, DE / United States
D3 Oncology Inc., Wilmington, DE / United States
Corindus, Inc., Wilmington, DE / United States
CD-adapco Battery Design LLC, Dover, DE / United States
Bytemark Inc., Dover, DE / United States
100
501
Consolidated Financial Statements
100
YUTRAFFIC, UNIPESSOAL LDA, Amadora / Portugal
SIEMENS HEALTHCARE, UNIPESSOAL, LDA, Amadora / Portugal
Siemens Logistics, Unipessoal Lda, Lisbon Portugal
SIEMENS MOBILITY, UNIPESSOAL LDA, Amadora / Portugal
Siemens S.A., Amadora / Portugal
YUNEX Sp. z o.o., Warsaw / Poland
Varian Medical Systems Poland Sp. z o.o., Warsaw / Poland
Siemens Sp. z o.o., Warsaw / Poland
Siemens Mobility Sp. z o.o., Warsaw / Poland
Siemens Industry Software Sp. z o.o., Warsaw / Poland
Siemens Healthcare Sp. z o.o., Warsaw / Poland
Siemens Finance Sp. z o.o., Warsaw / Poland
Siemens Healthcare (Private) Limited, Lahore / Pakistan
Siemens Pakistan Engineering Co. Ltd., Karachi / Pakistan
Mentor Graphics Polska Sp. z o.o., Katowice / Poland
Siemens Digital Logistics Sp. z o.o., Wroclaw / Poland
Mentor Graphics Pakistan Development (Private) Limited, Lahore / Pakistan
Siemens Industrial LLC, Muscat / Oman
Siemens Mobility AS, Oslo / Norway
Consolidated Financial Statements
Asia, Australia (154 companies)
Siemens W.L.L., Doha Qatar
54
J2 Innovative Concepts Europe SRL, Bucharest / Romania
Siemens Industry Software S.R.L., Brasov / Romania
63
100
Arabia Electric Ltd. (Equipment), Jeddah / Saudi Arabia
Varian Medical Systems (RUS) Limited Liability Company, Moscow / Russian Federation
Siemens Mobility LLC, Moscow / Russian Federation
Siemens Healthcare Limited Liability Company, Moscow / Russian Federation
Siemens Finance and Leasing LLC, Vladivostok / Russian Federation
000 Siemens Industry Software, Moscow / Russian Federation
000 Siemens, Moscow / Russian Federation
000 Legion II, Moscow / Russian Federation
LIMITED LIABILITY COMPANY SIEMENS ELEKTROPRIVOD, St. Petersburg / Russian Federation
Acuson RUS Limited Liability Company, Moscow / Russian Federation
Varinak Europe SRL (Romania), Pantelimon / Romania
SIMEA SIBIU S.R.L., Sibiu / Romania
Siemens Mobility S.R.L., Bucharest / Romania
Siemens Healthcare S.R.L., Bucharest / Romania
54
Siemens S.R.L., Bucharest / Romania
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
1007
100
100
100
100
100
100
100
100
100
100
Due to the large contract volume and risk profile, our audit procedures focused on large contracts for delivery of high-speed and commuter
trains.
3
Our audit procedures did not lead to any reservations relating to revenue recognition on construction-type contracts.
Reference to related disclosures: With regard to the recognition and measurement policies applied in accounting for construction-type
contracts, refer to Note 2 Material accounting policies and critical accounting estimates in the notes to the consolidated financial
statements. With respect to contract assets and liabilities as well as provisions for order related losses and risks, refer to Note 10 Contract
assets and liabilities, Note 18 Provisions and Note 21 Commitments and contingencies in the notes to the consolidated financial
statements.
Provisions for proceedings out of or in connection with alleged compliance violations as well as provisions for asset retirement
obligations
Reasons why the matter was determined to be a key audit matter: We considered the accounting for provisions for proceedings out
of or in connection with alleged compliance violations, including allegations of corruption and antitrust violations, and for asset retirement
obligations to be a key audit matter. These matters are subject to inherent uncertainties and require estimates that could have a significant
impact on the recognition and measurement of the respective provision and, accordingly, on assets, liabilities and financial performance.
The proceedings out of or in connection with alleged compliance violations are subject to uncertainties because they involve complex
legal issues and accordingly, considerable management judgment, in particular when determining whether and in what amount a
provision is required to account for the risks. The uncertainties and estimates with respect to asset retirement obligations pertain especially
to the estimated costs for waste treatment and packaging for final storage, for interim storage as well as transport to the final nuclear
waste storage facility.
Auditor's response: During our audit of the financial reporting of proceedings out of or in connection with alleged compliance violations,
we examined the processes implemented by Siemens for identifying, assessing and accounting for legal and regulatory proceedings. To
determine what potentially significant pending legal proceedings or claims asserted are known and to assess management's estimates of
the expected cash outflows, our audit procedures included inquiring of management and other persons within the Group entrusted with
these matters, obtaining written statements from in-house legal counsels with respect to the assessment of estimated cash outflows and
their probability, obtaining confirmations from external legal advisors and evaluating internal statements concerning the accounting
treatment in the consolidated financial statements. Furthermore, we examined legal consulting expense accounts for any indications of
legal matters not yet considered.
Independent Auditor's Report (Group)
We further considered alleged or substantiated non-compliance with legal provisions, official regulations and internal company policies
(compliance violations) by inspecting internal and external statements on specific matters, obtaining written statements from external
legal advisors, and by inquiring of the compliance organization. In this regard, among other procedures, we evaluated the conduct and
results of internal investigations by inspecting internal reports and the measures taken to remediate identified weaknesses, and assessed
on this basis whether management's evaluation of any risks to be accounted for in the consolidated financial statements is plausible.
Based on the aforementioned uncertainties, our audit procedures with respect to asset retirement obligations focused on the remediation
and environmental protection liabilities in connection with the decommissioning of the facilities in Hanau, Germany (Hanau facilities), as
well as for the nuclear research and service center in Karlstein, Germany (Karlstein facilities). Our audit procedures included, among others,
assessing the estimated costs for waste treatment and packaging for final storage, for interim storage as well as transport to the final
nuclear waste storage facility, and the valuation methods used by drawing on the expertise of our valuation specialists. We evaluated
management's assessments, particularly regarding the accounting effects of the contractually agreed transfer of the nuclear waste disposal
obligation to the Federal Republic of Germany, which is still subject to the approval of the EU commission under state-aid-rules, and the
expected costs to fulfill the obligations remaining with Siemens through inquiries of persons entrusted with the matter and inspections of
internal and external documents.
4
Our audit procedures did not lead to any reservations relating to the accounting for proceedings out of or in connection with alleged
compliance violations as well as for asset retirement obligations.
Reference to related disclosures: With regard to the recognition and measurement policies applied in accounting for provisions, refer to
Note 2 Material accounting policies and critical accounting estimates in the notes to the consolidated financial statements. With respect
to proceedings out of or in connection with alleged compliance violations, refer to Note 22 Legal proceedings. With respect to the
uncertainties and estimates relating to asset retirement obligations, refer to Note 18 Provisions of the notes to the consolidated financial
statements.
Uncertain tax positions and deferred taxes
The Supervisory Board is responsible for the Report of the Supervisory Board in the Annual Report 2021 within the meaning of ISA [DE]
720 (Revised). Management and the Supervisory Board are responsible for the declaration pursuant to Sec. 161 AktG ["Aktiengesetz":
German Stock Corporation Act] on the Corporate Governance Code, which is part of the Corporate Governance Statement, and for the
Compensation Report. In all other respects, management is responsible for the other information. The other information comprises the
Corporate Governance Statement referred to above. In addition, the other information comprises parts to be included in the Annual Report,
of which we received a version prior to issuing this auditor's report, in particular:
Reasons why the matter was determined to be a key audit matter: Siemens operates in numerous countries with different local tax
legislation. The accounting for uncertain tax positions as well as deferred taxes requires management to exercise considerable judgment
and make estimates and assumptions, and was therefore a key audit matter. In particular, this affects the measurement and completeness
of uncertain tax positions, the recoverability of deferred tax assets, the measurement and completeness of deferred tax liabilities as well
as management's assessments regarding the tax implications of the COVID-19 pandemic.
Auditor's response: With the assistance of internal tax specialists who have knowledge of relevant local tax law, we examined the
processes installed by management for the identification, recognition and measurement of tax positions. In the course of our audit
procedures relating to uncertain tax positions, we evaluated whether management's assessment of the tax implications of significant
business transactions or events in fiscal year 2021, which could result in uncertain tax positions or influence the measurement of existing
uncertain tax positions, was in compliance with tax law. In particular, this includes the tax implications arising from the results of tax field
audits, the acquisition or disposal of company shares, corporate (intragroup) restructuring activities and cross-border matters, such as the
determination of transfer prices.
Independent Auditor's Report (Group)
In order to assess measurement and completeness, we also obtained confirmations from external tax advisors. Further, we evaluated
management's assessments with respect to the prospects of success of appeal and tax court proceedings by inquiring of the employees of
the Siemens tax department and by considering current tax case law.
As part of our substantive audit procedures, which particularly involved project reviews, we evaluated management's estimates and
assumptions based on a risk-based selection of a sample of contracts. Our sample primarily included projects that are subject to significant
future uncertainties and risks, such as projects with complex safety/technical and regulatory requirements or projects with a large portion
of materials and services to be provided by suppliers or consortium partners, fixed-price or turnkey projects, cross-border projects, projects
in regions particularly affected by the COVID-19 pandemic and projects with changes in cost estimates, delays and/or low or negative
margins. Our audit procedures included, among others, review of the contracts and their terms and conditions including contractually
agreed partial deliveries and services, termination rights, penalties for delay and breach of contract, liquidated damages as well as joint
and several liability. In order to evaluate whether revenues were recognized on an accrual basis for the selected projects, we analyzed
revenues attributable to the fiscal year and corresponding cost of sales to be recognized in the statement of income considering the extent
of progress towards completion and examined the accounting for the associated items in the statement of financial position. Considering
the requirements of IFRS 15, we also assessed the accounting for contract amendments or contractually agreed options. We further
performed inquiries of project management (both commercial and technical project managers) with respect to the development of the
projects including the effects of COVID-19 on project execution, the reasons for deviations between planned and actual costs, the current
estimated costs to complete the projects, and management's assessments on probabilities that contract risks and claims from joint and
several liability will materialize. To identify anomalies in the development of margins and other project KPIs, we also applied data analysis
procedures. In designing our audit procedures, we also considered results from project audits conducted by the internal audit function.
Furthermore, we obtained evidence from third parties for selected projects (e.g., project acceptance documentation, contractual terms
and conditions, and lawyers' confirmations regarding alleged breaches of contract and asserted claims).
In assessing the recoverability of deferred tax assets, we above all analyzed management's assumptions with respect to tax planning
strategies and projected future taxable income, also in view of the implications of the COVID-19 pandemic, and compared them to internal
business plans. In the course of our audit procedures regarding deferred tax liabilities, we examined in particular the assumptions regarding
reinvestment of subsidiaries' retained profits for an indefinite period and assessed these taking into account dividend planning.
Our audit procedures did not lead to any reservations relating to the accounting for uncertain tax positions and deferred taxes.
Reference to related disclosures: With regard to the recognition and measurement policies applied in accounting for income taxes, refer
to Note 2 Material accounting policies and critical accounting estimates in the notes to the consolidated financial statements. With respect
to disclosures for deferred tax assets and liabilities, refer to Note 7 Income taxes in the notes to the consolidated financial statements.
Other information
Furthermore, we evaluated the disclosures on proceedings out of or in connection with alleged compliance violations as well as on asset
retirement obligations in the notes to the consolidated financial statements.
Auditor's response: As part of our audit, we obtained an understanding of the Group's internally established methods, processes and
control mechanisms for project management in the bid and execution phase of construction-type contracts. In this regard, we assessed
the design and operating effectiveness of the accounting-related internal controls in the project business by obtaining an understanding
of business transactions specific to construction-type contracts, from the initiation of the transaction through presentation in the
consolidated financial statements. We also tested controls addressing the timely assessment of changes in cost estimates and the timely
and complete recognition of such changes in the project calculation.
Basis for the opinions
Revenue recognition on construction-type contracts
We have audited the consolidated financial statements of Siemens Aktiengesellschaft, Berlin and Munich, and its subsidiaries (the Group),
which comprise the consolidated statements of income and comprehensive income for the fiscal year from October 1, 2020 to September
30, 2021, the consolidated statements of financial position as of September 30, 2021, the consolidated statements of cash flows and
changes in equity for the fiscal year from October 1, 2020 to September 30, 2021, and notes to the consolidated financial statements,
including a summary of significant accounting policies. In addition, we have audited the group management report of Siemens
Aktiengesellschaft, which is combined with the management report of Siemens Aktiengesellschaft, for the fiscal year from October 1,
2020 to September 30, 2021. In accordance with the German legal requirements, we have not audited the content of the Corporate
Governance Statement which is published on the website stated in the combined management report.
•
.
In our opinion, on the basis of the knowledge obtained in the audit,
the accompanying consolidated financial statements comply, in all material respects, with the International Financial Reporting
Standards (IFRSs) as adopted by the European Union (EU), and the additional requirements of German commercial law pursuant to
Sec. 315e (1) HGB ["Handelsgesetzbuch”: German Commercial Code] as well as with full IFRSS as issued by the International Accounting
Standards Board (IASB), and, in compliance with these requirements, give a true and fair view of the assets, liabilities and financial
position of the Group as of September 30, 2021 and of its financial performance for the fiscal year from October 1, 2020 to September
30, 2021, and
⚫ the accompanying group management report as a whole provides an appropriate view of the Group's position. In all material respects,
this group management report is consistent with the consolidated financial statements, complies with German legal requirements and
appropriately presents the opportunities and risks of future development. Our opinion on the group management report does not cover
the content of the Corporate Governance Statement referred to above.
Pursuant to Sec. 322 (3) Sentence 1 HGB, we declare that our audit has not led to any reservations relating to the legal compliance of the
consolidated financial statements and of the group management report.
We conducted our audit of the consolidated financial statements and of the group management report in accordance with Sec. 317 HGB
and the EU Audit Regulation (No 537/2014, referred to subsequently as "EU Audit Regulation") and in compliance with German Generally
Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in
Germany] (IDW). In conducting the audit of the consolidated financial statements we also complied with International Standards on
Auditing (ISA). Our responsibilities under those requirements, principles and standards are further described in the "Auditor's
responsibilities for the audit of the consolidated financial statements and of the group management report" section of our auditor's report.
We are independent of the group entities in accordance with the requirements of European law and German commercial and professional
law, and we have fulfilled our other German professional responsibilities in accordance with these requirements. In addition, in accordance
with Art. 10 (2) f) of the EU Audit Regulation, we declare that we have not provided non-audit services prohibited under Art. 5 (1) of the
EU Audit Regulation. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions
on the consolidated financial statements and on the group management report.
Key audit matters in the audit of the consolidated financial statements
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial
statements for the fiscal year from October 1, 2020 to September 30, 2021. These matters were addressed in the context of our audit of
the consolidated financial statements as a whole, and in forming our opinion thereon; we do not provide a separate opinion on these
matters.
Below, we describe what we consider to be the key audit matters:
Accounting for the acquisition of Varian
Reasons why the matter was determined to be a key audit matter: The acquisition of Varian Medical Systems, Inc., USA (Varian), was
completed on April 15, 2021. Since then, Siemens AG indirectly holds all the shares in Varian via its subsidiary Siemens Healthineers AG.
The acquisition was accounted for in accordance with IFRS 3, Business Combinations, on the basis of a preliminary purchase price
allocation. To finance the acquisition, a further capital increase was carried out at the level of Siemens Healthineers AG in fiscal year 2021
by issuing new shares, resulting in an increase of non-controlling interests in the Siemens consolidated financial statements. Furthermore,
the Group issued bonds denominated in US dollars to finance the transaction. To hedge foreign currency risks in connection with the
acquisition and its financing, the Group entered into hedging transactions which were designated as hedging instruments in hedging
relationships.
The accounting for the acquisition, including financing and hedging of foreign currency risks, was a key audit matter due to the estimation
uncertainties and judgments involved in the preliminary purchase price allocation (particularly regarding the measurement of acquired
intangible assets) and due to the overall significant impact on the assets, liabilities, financial position and financial performance of the
Group, the complexity of the transaction and the associated significant risk of material misstatement.
Auditor's response: Our audit procedures in relation to the preliminary purchase price allocation included the assessment of the
consideration transferred by Siemens and an evaluation of the methodology applied by the external appraiser engaged by management
with respect to the identification and valuation of the assets acquired and liabilities assumed in accordance with the requirements of IFRS
2
Independent Auditor's Report (Group)
3. We assessed the suitability of the preliminary external appraisal as audit evidence, among other things, through inquiries of
management as well as of the external appraiser. With the assistance of internal valuation specialists, we also analyzed whether the
assumptions and estimates (particularly growth rates, cost of capital, royalty rates and remaining useful lives) used in determining the fair
values of the identifiable assets acquired (particularly the acquired customer relationships and trade names as well as technologies) and
liabilities assumed correspond to general and industry-specific market expectations. In addition, we used the expertise of internal industry
specialists for the assessment of the recognition and valuation of identified intangible assets and liabilities assumed. Further, we
reperformed the calculations in the valuation models and reconciled the expected future cash flows underlying the valuations with, inter
alia, internal business plans. As part of our audit procedures, we also assessed the earnings effects in fiscal year 2021 resulting from the
subsequent accounting for assets acquired and liabilities assumed, particularly taking into account the remaining useful lives of the
acquired assets. As part of our audit of the accounting for the capital increase, we compared the change in equity with the underlying
resolutions of the Managing Board and the Supervisory Board of Siemens Healthineers, the register entries as well as other contractual
agreements with third parties. For the bonds issued, we compared the recognized amounts with the respective underlying contractual
agreements. With regard to the accounting for hedging relationships we assessed whether the requirements for hedge accounting in
accordance with IFRS 9, Financial Instruments, were satisfied based on the documentation prepared by management and the underlying
contractual agreements. We also assessed the accounting for hedging relationships and reconciled the amounts with the respective line
items in the consolidated statement of financial position, consolidated statement of income and consolidated statement of comprehensive
income. In this context, we further assessed the methodology applied to determine the fair values of hedging instruments and the clerical
accuracy of the respective calculations.
Furthermore, we assessed the application of uniform accounting policies, tax effects resulting from the acquisition and the accounting for
the first-time consolidation of the Varian entities in the consolidation system. In addition, we assessed the acquisition-related disclosures
(including financing and hedging) in the notes to the consolidated financial statements taking into account the respective IFRS
requirements.
Our audit procedures did not lead to any reservations relating to the accounting for the acquisition of Varian.
Reference to related disclosures: With regard to the accounting and measurement policies applied in connection with the business
combination, refer to Note 2 Material accounting policies and critical accounting estimates in the notes to the consolidated financial
statements. An explanation of the transaction including the related financing and hedging transactions as well as disclosures on the
preliminary purchase price allocation is included in Note 3 Acquisitions, dispositions and discontinued operations, Note 16 Debt and Note
24 Derivative financial instruments and hedging activities in the notes to the consolidated financial statements.
Reasons why the matter was determined to be a key audit matter: The Group conducts a significant portion of its business under
construction-type contracts, particularly in the Mobility business. Revenue from long-term construction-type contracts is recognized in
accordance with IFRS 15, Revenue from Contracts with Customers, generally over time under the percentage-of-completion method. We
consider the accounting for construction-type contracts to be an area posing a significant risk of material misstatement (including the
potential risk of management override of internal controls) and accordingly a key audit matter, because management's assessments
significantly impact the determination of the extent of progress towards completion. These assessments include, in particular, the scope
of deliveries and services required to fulfill contractually defined obligations, total estimated contract costs, remaining costs to completion
and total estimated contract revenues, as well as contract risks including technical, political, regulatory and legal risks. Revenues, total
estimated contract costs and profit recognition may deviate significantly from original estimates based on new knowledge about cost
overruns and changes in project scope over the term of a construction-type contract. The effects of the coronavirus pandemic (COVID-19)
on the project business, such as delays in project execution or disruptions in supply chains as well as change in law clauses with regard to
compensation for damages or contractual penalties for delays in delivery and their accounting treatment remained of key significance for
our audit.
•
Perform audit procedures on the prospective information presented by management in the group management report. On the basis of
sufficient appropriate audit evidence we evaluate, in particular, the significant assumptions used by management as a basis for the
prospective information, and evaluate the proper derivation of the prospective information from these assumptions. We do not express
a separate opinion on the prospective information and on the assumptions used as a basis. There is a substantial unavoidable risk that
future events will differ materially from the prospective information.
the Responsibility Statement (to the Consolidated Financial Statements and the Group Management Report),
Identify and assess the risks of material misstatement of the consolidated financial statements and of the group management report,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Obtain an understanding of internal control relevant to the audit of the consolidated financial statements and of arrangements and
measures (systems) relevant to the audit of the group management report in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of these systems.
• Evaluate the appropriateness of accounting policies used by management and the reasonableness of estimates made by management
and related disclosures.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor's report
to the related disclosures in the consolidated financial statements and in the group management report or, if such disclosures are
inadequate, to modify our respective opinions. Our conclusions are based on the audit evidence obtained up to the date of our auditor's
report. However, future events or conditions may cause the Group to cease to be able to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether
the consolidated financial statements present the underlying transactions and events in a manner that the consolidated financial
statements give a true and fair view of the assets, liabilities, financial position and financial performance of the Group in compliance
with IFRSS as adopted by the EU and the additional requirements of German commercial law pursuant to Sec. 315e (1) HGB as well as
with full IFRSS as issued by the IASB.
•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group
to express opinions on the consolidated financial statements and on the group management report. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our opinions.
• Evaluate the consistency of the group management report with the consolidated financial statements, its conformity with German law,
and the view of the Group's position it provides.
•
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with the relevant independence requirements,
and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where
applicable, the related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the
audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in
our auditor's report unless law or regulation precludes public disclosure about the matter.
Other legal and regulatory requirements
Report on the assurance on the electronic rendering of the consolidated financial statements and the group
management report prepared for publication purposes in accordance with Sec. 317 (3a) HGB
Opinion
We have performed assurance work in accordance with Sec. 317 (3a) HGB to obtain reasonable assurance about whether the rendering
of the consolidated financial statements and the group management report (hereinafter the "ESEF documents") contained in the file
SIEMENS 2021.zip (SHA-256 checksum: c2fee878a23005add85c87b5f4a7cf3e7883b81d2626892870c12ff3d2a977f8) and prepared for
publication purposes complies in all material respects with the requirements of Sec. 328 (1) HGB for the electronic reporting format ("ESEF
6
Independent Auditor's Report (Group)
format"). In accordance with German legal requirements, this assurance work extends only to the conversion of the information contained
in the consolidated financial statements and the group management report into the ESEF format and therefore relates neither to the
information contained within these renderings nor to any other information contained in the file identified above.
In our opinion, the rendering of the consolidated financial statements and the group management report contained in the file identified
above and prepared for publication purposes complies in all material respects with the requirements of Sec. 328 (1) HGB for the electronic
reporting format. Beyond this assurance opinion and our audit opinions on the accompanying consolidated financial statements and the
accompanying group management report for the fiscal year from October 1, 2020 to September 30, 2021 contained in the "Report on the
audit of the consolidated financial statements and of the group management report" above, we do not express any assurance opinion on
the information contained within these renderings or on the other information contained in the file identified above.
Basis for the opinion
Opinions
•
•
•
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and whether the group management report as a whole provides an appropriate view of the
Group's position and, in all material respects, is consistent with the consolidated financial statements and the knowledge obtained in the
audit, complies with the German legal requirements and appropriately presents the opportunities and risks of future development, as well
as to issue an auditor's report that includes our opinions on the consolidated financial statements and on the group management report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Sec. 317 HGB and
the EU Audit Regulation as well as in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated
by the IDW and in supplementary compliance with ISA will always detect a material misstatement. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements and this group management report.
the Responsibility Statement (to the Annual Financial Statements and the Management Report),
the Five-Year Summary,
•
the Compensation Report,
the Report of the Supervisory Board,
• Notes and forward-looking statements,
but not the consolidated financial statements and the annual financial statements, not the disclosures of the combined management
report whose content is audited and not our auditor's reports thereon.
Our opinions on the consolidated financial statements and on the group management report do not cover the other information, and
consequently we do not express an opinion or any other form of assurance conclusion thereon.
•
In connection with our audit, our responsibility is to read the other information and, in so doing, to consider whether the other information
is materially inconsistent with the consolidated financial statements, with the group management report or our knowledge obtained in
the audit, or
⚫ otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Responsibilities of management and the Supervisory Board for the consolidated financial statements and the
group management report
Management is responsible for the preparation of the consolidated financial statements that comply, in all material respects, with IFRSS
as adopted by the EU and the additional requirements of German commercial law pursuant to Sec. 315e (1) HGB as well as with full IFRSS
as issued by the IASB, and that the consolidated financial statements, in compliance with these requirements, give a true and fair view of
the assets, liabilities, financial position and financial performance of the Group. In addition, management is responsible for such internal
control as management has determined necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going
concern. It also has the responsibility for disclosing, as applicable, matters related to going concern. In addition, management is
responsible for financial reporting based on the going concern basis of accounting, unless there is an intention to liquidate the Group or
to cease operations, or there is no realistic alternative but to do so.
Furthermore, management is responsible for the preparation of the group management report that, as a whole, provides an appropriate
view of the Group's position and is, in all material respects, consistent with the consolidated financial statements, complies with German
legal requirements and appropriately presents the opportunities and risks of future development. In addition, management is responsible
for such arrangements and measures (systems) as management has considered necessary to enable the preparation of a group
management report that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropriate
evidence for the assertions in the group management report.
The Supervisory Board is responsible for overseeing the Group's financial reporting process for the preparation of the consolidated financial
statements and of the group management report.
5
Independent Auditor's Report (Group)
Auditor's responsibilities for the audit of the consolidated financial statements and of the group
management report
We exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Report on the audit of the consolidated financial statements and of the group management
report
Responsibilities of management and the Supervisory Board for the ESEF documents
Independent Auditor's Report (Group)
Equity
interest
Net income
Equity
in %
in millions
of €
in millions
of €
1004,5
Consolidated Financial Statements
(1)
Munipolis GmbH, Munich
1004,5
257
SPT Beteiligungen GmbH & Co. KG, Grünwald
To Siemens Aktiengesellschaft, Berlin and Munich
170
Europe, Commonwealth of Independent States (C.I.S.), Africa, Middle East (without Germany) (1
company)
Siemens Gas and Power Holding B.V., Zoeterwoude / Netherlands
(1)
Erlapolis 20 GmbH, Munich
Germany (3 companies)
Other investments11
We conducted our assurance work on the rendering, of the consolidated financial statements and the group management report contained
in the file identified above in accordance with Sec. 317 (3a) HGB and the IDW Assurance Standard: Assurance on the Electronic Rendering
of Financial Statements and Management Reports Prepared for Publication Purposes in Accordance with Sec. 317 (3a) HGB (IDW ASS 410)
and the International Standard on Assurance Engagements 3000 (Revised). Our responsibility in accordance therewith is further described
in the "Group auditor's responsibilities for the assurance work on the ESEF documents" section. Our audit firm applies the IDW Standard
on Quality Management 1: Requirements for Quality Management in the Audit Firm (IDW QS 1).
7
Our auditor's report must always be read together with the audited consolidated financial statements and the audited group management
report as well as the assured ESEF documents. The consolidated financial statements and the group management report converted to the
ESEF format - including the versions to be published in the Bundesanzeiger [German Federal Gazette] ― are merely electronic renderings
of the audited consolidated financial statements and the audited group management report and do not take their place. In particular, the
ESEF report and our assurance opinion contained therein are to be used solely together with the assured ESEF documents made available
in electronic form.
Other matter - use of the auditor's report
We declare that the opinions expressed in this auditor's report are consistent with the additional report to the Audit Committee pursuant
to Art. 11 of the EU Audit Regulation (long-form audit report).
We were elected as group auditor by the Annual Shareholders' Meeting on February 3, 2021. We were engaged by the Supervisory Board
on February 3, 2021. We have been the group auditor of Siemens Aktiengesellschaft without interruption since the fiscal year from October
1, 2008 to September 30, 2009.
Further information pursuant to Art. 10 of the EU Audit Regulation
Evaluate whether the tagging of the ESEF documents with Inline XBRL technology (iXBRL) in accordance with the requirements of Arts.
4 and 6 of Commission Delegated Regulation (EU) 2019/815, in the version in force at the date of the financial statements, enables an
appropriate and complete machine-readable XBRL copy of the XHTML rendering.
•
• Evaluate whether the ESEF documents enable an XHTML rendering with content equivalent to the audited consolidated financial
statements and to the audited group management report.
• Evaluate the technical validity of the ESEF documents, i.e., whether the file containing the ESEF documents meets the requirements of
Commission Delegated Regulation (EU) 2019/815, in the version in force at the date of the financial statements, on the technical
specification for this file.
Obtain an understanding of internal control relevant to the assurance on the ESEF documents in order to design assurance procedures
that are appropriate in the circumstances, but not for the purpose of expressing an assurance opinion on the effectiveness of these
controls.
Identify and assess the risks of material intentional or unintentional non-compliance with the requirements of Sec. 328 (1) HGB, design
and perform assurance procedures responsive to those risks, and obtain assurance evidence that is sufficient and appropriate to provide
a basis for our assurance opinion.
•
.
Our objective is to obtain reasonable assurance about whether the ESEF documents are free from material intentional or unintentional
non-compliance with the requirements of Sec. 328 (1) HGB. We exercise professional judgment and maintain professional skepticism
throughout the assurance work. We also:
The Supervisory Board is responsible for overseeing the process for preparing the ESEF documents as part of the financial reporting process.
Group auditor's responsibilities for the assurance work on the ESEF documents
In addition, management is responsible for such internal control as it has determined necessary to enable the preparation of ESEF
documents that are free from material intentional or unintentional non-compliance with the requirements of Sec. 328 (1) HGB for the
electronic reporting format.
Management is responsible for the preparation of the ESEF documents including the electronic rendering of the consolidated financial
statements and the group management report in accordance with Sec. 328 (1) Sentence 4 No. 1 HGB and for the tagging of the
consolidated financial statements in accordance with Sec. 328 (1) Sentence 4 No. 2 HGB.
2
1,307
1004,5
Americas (2 companies)
60
Responsibility Statement
5,592
SIEMENS
Responsibility Statement (Group)
To the best of our knowledge, and in accordance with the applicable reporting principles, the Consolidated Financial Statements give a
true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the Group Management Report, which has
been combined with the Management Report for Siemens Aktiengesellschaft, includes a fair review of the development and performance
of the business and the position of the Group, together with a description of the material opportunities and risks associated with the
expected development of the Group.
Munich, November 30, 2021
Siemens Aktiengesellschaft
60
The Managing Board
Cedrik Neike
Prof. Dr. Ralf P. Thomas
Matthias Rebellius
Judith Wiese
2
Independent
Auditor's Report
TO THE CONSOLIDATED FINANCIAL STATEMENTS AND THE
GROUP MANAGEMENT REPORT FOR FISCAL 2021
SIEMENS
Dr. Roland Busch
395
TO THE CONSOLIDATED FINANCIAL STATEMENTS AND THE
GROUP MANAGEMENT REPORT FOR FISCAL 2021
8
Babson Diagnostics, Inc., Dover, DE / United States
Thoughtworks Holding Inc., Wilmington, DE / United States
1 Control due to a majority of voting rights.
2 Control due to rights to appoint, reassign or remove members of the key management personnel.
65
* No control due to contractual arrangements or legal circumstances.
5 No significant influence due to contractual arrangements or legal circumstances.
6 Significant influence due to contractual arrangements or legal circumstances.
7 Not consolidated due to immateriality.
3 Control due to contractual arrangements to determine the direction of the relevant activities.
⁹ Exemption pursuant to Section 264 b German Commercial Code.
10 Exemption pursuant to Section 264 (3) German Commercial Code.
11 Values according to the latest available local GAAP financial statements; the underlying fiscal year may differ from the Siemens fiscal year.
12 Siemens AG is a shareholder with unlimited liability of this company.
13 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability of this company.
n/a = No financial data available.
205
(4)
7
8 Not accounted for using the equity method due to immateriality.
Independent Auditor's Report (Group)
Dr. Gaenslen
Wirtschaftsprüfer
[German Public Auditor]
[German Public Auditor]
Wirtschaftsprüferin
Munich, November 30, 2021
Wirtschaftsprüfungsgesellschaft
Ernst & Young GmbH
The German Public Auditor responsible for the engagement is Katharina Breitsameter.
German Public Auditor responsible for the engagement
Breitsameter
1,968
Provisions for taxes
(211)
(3,668)
321
36
(770)
(3,255)
78,520
(12,063)
12,450
78,133
5,426
1,718
24
(24)
1,718
74,852
(4,933)
5,450
Securities
3,561
3,746
(701)
4
(151)
(554)
4,447
(897)
1,229
4,115
Loans
7,373
1,202
74,877
Non-current assets
81,911
949
863
12
1,696
1,442
17,564
12,694
1,583
1,937
20,844
16,074
215
2,082
435
8,351
24,089
25,724
184
9
12,659
(12,356)
82,213
(5,912)
(1,023)
6,084
37
(6,293)
75,920
75,999
1,243
13
133
606
(1,485)
216
(178)
73
Advanced payments made and construction in
progress
69
64
(101)
4
(11)
(95)
165
(6)
7
164
Equipment leased to others
264
(919)
135
(127)
1,326
(1,008)
(65)
56
(1,016)
310
40
318
1,217
98
6
(137)
1,183
(927)
Other equipment, plant and office equipment
(1,005)
(49)
64
(1,523)
58,517
63,304
(1,482)
81
32
(441)
(1,154)
64,786
7,570
(1,324)
(285)
282
8,896
(4,910)
285
9,738
59,672
3,172
199
(205)
3,165
(2,275)
64
(1)
73
(2,289)
876
897
Financial assets
Shares in affiliated companies
Shares in investments
197
(986)
1,869
1,934
(12,032)
4,135
4,357
(1,570)
(1,677)
(1,999)
(2,131)
(1,001)
(1,359)
2
279
202
Other operating expenses
2
(475)
(757)
Income (loss) from operations
Interest expenses
(18)
(26)
thereof negative interest from financial investment
411
319
(10,960)
4
8,078
5,303
3
Income (loss) from investments, net
(1,365)
(631)
Interest income
4
16,389
1
00
8
Annual Financial
Statements*
FOR FISCAL 2021
* This document is an English language translation of the decisive German version and is not provided in
the European Single Electronic Format (ESEF). The legally required rendering in ESEF is filed in German
language with the operator of the German Federal Gazette and published in the German Federal Gazette.
SIEMENS
Table of contents
Annual Financial Statements
3
1.
Income Statement
4
2.
Balance Sheet
5
3.
Notes
2020
2021
Note
Other operating income
General administrative expenses
Selling expenses
15,094
Research and development expenses
Cost of sales
Revenue
(in millions of €)
Fiscal year
Annual Financial Statements
1. Income Statement
Gross profit
(59)
137
thereof positive interest from borrowing
Intangible assets
Property, plant and equipment
Financial assets
Current assets
Inventories
Advance payments received
Receivables and other assets
Trade receivables
Receivables from affiliated companies
Other receivables and other assets
Other Securities
Cash and cash equivalents
Prepaid expenses
Deferred tax assets
Active difference resulting from offsetting
Total assets
Annual Financial Statements
11
75,999
75,920
74,877
74,852
897
Non-current assets
876
192
10
2020
2021
Note
Sep. 30,
225
(131)
Assets
2. Balance Sheet
395
286
Other financial income (expenses), net
5
39
(1,800)
Income from business activity
5,166
5,192
Income taxes
Net income
6
(20)
78
5,147
5,270
Appropriation of net income
3
2,975
(2,436)
(1,918)
3,400
141
12,694
(12,694)
5,270
(in millions of €)
5,147
171
Unappropriated net income
Allocation to other retained earnings
Asset reduction due to spin-off
Withdrawals from other retained earnings
Profit carried forward
Net income
27
23
290
1,326
18
Liabilities to banks
Trade payables
Liabilities to affiliated companies
Other liabilities
501
2,111
98
1,777
58,985
63,638
Deferred income
Total shareholders' equity and liabilities
1 Conditional Capital as of September 30, 2021 and 2020 amounted to €421 million and €421 million, respectively.
1,293
62,890
249
1,632
67,145
271
Property, plant and equipment: The components of production costs are described in the context of the explanations for inventories. In
general, property, plant and equipment is depreciated using the straight-line method. In certain cases, the declining balance method is
applied, whereby a switch is made from the declining balance to the straight-line method as soon as the latter results in higher depreciation
expense. Items are depreciated on a pro rata temporis basis in the year of acquisition. Low-value non-current assets that are subject to
wear and tear, movable, and capable of being used independently, are expensed immediately or capitalized and fully depreciated in the
year of acquisition.
Acquired goodwill is generally amortized systematically over the expected useful life of five to 15 years. The expected useful life is based
on the expected use of the acquired businesses and is determined in particular by economic factors such as future growth and profit
expectations, synergy effects and employee base.
Intangible assets acquired for consideration are capitalized at acquisition costs and amortized on a straight-line basis over a maximum of
five years or, if longer, the contractually agreed useful life. Items are amortized on a pro rata temporis basis in the year of acquisition. The
capitalization option for internally generated intangible assets is not used.
Negative interest from financial investments is presented as a deduction in interest income, and positive interest from borrowings as a
deduction in interest expenses.
Revenue are proceeds from selling and leasing products, providing services and granting licenses, including licensing contracts for the
use of the Siemens trademark.
3.2 Accounting and Measurement Principles
Liabilities
The Annual Financial Statements of Siemens AG have been prepared in accordance with the regulations set forth in the German
Commercial Code (Handelsgesetzbuch, HGB) and the German Stock Corporation Act (Aktiengesetz, AktG). Amounts are presented in
millions of euros (€ million). Due to rounding, numbers presented may not add up precisely to totals provided.
3.1 General Disclosures
|| 3. Notes to Annual Financial Statements
Annual Financial Statements
4
102,975
101,487
Siemens AG has registered offices in Berlin and Munich, Germany. The Company is registered in the commercial register maintained by
the local courts in Berlin Charlottenburg, Germany, under the entry number HRB 12300, and in Munich, Germany, under the entry number
HRB 6684.
Useful lives of property, plant and equipment
11,700
636
3,687
16,023
3,592
Treasury shares
Issued capital
Capital reserve
Other retained earnings
Unappropriated net income
Special reserve with an equity portion
15
2,550
2,550
(143)
(152)
2,407
2,398
8,289
8,156
7,119
5,387
17
Other provisions
628
(6)
12,372
16
16,592
Provisions for pensions and similar commitments
619
541
18,917
21,216
37
3,400
Provisions
Factory and office buildings
Other buildings
Technical equipment and machines
4,832
2,086
15,094
Fiscal year
2021
11,507
1,058
2,529
15,094
6
Annual Financial Statements
NOTE 2 Other operating income and expenses
Other operating income included income of €171 million from the release of a provision related to an investment and income from the
release of the special reserve with an equity portion of €78 (2020: €49) million.
Other operating expenses included expenses of €191 million for an intragroup service contract and expenses of €109 million for the
recognition of a provision related to guarantees and expected obligations from consortium contracts.
NOTE 3 Income (loss) from investments, net
(in millions of €)
Income from investments
610
4,655
3,534
4,666
3,599
2020
8,176
2021
Gains from the disposal of investments
Losses from the disposal of investments
Income from investments, net
Reversals of impairments on investments
Impairments on investments
Expenses from loss transfers from affiliated companies
Income from profit transfer agreements with affiliated companies
thereof from affiliated companies
Fiscal year
2021
Fiscal year
Revenue
Other provisions are recognized in an appropriate and sufficient amount to cover individual obligations for all identifiable risks relating
to liabilities of uncertain timing and amount and for anticipated losses on onerous contracts, taking account of price and cost increases
expected to arise in the future. Provisions for agreed personnel restructuring measures were recognized for legal and constructive
obligations. Significant provisions with a remaining term of more than one year are discounted using a discount rate which corresponds
to the average market interest rate appropriate for the remaining term of the obligations, as calculated and published by Deutsche
Bundesbank.
According to the Act on the Improvement of Company Pensions (Gesetz zur Verbesserung der betrieblichen Altersversorgung), Siemens
AG is secondarily liable for pension benefits provided under an indirect pension funding vehicle (mittelbarer Durchführungsweg). Siemens
AG recognizes the underfunding in the item Provisions for pensions and similar commitments as far as the respective assets of the pension
fund or of the pension and support fund (Pensions- und Unterstützungskasse) do not cover the settlement amount of the respective
pension obligations.
Entitlements resulting from plans based on asset returns from underlying assets are generally measured at the fair value of the underlying
assets at the balance sheet date. If the performance of the underlying assets is lower than a guaranteed return, the pension provision is
measured by projecting forward the contributions at the guaranteed fixed return and discounting to a present value.
Annual Financial Statements
5
Pensions and similar commitments: Siemens AG measures its pension obligations using the settlement amount calculated with the
actuarial projected unit credit method on the basis of biometric probabilities. The discount rate used corresponds to the average market
interest rate for instruments with an assumed remaining maturity of 15 years as published by German Federal Reserve Bank (Deutsche
Bundesbank).
Foreign currency translation: Receivables, other current assets, securities, cash and cash equivalents, provisions and liabilities (excluding
advance payments received on orders) as well as commitments and contingencies denominated in foreign currency are generally
measured applying the mean spot exchange rate on the balance sheet date. Balance Sheet line items denominated in foreign currency
which are part of a valuation unit used to hedge foreign currency risk are measured using the mean spot exchange rate on the transaction
date. Non-current assets and inventories acquired in foreign currency are generally measured applying the mean spot exchange rate on
the transaction date.
Offsetting of assets and of income and expenses: Siemens AG measures assets at fair value that are designated as being held exclusively
to settle specified pension obligations and obligations for early retirement ("Altersteilzeit") arrangements and which cannot be accessed
by other creditors. Income and expenses relating to these designated assets are offset against the expenses arising from compounding
the corresponding obligations and are reported within the line item Other financial income (expenses), net.
Allowances on receivables are determined on the basis of the probability of default and country risks.
Financial assets: Impairment losses are recognized if the decline in value is presumed to be other than temporary. This applies, if objective
evidence, particularly events or changes in circumstances, indicate a significant or other than temporary decline in value. In case of an
impairment in prior periods, a lower recognized value may not be maintained if the reasons for the impairment do no longer exist.
Inventories are measured at the lower of average acquisition or production costs and daily values. Production costs comprise, in addition
to direct costs, an appropriate portion of production and material overheads and depreciation of property, plant and equipment. General
administration expenses, expenses for social facilities, voluntary social costs and company pension scheme costs are not capitalized. Write-
downs are recorded to cover inventory risks for reduced usability and technological obsolescence as well as in the context of loss-free
valuation of unbilled contracts in construction-type and service businesses.
Special reserve with an equity portion includes reserves pursuant to Section 6b of the German Income Tax Act
(Einkommensteuergesetz), recognized and transferred in fiscal years prior to the transition to regulations of the German Accounting Law
Modernisation Act (Bilanzrechtsmodernisierungsgesetz).
3 to 8 years
mostly 3 to 5 years
20 to 50 years
5 to 10 years
mostly 10 years
Other equipment, plant and office equipment
Equipment leased to others
Deferred tax assets for differences between valuations of balance sheet line items in accordance to commercial and tax law and tax loss
carryforwards are recognized if a future tax benefit is expected. Deferred tax assets are netted with deferred tax liabilities. Recognized
deferred tax assets and liabilities comprise temporary differences of assets, liabilities, and deferred items of entities forming part of the
Siemens AG tax group and partnerships to the extent that the recovery or settlement of the carrying amount of assets, liabilities, or deferred
items result in a deductible or taxable amount in the taxable profit (loss) of Siemens AG.
Subscribed capital¹
Guarantees and other commitments: Siemens AG issues parent company guarantees, i.e. guarantees to ensure performance obligations
incurred from the delivery of goods or provision of services by affiliated and long-term investee companies or their parent companies. For
measurement purposes, the contract amount of the secured delivery or service agreement is reduced using the straight-line method over
the planned term of the delivery or service agreement, unless there are reasons for a different risk assessment and an increased liability
amount ("risk-adequate liability amount"). Credit lines included in the guarantee obligations in the context of financing affiliated
companies are recognized at their nominal amount.
Classification of items in the annual financial statements: Siemens AG aggregates individual line items of the Income Statement and
Balance Sheet if the individual line item is not material for providing a true and fair view of the Company's financial position and if such
an aggregation improves the clarity of the presentation. Siemens AG discloses these items separately in the notes.
Asia, Australia
Americas
Europe, C.I.S., Africa, Middle East
(in millions of €)
Revenue by region
Revenue
Derivative financial instruments are used by Siemens AG almost exclusively for hedging purposes and - if the relevant conditions are
met- are aggregated with the underlying hedged item into valuation units. When a valuation unit is created, changes in values or cash
flows from the hedged item and hedging contract are compared. A provision is recognized only for a negative surplus from the ineffective
part of the market value changes. The unrealized gains and losses from the effective part offset each other completely and are not
recognized in the Balance Sheet or the Income Statement.
Other revenue
Digital Industry
(in millions of €)
Revenue by lines of business
NOTE 1 Revenue
3.3 Notes to the Income Statement
The business and economic environment continues to be affected by the coronavirus pandemic (COVID-19). Due to the spread of the
virus, it is difficult to predict the duration and extent of the resulting impact on Siemens AG's assets, provisions, liabilities and results.
However, the Company does not anticipate that COVID-19-related effects will have a material impact on the financial statements.
Smart Infrastructure
Shareholders' equity
2,975
102,975
(88)
Write-ups
Depreciation/
amortization
Oct 01, 2020
Sep 30, 2021
Sep 30, 2020
Sep 30, 2021
Sep 30, 2021
Disposals
Carrying amount
Accumulated depreciation/amortization
Shareholders' equity and liabilities
Property, plant and equipment
10
325
606
10
404
Concessions and industrial property rights
Goodwill
Disposals
Reclassifi-
cations
Additions
Oct 01, 2020
Acquisition or production costs
Intangible assets
(in millions of €)
NOTE 10 Non-current assets
3.4 Notes to the Balance Sheet
8
00
203
(298)
(26)
88
Technical equipment and machinery
146
175
(252)
2
(7)
(246)
427
(2)
20
17
392
buildings on third-party land
Land, land rights and buildings, including
225
192
(336)
(236)
89
106
203
(84)
(16)
The income statement of Siemens AG included expenses and income relating to prior periods of €253 million and €512 million,
respectively. Expenses relating to prior periods included tax expenses related to the completion of a tax audit. Income relating to prior
periods resulted mainly from the release of provisions as well as tax income, particularly related to the remedy of appeals filed.
(100)
119
(88)
528
(382)
(42)
88
103
NOTE 9 Income and expenses relating to prior periods
Annual Financial Statements
NOTE 8 Impact of tax regulations on net income
11
assets
Financial income (expenses), (net) relating to the pension and personnel-related provisions that are offset against designated plan
(815)
(1,058)
Interest component of changes in the pension provisions that are not offset against designated plan assets
2020
H2021
(in millions of €)
Fiscal year
NOTE 5 Other financial income (expenses), net
Interest income from loans of non-current financial assets amounted to €79 (2020: €81) million.
Interest income presented in the income statement included interest income from affiliated companies of €209 (2020: €326) million.
Interest expenses included interest income from borrowing from affiliated companies of €166 (2020: interest expenses from borrowing
of €88) million.
NOTE 4 Interest income and interest expenses
Gains from the disposal of investments included gains from the disposal of Flender GmbH, Germany, amounting to €875 million, of Kyros
Beteiligungsverwaltung GmbH, Germany, amounting to €411 million and of BSAV Kapitalbeteiligungen und Vermögensverwaltungs
Management GmbH, Germany, amounting to €301 million.
Income from investments included in particular profit distributions from Siemens Ltd., China, amounting to €1,331 million, from Siemens
Holdings plc., United Kingdom, amounting to €698 million and from Siemens Healthineers AG, Germany, amounting to €534 million.
Income from profit transfer agreements with affiliated companies included profit transfers from Siemens Beteiligungen Inland GmbH,
Germany, amounting to €307 million.
8,078
101,487
85
51
14
1,034
(619)
(31)
(1,646)
664
1,724
2,452
(39)
(21)
The use of tax incentives had a positive effect on net income of €78 million.
32
Other financial income
5,303
218
Fiscal year
2021
2020
(229)
(126)
209
Annual Financial Statements
(20)
Income tax expenses resulted primarily from foreign withholding taxes as well as from expenses for previous years from the completion
of a tax audit. Tax income from the remedy of appeals filed had an offsetting effect.
Deferred taxes included income from the increase of deferred tax assets related to pension provisions.
NOTE 7 Other taxes
Other taxes of €16 (2020: €16) million were included in functional costs.
(4)
1,424
78
Income taxes
204
(in millions of €)
(206)
Income tax expenses
Deferred taxes
(277)
(132)
(895)
39
Other financial expenses
(1,800)
Impairments and reversal of impairments of loans and securities of non-current and current assets
Other financial income (expenses), net
Financial income (expenses), net relating to the pension and personnel-related provisions that are offset against designated plan assets
represented a net amount from offset income totaling €57 (2020: €18) million and expenses totaling €46 (2020: €50) million.
Other financial income resulted from gains from non-current securities, in fiscal 2021 primarily from the transfer of investment funds to
SPT Beteiligungen GmbH & Co. KG, totaling €692 (2020: €186) million, the release of provisions for risks relating to derivative financial
instruments totaling €213 (2020: expenses of €48) million, from derivative instruments related to interest rate hedging totaling €312
(2020: expenses of €10) million, and from derivative financial instruments related to foreign currency hedging amounting to €197 (2020:
expenses of €176) million.
Other financial expenses included expenses from monetary balance sheet items denominated in foreign currencies totaling €186 (2020:
income of €32) million. In addition, the position included expenses from compounding of other provisions amounting to €18 (2020: €33)
million.
Impairments and reversal of impairments of loans and securities of non-current and current assets included an impairment of €149 million
of a long-term loan related to an investment.
7
NOTE 6 Income taxes
- Arabia Electric Ltd., Saudi Arabia
- Siemens Ltd., India¹
Positions outside Germany:
- Siemens Ltd., Australia
- Siemens France Holding S.A., France
- Siemens Aktiengesellschaft Österreich,
Austria (Chairman)
Positions outside Germany:
(Deputy Chairman)
Positions outside Germany:
Siemens Energy AG, Munich'
Siemens Energy AG, Munich¹
German positions:
Munich
Siemens Energy Management GmbH,
German positions:
- Evonik Industries AG, Essen¹
Positions outside Germany:
- Siemens Ltd., India¹
- Atos SE, France¹
Siemens Energy Management GmbH,
Munich
- Siemens Ltd., Saudi Arabia (Deputy
Members of the Supervisory Board and positions held by Supervisory Board members
- Siemens Schweiz AG, Switzerland
Occupation
- NXP Semiconductors N.V., Netherlands'
German positions:
Name
Memberships in supervisory boards whose
establishment is required by law or in comparable
In fiscal 2021, the Supervisory Board had the following members:
- European School of Management and
Technology GmbH, Berlin
German positions:
1 Publicly listed.
September 30,
2023
October 1,
2020
January 30,
1971
Judith Wiese
- Siemens Proprietary Ltd., South Africa
(Chairman)
Positions outside Germany:
- Siemens Healthineers AG, Munich
(Chairman)1
- Siemens Healthcare GmbH, Munich
(Chairman)
German positions:
- Siemens W.L.L., Qatar
(Chairman)
Chairman)
Positions outside Germany:
1
- Siemens Energy Management GmbH,
German positions:
March 31, 2021
April 1, 2011
May 24, 1958
(since February 3, 2021)
Klaus Helmrich
EOS Holding AG, Krailling
- Siemens Mobility GmbH, Munich
(Chairman)
- Siemens Healthineers AG, Munich¹
(as of September 30, 2021)
German positions:
Group company positions
(as of September 30, 2021)
External positions
Memberships in supervisory boards whose establishment is required by law or in
comparable domestic or foreign controlling bodies of business enterprises
Term expires
March 31, 2025
First appointed
April 1, 2011
Date of birth
November 22,
1964
President and Chief
Executive Officer
(Dr. rer. nat.)
Jim Hagemann Snabe
Chairman
(until March 31, 2021)
as of March 31, 2021
Joe Kaeser
Munich (Chairman)
June 23, 1957
(President and Chief
Executive Officer,
member of the
Managing Board
- Siemens Energy AG, Munich (Chairman)¹
- Mercedes-Benz AG, Stuttgart
Daimler AG, Stuttgart¹
German positions:
2023
September 18, September 17,
2013
March 7, 1961
Ralf P. Thomas
(Prof. Dr. rer. pol.)
September 30,
2025
October 1,
2020
January 2,
1965
Matthias Rebellius
May 31, 2025
March 7, 1973 April 1, 2017
Shareholders'
Meeting
At the end of
the 2021
Annual
Cedrik Neike
as of February 3, 2021
until February 3, 2021)
May 1, 2006
Chairman of the Supervisory Board of
Siemens AG and of the Board of Directors
of A.P. Møller-Mærsk A/S
Date of birth
October 27,
1965
Member
since
October 1,
2013
Interest rate swaps
Interest rate options
Existing derivative financial instruments
5,325
950
6,275
24
5
Interest rate hedging contracts
30
-
Fair values of interest rate derivative financial instruments are determined by discounting expected future cash flows over the remaining
term of the instrument using current market interest rates and yield curves. If option components are included, fair values are determined
based on an option price model or quoted market prices.
The following table presents the carrying amounts, if existing, of derivative financial instruments not included in valuation units and the
balance sheet line items in which these amounts were recognized.
Interest rate hedging contracts
Interest rate swaps
Other assets
Sep 30, 2021
Other
provisions Other liabilities
The notional amounts equal the contractual amounts of the individual derivative financial instrument which – irrespective of the nature
of the concluded position (sale or purchase) – are presented on a gross basis (gross notional amounts).
Interest rate options
(in millions of €)
Notional
amount
Effective January 1, 2020, the Gas and Power business line was transferred to Siemens Energy Global GmbH & Co. KG in preparation for
the spin-off of the Siemens Energy business, which occurred on September 25, 2020. The items Obligations from guarantees and Others
included guarantees and other commitments for the benefit of companies of the Siemens Energy Group totaling €0.8 billion and €12.3
billion, respectively, with corresponding full reimbursement rights towards Siemens Energy Global GmbH & Co. KG. In addition, the
position included indemnifications issued in connection with dispositions of businesses. Such indemnifications, if customary to the
relevant transactions, may protect the buyer from potential tax, legal and other risks in conjunction with the purchased business.
Warranty obligations included obligations of Siemens AG towards affiliated companies totaling €414 million.
Siemens AG only enters into guarantees and other commitments after careful consideration of the risks concerned and in general only in
relation to its own business activities or those of affiliated companies as well as to business activities of companies, if it holds an investment
in them or their parent companies. Based on an ongoing risk evaluation of the arrangements entered into and taking into account all
information available up to the date on which the Annual Financial Statements were issued for approval, Siemens AG concluded that the
relevant primary debtors are able to fulfill the underlying obligations. For this reason, Siemens AG considered it not probable that it will
be called upon in conjunction with any of the guarantees and commitments described above.
NOTE 24 Financial payment obligations under lease and rental arrangements
Expenses for lease and rental arrangements with third parties in which the economic ownership of the leased/rented asset was not
attributable to Siemens AG and the relevant items were not recognized as assets by Siemens AG amounted to €195 million. Object of
these contracts were mainly real estate and other non-current assets.
Payment obligations under lease and rental arrangements amounted to €1,155 million, of which €74 million resulted from transactions
with affiliated companies. Payment obligations under lease and rental arrangements due within the next fiscal year amounted to €259
million.
NOTE 25 Other financial obligations
Obligations for equity and debt contributions amounted to €379 million, of which €165 million related to associates.
Fair values
Approximately €2.2 billion were outstanding as of September 30, 2021 from an outsourcing agreement with a maturity of several years.
Siemens AG has entered into a contract to pay its affiliated company Siemens Trademark GmbH & Co. KG, Germany, a running royalty for
the use of the Siemens trademark rights. The fee is calculated by applying business-specific royalty rates to brand-related revenue. The
contract has an indefinite duration. For fiscal 2021, the corresponding expenses amounted to €725 million. For fiscal 2022, the royalty is
expected to be in the same magnitude.
15
Annual Financial Statements
being subject to payment of damages and punitive damages, equitable remedies or criminal or civil sanctions, fines or disgorgements of
profit. In individual cases, this may also lead to formal or informal exclusion from tenders or the revocation or loss of business licenses or
permits. In addition, further Legal Proceedings may be commenced or the scope of pending Legal Proceedings may be expanded. Some
of these legal proceedings could result in adverse decisions for Siemens AG that may have material effects on its financial position, the
results of its operations and/or its cash flows in the respective reporting period. In addition, Siemens is jointly and severally liable within
consortia. As far as not recognized in the financial statements, Siemens AG did not expect any material negative effects on its financial
position, the results of its operations and/or its cash flows at balance sheet date.
NOTE 26 Derivative financial instruments and valuation units
As a consequence of its global operating, investing and financing activities, Siemens AG is in particular exposed to risks resulting from
changes in exchange rates and interest rates, managed in line with a proven risk management system in consideration of defined risk
limits. As the parent company of the Siemens Group, Siemens AG has the central role within the group-wide management of financial
market risks. To manage the risks resulting from changes in exchange rates and interest rates, Siemens uses primarily foreign currency
forward contracts, interest rate swaps, combined interest and foreign currency swaps as well as interest rate options and interest rate
futures. Thereby the operating units of Siemens AG are not allowed to enter into derivative financial instruments for speculative purposes.
The contract partners of the Company for derivative financial instruments are banks, brokers and affiliated companies. The credit rating
for banks and brokers is constantly monitored.
The following table presents the notional amounts and fair values of those existing derivative financial instruments that were not included
in a valuation unit at the balance sheet date:
Sep 30, 2021
In the course of its normal business operations, Siemens AG is involved in numerous legal and regulatory proceedings as well as
governmental investigations (legal proceedings) in various jurisdictions. These legal proceedings could result in particular in the Company
Warranty obligations relating to financing of affiliated companies included guarantees towards banks for credit lines granted to affiliated
companies.
Derivative financial instruments requiring recognition
1
Net foreign currency position (after hedging)
Sep 30,
2021
(891)
14,534
(15,426)
466
thereof with affiliated companies
779
(425)
292
7,289
(6,998)
(133)
Firm commitments and forecast transactions concern business transactions for which a legally binding contract was concluded but not yet
performed on by either contracting party, as well as contingent payment claims for already partially completed performance obligations
in the project and product businesses.
The net fair value of derivative financial instruments from foreign currency hedge accounting was €320 million as of September 30, 2021;
positive fair values were €1,328 million and negative fair values were €1,008 million. Accordingly, no provision for anticipated losses was
recognized for the derivative financial instruments with negative fair values that were included in this macro valuation unit.
(312)
(283)
thereof with external contract partners
Net foreign currency position (before hedging)
1
(283)
(10)
(10)
Provided the relevant conditions are met, derivative financial instruments are aggregated with the underlying hedged item into valuation
units. Using the freezing method, the hedging transactions are not recognized in the balance sheet. The effectiveness of the valuation
unit is either ensured through risk management, or is demonstrated both prospectively and retrospectively based on appropriate methods
used to demonstrate effectiveness (e.g. dollar offset method, regression method, sensitivity analysis). Valuation gains and losses from
derivative financial instruments and hedged items are netted for each valuation unit. A provision for anticipated losses on onerous
contracts is recognized for the respective valuation unit in the amount of an existing loss surplus. Profit surpluses are not recognized.
Valuation unit used to hedge the foreign currency risk
According to the Company policy, Siemens units are responsible for recording, assessing and monitoring their foreign currency transaction
exposure. The net foreign currency position of the Siemens units serves as a central performance measure and has to be hedged within a
band of at least 75% but no more than 100% with the Corporate Treasury of Siemens AG.
Foreign currency exchange contracts (net face value)
The remaining foreign currency risk after offsetting cash flows in the same currency is hedged by the Corporate Treasury of Siemens AG
with external contract partners. The net foreign currency position (before hedging) of Siemens AG is combined with the offsetting foreign
currency exchange contracts to a macro valuation unit. For this purpose, hedged items and hedging instruments are measured with the
respective underlying discounted cash flows. For foreign currency derivative financial instruments, the determination is based on the
changes in relevant forward exchange rates. The existing derivative currency hedging contracts are included in the valuation unit in their
entirety and had maturity terms until the year 2041. The cash in- and outflows from the foreign currency exchange contracts, firm
commitments and forecast transactions are disclosed on a net basis in the following table.
Annual Financial Statements
(in millions of €)
Foreign currency risk from balance sheet items
thereof assets
thereof liabilities
Foreign currency risk from firm commitments and forecast transactions
thereof expected cash inflows from firm commitments and forecasted transactions
thereof expected cash outflows from firm commitments and forecasted transactions
16
114,226
15,658
20,011
Vested and fulfilled
Forfeited
Settled
Organizational changes
Fiscal year
2021
744,034
Granted
314,473
(36,845)
(20,289)
4,975
Outstanding, end of fiscal year
The pro rata intrinsic value of all matching shares issued to beneficiaries of Siemens AG amounted to €64 million.
737,581
±
(268,767)
14
Outstanding, beginning of fiscal year
The following table shows the changes in the entitlements to matching shares of beneficiaries of Siemens AG:
Change in connection with the adjustment of the ESG target
Organizational changes
Non-vested, end of fiscal year
Fiscal year
2021
4,145,939
1,402,547
(in number of shares)
(663,086)
(3,591)
(90,280)
114,516
4,678,418
The pro rata intrinsic value of all stock awards issued to beneficiaries of Siemens AG amounted to €288 million at the balance sheet date.
Share Matching Program
Plan participants receive the right to one Siemens share without payment (matching share) for every three investment shares continuously
held over a vesting period.
Matching shares granted to beneficiaries of Siemens AG are expensed as incurred over the vesting period and are measured at the intrinsic
value (= share price of the Siemens stock) at the balance sheet date on a pro rata basis for the proportion of the vesting period expired at
the balance sheet date.
(227,627)
NOTE 22 Shares in investment funds
The following shares in investment funds according to investment objects were held:
(in million of €)
2,809
226
Generally, shares in investment funds are accounted for securities held as non-current financial assets. Exceptions were those shares which
represented plan assets and therefor were not accessible by all other creditors. These shares are held exclusively for the purpose of settling
liabilities arising from post-employment obligations or comparable obligations with a long-term maturity, and are to be offset against such
liabilities.
NOTE 23 Guarantees and other commitments
(in millions of €)
Obligations from guarantees
Warranty obligations
2,583
thereof relating to financing of affiliated companies
thereof Others
Guarantees and other commitments
Sep 30,
2021
2,711
111,515
75,845
thereof relating to performance guarantees on behalf of affiliated companies
59
59
37
Mixed funds
Bond-based funds
Share-based funds
Money market funds
Shares in investment assets according to investment objects
Annual Financial Statements
Sep 30, 2021
Deviation
Carrying
amount
2,157
Market value
from carrying
amount
2,383
226
331
331
37
Valuation unit used to hedge the interest rate risk
The interest rate hedging contracts used by Siemens AG serve mainly to hedge against interest rate risks and to optimize the interest result
in accordance with internal interest rate benchmarks.
Siemens AG has entered into interest rate derivatives with external counterparties to hedge interest rate swaps transacted with its affiliated
companies against interest rate risk. As of September 30, 2021, the interest rate swaps transacted with affiliated companies included in
this macro valuation unit had a notional amount of €2,080 million and fair values of €(255) million and had maximum maturity terms
until the year 2028. At balance sheet date, these underlying transactions were matched by external interest rate derivatives with fair values
of €115 million, and maximum maturity terms until the year 2028. As of September 30, 2021, the negative surplus for the macro valuation
unit, recorded in provisions for onerous contracts, amounted to €139 million.
To hedge receivables from affiliated companies against interest rate risk, Siemens AG has entered into interest rate derivatives with
external counterparties and combined these instruments with the underlying transactions in a macro valuation unit. As of September 30,
2021, the notional amount of the receivables, which had a maximum maturity until the year 2045, amounted to €13,904 million. As of
September 30, 2021, the cumulative market value changes of these receivables of €131 million were matched by offsetting interest rate
derivatives with a positive net fair value of €37 million and maximum maturity terms until the year 2040, of which positive fair values
were €148 million and negative fair values were €111 million.
- Air Liquide International Corporation (ALIC), USA
(Chairman)4
American Air Liquide Holdings, Inc., USA4
The Hydrogen Company S.A., France4
German positions:
- Siemens Energy AG, Munich³
- Siemens Energy Management GmbH, Munich
German positions:
Bayerische Motoren Werke Aktiengesellschaft,
Munich (Chairman)³
- Air Liquide International S.A., France (Chairman and
Chief Executive Officer) 3,4
Henkel AG & Co. KGaA, Düsseldorf³,5
Positions outside Germany:
- Member of the Board of Directors, Nestlé S.A.,
Switzerland³
German positions:
Messer Group GmbH, Sulzbach
Siemens Healthcare GmbH, Munich
Siemens Healthineers AG, Munich³
- TÜV Süd AG, Munich
Henkel Management AG, Düsseldorf
Positions outside Germany:
Positions outside Germany:
January 27, 2023
2019
Norbert Reithofer
(Dr.-Ing. Dr.-Ing. E.h.)
Chairman of the Supervisory Board of
Bayerische Motoren Werke
Aktiengesellschaft
May 29, 1956 January 27, 2023
2015
Kasper Rørsted
(since February 3, 2021)
2015
Chief Executive Officer and Board
Member of adidas AG³
February 3, 2025
2021
Economics
Nathalie von Siemens
(Dr. phil.)
Member of supervisory boards
Baroness Nemat Shafik Director of the London School of
(DBE, DPhil)
August 13,
1962
July 14, 1971
January 31, 2023
2018
February 24,
1962
EssilorLuxottica SA, France³
Michael Sigmund²
Chairman of the Committee of
until February 3, 2021)
1967
June 21,
1965
January 31, 2023
2018
January 31, 2023
2018
German positions:
Siemens Industry Software GmbH, Cologne
as of February 3, 2021
Matthias Zachert
January 23, 2021
2013
Chairman of the Board of Management of November 8,
LANXESS AG³
Deputy Chairman of the Central Works
Council of Siemens Industry Software
GmbH
1 As a rule, the term of office ends at the conclusion of the (relevant) ordinary Annual Shareholders' Meeting.
2 Employee representative.
3 Publicly listed.
4 Group company position.
5 Shareholders' Committee.
Gunnar Zukunft²
October 21,
1946
Member of the Supervisory Board
Siemens Healthcare GmbH, Munich
September
Spokespersons of the Siemens Group and 13, 1957
Chairman of the Central Committee of
March 1,
2014
2023
Spokespersons of Siemens AG
Chairwoman of the Central Works Council August 3,
Dorothea Simon²
of Siemens Healthcare GmbH
Grazia Vittadini
(since February 3, 2021)
Werner Wenning
(Second Deputy Chairman
and member of the
Supervisory Board
Airbus Special Advisor
1969
September
23, 1969
October 1,
2017
February 3, 2025
2021
2023
German positions:
January 30, 2023
Settled
April 26,
1967
Hagen Reimer²
Roland Busch
2018
October 10,
1979
October
16, 2020
2023
December 23, January 24, 2023
1954
2008
Andrea Fehrmann²
(Dr. phil.)
Name
Trade Union Secretary, IG Metall Regional June 21,
Office for Bavaria
1970
2018
Bettina Haller²
Chairwoman of the Combine Works
Council of Siemens AG
March 14,
1959
April 1,
2007
2023
January 31, 2023
Harald Kern²
In fiscal 2021, the Managing Board had the following members:
NOTE 30 Members of the Managing Board and Supervisory Board
To hedge payables to affiliated companies against interest rate risk, Siemens AG has entered into interest rate derivatives with external
counterparties. The payables hedged within this micro valuation unit had a nominal volume of €2,147 million as of September 30, 2021
and maximum maturity terms until the year 2025. As of September 30, 2021, negative cumulative changes in market value of these
liabilities of €101 million were matched by external interest rate derivatives with identical maturities whose market value was €109 million.
The amount of interest rate risks hedged with the valuation unit that did not lead to a provision for anticipated losses accordingly totaled
€227 million.
NOTE 27 Proposal for the appropriation of net income
The Supervisory Board and the Managing Board propose the unappropriated net income of Siemens AG for the fiscal year ended September
30, 2021, amounting to €3,400 million to be appropriated as follows: Distribution of a dividend of €4.00 on each share of no par value
entitled to the dividend, and carry-forward of the unappropriated net income for shares of no par value not entitled to the dividend.
note 28 Remuneration of the members of the Managing Board and the Supervisory Board
Remuneration of the members of the Managing Board
Members of the Managing Board, including members who retired from the Managing Board during the fiscal year, received cash
compensation of €21.4 million. The fair value of share-based compensation amounted to €11.6 million for 202,139 stock awards. The
Company granted contributions under the BSAV to members of the Managing Board totaling €3.0 million.
Therefore, the compensation and benefits attributable to members of the Managing Board amounted to €36.0 million in total.
Members of the Managing Board and positions held by Managing Board members
Total remuneration of former members of the Managing Board
Siemens recognized pension provisions totaling €131.7 million for the pension entitlements to former members of the Managing Board
and their surviving dependents.
17
Annual Financial Statements
Remuneration of the members of the Supervisory Board
Compensation attributable to members of the Supervisory Board comprises a base compensation and additional compensation for
committee work and amounted to €5.2 million (including meeting fees).
NOTE 29 Declaration of Compliance with the German Corporate Governance Code
As of October 1, 2021, the mandatory statement pursuant to Section 161 of the German Stock Corporation Act (AktG) has been issued by
the Managing Board and the Supervisory Board and is permanently accessible on www.SIEMENS.DE/CORPORATE-GOVERNANCE.
Former members of the Managing Board and their surviving dependents received a total of €30.1 million according to Section 285 para.
1 number 9b of the German Commercial Code.
Chairman of the Siemens Europe
Committee
March 16,
1960
January 24, 2023
Chief Executive Officer (CEO) - President
and Chairwoman of the Group
Management of TRUMPF GmbH + Co. KG
Chairman and Chief Executive Officer of
Air Liquide S.A.
January 25, 2023
December 15, January 24, 2021
1959
2008
September 3,
1957
2018
German positions:
Benoît Potier
- MAN Truck & Bus SE, Munich (Deputy Chairman)
Chairman)
- Siemens Energy AG, Munich³
- Siemens Energy Management GmbH, Munich
- ThyssenKrupp AG, Essen (Deputy Chairman)³
Traton SE, Munich³
Positions outside Germany:
- TRUMPF Schweiz AG, Switzerland4
January 31, 2023
- Premium Aerotec GmbH, Augsburg (Deputy
as of February 3, 2021
(until February 3, 2021)
(Dr. phil.)
2008
Jürgen Kerner²
Chief Treasurer and Executive Member of January 22,
the Managing Board of IG Metall
1969
2012
- ProSiebenSat.1 Media SE, Munich (Chairman)³
- RWE AG, Essen (Chairman)³
German positions:
- Allianz SE, Munich (Chairman)³
- Fresenius Management SE, Bad Homburg
Fresenius SE & Co. KGaA, Bad Homburg (Deputy
Chairman)³
German positions:
- Siemens Energy AG, Munich³
Siemens Energy Management GmbH, Munich
German positions:
Siemens Mobility GmbH, Munich (Deputy
Chairwoman)
Nicola Leibinger-
Kammüller
Trade Union Secretary of the Managing
Board of IG Metall
Forfeited
Vested and fulfilled
Granted
Shareholders' equity
Subscribed capital
Oct 01, 2020 Share buybacks Issuance of treasury
shares under share-
based payments
and employee
share programs
Annual Financial Statements
Sep 30,
2021
Unappropriated net income
1,089
(287)
51
950
Dividend
for 2020
Net income
Sep 30, 2021
2,550
(751)
2,550
Other retained earnings
Issued capital
3,084
Receivables from affiliated companies resulted primarily from intragroup-financing activities and included trade receivables totaling €6
(2020: €31) million.
NOTE 13 Deferred tax assets
Deferred tax assets resulted mainly from pension provisions and pension-related assets as well as deferred taxes of companies within the
consolidated tax group. Deferred taxes from partnerships had an offsetting effect.
For the measurement of deferred taxes, a tax rate of 31.33% was applied. Deviating from this, a tax rate of 15.83% was applied for
temporary differences related to assets, liabilities and prepaid/deferred items of partnerships.
10
10
Capital reserve
NOTE 14 Active difference resulting from offsetting
Fair value of designated plan assets
Settlement amount for offset pension provisions
Settlement amount for offset personnel-related provisions
Active difference resulting from offsetting
Acquisition cost of designated plan assets
NOTE 15 Shareholders' equity
(in millions of €)
Subscribed capital
Treasury shares
(in millions of €)
(152)
(3)
12
5,147
21,216
The capital stock of Siemens AG is divided into 850,000,000 registered shares of no-par value with a notional value of €3.00 per share.
Authorized capital (not issued)
As of September 30, 2021, Siemens AG had authorized capital totaling a nominal amount of €600 million, which can be issued in
instalments and with different time limits by issuing up to 200 million registered no-par value shares.
In detail, there are the following authorizations to increase the capital stock:
.
•
(2,804)
By resolution of the Annual Shareholders' Meeting of February 3, 2021, the Managing Board is authorized to increase the capital stock
until February 2, 2026 by up to €90 million through the issuance of up to 30 million Siemens shares against contributions in cash
(Authorized Capital 2021). Subscription rights of existing shareholders are excluded. The new shares may exclusively be offered to
employees of Siemens AG and its affiliated companies (employee shares). To the extent permitted by law, employee shares may also be
issued in such a manner that the contribution to be paid on such shares is covered by that part of the annual net income which the
Managing Board and the Supervisory Board may allocate to other retained earnings under Section 58 para. 2 of the German Stock
Corporation Act.
Treasury shares
The following table presents the development of treasury shares:
(in number of shares)
Treasury shares, beginning of fiscal year
Share buyback
Issuance under share-based payments and employee share programs
Treasury shares, end of fiscal year
Further, by resolution of the Annual Shareholders' Meeting of January 30, 2019, the Managing Board is authorized to increase, with the
approval of the Supervisory Board, the capital stock until January 29, 2024 by up to €510 million through the issuance of up to 170
million registered no-par value shares against cash contributions and/or contributions in kind (Authorized Capital 2019). Under certain
conditions, the Managing Board is authorized, with the consent of the Supervisory Board, to exclude shareholders' subscription rights
in the event of issue against contributions in kind. In the case of issue against cash payment, the shares are generally to be offered to
shareholders for subscription. However, the Managing Board is authorized, with the consent of the Supervisory Board, to exclude
subscription rights, firstly for any fractional amounts, secondly, to grant dilution compensation in connection with convertible bonds or
bonds with warrants already issued, and thirdly, under certain further conditions, if the issue price of the new shares does not fall
significantly below the stock exchange price of the company's already listed shares.
503
(547)
18,917
(143)
2,398
(3)
12
2,407
8,156
133
8,289
5,387
(544)
359
1,918
7,119
2,975
(2,804)
3,229
3,400
16,074
Fiscal year
4,632
170
Second Deputy Chairman
(since February 3, 2021)
Tobias Bäumler²
(since October 16, 2020)
Michael Diekmann
RWE AG and of ProSiebenSat.1 Media SE
Deputy Chairman of the Central Works
Council and of the Combine Works
Council of Siemens AG
Chairman of the Supervisory Board of
Allianz SE
1954
Annual Financial Statements
Additions and disposals in Shares in affiliated companies and Securities were mainly related to supplemental fundings of Siemens
Pension Trust e.V. as well as to corporate law measures to simplify the investment structure of the pension assets. The additions to Shares
in affiliated companies resulted primarily from the increase in the carrying amount of the shares in SPT Beteiligungen GmbH & Co. KG of
€7.8 billion. This increase was due, on the one hand, from the fair value transfer of investment funds by disclosing unrealized gains of
€4.8 billion, which led to a corresponding disposal in Securities with a carrying amount of €4.1 billion. On the other hand, the additions
included supplemental fundings, including shares in Bentley Systems, Inc. in the amount of €1.0 billion and in Charge Point Holdings, Inc.
in the amount of €0.3 billion as well as zero-coupon receiver swaps in the amount of €0.3 billion. In connection with the contribution of
the shares in Bentley Systems, Inc., there was a corresponding capital reduction at Siemens Beteiligungsverwaltung GmbH & Co. OHG in
the same amount, which resulted in a disposal in Shares in affiliated companies. Also, the intragroup sale of a stake in Atecs Mannesmann
GmbH of €1.1 billion and the sale of Flender GmbH of €1.0 billion to Carlyle Group Inc. were reflected in disposals in Shares in affiliated
companies.
(Dr. rer. pol.)
Disposals of investments resulted primarily from the sale of shares in Siemens Energy AG held by Siemens Pension-Trust e.V., totaling
€1.0 billion. Proceeds from the sales were also contributed to SPT Beteiligungen GmbH & Co. KG.
Total impairments of non-current assets were €772 (2020: €2,193) million.
NOTE 11 Inventories
(in millions of €)
Raw materials and supplies
Work in progress
Finished products and goods
Cost of unbilled contracts
For the investment in Siemens Energy AG, the market price as of September 30, 2021, was around 11% below the carrying amount of
€5.3 billion. However, the investment is not considered to be permanently impaired due to the unchanged expected value potential.
Loans included loans to affiliated companies amounting to €3,327 (2020: €3,249) million, loans to investments amounting to €43 (2020:
€0) million, and other loans amounting to €375 (2020: €312) million.
Advance payments made
Inventories
Annual Financial Statements
German positions:
Term
domestic or foreign controlling bodies of business
expires
2025
enterprises (as of September 30, 2021)
German positions:
- Allianz SE, Munich (Deputy Chairman)³
Positions outside Germany:
-A.P. Møller-Mærsk A/S, Denmark (Chairman)³
18
- C3.ai, Inc., USA³
Chairwoman of the Central Works Council March 26,
First Deputy Chairwoman
Werner Brandt
of Siemens AG
Chairman of the Supervisory Board of
1960
January 3,
January 24, 2023
2008
January 31, 2023
Birgit Steinborn²
NOTE 12 Receivables and other assets
(in millions of €)
Trade receivables
17,564
thereof
maturities
more than
one year
40
4,407
Sep 30, 2020
thereof
maturities
more than
one year
1,442
12,694
69
2,845
Sep 30, 2021
1,696
1,583
1,937
170
2
2
1,582
186
1,936
186
1,869
1,934
73
Receivables from affiliated companies
Other receivables and other assets
thereof from long-term investees
thereof other assets
Receivables and other assets
Sep 30,
2021
2020
491
404
264
238
253
280
856
874
70
20,844
19
2021
50,690,288
47,644,581
55,226
8,756
3,163
Liabilities to affiliated companies resulted primarily from intragroup-financing activities.
3.5 Other disclosures
NOTE 19 Material expenses
(in millions of €)
67,145
Expenses for raw materials, supplies and purchased merchandise
Material expenses
NOTE 20 Personnel expenses
Fiscal year
2021
2020
(4,713)
(5,299)
Costs of purchased services
(3,009)
1,669
55,844
1
1
1,288
50
1,220
68
1,632
1,618
5,377
14
39
39
209
209
231
231
62,890
50
(3,211)
(7,722)
(8,510)
Employees
Annual Financial Statements
Fiscal year
2021
27,100
8,300
7,000
Administration and general functions
7,200
NOTE 21 Share-based payment
Siemens AG allows employees and members of the Managing Board to participate in share-based payment programs. For the purpose of
servicing share-based payment programs Siemens AG also delivers Siemens shares, which have been granted by affiliated companies.
Stock Awards
Siemens AG grants stock awards to members of the Managing Board, members of the senior management and other eligible employees.
Stock awards to beneficiaries of Siemens AG are expensed as incurred over the vesting period and are measured at the intrinsic value
(= share price of the Siemens stock) at the balance sheet date on a pro rata basis for the proportion of the vesting period expired
considering the estimated target attainment at the balance sheet date.
The following table shows the changes in the stock awards held by beneficiaries of Siemens AG:
(in number of shares)
Non-vested, beginning of fiscal year
49,500
Research and development
Sales
Production
(in millions of €)
Wages and salaries
Fiscal year
2021
2020
(4,584)
(4,993)
Social security contributions and expenses for other employee benefits
Expenses for pensions
(657)
(383)
(738)
(437)
Personnel expenses
(5,624)
(6,168)
Personnel expenses did not include the expenses resulting from the compounding of the pension and personnel-related provisions, which
are included in other financial income (expenses), net.
13
The breakdown of employees per function is as follows:
5
976,346
(4,022,053)
5
1,619
As of September 30, 2021, the following information on shareholdings subject to reporting requirements was available to the Company
pursuant to Section 160 para 1 No. 8 German Stock Corporation Act (Aktiengesetz):
BlackRock, Inc., Wilmington, USA, notified us on April 14, 2021, that its percentage of voting rights (held either directly or indirectly) in
Siemens AG amounted to 6.17% (52,408,410 voting rights) on April 9, 2021.
The State of Qatar, Doha, acting by and through the DIC Company Limited, notified us on May 10, 2012, that its percentage of voting
rights (held either directly or indirectly) in Siemens AG exceeded the threshold of 3% of the voting rights in our Company on May 7, 2012
and amounted to 3.04% (27,758,338 voting rights) as per this date.
The Werner Siemens-Stiftung, Zug, Switzerland, notified us on January 21, 2008, that its percentage of voting rights (held either directly
or indirectly) in Siemens AG exceeded the threshold of 3% of the voting rights in our Company on January 2, 2008 and amounted to 3.03%
(27,739,285 voting rights) as per this date.
NOTE 16 Provisions for pensions and similar commitments
In Germany, Siemens AG provides pension benefits through the BSAV (Beitragsorientierte Siemens Altersversorgung), frozen legacy plans
and deferred compensation plans. The majority of Siemens' active employees participate in the BSAV. The benefits are predominantly
based on nominal contributions by the Company and investment returns on assets designated to that plan, subject to a minimum return
guaranteed by the Company. In connection with the implementation of the BSAV, benefits provided under the frozen legacy plans were
modified to substantially eliminate the effects of compensation increases. Therefore, valuation assumptions for salary and pension
increases including career trend are no longer significant for the pension obligation of Siemens AG. The pension benefits are funded via
contractual trust arrangements (CTA). A portion of these trust assets also covers the pension obligations of other domestic subsidiaries.
12
Disclosures on shareholdings of Siemens AG
Annual Financial Statements
AG.
The actuarial valuation of the settlement amount of €13,123 million as of September 30, 2021 was based, among others, on a discount
rate of 1.98% and on a rate of pension progression of 1.50% per year, except for the BSAV and deferred compensation plans with 1.00%
per year. The mortality tables used (Siemens Bio 2017/2021) are primarily based on data of the German Siemens population, using a set
of formulas that corresponds to generally accepted actuarial standards.
NOTE 17 Other provisions
The main amounts in other provisions were contributed by provisions related to personnel costs of €1,271 million, provisions for
decontamination obligations of €496 million, and provisions for onerous contracts from derivative financial instruments amounting to
€422 million.
In May 2021, Siemens AG and the Federal Republic of Germany entered into a public-law contract based on which the obligation of final
disposal of nuclear waste is transferred to the Federal Republic of Germany for a payment of €360 million. The contract and therefore the
payment is subject to the approval of the EU commission under state-aid rules. Estimation uncertainties still relate to assumptions made
to measure the obligations that remain with Siemens AG, with regard to conditioning and packaging of nuclear waste, as well as
intermediate storage and transport to the final storage facility "Schacht Konrad" or a logistics depot until year-end 2032.
NOTE 18 Liabilities
(in million of €)
Therefore, the assets do not meet the criteria for offsetting against the pension obligation and are presented as financial assets of Siemens
Liabilities to banks
These amounts subject to dividend payout restrictions face other retained earnings in a sufficiently high amount. The unappropriated net
income of €3,400 million is available for distribution.
Amounts from the capitalization of assets at fair value
Siemens AG held 47,644,581 treasury shares, equaling a nominal amount of €143 million, representing 5.6% of the capital stock.
11
Annual Financial Statements
On September 24, 2021, the share buyback announced on November 8, 2018 with a volume of up to €3 billion was completed. The share
buyback, which began on December 3, 2018, was executed in the reporting period based on the authorization granted by the Annual
Shareholders' Meeting on February 5, 2020. In addition to the dividend policy, the share buyback was intended to allow shareholders to
continuously participate in the success of the company. In fiscal 2021, Siemens AG repurchased a total of 976,346 treasury shares under
this share buyback program. This represented a nominal amount of €3 million or 0.1% of capital stock. In this reporting period, €137
million (excluding incidental transaction charges) were spent for this purpose; this represents a weighted average stock price of €140.22
per share. The purchases were made in the reporting period on 228 Xetra trading days and were carried out by a bank that had been
commissioned by Siemens AG; the shares were purchased exclusively on the electronic trading platform of the Frankfurt Stock Exchange
(Xetra). The average volume on these trading days was about 4,282 shares.
In addition, a final payment of €410 million was made to the executing bank in fiscal 2021, which led to weighted average acquisition
costs of €100.42 per share in relation to the total share buyback from 2018 to 2021 of 29,385,132 shares with a buyback volume including
the final payment of €2,951 million. The final payment was recognized in the balance sheet as a purchase price adjustment against other
retained earnings.
On June 24, 2021, Siemens again announced a share buyback with a volume of up to €3 billion in the period from the beginning of fiscal
2022 to 2026. The share buyback, which began on November 15, 2021, will be executed based on the authorizations granted by the
Annual Shareholders' Meeting on February 5, 2021. In addition to the dividend policy, the share buyback is intended to allow shareholders
to continuously participate in the success of the company.
The treasury shares purchased under the share buybacks may be used for purposes of retirement, distribution to employees, members of
the executive bodies of companies affiliated with Siemens and members of the Managing Board, as well as the servicing of convertible
bonds with attached warrants.
38
In fiscal 2021, Siemens AG re-issued in total 4,022,053 treasury shares under the exclusion of subscription rights in connection with share-
based payments and employee share programs in the Group, equaling a nominal amount of €12 million and 0.5% of the capital stock. The
Company received in total €203 million for 1,729,089 shares, re-issued against payment of a purchase price. Siemens AG received this
amount for unrestricted use. All shares were sold as investment shares in connection with the share matching program to plan participants.
In each case, the purchase price was determined on the basis of the closing rate in Xetra trading, determined on a monthly effective date.
Therefore, in the reporting period, in total 1,199,097 shares related to the monthly investment plan at a weighted average share price of
€130.61 per share, 158,769 shares related to the share matching plan at a weighted average share price of €134.02 per share, and
371,223 shares related to the base share program at a weighted average share price of €67.01 per share (after consideration of a 50%
subsidy by the Company). The other shares re-issued during the reporting period can be primarily attributed to the servicing of stock
awards granted in fiscal 2017 totaling 1,555,044 shares, to 624,480 matching shares under the share matching program for fiscal 2018,
and to 113,440 jubilee shares.
(in millions of €)
Fiscal Year
2021
Amount representing the difference of the recognition of provisions and similar commitments based on average interest rates covering ten and
seven years, respectivly
890
Amounts from the capitalization of deferred taxes
1,243
Information on amounts subject to dividend payout restrictions
Advance payments received
Trade payables
Liabilities to affiliated companies
39
1,777
1,708
69
58,985
52,047
5,270
2,072
1,669
51,802
8,674
3,163
1,293
1,224
68
1,632
63,638
2,111
98
98
Other liabilities
thereof to long-term investees
thereof miscellaneous liabilities
therein from taxes
therein for social security
Liabilities
Sep 30,
2021
up to 1
year
1 year up
to 5 years
thereof
maturities
more than
5 years
Sep 30,
2020
up to
1 year
1 year up
to 5 years
thereof
maturities
more than
5 years
501
501
14
(in millions of €)
40
NOTE 31 List of subsidiaries and associated companies pursuant to Section 285 para. 11, 11a and
11b of the German Commercial Code
PolyDyne Software Inc., Austin, TX / United States
1
6
1005
Siemens Capital Company LLC, Wilmington, DE / United States
(48)
1,497
100
Siemens Corporation, Wilmington, DE / United States
58
5,327
100
Annual Financial Statements
100
124
100
Siemens Government Technologies, Inc., Wilmington, DE / United States
Siemens Healthcare Diagnostics Inc., Los Angeles, CA / United States
Siemens Healthineers Holdings, LLC, Wilmington, DE / United States
Siemens Industry Software Inc., Wilmington, DE / United States
Siemens Industry, Inc., Wilmington, DE / United States
5
422
100
(14)
6,632
100
13,895
100
160
4,675
100
1,607
461
158
375
530
100
176
100
(21)
129
73
(4)
98
100
(15)
3
100
28
Fluence Energy, LLC, Wilmington, DE / United States
Mannesmann Corporation, New York, NY / United States
(44)
(18)
43
4
275
205
43
100
-
Panda Stonewall Intermediate Holdings I, LLC, Wilmington, DE / United States
PETNET Solutions, Inc., Knoxville, TN / United States
-
Hickory Run Holdings, LLC, Wilmington, DE / United States
(46)
6,852
Siemens Medical Solutions USA, Inc., Wilmington, DE / United States
214
423
100
246
8,620
100
Dade Behring Hong Kong Holdings Corporation, Tortola / Virgin Islands, British
94
33
100
Asia, Australia (53 companies)
Australia Hospital Holding Pty Limited, Bayswater / Australia
J.R.B. Engineering Pty Ltd, Bayswater / Australia
Varian Medical Systems Netherlands Holdings, Inc., Wilmington, DE / United States
Varian Medical Systems, Inc., Wilmington, DE / United States
1
100
-
100
Siemens Ltd., Bayswater / Australia
12
102
100
Siemens Mobility Pty Ltd, Bayswater / Australia
22
159
100
Beijing Siemens Cerberus Electronics Ltd., Beijing / China
22
22
100
100
6,587
165
16,362
100
Siemens Mobility, Inc, Wilmington, DE / United States
70
938
100
Siemens Public, Inc., Iselin, NJ / United States
27
1,476
100
Siemens USA Holdings, Inc., Wilmington, DE / United States
-
7,415
10,376
SMI Holding LLC, Wilmington, DE / United States
(6)
7
100
Supplyframe, Inc., Pasadena, CA / United States
(1)
60
100
Thoughtworks Holding Inc., Wilmington, DE / United States
65
395
85
Varian Medical Systems International Holdings, Inc., Wilmington, DE / United States
100
eMeter Corporation, Wilmington, DE / United States
Enlighted, Inc., Wilmington, DE / United States
ECG TopCo Holdings, LLC, Wilmington, DE / United States
ECG Acquisition, Inc., Wilmington, DE / United States
100
Siemens Industry Software Limited, Frimley, Surrey / United Kingdom
18
101
100
Siemens Mobility Limited, London / United Kingdom
111
750
100
Siemens Pension Funding Limited, Frimley, Surrey / United Kingdom
(2)
480
100
378
Siemens plc, Frimley, Surrey / United Kingdom
1,053
100
Siemens Process Systems Engineering Limited, Frimley, Surrey / United Kingdom
(15)
105
100
Yunex Limited, Poole, Dorset / United Kingdom
60
100
Americas (47 companies)
Siemens Industrial S.A., Buenos Aires / Argentina
GNA 1 Geração de Energia S.A., São João da Barra / Brazil
Siemens Healthcare Diagnósticos Ltda., São Paulo / Brazil
Siemens Infraestrutura e Indústria Ltda., São Paulo / Brazil
Siemens Participações Ltda., São Paulo/ Brazil
EPOCAL INC., Toronto / Canada
(1)
22
19
2
100
162
100
Project Ventures Rail Investments I Limited, Frimley, Surrey / United Kingdom
SBS Pension Funding (Scotland) Limited Partnership, Edinburgh / United Kingdom
Siemens Financial Services Holdings Ltd., Stoke Poges, Buckinghamshire / United Kingdom
Siemens Financial Services Ltd., Stoke Poges, Buckinghamshire / United Kingdom
Siemens Healthcare Diagnostics Manufacturing Ltd, Frimley, Surrey / United Kingdom
Siemens Healthcare Diagnostics Products Ltd, Frimley, Surrey / United Kingdom
15
8
100
15
591
57
23
137
100
41
Siemens Industry Software Computational Dynamics Limited, Frimley, Surrey / United Kingdom
341
6
180
100
3
170
100
Siemens Healthcare Limited, Frimley, Surrey / United Kingdom
34
(26)
100
Siemens Holdings plc, Frimley, Surrey / United Kingdom
577
1,214
100
100
(11)
277
44
100
(2)
46
100
58
83
100
6
111
100
Babson Diagnostics, Inc., Dover, DE / United States
(4)
17
7
Bentley Systems, Incorporated, Wilmington, DE / United States
101
278
95,7
CEF-L Holding, LLC, Wilmington, DE / United States
7
247
275
ChargePoint Holdings, Inc., Campbell, CA / United States
n/a
n/a
4
Corindus, Inc., Wilmington, DE / United States
205
100
77
3
225
20
138
100
16
78
100
(12)
74
100
3
116
100
22
22
Annual Financial Statements
Siemens Canada Limited, Oakville / Canada
Siemens Financial Ltd., Oakville / Canada
Siemens Healthcare Limited, Oakville / Canada
Siemens S.A., Santiago de Chile / Chile
Siemens S.A., Tenjo / Colombia
Grupo Siemens S.A. de C.V., Mexico City / Mexico
Siemens, S.A. de C.V., Mexico City / Mexico
26
284
100
13
463
100
30
100
Mentor Graphics (Shanghai) Electronic Technology Co., Ltd., Shanghai / China
2
126
100
Dresser-Rand Asia Pacific Sdn. Bhd., Kuala Lumpur / Malaysia
6
100
Siemens Malaysia Sdn. Bhd., Petaling Jaya Malaysia
6
86
100
3
100
Siemens, Inc., Manila / Philippines
Siemens Pte. Ltd., Singapore / Singapore
13
39
100
Siemens Limited, Taipei / Taiwan, Province of China
13
44
100
Siemens Mobility Limited, Bangkok/Thailand
11
10
100
Siemens Ltd., Ho Chi Minh City / Viet Nam
1
25
100
92
1 The values correspond to the annual financial statements after a possible profit transfer, for subsidiaries according to the IFRS closing.
Siemens Ltd. Seoul, Seoul / Korea, Republic of
100
1,523
51
Siemens Technology and Services Private Limited, Navi Mumbai / India
28
65
100
P.T. Jawa Power, Jakarta / Indonesia
195
909
505
Siemens Healthcare Diagnostics K.K., Tokyo / Japan
7
207
100
100
25
251
100
Siemens K.K., Tokyo / Japan
5
180
100
Varian Medical Systems K.K., Tokyo / Japan
10
77
100
Siemens Healthineers Ltd., Seoul / Korea, Republic of
27
Siemens Healthcare K.K., Tokyo / Japan
2 Siemens AG is a shareholder with unlimited liability of this company.
3 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability of this company.
4 Values from fiscal year October 01, 2019 - September 30, 2020
the accompanying management report as a whole provides an appropriate view of the Company's position. In all material respects, this
management report is consistent with the annual financial statements, complies with German legal requirements and appropriately
presents the opportunities and risks of future development. Our opinion on the management report does not cover the content of the
Corporate Governance Statement referred to above.
Pursuant to Sec. 322 (3) Sentence 1 HGB, we declare that our audit has not led to any reservations relating to the legal compliance of the
annual financial statements and of the management report.
Basis for the opinions
We conducted our audit of the annual financial statements and of the management report in accordance with Sec. 317 HGB and the EU
Audit Regulation (No 537/2014, referred to subsequently as "EU Audit Regulation") and in compliance with German Generally Accepted
Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW).
In conducting the audit of the annual financial statements we also complied with International Standards on Auditing (ISA). Our
responsibilities under those requirements, principles and standards are further described in the "Auditor's responsibilities for the audit of
the annual financial statements and of the management report" section of our auditor's report. We are independent of the Company in
accordance with the requirements of European law and German commercial and professional law, and we have fulfilled our other German
professional responsibilities in accordance with these requirements. In addition, in accordance with Art. 10 (2) f) of the EU Audit
Regulation, we declare that we have not provided non-audit services prohibited under Art. 5 (1) of the EU Audit Regulation. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions on the annual financial statements
and on the management report.
Key audit matters in the audit of the annual financial statements
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the annual financial
statements for the fiscal year from October 1, 2020 to September 30, 2021. These matters were addressed in the context of our audit of
the annual financial statements as a whole, and in forming our opinion thereon; we do not provide a separate opinion on these matters.
Below, we describe what we consider to be the key audit matters:
Impairment of non-current financial assets
Reasons why the matter was determined to be a key audit matter: The impairment test of non-current financial assets was a key audit
matter, as in particular shares in affiliated companies and investments entail a significant risk of material misstatement due to the
materiality of these assets as well as the judgment involved in assessing whether there is objective evidence to indicate a lower net
realizable value and permanent impairment. The valuations of non-current financial assets also depend to a large extent on the assessment
of future cash inflows, particularly given the continuing effects of the COVID-19 pandemic, and the discount rate applied.
Auditor's response: In assessing whether there was objective evidence to indicate a lower net realizable value and permanent impairment,
we obtained an understanding of management's evaluation and also obtained external evidence of ratings, stock market prices, analyst
assessments and observable valuation inputs in this regard.
With regard to the net realizable values calculated by management and its assessment as to whether an impairment is expected to be
permanent, we examined the underlying processes related to the planning of future cash flows as well as to the calculation of net realizable
value. We assessed the underlying valuation models for the determination of net realizable value in terms of methodology and reperformed
the calculations with the assistance of internal valuation specialists. We further obtained explanations from management regarding
material value drivers of the planning, including the effects of the COVID-19 pandemic, and examined whether the budget planning
reflects general and industry-specific market expectations.
Forecast accuracy was assessed on a sample basis using budget-to-actual comparisons of historically forecast data with the actual results,
also considering the effects attributable to the COVID-19 pandemic. The parameters used to estimate net realizable value such as the
estimated growth rates and the weighted average cost of capital rates were assessed by comparing them to publicly available market data.
We also performed our own sensitivity analyses to assess the impairment risk in the case of a reasonably possible change in one of the
significant assumptions.
Our audit procedures did not lead to any reservations relating to assessing the impairment of non-current financial assets.
2
the accompanying annual financial statements comply, in all material respects, with the requirements of German commercial law
applicable to business corporations and give a true and fair view of the assets, liabilities and financial position of the Company as of
September 30, 2021 and of its financial performance for the fiscal year from October 1, 2020 to September 30, 2021 in compliance
with German legally required accounting principles, and
Independent Auditor's Report (Siemens AG)
Other provisions
Reasons why the matter was determined to be a key audit matter: We considered the accounting for other provisions, especially for
legal disputes, regulatory proceedings and governmental investigations (legal proceedings) resulting from or in connection with alleged
compliance violations as well as for decontamination to be a key audit matter. These matters are subject to inherent uncertainties and
require estimates that could have a significant impact on the recognition and measurement of the respective provision and, accordingly,
on assets, liabilities and financial performance. Legal proceedings resulting from or in connection with alleged compliance violations are
subject to uncertainties because they involve complex legal issues and accordingly, considerable management judgment, in particular
when determining whether and in what amount a provision is required to account for the risks. The uncertainties and estimates with
respect to provisions for decontamination pertain especially to the estimated costs for waste treatment and packaging for final storage,
for interim storage as well as transport to the final nuclear waste storage facility.
Auditor's response: During our audit of the financial reporting of legal proceedings resulting from or in connection with alleged
compliance violations, we examined the processes implemented by Siemens for identifying, assessing and accounting for legal and
regulatory proceedings. To determine what potentially significant pending legal proceedings or claims asserted also in connection with
joint and several liability are known and to assess management's estimates of the expected cash outflows, our audit procedures included
inquiring of management and other persons within the Company entrusted with these matters, obtaining written statements from in-
house legal counsels with respect to the assessment of estimated cash outflows and their probability, obtaining confirmations from
external legal advisors and evaluating internal statements concerning the accounting treatment in the annual financial statements.
Furthermore, we examined legal consulting expense accounts for any indications of legal matters not yet considered.
We further considered alleged or substantiated non-compliance with legal provisions, official regulations and internal company policies
(compliance violations) by inspecting internal and external statements on specific matters, obtaining written statements from external
legal advisors, and by inquiring of the compliance organization. In this regard, among other procedures, we evaluated the conduct and
results of internal investigations by inspecting internal reports and the measures taken to remediate identified weaknesses, and assessed
on this basis whether management's evaluation of any risks to be accounted for in the annual financial statements is plausible.
Based on the aforementioned uncertainties, our audit procedures with respect to the provisions for decontamination focused on the
remediation and environmental protection liabilities in connection with the decommissioning of the facilities in Hanau, Germany (Hanau
facilities), as well as for the nuclear research and service center in Karlstein, Germany (Karlstein facilities). Our audit procedures included,
among others, assessing the estimated costs for waste treatment and packaging for final storage, for interim storage as well as transport
to the final nuclear waste storage facility, and the valuation methods used by drawing on the expertise of our valuation specialists. We
evaluated management's assessments particularly regarding the accounting effects of the contractually agreed transfer of the nuclear
waste disposal obligation to the Federal Republic of Germany, which is still subject to the approval of the EU commission under state-aid
rules, and the expected costs to fulfill the obligations remaining with Siemens through inquiries of persons entrusted with the matter and
inspections of internal and external documents.
Furthermore, we evaluated the disclosures on provisions for decontamination in the notes to the financial statements.
Our audit procedures did not lead to any reservations relating to the accounting for other provisions.
Reference to related disclosures: With regard to the recognition and measurement policies applied in accounting for other provisions,
refer to chapter 3.2 Accounting and Measurement Principles in the notes to the financial statements. With respect to the legal proceedings,
regulatory proceedings and governmental investigations, refer to chapter 3.5 Other Disclosures, Note 25 Other financial obligations and
with respect to the uncertainties and estimates relating to the provisions for decontamination, refer to chapter 3.4 Notes to the Balance
Sheet, Note 17 Other provisions in the notes to the financial statements.
Uncertain tax positions and recoverability of deferred tax assets
Reasons why the matter was determined to be a key audit matter: The accounting for uncertain tax positions as well as deferred taxes
requires management to exercise considerable judgment and make estimates and assumptions, and was therefore a key audit matter. In
particular, this affects the measurement and completeness of uncertain tax positions, the recoverability of deferred tax assets as well as
management's assessments regarding the tax implications of the COVID-19 pandemic.
Auditor's response: With the assistance of internal tax specialists who have knowledge of tax law, we examined the processes installed
by management for the identification, recognition and measurement of tax positions. In the course of our audit procedures relating to
uncertain tax positions, we evaluated whether management's assessment of the tax implications of significant business transactions or
events in fiscal year 2021, which could result in uncertain tax positions or influence the measurement of existing uncertain tax positions,
was in compliance with tax law. In particular, this includes the tax implications arising from the results of tax field audits, the acquisition
or disposal of company shares, corporate (intragroup) restructuring activities and cross-border matters, such as the determination of
transfer prices. In order to assess measurement and completeness, we also obtained confirmations from external tax advisors. Further, we
evaluated management's assessments with respect to the prospects of success of appeal and tax court proceedings by inquiring of the
employees of the Siemens tax department and by considering current tax case law.
In assessing the recoverability of deferred tax assets, we above all analyzed management's assumptions with respect to tax planning
strategies and projected future taxable income, also in view of the implications of the COVID-19 pandemic, and compared them to internal
business plans.
Our audit procedures did not lead to any reservations relating to the accounting for uncertain tax positions and the assessment of the
recoverability of deferred tax assets.
3
Reference to related disclosures: With regard to the recognition and measurement policies applied for the impairment of non-current
financial assets, refer to chapter 3.2 Accounting and Measurement Principles in the notes to the financial statements and with respect to
write-downs and write-ups of non-current financial assets, refer to chapter 3.3 Notes to the Income Statement, Note 3 Income (loss) from
investments, net as well as chapter 3.4 Notes to the Balance Sheet, Note 10 Non-current assets in the notes to the financial statements.
•
.
In our opinion, on the basis of the knowledge obtained in the audit,
5 Values from fiscal year January 01, 2020 - December 31, 2020
6 Values from fiscal year April 01, 2020 - March 31, 2021
7 Therein are 2% held via an investment fund managed by Siemens Fonds Invest GmbH.
n/a = No financial data available.
24
224
Responsibility Statement
TO THE ANNUAL FINANCIAL STATEMENTS AND THE MANAGEMENT REPORT
FOR FISCAL 2021
SIEMENS
Responsibility Statement (Siemens AG)
To the best of our knowledge, and in accordance with the applicable reporting principles, the Annual Financial Statements give a true and
fair view of the assets, liabilities, financial position and profit or loss of the Company, and the Management Report for Siemens
Aktiengesellschaft, which has been combined with the Group Management Report, includes a fair review of the development and
performance of the business and the position of the Company, together with a description of the material opportunities and risks
associated with the expected development of the Company.
Munich, November 30, 2021
Siemens Aktiengesellschaft
The Managing Board
Dr. Roland Busch
Cedrik Neike
Prof. Dr. Ralf P. Thomas
Matthias Rebellius
Judith Wiese
2
Independent
Auditor's Report
TO THE ANNUAL FINANCIAL STATEMENTS AND THE MANAGEMENT REPORT
FOR FISCAL 2021
SIEMENS
Independent Auditor's Report (Siemens AG)
To Siemens Aktiengesellschaft, Berlin and Munich
Report on the audit of the annual financial statements and of the management report
Opinions
We have audited the annual financial statements of Siemens Aktiengesellschaft, Berlin and Munich, (the Company) which comprise the
income statement for the fiscal year from October 1, 2020 to September 30, 2021, the balance sheet as of September 30, 2021 and notes
to the financial statements, including the recognition and measurement policies presented therein. In addition, we have audited the
management report of Siemens Aktiengesellschaft, which is combined with the group management report, for the fiscal year from October
1, 2020 to September 30, 2021. In accordance with the German legal requirements, we have not audited the content of the Corporate
Governance Statement which is published on the website stated in the combined management report.
120
Next47 Fund 2021, L.P., Palo Alto, CA / United Kingdom
Siemens Limited, Mumbai / India
171
Siemens Financial Services Ltd., Beijing / China
25
433
100
Siemens Healthcare Diagnostics Manufacturing Ltd., Shanghai, Shanghai / China
(7)
77
100
Siemens Healthineers Diagnostics (Shanghai) Co., Ltd., Shanghai / China
41
333
100
Siemens Healthineers Ltd., Shanghai / China
Annual Financial Statements
96
100
Siemens Industrial Automation Products Ltd., Chengdu, Chengdu / China
162
192
100
Siemens Industry Software (Shanghai) Co., Ltd., Shanghai / China
39
81
100
Siemens International Trading Ltd., Shanghai, Shanghai / China
Siemens Ltd., China, Beijing / China
Siemens Medium Voltage Switching Technologies (Wuxi) Ltd., Wuxi / China
13
182
41
23
132
62
100
Shanghai Electric Power Generation Equipment Co., Ltd., Shanghai / China
10
507
405
Siemens Circuit Protection Systems Ltd., Shanghai, Shanghai / China
21
30
75
Siemens Electrical Apparatus Ltd., Suzhou, Suzhou / China
74
122
100
100
32
40
100
Siemens Electrical Drives Ltd., Tianjin / China
63
134
85
Siemens Factory Automation Engineering Ltd., Beijing / China
Siemens Finance and Leasing Ltd., Beijing / China
25
29
100
23
Siemens Electrical Drives (Shanghai) Ltd., Shanghai / China
100
851
2,333
14
100
Zhenjiang Siemens Busbar Trunking Systems Co. Ltd., Yangzhong / China
21
33
505
Siemens Limited, Hong Kong / Hong Kong
9
24
100
Bangalore International Airport Ltd., Bangalore / India
(64)
318
7
206
(4)
248
99
Mentor Graphics (India) Private Limited, New Delhi / India
7
85
100
Siemens Financial Services Private Limited, Mumbai / India
8
69
100
Siemens Healthcare Private Limited, Mumbai / India
31
C&S Electric Limited, New Delhi / India
Siemens Wiring Accessories Shandong Ltd., Zibo / China
55
49
100
50
55
85
Siemens Mobility Equipment (China) Co., Ltd, Shanghai Pilot Free Trade Zone / China
Siemens Mobility Technologies (Beijing) Co., Ltd, Beijing / China
17
93
100
19
123
100
Siemens Numerical Control Ltd., Nanjing, Nanjing / China
73
89
80
Siemens Shanghai Medical Equipment Ltd., Shanghai / China
102
128
100
Siemens Shenzhen Magnetic Resonance Ltd., Shenzhen / China
60
99
100
Siemens Standard Motors Ltd., Yizheng / China
60
87
100
Siemens Switchgear Ltd., Shanghai, Shanghai / China
29
100
100
Siemens Financial Services, Inc., Wilmington, DE / United States
Next47 Fund 2020, L.P., Palo Alto, CA / United Kingdom
Valeo Siemens eAutomotive GmbH, Erlangen
(12)
153
505
Varian Medical Systems Particle Therapy GmbH & Co. KG, Troisdorf
(18)
150
1003
Veja Mate Offshore Project GmbH, Oststeinbek
137
347
205
VMS Deutschland Holdings GmbH, Darmstadt
1004
3
100
Yunex GmbH, Munich
2
69
100
Europe, Commonwealth of Independent States (C.I.S.), Africa, Middle East (without
Germany) (104 companies)
Siemens Spa, Algiers / Algeria
19
40
100
20
20
Annual Financial Statements
220
ETM professional control GmbH, Eisenstadt / Austria
170
100
2,178
100
Siemens Mobility Real Estate GmbH & Co. KG, Grünwald
7
121
100
Siemens Nixdorf Informationssysteme GmbH, Grünwald
28
100
Siemens Project Ventures GmbH, Erlangen
Siemens Real Estate GmbH & Co. KG, Kemnath
Siemens Trademark GmbH & Co. KG, Kemnath
Siemens Treasury GmbH, Munich
(26)
263
100
SPT Beteiligungen GmbH & Co. KG, Grünwald
14
100
653
1,841
100
2
3
100
SIM 2. Grundstücks-GmbH & Co. KG, Grünwald
SIMAR Ost Grundstücks-GmbH, Grünwald
6
321
904
(1)
(30)
115
14
21
100
84
100
17
52
100
Siemens Mobility, s.r.o., Prague / Czech Republic
12
27
100
Siemens, s.r.o., Prague / Czech Republic
44
103
100
14
Siemens A/S, Ballerup / Denmark
40
100
Siemens Aarsleff Konsortium I/S, Ballerup / Denmark
672,3
Siemens Osakeyhtiö, Espoo / Finland
9
40
100
ATOS SE, Bezons / France
(262)
6,871
105
Siemens France Holding SAS, Saint-Denis / France
6
100
24
7
Siemens Aktiengesellschaft Österreich, Vienna / Austria
160
1,374
100
Siemens Healthcare Diagnostics GmbH, Vienna / Austria
14
112
100
Siemens Konzernbeteiligungen GmbH, Vienna / Austria
359
1,818
100
Siemens Metals Technologies Vermögensverwaltungs GmbH, Vienna / Austria
Siemens Mobility Austria GmbH, Vienna / Austria
42
100
20
(153)
100
Siemens Healthcare NV, Beersel / Belgium
10
99
100
Siemens Industry Software NV, Leuven / Belgium
Siemens Mobility S.A. / N.V, Beersel / Belgium
Siemens S.A./N.V., Beersel / Belgium
OEZ s.r.o., Letohrad / Czech Republic
23
388
100
212
74
Siemens Mobility GmbH, Munich
80
Onespin Solutions Holding GmbH, Munich
(1)
53
100
OWP Butendiek GmbH & Co. KG, Bremen
119
648
235
Project Ventures Butendiek Holding GmbH, Munich
66
1006
RISICOM Rückversicherung AG, Grünwald
70
100
316
Siemens Bank GmbH, Munich
29
1,149
100
Siemens Beteiligungen Europa GmbH, Munich
47
5,159
100
Siemens Beteiligungen Inland GmbH, Munich
(97)
21,257
100
Siemens Beteiligungen USA GmbH, Berlin
100
(17)
1
100
September 30, 2021
Germany (46 companies)
Erlapolis 20 GmbH, Munich
evosoft GmbH, Nuremberg
HaCon Ingenieurgesellschaft mbH, Hanover
KACO new energy GmbH, Neckarsulm
Munipolis GmbH, Munich
NEO New Oncology GmbH, Cologne
Next47 Services GmbH, Munich
Net income in
millions of €1
Equity in
millions of €¹
Equity interest
in %
(28)
(1)
1004
2
8
100
(7)
150
100
(16)
47
100
257
1004
1,142
(1)
13,723
100
Siemens Beteiligungsverwaltung GmbH & Co. OHG, Kemnath
1,619
100
Siemens Healthineers AG, Munich
1,377
24,363
75
Siemens Healthineers Beteiligungen GmbH & Co. KG, Röttenbach
95
23,648
100
Siemens Healthineers Holding I GmbH, Munich
(60)
(4,811)
138
100
101
101
100
Siemens Immobilien GmbH & Co. KG, Grünwald
68
92
100
Siemens Industry Software GmbH, Cologne
13
308
100
Siemens Logistics GmbH, Constance
28
Siemens Healthineers Innovation GmbH & Co. KG, Röttenbach
Siemens Healthcare GmbH, Munich
100
473
1,058
23,511
100²
Siemens Campus Erlangen Grundstücks-GmbH & Co. KG, Grünwald
14
31
100
Siemens Electronic Design Automation GmbH, Munich
(9)
69
100
Siemens Energy AG, Munich
200
13,021
40
124
6
130
100
Siemens Financial Services GmbH, Munich
Siemens Fonds Invest GmbH, Munich
8
2,033
100
1
12
100
Siemens Healthcare Diagnostics Products GmbH, Marburg
(13)
100
224
Siemens Finance & Leasing GmbH, Munich
Siemens Healthcare SAS, Saint-Denis / France
115
100
Siemens Healthcare Limited Liability Company, Moscow / Russian Federation
19
14
100
Siemens Mobility LLC, Moscow / Russian Federation
16
25
100
Siemens Healthcare Limited, Riyadh / Saudi Arabia
20
51
50
Siemens Mobility d.o.o. Cerovac, Kragujevac / Serbia
Siemens s.r.o., Bratislava / Slovakia
Fábrica Electrotécnica Josa, S.A.U., Tres Cantos / Spain
(9)
34
100
5
29
100
(12)
43
70
2
45
100
Siemens Proprietary Limited, Midrand / South Africa
SIEMENS HEALTHCARE, S.L.U., Getafe / Spain
Siemens Finance and Leasing LLC, Vladivostok / Russian Federation
51
Varian Medical Systems Nederland B.V., Houten / Netherlands
27
6,273
100
21
Annual Financial Statements
SIEMENS HEALTHCARE, UNIPESSOAL, LDA, Amadora / Portugal
4
91
100
Siemens S.A., Amadora / Portugal
11
108
100
100
11
25
55
LIMITED LIABILITY COMPANY SIEMENS ELEKTROPRIVOD, St. Petersburg / Russian Federation
5
25
100
000 Legion II, Moscow / Russian Federation
3
74
100
000 Siemens, Moscow / Russian Federation
20
Siemens W.L.L., Doha Qatar
12
277
100
110
100
35
1,103
100
74
5,968
100
Siemens Healthcare Saglik Anonim Sirketi, Istanbul / Turkey
Siemens Sanayi ve Ticaret Anonim Sirketi, Istanbul / Turkey
Electrium Sales Limited, Frimley, Surrey / United Kingdom
11
49
29
100
93
100
(6)
81
100
Galloper Wind Farm Holding Company Limited, Swindon, Wiltshire / United Kingdom
Next47 Fund 2018, L.P., Palo Alto, CA / United Kingdom
38
99
255
92
100
Next47 Fund 2019, L.P., Palo Alto, CA / United Kingdom
94
35
100
142
7
100
Siemens Holding S.L., Madrid / Spain
9
76
100
SIEMENS MOBILITY, S.L.U., Tres Cantos / Spain
1
65
100
Siemens Rail Automation S.A.U., Tres Cantos / Spain
27
639
100
Siemens S.A., Madrid / Spain
20
188
100
Siemens Financial Services AB, Solna / Sweden
26
214
100
Siemens Healthcare AG, Zurich / Switzerland
4
157
100
Siemens Industry Software GmbH, Zurich / Switzerland
Siemens Mobility AG, Wallisellen / Switzerland
Siemens Schweiz AG, Zurich / Switzerland
Varian Medical Systems International AG, Steinhausen / Switzerland
505
100
100
Ural Locomotives Holding Besloten Vennootschap, The Hague / Netherlands
1003
1,995
348
100
62
1
Siemens Limited, Dublin Ireland
Mentor Graphics (Ireland) Limited, Shannon, County Clare / Ireland
Mentor Graphics (Holdings) Unlimited Company, Shannon, County Clare / Ireland
SIEMENS HEALTHCARE INDUSTRIAL AND COMMERCIAL SINGLE MEMBER SOCIETE ANONYME,
Chalandri / Greece
100
92
7
146
Siemens A.E., Electrotechnical Projects and Products, Athens / Greece
183
44
Siemens SAS, Saint-Denis / France
100
106
(31)
Siemens Mobility SAS, Châtillon / France
100
53
7
Siemens Industry Software SAS, Châtillon / France
100
222
100
1,836
100
2
100
11
22
3
Varian Medical Systems Italy SpA, Segrate / Italy
100
198
35
Siemens S.p.A., Milan / Italy
100
254
17
Siemens Healthcare S.r.l., Milan / Italy
100
1
-
UGS Israeli Holdings (Israel) Ltd., Airport City / Israel
100
51
14
100
81
(1)
100
116
Siemens Industry Software Ltd., Airport City / Israel
Siemens Concentrated Solar Power Ltd., Rosh HaAyin / Israel
Mentor Graphics Development Services (Israel) Ltd., Rehovot / Israel
100
22
FAST TRACK DIAGNOSTICS LUXEMBOURG S.à r.l., Esch-sur-Alzette / Luxembourg
13
105
2
170
4,420
100
13,895
100
114
1,029
100
61
459
100
1,452
5,592
12,299
Siemens International Holding III B.V., The Hague / Netherlands
(1)
2
100
Siemens Mobility Holding B.V., The Hague / Netherlands
86
960
100
Siemens Nederland N.V., The Hague / Netherlands
29
33
100
166
100
1,307
Siemens International Holding B.V., The Hague / Netherlands
83
SPT Holding SARL, Luxembourg / Luxembourg
(146)
100
100
36
1004
SPT Invest Management, SARL, Luxembourg Luxembourg
(2)
1004
Varian Medical Systems Mauritius Ltd., Ebene / Mauritius
100
Castor III B.V., The Hague / Netherlands.
3
100
Dresser-Rand International B.V., The Hague / Netherlands
77
100
100
Mendix Technology B.V., Rotterdam / Netherlands
(73)
122
8
100
Mentor Graphics (Netherlands) B.V., Eindhoven / Netherlands
Pollux III B.V., The Hague / Netherlands
57
-
3
100
3
Siemens Financieringsmaatschappij N.V., The Hague / Netherlands
Siemens Gas and Power Holding B.V., Zoeterwoude / Netherlands
Siemens Healthineers Holding III B.V., The Hague / Netherlands
Siemens Healthineers Holding IV B.V., The Hague / Netherlands
Siemens Healthineers Nederland B.V., The Hague / Netherlands
Siemens Industry Software Netherlands B.V., Eindhoven / Netherlands
Gross profit¹
Provisions for pensions and similar obligations
Equity (including non-controlling interests)
Income from continuing operations¹
Revenue¹
as a percentage of total assets
Net income
Net debt
Current assets
Current liabilities
Debt
Long-term debt
Revenue and profit
Assets, liabilities and equity2
(in millions of €, except where otherwise stated)
Munich, November 30, 2021
FOR THE FIVE YEARS UNTIL FISCAL 2021
6
Total assets
German Public Auditor responsible for the engagement
The German Public Auditor responsible for the engagement is Katharina Breitsameter.
Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft
Breitsameter
Wirtschaftsprüferin
[German Public Auditor]
Dr. Gaenslen
Wirtschaftsprüfer
[German Public Auditor]
Independent Auditor's Report (Siemens AG)
7
Five-Year Summary
SIEMENS
Cash flows
5,648
Cash flows from investing activities - continuing operations¹
Additions to intangible assets and property, plant and equipment¹
25,043
5,636
4,156
5,063
5,084
6,041
20,535
6,697
6,120
6,094
Sep 30,
Sep 30,
Sep 30,
Our auditor's report must always be read together with the audited annual financial statements and the audited management report as
well as the assured ESEF documents. The annual financial statements and the management report converted to the ESEF format -
including the versions to be published in the Bundesanzeiger [German Federal Gazette] - are merely electronic renderings of the audited
annual financial statements and the audited management report and do not take their place. In particular, the ESEF report and our
assurance opinion contained therein are to be used solely together with the assured ESEF documents made available in electronic form.
4,200
21,381
19,888
22,737
Cash flows from financing activities - continuing operations¹
Change in cash and cash equivalents
Free cash flow - continuing and discontinued operations
Free cash flow - continuing operations¹
Employees
Continuing operations (in thousands)¹
Five-Year Summary
FY 2021
FY 2020
FY 2019
FY 2018
FY 2017
62,265
55,254
56,797
55,538
82,863
Cash flows from operating activities – continuing operations¹
Amortization, depreciation and impairments¹
-
the Five-Year Summary,
Audit-related services include primarily audits of financial statements as well as other attestation services in connection with M&A
activities, attestation services related to the sustainability reporting, comfort letters and other attestation services required under
regulatory requirements, contractually agreed or requested on a voluntary basis. Permitted tax services were rendered in connection with
audit-related support for the analysis of the design of the tax compliance management system performed by Siemens.
Responsibilities of management and the Supervisory Board for the annual financial statements and the
management report
Management is responsible for the preparation of the annual financial statements that comply, in all material respects, with the
requirements of German commercial law applicable to business corporations, and that the annual financial statements give a true and fair
view of the assets, liabilities, financial position and financial performance of the Company in compliance with German legally required
accounting principles. In addition, management is responsible for such internal control as it, in accordance with German legally required
accounting principles, has determined necessary to enable the preparation of annual financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the annual financial statements, management is responsible for assessing the Company's ability to continue as a going
concern. It also has the responsibility for disclosing, as applicable, matters related to going concern. In addition, management is
responsible for financial reporting based on the going concern basis of accounting, provided no actual or legal circumstances conflict
therewith.
Furthermore, management is responsible for the preparation of the management report that as a whole provides an appropriate view of
the Company's position and is, in all material respects, consistent with the annual financial statements, complies with German legal
requirements and appropriately presents the opportunities and risks of future development. In addition, management is responsible for
such arrangements and measures (systems) as management has considered necessary to enable the preparation of a management report
that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropriate evidence for the
assertions in the management report.
The Supervisory Board is responsible for overseeing the Company's financial reporting process for the preparation of the annual financial
statements and of the management report.
Auditor's responsibilities for the audit of the annual financial statements and of the management report
Our objectives are to obtain reasonable assurance about whether the annual financial statements as a whole are free from material
misstatement, whether due to fraud or error, and whether the management report as a whole provides an appropriate view of the
Company's position and, in all material respects, is consistent with the annual financial statements and the knowledge obtained in the
audit, complies with the German legal requirements and appropriately presents the opportunities and risks of future development, as well
as to issue an auditor's report that includes our opinions on the annual financial statements and on the management report.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Sec. 317 HGB and
the EU Audit Regulation as well as in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated
by the IDW and in supplementary compliance with ISA will always detect a material misstatement. Misstatements can arise from fraud or
Independent Auditor's Report (Siemens AG)
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these annual financial statements and this management report.
We exercise professional judgment and maintain professional skepticism throughout the audit. We also:
•
•
Identify and assess the risks of material misstatement of the annual financial statements and of the management report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
4
⚫ is materially inconsistent with the annual financial statements, with the management report or our knowledge obtained in the audit, or
• otherwise appears to be materially misstated.
In connection with our audit, our responsibility is to read the other information, and, in so doing, to consider whether the other information
Our opinions on the annual financial statements and on the management report do not cover the other information, and consequently
we do not express an opinion or any other form of assurance conclusion thereon.
Independent Auditor's Report (Siemens AG)
Reference to related disclosures: With regard to the recognition and measurement policies applied in accounting for income taxes, refer
to chapter 3.2 Accounting and Measurement Principles and chapter 3.3 Notes to the Income Statement, Note 6 Income taxes and with
respect to disclosures for deferred tax assets, refer to chapter 3.4 Notes to the Balance Sheet, Note 13 Deferred tax assets in the notes to
the financial statements.
Other information
The Supervisory Board is responsible for the Report of the Supervisory Board in the Annual Report 2021 within the meaning of ISA [DE]
720 (Revised). Management and the Supervisory Board are responsible for the declaration pursuant to Sec. 161 AktG ["Aktiengesetz":
German Stock Corporation Act] on the Corporate Governance Code, which is part of the Corporate Governance Statement, and for the
Compensation Report. In all other respects, management is responsible for the other information. The other information comprises the
Corporate Governance Statement referred to above.
In addition, the other information comprises parts to be included in the Annual Report, of which we received a version prior to issuing this
auditor's report, in particular:
•
the Responsibility Statement (to the annual financial statements and the management report),
⚫ the Responsibility Statement (to the consolidated financial statements and the group management report),
•
Sep 30,
•
the Compensation Report,
⚫ the Report of the Supervisory Board,
• Notes and forward-looking statements,
but not the consolidated financial statements and the annual financial statements, not the disclosures of the combined management
report whose content is audited and not our auditor's reports thereon.
Obtain an understanding of internal control relevant to the audit of the annual financial statements and of arrangements and measures
(systems) relevant to the audit of the management report in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of these systems of the Company.
Other matter use of the auditor's report
Evaluate the appropriateness of accounting policies used by management and the reasonableness of estimates made by management
and related disclosures.
•
In addition, management is responsible for such internal control as it has determined necessary to enable the preparation of ESEF
documents that are free from material intentional or unintentional non-compliance with the requirements of Sec. 328 (1) HGB for the
electronic reporting format.
The Supervisory Board is responsible for overseeing the process for preparing the ESEF documents as part of the financial reporting process.
Auditor's responsibilities for the assurance work on the ESEF documents
Our objective is to obtain reasonable assurance about whether the ESEF documents are free from material intentional or unintentional
non-compliance with the requirements of Sec. 328 (1) HGB. We exercise professional judgment and maintain professional skepticism
throughout the assurance work. We also:
• Identify and assess the risks of material intentional or unintentional non-compliance with the requirements of Sec. 328 (1) HGB, design
and perform assurance procedures responsive to those risks, and obtain assurance evidence that is sufficient and appropriate to provide
a basis for our assurance opinion.
•
•
Management is responsible for the preparation of the ESEF documents including the electronic rendering of the annual financial
statements and the management report in accordance with Sec. 328 (1) Sentence 4 No. 1 HGB.
Obtain an understanding of internal control relevant to the assurance on the ESEF documents in order to design assurance procedures
that are appropriate in the circumstances, but not for the purpose of expressing an assurance opinion on the effectiveness of these
controls.
Evaluate whether the ESEF documents enable an XHTML rendering with content equivalent to the audited annual financial statements
and to the audited management report.
Further information pursuant to Art. 10 of the EU Audit Regulation
We were elected as auditor by the Annual Shareholders' Meeting on February 3, 2021. We were engaged by the Supervisory Board on
February 3, 2021. We have been the auditor of Siemens Aktiengesellschaft without interruption since the fiscal year from October 1, 2008
to September 30, 2009.
We declare that the opinions expressed in this auditor's report are consistent with the additional report to the Audit Committee pursuant
to Art. 11 of the EU Audit Regulation (long-form audit report).
In addition to the financial statement audit, we have provided to the Company or entities controlled by it the following services that are
not disclosed in the annual financial statements or in the management report:
In addition to auditing the statutory financial statements of Siemens AG, we performed the statutory audit of Siemens' consolidated
financial statements, audits of financial statements of subsidiaries of Siemens AG, reviews of interim financial statements integrated in
the audit, project-based IT audits, audit services in connection with the implementation of new accounting standards as well as service
organization control engagements.
Evaluate the technical validity of the ESEF documents, i.e., whether the file containing the ESEF documents meets the requirements of
Commission Delegated Regulation (EU) 2019/815, in the version in force at the date of the financial statements, on the technical
specification for this file.
Responsibilities of management and the Supervisory Board for the ESEF documents
"Auditor's responsibilities for the assurance work on the ESEF documents" section. Our audit firm applies the IDW Standard on Quality
Management 1: Requirements for Quality Management in the Audit Firm (IDW QS 1).
Independent Auditor's Report (Siemens AG)
•
Evaluate the overall presentation, structure and content of the annual financial statements, including the disclosures, and whether the
annual financial statements present the underlying transactions and events in a manner that the annual financial statements give a true
and fair view of the assets, liabilities, financial position and financial performance of the Company in compliance with German legally
required accounting principles.
Evaluate the consistency of the management report with the annual financial statements, its conformity with German law and the view
of the Company's position it provides.
• Perform audit procedures on the prospective information presented by management in the management report. On the basis of
sufficient appropriate audit evidence we evaluate, in particular, the significant assumptions used by management as a basis for the
prospective information, and evaluate the proper derivation of the prospective information from these assumptions. We do not express
a separate opinion on the prospective information and on the assumptions used as a basis. There is a substantial unavoidable risk that
future events will differ materially from the prospective information.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with the relevant independence requirements,
and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where
applicable, the related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the
audit of the annual financial statements of the current period and are therefore the key audit matters. We describe these matters in our
auditor's report unless law or regulation precludes public disclosure about the matter.
Other legal and regulatory requirements
Report on the assurance on the electronic rendering of the annual financial statements and the management
report prepared for publication purposes in accordance with Sec. 317 (3a) HGB
Opinion
We have performed assurance work in accordance with Sec. 317 (3a) HGB to obtain reasonable assurance about whether the rendering
of the annual financial statements and the management report (hereinafter the "ESEF documents") contained in the file SIEMENS_2021.zip
(SHA-256-checksum: c2fee878a23005add85c87b5f4a7cf3e7883b81d2626892870c12ff3d2a977f8) and prepared for publication
purposes complies in all material respects with the requirements of Sec. 328 (1) HGB for the electronic reporting format ("ESEF format").
In accordance with German legal requirements, this assurance work extends only to the conversion of the information contained in the
annual financial statements and the management report into the ESEF format and therefore relates neither to the information contained
within these renderings nor to any other information contained in the file identified above.
In our opinion, the rendering of the annual financial statements and the management report contained in the file identified above and
prepared for publication purposes complies in all material respects with the requirements of Sec. 328 (1) HGB for the electronic reporting
format. Beyond this assurance opinion and our audit opinions on the accompanying annual financial statements and the accompanying
management report for the fiscal year from October 1, 2020 to September 30, 2021 contained in the "Report on the audit of the annual
financial statements and of the management report" above, we do not express any assurance opinion on the information contained within
these renderings or on the other information contained in the file identified above.
Basis for the opinion
We conducted our assurance work on the rendering of the annual financial statements and the management report contained in the file
identified above in accordance with Sec. 317 (3a) HGB and the IDW Assurance Standard: Assurance on the Electronic Rendering of Financial
Statements and Management Reports Prepared for Publication Purposes in Accordance with Sec. 317 (3a) HGB (IDW ASS 410) and the
International Standard on Assurance Engagements 3000 (Revised). Our responsibility in accordance therewith is further described in the
5
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor's
report to the related disclosures in the annual financial statements and in the management report or, if such disclosures are inadequate,
to modify our respective opinions. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report.
However, future events or conditions may cause the Company to cease to be able to continue as a going concern.
Sep 30,
7,684
2020
Dividend per share³
€4.00
€3.50
€3.90
€3.80
€3.70
1 In FY 2020, Gas and Power and Siemens Gamesa Renewable Energy were classified as discontinued operations. Prior-period amounts beginning with FY 2018 are presented on a comparable basis.
In FY 2021, Flender GmbH was classified as discontinued operation. Prior-period amounts beginning with FY 2019 are presented on a comparable basis.
2 Beginning with September 30, 2018 under consideration of IFRS 9.
3 For FY 2021 to be proposed to the Annual Shareholders' Meeting.
2
€7.13
Compensation Report
SIEMENS
Siemens Aktiengesellschaft
Berlin and Munich
Compensation Report 2021
This Compensation Report provides an explanation and a clear and com-
prehensible presentation of the compensation individually awarded
and due to the current and former members of the Managing Board and
the Supervisory Board of Siemens AG for fiscal 2021 (October 1, 2020 to
September 30, 2021). The Report complies with the requirements of the
German Stock Corporation Act (Aktiengesetz, AktG). Detailed information
regarding the compensation systems for members of the Managing Board
and the Supervisory Board of Siemens AG is available on the Siemens
Global Website www.SIEMENS.COM/CORPORATE-GOVERNANCE.
Due to rounding, numbers presented throughout this document may not
add up precisely to the totals provided and percentages may not precisely
reflect the absolute figures.
Table of
contents
A. Fiscal 2021 in retrospect
4
B. Compensation of Managing Board members
6
2021
B.1 The compensation system at a glance
€5.84
€4.70
FY 2021
FY 2020
FY 2019
FY 2018
FY 2017
€7.68
€5.00
€6.41
€7.12
€7.34
€5.74
€6.36
€5.82
€5.94
€7.27
Diluted earnings per share - continuing and discontinued operations
Diluted earnings per share - continuing operations¹
€7.59
€4.93
€6.32
€7.01
€7.19
€6.28
€4.77
Basic earnings per share - continuing operations¹
B.2 Principles of the determination of compensation
9
D. Comparative information on
profit development and annual
change in compensation
E.
Other
Independent auditor's report
32
KE
35
38
39
C. Compensation of Supervisory Board members
Compensation Report → A. Fiscal 2021 in retrospect
The Managing Board and the Supervisory Board of
Siemens AG have decided to voluntarily implement
ahead of time the new legal requirements regarding the
issuance of the Compensation Report that are set out in
Section 162 of the German Stock Corporation Act. The
emphasis of the Report continues to be on providing
clear, transparent and comprehensive reporting. The
Managing Board and the Supervisory Board have also
decided to commission the independent auditor to con-
duct a substantive audit of the Compensation Report,
over and above the requirement set out in Section 162
para. 3 sent. 1 and 2 of the German Stock Corporation Act.
What did the economic and
political environment look like
at the start of fiscal 2021?
In the fall of 2020, the outlook for the fiscal year ahead
was anything but stable. Due to the ongoing COVID-19
pandemic, Siemens and its customers and partners
worldwide faced major challenges. In the U.S., the presi-
dential election was imminent, and it wasn't clear what
economic consequences the tense relations between the
U.S. and China would have. There were also structural
problems in Siemens' key customer sectors such as ma-
chine building due to low capacity utilization - and in
the automobile industry, which is undergoing a dramatic
structural transformation. All these factors are having an
impact on Siemens' business. In retrospect, we've experi-
enced an exciting and a very challenging, but also a very
successful fiscal year. The employees of Siemens have
delivered a stellar performance in difficult times.
-
Changes in the
Managing Board and the
Compensation Committee
In fiscal 2021, there were also changes in the Managing
Board. Matthias Rebellius and Judith Wiese were ap-
pointed full members of the Managing Board effective
October 1, 2020. Joe Kaeser left the Managing Board
effective the end of the Annual Shareholders' Meeting on
February 3, 2021. Klaus Helmrich left the Managing
Board effective March 31, 2021. The Supervisory Board is
very grateful to both Mr. Kaeser and Mr. Helmrich for
their many years of successful work on behalf of Siemens
and for their extraordinary services to the Company.
Dr. Roland Busch was appointed President and CEO effec-
tive the end of the 2021 Annual Shareholders' Meeting.
He combines entrepreneurial farsightedness with a de-
sire to optimally support customers in their digital and
sustainable transformation. The Company is driving this
transformation with technologies that add real value for
customers - technologies that will continue to be crucial
for Siemens in the future and of which Dr. Roland Busch
has a deep and broad understanding.
Following the scheduled departure of Werner Wenning,
the previous, long-serving Chairman of the Compensa-
tion Committee of the Supervisory Board of Siemens AG,
from the Supervisory Board and thereby also from the
Compensation Committee, the Compensation Commit-
tee elected Michael Diekmann to serve as its new Chair-
man effective February 4, 2021. The Compensation Com-
mittee also acquired two new members: Harald Kern,
who joined the Committee in October 2020, succeeding
Robert Kensbock, who left the Supervisory Board
on September 25, 2020, the effective date of the
Siemens Energy spin-off, and Matthias Zachert, who
joined the Committee in February 2021.
FISCAL 2021 4
| A. Fiscal 2021 in retrospect
6
31
30
B.2.1 Target compensation and compensation structure
9
B.2.2 Maximum compensation
B.2.3 Appropriateness of compensation
11
12
B.3 Variable compensation in fiscal 2021
12
B.3.1 Short-term variable compensation (Bonus)
14
B.7 Outlook for fiscal 2022
B.3.2 Long-term variable compensation (Stock Awards)
B.3.3 Malus and clawback regulations
25
B.4 Share Ownership Guidelines
26
B.5 Pension benefit commitment
26
B.6 Compensation awarded and due
27
B.6.1 Active Managing Board members in fiscal 2021
B.6.2 Former members of the Managing Board
27
18
2021
Basic earnings per share - continuing and discontinued operations
377
19,840
22,607
2,839
6,360
9,896
9,582
49,274
35%
139,608
39,823
50,984
48,046
22,726
44,619
34%
150,248
35%
138,915
33%
136,111
FY 2021
FY 2020
FY 2019
FY 2018
FY 2017
10,109
32%
123,897
7,851
29,270
26,777
2019
2018
2017
52,340
52,968
70,370
64,556
60,750
39,952
34,117
38,022
50,723
46,077
48,700
44,567
36,449
32,177
32,224
40,879
38,005
30,414
27,120
47,874
Stock market information
6,825
7,225
6,404
5,845
5,824
4,769
8,379
6,352
5,086
5,719
4,819
Sep 30,
8,237
Sep 30,
Sep 30,
Sep 30,
2021
2020
2018
2017
303
285
287
288
Sep 30,
7,539
(2,228)
1,325
3,075
3,098
2,222
2,131
3,211
(17,192)
(4,050)
(4,166)
(3,288)
(7,456)
2,677
(1,730)
(1,739)
(1,820)
(2,406)
785
4,267
(1,214)
(2,376)
(1,560)
(4,509)
1,663
(1,498)
2019
Compensation Report → A. Fiscal 2021 in retrospect
Fixed
→ Commitments in connection with
the termination of Managing Board
appointments:
Termination by mutual agreement
and without serious cause
Change of control (only for
first-time appointments and/or
reappointments before Novem-
ber 2019)
→ Compensation alloted to Judith Wiese
for the loss of benefits granted by her
former employer: €1,469,124 (gross)
50% in the form of Stock Awards
additionally to the 2021 tranche
-
in November 2020
50% in cash in March 2021
MAXIMUM COMPENSATION
Caps Managing Board members'
compensation in order to avoid
uncontrollably high payments and
thus disproportionate costs and risks
for the Company.
→ Determined annually by the
Supervisory Board
→ Equals the sum of maximum
amounts that can possibly be
paid out to each Managing Board
member from all compensation
components for the relevant fiscal
year and is calculated as follows:
Base salary
+ maximum fringe benefits
+ BSAV contribution or amount
for free disposal
+ two times the Bonus
target amount
+ three times the Stock Awards
target amount
→ Maximum compensation for each
Managing Board member for fiscal
2021 determined in accordance
with the compensation system
→ Final assessment of compliance with
maximum compensation when the
2021 Stock Awards tranche is settled
in fiscal 2025
→ Reporting in Compensation Report
for fiscal 2025
SHARE OWNERSHIP GUIDELINES
-
→ Commitments granted in connec-
tion with the commencement of
Managing Board appointments:
Compensation for the loss of
benefits from a former employer
Moving expenses due to a change
of the regular place of work at the
request of the Company
Are part of competitive compensation
and help the Company obtain the
best candidates worldwide for the
Managing Board.
OTHER BENEFITS
2021 Stock Awards tranche
→ Grant date: November 13, 2020
End of vesting period: in Novem-
ber 2024
→
→ Performance criteria:
80%: development of TSR relative
to MSCI World Industrials index
20%: ESG key performance
indicators: CO2 emissions,
digital learning hours and
Net Promoter Score
Target amounts (based on 100% target
achievement)
→ President and CEO: €2,390,000
→ CFO: €1,544,000
→ Other Managing Board members:
€1,259,000
Foster an alignment of Managing
Board and shareholder interests and
provide additional incentives to
sustainably increase Company value.
Malus and clawback
regulations
In cases of severe breaches of duty or
compliance and/or unethical behavior
or in cases of grossly negligent or willful
breaches of duty of care or in cases in
which variable compensation compo-
nents linked to the achievement of
specific targets have been unduly paid
out on the basis of incorrect data, the
Supervisory Board can withhold
or reclaim variable compensation.
No application in fiscal 2021
FISCAL 2021
7
Compensation Report B. Compensation of Managing Board members
Link to strategy
Implementation
in compensation
system
Application
in 2021
Aim to ensure sustainable Company
development and avoid inappropriate
risks.
→ Payout cap: 300% of target amount
→ Obligates Managing Board members
to permanently hold Siemens shares
of an amount equal to a multiple of
their base salary during their terms
of office on the Managing Board
President and CEO: 300%
- Other Managing Board
members: 200%
→ Verification date on second Friday
in March
30% to 42%
of total target compensation
In line with the decision not to adjust, as a rule, employee
compensation worldwide in fiscal 2021 due to the ongo-
ing COVID-19 pandemic, the total target compensation of
the Managing Board members was not increased except
in the case of Dr. Roland Busch and is unchanged com-
pared to fiscal 2020. The total target compensation of
Dr. Roland Busch was increased as of October 1, 2020,
due to his appointment as President and CEO effec-
tive the end of the Annual Shareholders' Meeting on
February 3, 2021, and the related expansion of his duties
already at the beginning of fiscal 2021.
As in previous years, all components of the compen-
sation of the position of President and CEO¹ were differ-
entiated. As in fiscal 2020, the target amount of
Prof. Dr. Ralf P. Thomas's Stock Awards was differentiated
due to his particular responsibilities as CFO.
The following table shows the individualized target com-
pensation of each Managing Board member and the rela-
tive proportions of total target compensation represented
by each of the individual compensation components.
1 Joe Kaeser held this position until the end of the Annual Shareholders'
Meeting on February 3, 2021, when he was succeeded by Dr. Roland Busch,
who has held the position since that date.
FISCAL 2021 9
Target compensation fiscal 2021
Managing Board members
in office on September 30, 2021
Fixed
Base salary
compensation
+ Fringe benefits²
+ BSAV contribution/amount for free disposal³
= Total
Variable
compensation
+ Short-term variable compensation
Bonus for fiscal 2021
Bonus for fiscal 2020
of total target compensation
20% to 28%
Long-term variable
compensation
(Stock Awards)
Short-term variable
compensation
(Bonus)
→ Relevant share price: average Xetra
opening price of the fourth quarter
of the previous calendar year
→ Obligation to purchase additional
shares if the value of the accu-
mulated shareholding falls below
the respective amounts to be
verified due to fluctuations in
the Siemens share price
→ Verification date: March 12, 2021
→ Relevant share price: €111.13
→ Fulfilled by all the Managing Board
members obligated to provide
verification
FISCAL 2021 8
B.2 Principles of the
determination of compensation
B.2.1 Target compensation
and compensation structure
The Supervisory Board has determined, in accordance
with the compensation system for the Managing Board
members, the amount of each Managing Board mem-
ber's total target compensation for fiscal 2021. In making
this determination, the Supervisory Board has ensured
that the proportion of long-term variable compensation
always exceeds that of short-term variable compensation
and that the proportions of the individual compensation
components are within the ranges defined in the com-
pensation system.
Composition of total target compensation
→ Four-year build-up phase
Base salary
TOTAL TARGET COMPENSATION
FIXED COMPENSATION
+ Fringe benefits
+
Pension benefit
commitment
36% to 43%
of total target compensation
+
VARIABLE COMPENSATION
Compensation Report B. Compensation of Managing Board members
- 20%: Siemens-internal ESG/Sus-
tainability index with three equally
weighted key performance indica-
tors and annual interim targets
36-month performance period
Outperformance relative to
sector index-/+20 percent-
age points
•
5
Compensation Report B. Compensation of Managing Board members
B. Compensation of
Managing Board members
B.1 The compensation system
at a glance
The current compensation system for the members of
the Managing Board of Siemens AG has been in place
since fiscal 2020 and was endorsed by the Annual Share-
holders' Meeting on February 5, 2020, by a majority of
94.51%.
The compensation of the Managing Board members con-
sists of fixed and variable components. Fixed compensa-
tion, which is not performance-based, comprises base
salary, fringe benefits and a pension benefit commit-
ment. Short-term variable compensation (Bonus) and
long-term variable compensation (Stock Awards) are per-
formance-based compensation and thus variable.
The Share Ownership Guidelines are a further key com-
ponent of the compensation system. They obligate Man-
aging Board members to permanently hold Siemens
shares worth a defined multiple of their base salary and
to purchase additional shares in the event that the value
of their shares falls below the defined amount.
The Managing Board compensation system is also sup-
plemented by commitments granted in connection with
the commencement and termination of appointments to
the Managing Board as well as any change in the regular
place of work.
The following table provides an overview of the compo-
nents of the compensation system for Managing Board
members, the underlying goals (including the link to the
Company's strategy) and the components' concrete im-
plementation in fiscal 2021.
Link to strategy
Implementation
in compensation
system
Application
in 2021
FIXED COMPENSATION
Competitive compensation in order to obtain the best candidates worldwide to develop and execute the Company's
strategy and manage its operations and in order to retain these individuals at the Company over the long term
Base salary
→ Contractually agreed fixed annual
compensation based on a
Managing Board member's duties
and related responsibilities and his
or her experience
→ Payment in 12 monthly installments
→ President and CEO:
€1,770,000 p.a.
FISCAL 2021
In line with the principle anchored in the compensation
system namely, that exceptional performance should
be appropriately rewarded and that failure to achieve tar-
gets should result in a perceptible reduction in compen-
sation (the pay for performance principle) – the excellent
results of fiscal 2021 are reflected in the Managing
Board's variable compensation, which takes into account
not only financial success but also environmental and
social aspects. As a result, the compensation of the Man-
aging Board members is also oriented toward the inter-
ests of the shareholders as well as the other stakeholders
of Siemens AG.
-
Despite the challenges and the economic and pandem-
ic-related uncertainty, Siemens has achieved outstanding
results. For example, the Company succeeded in main-
taining its supply chains and its delivery capacity during
the fiscal year and continued to be a reliable partner to its
customers. These developments were reflected in the
strong financial performance in fiscal 2021. Siemens
raised its outlook several times during the fiscal year,
most recently after the third quarter, and reached or ex-
ceeded all the targets set for the primary measures for
fiscal 2021. Return on capital employed (ROCE) was in
double-digits, and the capital structure ratio came in at
1.5. Basic EPS from net income increased 54% to €7.68. In
addition, free cash flow from continuing and discontin-
ued operations for fiscal 2021 increased 29% year-over-
year to €8.2 billion, reaching a new high. Revenue also
was higher at all industrial businesses, rising to €62.3 bil-
lion. Siemens achieved revenue growth of 11.5% net of
currency translation and portfolio effects and delivered
net income of €6.7 billion. Discontinued operations,
largely related to the sale of Flender, contributed income
of €1.1 billion in fiscal 2021.
26%
551
26%
755
+ Long-term variable compensation
2021 Stock Awards (vesting: 2020-2024)
2020 Stock Awards (vesting: 2019-2023)
= Total target compensation (TTC)
Bonus for fiscal 2020
Bonus for fiscal 2021
+ Short-term variable compensation
Variable
compensation
→ Other Managing Board members:
€1,101,600 p.a.
43%
43%
901
How is the new strategy
reflected in Managing Board
compensation?
The Managing Board presented the new Company strat-
egy for accelerated high value growth at Capital Market
Day on June 24, 2021: Siemens as a focused technology
company, active in highly attractive growth markets that
are the backbone of the global economy: industry, infra-
structure, transportation and healthcare. The Supervisory
Board is convinced that this strategy positions Siemens to
meet the challenges of the future. The Managing Board
compensation that has been determined by the Supervi-
sory Board fosters the implementation of the Company's
strategic targets by providing incentives for increasing
profit and capital efficiency and for cash generation.
Taking into account all the changes and the existing chal-
lenges, the Compensation Committee of the Supervisory
Board intensively discussed the key performance indica-
tors for variable compensation as well as the individual
targets for Managing Board members. As a result of its
decision to place the focus on the Managing Board's over-
all responsibility and cross-business collaboration, two-
thirds of the short-term variable compensation (Bonus)
of all Managing Board members were determined on the
basis of the same criteria. Strategic and sustainability-
related aspects, which are measured on the basis of the
members' individual areas of responsibility, are anchored
in the remaining third of short-term variable compensa-
tion, the "individual targets."
-
-
Sustainability strategic goal and an expression of
Siemens' social responsibility – is also firmly anchored in
the long-term variable compensation of both the Manag-
ing Board and the roughly 7,000 other Company manag-
ers worldwide. At Capital Market Day in 2021, DEGREE, a
framework that addresses sustainability from every angle
and defines ambitious targets, was introduced. As a re-
sult, the environment, society and good governance will
play a significantly stronger role. The key performance
indicators applied in long-term variable compensation are
part of this framework (CO2 emissions and digital learning
hours) and/or reflect the Company's priorities (Net Pro-
moter Score as an expression of customer satisfaction).
How did Siemens perform
in fiscal 2021?
1,801
Fringe benefits
→ Determination of a maximum
amount relative to base salary, cover-
ing expenses incurred to the benefit
of the Managing Board member
Includes in-kind compensation
and fringe benefits granted by the
Company, for example:
- Provision of a company car
- Insurance allowances
- Costs of medical checkups
Bonus for fiscal 2021
→ Performance period: October 1,
2020, to September 30, 2021
→ Payout: February 2022 (at the latest)
→ 33.34% earnings per share (EPS)
→ 33.33% return on capital
employed (ROCE)
→33.33% individual targets:
- Cash conversion rate (CCR) in
-
the area of responsibility
Growth (for Managing Board
members with business responsi-
bility and the President and CEO)
→ Consideration of extraordinary
developments in justified, infre-
quent special cases possible
- One to three additional individual
targets with focus topics from
the Bonus topic catalogue
→ President and CEO: €1,770,000
→ Other Managing Board members:
€1,101,600
VARIABLE COMPENSATION
Long-term variable
compensation (Stock Awards)
Fosters long-term commitment and
provides incentives for sustainable
value creation in accordance with
the interests of shareholders and
for the achievement of strategic sus-
tainability targets.
Performance-oriented plan settled
by share transfer after the end of
an approximately four-year vesting
period
→ Performance range: 0% to 200%,
using linear interpolation
→ Two performance criteria:
80%: development of total
shareholder return (TSR) relative
to an international sector index
• 12-month reference and
Target amounts (based on 100% target
achievement)
Compensation Report → B. Compensation of Managing Board members
- Managing Board portfolio
- Individual targets: two to four
equally weighted financial
targets or focus topics
→ Performance range: 0% to 200%,
using linear interpolation
→Three equally weighted target
dimensions:
In fiscal 2021, Managing Board members
were entitled to fringe benefits equal to
a maximum of 7.5% of their base salary.
→ President and CEO:
max. €132,750
→ Other Managing Board members:
max. €82,620
Pension benefit commitment
→ Annual contributions to the
Siemens Defined Contribution
Pension Plan (BSAV)
→ Newly appointed Managing Board
members as of October 1, 2019:
fixed cash amount for free disposal
→ Commitment at beginning
of fiscal year
→ Credit to pension account (BSAV
contribution) or payout (amount
for free disposal) in January after
the end of the fiscal year
BSAV contribution
(credit in January 2022)
→ President and CEO:
€991,200
-Siemens Group
→ Other Managing Board members:
€616,896
→ Other Managing Board members:
€550,800
FISCAL 2021 6
Compensation Report B. Compensation of Managing Board members
Link to strategy
Implementation
in compensation
system
Application
in 2021
Short-term variable
compensation (Bonus)
Provides incentives for strong
annual financial and non-financial
performance as the basis for
long-term Company strategy
and sustainable value creation.
Performance-oriented annual
Bonus, paid in cash in the subsequent
fiscal year
Amount for free disposal
(payment in January 2022)
2,205
Dr. Roland Busch'
President and CEO since Feb. 3, 2021
2020
83
2%
+ BSAV contribution/amount for free disposal³
551
13%
= Total
1,735
42%
Variable
compensation
+ Short-term variable compensation
Bonus for fiscal 2021
1,102
27%
Bonus for fiscal 2020
+ Long-term variable compensation
2021 Stock Awards (vesting: 2020-2024)
1,259
31%
2020 Stock Awards (vesting: 2019-2023)
= Total target compensation (TTC)
+Fringe benefits²
compensation
1,102
Base salary
25%
1,102
25%
+ Long-term variable compensation
2021 Stock Awards (vesting: 2020-2024)
2020 Stock Awards (vesting: 2019-2023)
Total target compensation (TTC)
1,259
31%
1,544
35%
1,544
4,096
35%
100%
4,447
100% 4,447 100%
Judith Wiese
Managing Board member since Oct. 1, 2020
2021
2020
€ thousand in % of TTC € thousand in % of TTC
27%
Fixed
4,096
1,102
100%
2 For fiscal 2021, each Managing Board member was awarded fringe benefits equal to a maximum 7.5% of his or her base salary. The target amount reported
here is also equal to the maximum amount.
+ Fringe benefits³
57
2%
165
2%
41
2%
83
2%
+ BSAV contribution/amount for free disposal
= Total
423
15%
1,235
15%
308
15%
617
15%
1,234
compensation
26%
1,102
26%
3 Matthias Rebellius and Judith Wiese are not included in the Siemens Defined Contribution Pension Plan (BSAV). Instead of BSAV contributions, they receive
a fixed cash amount for free disposal.
FISCAL 2021 10
Target compensation fiscal 2021 (cont.)
Compensation Report → B. Compensation of Managing Board members
Joe Kaeser¹
President and CEO until Feb. 3, 2021
Klaus Helmrich²
Managing Board member until March 31, 2021
Managing Board members
who left during the fiscal year
2021
2020
1 Dr. Roland Busch was first appointed a full member of the Managing Board effective April 1, 2011. He served as Deputy CEO from October 1, 2019, until the
end of the Annual Shareholders' Meeting on February 3, 2021, when he succeeded Joe Kaeser as President and CEO.
2021
€ thousand in % of TTC € thousand in % of TTC
€ thousand in % of TTC € thousand in % of TTC
Fixed
Base salary
755
26%
2,205
26%
551
2020
1,102 27%
41%
1,801
617
15%
617
15%
2,894
41%
2,071
42%
1,801
43%
1,801
43%
1,770 25%
1,102 26%
1,277
26%
1,102
26%
+ Long-term variable compensation
2021 Stock Awards (vesting: 2020-2024)
2020 Stock Awards (vesting: 2019-2023)
= Total target compensation (TTC)
12%
617
14%
991
2021
Cedrik Neike
Managing Board member since April 1, 2017
2020
€ thousand in % of TTC € thousand in % of TTC
€ thousand in % of TTC € thousand in % of TTC
1,770
25%
1,352
27%
1,102
2,390
26%
26%
133
2%
101
2%
83
2%
83
2%
1,102
34%
1,259
30%
1,102
25%
1,102
25%
83
2%
83
2%
83
€ thousand in % of TTC € thousand in % of TTC
2%
13%
617
14%
617
14%
1,735
42%
1,801
41%
551
2021
€ thousand in % of TTC € thousand in % of TTC
1,102
2020
7,054
100%
1,594 32%
4,942 100%
1,259
30%
4,162
100% 4,162
100%
43%
27%
Base salary
+ Fringe benefits²
+ BSAV contribution/amount for free disposal³
= Total
Variable
compensation
+ Short-term variable compensation
Bonus for fiscal 2021
Bonus for fiscal 2020
2021
Matthias Rebellius
Managing Board member since Oct. 1, 2020
2020
Prof. Dr. Ralf P. Thomas
Managing Board member since Sept. 18, 2013
2021
compensation
43%
26%
26%
indicator/focus topic Bonus
Profit
Profitability/
capital efficiency
Liquidity
Growth
Long-term
value creation
Earnings per
share (EPS)
Return on capital
employed (ROCE)
Key performance
Cash conversion
rate (CCR)
revenue growth
Total shareholder
return (TSR)
Stock
Awards Link to strategy
EPS reflects the net income attributable to the shareholders of Siemens AG and incen-
tivizes the sustainable increase in profit - particularly by focusing on profitable growth.
This key performance indicator provides a comprehensive perspective that encompasses
all units of the Siemens Group.
ROCE, which is the primary measure for managing capital efficiency at Group level,
reflects our focus on profitable growth, the implementation of measures to sustainably
increase competitiveness and stringent working capital management.
CCR measures the ability to convert profit into cash flow in order to finance growth and
offer our shareholders an attractive, progressive dividend policy.
Further accelerating high-value qualitative growth is a key element of Siemens' strategy.
As a focused technology company, Siemens wants to expand its position on all targeted
markets and tap additional profitable markets.
Comparable
Performance
criterion
Compensation Report → B. Compensation of Managing Board members
Performance criteria of variable compensation and link to strategy
1 The value of the Siemens shares transferred after the expiration of the vesting period is capped at 300% of the Stock Awards target amount.
If this cap is exceeded, a corresponding number of Stock Awards is forfeited without refund or replacement.
FISCAL 2021 11
Compensation Report B. Compensation of Managing Board members
The base salary and the BSAV contribution (or the amount
for free disposal) are fixed amounts. In no case did the
fringe benefits awarded to a Managing Board member
exceed the maximum amount defined for fiscal 2021. The
Bonus cap was not reached in fiscal 2021.
Since the 2021 Stock Awards tranche is not due until No-
vember 2024, compliance with the maximum limit of the
Stock Awards for fiscal 2021 can only be finally assessed
in November 2024, when the 2021 Stock Awards tranche
is settled. However, compliance with the maximum com-
pensation for fiscal 2021 in accordance with Section 87a
of the German Stock Corporation Act is already ensured
since the maximum compensation for fiscal 2021 will not
be exceeded even if the value of the Siemens shares
transferred equals 300% of the Stock Awards target
amount (cap).
The final assessment of compliance with the maximum
compensation for fiscal 2021 will be included in the Com-
pensation Report for fiscal 2025.
-
B.2.3 Appropriateness of compensation
The Supervisory Board conducted the annual review of
Managing Board compensation in order to determine
the latter's appropriateness and conformity with market
conditions. For this purpose, the Supervisory Board
assessed with the assistance of an external and inde-
pendent compensation consultant and in accordance
with the compensation system the compensation's
level and structure relative to the companies included in
the DAX 40, the German blue-chip stock index, and rela-
tive to the companies included in the STOXX Europe 50
(horizontal comparison). In the course of its review, the
Supervisory Board also assessed the development of
Managing Board compensation relative to the compen-
sation of Senior Management and Siemens' total work-
force in Germany (vertical comparison). Senior Manage-
ment comprises executive employees. The total
workforce comprises Senior Management as well as the
Siemens employees who are covered by collective bar-
gaining agreements and those who are not. In addition
to a status quo analysis, the vertical comparison took into
account the development of compensation ratios over
time. Since Siemens Healthineers is a separately man-
aged, publicly listed company, its workforce was not in-
cluded in the vertical comparison.
The appropriateness review of Managing Board com-
pensation for fiscal 2021 has shown that the Managing
Board compensation resulting from target achievement
in fiscal 2021 is appropriate.
B.3 Variable compensation
in fiscal 2021
Variable compensation is tied to performance and
accounts for a significant proportion of the total compen-
sation of Managing Board members. It consists of a short-
term variable component (Bonus) and a long-term variable
component (Stock Awards).
The performance criteria and the key performance indi-
cators used to measure performance for variable com-
pensation in fiscal 2021 are derived from the Company's
strategic goals and operational steering and are in line
with the current compensation system. As a rule, all the
performance criteria measure successful value creation
in all its different forms, as strategically envisioned.
In line with Siemens' social responsibility, sustainability
is also included in the performance criteria.
The performance criteria relevant for fiscal 2021, the key
performance indicators, the focus topics and the ex-
planations of how these foster the Company's long-term
development are shown in the following table.
FISCAL 2021
12
NON-FINANCIAL, QUALITATIVE TARGETS
FINANCIAL TARGETS
TSR is a yardstick for measuring the achievement of Siemens' strategic goal of sustainably
increasing Company value. It indicates total value creation for shareholders in the form
of increases in the Siemens share price and dividends paid.
Execution
of Company
strategy
Sustainability
→ "Individual targets."
Performance criteria are assigned to each of the three
target dimensions based on Company priorities and the
responsibilities of each Managing Board member. One
financial performance criterion is assigned to the
"Siemens Group" dimension and another to the "Manag-
ing Board portfolio" dimension. The fulfillment of these
criteria is measured on the basis of key performance indi-
Bonus design and calculation of payout amount
cators. Within the "Individual targets" dimension, the
financial performance criteria growth and liquidity can be
employed as can additional non-financial performance
criteria. In the case of non-financial performance criteria,
the Supervisory Board considers the degree to which a
Managing Board member has fulfilled so-called focus
topics, which comprise operations-related aspects of the
execution of the Company's strategy as well as sustain-
ability-related aspects.
At the end of the fiscal year, target achievement for the
individual key performance indicators and the achieve-
ment of the Managing Board members' individual tar-
gets are determined and aggregated to form a weighted
average. The percentage of weighted target achieve-
ment multiplied by the individual target amount yields
the Bonus payout amount for the past fiscal year. The
payable Bonus is capped at two times the target amount
and is paid in cash, at the latest, together with the com-
pensation paid at the end of February of the following
fiscal year.
Bonus
target amount
Weighted average target achievement (0%-200%)
33.34%
Siemens
X
Group
Bonus
payout amount
33.33%
Managing
Board portfolio
33.33%
Individual
targets
FISCAL 2021
14
1,102
→ "Managing Board portfolio"
3,891
→ "Siemens Group"
compensation (Bonus)
Diverse focus
topics
Diverse focus
topics
Siemens-internal
ESG/Sustainability
index
The individual targets for executing the Company strategy enable the Company to focus
on specific factors that are aligned with its short- and medium-term targets and measures
in order to ensure its long-term strategic development.
The focus topics in fiscal 2021 comprised business development, optimization/efficiency
enhancement, the implementation of portfolio measures and the implementation of
other strategic measures.
→ Succession planning – Thorough succession planning ensures sustainable
Company development and fosters talents and young employees.
→ Innovation performance - Innovation is the basis of our success. The development
and introduction of future-oriented technologies, products and services create opportu-
nities for a sustainable and better future by, among other things, reducing emissions
and waste and enhancing resource efficiency.
→ Employee satisfaction - Satisfied employees feel valued. They are motivated
and resilient, tackle challenges gladly and thus make a major contribution to the
Company's success.
→ Sustainability/diversity - Siemens honors its social responsibility by achieving
ambitious sustainability targets and by fostering diversity, inclusion and equal
opportunity.
The Siemens-internal ESG/Sustainability index for the 2021 Stock Awards tranche
includes:
→ CO2 emissions - Climate neutrality by 2030 in order to support the 1.5-degree target
and thus combat global warming.
→ Digital learning hours - Focus on learning in order to empower our people to
remain resilient and relevant in a constantly changing environment.
→ Net Promoter Score - Strong customer relationships are the basis for sustainable
development both for Siemens and for our customers.
The Supervisory Board aims to ensure that the targets
for variable compensation are demanding and ambitious.
If they are not reached, variable compensation can be
reduced to zero. If the targets are significantly exceeded,
target achievement is capped at 200%.
FISCAL 2021
13
Compensation Report → B. Compensation of Managing Board members
B.3.1 Short-term variable
B.3.1.1 BASIC PRINCIPLES AND FUNCTIONING
The Bonus system is based on three equally weighted
target dimensions, which take account of the overall re-
sponsibility of the Managing Board as well as each Man-
aging Board members' specific business responsibilities
and individual challenges:
5,327
3,605
8,636
Dr. Roland
Busch
Cedrik
Neike
Matthias
Rebellius
Prof. Dr.
Ralf P.
Thomas
Kaeser
Judith
Wiese
(until
Feb. 3, 2021)
Joe
Klaus
Helmrich
(until
(€ thousand)
Fixed
Base salary
1,770
1,102
1,102
1,102
1,102
March 31, 2021)
Managing Board members
who left during the fiscal year
Managing Board members
The following table shows the maximum compensation
of each Managing Board member as approved by the
Supervisory Board for fiscal 2021 in accordance with Sec-
tion 87a para. 1 sent. 2 No. 1 of the German Stock Corpo-
ration Act.
7,715
861
30%
630
30%
2,850 100%
2,516
8,326 100%
30%
1,259
30%
2,081 100%
4,162
100%
1 Pro-rated compensation for the period from October 1, 2020, up to and including February 3, 2021.
2 Pro-rated compensation for the period from October 1, 2020, up to and including March 31, 2021.
3 For fiscal 2021, each Managing Board member was awarded fringe benefits equal to a maximum 7.5% of his or her base salary.
The target amount reported here is also equal to the maximum amount for the fiscal year on a pro-rated basis.
B.2.2 Maximum compensation
The maximum compensation of each Managing Board
member is determined annually by the Supervisory Board
in accordance with Section 87a para. 1 sent. 2 No. 1 of the
German Stock Corporation Act. Maximum compensation
is equal to the total of the maximum amounts of all com-
pensation components that can possibly be paid out to
each Managing Board member for the relevant fiscal
year. It is calculated by adding base salary, maximum
fringe benefits, the BSAV contribution (or the amount
for free disposal) as well as two times the Bonus target
Maximum compensation fiscal 2021
amount and three times the Stock Awards target amount.
Twice the Bonus target amount and triple the Stock
Awards target amount also correspond to the respective
limits (individual caps) on the amount of variable com-
pensation.
755
551
in office on September 30, 2021
+
(three times target amount)'
= Maximum compensation
3,540
2,203
2,203
2,203
2,203
1,102
7,170
3,777
3,777
4,632
3,777
2,583
1,889
13,604
compensation
7,715
7,781
+
vesting: 2020-2024
1,509
2021 Stock Awards
133
83
83
83
83
Fringe benefits (maximum amount)
41
BSAV contribution/amount for
+ free disposal
991
57
551
617
551
423
308
Variable
617
Bonus for fiscal 2021
compensation + (two times target amount)
Schneider
Reference
price
Performance
price
Reference price versus
GE
ABB
MHI
Rockwell
performance price
Performance of the Siemens share compared to the share performance of five relevant competitors
2 In addition to his position as a member of the Managing Board of Siemens AG, Matthias Rebellius is Chairman of the Board of Directors and CEO of Siemens Schweiz AG.
The corresponding legal relationship is defined in a separate contract between Matthias Rebellius and Siemens Schweiz AG. The entire compensation he receives under
the terms of his contract with Siemens Schweiz AG is deducted from his Managing Board compensation. Of the target amount reported here (based on 100% target
achievement), €600,000 is attributable to Siemens Schweiz AG.
The 2017 Stock Awards tranche became due and was
settled in fiscal 2021. The 2017 Stock Awards tranche de-
pended on the performance of the Siemens share com-
pared to the share performance of five relevant compet-
itors during the approximately four-year vesting period
from November 11, 2016, to November 12, 2020.
IN FISCAL 2021 (2017 TRANCHE)
B.3.2.3 TRANSFER OF STOCK AWARDS
Concrete target setting and the degree of target achieve-
ment for the Siemens-internal ESG/Sustainability index
of the 2021 Stock Awards tranche will be published to-
gether with the degree of target achievement for the
TSR in the Compensation Report for fiscal 2025, after the
expiration of the vesting period.
3 As compensation for the loss of benefits granted by her former employer, the Supervisory Board allotted to Judith Wiese one-time compensation of €1,469,124 (gross)
in fiscal 2021 -50% in cash and the remaining 50% in the form of Stock Awards from the 2021 tranche. Accordingly, a further 14,944 Stock Awards from the 2021 tranche
with a fair value of €859,111 were allocated to Judith Wiese in November 2020, based on target achievement of 200%.
2,561
1 The fair value on the allocation date is calculated for the TSR component on the basis of a valuation model and amounts to €47.37. The fair value for the ESG component of
€97.96 is equal to the Xetra closing price of the Siemens share on the allocation date, less the discounted expected dividends. For the 2021 tranche, the allocation date in
accordance with IFRS 2 was December 14, 2020 (the date of communication to the Managing Board members).
€736,181
Competitors (average)
Overview of target achievement for the 2017 Stock Awards tranche
Siemens AG
Compensation Report → B. Compensation of Managing Board members
$26.40
€1,007,142
-
date. At the time when the 2017 Stock Awards became
due, the Managing Board members - like all other eligi-
The following table provides a summary of the key pa-
rameters of the 2017 Stock Awards tranche. In connection
with the due date and settlement of the Stock Awards for
fiscal 2017, the table also includes an additional cash pay-
ment to the Managing Board members as a result of the
Siemens Energy spin-off. The spin-off of Siemens Energy
in fiscal 2020 led to adjustments in the stock-based com-
pensation commitments agreed upon until the spin-off
22
FISCAL 2021
A = (2.16)
percentage
points
Target achievement: 89%
(12.03)%
€95.29
€108.32
(9.87)%
20.08%
15.42%
(16.05)%
(60.54)%
(8.27)%
€78.71
€65.55
$159.09 $183.62
¥4,607.00 ¥3,867.60
CHF 23.26 CHF 21.33
$10.42
3,504
Managing Board members
14,015
€4,780,000
€2,390,000
ESG/Sustainability index
(Weighting 20%)
Total shareholder return
(Weighting 80%)
Siemens-internal
Fair value at
allocation date¹
of Stock Awards
Maximum number
Based on 200% target achievement
Compensation Report → B. Compensation of Managing Board members
Maximum
allocation amount
Target amount
(based on 100%
target achievement)
Klaus Helmrich (until March 31, 2021)
Joe Kaeser (until Feb. 3, 2021)
who left during the fiscal year
Compensation Report → B. Compensation of Managing Board members
Judith Wiese³
Prof. Dr. Ralf P. Thomas
Matthias Rebellius²
Cedrik Neike
Dr. Roland Busch
38,897
10,245
9,724
€1,259,000
€1,722,262
€1,259,000
€861,131
€629,500
€1,472,460
5,123
20,490
€2,518,000
€1,259,000
€1,805,745
6,282
25,129
€3,088,000
€1,544,000
€1,472,362
5,122
20,490
€2,518,000
€1,259,000
€1,472,460
5,123
20,490
€2,518,000
€2,795,114
ble employees were, accordingly, entitled to receive an
additional cash payment based on the spin-off ratio of 2:1
and on the Siemens Energy share price of €22.20 on the
date when their stock-based compensation commit-
ments became due.
FISCAL 2021
Managing Board
members in office on
September 30, 2021
5,360
25,613
70,291
119,883
1,325
10,721
48,621
83,308
Balance at the end
of fiscal 2021
Other changes²
Vested and settled
Allocated
of fiscal 2021
Balance at beginning
During fiscal year
Compensation Report B. Compensation of Managing Board members
Judith Wiese4
Prof. Dr. Ralf P. Thomas
Matthias Rebellius
Cedrik Neike3
Dr. Roland Busch
663
in office on September 30, 2021
89,881
25,612
FISCAL 2021 24
4 The reported figures also include the Stock Awards allocated to Judith Wiese in November 2020 as compensation for the loss of benefits granted by her former employer
in addition to the regular allocation of Stock Awards from the 2021 tranche.
2 The target achievement of the Stock Awards from the 2017 tranche, which were due and settled in fiscal 2021, was 89%. As the Stock Awards from the 2017 tranche were
allocated on the basis of 100% target achievement, a number equivalent to this shortfall was forfeited without refund or replacement, in accordance with plan requirements.
3 In addition to his position as a member of the Managing Board, Cedrik Neike served as Executive Chairman of the Board of Directors of Siemens Ltd. China from May 1, 2017,
to March 31, 2019. The reported figures include the Stock Awards allocated to Cedrik Neike by Siemens Ltd. China due to this position.
1 The settlement of Stock Awards from the 2018 tranche will be by share transfer up to a target achievement of 100%, and above 100% in cash. For this reason, the number
of Stock Awards from the 2018 tranche, as set out in the table, is based on a target achievement of 100%. Starting with the 2019 tranche, settlement of Stock Awards will be
entirely by share transfer. For this reason, the number of Stock Awards, as set out in the table, is based on a target achievement of 200%. At the end of the vesting period,
a final number of Siemens shares to be transferred will be determined on the basis of actual target achievement and taking into account the Stock Awards cap.
77,074
145,955
2,650
1,325
21,442
10,721
17,519
12,806
76,314
Klaus Helmrich (until March 31, 2021)
Joe Kaeser (until Feb. 3, 2021)
who left during the fiscal year
Managing Board members
40,557
40,557
108,332
1,325
10,721
31,411
88,967
25,612
Information on the transfer of the 2017 Stock Awards tranche
Managing Board members
Changes in Stock Awards in fiscal 2021
6,023 x
12,046 x
€91.32 =
€91.32 =
€1,100,000 /
Prof. Dr. Ralf P. Thomas
€550,000 /
Cedrik Neike (since April 1, 2017)³
12,046 x
€91.32 =
€1,100,000 /
Dr. Roland Busch
spin-off
Nov. 13, 2020²
Cash payment
Siemens Energy
Value at
transfer date
Number
of Stock
Awards¹
calculated
Target
achievement
of share price
performance
of Stock
Awards¹
allocated
Nov. 11, 2016
Number
Allocation
price
Target amount
(based on
100% target
achievement)
89% =
89% =
89% =
(Amounts in number of units)1
10,721 >
5,360 >
10,721 >
€119,003
The following overview shows the changes in the balance
of the Stock Awards held by Managing Board members in
fiscal 2021.
IN FISCAL 2021
B.3.2.4 CHANGES IN STOCK AWARDS
23
In the course of transferring the 2017 Stock Awards
tranche, compliance with the maximum amounts of total
compensation for fiscal 2017 was also reviewed. The ap-
plicable maximum amount was not exceeded in the case
of any active or former Managing Board member.
3 The amount reported for Cedrik Neike under "Value at transfer date" comprises the 4,345 Phantom Stock Awards allocated by Siemens AG that were valued
at €113.72, the Xetra closing price of the Siemens share on November 12, 2020, in accordance with the plan requirements applicable to the Managing Board as well
as the 1,015 Stock Awards allocated by Siemens Ltd. China that were valued at €113.04, the Xetra closing price of the Siemens share on November 13, 2020, in
accordance with the plan requirements applicable to Senior Management. For the calculation of the additional cash payment resulting from the Siemens Energy
spin-off, the Xetra closing prices of the Siemens Energy share on November 12, 2020, of €22.20 and on November 13, 2020, of €22.87, respectively, were used in
accordance with the relevant plan requirements.
2 The Stock Awards settled by share transfer were valued at €112.78, the German low price of the Siemens share on November 13, 2020.
1 Cedrik Neike was appointed a full member of the Managing Board effective April 1, 2017. Due to his intra-year appointment, his Stock Awards target amount for fiscal
2017 was determined on a pro-rated basis and, instead of Stock Awards, a corresponding number of Phantom Stock Awards was allocated to him in accordance with
plan requirements. In contrast to Stock Awards, these Phantom Stock Awards were settled after the end of the vesting period by cash payment rather than by share.
transfer. In addition to his position as a member of the Managing Board, Cedrik Neike served as Executive Chairman of the Board of Directors of Siemens Ltd. China
from May 1, 2017, to March 31, 2019. Of the allocated number of Phantom Stock Awards reported here, 1,141 are attributable to the commitment by Siemens Ltd.
China. Of the calculated number of Phantom Stock Awards reported here, 1,015 were awarded and paid by Siemens Ltd. China.
€119,003
€238,006
€2,418,229 +
€1,209,114 +
21,442 >
10,721 >
89% =
89% =
24,092 x
12,046 x
€91.32 =
€91.32 =
€2,200,000/
€1,100,000/
Klaus Helmrich (until March 31, 2021)
Joe Kaeser (until Feb. 3, 2021)
members who left during
the fiscal year
Managing Board
€59,836
€119,003
€1,209,114 +
€608,849 +
€1,209,114 +
152,528
B.3.1.2 BONUS FOR FISCAL 2021
in office on September 30, 2021
+0.4
Performance range
Individual targets per Managing Board member
Key performance
Weighting indicator/focus topic
25%
Cash conversion rate
Growth
Implementation of other
strategic measures
Target setting
CCR IB
(0.4)
Expansion of the software and digital businesses
75%
Target achievement
200%
160.00%
Smart Infrastructure
Actual
100%
value
2021
Dr. Roland
Busch
target
Cap
100%
100%
Cap
target
(0.5)
+0.5
Performance range
Target achievement
Cash conversion rate
Digital Industries
200%
140.00%
100%
Actual
value
2021
1.12
0%
CCR
0.56
0.96
1.36
Floor
1.20
Floor
0%
0.96
75%
25%
Implementation of other
strategic measures
Innovation performance
Cash conversion rate
Implementation of
portfolio measures
Optimization/efficiency
enhancement
CCR DI
Expansion of the software and digital businesses
Further development of the strategy for Digital Industries
and Advanta
Expansion und use of innovative loT solution building blocks
CCR SI
Rebellius
Expansion of the software and digital businesses
Expansion and use of innovative loT solution building blocks
CCR IB
Implementation of portfolio measures and drive performance
of Portfolio Companies
140.00%
132.50%
avg. 130.00%
160.00%
125.00%
avg. 113.33%
134.00%
Further development of the strategy for Smart Infrastructure
and Supply Chain Management
Matthias
Cash conversion rate
Growth
25%
1.36
Floor
100%
Cap
target
(0.4)
+0.4
Performance range
Target
achievement
134.00%
Total target
achievement
Further development of the strategy for the Mobility business
133.50%
avg. 133.33%
Succession planning, taking into consideration Siemens'
diversity targets
Succession planning
25%
Cash conversion rate
Growth
Cedrik
Neike
75%
Implementation of other
strategic measures
Innovation performance
0.56
Prof. Dr. Ralf
1.45
0.45
€4.77
0%
EPS
€3.97
€5.47
€6.97
2021
€7.68
avg. 2019-2021 €6.09
2020
Floor
Cap
(actual value)
target
€(1.50)
+€1.50
For fiscal 2018 through 2020: comparable EPS
of continuing operations
Performance range
Target achievement: 141.33%
FISCAL 2021 15
100%
avg.
€6.09
(100% target)
"Siemens Group" target dimension
For the "Siemens Group" target dimension in fiscal 2021,
the Supervisory Board of Siemens AG approved the perfor-
mance criterion "profit," measured in terms of basic earn-
ings per share (EPS). EPS is calculated by dividing income
from continuing operations, income from discontinued
operations and net income - all attributable to ordinary
shareholders of Siemens AG - by the weighted average
number of shares outstanding during the fiscal year.
For both target setting and target achievement, the
average EPS of three consecutive fiscal years is used. The
averaged values take account of the Company's long-term
performance and provide incentives for a sustainable in-
crease in profit. Because of the significant change in the
portfolio of Siemens AG due to the spin-off of Siemens
Energy at the end of fiscal 2020, the EPS target for fiscal
2021 was defined on the basis of the comparable EPS of
continuing operations in the years 2018 through 2020. In
this process, the Flender sale in the first half of fiscal 2021
was also taken into account.
Earnings per share (EPS): Target setting and target achievement
33.34% Siemens Group
Basic earnings per share (EPS), three-year average
Target achievement
200%
Calculation of target and actual value:
141.33%
FY
EPS
Actual
100%
2018
€5.83
value
2021
2019
€5.82
avg. 2018-2020 --> €5.47
Compensation Report → B. Compensation of Managing Board members
0.95
"Managing Board portfolio" target dimension
for the "Managing Board portfolio" target dimension for
fiscal 2021 for all Managing Board members. ROCE is
defined as profit before interest and after tax divided by
average capital employed. The target amount for ROCE
is based on the budget plans. To focus on the operating
performance of Siemens AG, Varian and main effects
relating to the stake in Siemens Energy (profit "Siemens
Energy Investment" and asset "Siemens Energy Invest-
ment") were disregarded in target setting and in deter-
mining ROCE target achievement.
When setting the targets for fiscal 2021, the Supervisory
Board took into account both the shared tasks and the
individual responsibilities of the Managing Board mem-
bers. For this reason, the cash conversion rate (CCR) was
defined as a target for all Managing Board members. The
CCR reflects a company's ability to convert profit into
available cash. For the President and CEO and the
Managing Board members with primarily functional
responsibility, the CCR target was defined on the basis of
Siemens' Industrial Businesses (IB). The CCR IB is defined
as the ratio of free cash flow from IB to Adjusted EBITA IB.
For the Managing Board members with business respon-
sibility for Digital Industries (DI) and Smart Infrastructure
(SI), the CCR targets are business-specific and defined as
the ratio of free cash flow to Adjusted EBITA at each busi-
ness. The target amounts for CCR were based on the
budget plans.
The other individual targets were defined on the basis of
the Managing Board members' respective areas of re-
sponsibility.
FISCAL 2021 16
Target achievement
Individual targets: Target setting and target achievement
Compensation Report → B. Compensation of Managing Board members
33.33% Individual targets
2 to 4 individual targets, target achievement between 0% and 200% each
The "Individual targets" target dimension comprises two
to four equally weighted individual targets, achievement
of each of which may be between 0% and 200%.
Calculation:
-200%
134.00%
100%
Industrial Businesses
Actual
value
2021
1.12
0%
CCR
Average achievement of the equally weighted individual targets: CCR as reported, growth and/or further non-financial, qualitative individual targets
"Individual targets" target dimension
Target achievement: 200.00%
(3.0) ppts. +3.0 ppts.
Performance range
Return on capital employed (ROCE): Target setting and target achievement
33.33% Managing Board portfolio
Return on capital employed (ROCE)
Target achievement
200%
200.00%
Calculation:
Actual
100%
value
2021
18.56%
0%
ROCE
100%
target
8.54% 11.54% 14.54%
Floor
ROCE (as reported)
Varian and
Siemens Energy-related effects
Actual ROCE value
13.10%
+5.46 percentage
points
18.56%
Cap
+
Because of the new structure of Siemens AG and the
changes in the assignment of Managing Board respon-
sibilities as of October 1, 2020, target setting for the
Bonus for fiscal 2021 focused on the Managing Board's
overall responsibility, cross-business collaboration and
Siemens' strategic realignment. For this reason, the
Supervisory Board of Siemens AG established "profit-
ability/capital efficiency" measured in terms of return on
capital employed (ROCE) as the performance criterion
P. Thomas
CCR
Performance of Siemens Financial Services and optimization
of finance organization
100%
0%
(20) ppts.
+20 ppts.
Relative
TSR
Siemens compared to MSCI World Industrials index
→ If the change in the TSR of Siemens AG is at least
20 percentage points above that of the sector index,
target achievement is 200%.
→ If the change in the TSR of Siemens AG is equal to
that of the sector index, target achievement is 100%.
If the change in the TSR of Siemens AG is at least
20 percentage points below that of the sector index,
target achievement is 0%.
If the change in the TSR of Siemens AG is between
20 percentage points above and 20 percentage points
below that of the sector index, target achievement is
calculated using linear interpolation.
200%
FYn+4
Environmental, social and governance The Siemens-
internal ESG/Sustainability index is based on three
equally weighted, structured and verifiable ESG key per-
formance indicators. At the beginning of each tranche,
the Supervisory Board defines ambitious target values for
each of the ESG key performance indicators. Target mea-
surement is based on defined interim targets for each
fiscal year. Target achievement for the Siemens-internal
ESG/Sustainability index is finally determined at the end
of the approximately four-year vesting period on the
basis of the weighted average of the target achievement
values calculated for each of the key performance indi-
cators.
FISCAL 2021 19
Compensation Report → B. Compensation of Managing Board members
Determination of total target achievement
At the end of the approximately four-year vesting period,
the Supervisory Board determines the degree of target
achievement. The target achievement range for TSR and for
the Siemens-internal ESG/Sustainability index is between
0% and 200%. If target achievement is less than 200%, a
number of Siemens Stock Awards equivalent to the short-
fall are forfeited without refund or replacement and a
correspondingly smaller number of shares is transferred.
Calculation of Siemens shares to be transferred (illustrative)
The value of the Siemens shares transferred after the ex-
piration of the vesting period is also capped at 300% of
the target amount. If this cap is exceeded, a correspond-
ing number of Stock Awards is forfeited without refund
or replacement.
The remaining number of Stock Awards is settled by the
transfer of Siemens shares to the relevant Managing
Board member.
OCT
Target achievement
Calculation of TSR target achievement
achievement.
Total shareholder return - TSR is indicative of the perfor-
mance of one share over a specified period of time - in
the case of Siemens, over the approximately four-year
vesting period. It takes into account changes in the
share price and the dividends paid during this period. To
reflect the Company's international footprint, the TSR of
Siemens AG is compared at the end of the vesting period
with the TSR of an international sector index, the MSCI
World Industrials or a comparable successor index.
Target achievement for TSR is concretely determined
by first calculating a TSR reference value for Siemens AG
and a TSR reference value for the sector index. The TSR
FISCAL 2021 18
Compensation Report → B. Compensation of Managing Board members
reference value is equal to the average of the end-of-
month values over the first 12 months of the vesting
period (reference period).
In order to determine at the end of the vesting period
how well the TSR of Siemens AG has performed rela-
tive to the TSR of the sector index, the TSR perfor-
mance value is calculated over the subsequent 36 months
(performance period). The TSR performance value is the
average of the end-of-month values during the perfor-
mance period.
At the end of the vesting period, the change in Siemens'
TSR as well as that of the sector index is determined by
comparing the TSR reference values with the TSR perfor-
mance values.
Calculation of TSR reference values and TSR performance values for Stock Awards
FYn
FYn+1
OCT
NOV
NOV
12 months
TSR reference values for
→ MSCI World Industrials index
→ Siemens AG
36 months
TSR performance values for
→ MSCI World Industrials index
→ Siemens AG
The following applies for the determination of target
ESG
(Weighting: 20%)
75%
TSR
(Weighting: 80%)
The Supervisory Board set the allocation date for the
2021 Stock Awards tranche at November 13, 2020. The
time sequence of this tranche is as follows.
Time sequence for the 2021 Stock Awards tranche
Allocation and four-year vesting period
Transfer
Process sequence
OCT '20
NOV '20
OCT '21
NOV '21
2022
2023
SEPT '24 OCT '24
NOV '24
Performance
measurement
TSR reference period
TSR performance period
ESG performance measurement based on interim targets for each fiscal year
The target amounts, the maximum allocation amounts,
the maximum number of Stock Awards allocated and
the fair value at allocation date in accordance with IFRS 2
Share-based Payment are shown in the following table.
The allocation price applicable for the 2021 tranche was
€98.31.
FISCAL 2021 21
Information on the allocation of 2021 Stock Awards tranche
Managing Board members
Customer intention to recommend us,
measured on a scale of 1 (extremely
unlikely) to 10 (extremely likely). NPS
is defined as the number of promoters
(%) minus the number of detractors (%).
Since fiscal 2020, the number of Siemens shares that is
actually transferred depends 80% on the financial perfor-
mance criterion "long-term value creation," measured on
the basis of the key performance indicator "total share-
holder return" (TSR), and 20% on the non-financial per-
formance criterion "sustainability." For measuring the
"sustainability" performance criterion, Siemens AG's per-
formance in the environmental, social and governance
(ESG) area is assessed on the basis of a Siemens-internal
ESG/Sustainability index, the composition of which is de-
termined annually by the Supervisory Board.
Net Promoter Score (NPS)
Digital learning hours per employee
TSR
Adjustment to actual
target achievement
120%
110%
Maximum number
of Stock Awards
(based on 200%
target achievement)
Number of
Stock Awards
based on target
achievement
Xetra closing price
of Siemens share
on transfer date
Value of
Stock Awards
in euros
(Cap: 300%)
>300% of target amount
Number of Stock Awards
based on target achievement
is reduced by amount by which
cap is exceeded
≤300% of target amount
Number of Stock Awards
based on target achievement
= final number of Stock Awards
Final number of
Stock Awards
Settlement by
transfer of Siemens
shares to Managing
Board member
FISCAL 2021 20
Compensation Report B. Compensation of Managing Board members
B.3.2.2 ALLOCATION OF STOCK AWARDS
IN FISCAL 2021
The Supervisory Board approved the following perfor-
mance criteria for the 2021 Stock Awards tranche:
→ "Long-term value creation," measured in terms of the
development of the TSR of Siemens AG relative to the
international sector index MSCI World Industrials and
→ "Sustainability," measured in terms of the Siemens-
internal ESG/Sustainability index, which is based on
the following three equally weighted key performance
indicators:
ESG key performance indicators for 2021 Stock Awards tranche
CO2 emissions
Amount of greenhouse gases emitted
by the Company's business operations
in tons of CO2 equivalent, excluding
carbon offsets (for example, certifi-
cates).
The total number of digital learning
hours completed in virtual trainer-led
training sessions, self-paced learning,
learning on the job, community-based
virtual learning and hybrid training
sessions, divided by the total number
of employees.
Performance criteria
ESG
At the beginning of a fiscal year, the Supervisory Board
defines a target amount in euros based on 100% target
achievement for each Managing Board member. This tar-
get amount is extrapolated to target achievement of 200%
("maximum allocation amount"). Stock Awards for this
maximum allocation amount are then allocated to the
Managing Board members. The number of Stock Awards is
calculated by dividing the maximum allocation amount by
the price of the Siemens share on the allocation date, less
the estimated discounted dividends ("allocation price").
122.00%
Optimization of the regional growth concept
118.00%
67%
avg. 110.00%
Succession planning
Successful transition of the Digital Industries business to Cedrik Neike
Target achievement: 118.00% to 133.50%
FISCAL 2021
134.00%
110.00%
134.00%
17
Bonus for fiscal 2021
Total target achievement and the resulting Bonus payout
amount for each Managing Board member are summa-
rized in the following table.
Total target achievement and Bonus payout amounts for fiscal 2021
Managing Board members
in office on September 30, 2021
Dr. Roland Busch
Cedrik Neike
Matthias Rebellius
Prof. Dr. Ralf P. Thomas
Total target achievement for the
CCR IB
Cash conversion rate
Succession planning
Cash conversion rate
Growth
Klaus
Helmrich
An approximately four-year vesting period begins with
the allocation of Stock Awards, after the expiration of
which Siemens shares are transferred. The beneficiary
Managing Board members are not entitled to dividends
during the vesting period.
131.00%
avg. 130.00%
25%
Judith
Wiese
75%
Implementation of other
strategic measures
Cash conversion rate
Business development
Employee satisfaction
Preserve rating and safeguard deleveraging
CCR IB
134.00%
Sustainability/diversity
Expansion of Global Business Services
Strengthening employee responsibility and people development
Implementation and realization of CO2 climate targets; succession
planning, taking into consideration Siemens' diversity targets
126.00%
avg. 123.33%
Managing Board members
who left during the fiscal year
50%
Joe Kaeser
50%
33%
Judith Wiese
Compensation Report B. Compensation of Managing Board members
Successful transition to new CEO Dr. Roland Busch
CCR IB
who left during the fiscal year
€2,203,200
157.44%
€0
€1,101,600
€2,203,200
155.78%
€1,716,072
Managing Board members
Joe Kaeser (until Feb. 3, 2021)
€0
€754,688
Klaus Helmrich (until March 31, 2021)
€0
€550,800
€1,509,376
€1,101,600
154.44%
153.11%
€1,165,540
€843,330
B.3.2 Long-term variable
compensation (Stock Awards)
Compensation range
B.3.2.1 BASIC PRINCIPLES AND FUNCTIONING
Siemens grants long-term variable compensation in the
form of Stock Awards. A Stock Award is the claim to one
share-conditional on target achievement - after the ex-
piration of a defined vesting period. The vesting period
is, accordingly, the term of each tranche.
€1,101,600
€0
€1,734,359
€1,712,327
Floor
(based on 0%
target achievement)
Target amount
(based on 100%
target achievement)
Cap
(based on 200%
target achievement)
Total target
achievement
Bonus
payout amount
€1,770,000
€3,540,000
158.27%
€2,801,379
€0
€2,203,200
€1,101,600
€2,203,200
157.94%
€1,739,867
€0
€1,101,600
€0
155.44%
36,000
31%
80,000
55%
9%
2020
285,500
14%
25,500
140,000
256,000
2021
140,000
91%
13,500
9%
153,500
2020
140,000
89%
42%
18,000
2021
120,000
140,000
140,000
11%
91%
13,500
9%
153,500
2020
140,000
89%
18,000
11%
158,000
2021
93,333
50%
80,000
42%
15,000
8%
188,333
2020
2021
49%
158,000
Compensation Report → C. Compensation of Supervisory Board members
(since Jan. 2018)
9,000
10%
93,028
75,152
1,650,741
1,433,939
31%
34,500
14%
241,167
32%
29%
465,000
607,500
9% 5,225,324
12%
4,984,470
1 These employee representatives on the Supervisory Board and the representatives of the trade unions on the Supervisory Board have agreed
to transfer their compensation to the Hans Böckler Foundation, in accordance with the guidelines of the Confederation of German Trade Unions.
2 Werner Brandt has been a member of the Supervisory Board since January 31, 2018, and was elected Second Deputy Chairman
of the Supervisory Board, effective the end of the Annual Shareholders' Meeting on February 3, 2021.
3 Compared to the amounts reported in the 2020 Compensation Report, the total does not include the compensation of €359,000
paid to former Supervisory Board member Robert Kensbock.
FISCAL 2021 33
Pursuant to Section 113 para. 3 of the German Stock Cor-
poration Act in the version amended by the German Act
Implementing the Second Shareholders' Rights Directive
(Gesetz zur Umsetzung der zweiten Aktionärsrechtericht-
linie, ARUG II), the annual shareholders' meeting of a
listed company must resolve on compensation for the
members of the supervisory board at least every four
years. In accordance with Section 113 para. 3 of the Ger-
man Stock Corporation Act, the Annual Shareholders'
Meeting on February 3, 2021, therefore adopted a resolu-
tion regarding the compensation of Supervisory Board
members and voted to amend Section 17 of the Articles
of Association. The compensation system for Supervisory
Board members submitted to the Annual Shareholders'
Meeting and the proposed new version of Section 17 of
the Articles of Association were approved by a majority of
97.49% of the valid votes cast. The provisions of the new
version of Section 17 of the Articles of Association, which
came into effect on October 1, 2021, replace the previous
provisions of the Articles of Association regarding Super-
visory Board compensation as of that date. The compen-
sation system approved by the Annual Shareholders'
Meeting as well as the Articles of Association are publicly
available on the Siemens Global Website at ☐ www.
SIEMENS.COM/CORPORATE-GOVERNANCE.
FISCAL 2021 34
158,000
33%
411,000
12%
51,000
Supervisory Board members
who left during the fiscal year
2021
Werner Wenning
91,667
(Second Deputy Chairman until Feb. 2021)
2020
Dr. Nicola Leibinger-Kammüller
2021
(until Feb. 2021)
Gunnar Zukunft¹
2020
2021
2020
220,000
53,472
131,515
3,109,583
2,943,030
55%
54%
57%
55%
60%
59%
58,333
140,000
30,556
35%
16,500
10%
166,500
34%
Total³
11%
27,000
89%
€ thousand in % of TC € thousand in % of TC
26%
1,102
71
2%
32%
1,102
70
€ thousand in % of TC € thousand in % of TC
2020
2021
2020
2021
2%
Prof. Dr. Ralf P. Thomas
Managing Board member since Sept. 18, 2013
621
2,638
4,119
594
5,049
608
6,941
933
100%
2,017
3,524 100%
Matthias Rebellius4
Managing Board member since Oct. 1, 2020
1,102
81
27%
2%
100% 4,087 100%
4,235
3,435 100%
Total compensation (TC)
(according to Section 162 AktG)
=
3%
119
51%
2,092
1,209 29%
20%
812
41%
1,734
1,712 50%
29%
1,183
28%
1,172
50%
1,723
16%
551
100%
6,008 100% 4,441
2%
60
2%
29%
1,770
109
€ thousand in % of TC € thousand in % of TC
2020
2021
2020
2021
Cedrik Neike 2,3
Managing Board member since April 1, 2017
Dr. Roland Busch¹
President and CEO since Feb. 3, 2021
Compensation Report → B. Compensation of Managing Board members
+ Other
Cash payment Siemens Energy spin-off
2016 Stock Awards (vesting: 2015-2019)
+ Long-term variable compensation
2017 Stock Awards (vesting: 2016-2020)
Bonus for fiscal 2020
Bonus for fiscal 2021
+ Short-term variable compensation
Variable
compensation
= Total
+ Amount for free disposal
+ Fringe benefits
compensation
1,352
98
+ Service costs
30%
€ thousand in % of TC € thousand in % of TC
1,102 31% 1,102
14
0%
2%
119
2,092 47%
17%
609
1,209 20%
44%
879
20%
899
49%
1,740
47%
2,801
56%
1,138
1,116 32%
33%
1,450
1,879 31%
2%
36
55%
2%
Base salary
= Total compensation (incl. service costs)
588
115
1%
26%
1,102
20%
551
27%
2,205
16%
755
40
1%
€ thousand in % of TC € thousand in % of TC
2020
2021
2020
2021
Klaus Helmrich 3
Managing Board member until March 31, 2021
Joe Kaeser²
President and CEO until Feb. 3, 2021
Bonus for fiscal 2020
Bonus for fiscal 2021
+ Short-term variable compensation
= Total
€ thousand in % of TC € thousand in % of TC
34
1%
45
238
50%
2,092
51%
4,106
1,209 44%
2,418 52%
+ Long-term variable compensation
2017 Stock Awards (vesting: 2016-2020)
2016 Stock Awards (vesting: 2015-2019)
Cash payment Siemens Energy spin-off
23%
947
1,626 20%
31%
843
1,166 25%
27%
1,147
21%
585
29%
2,320
17%
794
1%
+ Amount for free disposal
+ Fringe benefits
Variable
compensation
Base salary
82
26%
1,102
+ Fringe benefits
compensation
Base salary
Fixed
€ thousand in % of TC € thousand in % of TC
2020
2021
Managing Board member since Oct. 1, 2020
Judith Wiese¹
Compensation Report → B. Compensation of Managing Board members
in office on September 30, 2021
Managing Board members
Compensation awarded and due in accordance with Section 162 para. 1 sent 1 AktG -
Active Managing Board members in fiscal 2021 (cont.)
FISCAL 2021 28
4 In addition to his position as a member of the Managing Board of Siemens AG, Matthias Rebellius is Chairman of the Board of Directors and CEO of Siemens Schweiz AG. The corre-
sponding legal relationship is defined in a separate contract between Matthias Rebellius and Siemens Schweiz AG. The entire compensation he receives under the terms of his
contract with Siemens Schweiz AG is deducted from his Managing Board compensation. Of the base salary and fringe benefits reported here, €615,367 and €29,579, respectively,
were awarded and paid by Siemens Schweiz AG. Of the Bonus for fiscal 2021 reported here, €859,802 (corresponding to CHF931,165 and converted into euros as of September 30,
2021) will be paid by Siemens Schweiz AG. Furthermore, employer contributions to pension plans paid by Siemens Schweiz AG are deducted from the amount for free disposal.
3 In addition to his position as a member of the Managing Board, Cedrik Neike served as Executive Chairman of the Board of Directors of Siemens Ltd. China from May 1, 2017, to
March 31, 2019. The amount reported under "2017 Stock Awards (vesting: 2016-2020)" includes the value of the Stock Awards allocated by Siemens Ltd. China. Likewise, a portion
of the additional cash payment attributable to the Stock Awards allocated by Siemens Ltd. China is included under "Cash payment Siemens Energy spin-off." For details, see "Trans-
fer of Stock Awards in fiscal 2021 (2017 tranche)."
2 Cedrik Neike was appointed a full member of the Managing Board effective April 1, 2017. Due to his intra-year appointment, his Stock Awards target amount for fiscal 2017 was
determined on a pro-rated basis and, instead of Stock Awards, a corresponding number of Phantom Stock Awards was allocated to him in accordance with plan requirements.
In contrast to Stock Awards, these Phantom Stock Awards were settled after the expiration of the vesting period by cash payment rather than by share transfer.
1 Dr. Roland Busch was first appointed a full member of the Managing Board effective April 1, 2011. He served as Deputy CEO from October 1, 2019, until the end of the Annual
Shareholders' Meeting on February 3, 2021, when he succeeded Joe Kaeser as President and CEO.
601
4,688
4,823
2%
3,435
+ Amount for free disposal
13%
compensation
Fixed
who left during the fiscal year
Managing Board members
4,185
= Total compensation (incl. service costs)
+ Service costs
100%
4,185
Total compensation (TC)
(according to Section 162 AktG)
18%
735
+ Long-term variable compensation
2017 Stock Awards (vesting: 2016-2020)
2016 Stock Awards (vesting: 2015-2019)
Cash payment Siemens Energy spin-off
+ Other
Bonus for fiscal 2020
41%
1,716
Bonus for fiscal 2021
+ Short-term variable compensation
Variable
compensation
41%
1,734
Total
=
551
5%
Fixed
+ Service costs
Dr. Roland Busch4
Number of
shares²
Value
in €¹
base salary'
compliance on March 12, 2021
Percentage of
in office on September 30, 2021,
and required to verify
Managing Board members
Verified
200%
Required
Obligations under the Share Ownership Guidelines
The deadlines by which the individual Managing Board
members must first verify compliance with the Share
Ownership Guidelines (SOG) vary from member to mem-
ber, depending on when they were appointed to the
Managing Board. For Managing Board members in office
B.4 Share Ownership Guidelines
Compensation Report → B. Compensation of Managing Board members
FISCAL 2021 25
In fiscal 2021, the Supervisory Board did not exercise this
authority.
The Supervisory Board exercises its authority to withhold
or reclaim variable compensation components at its duty-
bound discretion.
B.3.3 Malus and clawback regulations
Under existing malus and clawback regulations, the Super-
visory Board is authorized to withhold or reclaim variable
compensation in cases of severe breaches of duty or
compliance and/or unethical behavior or in cases of
grossly negligent or willful breaches of the duty of care or
in cases in which variable compensation components
linked to the achievement of specific targets have been
unduly paid out on the basis of incorrect data.
1 The 2018 and 2019 Stock Awards tranches depend on the performance of the Siemens share relative to the share performance
of five relevant competitors during the approximately four-year vesting period.
Performance period
on September 30, 2021, the following table shows the
number of Siemens shares that each held in order to
comply with the SOG on March 12, 2021, the verification
date. It also shows the number of shares to be held
throughout the Managing Board members' terms of of-
fice with a view to future verification dates.
2,446,325
22,013
Percentage of
base salary'
268%
ual pension accounts in the January following each fiscal
year. Until pension payments begin, members' pension
accounts are credited with an annual interest payment
(guaranteed interest) in January of each year. The inter-
est rate is currently 0.90%.
Most of the members of the Managing Board are in-
cluded in the Siemens Defined Contribution Pension Plan
(BSAV). Newly appointed members of the Managing Board
can be awarded, instead of BSAV contributions, a fixed
cash amount for free disposal.
B.5 Pension benefit commitment Contributions under the BSAV are credited to the individ-
4 Dr. Roland Busch was appointed President and CEO only after the reference date relevant for the calculation of the SOG target.
As a result, the amount of his obligation on the verification date of March 12, 2021, was still 200% of his relevant average base salary.
3 As of March 12, 2021 (verification date).
1 The amount of the obligation is based on the average base salary during the four years prior to the respective verification dates.
2 Based on the average Xetra opening price of €111.13 for the fourth quarter of 2020 (October to December).
58,890
6,544,446
41,645
4,628,050
Total
29,375
3,264,444
299%
19,632
2,181,725
200%
Prof. Dr. Ralf P. Thomas
29,515
3,280,002
shares³
Number of
Value
in €²
Sept '24
Oct '20
Performance period
Oct '24
Nov 10, '17
2024
2023
2022
2021
2020
2019
2018
End of vesting period
and transfer
Vesting
period
Allocation
Compensation Report B. Compensation of Managing Board members
Performance
criteria
2021
tranche
Performance
criteria
tranche
2020
Performance
criterion
2019
tranche
Performance
criterion
2018
tranche
Outstanding Stock Awards tranches on September 30, 2021
As of the end of fiscal 2021, the following Stock Awards
tranches were within the vesting period and are there-
fore included in the balance at the end of the fiscal year.
Nov '21
Information on the BSAV
Share price performance
compared to competitors¹
Oct '21
Nov '21
Nov '20 Oct '21
Reference period
Total shareholder return compared to
MSCI World Industrials index (80%)
Siemens-internal
ESG/Sustainability index (20%)
Nov '24
Nov 13, '20
Performance period
Sept '23
Oct '19
Siemens-internal
ESG/Sustainability index (20%)
Performance period
Oct '23
Nov '19 Oct '20 Nov '20
Reference period
Total shareholder return compared to
MSCI World Industrials index (80%)
Nov '23
Nov 8, '19
Performance period
Oct '22
Nov '19
Nov '18 Oct '19
Reference period
Nov '22
Nov 9, '18
Share price performance
compared to competitors¹
Performance period
Nov '17 Oct '18 Nov '18
Reference period
= Total compensation (incl. service costs)
Contributions¹
2021
Payout in
Jan '22
2021
Settlement in
Nov '20
Amount for free disposal
Sep
Aug
July
June
May
March April
Short-term variable compensation: Bonus for 2021
Feb
Dec
Nov
€ Oct
Monthly payout
Base salary and fringe benefits
2017 Stock Awards tranche
Long-term variable compensation:
2017
-
In connection with the due date and settlement of the
Stock Awards for fiscal 2017, the table also includes the
additional cash payment to eligible Managing Board
members as a result of the Siemens Energy spin-off.
The spin-off of Siemens Energy in fiscal 2020 led to ad-
justments in the stock-based compensation allocations
agreed upon until the spin-off date. At the time when
the 2017 Stock Awards became due, the Managing
Board members like all other eligible employees -
were, accordingly, entitled to receive an additional
cash payment based on the spin-off ratio of 2:1 and on
the Siemens Energy share price of €22.20 on the date
when their stock-based compensation allocations be-
came due.
Jan
Payout latest
in Feb '22
plus cash payment relating to Siemens Energy spin-off
Compensation granted in connection with the
commencement/termination of appointments
Total compensation (TC)
(according to Section 162 AktG)
+ Long-term variable compensation
2017 Stock Awards (vesting: 2016-2020)
2016 Stock Awards (vesting: 2015-2019)
Cash payment Siemens Energy spin-off
+ Other
Bonus for fiscal 2020
Bonus for fiscal 2021
+ Short-term variable compensation
Total
=
+ Amount for free disposal
Variable
compensation
+ Fringe benefits
compensation
Base salary
Fixed
in office on September 30, 2021
Managing Board members
Compensation awarded and due in accordance with Section 162 para. 1 sent 1 AktG -
Active Managing Board members in fiscal 2021
27
FISCAL 2021
Although the service costs for Company pension plans
are not to be classified as awarded and due compensa-
tion, they are also reported in the following table for pur-
poses of transparency.
accordance with Section 162 para. 1 sent. 1 of the German
Stock Corporation Act.
In addition to the amounts of compensation, Section 162
para. 1 sent. 2 No. 1 of the German Stock Corporation Act
requires disclosure of the relative proportion of total
compensation represented by all fixed and variable
compensation components. The relative proportions
reported here refer to the compensation components
"awarded" and "due" in the respective fiscal years in
Fixed compensation
Variable compensation
Other
2022
Furthermore, in fiscal 2021 and 2020, the Stock Awards
from the 2017 and 2016 tranches allocated in fiscal 2017
and 2016, respectively, became due and were settled by
transfer of Siemens shares. The value of Siemens shares
at the time of transfer is reported under "Long-term vari-
able compensation."
for the reporting year are reported, although payout only
occurs after the end of each reporting year, in order to
make reporting transparent and comprehensible and in
order to guarantee a connection between performance
and compensation in the reporting period.
Compensation awarded and due in fiscal 2021
The Bonus is reported under "Short-term variable com-
pensation" as "due compensation" since the underlying
services were fully rendered by the end of each period
(September 30). Therefore, the Bonus payout amounts
8,538,765
4,069,811
8,431,412
21,039,988
608,225
621,266
601,098
1,830,589
932,613
594,468
588,070
2,115,151
616,896
1,850,688
2,224,992
Total
616,896
Prof. Dr. Ralf P. Thomas
616,896
616,896
Cedrik Neike
616,896
991,200
Dr. Roland Busch
in office on September 30, 2021
Managing Board members
2020
2021
(Amounts in €)
Defined benefit obligation
for all pension commitments
excluding deferred compensation²
2020
2021
2020
6,566,101
Service costs
according to IAS 19R
2,938,080
16,207,039
The following tables show the compensation awarded
and due to the active members of the Managing Board in
fiscal 2021 and fiscal 2020 in accordance with Sec-
tion 162, para. 1, sent. 1 of the German Stock Corporation
Act. As a result, they include all the amounts actually paid
to individual Managing Board members in the reporting
period ("awarded compensation") and/or all the compen-
sation that is legally due but not yet received ("due com-
pensation").
B.6.1 Active Managing Board members
in fiscal 2021
B.6 Compensation awarded
and due
Judith Wiese and Matthias Rebellius, who were newly
appointed to the Managing Board as of October 1, 2020,
are not included in the BSAV. Instead of BSAV contribu-
tions, the Supervisory Board awarded them for fiscal 2021
a fixed cash amount of €550,800 each for free disposal.
This amount will be paid in January 2022.
Compensation Report → B. Compensation of Managing Board members
FISCAL 2021 26
1 As in the previous year, a total of €22,950 is attributable to the funding of personal pension benefit commitments earned prior to the transfer to the BSAV.
2 Deferred compensation totals €4,164,429 (2020: €3,911,848), including €3,741,588 for Joe Kaeser (2020: €3,512,020), €359,363 for Klaus Helmrich (2020: €342,276)
and €63,478 for Prof. Dr. Ralf P. Thomas (2020: €57,552).
22,618,771
20,426,146
7,026,562
15,592,209
13,028,557
7,397,589
1,219,888
611,168
1,831,056
294,170
294,170
0
1,234,800
616,896
1,851,696
308,448
731,073
Total
Klaus Helmrich (until March 31, 2021)
422,625
Joe Kaeser (until Feb. 3, 2021)
who left during the fiscal year
Managing Board members
6,702,858
18,000
119
+ Other
100,000
53%
140,000
2021
Harald Kern¹
256,000
14%
36,000
31%
80,000
38%
55%
2020
(since April 2007)
242,500
9%
22,500
33%
80,000
58%
140,000
2021
140,000
24,000
9%
264,000
200,000
35%
140,000
2020
(since Jan. 2012)
383,500
11%
43,500
52%
200,000
37%
140,000
2021
Jürgen Kerner¹
247,000
11%
27,000
32%
80,000
57%
140,000
2020
(since Jan. 2008)
158,000
11%
18,000
89%
2021
Michael Diekmann
2020
(since Oct. 2020)
287,000
9%
42%
120,000
49%
140,000
2021
Tobias Bäumler¹
336,000
11%
36,000
48%
160,000
42%
140,000
2020
(since Jan. 2018, Second Deputy Chairman since Feb. 2021)
438,167
7%
140,000
50%
57%
35%
140,000
2020
153,500
9%
13,500
91%
140,000
2021
222,500
10%
22,500
27%
60,000
63%
140,000
2020
Bettina Haller¹
(since Jan. 2018)
Dr. Andrea Fehrmann¹
(since Jan. 2008)
246,167
8%
19,500
86,667
31,500
61,500
401,500
16,667
81%
140,000
2021
Dr. Nathalie von Siemens
158,000
11%
18,000
89%
140,000
10%
2020
140,130
7%
10,500
93%
129,630
2021
Baroness Nemat Shafik (DBE, DPhil)
2020
(since Feb. 2021)
130,500
(since Jan. 2018)
16,500
10%
173,167
140,000
2020
153,500
9%
13,500
91%
140,000
2021
(since Jan. 2018)
Matthias Zachert
(since Feb. 2021)
Grazia Vittadini
Dorothea Simon¹
(since Oct. 2017)
Michael Sigmund
(since March 2014)
201,000
10%
21,000
20%
40,000
70%
140,000
2020
(since Jan. 2015)
8%
10,500
20%
26,667
2020
(since Jan. 2019)
153,500
9%
13,500
91%
140,000
2021
Hagen Reimer¹
156,758
13%
21,000
87%
135,758
2020
(since Jan. 2018)
155,000
10%
15,000
90%
140,000
2021
Benoît Potier
140,000
15%
89%
11%
72%
93,333
2021
Kasper Rørsted
194,045
10%
19,500
20%
38,788
70%
135,758
2020
(since Jan. 2015)
189,833
9%
16,500
20%
38,519
71%
134,815
2021
Dr.-Ing. Dr.-Ing. E.h. Norbert Reithofer
158,000
18,000
4%
49%
44%
performance
Performance
criterion
Target
dimension
Key
VARIABLE COMPENSATION
Matthias Rebellius
€7,715,220
Cedrik Neike
€7,781,316
Dr. Roland Busch
€15,295,950
MAXIMUM COMPENSATION
Compensation Report B. Compensation of Managing Board members
indicator
Outlook fiscal 2022
B.7 Outlook for fiscal 2022
FISCAL 2021 30
4 Like other eligible employees of Siemens AG who were employed by the Company before September 30, 1983, Joe Kaeser was entitled to transition payments
in the first six months of his retirement equal to the difference between his last base salary and his pension entitlement under the Company pension plan. The
transition payments that Joe Kaeser received in each month from March through August 2021 amounted to €178,080 and are included under "Pensions: Annuity."
5 Michael Sen's appointment as a member of the Managing Board of Siemens AG was terminated by mutual agreement as of March 31, 2020, prior to the end
of his contractual term of office. His employment relationship remained unaffected until the end of the day on March 31, 2021. The amount reported under
"Other" contains the base salary of €550,800 awarded to Michael Sen for the period from October 1, 2020, until the early termination of his employment
contract on March 31, 2021, his pro-rated Bonus for fiscal 2021 of €550,800 and a severance payment in the gross amount of €3,544,427, which was due
and payable on the termination date of March 31, 2021.
3 The amounts reported under "2017 Stock Awards (vesting: 2016-2020)" also include the additional cash payment relating to the settlement of the 2017 Stock Awards
tranche due to the Siemens Energy spin-off.
2 Fringe benefits include in-kind compensation and fringe benefits awarded by the Company such as the provision of a company car and insurance allowances.
In the case of Lisa Davis, they also include contractually agreed payments for tax adjustments.
1 The table includes only compensation that was awarded to former members after they left the Managing Board.
588
42
664
1,274
The following overview shows the maximum compen-
sation and the performance criteria for variable compensa-
tion for fiscal 2022, as approved by the Supervisory Board
of Siemens AG on September 23, 2021.
Bonus
fiscal 2022
Siemens
Group
Profit
Comparable revenue growth, measured on the basis of:
→ all-in for Managing Board members with primarily functional responsibility
→ the relevant business for Managing Board members with business responsibility
CCR, measured on the basis of:
With return on capital employed (ROCE), we aim to focus on Siemens' operating
performance, analogously to fiscal 2021. Thus ROCE excludes defined Varian-
related acquisition effects and the main Siemens Energy-related effects in order to
further increase the transparency of Siemens' operating performance.
This approach is aligned with external communications and the modified Financial
Framework for the financial steering of the Company, presented at Capital Market
Day 2021.
Beginning with fiscal 2022, EPS before purchase price allocation (EPS pre PPA)
will be used in order to increase transparency regarding the operating performance
of Siemens. EPS pre PPA is defined as basic earnings per share from net income
adjusted for amortization of intangible assets acquired in business combinations
and related income taxes. As for EPS, EPS pre PPA includes the amounts attributable
to shareholders of Siemens AG.
To strengthen the focus and connection between performance in the reporting year
and target achievement, the actual value of the reporting year is used. The target
value continues to be based on the average of the previous three fiscal years and
thus on the concept of continuous improvement.
Details
Total
shareholder
return (TSR)
Diverse
focus topics
Diverse
focus topics
growth
revenue
Comparable
Return on
capital
employed
(ROCE)
Judith Wiese
€7,715,220
Prof. Dr. Ralf P. Thomas
€8,636,316
efficiency
Profitability/
capital
Managing
Board
portfolio
Stock Awards
tranche
2022
Basic earnings
per share (EPS)
Capital payment (partial or full)
2017 Stock Awards (vesting: 2016-2020)³
Annuity
Pensions
Peter Löscher
President and CEO
until July 31, 2013
(€ thousand)
Compensation awarded and due in accordance with Section 162 para. 1 sent 1 AktG -
Former members of the Managing Board'
and due to former members of the Managing Board in
fiscal 2021 in accordance with Section 162 para. 1 sent. 1
of the German Stock Corporation Act. In accordance with
Section 162 para. 5 of the German Stock Corporation Act,
the personal information of former Managing Board
members is no longer included if they left the Managing
Board before September 30, 2011.
The following table shows the compensation awarded
of the Managing Board
B.6.2 Former members
FISCAL 2021 29
611
4,797
3,050
294
3 Pro-rated compensation for the period from October 1, 2020, up to and including March 31, 2021.
2 Pro-rated compensation for the period from October 1, 2020, up to and including February 3, 2021.
1 As compensation for the loss of benefits granted by her former employer, the Supervisory Board allotted to Judith Wiese one-time
compensation of €1,469,124 (gross) in fiscal 2021. 50% of this compensation was allocated in November 2020 in the form of Stock
Awards, and the remaining 50% was awarded in cash in March 2021. The cash payment is included under "Other."
1,220
9,271
4,616
= Total compensation (incl. service costs)
+ Service costs
2,756 100% 4,186 100%
8,051 100%
100%
4,616
Total compensation (TC)
(according to Section 162 AktG)
=
Fixed and
variable
compensation
→ Siemens for Managing Board members with primarily functional responsibility
Fringe benefits²
Pensions
Prof. Dr.
Hermann Requardt
Managing Board member
until Jan. 31, 2015
Prof. Dr.
Siegfried Russwurm
Managing Board member
until March 31, 2017
Janina Kugel
Managing Board member
until Jan. 31, 2020
1,103
3,085
571
14
1,328
1,247
4,646
21
106
Managing Board member
until Feb. 29, 2020
Lisa Davis
Michael Sen
Managing Board member
until March 31, 2020
Joe Kaeser4
President and CEO
until Feb. 3, 2021
Klaus Helmrich
Managing Board member
until March 31, 2021
Compensation Report B. Compensation of Managing Board members
compensation
Other
Fringe benefits²
Fixed and
variable
Capital payment (partial or full)
2017 Stock Awards (vesting: 2016-2020) 3
Annuity
Other
213,333
→ the relevant business for Managing Board members with business responsibility
Sucession planning; sustainability/diversity
280,000
2020
(since Oct. 2013, Chairman since Jan. 2018)
608,000
8%
in €
in % of TC
in €
48,000
46%
in % of TC
44%
in €
280,000
280,000
2021
Jim Hagemann Snabe
in % of TC
in €
(TC)
compensation
Meeting
attendence fee
Comittee
compensation
compensation
46%
280,000
44%
72,000
193,333
2021
Dr. Werner Brandt²
481,500
13%
61,500
42%
200,000
46%
220,000
2020
(since Jan. 2008, First Deputy Chairwoman since Jan. 2015)
466,500
10%
46,500
43%
200,000
47%
220,000
2021
Birgit Steinborn¹
632,000
11%
in office on September 30, 2021
Basic
Supervisory Board members
Total
Chairman
€280,000
Compensation of members of the Supervisory Board and its committees
Under the rules for fiscal 2021, the members of the Super-
visory Board receive an annual base compensation, and
the members of the Supervisory Board committees re-
ceive additional compensation for their committee work.
the Innovation and Finance Committee receive additional
compensation. The compensation authorized by the Arti-
cles of Association for work in the Compliance Committee
was no longer paid in fiscal 2021 since the Compliance
Committee was reintegrated into the Audit Committee
and the duties of the Compliance Committee were trans-
ferred to the Audit Committee effective October 1, 2020.
The rules for Supervisory Board compensation for fiscal
2021 were approved by the Annual Shareholders' Meeting
on January 28, 2014, and have been in effect since fiscal
2014. They are set out in Section 17 of the Articles of
Association of Siemens AG in the version applicable for
fiscal 2021. Supervisory Board compensation consists
entirely of fixed compensation; it reflects the responsibil-
ities and scope of the work of the Supervisory Board
members. The Chairman and Deputy Chairs of the Super-
visory Board as well as the chairs and members of the
Audit Committee, the Chairman's Committee, the Com-
pensation Committee, the Compliance Committee and
Supervisory Board members
C. Compensation of
Compensation Report → C. Compensation of Supervisory Board members
31
FISCAL 2021
→ Net Promoter Score
→ Digital learning hours per employee
The Siemens-internal ESG/Sustainability index for the 2022 Stock Awards tranche
is based on the following three equally weighted key performance indicators:
→ CO2 emissions
Siemens-
internal ESG/
Sustainability
index
Sustainability
Long-term
value creation
Sustainability
Company
strategy
Growth
Cash
conversion
rate (CCR)
Liquidity
Individual
targets
Development of the TSR of Siemens AG relative to the international sector index
MSCI World Industrials
Base compensation of Supervisory Board
Business development; implementation of portfolio measures; optimization/
efficiency enhancement; implementation of other strategic measures
Deputy Chair
€220,000
Audit Committee
Compensation awarded and due in accordance with Section 162 para. 1 sent 1 AktG -
Supervisory Board members
The following table shows the compensation awarded and due to the members of the Supervisory Board in
fiscal 2021 and fiscal 2020 in accordance with Section 162, para. 1, sent. 1 of the German Stock Corporation Act.
Compensation Report →C. Compensation of Supervisory Board members
32
FISCAL 2021
The members of the Supervisory Board are reimbursed
for out-of-pocket expenses incurred in connection with
their duties and for any value-added tax to be paid on
their compensation. For the performance of his duties,
the Chairman of the Supervisory Board is also entitled to
an office with secretarial support and the use of a car
service. No loans or advances from the Company are pro-
vided to members of the Supervisory Board.
In addition, the members of the Supervisory Board re-
ceive €1,500 for each meeting of the Supervisory Board
and its committees they attend.
If a Supervisory Board member is absent from any Super-
visory Board meetings, one-third of the aggregate com-
pensation due to that member is reduced by the percent-
age of Supervisory Board meetings he or she does not
attend in relation to the total number of Supervisory
Board meetings held during the fiscal year. In the event
of changes in the composition of the Supervisory Board
or its committees, compensation is paid on a pro-rated
basis, rounding up to the next full month.
Compensation for any work on the Chairman's Commit-
tee is deducted from compensation for work on the Com-
pensation Committee.
Member
€40,000
Chair
€80,000
€60,000
Member
Chair
€100,000
Finance Committee
Innovation and
Compensation
Committee
Member
€140,000
Member
€80,000
Chair
€120,000
Member
€80,000
Chair
€160,000
Chairman's Committee
Additional compensation for committee work
4
FISCAL 2021
9,643
10.6%
Dr. Andrea Fehrmann1 (since Jan. 2018)
113
149
32.4%
158
6.0%
154
(2.8)%
Bettina Haller¹ (since April 2007)
231
244
5.8%
246
244
256
4.9%
243
(5.3)%
Harald Kern (since Jan. 2008)
229
244
6.5%
240
(1.8)%
247
3.1%
264
0.0%
6.9%
3.5%
(0.7)%
(3.8)%
Birgit Steinborn¹
(since Jan. 2008, First Deputy Chairwoman since Jan. 2015)
468
477
1.9%
471
(1.3)%
482
2.2%
467
(3.1)%
Dr. Werner Brandt²
223
(since Jan. 2018, Second Deputy Chairman since Feb. 2021)
324
35.0%
336
3.7%
438
30.4%
Tobias Bäumler' (since Oct. 2020)
287
Michael Diekmann (since Jan. 2008)
204
217
6.1%
215
240
608
Jürgen Kerner¹ (since Jan. 2012)
394
131
Baroness Nemat Shafik (DBE, DPhil) (since Jan. 2018)
113
140
24.2%
158
13.1%
140 (11.3)%
Dr. Nathalie von Siemens (since Jan. 2015)
151
185
22.9%
194
Kasper Rørsted (since Feb. 2021)
4.6%
3.9%
173 (13.8)%
Michael Sigmund (since March 2014)
151
152
1.0%
149
(2.0)%
158
6.0%
154 (2.8)%
Dorothea Simon' (since Oct. 2017)
152
201
381
(2.2)%
6.6%
3.5%
391
(0.8)%
402
2.7%
384
(4.5)%
Benoît Potier (since Jan. 2018)
113
141
25.5%
157
11.0%
190
155
Hagen Reimer' (since Jan. 2019)
110
158
44.3%
154
(2.8)%
(since Jan. 2015)
188
189
0.6%
182
(3.7)%
194
(1.1)%
3.2%
632
14.3%
3
2
n.a.
3
n.a.
(2)
n.a.
11.5
n.a.
Earnings per share³ (in €)
7.44
7.12
(4.3)%
Comparable revenue growth² (in %)
6.41
4,076
4,547
11.6% 11,219
(10.0)%
146.7%
5.00
(22.0)%
5,270 (53.0)% 5,147
7.68
53.6%
(2.3)%
II. AVERAGE EMPLOYEE COMPENSATION (in € thousand)
Workforce in Germany
91
94
3.3%
Net income according to HGB (in € billion)
95
9.0%
(34.2)%
Compensation Report → D. Comparative information on profit development and annual change in compensation
D. Comparative information on
profit development and annual
change in compensation
The following table shows, in accordance with Sec-
tion 162 para. 1 sent. 2 No. 2 of the German Stock Corpo-
ration Act, Siemens' profit development, the annual
change in the Managing Board and Supervisory Board
members' compensation and the annual change in aver-
age employee compensation on a full-time equivalent
basis over the last five fiscal years.
Profit development is presented on the basis of the
Siemens Group's key performance indicators revenue,
comparable revenue growth and earnings per share. The
latter is also one of the financial targets for the short-
term variable compensation (Bonus) of the Managing
Board and thus has a significant influence on the amount
of the compensation of the Managing Board members. In
accordance with Section 275 para. 3 No. 16 of the German
Commercial Code (Handelsgesetzbuch, HGB), the devel-
opment of the net income of Siemens AG is also shown.
The compensation awarded and due to the Managing
Board and Supervisory Board members in each fiscal year
is presented in accordance with Section 162 para. 1 sent. 1
of the German Stock Corporation Act.
The presentation of average employee compensation is
based on the size of the workforce, including trainees,
employed by Siemens in Germany. In fiscal 2021, this
workforce comprised on average 71,838 employees
(full-time equivalent). By way of comparison, the
Siemens Group had about 241,000 employees and train-
ees worldwide as of September 30, 2021. The figures
exclude the workforce of Siemens Healthineers, which
is not included in the presentation since it is a separately
managed, publicly listed company.
Average employee compensation comprises the person-
nel costs for wages and salaries, fringe benefits, employer
contributions to social insurance and any short-term
variable compensation components attributable to the
fiscal year. For compensation in connection with share
plans, the amounts received in the fiscal year are taken
into account. Therefore, employee compensation is also
equivalent, in principle, to awarded and due compensa-
tion within the meaning of Section 162 para. 1 sent. 1 of
the German Stock Corporation Act and thus in line with
Managing Board and Supervisory Board compensation.
FISCAL 2021 35
Compensation Report → D. Comparative information on profit development and annual change in compensation
Comparative information on profit development and change in compensation
of employees, Managing Board and Supervisory Board members
Fiscal
2017
2018
62,265
Change
in %
Change
in %
2020
Change
in %
2021
Change
in %
I. PROFIT DEVELOPMENT
Revenue (in € billion)
83,049
83,044
(0.0)%
86,849
4.6%
57,139
2019
1.1%
96
1.1%
Prof. Dr. Siegfried Russwurm 4 (until March 2017)
4,363
Michael Sen (from April 2017 until March 2020)
1,272
2,661 (5.8)% 7,969 199.5% 6,562 (17.6)% 1,434 (78.2)%
2,718 23.4% 4,192 54.3% 2,631 (37.2)% 1,274 (51.6)%
3,244 (25.7)% 4,330
33.5% 2,905 (32.9)% 664 (77.1)%
2,841 123.4% 2,448 (13.8)% 1,991 (18.7)% 5,914 197.1%
1 Revenue as reported. In fiscal 2020, the segments "Gas and Power" and "Siemens Gamesa Renewable Energy" were classified as discontinued operations and are therefore not
included in the amount reported for fiscal 2020.
2 The primary measure for managing and controlling revenue growth is comparable growth, because it shows the development of Siemens' business net of currency translation
effects, which arise from the external environment outside the Company's control, and portfolio effects, which involve business activities that are either new to or no longer a
part of the relevant business.
3 Basic earnings per share from continuing and discontinued operations as reported.
4 The increase in compensation in fiscal 2019 is primarily attributable to the one-time benefit from two Stock Awards tranches - the 2014 and 2015 tranches in November 2018,
due to a reduction in the duration of the Stock Awards to the customary four-year period starting with the 2015 tranche.
FISCAL 2021 36
Compensation Report → D. Comparative information on profit development and annual change in compensation
Comparative information on profit development and change in compensation
of employees, Managing Board and Supervisory Board members (cont.)
Fiscal
2,202
2017
Change
in %
2019
Change
in %
2020
Change
in %
2021
Change
in %
IV. SUPERVISORY BOARD MEMBERS' COMPENSATION (in € thousand)
Jim Hagemann Snabe
(since Oct. 2013, Chairman since Jan. 2018)
279
536 92.0%
613
2018
Janina Kugel (until Jan. 2020)
2,825
Lisa Davis (until Feb. 2020)
99
3.1%
III. MANAGING BOARD MEMBERS' COMPENSATION (in € thousand)
Dr. Roland Busch 4
(since April 2011, President and CEO since Feb. 2021)
5,482
Cedrik Neike (since April 2017)
2,556
4,556 (16.9)%
3,710 45.1%
Matthias Rebellius (since Oct. 2020)
Prof. Dr. Ralf P. Thomas 4 (since Sept. 2013)
3,347
3,143
(6.1)%
6,740 114.5% 4,087
Judith Wiese (since Oct. 2020)
6,730 47.7% 4,441 (34.0)% 6,008 35.3%
2,331 (37.2)% 2,017 (13.5)% 3,524 74.7%
3,435
(39.4)% 4,235
4,185
3.6%
Managing Board members
who left during the fiscal year
Joe Kaeser (President and CEO until Feb. 2021)
8,391
Klaus Helmrich 4 (until March 2021)
5,586
(13.0)% 12,978
4,608 (17.5)% 6,679
54.7%
45.0%
8,051 (38.0)%
4,186 (37.3)%
4,616 (42.7)%
2,756 (34.2)%
Former Managing Board members
149
(2.0)%
Dr.-Ing. Dr.-Ing. E.h. Norbert Reithofer
6.0%
Fiscal 2021 was Siemens AG's first year as a newly posi-
tioned, focused technology company. It was also the
first year for the Company's new Managing Board
team. Together with his Managing Board colleagues,
Dr. Roland Busch pursued clear strategic objectives and
positioned Siemens' operations for faster growth. As
planned, Dr. Busch succeeded Joe Kaeser as President
and CEO at the conclusion of the ordinary Annual Share-
holders' Meeting on February 3, 2021.
Dear Shareholders,
Report of the Supervisory Board
Berlin and Munich, December 2, 2021
| Report of the Supervisory Board
SIEMENS
Report of the
Supervisory Board
40
FISCAL 2021
Independent auditor's report
Compensation Report →
[German Public Auditor]
Wirtschaftsprüfer
Dr. Gaenslen
[German Public Auditor]
Wirtschaftsprüferin
Breitsameter
Wirtschaftsprüfungsgesellschaft
Ernst & Young GmbH
Munich, December 2, 2021
The "General Engagement Terms for Wirtschaftsprüfer
and Wirtschaftsprüfungsgesellschaften [German Public
Auditors and Public Audit Firms]" as issued by the IDW
on January 1, 2017, are applicable to this engagement
and also govern our responsibility and liability to third
parties in the context of this engagement (☐ wWW.DE.EY.
COM/GENERAL-ENGAGEMENT-TERMS).
Limitation of liability
FISCAL 2021 39
The audit of the content of the Compensation Report de-
scribed in this auditor's report comprises the formal audit
of the Compensation Report required by Sec. 162 (3) AktG
and the issue of a report on this audit. As we are issuing
an unqualified opinion on the audit of the content of the
Compensation Report, this also includes the opinion that
the disclosures pursuant to Sec. 162 (1) and (2) AktG are
made in the Compensation Report in all material respects.
Other matter – formal audit
of the Compensation Report
-
In our opinion, on the basis of the knowledge obtained in
the audit, the Compensation Report for the fiscal year
from October 1, 2020 to September 30, 2021 and the re-
lated disclosures comply, in all material respects, with the
financial reporting provisions of Sec. 162 AktG. Our opin-
ion on the Compensation Report does not cover the con-
tent of the abovementioned disclosures in the Compen-
sation Report that is beyond the scope of Sec. 162 AktG.
Opinion
We believe that the evidence we have obtained is suffi-
cient and appropriate to provide a basis for our opinion.
This move-intensively promoted by the Supervisory
Board - successfully concluded Siemens' strategic, struc-
tural and personnel realignment, which provided a
strong foundation for the outstanding achievements of
the Company's roughly 300,000 employees in fiscal 2021.
Despite the uncertainties due to the ongoing COVID-19
pandemic, Siemens AG seized the opportunities provided
by the economic recovery and the accelerated drive to-
ward digitalization and sustainability that is transforming
its key markets. The broad-based growth and high profit-
ability achieved by the Company's businesses are impres-
sive and speak for themselves. Siemens proved that sus-
tainable technologies designed to benefit society are
already a model for success.
An audit involves performing audit procedures to obtain
audit evidence about the amounts in the Compensation
Report and the related disclosures. The audit procedures
selected depend on the auditor's judgment, including
the assessment of the risks of material misstatement of
the Compensation Report and the related disclosures,
whether due to fraud or error. In making those risk as-
sessments, the auditor considers internal control relevant
to the preparation of the Compensation Report and the
related disclosures in order to plan and perform audit
procedures that are appropriate under the given circum-
stances, but not for the purpose of expressing an opinion
on the effectiveness of the entity's internal control. An
audit also includes evaluating the accounting policies
used and the reasonableness of accounting estimates
made by management and the Supervisory Board, as
well as evaluating the overall presentation of the Com-
pensation Report and the related disclosures.
In close dialogue with the Supervisory Board, the new
management team also succeeded in further accelerating
business and technological innovation. The extensive in-
troduction of Software-as-a-Service (SaaS) offerings by
Siemens' industry software business is an excellent exam-
ple of this success. In addition, the Companywide DEGREE
program intensified the focus of all Siemens businesses
on ambitious sustainability targets – targets for environ-
mental and social sustainability and good governance -
even further.
In fiscal 2021, the Supervisory Board performed in full the
duties assigned to it by law, the Siemens Articles of Asso-
ciation and the Bylaws for the Supervisory Board. On the
158
The Chairman's Committee met nine times. It also made
two decisions using other customary means of commu-
nication. In my capacity as Chairman of the Chairman's
Committee, I discussed topics of major importance with
the other Committee members also between meetings.
In fiscal 2021, the Supervisory Board had six standing
committees. These committees prepare proposals and
issues to be dealt with at the Supervisory Board's plenary
meetings. Some of the Supervisory Board's decision-mak-
ing powers have been delegated to these committees
within the permissible legal framework. The committee
chairpersons report to the Supervisory Board on their
committees' work at the subsequent Board meeting.
A list of the members and a detailed explanation of the
tasks of the individual Supervisory Board committees are
set out in the Corporate Governance Statement.
Work in the Supervisory Board
committees
At our meeting on September 23, 2021, we approved a
Declaration of Conformity in accordance with Section 161
of the German Stock Corporation Act (Aktiengesetz,
AktG). Information on corporate governance is provided
in the Corporate Governance Statement, which is pub-
licly available on the Siemens Global Website at ☐ www.
SIEMENS.COM/CORPORATE-GOVERNANCE. The Company's Dec-
laration of Conformity has been made permanently avail-
able to shareholders on the Siemens Global Website at
WWW.SIEMENS.COM/DECLARATION OF CONFORMITY. The cur-
rent Declaration of Conformity is also available in the
Corporate Governance Statement.
Corporate Governance Code
auditor for the Compensation Report for fiscal 2021. In
addition, we dealt with matters relating to corporate gov-
ernance, in particular with the Declaration of Conformity
with the German Corporate Governance Code and with
the independence of the shareholder representatives on
the Supervisory Board. We approved amendments to the
Bylaws for the Managing Board, the Bylaws for the Super-
visory Board and the bylaws for the Chairman's Commit-
tee, the Audit Committee and the Compensation Commit-
tee of the Supervisory Board. In addition, we amended
the objectives for the composition of the Supervisory
Board as well as the profile of skills and expertise and the
diversity concept for the Supervisory Board. Finally, we
conducted a self-assessment of our activities.
At our meeting on September 23, 2021, the Managing
Board reported on the state of the Company. One focus of
this meeting was the Company's human resources strat-
egy - including talent and leadership development, suc-
cession planning for the Managing Board and diversity.
The Managing Board reported on the current situation at
the Portfolio Companies. We concerned ourselves with
the annual review of Managing Board compensation and -
after preparation by and on a recommendation of the
Compensation Committee - defined each Managing Board
member's individual target total compensation and max-
imum compensation as well as the performance criteria
for variable compensation for fiscal 2022. At this meeting,
we also discussed the Compensation Report for fiscal 2021
and made a decision regarding the engagement of an
At our meeting on August 4, 2021, the Managing Board
reported on the Company's current business and finan-
cial position following the conclusion of the third quarter.
One focus of this meeting was the sustainability strategy
(DEGREE). We were informed about the current business
situation at Siemens Healthineers. We approved the Man-
aging Board's decision to acquire SQCAP B.V. (Sqills),
Netherlands, a leading supplier of SaaS solutions for the
rail industry.
On May 16, 2021, we approved – in a decision using other
customary means of communication and on the recom-
mendation of the Innovation and Finance Committee -
the Managing Board's decisions to acquire Supplyframe,
Inc., U.S., a marketplace for the global electronics value
chain. On May 21, 2021, we made another decision using
other customary means of communication to exercise
ownership rights in subsidiaries of Siemens AG in accor-
dance with Section 32 of the German Codetermination
Act (Mitbestimmungsgesetz, MitbestG). At an extraordi-
nary Supervisory Board meeting on June 22, 2021, the
Managing Board presented the reporting planned for
Capital Market Day on June 24, 2021. We approved the
Managing Board's decision on the share buyback. On
July 28, 2021, we were informed about matters concern-
ing Siemens Healthineers.
Board reported to us in detail in particular on the digital
marketplace strategy of the Digital Industries Business
and the SaaS business model. We also discussed Manag-
ing Board compensation. Finally, we concerned ourselves
with the Company's stake in Siemens Energy.
Report of the Supervisory Board
3
FISCAL 2021
In April 2021, the members of the Managing and Super-
visory Boards met several times in smaller groups of a few
participants each for strategy discussions (so-called multi-
lateral strategy sessions) in order to conduct detailed con-
sultations and discussions regarding topics of strategic
importance for Siemens AG.
The regular terms of office of three shareholder represen-
tatives on the Supervisory Board, who had been reelected
early to five-year terms of office by the Annual Sharehold-
ers' Meeting on January 26, 2016, ended at the Annual
Shareholders' Meeting on February 3, 2021. Three share-
holder representatives on the Supervisory Board were
elected for new, four-year terms of office - that is, for the
electoral period 2021 to 2025 - by the Annual Sharehold-
ers' Meeting on February 3, 2021. The constituent meet-
ing of the Supervisory Board took place immediately after
the Annual Shareholders' Meeting on February 3, 2021.
At this Supervisory Board meeting, Jim Hagemann Snabe
was reelected Chairman of the Supervisory Board.
The Supervisory Board confirmed Birgit Steinborn in
her position as First Deputy Chairwoman and elected
Dr. Werner Brandt Second Deputy Chairman of the Super-
visory Board. The Supervisory Board also elected the
members of its committees.
At our meeting on February 2, 2021, the Managing Board
reported on the Company's current business and finan-
cial position following the conclusion of the first quarter.
and the Compensation Report - and the agenda for the
ordinary Annual Shareholders' Meeting on February 3,
2021. On the recommendation of the Compensation
Committee, we also made a further decision regarding
the target setting for Managing Board compensation for
fiscal 2021. In addition, we concerned ourselves with the
annual reporting of the Chief Compliance Officer and the
Cybersecurity Officer.
On December 1, 2020, we discussed the financial state-
ments and the Combined Management Report for
Siemens AG and the Siemens Group as of September 30,
2020, the Annual Report for 2020 - including the Report
of the Supervisory Board, corporate governance reporting
At our meeting on November 11, 2020, we discussed the
key financial figures for fiscal 2020 and approved the bud-
get for fiscal 2021. On a recommendation by the Compen-
sation Committee, we also defined the Managing Board
members' compensation for fiscal 2020 on the basis of
calculated target achievement. An internal review con-
firmed the appropriateness of this compensation. We had
already defined the performance criteria for the Manag-
ing Board's variable compensation for fiscal 2021 at our
meeting on September 22, 2020. On this basis and on the
recommendation of the Compensation Committee, we
made a decision on target setting for Managing Board
compensation for fiscal 2021 at our meeting on Novem-
ber 11, 2020. At this meeting, we also approved a Manag-
ing Board decision on financing measures.
At an extraordinary meeting on October 29, 2020,
we approved the Managing Board's decision to sell
Flender GmbH, a producer of mechanical and electrical
drive systems, to The Carlyle Group, U.S.
We held a total of six regular plenary meetings and two
extraordinary meetings in fiscal 2021. Another extraordi-
nary meeting the Supervisory Board's constituent meet-
ing was held immediately after the Annual Sharehold-
ers' Meeting on February 3, 2021. We also made two
decisions using other customary means of communica-
tion. Topics of discussion at our regular plenary meetings
were revenue, profit and employment development at
Siemens AG and the Siemens Group as well as the Com-
pany's financial position and the results of its operations.
In addition, we concerned ourselves, as occasion required,
with acquisition and divestment projects and with risks
to the Company. We received regular reports from the
Managing Board regarding the impact on Siemens of the
COVID-19 pandemic. In addition, we met regularly in
closed sessions without the Managing Board in atten-
dance. In these sessions, we dealt with agenda items that
concerned either the Managing Board itself or internal
Supervisory Board matters.
-
Topics at the plenary meetings
of the Supervisory Board
Report of the Supervisory Board
FISCAL 2021 2
A special focus of our activities in fiscal 2021 was the
Company's further strategic development after the suc-
cessful spin-off and subsequent public listing of Siemens
Energy. At our meetings and in additional informational
sessions, we concerned ourselves intensively with the
goals and priorities of Siemens' businesses and with the
Managing Board's technology and personnel strategy.
In this connection, we focused our attention on innova-
tion, digitalization and the related opportunities for
growth. Together with the Managing Board, we dis-
cussed the markets, trends and growth fields. The sus-
tainability strategy of Siemens AG was another focus of
our work in fiscal 2021.
-
basis of detailed written and oral reports provided by the
Managing Board, we monitored the Managing Board and
advised it on the management of the Company. In my
capacity as Chairman of the Supervisory Board, I regu-
larly exchanged information with the President and CEO
and the other Managing Board members. As a result, the
Supervisory Board was always kept up to date on pro-
jected business policies, Company planning - including
financial, investment and personnel planning – and the
Company's profitability and business operations as well
as on the state of Siemens AG and the Siemens Group.
We were directly involved at an early stage in all deci-
sions of fundamental importance to the Company and
discussed these decisions with the Managing Board
intensively and in detail. To the extent that Supervisory
Board approval of the decisions and measures of Com-
pany management was required by law, the Siemens
Articles of Association or our Bylaws, the members of
the Supervisory Board - prepared in some cases by the
Supervisory Board's committees – issued such approval
after intensive review and discussion. The relevant Man-
aging Board members informed us - within the limits of
the applicable legal framework - about critically impor-
tant measures and decisions at the Company's equity
investments.
-
Our responsibility is to express an opinion on this Com-
pensation Report and the related disclosures based on
our audit. We conducted our audit in compliance with
German Generally Accepted Standards for Financial State-
ment Audits promulgated by the Institut der Wirtschafts-
prüfer [Institute of Public Auditors in Germany] (IDW).
Those standards require that we comply with ethical re-
quirements and plan and perform the audit to obtain
reasonable assurance about whether the Compensation
Report and the related disclosures are free from material
misstatement.
At our meeting on May 7, 2021, the Managing Board
reported to us on the Company's current business and
financial position following the conclusion of the second
quarter. As part of a strategic focus, we concerned our-
selves at this meeting - on the basis of the strategy dis-
cussions conducted in smaller groups with the Managing
Board in the previous weeks - comprehensively and
in detail with the strategic priorities of Siemens AG and
the strategic orientation of its businesses. The Managing
Management and the Supervisory Board of Siemens AG
are responsible for the preparation of the Compensation
Report and the related disclosures in compliance with the
requirements of Sec. 162 AktG. In addition, management
and the Supervisory Board are responsible for such inter-
nal control as they determine is necessary to enable the
preparation of a Compensation Report and the related
disclosures that are free from material misstatement,
whether due to fraud or error.
411
(1.5)%
398
0.4%
404
402
Dr. Nicola Leibinger-Kammüller (until Feb. 2021)
(Second Deputy Chairman until Feb. 2021)
Werner Wenning
154 (2.8)%
6.0%
158
32.4%
149
113
11.5%
286
4.9%
256
37.9%
177
who left during the fiscal year
Supervisory Board members
Matthias Zachert (since Jan. 2018)
Gunnar Zukunft' (since Jan. 2018)
188
Grazia Vittadini (since Feb. 2021)
(2.8)%
Auditor's responsibility
154
3.4%
167 (59.5)%
244
249
We have audited the attached Compensation Report of
Siemens Aktiengesellschaft, Berlin and Munich, prepared
to comply with Sec. 162 AktG ["Aktiengesetz": German
Stock Corporation Act] for the fiscal year from October 1,
2020 to September 30, 2021 and the related disclosures.
We have not audited the content of disclosures regarding
appropriateness and marketability of the compensation
in chapter 7 B.2.3 APPROPRIATENESS OF THE COMPENSATION that
is beyond the scope of Sec. 162 AktG.
243
Responsibilities of management
and the Supervisory Board
To Siemens Aktiengesellschaft, Berlin and Munich
Compensation Report → Independent auditor's report
I Independent auditor's report
FISCAL 2021 38
of Siemens AG
Chief Financial Officer
Jim Hagemann Snabe
Prof. Dr. Ralf P. Thomas
For the Supervisory Board
President and Chief Executive Officer
of Siemens AG
Dr. Roland Busch
For the Managing Board
Chairman of the Supervisory Board
of Siemens AG
93 (61.4)%
(1.2)%
financial loss associated with their activities on behalf
of the Company. The insurance policy for fiscal 2021 in-
cludes a deductible for the members of the Managing
Board that complies with the requirements of the Ger-
man Stock Corporation Act.
241
(1.8)%
2.5%
1 These employee representatives on the Supervisory Board and the representatives of the trade unions on the Supervisory Board have agreed to transfer
their compensation to the Hans Böckler Foundation, in accordance with the guidelines of the Confederation of German Trade Unions.
246
FISCAL 2021
37
| E. Other
Compensation Report E. Other
The Company provides a group insurance policy for
Supervisory and Managing Board members and certain
other employees of the Siemens Group. The policy is taken
out for one year at a time or renewed annually. It covers
the personal liability of the insured individuals in cases of
2 Werner Brandt has been a member of the Supervisory Board since January 31, 2018, and was elected Second Deputy Chairman of the Supervisory Board,
effective the end of the Annual Shareholders' Meeting on February 3, 2021.
Europe, C.I.S., Africa, Middle East
(in millions of €)
26%
Revenue (location of customer)
In the Asia, Australia region, orders overall rose substantially due to double-digit increases in all four industrial businesses, with the
highest contributions from Siemens Healthineers and Digital Industries. The pattern of order development in China was largely the same
as for the region.
Order growth in the Americas and in the U.S. was due mainly to a higher volume from large orders in Mobility, particularly including the
large order in the U.S. mentioned above. Overall, order intake both in the region and in the U.S. was subject to significantly negative
currency translation effects, partly offset by portfolio effects which related primarily to the acquisition of Varian.
In the Europe, C.I.S., Africa, Middle East region, order intake was up substantially year-over-year with increases in all four industrial
businesses. Sharp order growth in Siemens Healthineers included high volume from rapid coronavirus antigen tests. Digital Industries and
Smart Infrastructure also recorded double-digit growth, while orders in Mobility were up clearly year-over year. In Germany, order intake
in Siemens Healthineers almost doubled due mainly to the high volume from rapid coronavirus antigens tests. Digital Industries and Smart
Infrastructure posted double-digit growth, while Mobility posted a substantial decline due to a lower volume from large orders which in
fiscal 2020 had included a €1.1 billion order for high-speed trains.
Orders related to external customers were up substantially year-over-year on double-digit growth in all four industrial businesses, reflecting
a very strong rebound in economic activity even though the economic environment was still strongly impacted by COVID-19. Orders in
Mobility increased sharply on a higher volume from large orders which included a €2.8. billion order for trainsets including dual powered
and hybrid battery vehicles and associated services in the U.S., its largest-ever order in the Americas. Siemens Healthineers, Digital
Industries and Smart Infrastructure also posted double-digit order growth year-over-year. The broad-based increase in emerging markets
was driven by China and, to a lesser degree, India.
25%
20%
58,030
19,208
21%
23%
71,374
23%
27%
7,094
23%
therein: Germany
9,029
15,234
Americas
4.3 Research and development
Asia, Australia
4,200
59%
13,473
7.68
5.00
54%
13.1%
7.8%
As a result of the developments described above, Income from continuing operations before income taxes increased 36%. Severance
charges for continuing operations were €410 million, of which €251 million were in Industrial Business. In fiscal 2020, severance charges
for continuing operations were €589 million, of which €490 million were in Industrial Business.
The tax rate in fiscal 2021 was 25%, close to the 24% rate in fiscal 2020, benefiting from reversal of income tax provisions and largely tax-
free gains resulting from the transfers of assets to Siemens Pension-Trust e.V. mentioned above. These benefits were partly offset by losses
related to equity investments which were not tax-deductible. As a result, the increase in Income from continuing operations was 36%.
Income from discontinued operations, net of income taxes in fiscal 2021 included a gain of €0.9 billion from the sale of Flender and
also benefited from reversal of income tax provisions. The prior year included a pretax gain of €0.9 billion, net of related expenses, from
the spin-off of Siemens Energy AG (Siemens Energy), as well as a positive contribution from Flender. These positive factors were largely
offset, however, by losses at the former operating businesses Gas and Power and Siemens Gamesa Renewable Energy (now part of Siemens
Energy) and €0.3 billion in income tax expenses mainly related to the carve-out of Siemens Energy.
The increase in basic earnings per share reflects an increase of Net income attributable to Shareholders of Siemens AG, which was €6,161
million in fiscal 2021 compared to €4,030 million in fiscal 2020, combined with a lower number of weighted average shares outstanding.
As expected, ROCE improved year-over-year, but was below the target range set in our Siemens Financial Framework. The increase year-
over-year was due both to sharply higher income before interest after tax and to clearly lower average capital employed following the
spin-off of Siemens Energy at the end of fiscal 2020.
In fiscal 2021, we reported research and development expenses of €4.9 billion, compared to €4.6 billion in fiscal 2020. The resulting R&D
intensity, defined as the ratio of R&D expenses and revenue, was 7.8% (fiscal 2020: 8.3%). Additions to capitalized development expenses
amounted to €0.3 billion in fiscal 2021, compared to €0.4 billion in fiscal 2020. As of September 30, 2021 and 2020, Siemens held
approximately 43,400 and 40,900 respectively, granted patents worldwide in its continuing operations. On average, we had 42,500 R&D
employees in fiscal 2021.
-
Our research and development activities are ultimately geared to developing innovative, sustainable solutions for our customers - and the
Siemens businesses while also strengthening our own competitiveness. Joint implementation by the operating units and Technology,
our central R&D department, ensures that research activities and business strategies are closely aligned with one another, and that all
units benefit equally and quickly from technological developments. As in previous years, we focused on the following technologies:
additive manufacturing, autonomous robotics, blockchain applications, connected (e-)mobility, connectivity and edge devices, cyber
security, data analytics and artificial intelligence, distributed energy systems, energy storage, future of automation, materials, power
electronics, simulation and digital twin, and software systems and processes.
We advance certain of these technologies also through our open innovation concept. We are working closely with scholars from leading
universities and research institutions, not only under bilateral cooperation agreements but also in publicly funded collective projects. Our
focus here is on our strategic research partners, and especially the eight Centers of Knowledge Interchange that we maintain at leading
universities worldwide.
17
Combined Management Report
Siemens' global venture capital unit, Next47, provides capital to help start-ups expand and scale. It serves as the creator of next-generation
businesses for Siemens by building, buying and partnering with innovative companies at any stage. Next47 is focused on anticipating how
emerging technologies will influence our end markets. This foreknowledge enables Siemens and our customers to grow and thrive in the
age of digitalization.
18
Siemens (continuing operations)
therein: China
therein: U.S.
16,589
Orders (location of customer)
24%
(in millions of €)
Currency translation effects took three percentage points each from order and revenue growth, respectively. Portfolio transactions, in
particular the acquisition of Varian by Siemens Healthineers, added five percentage points to order and four percentage points to revenue
growth year-over-year. The resulting ratio of orders to revenue (book-to-bill) for Siemens in fiscal 2021 was 1.15. The order backlog was
€85 billion as of September 30, 2021.
4.1 Orders and revenue by region
4. Results of operations
Combined Management Report
15
15
Beginning with fiscal 2022, governance costs and Siemens brand fees, previously included in Corporate items, will be included within the
new item Governance; results related to Technology and Next47, also previously included in Corporate items, will be disclosed under the
new item Innovation. Other components of corporate items, including the businesses Advanta and Global Business Solution, will be
transferred to the item Financing, eliminations and other items (formerly Eliminations, Corporate Treasury and other reconciling items).
In line with the change to a new profit definition, this item will also include operating financial income (expenses), net. As a result of the
changes described above, Corporate items will be retired as a disclosure line item. If this new reporting structure had already existed in
fiscal 2021, the items Innovation; Governance; and Financing, eliminations and other items would have recorded €(207) million, €(751)
million and €452 million in profit, respectively.
Combined Management Report
14
Europe, C.I.S., Africa, Middle East
Improved results in Eliminations, Corporate Treasury and other reconciling items were due mainly to lower interest expenses on debt
and positive effects related to reinsurance contracts.
Lower profit at Siemens Real Estate was due mainly to reduced gains related to disposals. The prior year included a gain of €219 million
from the transfer of an investment.
The result for Siemens Energy Investment included Siemens' share of Siemens Energy AG's result after tax and, in addition, expenses
from amortization of assets resulting from purchase price allocation due to the initial recognition of the investment at fair value in
September 2020. In fiscal 2021, Siemens' share of Siemens Energy AG's net loss amounted to €159 million, which was due mainly to
planned restructuring measures by Siemens Energy to improve its competitiveness, while the expenses from amortization amounted to a
€237 million.
(1,731)
(1,739)
(243)
(94)
(691)
(738)
6,697
(211)
The positive change in Corporate items was mainly due to the following factors in fiscal 2021: Firstly, a positive result, primarily resulting
from revaluation gains, totaling €358 million related to the transfers of assets to Siemens Pension-Trust e.V. in Germany, which included
the stakes in Bentley and ChargePoint Holdings, Inc. (ChargePoint). Secondly, a gain of €314 million related to the revaluation of, and
dividends received for the stake in, Thoughtworks Holdings Inc. (Thoughtworks), which completed its initial public offering in the U.S. in
September 2021. These factors were partly offset by expenses of €94 million from revised estimates related to provisions for a legacy
project. Severance charges within Corporate items were €73 million (€68 million in fiscal 2020).
therein: Germany
Americas
therein: U.S.
14,212
17,555
24%
22%
16,780
20,474
9%
14%
10,646
12,118
20%
24%
27,778
34,311
Comp.
% Change
Actual
2020
Fiscal year
2021
1 As defined by the International Monetary Fund.
therein: emerging markets¹
Siemens (continuing operations)
therein: China
Asia, Australia
26%
>200%
Revenue related to external customers went up significantly year-over-year, led by double-digit growth in Siemens Healthineers and Digital
Industries. Smart Infrastructure recorded a clear increase, while Mobility posted slightly higher revenue year-over-year. The revenue
increase in emerging markets was driven by substantially higher demand in China and, to a lesser degree, India.
1,062
16%
13%
8,232
6,594
25%
21%
62,265
17,651
55,254
13%
11%
12,784
15,323
15%
Revenue in Europe, C.I.S., Africa, Middle East increased significantly on growth in all four industrial businesses. Within the region,
Germany showed sharp growth particularly due to Siemens Healthineers which doubled its revenue in the country through sales of rapid
coronavirus antigen tests. The other industrial businesses posted sizeable increases in Germany.
therein: emerging markets'
16
Combined Management Report
In the Americas, revenue was up in all four industrial businesses, led by Siemens Healthineers. As with orders, revenue was subject to
significantly negative currency translation effects, partly offset by portfolio effects related primarily to the acquisition of Varian. The pattern
of revenue growth in the U.S. was largely the same as for the region.
In Asia, Australia, Digital Industries, Siemens Healthineers and Smart Infrastructure all posted double-digit growth, while Mobility reported
a decline. Growth in the region was primarily due to increases in China and India.
4.2 Income
(in millions of €, earnings per share in €)
Digital Industries
15%
Smart Infrastructure
14,815
6%
(170)
As defined by the International Monetary Fund.
Fiscal year
% Change
2021
2020
Actual
Comp.
31,138
27,252
9%
14%
11,249
9,373
20%
16%
16,312
15,218
7%
10%
13,521
12,761
12%
Mobility
Siemens Healthineers
Industrial Business
7,560
17%
15.0%
14.3%
512
345
48%
(85)
(673)
87%
8,808
(1,739)
0%
7,496
5,502
36%
(1,861)
(1,346)
(38)%
5,636
4,156
36%
(1,731)
30%
2,184
2,847
Adjusted EBITA margin Industrial Business
Siemens Financial Services
Portfolio Companies
Reconciliation to Consolidated Financial Statements
Income from continuing operations before income taxes
Income tax expenses
Income from continuing operations
Income from discontinued operations, net of income taxes
Net income
Basic earnings per share
ROCE
Fiscal year
2021
2020
% Change
3,362
3,252
3%
1,743
1,302
34%
857
822
4%
44
(887)
3,024
325
In October 2021, Mobility closed the acquisition of SQCAP B.V. (Sqills), Netherlands, a provider of cloud-based inventory management,
reservation, and ticketing software for public transport operators to enhance its offerings that increase the availability, capacity and
utilization of public transportation. The purchase price is €537 million paid in cash plus a contingent consideration recognized at the
acquisition date at its maximum amount of €79 million. For further information see Note 34 in Notes to Consolidated Financial Statements
for fiscal 2021.
Markets served by Mobility grew moderately in fiscal 2021 as they partly recovered from impacts related to COVID-19. The market for
rolling stock saw large orders across all segments, especially for high-speed trains, commuter trains and locomotives. The rail infrastructure
market has seen growth both in urban and mainline segments due to the renewal and extension of mainline tracks and the ongoing trend
towards automatic train protection (ATP), including communications-based train control (CBTC) and European train control system (ETCS)
technologies. Service demand partly recovered from prior-year impacts related to COVID-19, due to growing installed bases which drove
a corresponding increase in the spare parts and maintenance market. On a geographic basis, market development in Europe continued to
be characterized by awards of mid-size to large orders, particularly in Germany, Denmark and in Switzerland. While demand in the Middle
East rose, demand in Africa was held back by ongoing uncertainties related to budget constraints and political climates. In the Americas
region, investment activities were driven by demand for urban and mainline transport, especially in the U.S. and Canada. Within the Asia,
Australia region, markets saw ongoing rail investments, particularly in China. For fiscal 2022, markets served by Mobility are expected to
further recover from impacts related to COVID-19 and to grow clearly, partly benefiting from fiscal stimulus and investment programs.
Mobility anticipates that rail operators in Europe, particularly in Germany and in the U.K., will continue making significant investments and
that customers in the Middle East and Africa will tender large turnkey systems, especially for additional rail lines in Egypt and Saudi Arabia.
Markets in the Americas region are expected to remain strong, especially due to ongoing investments in urban and mainline transport and
large investment programs dedicated to transportation and enhancements of existing infrastructure in the U.S. In China, investments in
high-speed trains, urban transport, freight logistics and rail infrastructure are expected to continue to drive growth. In India, privatization
is expected to drive infrastructure enhancements and upgrades and to lead to strong market growth through investments in mainline
(high-speed, freight infrastructure, additional rolling stock), urban metro and rail electrification with ambitious electrification targets for
the broad-gauge network. Despite an adverse short-term impact from COVID-19, rail transport and intermodal mobility solutions are
expected to remain a high priority as urbanization continues to progress around the world. In emerging countries, rising incomes are
expected to result in greater demand for public transport solutions.
Orders grew on sharply higher volume from large orders, which Mobility won across the three reporting regions, highlighted by a €2.8
billion order for trainsets including dual powered and hybrid battery vehicles and associated services in the U.S., Mobility's largest-ever
order in the Americas. Large contract wins in the region Europe, C.I.S., Africa, Middle East included an order for passenger coaches in the
Czech Republic, an order for regional trains in Austria and an order for light rail vehicles in Germany, each worth €0.4 billion, and in the
region Asia, Australia a €0.2 billion order for a signaling system in Taiwan. Revenue growth was driven by the rail infrastructure business,
including significant growth in its mainline activities. On a geographic basis, revenue rose in the Americas due particularly to a significant
growth contribution from the U.S., and in the region Europa, C.I.S., Africa, Middle East, including clear growth in Germany. These increases
were only partly offset by lower revenue in the region Asia, Australia. Adjusted EBITA rose in the majority of the businesses, most strongly
in the rail infrastructure business. For Mobility overall, impacts related to COVID-19, such as measures in the rolling stock business to
safeguard employee health in manufacturing facilities, held back revenue and Adjusted EBITA growth, albeit to a lesser extent than a year
earlier. Severance charges were €22 million, compared to €20 million a year earlier. Mobility's order backlog reached €36 billion at the
end of the fiscal year, of which €9 billion are expected to be converted into revenue in fiscal 2022.
Adjusted EBITA margin
9.1%
9.3%
4%
822
857
3%
3.5 Siemens Healthineers
2%
1,416
3%
2%
9,052
9,232
41%
38%
9,169
12,696
Comp.
1,392
% Change
Actual
Siemens is majority shareholder in the publicly listed Siemens Healthineers AG, Germany (Siemens Healthineers). Siemens Healthineers
is a global provider of healthcare solutions and services. It develops, manufactures, and sells a diverse range of innovative diagnostic and
therapeutic products and services to healthcare providers. In addition, it also provides clinical consulting services, complemented by
extensive training and service offerings. This comprehensive portfolio supports customers all along the care continuum, from prevention
and early detection to diagnosis, treatment, and follow-up care. The customer spectrum ranges from public and private healthcare
providers, including hospitals and hospital systems, public and private clinics and laboratories, universities, physicians/physician groups,
public health agencies, state-run and private health insurers, to pharmaceutical companies and clinical research institutes. The imaging
business provides imaging products, services and solutions. Its most important products are equipment for magnetic resonance, computed
tomography, X-ray systems, molecular imaging, and ultrasound. The diagnostics business offers in-vitro diagnostic products and services
to healthcare providers in laboratory, molecular and point-of-care diagnostics. The portfolio of the advanced therapies business consists
of highly integrated products, solutions and services across multiple clinical fields that are designed to support image-guided minimally
invasive treatments, in areas such as cardiology, interventional radiology and surgery. On April 15, 2021, Siemens acquired Varian, which
is active in the field of cancer care, with solutions especially in radiation oncology and related digital solutions and applications. Varian
thus offers a good complement to Siemens Healthineers' businesses in medical imaging, laboratory diagnostics and interventional
procedures. The purchase price paid in cash amounted to USD 16.4 billion (€13.9 billion as of the acquisition date). To partially finance
this acquisition, Siemens Healthineers carried out a capital increase during fiscal 2021 without the participation of Siemens, consequently
Combined Management Report
2,847
15.8%
19%
24%
14,460
17,997
18%
26%
16,163
20,320
Comp.
(435)
Actual
% Change
Fiscal year
2021
Adjusted EBITA margin
Adjusted EBITA
Revenue
Orders
(in millions of €)
R&D activities at Siemens Healthineers are aimed at delivering innovative, sustainable solutions to its customers while safeguarding and
improving its competitiveness. Particularly in the field of digitalization and artificial intelligence, it has further expanded its activities and
has 67 products and applications on the market that are designed to further improve its customers' productivity, while enabling clinical
decisions to be more precise and tailored to the individual patient. Furthermore, Siemens Healthineers is continuously expanding its
portfolio of digital services to support customers in their transition to value-based care. The teamplay digital health platform brings
together data, applications and services to make better decisions for patients in an efficient way. In addition, in fiscal 2021 Siemens
Healthineers extended its portfolio in the field of cancer care with the Varian acquisition. The combined company pursues an intelligent
cancer care strategy, harnessing advanced technologies such as Al and data analytics to improve cancer treatment and expand global
access to cancer care. In addition to continually updating its portfolio, Siemens Healthineers also improves existing products and solutions.
Siemens Healthineers focuses its investments mainly on enhancing competitiveness and innovation. The main capital expenditures were
for spending for factories to expand manufacturing and technical capabilities, in particular in China and the U.S., and for additions to
intangible assets, including capitalized development expenses within the Atellica Solution and Central Lab product lines.
The addressable markets of Siemens Healthineers are shaped by four major trends. The first is demographic, in particular the growing and
aging global population. This trend poses major challenges for global healthcare systems and, at the same time, offers opportunities for
players in the healthcare industry as the demand for cost-efficient healthcare solutions continues to intensify. The second trend is
economic development in emerging countries, which opens up improved access to healthcare for many people. Significant investment in
the expansion of private and public healthcare systems will persist, driving overall demand for healthcare products and services and hence
market growth. The third trend is the increase in chronic diseases as a consequence of an aging population and environmental and lifestyle-
related changes. This trend results in far more patients with multiple morbidities, putting further pressure on healthcare systems and
leading to higher costs; it also increases the need for new, more timely ways to detect and treat diseases. The fourth global trend, the
transformation of healthcare providers, results from a combination of societal and market forces that are driving healthcare providers to
operate and organize their businesses differently. Increasing cost pressure on the healthcare sector is prompting the introduction of new
remuneration models for healthcare services, such as value-based rather than treatment-based reimbursement. Digitalization and artificial
intelligence are thereby likely to be key enablers for healthcare providers as they increasingly focus on enhancing the overall patient
experience, with better outcomes and overall reduction in cost of care. This development is driven partly by society's increasing resistance
to healthcare costs, payers' increasing professionalization, burdens from chronic disease, rapid scientific progress and staff shortages. As
a result of these factors, healthcare providers are consolidating into networked structures, resulting in larger clinic and laboratory chains,
often operating internationally, which act increasingly like large corporations. Applying this industrial logic to the healthcare market can
lead to systematic improvements in quality, while at the same time reducing costs.
reducing Siemens' stake in Siemens Healthineers from about 79% to slightly over 75%. Competition in the imaging, Varian and advanced
therapies businesses consists mainly of a small number of large multinational companies, while the diagnostics market is fragmented with
a variety of global players that compete with each other across market segments and also with several regional players and specialized
companies in niche technologies. The business activities of Siemens Healthineers are to a certain extent resilient to short-term economic
trends because large portions of its revenue stem from recurring business. They are, however, directly and indirectly dependent on trends
in healthcare markets and on developments in health policy, and geopolitical developments around the world.
2020
2020
2021
Fiscal year
14,323
15,015
12%
9%
14,734
16,071
Comp.
% Change
Actual
2020
Fiscal year
2021
5%
Adjusted EBITA margin
therein: products business
Revenue
Orders
(in millions of €)
Smart Infrastructure's R&D activities focus on sustainable and decarbonized infrastructures in electrification, distribution grids and
buildings. It develops digital offerings for the energy market such as for integrating renewable energy into conventional grids.
Furthermore, R&D efforts strengthen Smart Infrastructure's capabilities to create comfortable, safe and energy-efficient buildings and
infrastructures that support increased efficiency for occupants, equipment and the use of building space. Smart Infrastructure is expanding
its digital offerings such as cloud solutions using field data from controllers and loT devices. Furthermore, it develops technologies for
environmentally friendly and increasingly renewable-based energy systems, ranging from photovoltaic and battery storage inverters to
charging solutions for e-mobility. In this regard, data from field devices is the basis for intelligent grid control and protection, providing
grid stability and flexibility and continuously matching energy supply and demand while protecting grid assets. For electrical distribution
systems and industrial plants, Smart Infrastructure continuously drives digitalization of its switching and control products with built-in
intelligence, connectivity to the cloud, and increasingly remote diagnostics and edge computing capability. Its digital twins of products,
building systems or grids deliver customer value from online configuration and parametrization, to operation, to maintenance planning.
Smart Infrastructure also develops data-driven applications and digital services. To a large extent, its capital expenditures relate to the
products businesses. Main investment areas are replacement of fixed assets and further digitalization of factories and technical
equipment, with a strong focus on innovation.
Smart Infrastructure's customer base is diverse. It encompasses infrastructure developers, construction companies and contractors;
owners, operators and tenants of both public and commercial buildings including hospitals, campuses, airports and data centers;
companies in heavy industries such as oil and gas, mining and chemicals; companies in discrete manufacturing industries such as
automotive and machine building; and utilities and power grid network operators (transmission and distribution). Smart Infrastructure
serves its customers through a broad range of channels, including its global sales organization, distributors and partners such as panel
builders, original equipment manufacturers (OEM) and value-added resellers and installers, all complemented by direct sales such as
through the branch offices of its regional solutions and services units worldwide and e-commerce channels. Smart Infrastructure's principal
competitors consist mainly of large multinational companies and smaller manufacturers in emerging countries. Its solutions and services
business also competes with local players such as system integrators and facility management firms. Smart Infrastructure's businesses are
impacted by changes in the overall economic environment to varying degrees, depending on customer segment. While customer demand
in discrete manufacturing industries changes quickly and strongly with macroeconomic cycles, it reacts more slowly in infrastructure,
construction, heavy industries and the utilities sector. The building solutions business in particular is affected by economic cycles in the
non-residential building construction markets with a time lag of two to four quarters. Overall, Smart Infrastructure has developed a
balanced and resilient business mix with its diversified regional and vertical markets; its range of products, systems, solutions and services;
and its participation in both long- and short-cycle markets. To further strengthen the resilience of its portfolio, Smart Infrastructure aims
at increasing the share of service revenue and beginning with fiscal 2022 will report revenue generated from service activities.
Smart Infrastructure benefits from a number of favorable trends. These include urbanization, demographic change, climate change, and
digitalization. Urbanization and demographic change drive a need for smarter and more human-centric buildings. Climate change drives
the need for decarbonization. This results in an increasing demand for flexible and resilient energy infrastructures and rapid growth in
electric mobility. Digitalization is an enabler for such changes in both buildings and grids, making it possible to develop smarter buildings
and manage electricity distribution with a higher share of renewables. The markets served are experiencing shifts that present
opportunities where building technologies and electrification meet.
Smart Infrastructure offers products, systems, solutions, services and software to support a sustainable transition in energy generation
sources, from fossil to renewable and a transition to smarter, more sustainable buildings and communities. This versatile portfolio is
structured into three businesses: buildings, electrification and electrical products. The buildings business addresses the needs of operators,
owners, occupants and users of buildings. It spans integrated building management systems and software; heating, ventilation and air
conditioning (HVAC) controls; fire safety and security products and systems; and solutions and services such as energy and performance
services. The electrification business makes grids more resilient, flexible and efficient. Its offerings cover grid simulation, operation and
control software; substation automation and protection; medium-voltage primary and secondary switchgear (including SF6-free medium-
voltage switchgear); and low-voltage switchboards and eMobility charging infrastructure. The electrical products business supplies
electrification and buildings. Its offerings include low-voltage switching, measuring and control equipment; low-voltage distribution
systems and switchgear; and circuit breakers, contactors and switching for medium-voltage. In fiscal 2021, Smart Infrastructure acquired
C&S Electric Limited (C&S Electric), India, a provider of electrical and electronic equipment for infrastructure, power generation,
transmission and distribution to strengthen its position in India as a supplier of low-voltage power distribution and electrical installation
technology.
3.3 Smart Infrastructure
quarters. Digital Industries expects its primary markets, as described above, to show clear growth in fiscal 2022, with somewhat diminished
momentum compared to fiscal 2021 and more geographic balance among the three reporting regions.
Combined Management Report
Adjusted EBITA
8%
5,769
5,182
Adjusted EBITA
therein: service business
Revenue
Orders
(in millions of €)
connectivity, simulation and digital twin, data analytics and Al, additive manufacturing and software systems and processes. Mobility's
investments focus mainly on maintaining or enhancing its production facilities, on meeting project demands and enhancing its depot
services.
Combined Management Report
10
Mobility's R&D strategy is focused on making trains and infrastructures more intelligent, thereby increasing its customers' return on
investment, improving the passenger experience, and guaranteeing availability. Decarbonization and seamlessly connected (e-)mobility
are also key factors for the future of transportation. Mobility's major R&D areas include the development of efficient vehicle platforms with
optimized lifecycle cost and maximum customization flexibility; eco-friendly, alternative power supplies for trains (batteries, hydrogen,
dual mode) and trucks (eHighway); digital services for railways via its Railigent application suite; "signaling in the cloud," a new system
architecture for rail infrastructure and loT/cloud-based technologies; solutions for more automated and autonomous driving for rail and
road; innovative brake monitoring systems for freight trains; and digital technologies and loT solutions including cyber security,
The main trends driving Mobility's markets are urbanization and the need to reduce emissions, particularly from transportation. Increasing
populations in urban centers need daily mobility that is simpler, faster, and more flexible, reliable and affordable. At the same time, cities
and national economies face the challenge of cutting CO₂ and noise emissions and reducing space requirements and costs of
transportation. The pressure on mobility providers to meet all these needs is expected to rise continuously. Furthermore, improving
availability, connectivity, and sustainability of rail infrastructures increasingly requires digital solutions, which provide growth
opportunities. While a significant drop in ridership driven by COVID-19 has strongly impacted mobility operators, overall trends towards
urbanization and decarbonization persist unchanged and recovery programs in many countries have been allocating significant funds to
rail and public transport operators to address these trends.
Mobility sells its products, systems and solutions through its worldwide network of sales units. The principal customers of Mobility are
public and state-owned companies in the transportation and logistics sectors, so its markets are driven primarily by public spending.
Customers usually have multi-year planning and implementation horizons, and their contract tenders therefore tend to be independent
of short-term economic trends. Large contracts in the rolling stock and the rail infrastructure business are often awarded together with
service contracts, which start to generate revenue only after the respective products and solutions have been put in operation, which can
be a number of years after the contract award. Mobility's principal competitors are multinational companies. Consolidation among
Mobility's competitors is continuing: In January 2021, Alstom SA of France announced the closing of the acquisition of Bombardier
Transportation. In August 2021, Hitachi Ltd., Japan, announced an agreement of Hitachi Rail to acquire the Ground Transportation Systems
business of Thales. Market consolidation may lead to increased competitive pressure within the rail supply industry and also to fewer
sourcing options for rail customers.
Mobility combines all Siemens businesses in the area of passenger and freight transportation. Within its rolling stock business, its offerings
encompass trains for urban and regional transport such as vehicles for metro systems, trams and light rail, and commuter trains as well as
trains and passenger coaches for intercity and long-distance services, such as high-speed rail. Rolling stock offerings furthermore include
locomotives for freight or passenger transport and solutions for automated transportation such as automated people movers. Offerings in
its rail infrastructure business include products and solutions for rail automation, such as automatic train control systems, interlocking,
operations control and telematic systems, digital station solutions and railway communication systems, signaling on-board and crossing
products and yard and depot solutions; for electrification such as AC and DC traction power supply, contact lines and network control; and
intermodal solutions, such as platforms for fleet management, route planning, ticketing and payments solutions and data analytics. With
its service business, Mobility provides customer services for rolling stock and rail infrastructure throughout the entire lifecycle, such as
maintenance and digital services. In its turnkey business, it bundles consulting, planning, financing, construction, service and operation
of completed mobility systems. Its intelligent traffic systems business provides solutions for traffic management such as autonomous
driving, eHighway systems and tolling solutions. During fiscal 2021, Mobility carved out the intelligent traffic systems business to form a
separately managed entity, which operates under the brand name Yunex Traffic.
3.4 Mobility
Overall, markets served by Smart Infrastructure grew moderately in fiscal 2021, experiencing a recovery from COVID-19-related effects
that had a strong impact on most customer industries a year earlier. Industrial markets developed well, with strong growth in the machine
building and pharmaceutical industries, followed by the automotive, food and beverage, oil and gas and chemicals industries. Grid markets
grew clearly as utilities continued to prioritize investments in making legacy networks more automated, intelligent, flexible and reliable.
Ongoing strong demand for remote working and cloud services resulted in strong growth in the data center market. Conditions in non-
residential construction markets were challenging, while residential construction markets, in which Smart Infrastructure has a significantly
lower exposure, grew strongly. On a geographic basis, market growth in fiscal 2021 was mainly driven by the region Asia, Australia, which
recovered earlier from impacts related to COVID-19, while market volume in the Americas declined. Smart Infrastructure also experienced
a number of supply chain constraints, especially in the areas of base metals (copper, aluminum, steel), plastics, semiconductors and
transportation services. Whereas the management of these constraints required additional effort, Smart Infrastructure's supply chains have
proven to be resilient, so that major interruptions could be avoided and delivery ability was maintained. In fiscal 2022, markets served by
Smart Infrastructure are expected to grow slightly faster than in fiscal 2021. Demand from the pharmaceutical industry, data centers and
utilities are expected to be main growth drivers, while growth rates of the non-residential construction markets are expected to come in
below the average growth of markets served by Smart Infrastructure. On a geographic basis, Asia, Australia is expected to continue to be
the fastest-growing region. Growth in the region Europe, C.I.S., Africa, Middle East is expected to accelerate and markets in the region
Americas are expected to return to growth.
and services business was due to negative currency translation effects. Despite more challenging supply conditions, Smart Infrastructure
maintained its delivery capacity by successfully avoiding major supply chain disruptions. On a geographic basis, orders and revenue were
up in all regions, with double-digit volume growth in the region Asia, Australia including a particularly strong contribution from China.
Volume growth in the Americas included strong demand from residential markets in the U.S. Overall, growth in this region was sharply
impacted by negative currency translation effects, which eased towards the end of the fiscal year. Adjusted EBITA and profitability rose
in all businesses, with the strongest growth contributions coming from the products business and the systems business on higher revenue
and increased capacity utilization. Adjusted EBITA overall rose also due to cost savings related to prior execution of Smart Infrastructure's
competitiveness program, while severance associated with the program fell sharply, to €47 million from €195 million a year earlier.
Particularly during the first half of fiscal 2021, Adjusted EBITA development benefited from expense reductions year-over-year related to
COVID-19 restrictions. These effects were only partly offset by negative currency effects. For comparison, Adjusted EBITA in fiscal 2020
benefited from a €159 million gain from the sale of a business. Smart Infrastructure's order backlog was €11 billion at the end of the fiscal
year, of which €7 billion are expected to be converted into revenue in fiscal 2022.
Combined Management Report
9
Orders at Smart Infrastructure rose in all businesses on broad-based improvements in its main customer markets. The strongest growth
contributions came from the products business, which saw a clear recovery in demand from industrial customers, and from the systems
business, which won a number of significant contracts including orders from semiconductor manufacturers in the U.S. Orders in the
solutions and services business grew slightly as the business saw first signs of recovery in relevant markets towards the end of the fiscal
year. Revenue growth also was driven mainly by the products business and the systems business, while a slight decline in the solutions
34%
1,302
9.1%
1,743
11.6%
15%
11%
2,184
30%
11
In fiscal 2021, Siemens Healthineers recorded double-digit growth both in orders and revenue, with both metrics developing similarly.
While all businesses contributed to growth, the increases were highest in the diagnostics and imaging businesses. On a geographic basis,
growth was particularly strong in the region Europe, C.I.S. Africa, Middle East. The reporting regions Asia, Australia and Americas also saw
double-digit increases, the latter one despite significant currency translation effects. Portfolio effects primarily following the acquisition
of Varian added twelve percentage points to order growth and nine percentage points to revenue growth. Adjusted EBITA was
substantially higher year-over-year, due primarily to strong earnings development in the diagnostics business that was driven by high
demand for rapid coronavirus antigen tests. The imaging business again posted strong earnings, which were higher than in the prior year.
Varian delivered a positive contribution to earnings on an operating basis. In contrast, Adjusted EBITA in the advanced therapies business
was lower year-over-year. Adjusted EBITA included subsequent measurement effects from purchase price allocation related to the Varian
acquisition totaling €0.1 billion and expenses totaling €0.1 billion related to the closing of the Varian transaction and its ongoing
integration. Profitability was also burdened by negative currency effects. Severance charges were €68 million in fiscal 2021 and €65 million
in fiscal 2020. The order backlog for Siemens Healthineers was €27 billion at the end of the fiscal year, of which €9 billion are expected to
be converted into revenue in fiscal 2022.
(5)%
15.1%
3,058
20%
16%
3,516
Comp.
% Change
Actual
(2)%
2020
Fiscal year
Adjusted EBITA margin
Adjusted EBITA
Revenue
Orders
(in millions of €)
Demand within the industries served by Portfolio Companies mainly shows a delayed response to changes in the overall economic
environment. The results of fully consolidated units are strongly dependent, however, on customer investment cycles in their key
industries. In commodity-based industries such as oil and gas or mining, these cycles are driven mainly by commodity price fluctuations
rather than changes in produced volumes. The broad range of fully consolidated units and their heterogonous industrial customer base
are reflected in the use of various sales and marketing channels, requiring a dedicated sales approach based on in-depth understanding
of specific industries and customer requests.
After this disposal, Portfolio Companies consists mainly of three fully consolidated, separately managed units at the end of fiscal 2021.
Large Drives Applications, which offers electric motors, converters and solutions for mining, will be carved out beginning with fiscal 2022
to increase its entrepreneurial freedom and thereby unlock its full potential. Similarly, Siemens Logistics, which offers sorting technology
and solutions, will be reorganized to separate its mail and parcel activities from its airport logistics activities, which focuses on baggage
and cargo handling. The third fully consolidated unit, Siemens Energy Assets, comprises certain regional remaining business activities of
the former Gas and Power segment; as part of the Siemens Energy carve-out these activities remained with Siemens due to country-specific
regulatory restrictions or economic considerations. Portfolio Companies also holds an at-equity investment in Valeo Siemens eAutomotive
GmbH.
2021
(85)
(673)
87%
94
(24)
(396)
2020
2021
Fiscal year
Eliminations, Corporate Treasury and other reconciling items
Reconciliation to Consolidated Financial Statements
Amortization of intangible assets acquired in business combinations
Centrally carried pension expense
Corporate items
Siemens Real Estate
Siemens Energy Investment
(in millions of €)
Profit
3.8 Reconciliation to Consolidated Financial Statements
Although the broad range of businesses are operating in diverse markets, overall the main markets served by Portfolio Companies are
generally impacted by uncertainties regarding geopolitical and economic developments and by cautiousness of investment sentiment.
However, ongoing recovery is expected to continue in most end-customer vertical markets in fiscal 2022.
Even though volume development was held back by adverse currency translation effects and impacts related to COVID-19, orders still
increased significantly, driven by Siemens Logistics and Large Drives Applications. However, Portfolio Companies recorded lower revenue
compared to fiscal 2020, as Large Drives Applications in particular could not offset these headwinds. Fully consolidated units made good
progress with profitability and delivered overall a sharply improved earnings performance, even though Portfolio Companies recorded
higher severance charges of €74 million, up from €21 million in fiscal 2020, related to cost structure improvement measures mainly at
Large Drives Applications. A positive Adjusted EBITA for fully consolidated units was more than offset by continued negative results from
the at-equity investment in Valeo Siemens eAutomotive GmbH. For comparison, fiscal 2020 included an impairment of €453 million on
the at-equity investment and a goodwill impairment of €99 million related to Siemens Energy Assets. Portfolio Companies' order backlog
was €4 billion at the end of fiscal 2021, of which €2 billion was expected to be converted into revenue in fiscal 2022.
(2.8)%
(21.0)%
Combined Management Report
13
3,209
Combined Management Report
The increase in total assets since the end of fiscal 2020 was due to growth in the debt business and positive currency translation effects.
Net cash from operations (defined as the sum of cash flows from operating and investing activities) amounted to €105 million compared
to €(284) million in fiscal 2020. In fiscal 2021 and fiscal 2020, net cash from operations comprised Free cash flow of €820 million and
€611 million, respectively, and remaining cash flows from investing activities, including from change in receivables from financing
activities, of €(715) million and €(895) million, respectively.
A high earnings contribution from the debt business resulted in a sharp increase in Earnings before taxes and was also the main factor
for the increase of the ROE. The improvement was due mainly to sharply lower expenses for credit risk provisions compared to fiscal 2020,
when results were significantly influenced by effects related to COVID-19. However, results from the equity business were affected by high
ongoing uncertainty in the macroeconomic environment. Additionally, sales of investments in the previous fiscal year lifted profit for that
period. This led also, along with seasonal effects on offshore wind-farm projects, to a lower share of profit from investments accounted
for using the equity method in fiscal 2021. For comparison, results in the equity business in fiscal 2020 included a loss of €98 million from
an impairment of an equity investment in the U.S.
28,946
2020
Sep 30,
2021
30,384
(in millions of €)
Total assets
11.7%
15.4%
82
49
345
SFS is de-risking its business profile by reducing exposure in connection with energy-related equity investments as a consequence of the
spin-off of Siemens Energy. This has the additional benefit of more tightly focusing SFS's business scope and capital allocation on areas of
intense domain know-how closely aligned with Siemens' customers and markets, particularly for Digital Industries, Smart Infrastructure
and Mobility. Accordingly, SFS is influenced by the business development of the markets served by our industrial businesses, among other
factors, including effects related to COVID-19. In addition to its high level of diversification across industries, SFS has a strong regional
footprint in investment-grade countries, with the highest share in the U.S. SFS intends to maintain a highly diversified portfolio across
regions, while participating in the strong economic development of selected Asian markets.
512
2021
Fiscal year
ROE (after taxes)
therein: equity business
Earnings before taxes (EBT)
(in millions of €)
Siemens Financial Services provides financing solutions for Siemens' customers as well as other companies in the form of debt and equity
investments. Based on its comprehensive financing know-how and specialist technology expertise in the areas of Siemens businesses, SFS
supports its customers' investments with leasing, lending and working capital financing solutions as well as equipment, project and
structured financing. In addition, SFS supports Siemens' industrial businesses via a joint go-to-market that includes SFS's risk management
expertise, such as to assess the risk profiles of projects or business models. Furthermore, SFS collaborates with the industrial businesses
to co-develop new digital business models. Recent examples include energy as a service or pay-per-use and pay-for-outcome options that
give customers more financial flexibility.
3.6 Siemens Financial Services
Markets addressed by the imaging business grew significantly, mainly due to large COVID 19-driven demand for computer tomography
systems and initial signs of normalization in all other modalities. For the Imaging market, it is expected that a normalization of growth to
pre-COVID-19 levels will occur in fiscal year 2022. In the diagnostics business, the markets for point-of-care tests for patient monitoring
and for lab tests increased in fiscal 2021. On the one hand, the backlog of purchasing decisions and capital expenditure by laboratories
and hospitals from the previous year dissipated while, on the other, demand for certain diagnostic reagents, particularly tests for routine
care, increased. The markets for combating the COVID-19 pandemic posted sharp growth. Vaccination rates in the population and further
COVID-19 implications such as future waves and testing guidelines are key factors for determining expected growth in the market for the
diagnostics business. Siemens Healthineers expects demand for tests for acute infection with SARS-CoV-2 to decrease sharply. In the Varian
business, growth was driven primarily by new and replacement business. In markets such as the U.S. and Western Europe, product
innovations led to higher customer investment. The market for Varian is expected to continue to grow throughout fiscal 2022. The recovery
in the advanced therapies markets was made possible through a combination of a resumption in elective surgical procedures and the
gradual return of patients. The expectation is that the slight market recovery already seen in fiscal 2021 will continue on a broad basis in
fiscal 2022.
12
In general, the markets addressed by Siemens Healthineers showed significant growth in fiscal 2021. Nearly two years after the first case
of COVID-19 was identified, the virus continues to impact health systems worldwide. Competition among the leading healthcare
companies remained at elevated high levels. While the long-term market trends generally remained intact, the COVID-19 pandemic did
reinforce some of these trends and has, for example, raised the already increasing cost pressure on health systems and customers to
unprecedented levels. Especially in countries with severe COVID-19 outbreaks such as the U.S., India, and Brazil, a significant impact on
healthcare economics was apparent in the form of additional cost increases combined with simultaneous revenue losses for hospitals.
Staff shortages became more acute, leading to significant care disruptions at many hospitals and overburdening healthcare systems. The
pandemic served to drive efforts toward innovation and digital transformation in healthcare. From a regional perspective, China is one of
the biggest markets for medical technology and a major incremental growth driver. In the course of the last fiscal year, China's healthcare
market recovered almost fully from effects related to the coronavirus pandemic during the fiscal year. In the region Europe, C.I.S., Africa,
Middle East, public investment programs as well as a rise in COVID-19-related demand helped drive a market rise in several countries. The
private market also began to recover. In the U.S., business began to return to normal as progress was made in the vaccination campaign.
2020
3.7 Portfolio Companies
Sep 30,
Portfolio Companies comprise businesses which deliver a broad range of customized and application-specific products, software,
solutions, systems and services for different industries including oil and gas, chemical, mining, cement, logistics, energy, marine, water
and fiber. Unrealized potential within these businesses requires adjustment in their approach using defined measures including internal
re-organization, digitalization, cost improvements, and optimizing procurement, production and service activities. After achieving certain
threshold performance targets, businesses may be transferred to one of Siemens industrial businesses, combined with an external business
from the same industry, sold or placed into an external private equity partnership.
In March 2021 Siemens sold Flender GmbH, Germany, (Flender) to Carlyle Group Inc., U.S. During the first quarter of fiscal 2021 the
businesses of Flender (previously reported in Portfolio Companies) were classified as held for disposal and discontinued operations. Prior-
period amounts are presented on a comparable basis. For further information see Note 3 in Notes to Consolidated Financial Statements
for fiscal 2021.
pursuant to Sections 289f and 315d
of the German Commercial Code
Statement
Corporate Governance
FISCAL 2021 9
fications and experience that he or she has acquired
over many years in management positions within the
Siemens Group. With regard to the number of man-
dates accepted by Managing Board and Supervisory
Board members, an assessment is also to be possible
in each individual case in order to determine if the
number of accepted mandates relevant within the
meaning of the Code is deemed appropriate. This as-
sessment is to consider the expected personal work-
load caused by the accepted mandates, which can
vary from mandate to mandate.
Report of the Supervisory Board
Chairman
Following the regular departure of Werner Wenning,
the previous, long-serving Chairman of the Compen-
sation Committee of the Supervisory Board of
Siemens AG, from the Supervisory Board and thereby
also from the Compensation Committee, the Compen-
sation Committee elected Michael Diekmann to serve
2. Compensation Report/
3. Information on corporate
as its new Chairman, effective February 4, 2021. governance practices
Mr. Diekmann has been a member of the Supervisory
Board of Siemens AG since January 24, 2008, and is
therefore not regarded as independent in terms of the
Code's independence indicators. In the view of the
Compensation Committee, however, Mr. Diekmann is
currently the most suitable candidate for the position
of Chairman because of his professional experience -
due, among other things, to his many years of work
on the Compensation Committee and because his
election will help ensure continuity in the Commit-
tee's work.
Berlin and Munich, October 1, 2021
Siemens Aktiengesellschaft
-
The Managing Board The Supervisory Board"
The current Declaration of Conformity and the Declara-
tions of Conformity of the previous five years are avail-
able on the Siemens Global Website at www.SIEMENS.
SIEMENS
The current compensation system for the Managing
Board members pursuant to Section 87a para. 1 and 2
sent. 1 of the German Stock Corporation Act, which was
endorsed by the Annual Shareholders' Meeting on Febru-
ary 2, 2020, and the decision of the Annual Shareholders'
Meeting on February 3, 2021, pursuant to Section 113
para. 3 of the German Stock Corporation Act regarding
the compensation of the Supervisory Board members are
publicly available on the Siemens Global Website at
WWW.SIEMENS.COM/CORPORATE-GOVERNANCE. The Compen-
sation Report and the Independent Auditor's Report in
accordance with Section 162 of the German Stock Cor-
poration Act are publicly available at the same Internet
address.
Corporate Governance Statement
Corporate Governance Statement
qualifications and experience of the Managing Board
Corporate Governance Statement
2
Instead of regarding the recommended maximum pe-
riod of the first-time appointment of Managing Board
members and the recommended maximum number
of mandates for Managing Board and Supervisory
Board members as rigid upper limits, an assessment is
to be possible in each individual case. While the period
of the first-time appointment of a Managing Board
member shall not, as a rule, exceed three years, an
assessment is to be possible in each individual case in
order to determine what period of appointment is
deemed appropriate within the legally permissible pe-
riod. This assessment is to consider the individual
COM/DECLARATION OF CONFORMITY.
→ Siemens AG does not comply with the recommen-
dation in C.10 sent. 1 variant 3. According to this
recommendation, the chair of the committee that
addresses Managing Board compensation shall
be independent from the company and the Man-
aging Board.
member to be appointed and, in particular, the quali- Compensation system
pursuant to Sections 289f and 315d
of the German Commercial Code
→ Siemens AG does not comply with the recommen-
dations in C.4 and C.5. According to the recom-
mendation in C.4, a Supervisory Board member
who is not a member of any Managing Board of a
listed company shall not accept more than five
Supervisory Board mandates at non-group listed
companies or comparable functions, with an ap-
pointment as chair of the Supervisory Board being
counted twice. According to the recommendation
in C.5, members of the Managing Board of a listed
company shall not have, in aggregate, more than
two Supervisory Board mandates in non-group
listed companies or comparable functions and shall
not accept the chairmanship of a Supervisory Board
in a non-group listed company.
Since making its last Declaration of Conformity dated
February 4, 2021, Siemens AG has complied, and will
continue to comply, with all the recommendations of
the Government Commission on the German Corpo-
rate Governance Code in the version of December 16,
2019 ('Code') published by the Federal Ministry of
Justice and Consumer Protection in the official section
of the Federal Gazette (Bundesanzeiger), with the fol-
lowing exceptions:
"Declaration of Conformity by the Managing Board and
the Supervisory Board of Siemens Aktiengesellschaft
with the German Corporate Governance Code pursu-
ant to Section 161 of the German Stock Corporation Act
The Managing Board and the Supervisory Board of
Siemens AG approved the following Declaration of Con-
formity pursuant to Section 161 of the German Stock Cor-
poration Act (Aktiengesetz, AktG) as of October 1, 2021:
1. Declaration of Conformity
with the German Corporate
Governance Code
-
CORPORATE-GOVERNANCE.
In this Statement, the Managing Board and the Super-
visory Board report as of November 8, 2021, on corporate
governance at the Company in fiscal 2021 (October 1,
2020, to September 30, 2021) pursuant to Sections 289f
and 315d of the German Commercial Code (Handels-
gesetzbuch, HGB) and as prescribed in Principle 22 of the
German Corporate Governance Code ("Code"). Further
information regarding corporate governance – for exam-
ple, the Bylaws for the Supervisory Board, the Bylaws
for the Managing Board, the bylaws for the Supervisory
Board committees and the Corporate Governance State-
ments of the previous fiscal years is also available
on the Siemens Global Website at www.SIEMENS.COM/
→ Siemens AG does not comply with the recommen-
dation in B.3. According to this recommendation,
the first-time appointment of Managing Board
members shall be for a period of not more than
three years.
Suggestions of the Code
Corporate Governance Statement
According to the suggestion in A.5 of the Code, in the
case of a takeover event, the Managing Board should
convene an Extraordinary General Meeting at which
shareholders will discuss the takeover offer and may
decide on corporate actions. The convening of a share-
holders' meeting - even taking into account the short-
ened time limits stipulated in the German Securities
Acquisition and Takeover Act (Wertpapiererwerbs- und
Übernahmegesetz, WpÜG) – is an organizational chal-
lenge for large publicly listed companies. It appears
doubtful whether the associated effort is justified also
in cases where no relevant decisions by the sharehold-
ers' meeting are intended. Therefore, extraordinary
shareholders' meetings shall be convened only in appro-
priate cases.
As a rule, the portfolio assigned to an individual member
is that member's own responsibility. Activities and trans-
actions in a particular Managing Board portfolio that are
considered to be extraordinarily important for the Com-
pany or associated with an extraordinary economic risk
require the prior consent of the full Managing Board. The
same applies to activities and transactions for which the
President and CEO or another member of the Managing
The Supervisory Board has issued Bylaws for the Manag-
ing Board that contain the assignment of different port-
folios and the rules for cooperation both within the Man-
aging Board and between the Managing Board and the
Supervisory Board as well as rules for the so-called Equity
Investments. In accordance with these Bylaws, the Man-
aging Board is divided into the portfolio of the President
and CEO and a variety of Managing Board portfolios. The
Managing Board members responsible for the individual
Managing Board portfolios are defined in a business as-
signment plan that is determined by the Supervisory Board.
As the Managing Board member with responsibility for
the People & Organization portfolio, the Labor Director
(Arbeitsdirektor) is appointed in accordance with the re-
quirements of Section 33 of the German Codetermina-
tion Act (Mitbestimmungsgesetz, MitbestG). While the
first-time appointment of Managing Board members is
not, as a rule, to exceed a period of three years, an assess-
ment is to be made in each individual case in order to
determine what period of appointment is deemed appro-
priate within the legally permissible period. This matter is
explained in greater detail in Section 1 of this Corporate
Governance Statement.
www.SIEMENS.COM/
SUSTAINABILITYINFORMATION.
4. Description of the operation
of the Managing Board and the
Supervisory Board and of the
composition and operation of
their committees
Siemens AG is subject to German corporate law. There-
fore, it has a two-tier board structure, consisting of a
Managing Board and a Supervisory Board. The duties and
powers of the Managing Board and the Supervisory
Board as well as the regulations regarding their operation
and composition are defined primarily by the German
Stock Corporation Act, the Articles of Association of
Siemens AG and the bylaws for the Company's governing
bodies. The Articles of Association of Siemens AG,
the Bylaws for the Managing Board, the Bylaws for
the Supervisory Board and the bylaws for the Super-
visory Board's most important committees are available
on the Siemens Global Website at WWW.SIEMENS.COM/
Board demands a prior decision by the Managing Board.
The President and CEO is responsible for the coordina-
tion of all Managing Board portfolios. Further details
are available in the Bylaws for the Managing Board
on the Siemens Global Website at ☐ wWW.SIEMENS.COM/
CORPORATE-GOVERNANCE.
In fiscal 2021, the Managing Board of Siemens AG
comprised Dr. Roland Busch (President and CEO since
the conclusion of the ordinary Annual Shareholders'
Meeting on February 3, 2021, previously Deputy CEO),
Cedrik Neike, Matthias Rebellius, Prof. Dr. Ralf P. Thomas
and Judith Wiese as well as Klaus Helmrich (until
March 31, 2021) and Joe Kaeser (President and CEO until
the conclusion of the ordinary Annual Shareholders'
Meeting on February 3, 2021). Further information
regarding the Managing Board members and their mem-
berships, which are to be disclosed pursuant to Sec-
tion 285 No. 10 of the German Commercial Code, are set
out in Section 10 of this Corporate Governance State-
ment. Information about the Managing Board members'
areas of responsibility and their curricula vitae are avail-
able on the Siemens Global Website at www.SIEMENS.
COM/MANAGEMENT.
As the top management body, the Managing Board is
committed to serving the interests of the Company and
achieving sustainable growth in company value. The
members of the Managing Board are jointly responsible
for the entire management of the Company and decide
on basic issues of business policy and corporate strategy,
including Siemens' sustainability strategy, as well as on
the Company's annual and multi-year plans, unless spe-
cific circumstances are taken into account for companies
that are separately managed and publicly listed them-
selves (Siemens Healthineers). The Companywide DEGREE
program, which was approved by the Managing Board in
fiscal 2021, intensified the focus of all Siemens businesses
on ambitious sustainability targets – targets for environ-
mental and social sustainability and good governance -
even further. More details on sustainability are available
on the Siemens Global Website at www.SIEMENS.COM/
SUSTAINABILITYINFORMATION.
-
The Managing Board prepares the Company's Quarterly
Statements and Half-year Financial Report, the Annual
Financial Statements of Siemens AG, the Consolidated
Financial Statements of the Siemens Group and the
4
Managing Board
BYLAWS-MANAGINGBOARD.
The Managing Board and the Supervisory Board cooper-
ate closely for the benefit of the Company. The Managing
Board informs the Supervisory Board regularly, compre-
hensively and without delay on all issues of importance
to the entire Company with regard to strategy, planning,
business development, financial position, results of oper-
ations, compliance and entrepreneurial risks. At regular
intervals, the Managing Board also discusses the status
of strategy implementation with the Supervisory Board.
100
-
According to the suggestion in D.8 sent. 2, participation
by telephone or video conference in the meetings of the
Supervisory Board and its committees should not be the
rule. At Siemens AG, participation in meetings is, as a rule,
in person. Participation by telephone takes place only
in exceptional cases. Due to the special circumstances
3
Corporate Governance Statement
created by the COVID-19 pandemic, several meetings of
the Supervisory Board and its committees in fiscal 2021
took place as virtual meetings or with the possibility of
participation in a virtual format.
Further corporate governance practices applied beyond
the applicable legal requirements are contained in our
Business Conduct Guidelines, which are publicly available
on the Siemens Global Website at WWW.SIEMENS.COM/
COMPLIANCE.
The Company's values and Business
Conduct Guidelines
In the 174 years of its existence, our Company has built an
excellent reputation around the world. Technical perfor-
mance, innovation, quality, reliability and international
engagement have made Siemens a leading company in
its areas of activity. It is top performance with the highest
ethics that has made Siemens strong. This is what the
Company will continue to stand for in the future.
The Business Conduct Guidelines provide the ethical and
legal framework within which we want to conduct our
activities and remain on course for success. They contain
the basic principles and rules for our conduct within our
Company and in relation to our external partners and the
general public. They set out how we meet our ethical and
legal responsibility as a Company and give expression to
our Company values: "Responsible" - "Excellent" - "Inno-
vative." Our Business Conduct Guidelines are publicly
available on the Siemens Global Website at www.
Combined Management Report of Siemens AG and the
Siemens Group. Together with the Supervisory Board,
the Managing Board prepares the Compensation Report.
The Managing Board has established an appropriate and
effective internal control system and risk management
system. It also ensures that the Company adheres to stat-
utory requirements, official regulations and internal
Company policies and works to achieve compliance with
these provisions and policies within the Siemens Group.
The Managing Board has established a comprehensive
compliance management system. Protection is offered
to employees and third parties who provide informa-
tion on unlawful behavior within the Company. Details
on the compliance management system are available
on the Siemens Global Website at
Jim Hagemann Snabe
SIEMENS.COM/COMPLIANCE.
5
In fiscal 2021, the Managing Board had one committee,
the Equity and Compensation Committee. The Equity
and Compensation Committee was dissolved effective
October 1, 2021. The duties assigned to it were trans-
ferred back to the Managing Board at that time. The
Equity and Compensation Committee was responsible for
the duties assigned to it by a decision of the Managing
Board - including, in particular, duties in connection with
capital measures and equity-linked financial instruments
relating to the compensation of all employees and man-
agers of the Siemens Group except the members of the
EQUITY AND COMPENSATION COMMITTEE
OF THE MANAGING BOARD
The members of the Managing Board are subject to a com-
prehensive prohibition on competitive activity for the pe-
riod of their employment at Siemens AG. They are commit-
ted to serving the interest of the Company. When making
their decisions, they may not be guided by personal inter-
ests, nor may they exploit for their own advantage busi-
ness opportunities offered to the Company. Managing
Board members may engage in secondary activities - in
particular, supervisory board positions outside the Siemens
Group-only with the approval of the Chairman's Commit-
tee of the Supervisory Board. The Supervisory Board is re-
sponsible for decisions regarding any adjustments to Man-
aging Board compensation that are necessary in order to
take account of compensation for secondary activities.
Every Managing Board member is under an obligation to
disclose conflicts of interest without delay to the Chairman
or Chairwoman of the Supervisory Board and to inform the
other members of the Managing Board thereof.
Siemens AG voluntarily complies with the Code's sugges-
tions, with only the following exceptions:
For the Supervisory Board
78
and the Supervisory Board reelected Mr. Snabe its Chair-
man. The Annual Shareholders' Meeting on February 3,
2021, newly elected Kasper Rørsted and Grazia Vittadini
to four-year terms of office as shareholder representa-
tives on the Supervisory Board.
100
100
55
100
On behalf of the Supervisory Board, I would like to thank
the members of the Managing Board and all the employ-
ees and employee representatives of Siemens AG and of
all Group Companies for their outstanding commitment
and constructive cooperation in fiscal 2021.
100
6/6
100
4/4
100
5/5
13
100
33
3/3
100
100
100
6/6
100
Harald Kern
9/9
1/1
100
100
Bettina Haller
100
3/3
100
1/1
=1
100
9/9
100
9/9
100
22222
4/4
6/6
100
3/3
33
100
Werner Brandt (Dr. rer. pol.)
Second Deputy Chairman
Tobias Bäumler
Michael Diekmann
Andrea Fehrmann (Dr. phil.)
100
6/6
4/4
3/3
9/9
100
Norbert Reithofer (Dr. Ing. Dr. Ing. E.h.)
8/9
Kasper Rørsted (since February 3, 2021)
5/5
100
Baroness Nemat Shafik (DBE, DPhil)
7/9
Nathalie von Siemens (Dr. phil.)
Hagen Reimer
9/9
Michael Sigmund
9/9
100
Dorothea Simon
9/9
100
88828 % 8
3/3
100
2/2
100
100
100
100
33
100
Jürgen Kerner
9/9
100
8/9
89
3/4
75
6/6
1/1
100
100
Nicola Leibinger-Kammüller (Dr. phil.)
(until February 3, 2021)
3/4
Benoît Potier
9/9
100
28
75
3/3
3/3
100
6/6
100
100
2/2
100
9/9
Matthias Zachert
100
1/1
100
2/2
100
6/6
4/4
4/4
Werner Wenning (until February 3, 2021)
100
2/2
100
3/3
100
5/5
Grazia Vittadini (since February 3, 2021)
100
100
1/1
100
9/9
FISCAL 2021 8
The Annual Shareholders' Meeting reelected
Jim Hagemann Snabe, whose regular term of office also
expired at the end of the Annual Shareholders' Meeting
on February 3, 2021, to a four-year term of office as
shareholder representative on the Supervisory Board,
Dr. Nicola Leibinger-Kammüller and Werner Wenning left
the Supervisory Board at the end of the Annual Share-
holders' Meeting on February 3, 2021, when their terms
of office as shareholder representatives on the Super-
visory Board expired. We thanked Dr. Nicola Leibinger-
Kammüller and Werner Wenning for their many years of
trust-based cooperation and for their professional com-
mitment and contribution to the Company's success. We
are especially grateful to Mr. Wenning, who, as Second
Deputy Chairman of the Supervisory Board and Chairman
of the Compensation Committee, decisively shaped the
Supervisory Board's work over a period of many years.
Robert Kensbock left the Supervisory Board on Septem-
ber 25, 2020, the effective date of the spin-off of Siemens
Energy. In a decision of October 16, 2020, the Charlotten-
burg District Court appointed Tobias Bäumler to succeed
Mr. Kensbock as an employee representative on the
Supervisory Board for the remainder of Mr. Kensbock's
term of office.
Matthias Rebellius and Judith Wiese have been full mem-
bers of the Managing Board since October 1, 2020.
Joe Kaeser left the Managing Board effective the end of
the Annual Shareholders' Meeting on February 3, 2021.
Klaus Helmrich left the Managing Board effective
March 31, 2021. Joe Kaeser worked for Siemens for more
than 40 years. For seven years, he headed the Company
as President and CEO. Klaus Helmrich retired at the expi-
ration of his term of office after nine years on the Man-
aging Board and 35 years at the Company. The Super-
visory Board would like to thank both Mr. Kaeser and
Mr. Helmrich for their many years of successful work on
behalf of Siemens and their extraordinary services to the
Company. We would especially like to thank Joe Kaeser,
who shaped the Company as few others have done and
left behind a strong foundation for future generations.
Changes in the composition of the
Supervisory and Managing Boards
The Supervisory Board concurs with the results of the
audit. Following the definitive findings of the Audit Com-
mittee's examination and our own examination, we have
no objections. The Managing Board prepared the Annual
Financial Statements of Siemens AG and the Consoli-
dated Financial Statements of the Siemens Group.
We approved the Annual Financial Statements and the
Consolidated Financial Statements. In view of our ap-
proval, the financial statements are accepted as submit-
ted. We endorsed the Managing Board's proposal that
the net income available for distribution be used to pay
out a dividend of €4.00 per share entitled to a dividend
and that the amount of net income attributable to shares
of stock not entitled to receive a dividend for fiscal 2021
be carried forward.
the Managing Board's proposal for the appropriation of
net income were submitted to us by the Managing Board
in advance. The Audit Committee discussed the dividend
proposal in detail at its meeting on November 9, 2021. It
discussed the Annual Financial Statements of Siemens AG,
the Consolidated Financial Statements of the Siemens
Group and the Combined Management Report in detail
at its meeting on December 1, 2021. In this context, the
Audit Committee concerned itself, in particular, with the
key audit matters described in the independent auditors'
respective opinions, including the audit procedures im-
plemented. The Audit Committee's review also covered
the non-financial information for Siemens AG and the
Siemens Group that is included in the Combined Man-
agement Report. The audit reports prepared by the inde-
pendent auditors were distributed to all members of the
Supervisory Board and comprehensively reviewed at the
Supervisory Board meeting on December 2, 2021, in the
presence of the independent auditors, who reported on
the scope,
focal points and main findings of their audit,
addressing, in particular, key audit matters and the audit
procedures implemented. No major weaknesses in the
Company's internal control or risk management systems
were reported. At this meeting, the Managing Board ex-
plained the financial statements of Siemens AG and the
Siemens Group as well as the Company's risk manage-
ment system.
Report of the Supervisory Board
7
Gunnar Zukunft
FISCAL 2021
The independent auditors, Ernst & Young GmbH Wirt-
schaftsprüfungsgesellschaft, Stuttgart, audited the An-
nual Financial Statements of Siemens AG, the Consoli-
dated Financial Statements of the Siemens Group and the
Combined Management Report for Siemens AG and the
Siemens Group for fiscal 2021 and issued an unqualified
opinion for each. Ernst & Young GmbH Wirtschaftsprü-
fungsgesellschaft, Stuttgart, has served as the indepen-
dent auditors of Siemens AG and the Siemens Group
since fiscal 2009. Katharina Breitsameter has signed as
auditor since fiscal 2016 and as auditor responsible for
the audit since fiscal 2021. Dr. Philipp Gaenslen has
signed as auditor since fiscal 2021. The Annual Financial
Statements of Siemens AG and the Combined Manage-
ment Report for Siemens AG and the Siemens Group
of the financial statements
Detailed discussion of the audit
100
100
4/4
96
97
98
100
were prepared in accordance with the requirements of
German law. The Consolidated Financial Statements of
the Siemens Group were prepared in accordance with
the International Financial Reporting Standards (IFRS) as
adopted by the EU and with the additional requirements
of German law set out in Section 315 e (1) of the German
Commercial Code (Handelsgesetzbuch, HGB). The Con-
solidated Financial Statements of the Siemens Group also
comply with the IFRS as issued by the International Ac-
counting Standards Board (IASB). The independent audi-
tors conducted their audit in accordance with Section 317
of the German Commercial Code and the EU Audit Regu-
lation and German generally accepted standards for the
audit of financial statements as promulgated by the Insti-
tut der Wirtschaftsprüfer (IDW) as well as in supplemen-
tary compliance with the International Standards on Au-
diting (ISA). The abovementioned documents as well as
100
100
in %
Committee
Report of the Supervisory Board
Audit
Committee
Nominating
Committee
No.
in %
No.
in %
No.
in %
No.
No.
in %
No.
in %
99
9/9
100
9/9
1/1
Committee
Compensation
Innovation
and Finance
Committee
meetings)
Report of the Supervisory Board
The Committee concerned itself, in particular, with per-
sonnel-related matters, succession planning for the com-
position of the Managing Board, corporate governance
issues and the acceptance by Managing Board members
of positions at other companies and institutions. Within
the limits of the applicable legal framework, the Chair-
man's Committee was informed of and/or approved crit-
ically important, personnel-related measures at Siemens'
businesses and equity investments.
The Nominating Committee met once. It also made one
decision using other customary means of communica-
tion. The Nominating Committee gave in-depth consid-
eration to succession planning for the Supervisory Board
and prepared the Supervisory Board's nominations of
shareholder representatives on the Supervisory Board for
election by the 2021 Annual Shareholders' Meeting. The
Nominating Committee was supported in this connection
by an external consulting firm. In selecting the potential
candidates and in preparing a recommendation for the
Supervisory Board decision, the Nominating Committee
gave particular consideration to the objectives that the
Supervisory Board had previously approved for its com-
position, including the profile of required skills and
expertise and the diversity concept for the Supervisory
Board. With a view to the regular Supervisory Board elec-
tions scheduled for 2023, the Nominating Committee
defined the topics for its work over the next few years
and examined the regulatory framework conditions for
the Supervisory Board's composition.
The Mediation Committee had no need to meet.
The Compensation Committee met four times. It also
made one decision using other customary means of com-
munication. The Compensation Committee prepared, in
particular, Supervisory Board decisions regarding the
definition of performance criteria and the targets for vari-
able compensation, the determination and review of the
appropriateness of Managing Board compensation and
the approval of the Compensation Report. In addition,
the Compensation Committee prepared the Supervisory
Board's decision regarding the engagement of an auditor
for the Compensation Report for fiscal 2021.
Chairman's
The Audit Committee held six regular meetings. In the
presence of the independent auditors, of the President
and CEO, of the Deputy Chairman and of the Chief Finan-
cial Officer, the Audit Committee dealt with the financial
statements and the Combined Management Report for
Siemens AG and the Siemens Group. The Audit Commit-
tee discussed the Half-year Financial Report and the quar-
terly statements with the Managing Board and the inde-
pendent auditors. In the presence of the independent
auditors, it also discussed the report on the auditors'
review of the Company's Half-year Consolidated Financial
Statements and of its Interim Group Management Re-
port. As part of the preparation and implementation of
the audit, the Audit Committee regularly exchanged
views with the independent auditors without the Manag-
ing Board in attendance. In addition, it met regularly in
closed sessions without the Managing Board and inde-
pendent auditors in attendance. The Audit Committee
recommended that the Supervisory Board propose to the
Annual Shareholders' Meeting that Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft, Stuttgart, be elected
independent auditors for fiscal 2021. It awarded the audit
FISCAL 2021
5
Report of the Supervisory Board
contract for fiscal 2021 to the independent auditors, who
had been elected by the Annual Shareholders' Meeting,
defined the Audit Committee's focus areas and deter-
mined the auditors' fee. The Audit Committee monitored
the selection, independence, qualification, rotation and
efficiency of the independent auditors as well as the ser-
vices they provided and concerned itself with the review
of the quality of the audit of the financial statements.
In fiscal 2021, against the backdrop of the Wirecard situ-
ation, the Audit Committee regularly discussed the role
of Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft,
Stuttgart, as the independent auditors of Wirecard AG.
The Audit Committee questioned the independent audi-
tors regarding this matter and assessed the impact on
Siemens AG. No impediments were identified that would
preclude Ernst & Young GmbH Wirtschaftsprüfungs-
gesellschaft, Stuttgart, from being elected to serve as
independent auditors for fiscal 2022. The Audit Commit-
tee also dealt with the Company's accounting and ac-
counting process, the effectiveness of its internal control
system, its risk management system and the effective-
ness, resources and findings of its internal audit as well
as with reports concerning potential and pending legal
disputes. In addition, the Audit Committee concerned
itself with compliance-related matters and, in particular,
with the Chief Compliance Officer's quarterly reports and
annual report. Due to the regular external rotation of
independent auditors at the conclusion of fiscal 2023
required in accordance with the current legal situation,
the Audit Committee's work in fiscal 2021 also focused on
the preparation and implementation of a transparent and
non-discriminatory process for the selection of the inde-
pendent auditors for fiscal 2024. At its meeting on
August 3, 2021, the Audit Committee approved for this
purpose the introduction of a tendering process in accor-
dance with Article 16 of the EU audit regulation (Regula-
tion (EU) No. 537/2014 of the European Parliament and of
the Council of April 16, 2014, on specific requirements
regarding the statutory audit of public-interest entities
and repealing Commission Decision 2005/909/EG,
"EU audit regulation"). The members of the Audit Commit-
tee participated as guests in the Innovation and Finance
Committee's discussion of the budget for fiscal 2021.
The Innovation and Finance Committee met three
times. It also made one decision using other customary
means of communication. The Innovation and Finance
Committee's work focused on its recommendation re-
garding the budget for fiscal 2021, the discussion of the
pension system and the preparation and approval of in-
vestment and divestment projects and/or financial mea-
sures. For example, the Innovation and Finance Commit-
tee prepared the Supervisory Board's decision regarding
the acquisition of Supplyframe, Inc., U.S. It also con-
cerned itself with M&A action fields and with Next47, the
independent unit established by Siemens in 2016 to bun-
dle the Company's venture capital activities in order to
foster disruptive ideas more intensively and expedite the
development of new technologies. Innovation and tech-
nology-related topics were a further focus. The Managing
Board reported to the Innovation and Finance Committee
regarding user-centered product design and experience
(UX). A guest speaker explained this topic from an exter-
nal perspective (outside-in). Within the limits of the ap-
plicable legal framework, the relevant Managing Board
members informed the Innovation and Finance Commit-
tee about critically important measures and decisions at
the Company's equity investments.
New Supervisory Board members can meet with Manag-
ing Board members and other managers with specialist
responsibility to exchange views on current topics and
topics of fundamental importance and thus gain an
overview of Company-relevant matters (onboarding). In
fiscal 2021, a separate informational event was held for
the new Supervisory Board members on March 12, 2021,
in order to acquaint them, in particular, with the Compa-
ny's business model and strategy and with the structures
of the Siemens Group. The new members of the Audit
Committee participated in discussions with the indepen-
dent auditors on April 14, 2021. On April 15, 2021, they
also took part in an introductory event regarding the
Audit Committee's tasks and processes and the areas of
the Group relevant for the Audit Committee.
Board (plenary
The Supervisory Board members take part, on their own
responsibility, in the educational and training measures
necessary for the performance of their duties - measures
relating, for example, to changes in the legal framework
and new, groundbreaking technologies. The Company
supports them in this regard. Internal informational
events are offered when necessary to support targeted
training measures. Two internal training events for all
Supervisory Board members were held in fiscal 2021: one
event on April 14, 2021, concerning strategically relevant
technology-related topics, and another on July 19, 2021,
concerning Group finance.
Supervisory
First Deputy Chairwoman
Chairman
Birgit Steinborn
Jim Hagemann Snabe
(Number of meetings/
participation in %)
FISCAL 2021 6
Disclosure of participation by individual
Supervisory Board members in meetings
The average rate of participation by members in the
meetings of the Supervisory Board and its committees
was 98%. Due to the exceptional circumstances caused
by the COVID-19 pandemic, all meetings in fiscal 2021
were held either in a virtual format or as in-person meet-
ings in which virtual participation was possible. The par-
ticipation rate of individual members in the meetings of
the Supervisory Board and its committees is set out in the
following chart:
management levels below the Managing Board at 20%,
applicable in each case until June 30, 2022.
Statutory provisions on the equal participation of men
and women in management positions that may be appli-
cable to Group Companies other than Siemens AG re-
main unaffected.
In September 2018, the Supervisory Board approved the
following diversity concept for the composition of the
Managing Board:
The composition of the Supervisory Board fulfilled the
legal requirements regarding the minimum gender quota
in the reporting period.
6. Diversity concept for the
Managing Board and long-term
succession planning
When filling managerial positions at the Company, the
Managing Board takes diversity into account and, in par-
ticular, aims for an appropriate consideration of women
and internationality. In 2017, the Managing Board set the
target for the percentage of women at each of the two
The Supervisory Board and its committees regularly con-
duct reviews - either internally or with the involvement
of external consultants - in order to determine how effi-
ciently they perform their duties. In fiscal 2021, the Super-
visory Board conducted an internal self-assessment at its
meeting on September 23, 2021. The results of this as-
5. Targets for the quota of
women on the Managing Board
and at the two management
levels below the Managing
Board; Information on Managing
Board and Supervisory Board
compliance with minimum gen-
der quota requirements
constructive and characterized by a high degree of trust
and openness. The results also confirm that meetings are
organized and conducted efficiently and that the partici-
pants receive sufficient information. The review did not
reveal a need for any fundamental changes. Individual
suggestions for improvement are also discussed and im-
plemented during the year.
sessment confirm that cooperation within the Super-
visory Board and with the Managing Board is professional,
SUPERVISORY BOARD SELF-ASSESSMENT
"The goal is to achieve a composition that is as diverse
as possible and comprises individuals who comple-
ment one another in a Managing Board that provides
strong leadership as well as to ensure that, as a group,
the members of the Managing Board have all the
knowhow and skills that are considered essential in
view of Siemens' activities.
CORPORATE-GOVERNANCE.
At Siemens AG, the Supervisory Board has set a target for
the proportion of women on the Managing Board at a
minimum of 25% until June 30, 2022. Pursuant to the Ger-
man Stock Corporation Act in the version of the Second
Management Positions Act (Zweites Führungspositionen-
Gesetz, FÜPOG II), the Managing Board must include at
least one woman and at least one man (minimum partic-
ipation requirement). In fiscal 2021, Siemens AG already
complied with this requirement.
When selecting members of the Managing Board, the
Supervisory Board pays close attention to candidates'
personal suitability, integrity, convincing leadership
qualities, international experience, expertise in their
prospective areas of responsibility, achievements to
date and knowledge of the Company as well as their
ability to adjust business models and processes in a
changing world. Diversity with respect to such charac-
teristics as age and gender as well as professional and
educational background is an important selection cri-
terion for appointments to Managing Board positions.
When selecting members of the Managing Board, the
Supervisory Board also gives special consideration to
the following factors:
Corporate Governance Statement
9
Further details regarding the operation and composition
of the Supervisory Board and its committees are pro-
vided in the Bylaws for the Supervisory Board and the
bylaws for its committees, which are publicly available
on the Siemens Global Website at ☐ www.SIEMENS.COM/
10
Jointly with the Managing Board and with the support of
the Chairman's Committee, the Supervisory Board conducts
long-term succession planning for the Managing Board. In
its long-term succession planning, the Supervisory Board
takes into account the target it has defined for the propor-
tion of women on the Managing Board and the criteria set
out in the diversity concept it has approved for the Manag-
ing Board's composition as well as the requirements of the
German Stock Corporation Act, the Code and the Bylaws for
the Chairman's Committee. Considering the concrete qual-
ification requirements and the above-mentioned criteria,
the Chairman's Committee prepares an ideal profile, on the
basis of which it compiles a shortlist of the available candi-
dates. Structured interviews are then conducted with these
candidates. After the interviews, a proposal is submitted to
the Supervisory Board for approval. When developing the
profile of requirements and selecting candidates, the Super-
visory Board and the Chairman's Committee are supported,
if necessary, by external consultants.
Long-term succession planning
for the Managing Board
In the summer of 2020, the Supervisory Board appointed
Judith Wiese and Matthias Rebellius to the Managing
Board as of October 1, 2020, taking into account the diver-
sity concept and the Company's best interest. In the
course of fiscal 2021, Joe Kaeser and Klaus Helmrich left
the Managing Board at the completion of their regular
terms of office. The target for June 30, 2022, continues
to apply. The appropriate consideration of women is a
key component of long-term succession planning for the
Managing Board. Different age groups are represented
on the Managing Board. No Managing Board member is
currently older than 63 years of age.
In its current composition, the Managing Board fulfills all
the requirements of the diversity concept. The Managing
Board members have a broad range of knowledge, expe-
rience and educational and professional backgrounds as
well as international experience. The Managing Board has
all the knowledge and experience that is considered es-
sential in view of Siemens' activities. As a group, the Man-
aging Board has experience in the business areas that are
important for Siemens - in particular, in the industry, en-
ergy, healthcare and infrastructure sectors - as well as
many years of experience in technology (including infor-
mation technology and digitalization), research and devel-
opment, procurement, manufacturing and sales, finance,
law (including compliance) and human resources.
→ In addition to the expertise and management and
leadership experience required for their specific
tasks, the Managing Board members shall have the
broadest possible range of knowledge and experi-
ence and the widest possible educational and pro-
fessional backgrounds.
Implementation of the diversity concept
for the Managing Board in fiscal 2021
The diversity concept for the Managing Board is imple-
mented as part of the process for making appointments
to the Managing Board. When selecting candidates and/
or making proposals for the appointment of Managing
Board members, the Supervisory Board and/or the Chair-
man's Committee of the Supervisory Board take into ac-
count the requirements defined in the diversity concept
for the Managing Board.
→It is considered helpful if different age groups are
represented on the Managing Board. In accordance
with the recommendation of the Code, the Super-
visory Board has defined an age limit for the mem-
bers of the Managing Board. In keeping with this
limit, the members of the Managing Board are, as
a rule, to be not older than 63 years of age.
→ When selecting individuals for Managing Board po-
sitions, the targets set by the Supervisory Board for
the proportion of women on the Managing Board
shall be taken into account. The Supervisory Board
has established as a target that - until June 30,
2022-25% of the Managing Board positions are to
be held by women.
→ As a group, the Managing Board shall have many
years of experience in technology (including infor-
mation technology and digitalization), research
and development, procurement, manufacturing
and sales, finance, law (including compliance) and
human resources.
→ As a group, the Managing Board shall have experi-
ence in the business areas that are important for
Siemens in particular, in the industry, energy,
healthcare and infrastructure sectors.
→ Taking the Company's international orientation
into account, the composition of the Managing
Board shall reflect internationality with respect to
different cultural backgrounds and international
experience (such as extensive professional experi-
ence in foreign countries and responsibility for
business activities in foreign countries in areas that
are relevant for Siemens).
Corporate Governance Statement
When making an appointment to a specific Manag-
ing Board position, the decisive factor is always the
Company's best interest, taking into consideration all
circumstances in the individual case."
Corporate Governance Statement
review conducted by the Audit Committee and taking
into account the reports of the independent auditors.
The Supervisory Board approves the Managing Board's
proposal for the appropriation of net income and the Re-
port of the Supervisory Board to the Annual Sharehold-
ers' Meeting. The Supervisory Board is jointly responsible
with the Managing Board for the preparation of the Com-
pensation Report. In addition, the Company's adherence
to statutory provisions, official regulations and internal
Company policies (compliance) are monitored by the
Supervisory Board and/or the Audit Committee. The Super-
visory Board also appoints the members of the Managing
Board and determines each member's portfolios. The
Supervisory Board approves - on the basis of a proposal
by the Compensation Committee the compensation
system for Managing Board members and defines their
concrete compensation in accordance with this system.
It sets the individual targets for the variable compensa-
tion and the total compensation of each individual Man-
aging Board member, reviews the appropriateness of to-
tal compensation and regularly reviews the Managing
Board compensation system. Effective October 1, 2019,
the Supervisory Board adopted - on the basis of a pro-
posal by the Compensation Committee - an adjusted
compensation system, which was approved by the An-
nual Shareholders' Meeting on February 5, 2020. Import-
ant Managing Board decisions - such as those regarding
major acquisitions, divestments, fixed asset investments
or financial measures - require Supervisory Board ap-
proval unless the Bylaws for the Supervisory Board spec-
ify that such authority be delegated to the Innovation
and Finance Committee of the Supervisory Board.
As of September 30, 2021, the Innovation and Finance
Committee comprised Jim Hagemann Snabe (Chair-
man), Tobias Bäumler, Harald Kern, Jürgen Kerner,
Dr.-Ing. Dr.-Ing. E.h. Norbert Reithofer, Kasper Rørsted,
Birgit Steinborn and Grazia Vittadini.
Corporate Governance Statement
Managing Board and of Top Management and relating to
share-based compensation components and employee
share plans. The Equity and Compensation Committee
comprised the President and CEO, the Managing Board
member with responsibility for the People & Organization
portfolio, the Managing Board member with responsibil-
ity for the Controlling and Finance portfolio and - as of
October 1, 2020 - the Deputy CEO. As of September 30,
2021, its members were Dr. Roland Busch (Chairman),
Prof. Dr. Ralf P. Thomas and Judith Wiese.
Further details regarding the operation and composition
of the Managing Board and its committees are provided
in the Bylaws for the Managing Board, which are publicly
available on the Siemens Global Website at www.
SIEMENS.COM/BYLAWS-MANAGINGBOARD.
Supervisory Board
The Supervisory Board of Siemens AG has 20 members.
As stipulated by the German Codetermination Act, half of
its members represent Company shareholders, and half
represent Company employees. The shareholder repre-
sentatives on the Supervisory Board are elected at the
Annual Shareholders' Meeting by a simple majority vote.
Elections to the Supervisory Board are conducted, as a
rule, on an individual basis. The employee representatives
on the Supervisory Board are elected in accordance with
the provisions of the German Codetermination Act. Fur-
ther information regarding the Supervisory Board mem-
bers and their memberships, which are to be disclosed
pursuant to Section 285 No. 10 of the German Commer-
cial Code, are set out in Section 11 of this Corporate Gov-
ernance Statement. The curricula vitae of the Supervisory
Board members are publicly available on the Siemens
Global Website at www.SIEMENS.COM/SUPERVISORY-BOARD
and updated annually.
The Supervisory Board oversees and advises the Manag-
ing Board in its management of the Company's business.
At regular intervals, the Supervisory Board discusses
business development, planning, strategy and strategy
implementation. It reviews the Annual Financial State-
ments of Siemens AG, the Consolidated Financial State-
ments of the Siemens Group, the Combined Manage-
ment Report of Siemens AG and the Siemens Group, and
the proposal for the appropriation of net income. It ap-
proves the Annual Financial Statements of Siemens AG as
well as the Consolidated Financial Statements of the
Siemens Group, based on the results of the preliminary
-
Separate preparatory meetings of the shareholder repre-
sentatives and of the employee representatives are held
regularly in order to prepare the Supervisory Board meet-
ings. The Supervisory Board also meets regularly without
the Managing Board in attendance. Every Supervisory
Board member must disclose conflicts of interest to the
Supervisory Board. Information regarding conflicts of in-
terest that may have arisen and their handling is provided
in the Report of the Supervisory Board. Special informa-
tional (onboarding) events are held in order to familiarize
new Supervisory Board members with the Company's
business model and the structures of the Siemens Group.
The Supervisory Board members take part, on their own
responsibility, in the educational and training measures
necessary for the performance of their duties – measures
relating, for example, to changes in the legal framework
6
Corporate Governance Statement
and new, groundbreaking technologies. The Company
supports them in this regard. Internal informational
events are offered when necessary to support targeted
training measures.
Details regarding the work of the Supervisory Board are
provided in the Report of the Supervisory Board, which
will be made publicly available for each previous fiscal
year on the Siemens Global Website.
SUPERVISORY BOARD COMMITTEES
8
In fiscal 2021, the Supervisory Board had six committees,
whose duties, responsibilities and procedures fulfill the
requirements of the German Stock Corporation Act and
the Code. The chairmen of these committees provide the
Supervisory Board with regular reports on their commit-
tees' activities.
Supervisory Board regarding the composition of the Super-
visory Board committees and decides whether to approve
contracts and business transactions with Managing
Board members and parties related to them.
As of September 30, 2021, the Chairman's Committee
comprised Jim Hagemann Snabe (Chairman), Dr. Werner
Brandt, Jürgen Kerner and Birgit Steinborn.
The Compensation Committee prepares, in particular,
the proposals for decisions by the Supervisory Board's
plenary meetings regarding the system of Managing
Board compensation, including the implementation of
this system in Managing Board contracts, the definition
of the targets for variable Managing Board compensa-
tion, the determination and review of the appropriate-
ness of the total compensation of individual Managing
Board members and the annual Compensation Report.
As of September 30, 2021, the Compensation Committee
comprised Michael Diekmann (Chairman), Harald Kern,
Jürgen Kerner, Jim Hagemann Snabe, Birgit Steinborn
and Matthias Zachert.
The Audit Committee oversees, in particular, the ac-
counting and the accounting process and conducts a
preliminary review of the Annual Financial Statements
of Siemens AG, the Consolidated Financial Statements of
the Siemens Group and the Combined Management
Report of Siemens AG and the Siemens Group (including
non-financial measures). On the basis of the indepen-
dent auditors' report on their audit of the annual finan-
cial statements, the Audit Committee makes, after its
preliminary review, recommendations regarding Super-
visory Board approval of the Annual Financial Statements
of Siemens AG and the Consolidated Financial Statements
of the Siemens Group. The Audit Committee discusses
the Quarterly Statements and Half-year Financial Report
with the Managing Board and the independent auditors
and deals with the auditors' reports on the review of the
Half-year Consolidated Financial Statements and Interim
Group Management Report. It also monitors the Compa-
ny's adherence to statutory provisions, official regula-
tions and internal Company policies (compliance). The
Chief Compliance Officer reports regularly to the Audit
Committee. The Audit Committee concerns itself with the
Company's risk monitoring system and oversees the ap-
propriateness and effectiveness of its internal control, risk
management and internal audit systems as well as the
7
Corporate Governance Statement
internal process for related party transactions. The Audit
Committee receives regular reports from the internal au-
dit department. It prepares the Supervisory Board's rec-
ommendation to the Annual Shareholders' Meeting con-
cerning the election of the independent auditors and
submits the corresponding proposal to the Supervisory
Board. Prior to submitting this proposal, the Audit Com-
mittee obtains a statement from the prospective indepen-
dent auditors affirming that their independence is not in
question. It awards the audit contract to the independent
auditors elected by the Annual Shareholders' Meeting and
monitors the independent audit of the financial state-
ments as well as the auditors' selection, independence,
qualification, rotation and efficiency and the services ren-
dered by the auditors. The Audit Committee assesses the
quality of the audit of the financial statements on a regu-
lar basis. Outside its meetings, the Supervisory Board is
also in regular communication with the independent au-
ditors via the Chairman of the Audit Committee.
As of September 30, 2021, the Audit Committee com-
prised Dr. Werner Brandt (Chairman), Tobias Bäumler,
Bettina Haller, Jürgen Kerner, Jim Hagemann Snabe,
Birgit Steinborn, Grazia Vittadini and Matthias Zachert.
The members of the Audit Committee are, as a group,
familiar with the sector in which the Company operates.
Pursuant to the German Stock Corporation Act, the Audit
Committee has had to include to date at least one Super-
visory Board member with knowledge and experience in
the areas of accounting or the auditing of financial state-
ments. Pursuant to the German Stock Corporation Act in
the version of the Financial Market Integrity Strengthen-
ing Act (Finanzmarktintegritätsstärkungsgesetz, FISG),
the Supervisory Board must - after the conclusion of a
defined transition period - have at least one member
with knowledge and expertise in the area of accounting,
and at least one additional member with knowledge and
expertise in the auditing of financial statements. In the
person of Mr. Zachert, the Supervisory Board and the Au-
dit Committee have at least one member with knowledge
and expertise in the area of accounting and in the person
of Dr. Brandt at least one additional member with knowl-
edge and expertise in the auditing of financial statements.
Pursuant to the Code, the chair of the Audit Committee
shall have specialist knowledge and experience in the ap-
plication of accounting principles and internal control
processes, be familiar with the auditing of financial state-
ments and be independent. The Chairman of the Audit
Committee, Dr. Werner Brandt, fulfills these requirements.
The Nominating Committee is responsible for making rec-
ommendations to the Supervisory Board on suitable can-
didates for the election by the Annual Shareholders' Meet-
ing of shareholder representatives on the Supervisory
Board. In preparing these recommendations, the objec-
tives defined by the Supervisory Board for its composition
and the approved diversity concept - in particular, inde-
pendence and diversity - are to be appropriately consid-
ered, as are the proposed candidates' required knowledge,
abilities and professional experience. Fulfillment of the
required profile of skills and expertise is also to be aimed
at. Attention shall be paid to an appropriate participation
of women and men in accordance with the legal require-
ments relating to the gender quota as well as to ensuring
that the members of the Supervisory Board are, as a group,
familiar with the sector in which the Company operates.
As of September 30, 2021, the Nominating Committee
comprised Jim Hagemann Snabe (Chairman), Dr. Werner
Brandt, Benoît Potier and Dr. Nathalie von Siemens.
The Mediation Committee submits proposals to the
Supervisory Board in the event that the Supervisory
Board cannot reach the two-thirds majority required for
the appointment or dismissal of a Managing Board mem-
ber on the first ballot.
As of September 30, 2021, the Mediation Committee
comprised Jim Hagemann Snabe (Chairman), Dr. Werner
Brandt, Jürgen Kerner and Birgit Steinborn.
Based on the Company's overall strategy, the Innovation
and Finance Committee discusses, in particular, the
Company's innovation focuses and prepares the Super-
visory Board's discussions and resolutions regarding ques-
tions relating to the Company's financial situation and
structure - including annual planning (budget) – as well
as the Company's fixed asset investments and its finan-
cial measures. In addition, the Innovation and Finance
Committee has been authorized by the Supervisory
Board to decide on the approval of transactions and mea-
sures that require Supervisory Board approval and have a
value of between €300 million and €600 million.
The Chairman's Committee makes proposals, in particu-
lar, regarding the appointment and dismissal of Manag-
ing Board members and is responsible for concluding,
amending, extending and terminating employment con-
tracts with members of the Managing Board. When mak-
ing recommendations for first-time appointments, it
takes into account that the terms of these appointments
shall not, as a rule, exceed three years, whereby it is to be
determined in each individual case what period of ap-
pointment is to be deemed appropriate within the legally
permissible period. In preparing recommendations re-
garding the appointment of Managing Board members,
the Chairman's Committee takes into account the candi-
dates' professional qualifications, international experi-
ence and leadership qualities, the age limit specified for
Managing Board members and the long-range plans for
succession as well as diversity. It also takes into account
the targets for the proportion of women on the Manag-
ing Board that have been defined by the Supervisory
Board and the diversity concept for the Managing Board
that has been approved by the Supervisory Board. The
Chairman's Committee concerns itself with questions re-
garding the Company's corporate governance and pre-
pares the resolutions to be approved by the Supervisory
Board regarding the Declaration of Conformity with the
Code - including the explanation of deviations from the
Code and regarding corporate governance reporting
and the Report of the Supervisory Board to the Annual
Shareholders' Meeting. It is responsible for approving the
Company's related party transactions. Furthermore, the
Chairman's Committee submits recommendations to the
7. Objectives regarding the
Supervisory Board's composition
as well as the profile of required
skills and expertise and the
diversity concept for the Super-
visory Board
2021
"The composition of the Supervisory Board of
Siemens AG shall be such that the Supervisory Board's
ability to effectively monitor and advise the Managing
Board is ensured. In this connection, mutually comple-
mentary collaboration among members with a wide
range of personal and professional backgrounds and
diversity with regard to internationality, age and gen-
der are considered helpful.
January 31,
2018
2023
October 10,
1979
October 16,
2020
2023
December 23,
1954
January 24,
2008
2023
Andrea Fehrmann²
(Dr. phil.)
Trade Union Secretary,
IG Metall Regional Office for Bavaria
June 21,
1970
January 31,
2018
2023
Bettina Haller²
Chairwoman of the Combine
Works Council of Siemens AG
March 14,
1959
April 1,
2007
2023
Harald Kern²
Jürgen Kerner²
Chairman of the
Siemens Europe Committee
Chief Treasurer and Executive Member
of the Managing Board of IG Metall
Nicola
Leibinger-Kammüller
(Dr. phil.)
January 3,
1954
(until February 3, 2021)
2023
March 26,
1960
In fiscal 2021, the Supervisory Board had the following members:
Name
Jim Hagemann Snabe Chairman of the Supervisory Board
Occupation
Date of birth
Member since
Term
expires¹
Chairman
of Siemens AG and of the Board of
Directors of A. P. Møller-Mærsk A/S
October 27,
1965
October 1,
2013
2025
Birgit Steinborn²
First Deputy Chairwoman
Chairwoman of the Central Works
Council of Siemens AG
Werner Brandt
(Dr. rer. pol.)
Second Deputy Chairman
(since February 3, 2021)
Tobias Bäumler²
(since October 16, 2020)
Michael Diekmann
Chairman of the Supervisory Board
of RWE AG and of ProSiebenSat.1 Media SE
Deputy Chairman of the
Central Works Council and of the
Combine Works Council of Siemens AG
Chairman of the Supervisory Board
of Allianz SE
January 24,
2008
11. Members of the Supervisory Board and
positions held by Supervisory Board members
as of February 3, 2021
Chief Executive Officer (CEO) - President
and Chairwoman of the Group Management
of TRUMPF GmbH + Co. KG
(Deputy Chairman)
Premium Aerotec GmbH, Augsburg
(Deputy Chairman)
→ Siemens Energy AG, Munich³
→ Siemens Energy Management GmbH,
Munich
→ Thyssenkrupp AG, Essen
(Deputy Chairman)³
→ Traton SE, Munich³
Positions outside Germany:
→ TRUMPF Schweiz AG, Switzerland
Chairman and Chief Executive Officer
of Air Liquide S.A
September 3,
1957
January 31,
2023
2018
1 As a rule, the term of office ends at the conclusion of the (relevant) ordinary Annual Shareholders' Meeting.
2 Employee representative.
Positions outside Germany:
→ Air Liquide International S.A., France
(Chairman and Chief Executive
Officer) 3,4
→ Air Liquide International Corporation
(ALIC), USA (Chairman)4
→ American Air Liquide Holdings,
Inc., USA4
→ The Hydrogen Company S.A., France4
3 Publicly listed.
4 Group company position.
15
In September 2021, the Supervisory Board approved
changes to the objectives for its composition including
the profile of required skills and expertise and the diver-
sity concept:
→ MAN Truck & Bus SE, Munich
Benoît Potier
German positions:
German positions:
March 16,
1960
January 24,
2008
2023
January 22,
1969
January 25,
2023
2012
December 15,
1959
January 24,
2008
Corporate Governance Statement
Memberships in supervisory boards
whose establishment is required by law
or in comparable domestic or foreign
controlling bodies of business enterprises
(as of September 30, 2021)
German positions:
→ Allianz SE, Munich (Deputy Chairman)³
Positions outside Germany:
→ A.P. Møller-Mærsk A/S, Denmark
(Chairman)³
C3.ai, Inc., USA³
German positions:
→ ProSiebenSat.1 Media SE, Munich
(Chairman)³
→ RWE AG, Essen (Chairman)³
German positions:
→ Allianz SE, Munich (Chairman)³
→ Fresenius Management SE,
Bad Homburg
→Fresenius SE & Co. KGaA,
Bad Homburg (Deputy Chairman)³
German positions:
→ Siemens Energy AG, Munich³
→ Siemens Energy Management GmbH,
Munich
→ Siemens Mobility GmbH, Munich
(Deputy Chairwoman)
14
5 Shareholders' Committee.
September 30, German positions:
2023
The Articles of Association of Siemens AG, the Bylaws for
the Supervisory Board, the bylaws for the most important
Supervisory Board committees, the Bylaws for the Man-
aging Board, our Declarations of Conformity with the
Code and a variety of other corporate-governance-related
documents are posted on the Siemens Global Website at
WWW.SIEMENS.COM/CORPORATE-GOVERNANCE.
13
10. Members of the Managing Board and
positions held by Managing Board members
In fiscal 2021, the Managing Board had the following members:
Name
Roland Busch
(Dr. rer. nat.)
President and
Chief Executive Officer
(since February 3, 2021)
Date of birth
November 22,
1964
First appointed Term expires
April 1,
2011
March 31,
2025
Corporate Governance Statement
Memberships in supervisory boards whose establishment is required by law
or in comparable domestic or foreign controlling bodies of business enterprises
External positions
(as of September 30, 2021)
Group company positions
(as of September 30, 2021)
German positions:
→ Siemens Healthineers AG, Munich'
→ Siemens Mobility GmbH, Munich
(Chairman)
Klaus Helmrich
May 24,
1958
April 1,
2011
March 31,
2021
(until March 31, 2021)
as of March 31, 2021
wirkungen der COVID-19-Pandemie, GesRua COVBekG)
of March 27, 2020 (Federal Law Gazette | No. 14 2020,
p. 570) whose application was extended until Decem-
ber 31, 2021 by the Ordinance on the Extension of the
Measures Under the Law of Companies, Cooperative
Societies, Associations and Foundations to Combat the
Effects of the COVID-19 Pandemic (Verordnung zur Ver-
längerung von Maßnahmen im Gesellschafts-, Genossen-
schafts-, Vereins- und Stiftungsrecht zur Bekämpfung
der Auswirkungen der COVID-19-Pandemie, GesRGen-
RCOVMVV) of October 20, 2020 (Federal Law Gazette |
No. 48 2020, p. 2258), the ordinary Shareholders' Meet-
ing on February 3, 2021, was conducted as a virtual
shareholders' meeting without the physical presence of
shareholders or their proxies due to the special circum-
stances created by the COVID-19 pandemic.
Joe Kaeser
Shareholders exercise their rights at the Annual Share-
holders' Meeting. An ordinary Annual Shareholders'
Meeting normally takes place within the first five months
of each fiscal year. The Annual Shareholders' Meeting de-
cides, among other things, on the appropriation of net
income, the ratification of the acts of the members of the
Managing and Supervisory Boards, and the appointment
of the independent auditors. Amendments to the Articles
of Association and measures that change the Company's
capital stock are approved at the Annual Shareholders'
Meeting and implemented by the Managing Board. The
Managing Board facilitates shareholder participation in
this meeting through electronic communications - in
particular, via the Internet - and enables shareholders
who are unable to attend the meeting to vote by proxy.
Proxies can also be reached during the Annual Sharehold-
ers' Meeting. Furthermore, shareholders may exercise
their right to vote in writing or by means of electronic
communications (absentee voting). The Managing Board
may enable shareholders to participate in the Annual
Shareholders' Meeting without the need to be present at
the venue and without a proxy and to exercise some or all
of their rights fully or partially by means of electronic
communications. The Company enables shareholders to
follow the entire Annual Shareholders' Meeting via the
Internet. Shareholders may submit motions regarding
the proposals of the Managing and Supervisory Boards
and may contest decisions of the Annual Shareholders'
Meeting. Shareholders owning Siemens stock with an
aggregate notional value of €100,000 or more may also
demand the judicial appointment of special auditors to
examine specific issues. The reports, documents and in-
formation required by law for the Annual Shareholders'
Meeting, including the Annual Report, can be down-
loaded from the Siemens Global Website. The same ap-
plies to the agenda for the Annual Shareholders' Meeting
and to any counterproposals or shareholders' nomina-
tions that may require disclosure. For the election of
shareholder representatives on the Supervisory Board, a
detailed curriculum vitae of every candidate is published.
In accordance with Section 1 para. 2 of the German Act
Concerning Measures Under the Law of Companies,
Cooperative Societies, Associations, Foundations and
Commonhold Property to Combat the Effects of the
COVID-19 Pandemic (Gesetz über Maßnahmen im Gesell-
schafts-, Genossenschafts-, Vereins-, Stiftungs- und
The goal is to ensure that, in the Supervisory Board, as
a group, all the knowhow and experience is available
that is considered essential in view of Siemens' activi-
ties. This includes, for instance, knowledge and expe-
rience in the areas of technology (including informa-
tion technology and digitalization), procurement,
manufacturing and sales, finance, law (including
compliance) and human resources. In addition, the
members of the Supervisory Board shall collectively
have knowledge and experience in the business areas
that are important for Siemens, in particular, in the
areas of industry, energy, healthcare and infrastruc-
ture. As a group, the members of the Supervisory
Board are to be familiar with the sector in which the
Company operates. In accordance with the German
Stock Corporation Act, at least one member of the
Profile of required skills and expertise
The candidates proposed for election to the Super-
visory Board shall have the knowledge, skills and ex-
perience necessary to carry out the functions of a
Supervisory Board member in a multinational com-
pany oriented toward the capital markets and to safe-
guard the reputation of Siemens in public. In particu-
lar, care shall be taken with regard to the personality,
integrity, commitment and professionalism of the in-
dividuals proposed for election.
Supervisory Board must have knowledge and exper-
tise in the area of accounting, and at least one addi-
tional member of the Supervisory Board must have
knowledge and expertise in the area of financial state-
ments. These two Supervisory Board members shall
be independent. At least one member of the Super-
visory Board shall have specific knowledge and expe-
rience in applying accounting principles and internal
control processes. This member shall, in addition, be
familiar with the auditing of financial statements and
independent. In particular, the Supervisory Board
shall also include members who have leadership expe-
rience as senior executives or members of a super-
visory board (or comparable body) at a major com-
pany with international operations.
When a new member is to be appointed, a review shall
be performed to determine which of the areas of ex-
pertise deemed desirable for the Supervisory Board
are to be strengthened.
Internationality
Taking the Company's international orientation into
account, care shall be taken to ensure that the Super-
visory Board has an adequate number of members
with extensive international experience. The goal is to
make sure that the present considerable share of Su-
pervisory Board members with extensive international
experience is maintained.
Diversity
With regard to the composition of the Supervisory
Board, attention shall be paid to achieving sufficient
diversity. Not only is appropriate consideration to be
given to women. Diversity of cultural heritage and a
wide range of educational and professional back-
grounds, experiences and ways of thinking are also to
be promoted. When considering possible candidates
for new elections or for filling Supervisory Board posi-
tions that have become vacant, the Supervisory Board
shall give appropriate consideration to diversity at an
early stage in the selection process.
In accordance with the German Stock Corporation
Act, the Supervisory Board is composed of at least
30% women and at least 30% men. The Nominating
Committee shall continue to include at least one fe-
male member.
11
Corporate Governance Statement
Independence
The Supervisory Board shall include what the share-
holder representatives on the Supervisory Board con-
sider to be an appropriate number of independent
shareholder representatives. More than half of the
shareholder representatives shall be independent of
the Company and its Managing Board. Substantial -
and not merely temporary - conflicts of interest are to
be avoided.
No more than two former members of the Managing
Board of Siemens AG shall belong to the Supervisory
Board.
The Supervisory Board members shall have sufficient
time to exercise their mandates with the necessary
regularity and diligence.
Limits on age and on length of
membership
In compliance with the age limit stipulated by the
Supervisory Board in its Bylaws, only individuals who
are no older than 70 years of age shall, as a rule, be
nominated for election to the Supervisory Board.
Nominations shall take into account the regular limit
established by the Supervisory Board, which restricts
membership on the Supervisory Board to a maximum
of three full terms of office. It is considered helpful if
different age groups are represented on the Super-
visory Board."
Implementation of the objectives
regarding the Supervisory Board's
composition as well as the profile of
required skills and expertise and the
diversity concept for the Supervisory
Board in fiscal 2021; independent
members of the Supervisory Board
Within the framework of the selection process and the
nomination of candidates for the Supervisory Board, the
Supervisory Board as well as the Nominating Committee
of the Supervisory Board take into account the objectives
regarding the Supervisory Board's composition and the
requirements defined in its diversity concept. The Super-
visory Board and the Nominating Committee have re-
cently taken the objectives - including the profile of re-
quired skills and expertise and the diversity concept - into
consideration in the nominations of three shareholder
representatives to be elected by the Annual Shareholders'
Meeting in 2021. As an additional criterion, the Super-
visory Board takes into account expertise in the area of
sustainability.
The Supervisory Board is of the opinion that, with its cur-
rent composition, it meets the objectives for its composi-
tion and fulfills the profile of required skills and expertise
as well as the diversity concept. The Supervisory Board
members have the specialist and personal qualifications
considered necessary. As a group, they are familiar with
the sector in which the Company operates and have the
knowledge, skills and experience essential for Siemens.
A considerable number of Supervisory Board members
are engaged in international activities and/or have many
years of international experience. Appropriate consider-
ation has been given to diversity in the Supervisory Board.
In fiscal 2021, the Supervisory Board had seven female
members, of whom three are shareholder representatives
and four are employee representatives. As a result, 35% of
the Supervisory Board members are women. Dr. Nathalie
von Siemens is a member of the Nominating Committee.
In the estimation of the shareholder representatives, the
Supervisory Board now has at least nine independent
shareholder representatives – namely, Dr. Werner Brandt,
Benoît Potier, Dr.-Ing. Dr.-Ing. E.h. Norbert Reithofer,
Kasper Rørsted, Baroness Nemat Shafik, Dr. Nathalie von
Siemens, Jim Hagemann Snabe, Grazia Vittadini and
Matthias Zachert - and thus an appropriate number of
members who are independent in the meaning of the
Code. The regulations establishing limits on age and re-
stricting membership in the Supervisory Board to three
full terms of office are complied with.
8. Share transactions by
members of the Managing and
Supervisory Boards
Pursuant to Article 19 of EU Regulation No. 596/2014 of
the European Parliament and Council of April 16, 2014,
on market abuse (Market Abuse Regulation), members
of the Managing Board and the Supervisory Board are
legally required to disclose all transactions conducted on
their own account relating to the shares or debt instru-
ments of Siemens AG or to the derivatives or financial
instruments linked thereto if the total value of such
transactions entered into by a board member or any
closely associated person in any calendar year reaches or
12
Corporate Governance Statement
exceeds €20,000. All transactions reported to Siemens AG
in fiscal 2021 have been duly published and are available
on the Siemens Global Website at WWW.SIEMENS.COM/
DIRECTORS-DEALINGS.
9. Annual Shareholders' Meeting Wohnungseigentumsrecht zur Bekämpfung der Aus-
and investor relations
June 23,
1957
As part of our investor relations activities, we inform our
investors comprehensively about developments within
the Company. For communication purposes, Siemens
makes extensive use of the Internet. We publish Quar-
terly Statements, Half-year Financial and Annual Reports,
earnings releases, ad hoc announcements, analyst pre-
sentations, letters to shareholders and press releases as
well as the financial calendar for the current year, which
contains the publication dates of significant financial
communications and the date of the Annual Sharehold-
ers' Meeting, at ☐ WWW.SIEMENS.COM/INVESTORS. The Chair-
man of the Supervisory Board regularly discusses Super-
visory-Board-specific topics with investors.
At the end
German positions:
→ Siemens Energy AG, Munich'
→ Siemens Energy Management GmbH,
Munich
German positions:
→ Siemens Energy AG, Munich'
→ Siemens Energy Management GmbH,
Munich
Positions outside Germany:
→ Siemens Ltd., India¹
Positions outside Germany:
→ Siemens Aktiengesellschaft Österreich,
Austria (Chairman)
→ Siemens France Holding S.A., France
Positions outside Germany:
→ Arabia Electric Ltd., Saudi Arabia
(Deputy Chairman)
→ Siemens Ltd., Australia
→Siemens Ltd., India'
→ Siemens Ltd., Saudi Arabia
(Deputy Chairman)
→ Siemens Schweiz AG, Switzerland
(Chairman)
→ Siemens W.L.L., Qatar
German positions:
→ Siemens Healthcare GmbH,
Munich (Chairman)
→ Siemens Healthineers AG,
Munich (Chairman)'
Positions outside Germany:
→ Siemens Proprietary Ltd.,
South Africa (Chairman)
Judith Wiese
January 30,
1971
October 1,
2020
May 1,
2006
→ Evonik Industries AG, Essen¹
Positions outside Germany:
→ Atos SE, France¹
German positions:
1 Publicly listed.
→ NXP Semiconductors N.V.,
Netherlands'
(President and Chief
Executive Officer, member
of the Managing Board
until February 3, 2021)
as of February 3, 2021
of the 2021
Annual
Shareholders'
Meeting
Cedrik Neike
March 7,
1973
April 1,
2017
May 31,
2025
Matthias Rebellius
January 2,
1965
October 1,
2020
→ European School of Management
and Technology GmbH, Berlin
September 30,
2025
Ralf P. Thomas
(Prof. Dr. rer. pol.)
Munich (Chairman)
→ Siemens Energy Management GmbH,
Munich (Chairman)1
→ Siemens Energy AG,
→Mercedes-Benz AG, Stuttgart
Positions outside Germany:
German positions:
German positions:
→EOS Holding AG, Krailling
September 17,
2023
September 18,
2013
→Daimler AG, Stuttgart'
March 7,
1961
Member of the Board of Directors,
Nestlé S.A., Switzerland³
Positions outside Germany:
→ Henkel AG & Co. KGaA, Düsseldorf 3,5
→ Henkel Management AG, Düsseldorf
→ Bayerische Motoren Werke Aktien-
gesellschaft, Munich (Chairman)³
German positions:
→ Siemens Energy AG, Munich³
German positions:
Memberships in supervisory boards
whose establishment is required by law
or in comparable domestic or foreign
controlling bodies of business enterprises
(as of September 30, 2021)
Corporate Governance Statement
German positions:
→ Siemens Energy Management GmbH,
Munich
→ Messer Group GmbH, Sulzbach
(Second Deputy Chairman
and member of the
Supervisory Board
Positions outside Germany:
→ EssilorLuxottica SA, France³
Michael Sigmund²
Dorothea Simon²
Grazia Vittadini
(since February 3, 2021)
Werner Wenning
(Dr. phil.)
until February 3, 2021)
as of February 3, 2021
Chairman of the Committee
of Spokespersons of the Siemens Group
and Chairman of the Central Committee
of Spokespersons of Siemens AG
Chairwoman of the Central Works
Council of Siemens Healthcare GmbH
Airbus Special Advisor
September 13,
1957
March 1,
2014
→ Siemens Healthcare GmbH, Munich
→Siemens Healthineers AG, Munich³
→ TÜV Süd AG, Munich
2023
2023
July 14,
1971
Member since
Term
expires¹
Hagen Reimer2
Trade Union Secretary of the
Managing Board of IG Metall
April 26,
1967
January 30,
2019
2023
Norbert Reithofer
(Dr.-Ing. Dr.-Ing. E.h.)
Chairman of the Supervisory Board
of Bayerische Motoren Werke
Aktiengesellschaft
Kasper Rørsted
(since February 3, 2021)
Baroness
Nemat Shafik
January 27,
2015
May 29,
1956
2023
Chief Executive Officer and
Board Member of adidas AG3
February 24,
1962
February 3,
2021
2025
Director of the London
School of Economics
August 13,
1962
January 31,
2018
(DBE, DPhil)
Nathalie
Member of supervisory boards
von Siemens
January 27,
2015
2023
August 3,
1969
2023
Notes and forward-looking statements
This document contains statements related to our future business and financial performance and future events or developments involving
Siemens that may constitute forward-looking statements. These statements may be identified by words such as "expect," "look forward
to," "anticipate," "intend," "plan," "believe," "seek," "estimate," "will," "project" or words of similar meaning. We may also make forward-
looking statements in other reports, in prospectuses, in presentations, in material delivered to shareholders and in press releases. In
addition, our representatives may from time to time make oral forward-looking statements. Such statements are based on the current
expectations and certain assumptions of Siemens' management, of which many are beyond Siemens' control. These are subject to a
number of risks, uncertainties and factors, including, but not limited to, those described in disclosures, in particular in the chapter Report
on expected developments and associated material opportunities and risks in the Annual Report. Should one or more of these risks or
uncertainties materialize, events of force majeure, such as pandemics, occur or should underlying expectations including future events
occur at a later date or not at all or assumptions prove incorrect, actual results, performance or achievements of Siemens may (negatively
or positively) vary materially from those described explicitly or implicitly in the relevant forward-looking statement. Siemens neither
intends, nor assumes any obligation, to update or revise these forward-looking statements in light of developments which differ from
those anticipated.
-
This document includes – in the applicable financial reporting framework not clearly defined – supplemental financial measures that are
or may be alternative performance measures (non-GAAP-measures). These supplemental financial measures should not be viewed in
isolation or as alternatives to measures of Siemens' net assets and financial positions or results of operations as presented in accordance
with the applicable financial reporting framework in its Consolidated Financial Statements. Other companies that report or describe
similarly titled alternative performance measures may calculate them differently.
Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and
percentages may not precisely reflect the absolute figures.
This document is an English language translation of the German document. In case of discrepancies, the German language document is
the sole authoritative and universally valid version.
For technical reasons, there may be differences between the accounting records appearing in this document and those published pursuant
to legal requirements.
The Sustainability Report 2021 which reports on Sustainability and Citizenship at Siemens is available at: siemens.com/investor/en/
2
Address
Internet
Phone
E-mail
Siemens AG
Werner-von-Siemens-Str. 1
80333 Munich
Germany
www.siemens.com
+49 89 636-33443 (Media Relations)
+49 89 636-32474 (Investor Relations)
+49 89 636-30085 (Media Relations)
+49 89 636-1332474 (Investor Relations)
press@siemens.com
investorrelations@siemens.com
© 2021 by Siemens AG, Berlin and Munich
Date of birth
Occupation
Name
October 1,
2017
SIEMENS
Notes and forward-
looking statements
Fax
Shareholders' Committee.
16
→ Siemens Healthcare GmbH, Munich
September 23,
1969
February 3,
2021
2025
Member of the Supervisory Board
October 21,
1946
January 23,
2013
Chairman of the Board of
Management of LANXESS AG³
Matthias Zachert
November 8,
1967
January 31,
2023
2021
German positions:
2018
4 Group company position.
3 Publicly listed.
2 Employee representative.
1 As a rule, the term of office ends at the conclusion of the (relevant) ordinary Annual Shareholders' Meeting.
→ Siemens Industry Software GmbH,
Cologne
5
2023
January 31,
2018
June 21,
1965
Deputy Chairman of the Central
Works Council of Siemens Industry
Software GmbH
Gunnar Zukunft²
German positions:
22
With regard to capital expenditures for continuing operations, we expect a significant increase in fiscal 2022. In the coming years, up to
€0.6 billion are to be invested in Siemensstadt Square. This project initiated in fiscal 2019 aims to transform Siemens' existing industrial
area in Berlin into a modern urban district supporting a diverse range of purposes, including strengthening key technologies. Further
investments are planned in relation to Siemens Campus Erlangen. In addition, we continue to invest in attractive innovation fields through
Next47, our global venture capital unit.
Additions to intangible assets and property, plant and equipment from continuing operations totaled €1.7 billion in fiscal 2021. Within
the industrial businesses, ongoing investments related mainly to technological innovations; maintaining and extending our capacities for
designing, manufacturing and marketing new solutions; improving productivity; and replacements of fixed assets. These investments
amounted to €1.3 billion in fiscal 2021. The remaining portion related mainly to Siemens Real Estate, including significant amounts for
projects such as new office buildings in Germany. Siemens Real Estate is responsible for uniform and comprehensive management of
Company real estate worldwide (except for Siemens Healthineers) and supports the industrial businesses and corporate activities with
customer-specific real estate solutions.
Investing activities
With our ability to generate positive operating cash flows from continuing and discontinued operations of €10.0 billion in fiscal 2021, our
total liquidity (defined as cash and cash equivalents plus current interest-bearing debt securities) of €10.7 billion, our unused lines of
credit, and our credit ratings at year-end, we believe that we have sufficient flexibility to fund our capital requirements. Also in our opinion,
our operating net working capital is sufficient for our present requirements.
(142)
8,237
8,379
(1,759)
(29)
7. Overall assessment of the economic position
The Free cash flow for the Industrial Business amounted to €9,847 million, resulting in a cash conversion rate of 1.12. The cash conversion
rate for the Siemens Group was 1.23.
Combined Management Report
24
In fiscal 2021, Siemens made further progress in sharpening its business focus by divesting activities such as the Flender business on one
side, while on the other side strengthening our industrial businesses with a number of significant acquisitions. Important examples are: in
the second quarter of fiscal 2021, the acquisition of C&S Electric, a provider of electrical and electronic equipment for infrastructure, power
generation, transmission and distribution in India, to strengthen Smart Infrastructure's position in that country as a supplier of low-voltage
power distribution and electrical installation technology; in the third quarter of fiscal 2021, the acquisition of Varian, a global leader in the
field of cancer care, with solutions especially in radiation oncology and related digital solutions and applications, which provides a good
complement to Siemens Healthineers' activities in medical imaging, laboratory diagnostics and interventional procedures; in the fourth
quarter of fiscal 2021, the acquisition of Supplyframe, a marketplace for the global electronics value chain, with which Digital Industries
intends to significantly strengthen digital marketing and accelerate sales of its offerings to small and medium-sized companies. At the
beginning of the first quarter of fiscal 2022, Mobility closed the acquisition of Sqills, a provider of cloud-based inventory management,
reservation, and ticketing software for public transport operators, which enhances Mobility's existing offerings for increasing the
availability, capacity and utilization of public transportation.
Following the deep recession during fiscal 2020, many of Siemens' key customer industries including automotive, machine building,
pharmaceuticals, chemicals, electronics, and cloud services recovered or continued to grow during fiscal 2021. Although COVID-19 led to
a significant drop in public transit ridership, recovery programs in many countries have been allocating significant funds to transport
providers, resulting in strong order development. During the fiscal year, Siemens succeeded in maintaining its supply chains and delivery
capacity and continued to be a reliable partner for its customers, despite more challenging supply condition. These developments were
reflected in our strong financial performance for fiscal 2021. We raised our outlook during the fiscal year, most recently after the third
quarter, and reached or exceeded all the targets set for our primary measures for fiscal 2021. We achieved revenue growth of 11.5% net
of currency translation and portfolio effects and delivered net income of €6.7 billion. Return on capital employed (ROCE) was double-digit
at 13.1% and our capital structure ratio came in at 1.5.
Orders rose 23% year-over-year to €71.4 billion, for a book-to-bill ratio of 1.15, thus fulfilling our expectation of a ratio above 1. All our
four industrial businesses increased orders year-over-year. Mobility achieved the highest growth rate due to a sharply higher volume from
large orders, including its largest ever order in the Americas, worth €2.8 billion, for trainsets and associated services. Substantial order
growth at Siemens Healthineers included new volume from the acquisition of Varian. Significant order growth at Digital Industries was
driven mainly by its factory automation and motion control businesses, while orders at Smart Infrastructure increased clearly on growth
in all its businesses, with the strongest contributions coming from the products business and the systems business.
Revenue was also higher in all our industrial businesses, rising to €62.3 billion, a 13% increase year-over-year. The strongest increases
came from Siemens Healthineers and Digital Industries, which both posted double-digit growth. Revenue growth at Siemens Healthineers
included all businesses with the highest increases coming from the diagnostics and imaging businesses. Revenue development at Digital
Industries also included increases in all its businesses led by factory automation and motion control. Revenue growth at Smart
Infrastructure was driven by its products business and its systems business. Revenue at Mobility rose slightly, as parts of its businesses
continued to be impacted by restrictions related to COVID-19. Excluding currency translation and portfolio effects, revenue for Siemens
grew 11.5%. We thus exceeded our forecast given in our Annual Report 2020, which was to achieve moderate comparable revenue growth
and we met our raised guidance given after the third quarter of fiscal 2021, which was to achieve comparable revenue growth of 11% to
12%.
Adjusted EBITA Industrial Business rose 17% to €8.8 billion on growth in all industrial businesses, led by Siemens Healthineers on strong
earnings development in its diagnostics business driven by strong demand for rapid coronavirus antigen tests and by Smart Infrastructure
on increases in all its businesses. Adjusted EBITA at Digital Industries rose moderately even though prior-year results benefited from a €0.8
billion positive effect related mainly to a revaluation of the stake in Bentley. Adjusted EBITA at Mobility also rose moderately, driven by its
rail infrastructure business.
Adjusted EBITA margin Industrial Business rose to 15.0%, up from 14.3% a year earlier. With Adjusted EBITA margins of 11.6%, 15.8% and
9.3%, respectively, Smart Infrastructure, Siemens Healthineers and Mobility improved their Adjusted EBITA margins year-over-year. The
Adjusted EBITA margin of 20.4% at Digital Industries came in below the prior-year level of 21.7%, which included the above-mentioned
substantial positive effect related to Bentley, which added 5.1 percentage points to Digital Industries' Adjusted EBITA margin.
Siemens Financial Services sharply increased earnings before taxes due to lower expenses for credit risk provisions year-over-year, resulting
in a return on equity after tax of 15.4%. In addition, results outside Industrial Business in fiscal 2021 benefited from a €0.3 billion
revaluation gain and gains related to transfers of assets to Siemens Pension Trust e.V. in Germany were higher in the current period. A
€0.4 billion loss related to Siemens Energy Investment was due mainly to Siemens Energy's execution of planned restructuring measures
to improve its competitiveness and expenses from amortization of assets resulting from purchase price allocation. For comparison, results
outside Industrial Business a year earlier included an impairment of €0.5 billion on our equity investment stake in Valeo Siemens
eAutomotive GmbH.
Net income in fiscal 2021 rose 59% to €6.7 billion, and basic EPS from net income increased 54% to €7.68. We thus exceeded the forecast
given in our Annual Report 2020, which was for a moderate increase in net income, and also exceeded our raised forecast after the third
quarter, which was for net income in the range of €6.1 billion to €6.4 billion. This improvement was due mainly to the aforementioned
significantly higher Adjusted EBITA Industrial Business and the lower loss outside Industrial Business. In addition, discontinued operations,
largely related to the sale of Flender, contributed income of €1.1 billion in fiscal 2021.
23
Combined Management Report
ROCE for fiscal 2021 rose to 13.1%, up from 7.8% in fiscal 2020. This increase was due to a combination of sharply higher net income and
clearly lower average capital employed year-over-year. We thus exceeded our forecast for ROCE given in our Annual Report 2020, which
was for ROCE to remain in the single-digit range in fiscal 2021.
We evaluate our capital structure using the ratio of Industrial net debt to EBITDA. Due primarily to an increase in net debt year-over-year,
this ratio rose to 1.5, compared to 1.3 in fiscal 2020. We thus achieved our forecast given in our Annual Report 2020, which was for a ratio
above 1.0 in fiscal 2021.
Free cash flow from continuing and discontinued operations for fiscal 2021 increased 29% year-over-year to €8.2 billion, reaching a new
high.
We intend to continue providing an attractive shareholder return. The Siemens Managing Board, in agreement with the Supervisory Board,
proposes a dividend of €4.00 per share, up from €3.50 per share a year earlier.
(1,730)
Siemens successfully executed on its strategy as a focused technology company in fiscal 2021, following the spin-off and public listing of
Siemens Energy in September 2020. All our industrial businesses are addressing highly attractive markets in industrial automation,
infrastructure, transportation and healthcare. With our offerings we are taking advantage of growth trends such as digitalization and
decarbonization, for example by helping our customers to combine the real and the digital worlds. With the financial framework that we
presented in June 2021, we have set ambitious new targets: we aim to further accelerate our profitable growth while placing an even
greater emphasis on free cash flow.
9,996
Dividends paid to shareholders of Siemens AG
10,109
Interest paid
224
Dividends attributable to non-controlling interests
Cash flows from financing activities continuing operations
Cash flows from financing activities - discontinued operations
Cash flows from financing activities - continuing and discontinued operations
785
Led by Digital Industries, all industrial businesses delivered strong conversion of their Adjusted EBITA to Cash flows from operating
activities, including only minor cash flows from changes in operating net working capital in all industrial businesses.
Cash outflows from acquisitions of businesses, net of cash acquired, were due mainly to the acquisitions of Varian by Siemens
Healthineers for €13.4 billion and Supplyframe by Digital Industries for €0.6 billion.
Cash outflows for purchase of investments and financial assets for investment purposes primarily included additions of assets eligible
as central bank collateral and payments for debt or equity investments related to certain businesses or projects, including the acquisition
of an equity stake in Thoughtworks for €0.3 billion.
Cash outflows from change in receivables from financing activities of SFS related mainly to SFS' debt business.
Cash inflows from other disposals of assets mainly included disposals of assets eligible as central bank collateral.
Cash outflows for purchase of treasury shares included a final payment of €0.4 billion to the commissioned bank, which was due with
completion of the share buyback program 2018-2021.
(113)
Cash inflows from the re-issuance of treasury shares and other transactions with owners mainly included proceeds of €2.3 billion
related to Siemens Healthineers AG's issuance of 53 million new shares to institutional investors.
Combined Management Report
Cash outflows from the change in short-term debt and other financing activities mainly included net cash outflows related to
commercial paper, partly offset by cash inflows from new bank loans.
Cash inflows from investing activities from discontinued operations were driven by the sale of Flender, which resulted in cash inflows
(net of cash disposed) of €1.8 billion.
We report Free cash flow as a supplemental liquidity measure:
Free cash flow
(in millions of €)
Cash flows from operating activities
Additions to intangible assets and property, plant and equipment
Free cash flow
Fiscal year 2021
Continuing
operations
Discontinued
operations
Continuing and
discontinued
operations
21
Combined Management Report
Capital efficiency
8.1 Report on expected developments
For the Siemens Group we expect mid-single-digit comparable revenue growth, net of currency translation and portfolio effects, and a
book-to-bill ratio above 1.
We expect profitable growth of our industrial businesses to drive an increase in EPS pre PPA to a range of €8.70 to €9.10, up from €8.32
in fiscal 2021. We assume that rigorous execution of our portfolio optimization strategy will contribute similarly as in fiscal 2021, when
we generated €1.5 billion in net income from the sale of our Flender business, divestment of our stakes in Bentley and ChargePoint, and
revaluation of our stake in Thoughtworks.
This outlook excludes burdens from legal and regulatory matters.
Overall, the actual development for Siemens and its segments may vary, positively or negatively, from our outlook due to the risks and
opportunities described below or if our expectations and assumptions do not materialize.
26
8.2 Risk management
Combined Management Report
8.2.1 Basic principles of risk management
Our risk management policy stems from a philosophy of pursuing sustainable growth and creating economic value while managing
appropriate risks and opportunities and avoiding inappropriate risks. As risk management is an integral part of how we plan and execute
our business strategies, our risk management policy is set by the Managing Board. Our organizational and accountability structure requires
each of the respective managements of our organizational units to implement risk management programs that are tailored to their specific
industries and responsibilities, while being consistent with the overall policy.
8.2.2 Enterprise risk management process
We have implemented and coordinated a set of risk management and control systems which support us in the early recognition of
developments that could jeopardize the continuity of our business. The most important of these systems include our enterprise-wide
processes for strategic planning and management reporting. Strategic planning is intended to support us in considering potential risks and
opportunities well in advance of major business decisions, while management reporting is intended to enable us to monitor such risks
more closely as our business progresses. Our internal auditors regularly review the adequacy and effectiveness of our risk management.
Accordingly, if deficits are detected, it is possible to adopt appropriate measures for their elimination. This coordination of processes and
procedures is intended to help ensure that the Managing Board and the Supervisory Board are fully informed about significant risks in a
timely manner.
Risk management at Siemens builds on a comprehensive, interactive and management-oriented Enterprise Risk Management (ERM)
approach that is integrated into the organization and that addresses both risks and opportunities. Our ERM approach is based on the
globally accepted COSO Standard (Committee of Sponsoring Organizations of the Treadway Commission) Enterprise Risk Management –
Integrating with Strategy and Performance (2017) and the ISO (International Organization for Standardization) Standard 31000 (2018)
and is adapted to Siemens requirements. The frameworks connect the ERM process with our financial reporting process and our internal
control system. They consider a company's strategy, the efficiency and effectiveness of its business operations, the reliability of its financial
reporting and compliance with relevant laws and regulations to be equally important.
Our ERM process aims for early identification and evaluation of, and response regarding, risks and opportunities that could materially
affect the achievement of our strategic, operational, financial and compliance objectives. The time horizon is typically three years, and we
take a net risk approach, addressing risks and opportunities remaining after the execution of existing and effective measures and controls.
If risks have already been considered in plans, budgets, forecasts or the consolidated financial statements (e.g. as a provision or risk
contingency), they are supposed to be incorporated with their financial impact in the entity's business objectives. As a consequence, only
additional risks arising from the same subject (e.g. deviations from business objectives, different impact perspectives) should be
considered. In order to provide a comprehensive view of our business activities, risks and opportunities are identified in a structured way
combining elements of both top-down and bottom-up approaches. Reporting generally follows a quarterly cycle; we complement this
periodic reporting with an ad-hoc reporting process that aims to escalate critical issues in a timely manner. Relevant risks and opportunities
are evaluated in terms of impact and likelihood, considering different impact perspectives, including business objectives, reputation and
regulatory requirements. The bottom-up identification and prioritization process is supplemented by workshops with the respective
managements of our organizational units. The top-down element ensures that potential new risks and opportunities are discussed at
different management levels and are included in the subsequent reporting process, if found to be relevant. Reported risks and
opportunities are analyzed regarding potential cumulative effects and are aggregated within and for each of the organizational units
mentioned above.
Responsibilities are assigned for all relevant risks and opportunities, with the hierarchical level of responsibility depending on the
significance of the respective risk or opportunity. In a first step, assuming responsibility for a specific risk or opportunity involves choosing
one of our general response strategies. Our general response strategies with respect to risks are avoidance, transfer, reduction or
acceptance of the relevant risk. Our general response strategy with respect to opportunities is to "seize" the relevant opportunity. In a
second step, responsibility for a risk or opportunity also involves the development, initiation and monitoring of appropriate response
measures corresponding to the chosen response strategy. These response measures have to be specifically tailored to allow for effective
risk management. Accordingly, we have developed a variety of response measures with different characteristics. For example, we mitigate
the risk of fluctuations in currency and interest rates by engaging in hedging activities. Regarding our projects, systematic and
comprehensive project management with standardized project milestones, including provisional acceptances during project execution
and complemented by clearly defined approval processes, assists us in identifying and responding to project risks at an early stage, even
before the bidding phase. Furthermore, we maintain appropriate insurance levels for potential cases of damage and liability risks in order
to reduce our exposure to such risks and to avoid or minimize potential losses. Among others, we address the risk of fluctuation in
economic activity and customer demand by closely monitoring macroeconomic conditions and developments in relevant industries, and
by adjusting capacity and implementing cost-reduction measures in a timely and consistent manner if they are deemed necessary.
Worldwide there are risks from the transmission of infectious agents from animals to humans, from humans to humans and in other ways.
Epidemic, pandemic or other infectious developments such as bioterrorism to cause high disease rates in countries, regions or continents.
We constantly check information from the World Health Organization (WHO), the - Centers for Disease Control and Prevention in the U.S.
and Europe, the Robert Koch Institute in Germany and other institutions in order to be able to identify early epidemic or pandemic risks
and determine and initiate related mitigation actions as early as possible.
8.2.3 Risk management organization and responsibilities
To oversee the ERM process and to further drive the integration and harmonization of existing control activities to align with legal and
operational requirements, the Managing Board established a Risk Management and Internal Control Organization, led by the Head of
Assurance. In order to allow for a meaningful discussion of risk at the Siemens Group level, this organization aggregates individual risks
and opportunities of similar cause-and-effect nature into broader risk and opportunity themes. This aggregation naturally results in a
mixture of risks, including those with a primarily qualitative assessment and those with a primarily quantitative risk assessment.
Accordingly, we do not adopt a purely quantitative assessment of risk and opportunity themes. Thematic risk and opportunity assessments
27
Combined Management Report
as well as our risk-bearing capacity then form the basis for the evaluation of the company-wide risk and opportunity situation during the
quarterly board meetings. The Head of Assurance assists the Managing Board with the operation and oversight of the risk and internal
control system and reporting to the Audit Committee of the Supervisory Board.
8.3 Risks
Below we describe the risks that could have a material adverse effect on our business situation, financial condition (including effects on
assets, liabilities and cash flows), results of operations and reputation. The order in which the risks are presented in each of the four
categories reflects the currently estimated relative exposure for Siemens associated with these risks and thus provides an indication of the
risks' current importance to us. Additional risks not known to us or that we currently consider immaterial may also negatively impact our
business objectives and operations. Unless otherwise stated, the risks described below relate to all our organizational units.
8.3.1 Strategic risks
Economic, political and geopolitical conditions: We see significant uncertainties regarding the global economic outlook. In particular, a
renewed intensity of the COVID-19 pandemic could stall the recovery achieved to date, and even lead to a new recession, for example if
current vaccines are less effective with new variants, leading to the return of contact restrictions or lockdowns. There is also great
uncertainty about the long-term consequences of the pandemic for important Siemens customer industries, such as aerospace and non-
residential construction. Moreover, during the COVID-19 pandemic significant macroeconomic challenges have not been defused and in
some cases, they have intensified. A renewed escalation of the trade conflict between the U.S. and China and an intensified de-coupling
would significantly worsen global growth prospects. Adverse effects on confidence and investment activity would severely hit Siemens'
business. Increasing trade barriers, protectionism, sanctions and in particular technical regulations would negatively impact production
costs and productivity along our many value chains, as well as significantly impede or even hinder access to sales markets. A significant
risk to our sales potential and cost structure is coming from mounting supply chain bottlenecks, due to growing lack of availability of
intermediate goods, in particular electronic components. Bottlenecks in energy supply on the one hand and in access to raw materials on
the other would substantially reduce industrial production potential. The escalating possibility of major defaults in the Chinese property
sector, with potential spillover effects into the entire real estate market and financial markets, would significantly impact growth prospects
of one of our core geographic markets and might have reverberations even on the global financial system and the world economy. A
substantial increase in inflation rates could lead to serious distortions in global currency, capital, and foreign exchange markets, if central
banks initiate the tightening cycle too fast and too aggressively. Highly indebted (emerging and industrialized) countries could suffer from
increasing financing costs and a loss of investor confidence. Additional threats to the outlook could arise as well, ranging from market
pressure to intensify austerity measures to declining confidence in individual currency markets. Additionally, a strong increase of raw
material and intermediate goods prices would negatively impact Siemens's cost structure. Other significant risks could arise from
geopolitical tensions (particularly in the Near and Middle East, Hong Kong and Taiwan), the European Union's relations with Russia, the
economic vulnerability of several emerging markets (including Argentina, Turkey, Venezuela) and political upheavals. We are dependent
on the economic development of certain industries; a continuation or even an intensification of the cyclical and structural headwinds in
core customer industries, e.g., automotive or construction, would have adverse impact on our business prospects. Further business risk
would result from an abrupt weakening of Chinese economic growth. A terrorist mega-attack or a significant cybercrime incident, or a
series of such attacks or incidents in major economies, could depress economic activity globally and undermine consumer and business
confidence. Additionally, the highly interconnected global economy remains vulnerable to natural disasters or further pandemics.
In general, due to long-cycle businesses in our organizational units and the importance of long-term contracts for Siemens, there is usually
a time lag between changes in macroeconomic conditions and their impact on our financial results. In contrast, short-cycle business
activities react quickly to volatility in market demand. If the moderate growth of certain markets stalls again and if we are not successful
in adapting our production and cost structure to subsequent changes in conditions in the markets in which we operate, there can be no
assurance that we will not experience adverse effects. For example, our customers may modify, delay or cancel plans to purchase our
products, solutions and services, or fail to follow through on purchases or contracts already executed. Furthermore, the prices for our
products, solutions and services may decline to a greater extent than we currently anticipate. In addition, it may become more difficult for
our customers to obtain financing. Contracted payment terms, especially regarding the level of advance payments by our customers
relating to long-term projects, may become less favorable, which could negatively impact our financial condition. Siemens' global setup
with operations in almost all relevant economies, our wide range of offerings with varied exposures to business cycles, and our balanced
mix of business models (e.g. equipment, components, systems, software, services and solutions) help us to absorb impacts from adverse
developments in any single market.
Disruptive technologies: The markets in which our businesses operate experience rapid and significant changes due to the introduction
of innovative and disruptive technologies. In the fields of digitalization (e.g. IoT, artificial intelligence, cloud computing, Industry 4.0),
there are risks associated with new competitors, substitutions of existing products/solutions/services, new business models (e.g. in terms
of pricing, financing, extended scopes for project business or subscription models in the software business) and finally the risk that our
competitors may have more advanced time-to-market strategies and introduce their disruptive products and solutions faster than Siemens.
Our operating results depend to a significant extent on our technological leadership, our ability to anticipate and adapt to changes in our
markets and to optimize our cost base accordingly. Introducing new products and technologies requires a significant commitment to
research and development, which in return requires expenditure of considerable financial resources that may not always result in success.
Our results of operations may suffer if we invest in technologies that do not operate or may not be integrated as expected, or that are not
accepted in the marketplace as anticipated, or if our products, solutions or systems are not introduced to the market in a timely manner,
particularly compared to our competitors, or even become obsolete. We constantly apply for new patents and actively manage our
intellectual property portfolio to secure our technological position. However, our patents and other intellectual property may not prevent
competitors from independently developing or selling products and services that are similar to ours.
Competitive environment: The worldwide markets for our products, solutions and services are highly competitive in terms of pricing,
product and service quality, product development and introduction time, customer service, financing terms and shifts in market demands.
We face strong, established competitors as well as rising competitors from emerging markets and new industries, which may have a better
cost structure. Some industries in which we operate are undergoing consolidation, which may result in stronger competition, a change in
our relative market position, an increase in inventory of finished or work-in-progress goods, or unexpected price erosion. Furthermore,
785
28
Our outlook for fiscal 2022 is based on continuing healthy growth in global GDP, albeit with slowing momentum, and our expectation that
the challenges to our businesses from COVID-19 and supply chain constraints will ease during fiscal 2022. With these conditions and given
our very strong fiscal year 2021, we expect our industrial businesses to continue their profitable growth.
8.1.3 Overall assessment
For our capital structure, defined as the ratio of industrial net debt to EBITDA (continuing operations), we expect in fiscal 2022 to achieve
a ratio below the prior-year figure of 1.5. We assume that our targeted cash conversion rate of 1 minus the annual comparable revenue
growth rate of the Group over a cycle of three to five years will support the achievement of the capital structure target in fiscal 2022.
Capital structure
8.1.1 Worldwide economy
After the deepest recession and the fastest rebound in decades, in calendar 2020 and calendar 2021, respectively, the global economic
recovery is expected to continue with slowing momentum in fiscal 2022. Global gross domestic product (GDP) is expected to expand by
4.3% in calendar 2022. The outlook is still subject to a high level of uncertainty. The biggest source of concern remains COVID-19. New
variants could emerge before widespread vaccination is reached globally, or they could escape existing immunity, while vaccine
effectiveness might fade more quickly than expected.
However, in our baseline forecast we assume the impact of the Delta variant will recede further, vaccination rates will continue to rise,
especially in developing countries, and the global economy gradually will return to normal. The service sector will reopen further, and
consumer spending for services will recover, which will contribute significantly to the global recovery. This is supported by consumers still
having substantial pent-up savings which will continue to fuel consumer demand. In addition, companies in general have low levels of
inventory and will seek to re-stock, adding to demand, even if consumer spending should slow. Also, many companies might want to have
structurally higher inventory levels to improve supply chain resilience, as supply chains were often stressed during the pandemic. However,
we expect supply shortages to continue in the first half of calendar 2022.
Besides a potential re-emergence of the pandemic, further risks exist for fiscal 2022. Supply bottlenecks might last longer and restrain the
recovery. While we expect price pressures to subside for the most part in fiscal 2022 in our baseline outlook, persistent supply bottlenecks
or further energy price increases could fuel inflation and inflation expectations, and thus prompt a faster-than-anticipated monetary
tightening. This could reverberate in financial markets and weigh on investment spending. Risks for financial markets could also emerge
from other sources, e.g. an escalation of the U.S.-China trade and technology conflict, high corporate or government debt levels or China's
property sector which could undergo a substantial correction after a period of over-investment.
The necessary adjustments in the Chinese property sector, a high ratio of debt to GDP and worsening business conditions will limit China's
GDP growth in calendar 2022 to 5.7%. The European Union economy is expected to expand by 4.0% in calendar 2022, still supported by
catch-up effects and announced stimulus programs becoming effective. In the U.S., GDP is expected to expand by 4.3%, where government
spending has a negative effect on GDP growth, as it is reduced from calendar 2021 on, implying a negative fiscal impulse. An important
pre-requisite is preventing federal limits on borrowing (the debt ceiling) from disrupting government operations and spending programs.
Global fixed investments are expected to expand by 4.4% in calendar 2022, after already growing by 6.4% in calendar 2021. Important
customer industries for Siemens are participating in the global recovery (e.g. electronics, pharma, materials, chemicals). Yet persistent
supply bottlenecks have the potential to significantly derail this recovery, such as in the automotive sector due to semiconductor shortages.
The infrastructure sector (particularly public transport and electricity grids) will benefit from various green stimulus programs.
Overall, the market environment for Siemens is expected to remain favorable in fiscal 2022, but with some deceleration compared to fiscal
2021. Risks for the outlook are still substantial.
The forecasts presented here for GDP and fixed investments are based on a report from IHS Markit dated October 15, 2021.
8.1.2 Siemens Group
We are basing our outlook for fiscal 2022 on the above-mentioned expectations and assumptions regarding the overall economic situation,
including continuing healthy growth in global GDP albeit with slowing momentum, and also on the specific market conditions we expect
for our respective industrial businesses, as described in chapter 3 Segment information. Furthermore, we assume that the challenges to
our businesses from COVID-19 will ease during fiscal 2022. Although we also expect supply chain constraints to recede somewhat during
fiscal 2022, we expect continued impacts from higher prices for raw materials and components and from wage increases, which we intend
to mitigate by adjusting prices for our own products, solutions and services.
We are exposed to currency translation effects, mainly involving the U.S. dollar, the British pound and currencies of emerging markets,
particularly the Chinese yuan. While we expect volatility in global currency markets to continue in fiscal 2022, we have improved our
natural hedge on a global basis through geographic distribution of our production facilities in the past. Nevertheless, Siemens is still a net
exporter from the Eurozone to the rest of the world, so a weak euro is principally favorable for our business and a strong euro is principally
unfavorable. In addition to the natural hedging strategy just mentioned, we also hedge currency risk in our export business using derivative
financial instruments. We expect these steps to help us limit effects on income related to currency in fiscal 2022. Based on currency
exchange rates as of the beginning of November 2021, we do not expect significant currency effects on nominal growth rates in volume
and profit for our businesses in fiscal 2022.
This outlook excludes burdens from legal and regulatory matters.
Segments
We expect our industrial businesses to continue their profitable growth.
Digital Industries expects for fiscal 2022 to achieve comparable revenue growth of 5% to 8%. The profit margin is expected to be 19% to
21%, including known headwinds of up to two percentage points associated with the strategic transition to software as a service (SaaS)
in parts of its large software business.
8. Report on expected developments and associated material
opportunities and risks
Smart Infrastructure expects for fiscal 2022 comparable revenue growth of 5% to 8%. The profit margin is expected to be 12% to 13%.
Mobility expects for fiscal 2022 comparable revenue growth of 5% to 8%. The profit margin is expected to be 10.0% to 10.5%.
Combined Management Report
Siemens Healthineers expects to achieve comparable revenue growth in the range of 0% to 2% in fiscal 2022. The profit margin, which
was 15.8% in fiscal 2021, is expected to continue to improve.
Siemens Financial Services expects to further improve Earnings before taxes year-over-year. Return on equity (ROE) (after tax) is expected
to reach the lower half of the new target range of 15% to 20%.
Revenue growth
For comparable revenue, net of currency translation and portfolio effects, we expect the Siemens Group to achieve mid-single-digit
growth. Furthermore, we anticipate that orders in fiscal 2022 will exceed revenue for a book-to-bill ratio above 1.
As of September 30, 2021, our order backlog totaled €85 billion, and we expect conversion from the backlog to strongly support revenue
growth in fiscal 2022 with approximately €34 billion of past orders converted to current revenue. For expected conversion of order backlog
to revenue for our respective segments, see chapter 3 Segment information.
Profitability
We assume that rigorous execution of our portfolio optimization strategy in fiscal 2022 will contribute similarly as in fiscal 2021, when we
generated €1.5 billion in net income from the sale of our Flender business, divestment of our stakes in Bentley and ChargePoint, Inc., and
revaluation of our stake in Thoughtworks. In October 2021, Siemens already recognized a €0.3 billion pretax gain (€0.2 billion after tax)
related to its investment in Fluence Energy, LLC (Fluence).
We expect our fully consolidated units within Portfolio Companies to reach profit margins above 5%, while results from the equity
investment are expected to be volatile and negative.
In addition, results for Siemens Energy Investment, which includes Siemens' share of Siemens Energy AG's profit after tax, amounting to
a negative €0.2 billion in fiscal 2021, is expected to improve; amortization of assets resulting from purchase price allocation due to the
initial recognition of the investment at fair value in September 2020, which are also included in Siemens Energy Investment, are expected
to decline to €0.1 billion in fiscal 2022, from €0.2 billion in fiscal 2021. We anticipate that Siemens Real Estate will continue with real
estate disposals depending on market conditions, at a similar level as in fiscal 2021. Results for Innovation also are expected on the prior-
year level, which was a negative €0.2 billion. Results related to Governance, were a negative €0.8 billion in fiscal 2021; we expect a
substantial improvement in fiscal 2022, to a negative €0.5 billion. Centrally carried pension expense are expected to be on prior-year level,
which was a negative €0.2 billion. Amortization of intangible assets acquired in business combinations, which was €0.7 billion in fiscal
2021, is expected at €0.9 billion due mainly to the acquisition of Varian in April 2021. Financing, eliminations and other items, which were
a positive €0.5 billion in fiscal 2021, are expected to include substantial parts of gains from revaluation and from divestments in fiscal
2022, resulting from our portfolio optimization strategy, among them the above-mentioned gain related to Fluence.
We anticipate our tax rate for fiscal 2022 to be in the range of 25% to 29%, depending strongly on portfolio-related gains, compared to
25% in fiscal 2021. This assumption does not take into consideration possible impacts from potential major tax reforms. We do not expect
material influence on financial results from discontinued operations in fiscal 2022.
Our forecast for net income takes into account a number of additional factors. We assume solid project execution to continue in fiscal
2022. We plan to increase the ratio of R&D expenses to revenue, which was 7.8% in fiscal 2021, to approximately 8% with a strong focus
on software and digital technologies. Severance charges, which were €0.4 billion in fiscal 2021, are expected at €0.2 billion in fiscal 2022.
Given the above-mentioned assumptions, we expect profitable growth of our industrial businesses to drive an increase in net income and
EPS pre PPA to a range of €8.70 to €9.10, up from €8.32 in fiscal 2021.
For fiscal 2022, we expect ROCE adjusted for defined Varian-related acquisition effects, which was 15.1% in fiscal 2021, to improve in our
target range of 15% to 20%.
25
(285)
6,209
(704)
Sep 30,
Combined Management Report
6.1 Capital structure
| 6. Financial position
19
The increase in other financial assets was driven mainly by increased equity investments as well as higher receivables from finance leases
and higher loans receivable at SFS. The increase of the latter two was mainly due to new business and – in case of loans receivable - also
to a reassessment of the expected repayment dates. Set against these factors was a decrease resulting mainly from contributions of assets
to Siemens Pension-Trust e.V., including the stake in Bentley.
In fiscal 2021, the acquisition of Varian was the major factor related to the increase of Siemens' assets, mainly goodwill, other intangible
assets, inventories, property, plant and equipment, and trade and other receivables. The increase of the latter was driven also by
higher business volume, primarily at Siemens Healthineers. Goodwill increased also due to the acquisition of Supplyframe. These increases
were partly offset by the sale of Flender, among other factors. This applies mainly to inventories, trade and other receivables, and property,
plant and equipment. For further information see Note 3 in Notes to Consolidated Financial Statements for fiscal 2021.
Our total assets at the end of fiscal 2021 were influenced by positive currency translation effects of €2.3 billion (mainly goodwill), primarily
involving the U.S. dollar.
13%
123,897
139,608
23%
(in millions of €)
70,928
23%
1,769
2,183
(4)%
2,988
2,865
1%
22,771
22,964
(4)%
7,862
7,539
87,267
8%
2021
% Change
7,628
Other current liabilities
(21)%
2,281
1,809
Current income tax liabilities
35%
1,674
2,263
Current provisions
31%
7,524
2020
9,858
(12)%
1,958
1,731
Other current financial liabilities
12%
7,873
8,832
Trade payables
19%
6,562
7,821
Short-term debt and current maturities of long-term debt
Contract liabilities
10,250
11,023
127%
9,545
% Change
2020
2021
Sep 30,
Combined Management Report
Total assets
Total non-current assets
Other assets
Deferred tax assets
Other financial assets
Investments accounted for using the equity method
14,041
Property, plant and equipment
Goodwill
Total current assets
Assets classified as held for disposal
Other current assets
Current income tax assets
Inventories
Contract assets
Other current financial assets
Trade and other receivables
Cash and cash equivalents
(in millions of €)
5. Net assets position
Other intangible assets
(32)%
15,518
14,074
4,838
10,964
45%
20,449
29,729
(1)%
52,968
52,340
(34)%
338
223
38%
1,271
1,751
18%
1,523
1,795
13%
7,795
8,836
21%
5,545
6,688
(5)%
8,382
7,985
10%
23%
Liabilities associated with assets classified as held for disposal
10
35
2021
Fiscal year
Acquisitions of businesses, net of cash acquired
Additions to intangible assets and property, plant and equipment
Cash flows from investing activities
Cash flows from operating activities - continuing and discontinued operations
Cash flows from operating activities - discontinued operations
Cash flows from operating activities - continuing operations
Other reconciling items to cash flows from operating activities - continuing operations
Change in operating net working capital
Net income
Cash flows from operating activities
6,697
(in millions of €)
Share buyback
For further information about our commitments and contingencies see Note 21 in Notes to Consolidated Financial Statements for fiscal
2021.
Irrevocable loan commitments amounted to €3.9 billion. A considerable portion of these commitments resulted from asset-based lending
transactions, meaning that the respective loans can be drawn only after the borrower has provided sufficient collateral.
In addition to these commitments, there are contingent liabilities of €0.5 billion which mainly result from other guarantees, legal
proceedings and from joint and several liabilities of consortia. Other guarantees include €0.2 billion in connection with the Siemens Energy
business, for which Siemens has reimbursement rights towards Siemens Energy.
As of September 30, 2021, the undiscounted amount of maximum potential future payments related primarily to credit and performance
guarantees amounted to €15.6 billion. This included primarily Siemens' obligations from performance and credit guarantees in connection
with the Siemens Energy business, for which Siemens has reimbursement rights towards Siemens Energy.
Off-balance-sheet commitments
Combined Management Report
20
For further information about our debt see Note 16 in Notes to Consolidated Financial Statements for fiscal 2021. For further information
about the functions and objectives of our financial risk management see Note 25 in Notes to Consolidated Financial Statements for fiscal
2021.
We have credit facilities totaling €7.5 billion which were unused as of September 30, 2021.
As of September 30, 2021, we recorded, in total, €43.4 billion in notes and bonds, €2.3 billion in loans from banks, €0.1 billion in other
financial indebtedness and €2.9 billion in lease liabilities. Notes and bonds were issued mainly in the U.S. dollar and euro, and to a lesser
extent in the British pound.
Debt and credit facilities
The share buyback announced in November 2018 was completed on September 24, 2021 with a total volume of €3 billion. On June 24,
2021, Siemens announced that it intends to launch a new five-year share buyback program of up to €3 billion, beginning in fiscal 2022.
6.2 Cash flows
(187)
3,599
10,109
(952)
(4,294)
8,316
2,055
(547)
Change in short-term debt and other financing activities
Repayment of long-term debt (including current maturities of long-term debt)
Issuance of long-term debt
Re-issuance of treasury shares and other transactions with owners
Purchase of treasury shares
Cash flows from financing activities
(15,494)
Cash flows from investing activities - continuing and discontinued operations
1,698
Cash flows from investing activities - discontinued operations
(17,192)
Cash flows from investing activities - continuing operations
1,084
Other disposals of assets
(631)
Change in receivables from financing activities of SFS
(1,523)
Purchase of investments and financial assets for investment purposes
(14,391)
(1,730)
9,996
(113)
Our capital structure ratio as of September 30, 2021 increased to 1.5 from 1.3 a year earlier. The change was due primarily to the above-
mentioned increase in long-term debt and decreased cash and cash equivalents related to the acquisition of Varian.
(2,804)
Capital structure ratio
The decrease of provisions is due mainly to reclassification of a large part of a major asset retirement obligation to current provisions.
The main factors for the increase in total equity attributable to shareholders of Siemens AG were €6.2 billion in net income attributable
to shareholders of Siemens AG; positive other comprehensive income, net of income taxes, of €3.5 billion resulting mainly from positive
effects from remeasurements of defined benefit plans and from currency translation; and higher retained earnings of €1.2 billion due to
Siemens Healthineers' increase in share capital. The increase was partly offset by dividend payments of €2.8 billion (for fiscal 2020) and
the repurchase of 976,346 treasury shares totaling €0.5 billion (including final payment to a commissional bank).
(27)%
2,352
1,723
Debt ratio
Total liabilities
Total non-current liabilities
Other liabilities
Other financial liabilities
Provisions
>200%
664
2,337
679
Deferred tax liabilities
6,360
2,839
Provisions for pensions and similar obligations
8%
38,005
40,879
Long-term debt
17%
34,117
39,952
Total current liabilities
(71)%
(55)%
769
(12)%
1,925
Long-term debt increased due primarily to the issuance of U.S. dollar instruments of €8.4 billion. Set against this were mainly decreases
from the above-mentioned reclassifications and currency translation effects for bonds issued in the U.S. dollar and British pound.
Provisions for pensions and similar obligations substantially decreased mainly due to a positive return on plan assets and extraordinary
fundings in Germany, including the transfer of Siemens' stake in Bentley to Siemens Pension-Trust e.V.
Increases in deferred tax liabilities and contract liabilities year-over-year were due mainly to the acquisition of Varian. For further
information see Note 3 in Notes to Consolidated Financial Statements for fiscal 2021.
The increase in short-term debt and current maturities of long-term debt was due mainly to reclassifications of long-term U.S. dollar
and euro instruments totaling €5.7 billion, and to higher loans from banks totaling €0.9 billion. This was offset by repayment of euro and
U.S. dollar instruments totaling €3.5 billion, and by a €1.9 billion decrease in commercial papers.
13%
123,897
139,608
43%
3,433
4,901
32%
35%
22%
36,390
44,373
Total liabilities and equity
Non-controlling interests
Total equity attributable to shareholders of Siemens AG
Equity ratio
68%
65%
7%
84,074
90,333
1%
49,957
50,381
6%
1,808
The share capital increase of Siemens Healthineers mentioned above contributed also to higher non-controlling interests totaling €1.0
billion. For further information see Note 3 in Notes to Consolidated Financial Statements for fiscal 2021.
Project-related risks: A number of our segments conduct activities under long-term contracts that are awarded on a competitive bidding
basis. Such contracts typically arise at Mobility and in various activities of Smart Infrastructure or Portfolio Companies. Some of these
contracts are inherently risky because we may assume substantially all of the risks associated with completing a project and meeting post-
completion warranty obligations. For example, we may face the risk that we must satisfy technical requirements of a project even though
we have not gained experience with those requirements before winning the project. The profit margins realized on fixed-priced contracts
may vary from original estimates as a result of changes in costs and productivity over a contract's term. We sometimes bear the risk of
unanticipated project modifications, shortage of key personnel, quality problems, financial difficulties of our customers and/or significant
partners, cost overruns or contractual penalties caused by unexpected technological problems, unexpected developments at the project
sites, unforeseen changes or difficulties in the regulatory or political environment, performance problems with our suppliers,
subcontractors and consortium partners or other logistical difficulties. Some of our multi-year contracts also contain demanding
installation and maintenance requirements in addition to other performance criteria relating to timing, unit cost and compliance with
government regulations, which, if not satisfied, could subject us to substantial contractual penalties, damages, non-payment and contract
termination. There can be no assurance that contracts and projects, in particular those with long-term duration and fixed-priced
calculation, can be completed profitably. To tackle those risks, we established a global project management organization to systematically
improve the technical and commercial capabilities of our project management personnel. For very complex projects we conduct dedicated
risk assessments in very early stages of the sales phase before we decide to hand over a binding offer to our customers.
Shortage of skilled personnel: Competition for diverse and highly qualified personnel (e.g. specialists, experts, digital talent) remains
intense in the industries and regions in which our businesses operate. We have ongoing demand for highly skilled employees and a need
to enhance diversity, inclusion and sense of belonging in our workforce. Our future success depends in part on our continued ability to
identify, assess and hire engineers, digital talent and other qualified personnel. We must also integrate, develop and retain them after they
join us, which appears especially relevant in times of a new, increasingly virtual working environment. We address these topics for example
by strengthening the capabilities and skills of our talent acquisition teams and a strategy of proactive search for people with the required
capabilities in our respective industries and markets. Technology and digitalization help us to be more effective in attracting and selecting
diverse talent. Furthermore, we have a focus on diversity and structured succession planning.
At the Shareholders' Meeting, each share of stock has one vote and accounts for the shareholder's proportionate share in the Company's
net income. An exception to this rule applies with regard to treasury shares held by the Company, which do not entitle the Company to
any rights. Under Section 136 of the German Stock Corporation Act the voting right of the affected shares is excluded by law.
As of September 30, 2021, the Company held 47,644,581 shares of stock in treasury.
(1,570)
27%
27%
(5)%
4,357
4,135
9%
(8)%
16,389
(12,032)
2020
2021
15,094
(10,960)
% Change
Fiscal year
Allocation to other retained earnings
Profit carried forward
Net income
Income taxes
Income from business activity
thereof Income from investments, net 5,303 (prior year 8,078)
Financial income, net
Other operating income (expenses), net
Selling and general administrative expenses
Research and development expenses
as percentage of revenue
Gross profit
Cost of Sales
Revenue
(in millions of €)
Statement of Income of Siemens AG in accordance with German Commercial Code (condensed)
(1,677)
6%
(2,999)
(3,490)
The R&D intensity (R&D as a percentage of revenue) was 10%, on the same level as fiscal 2020. The research and development activities
of Siemens AG are fundamentally the same as for its corresponding business activities within the Siemens Group. Research and
development expenses in both periods related mainly to Digital Industries. On an average basis, we employed 7,000 people in R&D in
fiscal 2021.
Research and development expenses and selling and general administrative expenses decreased due mainly to the above-mentioned
transfer of the business activities of Gas and Power.
On a geographical basis, 76% of revenue was generated in the Europe, C.I.S., Africa, Middle East region, 17% in the Asia, Australia region
and 7% in the Americas region. Exports from Germany accounted for 54% of overall revenue. In fiscal 2021, orders for Siemens AG
amounted to €15.7 billion.
The decrease of revenue and cost of sales was due mainly to the business activities of Gas and Power which, effective with the beginning
of calendar year 2020, were transferred to Siemens Energy Global GmbH & Co. KG in preparation of the Siemens Energy spin-off completed
in September 2020.
2,975
Unappropriated net income
14%
3,400
21%
(2,436)
(1,918)
22%
141
171
9.1 Results of operations
(2)%
5,147
n/a
78
(20)
0%
5,192
5,166
(12)%
6,557
5,797
65%
(555)
(196)
14%
5,270
As of September 30, 2021, the number of employees was 49.100.
The Supervisory Board and the Managing Board propose from the unappropriated net income of Siemens AG for the fiscal year ended
September 30, 2021, amounting to €3,400 million to distribute a dividend of €4.00 per share of no par value entitled to the dividend. The
proposed dividend represents a total payout of €3.2 billion based on the estimated number of shares entitled to dividend at the date of
the Annual Shareholders' Meeting. Based on Net income of Siemens group attributable to shareholders of Siemens AG of €6.2 billion for
fiscal 2021, the dividend payout percentage is 52%. We intend to continue providing an attractive return to our shareholders. This includes
striving for a dividend per share that exceeds the amount of the preceding year, or that at least matches the prior-year-level. For fiscal
2022, we expect that net income of Siemens AG will be sufficient to fund the distribution of a corresponding dividend.
In fiscal 2021, results for Siemens AG arise mainly from the business activities of Digital Industries and Smart Infrastructure and are
influenced significantly by the results of subsidiaries and investments we own either directly or indirectly. The business development of
Siemens AG is fundamentally subject to the same risks and opportunities as the Siemens Group. Therefore, the foregoing explanations for
the Siemens Group apply also for Siemens AG.
Environmental, health & safety and other governmental regulations: Some of the industries in which we operate are highly regulated.
Current and future environmental, health and safety and other governmental regulations or changes thereto may require us to change
the way we run our operations and could result in significant increases in our operating or production costs. Furthermore, we see the risk
of potential environmental and health and safety incidents as well as potential non-compliance with environmental and health and safety
regulations affecting Siemens and our contractors or sub-suppliers, resulting for example in serious injuries, business interruptions,
penalties, loss of reputation and internal or external investigations.
Geopolitical uncertainties including sanctions and export control: As a globally operating organization, we conduct business with
customers in countries which are subject to export control regulations, embargoes, economic sanctions, debarment policies or other forms
of trade restrictions (hereafter referred to as "sanctions") imposed by the U.S., the EU, China or other countries or organizations. New or
expanded sanctions in countries in which we do business may result in a curtailment of our existing business in such countries or indirectly
in other countries. We are also aware of policies of national authorities and institutional investors, such as pension funds or insurance
companies, requiring divestment of interests in and prohibiting investment in and transactions with entities doing business with countries
identified by the U.S. Department of State as state sponsors of terrorism. As a result, it is possible that such policies may result in our being
unable to gain or retain certain investors or customers. In addition, the termination of our activities in sanctioned countries may expose
us to customer claims and other actions. Our reputation could also suffer due to our activities with counterparties in or affiliated with these
countries.
Protectionism (including tariffs/trade war): Protectionist trade policies, de-coupling and changes in the political and regulatory
environment in the markets in which we operate, such as import and export controls, tariffs and other trade barriers including debarment
from certain markets and price or exchange controls, could affect our business in national markets and could impact our business situation,
financial position and results of operations; and may expose us to penalties, other sanctions and reputational damage. In addition, the
uncertainty of the legal environment in some regions could limit our ability to enforce our rights and subject us to increasing costs related
to appropriate compliance programs.
The latter case will cause significant extra effort and cost to do the needed product changes and to maintain the country-specific product
variant as an additional derivate item in the portfolio. In the worst case, if the two aforementioned ways of maintaining the product's
marketability prove to be not feasible, sale of the affected product in the market has to be stopped. We monitor the political and regulatory
landscape in all our key markets to anticipate potential problem areas, with the aim of quickly adjusting our business activities and
processes to changed conditions. However, any changes in regulations, laws and policies could adversely affect our business activities and
processes as well as our financial condition and results of operations.
Combined Management Report
31
Changes of regulations, laws and policies: As a diversified company with global businesses we are exposed to various product- and
country-related regulations, laws and policies influencing our business activities and processes. According to observations and analysis,
there is an increasing risk that existing technical regulations in target markets will suddenly change, or new ones will be set in force, which
determine market access criteria that our products do not meet. The affected products would lose marketability in this market. The way
of resolving the risk of a sales-stop depends on the case of how to correct the non-conformity. In case the product can technically stay as
is, while it has to undergo new and additional conformity assessment and certification, there will be considerable effort and cost to carry
out the needed testing and certification procedures. In a worse case, the affected product will need re-engineering or re-design to meet
the requirements of the changed or new technical regulation even before it can become re-assessed and certified for market approval.
Along with other measures, Siemens has established a global compliance organization that conducts among others compliance risk
mitigation processes such as Compliance Risk Assessments or initiates internal audit activities performed by the internal assurance
department.
In addition, future developments in ongoing and potential future investigations, such as responding to the requests of governmental
authorities and cooperating with them, could divert management's attention and resources from other issues facing our business.
Furthermore, we might be exposed to compliance risks in connection with recently acquired operations that are in the ongoing process of
integration.
In its global business, Siemens does part of its business with state-owned enterprises and governments. We also participate in a number
of projects funded by government agencies and intergovernmental and supranational organizations, such as multilateral development
banks. Ongoing or potential future investigations into allegations of corruption, antitrust violations or other violations of law could as well
impair relationships with such parties or could result in our exclusion from public contracts. Such investigations may also adversely affect
existing private business relationships and our ability to pursue potentially important strategic projects and transactions, such as strategic
alliances, joint ventures or other business alliances, or could result in the cancellation of certain of our existing contracts. Moreover, third
parties, including our competitors, could initiate significant litigation.
Current and future investigations regarding allegations of corruption, of antitrust violations and of other violations of law:
Proceedings against us or our business partners regarding allegations of corruption, of antitrust violations and of other violations of law
may lead to fines as well as penalties, sanctions, injunctions against future conduct, profit disgorgements, disqualifications from directly
and indirectly engaging in certain types of business, the loss of business licenses or permits, other restrictions and legal consequences as
well as negative public media coverage. Accordingly, we may, among other things, be required to comply with potential obligations and
liabilities arising in connection with such investigations and proceedings, including potential tax penalties. Moreover, any findings related
to public corruption that are not covered by the 2008 and 2009 corruption charge settlements, which we concluded with U.S. and German
authorities, may endanger our business with government agencies and intergovernmental and supranational organizations. Monitors
could again be appointed to review future business practices and we may otherwise be required to further modify our business practices
and our compliance program.
8.3.4 Compliance risks
For further information on post-employment benefits, derivative financial instruments, hedging activities, financial risk management and
related measures, see Notes 17, 24 and 25 in Notes to Consolidated Financial Statements for fiscal 2021.
Credit risks: We provide our customers with various forms of direct and indirect financing of orders and projects, including guarantees.
Siemens Financial Services in particular bears credit risks due to such financing activities if, for example, customers do not meet obligations
arising from these financing arrangements, meet them only partially, or meet them late.
In addition, while we have procedures in place to ensure compliance with applicable governmental regulations in the conduct of our
business operations, it cannot be excluded that violations of applicable governmental regulations may be caused either by us or by third
parties that we contract with, including suppliers or service providers whose activities may be attributed to us. Any such violations
particularly expose us to the risk of liability, penalties, fines, reputational damage or loss of licenses or permits that are important to our
business operations. In particular, we could also face liability for damage or remediation for environmental contamination at the facilities
we design or operate. With regard to certain environmental risks, we maintain liability insurance at levels that our management believes
are appropriate and consistent with industry practice. We may incur environmental losses beyond the limits, or outside the coverage, of
such insurance, and such losses may have an adverse effect on our business situation, financial condition and results of operations.
Current or future litigation and legal and regulatory proceedings: Siemens is and potentially will be involved in numerous legal disputes
and proceedings in various jurisdictions. These legal disputes and proceedings could result, in particular, in Siemens being subject to
payment of damages and punitive damages, equitable remedies or sanctions, fines or disgorgement of profit. In individual cases this may
also lead to formal or informal exclusion from tenders or the revocation or loss of business licenses or permits. Asserted claims are generally
subject to interest rates. Some of these legal disputes and proceedings could result in adverse decisions for Siemens or decisions,
assessments or requirements of regulatory authorities could deviate from our expectations, which may have material effects on our
business activities as well as our financial position, results of operations and cash flows. Siemens maintains liability insurance for certain
legal risks at levels our management believes are appropriate and consistent with industry practice. The insurance policy, however, does
not protect Siemens against reputational damage. Moreover, Siemens may incur losses relating to legal proceedings beyond the limits, or
outside the coverage, of such insurance or exceeding any provisions made for losses related to legal proceedings. Finally, there can be no
assurance that Siemens will be able to maintain adequate insurance coverage on commercially reasonable terms in the future.
Liquidity and financing risks: Our treasury and financing activities could face adverse deposit and/or financing conditions from negative
developments related to financial markets, such as limited availability of funds and hedging instruments, an updated evaluation of our
solvency, particularly from rating agencies, negative interest rates, and impacts arising from more restrictive regulation of the financial
sector, central bank policy, or the usage of financial instruments. Widening credit spreads due to uncertainty and risk aversion in the
financial markets might lead to adverse changes in the market values of our financial assets, in particular our derivative financial
instruments.
Risks from pension obligations: The provisions for pensions and similar obligations may be affected by changes in actuarial assumptions,
including the discount rate, as well as by movements in financial markets or a change in the mix of assets in our investment portfolio.
Additionally, they are subject to legal risks with regard to plan design among other factors. A significant increase in the underfunding may
have a negative effect on our capital structure and rating, and thus may tighten refinancing options and increase costs. In order to comply
with local pension regulations in selected foreign countries, we may face an economic risk of increasing cash outflows due to change in
funding level according to local regulations of our pension plans in these countries or to changes in the regulations themselves.
Audits by tax authorities and changes in tax regulations: We operate in nearly all countries of the world and therefore are subject to
many different tax regulations. Changes in tax laws in any of these jurisdictions could result in higher tax expenses and increased tax
payments. Furthermore, legislative changes could impact our tax receivables and liabilities as well as deferred tax assets and deferred tax
liabilities. In addition, the uncertain legal environment in some regions could limit our ability to enforce our rights. As a globally operating
organization, we conduct business in countries subject to complex tax rules, which may be interpreted in different ways. Future
interpretations or developments of tax regimes may affect our business situation, financial condition and results of operations. We are
regularly audited by tax authorities in various jurisdictions and we continuously identify and assess relevant risks.
8.3.3 Financial risks
Combined Management Report
30
Combined Management Report
there is a risk that critical suppliers are taken over by competitors and a risk that competitors are increasingly offering services to our
installed base. We address these risks with various measures, for example benchmarking, strategic initiatives, sales push initiatives,
executing productivity measures and target cost projects, rightsizing of our footprint, outsourcings, mergers and joint ventures and
optimizing our product and service portfolio. We continuously monitor and analyze competitive, market and industry information in order
to be able to anticipate unfavorable changes in the competitive environment rather than merely reacting to such changes.
COVID-19 pandemic (COVID-19): The COVID-19 situation may worsen, as the number of new infections is rising again in many countries.
At the same time, the number of cases and the severe course of the disease will develop very differently depending on the respective
vaccination rate in the countries. The impact of the pandemic therefore varies considerably between regions and customer sectors.
Governments and other local authorities are working to contain the spread of infection by implementing various countermeasures such
as contact restrictions, adherence to minimum hygienic standards, wearing of respiratory masks, vaccine mandates, and vaccination and
testing services to avoid widespread curfews and restrictions on the opening of certain sectors of the economy. Depending on
epidemiological trends and political pressure, governments are expected to relax existing restrictions and avoid new ones to reduce the
associated economic harm. The extent and duration of the individual impacts on our business are difficult to predict. For example, if
containment measures are initiated at short notice or last an unpredictably long time, our business may be significantly impacted in ways
that exceed current expectations and go beyond mitigation measures already in place. We could face unexpected closures of sites, factories
or office buildings of our suppliers, customers or our own operations, which would affect our ability to produce or deliver our products,
solutions and services. The most material uncertainties of the COVID-19 crisis are its continued duration, including for example potential
further waves of infection, mutations of the virus and the evolution of global vaccination progress, and the economic costs of restrictions.
Since the second quarter of fiscal 2020, we have felt the impact in our businesses, both our short-cycle businesses and project businesses,
as, for example, customers cancelled orders or postponed investments, we were exposed to increased default risk, and our supply chain
experienced difficulties in certain areas. Now we are seeing a recovery in many business sectors, and travel is also becoming easier. The
longer the restrictive measures such as curfews last, the deeper the resulting recession will be. Possible consequences include an
unchecked increase of public and private debt which hampers the post-crisis recovery, serious disruptions in the financial system and
insolvencies among Siemens customers and suppliers. In the long term, a reversal of globalization could reduce potential future growth.
Various task forces and crisis teams have been set up in all areas of Siemens to carefully monitor and mitigate the various impacts of
COVID-19, with a focus on the health and safety of our employees through operational vaccination offers, testing concepts and making
treatment offers available, and on business continuity. At the Group level, an executive-level crisis team at Group headquarters has worked
out overarching decisions and coordinated the flow of information through the different levels of the organization, while empowering
responsible management in each business and country to take appropriate action according to national and regional guidelines.
Increasing sustainability focus: The increasing environmental, social and governance (ESG) requirements from governments and
customers as well as financing restrictions from governments, customer demands and financing restrictions for greenhouse gas emitting
technologies could result in additional costs. Additionally, business involvement in sensitive environmental, social or governance activities
might be negatively perceived and trigger adverse media attention. This could lead to reputational damage and have an impact on
achieving our business goals. In fiscal 2021 we introduced a binding ESG risk framework and with it an optimized due diligence process.
This supports Siemens businesses with due diligence in the customer-oriented environment with a view to possible environmental and
social risks as well as related human rights and reputational risks.
Portfolio measures, at-equity investments, other investments and strategic alliances: Our strategy includes divesting our activities in
some business areas and strengthening others through portfolio measures, including mergers and acquisitions. With respect to
divestments, we may not be able to divest some of our activities as planned, and the divestitures we do carry out could have a negative
impact on our business situation, financial condition, results of operations and reputation. Mergers and acquisitions are inherently risky
because of difficulties that may arise when integrating people, operations, technologies and products. There can be no assurance that any
of the businesses we acquire can be integrated successfully and in a timely manner as originally planned, or that they will perform as
anticipated once integrated. In addition, we may incur significant acquisition, administrative, tax and other expenditures in connection
with these transactions, including costs related to integration of acquired businesses. Furthermore, portfolio measures may result in
additional financing needs and adversely affect our capital structure. Acquisitions can lead to substantial additions to intangible assets,
including goodwill, in our statements of financial position. If we were to encounter continuing adverse business developments or if we
were otherwise to perform worse than expected at acquisition activities, then these intangible assets, including goodwill, might have to
be impaired, which could adversely affect our business situation, financial condition and results of operations. Our investment portfolio
includes investments held for purposes other than trading and other investments. Any factors negatively influencing the financial
condition and results of operations of our at-equity investments and other investments could have an adverse effect on our equity pick-
up related to these investments or may result in a related write-off. In addition, our business situation, financial condition and results of
operations could also be adversely affected in connection with loans, guarantees or non-compliance with financial covenants related to
these investments. Furthermore, such investments are inherently risky as we may not be able to sufficiently influence corporate
governance processes or business decisions taken by our at-equity investments, other investments and strategic alliances, which may have
a negative effect on our business and especially on our reputation. In addition, joint ventures bear the risk of difficulties that may arise
when integrating people, operations, technologies and products. Strategic alliances may also pose risks for us because we compete in
some business areas with companies with which we have strategic alliances. Besides other measures, we handle these risks with
standardized processes as well as dedicated roles and responsibilities in the areas of mergers, acquisitions, divestments and carve-outs.
This includes the systematic treatment of all contractual obligations and post-closing claims.
8.3.2 Operational risks
Cyber/Information security: Digital technologies are deeply integrated into our business portfolio. Further integration of information
technology into products and services in conjunction with changing business strategies (such as outsourcing, globally distributed
development, a lesser degree of sole production) are leading to an increasingly distributed supply chain, making efficient controls difficult.
The fact of a large number of suppliers requires a significant effort for the initial and regular verification of the effective implementation
of cybersecurity requirements by suppliers. Siemens business entities might lose market access if their products, solutions and services do
not comply with increased regulations and legal requirements for cybersecurity in their respective countries. We observe a global increase
29
Combined Management Report
of cybersecurity threats and higher levels of professionalism in computer crime, which pose a risk to the security of products, systems and
networks and the confidentiality, availability and integrity of data. According to various external data sources, this trend has accelerated
during the COVID-19 pandemic. Especially the number of phishing attacks as well as the number of malicious websites have increased
significantly. Moreover, the information technology market is concentrated among a small number of information technology and
software vendors, which could lead to dependence on a single provider. There can be no assurance that the measures aimed at protecting
our intellectual property and portfolio will address these threats under all circumstances. There is a risk that confidential information (data
privacy) may be stolen or that the integrity of our portfolio may be compromised, e.g. by attacks on our networks, social engineering, data
manipulations in critical applications and a loss of critical resources, resulting in financial damages. Cybersecurity covers the IT of our entire
enterprise including office IT, systems and applications, special purpose networks, and our operating environments such as manufacturing
and research and development (R&D). Like other large multinational companies, we face active cyber threats from sophisticated
adversaries that are supported by organized crime and nation-states engaged in economic espionage or even sabotage. We strive to
mitigate these risks by employing a number of measures, including employee training, considering new models of flexible working
environments, and comprehensive monitoring of our networks and systems through cyber defense with an artificial intelligence solution
to identify attacks faster and prevent damage to society and especially to critical infrastructures, our customers, our partners and Siemens
overall. We initiated the industrial "Charter of Trust," signed by a growing group of global companies, which sets out principles for building
trust in digital technologies and creating a more secure digital world. Nonetheless, our systems, products, solutions and services, as well
as those of our service providers, remain potentially vulnerable to attacks. Such attacks could potentially lead to the publication,
manipulation or leakage of information such as through industrial espionage. They could also result in deliberate improper use of our
systems, vulnerable products, production downtimes and supply shortages, with potential adverse effects on our reputation, our
competitiveness and results of operations. For increased protection of Siemens and reduction of a potential financial impact caused by
cyber incidents, the risk transfer possibilities have been evaluated. As a result of an international insurance tender, the currently insurable
cybersecurity risks have been to a partial extent transferred to a consortium of insurance companies.
Supply chain management: The financial performance of our operating units depends on reliable and effective supply chain management
for components, sub-assemblies and materials. Capacity constraints and supply shortages resulting from ineffective supply chain
management may lead to production bottlenecks, delivery delays, quality issues and additional costs. We also rely on third parties to supply
us with parts, components and services. Using third parties to manufacture, assemble and test our products may reduce our control over
manufacturing yields, quality assurance, product delivery schedules and costs. Although we work closely with our suppliers to avoid supply-
related problems, there can be no assurance that we will not encounter supply problems in the future, especially if we use single-source
suppliers for critical components. Shortages and delays could materially harm our businesses. Unanticipated increases in the price of
components or raw materials due to market shortages or other reasons could also adversely affect performance. Furthermore, we may be
exposed to the risk of delays and interruptions in the supply chain as a consequence of catastrophic events (including pandemics), cyber
incidents or suppliers' financial difficulties, particularly if we are unable to identify alternative sources of supply or means of transportation
in a timely manner or at all. Besides other measures, we mitigate price fluctuation in global raw material markets with various hedging
instruments.
38
Market price risks: We are exposed to fluctuations in exchange rates, especially between the U.S. dollar and the euro, because a high
percentage of our business volume is conducted as exports from Europe to areas using the U.S. dollar. In addition, we are exposed to
effects involving the currencies of emerging markets, in particular the Chinese yuan. Appreciable changes in euro exchange rates could
materially change our competitive position. We are also exposed to fluctuations in interest rates. Even hedging activities to mitigate such
risks may result in a reverse effect. Fluctuations in exchange or interest rates, negative developments in the financial markets and changes
in central bank policies could therefore negatively impact our financial results.
The change in other operating income (expenses), net, was mainly due to higher expenses in fiscal 2020, which included expenses
related to the valuation of an investment as well as expenses related to the spin-off of Siemens Energy.
For additional information with respect to specific proceedings, see Note 22 in Notes to Consolidated Financial Statements for fiscal 2021.
8.3.5 Assessment of the overall risk situation
While our assessments of individual risks have changed during fiscal 2021 due to developments in the external environment, changes in
our business portfolio, effects of our own mitigation measures and the revision of our risk assessment, the overall risk situation for Siemens
did not change significantly as compared to the prior year. We currently see the operational risk cyber/information security as the most
significant challenge for us followed by the strategic risk arising from economic, political and geopolitical conditions.
The Annual Financial Statements of Siemens AG have been prepared in accordance with the regulations set forth in the German
Commercial Code (Handelsgesetzbuch) and the German Stock Corporation Act (Aktiengesetz).
9. Siemens AG
Combined Management Report
34
Our internal audit function systematically evaluates our financial reporting integrity, the effectiveness of the control system and the risk
management system, and adherence to our compliance policies. Siemens Healthineers has its own internal audit department and annual
audit plan. Topics from the annual audit plan of Siemens Healthineers that are also relevant for our Managing Board and Audit Committee
must be mandated first by Siemens Healthineers' Managing Board and Audit Committee and subsequently by our Managing Board and
Audit Committee. The audit procedures for these topics will be generally executed by joint teams including members of our and Siemens
Healthineers' internal audit functions, thus respecting the interests of both Siemens AG and Siemens Healthineers. In addition, the Audit
Committee is integrated into our control system. In particular, it oversees the accounting and accounting process and the effectiveness of
the internal control system, the risk management system and the internal audit system. Moreover, we have rules for accounting-related
complaints.
After the acquisition of Varian, Siemens Healthineers has commenced to integrate the former Varian entities into our accounting-related
internal control and risk management system. The integration efforts for the accounting-related internal control system will continue in
fiscal 2022.
Siemens Healthineers is subject to our Group-wide principles for the accounting-related internal control and risk management system and
is responsible for adhering to those principles. The management of Siemens Healthineers provides periodic signoffs to the Managing Board
of Siemens AG, certifying the effectiveness of its accounting-related internal control system as well as the completeness, accuracy, and
reliability of the financial data reported to us.
On a quarterly basis, we execute an internal certification process. Management at different levels of our organization, supported by
confirmations by managements of entities under their responsibility, confirms the accuracy of the financial data that has been reported to
Siemens' corporate headquarters and reports on the effectiveness of the related control systems.
Qualification of employees involved in the accounting process is ensured through appropriate selection processes and training. As a
fundamental principle, based on materiality considerations, the "four eyes" principle applies, and specific procedures must be adhered to
for data authorization. Additional control mechanisms include target-performance comparisons and analyses of the composition of and
changes in individual line items, both in the closing data submitted by reporting units and in the Consolidated Financial Statements. In
line with our information security requirements, accounting-related IT systems contain defined access rules protecting them from
unauthorized access. The manual and system-based control mechanisms referred to above generally also apply when reconciling the
International Financial Reporting Standards (IFRS) closing data to the Annual Financial Statements of Siemens AG.
The base data used in preparing our financial statements consists of the closing data reported by the operations of Siemens AG and its
subsidiaries. The preparation of the closing data of most of our entities is supported by an internal shared services organization.
Furthermore, other accounting activities, such as governance and monitoring activities, are usually bundled on a regional level. In
particular cases, such as valuations relating to post-employment benefits, we use external experts. The reported closing data is used to
prepare the financial statements in the consolidation system. The steps necessary to prepare the financial statements are subject to both
manual and automated controls.
is analyzed on an ongoing basis. Accounting departments are informed quarterly about current topics and deadlines from an accounting
and closing process perspective.
Combined Management Report
33
At the end of each fiscal year, our management performs an evaluation of the effectiveness of the implemented control system, both in
design and operating effectiveness. We have a standardized procedure under which necessary controls are defined, documented in
accordance with uniform standards, and tested regularly for their effectiveness. Nevertheless, there are inherent limitations on the
effectiveness of any control system, and no system, including one determined to be effective, may prevent or detect all misstatements.
Our Consolidated Financial Statements are prepared on the basis of a centrally issued conceptual framework which primarily consists of
uniform Financial Reporting Guidelines and a chart of accounts. For Siemens AG and other companies within the Siemens Group required
to prepare financial statements in accordance with German Commercial Code, this conceptual framework is complemented by mandatory
regulations specific to the German Commercial Code. The need for adjustments in the conceptual framework due to regulatory changes
The most significant challenges have been mentioned first in each of the four risk categories: strategic, operational, financial and
compliance.
The overarching objective of our accounting-related internal control and risk management system is to ensure that financial reporting is
conducted in a proper manner, such that the Consolidated Financial Statements and the Combined Management Report of Siemens Group
as well as the Annual Financial Statements of Siemens AG as the parent company are prepared in accordance with all relevant regulations.
Our ERM approach is based on the globally accepted COSO Standard (Committee of Sponsoring Organizations of the Treadway
Commission) Enterprise Risk Management - Integrating with Strategy and Performance (2017) and the ISO (International Organization
for Standardization) Standard 31000 (2018) and is adapted to Siemens requirements. The frameworks connect the ERM process with our
financial reporting process and our internal control system. They consider a company's strategy, the efficiency and effectiveness of its
business operations, the reliability of its financial reporting and compliance with relevant laws and regulations to be equally important.
Our accounting-related internal control system is based on the internationally recognized Internal Control - Integrated Framework (2013)
also developed by COSO. The two systems are complementary.
While our assessments of individual opportunities have changed during fiscal 2021 due to developments in the external environment,
changes in our business portfolio, our endeavors to profit from them and revision of our strategic plans, the overall opportunity situation
for Siemens did not change significantly as compared to the prior year.
Assessment of the overall opportunities situation: The most significant opportunity for Siemens is favorable political and regulatory
environment (including sustainability) as described above.
Optimization of organization and processes: On the one hand, we leverage ideas to drive further improvements in our processes and
cost structure, such as common computing architecture for image processing or optimizing factory capacities for shorter lead times. On
the other hand, we see an opportunity of further penetrating markets by ramping up local business excellence (e.g. engineering) and
increasing local sourcing and local manufacturing.
Turning COVID-19 challenges into opportunities: The participation in governmental COVID-19 recovery programs such as the European
Union's "Next Generation EU" recovery plan is an opportunity for Siemens. There is also the chance to strengthen our customer relationship
through additional market offerings that specifically address use cases related directly to the COVID-19 pandemic. Potential growth areas
might arise through the optimization program "new normal" with, for example, more working flexibility for our employees.
Value creation through innovation: We drive innovation by investing significantly in R&D in order to develop sustainable solutions for
our customers while also strengthening our own competitiveness. Being an innovative company and constantly inventing new
technologies that we expect will meet future demands arising from the megatrends of demographic change, urbanization, climate change
and globalization is one of our core purposes. We are granted thousands of new patents every year and continuously develop new concepts
and convincing new digital and data-driven business models. This helps us create the next generation of ground-breaking innovations in
such fields as digitalization, artificial intelligence, autonomous machines and edge computing. Across our operating units, we are profiting
from our strength in the "Digital Enterprise." Foremost, our cloud-based MindSphere platform enhances the availability of our customers'
digital products and systems and improves their productivity and efficiency. We offer edge computing apps along with MindSphere in
individual facilities, so that customers can connect all their facilities to create an integrated data network. We see also significant
opportunities to generate additional volume and profit from innovative digital products, services and solutions, including cyber security
and applications for optimized energy consumption. We see growth opportunities in opening up access to new markets and customers
through new marketing and sales strategies, which we implement in our operating units. Our position along the value chains of
automation and digitalization allows us to further increase market penetration. Along these value chains, we have identified several
concrete growth fields in which we see our greatest long-term potential. Hence, we are combining and developing our resources and
capabilities for these growth fields.
Mergers, acquisitions, equity investments, partnerships, divestments and streamlining our portfolio: We constantly monitor our
current and potential markets to identify opportunities for strategic mergers, acquisitions, equity investments and partnerships, which
may complement our organic growth. Such activities may help us to strengthen our position in our existing markets, provide access to
new or underserved markets, or complement our technological portfolio in strategic areas. Opportunities might also arise when portfolio
optimization measures generate gains, which enable us to further pursue our other strategies for growth and profitability.
Favorable political and regulatory environment (including sustainability): We see opportunities from potential improvement in the
geopolitical policy environment, which could quickly restore a more positive industrial investment sentiment that supports the growth of
our markets. In addition, government initiatives and subsidies (including tax reforms, recovery plans among others) may lead to more
government spending (e.g. infrastructure, healthcare or digitalization investments) and ultimately result in an opportunity for us to
participate in ways that increase our revenue and profit. By enabling our customers to lower their GHG (Greenhouse Gas) emissions across
our portfolio and by reducing CO2 emission in our own operation, Siemens strives to support the trend towards a low-carbon economy.
Siemens also welcomes and supports from an opportunity perspective, recent legislative and governmental accelerate to mitigate climate
change worldwide, especially in Europe through e.g. the Green Deal or Sustainable Finance Initiative.
necessarily the only ones we encounter. In addition, our assessment of opportunities is subject to change because the Company, our
markets and technologies are constantly advancing. It is also possible that opportunities we see today will never materialize.
Combined Management Report
32
Within our ERM we regularly identify, evaluate and respond to opportunities that present themselves in our various fields of activity. Below
we describe our most significant opportunities. Unless otherwise stated, the opportunities described relate to all organizational units. The
order in which the opportunities are presented reflects the currently estimated relative exposure for Siemens associated with these
opportunities and thus provides an indication of the opportunities' current importance to us. The described opportunities are not
8.4 Opportunities
concern.
At present, no risks have been identified that either individually or in combination could endanger our ability to continue as a going
8.5 Significant characteristics of the accounting-related internal control and risk management
system
The decrease in financial income, net was due primarily to lower income from investments, net, partly offset by a positive change in
other financial income (expenses), net. The primary factors in lower income from investments, net were the following: a profit transfer
agreement with Siemens Beteiligungen Inland GmbH, Germany, which reduced income by €0.9 billion; a decline in income from the
investment in Siemens Holdings plc, Ltd., United Kingdom, of €0.7 billion; and a decrease of €0.5 billion in income from Siemens Ltd,
China. Furthermore, fiscal 2020 included a gain of €2.1 billion from the disposal of Siemens Limited, India, which was partly offset by an
impairment of €1.3 billion on the stake in Siemens Energy AG. In contrast, a gain of €0.9 billion from the sale of Flender GmbH, Germany
in fiscal 2021 was recorded in income from investments, net. The positive change in other financial income (expenses), net included an
increase in gains from non-current securities by €0.5 billion and a reduction of expenses by €0.4 billion from impairments of loan
receivables related to an investment. Higher gains from non-current securities were driven by a transfer of investment funds and
corresponding realization of hidden reserves as mentioned below.
Internal programs and initiatives: We are in a continuous process of operational optimization and constantly engage in cost-reduction
initiatives, including ongoing capacity adjustment measures and structural initiatives. Consolidation of business activities and
manufacturing facilities, outsourcings, joint ventures and the streamlining of product portfolios are all part of these cost-reduction efforts.
These measures may not be implemented as planned, may turn out to be less effective than anticipated, may become effective later than
estimated or may not become effective at all. Any future contribution of these measures to our profitability will be influenced by the actual
savings achieved and by our ability to sustain them. In case of restructuring and outsourcing activities, there could be delays in product
deliveries or we might even experience delivery failures. Furthermore, delays in critical R&D projects could lead to negative impacts in
running projects. We constantly control and monitor the progress of these projects and initiatives using standardized controlling and
milestone tracking approaches.
9.2 Net assets and financial position
10.2 Restrictions on voting rights or transfer of shares
As of September 30, 2021, the Company's common stock totaled €2.550 billion. The capital stock is divided into 850 million registered
shares of no par value (Siemens shares). The shares are fully paid in. All shares confer the same rights and obligations. The shareholders'
rights and obligations are governed in detail by the provisions of the German Stock Corporation Act, in particular by Sections 12, 53a et
seq., 118 et seq. and 186 of the German Stock Corporation Act.
10.1 Composition of common stock
explanatory report
10. Takeover-relevant information (pursuant to Sections 289a
and 315a of the German Commercial Code) and
Combined Management Report
36
The Corporate Governance statement pursuant to Sections 289f and 315d of the German Commercial Code is publicly available on the
company's website at siemens.de/corporate-governance.
9.3 Corporate Governance statement
The increase in equity was attributable to net income for the year of €5.1 billion and the transfer of €0.5 billion in treasury shares to
employees in connection with our share-based payments programs. These factors were partly offset by dividends paid in fiscal 2021 (for
fiscal 2020) of €2.8 billion and share buybacks during the year amounting to €0.5 billion (including a €0.4 billion final payment to the
commissioned bank). The equity ratio as of September 30, 2021 increased to 21%, from 18% a fiscal year earlier. For the disclosures in
accordance with Section 160 para. 1 no. 2 of the German Stock Corporation Act about treasury shares, refer to Note 15 of our Notes to
Annual Financial Statements for fiscal 2021.
The increase in provisions for pensions and similar commitments was mainly due to recording of current service and interest costs and
to lower discount rates partly offset by payments for pensions and similar commitments.
The change in cash and cash equivalents, other securities related to the liquidity management of the Corporate Treasury of Siemens
AG, which was focused not solely on the business activities of Siemens AG. The liquidity management is based on the financing policy of
the Siemens Group, which is aimed towards a balanced financing portfolio, a diversified maturity profile and a comfortable liquidity
cushion. Intra-group financing activities drove both an increase in receivables from affiliated companies, which resulted in higher
inventories, receivables and other assets, and lower liabilities to affiliated companies, which was the main reason for the reduction of
trade payables, liabilities to affiliated companies and other liabilities.
During fiscal 2021 Siemens contributed supplemental fundings to Siemens Pension-Trust e.V. and took measures under company law to
simplify the investment structure of pension assets, which for the most part had overall no impact on the carrying amount of the financial
assets as of September 2021 compared to the prior year. The supplemental fundings included stakes in Bentley Systems, Inc. in the amount
of €1.0 billion and in ChargePoint Holdings, Inc. in the amount of €0.3 billion, as well as zero-coupon receiver swaps in the amount of
€0.3 billion. The measures to simplify the investment structure included a transfer of investment funds at fair value of €4.8 billion
(including realization of hidden reserves) to shares in affiliated companies, which led to a disposal of securities with a carrying amount of
€4.1 billion in the fixed assets register. In addition to these transactions Siemens recorded the disposal of Flender GmbH in the fixed assets
register, at a carrying amount of €1.0 billion.
(1)%
102,975
101,487
(8)%
271
(6)%
(7)%
67,047
67,145
>200%
98
501
62,389
62,890
249
4%
16,023
(2)%
4,323
6%
Siemens shares issued to employees worldwide under the employee share programs implemented since the beginning of fiscal 2009, in
particular the Share Matching Plan, are freely transferable unless applicable local laws provide otherwise. Under the rules of the Share
Matching Plan, however, in order to receive one matching share free of charge for each three shares purchased, participants are required
to hold the shares purchased by them for a vesting period of several years, during which the participants must be continuously employed
by Siemens AG or any of its affiliated companies. The right to receive matching shares is forfeited if the purchased shares are sold,
transferred, hedged on, pledged or hypothecated in any way during the relevant vesting period.
The von Siemens-Vermögensverwaltung GmbH (VSV) has, on a sustained basis, powers of attorney allowing it to exercise the voting rights
for 10,716,740 shares (as of September 30, 2021) on behalf of members of the Siemens family. These shares are part of the total number
of shares held by the family's members. The powers of attorney are based on an agreement between the VSV and, among others, members
of the Siemens family. The shares are voted together by VSV, taking into account the suggestions of a family partnership established by
the family's members or of one of this partnership's governing bodies.
10.3 Legislation and provisions of the Articles of Association applicable to the appointment and
removal of members of the Managing Board and governing amendment to the Articles of
Association
The appointment and removal of members of the Managing Board are subject to the provisions of Sections 84 and 85 of the German Stock
Corporation Act and Section 31 of the German Codetermination Act (Mitbestimmungsgesetz). According to Section 8 para. 1 of the Articles
of Association, the Managing Board is comprised of several members, the number of which is determined by the Supervisory Board.
According to Section 179 of the German Stock Corporation Act, any amendment to the Articles of Association requires a resolution of the
Shareholders' Meeting. The authority to adopt purely formal amendments to the Articles of Association was transferred to the Supervisory
Board under Section 13 para. 2 of the Articles of Association. In addition, by resolutions adopted during past Shareholders' Meetings, the
Supervisory Board has been authorized to amend Section 4 of the Articles of Association in accordance with the utilization of the
Authorized and Conditional Capitals, and after expiration of the then-applicable authorization and utilization period.
35
In November 2018, the Company announced that it would carry out a share buyback of up to €3 billion in volume until November 15,
2021 at the latest. The buyback commenced on December 3, 2018 and terminated on September 24, 2021. Using the authorizations given
by the Annual Shareholders' Meetings on January 27, 2015 and February 5, 2020, Siemens repurchased 29.4 million shares by September
30, 2021 under this share buyback. This buyback had the exclusive purposes of retirement, of issuing shares to employees, board members
of affiliated companies and members of the Managing Board of Siemens AG, and of servicing/securing the obligations or rights to acquire
Siemens shares arising particularly from or in connection with convertible bonds and warrant bonds. On June 24, 2021, Siemens
announced that it intends to launch a new five-year share buyback program of up to €3 billion, beginning in fiscal 2022.
Furthermore, the Supervisory Board is authorized to use shares acquired on the basis of this or any previously given authorization to meet
obligations or rights to acquire Siemens shares that were or will be agreed with members of the Managing Board within the framework of
rules governing Managing Board compensation.
used to service or secure obligations or rights to acquire Siemens shares arising particularly from or in connection with convertible bonds
or warrant bonds of the Company or its affiliated companies. Moreover, the Managing Board is authorized to exclude subscription rights
in order to grant holders/creditors of conversion or option rights or respective conversion or option obligations on Siemens shares
subscription rights as compensation against effects of dilution to the extent to which they would be entitled after exercise of such rights
or fulfillment of such obligations, and to use Siemens shares to service such subscription rights.
sold by the Managing Board, with the approval of the Supervisory Board, against payment in cash if the price at which such Siemens
shares are sold is not significantly lower than the market price of Siemens stock (exclusion of subscription rights, limited to 10% of the
capital stock, by mutatis mutandis application of Section 186 para. 3 sentence 4 German Stock Corporation Act); or
offered and transferred, with the approval of the Supervisory Board, to third parties against non-cash contributions;
used in connection with share-based compensation programs and/or employee share programs of the Company or any of its affiliated
companies and issued to individuals currently or formerly employed by the Company or any of its affiliated companies as well as to
board members of any of the Company's affiliated companies;
retired;
•
•
•
•
•
In addition to selling them over the stock exchange or through a public sales offer to all shareholders, the Managing Board is authorized
by resolution of the Shareholders' Meeting on February 5, 2020 to also use Siemens shares repurchased on the basis of this or any
previously given authorization for every permissible purpose, in particular as follows: Such Siemens shares may be
11,700
The Company may not repurchase its own shares unless so authorized by a resolution duly adopted by the shareholders at a general
meeting or in other very limited circumstances set forth in the German Stock Corporation Act. On February 5, 2020, the Shareholders'
Meeting authorized the Company to acquire until February 4, 2025 up to 10% of its capital stock existing at the date of adopting the
resolution or - if this value is lower - as of the date on which the authorization is exercised. The aggregate of shares of stock of Siemens
AG repurchased under this authorization and any other Siemens shares previously acquired and still held in treasury by the Company or
attributable to the Company pursuant to Sections 71d and 71e of the German Stock Corporation Act may at no time exceed 10% of the
then existing capital stock. Any repurchase of Siemens shares shall be accomplished at the discretion of the Managing Board either (1) by
acquisition over the stock exchange, (2) through a public share repurchase offer or (3) through a public offer to swap Siemens shares for
shares in a listed company within the meaning of Section 3 para. 2 German Stock Corporation Act. The Managing Board is additionally
authorized to complete the repurchase of Siemens shares in accordance with the authorization described above by using certain derivatives
(put and call options, forward purchases and any combination of these derivatives). In exercising this authorization, all stock repurchases
based on the derivatives are limited to a maximum volume of 5% of Siemens' capital stock existing at the date of adopting the resolution
at the Shareholders' Meeting. A derivative's term of maturity may not, in any case, exceed 18 months and must be chosen in such a way
that the repurchase of Siemens shares upon exercise of the derivative will take place no later than February 4, 2025.
• The exclusion is used to grant holders of conversion or option rights or conversion or option obligations on Siemens shares a
compensation for the effects of dilution.
The exclusion is necessary with regard to fractional amounts resulting from the subscription ratio.
The issue price of the new shares/bonds is not significantly lower than the stock market price of the Siemens shares already listed or the
theoretical market price of the bonds computed in accordance with generally accepted actuarial methods (exclusion of subscription
rights, limited to 10% of the capital stock, in accordance with or by mutatis mutandis application of Section 186 para. 3 sentence 4
German Stock Corporation Act).
•
.
The new shares under Authorized Capital 2019 and the aforementioned bonds are to be issued against cash or non-cash contributions.
They are, as a matter of principle, to be offered to shareholders for subscription. The Managing Board is authorized to exclude, with the
approval of the Supervisory Board, subscription rights of shareholders in the event of capital increases against contributions in kind. In the
event of capital increases against contributions in cash, the Managing Board is authorized to exclude shareholders' subscription rights with
the approval of the Supervisory Board in the following cases:
shares, respectively (Conditional Capitals 2019 and 2020), i.e. in total by up to €420 million through the issuance of up to 140 million
Siemens shares.
Combined Management Report
By resolutions of the Shareholders' Meetings on January 30, 2019 and February 5, 2020, the Managing Board is authorized to issue bonds
with conversion, exchange or option rights or with warrants attached, or a combination of these instruments, entitling the holders to
subscribe to up to 80 million and up to 60 million Siemens shares, respectively. Based on these two authorizations, the Company or its
affiliated companies may issue bonds until January 29, 2024 and February 4, 2025, respectively, each in an aggregate principal amount
of up to €15 billion. In order to grant shares of stock to holders/creditors of such convertible bonds or warrant bonds, the capital stock was
conditionally increased by resolutions of the Shareholders' Meetings in 2019 and 2020, by up to 80 million and up to 60 million Siemens
As of September 30, 2021, the total unissued authorized capital of Siemens AG therefore consisted of €600 million nominal that may be
used, in installments with varying terms, by issuance of up to 200 million Siemens shares.
Furthermore, the Managing Board is authorized to increase, with the approval of the Supervisory Board, the capital stock until January 29,
2024 by up to €510 million through the issuance of up to 170 million Siemens shares against cash contributions and/or contributions in
kind (Authorized Capital 2019).
The Managing Board is authorized to increase, with the approval of the Supervisory Board, the capital stock until February 2, 2026 by up
to €90 million through the issuance of up to 30 million Siemens shares against contributions in cash (Authorized Capital 2021).
Subscription rights of existing shareholders are excluded. The new shares shall be offered exclusively to employees of the Company and
any of its affiliated companies. To the extent permitted by law, such employee shares may also be issued in such a manner that the
contribution to be paid on such shares is covered by that part of the annual net income which the Managing Board and the Supervisory
Board may allocate to other retained earnings under Section 58 para. 2 of the German Stock Corporation Act.
10.4 Powers of the Managing Board to issue and repurchase shares
Resolutions of the Shareholders' Meeting require a simple majority vote, unless a greater majority is required by law (Section 23 para. 2 of
the Articles of Association). Pursuant to Section 179 para. 2 of the German Stock Corporation Act, amendments to the Articles of
Association require a majority of at least three-quarters of the capital stock represented at the time of the casting of the votes, unless
another capital majority is prescribed by the Articles of Association.
The new shares issued or to be issued in exchange for contributions in cash and in kind and with shareholders' subscription rights excluded,
may in certain cases be subject to further restrictions. The details of those restrictions are described in the relevant authorization. In
addition, the Managing Board has issued the commitment not to increase the capital stock from the Authorized Capital 2019 and the
Conditional Capitals 2019 and 2020 by a total of more than 10% of the capital stock existing at the time of the Shareholders' Meeting on
February 5, 2020, to the extent that capital increases with shareholders' subscription rights excluded are made from the Authorized Capital
2019 against contributions in cash or in kind or to service convertible bonds and/or warrant bonds issued under the authorizations
approved on January 30, 2019 or February 5, 2020 with shareholders' subscription rights excluded. This commitment ends no later than
February 4, 2025.
12,372
4,220
16,592
37
619
(74)%
8,786
2,297
29%
16,937
21,792
Prepaid expenses
Cash and cash equivalents, other securities
Inventories, receivables and other assets
Current assets
0%
75,999
75,920
0%
74,877
74,852
1,122
1,068
2020
2021
% Change
Sep. 30,
Combined Management Report
Financial assets
Intangible and tangible assets
Non-current assets
Assets
(13)%
Statement of Financial Position of Siemens AG in accordance with German Commercial Code (condensed)
24,089
25,724
(5)%
184
Special reserve with an equity portion
Provisions
Provisions for pensions and similar commitments
Provisions for taxes and other provisions
Liabilities
Liabilities to banks
Equity
Trade payables, liabilities to affiliated companies and other liabilities
Total liabilities and equity
21,216
18,917
(6)%
12%
541
Deferred income
Liabilities and equity
(in millions of €)
102,975
39%
(1)%
Deferred tax assets
1,243
133
20%
1,034
51
85
(41)%
Total assets
101,487
Active difference resulting from offsetting
4
Investments accounted for using the equity method
10,250
11,023
7,539
13
4,838
52,968
3,12
20,449
29,729
7,862
52,340
338
223
3
1,271
10,964
Other current financial liabilities
2,183
22,964
1,751
7,873
8,832
Trade payables
6,562
7,821
Short-term debt and current maturities of long-term debt
Liabilities and equity
123,897
139,608
70,928
87,267
1,769
2,988
2,865
7
22,771
14, 23
16
Other current assets
1,795
Other financial assets
Property, plant and equipment
Other intangible assets
Goodwill
Total current assets
Assets classified as held for disposal
Current income tax assets
Inventories
Deferred tax assets
Contract assets
Trade and other receivables
Cash and cash equivalents
(in millions of €)
Assets
3. Consolidated Statements of Financial Position
Consolidated Financial Statements
3
1,731
1,261
Other current financial assets
Other assets
Total non-current assets
Total assets
7
7,795
8,836
11
5,545
6,688
10
8,382
7,985
9
14,074
15,518
8
14,041
9,545
2020
Sep 30,
Sep 30,
2021
Note
1,523
1,958
39,607
10
9,652
6,840
7,040
Total liabilities and equity
Total equity
Non-controlling interests
Treasury shares, at cost
Other components of equity
33,078
Retained earnings
2,550
2,550
3, 19
84,074
90,333
49,957
50,381
1,808
Capital reserve
1,925
(19)
(4,804)
2020
2021
Fiscal year
Consolidated Financial Statements
(in millions of €)
4. Consolidated Statements of Cash Flows
4
123,897
(1,449)
139,608
49,274
3,433
4,901
3
36,390
44,373
Total equity attributable to shareholders of Siemens AG
(4,629)
39,823
769
679
Issued capital
Total current liabilities
35
10
3
Liabilities associated with assets classified as held for disposal
6,209
7,628
15
39,952
Other current liabilities
1,809
Current income tax liabilities
1,674
2,263
18
Current provisions
7,524
9,858
2,281
34,117
Long-term debt
16
Equity
Total liabilities
Total non-current liabilities
Other liabilities
Other financial liabilities
2,352
1,723
18
Provisions
664
2,337
7
Deferred tax liabilities
6,360
2,839
17
Provisions for pensions and similar obligations
38,005
40,879
Contract liabilities
(47)
28
Shareholders of Siemens AG
236
5
Other operating income
(10,682)
(11,189)
Selling and general administrative expenses
(4,569)
(4,859)
630
Research and development expenses
22,737
(39,527) (35,366)
55,254
62,265
2020
2021
Note
2,30
Gross profit
19,888
Cost of sales
Other operating expenses
(431)
Income tax expenses
5,502
7,496
Income from continuing operations before income taxes
496
641
Other financial income (expenses), net
(814)
6
(644)
1,545
1,483
Interest income
(596)
(478)
4
Income (loss) from investments accounted for using the equity method, net
(396)
Interest expenses
Revenue
(in millions of €, per share amounts in €)
Fiscal year
SIEMENS
* This document is an English language translation of the decisive German version and is not provided in
the European Single Electronic Format (ESEF). The legally required rendering in ESEF-format is filed in
German language with the operator of the German Federal Gazette and published in the German Federal
Gazette.
FOR FISCAL 2021
Statements*
Consolidated Financial
39
We are not aware of, nor have we during the last fiscal year been notified of, any shareholder directly or indirectly holding 10% or more
of the voting rights. There are no Siemens shares with special rights conferring powers of control. Shares of stock issued by Siemens AG
to employees under its employee share program and/or as share-based compensation are transferred to the employees. The beneficiary
employees who hold shares of employee stock may exercise their control rights in the same way as any other shareholder in accordance
with applicable laws and the Articles of Association.
10.7 Other takeover-relevant information
Table of contents
On September 18, 2019, the Supervisory Board of Siemens AG resolved that the contracts with members of the Managing Board should
not contain such right of termination in the future. This has already been taken into account in the case of contract extensions and in the
case of new contracts with the newly appointed members of the Managing Board as of October 1, 2020.
10.6 Compensation agreements with members of the Managing Board or employees in the
event of a takeover bid
Framework agreements concluded by Siemens AG under International Swaps and Derivatives Association Inc. documentation (ISDA
Agreements) grant each counterparty a right of termination, including in certain cases of (i) a transformation (for example mergers and
changes of form), (ii) an asset transfer or (iii) acquisition of ownership interests that enables the acquirer to exercise control over Siemens
AG or its controlling bodies. Partially this right of termination exists only, if (1) the resulting entity fails to simultaneously assume Siemens
AG's obligations under the ISDA Agreements or (2) the resulting entity's creditworthiness is materially weaker than Siemens AG's
immediately prior to such event. Generally, ISDA Agreements are designed such that upon termination all outstanding payment claims
documented under them are to be netted.
The lines of credit, and the relevant loan agreements mentioned above provide their respective lenders with a right of termination in the
event that (1) Siemens AG becomes a subsidiary of another company or (2) a person or a group of persons acting in concert acquires
effective control over Siemens AG by being able to exercise decisive influence over its activities (Art. 3(2) of Council Regulation (EC) 139/
2004).
In addition, in March 2020 and in June 2019 respectively, a consolidated subsidiary as borrower and Siemens AG as guarantor entered
into a bilateral loan agreement, each of which has been drawn in the full amount of US$ 500 million. In February 2021, a consolidated
subsidiary as borrower entered into two bilateral loan agreements in the total amount of US$ 500 million; both loan agreements have
been guaranteed by Siemens AG and have been fully drawn.
In March 2021, Siemens AG entered into a bilateral loan agreement, which has been drawn in the full amount of € 500 million.
As of September 30, 2021, Siemens AG maintained lines of credit in the amount of € 7.45 billion.
10.5 Significant agreements which take effect, alter or terminate upon a change of control of
the Company following a takeover bid
For details on the authorizations referred to above, especially with the restrictions to exclude subscription rights and the terms to include
shares when calculating such restrictions, please refer to the relevant resolution and to Section 4 of the Articles of Association.
The contracts with the members of the Managing Board previously contained the right of the member to terminate his or her contract
with the Company for good cause in the event of a change of control that results in a substantial change in the position of a Managing
Board member (for example, due to a change in corporate strategy or a change in the Managing Board member's duties and
responsibilities). A change of control exists if one or several shareholders acting jointly or in concert acquire a majority of the voting rights
in Siemens AG and exercise a controlling influence, or if Siemens AG becomes a dependent enterprise as a result of entering into an
intercompany agreement within the meaning of Section 291 of the German Stock Corporation Act, or if Siemens AG is to be merged into
an existing corporation or other entity. If this right of termination is exercised, the Managing Board member is entitled to a severance
payment in the amount of no more than two years' compensation. The calculation of the annual compensation includes not only the base
compensation and the target amount for the bonus, but also the target amount for the stock awards, in each case based on the most
recent completed fiscal year prior to termination of the contract. The stock-based compensation components for which a firm commitment
already exists will remain unaffected. Additionally, the severance payments cover non-monetary benefits by including an amount of 5%
of the total severance amount. Severance payments will be reduced by 10% as a lump-sum allowance for discounted values and for income
earned elsewhere. However, this reduction will apply only to the portion of the severance payment that was calculated without taking
account of the first six months of the remaining term of the Managing Board member's contract. There is no entitlement to a severance
payment if the Managing Board member receives benefits from third parties in connection with a change of control. A right to terminate
the contract does not exist if the change of control occurs within a period of twelve months prior to a Managing Board member's
retirement.
Consolidated Financial Statements
3
1.
Consolidated Financial Statements
1. Consolidated Statements of Income
Notes to Consolidated Financial Statements
Consolidated Statements of Changes in Equity
6.
7
5.
Consolidated Statements of Cash Flows
4.
45
6
5
Consolidated Statements of Financial Position
3.
4
Consolidated Statements of Comprehensive Income
2.
3
Consolidated Statements of Income
7
693
(1,861)
Income from continuing operations
Currency translation differences
(240)
2,210
Items that will not be reclassified to profit or loss
17
57
Income (loss) from investments accounted for using the equity method, net
(3)
1,587
(1)
5
30
Remeasurements of equity instruments
33
(45)
(261)
2,123
17
therein: Income tax effects
4,200
(2,805)
(237)
Non-controlling interests
Attributable to:
Total comprehensive income
1,214
10,345
(2,986)
3,647
Other comprehensive income, net of income taxes
Derivative financial instruments
(2,746)
Items that may be reclassified subsequently to profit or loss
(89)
88
Income (loss) from investments accounted for using the equity method, net
(38)
31
therein: Income tax effects
148
1,438
6,697
2020
Fiscal year
2021
Income from continuing operations
Diluted earnings per share
Net income
Income from discontinued operations
Income from continuing operations
Basic earnings per share
Shareholders of Siemens AG
Non-controlling interests
Income from discontinued operations
Net income
Attributable to:
6,697
Net income
44
1,062
3
Income from discontinued operations, net of income taxes
4,156
5,636
4,200
537
6,161
170
4,030
therein: Income tax effects
Remeasurements of defined benefit plans
Net income
(in millions of €)
|| 2. Consolidated Statements of Comprehensive Income
4.93
7.59
0.23
1.31
4.70
6.28
28
5.00
7.68
0.23
1.32
4.77
6.36
Income tax expenses
(1,346)
Interest (income) expenses, net
Acquisitions of businesses, net of cash acquired
Other non-cash (income) expenses
537
6,161
39,823
3,433
36,390
(4,629)
(115)
(42)
6,697
(1,292)
Net income
6,840
2,550
Balance as of October 1, 2020
39,823
3,433
36,390
(4,629)
33,078
6,161
(115)
Other comprehensive income, net of income taxes
1,465
58
Re-issuance of treasury shares
Purchase of treasury shares
74
74
(63)
137
Share-based payment
2,175
(3,088)
(2,804)
(2,804)
Dividends
3,647
156
3,492
(178)
29
(284)
(547)
372
(42)
33,078
550
(1,511)
(1,511)
(1,511)
545
5
Disposal of equity instruments
Re-issuance of treasury shares
Purchase of treasury shares
550
(147)
(141)
(6)
(3,492)
(318)
(3,174)
(3,174)
(2,986)
(218)
(147)
(1,292)
(2)
(2)
6,840
2,550
Balance as of September 30, 2020
(677)
(663)
(15)
(15)
Other changes in equity
(2)
1,969
366
365
1
Other transactions with non-controlling interests
(9,589)
(9,589)
(9,589)
Changes in equity resulting from major portfolio transactions
1,603
(547)
(547)
430
estimated growth rates and weighted average cost of capital. These estimates, including the methodology used, can have a material
impact on the respective values and ultimately the amount of any goodwill impairment.
Consolidated Financial Statements
8
The determination of the recoverable amount of a cash-generating unit or a group of cash-generating units to which goodwill is allocated
involves the use of estimates by management. The outcome predicted by these estimates is influenced e.g. by the successful integration
of acquired entities, volatility of capital markets, interest rate developments, foreign exchange rate fluctuations and the outlook on
economic trends. In determining recoverable amounts, discounted cash flow calculations generally use five-year projections (in
exceptional cases up to ten years) that are based on financial forecasts. Cash flow projections take into account past experience and
represent management's best estimate about future developments. Cash flows after the planning period are extrapolated using individual
growth rates. Key assumptions on which management has based its determination of fair value less costs to sell and value in use include
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the cash-generating unit or the group
of cash-generating units that is expected to benefit from the synergies of the business combination. If the carrying amount of the cash-
generating unit or the group of cash-generating units, to which the goodwill is allocated, exceeds its recoverable amount, an impairment
loss on goodwill allocated to that (group of) cash-generating unit(s) is recognized. The recoverable amount is the higher of the cash-
generating unit's or the group of cash-generating units' fair value less costs to sell and its value in use. If either of these values exceeds the
carrying amount, it is not always necessary to determine both values. These values are generally determined based on discounted cash
flow calculations. Impairment losses on goodwill are not reversed in future periods.
Goodwill - Goodwill is not amortized, instead, goodwill is tested for impairment annually, as well as whenever there are events or changes
in circumstances (triggering events) which suggest that the carrying amount may not be recoverable. Goodwill is carried at cost less
accumulated impairment losses. The goodwill impairment test is performed at the level of a cash-generating unit or a group of cash-
generating units, generally represented by a segment. Siemens Healthineers is tested one level below the segment. This is the lowest level
at which goodwill is monitored for internal management purposes.
Earnings per share - Basic earnings per share are computed by dividing income from continuing operations, income from discontinued
operations and net income, all attributable to ordinary shareholders of Siemens AG by the weighted average number of shares outstanding
during the year. Diluted earnings per share are calculated by assuming conversion or exercise of all potentially dilutive securities and share-
based payment plans.
Research and development costs - Costs of research activities are expensed as incurred. Costs of development activities are capitalized
when the recognition criteria in IAS 38 are met. Capitalized development costs are stated at cost less accumulated amortization and
impairment losses with an amortization period of generally three to ten years.
Other intangible assets - The Company amortizes intangible assets with finite useful lives on a straight-line basis over their respective
estimated useful lives. Estimated useful lives for patents, licenses and other similar rights generally range from three to five years, except
for intangible assets with finite useful lives acquired in business combinations. Intangible assets acquired in business combinations
primarily consist of customer relationships and trademarks as well as technology. Useful lives in specific acquisitions ranged from four to
30 years for customer relationships and trademarks (in fiscal 2020 four to 20 years) and for technology from five to 22 years (in fiscal
2020 five to 18 years).
Product-related expenses - Provisions for estimated costs related to product warranties are recorded in line item Cost of sales at the time
the related sale is recognized.
Income from royalties: Royalties are recognized on an accrual basis in accordance with the substance of the relevant agreement.
Income from interest - Interest is recognized using the effective interest method.
terms.
Sale of goods: Revenues are recognized at a point in time when control of the goods passes to the buyer, usually upon delivery of the
goods. Invoices are issued at that point in time and are usually payable within 30 days. For licensing transactions granting the customer a
right to use Siemens' intellectual property, payment terms are usually 30 days from the date of invoice issued according to the contractual
Revenues from services: Revenues are recognized over time on a straight-line basis or, if the performance pattern is other than straight-
line, as services are provided, i.e. under the percentage-of-completion method as described above. Payment terms are usually 30 days
from the date of invoice issued according to the contractual terms.
The percentage-of-completion method places considerable importance on accurate estimates of the extent of progress towards
completion and may involve estimates on the scope of deliveries and services required to fulfill the contractually defined obligations. These
significant estimates include total estimated costs, total estimated revenues, contract risks, including technical, political and regulatory
risks, risks from supply chain constraints and other judgments. Under the percentage-of-completion method, changes in estimates may
lead to an increase or decrease of revenue. In addition, Siemens needs to assess whether the contract is expected to continue or whether
it is terminated. In determining whether the continuation or termination of a contract is expected to be the most likely scenario, all relevant
facts and circumstances relating to the contract are considered on an individual basis.
Sales from construction-type contracts: Revenues are recognized over time under the percentage-of-completion method, based on the
percentage of costs incurred to date compared to total estimated costs. An expected loss on the contract is recognized as an expense
immediately. Payment terms are usually 30 days from the date of invoice issued according to the contractual terms.
Revenue recognition - Siemens recognizes revenue when, or as control over distinct goods or services is transferred to the customer; i.e.
when the customer is able to direct the use of the transferred goods or services and obtains substantially all of the remaining benefits,
provided a contract with enforceable rights and obligations exists and amongst others collectability of consideration is probable taking our
customer's creditworthiness into account. Revenue is the transaction price Siemens expects to be entitled to. Variable consideration is
included in the transaction price if it is highly probable that a significant reversal of revenue will not occur once associated uncertainties
are resolved. The amount of variable consideration is calculated by either using the expected value or the most likely amount depending
on which is expected to better predict the amount of variable consideration. Consideration is adjusted for the time value of money if the
period between the transfer of goods or services and the receipt of payment exceeds twelve months and there is a significant financing
benefit either to the customer or Siemens. If a contract contains more than one distinct good or service, the transaction price is allocated
to each performance obligation based on relative stand-alone selling prices. If stand-alone selling prices are not observable, the Company
reasonably estimates those. Revenue is recognized for each performance obligation either at a point in time or over time.
in net income. Those foreign currency-denominated transactions which are classified as non-monetary are remeasured using the historical
spot exchange rate.
Functional costs - In general, operating expenses by types are assigned to the functions following the functional area of the
corresponding profit and cost centers. Amortization, depreciation and impairment of intangible assets and property, plant and equipment
are included in functional costs depending on the use of the assets.
Consolidated Financial Statements
Property, plant and equipment - Property, plant and equipment, is valued at cost less accumulated depreciation and impairment losses.
Depreciation expense is recognized using the straight-line method. The following useful lives are assumed:
Other buildings
Combined Management Report
9
Defined benefit plans Siemens measures the entitlements by applying the projected unit credit method. The approach reflects an
actuarially calculated net present value of the future benefit entitlement for services already rendered. In determining the net present
value of the future benefit entitlement for service already rendered (Defined Benefit Obligation (DBO)), the expected rates of future salary
-
Inventories - Inventories are valued at the lower of acquisition or production costs and net realizable value, costs being generally
determined based on an average or first-in, first-out method. Determining net realizable value of inventories involves accounting estimates
for quantity, technical and price risks.
Income taxes - Tax positions are calculated taking into consideration the respective local tax laws, relevant court decisions and applicable
tax authorities' views. Tax regulations can be complex and possibly subject to different interpretations of tax payers and local tax
authorities. Different interpretations of existing or new tax laws as a result of tax reforms or other tax legislative procedures may result in
additional tax payments for prior years and are taken into account based on management's considerations. Under the liability method,
deferred tax assets and liabilities are recognized for expected tax consequences of future periods attributable to differences between the
financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets are recognized if sufficient
future taxable profit is available, including income from forecasted operating earnings, the reversal of existing taxable temporary
differences and available tax planning opportunities that Siemens would execute. As of each period-end, Siemens evaluates the
recoverability of deferred tax assets, based on taxable income of past periods and projected future taxable profits. As future developments
are uncertain and partly beyond Siemens's control, assumptions are necessary to estimate future taxable profits as well as the period in
which deferred tax assets will recover. Estimates are revised in the period in which there is sufficient evidence to revise the assumption.
Contract assets, contract liabilities, receivables - When either party to a contract with customers has performed, Siemens presents a
contract asset, a contract liability or a receivable depending on the relationship between Siemens' performance and the customer's
payment. Contract assets and liabilities are presented as current since incurred in the normal operating cycle. Receivables are recognized
when the right to consideration becomes unconditional. Valuation allowances for credit risks are made for contract assets and receivables
in accordance with the accounting policy for financial assets measured at amortized cost.
Discontinued operations and non-current assets held for disposal - Discontinued operations are reported when a component of an
entity is classified as held for disposal or has been disposed of, if the component represents a separate major line of business or
geographical area of operations and is part of a single coordinated plan to disposal. A non-current asset or a disposal group is held for
disposal if its carrying amount will be recovered principally through a sale transaction or through a distribution to owners rather than
through continuing use. In the Consolidated Statements of Income and of Cash Flows, discontinued operations is reported separately from
continuing operations; prior periods are presented on a comparable basis. The disclosures in the Notes to the Consolidated Financial
Statements outside Note 3 relate to continuing operations or assets and liabilities not held for disposal. The determination of the fair value
less costs to sell includes the use of estimates and assumptions that tend to be uncertain.
Lessee - Siemens recognizes right-of-use assets and lease liabilities for leases with a term of more than twelve months if the underlying
asset is not of low value. Payments for short-term and low-value leases are expensed over the lease term. Extension options are included
in the lease term if their exercise is reasonably certain. Right-of-use assets are measured at cost less accumulated depreciation and
impairment losses adjusted for any remeasurements. Right-of-use assets are depreciated under the straight-line method over the shorter
of the lease term and the useful life of the underlying assets. Lease liabilities are measured at the present value of the lease payments due
over the lease term, generally discounted using the incremental borrowing rate. Lease liabilities are subsequently measured at amortized
cost using the effective interest method. They are remeasured in case of modifications or reassessments of the lease.
Factory and office buildings
Lessor - Leases are classified as either finance or operating leases, determined based on whether substantially all the risks and rewards
incidental to ownership of an underlying asset are transferred. If this is the case, the lease is classified as a finance lease; if not, it is an
operating lease. Receivables from finance leases are recognized at an amount equal to the net investment in the lease. The assets
underlying the operating leases are presented in Property, plant and equipment and depreciated on a straight-line basis over their useful
lives or to their estimated residual value. Operating lease income is recognized on a straight-line basis over the lease term.
Impairment of property, plant and equipment and other intangible assets - The Company reviews property, plant and equipment and
other intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. In addition, intangible assets not yet available for use are subject to an annual impairment test. Impairment testing of
property, plant and equipment and other intangible assets involves the use of estimates in determining the assets' recoverable amount,
which can have a material impact on the respective values and ultimately the amount of any impairment.
generally 5 years
generally 3 to 7 years
generally 10 years
5 to 10 years
20 to 50 years
Equipment leased to others
Office & other equipment
Technical machinery & equipment
Leases - A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. Further information on leases can be found in Notes 8, 13 and 16.
7
Foreign currency transaction - Transactions that are denominated in a currency other than the functional currency of an entity, are
recorded at that functional currency applying the spot exchange rate at the date when the underlying transactions are initially recognized.
At the end of the reporting period, foreign currency-denominated monetary assets and liabilities are revalued to functional currency
applying the spot exchange rate prevailing at that date. Gains and losses arising from these foreign currency revaluations are recognized
Foreign currency translation - Assets and liabilities of foreign subsidiaries, where the functional currency is other than the euro, are
translated using the spot exchange rate at the end of the reporting period, while the Consolidated Statements of Income are translated
using average exchange rates during the period. Differences arising from such translations are recognized within equity and reclassified
to net income when the gain or loss on disposal of the foreign subsidiary is recognized. The Consolidated Statements of Cash Flows are
translated at average exchange rates during the period, whereas cash and cash equivalents are translated at the spot exchange rate at the
end of the reporting period.
1
Balance as of September 30, 2021
Other changes in equity
(219)
2,325
1,095
(45)
(174)
(178)
2,550
5
1,229
8
8
8
Other transactions with non-controlling interests
Changes in equity resulting from major portfolio transactions
Disposal of equity instruments
430
1,229
7,040
39,607
173
Associates and joint ventures are recorded in the Consolidated Financial Statements using the equity method and are initially recognized
at cost. If the investment was retained in a transaction in which Siemens lost control of a subsidiary, the fair value of the investment
represents the cost on initial recognition. Siemens' share of its associate's or joint venture's post-acquisition profits or losses is recognized
in the Consolidated Statements of Income, and its share of post-acquisition changes in equity that have not been recognized in the
associate's or joint venture's profit or loss is recognized directly in equity. The cumulative post-acquisition changes also include effects
from fair value adjustments and are adjusted against the carrying amount of the investment. When Siemens' share of losses in an associate
or joint venture equals or exceeds its interest in the investment, Siemens does not recognize further losses, unless it incurs obligations or
makes payments on behalf of the associate or joint venture. The interest in an associate or joint venture is the carrying amount of the
investment together with any long term interests that, in substance, form part of Siemens' net investment in the associate or joint venture.
Siemens reviews associates and joint ventures for impairment whenever there is objective evidence that its investment is impaired, for
example a significant or prolonged decline in the fair value of the investment below its cost. This includes the use of estimates and
assumptions also related to observable valuation inputs that tend to be uncertain.
Associates and joint ventures - Associates are companies over which Siemens has the ability to exercise significant influence over
operating and financial policies (generally through direct or indirect ownership of 20% to 50% of the voting rights). Joint ventures are
entities over which Siemens and one or more parties have joint control. Joint control requires unanimous consent of the parties sharing
control in decision making on relevant activities.
Business combinations - Cost of an acquisition is measured at the fair value of the assets given and liabilities incurred or assumed at the
date of exchange. Identifiable assets acquired and liabilities assumed in a business combination (including contingent liabilities) are
initially measured at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. Non-controlling
interests are measured at the proportional fair value of assets acquired and liabilities assumed (partial goodwill method). If there is no loss
of control, transactions with non-controlling interests are accounted for as equity transactions not affecting net income. At the date control
is lost, any retained equity interests are remeasured to fair value. In case of a written put option on non-controlling interests the Company
assesses whether the prerequisites for the transfer of present ownership interest are fulfilled at the balance sheet date. If the Company is
not the beneficial owner of the shares underlying the put option, the exercise of the put option will be assumed at each balance sheet
date and treated as equity transaction between shareholders with the recognition of a purchase liability at the respective exercise price.
The non-controlling interests participate in profits and losses during the reporting period.
Certain of these accounting policies require critical accounting estimates that involve complex and subjective judgments and the use of
assumptions, some of which may be for matters that are inherently uncertain and susceptible to change. Such critical accounting estimates
could change from period to period and have a material impact on the Company's results of operations, financial positions and cash flows.
Critical accounting estimates could also involve estimates where Siemens reasonably could have used a different estimate in the current
accounting period. Siemens cautions that future events often vary from forecasts and that estimates routinely require adjustment.
COVID-19 - Impacts of the pandemic coronavirus spread on Siemens' Consolidated Financial Statements are contingent on the further
evolution of virus variants, the progress of worldwide vaccinations and the vaccines' effectiveness. Potential impacts may also result from
increasingly phased out financial and non-financial measures originally taken by governments and organizations globally. Related impacts
could influence fair value and carrying amounts of assets and liabilities, amount and timing of results of operations and cash flows. Effects
vary considerably by region and customer industries. Siemens based its estimates and assumptions on existing knowledge and best
information available. We expect that related effects on Siemens' Consolidated Financial Statements will not reach a substantial degree.
Basis of consolidation - The Consolidated Financial Statements include the accounts of Siemens AG and its subsidiaries over which the
Company has control. Siemens controls an investee if it has power over the investee. In addition, Siemens is exposed to, or has rights to,
variable returns from the involvement with the investee and Siemens is able to use its power over the investee to affect the amount of
Siemens' return.
note 2 Material accounting policies and critical accounting estimates
The accompanying Consolidated Financial Statements present the operations of Siemens Aktiengesellschaft with registered offices in
Berlin (registry number HRB 12300) and Munich (registry number HRB 6684), Germany, and its subsidiaries (the Company or Siemens).
They have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union as well
as with the additional requirements set forth in Section 315e (1) of the German Commercial Code (HGB). The financial statements are in
accordance with IFRS as issued by the International Accounting Standards Board (IASB). The Consolidated Financial Statements were
authorized for issue by the Managing Board on November 30, 2021. Siemens prepares and reports its Consolidated Financial Statements
in euros (€). Due to rounding, numbers presented may not add up precisely to totals provided. Siemens is a German based multinational
focused technology company.
NOTE 1 Basis of presentation
| 6. Notes to Consolidated Financial Statements
Consolidated Financial Statements
60
49,274
4,901
44,373
(4,804)
124
9
115
114
(179)
(13)
(2,769)
(Income) loss related to investing activities
111
(185)
(1,730)
Additions to intangible assets and property, plant and equipment
Cash flows from investing activities
8,862
9,996
Cash flows from operating activities - continuing and discontinued operations
1,012
(113)
(1,498)
Cash flows from operating activities - discontinued operations
10,109
Cash flows from operating activities - continuing operations
1,347
1,369
Interest received
293
238
(1,632)
7,851
(2,324)
(14,391)
Purchase of investments and financial assets for investment purposes
Cash flows from investing activities - discontinued operations
(4,050)
(17,192)
Cash flows from investing activities - continuing operations
1,174
985
Disposal of investments and financial assets for investment purposes
218
(1,727)
2
47
98
Disposal of intangibles and property, plant and equipment
(994)
(631)
Change in receivables from financing activities
(1,269)
(1,523)
Disposal of businesses, net of cash disposed
1,698
1,183
(500)
(44)
(1,062)
Income from discontinued operations, net of income taxes
Adjustments to reconcile net income to cash flows from operating activities - continuing operations
4,200
6,697
Net income
Cash flows from operating activities
Amortization, depreciation and impairments
Dividends received
Change in other assets and liabilities
Additions to assets leased to others in operating leases
Contract liabilities
Trade payables
Trade and other receivables
Inventories
Contract assets
Change in operating net working capital from
Income taxes paid
1,403
3,075
1,861
(463)
418
1,132
67
1,286
214
(1,227)
(414)
3,098
(444)
(934)
373
586
(644)
(243)
(731)
(839)
1,346
(723)
(1,134)
Cash flows from investing activities - continuing and discontinued operations
(15,494)
to share-
holders of
Siemens AG
Total equity
attributable
Treasury
shares
at cost
Consolidated Financial Statements
Derivative
financial
instruments
Equity
instruments
Currency
translation
differences
Retained
earnings
Non
Capital
reserve
5. Consolidated Statements of Changes in Equity
5
13
14,041
9,545
Cash and cash equivalents at end of period (Consolidated Statements of Financial Position)
Less: Cash and cash equivalents of assets classified as held for disposal and discontinued operations
at end of period
14,054
9,545
Issued
capital
Cash and cash equivalents at end of period
controlling
interests
(in millions of €)
4,200
170
4,030
51,508
2,858
48,650
(3,663)
(226)
Total
equity
(49)
41,790
4,030
6,839
2,550
Share-based payment
Dividends
Other comprehensive income, net of income taxes
Net income
Balance as of October 1, 2019
1,409
12,391
14,054
Cash and cash equivalents at beginning of period
Interest paid
1,592
(952)
Change in short-term debt and other financing activities
(4,472)
(4,294)
Repayment of long-term debt (including current maturities of long-term debt)
10,255
(704)
8,316
2,624
2,055
Re-issuance of treasury shares and other transactions with owners
(1,517)
(547)
Purchase of treasury shares
Cash flows from financing activities
(5,184)
Issuance of long-term debt
(833)
Dividends paid to shareholders of Siemens AG
(2,804)
(4,509)
Change in cash and cash equivalents
(525)
204
Effect of changes in exchange rates on cash and cash equivalents
(4,663)
Effect of deconsolidation of Siemens Energy on cash and cash equivalents
3,172
785
Cash flows from financing activities - continuing and discontinued operations
(1,095)
Cash flows from financing activities - discontinued operations
4,267
785
Cash flows from financing activities continuing operations
(208)
(285)
Dividends attributable to non-controlling interests
(3,174)
(2,701)
1,663
3, 12
Advances to suppliers and
2021
Sep 30,
Finished goods and products held for resale
Advances to suppliers
Work in progress
Raw materials and supplies
(in millions of €)
NOTE 11 Inventories
As of September 30, 2021 and 2020, amounts expected to be settled after twelve months are €1,319 million and €960 million for contract
assets and €1,824 million and €1,112 million for contract liabilities, respectively. In fiscal 2021, contract assets and liabilities increased by
€141 million and €724 million, respectively, due to business combinations (mainly Varian). In fiscal 2021 and 2020, revenue includes
€4,966 million and €4,616 million, respectively, which was included in contract liabilities at the beginning of the fiscal year.
NOTE 10 Contract assets and liabilities
Consolidated Financial Statements
16
8,382
7,985
1,424
1,370
798
398
1,256
1,132
4,904
5,085
2020
2021
Sep 30,
Other
Derivative financial instruments
Interest-bearing debt securities
2020
Loans receivable
1,974
3,421
22,115
Balance at fiscal year-end
(9,588)
(123)
Dispositions and reclassifications to assets classified as held for disposal
1,247
8,768
Acquisitions and purchase accounting adjustments
(1,642)
657
32,098
22,115
2020
Fiscal year
2021
Translation differences and other
Balance at begin of fiscal year
Cost
(in millions of €)
NOTE 12 Goodwill
Cost of sales includes inventories recognized as expense amounting to €39,227 million and €35,017 million, respectively, in fiscal 2021
and 2020. Compared to prior year, write-downs increased by €61 million as of September 30, 2021. As of September 30, 2020, write-
downs decreased by €18 million compared to FY 2019.
7,795
8,836
600
616
2,355
2,825
3,043
1,796
Accumulated impairment losses and other changes
(in millions of €)
In fiscal 2021 and 2020, finance income on the net investment in the lease is €412 million and €398 million.
1,685
1,911
2,441
2,711
2020
2021
After four years but not more than five years
More than five years
After one year but not more than two years
After two years but not more than three years
After three years but not more than four years
Within one year
(in millions of €)
Sep 30,
Future minimum lease payments to be received are as follows:
In fiscal 2021 and 2020, the long-term portion of receivables from finance leases is reported in Other financial assets amounting to €4,700
million and €4,245 million, respectively.
14,074
15,518
2,003
2,250
12,071
13,267
2020
2021
Sep 30,
Trade receivables from the sale of goods and services
Receivables from finance leases
(in millions of €)
NOTE 8 Trade and other receivables
An uncertain tax regulation arising from a foreign tax reform may result in potential future tax payments amounting to a middle three-
digit million euro range. Due to the low probability and the character of a contingent liability, no tax liability was recognized.
1,192
1,284
NOTE 9 Other current financial assets
1,156
732
Investments in finance leases primarily relate to industrial machinery, medical equipment, transportation systems, equipment for
information technology and office machines.
6,475
7,162
Net investment in the lease
100
115
Plus present value of unguaranteed residual value
6,375
7,047
Present value of future minimum lease payments
(778)
(867)
Less: Unearned finance income relating to future minimum lease payments
7,153
7,914
Future minimum lease payments
2020
2021
(in millions of €)
Sep 30,
Future minimum lease payments reconcile to the net investment in the lease as follows:
7,153
7,914
717
748
422
452
807
1,690
Balance at begin of fiscal year
Impairment losses recognized during the period
43
2,576
138
4,631
licenses and similar rights
Acquired technology including patents,
(208)
1,794
(1,910)
3,704
(51)
277
22
3,456
Internally generated technology
(in millions of €)
in fiscal
2021
zation and
impairment
tion/amorti-
Deprecia-
ment
Carrying
amount
09/30/2021
ciation/am-
ortization
and impair-
nations
Accumu-
lated depre-
carrying
amount
09/30/2021
combi-
(243)
business
7,144
3,987
195
756
349
126
8,656
Land and buildings
(1,004)
10,964
(8,023)
18,987
(1,345)
319
6,553
335
13,124
Other intangible assets
(338)
5,184
(2,956)
8,139
(1,051)
3,978
176
5,037
and trademarks
Customer relationships
(458)
(3,158)
Translation differences and other
Gross
Reclassi-
fications
Sep 30, 2021
Terminal
value growth
Imaging of Siemens Healthineers
Digital Industries
Varian of Siemens Healthineers
(in millions of €)
The following table presents key assumptions used to determine fair value less costs to sell for impairment test purposes for the groups of
cash-generating units to which a significant amount of goodwill is allocated:
Consolidated Financial Statements
17
The fair value less costs to sell is mainly driven by the terminal value, which is particularly sensitive to changes in the assumptions on the
terminal value growth rate and discount rate. Both assumptions are determined individually for each cash-generating unit or group of
cash-generating units. Discount rates are based on the weighted average cost of capital (WACC). Siemens Financial Services' discount rate
represents its specific cost of equity. The discount rates are calculated based on a risk-free rate of interest and a market risk premium. In
addition, the discount rates reflect the current market assessment of the risks specific to each cash-generating unit or group of cash-
generating units by taking into account specific peer group information on beta factors, leverage and cost of debt as well as country
specific premiums. The parameters for calculating the discount rates are based on external sources of information. The peer group is
subject to an annual review and adjusted, if necessary. Terminal value growth rates take into consideration external macroeconomic
sources of data and industry specific trends.
To estimate the fair value less costs to sell of the cash-generating units or groups of cash-generating units, cash flows were projected for
the next five years (in exceptional cases up to ten years) based on past experience, actual operating results and management's best
estimate about future developments as well as market assumptions. The determined fair value of the cash-generating units or groups of
cash-generating units is assigned to level 3 of the fair value hierarchy.
Siemens performs the mandatory annual impairment test in the three months ended September 30. Key assumptions on which Siemens
based its determinations of the fair value less costs to sell for the cash-generating units or groups of cash-generating units include terminal
value growth rates up to 1.7% in fiscal 2021 and fiscal 2020, respectively and after-tax discount rates of 5.5% to 12.0% in fiscal 2021 and
5.5% to 12.5% in fiscal 2020.
20,449
30,160
20,449
29,729
1,666
1,688
(271)
99
(100)
22
1,938
1,666
Balance at fiscal year-end
Balance at begin of fiscal year
Carrying amount
Balance at fiscal year-end
Dispositions and reclassifications to assets classified as held for disposal
Goodwill
Retire-
ments¹
rate
1.7%
Additions Additions
through
Gross Translation
carrying differences
amount
10/01/2020
NOTE 13 Other intangible assets and property, plant and equipment
The sensitivity analysis for the groups of cash-generating units to which a significant amount of goodwill is allocated was based on a
reduction in after-tax future cash flows by 10% or an increase in after-tax discount rates by one percentage point or a reduction in the
terminal value growth rate by one percentage point. Siemens concluded that no impairment loss would need to be recognized on goodwill
in any of these groups of cash-generating units.
7.5%
1.5%
2,114
discount rate
8.5%
7.0%
1.7%
5,827
1.7%
6,732
rate
Goodwill
After-tax
Sep 30, 2020
Terminal
value growth
Smart Infrastructure
Imaging of Siemens Healthineers
Digital Industries
(in millions of €)
Revenue figures in the detailed forecast planning period of the groups of cash-generating units to which a significant amount of goodwill
is allocated are based on average revenue growth rates (excluding portfolio effects) of between 7.3% and 9.3% (3.1% and 6.1% in fiscal
2020).
7.5%
1.7%
6,525
After-tax
discount rate
7.8%
8.5%
1.7%
7,417
7,692
(588)
(55)
435
22,602
21,669
7,514
8,080
10,155
12,179
9,525
11,731
3,343
4,118
3,009
2,527
6,352
6,645
Fiscal year 2021
Fiscal year 2020
Revenue
28,482
27,457
Income (loss) from continuing operations, net of income taxes
Other comprehensive income, net of income taxes
(1,236)
(1,873)
369
(1,120)
Total comprehensive income (loss), net of income taxes
(867)
(2,993)
18,792
attributable to shareholders of Siemens Energy AG
16,874
23,397
Impairment and reversals of impairment
Income (loss) from investments accounted for using the equity method, net
Fiscal year
2021
2020
(514)
(114)
57
108
(21)
(590)
(478)
(596)
In fiscal 2021, share of profit (loss) from investments accounted for using the equity method includes a loss of €396 million (loss of €24
million in fiscal 2020) from Siemens Energy AG. In fiscal 2021, the loss includes Siemens' share of Siemens Energy AG's net losses of €(159)
million as well as effects from fair value adjustments at initial recognition of €(237) million.
Below summarized financial information of Siemens Energy AG are disclosed at a 100 per cent basis. They are adjusted to align with
Siemens' accounting policies and to incorporate effects from fair value adjustments at initial recognition. These adjustments were
preliminary in fiscal 2020 and have been finalized in fiscal 2021.
(in millions of €)
Ownership interest
Current assets
Non-current assets excluding goodwill
Current liabilities
Non-current liabilities
Net Assets
attributable to shareholders of Siemens Energy AG
Siemens interest in the net assets of Siemens Energy AG at fiscal year-end
Consolidation adjustments (including goodwill)
Carrying amount of Siemens Energy AG at end of fiscal year
Sep 30, 2021
35.1%
Siemens Energy AG
registered in Munich, Germany
Sep 30, 2020
35.1%
23,136
Gains (losses) on sales, net
(793)
Total comprehensive income, net of income taxes, attributable to Siemens (2020: since initial recognition on Sep. 25)
10,065
7,289
15,758
5,294
19
Item Loans receivable primarily relate to long-term loan transactions of SFS.
22,771
22,964
623
710
1,670
1,556
2,044
1,552
4,245
4,700
14,189
14,446
2020
2021
Other
Equity instruments
Derivative financial instruments
Receivables from finance leases
Loans receivable
(in millions of €)
Fiscal year 2021
14,827
(2,630)
31,338
10,824
(278)
(24)
13
Consolidated Financial Statements
Siemens Energy AG is globally active in the transmission and generation of electrical power and is publicly listed. The market capitalization
of Siemens Energy is €16.6 billion and €16.5 billion, respectively, as of September 30, 2021 and 2020.
Subsidiary with material non-controlling interests
Summarized financial information, in accordance with IFRS and before inter-company eliminations, is presented below.
(in millions of €)
Ownership interests held by non-controlling interests
Accumulated non-controlling interests
194
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net income attributable to non-controlling interests
Dividends paid to non-controlling interests
Revenue
Income (loss) from continuing operations, net of income taxes
Other comprehensive income, net of income taxes
Total comprehensive income, net of income taxes
Total cash flows
Siemens Healthineers AG
registered in Munich, Germany
Sep 30, 2021
25%
Sep 30, 2020
21%
4,031
2,623
10,268
Share of profit (loss), net
(in millions of €)
Investments accounted for using the equity method
Financial assets measured at amortized cost: Loans, receivables and other debt instruments held in a hold-to-collect business model
with contractual cash flows that represent solely payments of principal and interest are measured at amortized cost using the effective
interest method less valuation allowances for expected credit losses.
Valuation allowances are set up for expected credit losses, representing a forward-looking estimate of future credit losses involving
significant judgment. Expected credit loss is the gross carrying amount less collateral, multiplied by the probability of default and a factor
reflecting the loss in the event of default. Valuation allowances are not recognized when the gross carrying amount is sufficiently
collateralized. Probabilities of default are mainly derived from internal rating grades. A simplified approach is used to assess expected
credit losses from trade receivables, lease receivables and contract assets by applying their lifetime expected credit losses. The valuation
10
Consolidated Financial Statements
allowance for loans and other long-term debt instruments primarily held at Financial Services (SFS) is measured according to a three-stage
impairment approach:
Stage 1: At inception, twelve-month expected credit losses are recognized based on a twelve months probability of default.
Stage 2: If the credit risk of a financial asset increases significantly without being credit-impaired, lifetime expected credit losses are
recognized based on a lifetime probability of default. A significant increase in credit risk is determined for each individual financial
instrument using internal credit ratings. A rating deterioration does not trigger a transfer into Stage 2, if the credit rating remains within
the investment grade range. More than 30 days past due payments will not be transferred into Stage 2, if the delay is not credit-risk-
related.
Stage 3: If the financial asset is credit-impaired, valuation allowances equal lifetime expected credit losses. A financial asset is considered
credit-impaired when there is observable information about significant financial difficulties and a high vulnerability to default, however,
the definition of default is not yet met. Impairment triggers include liquidity problems, a request for debt restructuring or a breach of
contract. A credit-risk driven contractual modification always results in a credit-impaired financial asset.
Financial assets are written off as uncollectible if recovery appears unlikely. Generally, if the limitation period expired, when a debtor's
sworn statement of affairs is received, or when the receivable is not pursued due to its minor value. Receivables are written off when
bankruptcy proceedings close.
A financial asset is derecognized when the rights to cash flows expire or the financial asset is transferred to another party. Significant
modifications of contractual terms of a financial asset measured at amortized cost result in derecognition and recognition of a new
financial asset; for insignificant modifications, the carrying amount of the financial asset is adjusted without derecognition.
Cash and cash equivalents - The Company considers all highly liquid investments with less than three months maturity from the date of
acquisition to be cash equivalents. Cash and cash equivalents are measured at cost.
-
Loan Commitments Expected credit losses for irrevocable loan commitments are determined using the three-stage impairment
approach for financial assets measured at amortized cost and recognized as a liability.
Financial liabilities
-
except for derivative financial instruments, Siemens measures financial liabilities at amortized cost using the
effective interest method.
Derivative financial instruments - Derivative financial instruments, such as foreign currency exchange contracts and interest rate swap
contracts are measured at fair value unless they are designated as hedging instruments, for which hedge accounting is applied. Changes
in the fair value of derivative financial instruments are recognized either in net income or, in the case of a cash flow hedge, in line item
Other comprehensive income, net of income taxes (applicable deferred income tax). Certain derivative instruments embedded in host
contracts are also accounted for separately as derivatives.
Fair value hedges: The carrying amount of the hedged item is adjusted by the gain or loss attributable to the hedged risk. Where an
unrecognized firm commitment is designated as hedged item, the subsequent cumulative change in its fair value is recognized as a
separate financial asset or liability with corresponding gain or loss recognized in net income. For hedged items carried at amortized cost,
the adjustment is amortized until maturity of the hedged item. For hedged firm commitments the initial carrying amount of the assets or
liabilities that result from meeting the firm commitments are adjusted to include the cumulative changes in the fair value that were
previously recognized as separate financial assets or liabilities.
Cash flow hedges: The effective portion of changes in the fair value of derivative instruments designated as cash flow hedges are
recognized in line item Other comprehensive income, net of income taxes, and any ineffective portion is recognized immediately in net
income. Amounts accumulated in equity are reclassified into net income in the same periods in which the hedged item affects net income.
Share-based payment - Share-based payment awards at Siemens are predominately designed as equity-settled. Fair value is measured
at grant date and is expensed over the vesting period. Fair value is determined as the market price of the underlying shares, considering
dividends during the vesting period the grantees are not entitled to as well as market conditions and non-vesting conditions, if applicable.
Plans granting the rights to receive subsidiary shares constitute own shares and, accordingly, are accounted as equity-settled.
Prior-year information
presentation.
The presentation of certain prior-year information has been reclassified to conform to the current year
NOTE 3 Acquisitions, dispositions and discontinued operations
Acquisitions
On April 15, 2021, Siemens completed the acquisition of all shares in Varian Medical Systems, Inc., USA (Varian). Varian is active in the
field of cancer care, with solutions especially in radiation oncology and related digital solutions and applications. The acquired business is
integrated into Siemens Healthineers. Varian thus offers a good complement to Siemens Healthineers' businesses in medical imaging,
laboratory diagnostics and interventional procedures. The purchase price paid in cash amounted to US$16.4 billion (€13.9 billion as of the
acquisition date). The preliminary purchase price allocation as of the acquisition date resulted in the following assets and liabilities:
Cash and cash equivalents €0.6 billion, Trade and other receivables €0.6 billion, Inventories €0.8 billion, various other
current assets €0.4 billion, Goodwill €8.0 billion, Other intangible assets €6.3 billion, Property, plant and equipment €0.5 billion,
miscellaneous assets €0.2 billion, Trade payables €0.2 billion, Contract liabilities €0.7 billion, Current income tax liabilities €0.2 billion,
Other current liabilities €0.3 billion, Deferred tax liabilities €1.6 billion and miscellaneous liabilities €0.5 billion. Resulting intangible assets
mainly relate to technologies for oncology solutions, customer relationships, and the acquired order backlog. As of the acquisition date,
goodwill was allocated to the groups of cash-generating units Varian €7.5 billion and Imaging €0.5 billion in accordance with the expected
synergies. Goodwill relates to inseparable intangible assets such as synergy effects and employee know-how. Synergies from the
acquisition are mainly expected from broader regional coverage of the sales network, cross-selling opportunities into our existing customer
base and from expanded integrated service offerings (e.g. "Oncology-as-a-Service" program) and value partnerships, and joint product
innovation. In addition, the business combination is expected to generate cost synergies in the administrative field and in procurement
11
Consolidated Financial Statements
activities. The gross contractual amounts of Trade and other receivables is €603 million, of which €24 million were expected to be
uncollectable at the date of acquisition. The gross contractual amount of loans and bonds receivables is €227 million, of which
€207 million are probably uncollectible at the acquisition date. The acquired business contributed Revenue of €1,241 million and a net loss
of €50 million for the period from the acquisition date to September 30, 2021, including earnings effects from the purchase price allocation
and integration costs. If Varian had been included in the Consolidated Financial Statements since October 1, 2020, Revenue and
Net income, including earnings effects from the purchase price allocation and integration costs, would have been €63.6 billion and
€6.6 billion, respectively, in fiscal 2021. The purchase price allocation of Varian is preliminary as, in particular, the allocation of intangible
assets including goodwill to currency areas is not finalized. Adjustments may lead to changes, such as, in intangible assets including
goodwill and in deferred tax liabilities.
Financial assets measured at fair value through other comprehensive income (FVOCI): are equity instruments for which Siemens
irrevocably elects to present subsequent fair value changes in OCI at initial recognition of the instrument. Unrealized gains and losses, net
of deferred income tax expenses, as well as gains and losses on the subsequent sale of the instruments are recognized in line item Other
comprehensive income, net of income taxes.
In August 2021, Siemens acquired all shares in Supplyframe Inc., USA (Supplyframe). Supplyframe is a design-to-source platform for the
global electronics value chain. The transaction provides value to both Supplyframe's and Siemens' customers through access to both
Siemens' offerings and Supplyframe's marketplace intelligence. The acquired business is integrated into Digital Industries. The
preliminary purchase price paid in cash is €556 million as of the acquisition date. The preliminary purchase price allocation as of the
acquisition date resulted in Other intangible assets of €111 million, thereof customer-related intangible assets and trademark rights
€83 million and technology €28 million as well as in liabilities of €87 million. Goodwill of €491 million comprises intangible assets that
are not separable such as employee know-how and expected synergy effects. The acquired business contributed Revenue of €11 million
and Net income of €(7) million for the period from its acquisition date to September 30, 2021, including earnings effects from the
purchase price allocation and integration costs. If Supplyframe had been included in the Consolidated Financial Statements since
October 1, 2020, Revenue and Net income, including earnings effects from the purchase price allocation and integration costs, would
have been €62,314 million and €6,694 million, respectively, in fiscal 2021.
Financial assets measured at fair value through profit and loss (FVTPL): a) mandatorily measured at FVTPL: Debt financial assets are
measured at FVTPL if the business model they are held in is not a hold-to-collect or a hold-and-sell business model, or if their contractual
cash flows do not represent solely payments of principal and interest. Equity instruments are measured at FVTPL unless the FVOCI-option
is elected. b) Financial assets designated as measured at FVTPL are irrevocably designated at initial recognition if the designation
significantly reduces accounting mismatches that would otherwise arise if assets and liabilities as well as recognizing gains (losses) were
measured on different bases.
Legal Proceedings often involve complex legal issues and are subject to substantial uncertainties. Accordingly, considerable judgment is
part of determining whether it is probable that there is a present obligation as a result of a past event at the end of the reporting period,
whether it is probable that such a Legal Proceeding will result in an outflow of resources and whether the amount of the obligation can
be reliably estimated. Internal and external counsels are generally part of the determination process. Due to new developments, it may be
necessary, to record a provision for an ongoing Legal Proceeding or to adjust the amount of a previously recognized provision. Upon
resolution of a Legal Proceeding, Siemens may incur charges in excess of the recorded provisions for such matters. The outcome of Legal
Proceedings may have a material effect on Siemens' financial position, its results of operations and/or its cash flows.
(116)
1,346
1,861
2020
2021
Fiscal year
Income and expenses recognized directly in equity
Discontinued operations
Continuing operations
(in millions of €)
Including items charged or credited directly to equity and the expenses (benefits) from continuing and discontinued operations, the
income tax expenses (benefits) consist of the following:
Consolidated Financial Statements
15
Siemens has not recognized deferred tax liabilities for income taxes or foreign withholding taxes on the cumulative earnings of subsidiaries
of €31,628 million and €25,003 million, respectively in fiscal 2021 and 2020, because the earnings are intended to be permanently
reinvested in the subsidiaries.
As of September 30, 2021 and 2020, €82 million and €221 million respectively, expire over the periods to 2029.
The amount of €2,280 million for tax loss carryforwards for which no deferred tax asset has been recognized does include material loss
carryforwards for local taxes only.
2,364
2,474
2,172
2,280
2020
192
Consolidated Financial Statements
increases and expected rates of future pension progression are considered. The assumptions used for the calculation of the DBO as of the
period-end of the preceding fiscal year are used to determine the calculation of service cost and interest income and expense of the
following year. Significant plans apply individual spot rates from full discount rate curves to determine service cost and interest expense.
The net interest income or expense for the fiscal year will be based on the discount rate for the respective year multiplied by the net
defined benefit liability (asset) at the preceding fiscal year's period-end date.
Service cost, past service cost and settlement gains (losses) for pensions and similar obligations as well as administration costs unrelated
to the management of plan assets are allocated among functional costs. Past service cost and settlement gains (losses) are recognized
immediately in profit or loss. For unfunded plans, the amount in line item Provisions for pensions and similar obligations equals the DBO.
For funded plans, Siemens offsets the fair value of the plan assets with the DBO. Siemens recognizes the net amount, after adjustments
for effects relating to any asset ceiling.
Remeasurements comprise actuarial gains and losses as well as the difference between the return on plan assets and the amounts included
in net interest on the net defined benefit liability (asset). They are recognized in Other comprehensive income, net of income taxes.
Actuarial valuations rely on key assumptions including discount rates, expected compensation increases, rate of pension progression and
mortality rates. Discount rates used are determined by reference to yields on high-quality corporate bonds of appropriate duration and
currency at the end of the reporting period. In case such yields are not available, discount rates are based on government bonds yields.
Due to changing market, economic and social conditions, the underlying key assumptions may differ from actual developments.
Entitlements resulting from plans based on asset returns from underlying assets are generally measured at the fair value of the underlying
assets at period-end. If the performance of the underlying assets is lower than a guaranteed return, the DBO is measured by projecting
forward the contributions at the guaranteed fixed return and discounting back to a present value.
Provisions - A provision is recognized in the Statement of Financial Position when it is probable that the Company has a present legal or
constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are recognized at
present value by discounting the expected future cash flows at a pretax rate that reflects current market assessments of the time value of
money. When a contract becomes onerous, the present obligation under the contract is recognized as a provision.
Significant estimates are involved in the determination of provisions related to onerous contracts, warranty costs, asset retirement
obligations, legal and regulatory proceedings as well as governmental investigations (Legal Proceedings). Siemens records a provision for
onerous contracts with customers when current estimates of total estimated costs exceed estimated revenue. Onerous contracts with
customers are identified by monitoring the progress of the project and updating the estimates which requires significant judgment relating
to achieving certain performance standards as well as estimates involving warranty costs and estimates regarding project delays including
the assessment of responsibility splits between the contract partners for these delays.
Termination benefits - Termination benefits are provided as a result of an entity's offer made in order to encourage voluntary redundancy
before the regular retirement date or from an entity's decision to terminate the employment. Termination benefits in accordance with IAS
19, Employee Benefits, are recognized as a liability and an expense when the entity can no longer withdraw the offer of those benefits.
Financial instruments - A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity. Based on their contractual cash flow characteristics and the business model they are held in, financial
instruments are classified as financial assets and financial liabilities measured at cost or amortized cost, measured at fair value, loan
commitments, contract assets and receivables from finance leases. Regular way purchases or sales of financial assets are accounted for at
the trade date. Initially, financial instruments are recognized at fair value and net of transaction costs, if not categorized at FVTPL.
Subsequently, financial assets and liabilities are measured according to the category to which they are assigned to:
In addition, Siemens closed several smaller acquisitions in fiscal 2021 and 2020 for a total purchase price of €429 million and €551 million,
respectively, mainly paid in cash. The (preliminary) purchase price allocations resulted in Other intangible assets of €147 million and
€263 million and Goodwill of €254 million and €298 million, respectively, which comprises intangible assets that are not separable such
as employee know-how and expected synergy effects. The purchase price allocation for some of the acquired businesses is preliminary, as
a detailed analysis of the assets and liabilities has not been finalized.
Dilution of the stake in Siemens Healthineers
In March 2021, Siemens Healthineers placed 53 million new shares to institutional investors, receiving gross proceeds of €2.3 billion and
increasing its share capital to €1.128 billion. Siemens did not participate in the placement, thus, Siemens' stake in Siemens Healthineers
decreased from 79% to 75%. The dilution is accounted for as equity transaction, which increased Non-controlling interests by €1.0 billion
and Total equity attributable to shareholders of Siemens AG by €1.3 billion (mainly due to an increase in Retained earnings of €1.2 billion).
Inventories
Goodwill
Property, plant and equipment
Miscellaneous current and non-current assets
Assets classified as held for disposal
Trade payables
Other current financial liabilities
Miscellaneous current liabilities
Miscellaneous non-current liabilities
Liabilities associated with assets classified as held for disposal
Spin-off Siemens Energy AG in fiscal 2020
Mar 10, 2021
95
510
143
540
123
359
92
1,862
355
193
244
116
907
Income from discontinued operations, net of income taxes includes €119 million from Siemens Energy AG in fiscal 2021, which are mainly
attributable to the reversal of income tax provisions.
NOTE 4 Interests in other entities
Other current financial assets
Trade and other receivables
Cash and cash equivalents
(in millions of €)
Sale of Flender GmbH
In October 2020, Siemens signed an agreement to sell 100% of its shares in Flender GmbH including Siemens' Wind Energy Generation
business (Flender) to The Carlyle Group, U.S. Both businesses were previously reported under Portfolio Companies. In the first quarter of
fiscal 2021, the businesses of Flender (the disposal group) met the criteria for classification as held for disposal as well as for discontinued
operation, and, accordingly, Siemens ceased depreciation and amortization of assets within the disposal group. Upon closing of the
transaction in March 2021, Siemens no longer controls Flender. The consideration was €1.875 billion. Derecognized net assets amounted
to €954 million. The results of Flender are reported as discontinued operations in the Consolidated Statements of Income and Cash Flows
for all periods presented:
(in millions of €)
Revenue
Expenses
Disposal gain net of disposal costs
Income (loss) from discontinued operations before income taxes
FY 2021
928
(818)
FY 2020
1,885
(1,710)
885
(5)
995
(629)
170
Other income taxes
(8)
(36)
(40)
Income (loss) from discontinued operations, net of income taxes
946
134
thereof attributable to Siemens AG shareholders
946
134
The carrying amounts of the major classes of assets and liabilities derecognized were as follows:
12
Consolidated Financial Statements
Income taxes on ordinary activities
9,454
31,417
5,425
2021
Sep 30,
2021
2020
(2,931)
2,724
437
(1,302)
2,921
362
(600)
(417)
898
760
527
2,324
Fiscal year
(in millions of €)
Balance at beginning of fiscal year of deferred tax (assets) liabilities
1,346
2021
(2,324)
1,861
(91)
2020
2,324
1,705
607
655
(386)
(377)
(398)
(56)
100
(75)
54
7
(496)
(437)
147
33
(109)
2021
2020
NOTE 14 Other financial assets
(in millions of €)
Future minimum lease payments to be received under operating leases are:
In fiscal 2021 and 2020, expenses recognized for short-term leases are €50 million and €71 million, respectively; expenses for low-value
leases not accounted for under the right-of-use model are €21 million and €23 million, respectively.
The gross carrying amount of Advances to suppliers and construction in progress includes €959 million and €639 million, respectively, of
property, plant and equipment under construction in fiscal 2021 and 2020. As of September 30, 2021 and 2020, contractual commitments
for purchases of property, plant and equipment are €625 million and €563 million, respectively. Right-of-use assets are presented in
Property, plant and equipment in accordance with their nature; right-of-use assets have a carrying amount of €2,641 million and €2,474
as of September 30, 2021 and 2020, respectively; additions are €901 million and €1,273 million and depreciation expense is €726 million
and €706 million in fiscal 2021 and 2020. Right-of-use assets mainly relate to leases of land and buildings with a carrying amount of
€2,320 million and €2,187 million as of September 30, 2021 and 2020, additions of €659 million and €1,029 million and depreciation
expense of €534 million and €509 million in fiscal 2021 and 2020. Equipment leased to others mainly relate to Technical machinery and
equipment as well as to Office and other equipment owned by Siemens with a carrying amount of €1,279 million and €404 million,
respectively, as of September 30, 2021 and €1,223 million and €448 million, respectively, as of September 30, 2020.
2 Includes assets reclassified to Assets classified as held for disposal and dispositions of those entities.
1 Opening balance as of October 1, 2019 including effect of adopting IFRS 16
(2,054)
10,250
(13,194)
23,443
(11,911)
3,168
58
(951)
33,080
Property, plant and equipment
735
Within one year
Sep 30,
After one year but not more than two years
After two years but not more than three years
After three years but not more than four years
Sep 30,
In fiscal 2021 and 2020, income from operating leases is €668 million and €571 million, respectively, thereof from variable lease payments
€127 and €110 million, respectively.
1,586
1,505
186
166
129
124
188
182
261
247
369
336
454
449
2020
2021
Changes due to Siemens Energy
(1)
Fiscal year
Total deferred taxes, net
Fiscal year 2020
409
241
192
132
17.997
14,460
1.746
1,423
700
2.446
(598)
825
632
(233)
NOTE 5 Other operating income
In fiscal 2021 and 2020, Other operating income mainly includes gains on sales of property, plant and equipment of €73 million and €308
million, respectively, as well as insurance related income. Fiscal 2020 included gains on the sales of businesses of €177 million.
NOTE 6 Other operating expenses
(1,869)
Other operating expenses in fiscal 2021 and 2020 include losses on the sale of businesses as well as effects from insurance, personnel,
legal and regulatory matters.
Income taxes presented in the Consolidated Statements of Income
Sep 30,
(4,029)
Other
211
15
(217)
8
1,620
61
(301)
(49)
(6)
Balance at end of fiscal year of deferred tax (assets) liabilities
(527)
(2,324)
Deferred tax assets have not been recognized with respect of the following items (gross amounts):
(in millions of €)
Deductible temporary differences
Tax loss carryforwards
Changes in items of the Consolidated Statements of Comprehensive Income
Deferred tax balances and expenses (benefits) developed as follows in fiscal 2021 and 2020:
NOTE 7 Income taxes
(in millions of €)
Non-deductible expenses
Tax-free income
Taxes for prior years
Change in realizability of deferred tax assets and tax credits
Change in tax rates
Foreign tax rate differential
Tax effect of investments accounted for using the equity method
Other, net (primarily German trade tax differentials)
Actual income tax expenses
Deferred income tax assets and (liabilities) on a net basis are summarized as follows:
(in millions of €)
Deferred taxes due to temporary differences
Intangible assets
Pensions and similar obligations
Current assets and liabilities
Non-current assets and liabilities
Tax loss carryforwards and tax credits
Increase (decrease) in income taxes resulting from:
Income tax expenses (benefits) consist of the following:
Expected income tax expenses
Current and deferred income tax expenses differ from the amounts computed by applying a combined statutory German income tax rate
of 31% as follows:
Current taxes
Deferred taxes
Income tax expenses
Fiscal year
2021
2020
1,650
1,563
211
(217)
1,861
1,346
Current income tax expenses in fiscal 2021 and 2020 include adjustments recognized for current taxes of prior years in the amount of
€(359) million and €(64) million, respectively. The deferred tax expenses (benefits) in fiscal 2021 and 2020 include tax effects of the
origination and reversal of temporary differences of €94 million and €(289) million, respectively.
In Germany, the calculation of current taxes is based on a combined tax rate of 31%, consisting of a corporate tax rate of 15%, a solidarity
surcharge thereon of 5.5% and an average trade tax rate of 15%. For foreign subsidiaries, current taxes are calculated based on the local
tax law and applicable tax rates in the individual foreign countries. Deferred tax assets and liabilities in Germany and abroad are measured
at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled.
±
14
Consolidated Financial Statements
(in millions of €)
736
After four years but not more than five years
More than five years
(780)
carrying
amount
10/01/20191
Reclassi-
Additions Additions
Translation
Gross
Consolidated Financial Statements
18
'Includes assets reclassified to Assets classified as held for disposal and dispositions of those entities.
(2,071)
11,023
1,053
(1)
(13,578)
1,055
24,601
(35)
(2,529)
2,739
568
379
differences
23,443
(418)
Retire-
ments²
(95)
3,885
Internally generated technology
(in millions of €)
2020
in fiscal
zation and
impairment
Deprecia-
tion/amorti-
amount
09/30/2020
Carrying
ment
ortization
and impair-
Accumu-
lated depre-
ciation/am-
nations
Gross
carrying
amount
09/30/2020
combi-
business
fications
Property, plant and equipment
(420)
711
511
85
75
5,249
Office and other equipment
(270)
1,421
(3,405)
4,826
(732)
142
136
73
86
5,120
Technical machinery and equipment
(707)
81
(595)
5,406
(4,164)
47
16
736
construction in progress
Advances to suppliers and
(511)
1,882
(1,979)
419
3,860
1
626
14
76
3,682
Equipment leased to others
(582)
1,242
(538)
(753)
through
(1,741)
604
10
(206)
7,239
Office and other equipment
(273)
1,421
(3,699)
5,120
(4,523)
222
288
7
(233)
9,360
Technical machinery and equipment
(685)
3,456
5,067
124
5,249
512
(39)
1,461
construction in progress
(524)
1,856
(1,826)
3,682
(545)
38
656
(168)
3,700
Equipment leased to others
(571)
1,171
(4,078)
(2,523)
8,656 (3,589)
Additions from acquisitions not impacting net income
(3,902)
licenses and similar rights
(202)
373
70
(2,618)
4,631
(2,902)
Acquired technology including patents,
1,729
Customer relationships and trademarks
9,434
(333)
331
9
(4,401)
5,037 (3,642)
(443)
1,395
7,008
(315)
1,714
396
1,108
40
(306)
(194)
Land and buildings
(952)
4,838
11,319
13,124
(7,772)
495
704
(630)
20,326
Other intangible assets
(8,286)
5,375
2020
2021
Liabilities to personnel
NOTE 15 Other current liabilities
Sep 30,
Consolidated Financial Statements
1,076
4,304
(in millions of €)
Deferred Income
6,209
Other
70
321
34,728
37,505
3,537
5,867
2020
2021
2020
2021
Sep 30,
Sep 30,
Sep 30,
Sep 30,
Accruals for pending invoices
Non-current debt
Other financial indebtedness
Loans from banks
Notes and bonds
(in millions of €)
NOTE 16 Debt
Other includes miscellaneous tax liabilities of €742 million and €576 million, respectively, in fiscal 2021 and 2020.
1,100
7,628
1,280
1,616
518
541
108
96
Current debt
1,183
1,369
1,000
US$
1,750
1,493
US$
1,750
1,476
US$
1,100
939
US$
750
646
US$
750
638
1,401
US$
1,500
701
US$
1,750
1,697
US$
1,750
1,718
2.9%/2015/May 2022/US$-fixed-rate-instruments
3.25%/2015/May 2025/US$ fixed-rate-instruments
4.4%/2015/May 2045/US$ fixed-rate-instruments
1.7% /2016/September 2021/US$-fixed-rate-instruments
2.0%/2016/September 2023/US$-fixed-rate-instruments
2.35%/2016/October 2026/US$-fixed-rate-instruments
3.3%/2016/September 2046/US$-fixed-rate-instruments
US$
1,750
1,511
US$
1,750
1,493
US$
1,500
US$
6.125%/2006/August 2026/US$ fixed-rate instruments
1,700
US$
US$
850
725
3.125%/2017/March 2024/US$ fixed-rate-instruments
US$
1,000
902
US$
1,000
915
3.4%/2017/March 2027/US$ fixed-rate-instruments
US$
1,250
1,077
US$
734
1,463
850
US$ 3m LIBOR+0.61%/2017/March 2022/US$ floating-rate instruments
1,700
1,446
US$
1,000
856
US$
1,000
846
2.7%/2017/March 2022/US$ fixed-rate-instruments
US$
1,000
873
US$
1,000
884
US$
€
23,449
491
€
1,250
1,253
0.0%/2020/February 2026/EUR fixed-rate instruments
€
1,000
998
€
1,000
997
0.25%/2020/February 2029/EUR fixed-rate instruments
0.5%/2020/February 2032/EUR fixed-rate instruments
1.0%/2020/February 2025/GBP fixed-rate instruments
0.125%/2020/June 2022/EUR fixed-rate instruments
0.25%/2020/June 2024/EUR fixed-rate instruments
0.375%/2020/June 2026/EUR fixed-rate instruments
€
1,000
997
€
1,252
1,000
1,250
0.0%/2020/February 2023/EUR fixed-rate instruments
993
0.5%/2019/September 2034/EUR fixed-rate instruments
€
1,000
991
€
1,000
991
3m EURIBOR+0.7%/2019/December 2021/EUR floating-rate instrument
€
1,250
1,251
€
1,250
1,256
€
20,867
996
750
€
1,000
997
€
1,000
998
€
1,000
998
0.875%/2020/June 2023/GBP fixed-rate instruments
Total Debt Issuance Program
£
450
522
£
450
998
€
1,000
1,496
748
€
750
747
£
850
985
₤
850
929
€
1,500
1,498
€
1,500
€
2,021
683
2,929
55
€
994
1,000
€
746
750
€
747
750
€
998
1,000
€
999
1,000
39,576
7,664
(2,123)
(1,865)
124
1,191
44,567
In addition, other financing activities resulted in €(99) million cash flows in fiscal 2020.
1,000
994
€
750
1,000
€
963
800
€
884
800
€
882
800
€
Credit facilities
846
€
690
650
€
673
650
€
764
750
€
759
800
As of September 30, 2021 and 2020, Siemens has €7.45 billion and €22.95 billion lines of credit, thereof unused €7.45 billion and €22.95
billion, respectively. In fiscal 2021, the unused €7.0 billion syndicated credit facility maturing in 2025 was extended to mature in 2026
20
Consolidated Financial Statements
£
650
700
€
-
1,250
1,254
€
1,000
998
€
743
1,000
US$
100
85
US$
100
84
US$
400
342
€
1,250
998
1,002
650
383
with no extension option remaining. The €3.0 billion unused syndicated credit facility matured in December 2020. The €12.5 billion
unused syndicated bridge facility to secure Siemens Healthineers AG's financing of the acquisition of Varian Medical Systems, Inc. was
cancelled by Siemens in March 2021. In September 2021, the unused €450 million revolving bilateral credit facility was extended to
September 2022. The facilities are for general corporate purposes.
21
Notes and bonds
Consolidated Financial Statements
Sep 30, 2021
Currency
Carrying
Sep 30, 2020
Currency
Carrying
Notional amount
amount in
£
Notional amount
(interest/issued/maturity)
2.75%/2012/September 2025/GBP fixed-rate instruments
3.75%/2012/September 2042/GBP fixed-rate instruments
1.75%/2013/March 2021/EUR fixed-rate instruments
2.875%/2013/March 2028/EUR fixed-rate instruments
3.5%/2013/March 2028/US$ fixed-rate instruments
2014/September 2021/US$ floating-rate instruments
0.375%/2018/September 2023/EUR fixed-rate instruments
1.0%/2018/September 2027/EUR fixed-rate instruments
1.375%/2018/September 2030/EUR fixed-rate instruments
0.3%/2019/February 2024/EUR fixed-rate instruments
0.9%/2019/February 2028/EUR fixed-rate instruments
1.25%/2019/February 2031/EUR fixed-rate instruments
1.75%/2019/February 2039/EUR fixed-rate instruments
0.0%/2019/September 2021/EUR fixed-rate instruments
0.0%/2019/September 2024/EUR fixed-rate instruments
0.125%/2019/September 2029/EUR fixed-rate instruments
(in millions)
millions of €1
(in millions)
millions of €1
406
£
350
£
350
amount in
46
€
503
(5,758)
37,505
110
5
5,726
5,867
1,397
839
67
22
(42)
2,282
2,076
(1,957)
(9)
6
116
2,829
(745)
92
26
726
44,567
(242)
461
34,728 8,316
3,537 (3,511)
changes 09/30/2021
2,228
2,146
7,821
6,562
40,879
38,005
Lease liabilities
Total debt
In fiscal 2021 and 2020, Siemens recognized interest expenses on lease liabilities of €43 million and €39 million and expenses relating to
variable lease payments not included in the measurement of lease liabilities of €64 million and €100 million, respectively. In fiscal 2021
and 2020, cash flows to which Siemens is potentially exposed and which are not reflected in the measurement of lease liabilities relate
primarily to lease contracts entered into, however which have not yet commenced as well as to extension options whose exercise is not
yet reasonably certain totaling €2.9 billion and €2.6 billion, respectively, and, in addition, to variable lease payments mainly relating to
incidental and operating costs for buildings leased by Siemens, for which no significant fluctuations are expected in the future.
Changes in liabilities arising from financing activities
(in millions of €)
Non-current notes and bonds
2,941
Current notes and bonds
Other financial indebtness (current and non-current)
Lease liabilities (current and non-current)
Total debt
Cash flows
Non-cash changes
10/01/2020
(Acquisi-
tions)/Dis-
positions
Foreign
currency
translation
Reclassifi-
cations and
Fair value
changes
other
Loans from banks (current and non-current)
159
610
(236)
891
(1,387)
(225)
-
(144)
1,397
875
1,388
3,233
(911)
(1)
(735)
2,262
(209)
24
2,076
(108)
1,351
2,829
994
1,000
€
503
500
€
-
500
3,537
4
659
48,700
In addition, other financing activities resulted in €130 million cash flows in fiscal 2021.
(in millions of €)
Non-current notes and bonds
Current notes and bonds
Loans from banks (current and non-current)
Other financial indebtness (current and non-current)
Lease liabilities (current and non-current)
Total debt
Cash flows
3,509
Non-cash changes
(Acquisi-
tions)/Dis-
positions
29,176 10,256
4,029 (3,959)
Foreign
currency
translation
(1,276)
Fair value
changes
Reclassifi-
cations and
other
changes 09/30/2020
120
(3,549)
34,728
(46)
10/01/2019
1,064
303
US$
5,166
13,811
13,166
3,782
3,583
10,030
9,583
5,773
4,627
4,288
3,154
1,510
750
547
813
2,690
4,078
4.2%/2017/March 2047/US fixed-rate-instruments
2020
Sep 30,
Asset Liability Matching Strategies
As a significant risk, the Company considers a decline in the plans' funded status due to adverse developments of plan assets and/or defined
benefit obligations resulting from changing parameters. Accordingly, Siemens implemented a risk management concept aligned with the
defined benefit obligations (Asset Liability Matching). Risk management is based on a worldwide defined risk threshold (Value at Risk).
The concept, the Value at Risk and the asset development including the investment strategy are monitored and adjusted on an ongoing
basis under consultation of senior external experts. Independent asset managers are selected based on quantitative and qualitative
analyses, which include their performance and risk evaluation. Derivatives are used to reduce risks as part of risk management.
25
55
Disaggregation of plan assets
Consolidated Financial Statements
(in millions of €)
Equity securities
2021
Fixed income securities
Corporate bonds
Alternative investments
Multi strategy funds
Derivatives
Cash and cash equivalents
Insurance contracts
Other assets
Total
Government bonds
As in prior years, sensitivity determinations apply the same methodology as applied for the determination of the post-employment benefit
obligation. Sensitivities reflect changes in the DBO solely for the assumption changed.
297
33,543
702
1,369
4,026
581
183
690
898
380
2,352
134
3
424
1,195
Usage
(375)
(98)
633
277
1,574
Other
29,970
Virtually all equity securities have quoted prices in active markets. The fair value of fixed income securities is based on prices provided by
price service agencies. The fixed income securities are traded in active markets and almost all fixed income securities are investment grade.
Alternative investments include hedge funds, private equity and real estate investments, thereof real estate used by the Company with a
fair value of €530 million and €527 million, respectively, as of September 30, 2021 and 2020. Multi strategy funds mainly comprise
absolute return funds and diversified growth funds that invest in various asset classes within a single fund and aim to stabilize return and
reduce volatility. Derivatives predominantly consist of financial instruments for hedging interest rate risk and inflation risk.
Future cash flows
Employer contributions expected to be paid to defined benefit plans in fiscal 2022 are €212 million. Over the next ten fiscal years, average
annual benefit payments of €1,754 million and €1,730 million, respectively, are expected as of September 30, 2021 and 2020. The
weighted average duration of the DBO for Siemens defined benefit plans was 12 and 13 years, respectively, as of September 30, 2021 and
2020.
Defined contribution plans and state plans
Amounts recognized as expenses for defined contribution plans are €484 million and €710 million in fiscal 2021 and 2020, respectively.
Contributions to state plans amount to €1,449 million and €1,844 million in fiscal 2021 and 2020. Amounts are based on continuing and
discontinued operations.
NOTE 18 Provisions
Total
Order
related
(in millions of €)
Balance as of October 1, 2020
thereof: non-current
Additions
Warranties
risks
Asset
retirement
obligations
losses and
The DBO effect of a 10% reduction in mortality rates for all beneficiaries would be an increase of €1,196 million and €1,285 million,
respectively, as of September 30, 2021 and 2020.
(1,367)
1,689
1.3%
1.1%
0.9%
0.8%
2.8%
2.5%
1.9%
2020
1.6%
0.2%
GBP
CHF
The discount rate was derived from high-quality corporate bonds with an issuing volume of more than 100 million units in the respective
currency zones, which have been awarded an AA rating (or equivalent) by at least one of the three rating agencies Moody's Investors
Service, S&P Global Ratings or Fitch Ratings.
Applied mortality tables are:
Germany
U.S.
0.3%
U.K.
CH
2021
Consolidated Financial Statements
2020
(224)
(3)
(156)
402
455
(97)
Sep 30,
75
24
14
Actuarial assumptions
The weighted-average discount rate used for the actuarial valuation of the DBO was as follows:
Discount rate
EUR
USD
303
Siemens specific tables (Siemens Bio 2017/2021), (in fiscal 2020 Siemens Bio 2017/2020)
Pri-2012 with generational projection from the US Social Security Administration's Long Range Demographic Assumptions
SAPS S3 (Standard mortality tables for Self Administered Pension Schemes with allowance for future mortality improvements), (in fiscal 2020
SAPS S2)
BVG 2020 G (in fiscal 2020 BVG 2015 G)
Effect on DBO due to a one-half percentage-point
decrease
increase
decrease
Sep 30,
(in millions of €)
Discount rate
Rate of compensation increase
increase
Rate of pension progression
2020
(2,045)
95
1,559
2,259
(89)
(1,386)
(2,134)
95
2,412
(90)
2021
A one-half-percentage-point change of the above assumptions would result in the following increase (decrease) of the DBO:
2.7%
3.1%
The mortality tables used in Germany (Siemens Bio 2017/2021) are mainly derived from data of the German Siemens population and to a
lesser extent from data of the Federal Statistical Office in Germany by applying formulas in accordance with recognized actuarial standards.
The rates of compensation increase and pension progression for countries with significant effects are shown in the following table.
Inflation effects, if applicable, are included in the assumptions below.
Compensation increase
U.K.
CH
Pension progression
Germany
U.K.
Sensitivity analysis
Sep 30,
2021
2020
3.0%
2.6%
1.4%
1.4%
1.5%
1.5%
(100)
2021
(199)
Reversals
Sep 30,
2021
2020
2,774
2,672
26,519
25,267
Sep 30,
9.56
Equity allocated to SFS differs from the carrying amount of equity as it is mainly allocated based on the risks of the underlying business.
Siemens' current corporate credit ratings are:
Long-term debt
Short-term debt
NOTE 21 Commitments and contingencies
Sep 30, 2021
Moody's
Investors
Service
9.46
S&P
Global
Ratings
Debt to equity ratio
Allocated equity
EBITDA
7,496
5,672
(1,480)
(1,228)
3,075
3,157
Siemens Financial Services debt
9,091
Industrial net debt/EBITDA
1.5
1.3
1 Debt is generally reported with a value representing approximately the amount to be repaid. Accordingly, debt in a hedging relationship is adjusted for fair values of interest hedges as well as for foreign currency hedge effects;
the latter commencing with financing the acquisition of Varian Medical Systems, Inc. in fiscal 2021. Siemens deducts resulting changes in fair value, to derive an amount of debt that approximates the amount that will be repaid.
2 The adjustment considers that both Moody's and S&P view Siemens Financial Services as a captive finance company. These rating agencies generally recognize and accept higher levels of debt attributable to captive
finance subsidiaries in determining credit ratings. Following this concept, Siemens excludes Siemens Financial Services debt.
The SFS business is capital intensive and operates with a larger amount of debt to finance its operations compared to the industrial
business.
(in millions of €)
7,601
Plus/Less: Interest income, interest expenses and other financial income (expenses), net
Plus: Amortization, depreciation and impairments
Sep 30, 2020
Moody's
Investors
Service
Ratings
15,646
28,521
Item Credit guarantees covers the financial obligations of third parties generally in cases where Siemens is the vendor and (or) contractual
partner or Siemens is liable for obligations of associated companies accounted for using the equity method. Additionally, credit guarantees
are issued in the course of the SFS business. Credit guarantees generally provide that in the event of default or non-payment by the primary
debtor, Siemens will be required to settle such financial obligations. The maximum amount of these guarantees is equal to the outstanding
balance of the credit or, in case a credit line is subject to variable utilization, the nominal amount of the credit line. These guarantees have
typically residual terms of up to four years. The Company held collateral mainly through inventories and trade receivables. As of September
30, 2021 and 2020, Credit guarantees include €124 million and €271 million for which Siemens holds reimbursement rights towards
Siemens Energy. Siemens accrued €3 million and €18 million relating to credit guarantees as of September 30, 2021 and 2020,
respectively.
Furthermore, Siemens issues performance guarantees, which mainly include performance bonds. In the event of non-fulfillment of
contractual obligations by the primary obligor, Siemens will be required to pay up to an agreed-upon maximum amount. These agreements
typically have terms of up to ten years. As of September 30, 2021 and 2020, Performance guarantees include €14,508 million and €27,425
28
Consolidated Financial Statements
million for which Siemens holds reimbursement rights towards Siemens Energy; the related contract liability amount for parent company
guarantees is generally reduced using the straight-line method over the planned term of the underlying delivery or service agreement. As
of September 30, 2021 and 2020, the Company accrued €51 million and €1 million, respectively, relating to performance guarantees.
As of September 30, 2021 and 2020, in addition to guarantees disclosed in the table above, there are contingent liabilities of €475 million
and €405 million which mainly result from other guarantees, legal proceedings and from joint and several liabilities of consortia, in
particular from the construction of a power plant in Finland. Other guarantees include €189 million and €261 million for which Siemens
holds reimbursement rights towards Siemens Energy.
27,917
NOTE 22 Legal proceedings
As previously reported, in July 2008, Hellenic Telecommunications Organization S.A. (OTE) filed a lawsuit against Siemens AG with the
district court of Munich, Germany, seeking to compel Siemens AG to disclose the outcome of its internal investigations with respect to
OTE. OTE seeks to obtain information with respect to allegations of undue influence and/or acts of bribery in connection with contracts
concluded between Siemens AG and OTE from calendar year 1992 to 2006. At the end of July 2010, OTE expanded its claim and requested
payment of damages by Siemens AG of at least €57 million to OTE for alleged bribery payments to OTE employees. In October 2014, OTE
increased its damage claim to the amount of at least €68 million. Siemens AG continues to defend itself against the expanded claim.
As previously reported, in May 2014, the Public Affairs Office (Ministério Público) São Paulo initiated a lawsuit against Siemens Ltda. as
well as other companies and several individuals claiming, inter alia, damages in an amount of BRL2.5 billion (approximately €399 million
as of September 2021) plus adjustments for inflation and related interest in relation to train refurbishment contracts entered into between
2008 and 2011. In January 2015, the district court of São Paulo admitted a lawsuit of the State of São Paulo and two customers against
Siemens Ltda., Siemens AG and other companies and individuals claiming damages in an unspecified amount. In March 2015, the district
court of São Paulo admitted a lawsuit of the Public Affairs Office (Ministério Público) São Paulo against Siemens Ltda. and other companies
claiming, inter alia, damages in an amount of BRL487 million (approximately €78 million as of September 2021) plus adjustments for
inflation and related interest in relation to train maintenance contracts entered into in 2000 and 2002. In September 2015, the district
court of São Paulo admitted another lawsuit of the Public Affairs Office (Ministério Público) São Paulo against Siemens Ltda. and other
companies claiming, inter alia, damages in an amount of BRL918 million (approximately €147 million as of September 2021) plus
adjustments for inflation and related interest in relation to train maintenance contracts entered into in 2006 and 2007. Siemens is
defending itself against these actions. It cannot be excluded that further significant damage claims will be brought by customers or the
state against Siemens.
As previously reported, in June 2015, Siemens Ltda. appealed to the Supreme Court against a decision of a previous court to suspend
Siemens Ltda. from participating in public tenders and signing contracts with public administrations in Brazil for a five year term based on
alleged irregularities in calendar year 1999 and 2004 in public tenders with the Brazilian Postal authority. In June 2018, the court accepted
Siemens' appeal and declared the earlier instance decision as void. In June 2021, the court referred the case back to the court of first
instance. In February 2018, the Ministério Público in Brasilia filed a lawsuit based on the same set of facts, mainly claiming the exclusion
of Siemens Ltda. from public tenders for a ten year term. Siemens Ltda. is defending itself against the lawsuit. Siemens Ltda. is currently
not excluded from participating in public tenders.
Siemens is involved in numerous Legal Proceedings in various jurisdictions. These Legal Proceedings could result, in particular, in Siemens
being subject to payment of damages and punitive damages, equitable remedies or sanctions, fines or disgorgement of profit. In individual
cases this may also lead to formal or informal exclusion from tenders or the revocation or loss of business licenses or permits. In addition,
further Legal Proceedings may be commenced or the scope of pending Legal Proceedings may be extended. Asserted claims are generally
subject to interest rates.
Some of these Legal Proceedings could result in adverse decisions for Siemens, which may have material effects on its business activities
as well as its financial position, results of operations and cash flows.
For Legal Proceedings information required under IAS 37, Provisions, Contingent Liabilities and Contingent Assets is not disclosed if the
Company concludes that disclosure can be expected to seriously prejudice the outcome of the matter.
29
Proceedings out of or in connection with alleged compliance violations
S&P
Global
15,116
530
A1
A+
A1
A+
P-1
A-1+
P-1
604
A-1+
(in millions of €)
Credit guarantees
Performance guarantees
Sep 30,
Sep 30,
2021
2020
The following table presents the undiscounted amount of maximum potential future payments for major groups of guarantees:
Income from continuing operations before income taxes
10,189
13,861
1,505
351
577
1,552
3,985
thereof: non-current
539
23
138
847
1,723
The majority of the Company's provisions are generally expected to result in cash outflows during the next five years.
Warranties mainly relate to products sold. Order related losses and risks are provided for anticipated losses and risks on uncompleted
construction, sales and leasing contracts.
The Company is subject to asset retirement obligations related to certain items of property, plant and equipment. Such asset retirement
obligations are primarily attributable to environmental clean-up costs (disclosed in Corporate items of the Segment information) and to
costs primarily associated with the removal of leasehold improvements at the end of the lease term.
Environmental clean-up costs relate to remediation and environmental protection liabilities which have been accrued based on the
estimated costs of decommissioning the site for the production of uranium and mixed-oxide fuel elements in Hanau, Germany (Hanau
facilities), as well as for a nuclear research and service center in Karlstein, Germany (Karlstein facilities). In May 2021, Siemens AG and the
Federal Republic of Germany entered into a public-law contract based on which the obligation of final disposal of nuclear waste is
transferred to the Federal Republic of Germany for a payment of €360 million. The contract and therefore the payment is subject to the
approval of the EU commission under state-aid rules. Estimation uncertainties still relate to assumptions made to measure the obligations
that remain with Siemens AG, with regard to conditioning and packaging of nuclear waste, as well as intermediate storage and transport
to the final storage facility "Schacht Konrad" or a logistics depot until year-end 2032. As of September 30, 2021 and 2020, the provisions
total €507 million and €638 million, respectively. The decrease results primarily from the reversal of advance payments to the federal
26
Consolidated Financial Statements
199
government in the amount of €95 million which were capitalized and included in the carrying amount of the provision as well as from
interest rate adjustments.
115
(2)
(246)
(68)
(8)
(164)
(486)
Translation differences
12
3
4
7
24
Accretion expense and effect of changes in discount rates
(24)
(24)
Other changes including reclassifications to held for disposal and disposition of those entities
Balance as of September 30, 2021
(93)
1
Other includes provisions for life and industrial business reinsurance contracts (liability, property, construction) in connection with the
Siemens Energy business of €487 million and €499 million as of September 30, 2021 and 2020; thereof life €248 million and €262 million
and industrial business €239 million and €237 million, respectively, as of September 30, 2021 and 2020. The provisions are for incurred
and reported insurance losses as well as for incurred, hence, not yet reported insurance losses as of fiscal year-end. The provision is
determined using actuarial standard valuation methodologies, which are parameterized based on historical loss data. Life reinsurance
contracts have an average term of 20 years, whereas the cash outflows for the industrial business reinsurance contracts are expected
within the next five years. Other also includes provisions for Legal Proceedings, as far as the risks that are subject to such Legal Proceedings
are not already covered by project accounting. Provisions for Legal Proceedings amounted to €251 million and €248 million as of
September 30, 2021 and 2020, respectively. Furthermore, Other includes provision for indemnifications in connection with dispositions
of businesses of €96 million and €87 million as of September 30, 2021 and 2020. Such indemnifications may protect the buyer from
potential tax, legal and other risks in conjunction with the purchased business.
NOTE 19 Equity
Siemens' issued capital is divided into 850 million registered shares with no par value and a notional value of €3.00 per share as of
September 30, 2021 and 2020, respectively. The shares are paid in full. At the Shareholders' Meeting, each share has one vote and
accounts for the shareholders' proportionate share in the Company's net income. All shares confer the same rights and obligations.
(1,132)
(1,256)
Less: Fair value of foreign currency and interest hedges relating to short- and long-term debt¹
Net debt
(1,012)
37,010
(777)
28,492
Less: Siemens Financial Services debt²
Less: Current interest bearing debt securities
(26,519)
Plus: Provisions for pensions and similar obligations
2,839
6,360
Plus: Credit guarantees
Industrial net debt
530
604
(25,267)
(9,545) (14,041)
38,005
40,879
In fiscal 2021 and 2020, Siemens repurchased 976,346 shares and 19,071,746 shares, respectively. In fiscal 2021 and 2020, Siemens
transferred 4,022,053 and 5,613,506 treasury shares, respectively. As of September 30, 2021 and 2020, the Company has treasury shares
of 47,644,581 and 50,690,288 respectively.
Share based payment expenses increased Capital reserve by €294 million and €295 million (including non-controlling interests),
respectively, in fiscal 2021 and 2020. In connection with the settlement of share based payment awards Siemens treasury shares (at cost)
were transferred to employees of €226 million in fiscal 2021 and €310 million in fiscal 2020 which decreased Capital reserve and Retained
earnings by €165 million and €61 million, respectively in 2021 and by €218 million and €92 million in fiscal 2020.
As of September 30, 2021 and 2020, total authorized capital of Siemens AG is €600 million nominal issuable in installments based on
various time-limited authorizations, by issuance of up to 200 million registered shares of no par value. Siemens AG's conditional capital is
€420.6 million or 140.2 million shares as of September 30, 2021 and 2020. Primarily, it can be used to serve convertible bonds or warrants
under warrant bonds that could or can be issued based on various time-limited authorizations approved by the respective Shareholders'
Meeting.
Dividends paid per share were €3.50 and €3.90, respectively, in fiscal 2021 and 2020. The Managing Board and the Supervisory Board
propose to distribute a dividend of €4.00 per share to holders entitled to dividends, in total representing approximately €3.2 billion in
expected payments. Payment of the proposed dividend is contingent upon approval at the Shareholders' Meeting on February 10, 2022.
In November 2018, Siemens announced a share-buyback program of up to €3 billion. The program ceased in September 2021. On June
24, 2021, Siemens announced that it intends to launch a new five-year share buyback program of up to €3 billion, beginning in fiscal
2022.
NOTE 20 Additional capital disclosures
A key consideration of our capital structure management is to maintain ready access to capital markets through various debt instruments
and to sustain our ability to repay and service our debt obligations over time. In order to achieve this, Siemens intended to maintain an
Industrial net debt divided by EBITDA (continued operations) ratio of up to 1.0 as of September 30, 2021 and 2020, respectively. In line
with our updated Financial Framework we target an Industrial net debt divided by EBITDA (continuing operations) ratio of up to 1.5 for
fiscal 2022 and beyond. The ratio indicates the approximate number of years that would be needed to cover the Industrial net debt through
Income from continuing operations, excluding interest, other financial income (expenses), taxes, depreciation, amortization and
impairments. The fiscal 2020 ratio is disclosed as computed in the prior year, it is disclosed before retrospective classification of
discontinued operation.
27
Consolidated Financial Statements
Sep 30,
(in millions of €)
Short-term debt and current maturities of long-term debt
Plus: Long-term debt
Less: Cash and cash equivalents
2021
2020
7,821
6,562
(773)
Fiscal year
2,565
Experience (gains) losses
485
-
595
485
9,042
5,819
33
11
31,307
29,970
40,317
35,777
2020
2021
595
2020
2020
2021
2020
2021
Other³
Interest income
Interest expenses
Current service cost
Balance at begin of fiscal year
(in millions of €)
Fiscal year
Fiscal year
Fiscal year
Fiscal year
2021
299
406
-
(2,243)
(74)
2,243
income and net interest expenses
Return on plan assets excluding amounts included in net interest
658
540
2
313
241
970
780
Consolidated Statements of income
Components of defined benefit costs recognized in the
(11)
9
-
2
299
407
254
333
-
(1 - 11 + 111)
-
(333)
(4)
(31)
(13)
(20)
-
(254)
(III)
(DBO)²
(I)
Net defined benefit
balance
2.875%/2021/March 2041/US$ fixed-rate-instruments
Total US$ Bonds
1,503
1,750
US$
2.15%/2021/March 2031/US$ fixed-rate-instruments
1,074
1,250
US$
1.7%/2021/March 2028/US$ fixed-rate-instruments
1,505
Total
1,750
US$
1.2%/2021/March 2026/US$ fixed-rate-instruments
1,293
1,500
US$
1,500
1,283
US$
1,500
1,269
0.4%/2021/March 2023/US$ fixed-rate-instruments
US$
US$
1,078
Compounded SOFR+0.43%/2021/March 2024/US$ floating-rate instruments
US$
1,000
862
0.65%/2021/March 2024/US$ fixed-rate-instruments
1,250
74
1,500
22,505
ceiling
Effects of asset
Fair value of
plan assets
Defined benefit
obligation
Development of the defined benefit plans¹
plan rules. In case of an underfunded plan the Company together with the employees may be asked to pay supplementary contributions
according to a well-defined framework of recovery measures.
Consolidated Financial Statements
23
Following the Swiss law of occupational benefits (BVG) each employer has to grant post-employment benefits for qualifying employees.
Accordingly, Siemens in Switzerland sponsors several cash balance plans. These plans are administered by external foundations. The board
of the main foundation is composed of equally many employer and employee representatives. The board of the foundation is responsible
for investment policy and asset management, as well as for any changes in the plan rules and the determination of contributions to finance
the benefits. The Company is required to make total contributions at least as high as the sum of the employee contributions set out in the
Switzerland
Pension benefits are mainly offered through the Siemens Benefit Scheme for which, until the start of retirement, an inflation increase of
the majority of accrued benefits is mandatory. The required funding is determined by a funding valuation carried out every third year
based on legal requirements. Due to deviating guidelines for the determination of the discount rates, the technical funding deficit is usually
larger than the IFRS funding deficit. To reduce the deficit Siemens entered into an agreement with the trustees to provide annual payments
of £31 (€35) million until fiscal 2033. The agreement also provides for a cumulative advance payment by Siemens AG compensating the
remaining annual payments at the date of early termination of the agreement due to cancellation or insolvency.
U.K.
In the US, the Siemens Pension Plans are sponsored, which for the most part have been frozen to new entrants and to future benefit
accruals, except for interest credits on cash balance accounts. Siemens has appointed the Investment Committee as the named fiduciary
for the management of the assets of the Plans. The Plans' assets are held in Master Trusts and the trustees of the Master Trusts are
responsible for the administration of the assets of the trust, taking directions from the Investment Committee. The Plans are subject to the
funding requirements under the Employee Retirement Income Security Act of 1974 as amended (ERISA). There is a regulatory requirement
to maintain a minimum funding level of 80% in the defined benefit plans in order to avoid benefit restrictions. At their discretion,
sponsoring employers may contribute in excess of this regulatory requirement. Annual contributions are calculated by independent
actuaries.
U.S.
In Germany, pension benefits are provided through the following plans: BSAV (Beitragsorientierte Siemens Altersversorgung), frozen
legacy plans as well as deferred compensation plans. The majority of active employees participate in the BSAV. Those benefits are
predominantly based on notional contributions and the return on the corresponding assets of this plan, subject to a minimum return
guaranteed by the employer. At inception of the BSAV, benefits provided under the frozen legacy plans were modified to substantially
eliminate the effects of compensation increases. However, the frozen plans still expose Siemens to investment risk, interest rate risk and
longevity risk. The pension plans are funded via contractual trust arrangements (CTA). In Germany no legal or regulatory minimum funding
requirements apply.
The defined benefit plans open to new entrants are based predominantly on contributions made by the Company. Only to a certain extent,
those plans are affected by longevity, inflation and compensation increases and take into account country specific differences. The
Company's major plans are funded with assets in segregated entities. In accordance with local laws these plans are managed in the interest
of the beneficiaries by way of contractual trust agreements with each separate legal entity. The defined benefit plans cover 442,000
participants, including 178,000 actives, 84,000 deferreds with vested benefits and 180,000 retirees and surviving dependents.
Germany
Defined benefit plans
14,816
Total
1 Includes adjustments for fair value hedge accounting.
43,372
38,265
22
1,284
Consolidated Financial Statements
US$ Bonds - In September 2021, the 1.7% US$1.1 billion fixed-rate instruments were redeemed at face value. In March 2021, Siemens
issued instruments totaling US$10.0 billion (€8.6 billion at September 30, 2021) in seven tranches.
Assignable and term loans
As of September 30, 2021 and 2020, five respectively two bilateral term loan facilities are outstanding (in aggregate € 1.8 billion and
€0.85 billion). In fiscal 2021 three bilateral term loan facilities were newly signed: one bilateral €500 million term loan facility maturing
in March 2022 with a one-year extension option; one bilateral US$150 million term loan facility (€130 million) maturing in February 2022
with a one-year extension option and one bilateral US$350 million term loan facility (€302 million) maturing in February 2022 with a one-
year extension option. One existing bilateral US$500 million term loan facility (€432 million) has a maturity until March 2024 with a one-
year extension option remaining and the second existing bilateral US$500 million term loan facility (€432 million) has a maturity until
June 2024.
Commercial paper program
Siemens has a US$9.0 billion (€7.8 billion and €7.7 billion as of September 30, 2021 and 2020) commercial paper program in place
including US$ extendible notes capabilities as of September 30, 2021 and 2020. As of September 30, 2021 and 2020, US$15 million (€13
million) and US$2.3 billion (€2.0 billion), respectively, were outstanding. Siemens' commercial papers have a maturity of generally less
than 90 days. Interest rates ranged from 0.05% to 0.21% in fiscal 2021 and from 0.06% to 1.98% in fiscal 2020.
NOTE 17 Post-employment benefits
Debt Issuance Program - The Company has a program for the issuance of debt instruments in place under which, as of September 30,
2021, up to €30.0 billion of instruments can be issued (€25.0 billion as of September 30, 2020). As of September 30, 2021, €20.8 billion
in notional amounts were issued and are outstanding (€23.2 billion as of September 30, 2020). In March 2021 the 1.75% €1.25 billion
fixed-rate instrument was redeemed at face value. In September 2021, the US$ 400 million floating rate instruments were redeemed at
face value. In September 2021 the 0.0% €1.0 billion fixed-rate instrument was redeemed at face value.
Actuarial (gains) losses
(II)
(300)
-
3,355
3,702
3,328
3,402
(356)
(325)
8
8
6,000
6,339
5,637
6,005
341
-
147
-
2,617
2,648
2,958
2,795
33,543
U.K.
U.S.
5,062
1,768
-
-
5,819
2,015
-
11
(27)
1,643
29,970
16
11
2,015
5,819
2,839
6,360
825
541
1 Discloses figures including Flender and Siemens Energy AG. Accordingly, it comprises the total of continuing and discontinuing operations.
2 Total Defined benefit obligation (DBO) includes other post-employment benefits of €345 million and €393 million in fiscal 2021 and 2020 respectively, which primarily consist of transition payments to German employees after
retirement as well as post-employment health care and life insurance benefits to employees in the U.S. and India.
3 Includes past service benefits/costs, settlement gains/losses and administration costs related to liabilities.
Line item Business combinations, disposals and other includes the acquisition of Varian in fiscal 2021: DBO €303 million, Fair value of plan
assets €271 million.
Employer contributions in fiscal 2021 include fundings in Germany of €1,887 million, thereof a contribution of a stake in Bentley Systems,
Inc. amounting to €1,146 million, the contribution of various zero-coupon receiver swaps at total value of €368 million and the
contribution of a stake in an equity instrument in the amount of €270 million. In fiscal 2020, Employer contributions include fundings in
Germany of €2,730 million, including the contribution of a 9.9% interest in Siemens Energy AG of €1,881 million and real estate
contributions from Siemens Real Estate.
Net interest expenses relating to provisions for pensions and similar obligations amount to €53 million and €66 million, respectively, in
fiscal 2021 and 2020. The DBO is attributable to actives 29% and 28%, to deferreds with vested benefits 15% and 14% and to retirees and
surviving dependents 57% and 57%, respectively, in fiscal 2021 and 2020.
Other countries
The DBO remeasurements comprise actuarial (gains) and losses resulting from:
Changes in demographic assumptions
35,542
Changes in financial assumptions
75
thereof net defined benefit assets (presented in Other assets)
thereof provisions for pensions and similar obligations
Total
798
726
4
8
838
925
1,632
(in millions of €)
16
CH
-
-
142
102
142
102
Plan participants' contributions
(2,898)
(2,041)
(4,240)
-
2,898
2,041
Employer contributions
358
(2,165)
(18)
4
-
75
303
Effects of asset ceiling
4
(18)
Benefits paid
4
Remeasurements recognized in the Consolidated Statements of
Comprehensive Income
75
303
2,243
(74)
(18)
(1,759)
35,777
(1,828)
(2,394)
-
(2)
1
(1,097)
Other reconciling items
(1,091)
Balance at fiscal year-end
Germany
(634)
388
(5,812) 1,089
35,542 35,777 33,543 29,970
21,697 22,223 19,929 17,161
(535)
1
(2)
(17)
(101)
(1,576)
1
(1,638)
(1,685)
(121)
Settlement payments
(3)
(2)
195
-
Business combinations, disposals and other
Foreign currency translation effects
195
371
(3,489)
(2,179)
(4)
(143)
(1)
Loans and other debt instruments
under the general approach
Contract
Assets
and other
(10)
18
Change in valuation allowances recorded in the Consolidated Statements of
Income in the current period
227
36
537
111
27
73
Valuation allowance as of October 1, 2020
Stage 3
Stage 2
Stage 1
(in millions of €)
Lease
Receivables
2
the simplified
approach
ments under
debt instru-
Trade
receivables
48
6
Loans, receivables and other debt instruments measured at
(17)
2020
2021
Fiscal year
Loans, receivables and other debt instruments measured at amortized cost
Financial liabilities measured at amortized cost
Cash and cash equivalents
(in millions of €)
Net gains (losses) resulting from financial instruments are:
In fiscal 2021, a Level 3 equity investment mandatorily measured at FVTPL was merged with a public holding company in exchange for
shares in the new entity, ChargePoint. The transaction resulted in a gain of €220 million derived from now available Level 1 quoted prices.
The gain is disclosed in Other financial income (expenses), net and in Next47 of Corporate items. Subsequently, the investment was
contributed to the Siemens Pension-Trust e.V. at fair value of €270 million.
As of September 30, 2021 and 2020, Level 3 financial assets include venture capital investments of €515 million and €386 million (Next47
investments). In fiscal 2021 and 2020, new level 3 investments and purchases amounted to €522 million and €249 million, respectively.
Sales of Level 3 financial assets amounted to €305 million and €327 million, respectively, in fiscal 2021 and 2020.
In fiscal 2021, Siemens Advanta acquired equity stakes for €279 million in cash (Thoughtworks). The financial asset is mandatorily
measured at fair value through profit and loss (FVTPL). The company went public in September 2021 resulting in a gain from fair value
measurement including foreign currency effects of €289 million at Siemens disclosed in Corporate items of segment information and
presented in Other financial income (expenses), net.
Fair values of derivative financial instruments are determined in accordance with the specific type of instrument. Fair values of derivative
interest rate contracts are estimated by discounting expected future cash flows using current market interest rates and yield curves over
the remaining term of the instrument. Interest rate futures are valued based on quoted market prices, if available. Fair values of foreign
currency derivatives are based on forward exchange rates. Options are generally valued based on quoted market prices or based on option
pricing models. No compensating effects from underlying transactions (e.g. firm commitments and forecast transactions) are considered.
The Company limits default risks resulting from derivative financial instruments by generally transacting with financial institutions with a
minimum credit rating of investment grade. Based on Siemens' net risk exposure towards the counterparty, the resulting credit risk is taken
into account via a credit valuation adjustment.
Fair value of equity instruments quoted in an active market is based on price quotations at period-end date. Fair value of debt instruments,
is either based on prices provided by price service agencies or is estimated by discounting future cash flows using current market interest
rates.
213
213
765
765
(22)
978
(168)
amortized cost
74
22
Consolidated Financial Statements
Valuation allowances for expected credit losses
31
(702)
(672)
1,503
1,434
2020
2021
Fiscal year
Total interest expenses on financial liabilities
Total interest income on financial assets
(in millions of €)
Interest income (expense) includes interest from financial assets and financial liabilities not at fair value through profit or loss:
Amounts include foreign currency gains (losses) from recognizing and measuring financial assets and liabilities. Net gains (losses) on
financial assets and liabilities measured at FVTPL resulted from those mandatorily measured at FVTPL and comprise fair value changes of
derivative financial instruments for which hedge accounting is not applied including interest income (expense), as well as dividends from
and fair value changes of equity instruments measured at FVTPL.
Financial assets and financial liabilities at FVTPL
552
1,020
1,291
(526)
15
54
n/a
Contract
Assets
Lease
Receivables
(in millions of €)
Stage 1
Stage 2
Stage 3
Valuation allowance as of October 1, 2019
54
12
68
891
198
184
Change in valuation allowances recorded in the Consolidated Statements of
Income in the current period
67
11
978
n/a
n/a
Recoveries of amounts previously written off
(46)
(60)
the simplified
approach
(35)
n/a
Write-offs charged against the allowance
97
9
175
43
n/a
ments under
debt instru-
Trade
receivables
and other
8
(3)
(5)
Foreign exchange translation differences and other changes
2
7
5
2
n/a
Recoveries of amounts previously written off
(38)
(89)
(25)
n/a
n/a
Write-offs charged against the allowance
1
Reclassifications to line item Assets held for disposal and dispositions of
those entities
Loans and other debt instruments
under the general approach
Loans, receivables and other debt instruments measured at
amortized cost
212
53
535
98
5
15
37
27
22
-
-
Valuation allowance as of September 30, 2021
86
Not designated in a hedge accounting relationship (including embedded derivatives)
In connection with cash flow hedges
491
236
59,941
55,167
1 Reported in the following line items of the Statements of Financial Position as of September 30, 2021 and 2020, respectively: Trade and other receivables, Other current financial assets and Other financial
assets, except for separately disclosed €1,824 million and €1,843 million equity instruments in Other financial assets (thereof €675 million and €491 million at FVOCI), €198 million and €220 million financial
assets designated as measured at FVTPL and €1,950 million and €2,842 million derivative financial instruments (thereof in Other financial assets €1,552 million and €2,044 million) as well as €58 million and
€18 million debt instruments measured at FVTPL in Other financial assets. Includes €13,267 million and €12,071 million trade receivables from the sale of goods and services, thereof €663 million and
2 Reported in line items Other current financial assets and Other financial assets.
3 Reported in Other financial assets.
* Reported in the following line items of the Statements of Financial Position: Short-term debt and current maturities of long-term debt, Trade payables, Other current financial liabilities, Long-term debt and
Other financial liabilities, except for separately disclosed derivative financial instruments of €769 million and €978 million as of September 30, 2021 and 2020, respectively.
5 Reported in line items Other current financial liabilities and Other financial liabilities.
Cash and cash equivalents include €190 million and €126 million as of September 30, 2021 and 2020, respectively, which are not available
for use by Siemens mainly due to minimum reserve requirements with banks. As of September 30, 2021 and 2020, the carrying amount
of financial assets Siemens pledged as collateral is €156 million and €115 million, respectively.
The following table presents the fair values and carrying amounts of financial assets and financial liabilities measured at cost or amortized
cost for which the carrying amounts do not approximate fair value:
(in millions of €)
Notes and bonds
Loans from banks and other financial indebtedness
Sep 30, 2021
Sep 30, 2020
Fair value
45,594
2,400
Carrying
amount
43,373
Fair value
40,868
Carrying
amount
38,264
In connection with cash flow hedges
In connection with fair value hedges
Not designated in a hedge accounting relationship (including embedded derivatives)
Derivative financial instruments
Debt instruments measured at FVTPL
Equity instruments measured at FVOCI
213
Equity instruments measured at FVTPL
(in millions of €)
The following table allocates financial assets and financial liabilities measured at fair value to the three levels of the fair value hierarchy:
Fixed-rate and variable-rate receivables with a remaining term of more than twelve months, including receivables from finance leases, are
evaluated by the Company based on parameters such as interest rates, specific country risk factors, individual creditworthiness of the
customer, and the risk characteristics of the financed project. Based on this evaluation, allowances for these receivables are recognized.
The fair value of notes and bonds is based on prices provided by price service agencies at the period-end date (Level 2). The fair value of
loans from banks and other financial indebtedness as well as other non-current financial liabilities are estimated by discounting future
cash flows using rates currently available for debt of similar terms and remaining maturities (Level 2).
3,473
2,398
3,483
Financial assets measured at fair value
263
765
505
2021
42,436
Sep 30,
Financial assets
Equity instruments measured at FVOCI¹
Financial assets designated as measured at FVTPL³
Financial assets mandatorily measured at FVTPL²
2020
Derivatives designated in a hedge accounting relationship
Loans, receivables and other debt instruments measured at amortized cost¹
(in millions of €)
The following table discloses the carrying amounts of each category of financial assets and financial liabilities:
NOTE 23 Additional disclosures on financial instruments
Consolidated Financial Statements
2
Cash and cash equivalents
Sep 30, 2021
40,304
14,041
54,189
59,172
Derivatives designated in a hedge accounting relationship 5
Financial liabilities
Derivatives not designated in a hedge accounting relationship5
Financial liabilities measured at amortized cost4
59,268
9,545
56,012
220
198
3,422
2,305
790
852
675
Level 1
Level 2
Level 3
4,923
612
3,023
1,288
Total
Level 3
1,067
Level 2
Sep 30, 2020
Consolidated Financial Statements
In connection with cash flow hedges
In connection with fair value hedges
Not designated in a hedge accounting relationship (including embedded derivatives)
Derivative financial instruments
Level 1
Debt instruments measured at FVTPL
77
1,353
236
554
554
2,052
2,052
2,842
209
2,842
18
220
491
385
104
1
238
Financial liabilities measured at fair value – Derivative financial instruments
Financial assets measured at fair value
Equity instruments measured at FVTPL
Equity instruments measured at FVOCI
30
1
198
675
674
1
1,149
57
354
718
4,031
1,085
2,030
917
Total
77
(in millions of €)
256
1,950
263
263
505
505
Not designated in a hedge accounting relationship (including embedded derivatives)
In connection with cash flow hedges
769
1,950
769
545
545
307
307
1,098
1,098
Financial liabilities measured at fair value - Derivative financial instruments
Foreign exchange translation differences and other changes
1,024
4
7,939,840
2020
2021
Fiscal year
In fiscal 2021, Siemens issued a new tranche under each of the plans of the Share Matching Program.
Share Matching Plan
Share Matching Program and its underlying plans
Non-vested, end of period
Settled
Forfeited
Adjustments due to vesting conditions other than market conditions
Vested and fulfilled
2,683,909
Granted
Changes in stock awards:
€98.02 per share in fiscal 2021 and 2020, respectively, was determined as the market price of Siemens shares less the present value of
expected dividends during the vesting period.
Consolidated Financial Statements
37
The fair value of stock awards granted in fiscal 2021 and 2020 (TSR-related) was calculated applying a valuation model. In fiscal 2021 and
2020, inputs to that model include an expected weighted volatility of Siemens shares of 24.34% and 21.58%, respectively, and a market
price of €112.36 and €116.02 per Siemens share. Expected volatility was determined by reference to historic volatilities. The model applies
a risk-free interest rate of up to (0.49)% in fiscal 2021 and up to (0.26)% in fiscal 2020 and an expected dividend yield of 3.11% and 3.31%
in fiscal 2021 and 2020, respectively. Assumptions relating to correlations between the Siemens share price and the development of the
MSCI Index were derived from historic observations of share price and index changes. The fair value of the ESG component of €97.63 and
In fiscal 2021 and 2020, 1,975,492 and 2,688,334 equity-settled stock awards were granted relating to the TSR-Target with a fair value
of €104 million and €132 million, respectively. In fiscal 2021 and 2020, 493,472 and 672,197 equity-settled stock awards were granted
relating to the ESG-Target with a fair value of €48 million and €66 million, respectively.
Commitments to members of the senior management and other eligible employees
The Managing Board's stock awards are based on criteria described above. Fair values are €12 million and €12 million, respectively, in
fiscal 2021 and 2020, calculated by applying a valuation model. In fiscal 2021 and 2020, inputs to that model include an expected
weighted volatility of Siemens shares of 24.30% and 21.58%, respectively, and a market price of €112.70 and €116.80 per Siemens share.
Expected volatility was determined by reference to historic volatilities. The model applies a risk-free interest rate of up to (0.49)% and
(0.24)% in fiscal 2021 and 2020, respectively, and an expected dividend yield of 3.10% in fiscal 2021 and 3.31% in fiscal 2020.
Assumptions relating to correlations between the Siemens share price and the development of the MSCI index were derived from historic
observations of share price and index changes.
Commitments to members of the Managing Board
Stock awards are tied to performance criteria. For stock awards granted in fiscal 2021 and 2020, 80% of the target amount is linked to the
relative total shareholder return of Siemens compared to the total shareholder return of the MSCI World Industrials sector index (TSR-
Target) during a four-year restriction period; the remaining 20% are linked to a Siemens internal sustainability target considering
environmental, social and governance targets (ESG-Target). The annual target amount for stock awards up to and including tranche 2019
is linked to the share price performance of Siemens relative to the share price performance of five important competitors during the four-
year restriction period. The target attainment for each individual performance criteria ranges between 0% and 200%. For awards granted
since fiscal 2019 settlement is in shares only corresponding to the actual target attainment. Awards granted prior to fiscal 2019, target
outperformances in excess of 100% are settled in cash. The vesting period is four years.
The Company grants stock awards to members of the Managing Board, members of the senior management and other eligible employees.
Stock awards are subject to a restriction period of about four years and entitle the beneficiary to Siemens shares following the restriction
period without payment of consideration.
Non-vested, beginning of period
9,300,505
3,577,133
(1,292,912) (1,846,312)
(173,648)
(624,480)
874,793
1,785,913
1,509,046
654,483
Settled
Forfeited
Vested and fulfilled
Granted
Outstanding, beginning of period
2020
2021
Fiscal year
Resulting Matching Shares
Under the Base Share Program employees of Siemens AG and participating domestic Siemens companies may invest a fixed amount of
their compensation in Siemens shares, sponsored by Siemens. The shares are bought at market price at a predetermined date in the second
quarter and grant the right to receive matching shares under the same conditions applying to the Share Matching Plan described above.
The fair value of the Base Share Program amounted to €25 million and €33 million in fiscal 2021 and 2020, respectively.
Base Share Program
Under the Monthly Investment Plan employees other than senior managers may invest a specified part of their compensation in Siemens
shares on a monthly basis over a period of twelve months. Shares are purchased at market price at a predetermined date once a month.
If the Managing Board decides that shares acquired under the Monthly Investment Plan are transferred to the Share Matching Plan, plan
participants will receive the right to matching shares under the same conditions applying to the Share Matching Plan described above with
a vesting period of about two years. The Managing Board decided that shares acquired under the tranches issued in fiscal 2020 and 2019
are transferred to the Share Matching Plan as of February 2021 and February 2020, respectively.
Monthly Investment Plan
Under the Share Matching Plan, senior managers may invest a specified part of their variable compensation in Siemens shares (investment
shares). The shares are purchased at the market price at a predetermined date in the second quarter. Plan participants receive the right to
one Siemens share without payment of consideration (matching share) for every three investment shares continuously held over a period
of about three years (vesting period) provided the plan participant has been continuously employed by Siemens until the end of the vesting
period.
7,939,840
8,670,111
(2,303,850)
(42,116)
(412,903)
(444,962)
(374,733)
Stock Awards
(569,405)
Share-based payment awards may be settled in newly issued shares of capital stock of Siemens AG, in treasury shares or in cash. Share-
based payment awards may forfeit if the employment of the beneficiary terminates prior to the expiration of the vesting period. In fiscal
2021 and 2020, expense from equity-settled awards on a continuing basis are €294 million and €295 million; cash-settled awards on a
continuing basis resulted in gains (expenses) of €(8) million and €(26) million in fiscal 2021 and 2020. Included is expense of €127 million
and €100 million in fiscal 2021 and 2020, respectively, resulting from various individually immaterial plans, of which €66 million and €45
million, respectively, stem from Siemens Healthineers plans. Siemens Healthineers plans are largely similar to Siemens' plans, except for
granting Siemens Healthineers AG shares.
Siemens' investment portfolio consists of direct and indirect investments in publicly traded companies that are classified as long term
investments. These investments are monitored based on their current market value, affected primarily by fluctuations on the volatile
technology-related markets worldwide. As of September 30, 2021 and 2020, the market value of Siemens' portfolio, which mainly consists
of one investment in a publicly traded company, was €678 million and €1,055 million, respectively. As of September 30, 2021 and 2020,
the VaR relating to the equity price was €105 million and €182 million.
Consolidated Financial Statements
36
As of September 30, 2021 and 2020, collateral of €748 million and €829 million, respectively, relate to financial assets measured at fair
value. Those collaterals are provided in connection with netting agreements for derivatives providing protection from the risk of a
counterparty's insolvency. As of September 30, 2021 and 2020, collateral held for credit-impaired receivables from finance leases
amounted to €90 million and €141 million, respectively. As of September 30, 2021 and 2020, collateral held for financial assets measured
at amortized cost amounted to €3,328 million and €4,109 million, respectively, including €90 million and €141 million, respectively, for
credit-impaired loans in SFS' asset finance business. Those collaterals mainly comprised property, plant and equipment. Credit risks arising
from irrevocable loan commitments are equal to the expected future pay-offs resulting from these commitments.
To analyze and monitor credit risks, the Company applies various systems and processes. A main element is a central IT application that
processes data from operating units together with rating and default information and calculates an estimate, which may be used as a basis
for individual bad debt provisions. Additionally, qualitative information is considered to particularly incorporate the latest developments.
The carrying amount is the maximum exposure to a financial asset's credit risk, without taking account of any collateral. Collateral reduces
the valuation allowance to the extent it mitigates credit risk. Collateral needs to be specific, identifiable and legally enforceable to be taken
into account. Those collaterals are mostly held in the portfolio of SFS.
An exposure is considered defaulted if the debtor is unwilling or unable to pay its credit obligations. A range of internally defined events
trigger a default rating, including the opening of bankruptcy proceedings, receivables being more than 90 days past due, or a default
rating by an external rating agency.
Ratings and individually defined credit limits are based on generally accepted rating methodologies, with information obtained from
customers, external rating agencies, data service providers and Siemens' credit default experiences. Internal ratings consider appropriate
forward-looking information relevant to the specific financial instrument like expected changes in the debtor's financial position,
ownership, management or operational risks, as well as broader forward-looking information, such as expected macroeconomic, industry-
related and competitive developments. The ratings also consider a country-specific risk component derived from external country credit
ratings. Ratings and credit limits for financial institutions as well as Siemens' public and private customers, which are determined by
internal risk assessment specialists, are continuously updated and considered for investments in cash and cash equivalents and in
determining the conditions under which direct or indirect financing will be offered to customers.
Siemens maintains a Credit Risk Intelligence Unit to which numerous operating units from the Siemens Group regularly transfer business
partner data as a basis for a centralized internal rating and credit limit recommendation process. Due to the identification, quantification
and active management of credit risks, this increases credit risk transparency.
The effective monitoring and controlling of credit risk through credit evaluations and ratings is a core competency of our risk management
system. In this context, Siemens has implemented a binding credit policy.
Siemens provides its customers with various forms of direct and indirect financing particularly in connection with large projects. Hence,
credit risks are determined by the solvency of the debtors, the recoverability of the collaterals, the success of projects we invested in and
the global economic development.
Credit risk is defined as an unexpected loss in financial instruments if the contractual partner is failing to discharge its obligations in full
and on time or if the value of collateral declines.
Credit risk
SFS' external financing portfolio disaggregates into credit risk rating grades as of September 30, 2021 as follows (pre valuation
allowances):
2 A considerable portion result from asset-based lending transactions meaning that the respective loans can only be drawn after sufficient collateral has been provided by the borrower.
2
165
312
3,408
Irrevocable loan commitments²
530
Credit guarantees¹
72
213
143
429
1 Based on the maximum amounts Siemens could be required to settle in the event of default by the primary debtor.
(in millions of €)
Investment Grade Ratings
Non-Investment Grade Ratings
Equity Price Risk
Amounts above do not represent economic credit risk, since they consider neither collateral held nor valuation allowances already
recognized.
Trade receivables of operating units are generally rated internally; as of September 30, 2021 and 2020, approximately 47% and 43%,
respectively, have an investment grade rating and 53% and 57%, respectively, have a non-investment grade rating. Contract assets
generally show similar risk characteristics as trade receivables in operating units.
4,704
91
39
2,684
360
2,068
n/a
Stage 3
Stage 2
n/a
671
n/a
8
657
Stage 1
Stage 3
Stage 2
Stage 1
5,627
13,456
approach
ceivables
loan commitments
Lease Re-
Financial guarantees and
Loans and other debt
instruments under the general
NOTE 26 Share-based payment
14
(122,659)
(459,596)
5,636
Income from continuing operations
2020
2021
(shares in thousands; earnings per share in €)
Fiscal year
363
295
285
293
29
4,156
26
26
45
43
41
42
64
54
54
54
225
172
25
Less: Portion attributable to non-controlling interest
537
311
(48)
39
4.70
6.28
Diluted earnings per share (from continuing operations)
4.77
6.36
Basic earnings per share (from continuing operations)
817,364
811,490
Weighted average shares outstanding - diluted
806,335
11,029
9,661
Effect of dilutive share-based payment
801,829
Weighted average shares outstanding - basic
3,842
5,094
Income from continuing operations attributable to shareholders of Siemens AG to determine dilutive earnings per share
(3)
(5)
Less: Dilutive effect from share based payment resulting from Siemens Healthineers
3,845
5,099
Income from continuing operations attributable to shareholders of Siemens AG
165
(69,648)
171
2021
20,697
2020
2021
2020
2021
Fiscal year
Fiscal year
discontinued operations
Continuing and
Continuing
operations
Consolidated Financial Statements
19,789
Expenses relating to post-employment benefits
Wages and salaries
(in millions of €)
NOTE 27 Personnel costs
38
For their 25th and 40th service anniversary eligible employees receive jubilee shares. There were 3.15 million and 3.29 million entitlements
to jubilee shares outstanding as of September 30, 2021 and 2020, respectively.
Jubilee Share Program
account.
The weighted average fair value of matching shares granted in fiscal 2021 and 2020 of €96.92 and €89.71 per share, respectively, was
determined as the market price of Siemens shares less the present value of expected dividends; non-vesting conditions were taken into
1,509,046
1,389,016
Outstanding, end of period
Statutory social welfare contributions and expenses for optional support
20,882
26,660
3,082
2020
2021
Fiscal year
Fiscal year
discontinued operations
Continuing and
Continuing
operations
NOTE 28 Earnings per share
Administration and general services
Research and development
Sales and marketing
Manufacturing and services
(in thousands)
Employees were engaged in (averages; based on headcount):
In fiscal 2021 and 2020, severance charges for continuing operations amount to €410 million and €589 million, respectively, thereof at
Digital Industries €114 million and €210 million.
31,978
25,008
23,761
24,789
1,348
1,013
1,010
3,970
3,113
2,948
2020
111
(80,385)
1,430
Foreign currency exchange contracts
(in millions of €)
Sep 30, 2020
Sep 30, 2021
Fair values of each type of derivative financial instruments reported as financial assets or financial liabilities in line items Other current
financial assets (liabilities) or Other financial assets (liabilities) are:
6,512
450
5,147
859
598
605
therein: included in cash flow hedges
13
450
4,435
12 months
More than
Up to 12
months
10,739
14,676
5,752
873
3,605
More than
12 months
Up to 12
months
Sep 30, 2021
7,110
Interest rate swaps and combined interest and currency swaps
therein: included in cash flow hedges
Asset
33
74
45
70
Other (embedded derivatives, options, commodity swaps)
554
307
therein: included in fair value hedges
107
31
328
1,835
155
987
106
231
231
544
617
933
569
893
Liability
Asset
Liability
therein: included in fair value hedges
therein: included in cash flow hedges
Interest rate swaps
Foreign currency exchange contracts
2020
2,571
1,910
Gross amounts
Sep 30,
2021
(in millions of €)
Financial liabilities
Financial assets
Siemens enters into master netting and similar agreements for derivative financial instruments. Potential offsetting effects are as follows:
Offsetting
Impairment losses on financial instruments are presented in line items Cost of sales, Selling and general administrative expenses and Other
financial income (expenses), net. Net losses in fiscal 2021 and 2020 are €50 million and €404 million, respectively. Impairment losses net
of (gains) from reversal of impairments are €(19) million and €33 million in fiscal 2021 and 2020 are mostly attributable to the SFS
business and presented in Other financial income (expenses), net.
227
36
537
111
27
73
Valuation allowance as of September 30, 2020
(169)
(458)
Reclassifications to line item Assets held for disposal and dispositions of
those entities
(11)
(2)
(17)
147
35
Sep 30,
2021
1,950
753
Amounts offset in the Statement of Financial Position
(in millions of €)
To hedge foreign currency exchange and interest rate risks, derivatives are contracted to achieve a 1:1 hedge ratio so that the main
characteristics match the underlying hedged items (e.g. nominal amount, maturity) in a critical term match, which ensures an economic
relationship between hedging instruments and hedged items suitable for hedge accounting. The nominal amounts of hedging instruments
by maturity are:
NOTE 24 Derivative financial instruments and hedging activities
Consolidated Financial Statements
32
22
221
163
1,739
1,157
Net amounts
571
586
829
748
Related amounts not offset in the Statement of Financial Position
793
748
2,569
1,905
Net amounts in the Statement of Financial Position
2
5
2
5
2020
795
769
Sep 30, 2020
2,842
2024 to
2026
2023
2022
Fiscal year
Consolidated Financial Statements
35
The following table reflects our contractually fixed pay-offs for settlement, repayments and interest. The disclosed expected undiscounted
net cash outflows from derivative financial liabilities are determined based on each particular settlement date of an instrument and based
on the earliest date on which Siemens could be required to pay. Cash outflows for financial liabilities (including interest) without fixed
amount or timing are based on the conditions existing at September 30, 2021.
In addition, Siemens constantly monitors funding options available in the capital markets, as well as trends in the availability and costs of
such funding, with a view to maintaining financial flexibility and limiting repayment risks.
Liquidity risk results from the Company's inability to meet its financial liabilities. Siemens follows a deliberated financing policy that is
aimed towards a balanced financing portfolio, a diversified maturity profile and a comfortable liquidity cushion. Siemens mitigates liquidity
risk by the implementation of effective working capital and cash management, arranged credit facilities with highly rated financial
institutions, via a debt issuance program and via a global multi-currency commercial paper program. Liquidity risk may also be mitigated
by the Siemens Bank GmbH, which increases the flexibility of depositing cash or refinancing.
Liquidity risk
As of September 30, 2021 and 2020, the VaR relating to the interest rate was €529 million and €424 million. The increase was driven
mainly by higher interest rate volatilities for the U.S. dollar and an increase in interest rate sensitivity for the U.S. dollar related to the
US$10 billion instrument issued in March 2021.
If there are no conflicting country-specific regulations, all Siemens operating units generally obtain any required financing through
Corporate Treasury in the form of loans or intercompany clearing accounts. The same concept is adopted for deposits of cash generated
by the units.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. This risk arises whenever interest terms of financial assets and liabilities are different. In order to manage the Company's
position with regard to interest rate risk, interest income and interest expenses, Corporate Treasury performs a comprehensive corporate
interest rate risk management by using fixed or variable interest rates from bond issuances and derivative financial instruments when
appropriate. The interest rate risk relating to the Group, excluding SFS' business, is mitigated by managing interest rate risk within an
integrated Asset Liability Management approach. The interest rate risk relating to SFS' business is managed separately, considering the
term structure of financial assets and liabilities. The Company's interest rate risk results primarily from funding in the U.S. dollar, British
pound and euro.
Interest rate risk
Many Siemens units are located outside the Eurozone. Because the financial reporting currency of Siemens is the euro, the financial
statements of these subsidiaries are translated into euro for the preparation of the Consolidated Financial Statements. To consider the
effects of foreign currency translation in the risk management, the general assumption is that investments in foreign-based operations
are permanent and that reinvestment is continuous. Effects from foreign currency exchange rate fluctuations on the translation of net
asset amounts into euro are reflected in the Company's consolidated equity position.
Translation risk
As of September 30, 2021 and 2020, the VaR relating to foreign currency exchange rates was €39 million and €90 million. This VaR was
calculated under consideration of items of the Consolidated Statements of Financial Position in addition to firm commitments, which are
denominated in foreign currencies, as well as foreign currency denominated cash flows from forecast transactions for the following twelve
months. The decrease in the VaR resulted mainly from a lower net foreign currency position after hedging activities and a lower volatility
between the U.S. dollar and the euro.
Generally, the operating units conclude their hedging activities internally with Corporate Treasury. By applying a cost-optimizing portfolio
approach, Corporate Treasury itself hedges foreign currency exchange rate risks with external counterparties and limits them.
According to the Company policy, Siemens units are responsible for recording, assessing and monitoring their foreign currency transaction
exposure. The net foreign currency position of Siemens units serves as a central performance measure and has to be hedged within a band
of at least 75% but no more than 100%.
Operating units are prohibited from borrowing or investing in foreign currencies on a speculative basis. Intercompany financing or
investments of operating units are preferably carried out in their functional currency or on a hedged basis.
Each Siemens unit conducting businesses with international counterparties leading to future cash flows denominated in a currency other
than its functional currency is exposed to risks from changes in foreign currency exchange rates. In the ordinary course of business,
Siemens units are exposed to foreign currency exchange rate fluctuations, particularly between the U.S. dollar and the euro. Foreign
currency exchange rate exposure is partly balanced by purchasing of goods, commodities and services in the respective currencies as well
as production activities and other contributions along the value chain in the local markets.
Transaction risk
Foreign currency exchange rate risk
Consolidated Financial Statements
34
2027 and
thereafter
Any market sensitive instruments, including equity and interest-bearing investments that our Company's pension plans hold are not
included in the following quantitative and qualitative disclosures.
(in millions of €)
Notes and bonds
1
30
8,776
921
971
556
731
4
36
6
70
16
914
176
1,217
24,290
14,768
5,178
6,600
Derivative financial liabilities
Other financial liabilities
Trade payables
Lease liabilities
Other financial indebtedness
Loans from banks
Non-derivative financial liabilities
Actual results that are included in the Consolidated Statements of Income or Consolidated Statements of Comprehensive Income may
differ substantially from VaR figures due to fundamental conceptual differences. While the Consolidated Statements of Income and
Consolidated Statements of Comprehensive Income are prepared in accordance with IFRS, the VaR figures are the output of a model with
a purely financial perspective and represent the potential financial loss, which will not be exceeded within ten days with a probability of
99.5%. Although VaR is an important tool for measuring market risk, the assumptions on which the model is based give rise to some
limitations including the following. A ten day holding period assumes that it is possible to dispose of the underlying positions within this
period. This may not be valid during continuing periods of illiquid markets. A 99.5% confidence level means that there is a 0.5% statistical
probability that losses could exceed the calculated VaR. The use of historical data as a basis for estimating the statistic behavior of the
relevant markets and finally determining the possible range of the future outcomes on the basis of this statistic behavior may not always
cover all possible scenarios, especially those of an exceptional nature.
25
Increasing market fluctuations may result in significant earnings and cash flow volatility risk for Siemens. The Company's operating
business as well as its investment and financing activities are affected particularly by changes in foreign exchange rates and interest rates.
In order to optimize the allocation of financial resources across Siemens' segments and entities, as well as to achieve its aims, Siemens
identifies, analyzes and manages the associated market risks. The Company seeks to manage and control these risks primarily through its
regular operating and financing activities and uses derivative financial instruments when deemed appropriate.
6
97
(263)
36
117
133
(59)
reserve
reserve
reserve
Cost of
hedging
Cash flow
hedge
hedge
Cash flow
thereof: discontinued hedge accounting
Balance as of September 30, 2021
Other
Reclassification to net income
Hedging gains (losses) presented in OCI
Balance as of October 1, 2020
(in millions of €)
Foreign currency risk
Interest
rate risk
978
In order to quantify market risks Siemens has implemented a system based on Value at Risk (VaR), which is also used for internal
management of Corporate Treasury activities. The VaR figures are calculated based on historical volatilities and correlations of various risk
factors, a ten day holding period, and a 99.5% confidence level.
(12)
(121)
Other components of equity, net of income taxes, relating to cash flow hedges reconciles as follows:
(17)
114
NOTE 25 Financial risk management
The Company had interest rate swap contracts to pay variable rates of interest of an average of (0.14)% and (0.13)% as of September 30,
2021 and 2020, respectively and received fixed rates of interest (average rate of 1.50% and 1.49%, as of September 30, 2021 and 2020,
respectively). The notional amount of indebtedness hedged as of September 30, 2021 and 2020 was €6,007 million and €6,423 million,
respectively. This changed 15% and 18% of the Company's underlying notes and bonds from fixed interest rates into variable interest rates
as of September 30, 2021 and 2020, respectively. The notional amounts of these contracts mature at varying dates based on the maturity
of the underlying hedged items. The net fair value of interest rate swap contracts (excluding accrued interest) used to hedge indebtedness
as of September 30, 2021 and 2020 was €277 million and €520 million, respectively.
Under interest rate swap agreements outstanding in fiscal 2021 and 2020, the Company agreed to pay a variable rate of interest multiplied
by a notional principal amount, and to receive in return an amount equal to a specified fixed rate of interest multiplied by the same notional
principal amount. These interest rate swap agreements offset future changes in interest rates designated as hedged risk on the fair value
of the underlying fixed-rate debt obligations. As of September 30, 2021 and 2020, the carrying amounts of €6,305 million and €6,938
million, respectively, of fixed-rate debt obligations are designated in fair value hedges, including €304 million and €540 million cumulative
fair value hedge adjustments. Unamortized fair value hedge adjustments of €181 million and €220 million as of September 30, 2021 and
2020, respectively, relate to no longer applied hedge accounting. The amounts are amortized over the remaining term of the underlying
debt, maturing until 2042. Carrying amount adjustments to debt of €236 million and €(123) million, respectively, in fiscal 2021 and 2020
are included in Other financial income (expenses), net; the related swap agreements resulted in gains (losses) of €(243) million and €91
million, respectively, in fiscal 2021 and 2020. Net cash receipts and payments relating to such interest rate swap agreements are recorded
as interest expenses.
Fair value hedges of fixed-rate debt obligations
Siemens applies cash flow hedge accounting to a revolving portfolio of floating-rate commercial papers of nominal US$700 million.
Siemens pays a fixed rate of interest and receives a variable rate of interest, offsetting future changes in interest payments of the
underlying floating-rate commercial papers. Net cash receipts and payments are recorded as interest expenses. The Company had interest
rate swap contracts to receive variable rates of interest of an average of 0.13% and 0.23% as of September 30, 2021 and 2020, respectively,
and paid fixed rates of interest (average rate of 1.95% and 1.95%, as of September 30, 2021 and 2020, respectively).
Cash flow hedges of floating-rate commercial papers
Interest rate risk management relating to the Group, excluding SFS' businesses, uses derivative financial instruments under a portfolio-
based approach to manage interest risk actively relative to a benchmark. Interest rate management of the SFS and businesses remains to
be managed separately, considering the term structure of SFS' financial assets and liabilities on a portfolio basis. Neither approach qualifies
for hedge accounting treatment. Net cash receipts and payments in connection with interest rate swap agreements are recorded as interest
expense in Other financial income (expenses), net.
Interest rate risk management
Included are Siemens' foreign currency forward contracts, entered into in fiscal 2021, to hedge foreign currency risks relating to US$10
billion (€8.5 billion) bonds granted to Siemens Healthineers, through which a synthetic Euro financing structure is achieved. It factually,
also turns interest into € with volume weighted average interest rates of currently about 0.3%.
hedging transactions have an average remaining maturity until 2026 and 2022 (forward purchases of US$) as well as 2022 and 2021
(forward sales of US$).
Consolidated Financial Statements
Derivative financial instruments not designated in a hedging relationship
The Company's operating units apply hedge accounting to certain significant forecast transactions and firm commitments denominated
in foreign currencies. Particularly, the Company entered into foreign currency exchange contracts to reduce the risk of variability of future
cash flows resulting from forecast sales and purchases as well as firm commitments. The risk mainly results from contracts denominated
in US$ both from Siemens' operating units entering into long-term contracts e.g. from the project business and from the standard product
business. In fiscal 2021 and 2020, the risk is hedged against the euro at an average rate of 1.2808 €/US$ and 1.2013 €/US$ (forward
purchases of US$), respectively and 1.2070 €/US$ and 1.1950 €/US$ (forward sales of US$). As of September 30, 2021 and 2020, the
Cash flow hedges
The Company manages its risks associated with fluctuations in foreign currency denominated receivables, payables, debt, firm
commitments and forecast transactions primarily through a Company-wide portfolio approach. Under this approach the Company-wide
risks are aggregated centrally, and various derivative financial instruments, primarily foreign currency exchange contracts, foreign currency
swaps and options, are utilized to minimize such risks. Such a strategy does not qualify for hedge accounting treatment. The Company
also accounts for foreign currency derivatives, which are embedded in sale and purchase contracts.
(28)
Derivative financial instruments not designated in a hedging relationship
Foreign currency exchange rate risk management
Amounts reclassified to net income in connection with interest rate risk hedges and non-operative foreign currency hedges are presented
in Other financial income (expenses), net. Reclassifications of foreign currency risk hedges with operative business purposes are presented
as functional costs. Costs of hedging reserve is the forward element of forward contracts that are not designated as hedge accounting and
which are amortized to interest expense on a straight-line basis as the hedged item is time-period related. In fiscal 2021, €114 million in
Other relate to designated foreign currency swaps to hedge risks of the highly probable purchase price payment made for the Varian
acquisition. The amount was removed from the cash flow hedge reserve and included in the initial cost of Varian.
(3)
(11)
33
93
Varian Medical Systems Algeria Spa., Hydra / Algeria
Siemens Spa, Algiers / Algeria
Europe, Commonwealth of Independent States (C.I.S.), Africa, Middle East (without Germany) (306 companies)
ESTEL Rail Automation SPA, Algiers / Algeria
Zeleni Real Estate GmbH & Co. KG, Kemnath
VVK Versicherungsvermittlungs- und Verkehrskontor GmbH, Munich
Yunex GmbH, Munich
Weiss Spindeltechnologie GmbH, Maroldsweisach
VMZ Berlin Betreibergesellschaft mbH, Berlin
Siemens Industry Software Closed Joint-Stock Company, Yerevan / Armenia
Zeleni Holding GmbH, Kemnath
ETM professional control GmbH, Eisenstadt / Austria
10013
1007
1009
1007
1007
1007
1007
100
10010
10010
100
1007
100
100
ITH icoserve technology for healthcare GmbH, Innsbruck / Austria
VMS Deutschland Holdings GmbH, Darmstadt
Consolidated Financial Statements
Varian Medical Systems München GmbH, Munich
10010
1009
10013
1009
10010
1009
1007
10010
100
100
100
100
1007
46
46
Siemensstadt CX Verwaltungs GmbH, Grünwald
Siemensstadt Grundstücks-GmbH & Co. KG, Grünwald
Siemensstadt Management GmbH, Grünwald
Siemensstadt SPE Verwaltungs GmbH, Grünwald
Siemensstadt SWHH Verwaltungs GmbH, Grünwald
Siemensstadt VG Verwaltungs GmbH, Grünwald
SILLIT Grundstücks-Verwaltungsgesellschaft mbH, Munich
SIMAR Ost Grundstücks-GmbH, Grünwald
SYKATEC Systeme, Komponenten, Anwendungstechnologie GmbH, Erlangen
timeseries germany GmbH, Munich
Varian Medical Systems Deutschland GmbH & Co. KG, Darmstadt
Varian Medical Systems Haan GmbH, Haan
Varian Medical Systems Particle Therapy GmbH & Co. KG, Troisdorf
100
100
49
100
100
100
100
1007
Siemens Healthcare AS, Oslo / Norway
Siemens AS, Oslo / Norway
Yunex Traffic B.V., Zoetermeer / Netherlands
Varian Medical Systems Nederland Finance B.V., Houten / Netherlands
Varian Medical Systems Nederland B.V., Houten / Netherlands
TS International B.V., Rotterdam / Netherlands
100
TASS International B.V., Helmond / Netherlands
Timeseries Group B.V., Rotterdam / Netherlands
Siemens Mobility Holding B.V., The Hague / Netherlands
Siemens Mobility B.V., Zoetermeer / Netherlands
Siemens International Holding III B.V., The Hague / Netherlands
Siemens Financieringsmaatschappij N.V., The Hague / Netherlands
Siemens Healthineers Holding III B.V., The Hague / Netherlands
Siemens Healthineers Holding IV B.V., The Hague / Netherlands
Siemens Healthineers Nederland B.V., The Hague / Netherlands
Siemens Industry Software Netherlands B.V., Eindhoven / Netherlands
Siemens International Holding B.V., The Hague / Netherlands
Siemens Finance B.V., The Hague / Netherlands
Pollux III B.V., The Hague / Netherlands
Mentor Graphics (Netherlands) B.V., Eindhoven / Netherlands
Mendix Technology B.V., Rotterdam / Netherlands
Flowmaster Group N.V., Eindhoven / Netherlands
Fractal Technologies B.V., Ospel / Netherlands
100
Siemens Nederland N.V., The Hague / Netherlands
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
49
100
OPTIO Grundstücks-Vermietungsgesellschaft mbH & Co. Objekt Tübingen KG, Grünwald
10010
Siemens Financial Services GmbH, Munich
Siemens Fonds Invest GmbH, Munich
Siemens Global Innovation Partners Management GmbH, Munich
Siemens Healthcare Diagnostics Products GmbH, Marburg
Siemens Healthcare GmbH, Munich
Siemens Healthineers AG, Munich
Siemens Healthineers Beteiligungen GmbH & Co. KG, Röttenbach
Siemens Healthineers Beteiligungen Verwaltungs-GmbH, Röttenbach
Siemens Healthineers Holding I GmbH, Munich
Siemens Healthineers Holding II GmbH, Munich
Siemens Healthineers Innovation GmbH & Co. KG, Röttenbach
Siemens Healthineers Innovation Verwaltungs-GmbH, Röttenbach
Siemens Immobilien Besitz GmbH & Co. KG, Grünwald
Siemens Immobilien GmbH & Co. KG, Grünwald
Siemens Immobilien Management GmbH, Grünwald
Siemens Industriepark Karlsruhe GmbH & Co. KG, Grünwald
Siemens Industry Software GmbH, Cologne
Siemens Liquidity One, Munich
Siemens Logistics GmbH, Constance
Siemens Medical Solutions Health Services GmbH, Grünwald
Siemens Middle East Services LP GmbH, Munich
Siemens Mobility GmbH, Munich
Siemens Mobility Real Estate GmbH & Co. KG, Grünwald
Siemens Mobility Real Estate Management GmbH, Grünwald
Siemens Nixdorf Informationssysteme GmbH, Grünwald
1009
Siemens Finance & Leasing GmbH, Munich
1009
Siemens Electronic Design Automation GmbH, Munich
Siemens Campus Erlangen Verwaltungs-GmbH, Grünwald
Dresser-Rand International B.V., The Hague / Netherlands
Onespin Solutions Holding GmbH, Munich
R & S Restaurant Services GmbH, Munich
REMECH Systemtechnik GmbH, Unterwellenborn
100
1009
100
10010
RISICOM Rückversicherung AG, Grünwald
Siemens Bank GmbH, Munich
Siemens Beteiligungen Europa GmbH, Munich
Siemens Beteiligungen Inland GmbH, Munich
Siemens Beteiligungen Management GmbH, Kemnath
Siemens Beteiligungen USA GmbH, Berlin
Siemens Beteiligungsverwaltung GmbH & Co. OHG, Kemnath
100
100
100
10010
1007
10010
1009, 12
45
Consolidated Financial Statements
Siemens Campus Erlangen Grundstücks-GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 2 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 3 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 4 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 5 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 6 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 7 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objektmanagement GmbH, Grünwald
Siemens Digital Logistics GmbH, Frankenthal
1009
1009
1009
1009
1007
100
1009
Siemens OfficeCenter Frankfurt GmbH & Co. KG, Grünwald
Siemens OfficeCenter Verwaltungs GmbH, Grünwald
Siemens Private Finance Versicherungsvermittlungsgesellschaft mbH, Munich
Siemens Project Ventures GmbH, Erlangen
100
Siemens Real Estate Consulting GmbH & Co. KG, Munich
Siemens Real Estate Consulting Management GmbH, Grünwald
Siemens Real Estate GmbH & Co. KG, Kemnath
Siemens Real Estate Management GmbH, Kemnath
Siemens Technology Accelerator GmbH, Munich
Siemens Technopark Mülheim GmbH & Co. KG i.L., Grünwald
Siemens Technopark Nürnberg GmbH & Co. KG, Grünwald
Siemens Traction Gears GmbH, Penig
Siemens Trademark GmbH & Co. KG, Kemnath
Siemens Trademark Management GmbH, Kemnath
Siemens Treasury GmbH, Munich
Siemens-Fonds C-1, Munich
Siemens-Fonds Pension Captive, Munich
Siemens-Fonds S-7, Munich
Siemens-Fonds S-8, Munich
Siemensstadt C1 Verwaltungs GmbH, Grünwald
10010
10010
1009
1007
10010
1009
1009
100
1007
100
100
10010
10010
10010
1007
100
100
75
100
1007
100
1007
100
1007
1009
1009
1007
1009
100
100
100
Castor III B.V., The Hague / Netherlands
100
Siemens Industry Software SARL, Sala Al Jadida / Morocco
Siemens Healthcare Logistics LLC, Cairo / Egypt
Mentor Graphics Egypt Company (A Limited Liability Company - Private Free Zone), New Cairo / Egypt
Varian Medical Systems Scandinavia AS, Herlev / Denmark
Siemens Mobility A/S, Ballerup / Denmark
Siemens Industry Software A/S, Ballerup / Denmark
Siemens Healthcare A/S, Ballerup / Denmark
Siemens A/S, Ballerup / Denmark
Acuson Denmark S/A, Ballerup / Denmark
Yunex, s.r.o., Prague / Czech Republic
Siemens, s.r.o., Prague / Czech Republic
Siemens Electric Machines s.r.o., Drasov / Czech Republic
Siemens Healthcare, s.r.o., Prague / Czech Republic
Siemens Industry Software, s.r.o., Prague / Czech Republic
Siemens Mobility, s.r.o., Prague / Czech Republic
100
OEZ s.r.o., Letohrad / Czech Republic
Consolidated Financial Statements
+2
47
100
100
100
100
100
100
100
100
Siemens Healthcare d.o.o., Zagreb / Croatia
100
100
100
Siemens Financial Services SAS, Saint-Denis / France
PETNET Solutions SAS, Lisses / France
Padam Mobility SAS, Paris / France
Nextflow Software SAS, Nantes / France
Mentor Graphics (France) SARL, Meudon La Forêt / France
Aimsun SARL, Paris / France
VIBECO - Virtual Buildings Ecosystem Oy, Espoo / Finland
Acuson France SAS, Saint-Denis / France
Varian Medical Systems Finland OY, Helsinki / Finland
Siemens Osakeyhtiö, Espoo / Finland
Siemens Mobility Oy, Espoo / Finland
Siemens Industry Software Oy, Espoo / Finland
Siemens Healthcare Oy, Espoo / Finland
Siemens Mobility Egypt LLC, Cairo / Egypt
Siemens Industrial LLC, New Cairo / Egypt
Siemens Healthcare S.A.E., Cairo / Egypt
100
100
100
100
100
1007
100
100
100
100
100
100
100
100
Yunex S.A./N.V., Beersel / Belgium
Varian Medical Systems Belgium NV, Machelen / Belgium
Siemens S.A./N.V., Beersel / Belgium
Siemens Mobility S.A. / N.V, Beersel / Belgium
Siemens Industry Software NV, Leuven / Belgium
Siemens Healthcare NV, Beersel / Belgium
Samtech SA, Angleur / Belgium
Siemens W.L.L., Manama / Bahrain
Yunex Traffic Austria GmbH, Vienna / Austria
VVK Versicherungs-Vermittlungs- und Verkehrs-Kontor GmbH, Vienna / Austria
Varian Medical Systems Gesellschaft mbH, Brunn am Gebirge / Austria
Steiermärkische Medizinarchiv GesmbH, Graz / Austria
Siemens Personaldienstleistungen GmbH, Vienna / Austria
Siemens Mobility Austria GmbH, Vienna / Austria
Siemens Metals Technologies Vermögensverwaltungs GmbH, Vienna / Austria
Siemens Konzernbeteiligungen GmbH, Vienna / Austria
Siemens Industry Software GmbH, Linz / Austria
Siemens Healthcare Diagnostics GmbH, Vienna / Austria
Siemens Gebäudemanagement & -Services G.m.b.H., Vienna / Austria
Siemens Aktiengesellschaft Österreich, Vienna / Austria
Omnetric GmbH, Vienna / Austria
100
100
100
100
Siemens d.o.o. Sarajevo - U Likvidaciji, Sarajevo / Bosnia and Herzegovina
Siemens France Holding SAS, Saint-Denis / France
Siemens Healthcare SAS, Saint-Denis / France
Siemens Industry Software SAS, Châtillon / France
Siemens Lease Services SAS, Saint-Denis / France
Siemens Medicina d.o.o., Sarajevo / Bosnia and Herzegovina
Siemens Healthcare EOOD, Sofia / Bulgaria
100
100
51
100
100
100
52
100
100
100
100
100
100
100
100
100
69
100
100
491
100
51
Siemens d.d., Zagreb / Croatia
Varinak Bulgaria EOOD, Sofia / Bulgaria
Siemens Mobility EOOD, Sofia / Bulgaria
Siemens EOOD, Sofia / Bulgaria
Siemens Logistics SAS, Saint-Denis / France
Siemens Mobility SAS, Châtillon / France
Siemens SAS, Saint-Denis / France
100
100
Consolidated Financial Statements
Siemens TOO, Almaty / Kazakhstan
Siemens Healthcare Limited Liability Partnership, Almaty / Kazakhstan
Varian Medical Systems Italy SpA, Segrate / Italy
VAL 208 Torino GEIE, Milan / Italy
Siemens S.p.A., Milan / Italy
Siemens Mobility S.r.I., Milan / Italy
Siemens Logistics S.r.I., Milan / Italy
Siemens Industry Software S.r.l., Milan / Italy
Siemens Healthcare S.r.l., Milan / Italy
Acuson Italy S.r.I., Milan / Italy
UGS Israeli Holdings (Israel) Ltd., Airport City / Israel
Siemens Mobility Ltd., Rosh HaAyin / Israel
Siemens Ltd., Rosh Ha'ayin / Israel
Siemens Industry Software Ltd., Airport City / Israel
Siemens HealthCare Ltd., Rosh HaAyin / Israel
Siemens Concentrated Solar Power Ltd., Rosh HaAyin / Israel
Mentor Graphics Development Services (Israel) Ltd., Rehovot / Israel
Mentor Graphics (Israel) Limited, Herzilya Pituah / Israel
Siemens Limited, Dublin Ireland
48
100
100
100
Siemens Healthcare Medical Solutions Limited, Swords, County Dublin / Ireland
100
100
Siemens Healthcare SARL, Casablanca / Morocco
Varian Medical Systems Mauritius Ltd., Ebene / Mauritius
CTSI (Mauritius) Ltd., Ebene / Mauritius
FTD Europe Ltd, Sliema / Malta
TFM International S.A. i.L., Luxembourg / Luxembourg
100
492
FAST TRACK DIAGNOSTICS LUXEMBOURG S.à r.l., Esch-sur-Alzette / Luxembourg
Atruvi Invest Management S.à.r.l, Munsbach / Luxembourg
Siemens Industrial Business Co. For Electrical, Electronic and Mechanical Contracting WLL, Kuwait City / Kuwait
Crabtree (Pty) Ltd, Maseru / Lesotho
VMS Kenya, Ltd, Nairobi Kenya
100
100
100
100
10013
100
100
100
100
100
1007
100
100
100
100
Siemens S.A., Casablanca / Morocco
Mentor Graphics Development Services Limited, Shannon, County Clare / Ireland
Siemens Healthcare Diagnostics Manufacturing Limited, Swords, County Dublin / Ireland
100
100
100
100
100
100
100
100
100
100
100
Mentor Graphics (Ireland) Limited, Shannon, County Clare / Ireland
Mentor Graphics (Holdings) Unlimited Company, Shannon, County Clare / Ireland
Yunex Traffic Kft., Budapest / Hungary
Varian Medical Systems Hungary Kft., Budapest / Hungary
Siemens Zrt., Budapest / Hungary
Siemens Mobility Kft., Budapest / Hungary
Siemens Industry Software Kft., Budapest / Hungary
Siemens Healthcare Kft., Budapest / Hungary
evosoft Hungary Szamitastechnikai Kft., Budapest / Hungary
YUNEX SINGLE-MEMBER SOCIETE ANONYME, Athens / Greece
SIEMENS MOBILITY RAIL AND ROAD TRANSPORTATION SOLUTIONS SINGLE-MEMBER SOCIETE ANONYME, Athens / Greece
SIEMENS HEALTHCARE INDUSTRIAL AND COMMERCIAL SINGLE MEMBER SOCIETE ANONYME, Chalandri / Greece
Siemens A.E., Electrotechnical Projects and Products, Athens / Greece
Varian Medical Systems France SARL, Le Plessis-Robinson / France
Supplyframe Europe SAS, Grenoble / France
100
100
1007
100
10013
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Consolidated Financial Statements
10010
543
6,352
1,730 1,498
3,075
3,098
40
40
Consolidated Financial Statements
Description of reportable segments
Digital Industries, offers a comprehensive product portfolio and system solutions for automation used in discrete and process industries,
complemented by product lifecycle and data-driven services,
Smart Infrastructure, offers products, systems, solutions, services and software to support a sustainable transition in energy generation
sources, from fossil to renewable and a transition to smarter, more sustainable buildings and communities,
616
Mobility, combines all Siemens businesses in the area of passenger and freight transportation, including rail vehicles, rail automation
systems, rail electrification systems, road traffic technology, digital solutions and related services,
Siemens Financial Services provides financing solutions to Siemens' customers and other companies via debt and equity investments,
offering leasing, lending and working capital financing solutions and equipment, project and structured financing.
Portfolio Companies (POC)
Portfolio Companies comprise businesses which deliver a broad range of customized and application-specific products, software,
solutions, systems and services for various industries including oil and gas, chemical, mining, cement, logistics, energy, marine, water and
fiber.
Reconciliation to Consolidated Financial Statements
Siemens Energy Investment - includes our investment in Siemens Energy accounted for using the equity method as well as a smaller
investment in connection with Siemens Energy.
Siemens Real Estate (SRE) - manages the Group's real estate business portfolio, operates the properties, and is responsible for building
projects and the purchase and sale of real estate; excluded is the carved-out real estate of Siemens Healthineers; in fiscal 2020 Mobility
was excluded as well.
Corporate items - includes corporate costs, such as group managing costs, basic research of Corporate Technology, Siemens Advanta, as
well as corporate services and projects. Corporate items also include equity interests, activities generally intended for closure as well as
activities remaining from divestments and discontinued operations.
Centrally carried pension expense - includes the Company's pension related income (expense) not allocated to the segments, POC or
Siemens Real Estate.
Eliminations, Corporate Treasury and other reconciling items - comprise consolidation of transactions within the segments, certain
reconciliation and reclassification items as well as central financing activities. It also includes interest income and expense, such as, for
example, interest not allocated to segments or POC (referred to as financing interest), interest related to central financing activities or
resulting consolidation and reconciliation effects on interest.
Measurement - Segments
Accounting policies for Segment information are generally the same as those used for the Consolidated Financial Statements. Segment
information is disclosed for continuing operations; prior year Assets are reclassified to conform to the current year presentation. For
internal and segment reporting purposes intercompany lease transactions, however, are classified as operating leases by the lessor and
are accounted for off-balance sheet by the lessee (except for intercompany leases with Siemens Healthineers as lessees). Intersegment
transactions are based on market prices.
Siemens Healthineers develops, manufactures, and sells a diverse range of innovative diagnostic and therapeutic products and services
to healthcare providers,
347
376
(1,670)
2,144
28,946
820
611
22
23
204
253
767
354
270
18
25
53
159
Reconciliation to
Consolidated Financial Statements
(353) (1,672)
Siemens (continuing operations)
71,374 58,030
769
62,265
458
55,254
(1,018)
(1,960)
(249) (1,502) (1,739) (1,731) 59,990 60,325 (2,642)
62,265 55,254 7,496 5,502 139,608 123,897 8,379
Revenue
Revenue includes revenue from contracts with customers and revenue from leasing activities. In fiscal 2021 and 2020, lease revenue is
€1,050 million and €958 million, respectively. In fiscal 2021 and 2020, Digital industries recognized €4,290 million and €4,144 million
revenue, respectively, from its software business, Smart Infrastructure recognized €5,769 million and €5,182 million in its products
business. Revenues of Mobility are mainly derived from construction-type business.
Profit
Siemens' Managing Board is responsible for assessing the performance of the segments (chief operating decision maker). The Company's
profitability measure of the segments except for SFS is earnings before financing interest, certain pension costs, income taxes and
amortization expenses of intangible assets acquired in business combinations as determined by the chief operating decision maker (Profit).
The major categories of items excluded from Profit are described below.
(396)
(24)
94
325
(435)
(887)
(170)
(211)
(738)
(691)
Eliminations, Corporate Treasury and other reconciling items
(94)
(243)
Reconciliation to Consolidated Financial Statements
(1,739)
(1,731)
In fiscal 2021, Corporate items includes income of €192 million from Bentley Systems, Inc. stemming from the investment's fair value
measurement before its transfer to the Siemens Pension-Trust e.V.
In fiscal 2021 and 2020, Profit of SFS includes interest income of €1,154 million and €1,242 million, respectively and interest expenses of
€313 million and €436 million, respectively.
42
Assets
(in millions of €)
Siemens Energy Investment
Assets Siemens Real Estate
Assets Corporate items and pensions
Asset-based adjustments:
2020
2,202
2021
Centrally carried pension expense
Financing interest, excluded from Profit, is any interest income or expense other than interest income related to receivables from
customers, from cash allocated to the segments and interest expenses on payables to suppliers. Financing interest is excluded from Profit
because decision-making regarding financing is typically made at the corporate level.
Decisions on essential pension items are made centrally. Accordingly, Profit primarily includes amounts related to service cost of pension
plans only, while all other regularly recurring pension related costs are included in reconciliations in line item Centrally carried pension
expense.
Amortization expenses of intangible assets acquired in business combinations are not part of Profit. Furthermore, income taxes are
excluded from Profit since income tax is subject to legal structures, which typically do not correspond to the structure of the segments.
The effect of certain litigation and compliance issues is excluded from Profit, if such items are not indicative of performance. This may also
41
Consolidated Financial Statements
be the case for items that refer to more than one reportable segment, SRE and (or) POC or have a corporate or central character. Costs for
support functions are primarily allocated to the segments.
Profit of the segment SFS
In contrast to performance measurement principles applied to other segments, interest income and expenses are included, since interest
is an important source of revenue and expense of SFS.
Asset measurement principles
Management determined Assets (Net capital employed) as a measure to assess capital intensity of the segments except for SFS. Its
definition corresponds to the Profit measure except for amortization expenses of intangible assets acquired in business combinations
which are not part of Profit, however, the related intangible assets are included in the segments' Assets. Segment Assets is based on Total
assets of the Consolidated Statements of Financial Position, primarily excluding intragroup financing receivables, tax related assets and
assets of discontinued operations, since the corresponding positions are excluded from Profit. The remaining assets are reduced by non-
interest-bearing liabilities other than tax related liabilities, e.g. trade payables, to derive Assets. In contrast, Assets of SFS is Total assets. In
individual cases assets of Mobility include project-specific intercompany financing of long-term projects. Assets of Siemens Healthineers
and in fiscal 2020 of Mobility include real estate, while real estate of all other segments is carried at SRE.
Orders
Orders are determined principally as estimated revenue of accepted purchase orders for which enforceable rights and obligations exist as
well as subsequent order value changes and adjustments, excluding letters of intent. To determine orders, Siemens considers termination
rights and customer's creditworthiness.
As of September 30, 2021 and 2020, order backlog totaled €85 billion and €70 billion (continuing operations); thereof Digital Industries
€7 billion and €5 billion, Smart Infrastructure €11 billion and €10 billion, Mobility €36 billion and €32 billion and Siemens Healthineers
€27 billion and €18 billion. In fiscal 2022, Siemens expects to convert approximately €34 billion of the September 30, 2021 order backlog
into revenue; thereof at Digital Industries approximately €6 billion, Smart Infrastructure approximately €7 billion, Mobility approximately
€9 billion and Siemens Healthineers approximately €9 billion.
Free cash flow definition
Free cash flow of the segments constitutes cash flows from operating activities less additions to intangible assets and property, plant and
equipment. Except for SFS, it excludes financing interest, except for cases where interest on qualifying assets is capitalized or classified as
contract costs; it also excludes income tax as well as certain other payments and proceeds. Free cash flow of SFS includes related financing
interest payments and proceeds; income tax payments and proceeds of SFS are excluded. In individual cases, free cash flow of Mobility
includes project-specific intercompany financing of long-term projects.
Amortization, depreciation and impairments
Amortization, depreciation and impairments includes depreciation and impairments of property, plant and equipment as well as
amortization and impairments of intangible assets each net of reversals of impairment.
Measurement - POC and Siemens Real Estate
POC follows the measurement principles of the segments except for SFS. Siemens Real Estate applies the measurement principles of SFS.
Reconciliation to Consolidated Financial Statements
Profit
Fiscal year
(in millions of €)
Siemens Energy Investment
Siemens Real Estate
Corporate items
Amortization of intangible assets acquired in business combinations
1,104
1,314
7,142
2021
2020
2021
2020
Fiscal year
2021
2020
Sep 30,
2021
Sep 30,
Fiscal year
Fiscal year
Fiscal year
2020
2021
2020
2021
2020
2021
2020
14,279
358
718
16,514
14,997
3,362
3,252
2020
10,123 10,756
Fiscal year
Fiscal year
2021
16,156
100
NOTE 29 Segment information
Consolidated Financial Statements
Orders
External revenue
Intersegment
Revenue
Total
revenue
Profit
Assets
Free cash flow
Additions to
intangible
assets and
property, plant
& equipment
Amortization,
depreciation &
impairments
(in millions of €)
Fiscal year
2021
Digital Industries
18,427
Smart Infrastructure
Mobility
Siemens Healthineers
Industrial Business
Siemens Financial Services
Portfolio Companies
3,516
716
3,024
2020
15,896
16,071 14,734 14,671 13,742
12,696 9,169 9,205 9,012
20,320 16,163 17,921 14,349
67,514 55,963
697
Fiscal year
Intragroup financing receivables
3,750
288
292
76
111
17,997
14,460
57,954
51,381
805
663
2,879
667
2,747
34
179
1,450
48
461
58,759
697
3,058
52,832
716
3,209
2,847
8,808
512
345 30,384
(85) (673)
576
2,184 31,489 15,338
3,101
1,928
665
544
1,037
815
7,560 48,658 33,859
9,847
191
2,854
183
862
194
640
700
344
581
15,015 14,323
1,743
1,302
4,385
4,340
2,098
1,498
181
182
334
337
27
40
9,232
9,052
857
822
2,661
3,424
898
181
10010
Tax-related assets
Eliminations, Corporate Treasury, other items
Fiscal year
2021
2020
37.6
58.1
3.9
10.4
0.1
41.6
68.6
In fiscal 2021 and 2020, 43% and 44%, respectively, of the total fees related to Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft,
Germany.
Tax services
Audit Services relate primarily to services provided by EY for auditing Siemens' Consolidated Financial Statements, for auditing financial
statements of Siemens AG and its subsidiaries, for reviews of interim financial statements being integrated into the audit, for project-
accompanying IT audits, for audit services in connection with the implementation of new accounting standards as well as for audits of the
internal control system at service companies. Other Attestation Services include primarily audits of financial statements as well as other
attestation services in connection with M&A activities, audits of employee benefit plans, attestation services related to the sustainability
reporting, comfort letters and other attestation services required under regulatory requirements, contractually agreed or requested on a
voluntary basis.
The Managing and Supervisory Boards of Siemens Aktiengesellschaft and of Siemens Healthineers AG, a publicly listed subsidiary of
Siemens, provided the declarations required under Section 161 of the German Stock Corporation Act (AktG) on October 1, 2021 and
September 30, 2021. The declarations are available on the company's websites at siemens.com/gcg-code and at corporate.siemens-
healthineers.com/investor-relations/corporate-governance.
NOTE 34 Subsequent events
In October 2021, Siemens recognized a pre-tax gain of €291 million related to Siemens' investment in Fluence Energy, LLC, Delaware, U.S.
(Fluence), an investment accounted for using the equity method, which is active in energy storage products and services and digital
applications for renewables and storage. Fluence issued new equity to a newly formed parent holding company, Fluence Energy, Inc., a
Delaware corporation, which in turn issued shares of stock through an initial public offering. The transaction diluted Siemens' share
in Fluence to 34%.
In October 2021, Siemens acquired the Netherlands based company SQCAP B.V. (Sqills), a provider in the provision of cloud-based
inventory management, reservation, and ticketing software to public transport operators around the world. The acquired business will be
integrated into Mobility. The purchase price is €537 million paid in cash plus contingent consideration recognized at the acquisition date
44
Consolidated Financial Statements
at its maximum amount of €79 million. The purchase price allocation is preliminary as a detailed analysis of the assets and liabilities has
not been finalized. Resulting Other Intangible assets include mainly customer-related intangible assets of €193 million and technology-
related intangible assets of €138 million, while Goodwill of €368 million comprises intangible assets that are not separable such as
employee know-how and synergy effects.
NOTE 35 List of subsidiaries and associated companies pursuant to Section 313 para. 2 of the
German Commercial Code
September 30, 2021
Subsidiaries
Germany (121 companies)
NOTE 33 Corporate governance
Other attestation services
Audit services
(in millions of €)
861
1,358
1,181
870
1,407
In fiscal 2021 and 2020, sales of goods and services and other income resulting from transactions between discontinued operations and
joint ventures and associates amounted to €97 million and €391 million, respectively. Purchases of goods and services and other expenses
resulting from transactions between discontinued operations and joint ventures and associates amounted to €1 million and €174 million,
respectively.
As of September 30, 2021 and 2020, receivables to associates included reimbursement rights against Siemens Energy which were
recognized correspondingly with obligations from customer contracts in connection with Siemens Energy activities legally remaining at
Siemens. Liabilities to associates as of September 30, 2021 and 2020 were mainly due to trade receivables that also result from these
activities and that have economically to be allocated to Siemens Energy.
As of September 30, 2021 and 2020, guarantees to joint ventures and associates amounted to €14,533 million and €27,505 million,
respectively, thereof €14,159 million and €27,253 million, respectively, to associates. These guarantees included mainly obligations from
performance and credit guarantees in connection with the Siemens Energy business. For these guarantees, Siemens has reimbursement
rights towards Siemens Energy.
As of September 30, 2021 and 2020, loans given to joint ventures and associates amounted to €1,138 million and €900 million, therein
€1,122 million and €881 million related to joint ventures, respectively. The related book values amounted to €28 million and €26 million,
therein €25 million and €20 million related to joint ventures, respectively. Valuation adjustments recognized in fiscal 2021 and 2020
reduced book values of loans related to joint ventures by €242 million and €744 million, respectively.
As of September 30, 2021 and 2020, the Company had commitments to make capital contributions to joint ventures and associates of
€72 million and €62 million, therein €65 million and €51 million related to joint ventures, respectively.
43
Consolidated Financial Statements
As of September 30, 2021 and 2020, there were loan commitments to joint ventures amounting to €222 million and €299 million,
respectively.
Pension entities
For information regarding the funding of our post-employment benefit plans see Note 17.
Related individuals
In fiscal 2021 and 2020, members of the Managing Board – including members who left during fiscal 2021 - received cash compensation
of €21.4 million and €15.3 million. The fair value of share-based compensation amounted to €11.6 million and €11.3 million for 202,139
and 203,460 stock awards, respectively, granted in fiscal 2021 and 2020. In fiscal 2021 and 2020, the Company granted contributions
under the BSAV to members of the Managing Board totaling €3.0 million and €4.5 million, respectively.
Therefore, in fiscal 2021 and 2020, compensation and benefits, attributable to members of the Managing Board amounted to €36.0
million and €31.0 million in total, respectively.
In fiscal 2021 and 2020, expense related to share-based compensation amounted to €7.6 million and €17.7 million, respectively, including
expenses related to the additional cash payment compensation due to the spin-off of Siemens Energy.
Former members of the Managing Board and their surviving dependents received emoluments within the meaning of
Section 314 para. 1 No. 6 b of the German Commercial Code totaling €30.1 million and €16.0 million in fiscal 2021 and 2020, respectively.
The defined benefit obligation (DBO) of all pension commitments to former members of the Managing Board and their surviving
dependents as of September 30, 2021 and 2020 amounted to €192.0 million and €176.5 million, respectively.
Compensation attributable to members of the Supervisory Board comprised in fiscal 2021 and 2020 base compensation and additional
compensation for committee work and amounted to €5.2 and €5.3 million (including meeting fees), respectively.
In fiscal 2021 and 2020, no other major transactions took place between the Company and the members of the Managing Board and the
Supervisory Board.
Some of our board members hold, or in the last year have held, positions of significant responsibility with other entities. We have
relationships with almost all of these entities in the ordinary course of our business whereby we buy and sell a wide variety of products
and services on arm's length terms.
NOTE 32 Principal accountant fees and services
Fees related to professional services rendered by the Company's principal accountant, EY, for fiscal 2021 and 2020 are:
Acuson GmbH, Erlangen
Airport Munich Logistics and Services GmbH, Hallbergmoos
AIT Applied Information Technologies GmbH & Co. KG, Stuttgart
AIT Verwaltungs-GmbH, Stuttgart
Kyros 58 GmbH, Munich
Kyros 66 GmbH, Munich
Kyros 67 GmbH, Munich
Kyros B AG, Munich
Kyros C AG, Munich
Lincas Electro Vertriebsgesellschaft mbH, Grünwald
Moorenbrunn Entwicklungs Management GmbH, Grünwald
Moorenbrunn Entwicklungs-GmbH & Co. KG, Grünwald
NEO New Oncology GmbH, Cologne
Next47 GmbH, Munich
Next47 Services GmbH, Munich
Omnetric GmbH, Munich
Onespin Solutions GmbH, Munich
100
10010
1007
1007
1007
1007
1007
1007
10010
1007
1009
100
Kyros 54 GmbH, Munich
49
100
10010
Alpha Verteilertechnik GmbH, Cham
BEFUND24 GmbH, Erlangen
Berliner Vermögensverwaltung GmbH, Berlin
Capta Grundstücks-Verwaltungsgesellschaft mbH, Grünwald
Dade Behring Grundstücks GmbH, Kemnath
eos.uptrade GmbH, Hamburg
evosoft GmbH, Nuremberg
Geisenhausener Entwicklungs Management GmbH, Grünwald
Geisenhausener Entwicklungs-GmbH & Co. KG, Grünwald
HaCon Ingenieurgesellschaft mbH, Hanover
ILLIT Grundstücksverwaltungs-Management GmbH, Grünwald
IPGD Grundstücksverwaltungs-Gesellschaft mbH, Grünwald
KACO new energy GmbH, Neckarsulm
KompTime GmbH, Munich
Equity interest
in %
1007
10010
1009
100
10010
85
10010
100
100
10010
10010
1007
1009
85
8
2020
Sep 30,
2020
2021
2020
2021
Europe, C.I.S., Africa, Middle East
31,138
27,252
32,066
28,563
23,724
2020
17,624
Americas
16,312
15,218
16,426
15,061
22,409
14,410
Asia, Australia
14,815
12,784
13,773
11,630
5,582
3,504
Sep 30,
Siemens
Fiscal year
(in millions of €)
Reconciliation to Consolidated Financial Statements
NOTE 30 Information about geographies
Sep 30,
Sep 30,
2021
2020
6,458
6,748
4,535
3,898
228
(608)
56,091
51,431
4,511
4,335
33,456
27,568
(45,289)
(33,049)
59,990
60,325
Revenue by location
of customers
Revenue by location
of companies
Non-current assets
Fiscal year
2021
Liability-based adjustments
62,265
62,265
Joint ventures
Associates
Sales of goods and services
and other income
Fiscal year
2021
Purchases of goods and
services and other expenses
Receivables
Liabilities
Fiscal year
Sep 30,
2020
2021
2020
2021
169
147
10
34
113
1,329
1,498
68
215
584
594
87
121
1,129
1,242
Sep 30,
2020
76
1,105
Sep 30,
2021
(in millions of €)
55,254
Siemens has relationships with many joint ventures and associates in the ordinary course of business whereby Siemens buys and sells a
wide variety of products and services generally on arm's length terms. The transactions between continuing operations and joint ventures
and associates were as follows:
NOTE 31 Related party transactions
55,254
51,716
35,537
thereof Germany
11,249
9,373
13,226
11,227
7,061
6,995
thereof countries outside of Germany
51,016
45,881
49,039
44,027
44,655
28,543
therein U.S.
13,521
12,761
13,901
12,907
21,550
13,656
Non-current assets consist of property, plant and equipment, goodwill and other intangible assets.
Joint ventures and associates
10010
Plus: SFS Other interest expenses/income
Fiscal year
Smart Infrastructure offers products, systems, solutions, services and software to support the global transition from fossil to renewable
energy sources, and the associated transition to smarter, more sustainable buildings and communities. Smart Infrastructure's versatile
portfolio consists of buildings, electrification, and electrical products. Its buildings portfolio addresses the needs of operators, owners,
occupants and users of buildings. It spans integrated building management systems and software; heating, ventilation and air conditioning
controls; fire safety and security products and systems; and solutions and services such as energy performance services. With its
electrification portfolio, Smart Infrastructure makes grids more resilient, flexible and efficient. Its offerings cover grid simulation, operation
and control software; substation automation and protection; medium-voltage primary and secondary switchgear including fluorinated
gas-free (F-gas-free) medium-voltage switchgear; and low-voltage switchboards and eMobility charging infrastructure. The electrical
products portfolio addresses industrial and building applications. Its offerings include low-voltage switching, measuring and control
equipment; low-voltage distribution systems and switchgear; and circuit breakers, contactors and switching for medium voltage.
Smart Infrastructure's customer and end user base is diverse. It encompasses infrastructure developers, construction companies and
contractors; owners, operators and tenants of both public and commercial buildings including hospitals, campuses, airports and data
centers; companies in process industries such as oil and gas, pharmaceuticals and chemicals; companies in discrete manufacturing
industries such as automotive and machine building; and utilities and power grid network operators (transmission and distribution). Smart
Infrastructure serves its customers through a broad range of channels, including direct sales organizations, distributors and partners such
as panel builders, original equipment manufacturers and value-added resellers and installers. To address more complex customer
requirements, Smart Infrastructure uses its dedicated sales forces within its country organization. Furthermore, Smart Infrastructure
provides e-commerce platforms or marketplaces where customers can directly place orders on-line, either via a web shop or via electronic
interfaces, and sells its broad range of digital offerings and connected devices via Siemens Xcelerator. These digital sales channels and e-
commerce platforms are becoming increasingly important and Smart Infrastructure therefore is continuously strengthening its digital
omni-channel marketing and e-commerce platforms.
Smart Infrastructure's principal competitors consist mainly of large multinational companies and smaller manufacturers in emerging
countries. Its solutions and services business also competes with local players such as system integrators and facility management firms.
Smart Infrastructure's businesses are impacted by changes in the overall economic environment to varying degrees, depending on the
customer segment and offering. Demand for Smart Infrastructure's electrical and building products offerings is driven strongly by
macroeconomic cycles, while demand for its systems and solutions offerings changes more slowly, with a time lag of several quarters. In
contrast, demand for service offerings shows only limited influence from macroeconomic cycles. Overall, Smart Infrastructure has
developed a balanced and resilient business mix with its diversified regional and vertical markets; its range of products, systems, solutions
and services; and its participation in both long- and short-cycle markets. To further strengthen the resilience of its portfolio, Smart
Infrastructure aims to increase the share of overall revenue that comes from services.
Smart Infrastructure benefits from a number of major trends. These include urbanization, demographic change, decarbonization, and
digitalization. Urbanization and demographic change drive a need for smarter and more human-centric buildings. Climate change drives
the need for decarbonization and digitalization. This results in an increasing demand for flexible and resilient energy infrastructures
including rapid growth in electric mobility and more sustainable buildings. Digitalization is an enabler for such changes in both buildings
and grids, making it possible to develop smarter buildings and manage electricity distribution with a higher share of renewables. The
markets served are experiencing shifts that present opportunities where building technologies and electrification meet.
Smart Infrastructure's R&D activities focus on sustainable and decarbonizing offerings for buildings, utilities and industrial customers.
Smart Infrastructure develops digital offerings for stable operation of electrical grids with a high share of renewable energy. In this regard,
data from field devices is the basis for intelligent grid control and protection, providing grid flexibility and continuously matching energy
supply and demand while protecting grid assets. Furthermore, it develops technologies for environmentally friendly and increasingly
renewable-based energy systems, ranging from climate-friendly F-gas-free switchgear for medium voltage to charging solutions for e-
mobility and grid integration of green hydrogen production. R&D efforts also strengthen Smart Infrastructure's capabilities to improve the
sustainability, performance and attractiveness of buildings. Smart Infrastructure is expanding its digital offerings such as cloud solutions
using field data from controllers and loT devices and the business platform Building X on the principles of openness and modularity of
Siemens Xcelerator. These and other offerings are enhanced using Al and large language models. For electrical distribution systems and
industrial plants, Smart Infrastructure continuously drives digitalization of its switching and control products with connectivity to the cloud,
remote diagnostics and edge computing capability. Smart Infrastructure puts an increasing focus of R&D on the sustainability of its
products along the lifecycle, incorporating environmentally friendly designs, materials and processes. To a large extent, its capital
expenditures relate to the products businesses. Main investment areas are replacement of fixed assets and further digitalization of
factories and technical equipment, with a strong focus on innovation.
(in millions of €)
Orders
3.3 Smart Infrastructure
Revenue
Profit
Profit margin
Fiscal year
2023
% Change
2022
22,333
therein: service business
demand following unusually high demand during the COVID-19 pandemic. For fiscal 2024, markets served by Digital Industries are
expected to grow markedly slower than in fiscal 2023. While industrial software markets are expected to grow clearly, short-cycle markets
served by Digital Industries are expected to contract slightly. Among other factors, rebalancing of supply chains, trade conflicts, effects
from geopolitical tensions, cautious consumer spending and downsizing of inventories, mainly in distribution channels, are expected to
weigh on market growth.
Combined Management Report
7
19,517
12%
15%
5,067
4,691
8%
10%
4,947
3,892
27%
22.6%
19.9%
Following extraordinary demand in fiscal 2022, which included proactive customer purchasing, orders at Digital Industries came in lower
in its automation businesses. The short-cycle factory automation and the motion control businesses were affected most strongly due
particularly to destocking at customers. These declines were partly offset by significant growth in the software business, due to large
contract wins in both the PLM and the EDA businesses. Revenue rose on increases in all businesses due in part to conversion from the
order backlog which had expanded significantly in the previous fiscal year. The strongest revenue growth contributions came from the
factory automation and the process automation businesses. Overall, growth in the automation businesses was supported by improved
availability of components year-over-year. Revenue growth in the software business was led by the EDA business while year-over-year
growth in PLM was held back by the transition to SaaS. On a geographic basis, orders remained stable in the Americas region, but came in
lower in the region Europe, C.I.S., Africa, Middle East and in the region Asia, Australia due mainly to weaker demand in China. Revenue
grew in all regions with the strongest contribution coming from the region Europe, C.I.S., Africa, Middle East. Profit and profitability at
Digital Industries rose on strong improvements in all automation businesses, supported by higher capacity utilization and a more favorable
business mix including improved availability of components for high-margin products. Profit in the software business declined due to
increased expenses related to cloud-based activities including severance charges, which for Digital Industries overall rose to €109 million,
up from €64 million in the prior year.
At the beginning of fiscal 2024, business activities in the areas of low-voltage and geared motors and motor spindles, previously part of
Digital Industries' motion control business, were transferred to Portfolio Companies. If the transfer to Portfolio Companies had already
existed at the beginning of fiscal 2023, Digital Industries would have posted orders of €19.387 billion, revenue of €20.636 billion, profit
of €4.833 billion and a profit margin of 23.4%. At the beginning of fiscal 2024, Digital Industries' order backlog amounted to €11 billion,
of which €8 billion are expected to be converted into revenue in fiscal 2024.
In fiscal 2023, markets served by Digital Industries overall grew significantly. However, after a strong start, growth momentum
increasingly slowed over the course of the fiscal year. This was particularly evident in China. On a geographic basis, all regions contributed
to growth, led by the regions Americas and Europe, C.I.S., Africa, Middle East. While global supply chain constraints eased, high price
inflation led central banks to increase interest rates, which together with high energy costs impacted manufacturing industries. This
impacted predominantly consumer- and building-related industries whereas production of investments goods still benefited from
converting high order backlogs into current revenue. The entire manufacturing industry experienced a destocking of inventories as a
countereffect of proactive ordering in the previous fiscal year. This was most evident in distributor channels and resulted in a significant
decline in orders for automation equipment. Discrete industries, which are closer to consumer spending than process industries, were
impacted earlier and more strongly than process industries, which are more project-based. The global automotive industry recovered
throughout the year following a weak prior year, and benefited from improved supply chain conditions. Production of electric vehicles
continued to increase. On a geographic basis, China, Japan, the U.S. and countries of the European Union saw a strong catchup of
production mainly in the first half of the fiscal year. The machine-building industry grew strongly in the first half of fiscal 2023 but growth
in major countries such as China, Germany, Japan and countries of the European Union came to a halt or market volume even declined in
the second half of the fiscal year due to less favorable investment conditions caused by rising interest rates and a more cautious investment
sentiment in consumer industries. Within the pharmaceutical and the chemicals industries, the pharmaceutical industry grew throughout
the fiscal year, but with slower momentum towards the end of the fiscal year. In contrast, production in the chemicals industries declined
in fiscal 2023. This was particularly evident within the countries of the European Union due mainly to high energy costs. The food and
beverage industry grew strongly at the beginning of the fiscal year, driven by strong price increases. In the second half of the fiscal year,
growth slowed considerably, reflecting weaker consumer spending. The market for electronics and semiconductors declined markedly at
the beginning of fiscal 2023 but began to stabilize during the second half of the fiscal year. The decline, which was particularly evident in
countries such as Taiwan and Korea with a focus on semiconductor production, was due among other factors to shrinking consumer
20,798
21,919
Actual
7%
7%
Table of reports
Combined Management Report
Consolidated Financial Statements
Responsibility Statement (Siemens Group)
Independent Auditor's Reports (Siemens Group)
Annual Financial Statements
SIEMENS
Responsibility Statement (Siemens AG)
Five-Year Summary
Compensation Report (including Auditor's Report)
Report of the Supervisory Board
Corporate Governance Statement
Notes and forward-looking statements
Combined Management
Independent Auditor's Report (Siemens AG)
for fiscal 2023
Siemens Report
(in millions of €)
19,946
17,353
15%
15%
4,243
3,856
10%
11%
3,074
2,222
38%
15.4%
12.8%
8
Net income
Comp.
Report
(17)%
25,283
(27)
251
365
8,765
4,819
47,002
6
47,996
10.0%
1 Item Other interest expenses/income, net primarily consists of interest relating to corporate debt, and related hedging activities, as well as interest income on corporate assets.
2 Effects resulting from purchase price allocation for Varian Medical Systems, Inc. (Varian) which are comprised of amortization of tangible and intangible assets, inventory step-ups, deferred revenue adjustments and
related income taxes.
For purposes of calculating ROCE in interim periods, Income before interest after tax is annualized. Average capital employed is determined
using the average of the respective balances as of the quarterly reporting dates for the periods under review.
Calculation of capital employed
Total equity
Less: Goodwill and other intangible assets resulting from purchase price allocation related to the Varian acquisition
Plus: Long-term debt
18.6%
5
51
97
Plus: Net interest expenses related to provisions for pensions and similar obligations
Less: Interest adjustments (discontinued operations)
Less: Taxes on interest adjustments (tax rate (flat) 30%)
Plus: Defined Varian-related acquisition effects (after tax)²
(I) Income before interest after tax
(II) Average capital employed
(1) / (II) ROCE
2023
2022
8,529
4,392
(1,075)
(939)
957
971
Plus: Short-term debt and current maturities of long-term debt
(18)%
Less: Cash and cash equivalents
Less: Fair value of foreign currency and interest hedges relating to short- and long-term debt
offerings, which their customers either need or want in order to take full advantage of the investment goods. Finally, there is a trend from
globalization to regionalization, to support local economic development, to increase supply chain resilience or to better adapt solutions to
local needs. This is increasingly accompanied by more differentiated regulatory requirements.
-
Research & Development (R&D) activities at Digital Industries are aimed at innovative ways to merge the real and digital worlds with a
continuous flow of data, so that customers can improve their products, production and resource efficiency. Digital Industries' innovations
incorporate artificial intelligence (AI), edge computing, SaaS and software-defined control, among other advanced technologies. As part
of Siemens' open digital marketplace Siemens Xcelerator - a business platform that includes a curated portfolio of internet-of-things-
enabled hardware, software and digital services from across Siemens and certified third parties and facilitates interactions and transactions
between customers, partners and developers Digital Industries in fiscal 2023 introduced Industrial Operations X, an open and
interoperable portfolio for automating and operating industrial production. Industrial Operations X focuses on integrating IT capabilities
such as Al, low-code programming, edge computing, and cloud computing with automation technology and digital services. Through
various collaborations, Digital Industries is developing industrial-grade Al solutions. With Intrinsic, an Alphabet company, Digital Industries
collaborates to accelerate the integration of Al-based robotics and automation technology. Digital Industries and Microsoft are harnessing
generative Al to help industrial companies drive innovation and efficiency across the entire product lifecycle. Also in fiscal 2023, Digital
Industries introduced several innovations based on cloud and edge technologies such as Simcenter Cloud HPC, which provides instant-on,
rapidly scalable cloud-based high performance computing for complex simulation studies, hosted on Amazon Web Services; and Industrial
Edge Management System for Kubernetes clusters, which addresses IT users in production and aims to save IT resources, energy, and
costs. Major investments of Digital Industries in fiscal 2023 relate to its own factory automation, motion control and process automation
businesses, to further automate and digitalize facilities particularly in Germany, China and Singapore.
(in millions of €)
Orders
Revenue
therein: software business
Combined Management Report
Profit
Fiscal year
2023
2022
% Change
Actual
Comp.
20,620
Profit margin
6
Digital Industries sees three trends influencing its business and providing long-term growth opportunities. Producers of investment goods
in today's increasingly digital environment must modernize their production capacity, particularly to increase production flexibility and
reduce time to market. This environment also spurs producers to complement their core products with vertical solutions and service
Taken together, Digital Industries' offerings enable customers to optimize entire value chains from product design and development
through production and post-sale services. With its advanced software solutions in particular, Digital Industries supports customers in their
evolution towards the "Digital Enterprise," resulting in increased flexibility and efficiency of production processes and reduced time to
market for new products. The most important customer markets include the automotive industry, the machine-building industry, the
pharmaceutical and chemicals industry, the food and beverage industry and the electronics and semiconductor industry. Digital Industries
serves its customers through a common regional sales organization spanning all its businesses, using various sales channels depending
on the type of customer and industry and also enhancing customer choice across all channels. Changes in customer demand, especially
for standard products, are driven strongly by macroeconomic cycles, and can lead to significant short-term fluctuation in Digital Industries'
profitability. Volume from large contracts in the software business, particularly for EDA, may also result in strong fluctuations in quarterly
volume and profitability. In fiscal 2023, Digital Industries continued to transition parts of its software business, particularly PLM, from
largely upfront revenue recognition towards Software as a Service (SaaS), which yields more predictable recurring revenue and offers
growth opportunities by opening access to new customers, especially small and medium-sized companies seeking to reduce costs
associated with owning complex IT infrastructure. The transition held back revenue growth rates and profit margin development in the
software business in fiscal 2023 and Digital Industries expects continued impacts until completion of the transition. Competition with
Digital Industries' business activities comes primarily from multinational corporations that offer a relatively broad portfolio and from
smaller companies active only in certain geographic or product markets.
Plus: Provisions for pensions and similar obligations
Less: SFS debt
Plus: Adjustments from assets classified as held for disposal and liabilities associated with assets classified as held for disposal
Less: Adjustment for deferred taxes on net accumulated actuarial gains/losses on provisions for pensions and similar obligations
Capital employed (continuing and discontinued operations)
5
Combined Management Report
3. Segment information
3.1 Overall economic conditions
Overall, calendar 2023 was characterized by many headwinds for the global economy. Global economic development continued to slowly
recover from the negative shocks of the previous years: the coronavirus pandemic (COVID-19) with its disruptions on global demand and
supply chains; war in Ukraine and the following commodity price explosions, especially for European energy; spiraling inflation and severe
financial tightening which caused some turbulence in the banking sector and financial markets. After calendar 2022, in which global gross
domestic product (GDP) increased by 3.1%, calendar 2023 is expected to show global GDP increasing by 2.6%, which shows a remarkable
resilience of the global economy, given the number of big negative shocks of the previous year.
In the post-pandemic world, consumption patterns of households continued to normalize. In particular, the shift to goods from services
triggered by COVID-19 ended and then reversed, with a strong rebound of the service sector including tourism, and a normalization of
goods demand. In addition, in light of much higher interest rates many firms started to reduce their inventory levels, which they had
previously elevated as a precautionary measure to ensure production and delivery during periods of supply chain bottlenecks. Accordingly,
both global goods demand and trade were significantly weaker in calendar 2023.
These trends were primary contributors for the significant slowdown of the Chinese economy during calendar 2023, after it started very
dynamically in the first quarter of calendar 2023 following lifting of severe COVID-19 lockdowns. Another main contributor for the
slowdown was the intensification of the country's real estate crisis. Hence, China's GDP is expected to grow by only 5% in calendar 2023,
which is regarded as low because under multiple lockdowns in calendar 2022, China delivered GDP growth of only 3% and some catching-
up in 2023 was expected.
The U.S. economy was a positive surprise. Although monetary policy was substantially tightened and the main policy interest rate was
increased to 5.5%, consumption and investment were strong and GDP is expected to expand by 2.5% in calendar 2023. In particular the
labor market was robust and unemployment remained at historic lows. Despite the strong economy, inflation and core inflation rates
declined substantially. By end of calendar 2023, consumer price inflation is expected to be approximately 3%, after it reached nearly 6.5%
at the end of calendar 2022. Receding global commodity and energy prices and the dissolvement of supply chain bottlenecks both helped
ease inflation while tighter monetary policy had the desired effect of anchoring inflation expectations. This helped the U.S. avoid a price-
wage-price spiral which could have led to structurally higher inflation rates.
While the U.S. showed stronger economic growth than expected, the European Union (E.U.) experienced the difficulties that were widely
expected. The drastic increase of energy prices in calendar 2022, a result of the war in Ukraine, had a severe negative impact, especially
on energy-intensive industries. Strong increases in inflation rates led the European Central bank to increase the main policy interest rate
to 4.5% which weighed on fixed investment, especially in the real estate sector. Moreover, the global manufacturing and trade slowdown
mentioned above weighed on the E.U., due in particular to the high concentration of manufacturing and export industries in Germany,
the region's largest economy. GDP growth in calendar 2023 is expected to be 0.4% in the E.U. and -0.4% in Germany. Only the service
sector, in particular tourism, supported the overall E.U. economy.
The partly estimated figures presented here for GDP are based on an S&P Global report dated October 15, 2023.
3.2 Digital Industries
Digital Industries offers a comprehensive product portfolio and system solutions for automation used in discrete and process industries;
these offerings include automation systems and software for factories, numerical control systems, servo motors, drives and inverters and
integrated automation systems for machine tools and production machines. Digital Industries also provides process control systems,
machine-to-machine communication products, sensors (for measuring pressure, temperature, level, flow rate, distance or shape) and
radio frequency identification systems. Furthermore, Digital Industries offers production and product lifecycle management (PLM)
software, and software for simulation and testing of mechatronic systems. These leading software offerings are supplemented by an
electronic design automation (EDA) software portfolio; the Mendix cloud-native low-code application development platform, which allows
customers to significantly reduce app development times through visual representation of underlying code; and digital marketplaces for
the global electronics value chain, such as Supplyframe and Pixeom. Digital Industries also provides customers with lifecycle and data-
driven services.
Less: Current interest-bearing debt securities
for fiscal 2023
Less: Other interest expenses/income, net¹
Table of contents
35
10.1 Composition of common stock
35
10. Takeover-relevant information (pursuant to Sections 289a and 315a of the German Commercial Code) and
explanatory report
35
9.3 Corporate Governance statement
10.2 Restrictions on voting rights or transfer of shares
34
34
9.1 Results of operations
9. Siemens AG
33
33
33
9.2 Net assets and financial position
35
35
37
Our reportable segments and Portfolio Companies may do business with each other, leading to corresponding orders and revenue. Such
orders and revenue are eliminated on Group level.
As of September 30, 2023, Siemens has the following reportable segments: Digital Industries, Smart Infrastructure, Mobility and
Siemens Healthineers, which together form our “Industrial Business" and Siemens Financial Services (SFS), which supports the activities
of our industrial businesses and also conducts its own business with external customers. Furthermore, we report results for Portfolio
Companies, which comprises businesses that are managed separately to improve their performance.
Siemens comprises Siemens Aktiengesellschaft (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 headquarters situated in Munich. As of
September 30, 2023, Siemens had around 320,000 employees.
Siemens is a technology group that is active in nearly all countries of the world, focusing on the areas of automation and digitalization in
the process and manufacturing industries, intelligent infrastructure for buildings and distributed energy systems, smart mobility solutions
for rail transport, and medical technology and digital healthcare services.
1. Organization of the Siemens Group and basis of presentation
Combined Management Report
11. EU Taxonomy disclosure
38
10.7 Other takeover-relevant information
37
10.6 Compensation agreements with members of the Managing Board or employees in the
event of a takeover bid
10.5 Significant agreements which take effect, alter or terminate upon a change of control of
the Company following a takeover bid
removal of members of the Managing Board and governing amendment to the Articles of Association
10.4 Powers of the Managing Board to issue and repurchase shares
10.3 Legislation and provisions of the Articles of Association applicable to the appointment and
37
8.5 Significant characteristics of the internal control and risk management system
Non-financial matters of the Group and Siemens AG
8.4 Opportunities
8. Report on expected developments and associated material opportunities and risks
8.1 Report on expected developments
15
14
14
11
666890123
45
15
4.1 Orders and revenue by region
3.8 Reconciliation to Consolidated Financial Statements
3.7 Portfolio Companies
3.6 Siemens Financial Services
3.5 Siemens Healthineers
SIEMENS
3.4 Mobility
4. Results of operations
4455
4.2 Income
4.3 Research and development
7. Overall assessment of the economic position
30
8.3 Risks
222228
29
25
23
20
6.2 Cash flows
18
6.1 Capital structure
17
6. Financial position
17
5. Net assets position
8.2 Risk management
Siemens has policies for environmental, employee and social matters, for the respect of human rights, and anti-corruption and bribery
matters, among others. Our business model is described in chapters 1 and 3 of this Combined Management Report. Reportable information
that is necessary for an understanding of the development, performance, position and the impact of our activities on these matters is
included in this Combined Management Report, in particular in chapters 3 through 7. Forward-looking information, including risk
disclosures, is presented in chapter 8. Chapter 9 includes additional information that is required to be reported in the Combined
Management Report related to the parent company Siemens AG. EU Taxonomy disclosures are outlined in chapter 11.
16
3
5.47
801
792
10.77
(II) Weighted average shares outstanding
4,384
8,529
(I) (II) EPS pre PPA
(I) Adjusted Net income attributable to shareholders of Siemens AG
(193)
882
773
Plus: Amortization of intangible assets acquired in business combinations - attributable to shareholders of Siemens AG
Less: Taxes on adjustment
3,723
7,949
(220)
Calculation of ROCE
3.3 Smart Infrastructure
3.2 Digital Industries
3
As supplementary information, amounts reported in the Consolidated Financial Statements and the Annual Financial Statements of
Siemens AG related to such non-financial matters, and additional explanations thereto, are included in Notes to Consolidated Financial
Statements for fiscal 2023, Notes 17, 18, 22, 26 and 27, and in the Notes to the Annual Financial Statements for fiscal 2023, Notes 16,
17, 20, 21 and 25. In order to inform the users of the financial reports in a focused manner, these disclosures are not subject to a specific
non-financial framework - in contrast to the disclosures in our separate "Sustainability report 2023" document, which are based on the
standards developed by the Global Reporting Initiative (GRI). Said document also includes detailed information on DEGREE, Siemens'
sustainability framework. With DEGREE, Siemens intends to manage and track its progress on selected ambitions in the environmental,
social and governance areas.
4
4
4
4
Combined Management Report
1. Organization of the Siemens Group and basis of presentation
2. Financial performance system
2.1 Revenue growth
2.3 Capital structure
2.4 Liquidity and dividend
2.5 Calculations of EPS pre PPA and ROCE
3. Segment information
3.1 Overall economic conditions
Net income attributable to shareholders of Siemens AG
2022
2.2 Profitability and capital efficiency
(in millions of €, shares in thousands, earnings per share in €)
10-13%
11-16%
17-23%
Margin range
Siemens Healthineers
Mobility
Smart Infrastructure
Digital Industries
2.2 Profitability and capital efficiency
Currency translation effects are the difference between revenue for the current period calculated using the exchange rates of the current
period and revenue for the current period calculated using the exchange rates of the comparison period. For calculating the percentage
change year-over-year, this absolute difference is divided by revenue for the comparison period. A portfolio effect arises in the case of an
acquisition or a disposition and is calculated as the change year-over-year in revenue related to the transaction. For calculating the
percentage change, this absolute change is divided by revenue for the comparison period. Any portfolio effect is excluded for the twelve
months following the relevant transaction after which both current and past reporting periods fully reflect the portfolio change. For orders,
we apply the same calculations for currency translation and portfolio effects as described above.
In the Siemens Financial Framework we aim to achieve a revenue growth range of 5% to 7% per year on a comparable basis over a cycle
of three to five years. Our primary measure for managing and controlling our revenue growth is comparable growth, because it shows the
development in our business net of currency translation effects, which arise from the external environment outside of our control, and
portfolio effects, which involve business activities which are either new to or no longer a part of the respective business.
2.1 Revenue growth
2023
2. Financial performance system
Combined Management Report
17-21%
Siemens Financial Services (ROE after tax)
Within the Siemens Financial Framework, we aim to achieve over a cycle of three to five years margins that are comparable to those of
our relevant competitors. Therefore, we have defined profit margin ranges for our industrial businesses which also consider the profit
margins of their respective relevant competitors. Profit margin is defined as profit of the respective business divided by its revenue.
For our industrial businesses, profit represents EBITA adjusted for amortization of intangible assets not acquired in business combinations.
We have set the following margin ranges:
forward. Payment of the proposed dividend is contingent upon approval by Siemens shareholders at the Annual Shareholders' Meeting on
February 8, 2024. The prior-year dividend was €4.25 per share.
15-20%
Calculation of EPS pre PPA
Combined Management Report
2.5 Calculations of EPS pre PPA and ROCE
At the Annual Shareholders' Meeting, the Managing Board, in agreement with the Supervisory Board, will submit the following proposal
to allocate the unappropriated net income of Siemens AG for fiscal 2023: to distribute a dividend of €4.70 on each share of no par value
entitled to the dividend for fiscal 2023 existing at the date of the Annual Shareholders' Meeting; the remaining amount is to be carried
Fiscal year
As in the past, we intend to fund the dividend payout from Free cash flow. Our primary measure to assess our ability to generate cash,
and ultimately to pay dividends, is the cash conversion rate for the Siemens Group, defined as the ratio of Free cash flow (continuing and
discontinued operations) to net income. Over a cycle of three to five years, we aim to achieve a cash conversion rate of 1 minus the annual
comparable revenue growth rate.
4
2.4 Liquidity and dividend
Sustainable revenue and profit development is supported by a healthy capital structure. Accordingly, a key consideration within the
Siemens Financial Framework is to maintain ready access to the capital markets through various debt products and preserve our ability to
repay and service our debt obligations over time. Our primary measure for managing and controlling our capital structure is the ratio of
Industrial net debt to EBITDA (continuing operations). This financial measure indicates the approximate amount of time in years that would
be needed to cover Industrial net debt through income from continuing operations, without taking into account interest, taxes,
depreciation and amortization. We aim to achieve a ratio of up to 1.5.
2.3 Capital structure
We seek to work profitably and as efficiently as possible with the capital provided by our shareholders and lenders. For purposes of
managing and controlling our capital efficiency, we use return on capital employed, or ROCE, as our primary measure in our Siemens
Financial Framework. Our goal is to achieve a ROCE within a range of 15% to 20% over a cycle of three to five years.
Primary measure for managing and controlling profit and profitability at Group level: Net income is the primary driver of basic earnings
per share from net income (EPS) as well as of EPS before purchase price allocation accounting (EPS pre PPA) which is used for our capital
market communication. EPS pre PPA is defined as basic earnings per share from net income adjusted for amortization of intangible assets
acquired in business combinations and related income taxes. As with EPS, EPS pre PPA includes the amounts attributable to shareholders
of Siemens AG. We aim to achieve high-single-digit annual growth in EPS pre PPA over a cycle of three to five years.
We intend to continue providing an attractive return to our shareholders. In the Siemens Financial Framework, we strive for a dividend per
share that exceeds the amount for the preceding year, or at least matches it.
For Siemens Healthineers, we present the margin range we expect as that company's majority shareholder.
In line with common practice in the financial services business, our financial indicator for measuring capital efficiency at SFS is return on
equity after tax, or ROE after tax. ROE is defined as SFS' profit after tax, divided by its average allocated equity.
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
1007
100
100
Siemens Finance Sp. z o.o., Warsaw / Poland
100
Siemens Healthcare S.R.L., Bucharest / Romania
492
INNOMOTICS S.R.L., Sibiu / Romania
Siemens W.L.L., Doha Qatar
Siemens Large Drives W.L.L., Doha / Qatar
SIEMENS HEALTHCARE, UNIPESSOAL, LDA, Amadora / Portugal
Siemens Logistics, Unipessoal Lda, Lisbon / Portugal
SIEMENS MOBILITY, UNIPESSOAL LDA, Amadora / Portugal
Siemens S.A., Amadora / Portugal
Varian Medical Systems Poland Sp. z o.o., Warsaw / Poland
Siemens Sp. z o.o., Warsaw / Poland
Siemens Mobility Sp. z o.o., Warsaw / Poland
Siemens Industry Software Sp. z o.o., Warsaw / Poland
Siemens Healthcare Sp. z o.o., Warsaw / Poland
100
Siemens Digital Logistics Sp. z o.o., Wroclaw / Poland
Siemens Pakistan Engineering Co. Ltd., Karachi / Pakistan
SIEMENS INDUSTRY SOFTWARE (PRIVATE) LIMITED, Lahore / Pakistan
Siemens Healthcare (Private) Limited, Lahore / Pakistan
Siemens Industrial LLC, Muscat / Oman
Siemens Mobility AS, Oslo / Norway
47
100
100
100
100
100
Innomotics Sp. z o.o., Katowice / Poland
492
Siemens Electronic Design Automation B.V., Eindhoven / Netherlands
100
Siemens Mobility B.V., Zoetermeer / Netherlands
Siemens International Holding B.V., The Hague / Netherlands
Siemens Financieringsmaatschappij N.V., The Hague / Netherlands
Siemens Healthineers Holding III B.V., The Hague / Netherlands
Siemens Healthineers Holding IV B.V., The Hague / Netherlands
Siemens Healthineers Holding V B.V., The Hague / Netherlands
Siemens Healthineers Nederland B.V., The Hague / Netherlands
Siemens Industry Software Netherlands B.V., Eindhoven / Netherlands
Siemens Finance B.V., The Hague / Netherlands
Pollux III B.V., The Hague / Netherlands
Mendix Technology B.V., Rotterdam / Netherlands
Chronos B.V., Enschede / Netherlands
Castor III B.V., The Hague / Netherlands
Siemens S.A., Casablanca / Morocco
Siemens Industry Software SARL, Sala Al Jadida / Morocco
Siemens Healthcare SARL, Casablanca / Morocco
Siemens Mobility Holding B.V., The Hague / Netherlands
Varian Medical Systems Mauritius Ltd., Ebene / Mauritius
FTD Europe Ltd, Sliema / Malta
TFM International S.A. i.L., Luxembourg Luxembourg
FAST TRACK DIAGNOSTICS LUXEMBOURG S.à r.l., Esch-sur-Alzette / Luxembourg
Atruvi Invest Management S.à.r.l, Munsbach / Luxembourg
Siemens Industrial Business Co. For Electrical, Electronic and Mechanical Contracting WLL, Kuwait City / Kuwait
Siemens Large Drives Company for Repairing & Maintenance of Light & Heavy Equipment, W.L.L, Ahmadi / Kuwait
Crabtree (Pty) Ltd, Maseru / Lesotho
VMS Kenya, Ltd, Nairobi / Kenya
Siemens TOO, Almaty / Kazakhstan
Siemens Healthcare Limited Liability Partnership, Almaty / Kazakhstan
Innomotics Limited Liability Partnership, Almaty / Kazakhstan
Varian Medical Systems Italia S.p.A., Segrate / Italy
Siemens Industry Software S.R.L., Brasov / Romania
CTSI (Mauritius) Ltd., Ebene / Mauritius
Siemens Nederland N.V., The Hague / Netherlands
Sqills Products B.V., Enschede / Netherlands
TASS International B.V., Helmond / Netherlands
100
100
100
100
100
100
100
100
100
1007
100
1007
100
100
100
1007
100
100
100
100
Consolidated Financial Statements
Siemens Healthcare AS, Oslo / Norway
Siemens AS, Oslo / Norway
Innomotics AS, Oslo / Norway
Varian Medical Systems Nederland B.V., Houten / Netherlands
100
Siemens Mobility S.R.L., Bucharest / Romania
75
SIMEA SIBIU S.R.L., Sibiu / Romania
100
60
60
100
100
1007
100
100
100
100
100
100
Siemens S.p.A., Milan / Italy
51
51
51
51
51
100
100
100
100
100
100
100
100
100
100
Innomotics, S.L., Madrid / Spain
Fábrica Electrotécnica Josa, S.A.U., Tres Cantos / Spain
S'Mobility Employee Stock Ownership Trust, Johannesburg / South Africa
Siemens Proprietary Limited, Midrand / South Africa
_3
100
90
_3
_3
100
100
100
100
Siemens Large Drives Employee Ownership Trust, Johannesburg / South Africa
SIEMENS INDUSTRY SOFTWARE SA (PTY) LTD, Pretoria / South Africa
Siemens Healthcare Employee Share Ownership Trust, Midrand / South Africa
Siemens Healthcare Proprietary Limited, Halfway House / South Africa
Siemens Employee Share Ownership Trust, Johannesburg / South Africa
KACO NEW ENERGY AFRICA (PTY) LTD, Midrand / South Africa
Innomotics (Pty) Ltd., Midrand / South Africa
Crabtree South Africa Pty. Limited, Midrand / South Africa
Consolidated Financial Statements
48
100
100
Siemens Mobility (Pty) Ltd, Randburg / South Africa
100
100
100
Siemens Healthcare s.r.o., Bratislava / Slovakia
SAT Systémy automatizacnej techniky spol. s.r.o., Bratislava / Slovakia
Rolling Stock Services Bratislava s.r.o., Bratislava / Slovakia
OEZ Slovakia, spol. s r.o., Bratislava / Slovakia
Innomotics, s.r.o., Bratislava / Slovakia
Supplyframe doo Beograd-Stari grad, Belgrade / Serbia
Acuson Slovakia s. r. o., Bratislava / Slovakia
Siemens Mobility d.o.o. Cerovac, Kragujevac / Serbia
Siemens Healthcare d.o.o. Beograd, Belgrade / Serbia
Siemens d.o.o. Beograd, Belgrade / Serbia
Innomotics d.o.o. Beograd, Belgrade / Serbia
Varian Medical Systems Arabia Commercial Limited, Riyadh / Saudi Arabia
Siemens Mobility, s.r.o., Bratislava / Slovakia
Siemens Regional Headquarters Ltd., Jeddah / Saudi Arabia
Siemens Ltd., Riyadh / Saudi Arabia
Siemens Large Drives Ltd., Khobar / Saudi Arabia
Siemens Healthcare Limited, Riyadh / Saudi Arabia
Arabia Electric Ltd. (Equipment), Jeddah / Saudi Arabia
Varian Medical Systems (RUS) Limited Liability Company, Moscow / Russian Federation
Upsilon 1 LLC, St. Petersburg / Russian Federation
Smart Industry Software, 000, Moscow / Russian Federation
Siemens Mobility LLC, Moscow / Russian Federation
Siemens Healthcare Limited Liability Company, Moscow / Russian Federation
000 Siemens, Moscow / Russian Federation
Varinak Europe SRL (Romania), Pantelimon / Romania
Siemens Mobility Saudi Ltd, Khobar / Saudi Arabia
Siemens s.r.o., Bratislava / Slovakia
SIPRIN s.r.o., Bratislava Slovakia
Siemens Healthcare d.o.o., Ljubljana / Slovenia
100
100
100
55
55
100
100
100
100
100
100
100
100
100
100
100
1007
75
100
100
51
100
Consolidated Financial Statements
Siemens Trgovsko in storitveno podjetje, d.o.o., Ljubljana / Slovenia
Siemens Mobility d.o.o., Ljubljana / Slovenia
Siemens S.R.L., Bucharest Romania
Siemens Mobility S.r.I., Milan / Italy
100
Siemens Industry Software S.r.l., Milan / Italy
Siemens Mobility EOOD, Sofia / Bulgaria
Siemens Healthcare EOOD, Sofia / Bulgaria
Siemens EOOD, Sofia / Bulgaria
Siemens Medicina d.o.o., Sarajevo / Bosnia and Herzegovina
Siemens d.o.o. Sarajevo - U Likvidaciji, Sarajevo / Bosnia and Herzegovina
Varian Medical Systems Belgium NV, Groot-Bijgaarden / Belgium
Siemens S.A./N.V., Beersel / Belgium
Siemens Mobility S.A. / N.V, Beersel / Belgium
Siemens Industry Software NV, Leuven / Belgium
Siemens Healthcare NV, Groot-Bijgaarden / Belgium
Innomotics N.V., Beersel / Belgium
Varinak Bulgaria EOOD, Sofia / Bulgaria
Siemens W.L.L., Manama Bahrain
Varian Medical Systems Gesellschaft mbH, Brunn am Gebirge / Austria
Steiermärkische Medizinarchiv GesmbH, Graz / Austria
Siemens Personaldienstleistungen GmbH, Vienna / Austria
Siemens Mobility Austria GmbH, Vienna / Austria
100
Siemens Metals Technologies Vermögensverwaltungs GmbH, Vienna / Austria
100
100
100
100
69
VVK Versicherungs-Vermittlungs- und Verkehrs-Kontor GmbH, Vienna / Austria
Siemens d.d., Zagreb / Croatia
Siemens Healthcare d.o.o., Zagreb / Croatia
100
Siemens Large Drives, s.r.o., Drasov / Czech Republic
Siemens Industry Software, s.r.o., Prague / Czech Republic
Siemens Healthcare, s.r.o., Prague / Czech Republic
OEZ s.r.o., Letohrad / Czech Republic
45
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
100
100
52
100
100
100
Siemens Mobility, s.r.o., Prague / Czech Republic
100
100
ITH icoserve technology for healthcare GmbH, Innsbruck / Austria
Innomotics GmbH, Vienna / Austria
ETM professional control GmbH, Eisenstadt / Austria
Acuson Österreich GmbH, Vienna / Austria
Siemens Industry Software Closed Joint-Stock Company, Yerevan / Armenia
Siemens Spa, Algiers / Algeria
Siemens Healthineers Oncology Services Algeria E.U.R.L., Hydra / Algeria
Siemens Healthineers Algeria E.U.R.L., Hydra / Algeria
Europe, Commonwealth of Independent States (C.I.S.), Africa, Middle East (without Germany) (297 companies)
ESTEL Rail Automation SPA, Algiers / Algeria
Zeleni Real Estate GmbH & Co. KG, Kemnath
Zeleni Holding GmbH, Kemnath
Siemens Advanta Solutions GmbH, Vienna / Austria
Weiss Spindeltechnologie GmbH, Maroldsweisach
VMS Deutschland Holdings GmbH, Darmstadt
Varian Medical Systems Particle Therapy GmbH & Co. KG, Troisdorf
Varian Medical Systems München GmbH, Munich
Varian Medical Systems Haan GmbH, Haan
Varian Medical Systems Deutschland GmbH & Co. KG, Darmstadt
SYKATEC Systeme, Komponenten, Anwendungstechnologie GmbH, Erlangen
SIMAR Ost Grundstücks-GmbH, Grünwald
SILLIT Grundstücks-Verwaltungsgesellschaft mbH, Munich
Siemensstadt VG Verwaltungs GmbH, Grünwald
Siemensstadt SWHH Verwaltungs GmbH, Grünwald
Siemensstadt VG GmbH & Co. KG, Grünwald
Siemensstadt Management GmbH, Grünwald
Siemensstadt SPE GmbH & Co. KG, Grünwald
Siemensstadt SPE Verwaltungs GmbH, Grünwald
Siemensstadt SWHH GmbH & Co. KG, Grünwald
VVK Versicherungsvermittlungs- und Verkehrskontor GmbH, Munich
Siemens Aktiengesellschaft Österreich, Vienna / Austria
Siemens Healthcare Diagnostics GmbH, Vienna / Austria
Siemens Industry Software GmbH, Linz / Austria
100
100
100
51
100
100
100
10010
100
10013
100
100
10013
10010
10010
100
1007
1009
1007
1009
1007
1009
1007
Consolidated Financial Statements
Siemens Konzernbeteiligungen GmbH, Vienna / Austria
1007
Siemens Logistics S.r.I., Milan / Italy
Siemens, s.r.o., Prague / Czech Republic
Siemens A/S, Ballerup / Denmark
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
1007
100
100
100
100
100
100
100
Siemens Healthcare S.r.I., Milan / Italy
Innomotics S.r.I., Milan Italy
Acuson Italy S.r.l., Milan/Italy
UGS Israeli Holdings (Israel) Ltd., Airport City / Israel
Siemens Mobility Operations Ltd., Rosh Ha'ayin / Israel
Siemens Mobility Ltd., Rosh Ha'ayin / Israel
Siemens Ltd., Rosh Ha'ayin / Israel
Siemens Industry Software Ltd., Airport City / Israel
Siemens Industry Operations Ltd., Rosh Ha'ayin / Israel
Siemens HealthCare Ltd., Rosh Ha'ayin / Israel
Siemens Electronic Design Automation Ltd, Herzilya Pituah / Israel
Siemens Concentrated Solar Power Ltd., Rosh Ha'ayin / Israel
Mckit Systems Ltd., Giv'at Shmuel / Israel
46
100
100
100
100
1007
100
Mentor Graphics Development Services Limited, Shannon, County Clare / Ireland
Siemens Electronic Design Automation Limited, Shannon, County Clare / Ireland
Siemens Healthcare Diagnostics Manufacturing Limited, Swords, County Dublin / Ireland
Siemens Healthcare Medical Solutions Limited, Swords, County Dublin / Ireland
Siemens Industry Software Limited, Shannon, County Clare / Ireland
Siemens Limited, Dublin Ireland
Mentor Graphics (Holdings) Unlimited Company, Shannon, County Clare / Ireland
10013
100
100
100
Innomotics A/S, Ballerup / Denmark
100
100
Siemens SAS, Courbevoie / France
Siemens Mobility SAS, Châtillon / France
Siemens Logistics SAS, Saint-Denis / France
Siemens Financial Services SAS, Courbevoie / France
Siemens France Holding SAS, Courbevoie / France
Siemens Healthcare SAS, Courbevoie / France
Siemens Industry Software SAS, Châtillon / France
Siemens Lease Services SAS, Courbevoie / France
Siemens Electronic Design Automation SARL, Meudon La Forêt / France
PETNET Solutions SAS, Lisses / France
Padam Mobility SAS, Paris / France
Innomotics SAS, Saint-Priest / France
BLOCK IMAGING SAS, Paris / France
Acuson France SAS, Courbevoie / France
VIBECO - Virtual Buildings Ecosystem Oy, Espoo / Finland
Sqills IT Services SAS, Paris / France
Varian Medical Systems Finland OY, Helsinki / Finland
Siemens Mobility Oy, Espoo / Finland
Siemens Industry Software Oy, Espoo / Finland
Siemens Healthcare Oy, Espoo / Finland
Siemens Mobility Egypt LLC, Cairo / Egypt
Siemens Industry Software (A Limited Liability Company - Private Free Zone), New Cairo / Egypt
Siemens Industrial LLC, New Cairo / Egypt
Siemens Healthcare S.A.E., Cairo / Egypt
Siemens Healthcare Logistics LLC, Cairo / Egypt
Siemens Mobility A/S, Ballerup / Denmark
Siemens Industry Software A/S, Ballerup / Denmark
Siemens Healthcare A/S, Ballerup / Denmark
Siemens Osakeyhtiö, Espoo / Finland
Supplyframe Europe SAS, Grenoble / France
Varian Medical Systems France SARL, Le Plessis-Robinson / France
Wattsense SAS, Dardilly / France
100
100
100
100
100
100
100
100
1007
100
100
100
Innovation Strategies, S.L., Palma / Spain
100
100
Consolidated Financial Statements
Varian Medical Systems Hungary Kft., Budapest / Hungary
Siemens Zrt., Budapest Hungary
Siemens Mobility Kft., Budapest / Hungary
Siemens Industry Software Kft., Budapest / Hungary
Siemens Healthcare Kft., Budapest / Hungary
evosoft Hungary Szamitastechnikai Kft., Budapest / Hungary
SIEMENS MOBILITY RAIL AND ROAD TRANSPORTATION SOLUTIONS SINGLE-MEMBER SOCIETE ANONYME, Athens / Greece
SIEMENS HEALTHCARE INDUSTRIAL AND COMMERCIAL SINGLE MEMBER SOCIETE ANONYME, Marousi / Greece
Siemens A.E., Electrotechnical Projects and Products, Athens / Greece
100
Siemens Campus Madrid, S.L., Madrid / Spain
Siemens Financial Services S.A.U, Madrid / Spain
SIEMENS HEALTHCARE, S.L.U., Madrid / Spain
Siemens Industry Software S.L., Tres Cantos / Spain
Siemens Logistics S.L. Unipersonal, Madrid / Spain
SIEMENS MOBILITY, S.L.U., Tres Cantos / Spain
Siemens Industry Software AB, Solna / Sweden
Siemens S.A., Madrid / Spain
Hangzhou Alicon Pharm Sci & Tec Co., Ltd., Hangzhou / China
Innomotics Large Drives (Shanghai) Co., Ltd., Shanghai Pilot Free Trade Zone / China
Innomotics Mechanical Drives (Tianjin) Co., Ltd., Tianjin / China
Scion Medical Technologies (Shanghai) Ltd., Shanghai / China
Consolidated Financial Statements
100
Green Matrix (Suzhou) Network Technology Co., Ltd., Suzhou / China
100
100
100
1007
100
100
100
100
100
Beijing Siemens Cerberus Electronics Ltd., Beijing / China
Siemens Industrial Limited, Dhaka / Bangladesh
Asia, Australia (157 companies)
Australia Hospital Holding Pty Limited, Bayswater / Australia
Brightly Software Australia Pty Ltd, Sydney / Australia
Brightly Software Holdings Pty. Ltd., Sydney / Australia
Exemplar Health (NBH) 2 Pty Limited, Bayswater / Australia
Exemplar Health (NBH) Holdings 2 Pty Limited, Bayswater / Australia
Exemplar Health (NBH) Trust 2, Bayswater / Australia
Acuson (Shanghai) Co., Ltd., Shanghai / China
Innomotics Pty Ltd, Bayswater / Australia
Siemens Healthcare Pty. Ltd., Hawthorn East / Australia
Siemens Industry Software Pty Ltd, Bayswater / Australia
Siemens Ltd., Bayswater / Australia
Siemens Mobility Pty Ltd, Melbourne / Australia
SIEMENS RAIL AUTOMATION PTY. LTD., Bayswater / Australia
Varian Medical Systems Australasia Pty Ltd., Belrose / Australia
Siemens Healthcare Ltd., Dhaka / Bangladesh
Project Ventures Rail Investments (SMWSA) Pty Ltd, Bayswater / Australia
Siemens Rail Automation, C.A., Caracas / Venezuela
100
100
70
75
100
100
100
100
Siemens Electrical Drives Ltd., Tianjin / China
85
100
100
Siemens Finance and Leasing Ltd., Beijing / China
Siemens Financial Services Ltd., Beijing / China
100
100
Siemens Electronic Design Automation (Shanghai) Co., Ltd., Shanghai Pilot Free Trade Zone / China
Siemens Factory Automation Engineering Ltd., Beijing / China
100
Siemens Electrical Drives (Shanghai) Ltd., Shanghai / China
Siemens Digital Technology (Shenzhen) Co., Ltd., Shenzhen / China
100
100
100
100
100
1007
Siemens Electrical Apparatus Ltd., Suzhou, Suzhou / China
100
100
100
1007
100
Siemens Building Technologies (Tianjin) Ltd., Tianjin / China
Siemens Circuit Protection Systems Ltd., Shanghai, Shanghai / China
Siemens Commercial Factoring Ltd., Shanghai / China
100
Siemens S.A., Montevideo / Uruguay
52
100
Page Mill Corporation, Boston, MA / United States
PETNET Indiana, LLC, Indianapolis, IN / United States
PETNET Solutions Cleveland, LLC, Wilmington, DE / United States
PETNET Solutions, Inc., Knoxville, TN / United States
PolyDyne Software Inc., Dallas, TX / United States
Radiation Management Associates, LLC, Greenbelt, MD / United States
Rail-Term LLC, Plymouth, MI / United States
Siemens Advanta Solutions Corp., Wilmington, DE / United States
Siemens Capital Company LLC, Wilmington, DE / United States
Siemens Corporation, Wilmington, DE / United States
Siemens Financial Services, Inc., Wilmington, DE / United States
Siemens Financial, Inc., Wilmington, DE / United States
Siemens Government Technologies, Inc., Wilmington, DE / United States
Siemens Healthcare Diagnostics Inc., Los Angeles, CA / United States
Siemens Healthcare Laboratory, LLC, Wilmington, DE / United States
Siemens Healthineers Holdings, LLC, Wilmington, DE / United States
Siemens Industry Software Inc., Wilmington, DE / United States
Siemens Industry, Inc., Wilmington, DE / United States
100
Siemens Logistics LLC, Wilmington, DE / United States
Siemens Mobility, Inc, Wilmington, DE / United States
Siemens Public, Inc., Iselin, NJ / United States
Siemens USA Holdings, Inc., Wilmington, DE / United States
SMI Holding LLC, Wilmington, DE / United States
Supplyframe, Inc., Glendale, CA / United States
Varian BioSynergy, Inc., Wilmington, DE / United States
Siemens Medical Solutions USA, Inc., Wilmington, DE / United States
Varian Medical Systems Africa Holdings, Inc., Wilmington, DE / United States
Varian Medical Systems India Private Limited, Wilmington, DE / United States
Varian Medical Systems International Holdings, Inc., Wilmington, DE / United States
Varian Medical Systems Latin America, Ltd., Wilmington, DE / United States
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Varian Medical Systems Pacific, Inc., Wilmington, DE / United States
Varian Medical Systems, Inc., Wilmington, DE / United States
Vendigital, Inc., Wilmington, DE / United States
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
100
501
63
100
100
100
100
100
100
100
100
100
100
100
Siemens Healthcare Diagnostics Manufacturing Ltd., Shanghai, Shanghai / China
100
100
Siemens Healthineers Digital Technology (Shanghai) Co., Ltd., Shanghai / China
100
100
99
100
100
100
100
100
100
100
100
100
1007
Siemens Financial Services Private Limited, Mumbai / India
100
Siemens Healthcare Private Limited, Mumbai / India
100
100
90
100
100
_3
100
100
100
100
100
100
100
100
100
100
100
55
Siemens Healthineers India LLP, Bangalore / India
SIEMENS HEALTHINEERS INDIA MANUFACTURING PRIVATE LIMITED, Mumbai / India
100
100
100
100
100
100
100
96
100
100
Nihon Block Imaging KK, Tokyo / Japan
Siemens Electronic Design Automation Japan K.K., Tokyo / Japan
100
54
1007
Siemens Industry Software (India) Private Limited, New Delhi / India
100
100
100
SIEMENS LARGE DRIVES INDIA PRIVATE LIMITED, Mumbai / India
Siemens Limited, Mumbai / India
Siemens Logistics India Private Limited, Navi Mumbai / India
Siemens Rail Automation Pvt. Ltd., Navi Mumbai / India
Siemens Technology and Services Private Limited, Navi Mumbai / India
51
Varian Medical Systems International (India) Private Limited, Pune / India
PT Innomotics Motors and Solutions, Jakarta / Indonesia
PT Siemens Healthineers Indonesia, Jakarta / Indonesia
PT Siemens Mobility Indonesia, Jakarta / Indonesia
Acrorad Co., Ltd., Okinawa / Japan
Acuson Japan K.K., Tokyo / Japan
Innomotics G.K., Tokyo / Japan
P.T. Siemens Indonesia, Jakarta / Indonesia
100
70
100
Siemens Ltd., China, Beijing / China
100
Siemens Manufacturing and Engineering Centre Ltd., Shanghai / China
Siemens Mechatronics Technology JiangSu Ltd., Yizheng / China
51
100
Siemens Medium Voltage Switching Technologies (Wuxi) Ltd., Wuxi / China
Siemens Mobility Electrification Equipment (Shanghai) Co., Ltd., Shanghai / China
Siemens Mobility Equipment (China) Co., Ltd, Shanghai Pilot Free Trade Zone / China
Siemens Mobility Rail Equipment (Tianjin) Ltd., Tianjin / China
100
85
100
100
53
Consolidated Financial Statements
Siemens Mobility Technologies (Beijing) Co., Ltd, Beijing / China
Siemens Numerical Control Ltd., Nanjing, Nanjing / China
Siemens Power Automation Ltd., Nanjing / China
Siemens Sensors & Communication Ltd., Dalian / China
51
Siemens Shanghai Medical Equipment Ltd., Shanghai / China
Siemens Logistics Automation Systems (Beijing) Co., Ltd, Beijing / China
Siemens Large Drives Equipment (Tianjin) Ltd., Tianjin / China
100
100
Siemens Healthineers Ltd., Shanghai / China
100
Siemens Industrial Automation Products Ltd., Chengdu, Chengdu / China
100
85
Siemens Industry Software (Beijing) Co., Ltd., Beijing / China
Siemens Industry Software (Shanghai) Co., Ltd., Shanghai / China
100
Siemens Intelligent Signalling Technologies Co. Ltd., Foshan, Foshan / China
60
Siemens International Trading Ltd., Shanghai, Shanghai / China
100
100
Siemens Shenzhen Magnetic Resonance Ltd., Shenzhen / China
Siemens Signalling Co., Ltd., Xi'an / China
Siemens Standard Motors Ltd., Yizheng / China
Bytemark India LLP, Bangalore / India
Bytemark Technology Solutions India Pvt Ltd, Bangalore / India
C&S Electric Limited, New Delhi / India
Cancer Treatment Services Hyderabad Private Limited, Hyderabad / India
Enlighted Energy Systems Pvt Ltd, Chennai / India
PETNET Radiopharmaceutical Solutions Pvt. Ltd., Mumbai / India
Brightly Software India Private Limited, Bangalore / India
SIEMENS EDA (INDIA) PRIVATE LIMITED, New Delhi / India
Siemens Factoring Private Limited, Navi Mumbai / India
100
80
100
100
100
SIEMENS EDA (SALES & SERVICES) PRIVATE LIMITED, New Delhi / India
Artmed Healthcare Private Limited, Hyderabad / India
American Institute of Pathology and Laboratory Sciences Private Limited, Hyderabad / India
AIS Design Automation Private Limited, Bangalore / India
Siemens Switchgear Ltd., Shanghai, Shanghai / China
Siemens Technology Development Co., Ltd. of Beijing, Beijing / China
Siemens Wiring Accessories Shandong Ltd., Zibo / China
Siemens X-Ray Vacuum Technology Ltd., Wuxi, Wuxi / China
Suzhou Ling Dong Zhen GE Network Technology Co., Ltd., Suzhou / China
Varian Medical Systems China Co., Ltd., Beijing / China
Varian Medical Systems Trading (Beijing) Co., Ltd., Beijing / China
Scion Medical Limited, Hong Kong / Hong Kong
Siemens Healthcare Limited, Hong Kong / Hong Kong
Siemens Industry Software Limited, Hong Kong / Hong Kong
Siemens Limited, Hong Kong / Hong Kong
Siemens Logistics Limited, Hong Kong / Hong Kong
Siemens Mobility Limited, Hong Kong / Hong Kong
Supply Frame (Hong Kong) Limited, Hong Kong / Hong Kong
Vertice Investment Limited, Hong Kong / Hong Kong
Siemens Healthineers Diagnostics (Shanghai) Co., Ltd., Shanghai / China
Siemens Rail Automation S.A.U., Tres Cantos / Spain
100
100
492
1007
100
100
100
100
100
100
100
100
100
100
573
100
100
Siemens Electronic Design Automation Ltd, Farnborough, Hampshire / United Kingdom
Siemens Financial Services Ltd., Stoke Poges, Buckinghamshire / United Kingdom
Siemens Healthcare Diagnostics Ltd, Camberley, Surrey / United Kingdom
492
492
100
1007
492
100
492
100
492
49
Acuson United Kingdom Ltd., Camberley, Surrey / United Kingdom
Assetic UK Limited, Farnborough, Hampshire / United Kingdom
Brightly Software Limited, Farnborough, Hampshire / United Kingdom
ByteToken, Ltd, Edinburgh / United Kingdom
Data Sheet Archive Limited, Farnborough, Hampshire / United Kingdom
Electrium Sales Limited, Farnborough, Hampshire / United Kingdom
Flomerics Group Limited, Farnborough, Hampshire / United Kingdom
Henley Bidco Limited, Swindon, Wiltshire / United Kingdom
Henley Topco Limited, Swindon, Wiltshire / United Kingdom
Innomotics Motors and Large Drives Limited, Farnborough, Hampshire / United Kingdom
Project Ventures Rail Investments | Limited, Farnborough, Hampshire / United Kingdom
SBS Pension Funding (Scotland) Limited Partnership, Edinburgh / United Kingdom
Senseye Limited, Farnborough, Hampshire / United Kingdom
100
Siemens Healthcare FZ LLC, Dubai / United Arab Emirates
Siemens Healthcare L.L.C., Dubai / United Arab Emirates
Siemens Industrial LLC, Masdar City / United Arab Emirates
Siemens Large Drives LLC, Abu Dhabi / United Arab Emirates
Siemens Middle East Limited, Masdar City / United Arab Emirates
SIEMENS MOBILITY LLC, Dubai / United Arab Emirates
100
100
100
Siemens plc, Farnborough, Hampshire / United Kingdom
Siemens Process Systems Engineering Limited, Farnborough, Hampshire / United Kingdom
Siemens Rail Automation Limited, London / United Kingdom
Varian Medical Systems UK Holdings Limited, Crawley, West Sussex / United Kingdom
Varian Medical Systems UK Limited, Crawley, West Sussex / United Kingdom
Vendigital Holdings Ltd, Swindon, Wiltshire / United Kingdom
100
Vendigital Limited, London / United Kingdom
Siemens Healthcare S.A., Buenos Aires / Argentina
Siemens IT Services S.A., Buenos Aires / Argentina
Siemens Mobility S.A., Olivos / Argentina
Siemens S.A., Buenos Aires Argentina
Acuson Brasil Ltda., Joinville / Brazil
Siemens Healthcare Diagnósticos Ltda., São Paulo / Brazil
Siemens Industry Software Ltda., São Caetano do Sul / Brazil
Siemens Infraestrutura e Indústria Ltda., São Paulo / Brazil
Americas (130 companies)
100
Siemens Pension Funding Limited, Farnborough, Hampshire / United Kingdom
Siemens Pension Funding (General) Limited, Farnborough, Hampshire / United Kingdom
Siemens Healthcare Diagnostics Manufacturing Ltd, Camberley, Surrey / United Kingdom
100
Siemens Healthcare Diagnostics Products Ltd, Camberley, Surrey / United Kingdom
100
Siemens Healthcare Limited, Camberley, Surrey / United Kingdom
100
100
Siemens Holdings plc, Farnborough, Hampshire / United Kingdom
Siemens Industry Software Computational Dynamics Limited, Farnborough, Hampshire / United Kingdom
100
Siemens Industry Software Limited, Farnborough, Hampshire / United Kingdom
100
Siemens Mobility Limited, London / United Kingdom
100
100
100
100
100
_3
100
100
100
100
100
85
100
100
100
100
100
100
100
100
100
75
Mentor Graphics Tunisia SARL, Tunis / Tunisia
Telecomunicación, Electrónica y Conmutación S.A., Madrid / Spain
Varian Medical Systems Iberica SL, Madrid / Spain
Innomotics AB, Solna / Sweden
Siemens AB, Solna / Sweden
Siemens Electronic Design Automation AB, Solna / Sweden
Siemens Financial Services AB, Solna / Sweden
Siemens Mobility S.A.R.L., Tunis / Tunisia
Siemens Healthcare AB, Solna / Sweden
Siemens Healthineers International AG, Steinhausen / Switzerland
Siemens Industry Software GmbH, Zurich / Switzerland
Siemens Mobility AG, Wallisellen / Switzerland
Siemens Schweiz AG, Zurich / Switzerland
Varian Medical Systems Imaging Laboratory G.m.b.H., Dättwil / Switzerland
Siemens Tanzania Ltd. i.L., Dar es Salaam / Tanzania
Siemens Mobility AB, Solna / Sweden
100
100
100
Siemens Mobility Ulasim Sistemleri Anonim Sirketi, Istanbul / Türkiye
Siemens Sanayi ve Ticaret Anonim Sirketi, Istanbul / Türkiye
Sqills Turkey Bilgi Teknolojileri Ticaret Limited Sirketi, Istanbul / Türkiye
V.O.S.S. Varinak Onkoloji Sistemleri Satis Ve Servis Anonim Sirketi, Istanbul / Türkiye
100% foreign owned subsidiary "Siemens Ukraine", Kiev / Ukraine
SIEMENS HEALTHCARE LIMITED LIABILITY COMPANY, Kiev / Ukraine
Acuson Middle East FZ LLC, Dubai United Arab Emirates
Siemens Industry Software Yazilim Hizmetleri Anonim Sirketi, Istanbul / Türkiye
PSE Software and Consulting L.L.C., Abu Dhabi / United Arab Emirates
Samateq FZ LLC, UAE, Abu Dhabi / United Arab Emirates
Siemens Capital Middle East Ltd, Abu Dhabi / United Arab Emirates
10012
100
100
100
100
SD (Middle East) LLC, Dubai / United Arab Emirates
100
Siemens Healthcare Saglik Anonim Sirketi, Istanbul / Türkiye
Siemens Finansal Kiralama A.S., Istanbul / Türkiye
100
100
100
100
100
100
100
100
100
100
100
100
Siemens S.A., Tunis / Tunisia
Innomotics Motorlar Ve Yüksek Güclü Sürücüler Anonim Sirketi, Istanbul / Türkiye
Siemens AG - Siemens Sanayi ve Ticaret AS Velaro Joint Venture, Kartal - Istanbul / Türkiye
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
1007
1007
100
Siemens Healthcare S.A.C., Surquillo / Peru
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
1007
100
100
Siemens Mobility S.A.C., Lima / Peru
Varian Medical Systems Puerto Rico, LLC, Guaynabo / Puerto Rico
100
75
100
Gas Chromatography Systems MAXUM LLC, Wilmington, DE / United States
Healthcare Technology Management, LLC, Wilmington, DE / United States
100
100
1007
51
Consolidated Financial Statements
Innomotics LLC, Wilmington, DE / United States
J2 Innovations, Inc., Los Angeles, CA / United States
Keystone Physics Limited, Millersville, PA / United States
Mannesmann Corporation, New York, NY / United States
Mansfield Insurance Company, Jeffersonville, VT / United States
Medical Physics Holdings, LLC, Dover, DE / United States
Next47 Fund 2018, L.P., Palo Alto, CA / United States
Next47 Fund 2019, L.P., Palo Alto, CA / United States
Next47 Fund 2020, L.P., Palo Alto, CA / United States
Next47 Fund 2021, L.P., Palo Alto, CA / United States
Next47 Fund 2022, L.P., Palo Alto, CA / United States
Next47 Fund 2023, L.P., Palo Alto, CA / United States
Next47 Fund 2024, L.P., Palo Alto, CA / United States
Next47 Inc., Wilmington, DE / United States
Next47 Mid-Tier GP 2018, L.P., Wilmington, DE / United States
Next47 Mid-Tier GP 2019, L.P., Wilmington, DE / United States
Next47 Mid-Tier GP 2020, L.P., Wilmington, DE / United States
Next47 Mid-Tier GP 2021, L.P., Wilmington, DE / United States
Next47 Mid-Tier GP 2022, L.P., Wilmington, DE / United States
Next47 Mid-Tier GP 2023, L.P., Wilmington, DE / United States
Next47 Mid-Tier GP 2024, L.P., Wilmington, DE / United States
Next47 TTGP, L.L.C., Wilmington, DE / United States
P.E.T.NET Houston, LLC, Austin, TX / United States
78
Siemens S.A.C., Surquillo / Peru
100
100
Acuson Holding LLC, Wilmington, DE / United States
Acuson, LLC, Wilmington, DE / United States
Associates in Medical Physics, LLC, Greenbelt, MD / United States
Block Imaging International, LLC, Wilmington, DE / United States
Block Imaging Parts & Service, LLC, Holt, MI / United States
Block Imaging Technical Excellence, LLC, Holt, MI / United States
Brightly Software, Inc., Wilmington, DE / United States
Building Robotics Inc., Wilmington, DE / United States
Corindus, Inc., Wilmington, DE / United States
D3 Oncology Inc., Wilmington, DE / United States
100
ECG Acquisition, Inc., Wilmington, DE / United States
eMeter Corporation, Wilmington, DE / United States
Executive Consulting Group, LLC, Wilmington, DE / United States
100
100
100
100
ECG TopCo Holdings, LLC, Wilmington, DE / United States
100
100
100
100
100
100
100
100
100
100
100
100
50
Innomotics Inc., Oakville / Canada
Siemens Canada Limited, Oakville / Canada
Siemens Electronic Design Automation ULC, Vancouver / Canada
Siemens Financial Ltd., Oakville / Canada
100
Siemens Healthcare Limited, Oakville / Canada
100
100
100
100
100
Siemens Large Drives Máquinas e Soluções Ltda, Jundiaí / Brazil
Siemens Mobility Soluções de Mobilidade Ltda., São Paulo / Brazil
Siemens Participações Ltda., São Paulo/ Brazil
1007
Varian Medical Systems Brasil Ltda., Jundiaí / Brazil
Brightly Software Canada, Inc., Oakville / Canada
Bytemark Canada Inc., Oakville / Canada
EPOCAL INC., Toronto / Canada
100
100
100
Dade Behring Hong Kong Holdings Corporation, Tortola / British Virgin Islands
Siemens Industry Software ULC, Vancouver / Canada
SIEMENS MOBILITY LIMITED, Oakville / Canada
Varian Medical Systems Canada, Inc., Ottawa / Canada
Siemens Inmobiliaria S.A. de C.V., Mexico City / Mexico
Siemens Logistics S. de R.L. de C.V., Mexico City / Mexico
Siemens Mobility S. de R.L. de C.V., Mexico City / Mexico
SIEMENS SERVICIOS COMERCIALES SA DE CV, SOFOM, ENR, Mexico City / Mexico
Siemens, S.A. de C.V., Mexico City / Mexico
Innomotics S.A., Panama City / Panama
Siemens Industry Software, S.A. de C.V., Mexico City / Mexico
Innomotics S.A.C., Surquillo / Peru
100
100
10013
100
100
10013
Consolidated Financial Statements
Siemens Healthcare Diagnostics, S. de R.L. de C.V., Mexico City/Mexico
Innomotics Motors, S. de R.L. de C.V., Mexico City / Mexico
Indústria de Trabajos Eléctricos S.A. de C.V., Ciudad Juárez / Mexico
Siemens Healthcare Equipos Médicos Sociedad por Acciones, Santiago de Chile / Chile
Siemens Large Drives S.A., Santiago de Chile / Chile
Siemens Mobility SpA, Santiago de Chile / Chile
Siemens S.A., Santiago de Chile / Chile
Innomotics S.A.S., Tenjo / Colombia
J. Restrepo Equiphos S.A.S, Bogotá / Colombia
Siemens Healthcare S.A.S., Tenjo / Colombia
Siemens S.A.S., Tenjo / Colombia
Siemens Healthcare Diagnostics S.A., San José / Costa Rica
Siemens Mobility, S.R.L., Santo Domingo / Dominican Republic
Siemens S.A., Quito Ecuador
Siemens-Healthcare Cia. Ltda., Quito / Ecuador
Siemens Healthcare, Sociedad Anonima, Antiguo Cuscatlán / El Salvador
Siemens S.A., Antiguo Cuscatlán / El Salvador
Siemens S.A., Guatemala / Guatemala
Acuson México, S. de R.L. de C.V., Mexico City / Mexico
Grupo Siemens S.A. de C.V., Mexico City / Mexico
100
Consolidated Financial Statements
455
4
Software.co Technologies, Inc., Wilmington, DE / United States
Wi-Tronix Group Inc., Dover, DE / United States
Rether networks, Inc., Berkeley, CA / United States
MSS Energy Holdings, LLC, New York, NY / United States
PhSiTh LLC, New Castle, DE / United States
Hickory Run Holdings, LLC, Wilmington, DE / United States
Fluence Energy, Inc., Wilmington, DE / United States
DeepHow Corp., Princeton, NJ / United States
CEF-L Holding, LLC, Wilmington, DE / United States
Tenedora de Activos Medicos S.A.P.I. de C.V, Mexico City Mexico
Akuo Energy Dominicana, S.R.L, Santo Domingo / Dominican Republic
DELARO, S.A.P.I. DE C.V., Mexico City / Mexico
MPC Serviços Energéticos 1B S.A., Cabo de Santo Agostinho / Brazil
Tractian Limited, Grand Cayman / Cayman Islands
MPC Serviços Energéticos 1A S.A, Navegantes / Brazil
GNA 1 Geração de Energia S.A., São João da Barra / Brazil
Micropower Comerc Energia S.A., São Paulo / Brazil
Consolidated Financial Statements
56
984
25
508
25
33
106
49
5013
50
49
514
31
Asia, Australia (24 companies)
26
Exemplar Health (NBH) Partnership, Melbourne / Australia
Parklife Metro Holdings Unit Trust, Melbourne / Australia
378
20
20
50
30
23
308
33
20
206
22
238
27
49
29
33
22
48
48
20
22
Siemens Traction Equipment Ltd., Zhuzhou, Zhuzhou / China
Guangzhou Suikai Smart Energy Co., Ltd., Guangzhou / China
Chengdu Wayin Zhiyun Medical Technology Co., Ltd., Chengdu / China
DBEST (Beijing) Facility Technology Management Co., Ltd., Beijing / China
PHM Technology Pty Ltd, Melbourne / Australia
Parklife Metro Holdings Pty Ltd, Melbourne / Australia
208
Brasol Participaçoes e Empreendimentos S.A., Brazil, São Paulo / Brazil
Americas (18 companies)
Prime Green Energy Infrastructure Fund II, S.A. SICAV-RAIF, Luxembourg / Luxembourg
EGM Holding Limited, Birkirkara / Malta
Temir Zhol Electrification LLP, Nur-Sultan-City / Kazakhstan
498
498
428,13
23
574,8
48
25
508,13
674, 8, 12, 13
44
448
40
498
458
498
36
25
338
33
498
49
238
258
Energie Electrique de Tahaddart S.A., Tangier / Morocco
Buitengaats C.V., Amsterdam / Netherlands
Buitengaats Management B.V., Eemshaven / Netherlands
Infraspeed EPC Consortium V.O.F., Zoetermeer / Netherlands
Five Estuaries Offshore Wind Farm Limited, Swindon, Wiltshire / United Kingdom
Galloper Wind Farm Holding Company Limited, Swindon, Wiltshire / United Kingdom
Plessey Holdings Ltd., Farnborough, Hampshire / United Kingdom
Cross London Trains Holdco 2 Limited, London / United Kingdom
Awel Y Môr Offshore Wind Farm Limited, Swindon, Wiltshire / United Kingdom
CAPTON ENERGY DMCC, Dubai / United Arab Emirates
Interessengemeinschaft TUS, Volketswil / Switzerland
Certas AG, Zurich / Switzerland
WS Tech Energy Global S.L., Viladecans / Spain
Nertus Mantenimiento Ferroviario y Servicios S.A., Madrid / Spain
Impilo Consortium (Pty.) Ltd., La Lucia / South Africa
Rousch (Pakistan) Power Ltd., Islamabad / Pakistan
206,13
50
498
50
ZeeEnergie C.V., Amsterdam / Netherlands
Ural Locomotives Holding Besloten Vennootschap, The Hague / Netherlands
Locomotive Workshop Rotterdam B.V., Zoetermeer / Netherlands
50
508,13
208
206, 13
20
33
248
49
Infraspeed Maintainance B.V., Dordrecht / Netherlands
ZeeEnergie Management B.V., Eemshaven / Netherlands
25
35
50
5 No significant influence due to contractual arrangements or legal circumstances.
6 Significant influence due to contractual arrangements or legal circumstances.
7 Not consolidated due to immateriality.
8 Not accounted for using the equity method due to immateriality.
⁹ Exemption pursuant to Section 264 b German Commercial Code.
10 Exemption pursuant to Section 264 (3) German Commercial Code.
11 Values according to the latest available local GAAP financial statements; the underlying fiscal year may differ from the Siemens fiscal year.
12 Siemens AG is a shareholder with unlimited liability of this company.
13 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability of this company.
Consolidated Financial Statements
Equity
interest
Net income
Equity
in %
in millions
of €
in millions
of €
1004,5
3
15
1004,5
-
67
1004,5
1
273
* No control due to contractual arrangements or legal circumstances.
3 Control due to contractual arrangements to determine the direction of the relevant activities.
2 Control due to rights to appoint, reassign or remove members of the key management personnel.
1 Control due to a majority of voting rights.
438
50
50
176
46
76
26
268
50
25
49
24
1004,5
Asiri A O I Cancer Centre (Private) Limited, Colombo / Sri Lanka
57
Other investments11
Germany (4 companies)
Erlapolis 20 GmbH, Munich
Erlapolis 22 GmbH, Munich
Munipolis GmbH, Munich
SPT Beteiligungen GmbH & Co. KG, Grünwald
Europe, Commonwealth of Independent States (C.I.S.), Africa, Middle East (without Germany) (2
companies)
Medical Systems S.p.A., Genoa / Italy
KIC InnoEnergy S.E., Eindhoven / Netherlands
Americas (2 companies)
Electrify America, LLC, Wilmington, DE / United States
Thoughtworks Holding Inc., Wilmington, DE / United States
508
508
(1,795)
2
Independent auditor's report
To Siemens Aktiengesellschaft, Berlin and Munich
Report on the audit of the consolidated financial statements and of the group management
report
Opinions
We have audited the consolidated financial statements of Siemens Aktiengesellschaft, Berlin and Munich, and its subsidiaries (the Group),
which comprise the consolidated statements of income and comprehensive income for the fiscal year from October 1, 2022 to September
30, 2023, the consolidated statements of financial position as of September 30, 2023, the consolidated statements of cash flows and
changes in equity for the fiscal year from October 1, 2022 to September 30, 2023, and notes to the consolidated financial statements,
including a summary of significant accounting policies. In addition, we have audited the group management report of Siemens
Aktiengesellschaft, which is combined with the management report of Siemens Aktiengesellschaft, for the fiscal year from October 1,
2022 to September 30, 2023. In accordance with the German legal requirements, we have not audited chapter 11 "EU Taxonomy
disclosure" of the group management report, the sections "8.5.1 Internal Control System (ICS) and ERM" and "8.5.2 Compliance
Management System (CMS)" in chapter 8.5 of the combined management report as well as the content of the Corporate Governance
Statement which is published on the website stated in the combined management report. In our opinion, on the basis of the knowledge
obtained in the audit,
⚫ the accompanying consolidated financial statements comply, in all material respects, with the International Financial Reporting
Standards (IFRSS) as adopted by the European Union (EU), and the additional requirements of German commercial law pursuant to Sec.
315e (1) HGB ["Handelsgesetzbuch": German Commercial Code] as well as with full IFRSS as issued by the International Accounting
Standards Board (IASB), and, in compliance with these requirements, give a true and fair view of the assets, liabilities and financial
position of the Group as of September 30, 2023 and of its financial performance for the fiscal year from October 1, 2022 to September
30, 2023, and
•
the accompanying group management report as a whole provides an appropriate view of the Group's position. In all material respects,
this group management report is consistent with the consolidated financial statements, complies with German legal requirements and
appropriately presents the opportunities and risks of future development. Our opinion on the group management report does not cover
chapter 11 "EU Taxonomy disclosure" of the group management report, the sections "8.5.1 Internal Control System (ICS) and ERM" and
"8.5.2 Compliance Management System (CMS)" in chapter 8.5 of the group management report and the content of the Corporate
Governance Statement.
49
SINGAPORE AQUACULTURE TECHNOLOGIES (SAT) PTE LTD, Singapore / Singapore
Power Automation Pte. Ltd., Singapore / Singapore
BE C&I Solutions Holding Pte. Ltd., Singapore / Singapore
P.T. Jawa Power, Jakarta / Indonesia
SUNSOLE RENEWABLES PRIVATE LIMITED, Mumbai / India
Pune IT City Metro Rail Limited, Pune / India
Happzee Technologies Private Limited, Hyderabad / India
Greenko Sironj Wind Power Private Limited, New Delhi / India
Bangalore International Airport Ltd., Bangalore / India
Zhi Dao Railway Equipment Ltd., Taiyuan / China
Zhenjiang Siemens Busbar Trunking Systems Co. Ltd., Yangzhong / China
Tieke Intelligent Signalling Railway Equipment Co., Ltd., Tianjin / China
Xi'An X-Ray Target Ltd., Xi'an / China
TianJin ZongXi Traction Motor Ltd., Tianjin / China
Smart Metering Solutions (Changsha) Co. Ltd., Changsha / China
50
49
Independent Auditor's Reports (Group)
SIEMENS
to the Consolidated Financial Statements and the
Group Management Report for fiscal 2023
Auditor's Reports
132
6
113
314
9
(64)
782
8
(99)
730
58
Responsibility Statement
5,693
to the Consolidated Financial Statements and the
Group Management Report for fiscal 2023
Responsibility Statement (Group)
To the best of our knowledge, and in accordance with the applicable reporting principles, the Consolidated Financial Statements give a
true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the Group Management Report, which has
been combined with the Management Report for Siemens Aktiengesellschaft, includes a fair review of the development and performance
of the business and the position of the Group, together with a description of the material opportunities and risks associated with the
expected development of the Group.
Munich, December 4, 2023
Siemens Aktiengesellschaft
The Managing Board
Dr. Roland Busch
Cedrik Neike
Prof. Dr. Ralf P. Thomas
Matthias Rebellius
Judith Wiese
2
Independent
SIEMENS
508
Our audit procedures did not lead to any reservations relating to the accounting for uncertain tax positions and deferred taxes.
50
Siemens, Inc., Manila / Philippines
Siemens Healthcare Inc., Manila / Philippines
Siemens Healthcare Limited, Auckland / New Zealand
Siemens (N.Z.) Limited, Auckland / New Zealand
Varian Medical Systems Malaysia Sdn Bhd, Kuala Lumpur / Malaysia
Siemens Mobility Sdn. Bhd., Kuala Lumpur / Malaysia
Siemens Malaysia Sdn. Bhd., Petaling Jaya / Malaysia
Siemens Industry Software Sdn. Bhd., George Town, Penang / Malaysia
Varian Medical Systems Philippines, Inc., City of Pasig / Philippines
Siemens Healthcare Sdn. Bhd., Petaling Jaya / Malaysia
Innomotics Sdn. Bhd., Shah Alam / Malaysia
Varian Medical Systems Korea, Inc., Seoul / Korea
Siemens Mobility Ltd., Seoul / Korea
Siemens Ltd. Seoul, Seoul / Korea
Siemens Large Drives Limited, Seoul / Korea
Siemens Industry Software Ltd., Seoul / Korea
Siemens Healthineers Ltd., Seoul / Korea
Siemens Electronic Design Automation (Korea) LLC, Seoul / Korea
Radica Software Sdn. Bhd., George Town / Malaysia
Acuson Korea Ltd., Seongnam-si / Korea
Acuson Singapore Pte. Ltd., Singapore / Singapore
100
100
100
100
100
100
100
100
100
Consolidated Financial Statements
100
100
100
100
100
1007
100
100
100
100
100
Varian Medical Systems K.K., Tokyo / Japan
Siemens Healthcare Diagnostics K.K., Tokyo / Japan
For this we also assessed the accounting for contractually agreed options, contract amendments or contract terminations (including
related pending legal proceedings) also in relation to previous construction-type contracts with Russian customers. We also assessed the
recognition requirements of reimbursement claims.
Our audit procedures included, among others, review of the contracts and their terms and conditions including contractually agreed partial
deliveries and services, termination rights, penalties for delay and breach of contract, liquidated damages as well as joint and several
liability. In order to evaluate whether revenues were recognized on an accrual basis for the selected projects, we analyzed revenues
attributable to the fiscal year and corresponding cost of sales to be recognized in the statement of income considering the extent of
progress towards completion and examined the accounting for the associated items in the statement of financial position.
As part of our substantive audit procedures, which particularly involved project reviews, we evaluated management's estimates and
assumptions based on a risk-based selection of a sample of contracts. Our sample primarily included projects that are subject to significant
future uncertainties and risks, such as projects with complex safety/technical and regulatory requirements or projects with a large portion
of materials and services to be provided by suppliers or consortium partners, fixed-price or turnkey projects, cross-border projects and
projects with changes in cost estimates, delays and/or low or negative margins.
Auditor's response: As part of our audit, we obtained an understanding of the Group's internally established methods, processes and
control mechanisms for project management in the bid and execution phase of construction-type contracts. In this regard, we assessed
the design and operating effectiveness of the accounting-related internal controls in the project business by obtaining an understanding
of business transactions specific to construction-type contracts, from the initiation of the transaction through presentation in the
consolidated financial statements. We also tested controls addressing the timely assessment of changes in cost estimates, the timely and
complete recognition of such changes in the project calculation as well as their accounting treatment.
The effects of current geopolitical and macroeconomic developments on the project business, such as delays in project execution, price
increases or disruptions in supply chains and their accounting treatment were taken into account during our audit.
Revenues, total estimated contract costs and profit recognition may deviate significantly from original estimates based on new knowledge
about cost overruns and changes in project scope over the term of a construction-type contract.
Independent Auditor's Reports (Group)
2
We further performed inquiries of project management (both commercial and technical project managers) with respect to the
development of the projects, the reasons for deviations between planned and actual costs, the current estimated costs to complete the
projects, and management's assessments on probabilities that contract risks and claims from joint and several liability will materialize.
To identify anomalies in the development of margins and other project KPIs, we also applied data analysis procedures. In designing our
audit procedures, we also considered results from project audits conducted by the internal audit function. Furthermore, we obtained
evidence from third parties for selected projects (e.g., project acceptance documentation, contractual terms and conditions, and lawyers'
confirmations regarding alleged breaches of contract and asserted claims) and inspected the status of projects at plant sites. Due to the
large contract volume and risk profile, our audit procedures focused on large contracts for delivery of high-speed and commuter trains.
Our audit procedures did not lead to any reservations relating to revenue recognition on construction-type contracts.
Reasons why the matter was determined to be a key audit matter: The Group conducts a significant portion of its business under
construction-type contracts, particularly in the Mobility business. Revenue from long-term construction-type contracts is recognized in
accordance with IFRS 15, Revenue from Contracts with Customers, generally over time under the percentage-of-completion method. We
consider the accounting for construction-type contracts to be an area posing a significant risk of material misstatement (including the
potential risk of management override of internal controls) and accordingly a key audit matter, because management's assessments
significantly impact the determination of the extent of progress towards completion. These assessments include, in particular, the scope
of deliveries and services required to fulfill contractually defined obligations, total estimated contract costs, remaining costs to completion
and total estimated contract revenues, as well as contract risks including technical, political, regulatory, legal and supply chain risks.
Below, we describe what we consider to be the key audit matters:
matters.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial
statements for the fiscal year from October 1, 2022 to September 30, 2023. These matters were addressed in the context of our audit of
the consolidated financial statements as a whole, and in forming our opinion thereon; we do not provide a separate opinion on these
Key audit matters in the audit of the consolidated financial statements
We conducted our audit of the consolidated financial statements and of the group management report in accordance with Sec. 317 HGB
and the EU Audit Regulation (No 537/2014, referred to subsequently as "EU Audit Regulation") and in compliance with German Generally
Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in
Germany] (IDW). We performed the audit of the consolidated financial statements in supplementary compliance with the International
Standards on Auditing (ISAs). Our responsibilities under those requirements, principles and standards are further described in the "Auditor's
responsibilities for the audit of the consolidated financial statements and of the group management report" section of our auditor's report.
We are independent of the group entities in accordance with the requirements of European law and German commercial and professional
law, and we have fulfilled our other German professional responsibilities in accordance with these requirements. In addition, in accordance
with Art. 10 (2) f) of the EU Audit Regulation, we declare that we have not provided non-audit services prohibited under Art. 5 (1) of the
EU Audit Regulation. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions
on the consolidated financial statements and on the group management report.
Basis for the opinions
Pursuant to Sec. 322 (3) Sentence 1 HGB, we declare that our audit has not led to any reservations relating to the legal compliance of the
consolidated financial statements and of the group management report.
50
Revenue recognition on construction-type contracts
Siemens Healthcare K.K., Tokyo / Japan
Reference to related disclosures: With regard to the recognition and measurement policies applied in accounting for construction-type
contracts, refer to Note 2 Material accounting policies and critical accounting estimates in the notes to the consolidated financial
statements. With respect to contract assets and liabilities as well as provisions for order related losses and risks, refer to Note 10 Contract
assets and liabilities, Note 18 Provisions and Note 21 Commitments and contingencies in the notes to the consolidated financial
statements.
Reasons why the matter was determined to be a key audit matter: Since the spin-off of Siemens Energy AG in September 2020,
Siemens AG has held a 35.1% stake in the listed Siemens Energy AG which was reduced to 25.1% due to capital measures at Siemens
Energy AG and the contribution of shares in Siemens Energy AG to the Siemens Pension-Trust e.V. in fiscal year 2023. The investment is
accounted for as an associate, applying the equity method in accordance with IAS 28, Investments in Associates and Joint Ventures. As of
June 30, 2022, an impairment was recognized on the investment. During the first six months of the financial year 2023, the market
capitalization of the investment was mostly higher than the value at the time of the impairment. As of March 31, 2023, the latter was
significantly exceeded. As a result, an impairment reversal was made in accordance with IAS 36, Impairment of Assets, in the amount of
the increase in the stock market price since the date of the impairment until March 31, 2023. In addition, Siemens Energy AG acquired
additional shares in Siemens Gamesa Renewable Energy, S.A. in fiscal year 2023. This led to a reduction in equity in the consolidated
financial statements of Siemens Energy AG. The recognition of Siemens' share in this equity transaction resulted in a reduction of the
carrying amount of the investment in Siemens Energy AG, which was recognized directly in Siemens' equity. As of September 30, 2023,
the pro rata market value of the investment was above the book value.
In the course of our audit procedures relating to uncertain tax positions, we evaluated whether management's assessment of the tax
implications of significant business transactions or events in fiscal year 2023, which could result in uncertain tax positions or influence the
measurement of existing uncertain tax positions, was in compliance with tax law. In particular, this includes the tax implications arising
from cross border matters, such as the determination of transfer prices, the results of tax field audits, the acquisition or disposal of company
shares and corporate (intragroup) restructuring activities. In order to assess measurement and completeness, we also obtained
confirmations from external tax advisors. Further, we evaluated management's assessments with respect to the prospects of success of
appeal and tax court proceedings by inquiring of the employees of the Siemens tax department and by considering current tax case law.
In assessing the recoverability of deferred tax assets, we above all analyzed management's assumptions with respect to tax planning
strategies and projected future taxable income and compared them to internal business plans. In the course of our audit procedures
regarding deferred tax liabilities, we examined in particular the assumptions regarding reinvestment of subsidiaries' retained profits for an
indefinite period and assessed these taking into account dividend planning.
Reasons why the matter was determined to be a key audit matter: Siemens operates in numerous countries with different local tax
legislation. The accounting for uncertain tax positions as well as deferred taxes requires management to exercise considerable judgment
and make estimates and assumptions and was therefore a key audit matter. In particular, this affects the measurement and completeness
of uncertain tax positions, the recoverability of deferred tax assets and the measurement and completeness of deferred tax liabilities.
Auditor's response: With the assistance of internal tax specialists who have knowledge of relevant local tax law, we examined the
processes installed by management for the identification, recognition and measurement of tax positions.
Uncertain tax positions and deferred taxes
Reference to related disclosures: With regard to the recognition and measurement policies applied in accounting for provisions, refer to
Note 2 Material accounting policies and critical accounting estimates in the notes to the consolidated financial statements. With respect
to proceedings out of or in connection with alleged compliance violations, refer to Note 22 Legal proceedings.
Our audit procedures did not lead to any reservations relating to the accounting for proceedings out of or in connection with alleged
compliance violations.
Furthermore, we evaluated the disclosures on proceedings out of or in connection with alleged compliance violations in the notes to the
consolidated financial statements.
We further considered alleged or substantiated non-compliance with legal provisions, official regulations (including sanctions) and internal
company policies by inspecting internal and external statements on specific matters, obtaining written statements from external legal
advisors, and by inquiring of the compliance organization. In this regard, among other procedures, we evaluated the conduct and results
of internal investigations by inspecting internal reports and the measures taken to remediate identified weaknesses, and assessed on this
basis whether management's evaluation of any risks to be accounted for in the consolidated financial statements is plausible.
Auditor's response: During our audit of the financial reporting of proceedings out of or in connection with alleged compliance violations,
we examined the processes implemented by Siemens for identifying, assessing and accounting for legal and regulatory proceedings. To
determine what potentially significant pending legal proceedings or claims asserted are known and to assess management's estimates of
the expected cash outflows, our audit procedures included inquiring of management and other persons within the Group entrusted with
these matters, obtaining written statements from in-house legal counsels with respect to the assessment of estimated cash outflows and
their probability, obtaining confirmations from external legal advisors and evaluating internal statements concerning the accounting
treatment in the consolidated financial statements. Furthermore, we examined legal consulting expense accounts for any indications of
legal matters not yet considered.
Valuation of the investment in Siemens Energy AG
Reasons why the matter was determined to be a key audit matter: We consider the accounting for provisions for proceedings out of
or in connection with alleged compliance violations, including allegations of corruption and antitrust violations to be a key audit matter.
These matters are subject to inherent uncertainties and require estimates that could have a significant impact on the recognition and
measurement of the respective provision and, accordingly, on assets, liabilities and financial performance. The proceedings out of or in
connection with alleged compliance violations are subject to uncertainties because they involve complex legal issues and accordingly,
considerable management judgment, in particular when determining whether and in what amount a provision is required to account for
the risks.
Reference to related disclosures: With regard to the recognition and measurement policies applied in accounting for investments in
associates, refer to Note 2 Material accounting policies and critical accounting estimates in the notes to the consolidated financial
statements. Details on the reversal of the impairment of the investment in Siemens Energy AG and the other described transactions are
presented in Note 4 Interests in other entities. Regarding the subsequent events relating to the investment in Siemens Energy AG refer to
Note 34 Subsequent events.
Our audit procedures did not lead to any reservations regarding the valuation of the investment in Siemens Energy AG as of September
30, 2023.
Furthermore, we evaluated the disclosures in the notes to the consolidated financial statements regarding the investment in Siemens
Energy AG, and the reversal of the impairment, the effects of the other transactions described above as well as the events affecting
Siemens Energy AG after the balance sheet date.
In order to assess the valuation of the investment in fiscal year 2023, we also considered the effects for Siemens AG from the acquisition
of the shares in Siemens Gamesa Renewable Energy S.A. by Siemens Energy AG, the capital increase of Siemens Energy AG and the
contribution of shares in Siemens Energy AG to the Siemens Pension-Trust e.V. by Siemens AG.
Independent Auditor's Reports (Group)
3
With regards to the assessment of whether there are indications for a reversal of an impairment, in particular regarding the interpretation
of a possible significant increase of the fair value, we evaluated management's assessment made on a quarterly and year-end basis as well
as management's judgements and estimates contained therein and also considered external evidence on credit ratings, stock market
prices, analysts' assessments and observable valuation indicatorsin this regard. In addition, we evaluated the calculation of the reversal of
the impairment as of March 31, 2023.
Due to the judgments and estimates by management in the analyses and assessments with regards to possible impairments or reversals
of impairments as well as the overall material implications for the assets, liabilities and financial position of the Group and the related
significant risk of material misstatement, the assessment of the investment in Siemens Energy AG is one of the key audit matters.
Auditor's response: As part of our audit procedures in relation to management's assessment regarding the valuation of the investment in
Siemens Energy AG, we examined the methods and processes defined internally for the identification of indicators for a reversal of an
impairment and thus the timing of a possible reversal of an impairment as well as the measurement of a reversal of an impairment of the
investment in Siemens Energy AG.
Provisions for proceedings out of or in connection with alleged compliance violations
100
Siemens K.K., Tokyo / Japan
100
MeVis BreastCare GmbH & Co. KG, Bremen
MetisMotion GmbH, Munich
Ludwig Bölkow Campus GmbH, Taufkirchen
inpro Innovationsgesellschaft für fortgeschrittene Produktionssysteme in der Fahrzeugindustrie mbH, Berlin
LIB Verwaltungs-GmbH, Leipzig
IFTEC GmbH & Co. KG, Leipzig
DKS Dienstleistungsgesellschaft f. Kommunikationsanlagen des Stadt- und Regionalverkehrs mbH, Cologne
GuD Herne GmbH, Essen
55
50
Nordlicht Holding GmbH & Co. KG, Frankfurt
50
418
Caterva GmbH, Pullach i. Isartal
BentoNet GmbH, Baden-Baden
ATS Projekt Grevenbroich GmbH, Schüttorf
Alchemist Accelerator Europe Fund I GmbH & Co. KG, Grünwald
Germany (19 companies)
Associated companies and joint ventures
Varian Medical Systems Vietnam Co Ltd, Ho Chi Minh City / Viet Nam
258
Siemens Ltd., Ho Chi Minh City / Viet Nam
Nordlicht Holding Verwaltung GmbH, Frankfurt
Siemens EuroCash, Munich
Consolidated Financial Statements
49
100
KACO New Energy Co., Amman / Jordan
Transfima S.p.A., Milan / Italy
Transfima GEIE, Milan / Italy
Reindeer Energy Ltd., Bnei Berak / Israel
Parallel Graphics Ltd., Dublin Ireland
Siemens Energy AG, Munich
EVIOP-TEMPO S.A. Electrical Equipment Manufacturers, Vassiliko / Greece
Siemens Mobility Aarsleff Konsortium I/S, Ballerup / Denmark
Siemens Aarsleff Konsortium I/S, Ballerup / Denmark
Aspern Smart City Research GmbH & Co KG, Vienna / Austria
Aspern Smart City Research GmbH, Vienna / Austria
Armpower CJSC, Yerevan / Armenia
Europe, Commonwealth of Independent States (C.I.S.), Africa, Middle East (without Germany) (37 companies)
VARIAN MEDICAL SYSTEMS ALGERIA SPA, Hydra / Algeria
WUN H2 GmbH, Wunsiedel
Sternico GmbH, Wendeburg
TRIXELL SAS, Moirans / France
100
MeVis BreastCare Verwaltungsgesellschaft mbH, Bremen
100
INNOMOTICS LIMITED COMPANY, Ho Chi Minh City / Viet Nam
Siemens Mobility Limited, Bangkok/Thailand
Siemens Logistics Automation Systems Ltd., Bangkok/Thailand
Siemens Limited, Bangkok Thailand
Siemens Healthcare Limited, Bangkok / Thailand
Innomotics Limited, Bangkok Thailand
Varian Medical Systems Taiwan Co., Ltd., Taipei / Taiwan
Siemens Industry Software (TW) Co., Ltd., Taipei / Taiwan
Siemens Limited, Taipei / Taiwan
Siemens Healthcare Limited, Ho Chi Minh City / Viet Nam
Fang Zhi Health Management Co., Ltd., Taipei / Taiwan
Hong Tai Health Management Co. Ltd., Taipei / Taiwan
New Century Technology Co. Ltd., Taipei / Taiwan
Siemens Healthcare Limited, Taipei / Taiwan
Siemens Logistics Pte. Ltd., Singapore / Singapore
100
Siemens Industry Software Pte. Ltd., Singapore / Singapore
Siemens Healthcare Pte. Ltd., Singapore / Singapore
Siemens Electronic Design Automation Pte. Ltd., Singapore / Singapore
100
Innomotics Pte. Ltd., Singapore / Singapore
1007
Siemens Mobility Pte. Ltd., Singapore / Singapore
Siemens Pte. Ltd., Singapore / Singapore
100
YaRa Information Inc., Taipei / Taiwan
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
33
16
Total assets
170
107,005
14
103,884
Active difference resulting from offsetting
2,370
2,294
13
Deferred tax assets
32,047
220
223
28,724
1,454
Shareholders' equity and liabilities
2,065
Shareholders' equity
1 Conditional Capital as of September 30, 2023 and 2022 amounted to €421 million and €421 million, respectively.
Treasury shares
164
2,400
15
2,550
Total shareholders' equity and liabilities
Deferred income
Other liabilities
Liabilities to affiliated companies
Trade payables
Subscribed capital¹
Liabilities to banks
Other provisions
Provisions for taxes
Provisions for pensions and similar commitments
Provisions
Special reserve with an equity portion
Unappropriated net income
Other retained earnings
Capital reserve
Issued capital
Liabilities
Prepaid expenses
Property, plant and equipment
Other Securities
Management is responsible for the preparation of the ESEF documents including the electronic rendering of the consolidated financial
statements and the group management report in accordance with Sec. 328 (1) Sentence 4 No. 1 HGB and for the tagging of the
consolidated financial statements in accordance with Sec. 328 (1) Sentence 4 No. 2 HGB.
72,610
71,576
71,303
928
1,022
153
285
10
2022
2023
Note
Sep. 30,
Annual Financial Statements
Financial assets
Intangible assets
Non-current assets
Assets
(30)
72,657
Current assets
Inventories
Advance payments received
29,090
24,619
1,340
1,227
26,093
21,630
1,657
1,762
12
Cash and cash equivalents
Other receivables and other assets
Trade receivables
Receivables and other assets
1,334
1,571
(1,043)
(916)
2,377
2,487
11
Receivables from affiliated companies
(172)
•
2,378
Furthermore, management is responsible for the preparation of the group management report that, as a whole, provides an appropriate
view of the Group's position and is, in all material respects, consistent with the consolidated financial statements, complies with German
legal requirements and appropriately presents the opportunities and risks of future development. In addition, management is responsible
for such arrangements and measures (systems) as management has considered necessary to enable the preparation of a group
management report that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropriate
evidence for the assertions in the group management report.
The Supervisory Board is responsible for overseeing the Group's financial reporting process for the preparation of the consolidated financial
statements and of the group management report.
Auditor's responsibilities for the audit of the consolidated financial statements and of the group
management report
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and whether the group management report as a whole provides an appropriate view of the
Group's position and, in all material respects, is consistent with the consolidated financial statements and the knowledge obtained in the
audit, complies with the German legal requirements and appropriately presents the opportunities and risks of future development, as well
as to issue an auditor's report that includes our opinions on the consolidated financial statements and on the group management report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Sec. 317 HGB and
the EU Audit Regulation as well as in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated
5
Independent Auditor's Reports (Group)
by the IDW and in supplementary compliance with ISA will always detect a material misstatement. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements and this group management report.
We exercise professional judgment and maintain professional skepticism throughout the audit. We also:
•
•
•
•
•
.
identify and assess the risks of material misstatement of the consolidated financial statements and of the group management report,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than
the risk of not detecting a material misstatement resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control;
obtain an understanding of internal control relevant to the audit of the consolidated financial statements and of arrangements and
measures (systems) relevant to the audit of the group management report in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of these systems;
evaluate the appropriateness of accounting policies used by management and the reasonableness of estimates made by management
and related disclosures;
conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor's report
to the related disclosures in the consolidated financial statements and in the group management report or, if such disclosures are
inadequate, to modify our respective opinions. Our conclusions are based on the audit evidence obtained up to the date of our auditor's
report. However, future events or conditions may cause the Group to cease to be able to continue as a going concern;
evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether
the consolidated financial statements present the underlying transactions and events in a manner that the consolidated financial
statements give a true and fair view of the assets, liabilities, financial position and financial performance of the Group in compliance
with IFRSS as adopted by the EU and the additional requirements of German commercial law pursuant to Sec. 315e (1) HGB as well as
with full IFRSS as issued by the IASB;
In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going
concern. It also has the responsibility for disclosing, as applicable, matters related to going concern. In addition, management is
responsible for financial reporting based on the going concern basis of accounting, unless there is an intention to liquidate the Group or
to cease operations, or there is no realistic alternative but to do so.
obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to
express opinions on the consolidated financial statements and on the group management report. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our opinions;
Management is responsible for the preparation of the consolidated financial statements that comply, in all material respects, with IFRSS
as adopted the EU and the additional requirements of German commercial law pursuant to Sec. 315e (1) HGB as well as with full IFRSS
as issued by the IASB, and that the consolidated financial statements, in compliance with these requirements, give a true and fair view of
the assets, liabilities, financial position and financial performance of the Group. In addition, management is responsible for such internal
control as management has determined necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud (i.e., fraudulent financial reporting and misappropriation of assets) or error.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Independent Auditor's Reports (Group)
Reference to related disclosures: With regard to the recognition and measurement policies applied in accounting for income taxes, refer
to Note 2 Material accounting policies and critical accounting estimates in the notes to the consolidated financial statements. With respect
to disclosures for deferred tax assets and liabilities, refer to Note 7 Income taxes in the notes to the consolidated financial statements.
Other information
The Supervisory Board is responsible for the Report of the Supervisory Board in the Annual Report 2022 within the meaning of ISA [DE]
720 (Revised). Management and the Supervisory Board are responsible for the declaration pursuant to Sec. 161 AktG ["Aktiengesetz":
German Stock Corporation Act] on the Corporate Governance Code, which is part of the Corporate Governance Statement, and for the
Compensation Report. In all other respects, management is responsible for the other information. The other information comprises chapter
11 "EU Taxonomy disclosure" of the group management report, the sections "8.5.1 Internal Control System (ICS) and ERM" and "8.5.2
Compliance Management System (CMS)" in chapter 8.5 of the combined management report as well as the content of the Corporate
Governance Statement. In addition, the other information comprises parts to be included in the Annual Report, of which we received a
version prior to issuing this auditor's report, in particular:
.
•
(in millions of €)
the Responsibility Statement (to the Consolidated Financial Statements and the Group Management Report),
the Responsibility Statement (to the Annual Financial Statements and the Management Report),
the Five-Year Summary,
⚫ the Compensation Report,
⚫ the Report of the Supervisory Board,
• Notes and forward-looking statements,
but not the consolidated financial statements and the annual financial statements, not the disclosures of the combined management
report whose content is audited and not our auditor's reports as well as not our auditor's report on a limited assurance engagement on the
EU Taxonomy disclosure.
Our opinions on the consolidated financial statements and on the group management report do not cover the other information, and
consequently we do not express an opinion or any other form of assurance conclusion thereon.
In connection with our audit, our responsibility is to read the other information and, in so doing, to consider whether the other information
⚫ is materially inconsistent with the consolidated financial statements, with the group management report or our knowledge obtained in
the audit, or
•
otherwise appears to be materially misstated.
Responsibilities of management and the Supervisory Board for the consolidated financial statements and the
group management report
evaluate the consistency of the group management report with the consolidated financial statements, its conformity with German law,
and the view of the Group's position it provides.
perform audit procedures on the prospective information presented by management in the group management report. On the basis of
sufficient appropriate audit evidence we evaluate, in particular, the significant assumptions used by management as a basis for the
prospective information, and evaluate the proper derivation of the prospective information from these assumptions. We do not express
a separate opinion on the prospective information and on the assumptions used as a basis. There is a substantial unavoidable risk that
future events will differ materially from the prospective information.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
17,693
18,270
602
3,711
3,987
17
680
13,380
13,604
16
540
540
20,623
21,422
3,613
3,760
6,188
6,555
8,445
8,737
18
339
2,374
59,483
We also provide those charged with governance with a statement that we have complied with the relevant independence requirements,
and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where
applicable, the related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the
audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in
our auditor's report unless law or regulation precludes public disclosure about the matter.
Report on the assurance on the electronic rendering of the consolidated financial statements and the group
management report prepared for publication purposes in accordance with Sec. 317 (3a) HGB
Opinion
We have performed assurance work in accordance with Sec. 317 (3a) HGB to obtain reasonable assurance about whether the rendering
of the consolidated financial statements and the group management report (hereinafter the "ESEF documents") contained in the file
SIEMENS 2023.zip and prepared for publication purposes complies in all material respects with the requirements of Sec. 328 (1) HGB for
the electronic reporting format ("ESEF format"). In accordance with German legal requirements, this assurance work extends only to the
conversion of the information contained in the consolidated financial statements and the group management report into the ESEF format
and therefore relates neither to the information contained within these renderings nor to any other information contained in the file
identified above.
In our opinion, the rendering of the consolidated financial statements and the group management report contained in the file identified
above and prepared for publication purposes complies in all material respects with the requirements of Sec. 328 (1) HGB for the electronic
reporting format. Beyond this assurance opinion and our audit opinions on the accompanying consolidated financial statements and the
accompanying group management report for the fiscal year from October 1, 2022 to September 30, 2023 contained in the "Report on the
audit of the consolidated financial statements and of the group management report" above, we do not express any assurance opinion on
the information contained within these renderings or on the other information contained in the file identified above.
6
Independent Auditor's Reports (Group)
Basis for the opinion
2,370
We conducted our assurance work on the rendering, of the consolidated financial statements and the group management report contained
in the file identified above in accordance with Sec. 317 (3a) HGB and the IDW Assurance Standard: Assurance on the Electronic Rendering
of Financial Statements and Management Reports Prepared for Publication Purposes in Accordance with Sec. 317 (3a) HGB (IDW ASS 410)
(06.2022) and the International Standard on Assurance Engagements 3000 (Revised). Our responsibility in accordance therewith is further
described in the "Group auditor's responsibilities for the assurance work on the ESEF documents" section. Our audit firm applies the IDW
Standard on Quality Management 1: Requirements for Quality Management in the Audit Firm (IDW QS 1).
4
107,005
103,884
235
235
67,914
1,080
1,222
63,417
639
2,249
63,946
Responsibilities of management and the Supervisory Board for the ESEF documents
2. Balance Sheet
17,390
3,613
4
3
Table of contents
SIEMENS
This document is an English language translation of the authoritative German version and is not provided
in the European Single Electronic Format (ESEF). The legally required rendering in ESEF is filed in German
language with the operator of the German Company Register and published in the German Company
Register.
for fiscal 2023
Annual Financial
Statements*
10
10
[German Public Auditor]
Wirtschaftsprüferin
st
Johne
Wirtschaftsprüfer
Keller
Wirtschaftsprüfungsgesellschaft
Ernst & Young GmbH
Munich, December 4, 2023
We make express reference to the fact that we will not update the report to reflect events or circumstances arising after it was issued,
unless required to do so by law. It is the sole responsibility of anyone taking note of the summarized result of our work contained in this
report to decide whether and in what way this result is useful or suitable for their purposes and to supplement, verify or update it by means
of their own review procedures.
The "General Engagement Terms for Wirtschaftsprüfer and Wirtschaftsprüfungsgesellschaften [German Public Auditors and Public Audit
Firms]" dated January 1, 2017 are applicable to this engagement and also govern our relations with third parties in the context of this
engagement (www.de.ey.com/general-engagement-terms). In addition, please refer to the liability provisions contained there in no. 9
and to the exclusion of liability towards third parties. We accept no responsibility, liability or other obligations towards third parties unless
we have concluded a written agreement to the contrary with the respective third party or liability cannot effectively be precluded.
General engagement terms and liability
We draw attention to the fact that the assurance engagement was conducted for the Company's purposes and that the report is intended
solely to inform the Company about the result of the assurance engagement. As a result, it may not be suitable for another purpose than
the aforementioned. Accordingly, the report is not intended to be used by third parties for making (financial) decisions based on it. Our
responsibility is to the Company alone. We do not accept any responsibility to third parties. Our assurance conclusion is not modified in
this respect.
Restriction of use
Based on the assurance procedures performed and the evidence obtained, nothing has come to our attention that causes us to believe
that the EU Taxonomy disclosure of Siemens Aktiengesellschaft for the period from October 1, 2022 to September 30, 2023 is not
prepared, in all material respects, in accordance with the EU Taxonomy Regulation and the Delegated Acts adopted thereunder as well as
the interpretation by management as disclosed in the EU Taxonomy disclosure.
[German Public Auditor]
Assurance conclusion
10
10
Note 16 Provisions for pensions and similar commitments
Note 15 Shareholders' equity
Note 14 Active difference resulting from offsetting
Note 13 Deferred tax assets
Note 12 Receivables and other assets
Note 11 Inventories
Note 10 Non-current assets
Note 9 Expenses relating to prior periods
Note 8 Income relating to prior periods
Note 7 Other taxes
8
10
8
8
Note 2 Other operating income and expenses
Note 3 Income (loss) from investments, net
Note 4 Interest income and interest expenses
Note 5 Other financial income (expenses), net
3. Notes to Annual Financial Statements
Note 1 Revenue
2. Balance Sheet
1. Income Statement
Annual Financial Statements
12
9
56699 co co co co ooooo -
11
10
Note 6 Income taxes
12
Independent Auditor's Reports (Group)
In determining the disclosures in accordance with Art. 8 of the EU Taxonomy Regulation, management is required to interpret undefined
legal terms. Due to the immanent risk that undefined legal terms may be interpreted differently, the legal conformity of their interpretation
and, accordingly, our assurance engagement thereon are subject to uncertainties.
[German Public Auditor]
Wirtschaftsprüfer
Keller
Wirtschaftsprüfungsgesellschaft
Ernst & Young GmbH
Munich, December 4, 2023
The German Public Auditor responsible for the engagement is Siegfried Keller.
German Public Auditor responsible for the engagement
7
Our auditor's report must always be read together with the audited consolidated financial statements and the audited group management
report as well as the assured ESEF documents. The consolidated financial statements and the group management report converted to the
ESEF format - including the versions to be published in the Unternehmensregister [German Company Register] – are merely electronic
renderings of the audited consolidated financial statements and the audited group management report and do not take their place. In
particular, the ESEF report and our assurance opinion contained therein are to be used solely together with the assured ESEF documents
made available in electronic form.
-
Dr. Gaenslen
Wirtschaftsprüfer
[German Public Auditor]
Other matter - use of the auditor's report
We were elected as group auditor by the Annual Shareholders' Meeting on February 9, 2023. We were engaged by the Supervisory Board
on February 9, 2023. We have been the group auditor of Siemens Aktiengesellschaft without interruption since the fiscal year from October
1, 2008 to September 30, 2009.
Further information pursuant to Art. 10 of the EU Audit Regulation
evaluate whether the tagging of the ESEF documents with Inline XBRL technology (iXBRL) in accordance with the requirements of Arts.
4 and 6 of Commission Delegated Regulation (EU) 2019/815, in the version in force at the date of the financial statements, enables an
appropriate and complete machine-readable XBRL copy of the XHTML rendering.
•
• evaluate whether the ESEF documents enable an XHTML rendering with content equivalent to the audited consolidated financial
statements and to the audited group management report;
evaluate the technical validity of the ESEF documents, i.e., whether the file containing the ESEF documents meets the requirements of
Commission Delegated Regulation (EU) 2019/815, in the version in force at the date of the financial statements, on the technical
specification for this file;
•
•⚫ obtain an understanding of internal control relevant to the assurance on the ESEF documents in order to design assurance procedures
that are appropriate in the circumstances, but not for the purpose of expressing an assurance opinion on the effectiveness of these
controls;
identify and assess the risks of material intentional or unintentional non-compliance with the requirements of Sec. 328 (1) HGB, design
and perform assurance procedures responsive to those risks, and obtain assurance evidence that is sufficient and appropriate to provide
a basis for our assurance opinion;
Our objective is to obtain reasonable assurance about whether the ESEF documents are free from material intentional or unintentional
non-compliance with the requirements of Sec. 328 (1) HGB. We exercise professional judgment and maintain professional skepticism
throughout the assurance work. We also:
The Supervisory Board is responsible for overseeing the process for preparing the ESEF documents as part of the financial reporting process.
Group auditor's responsibilities for the assurance work on the ESEF documents
We declare that the opinions expressed in this auditor's report are consistent with the additional report to the Audit Committee pursuant
to Art. 11 of the EU Audit Regulation (long-form audit report).
9
Independent Auditor's Reports (Group)
Independent Auditor's Reports (Group)
Evaluation of the presentation of the EU Taxonomy disclosure.
•
Reconciliation of selected disclosures with the corresponding data in the consolidated financial statements and group management
report,
Inquiries and inspection of documents relating to the collection and reporting of data,
•
• Analytical evaluation of data at the level of the Group and businesses as well as service and governance units,
•
•
• Identification of likely risks of material misstatement in the EU Taxonomy disclosure,
Inquiries of the employees responsible for data capture and consolidation as well as the preparation of the EU Taxonomy disclosure
about the reporting processes, the data capture and compilation methods as well as internal controls to the extent relevant for the
limited assurance of the EU Taxonomy disclosure,
Inquiries of relevant employees for the assessment of the process to identify the Taxonomy-eligible and Taxonomy-aligned economic
activities,
8
•
In the course of our assurance engagement we have, among other things, performed the following assurance procedures and other
activities:
Our responsibility is to express a conclusion with limited assurance on the EU Taxonomy disclosure based on our assurance engagement.
We conducted our assurance engagement in accordance with the International Standard on Assurance Engagements (ISAE) 3000
(Revised): "Assurance Engagements other than Audits or Reviews of Historical Financial Information" issued by the International Auditing
and Assurance Standards Board (IAASB). This standard requires that we plan and perform the assurance engagement to obtain limited
assurance about whether any matters have come to our attention that cause us to believe that the Company's EU Taxonomy disclosure is
not prepared, in all material respects, in accordance with the EU Taxonomy Regulation and the Delegated Acts adopted thereunder as well
as the interpretation by management disclosed in the EU Taxonomy disclosure. In a limited assurance engagement, the procedures
performed are less extensive than in a reasonable assurance engagement, and accordingly, a substantially lower level of assurance is
obtained. The selection of the assurance procedures is subject to the professional judgment of the auditor.
Responsibilities of the auditor
We have complied with the German professional requirements on independence as well as other professional conduct requirements.
Our audit firm applies the national legal requirements and professional pronouncements, in particular the BS WP/vBP ["Berufssatzung für
Wirtschaftsprüfer/vereidigte Buchprüfer": Professional Charter for German Public Accountants/German Sworn Auditors]) in the exercise of
their Profession and the IDW Standard on Quality Management issued by the Institute of Public Auditors in Germany (IDW): Requirements
for Quality Management in the Audit Firm (IDW QS 1), and accordingly maintains a comprehensive quality management system that
includes documented policies and procedures with regard to compliance with professional ethical requirements, professional standards
as well as relevant statutory and other legal requirements.
Independence and quality assurance of the audit firm
These responsibilities of the Company's management include the selection and application of appropriate EU Taxonomy reporting
methods and making assumptions and estimates about individual disclosures that are reasonable in the circumstances. Furthermore,
management is responsible for such internal control as management considers necessary to enable the preparation of the EU Taxonomy
disclosure that is free from material misstatement, whether due to fraud (manipulation of the EU Taxonomy disclosure) or error.
The EU Taxonomy Regulation and the Delegated Acts adopted thereunder contain wording and terms that are still subject to considerable
interpretation uncertainties and for which clarifications have not yet been published in every case. Therefore, management has disclosed
their interpretation of the EU Taxonomy Regulation and the Delegated Acts adopted thereunder in the EU Taxonomy disclosure. They are
responsible for the defensibility of this interpretation. Due to the immanent risk that undefined legal terms may be interpreted differently,
the legal conformity of the interpretation is subject to uncertainties.
Management of the Company is responsible for the preparation of the EU Taxonomy disclosure in accordance with Art. 8 of Regulation
(EU) 2020/852 of the European Parliament and of the Council of June 18, 2020 on the establishment of a framework to facilitate
sustainable investment and amending Regulation (EU) 2019/2088 (hereinafter the "EU Taxonomy Regulation") and the Delegated Acts
adopted thereunder as well as in accordance with their own interpretation of the wording and terms contained in the EU Taxonomy
Regulation and the Delegated Acts adopted thereunder that is presented in the EU Taxonomy disclosure.
Responsibilities of management
We have performed a limited assurance engagement on the "EU Taxonomy disclosure" in chapter 11 of the group management report of
Siemens Aktiengesellschaft, Berlin and Munich (hereinafter the "Company"), which is combined with the management report of Siemens
Aktiengesellschaft, for the period from October 1, 2022 to September 30, 2023 (hereinafter the "EU Taxonomy disclosure").
To Siemens Aktiengesellschaft, Berlin and Munich
Independent auditor's report on a limited assurance
engagement on the EU Taxonomy disclosure
In addition, management is responsible for such internal control as it has determined necessary to enable the preparation of ESEF
documents that are free from material intentional or unintentional non-compliance with the requirements of Sec. 328 (1) HGB for the
electronic reporting format.
Note 17 Other provisions
13
Note 18 Liabilities
3
thereof positive interest from borrowing
51
(1,586)
4
Interest expenses
(18)
(1)
thereof negative interest from financial investment
387
1,014
341
4
4,204
4,734
3
Income (loss) from investments, net
(485)
151
Income (loss) from operations
(464)
(391)
2
Other operating expenses
Interest income
159
Other financial income (expenses), net
445
3,760
(185)
(950)
185
250
3,612
4,460
27
Unappropriated net income
Allocation to other retained earnings
Profit carried forward
5
Net income
3,612
4,460
498
(298)
6
Net income
Income taxes
3,115
4,758
Income from business activity
(1,044)
Appropriation of net income
338
2
(1,055)
17
Note 29 Declaration of Compliance with the German Corporate Governance Code
17
Note 28 Remuneration of the members of the Managing Board and the Supervisory Board
17
Note 27 Proposal for the appropriation of net income
17
Note 26 Derivative financial instruments and valuation units
15
Note 25 Other financial obligations
15
Note 30 Subsequent events
Note 24 Financial payment obligations under lease and rental arrangements
Note 23 Guarantees and other commitments
14
45557EE702
Note 22 Shares in investment funds
14
Note 21 Share-based payment
13
Note 20 Personnel expenses
13
Note 19 Material expenses
13
15
18
Note 31 Members of the Managing Board and Supervisory Board
Note 32 List of subsidiaries and associated companies pursuant to Section 285 no. 11, 11a and 11b of the
German Commercial Code
(1,209)
(2,228)
(2,492)
(1,785)
(2,084)
4,888
5,989
(12,502)
(13,671)
19,660
1
2022
2023
Note
Other operating income
General administrative expenses
Selling expenses
Research and development expenses
Gross profit
Cost of sales
Revenue
(in millions of €)
Fiscal year
Annual Financial Statements
1. Income Statement
3
•
Other legal and regulatory requirements
(783)
Retirement of treasury shares
Share buyback
Issuance under share-based payments and employee share programs
Treasury shares, end of fiscal year
2023
57,454,171
(50,000,000)
6,853,091
(4,227,344)
10,079,918
Siemens AG held 10,079,918 treasury shares, equaling a nominal amount of €30 million, representing 1.3% of the capital stock.
On June 24, 2021, Siemens announced a share buyback with a volume of up to €3 billion in the period from the beginning of fiscal 2022
to 2026. The share buyback, which began on November 15, 2021 and will run no longer than until September 15, 2026, is executed based
on the authorizations granted by the Annual Shareholders' Meeting on February 5, 2020. In addition to the dividend policy, the share
buyback is intended to allow shareholders to continuously participate in the success of the Company. In fiscal 2023, Siemens AG
repurchased a total of 6,853,091 treasury shares under this buyback program. This represented a nominal amount of €21 million or 0.9%
of capital stock. In the current reporting period, €884 million (excluding incidental transaction charges) were spent for this purpose; this
represents a weighted average stock price of €129.04 per share. The purchases were made in the reporting period on 248 Xetra trading
days and were carried out by a bank that had been commissioned by Siemens AG; the shares were purchased exclusively on the electronic
trading platform of the Frankfurt Stock Exchange (Xetra). The average volume on these trading days was about 27,633 shares.
11
Annual Financial Statements
The treasury shares purchased under the share buybacks may be used for purposes of retirement, distribution to employees, members of
the executive bodies of companies affiliated with Siemens and members of the Managing Board, as well as the servicing of convertible
bonds with attached warrants.
Following the 2023 Annual Shareholders' Meeting, the Management Board resolved to redeem 50,000,000 treasury shares.
In fiscal 2023, Siemens AG re-issued in total 4,227,344 treasury shares under the exclusion of subscription rights in connection with share-
based payments and employee share programs in the Group, equaling a nominal amount of €13 million and 0.5% of capital stock. The
Company received in total €236 million for 1,843,831 shares, re-issued against payment of a purchase price. Siemens AG received this
amount for unrestricted use. All shares were sold as investment shares in connection with the share matching program to plan participants.
In each case, the purchase price was determined on the basis of the closing rate in Xetra trading, determined on a monthly effective date.
Therefore, in the reporting period, in total 1,297,391 shares related to the monthly investment plan at a weighted average share price of
€138.69 per share, 227,427 shares related to the share matching plan at a weighted average share price of €145.02 per share, and
319,013 shares related to the base share program at a weighted average share price of €72.51 per share (after consideration of a 50%
subsidy by the Company). The other shares re-issued during the reporting period can be primarily attributed to the servicing of stock
awards granted in fiscal 2019 totaling 1,693,126 shares, to 573,467 matching shares under the share matching program for fiscal 2020,
and to 116,920 jubilee shares.
Information on amounts subject to dividend payout restrictions
(in millions of €)
Fiscal Year
Treasury shares, beginning of fiscal year
2023
(in number of shares)
The following table presents the development of treasury shares:
950
6,555
3,613
20,623
(3,362)
3,510
3,760
(884)
586
(3,362)
4,460
21,422
The capital stock of Siemens AG is divided into 800,000,000 registered shares (2022: 850,000,000 registered shares) of no-par value with
a notional value of €3.00 per share.
Authorized capital
As of September 30, 2023, Siemens AG had authorized capital totaling a nominal amount of €600 million, which can be issued in
instalments and with different time limits by issuing up to 200 million registered no-par value shares.
In detail, there are the following authorizations to increase the capital stock:
.
By resolution of the Annual Shareholders' Meeting of February 3, 2021, the Managing Board is authorized to increase the capital stock
until February 2, 2026 by up to €90 million through the issuance of up to 30 million Siemens shares against contributions in cash
(Authorized Capital 2021). Subscription rights of existing shareholders are excluded. The new shares may exclusively be offered to
employees of Siemens AG and its affiliated companies (employee shares). To the extent permitted by law, employee shares may also be
issued in such a manner that the contribution to be paid on such shares is covered by that part of the annual net income which the
Managing Board and the Supervisory Board may allocate to other retained earnings under Section 58 para. 2 of the German Stock
Corporation Act.
Further, by resolution of the Annual Shareholders' Meeting of January 30, 2019, the Managing Board is authorized to increase, with the
approval of the Supervisory Board, the capital stock until January 29, 2024 by up to €510 million through the issuance of up to 170
million registered no-par value shares against cash contributions and/or contributions in kind (Authorized Capital 2019). Under certain
conditions, the Managing Board is authorized, with the consent of the Supervisory Board, to exclude shareholders' subscription rights
in the event of issue against contributions in kind. In the case of issue against cash payment, the shares are generally to be offered to
shareholders for subscription. However, the Managing Board is authorized, with the consent of the Supervisory Board, to exclude
subscription rights, firstly for any fractional amounts, secondly, to grant dilution compensation in connection with convertible bonds or
bonds with warrants already issued, and thirdly, under certain further conditions, if the issue price of the new shares does not fall
significantly below the stock exchange price of the Company's already listed shares.
Treasury shares
Fiscal year
431
Amount representing the difference of the recognition of provisions and similar commitments based on average interest rates covering ten and
seven years, respectively
Amounts from the capitalization of deferred taxes
Sep 30,
2023
up to 1
year
1 year up
more than
Sep 30,
up to
1 year up
to 5 years
5 years
2022
1 year
to 5 years
thereof
maturities
more than
5 years
339
2
337
639
Liabilities to affiliated companies
257
Trade payables
(in million of €)
2,294
Amounts from the capitalization of assets at fair value
18
These amounts subject to dividend payout restrictions face other retained earnings in a sufficiently high amount. The unappropriated net
income of €3,760 million is available for distribution.
Disclosures on shareholdings of Siemens AG
As of September 30, 2023, the following information on shareholdings subject to reporting requirements was available to the Company
pursuant to Section 160 para 1 No. 8 German Stock Corporation Act (Aktiengesetz):
BlackRock, Inc., Wilmington, USA, informed us on August 7, 2023, that as of August 2, 2023, its percentage of voting rights (held either
directly or indirectly) in Siemens AG amounted to 6.68% of which 6.56% were voting rights from 52,480,190 shares due to their
participation and 0.12% were attributable to instruments.
Goldman Sachs Group, Inc., Wilmington, USA, informed us on December 22, 2022, that as of December 16, 2022, its percentage of voting
rights (held either directly or indirectly) in Siemens AG amounted to 4.15% of which 0.28% were voting rights from 2,377,304 shares due
to their participation and 3.87% were attributable to instruments.
The Werner Siemens-Stiftung, Zug, Switzerland, notified us on January 21, 2008, that its percentage of voting rights (held either directly
or indirectly) in Siemens AG exceeded the threshold of 3% of the voting rights in our Company on January 2, 2008 and amounted to 3.03%
(27,739,285 voting rights) as per this date.
NOTE 16 Provisions for pensions and similar commitments
In Germany, Siemens AG provides pension benefits through the BSAV (Beitragsorientierte Siemens Altersversorgung), frozen legacy plans
and deferred compensation plans. The majority of Siemens' active employees participate in the BSAV. The benefits are predominantly
based on nominal contributions by the Company and investment returns on assets designated to that plan, subject to a minimum return
guaranteed by the Company. At inception of the BSAV, benefits provided under the frozen legacy plans were modified to substantially
eliminate the effects of compensation increases. However, the frozen plans still expose Siemens to investment risk, interest rate risk,
inflation risk and longevity risk. The pension benefits are funded via contractual trust arrangements (CTA). A portion of these trust assets
also covers the pension obligations of other domestic subsidiaries. Therefore, the assets do not meet the criteria for offsetting against the
pension obligation and are presented as financial assets of Siemens AG.
The actuarial assumptions for valuation of the settlement amount as of September 30, 2023 were based, among others, on a discount
rate of 1.81% and an average weighted pension increase of 2.40% p.a. The mortality tables used (Siemens Bio 2017/2023) are primarily
based on data of the German Siemens population, using a set of formulas that corresponds to generally accepted actuarial standards.
NOTE 17 Other provisions
The major amounts in other provisions were contributed by provisions related to personnel costs amounting to €1,136 million, provisions
for contingent losses from derivative financial instruments amounting to €723 million, provisions for warranties, delay compensations,
penalties for delay and breach of contract amounting to €639 million, provisions for decontamination obligations amounting to €489
million, and provisions related to guarantees and expected obligations from consortium agreements amounting to €267 million.
In May 2021, Siemens AG and the Federal Republic of Germany entered into a public-law contract based on which the obligation of final
disposal of nuclear waste is transferred to the Federal Republic of Germany for a payment of €360 million. The contract and therefore the
payment is subject to the approval of the EU commission under state-aid rules. Estimation uncertainties still relate to assumptions made
to measure the obligations that remain with Siemens AG, with regard to conditioning and packaging of nuclear waste, as well as
intermediate storage and transport to the final storage facility "Schacht Konrad" or a logistics depot until year-end 2032.
12
NOTE 18 Liabilities
Annual Financial Statements
thereof
maturities
Liabilities to banks
639
(864)
6,188
thereof
maturities
more than
one year
51
26,093
4,345
1,340
193
161
1,330
193
5,295
4,588
29,090
Receivables from affiliated companies resulted primarily from intragroup-financing activities and included trade receivables totaling €15
million (2022: €12 million).
NOTE 13 Deferred tax assets
Deferred tax assets resulted mainly from pension provisions and pension-related assets, from deferred taxes of companies forming part of
the Siemens AG tax group, as well as from other provisions and tax loss carryforwards. Deferred taxes from partnerships had an offsetting
effect.
For the measurement of deferred taxes, a tax rate of 31.33% was applied. Deviating from this, a tax rate of 15.83% was applied for
temporary differences related to assets, liabilities and prepaid/deferred items of partnerships.
NOTE 14 Active difference resulting from offsetting
(in millions of €)
161
Fair value of designated plan assets
5,119
1,222
60
57
2,487
2,377
(in millions of €)
Trade receivables
Receivables from affiliated companies
Other receivables and other assets
thereof from long-term investees
thereof other assets
Receivables and other assets
Sep 30, 2023
thereof
maturities
more than
one year
15
Sep 30, 2022
1,657
ph
1,762
21,630
1,227
5
24,619
(150)
Settlement amount for offset pension provisions
Active difference resulting from offsetting
Dividend
for 2022
Net income
Sep 30, 2023
2,550
(150)
2,400
(172)
150
(21)
13
(30)
2,378
(21)
13
2,370
8,445
150
142
8,737
Annual Financial Statements
Settlement amount for offset personnel-related provisions
Issuance of treasury
shares under share-
based payments
and employee
share programs
Retirement of
treasury shares
Acquisition cost of designated plan assets
64,065
2023
1,011
(694)
(285)
33
939
10
10
NOTE 15 Shareholders' equity
(in millions of €)
Subscribed capital
Treasury shares
Issued capital
Capital reserve
Other retained earnings
Unappropriated net income
Shareholders' equity
Subscribed capital
Oct 01, 2022
Share buybacks
910
2,374
7
(5,005)
(75,860)
4,740,136
The pro rata intrinsic value of all stock awards issued to beneficiaries of Siemens AG amounted to €343 million at the balance sheet date.
Share Matching Program
Plan participants receive the right to one Siemens share without payment (matching share) for every three investment shares continuously
held over a vesting period.
Matching shares granted to beneficiaries of Siemens AG are expensed as incurred over the vesting period and are measured at the intrinsic
value (= share price of the Siemens stock) at the balance sheet date on a pro rata basis for the proportion of the vesting period expired at
the balance sheet date.
The following table shows the changes in the entitlements to matching shares of beneficiaries of Siemens AG:
(in number of shares)
Outstanding, beginning of fiscal year
Granted
Vested and fulfilled
Forfeited
Settled
Organizational changes
Outstanding, end of fiscal year
The pro rata intrinsic value of all matching shares issued to beneficiaries of Siemens AG amounted to €47 million.
NOTE 22 Shares in investment funds
The following shares in investment funds according to investment objects were held:
(924,465)
(in million of €)
(730,891)
5,111,928
7,100
6,300
49,000
Siemens AG allows employees and members of the Managing Board to participate in share-based payment programs. For the purpose of
servicing share-based payment programs, Siemens AG also delivers Siemens shares, which have been granted by affiliated companies.
Stock Awards
Siemens AG grants stock awards to members of the Managing Board, members of the senior management and other eligible employees.
Stock awards to beneficiaries of Siemens AG are expensed as incurred over the vesting period and are measured at the intrinsic value
(= share price of the Siemens stock) at the balance sheet date on a pro rata basis for the proportion of the vesting period expired, if
applicable, considering the estimated target attainment at the balance sheet date.
13
Annual Financial Statements
The following table shows the changes of stock awards subject to performance conditions held by beneficiaries of Siemens AG and, for
the first time since fiscal 2023 due to the overall increase in volume, also stock awards not subject to performance conditions:
(in number of shares)
Non-vested, beginning of fiscal year
Granted
Vested and fulfilled
Forfeited
Settled
Organizational changes
Non-vested, end of fiscal year
Fiscal year
2023
1,364,429
8,300
Mixed funds
Share-based funds
2,679
343
Generally, shares in investment funds are accounted for securities held as non-current financial assets. Exceptions were those shares which
represented plan assets and therefore were not accessible by all other creditors. These shares are held exclusively for the purpose of
settling liabilities arising from post-employment obligations or comparable obligations with a long-term maturity, and are to be offset
against such liabilities.
NOTE 23 Guarantees and other commitments
(in millions of €)
Obligations from guarantees
Warranty obligations
thereof relating to financing of affiliated companies
thereof relating to performance guarantees on behalf of affiliated companies
thereof Others
Guarantees and other commitments
Sep 30,
2023
3,395
101,116
70,041
23,040
8,036
104,511
14
2,336
Bond-based funds
50
24
Money market funds
Shares in investment assets according to investment objects
Fiscal year
2023
667,125
307,201
(296,040)
(31,134)
(15,853)
(29,029)
602,270
Carrying
amount
1,941
Market value
2,284
Sep 30, 2023
Deviation
from carrying
amount
343
321
321
24
50
2,367
27,200
Fiscal year
thereof miscellaneous liabilities
1,217
1,198
19
1,074
1,013
61
therein from taxes
111
111
93
93
therein for social security
91
91
137
137
Liabilities
63,417
6
57,737
6
5
2,249
2,209
40
59,483
54,165
3,732
1,585
63,946
56,143
6,119
1,684
Other liabilities
1,222
1,203
19
1,080
1,019
61
thereof to long-term investees
5
2023
4,095
67,914
Expenses for pensions
Personnel expenses
Fiscal year
2023
2022
(4,767)
(4,186)
(689)
(674)
(1,148)
(1,213)
(6,603)
(6,073)
Personnel expenses did not include the expenses resulting from the compounding of the pension and personnel-related provisions, which
are included in other financial income (expenses), net. Expenses for pensions mainly included effects from pension increases due to the
continued high consumer price index as part of the actuarial valuation of the settlement amount of pension obligations.
The breakdown of employees per function is as follows:
Production
Sales
Research and development
Administration and general functions
Employees
NOTE 21 Share-based payment
Social security contributions and expenses for other employee benefits
1,585
Wages and salaries
(9,117)
60,010
6,220
1,684
Liabilities to affiliated companies resulted primarily from intragroup-financing activities.
3.5 Other disclosures
NOTE 19 Material expenses
(in millions of €)
Expenses for raw materials, supplies and purchased merchandise
Costs of purchased services
Material expenses
NOTE 20 Personnel expenses
Fiscal year
2023
2022
(6,047)
(5,541)
(4,210)
(3,576)
(10,257)
(in millions of €)
937
Sep 30,
399
Disposals
Accumulated depreciation/amortization
Annual Financial Statements
Intangible assets
(in millions of €)
NOTE 10 Non-current assets
3.4 Notes to the Balance Sheet
8
The income statement of Siemens AG included expenses relating to prior periods of €34 million.
NOTE 9 Expenses relating to prior periods
The income statement of Siemens AG included income relating to prior periods of €520 million, resulting mainly from the release of
provisions.
NOTE 8 Income relating to prior periods
Other taxes of €21 million (2022: €11 million) were included in functional costs.
NOTE 7 Other taxes
Deferred taxes included income from an increase in deferred taxes related to partnerships, pension provisions, and from entities forming
part of the Siemens AG tax group.
498
(298)
350
229
Sep 30, 2023
(325)
Sep 30, 2023
Acquisition or production costs
39
(20)
(237)
310
(41)
178
505
129
203
49
303
Concessions and industrial property rights
Goodwill
Write-ups
Depreciation/
amortization
Oct 01, 2022
Sep 30, 2023
Disposals
Additions Reclassifications
Oct 01, 2022
Carrying amount
Sep 30, 2022
(217)
(527)
2023
510
479
138
(28)
(487)
(181)
Result from changes in provisions for risks relating to derivative financial instruments
Reversal of impairments of loans and securities
Result from foreign currency, interest rate and other derivative financial instruments
Result from realization of monetary balance sheet items denominated in foreign currencies
Interest component of changes in the pension and personnel-related provisions that are not offset
against designated plan assets
(52)
22
Financial income (expenses), (net) from pension and personnel-related provisions that are offset
against designated plan assets
(89)
(1)
19
44
18
(21)
59
2022
(361)
76
Fiscal year
Income taxes
Deferred taxes
Income tax expenses
(in millions of €)
Annual Financial Statements
NOTE 6 Income taxes
7
Result from foreign currency, interest rate and other derivative financial instruments included income of €536 million from the termination
of interest rate hedging contracts and combined interest and currency hedging contracts in connection with intragroup financing.
(1,044)
445
Other financial income (expenses), net
(3)
Other financial expenses
40
23
(904)
Other financial income
Impairments of loans and securities
71
93
66
(12)
110
Advanced payments made and construction in
progress
61
55
(115)
5
(11)
(109)
170
(6)
6
170
Equipment leased to others
263
298
(872)
186
(141)
(917)
107
1,170
(59)
145
269
64,580
Shares in investments
Shares in affiliated companies
Financial assets
928
1,022
(2,153)
445
(225)
(2,298)
3,100
(493)
366
3,227
108
144
(1)
(1)
(12)
(196)
16
171
445
buildings on third-party land
Land, land rights and buildings, including
Property, plant and equipment
153
285
(345)
48
(40)
(353)
630
(53)
87
192
(128)
9
(20)
(116)
319
5
1
(9)
442
1,180
Other equipment, plant and office equipment
309
343
(830)
247
(65)
(1,013)
1,173
Expenses from designated plan assets
(269)
78
1,322
Technical equipment and machinery
187
183
(259)
7
(8)
(258)
42
Income from designated plan assets
823
2022
166
1,040
(3,492)
2,730
3,102
Loans
4,673
1,598
(1,450)
4,821
4,821
4,673
Securities
1,591
268
(133)
1,727
(217)
63
(166)
(154)
(4,531)
(1,412)
Property, plant and equipment: The components of production costs are described in the context of the explanations for inventories. In
general, property, plant and equipment is depreciated using the straight-line method. In certain cases, the declining balance method is
applied, whereby a switch is made from the declining balance to the straight-line method as soon as the latter results in higher depreciation
expense. Items are depreciated on a pro rata temporis basis in the year of acquisition. Low-value non-current assets that are subject to
wear and tear, movable, and capable of being used independently, are expensed immediately or capitalized and fully depreciated in the
year of acquisition.
Acquired goodwill is generally amortized systematically over the expected useful life of five to 15 years. The expected useful life is based
on the expected use of the acquired businesses and is determined in particular by economic factors such as future growth and profit
expectations, synergy effects and employee base.
Intangible assets acquired for consideration are capitalized at acquisition costs and amortized on a straight-line basis over a maximum of
five years or, if longer, the contractually agreed useful life. Items are amortized on a pro rata temporis basis in the year of acquisition. The
capitalization option for internally generated intangible assets is not used.
Negative interest from financial investments is presented as a deduction in interest income, and positive interest from borrowings as a
deduction in interest expenses.
Revenue are proceeds from selling and leasing products, providing services and granting licenses, including licensing contracts for the
use of the Siemens trademark.
3.2 Accounting and Measurement Principles
The Annual Financial Statements of Siemens AG have been prepared in accordance with the regulations set forth in the German
Commercial Code (Handelsgesetzbuch, HGB) and the German Stock Corporation Act (Aktiengesetz, AktG). Amounts are presented in
millions of euros (€ million). Due to rounding, numbers presented may not add up precisely to totals provided.
Siemens AG has registered offices in Berlin and Munich, Germany. The Company is registered in the commercial register maintained by
the local courts in Berlin Charlottenburg, Germany, under the entry number HRB 12300, and in Munich, Germany, under the entry number
HRB 6684.
3.1 General Disclosures
3. Notes to Annual Financial Statements
Annual Financial Statements
(12)
58
222
(1,886)
62,180
62,427
7,632
2
6,222
Useful lives of property, plant and equipment
1,572
78,476
Annual Financial Statements
Loans included loans to affiliated companies in the amount of to €4,383 million (2022: €4,244 million), and other loans in the amount of
€438 million (2022: €430 million).
Total impairments of non-current assets were €179 million (2022: €4,268 million).
NOTE 11 Inventories
(in millions of €)
Raw materials and supplies
Work in progress
Finished products and goods
Cost of unbilled contracts
Advance payments made
Inventories
NOTE 12 Receivables and other assets
Sep 30,
2023
2022
812
762
278
298
9
1,374
72,657
(7,955)
2,136
Interest component of changes in the pension and personnel-related provisions that are offset
against designated plan assets
76,835
(6,900)
(179)
286
1,261
(5,532)
71,303
71,576
Non-current assets
82,208
2,680
(4,324)
80,565
(9,551)
(444)
286
1,754
72,610
Factory and office buildings
(3,778)
Technical equipment and machines
2,905
4,789
2,907
2022
2023
Fiscal year
Income (loss) from investments, net
Losses from the disposal of investments
Gains from the disposal of investments
Reversals of impairments on investments
Impairments on investments
Expenses from loss transfers from affiliated companies
Income from profit transfer agreements with affiliated companies
thereof from affiliated companies
Income from investments
(in millions of €)
Annual Financial Statements
NOTE 3 Income (loss) from investments, net
6
4,768
Other operating expenses included a loss of €196 million on the disposal relating to the carve-out of business activities into Innomotics
GmbH, Germany (a supplier of engines and large drives).
1,562
(61)
Other buildings
Fiscal year
2023
(in millions of €)
NOTE 5 Other financial income (expenses), net
Both the increase in interest income from €387 million in the prior year to €1,014 million in the current fiscal year and the swing in interest
expense from income of €51 million in the prior year to expenses of €1,586 million in the current fiscal year resulted primarily from the
effects of higher interest rates in connection with intragroup financing. Interest income included interest income from affiliated companies
of €890 million (2022: €347 million). Interest expenses included interest expenses from affiliated companies of €1,548 million (2022:
€67 million interest income). Interest income from loans of non-current financial assets amounted to €113 million (2022: €80 million).
NOTE 4 Interest income and interest expenses
In fiscal year 2023, Siemens AG sold 3.5% of the shares in Siemens Energy AG that were held as pension assets at that time. This resulted
in a gain of €213 million from the disposal of investments. As of the balance sheet date, Siemens AG directly held a 21.0% stake in Siemens
Energy AG. A reversal of impairment in the amount of €166 million was made on these shares based on Xetra closing price on the balance
sheet date. As of the reporting date, the carrying amount of the investment in Siemens Energy AG amounted to €2.1 billion.
Income from profit transfer agreements with affiliated companies included profit transfers from Siemens Beteiligungen Inland GmbH,
Germany, amounting to €1,323 million, and from Siemens Financial Services GmbH, Germany, amounting to €188 million.
Impairments on investments included an impairment of €164 million on a stake in Thoughtworks Holding, Inc., U.S.
Income from investments included in particular profit distributions from Siemens Ltd., China, amounting to €1,987 million, and from
Siemens Healthineers AG, Germany, amounting to €634 million.
4,204
4,734
(124)
(19)
61
240
61
224
(3,997)
(179)
3,474
Other operating income included income from an intragroup service contract in the amount of €148 million. Income from the release of
the special reserve with an equity portion was €1 million (2022: €1 million).
(2,078)
19,660
Classification of items in the annual financial statements: Siemens AG aggregates individual line items of the Income Statement and
Balance Sheet if the individual line item is not material for providing a true and fair view of the Company's financial position and if such
an aggregation improves the clarity of the presentation. Siemens AG discloses these items separately in the notes.
Derivative financial instruments are used by Siemens AG almost exclusively for hedging purposes and – if the relevant conditions are
met- are aggregated with the underlying hedged item into valuation units. When a valuation unit is created, changes in values or cash
flows from the hedged item and hedging contract are compared. A provision is recognized only for a negative surplus from the ineffective
part of the market value changes. The unrealized gains and losses from the effective part offset each other completely and are not
recognized in the Balance Sheet or the Income Statement.
Guarantees and other commitments: Siemens AG issues parent company guarantees, i.e. guarantees to ensure performance obligations
incurred from the delivery of goods or provision of services by affiliated and long-term investee companies or their parent companies. For
measurement purposes, the contract amount of the secured delivery or service agreement is reduced using the straight-line method over
the planned term of the delivery or service agreement, unless there are reasons for a different risk assessment and an increased liability
amount ("risk-adequate liability amount"). Credit lines included in the guarantee obligations in the context of financing affiliated
companies are recognized at their nominal amount.
Foreign currency translation: Receivables, other current assets, securities, cash and cash equivalents, provisions and liabilities (excluding
advance payments received on orders) as well as commitments and contingencies denominated in foreign currency are generally
measured applying the mean spot exchange rate on the balance sheet date. Balance Sheet line items denominated in foreign currency
which are part of a valuation unit used to hedge foreign currency risk are measured using the mean spot exchange rate on the transaction
date. Non-current assets and inventories acquired in foreign currency are generally measured applying the mean spot exchange rate on
the transaction date.
Other provisions are recognized in an appropriate and sufficient amount to cover individual obligations for all identifiable risks relating
to liabilities of uncertain timing and amount and for anticipated losses on onerous contracts, taking account of price and cost increases
expected to arise in the future. Provisions for agreed personnel restructuring measures were recognized for legal and constructive
obligations. Significant provisions with a remaining term of more than one year are discounted using a discount rate which corresponds
to the average market interest rate appropriate for the remaining term of the obligations, as calculated and published by Deutsche
Bundesbank.
According to the Act on the Improvement of Company Pensions (Gesetz zur Verbesserung der betrieblichen Altersversorgung), Siemens
AG is secondarily liable for pension benefits provided under an indirect pension funding vehicle (mittelbarer Durchführungsweg). Siemens
AG recognizes the underfunding in the item Provisions for pensions and similar commitments as far as the respective assets of the pension
fund or of the pension and support fund (Pensions- und Unterstützungskasse) do not cover the settlement amount of the respective
pension obligations.
Entitlements resulting from plans based on asset returns from underlying assets are generally measured at the fair value of the underlying
assets at the balance sheet date. If the performance of the underlying assets is lower than a guaranteed return, the pension provision is
measured by projecting forward the contributions at the guaranteed fixed return and discounting to a present value.
Annual Financial Statements
Pensions and similar commitments: Siemens AG measures its pension obligations using the settlement amount calculated with the
actuarial projected unit credit method on the basis of biometric probabilities. The discount rate used corresponds to the average market
interest rate for instruments with an assumed remaining maturity of 15 years as published by German Federal Reserve Bank (Deutsche
Bundesbank).
Offsetting of assets and of income and expenses: Siemens AG measures assets at fair value that are designated as being held exclusively
to settle specified pension obligations and obligations for early retirement ("Altersteilzeit") arrangements and which cannot be accessed
by other creditors.
Deferred tax assets for differences between valuations of balance sheet line items in accordance to commercial and tax law and tax loss
carryforwards are recognized if a future tax benefit is expected. Deferred tax assets are netted with deferred tax liabilities. Recognized
deferred tax assets and liabilities comprise temporary differences of assets, liabilities, and deferred items of entities forming part of the
Siemens AG tax group and partnerships to the extent that the recovery or settlement of the carrying amount of assets, liabilities, or deferred
items result in a deductible or taxable amount in the taxable profit (loss) of Siemens AG.
Allowances on receivables are determined on the basis of the probability of default and country risks.
Financial assets: Impairment losses are recognized if the decline in value is presumed to be other than temporary. This applies, if objective
evidence, particularly events or changes in circumstances, indicate a significant or other than temporary decline in value. In case of an
impairment in prior periods, a lower recognized value may not be maintained if the reasons for the impairment do no longer exist.
Inventories are measured at the lower of average acquisition or production costs and daily values. Production costs comprise, in addition
to direct costs, an appropriate portion of production and material overheads and depreciation of property, plant and equipment. General
administration expenses, expenses for social facilities, voluntary social costs and company pension scheme costs are not capitalized. Write-
downs are recorded to cover inventory risks for reduced usability and technological obsolescence as well as in the context of loss-free
valuation of unbilled contracts in construction-type and service businesses.
Special reserve with an equity portion includes reserves pursuant to Section 6b of the German Income Tax Act
(Einkommensteuergesetz), recognized and transferred in fiscal years prior to the transition to regulations of the German Accounting Law
Modernisation Act (Bilanzrechtsmodernisierungsgesetz).
mostly 3 to 5 years
3 to 8 years
20 to 50 years
5 to 10 years
mostly 10 years
Other equipment, plant and office equipment
Equipment leased to others
NOTE 2 Other operating income and expenses
3.3 Notes to the Income Statement
NOTE 1 Revenue
5
(in millions of €)
1,606
Revenue by lines of business
3,346
14,708
2023
Fiscal year
19,660
6,127
11,220
2023
2,313
Other revenue
Revenue
Asia, Australia
Europe, C.I.S., Africa, Middle East
Americas
(in millions of €)
Revenue by region
Revenue
Fiscal year
Smart Infrastructure
Digital Industries
Other
provisions
(722)
(1)
Other assets
Sep 30, 2023
Annual Financial Statements
Interest rate hedging contracts
(in millions of €)
The following table shows the carrying amounts, if any, of derivative financial instruments that are not included in valuation units and the
balance sheet items in which the carrying amounts are recognized:
Other liabilities
Combined interest and currency hedging contracts
Derivative financial instruments requiring recognition
(723)
thereof liabilities
Valuation unit used to hedge the foreign currency risk
According to the Company policy, Siemens units are responsible for recording, assessing and monitoring their foreign currency transaction
exposure. Foreign currency transaction exposure of the Siemens units from contracted business and cash balances in foreign currency is
generally hedged approximately by 100% with Corporate Treasury. Foreign currency transaction exposure of the Siemens units from
planned business above defined thresholds has to be hedged with Corporate Treasury within a band of 75% to 100% for a hedging period
of at least three months.
The remaining foreign currency risk after offsetting cash flows in the same currency is hedged by the Corporate Treasury with external
contract partners. The net foreign currency position (before hedging) is combined with the offsetting foreign currency exchange contracts
to a macro valuation unit. For this purpose, hedged items and hedging instruments are measured with the respective underlying
discounted cash flows. For foreign currency derivative financial instruments, the determination is based on the changes in relevant forward
exchange rates. The existing derivative currency hedging contracts are included in the valuation unit in their entirety and had maturity
terms until the year 2041. The cash in- and outflows from the foreign currency exchange contracts, firm commitments and forecast
transactions are disclosed on a net basis in the following table.
Sep 30,
(in millions of €)
Foreign currency risk from balance sheet items
thereof assets
Foreign currency risk from firm commitments and forecast transactions
thereof expected cash inflows from firm commitments and forecast transactions
thereof expected cash outflows from firm commitments and forecast transactions
15
Provided the relevant conditions are met, derivative financial instruments are aggregated with the underlying hedged item into valuation
units. Using the freezing method, the hedging transactions are not recognized in the balance sheet. The effectiveness of the valuation
unit is either ensured through risk management, or is demonstrated both prospectively and retrospectively based on appropriate methods
used to demonstrate effectiveness (e.g. dollar offset method, regression method, sensitivity analysis). Valuation gains and losses from
derivative financial instruments and hedged items are netted for each valuation unit. A provision for anticipated losses on onerous
contracts is recognized for the respective valuation unit in the amount of an existing loss surplus. Profit surpluses are not recognized.
Fair values of these derivative financial instruments are calculated by discounting expected future cash flows over the remaining term of
the instrument using current market interest rates and yield curves.
Interest rate hedging contracts
-
369
Combined interest and currency hedging contracts
Notional
amount
8,038
Net foreign currency position (before hedging)
(in millions of €)
Sep 30, 2023
The following table shows the notional volume and net fair values of existing derivative financial instruments that were not included in a
valuation unit as of the balance sheet date:
As a consequence of its global operating, investing and financing activities, Siemens AG is in particular exposed to risks resulting from
changes in exchange rates and interest rates, managed in line with a proven risk management system in consideration of defined risk
limits. As the parent company of the Siemens Group, Siemens AG has the central role within the group-wide management of financial
market risks. To manage the risks resulting from changes in exchange rates and interest rates, Siemens AG uses primarily foreign currency
forward contracts, interest rate swaps as well as combined interest and foreign currency swaps. Thereby the operating units of Siemens
AG are not allowed to enter into derivative financial instruments for speculative purposes. The contract partners of the Company for
derivative financial instruments are banks, brokers and affiliated companies. The credit rating for banks and brokers is constantly
monitored.
NOTE 26 Derivative financial instruments and valuation units
In the course of its normal business operations, Siemens AG is involved in numerous legal and regulatory proceedings as well as
governmental investigations (legal proceedings) in various jurisdictions. These legal proceedings could result in particular in the Company
being subject to payment of damages and punitive damages, equitable remedies or criminal or civil sanctions, fines or disgorgements of
profit. In individual cases, this may also lead to formal or informal exclusion from tenders or the revocation or loss of business licenses or
permits. In addition, further Legal Proceedings may be commenced or the scope of pending Legal Proceedings may be expanded. Some
of these legal proceedings could result in adverse decisions for Siemens AG that may have material effects on its financial position, the
results of its operations and/or its cash flows in the respective reporting period. In addition, Siemens is jointly and severally liable within
consortia. As far as not recognized in the financial statements, Siemens AG did not expect any material negative effects on its financial
position, the results of its operations and/or its cash flows at balance sheet date.
The notional amounts equal the contractual amounts of the individual derivative financial instrument which – irrespective of the nature
of the concluded position (sale or purchase) – are presented on a gross basis (gross notional amounts).
Siemens AG has entered into a contract to pay its affiliated company Siemens Trademark GmbH & Co. KG, Germany, a running royalty for
the use of the Siemens trademark rights. The fee is calculated by applying business-specific royalty rates to brand-related revenue. The
contract has an indefinite duration. For fiscal 2023, the corresponding expenses amounted to €988 million. For fiscal 2024, the royalty is
expected to be in the same magnitude.
NOTE 25 Other financial obligations
Payment obligations under lease and rental arrangements amounted to €1,334 million, of which €201 million resulted from transactions
with affiliated companies. Payment obligations under lease and rental arrangements due within the next fiscal year amounted to €247
million.
Expenses for lease and rental arrangements in which the economic ownership of the leased/rented asset was not attributable to Siemens
AG and the relevant items were not recognized as assets by Siemens AG amounted to €293 million. Object of these contracts were mainly
real estate and other non-current assets.
NOTE 24 Financial payment obligations under lease and rental arrangements
Siemens AG only enters into guarantees and other commitments after careful consideration of the risks concerned and in general only in
relation to its own business activities or those of affiliated companies as well as to business activities of companies, if it holds an investment
in them or their parent companies. Based on an ongoing risk evaluation of the arrangements entered into and taking into account all
information available up to the date on which the Annual Financial Statements were issued for approval, Siemens AG concluded that the
relevant primary debtors are able to fulfill the underlying obligations. For this reason, Siemens AG considered it not probable that it will
be called upon in conjunction with any of the guarantees and commitments described above.
Warranty obligations included obligations of Siemens AG towards affiliated companies totaling €1.0 billion.
The items Obligations from guarantees and Warranty Obligations - Others included guarantees and other commitments for the benefit of
companies of the Siemens Energy Group totaling €0.1 billion and €4.7 billion, respectively, with corresponding full reimbursement rights
towards Siemens Energy Global GmbH & Co. KG. In addition, the items included indemnifications issued in connection with dispositions
of businesses. Such indemnifications, if customary to the relevant transactions, may protect the buyer from potential tax, legal and other
risks in conjunction with the purchased business.
Warranty obligations relating to financing of affiliated companies included guarantees towards banks for credit lines granted to affiliated
companies.
Annual Financial Statements
Fair values
(722)
26
(696)
Approximately €1.5 billion were outstanding as of September 30, 2023, from an outsourcing agreement with a maturity of several years.
Obligations for equity contributions to affiliated companies amounted to €491 million.
Foreign currency exchange contracts (net notional value)
Annual Financial Statements
thereof with affiliated companies
Total remuneration of former members of the Managing Board
Former members of the Managing Board and their surviving dependents received a total of €24.6 million according to Section 285 no. 9b
of the German Commercial Code.
Siemens recognized pension provisions totaling €129.3 million for the pension entitlements to former members of the Managing Board
and their surviving dependents.
Remuneration of the members of the Supervisory Board
Compensation attributable to members of the Supervisory Board comprises a base compensation and additional compensation for
committee work and amounted to €5.3 million (including meeting fees).
NOTE 29 Declaration of Compliance with the German Corporate Governance Code
As of October 1, 2023, the mandatory statement pursuant to Section 161 of the German Stock Corporation Act (AktG) has been issued by
the Managing Board and the Supervisory Board and is permanently accessible on siemens.com/gcg-code.
NOTE 30 Subsequent events
In November 2023, agreements were entered into with the intent to acquire 18% of the shares in Siemens Limited, India from the Siemens
Energy Group for a purchase price of €2.1 billion in cash. Closing of the transaction is expected in December 2023.
17
Annual Financial Statements
NOTE 31 Members of the Managing Board and Supervisory Board
Members of the Managing Board and positions held by Managing Board members
In fiscal 2023, the Managing Board had the following members:
Name
Roland Busch
President and Chief
Executive Officer
Cedrik Neike
Memberships in supervisory boards whose establishment is required by law or in
comparable domestic or foreign controlling bodies of business enterprises
External positions
Date of birth
Therefore, the compensation and benefits attributable to members of the Managing Board amounted to €31.6 million in total.
Members of the Managing Board received cash compensation of €18.8 million. The fair value of share-based compensation amounted to
€10.5 million for 170,111 stock awards. The Company granted contributions under the BSAV to members of the Managing Board totaling
€2.2 million.
Remuneration of the members of the Managing Board
NOTE 28 Remuneration of the members of the Managing Board and the Supervisory Board
Net foreign currency position (after hedging)
2023
3,115
14,073
(10,958)
687
1,245
(558)
3,802
(3,968)
2,671
thereof with external contract partners
(6,639)
Firm commitments and forecast transactions relate to transactions for which a legally binding contract was concluded but not yet
performed on by either contracting party, as well as contingent payment claims for already partially completed performance obligations
in the project and product businesses.
As of September 30, 2023, the fair value of derivative financial instruments from foreign currency hedging transactions was €(4) million,
net. Positive fair values of €1,897 million were offset by negative fair values of €1,901 million. For derivative financial instruments with
negative fair values, no provision for anticipated losses was recognized as part of the valuation unit.
Valuation unit used to hedge the interest rate risk
The interest rate hedging contracts used by Siemens AG serve to reduce interest rate risks within the framework of an integrated asset-
liability management approach and to optimize the interest results.
Siemens AG has entered into interest rate derivatives with external counterparties to hedge interest rate swaps with its affiliated companies
against interest rate risk. As of September 30, 2023, the interest rate swaps with affiliated companies with a maximum maturity term until
the year 2028 included in this macro-valuation unit had a notional amount of €2,121 million and fair values of €122 million. At balance
sheet date, these underlying transactions were matched by external interest rate derivatives with negative fair values of €59 million, net,
and a maximum maturity term until the year 2030.
To hedge interest rate risks arising from payables to affiliated companies, Siemens AG has entered into interest rate derivatives with
external counterparties. As of September 30, 2023, the liabilities hedged in this micro-valuation unit had a nominal volume of €2,347
million and a maximum maturity term until the year 2025. As of September 30, 2023, the positive cumulative changes in the market value
of these payables of €86 million were offset by external interest rate derivatives with identical maturities whose negative market value
was €78 million.
16
The amount of interest rate risks hedged with the valuation unit, which did not lead to a provision for anticipated losses, totaled €165
million.
NOTE 27 Proposal for the appropriation of net income
The Supervisory Board and the Managing Board propose the unappropriated net income of Siemens AG for the fiscal year ended September
30, 2023, amounting to €3,760 million to be appropriated as follows: Distribution of a dividend of €4.70 on each share of no par value
entitled to the dividend, and carry-forward of the unappropriated net income for shares of no par value not entitled to the dividend.
(166)
(Dr. rer. nat.)
First appointed
April 1, 2011
19
Siemens Mobility, s.r.o., Prague / Czech Republic
Siemens, s.r.o., Prague / Czech Republic
17
32
100
46
113
100
Siemens A/S, Ballerup / Denmark
100
9
100
Siemens Aarsleff Konsortium I/S, Ballerup / Denmark
-
674,2
Siemens Osakeyhtiö, Espoo / Finland
15
46
100
43
(2)
(6)
100
(68)
(87)
100
Siemens Healthcare NV, Groot-Bijgaarden / Belgium
8
108
100
Siemens Industry Software NV, Leuven / Belgium
(64)
285
100
Siemens S.A./N.V., Beersel / Belgium
OEZ s.r.o., Letohrad / Czech Republic
Siemens Large Drives, s.r.o., Drasov / Czech Republic
23
94
100
30
65
Siemens France Holding SAS, Courbevoie / France
Siemens Mobility Austria GmbH, Vienna / Austria
71
100
1
63
100
131
1,996
100
252
1,789
Siemens Industry Software Limited, Shannon, County Clare / Ireland
100
Siemens Industry Software Ltd., Airport City / Israel
57
3,810
100
9
118
100
UGS Israeli Holdings (Israel) Ltd., Airport City / Israel
Siemens Concentrated Solar Power Ltd., Rosh Ha'ayin / Israel
Mentor Graphics (Holdings) Unlimited Company, Shannon, County Clare / Ireland
SIEMENS HEALTHCARE INDUSTRIAL AND COMMERCIAL SINGLE MEMBER SOCIETE ANONYME,
Marousi Greece
100
Siemens Healthcare SAS, Courbevoie / France
17
219
100
Siemens Industry Software SAS, Châtillon / France
14
58
100
Siemens Mobility SAS, Châtillon / France
(32)
89
100
Siemens SAS, Courbevoie / France
84
238
100
Siemens A.E., Electrotechnical Projects and Products, Athens / Greece
7
86
173
100
(22)
(1)
1
29
100
Siemens Project Ventures GmbH, Erlangen
44
330
100
Siemens Real Estate GmbH & Co. KG, Kemnath
Siemens Nixdorf Informationssysteme GmbH, Grünwald
14
100
Siemens Trademark GmbH & Co. KG, Kemnath
941
3,502
100
Siemens Treasury GmbH, Munich
1
8
144
100
119
8
48
100
Siemens Immobilien Besitz GmbH & Co. KG, Grünwald
(2)
141
100
Siemens Industry Software GmbH, Cologne
2
292
100
Siemens Logistics GmbH, Nuremberg
(18)
67
100
Siemens Mobility GmbH, Munich
226
2,723
100
Siemens Mobility Real Estate GmbH & Co. KG, Grünwald
100
SIM 2. Grundstücks-GmbH & Co. KG, Grünwald
6
312
Europe, Commonwealth of Independent States (C.I.S.), Africa, Middle East (without
Germany) (95 companies)
Annual Financial Statements
ETM professional control GmbH, Eisenstadt / Austria
15
22
100
Siemens Aktiengesellschaft Österreich, Vienna / Austria
113
1,350
100
Siemens Healthcare Diagnostics GmbH, Vienna / Austria
10
110
100
Siemens Konzernbeteiligungen GmbH, Vienna / Austria
179
1,824
100
Siemens Metals Technologies Vermögensverwaltungs GmbH, Vienna / Austria
20
-
20
42
104
SIMAR Ost Grundstücks-GmbH, Grünwald
1
(30)
100
SPT Beteiligungen GmbH & Co. KG, Grünwald
(1,795)
5,693
1004
Varian Medical Systems Particle Therapy GmbH & Co. KG, Troisdorf
(75)
96
100
VMS Deutschland Holdings GmbH, Darmstadt
4
428
100
Weiss Spindeltechnologie GmbH, Maroldsweisach
(1)
100
556
1
Medical Systems S.p.A., Genoa / Italy
55
000 Siemens, Moscow / Russian Federation
Upsilon 1 LLC, St. Petersburg / Russian Federation
Siemens Mobility d.o.o. Cerovac, Kragujevac / Serbia
Siemens Proprietary Limited, Midrand / South Africa
Fábrica Electrotécnica Josa, S.A.U., Tres Cantos / Spain
SIEMENS HEALTHCARE, S.L.U., Madrid / Spain
Siemens Logistics S.L. Unipersonal, Madrid / Spain
SIEMENS MOBILITY, S.L.U., Tres Cantos / Spain
Siemens Rail Automation S.A.U., Tres Cantos / Spain
Siemens S.A., Madrid / Spain
Siemens AB, Solna / Sweden
Siemens Financial Services AB, Solna / Sweden
Siemens Healthineers International AG, Steinhausen / Switzerland
54
Siemens Industry Software GmbH, Zurich / Switzerland
(4)
15
100
(4)
15
100
(6)
36
Siemens Mobility AG, Wallisellen / Switzerland
12
Siemens W.L.L., Doha Qatar
100
219
205
Siemens AS, Oslo / Norway
Siemens Sp. z o.o., Warsaw / Poland
11
22
100
20
65
100
21
Annual Financial Statements
SIEMENS HEALTHCARE, UNIPESSOAL, LDA, Amadora / Portugal
5
94
100
Siemens S.A., Amadora / Portugal
16
93
100
165
2
85
100
54
600
100
11
191
100
82
231
100
14
891
100
Varian Medical Systems Imaging Laboratory G.m.b.H., Dättwil /Switzerland
20
31
100
Siemens AG - Siemens Sanayi Ve Ticaret AS Velaro Joint Venture, Kartal - Istanbul / Türkiye
Siemens Schweiz AG, Zurich / Switzerland
18
100
95
(1)
44
100
23
300
100
3
10
100
5
69
100
28
671
100
40
227
100
13
37
ZeeEnergie C.V., Amsterdam / Netherlands
100
3,034
EGM Holding Limited, Birkirkara / Malta
66
(47)
335
Varian Medical Systems Mauritius Ltd., Ebene / Mauritius
7
78
100
1005
Buitengaats C.V., Amsterdam / Netherlands
219
205
KIC InnoEnergy S.E., Eindhoven / Netherlands
113
314
65
Mendix Technology B.V., Rotterdam / Netherlands
(79)
165
627
(103)
SPT Invest Management, SARL, Luxembourg Luxembourg
2
132
455
Siemens Healthcare S.r.l., Milan / Italy
17
253
100
Siemens S.p.A., Milan / Italy
123
290
100
FAST TRACK DIAGNOSTICS LUXEMBOURG S.à r.I., Esch-sur-Alzette / Luxembourg
(3)
65
100
SPT Holding SARL, Luxembourg / Luxembourg
6
193
1005
(19)
100
Siemens Electronic Design Automation B.V., Eindhoven / Netherlands
2
100
Siemens Mobility Holding B.V., The Hague / Netherlands
112
1,453
100
Siemens Nederland N.V., The Hague / Netherlands
54
171
100
Sqills Products B.V., Enschede / Netherlands
(3)
577
100
Ural Locomotives Holding Besloten Vennootschap, The Hague / Netherlands
11
100
503
Varian Medical Systems Nederland B.V., Houten / Netherlands
14
11,351
100
1,221
100
16
100
Siemens Financieringsmaatschappij N.V., The Hague / Netherlands
Siemens Healthineers Holding III B.V., The Hague / Netherlands
8
84
100
665
3,944
100
Siemens Healthineers Holding IV B.V., The Hague / Netherlands
13,895
100
Siemens Healthineers Nederland B.V., The Hague / Netherlands
279
1,395
100
Siemens Industry Software Netherlands B.V., Eindhoven / Netherlands
40
542
Siemens International Holding B.V., The Hague / Netherlands
Siemens Healthineers Innovation GmbH & Co. KG, Röttenbach
100
6,408
(since September 14,
2023)
Keryn Lee James
(since February 9, 2023)
Harald Kern²
Jürgen Kerner²
Head of the Regional Office Erlangen /
Nuremberg, Germany, Chairman of the
Committee of Spokespersons of the
Siemens Group and Chairman of the
Central Committee of Spokespersons of
Siemens AG
Chair of the Board of Directors of
OPUS Talent Solutions
April 25,
1968
September
Oliver Hartmann²
2028
December 12, February 9,
1968
2023
2027
March 16,
1960
January 24, 2028
2008
Chief Treasurer and Executive Member of January 22,
the Managing Board of IG Metall
January 25, 2028
1969
14, 2023
18
2028
April 1,
2007
- Fresenius SE & Co. KGaA, Bad Homburg (Deputy
Chairman)³
Positions outside Germany:
- HPE, Houston, Texas, USA³
German positions:
- Airbus Defence and Space GmbH, Taufkirchen
- Siemens Energy AG, Munich³
- Siemens Energy Management GmbH, Munich
German positions:
- Siemens Mobility GmbH, Munich (Deputy
Chairwoman)
Regina E. Dugan
(PhD)
President and Chief Executive Officer of
Wellcome Leap Inc.
March 19,
1963
February 9, 2027
2023
(since February 9, 2023)
Andrea Fehrmann²
(Dr. phil.)
Trade Union Secretary, IG Metall Regional June 21,
Office for Bavaria
1970
Bettina Haller²
Chairwoman of the Combine Works
Council of Siemens AG
March 14,
1959
2012
- Fresenius Management SE, Bad Homburg
Chairman of the Siemens Europe
Committee
Positions outside Germany:
German positions:
- Airbus GmbH, Hamburg
-MAN Truck & Bus SE, Munich (Deputy Chairman)
- Siemens Energy AG, Munich³
Siemens Energy Management GmbH, Munich
Thyssenkrupp AG, Essen (Deputy Chairman)³
- Traton SE, Munich³
Positions outside Germany:
AB Volvo, Gothenburg, Sweden³
German positions:
- Siemens Mobility GmbH, Munich
February 9, 2028
2023
September 3, January 31, 2027
2018
January 30, 2028
2019
May 29, 1956 January 27, 2023
2015
February 3, 2025
2021
February 24,
1962
August 13,
1962
2018
1957
April 26,
1967
February 9, 2027
2023
Member of supervisory boards
Director of the London School of
Economics
OPUS Talent Solutions, UK (Chair)
Martina Merz
(since February 9, 2023)
Christian Pfeiffer
(Dr.-Ing.)²
(since February 9, 2023)
Benoît Potier
Hagen Reimer²
Norbert Reithofer
(Dr.-Ing. Dr.-Ing. E.h.)
(until February 9, 2023)
(as of February 9, 2023)
Kasper Rørsted
Baroness Nemat Shafik
(DBE, DPhil)
(until February 9, 2023)
(as of February 9, 2023)
Nathalie von Siemens
(Dr. phil.)
Member of supervisory boards
March 1,
1963
June 2,
1969
Innovation manager at
Siemens Mobility GmbH,
member of the Combine Works Council
of Siemens AG and of the Central Works
Council of Siemens Mobility GmbH
Chairman of the Board of Directors of
L'Air Liquide S.A.
Trade Union Secretary of the Managing
Board of IG Metall
Chairman of the Supervisory Board of
Bayerische Motoren Werke
Aktiengesellschaft
Member of supervisory boards
Annual Financial Statements
- Allianz SE, Munich (Chairman)³
German positions:
2018
German positions:
- Siemens Energy AG, Munich'
- Siemens Energy Management GmbH,
Munich
German positions:
- European School of Management and
Technology GmbH, Berlin
Group company positions
(as of September 30, 2023)
German positions:
- Siemens Healthineers AG, Munich¹
- Siemens Energy Management GmbH,
Munich
- Siemens Mobility GmbH, Munich
(Chairman)
- Siemens Aktiengesellschaft Österreich,
Austria (Chairman)
- Siemens France Holding SAS, France
Positions outside Germany:
Arabia Electric Ltd. (Equipment), Saudi
Arabia (Deputy Chairman)
- Siemens Ltd., India¹
Siemens Ltd., Saudi Arabia (Deputy
Chairman)
- Siemens Schweiz AG, Switzerland
(Chairman)
Positions outside Germany:
- Siemens Energy AG, Munich'
German positions:
- Evonik Industries AG, Essen¹
Term expires
March 31, 2025
(as of September 30, 2023)
March 7, 1973 April 1, 2017
May 31, 2025
Matthias Rebellius
January 2,
1965
October 1,
2020
September 30,
2025
Ralf P. Thomas
(Prof. Dr. rer. pol.)
March 7, 1961
September 18,
2013
December 14,
2026
Judith Wiese
January 30,
1971
October 1,
2020
September 30,
2028
1 Publicly listed.
German positions:
Siemens W.L.L., Qatar
German positions:
- Siemens Healthcare GmbH, Munich
(Chairman)
Michael Diekmann
(until February 9, 2023)
(as of February 9, 2023)
Chairwoman of the Central Works Council March 26,
of Siemens AG
Chairman of the Supervisory Board of
RWE AG
Deputy Chairman of the Central Works
Council and of the Combine Works
Council of Siemens AG
Chairman of the Supervisory Board of
Allianz SE
1960
January 24,
2008
2028
January 3,
1954
January 31, 2027
German positions:
2018
RWE AG, Essen (Chairman)³
October 10,
1979
October
16, 2020
2028
December 23, January 24, 2023
1954
2008
January 31, 2028
Second Deputy Chairman
Tobias Bäumler²
January 31, 2023
(Dr. rer. pol.)
First Deputy Chairwoman
- Siemens Healthineers AG, Munich
(Chairman)'
Positions outside Germany:
- Siemens Proprietary Ltd., South Africa
(Chairman)
Members of the Supervisory Board and positions held by Supervisory Board members
In fiscal 2023, the Supervisory Board had the following members:
Memberships in supervisory boards whose
establishment is required by law or in comparable
Name
Occupation
Jim Hagemann Snabe
Chairman
Chairman of the Supervisory Board of
Siemens AG
Date of birth
October 27,
1965
Member
since
October 1,
2013
Term
expires
2025
domestic or foreign controlling bodies of business
enterprises (as of September 30, 2023)
Positions outside Germany:
- C3.ai, Inc., USA³
- Northvolt AB, Sweden (Chairman)
- Urban Partners A/S, Denmark (Deputy Chairman)
Birgit Steinborn²
Werner Brandt
July 14, 1971
January 27, 2027
2015
Positions outside Germany:
100
Siemens Bank GmbH, Munich
65
1,242
100
Siemens Beteiligungen Europa GmbH, Munich
192
5,895
327
100
(283)
26,716
100
Siemens Beteiligungen USA GmbH, Berlin
13,776
100
Siemens Beteiligungsverwaltung GmbH & Co. OHG, Kemnath
2,755
Siemens Beteiligungen Inland GmbH, Munich
13
RISICOM Rückversicherung AG, Grünwald
1004
71
100
Munipolis GmbH, Munich
1
273
1004
Next47 GmbH, Munich
5
(7)
100
Nordlicht Holding GmbH & Co. KG, Frankfurt
148
335
OWP Butendiek GmbH & Co. KG, Bremen
145
789
235
Project Ventures Butendiek Holding GmbH, Munich
66
24,217
100²
Siemens Campus Erlangen Grundstücks-GmbH & Co. KG, Grünwald
14
552
100
Siemens Healthcare GmbH, Munich
205
1,125
100
Siemens Healthineers AG, Munich
1,177
24,254
75
Siemens Healthineers Beteiligungen GmbH & Co. KG, Röttenbach
72
24,855
100
Siemens Healthineers Holding I GmbH, Munich
(48)
(4,731)
100
Siemens Healthineers Holding III GmbH, Munich
(37)
16
Siemens Healthcare Diagnostics Products GmbH, Marburg
14
18
100
Siemens Electronic Design Automation GmbH, Munich
(6)
73
100
Siemens Energy AG, Munich
(6)
13,164
324
Siemens Finance & Leasing GmbH, Munich
(6)
138
100
Siemens Financial Services GmbH, Munich
9
2,038
100
Siemens Fonds Invest GmbH, Munich
100
(1)
100
(179)
2028
1969
Chief Technology Officer and Member of
the Executive Team of Rolls-Royce
Holdings plc³ (until October 17, 2023),
September
23, 1969
October 1,
2017
February 3, 2025
2021
2028
German positions:
- Siemens Healthcare GmbH, Munich
German positions:
March 1,
2014
The Exploration Company GmbH, Gilching
Gunnar Zukunft²
(until February 9, 2023)
(as of February 9, 2023)
Special Advisor of Rolls-Royce Holdings
plc³ (since October 17, 2023)
Chairman of the Board of Management of November 8,
LANXESS AG³
January 31, 2027
1967
2018
Member of the Central Works Council of
Siemens Industry Software GmbH
June 21,
1965
Matthias Zachert
of Siemens Healthcare GmbH
Chairwoman of the Central Works Council August 3,
Spokespersons of Siemens AG
- L'Air Liquide S.A., France (Chairman)³
German positions:
- Bayerische Motoren Werke Aktiengesellschaft,
Munich (Chairman)³
- Henkel AG & Co. KGaA, Düsseldorf³,4
- Henkel Management AG, Düsseldorf
Positions outside Germany:
A. P. Møller-Mærsk A/S, Denmark³
German positions:
Messer SE & Co. KGaA, Bad Soden am Taunus
Siemens Healthcare GmbH, Munich
- Siemens Healthineers AG, Munich³
TÜV Süd AG, Munich
Positions outside Germany:
- EssilorLuxottica SA, France³
Michael Sigmund²
(until August 31, 2023)
(as of August 31, 2023)
Chairman of the Committee of
Dorothea Simon²
Grazia Vittadini
September
Spokespersons of the Siemens Group and 13, 1957
Chairman of the Central Committee of
January 31, 2023
German positions:
2018
Siemens Industry Software GmbH, Cologne
3
15
1004
67
1006
evosoft GmbH, Nuremberg
1
10
100
GuD Herne GmbH, Essen
19
37
505
HaCon Ingenieurgesellschaft mbH, Hanover
12
148
100
Innomotics GmbH, Munich
KACO new energy GmbH, Neckarsulm
1004
(192)
39
100
1 As a rule, the term of office ends at the conclusion of the (relevant) ordinary Annual Shareholders' Meeting.
² Employee representative.
3 Publicly listed.
4 Shareholders' Committee.
19
Annual Financial Statements
NOTE 32 List of subsidiaries and associated companies pursuant to Section 285 no. 11, 11a and 11b
of the German Commercial Code
Net income in
millions of €¹
Equity in
millions of €¹
Equity interest
in %
September 30, 2023
Germany (49 companies)
Berliner Vermögensverwaltung GmbH, Berlin
Erlangen KHK 5 GmbH & Co. KG, Grünwald
Erlapolis 20 GmbH, Munich
Erlapolis 22 GmbH, Munich
(63)
18
8
100²
8,407
(6)
25
Siemens Financial Services Ltd., Beijing / China
100
124
9
Siemens Finance and Leasing Ltd., Beijing / China
100
29
22
Siemens Factory Automation Engineering Ltd., Beijing / China
100
71
229
7
Annual Financial Statements
23
85
103
87
Siemens Electrical Drives Ltd., Tianjin / China
100
121
82
Siemens Electrical Apparatus Ltd., Suzhou, Suzhou / China
75
30
Siemens Electronic Design Automation (Shanghai) Co., Ltd., Shanghai Pilot Free Trade Zone /
China
22
100
(28)
Siemens Ltd., China, Beijing / China
100
42
14
Siemens International Trading Ltd., Shanghai, Shanghai / China
100
78
23
Siemens Industry Software (Shanghai) Co., Ltd., Shanghai / China
100
170
177
Siemens Healthcare Diagnostics Manufacturing Ltd., Shanghai, Shanghai / China
Siemens Healthineers Diagnostics (Shanghai) Co., Ltd., Shanghai / China
Siemens Industrial Automation Products Ltd., Chengdu, Chengdu / China
231
219
Siemens Healthineers Ltd., Shanghai / China
100
37
92
Siemens Healthineers Digital Technology (Shanghai) Co., Ltd., Shanghai / China
100
146
23
100
25
100
Siemens Circuit Protection Systems Ltd., Shanghai, Shanghai / China
100
9
100
6,411
Varian Medical Systems International Holdings, Inc., Wilmington, DE / United States
85
730
(99)
Thoughtworks Holding Inc., Wilmington, DE / United States
100
(77)
(41)
Supplyframe, Inc., Glendale, CA / United States
100
Varian Medical Systems, Inc., Wilmington, DE / United States
9
SMI Holding LLC, Wilmington, DE / United States
100
10,415
1,212
Siemens USA Holdings, Inc., Wilmington, DE / United States
100
1,674
43
Siemens Public, Inc., Iselin, NJ / United States
100
980
47
2
(85)
7,883
100
1
Innomotics Large Drives (Shanghai) Co., Ltd., Shanghai Pilot Free Trade Zone / China
100
28
25
Beijing Siemens Cerberus Electronics Ltd., Beijing / China
100
161
15
Siemens Mobility Pty Ltd, Melbourne / Australia
100
94
16
Siemens Ltd., Bayswater / Australia
100
7
5
Innomotics Pty Ltd, Bayswater / Australia
100
94
-
Brightly Software Holdings Pty. Ltd., Sydney / Australia
100
81
(4)
Brightly Software Australia Pty Ltd, Sydney / Australia
Asia, Australia (49 companies)
1,247
Siemens Mobility, Inc, Wilmington, DE / United States
2,219
Siemens Mechatronics Technology JiangSu Ltd., Yizheng / China
Siemens K.K., Tokyo / Japan
100
221
34
Siemens Healthcare K.K., Tokyo / Japan
100
205
20
Siemens Healthcare Diagnostics K.K., Tokyo / Japan
505
960
204
15
P.T. Jawa Power, Jakarta / Indonesia
73
45
Siemens Technology and Services Private Limited, Navi Mumbai / India
51
1,763
225
Siemens Limited, Mumbai / India
100
25
10
SIEMENS LARGE DRIVES INDIA PRIVATE LIMITED, Mumbai / India
100
100
282
143
Varian Medical Systems K.K., Tokyo / Japan
Existing derivative financial instruments
November 22,
1964
24
8 Values from fiscal year August 01, 2023 - September 30, 2023
7 Values from fiscal year July 21, 2023 - September 30, 2023
6 Values from fiscal year July 22, 2022 - September 30, 2022
5 Values from fiscal year January 01, 2022 - December 31, 2022
4 Values from fiscal year October 01, 2021 - September 30, 2022
3 Values from fiscal year January 01, 2020 - December 31, 2020
2 Siemens AG is a shareholder with unlimited liability of this company.
1 The values correspond to the annual financial statements after a possible profit transfer, for subsidiaries according to the IFRS closing.
Siemens Limited, Taipei / Taiwan
100
100
22
100
167
30
Siemens Ltd. Seoul, Seoul / Korea
100
114
20
Siemens Healthineers Ltd., Seoul / Korea
100
955
(1)
53
34
Siemens Healthcare Private Limited, Mumbai / India
100
100
196
86
Siemens Shanghai Medical Equipment Ltd., Shanghai / China
100
26
9
Siemens Sensors & Communication Ltd., Dalian / China
80
107
81
Siemens Numerical Control Ltd., Nanjing, Nanjing / China
Siemens Shenzhen Magnetic Resonance Ltd., Shenzhen / China
100
Siemens Healthcare Saglik Anonim Sirketi, Istanbul / Türkiye
Siemens Mobility Technologies (Beijing) Co., Ltd, Beijing / China
100
87
8
Siemens Mobility Equipment (China) Co., Ltd, Shanghai Pilot Free Trade Zone / China
85
64
57
Siemens Medium Voltage Switching Technologies (Wuxi) Ltd., Wuxi / China
100
104
153
116
205
100
102
17
Siemens Financial Services Private Limited, Mumbai / India
100
103
18
SIEMENS EDA (INDIA) PRIVATE LIMITED, New Delhi / India
99
249
9
C&S Electric Limited, New Delhi / India
100
37
21
Siemens Limited, Hong Kong / Hong Kong
505
53
39
Zhenjiang Siemens Busbar Trunking Systems Co. Ltd., Yangzhong / China
55
48
33
Siemens Switchgear Ltd., Shanghai, Shanghai / China
100
84
63
Siemens Standard Motors Ltd., Yizheng / China
100
100
21
793
100
62
44
Siemens Infraestrutura e Indústria Ltda., São Paulo / Brazil
100
209
30
Siemens Healthcare Diagnósticos Ltda., São Paulo/ Brazil
225
175
(71)
GNA 1 Geração de Energia S.A., São João da Barra / Brazil
Siemens Participações Ltda., São Paulo / Brazil
100
1
Siemens S.A., Buenos Aires / Argentina
Americas (57 companies)
100
1
100
102
(32)
Siemens Process Systems Engineering Limited, Farnborough, Hampshire / United Kingdom
Vendigital Holdings Ltd, Swindon, Wiltshire / United Kingdom
100
577
49
25
Siemens plc, Farnborough, Hampshire / United Kingdom
(17)
100
14
Siemens Healthcare Limited, Oakville / Canada
100
527
30
Siemens Financial Ltd., Oakville / Canada
100
272
53
Siemens Canada Limited, Oakville / Canada
100
8
37
2
100
127
EPOCAL INC., Toronto / Canada
4
100
74
(7)
Brightly Software Canada, Inc., Oakville / Canada
100
311
15
Dade Behring Hong Kong Holdings Corporation, Tortola / British Virgin Islands
Innomotics Inc., Oakville / Canada
80
474
Siemens Pension Funding Limited, Farnborough, Hampshire / United Kingdom
100
(6)
9
255
79
187
Galloper Wind Farm Holding Company Limited, Swindon, Wiltshire / United Kingdom
Project Ventures Rail Investments | Limited, Farnborough, Hampshire / United Kingdom
SBS Pension Funding (Scotland) Limited Partnership, Edinburgh / United Kingdom
Siemens Financial Services Ltd., Stoke Poges, Buckinghamshire / United Kingdom
Siemens Healthcare Diagnostics Manufacturing Ltd, Camberley, Surrey / United Kingdom
Siemens Healthcare Diagnostics Products Ltd, Camberley, Surrey / United Kingdom
Siemens Healthcare Limited, Camberley, Surrey / United Kingdom
100
53
(7)
Electrium Sales Limited, Farnborough, Hampshire / United Kingdom
100
17
174
Brightly Software Limited, Farnborough, Hampshire / United Kingdom
49
(69)
12
100
137
58
Siemens Industrial LLC, Masdar City / United Arab Emirates
Siemens Sanayi ve Ticaret Anonim Sirketi, Istanbul / Türkiye
100
41
17,743
(1)
(3)
621
29
100
932
156
Siemens Mobility Limited, London / United Kingdom
100
98
26
Siemens Industry Software Limited, Farnborough, Hampshire / United Kingdom
100
(2)
Siemens Industry Software Computational Dynamics Limited, Farnborough, Hampshire / United
Kingdom
100
57
1,169
Siemens Holdings plc, Farnborough, Hampshire / United Kingdom
100
87
65
100
205
4
100
181
7
100
333
3
100
100
7
100
183
53
100
145
(2)
100
142
(1)
100
115
100
123
78
53
1008
96
100
49
2
Mannesmann Corporation, New York, NY / United States
Medical Physics Holdings, LLC, Dover, DE / United States
Next47 Fund 2018, L.P., Palo Alto, CA / United States
Next47 Fund 2019, L.P., Palo Alto, CA / United States
Next47 Fund 2020, L.P., Palo Alto, CA / United States
Next47 Fund 2021, L.P., Palo Alto, CA / United States
Next47 Fund 2022, L.P., Palo Alto, CA / United States
PETNET Solutions, Inc., Knoxville, TN / United States
PolyDyne Software Inc., Dallas, TX / United States
Siemens Capital Company LLC, Wilmington, DE / United States
Siemens Corporation, Wilmington, DE / United States
Siemens Financial Services, Inc., Wilmington, DE / United States
Siemens Government Technologies, Inc., Wilmington, DE / United States
Siemens Healthcare Diagnostics Inc., Los Angeles, CA / United States
Siemens Healthineers Holdings, LLC, Wilmington, DE / United States
Siemens Industry Software Inc., Wilmington, DE / United States
Siemens Industry, Inc., Wilmington, DE / United States
205
441
59
Hickory Run Holdings, LLC, Wilmington, DE / United States
78
100
100
94
1,747
Siemens Medical Solutions USA, Inc., Wilmington, DE / United States
Siemens S.A., Santiago de Chile / Chile
100
25
18
Siemens Logistics LLC, Wilmington, DE / United States
100
5,964
1,318
100
5,229
3
100
13,895
100
7,358
(121)
100
515
22
100
2,111
170
100
6,259
1,090
100
138
(2)
1
Healthcare Technology Management, LLC, Wilmington, DE / United States
136
(3)
Block Imaging International, LLC, Wilmington, DE / United States
1008
93
Associates in Medical Physics, LLC, Greenbelt, MD / United States
100
27
2
Siemens S.A.C., Surquillo / Peru
100
130
1007
58
100
88
71
Grupo Siemens S.A. de C.V., Mexico City / Mexico
100
47
2
Siemens S.A.S., Tenjo / Colombia
Annual Financial Statements
22
22
28
Siemens, S.A. de C.V., Mexico City / Mexico
Brightly Software, Inc., Wilmington, DE / United States
Building Robotics Inc., Wilmington, DE / United States
CEF-L Holding, LLC, Wilmington, DE / United States
Corindus, Inc., Wilmington, DE / United States
100
(70)
ECG Acquisition, Inc., Wilmington, DE / United States
ECG TopCo Holdings, LLC, Wilmington, DE / United States
Electrify America, LLC, Wilmington, DE / United States
eMeter Corporation, Wilmington, DE / United States
645
(297)
Fluence Energy, Inc., Wilmington, DE / United States
100
141
95
782
(64)
75
60
(43)
100
334
(115)
100
(34)
(67)
(35)
(6)
100
(342)
176
100
(1)
275
175
Uncertain tax positions and recoverability of deferred tax assets
Independent Auditor's Report (Siemens AG)
3
In the course of our audit procedures relating to uncertain tax positions, we evaluated whether management's assessment of the tax
implications of significant business transactions or events in fiscal year 2023, which could result in uncertain tax positions or influence the
measurement of existing uncertain tax positions, was in compliance with tax law. In particular, this includes the tax implications arising
from cross border matters, such as the determination of transfer prices, the results of tax field audits, the acquisition or disposal of company
shares and corporate (intragroup) restructuring activities. In order to assess measurement and completeness of uncertain tax positions,
we also obtained confirmations from external tax advisors. Further, we evaluated management's assessments with respect to the prospects
of success of appeal and tax court proceedings by inquiring of the employees of the Siemens tax department and by considering current
tax case law.
Reasons why the matter was determined to be a key audit matter: The accounting for uncertain tax positions as well as deferred taxes
requires management to exercise considerable judgment and make estimates and assumptions, and was therefore a key audit matter. In
particular, this affects the measurement and completeness of uncertain tax positions as well as the recoverability of deferred tax assets.
Auditor's response: With the assistance of internal tax specialists who have knowledge of tax law, we examined the processes installed
by management for the identification, recognition and measurement of tax positions.
SIEMENS
Our audit procedures did not lead to any reservations relating to the accounting for proceedings out of or in connection with alleged
compliance violations.
We further considered alleged or substantiated non-compliance with legal provisions, official regulations (including sanctions) and internal
company policies by inspecting internal and external statements on specific matters, obtaining written statements from external legal
advisors, and by inquiring of the compliance organization. In this regard, among other procedures, we evaluated the conduct and results
of internal investigations by inspecting internal reports and the measures taken to remediate identified weaknesses, and assessed on this
basis whether management's evaluation of any risks to be accounted for in the annual financial statements is plausible.
Auditor's response: During our audit of the financial reporting of proceedings out of or in connection with alleged compliance violations,
we examined the processes implemented by Siemens for identifying, assessing and accounting for legal and regulatory proceedings. To
determine what potentially significant pending legal proceedings or claims asserted also in connection with joint and several liability are
known and to assess management's estimates of the expected cash outflows, our audit procedures included inquiring of management
and other persons within the Company entrusted with these matters, obtaining written statements from in-house legal counsels with
respect to the assessment of estimated cash outflows and their probability, obtaining confirmations from external legal advisors and
evaluating internal statements concerning the accounting treatment in the annual financial statements. Furthermore, we examined legal
consulting expense accounts for any indications of legal matters not yet considered.
Reasons why the matter was determined to be a key audit matter: We considered the accounting for other provisions for legal disputes,
regulatory proceedings and governmental investigations (legal proceedings) out of or in connection with alleged compliance violations to
be a key audit matter. These matters are subject to inherent uncertainties and require estimates that could have a significant impact on
the recognition and measurement of the respective provision and, accordingly, on assets, liabilities and financial performance. The
proceedings out of or in connection with alleged compliance violations are subject to uncertainties because they involve complex legal
issues and accordingly, considerable management judgment, in particular when determining whether and in what amount a provision is
required to account for the risks.
In assessing the recoverability of deferred tax assets, we above all analyzed management's assumptions with respect to tax planning
strategies and projected future taxable income and compared them to internal business plans.
Reference to related disclosures: With regard to the recognition and measurement policies applied in accounting for other provisions,
refer to chapter 3.2 Accounting and Measurement Principles in the notes to the financial statements. With respect to the legal proceedings,
regulatory proceedings and governmental investigations, refer to chapter 3.5 Other Disclosures, Note 25 Other financial obligations.
Our audit procedures did not lead to any reservations relating to the accounting for uncertain tax positions and the assessment of the
recoverability of deferred tax assets.
•
Other information
The Supervisory Board is responsible for the Report of the Supervisory Board in the Annual Report 2023 within the meaning of ISA [DE]
720 (Revised). Management and the Supervisory Board are responsible for the declaration pursuant to Sec. 161 AktG ["Aktiengesetz":
German Stock Corporation Act] on the Corporate Governance Code, which is part of the Corporate Governance Statement, and for the
Compensation Report. In all other respects, management is responsible for the other information. The other information comprises
chapter 11 "EU Taxonomy disclosure" of the combined management report, the sections "8.5.1 Internal Control System (ICS) and ERM"
and "8.5.2 Compliance Management System (CMS)" in chapter 8.5 of the combined management report as well as the content of the
Corporate Governance Statement. In addition, the other information comprises parts to be included in the Annual Report, of which we
received a version prior to issuing this auditor's report, in particular:
•
•
•
Other Provisions for legal disputes, regulatory proceedings and governmental investigations
the Responsibility Statement (to the annual financial statements and the management report),
the Responsibility Statement (to the consolidated financial statements and the group management report),
the Five-Year Summary,
•
the Compensation Report,
the Report of the Supervisory Board,
• Notes and forward-looking statements,
Reference to related disclosures: With regard to the recognition and measurement policies applied in accounting for income taxes, refer
to chapter 3.2 Accounting and Measurement Principles and chapter 3.3 Notes to the Income Statement, Note 6 Income taxes and with
respect to disclosures for deferred tax assets, refer to chapter 3.4 Notes to the Balance Sheet, Note 13 Deferred tax assets in the notes to
the financial statements.
Our audit procedures did not lead to any reservations relating to the valuation of non-current financial assets as of September 30, 2023.
Reference to related disclosures: With regard to the recognition and measurement policies applied for the impairment of non-current
financial assets, refer to chapter 3.2 Accounting and Measurement Principles in the notes to the financial statements and with respect to
write-downs and write-ups of non-current financial assets, refer to chapter 3.3 Notes to the Income Statement, Note 3 Income (loss) from
investments, net as well as chapter 3.4 Notes to the Balance Sheet, Note 10 Non-current assets and with respect to the subsequent events
relating to the investment in Siemens Energy AG, refer to chapter 3.5 Other disclosures, Note 30 Subsequent events in the notes to the
financial statements.
Auditor's response: With regards to the net realizable values calculated by management and its assessment as to whether an impairment
or reversal of impairment is expected to be permanent, we examined the underlying processes related to the planning of future cash flows
With regard to the reversal of impairment of the investment in Siemens Energy AG, we have traced the development of the stock market
price and assessed the calculation of the reversal of impairment as of September 30, 2023, considering the acquisition costs of the
investment.
to the Annual Financial Statements and the Management Report for fiscal 2023
Independent Auditor's Report (Siemens AG)
Independent auditor´s report
To Siemens Aktiengesellschaft, Berlin and Munich
Report on the audit of the annual financial statements and of the management report
Opinions
We have audited the annual financial statements of Siemens Aktiengesellschaft, Berlin and Munich, (the Company) which comprise the
income statement for the fiscal year from October 1, 2022 to September 30, 2023, the balance sheet as of September 30, 2023 and notes
to the financial statements, including the recognition and measurement policies presented therein. In addition, we have audited the
management report of Siemens Aktiengesellschaft, which is combined with the group management report, for the fiscal year from
October 1, 2022 to September 30, 2023. In accordance with the German legal requirements, we have not audited chapter 11 “EU
Taxonomy disclosure" of the combined management report, the sections "8.5.1 Internal Control System (ICS) and ERM" and "8.5.2
Compliance Management System (CMS)" in chapter 8.5 of the combined management report as well as the content of the Corporate
Governance Statement which is published on the website stated in the combined management report.
.
•
In our opinion, on the basis of the knowledge obtained in the audit,
the accompanying annual financial statements comply, in all material respects, with the requirements of German commercial law
applicable to business corporations and give a true and fair view of the assets, liabilities and financial position of the Company as of
September 30, 2023 and of its financial performance for the fiscal year from October 1, 2022 to September 30, 2023 in compliance
with German legally required accounting principles, and
the accompanying management report as a whole provides an appropriate view of the Company's position. In all material respects, this
management report is consistent with the annual financial statements, complies with German legal requirements and appropriately
presents the opportunities and risks of future development. Our opinion on the management report does not cover chapter 11 “EU
Taxonomy disclosure" of the combined management report, the sections "8.5.1 Internal Control System (ICS) and ERM" and "8.5.2
Compliance Management System (CMS)" in chapter 8.5 of the combined management report and the content of the Corporate
Governance Statement.
Furthermore, we evaluated the disclosures in the notes to the annual financial statements regarding the subsequent events relating to the
investment in Siemens Energy AG.
Pursuant to Sec. 322 (3) Sentence 1 HGB, we declare that our audit has not led to any reservations relating to the legal compliance of the
annual financial statements and of the management report.
We conducted our audit of the annual financial statements and of the management report in accordance with Sec. 317 HGB and the EU
Audit Regulation (No 537/2014, referred to subsequently as "EU Audit Regulation") and in compliance with German Generally Accepted
Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW).
In conducting the audit of the annual financial statements we also complied with International Standards on Auditing (ISA). Our
responsibilities under those requirements, principles and standards are further described in the "Auditor's responsibilities for the audit of
the annual financial statements and of the management report" section of our auditor's report. We are independent of the Company in
accordance with the requirements of European law and German commercial and professional law, and we have fulfilled our other German
professional responsibilities in accordance with these requirements. In addition, in accordance with Art. 10 (2) f) of the EU Audit
Regulation, we declare that we have not provided non-audit services prohibited under Art. 5 (1) of the EU Audit Regulation. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions on the annual financial statements
and on the management report.
but not the consolidated financial statements and the annual financial statements, not the disclosures of the combined management
report whose content is audited and not our auditor's reports as well as not our auditor's report on a limited assurance engagement on the
EU Taxonomy disclosure.
Key audit matters in the audit of the annual financial statements
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the annual financial
statements for the fiscal year from October 1, 2022 to September 30, 2023. These matters were addressed in the context of our audit of
the annual financial statements as a whole, and in forming our opinion thereon; we do not provide a separate opinion on these matters.
Below, we describe what we consider to be the key audit matters:
Valuation of non-current financial assets
Reasons why the matter was determined to be a key audit matter: The impairment test and the assessment regarding the need for a
reversal of impairment of non-current financial assets was a key audit matter, as in particular shares in affiliated companies and
investments entail a higher risk of material misstatement due to the materiality of these assets as well as the estimation uncertainties and
judgments involved in assessing whether there is objective evidence to indicate a lower net realizable value and permanent impairment
or a reversal of impairment, and the determination of the fair values.
The determination of the fair values of non-current financial assets also depends to a large extent on the assessment of future cash inflows
and the discount rate applied.
In case of the investment in Siemens Energy AG, in which 21,0% are held directly, the market capitalization during fiscal 2023 was on
average above the book value sometimes significantly. As of September 30, 2023, a reversal of impairment to the stock market price has
been recorded, following an impairment as of September 30, 2022.
2
Independent Auditor's Report (Siemens AG)
as well as to the calculation of net realizable value, obtained an understanding of management's evaluation and also considered external
evidence in this regard, amongst others, on the development of stock market prices.
We assessed the underlying valuation models for the determination of the net realizable value in terms of methodology and reperformed
the calculations with the assistance of internal valuation specialists. We further obtained explanations from management regarding
material value drivers of the planning and examined whether the budget planning reflects general and industry-specific market
expectations. Forecast accuracy was assessed on a sample basis using budget-to-actual comparisons of historically forecast data with the
actual results. The parameters used to estimate net realizable value such as the estimated growth rates and the weighted average cost of
capital rates were assessed by comparing them to publicly available market data. We also performed our own sensitivity analyses to assess
the impairment risk in the case of a reasonably possible change in one of the significant assumptions.
Basis for the opinions
Our opinions on the annual financial statements and on the management report do not cover the other information, and consequently
we do not express an opinion or any other form of assurance conclusion thereon.
-
•
Opinion
We have performed assurance work in accordance with Sec. 317 (3a) HGB to obtain reasonable assurance about whether the rendering
of the annual financial statements and the management report (hereinafter the "ESEF documents") contained in the file SIEMENS_2023.zip
and prepared for publication purposes complies in all material respects with the requirements of Sec. 328 (1) HGB for the electronic
reporting format ("ESEF format"). In accordance with German legal requirements, this assurance work extends only to the conversion of
the information contained in the annual financial statements and the management report into the ESEF format and therefore relates
neither to the information contained within these renderings nor to any other information contained in the file identified above.
In our opinion, the rendering of the annual financial statements and the management report contained in the file identified above and
prepared for publication purposes complies in all material respects with the requirements of Sec. 328 (1) HGB for the electronic reporting
format. Beyond this assurance opinion and our audit opinions on the accompanying annual financial statements and the accompanying
management report for the fiscal year from October 1, 2022 to September 30, 2023 contained in the "Report on the audit of the annual
financial statements and of the management report" above, we do not express any assurance opinion on the information contained within
these renderings or on the other information contained in the file identified above.
5
Independent Auditor's Report (Siemens AG)
Basis for the opinion
We conducted our assurance work on the rendering of the annual financial statements and the management report contained in the file
identified above in accordance with Sec. 317 (3a) HGB and the IDW Assurance Standard: Assurance on the Electronic Rendering of Financial
Statements and Management Reports Prepared for Publication Purposes in Accordance with Sec. 317 (3a) HGB (IDW ASS 410) (06.2022)
and the International Standard on Assurance Engagements 3000 (Revised). Our responsibility in accordance therewith is further described
in the "Auditor's responsibilities for the assurance work on the ESEF documents" section. Our audit firm applies the IDW Standard on Quality
Management 1: Requirements for Quality Management in the Audit Firm (IDW QS 1).
Responsibilities of management and the Supervisory Board for the ESEF documents
Management is responsible for the preparation of the ESEF documents including the electronic rendering of the annual financial
statements and the management report in accordance with Sec. 328 (1) Sentence 4 No. 1 HGB.
In addition, management is responsible for such internal control as it has determined necessary to enable the preparation of ESEF
documents that are free from material intentional or unintentional non-compliance with the requirements of Sec. 328 (1) HGB for the
electronic reporting format.
The Supervisory Board is responsible for overseeing the process for preparing the ESEF documents as part of the financial reporting process.
Auditor's responsibilities for the assurance work on the ESEF documents
Our objective is to obtain reasonable assurance about whether the ESEF documents are free from material intentional or unintentional
non-compliance with the requirements of Sec. 328 (1) HGB. We exercise professional judgment and maintain professional skepticism
throughout the assurance work. We also:
.
•
identify and assess the risks of material intentional or unintentional non-compliance with the requirements of Sec. 328 (1) HGB, design
and perform assurance procedures responsive to those risks, and obtain assurance evidence that is sufficient and appropriate to provide
a basis for our assurance opinion;
obtain an understanding of internal control relevant to the assurance on the ESEF documents in order to design assurance procedures
that are appropriate in the circumstances, but not for the purpose of expressing an assurance opinion on the effectiveness of these
controls;
• evaluate the technical validity of the ESEF documents, i.e., whether the file containing the ESEF documents meets the requirements of
Commission Delegated Regulation (EU) 2019/815, in the version in force at the date of the financial statements, on the technical
specification for this file;
• evaluate whether the ESEF documents enable an XHTML rendering with content equivalent to the audited annual financial statements
and to the audited management report.
Further information pursuant to Art. 10 of the EU Audit Regulation
We were elected as auditor by the Annual Shareholders' Meeting on February 9, 2023. We were engaged by the Supervisory Board on
February 9, 2023. We have been the auditor of Siemens Aktiengesellschaft without interruption since the fiscal year from October 1, 2008
to September 30, 2009.
We declare that the opinions expressed in this auditor's report are consistent with the additional report to the Audit Committee pursuant
to Art. 11 of the EU Audit Regulation (long-form audit report).
In addition to the financial statement audit, we have provided to the Company or entities controlled by it the following services that are
not disclosed in the annual financial statements or in the management report:
In addition to auditing the statutory financial statements of Siemens AG, we performed the statutory audit of Siemens' consolidated
financial statements, audits of financial statements of subsidiaries of Siemens AG, reviews of interim financial statements integrated in
the audit, project-based IT audits as well as service organization control engagements.
Audit-related services include primarily audits of financial statements as well as other attestation services in connection with M&A
activities, attestation services related to the sustainability reporting, the compensation reporting and the disclosures in accordance with
EU Taxonomy, comfort letters and other attestation services required under regulatory requirements, contractually agreed or requested
on a voluntary basis.
Other matter
use of the auditor's report
Auditor's Report
Report on the assurance on the electronic rendering of the annual financial statements and the management
report prepared for publication purposes in accordance with Sec. 317 (3a) HGB
In connection with our audit, our responsibility is to read the other information, and, in so doing, to consider whether the other information
Other legal and regulatory requirements
We also provide those charged with governance with a statement that we have complied with the relevant independence requirements,
and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where
applicable, the related safeguards.
•
is materially inconsistent with the annual financial statements, with the management report or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Responsibilities of management and the Supervisory Board for the annual financial statements and the
management report
Management is responsible for the preparation of the annual financial statements that comply, in all material respects, with the
requirements of German commercial law applicable to business corporations, and that the annual financial statements give a true and fair
view of the assets, liabilities, financial position and financial performance of the Company in compliance with German legally required
accounting principles. In addition, management is responsible for such internal control as it, in accordance with German legally required
accounting principles, has determined necessary to enable the preparation of annual financial statements that are free from material
misstatement, whether due to fraud (i.e., fraudulent financial reporting and misappropriation of assets) or error.
In preparing the annual financial statements, management is responsible for assessing the Company's ability to continue as a going
concern. It also has the responsibility for disclosing, as applicable, matters related to going concern. In addition, management is
responsible for financial reporting based on the going concern basis of accounting, provided no actual or legal circumstances conflict
therewith.
Furthermore, management is responsible for the preparation of the management report that, as a whole, provides an appropriate view of
the Company's position and is, in all material respects, consistent with the annual financial statements, complies with German legal
requirements and appropriately presents the opportunities and risks of future development. In addition, management is responsible for
such arrangements and measures (systems) as management has considered necessary to enable the preparation of a management report
that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropriate evidence for the
assertions in the management report.
The Supervisory Board is responsible for overseeing the Company's financial reporting process for the preparation of the annual financial
statements and of the management report.
Auditor's responsibilities for the audit of the annual financial statements and of the management report
Our objectives are to obtain reasonable assurance about whether the annual financial statements as a whole are free from material
misstatement, whether due to fraud or error, and whether the management report as a whole provides an appropriate view of the
Company's position and, in all material respects, is consistent with the annual financial statements and the knowledge obtained in the
4
Independent Auditor's Report (Siemens AG)
audit, complies with the German legal requirements and appropriately presents the opportunities and risks of future development, as well
as to issue an auditor's report that includes our opinions on the annual financial statements and on the management report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Sec. 317 HGB and
the EU Audit Regulation as well as in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated
by the IDW and in supplementary compliance with ISA will always detect a material misstatement. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these annual financial statements and this management report.
We exercise professional judgment and maintain professional skepticism throughout the audit. We also:
•
•
identify and assess the risks of material misstatement of the annual financial statements and of the management report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than for
the risk of detecting a material misstatement resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control;
obtain an understanding of internal control relevant to the audit of the annual financial statements and of arrangements and measures
(systems) relevant to the audit of the management report in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of these systems of the Company;
evaluate the appropriateness of accounting policies used by management and the reasonableness of estimates made by management
and related disclosures;
• conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor's
report to the related disclosures in the annual financial statements and in the management report or, if such disclosures are inadequate,
to modify our respective opinions. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report.
However, future events or conditions may cause the Company to cease to be able to continue as a going concern;
•
•
.
evaluate the overall presentation, structure and content of the annual financial statements, including the disclosures, and whether the
annual financial statements present the underlying transactions and events in a manner that the annual financial statements give a true
and fair view of the assets, liabilities, financial position and financial performance of the Company in compliance with German legally
required accounting principles;
evaluate the consistency of the management report with the annual financial statements, its conformity with German law and the view
of the Company's position it provides;
perform audit procedures on the prospective information presented by management in the management report. On the basis of
sufficient appropriate audit evidence we evaluate, in particular, the significant assumptions used by management as a basis for the
prospective information, and evaluate the proper derivation of the prospective information from these assumptions. We do not express
a separate opinion on the prospective information and on the assumptions used as a basis. There is a substantial unavoidable risk that
future events will differ materially from the prospective information.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the
audit of the annual financial statements of the current period and are therefore the key audit matters. We describe these matters in our
auditor's report unless law or regulation precludes public disclosure about the matter.
Independent
Our auditor's report must always be read together with the audited annual financial statements and the audited management report as
well as the assured ESEF documents. The annual financial statements and the management report converted to the ESEF format -
including the versions to be published in the Unternehmensregister [German Company Register] – are merely electronic renderings of the
audited annual financial statements and the audited management report and do not take their place. In particular, the ESEF report and
our assurance opinion contained therein are to be used solely together with the assured ESEF documents made available in electronic
form.
Judith Wiese
2
German Public Auditor responsible for the engagement
The German Public Auditor responsible for the engagement is Siegfried Keller.
Munich, December 4, 2023
Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft
Keller
Wirtschaftsprüfer
[German Public Auditor]
Dr. Gaenslen
Wirtschaftsprüfer
[German Public Auditor]
Independent Auditor's Report (Siemens AG)
7
Five-Year Summary
SIEMENS
for the five years until fiscal 2023
Munich, December 4, 2023
Dr. Roland Busch
The Managing Board
Siemens Aktiengesellschaft
To the best of our knowledge, and in accordance with the applicable reporting principles, the Annual Financial Statements give a true and
fair view of the assets, liabilities, financial position and profit or loss of the Company, and the Management Report for Siemens
Aktiengesellschaft, which has been combined with the Group Management Report, includes a fair review of the development and
performance of the business and the position of the Company, together with a description of the material opportunities and risks
associated with the expected development of the Company.
Responsibility Statement (Siemens AG)
SIEMENS
for fiscal 2023
to the Annual Financial Statements and the Management Report
Responsibility Statement
6
Cedrik Neike
Prof. Dr. Ralf P. Thomas
Matthias Rebellius
10,109
36%
151,502
35%
139,372
32%
123,897
(4,050)
34%
150,248
FY 2023
12,281
FY 2022
10,322
FY 2021
(17,192)
(2,467)
(3,458)
2,222
3,098
FY 2020
3,561
3,608
6,825
7,851
FY 2019
3,075
77,769
FY 2019
71,977
62,265
55,254
56,797
29,653
25,847
22,737
19,888
21,381
8,514
4,413
5,636
5,063
8,529
4,392
6,697
4,200
5,648
Sep 30,
Sep 30,
Sep 30,
FY 2020
37%
145,067
(4,166)
50,984
2,839
48,991
8,238
10,062
5,845
6,404
8,237
8,157
10,021
1,325
1,663
(4,509)
927
(388)
(1,214)
4,267
8,379
785
(8,730)
(1,739)
(1,498)
(1,730)
(2,084)
(2,218)
60,639
2019
2020
2021
2022
2023
Sep 30,
Sep 30,
(7,502)
39,823
6,352
Sep 30,
54,805
53,060
9,896
6,360
2,275
1,426
22,726
28,492
37,010
37,212
34,843
30,414
38,005
40,879
5,086
43,978
36,449
44,567
48,700
50,636
46,596
50,723
34,117
40,000
42,686
44,901
70,370
52,968
52,298
58,829
39,113
4,156
Short-term variable
Sep 30,
Performance period: October 1, 2022, to September 30, 2023
•
Bonus for fiscal 2023
Application in fiscal 2023
• Consideration of extraordinary developments in justified, infrequent special cases
possible
Individual targets: two to four equally weighted financial targets or focus topics
•
Managing Board portfolio
•
Siemens Group
•
Three equally weighted target dimensions:
Performance-oriented annual Bonus, paid in cash in the subsequent fiscal year
Performance range: 0% to 200%, using linear interpolation
Implementation in compensation system
compensation
(Stock Awards)
Long-term variable
compensation
(Bonus)
Payout: February 2024 (at the latest)
Performance criteria:
• 33.34% earnings per share before purchase price allocation (EPS pre PPA)
• 33.33% return on capital employed adjusted (ROCE adjusted)
Application in fiscal 2023
Payout cap: 300% of target amount
Outperformance relative to sector index -/+ 20 percentage points
Siemens-internal ESG/Sustainability index with three equally weighted key
performance indicators and annual interim targets (weighting: 20%)
12-month reference and 36-month performance period
Development of total shareholder return (TSR) relative to an international sector
index (weighting: 80%)
•
Two performance criteria:
• Performance range: 0% to 200%, using linear interpolation
FY 2021
Performance-oriented plan settled by share transfer after the end of an approximately
four-year vesting period
Other Managing Board members: €1,101,600
President and CEO: €1,770,000
Target amounts (based on 100% target achievement)
Two additional individual targets with focus topics from the Bonus topic
catalogue
Comparable revenue growth in the area of responsibility
•
• Cash conversion rate (CCR) in the area of responsibility
• 33.33% individual targets:
Implementation in compensation system
VARIABLE COMPENSATION
B. Compensation of Managing Board members
→
term.
to retain these
individuals at the
Company over the long
operations and in order
to obtain the best
candidates worldwide
to develop and execute
the Company's strategy
and manage its
compensation in order
Link to strategy
Competitive
Costs of medical checkups
•
Pension benefit
commitment
•
• Provision of a company car
• Includes in-kind compensation and fringe benefits granted by the Company, for
example:
incurred to the benefit of the Managing Board member
Determination of a maximum amount relative to base salary, covering expenses
•
Implementation in compensation system
• Other Managing Board members: €1,101,600 a year
President and CEO: €1,770,000 a year
Insurance allowances
2023 Stock Awards tranche
Application in fiscal 2023
President and CEO: max. €132,750
Compensation Report
7
FISCAL 2023
Amount for free disposal (payment in January 2024)
Other Managing Board members: €550,800
Other Managing Board members: €616,896
President and CEO: €991,200
•
BSAV contribution (credit in January 2024)
In fiscal 2023, Managing Board members were entitled to fringe benefits equal to a
maximum of 7.5% of their base salary
Application in fiscal 2023
Commitment at beginning of fiscal year
Newly appointed Managing Board members as of October 1, 2019: fixed cash amount
for free disposal
•
•
.
• Annual contributions to the Siemens Defined Contribution Pension Plan (BSAV)
Implementation in compensation system
• Other Managing Board members: max. €82,620
Credit to pension account (BSAV contribution) or payout (amount for free disposal) in
January after the end of the fiscal year
•
Allocation date: November 18, 2022
End of vesting period: in November 2026
Verification date on second Friday in March
Four-year build-up phase
Other Managing Board members: 200%
President and CEO: 300%
.
Obligates Managing Board members to permanently hold Siemens shares of an
amount equal to a multiple of their base salary during their terms of office on the
Managing Board
event of termination
of Managing Board
appointments
Commitments in the
Relevant share price: average Xetra opening price of the fourth quarter of the
previous calendar year
•
connection with the
Commitments in
.
•
Implementation in compensation system
Share Ownership
Guidelines
OTHER DESIGN CHARACTERISTICS
compensation in order
to avoid uncontrollably
high payments and
thus disproportionate
costs and risks for the
Company.
commencement of
Managing Board
appointments
Caps Managing Board
members'
Obligation to purchase additional shares if the value of the accumulated shareholding
falls below the respective amounts to be verified due to fluctuations in the Siemens
share price
• Verification date: March 10, 2023
FISCAL 2023 9
Are part of competitive
compensation and help
the Company obtain
the best candidates
worldwide for the
Managing Board.
Link to strategy
Foster an alignment of
Managing Board and
shareholder interests
and provide additional
incentives to
sustainably increase
Company value.
Link to strategy
No application in fiscal 2023
Application in fiscal 2023
Change of control (only for first-time appointments and/or reappointments before
November 2019)
Application in fiscal 2023
Termination by mutual agreement and without serious cause
Implementation in compensation system
No application in fiscal 2023
Application in fiscal 2023
Moving expenses due to a change of the regular place of work at the request of the
Company
Compensation for the loss of benefits from a former employer
Implementation in compensation system
Fulfilled by all the Managing Board members obligated to provide verification
Relevant share price: €120.12
•
Application in fiscal 2023
Link to strategy
Final assessment of compliance with maximum compensation when the 2023 Stock
Awards tranche is settled in fiscal 2027
Application in fiscal 2023
In cases of severe breaches of duty or compliance and/or unethical behavior or in cases
of grossly negligent or willful breaches of duty of care or in cases in which variable
compensation components linked to the achievement of specific targets have been
unduly paid out on the basis of incorrect data, the Supervisory Board can withhold or
reclaim variable compensation.
Implementation in compensation system
Other Managing Board members: €1,380,000
• Cedrik Neike: €1,470,000
Malus and clawback
regulations
Chief Financial Officer: €2,145,000
•
Link to strategy
Fosters long-term
commitment and
provides incentives for
sustainable value
creation in accordance
with the interests of
shareholders and for
the achievement of
strategic sustainability
targets.
creation.
Provides incentives for
strong annual financial
and non-financial
performance as the
basis for long-term
Company strategy and
sustainable value
Link to strategy
President and CEO: €3,340,000
Target amounts (based on 100% target achievement)
Development of TSR relative to MSCI World Industrials index (weighting: 80%)
ESG key performance indicators: CO2 emissions, digital learning hours per
employee and Net Promoter Score (weighting: 20%)
•
• Performance criteria:
Link to strategy
Reporting in Compensation Report for fiscal 2027
Aim to ensure
No application in fiscal 2023
determined in accordance with the compensation system
Maximum compensation for each Managing Board member for fiscal 2023
•
Application in fiscal 2023
+ three times the Stock Awards target amount
+ two times the Bonus target amount
+ BSAV contribution or amount for free disposal
+ maximum fringe benefits
sustainable Company
development and avoid
inappropriate risks.
Base salary
Implementation in compensation system
•
Maximum
compensation
MAXIMUM COMPENSATION
B. Compensation of Managing Board members
Compensation Report →
8
FISCAL 2023
Determined annually by the Supervisory Board based on total target compensation
Equals the sum of maximum amounts that can possibly be paid out to each Managing
Board member from all compensation components for the relevant fiscal year and is
calculated as follows:
Contractually agreed-upon fixed annual compensation based on a Managing Board
member's duties and related responsibilities and his or her experience
Payment in 12 monthly installments
Implementation in compensation system
Fringe benefits
12
10
10
6
6
B.2.3 Appropriateness of compensation
B.3 Variable compensation in fiscal 2023
B.2.1 Target compensation and compensation structure
B.2.2 Maximum compensation
B.2 Principles of the determination of compensation
12
B.1 The compensation system at a glance
A. Fiscal 2023 in retrospect
Table of contents
Due to rounding, numbers presented throughout this Report may not add up precisely to the totals provided and
percentages may not precisely reflect the absolute figures.
This Compensation Report provides an explanation and a clear and comprehensible presentation of the compensation
individually awarded and due to the current and former members of the Managing Board and the Supervisory Board of
Siemens AG for fiscal 2023 (October 1, 2022, to September 30, 2023). The Report complies with the requirements of the
German Stock Corporation Act (Aktiengesetz, AktG). Detailed information regarding the compensation systems for
members of the Managing Board and the Supervisory Board of Siemens AG is available on the Siemens Global Website at
WWW.SIEMENS.COM/CORPORATE-GOVERNANCE.
Compensation Report 2023
Siemens Aktiengesellschaft
Berlin and Munich
SIEMENS
2023
B. Compensation of Managing Board members
Compensation Report
13
14
C. Compensation of Supervisory Board members
B.7 Outlook for fiscal 2024
26
26
19
WWNNNNUE
31
30
B.3.1 Short-term variable compensation (Bonus)
27
B.6.2 Former members of the Managing Board
B.6.1 Active Managing Board members in fiscal 2023
B.6 Compensation awarded and due
B.5 Pension benefit commitment
B.4 Share Ownership Guidelines
25
B.3.3 Malus and clawback regulations
B.3.2 Long-term variable compensation (Stock Awards)
27
D. Comparative information on profit development and annual change in compensation
2
€3.50
€10.04
FY 2019
FY 2020
FY 2021
FY 2022
FY 2023
287
285
€4.65
303
320
2019
2020
2021
2022
2023
Sep 30,
Sep 30,
311
€3.90
€7.68
€6.41
€4.00
€4.25
€4.70
€5.74
€4.70
€6.28
€4.62
€9.90
€5.00
€6.32
€7.59
€4.59
€9.91
€5.82
€4.77
€6.36
€4.67
€10.02
€4.93
Sep 30,
33
34
200%
33.33%
Individual
targets
33.33%
Managing
Board
portfolio
Group
33.34%
Siemens
Pension benefit
commitment
(Bonus)
Short-term
variable
compensation
Long-term
variable
compensation
(Stock Awards)
compensation
Fringe benefits
Base salary
Fixed
(in % of target amount) regulations
Malus and clawback
Maximum payout
Design of compensation
components
Compensation
components
100%1
Cash
80%
20%
Base salary
FIXED COMPENSATION
The following tables describe the components of the compensation system for the Managing Board members, the
components' link to the Company's strategy and their concrete application in fiscal 2023.
Compensation Report → B. Compensation of Managing Board members
6
Commitments in
the event of
termination of
appointments
Severance cap
FISCAL 2023
in connection with
the commence-
ment of appoint-
ments
Total shareholder
return (TSR) com-
pared to MSCI World
İndustrials Index
Commitments
fiscal year
Equals the sum
of maximum
amounts that
can possibly be
paid out to each
Managing Board
member from all
compensation
components for
the relevant
Other design
characteristics
Maximum
compensation
Not applicable
1 Fringe benefits are reimbursed up to a maximum amount set by the Supervisory Board.
300%
Environment, Social
and Governance (ESG/
Sustainability index)
Share Ownership
Guidelines
32
Shares
Variable
Compensation Report
FISCAL 2023 4
Free cash flow from continuing and discontinued operations for fiscal 2023 was €10.0 billion, reaching a record high. The
cash conversion rate for Siemens, defined as the ratio of free cash flow from continuing and discontinued operations to net
Return on capital employed (ROCE) for fiscal 2023 rose to 18.6%, up from 10.0% in fiscal 2022. This increase was due to
sharply higher income before interest after tax year-over-year. We thus exceeded the forecast for ROCE, which was to come
close to or reach the lower end of our target range of 15% to 20%.
Net income nearly doubled year-over year to a historic high of €8.5 billion and corresponding basic earnings per share (EPS)
more than doubled to €10.04. Earnings per share before purchase price allocation (EPS pre PPA) increased to €10.77.
Revenue was higher in nearly all our industrial businesses and rose to €77.8 billion, up 8% year-over-year. Smart
Infrastructure and Digital Industries contributed double-digit growth with all businesses posting increases. Excluding
currency translation and portfolio effects, revenue for Siemens rose 11%. Profit Industrial Business exceeded the record
high of a year earlier and rose 11% to €11.4 billion. The profit margin of our Industrial Business rose to 15.4%, up from
15.1% a year earlier, reaching its highest level ever.
Fiscal 2023 was another very successful year for Siemens. We achieved excellent financial results in a volatile market
environment, which on the one hand included destocking by customers and distributors following previously proactive
purchasing, particularly in our short-cycle businesses, and on the other hand included improved supply chain conditions,
which accelerated revenue conversion from our high order backlog. We raised our outlook during the fiscal year after the
first and the second quarters. We then reached or exceeded all the targets set for our primary measures for fiscal 2023.
How did Siemens perform in fiscal 2023?
→
In addition, sustainability as a strategic goal and an expression of Siemens' social responsibility – is a high priority at
Siemens. Sustainability is managed using the DEGREE framework. Introduced in fiscal 2021, this framework addresses
sustainability from every angle and determines Siemens' ambitions in the sustainability area with systematized, measurable
and specific long-term targets for environment, social and governance (ESG) dimensions. DEGREE is an acronym that stands
for decarbonization, ethics, governance, resource efficiency, equity and employability. The DEGREE framework is
continuously developed and adapted to the commitments that Siemens has made, such as the Science Based Targets
initiative. The key performance indicators applied in long-term variable compensation are part of this DEGREE framework
(CO2 emissions and digital learning hours per employee) and/or reflect the Company's priorities (Net Promoter Score as an
expression of customer satisfaction).
How is the strategy reflected in Managing Board compensation?
What did the economic and political environment look like at the start of fiscal 2023?
Siemens AG began fiscal 2023 spurred by a strong performance in fiscal 2022. However, the economic and political
environment still contained a large number of uncertainties. Although new variants of the coronavirus did not produce the
negative impacts feared and a crisis in gas and electricity supplies failed to materialize, the economic situation began to
weaken - particularly in Germany, the Company's home market. The war in Ukraine continued as did tensions between the
western democracies and China. On the other hand, supply chain pressures eased. Due to a sharp increase in inflation, all
major central banks raised their interest rates to levels not seen since the beginning of the financial crisis in 2008. In Europe,
high energy prices burdened economic development, while, in the U.S., consumption and the labor market in particular
proved to be very resilient despite the interest rate increases. Growth in China - which had been strong following the
relaxation of COVID-19 restrictions in Q1 of fiscal 2023 - slowed due to the normalization of inventories, which had built
up during the pandemic, and as a result of the burdens imposed by the crisis in China's real estate market. Siemens AG's
markets benefited from high order backlogs, positive price developments and customers' efforts to become more resilient,
more competitive and more sustainable.
A. Fiscal 2023 in retrospect
Compensation Report → A. Fiscal 2023 in retrospect
38
Independent auditor's report
37
E. Other
As a leading technology company, Siemens partners closely with other companies, industries and innovators in order to
combine the real and the digital worlds. In this context, the Company focuses on accelerated, high-value growth. The
Managing Board compensation determined by the Supervisory Board fosters the implementation of the Company's strategic
targets by providing incentives for increasing profit, capital efficiency and cash generation. Incentives are also provided for
driving the Company's digital transformation and developing its sustainability-related business.
Fixed
A. Fiscal 2023 in retrospect
Siemens' strong operating performance in fiscal 2023 is reflected in the Managing Board's variable compensation, which
takes into account not only financial success but also environmental and social aspects. As a result, the compensation of
the Managing Board members is also oriented toward the interests of the shareholders as well as the other stakeholders of
Siemens AG.
Overview of the compensation system for Managing Board members
work.
The Managing Board compensation system is also supplemented by commitments granted in connection with the
commencement and termination of appointments to the Managing Board as well as any change in the regular place of
The Share Ownership Guidelines are a further key component of the compensation system. They obligate Managing Board
members to permanently hold Siemens shares worth a defined multiple of their base salary and to purchase additional
shares in the event that the value of their shares falls below the defined amount.
The compensation of the Managing Board members consists of fixed and variable components. Fixed compensation, which
is not performance-based, comprises base salary, fringe benefits and a pension benefit commitment. Short-term variable
compensation (Bonus) and long-term variable compensation (Stock Awards) are performance-based compensation and
thus variable.
The compensation system for the members of the Managing Board of Siemens AG that is applicable for fiscal 2023 has been
in place since fiscal 2020 and was approved by the Annual Shareholders' Meeting on February 5, 2020, by a majority of
94.51% of the valid votes cast.
B.1 The compensation system at a glance
B. Compensation of Managing Board members
income, was 1.17. We thus achieved a cash conversion rate that contributed strongly to the average required to reach our
target of 1 minus annual comparable revenue growth rate over a cycle of three to five years.
B. Compensation of Managing Board members
Compensation Report
FISCAL 2023 5
In view of the high level of approval, the Compensation Report for 2023 is basically unchanged in structure and scope. In
addition, no changes to the compensation system were deemed necessary for fiscal 2023. Pursuant to Section 120a para.1
sent. 1 of the German Stock Corporation Act (AktG), the compensation system for Managing Board members must be
submitted for regular approval by the Annual Shareholders' Meeting in February 2024. In this connection, the compensation
system has been subjected to a comprehensive review and adjusted. The compensation system as of fiscal 2024 is available
on the Company website as part of the Notice of Annual Shareholders' Meeting.
The Compensation Report for fiscal 2022 was prepared in accordance with Section 162 of the German Stock Corporation
Act (AktG), and its content was also audited by the independent auditors, beyond the requirement of Section 162 para. 3
sent. 1 and 2 of the German Stock Corporation Act (AktG). The Compensation Report on the compensation individually
awarded and due to the members of the Managing Board and the Supervisory Board of Siemens AG in fiscal 2022 was
approved by a majority of 92.09% of the valid votes cast at the Annual Shareholders' Meeting on February 9, 2023.
Vote on the Compensation Report for fiscal 2022 at the 2023 Annual Shareholders' Meeting
Following the scheduled departure of Michael Diekmann, the previous Chairman of the Compensation Committee of the
Supervisory Board of Siemens AG, from the Supervisory Board and thus also from the Compensation Committee, the
Compensation Committee elected Matthias Zachert to serve as its new Chairman, effective February 10, 2023. Grazia
Vittadini has been a new member of the Compensation Committee since February 2023. As of September 30, 2023, the
Compensation Committee comprised Matthias Zachert (Chairman), Harald Kern, Jürgen Kerner, Jim Hagemann Snabe,
Birgit Steinborn and Grazia Vittadini.
There were no changes in the composition of the Managing Board of Siemens AG in fiscal 2023. In fiscal 2023, the Managing
Board comprised Dr. Roland Busch (President and CEO), Cedrik Neike, Matthias Rebellius, Prof. Dr. Ralf P. Thomas and
Judith Wiese.
Composition of the Managing Board and the Compensation Committee
→
FY 2022
FY 2023
Gross profit
(in millions of €, except where otherwise stated)
Revenue and profit
Revenue
Five-Year Summary
Income from continuing operations
Net income
Assets, liabilities and equity
Current assets
Current liabilities
Long-term debt
Net debt
Provisions for pensions and similar obligations
Equity (including non-controlling interests)
as a percentage of total assets
Debt
Cash flows
1 For FY 2023 to be proposed to the Annual Shareholders' Meeting.
Diluted earnings per share - continuing operations
Dividend per share¹
Total assets
Basic earnings per share - continuing operations
Basic earnings per share - continuing and discontinued operations
Stock market information
Diluted earnings per share - continuing and discontinued operations
Employees
Free cash flow - continuing and discontinued operations
Free cash flow - continuing operations
Cash flows from financing activities - continuing operations
Change in cash and cash equivalents
Additions to intangible assets and property, plant and equipment
Cash flows from operating activities - continuing operations
Amortization, depreciation and impairments
Cash flows from investing activities - continuing operations
Continuing operations (in thousands)
15.42%
Target achievement: 200.00%
Target achievement: 168.00%
Target achievement
- 200%
200.00%
Smart Infrastructure
100%
Actual
value
2023
0% 41-
Target achievement
9.50%
100%
13.50%
Growth
Cap
target
(4) ppts.
+4 ppts.
Performance range
Target achievement: 200.00%
FISCAL 2023 16
5.50%
Floor
Performance range
168.00%
(5) ppts.
100%
target
9.50%
Cap
Growth
(2) ppts.
+2 ppts.
Performance range
Target achievement
200%
Compensation Report → B. Compensation of Managing Board members
+5 ppts.
100%
Actual
value
2023
14.90%
16.50% Growth
Cap
0% 4
6.50%
Floor
11.50%
100%
target
Digital Industries
The other two individual targets include focus topics from the areas of Company strategy / sustainability and were defined
on the basis of the Managing Board members' respective areas of responsibility.
Business development
Dr. Roland
Busch
.
.
Siemens Xcelerator revenue growth above fiscal-year targets
Accelerated expansion of Siemens Xcelerator business through modernization and modularization
as well as the extension of marketplace content and functionalities
Market share gains in nearly all businesses with accompanying revenue growth
Strengthening of value chain resilience
Strengthening of the sustainability organization in the business units and establishment of a
committee for sustainability-related business decisions
Implementation and anchoring in key processes such as product design and data / IT infrastructure
as well as the development of business models
Definition of basic structure and preparation of new key performance indicators for impact
Completion of materiality assessment pursuant to the Corporate Sustainability Reporting Directive
(CSRD) as well as sustainability scenario modeling
Positive revenue development as well as the expansion of Siemens Xcelerator scope to include
product design, engineering and verification
Further expansion of customer and partner landscape with, among others, NVIDIA, Microsoft and
Daimler Truck
Driving Regional sales transformation, among other things, through the introduction of overarching
sales processes and steering
Improved sector-specific expertise in the battery and semiconductor segment - in particular,
through the dedicated allocation of resources and the addressing of key customers
Transition to software-as-a-service considerably above plan and above the target communicated at
the 2021 Capital Market Day
Implementation of other strategic target setting
Development of
sustainability-related
business
Strengthening of sector-
specific solutions with
.
Achievement of software-as-
a-service targets
Individual targets: Focus topics from the areas of Company strategy / sustainability
expertise
•
Business development
Expansion of
Siemens Xcelerator business
Cedrik
Neike
Sustainable strengthening
of the businesses, including
resilience
Sustainability/diversity
Further development of the
sustainability-related
business strategy and
anchoring in Company
steering
Development of
sustainability-related
business
7.50%
Expansion of
Siemens Xcelerator business
Strengthening of the
Regions in go-to-market,
•
.
•
•
including sector-specific
5.50%
Floor
Performance range
10.74%
Siemens Group
Digital Industries
Smart Infrastructure
200%
-200%
162.50%
100%
115.00%
100.00%
100%
100%
Actual
Actual
value
value
Actual
value
2023
2023
2023
1.17
0.85
200%
0.95
Individual targets: Cash conversion rate (CCR) - Target setting and target achievement
The "Individual targets" target dimension comprises four equally weighted individual targets, achievement of each of which
may be between 0% and 200%.
2023
18.25%
Main Siemens-Energy-related effects
(0.40) ppts.
ROCE
0%
12.56%
Floor
15.56%
adjusted
100%
18.56%
Cap
Actual ROCE adjusted value
18.25%
target
(3) ppts. +3 ppts.
Performance range
Target achievement: 189.67%
FISCAL 2023
15
Target achievement
Compensation Report → B. Compensation of Managing Board members
"Individual targets" target dimension
The cash conversion rate (CCR) was defined as the first individual target for all Managing Board members. The CCR reflects
a company's ability to convert profit into available cash. For the President and CEO and the Managing Board members with
primarily functional responsibility, the CCR target was defined on the basis of the Siemens Group in order to support
Siemens' voluntary commitment to generate cash at Group level. CCR Siemens Group is defined as the ratio of free cash
flow from continuing and discontinued operations to net income. For the Managing Board members with business
responsibility for Digital Industries and Smart Infrastructure, the CCR targets are business-specific and defined as the ratio
of free cash flow to profit at each business. The target amounts for CCR were based on the budget plans.
0% 41
0% H
0%
+0.4
(0.4)
+0.4
(0.4)
+0.4
+
Performance range
Performance range
.
Target achievement: 162.50%
Target achievement: 100.00%
Target achievement: 115.00%
In addition to CCR, "comparable revenue growth" was defined as the second individual target for fiscal 2023 for all members
of the Managing Board. It indicates the development in Siemens' business net of currency translation effects arising from
the external environment outside of Siemens' control and the portfolio effects that involve business activities that are either
new to or no longer a part of the relevant business. For the President and CEO and the members of the Managing Board
with primarily functional responsibility, the growth target was determined on the basis of continuing operations (c/o)
related to the Siemens Group (Siemens c/o). For the Managing Board members with business responsibility for Digital
Industries and Smart Infrastructure, growth targets are based on their respective businesses. The respective target values
were derived from the external outlook for fiscal 2023.
Individual targets: Comparable revenue growth - Target setting and target achievement
Siemens c/o
200%
200.00%
100%
Actual
value
2023
(0.4)
CCR
target
target
CCR
0% 41
CCR
0.52
0.92
1.32
0.45
0.85
1.25
0.49
0.89
1.29
Floor
100%
Cap
Floor
100%
Cap
Floor
100%
Cap
target
Definition of basic structure and preparation of new key performance indicators for impact
Implementation of sustainability and energy efficiency campaigns
•
regard to sustainability-
Judith
25%
CCR Siemens Group
162.50%
Wiese
25%
Comparable revenue growth Siemens c/o
200.00%
155.63%
Sustainability/ diversity
Optimization efficiency enhancement
130.00%
Sustainability / diversity
Target achievement: 132.00% to 165.63%
FISCAL 2023
18
Compensation Report → B. Compensation of Managing Board members
Total target achievement for the Bonus for fiscal 2023
Total target achievement and the resulting Bonus payout amount for each Managing Board member are summarized in the
following table.
Total target achievement and Bonus payout amounts for fiscal 2023
50%
140.00%
50%
Implementation of portfolio measures
25%
CCR Smart Infrastructure
115.00%
Rebellius
25%
Comparable revenue growth Smart Infrastructure
200.00%
153.75%
Business development
50%
150.00%
Implementation of other strategic target setting
Prof. Dr.
25%
CCR Siemens Group
162.50%
Ralf P. Thomas
25%
Comparable revenue growth Siemens c/o
200.00%
160.63%
Compensation range
Managing Board members
Dr. Roland Busch
Cedrik Neike
181.14%
€1,995,438
€0
€1,101,600
€2,203,200
183.43%
€2,020,665
€0
€1,101,600
€2,203,200
181.77%
€2,002,378
B.3.2 Long-term variable compensation (Stock Awards)
B.3.2.1. BASIC PRINCIPLES AND FUNCTIONING
Siemens grants long-term variable compensation in the form of Stock Awards. A Stock Award is the claim to one share -
conditional on target achievement - after the expiration of a defined vesting period. The vesting period is, accordingly, the
term of each Stock Awards tranche.
At the beginning of a fiscal year, the Supervisory Board defines a target amount in euros based on 100% target achievement
for each Managing Board member. This target amount is extrapolated to target achievement of 200% ("maximum allocation
amount"). Stock Awards for this maximum allocation amount are then allocated to the Managing Board members. The
number of Stock Awards is calculated by dividing the maximum allocation amount by the price of the Siemens share on the
allocation date, less the estimated discounted dividends ("allocation price").
An approximately four-year vesting period begins with the allocation of Stock Awards, after the expiration of which Siemens
shares are transferred. The beneficiary Managing Board members are not entitled to dividends during the vesting period.
Performance criteria
Since fiscal 2020, the number of Siemens shares that is actually transferred depends 80% on the financial performance
criterion "long-term value creation," measured on the basis of the key performance indicator "total shareholder return"
(TSR), and 20% on the non-financial performance criterion "sustainability." For measuring the "sustainability" performance
criterion, Siemens AG's performance in the environment, social and governance (ESG) area is assessed on the basis of a
Siemens-internal ESG/Sustainability index, the composition of which is determined annually by the Supervisory Board.
Total shareholder return - TSR is indicative of the performance of one share over a specified period of time – in the case of
Siemens, over the approximately four-year vesting period. It takes into account changes in the share price and the dividends
paid during this period. To reflect the Company's international footprint, the TSR of Siemens AG is compared at the end of
the vesting period with the TSR of an international sector index, the MSCI World Industrials or a comparable successor index.
Target achievement for TSR is concretely determined by first calculating a TSR reference value for Siemens AG and a TSR
reference value for the sector index. The TSR reference value is equal to the average of the end-of-month values over the
first 12 months of the vesting period (reference period).
€2,203,200
Matthias
€1,101,600
Judith Wiese
Floor
(based on 0%
Target amount
Cap
in office on September 30, 2023
target achievement)
(based on 100%
target achievement)
(based on 200%
target achievement)
Total target
achievement
Bonus
payout amount
€0
€1,770,000
€3,540,000
185.10%
€0
€1,101,600
€2,203,200
173.89%
€3,276,270
€1,915,572
Matthias Rebellius
Prof. Dr. Ralf P. Thomas
€0
Establishment and expansion of partnerships as well as analysis of new business opportunities
External communications and training of sales personnel in sector-specific aspects of sustainability
Implementation of other strategic target setting
Business development
Identification of business opportunities and market-specific use cases
specific solutions with
•
regard to sustainability-
Successful, cross-sector scaling of energy-saving contracting in commercial buildings, hospitals,
universities
related business
FISCAL 2023 17
Compensation Report →
B. Compensation of Managing Board members
•
Individual targets: Focus topics from the areas of Company strategy / sustainability (cont.)
Judith
Wiese
Implementation of portfolio measures
Successful sale of Commercial Vehicles business to Meritor
Driving performance of
Portfolio Companies
Further development of
Siemens Financial Services
(SFS)
Sustainability / diversity
Development of the
sustainability-related
business of Siemens
Prof. Dr.
Ralf P.
Thomas
Strengthening of sector-
business
Definition and introduction of customer value in the sustainability strategy of Siemens AG
Determination of clear sustainability-related focus businesses and investment priorities
related business
Matthias
Business development
Rebellius
Expansion of
•
Siemens Xcelerator business
Strengthening of the
Regions in go-to-market,
including sector-specific
expertise
Siemens Xcelerator revenue growth above fiscal-year targets for Siemens Xcelerator software,
internet of things (IoT) and digital services and for Siemens Xcelerator loT hardware
value
Planning for seven sectors in key countries for fiscal 2024 already concluded
.
Strong development in the battery and semiconductor segment, among other things, through the
strengthening of sales structures and the conclusion of framework agreements
Implementation of other strategic target setting
Development of
•
sustainability-related
.
Financial Services (SFS)
Strong operating performance, including revenue growth and increase in operating profitability
year-over-year
Successful support for Siemens Xcelerator through specific SFS solutions and integration of a digital
payment and financing gateway
Scaling of established financing solutions in new business models of the industrial business
Dr. Roland
Busch
25%
CCR Siemens Group
162.50%
25%
Comparable revenue growth Siemens c/o
200.00%
165.63%
Business development
50%
150.00%
Sustainability / diversity
Cedrik
25%
CCR Digital Industries
100.00%
Neike
25%
Comparable revenue growth Digital Industries
168.00%
132.00%
Total target achievement
130.00%
Key performance indicator/ focus topics
Individual targets: Total target achievement by each Managing Board member
Development and implementation of methods for identifying SFS financing solutions with a positive
value contribution in the sustainability area
• Continuous further development of sustainability through innovation in financing offerings
Optimization / efficiency enhancement
Further development and
performance of Global
Business Services (GBS)
Implementation of Next
Work program
Sustainability / diversity
Further development of
DEGREE framework
Further development of the
sustainability-related
business strategy and
anchoring in Company
steering
• Further expansion of business activities, including a first major external contract
•
Revenue increase above annual planning as well as achievement of planned productivity targets
•
Targeted scaling of Next Work to now roughly 80,000 employees
•
Development and provision of a Next Work training program for managers and businesses
• Launch of a project to further develop the DEGREE framework
.
Acceleration of two DEGREE targets with adjusted, ambitious target setting and early achievement
of the target regarding the share of women in top management positions
Strengthening of the sustainability organization in the business units and establishment of a
committee for sustainability-related business decisions
Implementation and anchoring in key processes such as project design and data / IT infrastructure
as well as the development of business models
Target achievement for the target dimension "Individual targets" is summarized for each Managing Board member in the
following table.
Weighting
Actual
For fiscal 2020:
18.65%
།།། ༅།། ཚ།་། ༅།་།༅།
€ thousand in % of TTC € thousand in % of TTC € thousand in % of TTC € thousand in % of TTC
1,102
1,102
1,102
1,102
83
22%
617
1,801
4,903
1,102
༅། །
*། ༅།། ་།
83
།*།
83
551
1,735
1,102
5,048
2,145
2,000
།།
1,102
30%
4,373
100% 4,162
100%
Fixed
compensation
Base salary
+ Fringe benefits¹
Matthias Rebellius
Prof. Dr. Ralf P. Thomas
Managing Board member since Oct. 1, 2020
Managing Board member since Sept. 18, 2013
2023
2022
2023
2022
ས །
37%
617
1,801
་།
།།།
1,259
4,096
༄།། ༅།། རྨ།།
26%
2%
1,102
83
27%
2%
amount for free disposal²
551
13%
551
13%
= Total
1,735
41% 1,735
42%
Variable
compensation
+ Short-term variable compensation
Bonus for fiscal 2023
1,102
26%
Bonus for fiscal 2022
1,102
27%
1,102
83
1,259
€ thousand in % of TTC € thousand in % of TTC
2023
Variable
compensation
+BSAV contribution/
amount for free disposal²
= Total
+ Short-term variable compensation
Bonus for fiscal 2023
Bonus for fiscal 2022
+ Long-term variable compensation
551
1,735
1,102
2023 Stock Awards (vesting: 2022 - 2026) 1,380
2022 Stock Awards (vesting: 2021-2025)
Total target compensation (TTC)
4,217
Fixed
compensation
Base salary
+ Fringe benefits¹
+ BSAV contribution/
Judith Wiese
Managing Board member since Oct. 1, 2020.
2022
39%
100%
2,954
7,618
100%
The following table shows the individualized target compensation of each Managing Board member and the relative
proportions of total target compensation represented by each of the individual compensation components.
FISCAL 2023
10
Target compensation fiscal 2023
Managing Board members
in office on September 30, 2023
Compensation Report →
B. Compensation of Managing Board members
2023
Dr. Roland Busch
President and CEO since Feb. 3, 2021
2022
Cedrik Neike
2023
Managing Board member since April 1, 2017
2022
€ thousand in % of TTC € thousand in % of TTC € thousand in % of TTC € thousand in % of TTC
Fixed
Base salary
compensation
+ Fringe benefits¹
+BSAV contribution/
amount for free disposal²
1,770
Regarding compensation, all components of the compensation of the position of President and CEO are differentiated. The
target amount of Prof. Dr. Ralf P. Thomas's Stock Awards is differentiated due to his particular responsibilities as CFO. The
target amount of Cedrik Neike's Stock Awards is also differentiated due to the outstanding business results of Digital
Industries, the strategic importance of this Business for the further development of Siemens AG and Cedrik Neike's five-
years of membership on the Managing Board.
22%
Due to the increase in the Stock Awards target amounts, variable compensation is structured on a more long-term basis,
while compensation as a whole is oriented even more toward sustainable Company development.
of total target compensation
Compensation Report
→
B. Compensation of Managing Board members
B.2 Principles of the determination of compensation
B.2.1 Target compensation and compensation structure
The Supervisory Board has determined, in accordance with the compensation system for the Managing Board members,
the amount of each Managing Board member's total target compensation for fiscal 2023. In making this determination, the
Supervisory Board has ensured that the proportion of long-term variable compensation always exceeds that of short-term
variable compensation and that the proportions of total target compensation represented by each of the individual
compensation components are within the ranges defined in the compensation system.
Composition of total target compensation
Base salary
TOTAL TARGET COMPENSATION
FIXED COMPENSATION
+
36% to 43%
Fringe benefits
Pension benefit
commitment
of total target compensation
Short-term variable
compensation
(Bonus)
VARIABLE COMPENSATION
20% to 28%
of total target compensation
Long-term variable
compensation
(Stock Awards)
30% to 42%
The regular review of Managing Board compensation at the beginning of fiscal 2023 in order to determine the
compensation's appropriateness and conformity with customary market practices indicated that - when compared to the
companies in the DAX 40, the German blue-chip stock index, that have been defined in the compensation system as the
relevant market - the total target compensation of the members of the Managing Board of Siemens AG was positioned
toward the lower end of the customary market ranges. Compared to the companies in the STOXX Europe 50, which is also
used for a market comparison due to Siemens' international footprint, direct target compensation was actually below the
customary market range. Against this backdrop, the Supervisory Board approved an increase in the total target
compensation of all Managing Board members as of October 1, 2022. This increase was implemented by raising the
individual members' Stock Awards target amounts. The Stock Awards target amount for Dr. Roland Busch was raised to
€3,340,000 from €2,954,000, the target amount for Prof. Dr. Ralf P. Thomas was raised to €2,145,000 from €2,000,000,
the target amount for Cedrik Neike was raised to €1,470,000 from €1,259,000, and the target amounts for the remaining
Managing Board members were raised to €1,380,000 from €1,259,000.
+ Long-term variable compensation
2023 Stock Awards (vesting: 2022 - 2026)
2022 Stock Awards (vesting: 2021 - 2025)
1,770
1,102
+ Short-term variable compensation
2%
༅༅།ཇ། ༅། །
compensation
Bonus for fiscal 2023
1,770
22%
1,102
25%
Bonus for fiscal 2022
1,770
23%
1,102
26%
+ Long-term variable compensation
2023 Stock Awards (vesting: 2022 - 2026)
2022 Stock Awards (vesting: 2021 - 2025)
Total target compensation (TTC)
3,340
42%
1,470
34%
8,004
Variable
23%
1,801
1,801
133
2%
133
2%
83
25%
1,102
།
2%
83
991
12%
991
13%
617
14%
617
Total
2,894
36% 2,894
38%
41%
100%
1,380
1,259
13
Compensation Report → B. Compensation of Managing Board members
The Supervisory Board aims to ensure that the targets for variable compensation are demanding and sustainable. If they
are not reached, variable compensation can be reduced to zero. If the targets are significantly exceeded, target achievement
is capped at 200%.
B.3.1 Short-term variable compensation (Bonus)
B.3.1.1 BASIC PRINCIPLES AND FUNCTIONING
The Bonus system is based on three equally weighted target dimensions, which take account of the overall responsibility of
the Managing Board as well as each Managing Board members' specific business responsibilities and individual challenges:
→ "Siemens Group"
→ "Managing Board portfolio"
→> "Individual targets."
FISCAL 2023
Performance criteria are assigned to each of the three target dimensions based on Company priorities and the
responsibilities of each Managing Board member. One financial performance criterion is assigned to the "Siemens Group"
dimension and another to the "Managing Board portfolio" dimension. The fulfillment of these criteria is measured on the
basis of key performance indicators. Within the "Individual targets" dimension, the financial performance criteria "growth"
and "liquidity" can be employed as can additional, non-financial performance criteria. In the case of non-financial
performance criteria, the Supervisory Board considers the degree to which a Managing Board member has fulfilled so-called
focus topics, which comprise operations-related aspects of the execution of the Company's strategy as well as sustainability-
related aspects.
Bonus design and calculation of payout amount
Bonus
target amount
Weighted average target achievement (0%-200%)
☐ × Post + 2 + 2 =
Bonus
payout amount
B.3.1.2. BONUS FOR FISCAL 2023
"Siemens Group" target dimension
At the end of the fiscal year, target achievement for the individual key performance indicators and the achievement of the
Managing Board members' individual targets are determined and aggregated to form a weighted average. The percentage
of weighted target achievement multiplied by the individual target amount yields the Bonus payout amount for the past
fiscal year. The payable Bonus is capped at two times the target amount and is paid in cash, at the latest, together with the
compensation paid at the end of February of the following fiscal year.
• Net Promoter Score - Strong customer relationships are the basis for sustainable
development both for Siemens and for our customers.
Digital learning hours - Focus on learning in order to empower our people to
remain resilient and relevant in a constantly changing environment.
•
Comparable
revenue growth
Total
shareholder
return (TSR)
NON-FINANCIAL, QUALITATIVE TARGETS
Execution of
Company
strategy
Sustainability
Various focus
topics
Various focus
topics
Siemens-internal
ESG/Sustain-
ability index
EPS reflects the net income attributable to the shareholders of Siemens AG and
incentivizes the sustainable increase in profit - particularly by focusing on profitable
growth. This key performance indicator provides a comprehensive perspective that
encompasses all units of the Siemens Group. The consideration of EPS pre PPA
strengthens the focus on Siemens' operating performance.
ROCE, which is the primary measure for managing capital efficiency at Group level,
reflects our focus on profitable growth, the implementation of measures to sustainably
increase competitiveness and stringent working capital management. The adjustment
of ROCE places the focus on Siemens' operating performance.
CCR measures the ability to convert profit into cash flow in order to finance growth and
offer our shareholders an attractive, progressive dividend policy.
Further accelerating high-value growth is a key element of Siemens' strategy. As a
leading technology company, Siemens wants to expand its position on all targeted
markets and tap additional profitable markets.
TSR is a yardstick for measuring the achievement of Siemens' strategic goal of
sustainably increasing Company value. It indicates total value creation for shareholders
in the form of increases in the Siemens share price and dividends paid.
The individual targets for executing the Company strategy enable the Company to focus
on specific factors that are aligned with its short- and medium-term targets and
measures in order to ensure its long-term strategic development.
The focus topics in fiscal 2023 comprised business development, the implementation of
other strategic target setting, optimization / efficiency enhancement and the
implementation of portfolio measures.
Sustainability/diversity - Siemens honors its social responsibility by fostering
diversity, inclusion and equal opportunity.
The Siemens-internal ESG/Sustainability index for the 2023 Stock Awards tranche
includes:
• CO2 emissions - Climate neutrality by 2030 in order to support the 1.5-degree target
and thus combat global warming.
For the "Siemens Group" target dimension in fiscal 2023, the Supervisory Board of Siemens AG defined the performance
criterion "profit." In accordance with external communications and the Siemens Financial Framework for the financial
steering of the Company, the focus is on the transparent presentation of Siemens' operating performance. For this reason,
"profit" is measured in terms of basic earnings per share before purchase price allocation (EPS pre PPA). EPS pre PPA is
defined as basic earnings per share from net income adjusted for amortization of intangible assets acquired in business
combinations and related income taxes. It includes the amounts attributable to shareholders of Siemens AG.
To take account of the Company's long-term performance and provide incentives for a sustainable increase in profit, the
average EPS pre PPA of three consecutive fiscal years was used for target setting. The portfolio of Siemens AG changed
significantly due to the spin-off of Siemens Energy at the end of fiscal 2020. Against this backdrop, target setting for fiscal
2023 was defined on the basis of comparable EPS pre PPA values. The following EPS pre PPA values were used for this
purpose: the EPS pre PPA value of continuing operations was used for fiscal 2020, and the EPS pre PPA values of continuing
and discontinued operations were used for fiscal 2021 and fiscal 2022.
FISCAL 2023 14
Compensation Report → B. Compensation of Managing Board members
2021
EPS pre PPA
€5.39
€8.32
avg. 2020-2022 100% target
= €6.39
2022
€5.47
2023 €10.77
Actual value
In order to determine at the end of the vesting period how well the TSR of Siemens AG has performed relative to the TSR of
the sector index, the TSR performance value is calculated over the subsequent 36 months (performance period). The TSR
performance value is the average of the end-of-month values during the performance period.
comparable EPS pre PPA of continuing operations
"Managing Board portfolio" target dimension
The Supervisory Board of Siemens AG established "profitability / capital efficiency" measured in terms of return on capital
employed (ROCE) as the performance criterion for the "Managing Board portfolio" target dimension for fiscal 2023 for all
Managing Board members. ROCE is defined as profit before interest and after tax divided by average capital employed. For
the purposes of target setting and determining target achievement, ROCE – as defined in the Siemens Financial Framework,
which excludes certain Varian-related acquisition effects is adjusted for main effects relating to the stake in
Siemens Energy (profit "Siemens Energy Investment" in the numerator and asset "Siemens Energy Investment” in the
denominator). The target value for ROCE adjusted is derived from budget planning.
Return on capital employed adjusted (ROCE adjusted): Target setting and target achievement
33.33% Managing Board portfolio
ROCE adjusted
Target achievement
Percentage
points=ppts.
200%
189.67%
Calculation of actual value according to target setting:
ROCE as reported
(excluding defined
Varian-related acquisition effects)
2020
value creation
Fiscal
Target achievement: 200.00%
As part of target achievement, the actual EPS pre PPA value of the reporting year is used in order to place the focus on
performance in the reporting year.
Earnings per share before purchase price allocation (EPS pre PPA): Target setting and target achievement
33.34% Siemens Group
EPS pre PPA, basic
200%
Target achievement
100%
200.00%
Actual
value
2023
€10.77
90
0%
EPS pre PPA
€3.89
€6.39
Floor
100%
target
€8.89
Cap
€(2.50)
+ €2.50
Performance range
Calculation of target and actual value:
Long-term
Growth
Cash conversion
rate (CCR)
Neike
Matthias
Rebellius
Thomas
Judith
Wiese
1,770
1,102
1,102
1,102
1,102
133
83
83
83
83
BSAV contribution/
+ amount for free disposal
991
617
551
617
551
Busch
Variable
compensation
Cedrik
Fringe benefits (maximum amount)
31%
Total target compensation (TTC)
4,217
100% 4,096 100%
1
For fiscal 2023, each Managing Board member was awarded fringe benefits equal to a maximum 7.5% of his or her base salary.
The target amount reported here is also equal to the maximum amount.
2 Matthias Rebellius and Judith Wiese are not included in the Siemens Defined Contribution Pension Plan (BSAV).
Instead of BSAV contributions, they receive a fixed cash amount for free disposal.
FISCAL 2023
11
Compensation Report → B. Compensation of Managing Board members
B.2.2 Maximum compensation
The maximum compensation of each Managing Board member is determined annually by the Supervisory Board in
accordance with Section 87a para. 1 sent. 2 No. 1 of the German Stock Corporation Act (AktG). Maximum compensation is
equal to the total of the maximum amounts of all compensation components that can possibly be paid out to each
Managing Board member for the relevant fiscal year. It is calculated by adding base salary, maximum fringe benefits and
the BSAV contribution (or the amount for free disposal) as well as two times the Bonus target amount and three times the
Stock Awards target amount. Twice the Bonus target amount and triple the Stock Awards target amount also correspond
to the respective limits (individual caps) on the amount of variable compensation.
The following table shows the maximum compensation of each Managing Board member as approved by the Supervisory
Board for fiscal 2023 in accordance with Section 87a para. 1 sent. 2 No. 1 of the German Stock Corporation Act (AktG).
Maximum compensation fiscal 2023
Managing Board members
in office on September 30, 2023
Prof. Dr. Ralf P.
(€ thousand)
Fixed
Base salary
compensation
+
Dr. Roland
33%
Bonus for fiscal 2023
(two times target amount)
The appropriateness review of Managing Board compensation for fiscal 2023 has shown that Managing Board
compensation is appropriate.
FISCAL 2023 12
Compensation Report → B. Compensation of Managing Board members
B.3 Variable compensation in fiscal 2023
Variable compensation is tied to performance and accounts for a significant proportion of the total compensation of
Managing Board members. It consists of a short-term variable component (Bonus) and a long-term variable component
(Stock Awards).
The performance criteria and the key performance indicators used to measure performance for variable compensation in
fiscal 2023 are derived from the Company's strategic goals and operational steering and are in line with the compensation
system applicable for fiscal 2023. As a rule, all the performance criteria measure successful value creation in all its different
forms, as strategically envisioned. In line with Siemens' social responsibility, sustainability is also included in the
performance criteria.
The performance criteria relevant for fiscal 2023, the key performance indicators, the focus topics and the explanations of
how these foster the Company's long-term development are shown in the following table.
Performance criteria of variable compensation and link to strategy
Performance
criterion
FINANCIAL TARGETS
Key performance
indicator/ focus topic Bonus
Stock
Awards
Link to strategy
Profit
Profitability/
capital efficiency
Earnings per
share before
purchase price
allocation
(EPS pre PPA)
Return on capital
employed
adjusted
(ROCE adjusted)
Liquidity
The Supervisory Board conducted the annual review of Managing Board compensation in order to determine the latter's
appropriateness and conformity with market conditions. For this purpose, the Supervisory Board assessed the
compensation's level and structure relative to the companies included in the DAX 40, the German blue-chip stock index,
and relative to the companies included in the STOXX Europe 50 (horizontal comparison). In the course of its review, the
Supervisory Board also assessed the development of Managing Board compensation relative to the compensation of Senior
Management and Siemens' total workforce in Germany (vertical comparison). Senior Management comprises executive
employees. The total workforce comprises Senior Management as well as the Siemens employees who are covered by
collective bargaining agreements and those who are not. In addition to a status quo analysis, the vertical comparison took
into account the development of compensation ratios over time. Since Siemens Healthineers is a separately managed,
publicly listed company, its workforce was not included in the vertical comparison.
+
B.2.3 Appropriateness of compensation
Since the 2023 Stock Awards tranche is not due until November 2026, compliance with the maximum limit of the Stock
Awards for fiscal 2023 can be finally assessed only in November 2026, when the 2023 Stock Awards tranche is settled.
3,540
2,203
2,203
2,203
2,203
Stock Awards 2023
vesting: 2022- 2026
+
(three times target amount)
Maximum compensation
10,020
4,410
4,140
6,435
4,140
16,454
8,414
8,078
10,439
8,078
The base salary and the BSAV contribution (or the amount for free disposal) are fixed amounts. In no case did the fringe
benefits awarded to a Managing Board member exceed the maximum amount defined for fiscal 2023. The Bonus cap was
not reached in fiscal 2023.
The final assessment of compliance with the maximum compensation for fiscal 2023 will be included in the Compensation
Report for fiscal 2027.
FISCAL 2023 19
50%
0%
The following tables show the compensation awarded and due to the active members of the Managing Board in fiscal 2023
and fiscal 2022 in accordance with Section 162 para. 1, sent. 1 of the German Stock Corporation Act (AktG). As a result,
they include all the amounts actually paid to individual Managing Board members in the reporting period ("awarded
compensation") and all the compensation that is legally due but not yet received ("due compensation").
(1.75)ppts.
91%
100%
200%
Target achievement
28.81%
30.55%
67.35%
60.01%
37.32%
Reference price versus
performance price
Target achievement: 91%
€89.91 €115.81
Siemens AG
Competitors (average)
¥4,401.17 ¥3,422.67
€121.12
€72.37
Schneider
(22.23)%
Heavy Industries
Mitsubishi
10.32%
(20.00)%
Floor
0.00%
20.00%
100%
target
number of
Stock Awards
(based on
200% target
achievement)
Maximum
2
1
Prof. Dr. Ralf P. Thomas
Cedrik Neike2
Dr. Roland Busch
with a commitment of the Stock Awards
from the 2019 tranche
200% target
achievement)
Managing Board members in
office on September 30, 2023
Nov. 9, 2018
$79.66 $127.46
$74.91 $82.64
Allocation
price
Maximum
allocation
Information on the transfer of the 2019 Stock Awards tranche
FISCAL 2023 23
-
The following table provides a summary of the key parameters of the 2019 Stock Awards tranche. In connection with the
due date and settlement of the Stock Awards for fiscal 2019, the table also includes an additional cash payment to the
Managing Board members as a result of the Siemens Energy spin-off. The spin-off of Siemens Energy in fiscal 2020 led to
adjustments in the stock-based compensation commitments agreed upon until the spin-off date. At the time when the
2019 Stock Awards became due, the Managing Board members like all other eligible employees - were, accordingly,
entitled to receive an additional cash payment based on the spin-off ratio of 2:1 and on the Siemens Energy share price of
€14.68 on the date when their stock-based compensation commitments became due.
A= (1.75) percentage points
Performance range
+
+20 ppts.
(20) ppts.
Cap
amount
(based on
Compensation Report
General Electric
CHF 18.74 CHF25.73
5,148
20,592
€2,940,000
€1,470,000
€3,626,839
11,697
46,787
€6,680,000
€3,340,000
(weighting: 20%)
(weighting: 80%)
Total shareholder return ESG/ Sustainability index
Siemens-internal
Fair value at allocation
date¹
Maximum number of
Stock Awards
Maximum
allocation amount
Target amount
(based on 100%
target achievement)
Based on 200% target achievement
B. Compensation of Managing Board members
→
Compensation Report
2
1
€1,596,240
€1,380,000
€2,760,000
19,331
price
price
Performance
Reference
ABB
Performance of the Siemens share compared to the share performance of five relevant competitors
Overview of target achievement for the 2019 Stock Awards tranche
The 2019 Stock Awards tranche became due and was settled in fiscal 2023. The 2019 Stock Awards tranche depended on
the performance of the Siemens share compared to the share performance of five relevant competitors during the
approximately four-year vesting period from November 9, 2018, to November 17, 2022.
B.3.2.3 TRANSFER OF STOCK AWARDS IN FISCAL 2023 (2019 TRANCHE)
Concrete target setting and the degree of target achievement for the Siemens-internal ESG/Sustainability index of the 2023
Stock Awards tranche will be published together with the degree of target achievement for the TSR in the Compensation
Report for fiscal 2027, after the expiration of the vesting period.
In addition to his position as a member of the Managing Board of Siemens AG, Matthias Rebellius is CEO of Smart Infrastructure and CEO of Siemens Schweiz AG.
The corresponding legal relationship is defined in a separate contract between Matthias Rebellius and Siemens Schweiz AG. The entire compensation he receives under the terms
of his contract with Siemens Schweiz AG is deducted from his Managing Board compensation. Of the target amount reported here (based on 100% target achievement),
€600,000 is attributable to Siemens Schweiz AG.
Eaton
The fair value on the allocation date is calculated for the TSR component on the basis of a valuation model and amounts to €49.42. The fair value for the ESG component of
€112.39 is equal to the Xetra closing price of the Siemens share on the allocation date, less the discounted expected dividends. For the 2023 tranche, the allocation date in
accordance with IFRS 2 was November 23, 2022 (the date of communication to the Managing Board members).
4,833
19,331
€2,760,000
€1,380,000
€2,329,196
7,512
30,047
€4,290,000
€2,145,000
€1,498,519
4,833
€1,498,519
Judith Wiese
→
Target
achievement
of share
price
performance
Fixed
Base salary
1,102
30%
1,102
34%
compensation
+
Fringe benefits
41
1%
83
3%
+
Amount for free disposal¹
551
15%
551
17%
Total
1,693
46%
1,735
€ thousand in % of TC € thousand in % of TC
2023
Managing Board member since Oct. 1, 2020
2022
Judith Wiese
100%
3,160 100%
5,270
100%
4,304
100%
+ Service costs
518
578
Total compensation (incl. service costs)
3,160
54%
5,788
1
Matthias Rebellius and Judith Wiese are not included in the Siemens Defined Contribution Pension Plan (BSAV). Instead of BSAV contributions, they receive a fixed cash amount for
free disposal.
2 In addition to his position as a member of the Managing Board, Cedrik Neike served as Executive Chairman of the Board of Directors of Siemens Ltd. China from May 1, 2017, to
March 31, 2019. The amounts reported under "2019 Stock Awards (vesting: 2018-2022)" and "2018 Stock Awards (vesting: 2017-2021)" include the value of the Stock Awards
allocated by Siemens Ltd. China. Likewise, a portion of the additional cash payment attributable to the Stock Awards allocated by Siemens Ltd. China is included under "Cash
payment Siemens Energy spin-off." For details, see chapter "B.3.2.3 Transfer of Stock Awards in fiscal 2023 (2019 tranche)."
3
In addition to his position as a member of the Managing Board of Siemens AG, Matthias Rebellius is CEO of Smart Infrastructure and CEO of Siemens Schweiz AG.
The corresponding legal relationship is defined in a separate contract between Matthias Rebellius and Siemens Schweiz AG. The entire compensation he receives under the terms
of his contract with Siemens Schweiz AG is deducted from his Managing Board compensation. Of the base salary and fringe benefits reported here, €710,428 and €34,312,
respectively, were awarded and paid by Siemens Schweiz AG. Of the Bonus for fiscal 2023 reported here, €1,192,486 (corresponding to CHF 1,153,015 and converted into euros
as of September 30, 2023) will be paid by Siemens Schweiz AG. Furthermore, employer contributions to pension plans paid by Siemens Schweiz AG are deducted from the
amount for free disposal. Matthias Rebellius is subject to Swiss legislation on social insurance. Unlike in Germany, this subjection to social insurance also applies to compensation
as a member of the Managing Board of Siemens AG. Since the clarification of this matter in May 2023, employer contributions of CHF5,785 (€6,048) have accrued. For the reverse
transaction relating to the period from October 2020, when Matthias Rebellius joined the Managing Board, until May 2023, Siemens AG has incurred, in addition, one-time social
insurance costs of CHF133,548 (€139,855). Neither the employer contributions nor the one-time social insurance costs are included in the compensation awarded and due to
Matthias Rebellius in fiscal 2023.
FISCAL 2023
28
Compensation Report → B. Compensation of Managing Board members
Compensation awarded and due in accordance with Section 162 para. 1 sent. 1 German Stock Corporation Act (AktG) -
Active Managing Board members in fiscal 2023 (cont.)
Managing Board members
in office on September 30, 2023
4,882
B. Compensation of Managing Board members
Variable
Short-term variable compensation
The Stock Awards settled by share transfer were valued at €129.56, the German low price of the Siemens share on November 18, 2022.
In addition to his position as a member of the Managing Board, Cedrik Neike served as Executive Chairman of the Board of Directors of Siemens Ltd. China from May 1, 2017, to
March 31, 2019. Of the allocated number of Stock Awards reported here, 2,940 are attributable to the commitment by Siemens Ltd. China. Of the calculated number of Stock
Awards reported here, 1,338 were awarded and paid by Siemens Ltd. China.
€111,904
€1,975,920 +
€89,532
€1,580,891 +
€89,532
12,202 > €1,580,891 +
12,202 >
15,251 >
91%
91%
91% =
26,815 x
26,815 x
33,518 x
€85.03 =
€2,850,000 /
€85.03 =
€2,280,000 /
€85.03 =
€2,280,000 /
spin-off
Nov. 18, 20221
achievement
Cash payment
Siemens Energy
target
Value at
transfer day
based on
Number of
Stock Awards
In the course of transferring the 2019 Stock Awards tranche, compliance with the maximum amounts of total compensation
for fiscal 2019 was also reviewed. The applicable maximum amount was not exceeded in the case of any Managing Board
member.
B.3.2.4 CHANGES IN STOCK AWARDS IN FISCAL 2023
29
FISCAL 2023
compensation
Bonus for fiscal 2023
2,002
54%
Bonus for fiscal 2022
1,487
46%
1
+ Long-term variable compensation
2019 Stock Awards (vesting: 2018-2022)
2018 Stock Awards (vesting: 2017-2021)
+
Cash payment Siemens Energy spin-off
Total compensation (TC)
(according to Section 162 AktG)
+ Service costs
Total compensation (incl. service costs)
3,696
3,696
100%
3,223
100%
3,223
Matthias Rebellius and Judith Wiese are not included in the Siemens Defined Contribution Pension Plan (BSAV). Instead of BSAV contributions, they receive a fixed cash amount for
free disposal.
=
Prof. Dr. Ralf P. Thomas
Matthias Rebellius²
Cedrik Neike
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept
Amount for free disposal
2023
Short-term variable compensation: Bonus for 2023
Settlement in
Nov '22
plus cash payment relating to Siemens Energy spin-off
Payout in
Jan '24
2024
Payout latest
in Feb '24
Fixed compensation
Variable compensation
In addition to the amounts of compensation, Section 162 para. 1 sent. 2 No. 1 of the German Stock Corporation Act (AktG)
requires disclosure of the relative proportion of total compensation represented by all fixed and variable compensation
components. The relative proportions reported here refer to the compensation components "awarded" and "due" in the
respective fiscal years in accordance with Section 162 para. 1 sent. 1 of the German Stock Corporation Act (AktG).
Although the service costs for Company pension plans are not to be classified as awarded and due compensation, they are
also reported in the following table for purposes of transparency.
FISCAL 2023 27
Compensation Report → B. Compensation of Managing Board members
Compensation awarded and due in accordance with Section 162 para. 1 sent. 1 German Stock Corporation Act (AktG) -
Active Managing Board members in fiscal 2023
Managing Board members
in office on September 30, 2023
2023
Dr. Roland Busch
President and CEO since Feb. 3, 2021
2022
Cedrik Neike²
Managing Board member since April 1, 2017
2023
2022
€ thousand
in % of TC € thousand in % of TC € thousand
Monthly payout
Base salary and fringe benefits
Long-term variable compensation:
2019 Stock Awards tranche
2019
0%
100%
200%
Target achievement
Calculation of TSR target achievement
The following applies for the determination of target achievement.
→ MSCI World Industrials index
→ Siemens AG
TSR performance values for
36 months
→ MSCI World Industrials index
→ Siemens AG
TSR reference values for
in % of TC € thousand
12 months
OCT
NOV
FYn
FYn+1
Calculation of TSR reference values and TSR performance values for Stock Awards
At the end of the vesting period, the change in Siemens' TSR as well as that of the sector index is determined by comparing
the TSR reference values with the TSR performance values.
Compensation Report → B. Compensation of Managing Board members
The Bonus is reported under "Short-term variable compensation" as "due compensation" since the underlying services were
fully rendered by the end of each period (September 30). Therefore, the Bonus payout amounts for the reporting year are
reported, although payout only occurs after the end of each reporting year, in order to make reporting transparent and
comprehensible and in order to guarantee a connection between performance and compensation in the reporting period.
Furthermore, in fiscal 2023 and fiscal 2022, the Stock Awards from the 2019 and 2018 tranches allocated in fiscal 2019
and fiscal 2018, respectively, became due and were settled by transfer of Siemens shares. The value of Siemens shares at
the time of transfer is reported under "Long-term variable compensation."
In connection with the due date and settlement of the Stock Awards for fiscal 2019 and fiscal 2018, the tables also include
the additional cash payments to eligible Managing Board members as a result of the Siemens Energy spin-off. The spin-off
of Siemens Energy in fiscal 2020 led to adjustments in the stock-based compensation allocations agreed upon until the
spin-off date. At the time when the 2019 and 2018 Stock Awards became due, the Managing Board members - like all
other eligible employees - were, accordingly, entitled to receive an additional cash payment based on the spin-off ratio of
2:1 and on the Siemens Energy share price of €14.68 and €24.32, respectively, on the date when their respective stock-
based compensation allocations became due.
Compensation awarded and due in fiscal 2023
NOV
(20) ppts.
in % of TC
99
3%
།
1,496
124
4,215
100%
581
4,796
ཚ། ་།ཇ། ༅།
1,581
1,496
25%
1%
124
2%
90
5,979 100% 4,723
913
503
6,892
5,226
༅།
༅ག་།༄།
་།ཎ། ༅༅།ཎྜ
35%
༄༄།།།།
༅།་།
35%
26%
1%
1,770
1,102
23%
1,102
26%
111
36
1%
31
1%
1,770
༅། ༈ ། *།
31%
1,137
24%
1,132
27%
།*།༅། །༴།
1,916
41%
2,479
41%
1,462
1,881
+20 ppts.
Relative
TSR
Siemens compared to MSCI World Industrials index
2
1
Customer satisfaction is Siemens' top priority. For us, this
means identifying customer requirements as early as
possible, strengthening partnerships and maintaining and
building trust. As a result, we systematically measure
customer satisfaction and take steps to improve it.
Siemens' success is inseparably linked with highly qualified
employees. The right employees with the right expertise are
decisive for our further growth. That is why we place a strong
emphasis on learning in order to sustainably anchor it in
our day-to-day working environment while continuously
increasing learning hours.
Net zero emissions in business operations by 2030 with 55%
emission reduction by 2025 and 90% by 2030. This ambition,
which was raised in fiscal 2022, also contributes to
compliance with the SBTI pathway¹ and the fulfilment of the
obligations arising from membership in the RE100, EV100
and EP100 initiatives.²
Ambition
(Customer
impact)
priorities
Company
framework)
and Company
priorities
(Growth mindset)
Sustainability
strategy
(DEGREE
Sustainability
strategy
(DEGREE
framework)
Derived from
Customer intention to recommend us,
measured on a scale of 1 (extremely unlikely)
to 10 (extremely likely) and based on
comprehensive annual customer satisfaction
surveys.3
The total number of digital learning hours
completed in virtual trainer-led training ses-
sions, self-paced learning, learning on
the job, community-based virtual learning
and hybrid training sessions, divided by the
total number of employees.
Amount of greenhouse gases emitted
by the Company's business operations
in tons of CO2 equivalent, excluding
carbon offsets (for example, certificates).
Definition
Score (NPS)
Net Promoter
Digital learning
hours per
employee
CO2 emissions
Key performance
indicator
Compensation Report → B. Compensation of Managing Board members
Science Based Target Initiative (SBTI): Reduction targets for 2030 based on the scientific requirements for limiting global warming to 1.5 degrees Celsius.
Use of renewable energy (RE): 100% green electricity by 2030; use of electric vehicles (EV): 100% electric vehicles;
improving energy productivity (EP): 100% CO2-neutral buildings.
3 The NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. Customers that rate Siemens high on the scale are promoters.
Customers that find it unlikely to recommend Siemens to others are named detractors. Example: promoters (55%) minus detractors (10%) = NPS (45%).
The Supervisory Board set the allocation date for the 2023 Stock Awards tranche at November 18, 2022. The timeline of
this tranche is as follows.
Dr. Roland Busch
in office on September 30, 2023
Managing Board members
Information on the allocation of the 2023 Stock Awards tranche
22
22
FISCAL 2023
The target amounts, the maximum allocation amounts, the maximum number of Stock Awards allocated and the fair value
at allocation date in accordance with IFRS 2 Share-based Payment are shown in the following table. The allocation price
applicable for the 2023 tranche was €114.22.
ESG performance measurement based on interim targets for each fiscal year
TSR performance period
TSR reference period
ESG key performance indicators for 2023 Stock Awards tranche
Performance
measurement
SEPT '26 OCT '26
2025
2024
NOV '23
OCT '23
NOV '22
OCT '22
Process sequence
Transfer
Allocation and four-year vesting period
Timeline for the 2023 Stock Awards tranche
NOV '26
FISCAL 2023 21
→ "Sustainability," measured in terms of the Siemens-internal ESG/Sustainability index, which is based on the following
three equally weighted key performance indicators. Target setting for the three key performance indicators is oriented
on the Company's strategic sustainability planning, which is described in detail in Siemens' sustainability reporting.
→ "Long-term value creation," measured in terms of the development of the TSR of Siemens AG relative to the
international sector index MSCI World Industrials and
reference
3-year
1-year
Total shareholder return (TSR)
compared to sector index
(weighting: 80%)
Performance range 0%-200%
Four-year vesting period
maximum possible target
achievement of 200%)
x 2 (Extrapolation to
(based on 100% target
achievement)
Target amount
Allocation
period
Basic principles and functioning of Stock Awards
Compensation Report → B. Compensation of Managing Board members
FISCAL 2023 20
The value of the Siemens shares transferred after the expiration of the vesting period is also capped at 300% of the target
amount. If this cap is exceeded, a corresponding number of Stock Awards is forfeited without refund or replacement.
At the end of the approximately four-year vesting period, the Supervisory Board determines the degree of target
achievement. The target achievement range for TSR and for the Siemens-internal ESG/Sustainability index is between 0%
and 200%. If target achievement is less than 200%, a number of Siemens Stock Awards equivalent to the shortfall are
forfeited without refund or replacement and a correspondingly smaller number of shares is transferred.
Determination of total target achievement
Environment, social and governance - The Siemens-internal ESG/Sustainability index is based on three equally weighted,
structured and verifiable ESG key performance indicators. At the beginning of each tranche, the Supervisory Board defines
the target values for each of the ESG key performance indicators. Target measurement is based on defined interim targets
for each fiscal year. Target achievement for the Siemens-internal ESG/Sustainability index is finally determined at the end
of the approximately four-year vesting period on the basis of the weighted average of the target achievement values
calculated for each of the key performance indicators.
OCT
FYn+4
If the change in the TSR of Siemens AG is between
20 percentage points above and 20 percentage points
below that of the sector index, target achievement is
calculated using linear interpolation.
• If the change in the TSR of Siemens AG is equal to
that of the sector index, target achievement is 100%.
•If the change in the TSR of Siemens AG is at least
20 percentage points below that of the sector index,
target achievement is 0%.
• If the change in the TSR of Siemens AG is at least
20 percentage points above that of the sector index,
target achievement is 200%.
The remaining number of Stock Awards is settled by the transfer of Siemens shares to the relevant Managing Board member.
3,723
performance
period
Number of Stock Awards based
The Supervisory Board approved the following performance criteria for the 2023 Stock Awards tranche:
B.3.2.2 ALLOCATION OF STOCK AWARDS IN FISCAL 2023
Settlement by transfer of Siemens
shares to Managing Board member
= Final number of Stock Awards
Actual target achievement
= final number of
Stock Awards
300% of target amount
Number of Stock Awards
based on target
achievement
> 300% of target amount
Number of Stock Awards
based on target
achievement is reduced
by amount by which
cap is exceeded
performance
period
4-year
ESG/Sustainability index
(weighting: 20%)
Settlement after expiration of vesting period
Siemens-internal
of Stock Awards
= Maximum number
estimated discounted dividends)
allocation date, less the
(Xetra closing price on the
+ Allocation price
(based on 200% target
achievement)
= Maximum allocation
amount
= Value of Stock Awards in €
(Cap: 300% of target amount)
× Siemens share price
(Xetra closing price on
transfer date)
on target achievement
(based on 200% target
achievement)
(according to Section 162 AktG)
3,723
3%
In fiscal 2023, the Supervisory Board did not exercise this authority.
The Supervisory Board exercises its authority to withhold or reclaim variable compensation components at its duty-bound
discretion.
Under existing malus and clawback regulations, the Supervisory Board is authorized to withhold or reclaim variable
compensation in cases of severe breaches of duty or compliance and/or unethical behavior or in cases of grossly negligent
or willful breaches of the duty of care or in cases in which variable compensation components linked to the achievement
of specific targets have been unduly paid out on the basis of incorrect data.
B.3.3 Malus and clawback regulations
Performance period
Sept '26
Oct '22
Performance period
Oct '26
Nov '22 Oct '23 Nov '23
Reference period
Total shareholder return compared to
MSCI World Industrials index (80%)
Siemens-internal
ESG/Sustainability index (20%)
Nov '26
18 Nov '22
Performance period
Sept '25
FISCAL 2023 25
Oct '21
Compensation Report → B. Compensation of Managing Board members
The deadlines by which the individual Managing Board members must first verify compliance with the Share Ownership
Guidelines (SOG) vary from member to member, depending on when they were appointed to the Managing Board. For
Managing Board members in office on September 30, 2023, the following table shows the number of Siemens shares that
each held in order to comply with the SOG on March 10, 2023, the verification date. It also shows the number of shares to
be held throughout the Managing Board members' terms of office with a view to future verification dates.
Number of
Value
in €1
base salary
Percentage of
Verified
Required
Total
Prof. Dr. Ralf P. Thomas
Cedrik Neike
Dr. Roland Busch
compliance on March 10, 2023
and required to verify
in office on September 30, 2023,
Managing Board members
Obligations under the Share Ownership Guidelines
B.4 Share Ownership Guidelines
shares²
Siemens-internal
ESG/Sustainability index (20%)
Oct '25
Total shareholder return compared to
MSCI World Industrials index (80%)
Oct '19
Performance period
Oct '23
Nov '19 Oct '20 Nov '20
Reference period
Nov '23
8 Nov '19
2023
2022
2021
2020
End of vesting period
and transfer
Vesting
period
Allocation
Siemens-internal
ESG/Sustainability index (20%)
Siemens-internal
Performance period
ESG/Sustainability index (20%)
13 Nov '20
Nov '21 Oct '22 Nov '22
Reference period
Total shareholder return compared to
MSCI World Industrials index (80%)
Nov '25
12 Nov '21
Performance period
Sept '24
Oct '20
Performance period
Oct '24
Nov '20 Oct '21 Nov '21
Reference period
Nov '24
2026
2025
2024
Sept '23
Performance period
Total shareholder return
compared to MSCI World
Industrials index (80%)
300%
39,163
518,342
616,896
616,896
2,224,992
Total
Prof. Dr. Ralf P. Thomas
502,591
616,896
616,896
Cedrik Neike
792,442
991,200
991,200
Dr. Roland Busch
in office on September 30, 2023
Managing Board members
913,079
581,069
578,296
(Amounts in €)
8,569,123
4,350,198
4,026,008
Judith Wiese and Matthias Rebellius, who were appointed to the Managing Board as of October 1, 2020, are not included
in the BSAV. Instead of BSAV contributions, the Supervisory Board awarded these members for fiscal 2023 a fixed cash
amount of €550,800 each for free disposal. This amount will be paid in January 2024.
FISCAL 2023 26
Compensation Report → B. Compensation of Managing Board members
B.6 Compensation awarded and due
B.6.1 Active Managing Board members in fiscal 2023
A total of €12,325 is attributable to the funding of personal pension benefit commitments earned prior to the transfer to the BSAV.
Deferred compensation for Prof. Dr. Ralf P. Thomas totals €59,980 (2022: €57,419).
2
1
19,413,205
21,626,822
2,072,444
1,813,375
2,224,992
7,572,833
8,707,501
7,814,364
4,704,300
2022
2022
42,723
22,633
41,261
4,956,271
2,718,676
5,131,887
466%
18,342
2,203,200
200%
shares³
Number of
Amount
in €²
Total compensation (TC)
18,342
2,203,200
200%
9,110,700
2023
75,847
106,617
for all pension commitments
excluding deferred compensation²
Service costs according to IAS 19R
2023
2022
2023
Contributions¹
Defined benefit obligation
Information regarding the Siemens Defined Contribution Pension Plan (BSAV)
Contributions under the BSAV are credited to the individual members' pension accounts in the January following each fiscal
year. Until pension payments begin, members' pension accounts are credited with an annual interest payment (guaranteed
interest) on January 1 of each year. The interest rate is currently 0.25%.
Most of the members of the Managing Board are included in the Siemens Defined Contribution Pension Plan (BSAV). Since
fiscal 2020, newly appointed members of the Managing Board can be awarded, instead of BSAV contributions, a fixed cash
amount for free disposal.
B.5 Pension benefit commitment
As of March 10, 2023 (verification date).
3
The amount of the obligation is based on the average base salary during the four years prior to the respective verification dates.
Based on the average Xetra opening price of €120.12 for the fourth quarter of 2022 (October to December).
2
1
12,806,834
Performance
criteria
Percentage of
base salary1
316%
247%
Performance
criteria
1,102
35%
1,102
21%
in % of TC € thousand
1,102
2022
in % of TC
26%
30%
75
80
3%
+ Amount for free disposal¹
551
15%
551
2%
1,102
+ Fringe benefits
Base salary
1,869
3,276
1,581
=
Total compensation (incl. service costs)
Matthias Rebellius³
Prof. Dr. Ralf P. Thomas
Managing Board member since Oct. 1, 2020.
Managing Board member since Sept. 18, 2013
2023
2022
2023
€ thousand in % of TC € thousand in % of TC € thousand
Fixed
compensation
17%
། ། ་ །
1%
58
45%
1,524
35%
+ Long-term variable compensation
2019 Stock Awards (vesting: 2018 - 2022)
2018 Stock Awards (vesting: 2017-2021)
Cash payment Siemens Energy spin-off
1,976
37%
1,496
35%
112
2%
124
2023
tranche
1,428
+ Service costs
38%
རྨ། ་ །
=
Total
1,727
46%
1,733
55%
1,161
22%
1,160
27%
Variable
compensation
+ Short-term variable compensation
Bonus for fiscal 2023
1,995
Bonus for fiscal 2022
2,021
(according to Section 162 AktG)
1%
2019 Stock Awards (vesting: 2018-2022)
2018 Stock Awards (vesting: 2017 - 2021)
84,045
24,164
59,881
131,900
(18,267)
(15,251)
37,559
127,859
69,100
24,164
44,936
96,961
(14,613)
(12,202)
25,740
1 Starting with the 2019 tranche, the settlement of Stock Awards will be entirely by share transfer. For this reason, the number of Stock Awards, as set out in the table, is based on a
target achievement of 200%. At the end of the vesting period, a final number of Siemens shares to be transferred will be determined on the basis of actual target achievement and
taking into account the Stock Awards cap.
98,036
3 In addition to his position as a member of the Managing Board, Cedrik Neike served as Executive Chairman of the Board of Directors of Siemens Ltd. China from May 1, 2017, to
March 31, 2019. The reported figures include the Stock Awards allocated to Cedrik Neike by Siemens Ltd. China due to this position.
In addition to his position as a member of the Managing Board of Siemens AG, Matthias Rebellius is CEO of Smart Infrastructure and CEO of Siemens Schweiz AG.
2022
tranche
Cash payment Siemens Energy spin-off
Total compensation (TC)
Performance
criteria
2021
tranche
Performance
criteria
2020
tranche
Fiscal
Outstanding Stock Awards tranches on September 30, 2023
As of the end of fiscal 2023, the following Stock Awards tranches were within the vesting period and are therefore included
in the balance at the end of the fiscal year.
Compensation Report → B. Compensation of Managing Board members
24
FISCAL 2023
5 The reported figures also include the Stock Awards allocated to Judith Wiese in November 2020 as compensation for the loss of benefits granted by her former employer in
addition to the regular allocation of Stock Awards from the 2021 tranche.
of his contract with Siemens Schweiz AG is deducted from his Managing Board compensation. The Stock Awards reported here also include the Stock Awards allocated by
Siemens Schweiz AG since the appointment of Matthias Rebellius to the Managing Board of Siemens AG.
The corresponding legal relationship is defined in a separate contract between Matthias Rebellius and Siemens Schweiz AG. The entire compensation he receives under the terms
4
185,721
2 The target achievement of the Stock Awards from the 2019 tranche, which were due and settled in fiscal 2023, was 91%. Since the Stock Awards were initially allocated on the
basis of 200% target achievement, a number equivalent to this shortfall was forfeited without refund or replacement, in accordance with plan requirements.
(12,202)
Changes in Stock Awards in fiscal 2023
The following overview shows the changes in the balance of the Stock Awards held by Managing Board members in fiscal
2023.
Fixed
compensation
compensation
Base salary
+ Fringe benefits
(Amount in number of units)1
+ Amount for free disposal¹
+| " | +
Total
+ Short-term variable compensation
Bonus for fiscal 2023
(14,613)
Bonus for fiscal 2022
+ Long-term variable compensation
=
Managing Board members
Variable
in office on September 30, 2023
58,484
154,052
of fiscal 2023
Other changes²
Vested and settled
Allocated
Balance at the end
Balance at beginning
of fiscal 2023
Judith Wiese5
Prof. Dr. Ralf P. Thomas
Matthias Rebellius4
Cedrik Neike3³
Dr. Roland Busch
During fiscal year
34%
(until Feb. 2023)
in €
99,667
2022
140,000
59%
80,000
18,000
58,333
8%
238,000
Dr.-Ing. Dr.-Ing. E. h. Norbert Reithofer
2023
16,667
8%
72%
21%
in % of TC
Basic
33%
8%
6,000
292,000
Supervisory Board members
who left during the fiscal year
compensation
Committee
compensation
Meeting
attendance fee
Total com-
pensation (TC)
in €
in % of TC
Michael Diekmann
2023
58,333
59%
in €
33,333
in % of TC
in €
8,000
7%
targets
(until Feb. 2023)
29
47
1,670
FISCAL 2023 30
Compensation Report → B. Compensation of Managing Board members
B.7 Outlook for fiscal 2024
The following overview shows the performance criteria for variable compensation for fiscal 2024, as approved by the
Supervisory Board of Siemens AG. These criteria are based on the regularly audited and adjusted compensation system,
which will be submitted to the Annual Shareholders' Meeting for approval in February 2024.
9%
Outlook for fiscal 2024 - Variable compensation
BONUS
Performance criterion
Financial
Key performance
indicator
Profit
Profitability/
capital efficiency
22,000
until Jan. 31, 2015
81,000
Managing Board member
2 Lisa Davis's fringe benefits include contractually agreed-upon payments for tax adjustments.
2022
140,000
72%
40,000
21%
14,000
7%
194,000
Baroness Nemat Shafik (DBE, DPhil)
2023
58,333
91%
6,000
12%
1,670
1
The table includes only compensation that was awarded to former members after they left the Managing Board.
Prof. Dr.
Hermann Requardt
45%
86%
8%
8%
152,000
71% 40,000
20%
18,000
9%
198,000
(since Feb. 2021)
2022
140,000
71%
40,000
20%
16,000
8%
196,000
Dr. Nathalie von Siemens
12,000
2023
92%
Kasper Rørsted
ROCE
adjusted
Prof. Dr.
Siegfried Russwurm
Managing Board member
until March 31, 2017
Janina Kugel
Managing Board member
until Jan. 31, 2020
1,107
58
2,088
(since Jan. 2018)
Hagen Reimer¹
(since Jan. 2019)
2022 140,000
22,000
14% 162,000
2023 140,000
63%
60,000
27%
22,000
10%
222,000
2022 140,000
2023 140,000
326,000
140,000
20,000
Grazia Vittadini
(since Feb. 2021)
Matthias Zachert
(since Jan. 2018)
2023 140,000
2022 140,000
2023 140,000
2022 140,000
53% 104,167
39%
20,000
8%
264,167
48% 130,000
43% 160,000
48% 130,000
45%
20,000
7%
290,000
49%
26,000
152,000
88%
8%
92%
13%
160,000
(since Jan. 2015)
2022
140,000
86%
22,000
14%
162,000
Dorothea Simon¹
2023 140,000
91%
14,000
9%
154,000
(since Oct. 2017)
2022 140,000
12,000
Individual
targets
༅། ། ། །༅།༅།
CCR
(since Jan. 2018)
Bettina Haller¹
2022
140,000
92%
12,000
8%
152,000
2023 140,000
55%
90,000
35%
26,000
156,000
10%
(since April 2007)
2022
140,000
56%
90,000
36%
20,000
8%
250,000
Oliver Hartmann
2023
11,667
85%
256,000
2,000
10%
90%
(since Feb. 2023)
2023
2022
2023
2022
140,000
140,000
93,333
45%
47%
220,000
48%
32,000
7%
462,000
130,000
44%
26,000
9%
16,000
296,000
45%
22,000
8%
292,000
70%
26,667
20%
14,000
10%
134,000
Dr. Andrea Fehrmann¹
2023
140,000
48% 130,000
15%
13,667
(since Sept. 2023)
210,000
56%
26,000
7%
376,000
93,333
56%
60,000
36%
14,000
8%
167,333
(since Feb. 2023)
325,500
2022
2023
93,333
90%
10,000
10%
103,333
(since Feb. 2023)
2022
Benoît Potier
2023 140,000
88%
20,000
13% 160,000
Dr.-Ing. Christian Pfeiffer¹
9%
28,000
48%
2022
Keryn Lee James
2023
93,333
90%
10,000
10%
103,333
(since Feb. 2023)
2022
Harald Kern¹
2023 140,000
57%
80,000
33%
24,000
10%
244,000
(since Jan. 2008)
Jürgen Kerner¹
(since Jan. 2012)
Martina Merz
2022 140,000
2023 140,000
2022
2023
58%
80,000
33%
20,000
8%
240,000
140,000
43% 157,500
37%
Dr. Regina E. Dugan
(since Oct. 2020)
Tobias Bäumler1
2022 210,000
Total shareholder
return (TSR)
Details
Development of the TSR of Siemens AG relative to the international sector index
MSCI World Industrials
The Siemens ESG/Sustainability index for the 2024 Stock Awards tranche is based
on the following two equally weighted key performance indicators:
Siemens
ESG/
Sustainability
• CO2 emissions
index
•
Digital learning hours per employee
FISCAL 2023 31
Compensation Report → C. Compensation of Supervisory Board members
Key performance
indicator
C. Compensation of Supervisory Board members
Supervisory Board compensation consists entirely of fixed compensation; it reflects the responsibilities and scope of the
work of the Supervisory Board members. Under the applicable rules, the members of the Supervisory Board receive base
compensation for each full fiscal year, and the members of the Audit Committee, the Chairman's Committee, the
Compensation Committee and the Innovation and Finance Committee receive additional compensation for their committee
work. The Chairman and Deputy Chairs of the Supervisory Board as well as the chairs of the Audit Committee, the Chairman's
Committee, the Compensation Committee and the Innovation and Finance Committee receive additional compensation.
Compensation of members of the Supervisory Board and its committees
Chairman
€280,000
Basic compensation of Supervisory Board
Deputy Chair
€210,000
Additional compensation for committee work
Audit Committee
Chairman's Committee
Chair
€180,000
Member
€90,000
Chair
€80,000
Member
€40,000
Member
€140,000
The currently applicable rules for Supervisory Board compensation are set out in Section 17 of the Articles of Association of
Siemens AG. They have been in effect since October 1, 2021, and stem from a decision of the Annual Shareholders' Meeting
on February 3, 2021, in accordance with Section 113 para. 3 of the German Stock Corporation Act (AktG). The compensation
system for Supervisory Board members submitted to the Annual Shareholders' Meeting and the proposed new version of
Section 17 of the Articles of Association were approved by a majority of 97.49% of the valid votes cast. The compensation
system approved by the Annual Shareholders' Meeting as well as the Articles of Association are publicly available on the
Siemens Global Website at WWW.SIEMENS.COM/CORPORATE-GOVERNANCE.
Sustainability
Long-term value creation
Performance criterion
STOCK AWARDS
Growth
Execution of the
Company's strategy
•
EPS pre PPA,
basic
Comparable
revenue growth
•
Details
Analogously to fiscal 2023, basic earnings per share before purchase price
allocation (EPS pre PPA) is used to place the focus on Siemens' operating
performance and present it transparently.
With adjusted return on capital employed (ROCE adjusted), we aim to focus on
Siemens' operating performance, analogously to fiscal 2023. Therefore, ROCE - as
defined in the Siemens Financial Framework, which excludes certain Varian-related
acquisition effects - is adjusted for the main effects relating to the stake in
Siemens Energy.
Cash conversion rate (CCR), measured on the basis of:
•
.
Siemens Group for Managing Board members with primarily functional
responsibility
the relevant business for Managing Board members with business responsibility
Comparable revenue growth, measured on the basis of:
Siemens (c/o) for Managing Board members with primarily functional
responsibility
the relevant business for Managing Board members with business responsibility
Business development
Expansion of Siemens Xcelerator business
Strengthening the Regions
•
Next Work
Sustainability
•
Further development of the DEGREE framework
•
Further anchoring of sustainability in business processes and product development
Compensation
Committee
Liquidity
Innovation and
Chair
€80,000
5%
in €
602,000
290,000
48%
32,000
5%
602,000
47% 210,000
47%
30,000
7%
450,000
64,333
32,000
(since Jan. 2008, First Deputy Chairwoman since Jan. 2015)
47% 210,000
47%
26,000
6%
446,000
Dr. Werner Brandt
2023 210,000
45% 220,000
47%
34,000
7%
464,000
(since Jan. 2018, Second Deputy Chairman since Feb. 2021)
2022 210,000
48%
290,000
in % of TC
Member
€40,000
Chair
€80,000
Member
€40,000
In the event of changes in the composition of the Supervisory Board and/or its committees within a fiscal year,
compensation is paid on a pro-rated basis, rounding up to the next full month.
In addition, the members of the Supervisory Board receive a fee of €2,000 for each of the meetings of the Supervisory Board
and its committees that they attend. Attendance at a meeting also includes participation via telephone, video conference
or other similar customary means of communication. For attendance at several meetings on the same day, only a single fee
is paid.
The members of the Supervisory Board are reimbursed for out-of-pocket expenses incurred in connection with their duties
and for any value-added tax to be paid on their compensation. For the performance of his duties, the Chairman of the
Supervisory Board is also entitled to an office with secretarial support and the use of a car service. No loans or advances
from the Company are provided to members of the Supervisory Board.
FISCAL 2023 32
Compensation Report → C. Compensation of Supervisory Board members
The following table shows the compensation awarded and due to the members of the Supervisory Board in fiscal 2023 and
fiscal 2022 in accordance with Section 162 para. 1 sent. 1 of the German Stock Corporation Act (AktG).
Compensation awarded and due in accordance with Section 162 para. 1 sent. 1 German Stock Corporation Act (AktG) -
Supervisory Board members
Supervisory Board members
Basic
in office on September 30, 2023
compensation
Committee
compensation
Meeting Total com-
attendance fee pensation (TC)
in €
Jim Hagemann Snabe
2023
280,000
(since Oct. 2013, Chairman since Jan. 2018)
2022
Birgit Steinborn¹
2023
280,000
210,000
in % of TC
47%
47%
in €
in % of TC
in €
Finance Committee
(until Feb. 2023)
244
140,000
Compensation Report → Independent auditor's report
Limitation of liability
The "General Engagement Terms for Wirtschaftsprüfer and Wirtschaftsprüfungsgesellschaften [German Public Auditors and
Public Audit Firms]" as issued by the IDW on January 1, 2017, are applicable to this engagement and also govern our
responsibility and liability to third parties in the context of this engagement (WWW.DE.EY.COM/GENERAL-ENGAGEMENT-
TERMS).
Munich, December 6, 2023
Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft
Keller
Wirtschaftsprüfer
[German Public Auditor]
Dr. Gaenslen
Wirtschaftsprüfer
[German Public Auditor]
FISCAL 2023 38
FISCAL 2023 39
5%
188
154 (3)%
6%
173
4%
131
་ ། ། ༅ ། ་ ། ྃ །
244
Matthias Zachert (since Jan. 2018)
286
The audit of the content of the Compensation Report described in this auditor's report comprises the formal audit of the
Compensation Report required by Sec. 162 (3) AktG and the issue of a report on this audit. As we are issuing an unqualified
opinion on the audit of the content of the Compensation Report, this also includes the opinion that the disclosures pursuant
to Sec. 162 (1) and (2) AktG are made in the Compensation Report in all material respects.
Other matter - formal audit of the Compensation Report
In our opinion, on the basis of the knowledge obtained in the audit, the Compensation Report for the fiscal year from
October 1, 2022 to September 30, 2023 and the related disclosures comply, in all material respects, with the financial
reporting provisions of Sec. 162 AktG. Our opinion on the Compensation Report does not cover the content of the
abovementioned disclosures of the Compensation Report that go beyond the scope of Sec. 162 AktG.
36
Compensation Report →
E. Other
E. Other
The Company provides a group insurance policy for Supervisory and Managing Board members and certain other employees
of the Siemens Group. The policy is taken out for one year at a time or renewed annually. It covers the personal liability of
the insured individuals in cases of financial loss associated with their activities on behalf of the Company. The insurance
policy for fiscal 2023 includes a deductible for the members of the Managing Board that complies with the requirements of
the German Stock Corporation Act (AktG).
For the Managing Board
For the Supervisory Board
Dr. Roland Busch
President and Chief Executive Officer
of Siemens AG
Prof. Dr. Ralf P. Thomas
Chief Financial Officer
of Siemens AG
Jim Hagemann Snabe
Chairman of the Supervisory Board
of Siemens AG
FISCAL 2023 37
Compensation Report → Independent auditor's report
Independent auditor's report
To Siemens Aktiengesellschaft, Berlin and Munich
We have audited the attached Compensation Report of Siemens Aktiengesellschaft, Berlin and Munich, prepared to comply
with Sec. 162 AktG ["Aktiengesetz": German Stock Corporation Act] for the fiscal year from October 1, 2022 to September
30, 2023 and the related disclosures. We have not audited the content of disclosures regarding appropriateness and
marketability of the compensation in chapter B.2.3 APPROPRIATENESS OF THE COMPENSATION that is beyond the scope of
Sec. 162 AktG.
Responsibilities of management and the Supervisory Board
Management and the Supervisory Board of Siemens Aktiengesellschaft are responsible for the preparation of the
Compensation Report and the related disclosures in compliance with the requirements of Sec. 162 AktG. In addition,
management and the Supervisory Board are responsible for such internal control as they determine is necessary to enable
the preparation of a Compensation Report and the related disclosures that are free from material misstatement, whether
due to fraud (i.e., fraudulent financial reporting and misappropriation of assets) or error.
Auditor's responsibility
Our responsibility is to express an opinion on this Compensation Report and the related disclosures based on our audit. We
conducted our audit in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated
by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Those standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Compensation
Report and the related disclosures are free from material misstatement, whether due to fraud or error.
An audit involves performing procedures to obtain audit evidence about the amounts in the Compensation Report and the
related disclosures. The procedures selected depend on the auditor's judgment, including the assessment of the risks of
material misstatement of the Compensation Report and the related disclosures, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the preparation of the Compensation Report and
the related disclosures in order to plan and perform audit procedures that are appropriate in the circumstances, but not for
the
purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating
the accounting policies used and the reasonableness of accounting estimates made by management and the Supervisory
Board, as well as evaluating the overall presentation of the Compensation Report and the related disclosures.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion
Grazia Vittadini (since Feb. 2021)
FISCAL 2023
149
194
5%
256
(3)%
154
6%
158
149
Dr. Andrea Fehrmann1 (since Jan. 2018)
Dr. Regina E. Dugan (since Feb. 2023)
287
243
Tobias Bäumler1 (since Oct. 2020)
4%
336
324
(since Jan. 2018, Second Deputy Chairman since Feb. 2021)
Dr. Werner Brandt
467
2%
482
471
(since Jan. 2008, First Deputy Chairwoman since Jan. 2015)
438
(5)%
30%
Jürgen Kerner¹ (since Jan. 2012)
Dr. Nathalie von Siemens (since Jan. 2015)
Kasper Rørsted (since Feb. 2021)
154 (3)%
44%
158
110
2022
11%
157
141
Hagen Reimer¹ (since Jan. 2019)
Benoît Potier (since Jan. 2018)
Dr.-Ing. Christian Pfeiffer¹ (since Feb. 2023)
(4)%
7%
384
3%
264
3%
།* །༅།
391
240
Martina Merz (since Feb. 2023)
Dorothea Simon1 (since Oct. 2017)
Birgit Steinborn¹
1 These employee representatives on the Supervisory Board and the representatives of the trade unions on the Supervisory Board have agreed to transfer their compensation to the
Hans Böckler Foundation, in accordance with the guidelines of the Confederation of German Trade Unions.
64
(13)%
167
103
162
152
196
162
༅།ཎྜ།།༅།
5%
160
(2)% 326
(1)%
222
46%
50%
198
1%
160
(1)%
152
154
1%
(1)%
2%
(9)% 244
103
༅༅།༅།། ༅༅།། །།
རྩ། རྩ། རྞ།།
་། ། ༄།༅། ་། ་།༅།༅། ་།༅། ༅། ་། ༄།
(1)%
602
0%
(4)%
450
1%
5%
464
0%
2%
296
1%
134
(1)%
156
3%
3%
256
2%
14
290
(58)%
264
292
13%
140
Michael Sigmund (until Aug. 2023)
149
158
6%
154
(11)%
(3)% 152 (1)%
152
8%
158
64
142
(6)%
Gunnar Zukunft¹ (until Feb. 2023)
149
158
6%
154
(3)%
152
(1)%
(58)%
140
Baroness Nemat Shafik (DBE, DPhil) (until Feb. 2023)
(58)%
2%
326
12%
Supervisory Board members
who left during the fiscal year
Michael Diekmann (until Feb. 2023)
215
223
3%
246
11%
238
(3)%
100
(58)%
Dr.-Ing. Dr.-Ing. E. h. Norbert Reithofer (until Feb. 2023)
182
194
7%
190 (2)%
194
2%
81
(9)%
608
155
632
16% 77,769
9% 71,977
8.2
n.a.
n.a.
(2)
11.5
5.00 (22)% 7.68
6.41
Earnings per share³ (in €)
3
Comparable revenue growth² (in %)
(34)% 62,265
8%
86,849 57,139
Change
in %
2023
Change
in %
3%
Change
in %
2021
Change
in %
2020
2019
I. PROFIT DEVELOPMENT
Revenue (in € million)
n.a.
11
n.a.
102
3%
99
1%
96
95
Workforce in Germany
II. AVERAGE EMPLOYEE COMPENSATION (in € thousand)
23%
(30)% 4,460
3,612
(2)%
5,147
(53)%
5,270
11,219
97%
5.47 (34)% 10.77
8.32
Earnings per share before purchase price allocation (in €)
Net income according to HGB (in € million)
116%
4.65 (40)% 10.04
54%
Fiscal
3%
Comparative information on profit development and change in compensation
of employees, Managing Board and Supervisory Board members
Compensation Report →
91%
58,333
2023
2022 140,000
2023 3,126,667
2022 3,080,000
Total
(until Feb. 2023)
Gunnar Zukunft¹
152,000
8%
12,000
92%
6,000
2022 140,000
142,333
10%
14,000
90%
2023 128,333
Michael Sigmund
152,000
8%
12,000
92%
(until Aug. 2023)
9%
64,333
92%
34
FISCAL 2023
Average employee compensation comprises the personnel costs for wages and salaries, fringe benefits, employer
contributions to social insurance and any short-term variable compensation components attributable to the fiscal year. For
compensation in connection with share plans, the amounts received in the fiscal year are taken into account. Therefore,
employee compensation is also equivalent, in principle, to awarded and due compensation within the meaning of
Section 162 para. 1 sent. 1 of the German Stock Corporation Act (AktG) and is thus in line with Managing Board and
Supervisory Board compensation.
The presentation of average employee compensation is based on the size of the workforce, including trainees, employed
by Siemens in Germany. In fiscal 2023, this workforce comprised on average 70,984 employees (full-time equivalent). By
way of comparison, the Siemens Group had about 254,000 employees and trainees worldwide as of September 30, 2023.
The figures exclude the workforce of Siemens Healthineers, which is not included in the presentation since it is a separately
managed, publicly listed company.
The compensation awarded and due to the Managing Board and Supervisory Board members in each fiscal year is presented
in accordance with Section 162 para. 1 sent. 1 of the German Stock Corporation Act (AktG). Pension payments to former
members of the Managing Board are not listed here since they do not depend on Siemens' profit development.
Profit development is presented on the basis of the Siemens Group's key performance indicators revenue, comparable
revenue growth and basic earnings per share from continuing and discontinued operations. Through fiscal 2021, the latter
was also one of the financial targets for the short-term variable compensation (Bonus) of the Managing Board and thus had
a significant influence on the amount of the compensation of the Managing Board members. Since fiscal 2022, the
comparative information has also included basic earnings per share before purchase price allocation. This key performance
indicator supersedes basic earnings per share from continuing and discontinued operations in the Bonus in accordance with
the Siemens Financial Framework, which has been in effect since fiscal 2022. In accordance with Section 275 para. 3 No. 16
of the German Commercial Code (Handelsgesetzbuch, HGB), the development of the net income of Siemens AG is also
shown.
The following table shows, in accordance with Section 162 para. 1 sent. 2 No. 2 of the German Stock Corporation Act (AktG),
Siemens' profit development, the annual change in the Managing Board and Supervisory Board members' compensation
and the annual change in average employee compensation on a full-time equivalent basis over the last five fiscal years.
D. Comparative information on profit development
and annual change in compensation
Compensation Report → D. Comparative information on profit development and annual change in compensation
FISCAL 2023 33
These employee representatives on the Supervisory Board and the representatives of the trade unions on the Supervisory Board have agreed to transfer their compensation to the
Hans Böckler Foundation, in accordance with the guidelines of the Confederation of German Trade Unions.
1
5,114,000
8%
384,000
5,251,000
8%
446,000
32%
32%
60% 1,678,333
60% 1,650,000
152,000
8%
12,000
D. Comparative information on profit development and annual change in compensation
107
2022
III. MANAGING BOARD MEMBERS' COMPENSATION (in € thousand)
3%
3%
3%
(41)% 1,670
(30)% 3,338
27% 1,670
(73)% 2,088
(3)%
20% 1,671
7,969 6,562 (18)% 1,434 (78)% 1,721
6,679 4,186 (37)% 2,756 (34)% 1,620
12,978 8,051 (38)% 4,616 (43)% 3,238
4,192 2,631 (37)% 1,274 (52)% 1,620
2,448 1,991 (19)% 5,914 197% 1,620
Michael Sen (until March 2020)
Janina Kugel (until Jan. 2020)
Joe Kaeser (President and CEO until Feb. 2021)
Klaus Helmrich (until March 2021)
29%
Lisa Davis (until Feb. 2020)
3,696
2% 5,270
3,723
4,723
14%
6,815
ཚ། ༴ ། ་ ། ༄ ། ་ །
ཚ།*།རྒྱ།
༅།༈།
།༅།༅།ཚ།༅།
Former Managing Board members
1 Revenue as reported. In fiscal 2020, the segments "Gas and Power" and "Siemens Gamesa Renewable Energy" were classified as discontinued operations and are therefore not
included in the amount reported for fiscal 2020.
2 The primary measure for managing and controlling revenue growth is comparable growth, because it shows the development in Siemens' business net of currency translation
effects arising from the external environment outside of Siemens' control and the portfolio effects that involve business activities that are either new to or no longer a part of the
relevant business.
3 Basic earnings per share from continuing and discontinued operations as reported.
613
(since Oct. 2013, Chairman since Jan. 2018)
Jim Hagemann Snabe
IV. SUPERVISORY BOARD MEMBERS' COMPENSATION (in € thousand)
Harald Kern (since Jan. 2008)
Oliver Hartmann (since Sept. 2023)
Keryn Lee James (since Feb. 2023)
5%
Change
in %
2023
Change
in %
2022
in %
Change
2021
in %
2020
2019
Change
Fiscal
Comparative information on profit development and change in compensation
of employees, Managing Board and Supervisory Board members (cont.)
Compensation Report → D. Comparative information on profit development and annual change in compensation
35
FISCAL 2023
3,223
4,185
Bettina Haller1 (since April 2007)
4,304
Pensions
(vesting: 2018-2022)
Annuity
Capital payment
(partial or full)
Fixed and
variable
compensation
Fringe benefits
2019 Stock Awards
Pensions
(vesting: 2018-2022)
Annuity
compensation
Capital payment
(partial or full)
until March 31, 2021
Joe Kaeser
President and CEO
until Feb. 3, 2021
Michael Sen
Managing Board member
until March 31, 2020
Lisa Davis²
Managing Board member
until Feb. 29, 2020
1
583
3,338
Dr. Roland Busch
Judith Wiese (since Oct. 2020)
Klaus Helmrich
Managing Board member
2019 Stock Awards
1,670
28
Fringe benefits
variable
4,215
(39)% 4,235
3,160
6,740
Prof. Dr. Ralf P. Thomas (since Sept. 2013)
3,435
Matthias Rebellius (since Oct. 2020)
3,524
5,979
6,008
4,441 (34)%
2,017 (13)%
4,087
Cedrik Neike (since April 2017)
2,331
(in Tsd. €)
Compensation awarded and due in accordance with Section 162 para. 1 sent. 1 German Stock Corporation Act (AktG)
Former members of the Managing Board¹
The following table shows the compensation awarded and due to former members of the Managing Board in fiscal 2023 in
accordance with Section 162 para. 1 sent. 1 of the German Stock Corporation Act (AktG). In accordance with Section 162
para. 5 of the German Stock Corporation Act (AktG), the personal information of former Managing Board members is no
longer included if they left the Managing Board before September 30, 2013. The amounts reported under Stock Awards
also include the additional cash payment due to the Siemens Energy spin-off.
-
Compensation Report → B. Compensation of Managing Board members
(since April 2011, President and CEO since Feb. 2021)
6,730
B.6.2 Former members of the Managing Board
Fixed and
As of September 30, 2023, the undiscounted amount of maximum potential future payments related primarily to credit and performance
guarantees amounted to €6.2 billion. This included primarily Siemens' obligations from performance and credit guarantees in connection
with the Siemens Energy business, for which Siemens has reimbursement rights towards Siemens Energy.
In addition to these commitments, there are contingent liabilities of €0.4 billion which result mainly from other guarantees and legal
proceedings. Other guarantees include €0.1 billion, for which Siemens has reimbursement rights towards Siemens Energy.
Cash flows from operating activities
Irrevocable loan commitments amounted to €3.9 billion. A considerable portion of these commitments resulted from asset-based lending
transactions, meaning that the respective loans can be drawn only after the borrower has provided sufficient collateral.
For further information about our commitments and contingencies see Notes 21 and 25 in Notes to Consolidated Financial Statements for
fiscal 2023.
Share buyback
The share buyback program announced on June 24, 2021 with a volume of up to €3 billion ending September 15, 2026, at the latest,
began on November 15, 2021. This buyback is executed based on the authorization provided by the Annual Shareholders' Meeting on
February 5, 2020. In fiscal 2023, Siemens repurchased 6,853,091 shares under this share buyback program. On November 16, 2023 we
announced a share buyback of up to €6 billion for up to five years.
6.2 Cash flows
(in millions of €)
Cash flows from operating activities – discontinued operations
Change in operating net working capital
Other reconciling items to cash flows from operating activities - continuing operations
Cash flows from operating activities - continuing operations
Cash flows from operating activities - continuing and discontinued operations
Cash flows from investing activities
Fiscal year
2023
(2,165)
8,529
Net income
Off-balance-sheet commitments
(4)%
17
Non-controlling interests
5,918
Total liabilities and equity
47,791
37%
48,895
(2)%
36%
5,270
145,067
5,910
(11)%
151,502
The increase in short-term debt and current maturities of long-term debt was due mainly to reclassifications of long-term instruments
totaling €5.3 billion. This was partly offset by the repayment of euro, U.S. dollar and British pound instruments totaling €4.6 billion.
Long-term debt decreased due primarily to the above-mentioned reclassifications and currency translation effects of €1.9 billion on bonds
issued in the U.S. dollar and British pound. Set against this were mainly increases of €2.5 billion from the issuance of euro bonds.
The contribution of a stake in Siemens Energy AG to Siemens Pension-Trust e.V. led to a decrease of provisions for pensions and similar
obligations. Additional major effects resulted from returns on plan assets and actuarial gains and losses. For further information see Note
17 in Notes to Consolidated Financial Statement for fiscal 2023.
The main factors for the decrease in total equity attributable to shareholders of Siemens AG were a negative other comprehensive
income, net of income taxes, of €4.0 billion resulting mainly from currency translation; dividend payments of €3.4 billion (for fiscal 2022);
and changes in equity totaling €1.6 billion resulting from an equity transaction at Siemens Energy AG. These factors were largely offset by
€7.9 billion in net income attributable to shareholders of Siemens AG. In fiscal 2023, Siemens cancelled 50 million treasury shares, thereby
reducing issued capital by €150 million and retained earnings by €5.1 billion.
Capital structure ratio
Our capital structure ratio as of September 30, 2023 decreased to 0.6 from 1.0 a year earlier. The change was due to a decrease in Industrial
net debt and a higher EBITDA.
Debt and credit facilities
As of September 30, 2023, we recorded, in total, €40.9 billion in notes and bonds, €2.2 billion in loans from banks, €0.5 billion in other
financial indebtedness and €2.9 billion in lease liabilities. Notes and bonds were issued mainly in the U.S. dollar and the euro, and to a
lesser extent in the British pound.
We have credit facilities totaling €7.5 billion which were unused as of September 30, 2023.
For further information about our debt see Note 16 in Notes to Consolidated Financial Statements for fiscal 2023. For further information
about the functions and objectives of our financial risk management see Note 25 in Notes to Consolidated Financial Statements for fiscal
2023.
Combined Management Report
12,281
2,470
Additions to intangible assets and property, plant and equipment
300
(1,208)
(3,362)
(389)
(8,730)
(1)
Interest paid
Dividends paid to shareholders of Siemens AG
Dividends attributable to non-controlling interests
Cash flows from financing activities - continuing operations
Cash flows from financing activities – discontinued operations
Cash flows from financing activities - continuing and discontinued operations
(8,731)
Industrial Business recorded cash inflows from operating activities that exceeded its profit, with the highest contribution from Digital
Industries. Cash outflows from changes in operating net working capital were due mainly to Siemens Healthineers which recorded a
significant build-up of trade and other receivables as well as inventories due in part to the expected growth of business activities in coming
quarters.
Cash outflows for purchase of investments and financial assets for investment purposes included additions of assets eligible as central
bank collateral and payments for debt or equity investments.
Cash outflows from change in receivables from financing activities of SFS related primarily to SFS's debt business.
Cash inflows from other disposals of assets included mainly proceeds from disposals of assets eligible as central bank collateral, from the
sale of the Commercial Vehicles business by Portfolio Companies, and from the sale or disposal of debt or equity investments.
Cash outflows from the re-issuance of treasury shares and other transactions with owners were driven by the purchase of Siemens
Healthineers AG treasury shares.
18
Total equity attributable to shareholders of Siemens AG
Equity ratio
(5,252)
(404)
(884)
Change in short-term debt and other financing activities
(2,218)
Acquisitions of businesses, net of cash acquired
(407)
Purchase of investments and financial assets for investment purposes
(723)
Change in receivables from financing activities of SFS
(1,461)
Other disposals of assets
1,351
(41)
12,239
Cash flows from investing activities - continuing operations
Cash flows from investing activities – discontinued operations
281
Cash flows from investing activities - continuing and discontinued operations
(3,176)
Cash flows from financing activities
Purchase of treasury shares
Re-issuance of treasury shares and other transactions with owners
Issuance of long-term debt
Repayment of long-term debt (including current maturities of long-term debt)
(3,458)
64%
3.8 Reconciliation to Consolidated Financial Statements
(5)%
(5,141)
The result for Siemens Energy Investment was driven by a gain of €1.6 billion from a partial reversal of an impairment on Siemens' stake
in Siemens Energy AG (fiscal 2022 included an impairment of €2.7 billion), a gain of €0.3 billion resulting from the transfer of a stake in
Siemens Energy AG to Siemens Pension-Trust e.V., and a gain of €0.2 billion which was recorded in connection with a capital increase by
Siemens Energy AG in which Siemens did not participate. These gains were partly offset by Siemens' share of Siemens Energy's after-tax
loss and expenses from amortization of assets resulting from purchase price allocation totaling €1.5 billion (fiscal 2022: totaling €0.2
billion).
Financing, eliminations and other items included a revaluation loss of €0.2 billion on the stake in Thoughtworks Holding Inc. (fiscal
2022: a loss of €0.3 billion). For comparison, fiscal 2022 included also impacts totaling €0.5 billion at Corporate Treasury, resulting from
the sale of Siemens' financing and leasing business in Russia, as well as a loss of €0.1 billion resulting from applying hyperinflation
accounting. These effects were partly offset in fiscal 2022 by a gain of €0.5 billion in connection with an investment accounted for using
the equity method mainly due to fair value measurement.
13
Combined Management Report
4. Results of operations
4.1 Orders and revenue by region
Currency translation effects took two percentage points each from order and revenue growth year-over-year, respectively. Portfolio
measures, including the sale of Yunex Traffic in the third quarter of fiscal 2022 and the mail and parcel-handling business of Siemens
Logistics in the fourth quarter of fiscal 2022, took one percentage point each from order and revenue growth year-over-year. The ratio of
orders to revenue (book-to-bill) for Siemens in fiscal 2023 was 1.19. The order backlog as of September 30, 2023 was €111 billion.
Orders (location of customer)
(in millions of €)
Europe, C.I.S., Africa, Middle East
therein: Germany
Americas
therein: U.S.
Asia, Australia
therein: China
Siemens (continuing operations)
Fiscal year
2023
2022
% Change
Actual
Comp.
42,679
42,373
1%
4%
15,164
15,046
(1,135)
1%
(474)
(990)
Combined Management Report
Although the broad range of businesses is operating in diverse markets, overall the main markets served by Portfolio Companies are
generally impacted by uncertainties regarding geopolitical and economic developments which tend to trigger customer caution regarding
purchasing decisions. After the post-pandemic recovery, a normalizing growth momentum is expected in most end-customer vertical
markets in fiscal 2024.
At the beginning of fiscal 2024, Large Drives Applications and certain business activities which were transferred from Digital Industries are
combined in the areas of low- to high-voltage motors, geared motors, medium-voltage converters and motor spindles under a new
separately managed unit, Innomotics. If the transfer from Digital Industries had already existed at the beginning of fiscal 2023, Portfolio
Companies would have posted orders of €5,317 million, revenue of €4,699 million, profit of €457 million and a profit margin of 9.7%.
Portfolio Companies' order backlog amounted to €5 billion at the beginning of fiscal 2024, of which €3 billion are expected to be converted
into revenue in fiscal 2024.
Profit
(in millions of €)
Siemens Energy Investment
Siemens Real Estate
Innovation
Governance
Centrally carried pension expense
Amortization of intangible assets acquired in business combinations
Financing, eliminations and other items
Reconciliation to Consolidated Financial Statements
Fiscal year
2023
2022
668
(2,911)
67
118
(195)
(190)
(451)
(582)
(104)
(113)
(865)
(256)
3%
26,540
25,646
2022
Actual
Comp.
36,664
33,481
10%
12%
12,718
11,961
6%
9%
22,615
20,680
9%
9%
18,561
17,241
8%
7%
18,489
17,816
4%
10%
9,367
9,557
(2)%
4%
% Change
Fiscal year
2023
Siemens (continuing operations)
therein: China
3%
3%
22,093
21,563
2%
2%
23,085
20,990
10%
15%
8,798
10,831
(19)%
12
(15)%
89,010
4%
7%
On a worldwide basis, growth in orders related to external customers came on a sharp increase at Mobility and clear order growth at
Smart Infrastructure; both businesses reported higher order intake across all regions year-over-year. Digital Industries and, to a lesser
extent, Siemens Healthineers recorded order declines from high bases of comparison. Siemens Healthineers again had the highest order
contribution.
In the Europe, C.I.S., Africa, Middle East region, order intake increased by double digits at Mobility, including a €2.5 billion order for the
first line of a turnkey rail system in Egypt and a €2.1 billion order for suburban trains in Germany. Smart Infrastructure recorded clear order
growth, whereas Digital Industries showed a double-digit decline year-over-year from a high base of comparison, due to its automation
businesses. Orders at Siemens Healthineers declined year-over-year primarily due to lower demand for rapid coronavirus antigen tests in
the diagnostics business. Within the region, Germany showed a pattern similar to the region overall.
In the Asia, Australia region, order intake was up on a sharp increase at Mobility, including a €2.9 billion order for locomotives and
associated maintenance in India, combined with slight order growth at Smart Infrastructure. Orders declined at Digital Industries and
Siemens Healthineers. Within the region in China, order declines were reported in most of the industrial businesses, except at Mobility
with significant growth. Overall, order intake both in the region and in China was strongly burdened by negative currency translation
effects.
Revenue (location of customer)
(in millions of €)
Europe, C.I.S., Africa, Middle East
therein: Germany
Americas
therein: U.S.
Asia, Australia
92,305
In fiscal 2023, orders and revenue increased in all businesses. While order growth was driven by higher volume from larger orders, most
evidently at the Airport Logistics business of Siemens Logistics, revenue increased mainly at Large Drives Applications in part due to strong
conversion of the order backlog. Primarily due to the sale of the mail and parcel-handling business of Siemens Logistics in the fourth
quarter of fiscal 2022, portfolio effects took eleven and 13 percentage points from orders and revenue, respectively. The strong profit was
driven by Siemens Energy Assets and Large Drives Applications. Additionally, Portfolio Companies recorded a gain of €0.1 billion from the
sale of the Commercial Vehicles business. For comparison, profit in fiscal 2022 included a gain of €1.1 billion from the sale of the mail and
parcel-handling business of Siemens Logistics and a revaluation gain of €0.3 billion in connection with the sale of the equity investment
in Valeo Siemens eAutomotive GmbH. Portfolio Companies recorded lower severance charges of €12 million, down from €20 million in
fiscal 2022.
Profit margin
47.0%
15.5%
63%
(25)%
3,369
2,527
11.7%
1%
0%
(2)%
(4)%
25,556
21,715
21,681
24,499
Comp.
% Change
Actual
2022
2023
Fiscal year
Profit margin
Profit
Revenue
Orders
(in millions of €)
R&D activities at Siemens Healthineers are aimed at offering innovative and sustainable solutions for diagnostics and therapy to its
customers. Artificial intelligence, sensors, and robotics are focal points of the R&D activities at Siemens Healthineers. A growing share of
the R&D activities is devoted to improving the sustainability of the products. Furthermore, the systems of Siemens Healthineers regularly
receive extensive software releases to improve user friendliness and add innovative applications. Investments at Siemens Healthineers
were mainly for spending for factories to expand manufacturing and technical capabilities, in particular in the U.S. and China, for measures
related to improving operational efficiency and for additions to intangible assets, including capitalized development expenses for products
within the Atellica product line.
laboratories, results from a combination of societal and market forces that are driving healthcare providers to operate and organize their
businesses differently. This development is driven partly by staff shortages, society's increasing resistance to healthcare costs, the growing
professionalization of health insurance and governmental healthcare systems, burdens from chronic diseases and the rapid scientific
progress. The growing cost pressure will continue to drive new remuneration models for healthcare services such as value-based
reimbursement instead of treatment-based reimbursement. As a result of these factors, there's a trend of consolidation of healthcare
providers into networks. The aim of the resulting larger clinic and laboratory chains, often operating internationally and acting increasingly
like large corporations are systematic improvements in quality, while at the same time reducing costs. This development leads to an
increased demand for standardized and scalable systems and solutions as well as new business models.
Combined Management Report
10
Siemens as majority shareholder holds just over 75% of the shares of the publicly listed Siemens Healthineers AG, Germany. Siemens
Healthineers is a global provider of healthcare products, solutions and services. It develops, manufactures, and sells a diverse range of
diagnostic and therapeutic products and services to healthcare providers. In addition, Siemens Healthineers also provides clinical
consulting services, as well as an extensive range of training and service offerings. This comprehensive portfolio supports customers along
the entire care continuum, from prevention and early detection through to diagnosis, treatment, and follow-up care. The customer
spectrum ranges from public and private healthcare providers, including hospitals and hospital systems, public and private clinics and
laboratories, universities, physicians/joint medical practices, public health agencies, public and private health insurers, through to
pharmaceutical companies and clinical research institutes. The imaging business provides imaging products, services, and solutions as
well as digital offerings. Its most important products are devices for magnetic resonance imaging, computed tomography, X-ray, molecular
imaging, and ultrasound. The diagnostics business comprises in-vitro diagnostic products and services that are offered to healthcare
providers in the fields of laboratory and point-of-care diagnostics. The Varian business provides multi-modality cancer care technologies
along with solutions and services to oncology departments in hospitals and clinics. The portfolio of the advanced therapies business
consists of highly integrated products, services, and solutions across multiple clinical fields that are designed to support image-guided
minimally invasive treatments, in areas such as cardiology, interventional radiology, and surgery. Competition in the imaging, Varian and
advanced therapies businesses consists mainly of a small number of large multinational companies, while the diagnostics market is
fragmented with a variety of global players that compete with each other across market segments and also with several regional players
and specialized companies in niche technologies. Markets of Siemens Healthineers are characterized by long-term stability, though, over
the long term, these markets may also experience shorter-term fluctuations arising from macroeconomic and health political
developments, such as changes in health policy, regulation or reimbursement systems. Because a substantial portion of Siemens
Healthineers' revenue stems from recurring business, growth opportunities can be pursued from a stable foundation of profit.
The addressable markets of Siemens Healthineers are shaped by four major trends. The first is demographic developments, in particular
the growing and aging global population. This trend poses major challenges for global healthcare systems and, at the same time, offers
an opportunity for healthcare providers as the demand for cost-efficient healthcare solutions increases. The second trend is economic
development in emerging countries, which opens up improved access to healthcare for many people. Significant investment in the
expansion of private and public healthcare systems will persist, driving overall demand for healthcare products and services and hence
market growth. The third trend is the increase in non-communicable diseases as a consequence of an aging population and environmental
and lifestyle-related changes. This trend results in far more patients with multiple morbidities, increasing the need for new ways to detect
and treat diseases in a timely manner. The fourth global trend, the transformation of healthcare providers such as hospitals and
In fiscal 2023, Siemens Healthineers recorded a decrease of orders, while revenue was on the prior-year level. While the imaging and
Varian businesses in particular delivered growth in both orders and revenue, this was offset by a substantial decline in the diagnostics
business. On a geographic basis, revenue was on the prior-year level in all regions; in the Asia, Australia region reported revenue was held
back by negative currency translation effects. Profit declined primarily due to substantially lower revenue from rapid coronavirus antigen
tests in the diagnostics business, which also recorded charges of €0.2 billion related to its transformation program. In addition, profitability
was burdened by impairments and other charges totaling €0.3 billion due to a management decision to refocus certain activities in the
advanced therapies business. The imaging and Varian businesses increased their profit contributions on higher revenue. Severance charges
were €167 million in fiscal 2023, compared to €71 million a year earlier. The order backlog for Siemens Healthineers was €34 billion at
the end of the fiscal year, of which €11 billion are expected to be converted into revenue in fiscal 2024.
In general, the addressable global markets of Siemens Healthineers excluding rapid coronavirus antigen tests grew moderately in fiscal
2023. From a regional perspective, the Asia, Australia region saw market growth in most businesses; in China, government subsidy
programs, among others, including the program of lending incentives associated with the economic stimulus package, had a positive
effect on investment by healthcare providers. In the region Europe, C.I.S., Africa, Middle East, government subsidy programs, among
others, were able to support growth in most businesses. In the U.S., market growth was recorded in all businesses. Globally, higher volume
in the market for the imaging business was generated thanks to the high level of order backlogs resulting from demand catch-up effects,
on the one hand, and investments in diagnostic imaging equipment in reaction to announced price hikes, on the other hand. The imaging
market is expected to grow moderately overall in fiscal 2024, driven mainly by pent-up demand for the major imaging modalities. Within
the diagnostics business, demand for rapid coronavirus antigen tests declined sharply after the COVID-19 pandemic ceased to be a global
health emergency and the incidence of COVID-19 infections subsided. The market for the diagnostics business is expected to achieve slight
growth in fiscal 2024, excluding COVID-19 testing. In the market for Varian, overall market growth, especially in the U.S. and Western
Europe, was boosted mainly by increasing demand for product innovations and services as well as by an intact replacement market. For
this reason, the market for Varian is expected to grow clearly in fiscal 2024. For advanced therapies business, government subsidy
programs, including lending incentives enacted as part of the economic stimulus package in China along with EU investment programs,
positively influenced market development. The expectation for the advanced therapies business is that the market will continue to grow
moderately in fiscal 2024.
3.6 Siemens Financial Services
Siemens Financial Services provides financing solutions for Siemens' customers as well as other companies in the form of debt and equity
investments. Based on its comprehensive financing know-how and specialist technology expertise in the areas of Siemens businesses, SFS
supports its customers' investments with leasing, lending, working capital and structured financing solutions and offers a broad range of
equipment and project financing. In addition, SFS supports Siemens' industrial businesses with financial advisory services and via a joint
go-to-market that includes SFS's risk management expertise, such as to assess the risk profiles of projects or business models. Furthermore,
SFS collaborates with Siemens' industrial businesses to co-develop new digital business models, and also supports its customers through
targeted financings in sustainable technologies and projects.
Portfolio Companies comprise businesses which deliver a broad range of customized and application-specific products, software,
solutions, systems and services for different industries including oil and gas, chemical, mining, cement, logistics, energy, marine, water
and fiber. Unrealized potential within these businesses requires adjustment in their approach using defined measures including internal
re-organization, digitalization, cost improvements, and optimizing procurement, production and service activities. After achieving certain
threshold performance targets, businesses may be combined with another business in the same industry, sold, placed into an external
private equity partnership, or exited via a public listing.
3.7 Portfolio Companies
SFS's business scope and capital allocation is focused on areas of intense domain know-how closely aligned with Siemens' customers and
markets, particularly for Digital Industries, Smart Infrastructure and Mobility. Accordingly, SFS is influenced by the business development
of the markets served by the industrial businesses, among other factors, including macroeconomic effects such as inflation or recession
which could impact the credit risk of customers. In addition to its high level of diversification across industries, SFS has a strong regional
footprint in investment-grade countries, with the highest share in the U.S. SFS intends to maintain a highly diversified portfolio across
regions, while participating in the strong economic development of selected Asian markets.
Despite the increase in receivables from financing activities, total assets decreased since the end of fiscal 2022 due primarily to negative
currency translation effects.
Net cash from operations (defined as the sum of cash flows from operating and investing activities) amounted to €(733) million compared
to €(616) million in fiscal 2022. In fiscal 2023 and fiscal 2022, net cash from operations comprised Free cash flow of €852 million and
€985 million, respectively, while remaining cash flows from investing activities, including from changes in receivables from financing
activities, comprised €(1,585) million and €(1,601) million, respectively.
Siemens Financial Services in fiscal 2023 recorded higher earnings before taxes in the debt business despite a volatile credit environment.
In the prior period, earnings before taxes were burdened by €0.2 billion in connection with the sale of the financing and leasing business
in Russia at the end of the fiscal year. The equity business recorded strong results. While both periods under review included gains from
the sales of equity investments, fiscal 2022 additionally included higher gains from fair value measurements of investments and gains
from energy-related investments in connection with rising prices in global energy markets.
32,915
33,263
2022
2023
Sep 30,
Sep 30,
(in millions of €)
Total assets
3.5 Siemens Healthineers
15.6%
269
201
498
563
2022
2023
Fiscal year
Combined Management Report
ROE (after taxes)
therein: equity business
Earnings before taxes (EBT)
(in millions of €)
11
16.3%
77,769
Markets served by Mobility grew significantly in fiscal 2023, supported by long-term trends such as urbanization, decarbonization and
increasing demand for digital solutions. Market dynamics in fiscal 2023 also benefited from receding material shortages and easing of
supply chain constraints. On a geographic basis, all regions contributed to market growth, highlighted by large and very large orders in
Germany, the U.S., Egypt and India, among others. The market for rolling stock included large orders for high-speed trains, commuter
trains and locomotives in Europe, India and Egypt. Growth in North America included major investments in new and existing fleets,
especially for urban transport. Growth in the rail infrastructure market was driven mainly by digitalization, deployment of ETCS technology
and track electrification, for example with projects in Europe and Asia. For fiscal 2024, markets served by Mobility are expected to grow
clearly, benefiting from the above-mentioned trends and with all reporting regions contributing to growth. Market expansion is expected
to be supported by a large number of public investment programs. Mobility anticipates that rail operators in Europe, particularly in
Germany and in the U.K., will continue making significant investments in rolling stock and advanced rail infrastructure solutions and that
customers in the Middle East and Africa will tender large turnkey projects, especially in North Africa and the Middle East such as in in Egypt,
Saudi Arabia and the United Arab Emirates. Markets in the U.S. are expected to remain strong, especially due to ongoing investments in
rolling stock, particularly for mainline and light rail transport; within the infrastructure market demand is expected to continue for mass
transit including communications-based train control technology and from a developing market for rail freight solutions. In Asia, markets
in India are expected to grow strongly with investments in mainline transport (high-speed trains, freight infrastructure, rolling stock fleet
renewals and expansions of large commuter rail and locomotive tenders), urban metros and rail electrification driving growth.
8.2%
Mobility combines all Siemens businesses in the area of rail passenger and rail freight transportation. Within its rolling stock business, its
offerings encompass vehicles and selected components for urban and regional transport such as metro systems, trams and light rail, and
commuter trains as well as trains and passenger coaches for intercity and long-distance services, such as high-speed rail. Rolling stock
offerings furthermore include locomotives and solutions for automated transportation such as automated people movers. Offerings in its
rail infrastructure business include products and solutions for rail automation, such as automatic train control systems, interlocking,
operations control and telematic systems, digital station solutions and railway communication systems, signaling on-board and signaling
crossing products and yard and depot solutions; and for electrification such as AC and DC traction power supply, contact lines and network
control. With its service business, Mobility provides maintenance and digital services, among others, for rolling stock and rail infrastructure
throughout the entire lifecycle. In its turnkey business, it bundles consulting, planning, financing, construction, service and operation of
complete mobility systems. Mobility's software business comprises train planning systems, trip planning, mobile ticketing, Mobility as a
Service (MaaS) platforms, on-demand transportation and fleet management, data analytics, and inventory and reservation management.
Mobility sells its products, systems and solutions through its worldwide network of sales and execution units. The principal customers of
Mobility are public and state-owned companies in the transportation and logistics sectors, so its markets are driven primarily by public
spending. Customers usually have multi-year planning and implementation horizons, and their contract tenders therefore tend to be
independent of short-term economic trends. Large contracts in the rolling stock and the rail infrastructure business are often awarded
together with service contracts, which start to generate revenue only after the respective products and solutions have been put in
operation, which can be a number of years after the contract award. Mobility's principal competitors are multinational companies.
Consolidation among Mobility's competitors is continuing and may lead to increased competitive pressure within the rail transport industry
and also to fewer sourcing options for rail customers.
3.4 Mobility
Smart Infrastructure showed very strong performance in fiscal 2023. Orders increased clearly compared to the high prior-year level, which
included proactive purchasing by customers. Growth was mainly driven by the electrification business and included a number of larger
contract wins from data center, semiconductor, power distribution and battery manufacturing customers. Revenue rose in all businesses,
with the strongest growth contributions coming from the electrification and the electrical products businesses. On a geographic basis,
orders and revenue rose in all three reporting regions. The strongest growth contribution came from the Americas region, driven by the
U.S., while growth in the Asia, Australia region was held back by declines in China, which were due mainly to negative currency translation
effects. Profit also rose in all businesses. Growth in profit and profitability was driven by the electrical products and the electrification
businesses due to higher revenue, by increased capacity utilization and by cost reductions achieved through the execution of Smart
Infrastructure's competitiveness program. Severance charges were €50 million, up from €28 million a year earlier. At the end of fiscal
2023, Smart Infrastructure's order backlog was €16 billion, of which €10 billion are expected to be converted into revenue in fiscal 2024.
Overall, markets served by Smart Infrastructure grew clearly in fiscal 2023. Market dynamics were influenced by a further recovery from
COVID-19-related effects; easing of supply chain and logistics constraints, which resulted in shorter lead times for order fulfillment; strong
price inflation; and effects from the war in Ukraine. Furthermore, rising interest rates burdened building construction markets. On a
geographic basis, all reporting regions contributed to growth. Price inflation affected all regions and was particularly high in the U.S. While
on the one hand rising interest rates impacted growth in the U.S., economic activity was boosted by stimulus programs on the other hand.
In China, the recovery from lockdown measures was significantly weaker than expected, which also impacted growth dynamics in other
countries, while Europe was most strongly affected by the war in Ukraine and high energy prices. Grid markets grew clearly, driven by
demand for integration of energy from renewable resources. Industrial markets also grew clearly on strong demand in the battery,
semiconductor, and automotive industries. The buildings market overall also grew but activity in the commercial building market rose only
moderately. In fiscal 2024, markets served by Smart Infrastructure are expected to grow clearly but at a slower pace than in fiscal 2023
due to a substantially lower effect from price inflation and a cooling of the general economic environment. While growth is expected to
be weak in residential and commercial building markets and in some industrial markets, continued robust demand is expected for data
centers and power distribution. Overall, market development in fiscal 2024 is expected to continue to be influenced by rebalancing of
supply chains, trade conflicts and effects from geopolitical tensions.
Combined Management Report
At the end of fiscal 2023, Portfolio Companies consisted mainly of three separately managed units: Large Drives Applications offers electric
motors, converters and mining solutions. Siemens Logistics offers sorting technology and solutions focused on handling baggage and
cargo in airports. Siemens Energy Assets comprises certain regional business activities of the former Gas and Power segment; as part of
the Siemens Energy carve-out these activities remained so far with Siemens due to country-specific regulatory restrictions or economic
considerations.
Demand within the industries served by Portfolio Companies mainly shows a delayed response to changes in the overall economic
environment. Financial results are strongly dependent, however, on customer investment cycles in their key industries. In commodity-
based industries such as oil and gas or mining, these cycles are driven mainly by commodity price fluctuations rather than changes in
produced volumes. The heterogonous industrial customer base of the separately managed units requires a dedicated sales approach based
on in-depth understanding of specific industries and customer requests, resulting in the use of various sales and marketing channels for
Portfolio Companies.
(in millions of €)
Orders
Revenue
Profit
Fiscal year
2023
% Change
2022
Actual
Comp.
4,016
3,995
1%
15%
3,313
3,234
2%
19%
343
1,520
(77)%
10.3%
The main trends driving Mobility's markets are urbanization, decarbonization and digitalization. Increasing populations in urban centers
need daily mobility that is simpler, faster, and more flexible, reliable and affordable. At the same time, cities and national economies face
the challenge of cutting CO₂ and noise emissions and reducing space requirements and costs of transportation. The pressure on mobility
providers to meet all these needs is expected to rise continuously. Furthermore, improving availability, connectivity, and sustainability of
rail infrastructures increasingly requires digital solutions, which generates growth opportunities for providers of such solutions. IoT systems
and new software-based solutions such as MaaS are expected to become major growth enablers for the rail industry. Overall trends towards
urbanization, decarbonization and digitalization persist and many countries have been allocating significant funds to rail and public
transport operators to address these trends.
Mobility's R&D strategy is focused on reducing life-cycle costs of rail infrastructure and rolling stock, securing system availability,
increasing network capacity of rail infrastructure, optimizing the processes of rail operators and improving passenger experience. With
Siemens Xcelerator, Mobility intends to make software more modular and increasingly move it to the cloud. At the same time, Mobility
intends to enhance connectivity of hardware and software and provide open application programming interfaces. Thereby Mobility
accelerates the pace and impact of digital innovation, which in turn benefits owners, operators, and customers of rail transport. Mobility's
major R&D areas include the development of efficient vehicle platforms with optimized lifecycle cost; eco-friendly, alternative power
supplies for trains; the Railigent X open application suite for maintenance of rail assets; smart connected products; the Distributed Smart
Safe System (DS3), which allows for hardware-independent and cloud-enabled signaling; automatic train operation for European Train
Control System (ETCS); safe artificial intelligence for driverless trains; air-free brake systems, 5G for wireless-based activities; the Mobility
Software Suite X for operators and passengers; and cyber security. Mobility's investments focus mainly on maintaining or enhancing its
production facilities, on meeting project demands, and on enhancing its depot services.
9
(in millions of €)
8.4%
11%
794
882
9%
7%
1,592
1,710
15%
9%
9,692
10,549
65%
Order intake at Mobility exceeded the record level a year earlier on sharply higher volume from large orders. Contract wins in fiscal 2023
were highlighted by an order worth €2.9 billion for locomotives and associated maintenance in India, a €2.5 billion order for the first line
of a turnkey rail system in Egypt and a €2.1 billion order for suburban trains in Germany. Order intake a year earlier included among others
an order worth €1.5 billion for high-speed trains in Germany. Revenue rose on growth in nearly all businesses with the strongest
contribution coming from the rolling stock business, and was supported by improved availability of components. On a geographic basis,
revenue grew in all three reporting regions. Nominal volume development was held back by the fiscal 2022 divestment of Yunex Traffic,
resulting in a portfolio effect which took four percentage points from order growth and five percentage points from revenue growth in
the current period. As with revenue, profit and profitability rose in nearly all businesses. Profit in fiscal 2023 included a positive €0.2 billion
in trailing effects related to the winding down of business activities in Russia a year earlier, which burdened prior-year profit by €0.6 billion
in impairments and other charges. In addition, profit in fiscal 2022 included impacts from supplier delays and COVID-19 effects. These
burdens were largely offset by a gain of €0.7 billion from the sale of Yunex Traffic. Severance charges were €25 million, compared to €27
million a year earlier. Mobility's order backlog rose to €45 billion at the end of the fiscal year, of which €11 billion are expected to be
converted into revenue in fiscal 2024.
56%
20,629
Comp.
Actual
2022
2023
% Change
Fiscal year
Combined Management Report
Profit margin
Profit
therein: service business
Revenue
Orders
13,200
71,977
Order intake rose in both the Americas region and in the U.S. on double-digit increases at Mobility and Smart Infrastructure, whereas
Siemens Healthineers recorded a moderate order decline.
11%
1,523
1,565
(3)%
84,428
92,673
(9)%
145,067
8%
(4)%
Our total assets at the end of fiscal 2023 were influenced by negative currency translation effects of €7.6 billion (particularly affecting
goodwill and other financial assets), primarily involving the U.S. dollar.
The increase in other current financial assets was driven mainly by higher loans receivable at SFS, which were mainly due to new business
and reclassification of loans receivable from other financial assets due to a reassessment of the expected repayment dates. The latter was
a major factor also for the decrease of other financial assets, along with decreased positive fair values of derivative financial instruments.
Inventories increased in all industrial businesses, with the build-up most evident at Mobility and Siemens Healthineers.
The decrease of other intangible assets resulted mainly from negative currency translation effects and from impairments recorded at
Siemens Healthineers.
Our investment in Siemens Energy AG was the main factor for the decrease of investments accounted for using the equity method. For
further information see Note 4 in Notes to Consolidated Financial Statements for fiscal 2023.
16
6. Financial position
6.1 Capital structure
Combined Management Report
Sep 30,
(in millions of €)
2023
2022
% Change
Short-term debt and current maturities of long-term debt
7,483
6,658
12%
Trade payables
(9)%
2,459
2,231
(12)%
10,626
9%
1,363
1,432
(5)%
1,955
1,935
1%
99
413
(76)%
60,639
58,829
10,130
3%
33,861
(5)%
10,641
12,196
(13)%
11,938
11,733
2%
3,014
4,955
(39)%
22,855
25,903
32,224
11,548
10,317
Other current financial liabilities
1,426
2,275
(37)%
Deferred tax liabilities
1,655
2,381
(30)%
Provisions
Other financial liabilities
Other liabilities
Total non-current liabilities
Total liabilities
Debt ratio
1,794
1,857
(3)%
1,453
1,867
(22)%
1,666
1,654
1%
47,106
54,011
(13)%
92,007
96,697
Provisions for pensions and similar obligations
(11)%
43,978
39,113
1,601
1,616
(1)%
Contract liabilities
12,571
12,049
4%
Current provisions
2,320
2,156
8%
Current income tax liabilities
2,566
(2)%
2,381
Other current liabilities
8,182
7,448
10%
Liabilities associated with assets classified as held for disposal
50
61
(19)%
Total current liabilities
44,901
42,686
5%
Long-term debt
8%
0%
151,502
7,581
27%
3,074
2,222
38%
882
794
11%
2,527
3,369
(25)%
11,430
10,277
11%
15.4%
15.1%
563
498
13%
343
1,520
(77)%
(1,135)
(5,141)
78%
11,201
7,154
57%
3,892
(2,687)
4,947
2022
Worldwide, revenue related to external customers rose significantly at Smart Infrastructure and Digital Industries, while Mobility posted
clearly higher revenue growth year-over-year. Revenue at Siemens Healthineers came in level with fiscal 2022 and was again the highest
among industrial businesses.
Revenue in Europe, C.I.S., Africa, Middle East increased with double-digit growth contributions from Digital Industries and Smart
Infrastructure. Mobility reported clear revenue growth, which was held back by portfolio effects stemming from the sale of Yunex traffic
in fiscal 2022. Revenues at Siemens Healthineers decreased slightly. Within the region in Germany, the same pattern applied for Digital
Industries and Smart Infrastructure, while revenues at Mobility came in flat. A decline in Germany at Siemens Healthineers was primarily
due to lower demand for rapid coronavirus antigen tests in the diagnostics business.
In the Americas region, revenue was up in all four industrial businesses led by Smart Infrastructure with double-digit growth. Within the
region in the U.S., Mobility and Siemens Healthineers reported slight revenue decreases.
In the Asia, Australia region, revenue was up by on double-digit increase at Mobility, followed by revenue growth at Digital Industries and
Smart Infrastructure. As with orders, revenue development both in the region and in China was held back by strong negative currency
14
Combined Management Report
translation effects, which turned revenue development negative in China for Smart Infrastructure and Digital Industries. Mobility also
recorded a revenue decline in China.
4.2 Income
(in millions of €, earnings per share in €)
Digital Industries
Smart Infrastructure
Mobility
Siemens Healthineers
Industrial Business
Profit margin Industrial Business
Siemens Financial Services
Portfolio Companies
Reconciliation to Consolidated Financial Statements
Income from continuing operations before income taxes
7,559
Income from continuing operations
Income (loss) from discontinued operations, net of income taxes
Net income
Basic EPS
EPS pre PPA
ROCE
Fiscal year
2023
% Change
(2,741)
Income tax expenses
8,514
Contract assets
Inventories
Current income tax assets
Other current assets
Assets classified as held for disposal
Total current assets
Goodwill
Other intangible assets
Property, plant and equipment
Investments accounted for using the equity method
Other financial assets
Deferred tax assets
Other assets
Other current financial assets
Total non-current assets
Combined Management Report
Sep 30,
2022
10,084
10,465
% Change
(4)%
17,405
16,701
4%
10,605
9,696
9%
2%
Total assets
Cash and cash equivalents
Trade and other receivables
2023
5. Net assets position
4,413
(in millions of €)
93%
15
(21)
n/a
8,529
94%
10.04
4.65
116%
10.77
5.47
97%
4,392
10.0%
Siemens' global venture capital unit, Next47, provides capital to help start-ups expand and scale. It serves as the creator of next-generation
businesses for Siemens by building, buying and partnering with innovative companies at any stage. Next47 is focused on anticipating how
emerging technologies will influence our end markets. This foreknowledge enables our Company and our customers to grow and thrive
in the age of digitalization.
15
18.6%
We advance technologies also through our open innovation concept. We work closely with scholars from leading universities, research
institutions and academic start-ups, not only under bilateral cooperation agreements but also in publicly funded collective projects. Our
focus here is on our strategic research partners and in particular the Siemens Research and Innovation Ecosystems, which we maintain at
16 locations worldwide.
Siemens' core technologies have been determined to be critical for our Company's long-term success and that of our customers. They are
bundled in eleven technology areas: additive manufacturing and materials (from fiscal 2024 on: advanced manufacturing and circularity),
cybersecurity and trust, data analytics and artificial intelligence, power electronics, simulation and digital twin, sustainable energy and
infrastructure, future of automation, integrated circuits and electronics, connectivity and edge, software systems and processes, and user
experience.
In fiscal 2023, we reported research and development expenses of €6.2 billion, compared to €5.6 billion in fiscal 2022. The resulting R&D
intensity, defined as the ratio of R&D expenses to revenue, was 8.0% (fiscal 2022: 7.8%). Additions to capitalized development expenses
amounted to €0.3 billion as in the prior year. As of September 30, 2023, Siemens worldwide held approximately 45,000 granted patents
in its continuing operations. On average, we had 50,029 R&D employees in fiscal 2023.
4.3 Research and development
Our research and development activities are ultimately geared to developing innovative, sustainable solutions for our customers - and our
businesses - while also strengthening our own competitiveness. Joint implementation by the operating units and Technology, our central
R&D department, ensures that research activities and business strategies are closely aligned with one another, and that all units benefit
equally and quickly from technological developments.
At 18.6%, ROCE was back in the target range established in our Siemens Financial Framework. The increase year-over-year was due
primarily to sharply higher income before interest after tax.
The increase in Basic EPS and in EPS pre PPA reflects the increase of Net income attributable to Shareholders of Siemens AG, which was
€7,949 million in fiscal 2023 compared to €3,723 million in fiscal 2022, combined with a lower number of weighted average shares
outstanding. Our investment in Siemens Energy AG contributed €0.84 to the increase of EPS pre PPA.
The tax rate in fiscal 2023 was 24% (fiscal 2022: 38%), benefiting from tax-free gains in relation to the partial reversal of an impairment
on Siemens' stake in Siemens Energy AG and the contribution of a stake in Siemens Energy AG to Siemens Pension-Trust e.V. Moreover,
the gain recorded in connection with the capital increase by Siemens Energy AG was also tax-free. These positive influences on the tax
rate were partly offset by our participation in the after-tax loss at Siemens Energy, which was not tax-deductible. As a result, the increase
in Income from continuing operations was 93%.
As a result of the developments described in chapter 3, Income from continuing operations before income taxes increased by 57%.
Severance charges for continuing operations were €430 million, of which €351 million were in Industrial Business. In fiscal 2022,
severance charges for continuing operations were €272 million, of which €190 million were in Industrial Business.
Report of the Supervisory Board
Audit Committee concerned itself in fiscal 2023 - due to
the regular, legally required external rotation of the
independent auditors at the end of fiscal 2023 - with the
selection and transition procedure for the audit of the
financial statements for fiscal 2024.
Disclosure of participation by individual
Supervisory Board members in meetings
The average rate of participation by members in the
meetings of the Supervisory Board and its committees
was 97%. In fiscal 2023, meetings were held not only in
person but, in some cases, also in a virtual format via
video conference or in a so-called hybrid format. No
meetings were held via telephone conference. The par-
ticipation rate of individual members in the meetings of
the Supervisory Board and its committees is set out in the
following chart:
New Supervisory Board members can meet with Manag-
ing Board members and other managers with specialist
responsibility to exchange views on current topics and
topics of fundamental importance and thus gain an
overview of Company-relevant matters (onboarding). In
fiscal 2023, a separate informational event for the new
members of the Supervisory Board was held on March 13,
2023, to familiarize those members, in particular, with
the Company's business model and strategy and with the
structures of the Siemens Group. As part of this onboard-
ing program, Supervisory Board members also have the
opportunity to visit the various locations of different
Siemens business areas and gain an insight into the port-
folio as well as production and manufacturing methods.
Longer-serving Supervisory Board members may also
attend onboarding events and regularly do so.
Supervisory
The Supervisory Board members take part, on their own
responsibility, in the educational and training measures
necessary for the performance of their duties - measures
relating, for example, to changes in the legal framework
and to new, groundbreaking technologies. The Company
supports them in this regard. Internal informational
events are regularly offered to support targeted training
measures. In March and July of fiscal 2023, three internal
training events concerning strategically relevant tech-
nology and sustainability-related topics were held for
all Supervisory Board members. The Supervisory Board
informed itself, in particular, about industrial and
generative artificial intelligence and discussed the tech-
nological background, application and impact on
Siemens' markets as well as the technology-related and
regulatory challenges.
FISCAL 2023 7
Report of the Supervisory Board
The Innovation and Finance Committee met two times.
Both meetings were held in person. A decision was also
made using other customary means of communication.
The focus of the Committee's work was on innovation-
and technology-related topics. The Committee discussed
the Company's progress, strategic priorities, technolo-
gies and growth opportunities relating to the industrial
metaverse. In the strategic context, it concerned itself with
progress regarding Siemens Xcelerator, the Company's
open digital business platform. Detailed growth plans for
the portfolio and new Siemens Xcelerator portfolio
elements were presented. Expanding the ecosystem and
increasing the relevance of the marketplace were also
focus topics. Under the heading "UX Transformation," the
Managing Board reported on progress in user-centered
product design. The Committee's meetings and/or
decisions also focused on the discussion of the pension
system and the preparation and approval of investment
and divestment projects and/or financial measures. For
example, the Innovation and Finance Committee en-
dorsed the Managing Board's decision regarding the
Siemens Industrial Campus Erlangen Project.
FISCAL 2023
regularly without the Managing Board and/or the inde-
pendent auditors in attendance. Outside its meetings,
the Chairman of the Audit Committee regularly ex-
changed views with the independent auditors regarding
the progress of the audit and reported to the Audit Com-
mittee thereon. The Audit Committee recommended that
the Supervisory Board propose to the Annual Sharehold-
ers' Meeting that Ernst & Young GmbH Wirtschaftsprü-
fungsgesellschaft, Stuttgart, be elected independent
auditors for fiscal 2023. It awarded the audit contract for
fiscal 2023 to the independent auditors, who had been
elected by the Annual Shareholders' Meeting, defined
the audit's focus areas and determined the auditors' fee.
The Audit Committee approved the audit plan and defined
the Audit Committee's focus areas. It monitored the selec-
tion, independence, qualification, rotation and efficiency
of the independent auditors as well as the services they
provided and concerned itself with the review of the qual-
ity of the audit of the financial statements. In fiscal 2023,
against the backdrop of the Wirecard situation, the Audit
Committee regularly discussed the role of Ernst & Young
GmbH Wirtschaftsprüfungsgesellschaft, Stuttgart, as the
independent auditors of Wirecard AG. The Audit Commit-
tee questioned the independent auditors regarding this
matter and assessed the impact on Siemens AG. The Audit
Committee also dealt with the Company's accounting and
accounting process, the appropriateness and effective-
ness of its internal control system and its risk manage-
ment system (including sustainability-related aspects),
and the effectiveness, resources and findings of its inter-
nal audit as well as with reports concerning potential and
pending legal disputes. In addition, the Audit Committee
concerned itself with the Company's compliance with
legal requirements, official regulations and the Company's
internal guidelines (compliance) and dealt, in particular,
with the quarterly reports, the Chief Compliance Officer's
annual report and the compliance management system.
For this topic, the Managing Board member responsible
for People & Organization also attended the Audit Com-
mittee meetings at the invitation of the Audit Committee
Chairman. In this connection, the Audit Committee
concerned itself with the implementation of the new
German Supply Chain Act (Lieferkettensorgfaltspflichten-
gesetz, LKSG). It also focused on the current and future
regulatory requirements regarding sustainability report-
ing and its implementation, including, in particular, the
requirements of the EU taxonomy and the Corporate
Sustainability Reporting Directive (CSRD). Finally, the
The Audit Committee held six regular meetings. All the
meetings were held in person. In the presence of the in-
dependent auditors, the President and Chief Executive
Officer, the Chief Financial Officer, the General Counsel,
the head of accounting, the head of corporate audit and
the head of the sustainability function, the Audit Com-
mittee dealt with the financial statements and the Com-
bined Management Report for Siemens AG and the
Siemens Group, including the non-financial information
integrated into the Combined Management Report. In
this connection, the Audit Committee also concerned it-
self with the Sustainability Report, with the statements
regarding the EU taxonomy in the Combined Manage-
ment Report for Siemens AG and the Siemens Group and
with the related reports of the independent auditors. The
Committee discussed the Half-year Financial Report and
the quarterly statements with the Managing Board and
the independent auditors. In the presence of the inde-
pendent auditors, it also discussed the report on the au-
ditors' review of the Company's Half-year Consolidated
Financial Statements and of its Interim Group Manage-
ment Report. As part of the preparation and implemen-
tation of the audit, the Audit Committee regularly ex-
changed views with the independent auditors without
the Managing Board in attendance. In addition, it met
Report of the Supervisory Board
5
Board (plenary
The Compensation Committee met four times. All four
meetings were held in person. The Compensation Com-
mittee also made one decision using other customary
means of communication. The Committee prepared, in
particular, Supervisory Board decisions regarding the
definition of performance criteria and the targets for vari-
able compensation, regarding the determination and
regarding the review of the appropriateness of Managing
Board compensation and regarding the Compensation
Report. In addition, the Compensation Committee pre-
pared the Supervisory Board's decision regarding the en-
gagement of an auditor for the Compensation Report for
fiscal 2023. One focus of the Compensation Committee's
work was the preparation of the Supervisory Board's de-
cision regarding the adjustment of the compensation
system for the members of the Managing Board as of
fiscal 2024. Independent external consultants were also
involved in the preparation of this decision.
FISCAL 2023
6
meetings)
in %
Compensation
in %
The Mediation Committee had no need to meet.
No.
in %
No.
in %
No.
No.
Chairman's
in %
participation in %)
(Number of meetings/
Nominating
Committee
Innovation
and Finance
Committee
Committee
Audit
Committee
Committee
No.
The Nominating Committee met three times. Two meet-
ings were held in a virtual format via video conference
and one in a so-called hybrid format. The Nominating
Committee gave in-depth consideration to succession
planning for the composition of the Supervisory Board.
One focus of the Nominating Committee's activities in
fiscal 2023 was the preparation of the Supervisory
Board's nominations of shareholder representatives on
the Supervisory Board for election by the 2023 Annual
Shareholders' Meeting. The Nominating Committee was
supported in this connection by an external consulting
firm. In selecting the potential candidates and in prepar-
ing a recommendation for the Supervisory Board's deci-
sion, the Nominating Committee gave particular consid-
eration to the objectives that the Supervisory Board had
previously approved for its composition - including the
profile of required skills and expertise and the diversity
concept for the Supervisory Board - and to the Supervi-
sory Board's qualification matrix. With a view to the reg-
ular elections of three shareholder representatives on the
Supervisory Board scheduled for 2025, the Nominating
Committee also defined the topics for its work over the
next few years and concerned itself with the regulatory
framework, with the objectives that the Supervisory
Board had approved for its composition, including the
profile of required skills and expertise and the diversity
concept for the Supervisory Board, and with the qualifi-
cation matrix.
-
In fiscal 2023, the Supervisory Board had six standing
committees. These committees prepare decisions and
topics to be dealt with at the Supervisory Board's plenary
meetings. Some of the Supervisory Board's decision-mak-
ing powers have been delegated to these committees
within the permissible legal framework. The committee
chairpersons report to the Supervisory Board on their
committees' work at the subsequent Board meeting. A
list of the members and a detailed explanation of the
tasks of the individual Supervisory Board committees are
set out in the Corporate Governance Statement.
Topics at the plenary meetings of the
Supervisory Board
on decarbonization and energy efficiency, resource effi-
ciency and circularity as well as people centricity and social
impact. The Supervisory Board discussed the risks and op-
portunities for the Company connected with social and en-
vironmental factors as well as the environmental and social
impact of the Company's activities. The Supervisory Board
also concerned itself with the 2022 Sustainability Report.
Report of the Supervisory Board
FISCAL 2023 2
A special focus of our activities in fiscal 2023 was the fur-
ther implementation of the Company's growth strategy.
At our meetings and in additional informational sessions,
we concerned ourselves intensively with the goals and
priorities of Siemens' businesses and with the Managing
Board's technology and personnel strategy. In this connec-
tion, we focused our attention on the accelerated trans-
formation toward digitalization and sustainability and on
business and technological innovation and the related
opportunities for growth. Together with the Managing
Board, we discussed markets, trends and growth fields. A
further focus of our activities in fiscal 2023 - in addition to
Siemens Xcelerator, our platform for driving the digital
transformation - was Siemens AG's sustainability strategy.
We focused on sustainability-related topics in the environ-
ment, social and governance (ESG) area. At the center was
not only DEGREE, our Companywide sustainability frame-
work - with the aspects of decarbonization, ethics, gover-
nance, resource efficiency, equity and employability – but
also the positive impact the Company creates for customers
with its portfolio. The Supervisory Board discussed the risks
and opportunities for the Company connected with social
and environmental factors as well as the environmental
and social impact of the Company's activities. The discus-
sion made clear that sustainability is a strategic business
opportunity for Siemens due to our strong portfolio focused
kept up to date on projected business policies, Company
planning - including financial, investment and personnel
planning - and the Company's profitability and business
operations as well as on the state of Siemens AG and the
Siemens Group. We were directly involved at an early
stage in all decisions of fundamental importance to the
Company and discussed these decisions with the Man-
aging Board intensively and in detail. To the extent that
Supervisory Board approval of the decisions and mea-
sures of Company management was required by law, the
Siemens Articles of Association or our Bylaws, the mem-
bers of the Supervisory Board - prepared in some cases
by the Supervisory Board's committees issued such
approval after intensive review and discussion.
In fiscal 2023, the Supervisory Board performed in full
the duties assigned to it by law, the Siemens Articles
of Association and the Bylaws for the Supervisory Board.
On the basis of detailed written and oral reports provided
by the Managing Board, we monitored the Managing
Board and advised it on the management of the Company.
In my capacity as Chairman of the Supervisory Board,
I regularly exchanged information with the President and
Chief Executive Officer and other Managing Board mem-
bers. As a result, the Supervisory Board was always
Against this backdrop, the Supervisory Board focused
intensively in fiscal 2023 on the execution of Siemens'
growth strategy. Siemens Xcelerator, our open digital
business platform, gained more and more momentum
and is the key element of Siemens' strategy to combine
the real and the digital worlds. The business opportunities
created by digitalization and sustainability as well as the
DEGREE sustainability framework were likewise priorities.
In addition, the elections at the 2023 Annual Shareholders'
Meeting enabled the Supervisory Board to successfully
further develop its own profile of skills and expertise,
particularly in the areas of technology and sustainability.
Today, our Supervisory Board is more global and more
diverse than ever before - and, as a result, excellently
positioned to optimally support the Company also in the
next phases of its development.
In fiscal 2023, Siemens AG once again demonstrated its
operational excellence as a leading technology company
by delivering an impressively high level of profitable
growth. The Company's long-range strategy of combining
the real and the digital worlds and its rigorous orien-
tation toward long-term growth fields paid off: Siemens
benefited from strong, stable developments in the global
markets - above all, from worldwide efforts to make
value chains across the board more efficient, resilient
and sustainable. The Company also made major invest-
ments to drive its innovative power and enhance its
manufacturing capacities – while further strengthening
its regional diversification.
Dear Shareholders,
Report of the Supervisory Board
Berlin and Munich, December 6, 2023
Report of the Supervisory Board
SIEMENS
December 2023
Report of the
Supervisory Board
No.
We held a total of six regular plenary meetings in fiscal
2023. We also held an extraordinary constituent meeting
of the Supervisory Board immediately after the Annual
Shareholders' Meeting on February 9, 2023. Six meetings
were held in person and one in a so-called hybrid format -
that is, as an in-person meeting with the possibility of
virtual participation. No meetings were held via telephone
conference or in an exclusively virtual format. We also
made one decision using other customary forms of com-
munication. Topics of discussion at our regular plenary
meetings were strategic progress, revenue, profit and em-
ployment development at Siemens AG and the Siemens
Group, the Company's financial position and the results of
its operations, personnel-related matters, the status of the
implementation of Siemens Xcelerator, and sustainability.
In addition, we concerned ourselves, as occasion required,
with acquisition and divestment projects and with risks to
the Company. The Supervisory Board and/or the Innovation
and Finance Committee were regularly informed – within
the stipulated legal framework – by the relevant Managing
Board member about measures and decisions of funda-
mental importance at the Equity Investments, companies
in which Siemens holds a majority stake. In addition, we
regularly met in sessions without the Managing Board in
attendance. In these closed sessions, we dealt with agenda
items that concerned either the Managing Board itself or
internal Supervisory Board matters.
At our meeting on November 16, 2022, the Managing
Board reported to us on the Company's current business
position, including personnel-related matters and
sustainability, as of the fourth quarter. We discussed the
key financial figures for fiscal 2022 and approved the
budget for fiscal 2023. We also discussed the Managing
Board's considerations regarding business activities at
Large Drive Applications. On a recommendation by the
Compensation Committee, we also determined the
Managing Board members' compensation for fiscal 2022
on the basis of calculated target achievement. A review
conducted by an independent compensation expert con-
firmed the appropriateness of this compensation. We
had already defined the performance criteria for the Man-
aging Board's variable compensation for fiscal 2023 at our
meeting on September 23, 2022. On this basis and on a
recommendation by the Compensation Committee, we
made a decision regarding target setting for Managing
Board compensation for fiscal 2023 at our meeting on
November 16, 2022. At this meeting, we also approved
the Corporate Governance Statement for fiscal 2022 and
endorsed a decision by the Managing Board regarding
financing measures. In addition, we concerned ourselves
with personnel-related matters regarding the Managing
Board and, on a recommendation by the Chairman's Com-
mittee, approved the extension of Judith Wiese's appoint-
ment as a full member of the Managing Board from
October 1, 2023, until the end of September 30, 2028.
On December 7, 2022, we discussed the 2022 Annual
Financial Report - comprising the financial statements
and the Combined Management Report for Siemens AG
and the Siemens Group as of September 30, 2022 - as
well as the Report of the Supervisory Board to the Annual
Shareholders' Meeting, the Sustainability Report, the
Compensation Report for fiscal 2022, the Report on Gen-
der Equality and Equal Pay in accordance with the German
Transparency in Wage Structures Act (Entgelttransparenz-
gesetz, EntgTranspG) and the agenda for the ordinary
Annual Shareholders' Meeting on February 9, 2023. On
the basis of recommendations by the Nominating Com-
mittee, we concerned ourselves with proposals regarding
the election of seven shareholder representatives on the
Supervisory Board at the 2023 Annual Shareholders'
Meeting. We also concerned ourselves with the annual
reporting by the Chief Compliance Officer and the Global
Chief Cypersecurity Officer. One focus of the meeting was
the Company's personnel strategy. The Managing Board
reported on measures regarding employee training and
development under the heading #NextWork, with the aim
of systematically addressing the megatrends digitaliza-
tion, automation and demographic change.
Work in the Supervisory Board
committees
At our meeting on September 23, 2022, we approved a
Declaration of Conformity in accordance with Section 161
of the German Stock Corporation Act (Aktiengesetz,
AktG). Information on corporate governance is provided
in the Corporate Governance Statement, which is pub-
licly available on the Siemens Global Website at www.
SIEMENS.COM/CORPORATE-GOVERNANCE. The Company's Dec-
laration of Conformity has been made permanently avail-
able to shareholders on the Siemens Global Website at
WWW.SIEMENS.COM/DECLARATION OF CONFORMITY. The cur-
rent Declaration of Conformity is also available in the
Corporate Governance Statement.
Corporate Governance Code
the shareholder representatives on the Supervisory Board
within the meaning of the German Corporate Governance
Code and with the Supervisory Board's qualification
matrix. Finally, we discussed the results of the Supervisory
Board's self-assessment in August and the recommen-
dations and measures to be derived from it.
Report of the Supervisory Board
FISCAL 2023 4
The Supervisory Board meeting on September 22, 2023,
was held in Berlin, where we gained an insight into the
future-oriented project Siemensstadt Square and, on a tour
of the Röhrenwerk tube plant, familiarized ourselves with
the advanced production and manufacturing methods at
the long-standing location. At the meeting, the Managing
Board reported on the state of the Company. The person-
nel strategy of Siemens AG was again a focus of the meet-
ing. Following up on its reporting on December 7, 2022,
the Managing Board informed us about the strategic
approach to systematic workforce training, which aimed
to drive the organization's transformation and empower
its employees to continuously learn and grow. We dis-
cussed the Managing Board's considerations regarding the
2024 budget. A further focus of the meeting was Manag-
ing Board compensation, whose appropriateness had
been confirmed by an internal review. After preparation by
and on a recommendation of the Compensation Commit-
tee, we approved an adjustment of the compensation
system for the Managing Board as of fiscal 2024. As part of
the annual review of Managing Board compensation and
after preparation by and on a recommendation of the
Compensation Committee, we determined each Manag-
ing Board member's individual total target compensation
and maximum compensation and defined the perfor-
mance criteria for variable compensation for fiscal 2024. In
addition, we dealt with matters relating to corporate gov-
ernance – in particular, the Declaration of Conformity with
the German Corporate Governance Code. We approved
amendments to the Bylaws for the Managing Board and
changes to the diversity concept for the Managing Board.
We also concerned ourselves with the independence of
Company's sustainability strategy. We concerned our-
selves with the Company's strategic orientation and with
progress in its sustainability-related transformation. We
discussed the Company's business opportunities con-
nected with sustainability-related factors and concerned
ourselves with business potential particularly in the ar-
eas of decarbonization, energy efficiency and resource
efficiency. Regulatory requirements - in particular, the
EU taxonomy and the Corporate Sustainability Reporting
Directive (CSRD) - and their impact on Siemens were
also topics of our discussions. In addition, we discussed
the Siemens Energy investment and the format of the
2024 Annual Shareholders' Meeting. Finally, we dealt
with Managing Board compensation and approved a pro-
posal regarding the engagement of the auditors of the
Compensation Report for fiscal 2023.
The Chairman's Committee met eight times. Three
meetings were held in person, two in a virtual format via
video conference and three in a so-called hybrid format.
The Chairman's Committee also made one decision using
other customary means of communication. In my capac-
ity as Chairman of the Chairman's Committee, I discussed
topics of major importance with other Committee mem-
bers also between meetings. The Committee concerned
itself, in particular, with personnel-related matters, long-
term succession planning for the composition of the
Managing Board, corporate governance issues and the
acceptance by Managing Board members of positions at
other companies and institutions.
At our meeting on August 9, 2023, the Managing Board
reported on the Company's current business and finan-
cial position and on personnel-related matters as of the
third quarter. One focus of the meeting was the
At the beginning of May 2023, the members of the
Managing and Supervisory Boards met several times in
smaller groups (so-called multilateral strategy sessions)
to consider and discuss in detail topics of strategic
importance to the Company.
Due to the regular election of ten employee representa-
tives and seven shareholder representatives on the
Supervisory Board, a constituent meeting of the Super-
visory Board was held immediately after the Annual
Shareholders' Meeting on February 9, 2023. At this meet-
ing, the Supervisory Board confirmed Birgit Steinborn
as the Supervisory Board's First Deputy Chairwoman and
Dr. Werner Brandt as the Supervisory Board's Second
Deputy Chairman, effective the beginning of their re-
spective new electoral periods. The Supervisory Board
also elected the members of its committees.
and sustainability, as of the first quarter. We were in-
formed about the current business position of Siemens
Healthineers and that of its Diagnostics Business Area, in
particular.
Report of the Supervisory Board
3
FISCAL 2023
At our meeting on February 8, 2023, the Managing
Board reported on the Company's current business and
financial position, including personnel-related matters
On January 31, 2023, we approved – in a decision using other
customary means of communication - a decision regarding
the exercise of shareholding rights in associated companies
of Siemens AG pursuant to Section 32 of the German Code-
termination Act (Mitbestimmungsgesetz, MitbestG).
At our meeting on May 16, 2023, the Managing Board
reported on the Company's current business and finan-
cial position, including personnel-related matters and
sustainability, as of the second quarter. As part of a stra-
tegic focus, we concerned ourselves at this meeting - on
the basis of the strategy discussions held in the previous
weeks in smaller groups with the Managing Board - ex-
tensively and in detail with the growth targets and the
further implementation of Siemens' strategy as a focused
technology company. For Siemens Xcelerator, our open
digital business platform, growth targets for the portfolio
at the Siemens and business level were presented in de-
tail and the status of the two pillars "ecosystem" and
"marketplace" were discussed. We were also informed
about the current business position of Siemens Healthi-
neers and about progress in the integration of Varian. We
approved amendments to the Bylaws for the Managing
Board, for the Supervisory Board and for the Chairman's
Committee, the Audit Committee, the Innovation and
Finance Committee, and the Compensation Committee
of the Supervisory Board.
in %
2/2
Chairman
100
Baroness Nemat Shafik (DBE, DPhil)
(until February 9, 2023)
3/3
100
Nathalie von Siemens (Dr. phil.)
717
100
313
100
Michael Sigmund
(until August 31, 2023)
Dorothea Simon
Grazia Vittadini
6/6
100
717
100
5/7
100
71
717
100
3/3
100
Christian Pfeiffer (Dr. Ing.)
(since February 9, 2023)
4/4
100
Benoît Potier
717
100
3/3
100
Hagen Reimer
717
100
3/3
100
Norbert Reithofer (Dr. Ing. Dr. Ing. E.h.)
(until February 9, 2023)
3/3
Kasper Rørsted
75
3/3
2/3
The independent auditors, Ernst & Young GmbH Wirt-
schaftsprüfungsgesellschaft, Stuttgart, audited the
Annual Financial Statements of Siemens AG, the Consol-
idated Financial Statements of the Siemens Group and
the Combined Management Report for Siemens AG and
the Siemens Group for fiscal 2023 and issued an unqual-
ified opinion for each. Ernst & Young GmbH Wirtschafts-
prüfungsgesellschaft, Stuttgart, has served as the inde-
pendent auditors of Siemens AG and the Siemens Group
since fiscal 2009. Siegfried Keller has signed as auditor
since fiscal 2023 and as auditor responsible for the audit
also since fiscal 2023. Dr. Philipp Gaenslen has signed as
auditor since fiscal 2021. The Annual Financial State-
ments of Siemens AG and the Combined Management
Report for Siemens AG and the Siemens Group were pre-
pared in accordance with the requirements of German
law. The Consolidated Financial Statements of the
Siemens Group were prepared in accordance with the
International Financial Reporting Standards (IFRS) as
adopted for use in the European Union (EU) and with
the additional requirements of German law set out in
Section 315 e (1) of the German Commercial Code
(Handelsgesetzbuch, HGB). The Consolidated Financial
Statements of the Siemens Group also comply with all
IFRS requirements as issued by the International Account-
ing Standards Board (IASB). The independent auditors
conducted their audit in accordance with Section 317 of
the German Commercial Code and the EU Audit Regula-
tion and German generally accepted standards for the
audit of financial statements as promulgated by the Insti-
tut der Wirtschaftsprüfer (IDW) as well as in supplemen-
tary compliance with the International Standards on
Auditing (ISA). The abovementioned documents as well
as the Managing Board's proposal for the appropriation
of net income were submitted to the Supervisory Board
by the Managing Board in advance. The Audit Committee
discussed the dividend proposal in detail at its meeting
on November 14, 2023. It discussed the Annual Financial
Statements of Siemens AG, the Consolidated Financial
Statements of the Siemens Group and the Combined
Management Report in detail at its meeting on Decem-
ber 5, 2023. In this context, the Audit Committee con-
cerned itself, in particular, with the key audit matters
described in the independent auditors' respective opin-
ions, including the audit procedures implemented. The
Audit Committee's review also covered the non-financial
information for Siemens AG and the Siemens Group that
is included in the Combined Management Report. The
audit reports prepared by the independent auditors were
distributed to all members of the Supervisory Board and
comprehensively reviewed at the Supervisory Board
meeting on December 6, 2023, in the presence of the in-
dependent auditors, who reported on the scope, focal
points and main findings of their audit, addressing, in
particular, key audit matters, the Audit Committee's focus
areas and the audit procedures implemented. No major
weaknesses in the Company's internal control or risk
management systems were reported. At this meeting,
the Managing Board explained the financial statements
of Siemens AG and the Siemens Group as well as the
Company's risk management system.
The Supervisory Board concurs with the results of the au-
dit. Following the definitive findings of the Audit Com-
mittee's examination and our own examination, we have
no objections. The Managing Board prepared the Annual
Financial Statements of Siemens AG and the Consoli-
dated Financial Statements of the Siemens Group. We
approved the Annual Financial Statements of Siemens AG
and the Consolidated Financial Statements of the
Siemens Group. In view of our approval, these financial
statements are accepted as submitted. We endorsed the
Managing Board's proposal that the net income available
for distribution be used to pay out a dividend of €4.70
per share entitled to a dividend and that the amount of
net income attributable to shares of stock not entitled to
receive a dividend for fiscal 2023 be carried forward.
The Sustainability Report for fiscal 2023 and the informa-
tion regarding the EU taxonomy in the Combined Man-
agement Report for Siemens AG and the Siemens Group
for fiscal 2023 and the independent auditors' related re-
ports were dealt with at the Audit Committee meeting on
December 5, 2023, and at the Supervisory Board meeting
on December 6, 2023.
FISCAL 2023
9
Report of the Supervisory Board
Changes in the composition of the
Supervisory and Managing Boards
There were no changes in the composition of the Manag-
ing Board in fiscal 2023.
The shareholder representatives Michael Diekmann,
Dr.-Ing. Dr.-Ing. E.h. Norbert Reithofer and Baroness
Nemat Shafik and the employee representative
Gunnar Zukunft left the Supervisory Board upon the
expiry of their regular terms of office at the end of the
Annual Shareholders' Meeting on February 9, 2023.
-
On February 9, 2023, the Annual Shareholders' Meeting
elected Dr. Regina E. Dugan, Keryn Lee James and
Martina Merz to serve as new shareholder representa-
tives on the Supervisory Board for four-year terms of
office that is, for the electoral period 2023 to 2027.
Dr. Werner Brandt, Benoît Potier, Dr. Nathalie von Siemens
and Matthias Zachert, who were already shareholder rep-
resentatives on the Supervisory Board and whose regular
terms of office expired at the end of the Annual Share-
holders' Meeting on February 9, 2023, were reelected to
serve as shareholder representatives on the Supervisory
Board for four-year terms of office - for the electoral pe-
riod 2023 to 2027. Kasper Rørsted, Jim Hagemann Snabe
and Grazia Vittadini had already been elected by a
decision of the Annual Shareholders' Meeting on
February 3, 2021, to serve as shareholder represen-
tatives on the Supervisory Board for four-year terms of
office - for the electoral period 2021 to 2025.
Pursuant to the provisions of the German Codetermination
Act, Dr. Christian Pfeiffer was elected on November 22,
2022, to serve as a new employee representative on
the Supervisory Board for a five-year term of office, effec-
tive at the end of the Annual Shareholders' Meeting on
February 9, 2023. Tobias Bäumler, Dr. Andrea Fehrmann,
Bettina Haller, Harald Kern, Jürgen Kerner, Hagen Reimer,
Michael Sigmund, Dorothea Simon and Birgit Steinborn,
who were already employee representatives on the
Supervisory Board, were reelected to the Supervisory
Board for five-year terms of office - that is, for the elec-
toral period 2023 to 2028 - effective at the end of the
Annual Shareholders' Meeting on February 9, 2023.
Jim Hagemann Snabe
We thanked the Supervisory Board members who de-
parted in fiscal 2023 for their many years of trust-based
cooperation and for their professional commitment and
contribution to the Company's success. Our special
thanks go to Michael Diekmann, who - as Chairman of
the Compensation Committee - decisively shaped the
Supervisory Board's activities over many years.
On behalf of the Supervisory Board, I would like to thank
the members of the Managing Board and all the employ-
ees and employee representatives of Siemens AG and of
all Group companies for their outstanding commitment
and constructive cooperation in fiscal 2023.
For the Supervisory Board
Jim Hagemann Snabe
Chairman
FISCAL 2023
10
Detailed discussion of the audit of the
financial statements
100
Report of the Supervisory Board
100
67
2/2
100
717
100
4/4
100
6/6
100
Matthias Zachert
Gunnar Zukunft
(until February 9, 2023)
3/3
100
98
100
96
94
94
FISCAL 2023 8
3/4
Upon his retirement from the Company on August 31,
2023, Michael Sigmund left the Supervisory Board, on
which he had represented the Senior Management of
Siemens AG. In a decision of September 14, 2023, the
Charlottenburg District Court appointed Oliver Hartmann
to succeed Michael Sigmund as an employee represen-
tative on the Supervisory Board for the remainder of
Michael Sigmund's term of office.
Martina Merz
100
Werner Brandt (Dr. rer. pol.)
Second Deputy Chairman
717
100
8/8
100
Tobias Bäumler
717
100
6/6
100
3/3
100
6/6
100
2/2
100
Michael Diekmann
2/2
(until February 9, 2023)
100
100
(since February 9, 2023)
717
100
8/8
100
3/4
75
6/6
100
2/2
100
3/3
100
Birgit Steinborn
717
100
8/8
100
4/4
6/6
3/3
First Deputy Chairwoman
1/1
100
Harald Kern
717
100
4/4
100
2/2
100
Jürgen Kerner
717
100
100
4/4
100
1/3
33
1/2
100
50
4/4
(since February 9, 2023)
8/8
100
Regina E. Dugan (PhD)
100
Keryn Lee James
(since February 9, 2023)
4/4
100
100
Andrea Fehrmann (Dr. phil.)
717
100
2/2
717
100
Oliver Hartmann
6/6
(since September 14, 2023)
1/1
Bettina Haller
88
100
In the course of his professional career, Matthias Zachert
has served as the chief financial officer of a variety of
publicly listed companies and thus has specialist knowl-
edge and experience in the application of accounting
principles and internal control and risk management
systems, including sustainability reporting. His activities
as the chief financial officer of a publicly listed interna-
tional company include engagement with non-financial
aspects and the reporting thereon. As the current chief
executive officer and former chief financial officer of
Lanxess AG, Matthias Zachert has extensive knowledge
of the requirements for sustainability reporting and of
current developments in this area. Matthias Zachert
follows and monitors current developments in sustain-
ability reporting and actively applies this expertise for
the benefit of the Supervisory Board and the Audit
Committee of Siemens AG.
-
Due to his many years of work at a major auditing firm -
the former Price Waterhouse GmbH - and his many years
of service as the chief financial officer of publicly listed
international companies - Fresenius Medical Care AG
and, subsequently, SAP AG Dr. Werner Brandt has
specialist knowledge and experience in the auditing of
financial statements. Due to his above-mentioned activ-
ities and his many years of experience as the chairman
of the supervisory board and audit committee of various
publicly listed international companies, he also has
specialist knowledge and experience in the application
of accounting principles and internal control and risk
management systems and thus has expertise in the
area of accounting. In addition, Dr. Werner Brandt is
independent. As former chief financial officer of various
companies and as the current chairman of the super-
visory board of RWE AG and Chairman of the Audit
Committee of Siemens AG, Dr. Werner Brandt also has
extensive knowledge regarding sustainability reporting.
Dr. Werner Brandt follows current developments in
sustainability reporting and its audit and assurance and
is an active participant in discussions of this topic in
expert committees. He actively applies this expertise for
the benefit of the Supervisory Board and the Audit
Committee of Siemens AG.
7
As of September 30, 2023, the Nominating Commit-
tee comprised Jim Hagemann Snabe (Chairman),
Dr. Werner Brandt, Benoît Potier and Dr. Nathalie von
Siemens.
The Nominating Committee is responsible for making
recommendations to the Supervisory Board on suitable
candidates for the election by the Annual Shareholders'
Meeting of shareholder representatives on the Supervisory
Board. In preparing these recommendations, the objec-
tives defined by the Supervisory Board for its composition
and the approved diversity concept - in particular, inde-
pendence and diversity - are to be appropriately consid-
ered, as are the proposed candidates' required knowledge,
abilities and professional experience. Fulfillment of the
required profile of skills and expertise is also to be aimed
at. Attention shall be paid to an appropriate participation
of women and men in accordance with the legal require-
ments relating to the gender quota as well as to ensuring
that the members of the Supervisory Board are, as a group,
familiar with the sector in which the Company operates.
The Mediation Committee submits proposals to the
Supervisory Board in the event that the Supervisory
Board cannot reach the two-thirds majority required for
the appointment or dismissal of a Managing Board
member on the first ballot.
As of September 30, 2023, the Mediation Commit-
tee comprised Jim Hagemann Snabe (Chairman),
Dr. Werner Brandt, Jürgen Kerner and Birgit Steinborn.
As of September 30, 2023, the Innovation and Finance
Committee comprised Jim Hagemann Snabe (Chairman),
Tobias Bäumler, Dr. Regina E. Dugan, Harald Kern,
Jürgen Kerner, Kasper Rørsted, Birgit Steinborn and
Grazia Vittadini.
Committee, at least one additional member with exper-
tise in the area of auditing. Pursuant to the Code, the
chair of the Audit Committee shall be an expert in at
least one of these two areas and independent. The
Chairman of the Audit Committee, Dr. Werner Brandt,
fulfills these requirements.
Based on the Company's overall strategy, the Innovation
and Finance Committee discusses, in particular, the
Company's innovation focuses and prepares the Supervi-
sory Board's discussions and decisions regarding ques-
tions relating to the Company's financial situation and
structure - including annual planning (budget) – as well
as the Company's fixed asset investments and its finan-
cial measures. In addition, the Innovation and Finance
Committee has been authorized by the Supervisory Board
to decide on the approval of transactions and measures
that require Supervisory Board approval and have a value
of between €300 million and €600 million.
Corporate Governance Statement
As of September 30, 2023, the Audit Committee com-
prised Dr. Werner Brandt (Chairman), Tobias Bäumler,
Bettina Haller, Martina Merz, Hagen Reimer, Jim
Hagemann Snabe, Birgit Steinborn and Matthias Zachert.
The members of the Audit Committee are, as a group,
familiar with the sector in which the Company operates.
Pursuant to the German Stock Corporation Act, the
Supervisory Board must have at least one member with
expertise in the area of accounting and at least one
additional member with expertise in the auditing of
financial statements. According to the Code, expertise in
the area of accounting consists of specialist knowledge
and experience in the application of accounting prin-
ciples and internal control and risk management
systems, while expertise in the area of auditing consists
of specialist knowledge and experience in the auditing
of financial statements. Accounting and auditing also
include sustainability reporting and its audit and assur-
ance. In the person of Matthias Zachert, the Supervisory
Board and the Audit Committee have at least one mem-
ber with expertise in the area of accounting and in the
person of Dr. Werner Brandt, the Chairman of the Audit
In fiscal 2023, the Supervisory Board had six standing
committees, whose duties, responsibilities and pro-
cedures fulfill the requirements of the German Stock
Corporation Act and the Code. The chairmen of these
committees provide the Supervisory Board with regular
reports on their committees' activities.
Corporate Governance Statement
6
The Audit Committee oversees, in particular, the
accounting and the accounting process and conducts a
preliminary review of the Annual Financial Statements
of Siemens AG, the Consolidated Financial Statements of
the Siemens Group and the Combined Management Re-
port of Siemens AG and the Siemens Group, including
non-financial matters. On the basis of the independent
auditors' report on their audit of the annual financial
statements, the Audit Committee makes, after its prelim-
inary review, recommendations regarding Supervisory
Board approval of the Annual Financial Statements of
Siemens AG and the Consolidated Financial Statements
of the Siemens Group. The Audit Committee discusses
the quarterly statements and Half-year Financial Report
with the Managing Board and the independent auditors
and deals with the auditors' reports on the review of the
Half-year Consolidated Financial Statements and Interim
Group Management Report. The Audit Committee con-
cerns itself with sustainability reporting, which includes
the Sustainability Report in addition to reporting on
non-financial matters in the Combined Management
Report. It also monitors the Company's adherence to
statutory provisions, official regulations and internal
Company policies (compliance). The Chief Compliance
Officer reports regularly to the Audit Committee. The
Audit Committee concerns itself with the Company's risk
monitoring system. It oversees the appropriateness and
effectiveness of the risk management system and of the
internal control system with particular regard to financial
As of September 30, 2023, the Compensation Com-
mittee comprised Matthias Zachert (Chairman),
Harald Kern, Jürgen Kerner, Jim Hagemann Snabe,
Birgit Steinborn and Grazia Vittadini.
The Compensation Committee prepares, in particular,
the proposals for decisions by the Supervisory Board's
plenary meetings regarding the system of Managing
Board compensation, including the implementation of
this system in Managing Board contracts, the definition
of the targets for variable Managing Board compensa-
tion, the determination and review of the appropriate-
ness of the total compensation of the individual Manag-
ing Board members and the annual Compensation
Report. Insofar as the non-financial aspects of Managing
Board compensation are concerned, the Compensation
Committee also considers sustainability in the environ-
ment, social and governance (ESG) area.
As of September 30, 2023, the Chairman's Commit-
tee comprised Jim Hagemann Snabe (Chairman),
Dr. Werner Brandt, Jürgen Kerner and Birgit Steinborn.
The Chairman's Committee makes proposals, in particu-
lar, regarding the appointment and dismissal of Manag-
ing Board members and is responsible for concluding,
amending, extending and terminating employment con-
tracts with members of the Managing Board. When mak-
ing recommendations for first-time appointments, it
takes into account that the terms of these appointments
shall not, as a rule, exceed three years. In preparing rec-
ommendations regarding the appointment of Managing
Board members, the Chairman's Committee takes into
account the candidates' professional qualifications,
international experience and leadership qualities, the
age limit specified for Managing Board members
and long-term succession planning as well as diversity.
It also takes into account the diversity concept for the
Managing Board that has been approved by the Super-
visory Board. The Chairman's Committee concerns itself
with questions regarding the Company's corporate
governance and prepares the proposals to be approved
by the Supervisory Board regarding the Declaration of
Conformity with the Code - including the explanation of
deviations from the Code - and regarding the Corporate
Governance Statement and the Report of the Super-
visory Board to the Annual Shareholders' Meeting. It is
responsible for approving the Company's related party
transactions. Furthermore, the Chairman's Committee
submits recommendations to the Supervisory Board re-
garding the composition of the Supervisory Board com-
mittees and decides whether to approve contracts and
business transactions with Managing Board members
and parties related to them.
SUPERVISORY BOARD COMMITTEES
Details regarding the work of the Supervisory Board are
provided in the Report of the Supervisory Board, which is
made publicly available for each previous fiscal year on
the Siemens Global Website.
Corporate Governance Statement
5
The Supervisory Board has not established a dedicated
sustainability committee. Sustainability is one of the
focus topics of the Supervisory Board's work. Sustain-
ability is of such central importance for Siemens that it
is discussed regularly and in detail at the Supervisory
Board's plenary meetings. As a cross-cutting issue,
sustainability touches on the areas of responsibility of
several committees. To the extent that sustainability
affects reporting, the Audit Committee considers
sustainability-related questions in detail and reports on
these matters at the Supervisory Board's plenary meet-
ings. To prepare for discussions and decisions at these
meetings, the sustainability-related aspects of Managing
Board compensation are dealt with in the Compensation
Committee.
Separate preparatory meetings of the shareholder repre-
sentatives and of the employee representatives are held
regularly in order to prepare the Supervisory Board meet-
ings. The Supervisory Board also meets regularly without
the Managing Board in attendance. Every Supervisory
Board member must disclose conflicts of interest to the
Supervisory Board. Information regarding conflicts of
interest that may have arisen and their handling is
provided in the Report of the Supervisory Board. Special
informational (onboarding) events are held in order to
familiarize new Supervisory Board members with the
Company's business model and the structures of the
Siemens Group. The Supervisory Board members take
part, on their own responsibility, in the educational and
training measures necessary for the performance of their
duties - measures relating, for example, to changes in
the legal framework and new, groundbreaking tech-
nologies. The Company supports them in this regard.
Internal informational events are offered when necessary
to support targeted training measures.
reporting and sustainability reporting. The Audit Com-
mittee also monitors the internal audit system and the
internal process for related party transactions. The Audit
Committee receives regular reports from the internal au-
dit department. It prepares the Supervisory Board's rec-
ommendation to the Annual Shareholders' Meeting con-
cerning the election of the independent auditors and
submits the corresponding proposal to the Supervisory
Board. Prior to submitting this proposal, the Audit Com-
mittee obtains a statement from the prospective indepen-
dent auditors affirming that their independence is not in
question. Based on the decision of the Annual Share-
holders' Meeting, it awards the audit contract to the inde-
pendent auditors and monitors the independent audit of
the financial statements as well as the auditors' selection,
independence, qualification, rotation and efficiency and
the services rendered by the auditors. The Audit Commit-
tee assesses the quality of the audit of the financial state-
ments on a regular basis. Outside its meetings, the Super-
visory Board is also in regular communication with the
independent auditors via the Chairman of the Audit Com-
mittee. The Audit Committee regularly consults with the
independent auditors also without the Managing Board
in attendance. Outside its meetings, the Chairman of the
Audit Committee is in regular communication with the
independent auditors regarding the progress of the audit
and reports thereon to the Audit Committee.
Further details regarding the operation and composition
of the Supervisory Board and its committees are pro-
vided in the Bylaws for the Supervisory Board and the
bylaws for its committees, which are publicly available
on the Siemens Global Website at ☐ www.SIEMENS.COM/
→ As a group, the Managing Board shall have many
years of experience in technology (including infor-
mation technology, digitalization and cybersecu-
rity), sustainability, transformation, procurement,
manufacturing, research and development, sales,
finance, risk management, law (including compli-
ance) and human resources.
SUPERVISORY BOARD SELF-ASSESSMENT
-
10
Jointly with the Managing Board and with the support of
the Chairman's Committee, the Supervisory Board con-
ducts long-term succession planning for the Managing
Board. Long-term succession planning is systematic and
based on the strategic target setting of the Company.
Taking into account the concrete qualification require-
ments and the diversity concept that the Supervisory
Board has approved for the Managing Board's compo-
sition, the Chairman's Committee prepares ideal profiles.
When a concrete decision regarding succession is to be
made, the Chairman's Committee compiles a shortlist of
the available candidates on the basis of these profiles.
Structured interviews are then conducted with these
candidates. After the interviews, a recommendation is
submitted to the Supervisory Board for approval. When
developing the profile of requirements and selecting
candidates, the Supervisory Board and/or the Chairman's
Committee are supported, if necessary, by external
consultants.
Long-term succession planning
for the Managing Board
Siemens AG complies with the minimum participation
requirement set out in Section 76 para. 3a of the German
Stock Corporation Act. The Managing Board has one
female member, Judith Wiese. Beyond the minimum
participation requirement, the consideration of women
is a key component of the Supervisory Board's long-term
succession planning for the Managing Board. Different
age groups are represented on the Managing Board. No
Managing Board member has reached the stipulated
regular age limit.
industry, infrastructure, energy, mobility and healthcare
sectors - as well as many years of experience in tech-
nology (including information technology, digitalization
and cybersecurity), sustainability, transformation, pro-
curement, manufacturing, research and development,
sales, finance, risk management, law (including compli-
ance) and human resources.
In its current composition, the Managing Board fulfills all
the requirements of the diversity concept. The Managing
Board members have a broad range of knowledge, expe-
rience and educational and professional backgrounds as
well as international experience. The Managing Board
has all the knowledge and experience that is considered
essential in view of Siemens' activities. As a group, the
Managing Board has experience in the business areas
that are important for Siemens - in particular, in the
Implementation of the diversity concept
for the Managing Board in fiscal 2023
The diversity concept for the Managing Board is imple-
mented as part of the process for making appointments
to the Managing Board. When selecting candidates
and/or making proposals for the appointment of Manag-
ing Board members, the Supervisory Board and/or the
Chairman's Committee of the Supervisory Board take into
account the requirements defined in the diversity con-
cept for the Managing Board.
When making an appointment to a specific Managing
Board position, the decisive factor is always the Com-
pany's best interest, taking into consideration all cir-
cumstances in the individual case."
→ Diversity also means gender diversity. According to
the legal requirement applicable to Siemens AG
(Section 76 para. 3a of the German Stock Corpora-
tion Act), the Managing Board must include at least
one woman and at least one man (minimum partic-
ipation requirement). Beyond the minimum partici-
pation requirement, the consideration of women is
an essential aspect of the Supervisory Board's long-
term succession planning for the Managing Board.
→It is considered helpful if different age groups are
represented on the Managing Board. In accordance
with the recommendation of the Code, the Super-
visory Board has defined an age limit for the mem-
bers of the Managing Board. In keeping with this
limit, the members of the Managing Board are, as
a rule, to be not older than 67 years of age.
Corporate Governance Statement
9
→ As a group, the Managing Board shall have experi-
ence in the business areas that are important for
Siemens - in particular, in the industry, infrastruc-
ture, energy, mobility and healthcare sectors.
CORPORATE-GOVERNANCE.
→ Taking the Company's international orientation
into account, the composition of the Managing
Board shall reflect internationality with respect to
different cultural backgrounds and international
experience (such as extensive professional experi-
ence in foreign countries and responsibility for
business activities in foreign countries in areas that
are relevant for Siemens).
When selecting members of the Managing Board, the
Supervisory Board pays close attention to candidates'
personal suitability, integrity, convincing leadership
qualities, international experience, expertise in their
prospective areas of responsibility, achievements to
date and knowledge of the Company as well as their
ability to adjust business models and processes in a
changing world. Diversity with respect to such charac-
teristics as age and gender as well as professional and
educational background is an important selection cri-
terion for appointments to Managing Board positions.
When selecting members of the Managing Board, the
Supervisory Board also gives special consideration to
the following factors:
"The goal of this diversity concept is to achieve a com-
position that is as diverse as possible and comprises
individuals who complement one another in a Manag-
ing Board that provides strong leadership and brings
different perspectives to the management of the
Company as well as to ensure that, as a group, the
members of the Managing Board have all the know-
how and skills that are considered essential in view of
Siemens' activities.
For the composition of the Managing Board, the follow-
ing diversity concept applies:
6. Diversity concept for the
Managing Board and long-term
succession planning
Statutory provisions on the equal participation of men and
women in management positions that may be applicable to
Group companies other than Siemens AG remain unaffected.
The composition of the Supervisory Board fulfilled the
legal requirements regarding the minimum gender quota
in the reporting period.
When filling managerial positions at the Company, the
Managing Board takes diversity into account and, in partic-
ular, aims for an appropriate consideration of women and
internationality. In May 2022, in compliance with the
German legal requirements set out in Section 76 para. 4 of
the German Stock Corporation Act, the Managing Board set
the targets for the percentage of women in management
positions at Siemens AG that will apply until September 30,
2025, as follows: 30% for the first management level below
the Managing Board and 25% for the second management
level below the Managing Board. On the basis of projected
employee figures, women will, accordingly, hold a total
of four of the 13 positions at Siemens AG at the first
management level below the Managing Board and a
total of 32 of the 126 positions at Siemens AG at the
second management level below the Managing Board.
For the Siemens Group worldwide, the targets set out in
the Companywide DEGREE sustainability framework
continue to apply without change.
Pursuant to the German Stock Corporation Act, the Man-
aging Board of Siemens AG must include at least one
woman and at least one man (minimum participation
requirement). In fiscal 2023, Siemens AG complied with
this requirement. Beyond the minimum participation re-
quirement, the consideration of women is an essential
aspect of the Supervisory Board's long-term succession
planning for the Managing Board.
5. Targets, within the meaning
of Section 76 para. 4 of the
German Stock Corporation Act,
for the quota of women at the
two management levels below
the Managing Board; Information
on Managing Board compliance
with the participation require-
ment and Supervisory Board
compliance with minimum
gender quota requirements
Corporate Governance Statement
8
The Supervisory Board and its committees regularly con-
duct reviews - either internally or with the involvement
of external consultants in order to determine how
efficiently they perform their duties. In fiscal 2023, the
Supervisory Board conducted an internal self-assess-
ment. At its meeting on September 22, 2023, the Super-
visory Board concerned itself intensively with the results
of the assessment and the measures to be derived from
it. The results of the assessment confirm that coopera-
tion within the Supervisory Board and with the Manag-
ing Board is professional, constructive and characterized
by a high degree of trust and openness. The results also
confirm that meetings are organized and conducted
efficiently and that the participants receive sufficient
information. The composition and structure of the
Supervisory Board, including the structure and mecha-
nisms of its committees, were assessed as effective and
efficient. The review did not reveal a need for any funda-
mental changes. Individual suggestions for improvement
are also discussed and implemented during the year.
-
→In addition to the expertise and management and
leadership experience required for their specific
tasks, the Managing Board members shall have the
broadest possible range of knowledge and experi-
ence and the widest possible educational and pro-
fessional backgrounds.
wide sustainability strategy and on the status of this
strategy's implementation. The Supervisory Board deals
with both the risks and the opportunities for Siemens
relating to social and environmental factors and the
environmental and social impact of the Company's activ-
ities. The Supervisory Board and the Audit Committee
also concern themselves with sustainability reporting,
which includes the Sustainability Report in addition to re-
porting on non-financial matters in the Combined Man-
agement Report, and are kept up to date on new
developments and the status of their implementation at
Siemens. In addition, the Supervisory Board appoints and
dismisses the members of the Managing Board and
determines each member's portfolios. The Supervisory
Board approves - on the basis of a proposal by the
Compensation Committee – the compensation system for
Managing Board members and defines their concrete com-
pensation in accordance with this system. It sets the indi-
vidual targets for the variable compensation and the total
compensation of each individual Managing Board mem-
ber, reviews the appropriateness of total compensation
and regularly reviews the Managing Board compensation
system. Important Managing Board decisions
such as
those regarding major acquisitions, divestments, fixed as-
set investments or financial measures - require Supervi-
sory Board approval unless the Bylaws for the Supervisory
Board specify that such authority be delegated to the Inno-
vation and Finance Committee of the Supervisory Board.
Siemens AG is subject to German corporate law. There-
fore, it has a two-tier board structure, consisting of a
Managing Board and a Supervisory Board. The duties and
The Supervisory Board of Siemens AG has 20 members.
As stipulated by the German Codetermination Act, half of
its members represent Company shareholders, and half
represent Company employees. The shareholder repre-
sentatives on the Supervisory Board are elected at the
Annual Shareholders' Meeting by a simple majority vote.
Elections to the Supervisory Board are conducted, as a
rule, on an individual basis. The employee representa-
tives on the Supervisory Board are elected in accordance
with the provisions of the German Codetermination Act.
Further information regarding the Supervisory Board
members and their memberships, which are to be
disclosed pursuant to Section 285 No. 10 of the German
Commercial Code, are set out in Section 11 of this
Corporate Governance Statement. The curricula vitae of
the Supervisory Board members are publicly available
on the Siemens Global Website at ☐ www.SIEMENS.COM/
SUPERVISORY-BOARD and updated annually.
According to the suggestion in A.8 of the Code, in the
case of a takeover event, the Managing Board should
convene an Extraordinary General Meeting at which
shareholders will discuss the takeover offer and may
Siemens AG voluntarily complies with the Code's sugges-
tions, with only the following exception:
Suggestions of the Code
3. Information on corporate
governance practices
CORPORATE-GOVERNANCE.
The Compensation Report and the Independent Auditor's
Report in accordance with Section 162 of the German
Stock Corporation Act, the compensation system for the
Managing Board members pursuant to Section 87a
para. 1 and para. 2 sent. 1 of the German Stock Corpora-
tion Act and the decision of the Annual Shareholders'
Meeting pursuant to Section 113 para. 3 of the German
Stock Corporation Act regarding the compensation of
the Supervisory Board members are published on
the Siemens Global Website at ☐ wWW.SIEMENS.COM/
2. Compensation Report/
Compensation system
Siemens AG complies, and will continue to comply,
with all the recommendations of the Government
Commission on the German Corporate Governance
Code in the version of April 28, 2022 ("Code"), pub-
lished by the Federal Ministry of Justice in the official
section of the Federal Gazette (Bundesanzeiger).
"Declaration of Conformity by the Managing Board and
the Supervisory Board of Siemens Aktiengesellschaft
with the German Corporate Governance Code pursu-
ant to Section 161 of the German Stock Corporation
Act
The Managing Board and the Supervisory Board of
Siemens AG approved the following Declaration of
Conformity pursuant to Section 161 of the German Stock
Corporation Act (Aktiengesetz, AktG) as of October 1,
2023:
1. Declaration of Conformity
with the German Corporate
Governance Code
COM/DECLARATIONOFCONFORMITY.
The current Declaration of Conformity and the Declara-
tions of Conformity of the previous five years are avail-
able on the Siemens Global Website at www.SIEMENS.
The Managing Board The Supervisory Board"
Siemens Aktiengesellschaft
Berlin and Munich, October 1, 2023
As of February 10, 2023, the date of its last Declaration
of Conformity, Siemens AG complied with all the
recommendations of the Code.
CORPORATE-GOVERNANCE.
In this Statement, the Managing Board and the Super-
visory Board report as of November 9, 2023, on corporate
governance at the Company in fiscal 2023 (October 1,
2022, to September 30, 2023) pursuant to Sections 289f
and 315d of the German Commercial Code (Handels-
gesetzbuch, HGB) and as prescribed in Principle 23 of the
German Corporate Governance Code ("Code"). Further
information regarding corporate governance - for exam-
ple, the Bylaws for the Managing Board, the Bylaws for
the Supervisory Board, the bylaws for the Supervisory
Board committees and the Corporate Governance State-
ments of the previous fiscal years is also available
on the Siemens Global Website at www.SIEMENS.COM/
The Supervisory Board oversees and advises the Manag-
ing Board in its management of the Company's business.
At regular intervals, the Supervisory Board discusses
business development, planning, strategy (including
sustainability strategy) and strategy implementation.
It reviews the Annual Financial Statements of
Siemens AG, the Consolidated Financial Statements of
the Siemens Group, the Combined Management Report
of Siemens AG and the Siemens Group (including non-
financial matters), and the proposal for the appropriation
of net income. It approves the Annual Financial State-
ments of Siemens AG as well as the Consolidated Finan-
cial Statements of the Siemens Group, based on the
results of the preliminary review conducted by the Audit
Committee and taking into account the reports of the
independent auditors. The Supervisory Board approves
the Managing Board's proposal for the appropriation of
net income and the Report of the Supervisory Board to
the Annual Shareholders' Meeting. The Supervisory
Board is jointly responsible with the Managing Board for
the preparation of the Compensation Report. In addition,
the Company's adherence to statutory provisions, official
regulations and internal Company policies (compliance)
are monitored by the Supervisory Board and/or the Audit
Committee. The Supervisory Board's oversight and
advisory activities also encompass, in particular, sustain-
ability-related topics in the environment, social and
governance (ESG) area. The Managing Board reports
regularly to the Supervisory Board on Siemens' Company-
pursuant to Sections 289f and 315d
of the German Commercial Code
Corporate Governance Statement
SIEMENS
October 2023
pursuant to Sections 289f and 315d
of the German Commercial Code
Statement
Corporate Governance
2
Corporate Governance Statement
Corporate Governance Statement
decide on corporate actions. The convening of a share-
holders' meeting - even taking into account the short-
ened time limits stipulated in the German Securities
Acquisition and Takeover Act (Wertpapiererwerbs- und
Übernahmegesetz, WpÜG) – is an organizational chal-
lenge for large publicly listed companies. It appears doubt-
ful whether the associated effort is justified also in cases
where no relevant decisions by the shareholders' meeting
are intended. Therefore, extraordinary shareholders'
meetings shall be convened only in appropriate cases.
-
Supervisory Board
Corporate Governance Statement
4
Further details regarding the operation and composition
of the Managing Board are provided in the Bylaws for
the Managing Board, which are publicly available on
the Siemens Global Website at ☐ WWW.SIEMENS.COM/
The members of the Managing Board are subject to a
comprehensive prohibition on competitive activity for the
period of their employment at Siemens AG. They are com-
mitted to serving the interest of the Company. When mak-
ing their decisions, they may not be guided by personal
interests, nor may they exploit for their own advantage
business opportunities offered to the Company. Manag-
ing Board members may engage in secondary activities -
in particular, hold supervisory board positions outside the
Siemens Group - only with the approval of the Chairman's
Committee of the Supervisory Board. The Supervisory
Board is responsible for decisions regarding any adjust-
ments to Managing Board compensation that are neces-
sary in order to take account of compensation for second-
ary activities. Every Managing Board member is under an
obligation to disclose conflicts of interest without delay to
the Chairman of the Supervisory Board and to inform the
other members of the Managing Board thereof.
The Managing Board and the Supervisory Board cooper-
ate closely for the benefit of the Company. The Managing
Board informs the Supervisory Board regularly, compre-
hensively and without delay on all issues of importance
to the entire Company with regard to strategy (including
the Company's sustainability strategy), planning, business
development, financial position, results of operations,
compliance and entrepreneurial risks. At regular inter-
vals, the Managing Board also discusses the status of
strategy implementation with the Supervisory Board.
transactions in a particular Managing Board portfolio
that are considered to be extraordinarily important
for the Company or associated with an extraordinary
economic risk require the prior consent of the full
Managing Board. The same applies to activities and
transactions for which the President and CEO or another
member of the Managing Board demands a prior decision
by the Managing Board. The President and CEO is respon-
sible for the coordination of all Managing Board port-
folios. The Managing Board had no standing committee
in fiscal 2023. Further details are available in the Bylaws
for the Managing Board on the Siemens Global Website
at www.SIEMENS.COM/BYLAWS-MANAGINGBOARD.
As a rule, the portfolio assigned to an individual member
is that member's own responsibility. Activities and
The Supervisory Board has issued Bylaws for the
Managing Board that contain the assignment of different
portfolios and the rules for cooperation both within the
Managing Board and between the Managing Board and
the Supervisory Board as well as rules for the so-called
Equity Investments. In accordance with these Bylaws, the
Managing Board is divided into the portfolio of the
President and CEO and a variety of Managing Board port-
folios. The Managing Board members responsible for the
individual Managing Board portfolios are defined in a
business assignment plan that is determined by the
Supervisory Board. As the Managing Board member
with responsibility for the People & Organization port-
folio, the Labor Director (Arbeitsdirektor) is appointed in
accordance with the requirements of Section 33 of the
German Codetermination Act (Mitbestimmungsgesetz,
MitbestG). When making recommendations for the first-
time appointments of Managing Board members, it is to
be taken into account that the terms of these appoint-
ments shall not, as a rule, exceed three years.
SUSTAINABILITYINFORMATION.
The Managing Board prepares the Company's Quarterly
Statements and Half-year Financial Report, the Annual
Financial Statements of Siemens AG, the Consolidated
Financial Statements of the Siemens Group and the
Combined Management Report of Siemens AG and the
Siemens Group. Together with the Supervisory Board, the
Managing Board prepares the Compensation Report. The
Managing Board has established an appropriate and
effective internal control system and risk management
system that also covers sustainability-related aspects.
In addition, it ensures that the Company adheres to
statutory requirements, official regulations and internal
Company policies and works to achieve compliance with
these provisions and policies within the Siemens Group.
The Managing Board has established a comprehensive
compliance management system oriented toward
the Company's risk situation. Protection is offered to
employees and third parties who provide information
on unlawful behavior within the Company. Details on
the compliance management system are available on
the Siemens Global Website at ☐ wWW.SIEMENS.COM/
SUSTAINABILITYINFORMATION.
on the Siemens Global Website at WWW.SIEMENS.COM/
BYLAWS-MANAGINGBOARD.
3
Further corporate governance practices applied beyond
the applicable legal requirements are described in our
Business Conduct Guidelines, which are publicly available
on the Siemens Global Website at WWW.SIEMENS.COM/
Corporate Governance Statement
COMPLIANCE.
In its more than 175 years of existence, our Company has
built an excellent reputation around the world. Technical
performance, innovation, quality, reliability and inter-
national engagement have made Siemens a leading
company in its areas of activity. It is top performance with
the highest ethics that has made Siemens strong. This is
what the Company will continue to stand for in the future.
The Business Conduct Guidelines provide the ethical and
legal framework within which we want to conduct our
activities and remain on course for success. They contain
the basic principles and rules for our conduct within our
Company and in relation to our external partners and the
general public. They set out how we meet our ethical and
legal responsibility as a Company and give expression to
our Company values: "Responsible" - "Excellent" - "Inno-
vative." Our Business Conduct Guidelines are publicly
available on the Siemens Global Website at www.
SIEMENS.COM/COMPLIANCE.
The Company's values and Business
Conduct Guidelines
powers of the Managing Board and the Supervisory
Board as well as the regulations regarding their operation
and composition are defined primarily by the German
Stock Corporation Act, the Articles of Association of
Siemens AG and the bylaws for the Company's governing
bodies. The Articles of Association of Siemens AG, the
Bylaws for the Managing Board, the Bylaws for the
Supervisory Board and the bylaws for the Supervisory
Board's most important committees are available on
the Siemens Global Website at ☐ WWW.SIEMENS.COM/
CORPORATE-GOVERNANCE.
Managing Board
In fiscal 2023, the Managing Board of Siemens AG
comprised Dr. Roland Busch (President and CEO),
Cedrik Neike, Matthias Rebellius, Prof. Dr. Ralf P. Thomas
and Judith Wiese. Further information regarding the
Managing Board members and their memberships, which
are to be disclosed pursuant to Section 285 No. 10 of the
German Commercial Code, are set out in Section 10 of this
Corporate Governance Statement. Information about the
Managing Board members' areas of responsibility and
their curricula vitae are available on the Siemens Global
Website at WWW.SIEMENS.COM/MANAGEMENT.
As Siemens' top management body, the Managing Board
is committed to serving the interests of the Company and
achieving sustainable growth in company value. The
members of the Managing Board are jointly responsible
for the entire management of the Company and decide on
basic issues of business policy and Company strategy,
including Siemens' sustainability strategy as well as on
the Company's annual and multi-year plans, unless
specific circumstances are taken into account for compa-
nies that are separately managed and publicly listed
themselves (Siemens Healthineers). The Companywide
DEGREE program,
which was approved by the Managing
Board in fiscal 2021, intensified the focus of all Siemens
businesses on ambitious sustainability targets - targets
for environmental and social sustainability and good
governance - even further. The Managing Board ensures
that the risks and opportunities for the Company
connected with social and environmental factors and
the environmental and social impact of the Company's
activities are systematically identified and assessed. The
Company strategy gives due consideration to long-term
targets as well as to environmental and social objectives.
Company planning encompasses both the appropriate
financial targets and the appropriate sustainability-related
objectives. More details on sustainability are available
4. Description of the operation
of the Managing Board and the
Supervisory Board and of the
composition and operation of
their committees
September 3, February 24,
Diversity
March 1,
1963
December 12,
1968
March 19,
1963
1954
January 3,
Date of birth
No overboarding'
January 27,
2015
Personal qualification
January 31,
2018
February 3,
2021
October 1,
2013
February 3,
2021
January 31,
2018
February 9,
2023
February 9,
2023
1957
Independence¹
1962
Male
1965
February 9,
2023
German
Danish
French
German
German US-American Australian
Nationality
Female
Male
Female
Male
Male
Female
Female
Female
Male
Gender
1967
October 27, September 23, November 8,
1969
July 14,
1971
January 31,
2018
Danish
Grazia
Vittadini
No more than two former members of the Managing
Board of Siemens AG shall belong to the Supervisory
Board.
The Supervisory Board shall include what the share-
holder representatives on the Supervisory Board con-
sider to be an appropriate number of independent
shareholder representatives. More than half of the
shareholder representatives shall be independent of
the Company and its Managing Board. Substantial -
and not merely temporary - conflicts of interest are to
be avoided.
Independence
Committee shall continue to include at least one
female member.
Corporate Governance Statement
11
In accordance with the German Stock Corporation
Act, the Supervisory Board is composed of at least
30% women and at least 30% men. The Nominating
With regard to the composition of the Supervisory
Board, attention shall be paid to achieving sufficient
diversity. Not only is appropriate consideration to be
given to women. Diversity of cultural heritage and a
wide range of educational and professional back-
grounds, experiences and ways of thinking are also to
be promoted. When considering possible candidates
for new elections or for filling Supervisory Board
positions that have become vacant, the Supervisory
Board shall give appropriate consideration to diversity
at an early stage in the selection process.
Diversity
Taking the Company's international orientation into
account, care shall be taken to ensure that the Super-
visory Board has an adequate number of members
with extensive international experience. The goal is to
make sure that the present considerable share of
Supervisory Board members with extensive inter-
national experience is maintained.
Internationality
When a new member is to be appointed, a review
shall be performed to determine which of the areas
of expertise deemed desirable for the Supervisory
Board are to be strengthened.
Board must have knowledge and expertise in the area
of accounting, and at least one additional member of
the Supervisory Board must have knowledge and
expertise in the auditing of financial statements. The
expertise in the field of accounting shall consist of
special knowledge and experience in the application
of accounting principles and internal control and risk
management systems and the expertise in the field of
auditing shall consist of special knowledge and
experience in the auditing of financial statements.
Accounting and auditing also include sustainability
reporting and its audit and assurance. The chairman
of the audit committee shall have appropriate exper-
tise in at least one of the two areas and shall be inde-
pendent. In particular, the Supervisory Board shall
also include members who have leadership experi-
ence as senior executives or members of a supervisory
board (or comparable body) at a major company with
international operations.
The goal is to ensure that, in the Supervisory Board, as
a group, all the knowhow and experience is available
that is considered essential in view of Siemens' acti-
vities. This includes, for instance, knowledge and
experience in the areas of technology (including infor-
mation technology, digitalization and cybersecurity),
sustainability, transformation, procurement, manu-
facturing, research and development, sales, finance,
risk management, law (including compliance) and
human resources. In addition, the members of the
Supervisory Board shall collectively have knowledge
and experience in the business areas that are impor-
tant for Siemens, in particular, in the areas of industry,
infrastructure, energy, mobility and healthcare. As a
group, the members of the Supervisory Board are to
be familiar with the sector in which the Company
operates. In accordance with the German Stock Cor-
poration Act, at least one member of the Supervisory
Profile of required skills and expertise
The candidates proposed for election to the Super-
visory Board shall have the knowledge, skills and
experience necessary to carry out the functions of a
Supervisory Board member in a multinational com-
pany oriented toward the capital markets and to safe-
guard the reputation of Siemens in public. In particu-
lar, care shall be taken with regard to the personality,
integrity, commitment and professionalism of the
individuals proposed for election.
"The composition of the Supervisory Board of
Siemens AG shall be such that the Supervisory Board's
ability to effectively monitor and advise the Managing
Board is ensured. In this connection, mutually comple-
mentary collaboration among members with a wide
range of personal and professional backgrounds
and diversity with regard to internationality, age and
gender are considered helpful.
In September 2022, the Supervisory Board approved the
objectives for its composition including the profile of
required skills and expertise and the diversity concept:
7. Objectives regarding the
Supervisory Board's composition
as well as the profile of required
skills and expertise and the
diversity concept for the Super-
visory Board
Corporate Governance Statement
The Supervisory Board members shall have sufficient
time to exercise their mandates with the necessary
regularity and diligence.
Limits on age and on length of
membership
In compliance with the age limit stipulated by the Super-
visory Board in its Bylaws, only individuals who are no
older than 70 years of age shall, as a rule, be nominated
for election to the Supervisory Board. Nominations shall
take into account the regular limit established by the
Supervisory Board, which restricts membership on the
Supervisory Board to a maximum of three full terms of
office. It is considered helpful if different age groups are
represented on the Supervisory Board."
Implementation of the objectives
regarding the Supervisory Board's
composition as well as the profile of
required skills and expertise and the
diversity concept for the Supervisory
Board in fiscal 2023; Independent
members of the Supervisory Board
Within the framework of the selection process and
the nomination of candidates for the Supervisory Board,
the Supervisory Board as well as the Nominating Com-
mittee of the Supervisory Board take into account the
objectives regarding the Supervisory Board's composition
and the requirements defined in its diversity concept.
In preparing the nominations of the seven shareholder
representatives elected by the 2023 Annual Shareholders'
Meeting, the Supervisory Board and the Nominating
Committee took these objectives - including the profile
Jim
Hagemann
Snabe
Nathalie
von
Siemens
(Dr. phil.)
Kasper
Rørsted
Benoît
Potier
Merz
Martina
Keryn Lee
James
Dugan
(PhD)
Regina E.
Matthias
Zachert
Werner
Brandt
(Dr. rer. pol.)
Length of membership Member since
Shareholder representatives
Qualification matrix
12
The implementation status of the profile of required skills
and expertise is disclosed below in the form of a qualifi-
cation matrix.
In the estimation of the shareholder representatives, the
Supervisory Board now includes ten independent share-
holder representatives namely, Dr. Werner Brandt,
Dr. Regina E. Dugan, Keryn Lee James, Martina Merz,
Benoît Potier, Kasper Rørsted, Dr. Nathalie von Siemens,
Jim Hagemann Snabe, Grazia Vittadini and
Matthias Zachert and thus an appropriate number of
members who are independent within the meaning of
the Code. The regulations establishing limits on age and
restricting membership in the Supervisory Board to three
full terms of office are complied with.
The Supervisory Board is of the opinion that, with its
current composition, it meets the objectives for its compo-
sition and fulfills the profile of required skills and expertise
as well as the diversity concept. The Supervisory Board
members have the specialist and personal qualifications
considered necessary. As a group, they are familiar with the
sector in which the Company operates and have the knowl-
edge, skills and experience essential for Siemens in the
areas of technology (including information technology,
digitalization and cybersecurity), transformation, procure-
ment, manufacturing, research and development, sales,
finance, risk management, law (including compliance) and
human resources. Due to the presence in the Supervisory
Board of expertise in the sustainability-related matters
important for Siemens, the Supervisory Board is in a
position to monitor the way in which environmental and
social sustainability is taken into consideration in the
Company's strategic orientation and in Company planning.
Knowledge and experience in the business areas important
for Siemens - in particular, in the industry, infrastructure,
energy, mobility and healthcare sectors - are also present
in the Supervisory Board. A considerable number of Super-
visory Board members are engaged in international activi-
ties and/or have many years of international experience.
Appropriate consideration has been given to diversity in
the Supervisory Board. The Supervisory Board currently has
nine female members, of whom five are shareholder repre-
sentatives and four are employee representatives. As a
result, 45% of the Supervisory Board members are women.
Dr. Nathalie von Siemens is a member of the Nominating
Committee.
-
of required skills and expertise and the diversity con-
cept into consideration.
Corporate Governance Statement
Italian/
German
Positions outside Germany:
International
experience
C3.ai, Inc., USA³
Positions outside Germany:
Memberships in supervisory boards
whose establishment is required by law
or in comparable domestic or foreign
controlling bodies of business enterprises
(as of September 30, 2023)
Corporate Governance Statement
4 Shareholders' Committee.
3 Publicly listed.
2
German
2018
2027
January 31,
September 3,
1957
2028
February 9,
2023
June 2,
1969
2027
February 9,
2023
March 1,
1963
2028
January 25,
2012
January 22,
1969
2028
January 24,
2008
→ Northvolt AB, Sweden (Chairman)
→ Urban Partners A/S, Denmark
(Deputy Chairman)
German positions:
→ RWE AG, Essen (Chairman)³
(Deputy Chairman)³
→ Thyssenkrupp AG, Essen
Munich
→Siemens Energy Management GmbH,
→ Siemens Energy AG, Munich³
(Deputy Chairman)
→ MAN Truck & Bus SE, Munich
→ Airbus GmbH, Hamburg
German positions:
→ OPUS Talent Solutions, UK
(Chair)
Positions outside Germany:
March 16,
1960
→ Siemens Mobility GmbH, Munich
(Deputy Chairwoman)
→ Siemens Energy AG, Munich³
→Siemens Energy Management GmbH,
Munich
→ Airbus Defence and Space GmbH,
Taufkirchen
German positions:
→ HPE, Houston, Texas, USA³
Positions outside Germany:
Bad Homburg (Deputy Chairman)³
→ Fresenius SE & Co. KGaA,
Bad Homburg
→ Fresenius Management SE,
→ Allianz SE, Munich (Chairman)³
German positions:
German positions:
2027
February 9,
2023
December 12,
1968
June 21,
1970
IG Metall Regional Office for Bavaria
Trade Union Secretary,
Andrea Fehrmann²
(Dr. phil.)
(since February 9, 2023)
2027
February 9,
2023
March 19,
1963
of Wellcome Leap Inc.
(PhD)
President and Chief Executive Officer
January 31,
2018
Regina E. Dugan
January 24,
2008
December 23,
1954
2028
October 16,
2020
October 10,
1979
Chairman of the Supervisory Board
of Allianz SE
Central Works Council and of the
Combine Works Council of Siemens AG
Deputy Chairman of the
2027
January 31,
2018
January 3,
1954
2023
→ Traton SE, Munich³
2028
Chairwoman of the Combine
Works Council of Siemens AG
2028
September 14,
2023
April 25,
1968
2028
April 1,
2007
March 14,
1959
Chairman of the Board of Directors
of L'Air Liquide S.A.
Benoît Potier
Innovation manager at Siemens Mobility
GmbH, member of the Combine Works
Council of Siemens AG and of the Central
Works Council of Siemens Mobility GmbH
(since February 9, 2023)
Christian Pfeiffer²
(Dr.-Ing.)
Bettina Haller²
Member of supervisory boards
of the Managing Board of IG Metall
Chief Treasurer and Executive Member
Siemens Europe Committee
Chairman of the
of OPUS Talent Solutions
Jürgen Kerner²
Harald Kern²
Keryn Lee James
(since February 9, 2023)
Chair of the Board of Directors
Head of the Regional Office Erlangen/Nurem-
berg, Germany, Chairman of the Committee
of Spokespersons of the Siemens Group
and Chairman of the Central Committee
of Spokespersons of Siemens AG
Oliver Hartmann²
(since September 14,
2023)
Martina Merz
(since February 9, 2023)
→ AB Volvo, Gothenburg, Sweden³
German positions:
→ Siemens Mobility GmbH, Munich
(Chairman)
Corporate Governance Statement
4 Shareholders' Committee.
3 Publicly listed.
2 Employee representative.
1 As a rule, the term of office ends at the conclusion of the (relevant) ordinary Annual Shareholders' Meeting.
2018
2023
January 31,
June 21,
1965
Works Council of Siemens Industry
Software GmbH
Member of the Central
Memberships in supervisory boards
whose establishment is required by law
or in comparable domestic or foreign
controlling bodies of business enterprises
(as of September 30, 2023)
Gunnar Zukunft²
(until February 9, 2023)
(as of February 9, 2023)
January 31,
2018
November 8,
1967
2025
February 3,
2021
September 23,
1969
2028
October 1,
2017
August 3,
1969
2028
March 1,
2014
September 13,
1957
2027
Management of LANXESS AG³
German positions:
→ Henkel AG & Co. KGaA, Düsseldorf 3,4
→ Henkel Management AG, Düsseldorf
Positions outside Germany:
2
For technical reasons, there may be differences between the accounting records appearing in this document and those published pursuant
to legal requirements.
This document is an English language translation of the German document. In case of discrepancies, the German language document is
the sole authoritative and universally valid version.
Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and
percentages may not precisely reflect the absolute figures.
This document includes – in the applicable financial reporting framework not clearly defined – supplemental financial measures that are
or may be alternative performance measures (non-GAAP-measures). These supplemental financial measures should not be viewed in
isolation or as alternatives to measures of Siemens' net assets and financial positions or results of operations as presented in accordance
with the applicable financial reporting framework in its Consolidated Financial Statements. Other companies that report or describe
similarly titled alternative performance measures may calculate them differently.
-
This document contains statements related to our future business and financial performance and future events or developments involving
Siemens that may constitute forward-looking statements. These statements may be identified by words such as "expect," "look forward
to," "anticipate," "intend," "plan," "believe," "seek," "estimate," "will," "project" or words of similar meaning. We may also make forward-
looking statements in other reports, in prospectuses, in presentations, in material delivered to shareholders and in press releases. In
addition, our representatives may from time to time make oral forward-looking statements. Such statements are based on the current
expectations and certain assumptions of Siemens' management, of which many are beyond Siemens' control. These are subject to a
number of risks, uncertainties and factors, including, but not limited to, those described in disclosures, in particular in the chapter Report
on expected developments and associated material opportunities and risks in the Combined Management Report of the Siemens Report
(siemens.com/siemensreport). Should one or more of these risks or uncertainties materialize, should decisions, assessments or
requirements of regulatory authorities deviate from our expectations, should events of force majeure, such as pandemics, unrest or acts
of war, occur or should underlying expectations including future events occur at a later date or not at all or assumptions prove incorrect,
actual results, performance or achievements of Siemens may (negatively or positively) vary materially from those described explicitly or
implicitly in the relevant forward-looking statement. Siemens neither intends, nor assumes any obligation, to update or revise these
forward-looking statements in light of developments which differ from those anticipated.
Notes and forward-looking statements
SIEMENS
Notes and forward-
looking statements
18
→ Bayerische Motoren Werke Aktien-
gesellschaft, Munich (Chairman)³
→ Siemens Industry Software GmbH,
Cologne
→ The Exploration Company GmbH,
Gilching
German positions:
→ Siemens Healthcare GmbH, Munich
German positions:
→ EssilorLuxottica SA, France³
Positions outside Germany:
→Siemens Healthcare GmbH, Munich
→ Siemens Healthineers AG, Munich³
→ TÜV Süd AG, Munich
Bad Soden am Taunus
→ Messer SE & Co. KGaA,
German positions:
→ A.P. Møller-Mærsk A/S, Denmark³
German positions:
Chairman of the Supervisory Board
of RWE AG
Chairman of the Board of
Special Advisor of Rolls-Royce Holdings plc³
April 26,
1967
School of Economics
Director of the London
Member of supervisory boards
Chairman of the Supervisory Board
of Bayerische Motoren Werke
Aktiengesellschaft
2023
January 27,
2015
2028
January 30,
2019
Trade Union Secretary of the
Managing Board of IG Metall
Term
expires¹
May 29,
1956
Member since
Occupation
(DBE, DPhil)
Nemat Shafik
Baroness
Kasper Rørsted
Norbert Reithofer
(Dr.-Ing. Dr.-Ing. E.h.)
(until February 9, 2023)
(as of February 9, 2023)
Hagen Reimer²
Name
17
→ L'Air Liquide S.A., France (Chairman)³
Positions outside Germany:
Date of birth
(since October 17, 2023)
February 24,
1962
2025
(until October 17, 2023),
of Rolls-Royce Holdings plc³
and member of the Executive Team
Chief Technology Officer
Chairwoman of the Central Works
Council of Siemens Healthcare GmbH
of Spokespersons of the Siemens Group
and Chairman of the Central Committee
of Spokespersons of Siemens AG
Chairman of the Committee
Matthias Zachert
Grazia Vittadini
Dorothea Simon²
Michael Sigmund²
(until August 31, 2023)
(as of August 31, 2023)
February 3,
2021
(Dr. phil.)
January 27,
2015
July 14,
1971
von Siemens
Member of supervisory boards
Nathalie
(as of February 9, 2023)
(until February 9, 2023)
2018
2023
January 31,
August 13,
1962
2027
2028
1 As a rule, the term of office ends at the conclusion of the (relevant) ordinary Annual Shareholders' Meeting.
Employee representative.
March 26,
1960
Female
Male
Male
Male
Male
Male
Female
Female
Male
1960
Female
1969
March 26,
August 3,
April 26,
June 2,
1969
January 22,
1969
March 16,
1960
April 25,
1968
March 14,
1959
June 21,
1970
October 10,
1979
1967
Date of birth
German
German
Human resources
Risk management
Legal/compliance
Financial expert²
Finance
facturing/sales/R&D
Procurement/manu-
Transformation
Sustainability
Technology
qualification
German
Leadership experience
International experience
Nationality
Gender
German
German
German
German
German
German
German
Professional
Diversity
2008
January 24,
13
● Criterion met, based on a self-assessment by the Supervisory Board. A dot means at least "good knowledge" and thus the ability to understand the relevant issues well and make
informed decisions on the basis of existing qualifications, the knowledge and experience acquired in the course of work as a member of the Supervisory Board (for example, many
years of service on the Audit Committee) or the training measures regularly attended by all members of the Supervisory Board.
2 According to Section 100 para. 5 of the German Stock Corporation Act and recommendation D.3 of the GCGC.
1 According to the German Corporate Governance Code (GCGC).
business area/sector
Familiarity with
Human resources
Legal/compliance
Risk management
Financial expert²
Employee representatives
Finance
Procurement/manu-
Transformation
Sustainability
Technology
Leadership experience
Professional
qualification
Asia/Pacific
China
Americas
Europe
facturing/sales/R&D
Corporate Governance Statement
Andrea
Tobias
October 1,
2017
2019
January 30,
February 9,
2023
January 25,
2012
January 24,
2008
September
14, 2023
April 1,
2007
January 31,
2018
October 16,
2020
Length of membership Member since
Birgit
Steinborn
January 24,
2008
Hagen
Reimer
Christian
Pfeiffer
(Dr.-Ing.)
Jürgen
Kerner
Harald
Kern
Oliver
Hartmann
Haller
(Dr. phil.)
Bäumler
Bettina
Fehrmann
Familiarity with
business area/sector
Dorothea
Simon
2 According to Section 100 para. 5 of the German Stock Corporation Act and recommendation D.3 of the GCGC.
(Deputy Chairman)
→ Siemens Ltd., Saudi Arabia
→ Siemens Ltd., India¹
→ Arabia Electric Ltd. (Equipment),
Saudi Arabia (Deputy Chairman)
Positions outside Germany:
→ Siemens France Holding SAS, France
→ Siemens Aktiengesellschaft Österreich,
Austria (Chairman)
Positions outside Germany:
→ Siemens Healthineers AG, Munich'
→ Siemens Mobility GmbH, Munich
(Chairman)
German positions:
(as of September 30, 2023)
Group company positions
→ Siemens Energy Management GmbH,
Munich
→ Siemens Energy AG, Munich'
German positions:
→ Siemens Energy Management GmbH,
Munich
→ Siemens Energy AG, Munich'
German positions:
→ Evonik Industries AG, Essen¹
German positions:
(as of September 30, 2023)
or in comparable domestic or foreign controlling bodies of business enterprises
External positions
Memberships in supervisory boards whose establishment is required by law
Corporate Governance Statement
1 Publicly listed.
→ Siemens Schweiz AG, Switzerland
(Chairman)
→Siemens W.L.L., Qatar
German positions:
1 According to the German Corporate Governance Code (GCGC).
Chairwoman of the Central Works
Council of Siemens AG
2025
October 1,
2013
October 27,
1965
Term
expires¹
Member since
Date of birth
Michael Diekmann
(until February 9, 2023)
(as of February 9, 2023)
Tobias Bäumler²
Second Deputy Chairman
(Dr. rer. pol.)
October 1,
2020
Werner Brandt
Birgit Steinborn²
Jim Hagemann Snabe Chairman of the Supervisory Board
of Siemens AG
Chairman
Occupation
Name
In fiscal 2023, the Supervisory Board had the following members:
11. Members of the Supervisory Board and
positions held by Supervisory Board members
16
→ European School of Management
and Technology GmbH, Berlin
Positions outside Germany:
→Siemens Proprietary Ltd.,
South Africa (Chairman)
→ Siemens Healthineers AG,
Munich (Chairman)'
Munich (Chairman)
→Siemens Healthcare GmbH,
First Deputy Chairwoman
1971
September 30, German positions:
2028
Judith Wiese
10. Members of the Managing Board and
positions held by Managing Board members
15
CORPORATE-GOVERNANCE.
The Articles of Association of Siemens AG, the Bylaws
for the Supervisory Board, the bylaws for the most
important Supervisory Board committees, the Bylaws
for the Managing Board, our Declarations of Conformity
with the Code and a variety of other corporate-
governance-related documents are posted on the
Siemens Global Website at www.SIEMENS.COM/
As part of our investor relations activities, we inform our
investors comprehensively about developments within
the Company. For communication purposes, Siemens
makes extensive use of the Internet. We publish quarterly
statements, Half-year and Annual Financial Reports,
earnings releases, ad hoc announcements, analyst
presentations, letters to shareholders and press releases
as well as the financial calendar for the current year,
which contains the publication dates of significant
financial communications and the date of the Annual
Shareholders' Meeting, at ☐ wWW.SIEMENS.COM/INVESTORS.
The Chairman of the Supervisory Board regularly dis-
cusses Supervisory-Board-specific topics with investors.
Meeting (virtual shareholders' meeting). This authoriza-
tion applies to holding virtual shareholders' meetings in a
period of two years after the registration of this amend-
ment in the Company's commercial registers. This regis-
tration took place in May 2023.
-
Shareholders exercise their rights at the Annual Share-
holders' Meeting. An ordinary Annual Shareholders' Meet-
ing normally takes place within the first five months of
each fiscal year. The Annual Shareholders' Meeting de-
cides, among other things, on the appropriation of net
income, the ratification of the acts of the members of the
Managing and Supervisory Boards, and the appointment
of the independent auditors. Amendments to the Articles
of Association and measures that change the Company's
capital stock are approved at the Annual Shareholders'
Meeting and implemented by the Managing Board. The
Managing Board facilitates shareholder participation in
this meeting through electronic communications – in par-
ticular, via the Internet and enables shareholders who
are unable to attend the meeting to vote by proxy. Proxies
can also be reached during the Annual Shareholders'
Meeting. Furthermore, shareholders may exercise their
right to vote in writing or by means of electronic commu-
nications (absentee voting). The Managing Board may
enable shareholders to participate in the Annual Share-
holders' Meeting without the need to be present at the
venue and without a proxy and to exercise some or all of
their rights fully or partially by means of electronic com-
munications. The Company enables shareholders to follow
the entire Annual Shareholders' Meeting via the Internet.
Shareholders may submit motions regarding the proposals
● Criterion met, based on a self-assessment by the Supervisory Board. A dot means at least "good knowledge" and thus the ability to understand the relevant issues well and make
informed decisions on the basis of existing qualifications, the knowledge and experience acquired in the course of work as a member of the Supervisory Board (for example, many
years of service on the Audit Committee) or the training measures regularly attended by all members of the Supervisory Board.
January 30,
14
Corporate Governance Statement
8. Share transactions by
members of the Managing and
Supervisory Boards
Pursuant to Article 19 of EU Regulation No. 596/2014 of
the European Parliament and Council of April 16, 2014,
on market abuse (Market Abuse Regulation), members of
the Managing Board and the Supervisory Board are
legally required to disclose all transactions conducted on
their own account relating to the shares or debt instru-
ments of Siemens AG or to the derivatives or financial
instruments linked thereto if the total value of such trans-
actions entered into by a board member or any closely
associated person in any calendar year reaches or ex-
ceeds €20,000. All transactions reported to Siemens AG
in fiscal 2023 have been duly published and are available
on the Siemens Global Website at ☐ WWW.SIEMENS.COM/
DIRECTORS-DEALINGS.
of the Managing and Supervisory Boards and may contest
decisions of the Annual Shareholders' Meeting. Sharehold-
ers owning Siemens stock with an aggregate notional
value of €100,000 or more may also demand the judicial
appointment of special auditors to examine specific is-
sues. The reports, documents and information required by
law for the Annual Shareholders' Meeting, including the
Annual Financial Report, can be downloaded from the
Siemens Global Website. The same applies to the agenda
for the Annual Shareholders' Meeting and to any counter-
proposals or shareholders' nominations that may require
disclosure. For the election of shareholder representatives
on the Supervisory Board, a detailed curriculum vitae of
every candidate is published.
Pursuant to a decision by the Annual Shareholders' Meet-
ing on February 9, 2023, the Articles of Association have
been amended and the Managing Board has been autho-
rized to allow for the Annual Shareholders' Meeting to be
held without shareholders or their representatives being
9. Annual Shareholders' Meeting physically present at the place of the Annual Shareholders'
and investor relations
In fiscal 2023, the Managing Board had the following members:
=
Name
(Dr. rer. nat.)
December 14,
2026
September 18,
2013
March 7,
1961
Ralf P. Thomas
(Prof. Dr. rer. pol.)
September 30,
2025
October 1,
2020
January 2,
1965
Matthias Rebellius
May 31,
2025
2017
April 1,
March 7,
1973
First appointed Term expires
March 31,
2025
April 1,
2011
November 22,
1964
Date of birth
Cedrik Neike
Chief Executive Officer
President and
Roland Busch
Internet
Address
© 2023 by Siemens AG, Berlin and Munich
Fax
E-mail
Siemens AG
Werner-von-Siemens-Str. 1
80333 Munich
Germany
www.siemens.com
+49 (0)89 7805-33443 (Media Relations)
+49 (0)89 7805-32474 (Investor Relations)
+49 (0)89 7805-32475 (Investor Relations)
press@siemens.com
investorrelations@siemens.com
C
Phone
26
Cyber/Information security: Digital technologies are deeply integrated into our business portfolio. Further integration of information
technology into products and services in conjunction with changing business strategies (such as outsourcing, globally distributed
development, a lesser degree of sole production) are leading to an increasingly distributed supply chain, making efficient controls difficult.
The fact of a large number of suppliers requires a significant effort for the initial and regular verification of the effective implementation
of cybersecurity requirements by suppliers. Siemens business entities might lose market access if their products, solutions and services do
not comply with increased regulations and legal requirements for cybersecurity in their respective countries. We observe a global increase
of cybersecurity threats and higher levels of professionalism in computer crime, which pose a risk to the security of Siemens products,
solutions and services; to Siemens IT systems and networks; and to the confidentiality, availability and integrity of data. Like other large
multinational companies, we face active cyber threats from sophisticated adversaries that are supported by organized crime and nation-
states engaged in economic espionage or even sabotage. According to external sources of relevant data, this trend has been accelerated
by geopolitical developments and tensions worldwide. Especially the numbers of phishing attacks and malicious websites have increased
significantly. There is a risk that confidential information or data-privacy-relevant information may be stolen or that the integrity of our
portfolio may be compromised, such as by attacks on our networks, social engineering, data manipulations in critical applications, or a
loss of critical resources, resulting in financial damages and violation of data privacy laws. Moreover, the information technology market
is concentrated among a small number of information technology and software vendors, which could lead to dependence on a single
provider. There can be no assurance that the measures aimed at protecting our intellectual property and portfolio will address these threats
under all circumstances. Cybersecurity covers the IT of our entire enterprise including office IT, systems and applications, special-purpose
networks, and our operating environments such as manufacturing and R&D. We strive to mitigate these risks by employing a number of
cyber defense measures, including employee training, considering new models of flexible working environments, and comprehensive
monitoring of our networks and systems with an artificial intelligence solution to identify attacks faster, and thereby prevent damage to
society, critical infrastructures, our customers, our partners and Siemens overall. We initiated the industrial "Charter of Trust," signed by a
growing group of global companies, which sets out principles for building trust in digital technologies and creating a more secure digital
world. Nonetheless, our systems, products, solutions and services, as well as those of our service providers, remain potentially vulnerable
to attacks. Such attacks could potentially lead to the publication, manipulation or leakage of information such as through industrial
espionage. They could also result in deliberate improper use of our systems, vulnerable products, production downtimes and supply
shortages, with potential adverse effects on our reputation, our competitiveness and results of operations. For increased protection of
Siemens and reduction of a potential financial impact caused by cyber incidents, the currently insurable cybersecurity risks have been to a
partial extent transferred to a consortium of insurance companies.
in central bank policies could therefore negatively impact our financial results. Market prices show higher volatility than in the past due to
increased macroeconomic uncertainties resulting from inflation, geopolitical tensions and other factors noted above.
Competitive environment: The worldwide markets for our products, solutions and services are highly competitive in terms of pricing,
product and service quality, product development and introduction time, customer service, financing terms and shifts in market demands.
We face strong, established competitors as well as rising competitors from emerging markets and new industries, which may have a better
cost structure or offer a better customer solution. Some industries in which we operate are undergoing consolidation, which may result in
stronger competition, a change in our relative market position, an increase in inventory of finished or work-in-progress goods, or
unexpected price erosion. Furthermore, there is a risk that critical suppliers could be taken over by competitors and a risk that competitors
are increasingly offering services to our installed base. We address these risks with various measures, for example benchmarking, strategic
initiatives, sales push initiatives, executing productivity measures and target cost projects, rightsizing of our footprint, outsourcings,
mergers and joint ventures and optimizing our product and service portfolio. We continuously monitor and analyze competitive, market
and industry information in order to be able to anticipate unfavorable changes in the competitive environment rather than merely reacting
to such changes.
Combined Management Report
8.3.2 Operational risks
Disruptive technologies: The markets in which our businesses operate experience rapid and significant changes due to the introduction
of innovative and disruptive technologies. In the field of digitalization (e.g. Digital Twin, artificial intelligence, cloud computing), there are
risks associated with new competitors, substitutions for existing products/solutions/services, new business models (e.g. in terms of pricing,
financing, extended scopes for project business or subscription models in the software business), and finally the risk that our competitors
may have more advanced time-to-market strategies and introduce their disruptive products and solutions faster than Siemens. Siemens
generally differentiates its software offerings from those of other software companies through deep domain know-how. There are risks
associated with technologies such as artificial intelligence, including generative artificial intelligence, that domain expertise will not be a
significant distinguishing feature in the future, and that additional competitors may therefore emerge more easily or rapidly. Our operating
results depend to a significant extent on our technological leadership, our ability to anticipate and adapt to changes in our markets, and
our ability to optimize our cost base accordingly. Introducing new products and technologies requires a significant commitment to research
and development, which in return requires expenditure of considerable financial resources that may not always result in success. Our
results of operations may suffer if we invest in technologies that do not operate or may not be integrated as expected, or that are not
accepted in the marketplace as anticipated, or if our products, solutions or systems are not introduced to the market in a timely manner,
particularly compared to our competitors, or even become obsolete. We constantly apply for new patents and actively manage our
intellectual property portfolio to secure our technological position. However, our patents and other intellectual property may not prevent
competitors from independently developing or selling products and services that are similar to ours.
8.3.3 Financial risks
Internal programs and initiatives: We are in a continuous process of operational optimization and constantly engage in cost-reduction
initiatives, including ongoing capacity adjustment measures and structural initiatives. Consolidation of business activities and
manufacturing facilities, outsourcings, joint ventures and the streamlining of product portfolios are all part of these cost-reduction efforts.
These measures may not be implemented as planned, may turn out to be less effective than anticipated, may become effective later than
estimated or may not become effective at all. Any future contribution of these measures to our profitability will be influenced by the actual
savings achieved and by our ability to sustain them. In case of restructuring and outsourcing activities, there could be delays in product
deliveries or we might even experience delivery failures. Furthermore, delays in critical R&D projects could lead to negative impacts in
running projects. We constantly control and monitor the progress of these projects and initiatives using standardized controlling and
milestone tracking approaches.
Shortage of skilled personnel: Competition for diverse and highly qualified personnel, such as specialists and experts in technical fields,
remains intense in the industries and regions in which our businesses operate. We have ongoing demand for highly skilled people and a
need to enhance diversity, inclusion and sense of belonging in our workforce. Our future success depends in part on our continued ability
to attract engineers, tech talent and other qualified personnel. We address these topics for example by strengthening the capabilities and
skills of our talent acquisition teams and a strategy of proactive search for people with the required capabilities in our respective industries
and markets. In fiscal 2023 we rolled out our new Employer Branding in all our recruiting marketing activities and started a media campaign
with focus on tech talent in our key markets. Technology and digitalization help us to be more effective in attracting and selecting diverse
talent. In addition, we have a focus on diversity and structured succession planning. As with our existing people, we must also provide
new talent with opportunities to grow and bond, especially soon after they join us. This appears especially relevant at a time of new,
increasingly virtual working environments.
Project-related risks: A number of our segments conduct activities under long-term contracts that are awarded on a competitive bidding
basis. Such contracts typically arise at Mobility and in various activities of Smart Infrastructure or Portfolio Companies. Some of these
contracts are inherently risky because we may assume substantially all of the risks associated with completing a project and meeting post-
completion warranty obligations. For example, we may face the risk that we must satisfy technical requirements of a project even though
we have not gained experience with those requirements before winning the project. The profit margins realized on fixed-priced contracts
may vary from original estimates as a result of changes in costs and productivity over a contract's term. We sometimes bear the risk of
unanticipated project modifications, shortage of key personnel, quality problems, financial difficulties of our customers and/or significant
partners, cost overruns or contractual penalties caused by unexpected technological problems, unexpected developments at the project
sites, unforeseen changes or difficulties in the regulatory or political environment, performance problems with our suppliers,
subcontractors and consortium partners or other logistical difficulties. Some of our multi-year contracts also contain demanding
installation and maintenance requirements in addition to other performance criteria relating to timing, unit cost and compliance with
government regulations, which, if not satisfied, could subject us to substantial contractual penalties, damages, non-payment and contract
termination. There can be no assurance that contracts and projects, in particular those with long-term duration and fixed-price calculation,
can be completed profitably. To tackle those risks, we established a global project management organization to systematically improve
the technical and commercial capabilities of our project management personnel. For complex projects we conduct dedicated risk
assessments in very early stages of the sales phase before we decide to hand over a binding offer to our customers.
Risks from pension obligations: The provisions for pensions and similar obligations may be affected by changes in actuarial assumptions,
including the discount rate, as well as by movements in financial markets or a change in the mix of assets in our investment portfolio.
Additionally, they are subject to legal risks with regard to plan design, among other factors. A significant increase in underfunding may
have a negative effect on our capital structure and rating, and thus may tighten refinancing options and increase costs. In order to comply
with local pension regulations in selected foreign countries, we may face an economic risk of increasing cash outflows due to changes in
funding level according to local regulations of our pension plans in these countries or to changes in the regulations themselves.
Audits by tax authorities and changes in tax regulations: We operate in nearly all countries of the world and therefore are subject to
many different tax regulations. Changes in tax laws in any of these jurisdictions could result in higher tax expenses and increased tax
payments. Furthermore, legislative changes could impact our tax receivables and liabilities as well as deferred tax assets and deferred tax
liabilities. In addition, the uncertain legal environment in some regions could limit our ability to enforce our rights. As a globally operating
organization, we conduct business in countries subject to complex tax rules, which may be interpreted in different ways. Future
interpretations or developments of tax regimes may affect our business situation, financial condition and results of operations. We are
regularly audited by tax authorities in various jurisdictions and we continuously identify and assess relevant risks.
Market price risks: We are exposed to fluctuations in exchange rates, especially between the U.S. dollar and the euro, because a high
percentage of our business volume is conducted as exports from Europe to regions using the U.S. dollar. In addition, we are exposed to
effects involving the currencies of emerging markets, in particular the Chinese yuan. Appreciable changes in euro exchange rates could
materially change our competitive position. We are also exposed to fluctuations in interest rates. Even hedging activities to mitigate such
risks may result in a reverse effect. Fluctuations in exchange or interest rates, negative developments in the financial markets and changes
27
Combined Management Report
Supply chain management: The financial performance of our operating units depends on reliable and effective supply chain management
for components, sub-assemblies, energy, critical parts (e.g. semiconductors) and materials. Capacity constraints and supply shortages
resulting from ineffective supply chain management may lead to production bottlenecks, delivery delays, quality issues and additional
costs. We also rely on third parties to supply us with parts, components and services. Using third parties to manufacture, assemble and
test our products may reduce our control over manufacturing yields, quality assurance, product delivery schedules and costs. Although we
work closely with our suppliers to avoid supply-related problems, there can be no assurance that we will not encounter supply problems
in the future, especially if we use single-source suppliers for critical components. Shortages and delays could materially harm our
businesses. Unanticipated increases in the price of components or raw materials due to market shortages or other reasons could also
adversely affect performance. Furthermore, we may be exposed to the risk of delays and interruptions in the supply chain as a consequence
of catastrophic events (including pandemics), geopolitical uncertainties, energy shortages, sabotage, cyber incidents, suppliers' financial
difficulties or suppliers not meeting our standards, particularly if we are unable to identify alternative sources of supply or means of
transportation in a timely manner or at all. Besides other measures, we mitigate price fluctuation in global raw material markets with
various hedging instruments.
Increasing sustainability focus: Governments around the world continue to increase their focus on sustainability topics, resulting in the
risk of increased costs to comply with new laws and related reporting requirements. In addition, increasing stakeholder and investor focus
on sustainability topics brings reputational risk should our sustainability commitments, targets and activities be perceived as a deceptive
use of green marketing or otherwise not credible. Climate change litigation has become a worldwide phenomenon with a corresponding
risk to Siemens as a large corporation. We address these risks in a variety of ways including through our sustainability framework DEGREE,
in which we have set ambitious sustainability targets. DEGREE includes measures to reduce our carbon footprint along with other initiatives
addressing ESG topics more generally. We have implemented an ESG due diligence process that supports Siemens businesses with due
diligence in the customer-oriented environment with a view to possible environmental and social risks as well as related human rights and
reputational risks. Finally, we believe our overall portfolio is very well positioned to meet the current and future sustainability needs of our
customers and the societies in which we operate.
Economic, political and geopolitical conditions: We see high uncertainties regarding the global economic and geopolitical outlook,
which deteriorated significantly in the past year due to multiple headwinds, all of which may continue to intensify. First, the Israel-Gaza
conflict continues to escalate and might cause a larger regional conflict involving further parties. Ongoing risks emanate from the war in
Ukraine. Both the Israel-Gaza conflict and the war in Ukraine may have negative impacts on sales development, production processes and
purchasing and logistics processes, for example through interruptions in supply chains and energy supplies or bottlenecks affecting
components, raw materials and intermediate products. Each of the conflicts could also intensify further to the point of expanding to
include other warring parties, including NATO countries, and the use of unconventional weapons. An expansion of the conflicts would
have a significant impact on the Siemens market environment. Even the current states of conflicts could have a further negative impact
on development of potential crude oil and natural gas supplies. This would fuel inflation, with further risk of a sustained wage-price-spiral.
In any case one of the core risks for the Siemens outlook is that central banks may fail to get inflation below their targets and then react
more restrictively or even overreact. More restrictive financial conditions would likely push advanced economies into recession and pose
a significant risk to vulnerable emerging economies. Highly indebted (emerging and industrialized) countries could suffer from increasing
financing costs, further U.S. dollar appreciation, and loss of investor confidence. Other risks could arise for the stability of public finances
and the banking sector. Further risks are coming from other geopolitical tensions (particularly associated with the Baltics, Eastern Europe,
the Western Balkans, China, Taiwan, and Iran). We continue to face economic risks from a further significant slow-down of the Chinese
economy. Key risks are coming from potential financial imbalances, particularly due to the struggling real-estate sector, but also from the
growing debt-level of local governments, with growing negative implications for Siemens business in China and the country's trading
partners. Obstruction and redefinitions of international cooperation agreements could severely impact our business. First and foremost a
more extensive U.S.-China decoupling would have adverse effects on confidence and investment activity and would severely hit Siemens'
business. Increasing trade barriers, protectionism, sanctions and in particular technical regulations would negatively impact production
costs and productivity along our global value chains, as well as significantly impede or even hinder access to sales markets. A significant
risk to our sales potential and cost structures is coming from the possibility of renewed supply chain bottlenecks, due to growing lack of
availability of intermediate goods, in particular electronic components. Furthermore, grid-lock in U.S. politics could weigh on U.S. growth
with the risk of a global spillover. We are dependent on the economic development of certain industries; a continuation or even an
intensification of the cyclical and structural headwinds in core customer industries, e.g. automotive or construction, would have adverse
impact on our business prospects. A resurgence of COVID-19 or even the outbreak of a new pandemic, a terrorist attack, a significant
cybercrime incident, or a series of such attacks or incidents in major economies, could depress economic activity globally and undermine
consumer and business confidence. Additionally, the highly interconnected global economy remains vulnerable to natural disasters or
hybrid warfare.
25
Combined Management Report
8.2.2 Enterprise risk management process
We have implemented and coordinated a set of risk management and control systems which support us in the early recognition of
developments that could jeopardize the continuity of our business. The most important of these systems include our enterprise-wide
processes for strategic planning and management reporting. Strategic planning is intended to support us in considering potential risks and
opportunities well in advance of major business decisions, while management reporting is intended to enable us to monitor such risks
more closely as our business progresses. Our risk management and its contributing elements are regularly subject of audit activities by our
internal audit function. Accordingly, if deficits are detected, it is possible to adopt appropriate measures for their elimination. This
coordination of processes and procedures is intended to help ensure that the Managing Board and the Supervisory Board are fully informed
about significant risks in a timely manner.
Risk management at Siemens builds on a comprehensive, interactive and management-oriented Enterprise Risk Management (ERM)
approach that is integrated into the organization and that addresses both risks and opportunities. Our ERM approach is based on the
globally accepted COSO Standard (Committee of Sponsoring Organizations of the Treadway Commission) Enterprise Risk Management –
Integrating with Strategy and Performance (2017) and the ISO (International Organization for Standardization) Standard 31000 (2018)
and is adapted to Siemens requirements. The frameworks connect the ERM process with our financial reporting process, our internal
control and our compliance management system. They consider a company's strategy, the efficiency and effectiveness of its business
operations, the reliability of its financial reporting and compliance with relevant laws and regulations to be equally important.
Our ERM process aims for early identification and evaluation of, and response regarding, risks and opportunities that could materially
affect the achievement of our strategic, operational, financial and compliance objectives. The time horizon is typically three years, and we
take a net risk approach, addressing risks and opportunities remaining after the execution of existing and effective measures and controls.
If risks have already been considered in plans, budgets, forecasts or the consolidated financial statements (e.g. as a provision or risk
contingency), they are supposed to be incorporated with their financial impact in the entity's business objectives. As a consequence, only
additional risks arising from the same cause (e.g. deviations from business objectives, different impact perspectives) should be considered.
In order to provide a comprehensive view of our business activities, risks and opportunities are identified in a structured way combining
elements of both top-down and bottom-up approaches. Reporting generally follows a quarterly cycle; we complement this periodic
reporting with an ad-hoc reporting process that aims to escalate critical issues in a timely manner. Relevant risks and opportunities are
evaluated in terms of impact and likelihood, considering different impact perspectives, including business objectives, reputation and
regulatory requirements. The bottom-up identification and prioritization process is supplemented by workshops with the respective
managements of our organizational units. The top-down element ensures that potential new risks and opportunities are discussed at
different management levels and are included in the subsequent reporting process, if found to be relevant. Reported risks and
opportunities are analyzed regarding potential cumulative effects and are aggregated within and for each of the organizational units
mentioned above.
Responsibilities are assigned for all relevant risks and opportunities, with the hierarchical level of responsibility depending on the
significance of the respective risk or opportunity. In a first step, assuming responsibility for a specific risk or opportunity involves choosing
one of our general response strategies. Our general response strategies with respect to risks are avoidance, transfer, reduction or
acceptance of the relevant risk. Our general response strategy with respect to opportunities is to "pursue" the relevant opportunity. In a
second step, responsibility for a risk or opportunity also involves the development, initiation and monitoring of appropriate response
measures corresponding to the chosen response strategy. These response measures have to be specifically tailored to allow for effective
risk management. Accordingly, we have developed a variety of response measures with different characteristics. For example, we mitigate
the risk of fluctuations in currency and interest rates by engaging in hedging activities. Regarding our projects, systematic and
comprehensive project management with standardized project milestones, including provisional acceptances during project execution
and complemented by clearly defined approval processes, assists us in identifying and responding to project risks at an early stage, even
before the bidding phase. Furthermore, we maintain appropriate insurance levels for potential cases of damage and liability risks in order
to reduce our exposure to such risks and to avoid or minimize potential losses. Among others, we address the risk of fluctuation in
economic activity and customer demand by closely monitoring macroeconomic conditions and developments in relevant industries, and
by adjusting capacity and implementing cost-reduction measures in a timely and consistent manner if they are deemed necessary. Due to
regular screening of climate risks and environmental, social and governance (ESG) developments we can initiate related mitigation actions
in a timely manner – also as part of our DEGREE implementation. Worldwide there are risks from the transmission of infectious agents
from animals to humans, from humans to humans and in other ways. Epidemic, pandemic or other infectious developments such as
bioterrorism to cause high disease rates in countries, regions or continents. We constantly check information from the World Health
Organization (WHO), the Centers for Disease Control and Prevention in the U.S. and Europe, the Robert Koch Institute in Germany and
other institutions in order to be able to identify early epidemic or pandemic risks and determine and initiate related mitigation actions as
early as possible.
8.2.3 Risk management organization and responsibilities
Combined Management Report
To oversee the ERM process and to further drive the integration and harmonization of existing control activities to align with legal and
operational requirements, the Managing Board established a Risk Management and Internal Control Organization, led by the Head of
Assurance. In order to allow for a meaningful discussion at the Siemens Group level, this organization aggregates individual risks and
opportunities of similar cause-and-effect nature into broader risk and opportunity themes. This aggregation naturally results in a mixture
of risks, including those with a primarily qualitative assessment and those with a primarily quantitative assessment; the same applies to
opportunities. Accordingly, we do not adopt a purely quantitative assessment of risk and opportunity themes. Thematic risk and
opportunity assessments as well as our risk-bearing capacity then form the basis for the evaluation of the company-wide risk and
opportunity situation during the quarterly Managing Board meetings. The Head of Assurance assists the Managing Board with the
operation and oversight of the risk and internal control system and reporting to the Audit Committee of the Supervisory Board.
Combined Management Report
8.3 Risks
Below we describe the risks that could have a material adverse effect on our business situation, financial condition (including effects on
assets, liabilities and cash flows), results of operations and reputation. The order in which the risks are presented in each of the four
categories reflects the currently estimated relative exposure for Siemens associated with these risks and thus provides an indication of the
risks' current importance to us. Additional risks not known to us or that we currently consider immaterial may also negatively impact our
business objectives and operations. Unless otherwise stated, the risks described below relate to all our organizational units.
8.3.1 Strategic risks
If we are not successful in adapting our production and cost structure to subsequent changes in conditions in the markets in which we
operate, there can be no assurance that we will not experience adverse effects. For example, our customers may modify, delay or cancel
plans to purchase our products, solutions and services, or fail to follow through on purchases or contracts already executed. In addition, it
may become more difficult for our customers to obtain financing. Contracted payment terms, especially regarding the level of advance
payments by our customers relating to long-term projects, may become less favorable, which could negatively impact our financial
condition. Siemens' global setup with operations in almost all relevant economies, our wide range of offerings with varied exposures to
business cycles, and our balanced mix of business models (e.g. equipment, components, systems, software, services and solutions) help
us to absorb impacts from adverse developments in any single market.
Portfolio measures, at-equity investments, other investments and strategic alliances: Our strategy includes divesting our activities in
some business areas and strengthening others through portfolio measures, including mergers and acquisitions. With respect to
divestments, we may not be able to divest some of our activities as planned, and the divestitures we do carry out could have a negative
impact on our business situation, financial condition, results of operations and reputation. Mergers and acquisitions are inherently risky
because of difficulties that may arise when integrating people, operations, technologies and products. There can be no assurance that any
of the businesses we acquire can be integrated successfully and in a timely manner as originally planned, or that they will perform as
anticipated once integrated. In addition, we may incur significant acquisition, administrative, tax and other expenditures in connection
with these transactions, including costs related to integration of acquired businesses. Furthermore, portfolio measures may result in
additional financing needs and adversely affect our capital structure. Acquisitions can lead to substantial additions to intangible assets,
including goodwill, in our statements of financial position. If we were to encounter continuing adverse business developments or if we
were otherwise to perform worse than expected at acquisition activities, then these intangible assets, including goodwill, might have to
be impaired, which could adversely affect our business situation, financial condition and results of operations. Our investment portfolio
includes investments held for purposes other than trading and other investments. Any factors negatively influencing the financial
condition and results of operations of our at-equity investments, such as Siemens Energy, and other investments could have an adverse
effect on our equity pick-up related to these investments or may result in a related write-off. In addition, our business situation, financial
condition and results of operations could also be adversely affected in connection with loans, guarantees or non-compliance with financial
covenants related to these investments. Furthermore, such investments are inherently risky as we may not be able to sufficiently influence
corporate governance processes or business decisions taken by our at-equity investments, by other investments and by strategic alliances,
which may have a negative effect on our business and especially on our reputation. In addition, joint ventures bear the risk of difficulties
that may arise when integrating people, operations, technologies and products. Strategic alliances may also pose risks for us because we
compete in some business areas with companies with which we have strategic alliances. Besides other measures, we handle these risks
with standardized processes as well as dedicated roles and responsibilities in the areas of mergers, acquisitions, divestments and carve-
outs. This includes the systematic treatment of all contractual obligations and post-closing claims.
24
Liquidity and financing risks: Our treasury and financing activities could face adverse deposit and/or financing conditions from negative
developments related to financial markets, such as limited availability of funds and hedging instruments; an updated evaluation of our
solvency, particularly from rating agencies; negative interest rates; and impacts arising from more restrictive regulation of the financial
sector, central bank policy, or the usage of financial instruments. Widening credit spreads due to uncertainty and risk aversion in the
financial markets might lead to adverse changes in the market values of our financial assets, in particular our derivative financial
instruments.
Continuing Discontinued Continuing
operations operations
discontinued
operations
For further information on post-employment benefits, derivative financial instruments, hedging activities, financial risk management and
related measures, see Notes 17, 24 and 25 in Notes to Consolidated Financial Statements for fiscal 2023.
12,239
(41)
12,281
Cash flows from operating activities
(in millions of €)
and
discontinued
operations
Fiscal year 2022
Fiscal year 2023
Continuing
and
Continuing Discontinued
operations operations
Cash conversion rate
With our ability to generate positive operating cash flows from continuing and discontinued operations of €12.2 billion in fiscal 2023, our
total liquidity (defined as cash and cash equivalents plus current interest-bearing debt securities) of €11.1 billion, our unused lines of
credit, and our credit ratings at year-end, we believe that we have sufficient flexibility to fund our capital requirements. Also in our opinion,
our operating net working capital is sufficient for our present requirements.
Cash outflows for dividends attributable to non-controlling interests mainly included dividends paid to the shareholders of Siemens
Healthineers AG.
Combined Management Report
23
Additions to intangible assets and property, plant and equipment
Credit risks: We provide our customers with various forms of direct and indirect financing of orders and projects, including guarantees.
Siemens Financial Services in particular bears credit risks due to such financing activities if, for example, customers do not meet obligations
arising from these financing arrangements, meet them only partially, or meet them late. The credit environment has become more
dynamic due to a more uncertain macroeconomic outlook (e.g. inflation) and geopolitical tensions.
(2,218)
10,322
(2,084)
8.3.4 Compliance risks
Changes of regulations, laws and policies: Regulatory requirements are being introduced or modified at an unprecedented rate, often
with little or no advance implementation lead time. This creates a risk that new requirements become effective more quickly than they
can be implemented in the associated systems and processes, potentially resulting in business disruptions and the need for manual
mitigation interventions. As a diversified company with global businesses we are exposed to various product- and country-related
regulations, laws and policies influencing our business activities and processes. According to observations and analysis, there is an
increasing risk that existing technical regulations in target markets will suddenly change, or new ones will be set in force, which result in
market access criteria that our products do not meet. The affected products would lose marketability in this market. Reducing the risk of a
sales-stop depends on the required correction for the non-conformity. In case the product can technically stay as is, while it has to undergo
new and additional conformity assessment and certification, there will be considerable effort and cost to carry out the needed testing and
certification procedures. In a worse case, the affected product will need re-engineering or re-design to meet the requirements of the
changed or new technical regulation even before it can become re-assessed and certified for market approval. The latter case will cause
significant extra effort and cost to make the needed product changes and to maintain the country-specific product variant as an additional
derivative item in the portfolio. In the worst case, if the two aforementioned ways of maintaining the product's marketability prove to be
not feasible, we must stop selling the affected product in the market. The uncertain geopolitical situation has triggered unpredictable -
and often conflicting – extraterritorial regulations, restrictions and sanctions, thus creating a potential risk that it will be difficult to
simultaneously comply with all relevant regulatory requirements of certain transactions. Complex cross-jurisdictional regulations can vary
between countries, even within the same region, each with slightly different rules and requirements, creating a risk that a global standard
cannot be effectively implemented and maintained, potentially leading to a need for more custom or regional standards. We monitor the
political and regulatory landscape in all our key markets to anticipate potential problem areas, with the aim of quickly adjusting our
business activities and processes to changed conditions. However, any changes in regulations, laws and policies could adversely affect our
business activities and processes as well as our financial condition and results of operations.
-
Current and future investigations regarding allegations of corruption, of antitrust violations and of other violations of law:
Proceedings against us or our business partners regarding allegations of corruption, of antitrust violations and of other violations of law
may lead to fines as well as penalties, sanctions, injunctions against future conduct, profit disgorgements, disqualifications from directly
and indirectly engaging in certain types of business, the loss of business licenses or permits, other restrictions and legal consequences as
well as negative public media coverage. Accordingly, we may, among other things, be required to comply with potential obligations and
liabilities arising in connection with such investigations and proceedings, including potential tax penalties. Moreover, any findings related
to public corruption that are not covered by the 2008 and 2009 corruption charge settlements, which we concluded with U.S. and German
authorities, may endanger our business with government agencies and intergovernmental and supranational organizations. Monitors
could again be appointed to review future business practices and we may otherwise be required to further modify our business practices
and our compliance program.
In its global business, Siemens does part of its business with state-owned enterprises and governments. We also participate in projects
funded by government agencies and intergovernmental and supranational organizations, such as multilateral development banks.
Ongoing or potential future investigations into allegations of corruption, antitrust violations or other violations of law could as well impair
relationships with such parties or could result in our exclusion from public contracts. Such investigations may also adversely affect existing
private business relationships and our ability to pursue potentially important strategic projects and transactions, such as strategic alliances,
joint ventures or other business alliances, or could result in the cancellation of certain of our existing contracts. Moreover, third parties,
including our competitors, could initiate significant litigation.
In addition, future developments in ongoing and potential future investigations, such as responding to the requests of governmental
authorities and cooperating with them, could divert management's attention and resources from other issues facing our business.
Furthermore, we might be exposed to compliance risks in connection with recently acquired operations that are in the ongoing process of
integration.
Along with other measures, Siemens has established a global compliance organization that conducts compliance risk mitigation processes
such as Compliance Risk Assessments, among others, or initiates audit activities performed by the internal assurance department.
Sanctions and export control: As a globally operating organization, we conduct business with customers in countries which are subject
to export control regulations, embargoes, economic sanctions, debarment policies or other forms of trade restrictions (hereafter referred
to as "sanctions") imposed by the U.S., the EU, China or other countries or organizations. New or expanded sanctions in countries in which
we do business may result in a curtailment of our existing business in such countries or indirectly in other countries. We are also aware of
policies of national authorities and institutional investors, such as pension funds or insurance companies, requiring divestment of interests
in and prohibiting investment in and transactions with entities doing business with countries identified by the U.S. Department of State as
28
(II) Net income
(41)
10,062
(I) Free cash flow
(2,083)
10,241
(81)
(2,218)
Our risk management policy stems from a philosophy of pursuing sustainable growth and creating economic value while managing
appropriate risks and opportunities and avoiding inappropriate risks. As risk management is an integral part of how we plan and execute
our business strategies, our risk management policy is set by the Managing Board. Our organizational and accountability structure requires
each of the respective managements of our organizational units to implement risk management programs that are tailored to their specific
industries and responsibilities, while being consistent with the overall policy.
Revenue was higher in nearly all our industrial businesses and rose to €77.8 billion, up 8% year-over-year. Smart Infrastructure and Digital
Industries contributed double-digit growth with all businesses posting increases. Revenue growth at Smart Infrastructure was led by the
electrification and the electrical products businesses, while at Digital Industries the factory automation and the process automation
businesses contributed the strongest growth. Revenue growth at Mobility was led by a significant increase in the rolling stock business.
Revenue at Siemens Healthineers remained on the prior-year level as growth particularly in the imaging and Varian businesses was offset
by a decline in the diagnostics business. Excluding currency translation and portfolio effects, revenue for Siemens rose 11%. We thus
exceeded the forecast provided in our Combined Management Report for fiscal 2022, which was to achieve comparable revenue growth
in the range of 6% to 9%, and reached the upper end of our subsequently raised outlook, which was to achieve 9% to 11% in comparable
revenue growth.
8.2 Risk management
Net income nearly doubled year-over-year to a historic high of €8.5 billion and corresponding basic EPS more than doubled to €10.04. EPS
pre PPA increased to €10.77. Excluding a positive €0.84 per share related to Siemens Energy Investment, EPS pre PPA was €9.93. We thus
exceeded the forecast provided in our Combined Management Report for fiscal 2022, which was to achieve EPS pre PPA in a range of
€8.70 to €9.20, and exceeded our forecast made after the third quarter of fiscal 2023, which was for EPS pre PPA excluding Siemens
Energy Investment in the range of €9.60 to €9.90.
ROCE for fiscal 2023 rose to 18.6%, up from 10.0% in fiscal 2022. This increase was due to sharply higher income before interest after tax
year-over-year. We thus exceeded the forecast for ROCE provided in our Combined Management Report 2022, which was to come close
to or reach the lower end of our target range of 15% to 20%.
We evaluate our capital structure using the ratio of Industrial net debt to EBITDA. Due to a combination of a decrease in Industrial net debt
and higher EBITDA year-over-year, this ratio declined to 0.6. We thus achieved the forecast provided in our Combined Management Report
2022, which was to achieve a ratio of up to 1.5.
20
Combined Management Report
Free cash flow from continuing and discontinued operations for fiscal 2023 was €10.0 billion, reaching a record high. The cash conversion
rate for Siemens, defined as the ratio of Free cash flow from continuing and discontinued operations to Net income, was 1.17. We thus
achieved a cash conversion rate that contributed strongly to the average required to reach our target of 1 minus annual comparable
revenue growth rate over a cycle of three to five years.
Earnings before taxes at SFS increased significantly due mainly to higher earnings before taxes in the debt business, which in the prior
fiscal year included a €0.2 billion impact in connection with the sale of the financing and leasing business in Russia. Return on equity after
tax for SFS increased to 16.3%. Profit at Portfolio Companies included a €0.1 billion gain from the sale of the Commercial Vehicles business
but came in sharply lower compared to the prior fiscal year which had included a €1.1 billion gain from the sale of the mail and parcel-
handling business of Siemens Logistics and a €0.3 billion revaluation gain in connection with the sale of our stake in Valeo Siemens
eAutomotive GmbH. Results within Reconciliation to Consolidated Financial Statements benefited from positive effects related to Siemens
Energy Investment, including €1.6 billion from a partial reversal of the prior-year €2.7 billion impairment on Siemens' stake in Siemens
Energy AG. These positive effects were partly offset by Siemens' share of Siemens Energy's after-tax loss.
We intend to continue providing an attractive shareholder return. The Siemens Managing Board, in agreement with the Supervisory Board,
proposes a dividend of €4.70 per share, up from €4.25 per share a year earlier.
Combined Management Report
8. Report on expected developments and associated material
opportunities and risks
8.1 Report on expected developments
8.1.1 Worldwide economy
The global economy showed remarkable resilience in calendar 2023, given the number of headwinds and negative economic shocks from
the previous year. Nevertheless, these shocks still have adverse implications for economic growth in calendar 2024, especially the
dampening effects of tighter financial conditions. Accordingly, in calendar 2024 the global economy is expected to further slow down to
2.3% GDP growth, after 2.6% in calendar 2023. Given the high number of active and potential geopolitical conflicts, the outlook is subject
to a high level of uncertainty.
In the E.U., GDP is expected to increase by 0.8% in calendar 2024, after an anticipated growth of 0.4% in calendar 2023. The effects of the
energy crisis still show negative impacts, especially in energy-intensive industries. Tighter monetary policy - the European Central Bank
lifted the main policy interest rate to 4.5% in just over one year also held back growth, particularly in the construction industry. The
German economy is most impacted due to its proportionally large manufacturing sector and is expected to grow by only 0.5% in calendar
2024.
21
The profit margin of our Industrial Business rose to 15.4%, up from 15.1% a year earlier, reaching its highest level ever. Digital Industries
and Smart Infrastructure achieved the strongest increases and also contributed the highest margins: 22.6% and 15.4%, respectively. The
profit margin for Mobility rose slightly to 8.4%, while the profit margin at Siemens Healthineers declined to 11.7%.
Profit Industrial Business exceeded the record high of a year earlier and rose 11% to €11.4 billion. All industrial businesses except Siemens
Healthineers increased their profit year-over-year. The strongest increase came from Smart Infrastructure on improvements in all its
businesses, led by the electrical products and the electrification businesses. Growth at Digital Industries was driven by the automation
businesses, only partly offset by a decline in profit in the software business due mainly to higher expenses related to cloud-based activities.
Profit at Mobility increased in nearly all businesses and included positive trailing effects related to the winding down of business activities
in Russia a year earlier. Profit at Siemens Healthineers came in lower on declines in the diagnostics business, due primarily to sharply lower
revenue from rapid coronavirus antigen tests as well as charges related to its transformation program and charges related to refocusing
certain activities in the advanced therapies business.
Orders rose 7% year-over-year to €92.3 billion, for a book-to-bill ratio of 1.19, thus fulfilling our expectation of a ratio above 1. Order
growth was driven by sharply higher volume from large orders at Mobility, including an order worth €2.9 billion for locomotives and
associated maintenance in India and a €2.5 billion order for the first line of a turnkey rail system in Egypt, and by clear growth in Smart
Infrastructure led by the electrification business. Orders in Digital Industries came in lower as the destocking trend mentioned above had
a significant effect on its automation businesses.
8,238
(81)
8,157
4,392
1.86
The cash conversion rate was influenced by a non-cash profit of €0.7 billion in fiscal 2023 (in fiscal 2022 by a non-cash loss of €2.9 billion)
related to Siemens Energy Investment.
Investing activities
Additions to intangible assets and property, plant and equipment from continuing operations totaled €2.2 billion in fiscal 2023. Within
the industrial businesses, ongoing investments related mainly to technological innovations; maintaining, extending and digitalizing our
capacities for designing, manufacturing and marketing new solutions; improving productivity; and replacements of fixed assets. These
investments amounted to €1.7 billion in fiscal 2023. The remaining portion related mainly to Siemens Real Estate, including significant
amounts for projects such as new office buildings in Germany and Spain. Siemens Real Estate is responsible for uniform and comprehensive
management of Company real estate worldwide (except for Siemens Healthineers) and supports the industrial businesses and corporate
activities with customer-specific real estate solutions.
With regard to capital expenditures, we expect a significant increase in fiscal 2024. In the context of the €2 billion investment strategy
presented in fiscal 2023 to strengthen growth, innovation and resilience, significant amounts will be invested in the coming years for the
construction and expansion of high-tech production facilities in the U.S., China and Singapore. As part of this investment strategy, Siemens
also announced the establishment of its new Technology Campus in Erlangen, Germany, to expand development and manufacturing
capacities. In addition, up to €0.6 billion are to be invested in Siemensstadt Square. This project, initiated in fiscal 2019, aims to transform
Siemens' existing industrial area in Berlin into a modern urban district supporting a diverse range of purposes, including strengthening key
technologies. Further investments are planned in relation to new office buildings, including Siemens Campus Erlangen. Furthermore, we
continue to invest in attractive innovation fields through Next47, our global venture capital unit.
19
Combined Management Report
7. Overall assessment of the economic position
Overall, global economic development in fiscal 2023 was mixed and characterized by a number of headwinds. In this environment,
Siemens delivered a very strong performance in all its businesses due to its strategic positioning relative to long-term trends such as
automation, electrification and digitalization. With our offerings, we help increase resource efficiency and the decarbonization of industry,
transport and building infrastructures and make manufacturing more resilient and flexible. We expect these trends to continue to drive
our growth in the coming years.
During fiscal 2023, we made further progress in focusing our business portfolio by selling our Commercial Vehicles business. Furthermore,
we began forming a new motors and large drives company under the name Innomotics by combining our existing business activities in
the areas of low- to high-voltage motors, geared motors, medium-voltage converters and motor spindles. Also, we further reduced our
stake in Siemens Energy AG to 25.1% and transferred shares to Siemens Pension-Trust e.V. To boost future growth and drive innovation,
we announced a €2 billion investment strategy mainly for new manufacturing capacity as well as innovation labs and education centers.
We also expanded our open digital business platform, Siemens Xcelerator, by introducing Industrial Operations X, which includes a broad
range of interoperable offerings for more adaptive production, and by adding new cloud-based applications for Building X, our suite for
smart and sustainable buildings.
Fiscal 2023 was another very successful year for Siemens. We achieved excellent financial results in a volatile market environment, which
on the one hand included destocking by customers and distributors following previously proactive purchasing, particularly in our short-
cycle businesses, and on the other hand included improved supply chain conditions, which accelerated revenue conversion from our high
order backlog. We raised our outlook during the fiscal year after the first and the second quarters. We then reached or exceeded all the
targets set for our primary measures for fiscal 2023. We achieved revenue growth of 11% net of currency translation and portfolio effects
and delivered EPS pre PPA of €10.77. Excluding Siemens Energy Investment, EPS pre PPA was €9.93. ROCE increased to 18.6%, our capital
structure ratio came in at 0.6, and the cash conversion rate was 1.17.
-
-
The U.S. economy is expected to decelerate to a soft landing. After unexpectedly strong GDP growth (expected to be +2.5%) in calendar
2023, caused mainly by a very strong services sector while industry was weak, growth in calendar 2024 is expected to slow down to 1.6%.
Tighter financial conditions
the Federal Reserve increased the main policy interest rate to 5.5% and longer-term interest rates also
increased substantially – will unfold their full effect next year. Hence, a short and shallow recession during calendar 2024, while not our
baseline assumption, is also possible and expected by some economists. Consumer spending is expected to continue as a primary growth
driver, while government investment programs (CHIPS Act, Inflation Reduction Act) play a supporting role for the economy as they spur
business investment.
-
Outside our reportable segments, we expect Portfolio Companies to achieve an operational margin of more than 5%.
Results of Siemens Energy Investment depend on the performance of Siemens Energy and are excluded from our forecast for EPS pre PPA.
We anticipate that Siemens Real Estate will continue with real estate disposals depending on market conditions. Results for Innovation are
expected on the prior-year level, which was a negative €0.2 billion. The negative results related to Governance declined to €0.5 billion in
fiscal 2023; we expect a further improvement in fiscal 2024. Centrally carried pension expense are expected to be on the prior-year level,
which was a negative €0.1 billion. Amortization of intangible assets acquired in business combinations is expected in a range of €0.7
billion to €0.8 billion in fiscal 2024 based on our current business portfolio. Financing, eliminations and other items, which were a negative
€0.3 billion in fiscal 2023, are expected to be on the prior-year level depending on market developments.
We anticipate our tax rate for fiscal 2024 to be in the range of 24% to 29%. This assumption does not take into consideration possible
impacts from potential major tax reforms.
Our forecast for net income takes into account a number of additional factors. We assume solid project execution continues in fiscal 2024.
We plan to keep the ratio of R&D expenses to revenue, which was 8% in fiscal 2023 at approximately the level in fiscal 2024. We expect
the ratio of selling and general administrative expenses to revenue, which was 18% in fiscal 2023 to remain approximately on this level in
fiscal 2024. Severance charges, which were €0.4 billion in fiscal 2023, are expected at a lower level in fiscal 2024.
Given the above-mentioned assumptions, we expect profitable growth of our Industrial Business to drive an increase in EPS pre PPA
excluding Siemens Energy Investment to a range of €10.40 to €11.00 in fiscal 2024, along with a corresponding increase in net income.
For comparison, fiscal 2023 EPS pre PPA was €9.93 excluding €0.84 in EPS pre PPA from Siemens Energy Investment.
Capital efficiency
For fiscal 2024, we expect ROCE to be in our target range of 15% to 20%.
Capital structure
We aim in general for a capital structure of up to 1.5; we expect to achieve this in fiscal 2024.
Cash conversion rate
For fiscal 2024, we expect a cash conversion rate that contributes to reaching our target of 1 minus the annual comparable revenue growth
rate of Siemens over a cycle of three to five years.
8.1.3 Overall assessment
Our outlook for the Siemens Group for fiscal 2024 is based on the assumption that geopolitical tensions do not further increase. Under
this condition, we expect our Industrial Business to continue its profitable growth.
For the Siemens Group we expect comparable revenue growth in the range of 4% to 8% and a book-to-bill ratio above 1.
We expect profitable growth of our Industrial Business to drive an increase in EPS pre PPA excluding Siemens Energy Investment to a range
of €10.40 to €11.00 in fiscal 2024, up from EPS pre PPA excluding Siemens Energy Investment of €9.93 in fiscal 2023.
This outlook excludes burdens from legal and regulatory matters.
Overall, the actual development for Siemens and its segments may vary, positively or negatively, from our outlook due to the risks and
opportunities described below or if our expectations and assumptions do not materialize.
Profitability
8.2.1 Basic principles of risk management
As of September 30, 2023, our order backlog totaled €111 billion, and we expect conversion from the backlog to strongly support revenue
growth in fiscal 2024 with approximately €43 billion of past orders converted to current revenue. For expected conversion of order backlog
to revenue for our respective segments, see chapter 3 Segment information.
Revenue growth
GDP in China is expected to grow at only 4.6% in calendar 2024, after an anticipated growth of 5.0% in calendar 2023. The correction in
the real estate sector will continue to weigh on GDP growth. During calendar 2024 global goods demand, world trade and industrial
production are expected to modestly increase again. The main assumption behind this expectation is further normalization for two critical
factors: consumer spending and the inventory policies of companies. Both weighed on industrial output in calendar 2023 but are expected
to modestly support growth of the Chinese economy in calendar 2024. In addition, Chinese private consumption is expected to drive
domestic demand and some tailwinds will come from announced stimulus measures.
Globally, the decline of inflation rates is expected to continue, although at a slower pace. Past interest rate hikes are having the desired
effect, and headline inflation is expected to steadily approach the central bank targets. Hence, monetary policy is expected to become less
restrictive in calendar 2024.
Global fixed investments should benefit from government programs and from factory investments to improve supply chain resilience and
other diversification measures. Global gross fixed investments are expected to grow by 3.2% in calendar 2024, unchanged from 3.2% in
the year before.
Given the forecasted further slowdown of the global economy, growth of markets served by Siemens is also expected to slow in fiscal
2024 in light of significant headwinds, few tailwinds, and reduced stabilizing effects from high industry's order backlogs and price
adjustments in a number of our businesses.
The forecasts for calendars 2024 and 2023 presented here for GDP and fixed investments are based on a report from S&P Global dated
October 15, 2023.
8.1.2 Siemens Group
We are basing our outlook for fiscal 2024 on the above-mentioned expectations and assumptions regarding the overall economic situation
and also on the specific market conditions we expect for our respective industrial businesses, as described in chapter 3 Segment
information. Furthermore, we assume that geopolitical tensions do not further increase. We expect improvements in productivity and
adjusting prices for our own products, solutions and services to more than offset effects from wage increases and higher prices for raw
materials and components.
We are exposed to currency translation effects, mainly involving the U.S. dollar, the British pound and currencies of emerging markets,
particularly the Chinese yuan. Siemens is still a net exporter from the Eurozone to the rest of the world, so a weak euro is principally
favorable for our business and a strong euro is principally unfavorable. While we expect volatility in global currency markets to continue
in fiscal 2024, we have improved our natural hedge on a global basis through geographic distribution of our production facilities in the
past. In addition to the natural hedging strategy, we also hedge currency risk in our export business using derivative financial instruments.
We expect these steps to help us limit effects on income related to currency in fiscal 2024. In this outlook, we assume that currency
translation effects in fiscal 2024 slightly reduce nominal volume growth rates for Siemens and profitability of our businesses.
This outlook excludes burdens from legal and regulatory matters.
Segments
Digital Industries expects for fiscal 2024 comparable revenue development of 0% to 3%. This is based on the assumption that following
destocking by customers, global demand in the automation businesses, especially in China, will pick up again in the second half of the
fiscal year. The profit margin is expected to be 20% to 23%.
Smart Infrastructure expects for fiscal 2024 comparable revenue growth of 7% to 10%. The profit margin is expected to be 15% to 17%.
Mobility expects for fiscal 2024 comparable revenue growth of 8% to 11%. The profit margin is expected to be 8% to 10%.
22
Combined Management Report
Siemens Healthineers expects to achieve comparable revenue growth of 4.5% to 6.5% in fiscal 2024, and to contribute solidly to the profit
and profit margin of our Industrial Business.
SFS anticipates further gradually improved earnings before taxes in fiscal 2024 compared to fiscal 2023. Return on equity (ROE) (after tax)
is expected to be in the target range of 15% to 20%.
For comparable revenue, we expect the Siemens Group to achieve comparable revenue growth in the range of 4% to 8%. Furthermore,
we anticipate that orders in fiscal 2024 will exceed revenue for a book-to-bill ratio above 1.
10,021
8,529
1.17
(1)/(II) Cash conversion rate
Deferred income
On a quarterly basis, we execute an internal certification process. Management at different levels of our organization, supported by
confirmations by managements of entities under their responsibility, confirms the accuracy of the financial data that has been reported to
Siemens' corporate headquarters and reports on the effectiveness of the related control systems.
Siemens Healthineers is subject to our Group-wide principles for the accounting-related internal control and risk management system and
is responsible for adhering to those principles.
The integration of Varian into our accounting-related ICS, which began in fiscal 2021 after the acquisition by Siemens Healthineers,
continued in fiscal 2023 and was completed to a very large extent with regard to all Varian entities. The integration measures are planned
to be completely finalized in fiscal 2024.
Our internal audit function systematically reviews our financial reporting integrity, our accounting-related ICS and ERM. Siemens
Healthineers has its own internal audit department and annual audit plan (see also 8.5.1). The Audit Committee is integrated into our
accounting-related ICS. In particular, it oversees the accounting and accounting process and the adequacy and effectiveness of the
associated ICS, the ERM and the internal audit system. Moreover, we have rules for accounting-related complaints.
32
32
Combined Management Report
9. Siemens AG
The Annual Financial Statements of Siemens AG have been prepared in accordance with the regulations set forth in the German
Commercial Code (Handelsgesetzbuch) and the German Stock Corporation Act (Aktiengesetz).
In fiscal 2023, results for Siemens AG arise mainly from the business activities of Digital Industries and Smart Infrastructure and are
influenced significantly by the results of subsidiaries and investments Siemens AG owns either directly or indirectly. The business
development of Siemens AG is fundamentally subject to the same risks and opportunities as the Siemens Group. Therefore, the foregoing
explanations for the Siemens Group apply also for Siemens AG.
The Supervisory Board and the Managing Board propose to distribute a dividend of €4.70 per share of no par value entitled to the dividend,
from the unappropriated net income of Siemens AG for the fiscal year ended September 30, 2023 amounting to €3.8 billion. The proposed
dividend represents a total payout of €3.7 billion based on the estimated number of shares entitled to dividend at the date of the Annual
Shareholders' Meeting. We intend to continue providing an attractive return to our shareholders. This includes striving for a dividend per
share that exceeds the amount for the preceding year, or at least matches it. For fiscal 2024, we expect that net income of Siemens AG
will be sufficient to fund the distribution of a commensurate dividend.
As of September 30, 2023, the number of employees was around 47.300.
9.1 Results of operations
Statement of Income of Siemens AG in accordance with German Commercial Code (condensed)
Fiscal year
% Change
(in millions of €)
4,888
(9)%
13%
17,390
(12,502)
2022
2023
19,660
(13,671)
5,989
30%
Qualification of employees involved in the accounting process is ensured through appropriate selection processes and training. As a
fundamental principle, based on materiality considerations, the "four eyes" principle applies, and specific procedures must be adhered to
for data authorization. Additional control mechanisms include target-performance comparisons and analyses of the composition of and
changes in individual line items, both in the closing data submitted by reporting units and in the Consolidated Financial Statements. In
line with our information security requirements, accounting-related IT systems contain defined access rules protecting them from
unauthorized access. The manual and system-based control mechanisms referred to above generally also apply when reconciling the
International Financial Reporting Standards (IFRS) closing data to the Annual Financial Statements of Siemens AG.
Income (loss) from investments, net
Selling and general administrative expenses
Research and development expenses
as percentage of revenue
Gross profit
Cost of sales
Revenue
Other operating income (expenses), net
Combined Management Report
31
The base data used in preparing our financial statements consists of the closing data reported by the operations of Siemens AG and its
subsidiaries. The preparation of the closing data of most of our entities is supported by an internal shared services organization.
Furthermore, other accounting activities, such as governance and monitoring activities, are usually bundled on a regional level. In
particular cases, such as valuations relating to post-employment benefits, we use external experts. The reported closing data is used to
prepare the financial statements in the consolidation system. The steps necessary to prepare the financial statements are subject to both
manual and automated controls.
Overall responsibility for our ICS and ERM lies with the Managing Board. The Siemens Risk and Internal Control (RIC) organization bundles
and integrates the internal control and ERM processes and supports the Managing Board in designing and maintaining adequate and
effective processes for implementing, monitoring and reporting on internal control and ERM activities. It consists of the central RIC
departments of Siemens AG and the RIC departments at our organizational units. The central RIC departments are responsible for
monitoring and coordinating the entire processes in order to ensure an adequate and effective ICS and ERM within the Group.
Our ICS and ERM are based on the globally accepted COSO framework (Committee of Sponsoring Organizations of the Treadway
Commission). Our ERM approach is based on the COSO Standard "Enterprise Risk Management - Integrating with Strategy and
Performance" (2017) and the ISO (International Organization for Standardization) Standard 31000 (2018) and is adapted to Siemens
requirements. Our ICS is based on the internationally recognized "Internal Control - Integrated Framework" (2013) also developed by
COSO. The framework defines the elements of a control system and sets the standard for assessing the adequacy and effectiveness of the
ICS. The frameworks connect the ERM process with our financial reporting process and our ICS, both systems are complementary.
All Siemens entities are part of our ICS and ERM. The scope of activities to be performed by each entity is different, depending, among
others, on the entity's impact on the Consolidated Financial Statements of Siemens and the specific risks associated with the entity. The
management of each entity is obliged to implement an adequate and effective ICS and ERM within their area of responsibility, based on
the group-wide mandatory methodology.
Our ICS and ERM are based on the principles, guidelines and measures introduced by the Managing Board, which are aimed at the
organizational implementation of the Managing Board's decisions. Our ICS and ERM include the management of risks and opportunities
relating to the achievement of business goals, the correctness and reliability of internal and external accounting, and compliance with the
laws and regulations relevant to Siemens. Sustainability aspects are covered as well and are continuously developed based on the
regulatory requirements.
8.5.1 Internal Control System (ICS) and ERM
8.5 Significant characteristics of the internal control and risk management system
While our assessments of individual opportunities have changed during fiscal 2023 due to developments in the external environment,
changes in our business portfolio, our endeavors to profit from them and revision of our strategic plans, the overall opportunity situation
for Siemens did not change significantly as compared to the prior year.
We have an overarching, integrated ICS and ERM methodology (RIC methodology) with a standardized procedure under which necessary
controls are defined, documented in accordance with uniform standards, and tested regularly for their adequacy and effectiveness. For
more information on ERM, see chapter 8.2 Risk management.
Assessment of the overall opportunities situation: The most significant opportunity for Siemens is favorable political and regulatory
environment (including sustainability) as described above.
Leveraging Market Potential: Through sales and services initiatives we continuously strive to grow and extend our businesses in
established markets, open up new markets for existing portfolio elements and strengthen our installed base in order to gain a higher
market share and increased profits. Furthermore, we aim to increase our sales via improved account management and new distribution
channels.
Value creation through innovation: We drive innovation by investing significantly in R&D in order to develop sustainable solutions for
our customers while also strengthening our own competitiveness. Being an innovative company and constantly inventing new
technologies that we expect will meet future demands arising from the megatrends of demographic change, urbanization, digitalization,
environmental change, resource scarcity and glocalization is one of our core purposes. We are granted thousands of new patents every
year and continuously develop new concepts and convincing new digital and data-driven business models. This helps us create the next
generation of ground-breaking innovations in such fields as digital twin, artificial intelligence, automation and edge computing. Across
our operating units, we are profiting from our strength in connecting the real and digital worlds. Our Xcelerator platform is an open, digital
business platform featuring a curated portfolio of loT-enabled hardware and software, an ecosystem and a marketplace to enhance the
digital transformation of our customers. We see growth opportunities in opening up access to new markets and customers through new
marketing and sales strategies, which we implement in our operating units. Our position along the value chains of automation and
digitalization allows us to further increase market penetration. Along these value chains, we have identified several clear growth fields in
which we see our greatest long-term potential. Hence, we are combining and developing our resources and capabilities for these growth
fields.
legislative and governmental measures to accelerate the mitigation of climate change, especially in Europe such as through the Green
Deal or sustainable finance initiatives.
Combined Management Report
29
Within our ERM we regularly identify, evaluate and respond to opportunities that present themselves in our various fields of activity. Below
we describe our most significant opportunities. Unless otherwise stated, the opportunities described relate to all organizational units. The
order in which the opportunities are presented reflects the currently estimated relative exposure for Siemens associated with these
opportunities and thus provides an indication of the opportunities' current importance to us. The described opportunities are not
necessarily the only ones we encounter. In addition, our assessment of opportunities is subject to change because the Company, our
markets and technologies are constantly advancing. It is also possible that opportunities we see today will never materialize.
Favorable political and regulatory environment including sustainability: A favorable political and regulatory environment including
the transition towards a low-carbon economy could restore a more positive industrial investment sentiment that supports the growth of
our markets. In addition, government initiatives and subsidies (including tax reforms, green and digital recovery plans, R&D among others)
lead to more government spending (e.g. infrastructure, healthcare, mobility or digitalization investments) and may ultimately result in an
opportunity for us to participate in ways that increase our revenue and profit. Investments to strengthen countries' resilience, energy and
food security, as well as to diversify value chains close to major markets (reshoring, nearshoring) can present opportunities to businesses.
By enabling our customers to reduce their greenhouse gas (GHG) emissions using our portfolio and by reducing CO2 emission in our own
operations, Siemens strives to support the transition towards a low-carbon economy. Siemens also welcomes and supports recent
Optimization of organization and processes: On the one hand, we leverage ideas to drive further improvements in our processes and
cost structure, such as common computing architecture for image processing. Furthermore, we leverage ideas to drive further
improvements in our processes and cost structure optimizing factory capacities for shorter lead times. On the other hand, we see an
opportunity of further penetrating markets by quality initiative program and avoiding or reducing non conformance cost.
Mergers, acquisitions, equity investments, partnerships, divestments and streamlining our portfolio: We constantly monitor our
current and potential markets to identify opportunities for strategic mergers, acquisitions, equity investments and partnerships, which
may complement our organic growth. Such activities may help us to strengthen our position in our existing markets, provide access to
new or underserved markets, or complement our technological portfolio in strategic areas. Opportunities might also arise when portfolio
optimization measures generate gains, which enable us to further pursue our other strategies for growth and profitability.
23%
Our ICS and ERM and their contributing elements are regularly subject of audit activities by our internal audit function. These are carried
out either as part of the risk-based annual audit plan or as part of audits scheduled during the year upon request. Siemens Healthineers
has its own internal audit function and annual audit plan. Topics from the annual audit plan of Siemens Healthineers that are also relevant
for our Managing Board and Audit Committee must be mandated first by Siemens Healthineers' Managing Board and Audit Committee
Combined Management Report
Our Consolidated Financial Statements according to IFRS are prepared on the basis of a centrally issued conceptual framework which
primarily consists of uniform Financial Reporting Guidelines and a chart of accounts. For Siemens AG and other companies within the
Siemens Group required to prepare financial statements in accordance with German Commercial Code, this conceptual framework is
complemented by mandatory regulations specific to the German Commercial Code. The need for adjustments in the conceptual framework
due to regulatory changes is analyzed on an ongoing basis. Accounting departments are informed quarterly about current topics and
deadlines from an accounting and closing process perspective.
At the end of each fiscal year, our management performs an evaluation of the effectiveness of the accounting-related ICS. We have a
standardized procedure under which necessary controls are defined, documented in accordance with uniform standards, and tested
regularly for their effectiveness. Nevertheless, there are inherent limitations on the effectiveness of any control system, and no system,
including one determined to be effective, may prevent or detect all misstatements.
Our ICS and ERM are based on the globally recognized COSO framework, for further information see 8.5.1.
The overarching objective of our accounting-related ICS and ERM - as part of the overarching ICS and ERM – is to ensure that financial
reporting is conducted in a proper manner, such that the Consolidated Financial Statements and the Combined Management Report of
the Siemens Group and the Annual Financial Statements of Siemens AG as the parent company are prepared in accordance with all relevant
regulations.
8.5.3 Significant characteristics of the accounting-related ICS and ERM
The entire CMS is continuously adapted to business-specific risks and various local legal requirements. The findings from compliance risk
management as well as compliance controls and audits are used to derive measures for its further development.
30
The Compliance Control Program aims to ensure compliance with and implementation of the CMS and processes used worldwide. It is part
of the ICS and is continuously further developed and adapted to the current Siemens guidelines. In addition, current compliance issues are
discussed at the management level on a regular basis.
8.5.2 Compliance Management System (CMS)
Siemens Healthineers is largely subject to the Group-wide principles for our ICS and ERM and is responsible for adhering to those principles.
The integration of Varian into our ICS, which began in fiscal 2021 after the acquisition by Siemens Healthineers, continued in fiscal 2023
and was completed to a very large extent with regard to all Varian entities. The integration measures are planned to be completely finalized
in fiscal 2024.
The Audit Committee is systematically integrated into our ICS and ERM. In particular, it oversees the accounting and the accounting process
as well as the adequacy and effectiveness of the ICS, ERM and the internal audit system.
Nevertheless, there are inherent limitations on the effectiveness of any risk management and control system. For example, no system -
even if deemed to be adequate and effective – can guarantee that all risks that will actually occur will be identified in advance or that any
process violations will be ruled out under all circumstances.
At the end of each fiscal year, our Managing Board performs an evaluation of the adequacy and effectiveness of the ICS and ERM. This
evaluation is based primarily on the Siemens "In Control"-Statement and quarterly Managing Board meetings. The purpose of the "In
Control"-Statement is to provide an overview of the key elements of the ICS and ERM of Siemens AG and its affiliated companies at the
end of the fiscal year, to summarize the activities undertaken to review its adequacy and effectiveness and highlight any critical control
weaknesses identified as part of these activities. The information contained in this statement is provided to the Audit Committee of the
Supervisory Board of Siemens AG to report on the effectiveness of the ICS and ERM. The Siemens "In Control"-Statement is supported by
certifications at various corporate levels and by all affiliated companies. In the quarterly Managing Board meetings, the company-wide risk
and opportunity situation is evaluated, the results of the internal control process are explained and once a year an overall conclusion is
made about the adequacy and effectiveness of our ICS or ERM. Based on this, the Managing Board has no indication that our ICS or ERM
in their respective wholes have not been adequate or effective as of September 30, 2023.
and subsequently by our Managing Board and Audit Committee. The audit procedures for these topics will be - where reasonable -
executed by joint teams including members of our and Siemens Healthineers' internal audit functions, thus respecting the interests of
both Siemens AG and Siemens Healthineers.
Our ICS and ERM also comprise a CMS aligned to the Company's risk situation which is based on the three pillars - prevent, detect and
react. It includes the legal risk areas of corruption, antitrust law, data protection, money laundering, export controls as well as human
rights and is based on an extensive internal set of rules: The Siemens Business Conduct Guidelines (BCG) define the basic principles and
standards of behavior that must be observed by all employees in the company units and in relation to customers, external partners and
the public. In addition, there are extensive internal compliance regulations, including associated controls, which oblige all Siemens
employees to ensure the implementation of the CMS. They contain topic-specific implementation regulations for the individual risk areas
with regard to compliance processes and tools as well as additional guidelines and information. The compliance operating model contains
binding specifications for the employees of the compliance organization and describes responsibilities and how the CMS works.
Compliance risk management and compliance reviews as part of the CMS aim to identify compliance risks at an early stage and thus enable
to take appropriate and effective measures to avoid or minimize risks. The risk assessment is also integrated into individual business
processes and tools. The results of CMS that are relevant to the Group are taken into account as part of the Company-wide ERM.
8.4 Opportunities
28%
(1,785)
4%
On a geographical basis, 75% of revenue was generated in the Europe, C.I.S., Africa, Middle East region, 17% in the Asia, Australia region
and 8% in the Americas region. Exports from Germany accounted for 57% of overall revenue. In fiscal 2023, orders for Siemens AG
amounted to €16.1 billion.
The increases in revenue, cost of sales and research and development expenses were most evident at Digital Industries.
The R&D intensity (R&D costs as a percentage of revenue) was 10.6%, slightly above the level in fiscal 2022. The R&D activities of Siemens
AG are fundamentally the same as for its corresponding business activities within the Siemens Group. R&D expenses in both periods related
mainly to Digital Industries. On an average basis, Siemens AG employed 7,100 people in R&D in fiscal 2023.
The increase in selling and general administrative expenses was due mainly to higher selling expenses led by Digital Industries.
Other operating income (expenses), net, included mainly a loss of €0.2 billion from a disposal in connection with the carve-out of
business activities into the Innomotics GmbH, partly offset by €0.1 billion income from an intragroup service contract. Fiscal 2022 included
mainly expenses of €0.2 billion from the intragroup service contract and expenses of €0.1 billion for the recognition of a provision related
to guarantees and expected obligations from consortium contracts.
Income (loss) from investments, net included mainly income from investments of €2.9 billion (fiscal 2022: €4.8 billion) and income
from profit transfer agreements with affiliated companies of €1.6 billion (fiscal 2022: €3.5 billion). Additionally, in fiscal 2023 Siemens
AG recorded a gain of €0.2 billion from the sale of a part of its stake in Siemens Energy AG and a gain of €0.2 billion from the reversal of
an impairment on the remaining stake in Siemens Energy AG. The remaining stake held directly by Siemens AG amounted to 21.0% as of
September 30, 2023. These gains were partly offset by a loss of €0.2 billion from an impairment on a stake in Thoughtworks Holding Inc.
For comparison, in fiscal 2022 Siemens AG recorded losses of €4.0 billion from impairment of investments, which included an impairment
of €2.9 billion on Siemens AG's stake in Siemens Energy AG, Germany.
Interest and other financial income (expenses), net included a negative interest result of €0.6 billion compared to a positive interest
result of €0.4 billion a year earlier, which was driven by the effect of higher interest rates on intragroup-financing activities. Fiscal 2022
included impacts of €0.6 billion in connection with allowances on receivables from affiliated companies related to business activities in
Russia, expenses from the recognition of provisions for risks relating to derivative financial instruments of €0.4 billion and a higher negative
interest component of €0.3 billion from changes in pension and personnel-related provisions.
33
9.2 Net assets and financial position
Statement of Financial Position of Siemens AG in accordance with German Commercial Code (condensed)
(in millions of €)
Assets
Non-current assets
Intangible and tangible assets
Financial assets
Current assets
Inventories, receivables and other assets
Trade payables, liabilities to affiliated companies and other liabilities
Liabilities to banks
Liabilities
Provisions for taxes and other provisions
Provisions for pensions and similar commitments
Provisions
3,613
Special reserve with an equity portion
Liabilities and equity
Total assets
Active difference resulting from offsetting
Deferred tax assets
Prepaid expenses
Cash and cash equivalents, other securities
Equity
3,760
>-200%
(185)
Income from business activity
79%
(605)
(128)
Interest and other financial income (expenses), net
13%
Income taxes
4,204
83%
(306)
(53)
(3,283)
(3,701)
(17)%
4,734
(2,084)
Net income
4,758
(950)
Unappropriated net income
Allocation to other retained earnings
35%
185
250
Profit carried forward
23%
4,460
n/a
498
(298)
53%
3,115
3,612
concern.
(13)%
While our assessments of individual risks have changed during fiscal 2023 due to developments in the external environment, changes in
our business portfolio, effects of our own mitigation measures and the revision of our risk assessment, the overall risk situation for Siemens
did not change significantly as compared to the prior year. We currently see the strategic risk economic, political and geopolitical conditions
as the most significant challenge for us followed by the operational risk cyber/information security.
4%
540
540
0%
13,604
13,380
2%
4,666
18,270
4,313
8%
17,693
3%
339
63,079
63,417
235
639
(47)%
67,275
(6)%
10.1 Composition of common stock
10. Takeover-relevant information (pursuant to Sections 289a
and 315a of the German Commercial Code) and explanatory
report
Combined Management Report
34
The Corporate Governance statement pursuant to Sections 289f and 315d of the German Commercial Code is publicly available on the
company's website at siemens.com/corporate-governance.
9.3 Corporate Governance statement
20,623
The increase in equity was due to net income for the year of €4.5 billion and the transfer of €0.6 billion in treasury shares to employees
in connection with our share-based payment programs. These factors were partly offset by dividends paid in fiscal 2023 (for fiscal 2022)
of €3.4 billion and share buybacks during the year amounting to €0.9 billion. The equity ratio as of September 30, 2023 increased to 21%,
from 19% a fiscal year earlier. For the disclosures in accordance with Section 160 para. 1 no. 2 of the German Stock Corporation Act about
treasury shares, refer to Note 15 of our Notes to Annual Financial Statements for fiscal 2023.
(3)%
107,005
103,884
0%
(7)%
67,914
235
The change in cash and cash equivalents, other securities relates to the liquidity management conducted by Corporate Treasury, which
was focused not solely on the business activities of Siemens AG. The liquidity management is based on the financing policy of the Siemens
Group, which is aimed towards a balanced financing portfolio, a diversified maturity profile and a comfortable liquidity cushion. Intra-
group financing activities drove both a decrease of €4.5 billion in receivables from affiliated companies, which resulted in lower
inventories, receivables and other assets, and a decrease of €4.5 billion in liabilities to affiliated companies, which was the main reason
for the decrease of trade payables, liabilities to affiliated companies and other liabilities.
21,422
(3)%
103,884
72,657
72,610
0%
71,576
71,303
21%
0%
1,081
2022
% Change
At present, no risks have been identified that either individually or in combination could endanger our ability to continue as a going
Sep. 30,
2023
Combined Management Report
Total liabilities and equity
1,307
Following the cancellation of 50 million registered shares of no par value of the Company (Siemens shares) in February 2023, the
Company's capital stock amounts to €2.400 billion (as of September 30, 2023), divided into 800 million Siemens shares. The shares are
fully paid in. All shares confer the same rights and obligations. The shareholders' rights and obligations are governed in detail by the
provisions of the German Stock Corporation Act, in particular by Sections 12, 53a et seq., 118 et seq. and 186 of the German Stock
Corporation Act.
26,190
(14)%
107%
16
11%
2,065
2,294
33
1%
30,424
220
(10)%
32,047
28,724
56%
1,623
2,534
223
10.2 Restrictions on voting rights or transfer of shares
107,005
The von Siemens-Vermögensverwaltung GmbH (VSV) has, on a sustained basis, powers of attorney allowing it to exercise the voting rights
for 10,059,581 Siemens shares (as of September 30, 2023) on behalf of members of the Siemens family. These shares are part of the total
number of shares held by the family's members. The powers of attorney are based on an agreement between the VSV and, among others,
members of the Siemens family. The shares are voted together by vSV, taking into account the suggestions of a family partnership
established by the family's members or of one of this partnership's governing bodies.
The difference between Taxonomy-eligible revenue and Taxonomy-aligned revenue is mainly due to DNSH criteria related to pollution
prevention as part of Appendix C, which go beyond existing national regulation. This is mainly because additionally required
documentation is not completely available yet.
The revenue KPI shows the ratio of revenue from Taxonomy-eligible and/or aligned economic activities to the total revenue in the
Consolidated Statements of Income for the reporting year. Based on an assessment of the Siemens business portfolio, Taxonomy-eligible
revenue accounted for 20.3% and Taxonomy-aligned revenue for 16.5% of total revenue. This translates into €15.7 billion in Taxonomy-
eligible revenue and €12.8 billion in aligned revenue.
Revenue KPI
The key performance indicators (KPI) in this section were determined based on Commission Delegated Regulation (EU) 2021/2178 in
conjunction with the International Financial Reporting Standards applicable for the Consolidated Financial Statements. For calculating the
eligibility and alignment KPIs, Siemens' business activities and associated revenue, capital expenditures (CapEx), and operating
expenditures (OpEx) were predominantly directly mapped to an applicable economic activity listed in the Commission Delegated Acts in
connection with EU regulation 2020/852. For the calculation of CapEx and OpEx, allocations were also made based on the revenue of the
Taxonomy-eligible and aligned activities. To avoid double counting, a mapping was always made to one economic activity only. Following
the eligibility assessment, the alignment with Substantial Contribution criteria for all eligible business activities was assessed and
documented based on appropriate reporting hierarchy levels, such as business-segment, product-family or project level. Once a business
activity demonstrated Substantial Contribution, the Do No Significant Harm (DNSH) criteria were assessed together with technical experts
on the product, site, project and/or supplier level. For fiscal 2023, EU Taxonomy reporting is limited to the first two environmental
objectives (climate change mitigation and climate change adaption). Based on its implemented group-wide structures on risk analysis,
corporate guidelines and due diligence processes and mechanisms, Siemens fulfills the Minimum Safeguards requirements, which
comprise the areas of human rights, anti-corruption and bribery, taxation, and fair competition.
11. EU Taxonomy disclosure
Combined Management Report
Capital expenditures KPI
37
10.7 Other takeover-relevant information
On September 18, 2019, the Supervisory Board of Siemens AG resolved that the contracts with members of the Managing Board should
not contain such right of termination in the future. This has already been taken into account in the case of contract extensions and in the
case of new contracts with the newly appointed members of the Managing Board as of October 1, 2020.
The contracts with the members of the Managing Board previously contained the right of the member to terminate his or her contract
with the Company for good cause in the event of a change of control that results in a substantial change in the position of a Managing
Board member (for example, due to a change in corporate strategy or a change in the Managing Board member's duties and
responsibilities). A change of control exists if one or several shareholders acting jointly or in concert acquire a majority of the voting rights
in Siemens AG and exercise a controlling influence, or if Siemens AG becomes a dependent enterprise as a result of entering into an
intercompany agreement within the meaning of Section 291 of the German Stock Corporation Act, or if Siemens AG is to be merged into
an existing corporation or other entity. If this right of termination is exercised, the Managing Board member is entitled to a severance
payment in the amount of no more than two years' compensation. The calculation of the annual compensation includes not only the base
compensation and the target amount for the bonus, but also the target amount for the stock awards, in each case based on the most
recent completed fiscal year prior to termination of the contract. The stock-based compensation components for which a firm commitment
already exists will remain unaffected. Additionally, the severance payments cover non-monetary benefits by including an amount of 5%
of the total severance amount. Severance payments will be reduced by 10% as a lump-sum allowance for discounted values and for income
earned elsewhere. However, this reduction will apply only to the portion of the severance payment that was calculated without taking
account of the first six months of the remaining term of the Managing Board member's contract. There is no entitlement to a severance
payment if the Managing Board member receives benefits from third parties in connection with a change of control. A right to terminate
the contract does not exist if the change of control occurs within a period of twelve months prior to a Managing Board member's
retirement.
10.6 Compensation agreements with members of the Managing Board or employees in the
event of a takeover bid
Framework agreements concluded by Siemens AG under International Swaps and Derivatives Association Inc. documentation (ISDA
Agreements) grant each counterparty a right of termination, including in certain cases of (i) a transformation (for example mergers and
changes of form), (ii) an asset transfer or (iii) acquisition of ownership interests that enables the acquirer to exercise control over Siemens
AG or its controlling bodies. Partially this right of termination exists only, if (1) the resulting entity fails to simultaneously assume Siemens
AG's obligations under the ISDA Agreements or (2) the resulting entity's creditworthiness is materially weaker than Siemens AG's
immediately prior to such event. Generally, ISDA Agreements are designed such that upon termination all outstanding payment claims
documented under them are to be netted.
The lines of credit, and the relevant loan agreements mentioned above provide their respective lenders with a right of termination in the
event that (1) Siemens AG becomes a subsidiary of another company or (2) a person or a group of persons acting in concert acquires
effective control over Siemens AG by being able to exercise decisive influence over its activities (Art. 3(2) of Council Regulation (EC)
139/2004).
We are not aware of, nor have we during the last fiscal year been notified of, any shareholder directly or indirectly holding 10% or more
of the voting rights. There are no Siemens shares with special rights conferring powers of control. Shares of stock issued by Siemens AG
to employees under its share programs and/or as share-based compensation are transferred to the employees. The beneficiary employees
who hold shares of employee stock may exercise their control rights in the same way as any other shareholder in accordance with
applicable laws and the Articles of Association.
In December 2021, a consolidated subsidiary as borrower and Siemens AG as guarantor entered into a bilateral loan agreement in the
amount of €500 million, which has been fully drawn. In addition, in March 2020 and in June 2019 respectively, a consolidated subsidiary
as borrower and Siemens AG as guarantor entered into a bilateral loan agreement, each of which has been drawn in the full amount of
US$500 million.
The CapEx KPI shows the ratio of CapEx from Taxonomy-eligible and/or aligned economic activities to the total CapEx, reflecting additions
(including additions from business combinations) to other intangible assets and property, plant and equipment in accordance with Note
13 to the Consolidated Financial Statements. In the reporting year, 34.5% (€1.3 billion) of Siemens' CapEx were eligible, and 12.2% (€0.5
billion) were aligned. The aligned CapEx is composed as follows: a majority of €0.4 billion is related to additions to property, plant and
equipment, the remainder pertains to internally generated intangible assets and capitalized right-of-use assets.
Acquisition and ownership of buildings (CCM 7.7) related to Siemens' real estate portfolio represents the largest portion in overall CapEx
eligibility. The difference between Taxonomy-eligible CapEx and Taxonomy-aligned CapEx is impacted by (i) only partial availability of
information on energy performance certificates for our global portfolio and (ii) energy certificates below the required threshold defined
in the Substantial Contribution criteria for the energy efficiency of buildings.
For additional information with respect to specific proceedings, see Note 22 in Notes to Consolidated Financial Statements for fiscal 2023.
8.3.5 Assessment of the overall risk situation
In addition, while we have procedures in place to ensure compliance with applicable governmental regulations in the conduct of our
business operations, it cannot be excluded that violations of applicable governmental regulations may be caused either by us or by third
parties that we contract with, including suppliers or service providers whose activities may be attributed to us. Any such violations
particularly expose us to the risk of liability, penalties, fines, reputational damage or loss of licenses or permits that are important to our
business operations. In particular, we could also face liability for damage or remediation for environmental contamination at the facilities
we design or operate. With regard to certain environmental risks, we maintain liability insurance at levels that our management believes
are appropriate and consistent with industry practice. We may incur environmental losses beyond the limits, or outside the coverage, of
such insurance, and such losses may have an adverse effect on our business situation, financial condition and results of operations.
Current or future litigation and legal and regulatory proceedings: Siemens is and potentially will be involved in numerous legal disputes
and proceedings in various jurisdictions. These legal disputes and proceedings could result, in particular, in Siemens being subject to
payment of damages and punitive damages, equitable remedies or sanctions, fines or disgorgement of profit. In individual cases this may
also lead to formal or informal exclusion from tenders or the revocation or loss of business licenses or permits. Asserted claims are generally
subject to interest rates. Some of these legal disputes and proceedings could result in adverse decisions for Siemens; or decisions,
assessments or requirements of regulatory authorities could deviate from our expectations, which may have material effects on our
business activities as well as our financial position, results of operations and cash flows. Siemens maintains liability insurance for certain
legal risks at levels our management believes are appropriate and consistent with industry practice. However, the insurance policy does
not protect Siemens against, in particular, reputational damage. Moreover, Siemens may incur losses relating to legal disputes and
proceedings beyond the limits, or outside the coverage, of such insurance or exceeding any provisions made for losses related to legal
disputes and proceedings. Finally, there can be no assurance that Siemens will be able to maintain adequate insurance coverage on
commercially reasonable terms in the future.
The most significant challenges have been mentioned first in each of the four risk categories: strategic, operational, financial and
compliance.
Environmental, health & safety and other governmental regulations: Some of the industries in which we operate are highly regulated.
Current and future environmental, health, safety and other governmental regulations or changes thereto may require us to change the
way we run our operations and could result in significant increases in our operating or production costs. Furthermore, we see the risk of
potential environmental, health or safety incidents as well as potential non-compliance with environmental, health or safety regulations
affecting Siemens and our contractors or sub-suppliers, resulting for example in serious injuries, business interruptions, penalties, loss of
reputation and internal or external investigations.
At the Shareholders' Meeting, each share of stock has one vote and accounts for the shareholder's proportionate share in the Company's
net income. An exception to this rule applies with regard to treasury shares held by the Company, which do not entitle the Company to
any rights. Under Section 136 of the German Stock Corporation Act the voting right of the affected shares is excluded by law.
Siemens shares issued to employees worldwide under the Siemens share programs implemented since the beginning of fiscal 2009, in
particular the Share Matching Plan, are freely transferable unless applicable local laws indicate otherwise. Under the rules of the Share
Matching Plan, however, in order to receive one matching share free of charge for each three shares purchased, participants are required
to hold the shares purchased by them for a vesting period of several years, during which the participants must be continuously employed
by Siemens AG or any of its affiliated companies. The right to receive matching shares is forfeited if the purchased shares are sold,
transferred, hedged on, pledged or hypothecated in any way during the relevant vesting period.
Protectionism (including tariffs/trade war): Protectionist trade policies, de-coupling and changes in the political and regulatory
environment in the markets in which we operate, such as import and export controls, tariffs and other trade barriers including debarment
from certain markets, inbound and outbound investment screenings, and price or exchange controls, could affect our business in national
markets and could impact our business situation, financial position and results of operations; we may also be exposed to penalties, other
sanctions and reputational damage. In addition, the uncertainty of the legal environment in some regions could limit our ability to enforce
our rights and subject us to increasing costs related to adjusting our compliance programs.
This aligned CapEx includes €116 million related to a CapEx plan, associated with building projects to be finalized by fiscal 2028, summing
up to a planned total volume of €1.4 billion (capitalizable and non-capitalizable costs). The buildings are designed to minimize energy use
and carbon emissions (CCM 7.7).
state sponsors of terrorism. As a result, it is possible that such policies may result in our inability to gain or retain certain investors or
customers. In addition, the termination of our activities in sanctioned countries may expose us to customer claims and other actions. Our
reputation could also suffer due to our activities with counterparties in or affiliated with these countries or due to unauthorized diversion
of our products to restricted parties or destinations. Siemens addresses these risks by maintaining a comprehensive and robust control
program.
38
Corresponding to revenue, the difference between Taxonomy-eligible OpEx and Taxonomy-aligned OpEx relates mainly to the
documentation of DNSH criteria for pollution prevention (Appendix C).
This aligned OpEx includes €3 million related to a CapEx plan, associated with building projects to be finalized by fiscal 2028, summing up
to a planned total volume of €1.4 billion (capitalizable and non-capitalizable costs). The buildings are designed to minimize energy use
and carbon emissions (CCM 7.7).
The majority of eligible and/or aligned expenditures relate to processes and assets associated with the economic activities described for
the revenue KPI: (i) Manufacture of low carbon technologies for transport (CCM 3.3) and (ii) rail transportation infrastructure (CCM 6.14).
These two activities account for half of eligible OpEx and the majority of aligned OpEx.
The OpEx KPI shows the ratio of OpEx from Taxonomy-eligible and/or aligned economic activities to total OpEx. The total OpEx comprises
direct non-capitalized costs related to research and development, building renovation measures, short-term leases, maintenance and
repairs, and any other direct expenditures relating to the day-to-day servicing of assets of property, plant, and equipment per Annex I of
the Commission Delegated Regulation (EU) 2021/2178. Accordingly, 12.4% (€0.9 billion) of Siemens' OpEx were eligible and 8.2% (€0.6
billion) were aligned.
Operating expenditures KPI
Combined Management Report
In January 2023, Siemens AG entered into a bilateral loan agreement in the amount of US$250 million and in December 2022, Siemens
AG entered into a bilateral loan agreement in the amount of PLN500 million; both loan agreements have been fully drawn.
Taxonomy-eligible and aligned economic activities were primarily driven by the (i) Manufacture of low-carbon technologies for transport
(Climate Change Mitigation, CCM 3.3), (ii) rail transportation infrastructure (CCM 6.14), (iii) Infrastructure enabling low-carbon road
transport and public transport (CCM 6.15), all associated with Mobility businesses, as well as (iv) energy-efficient building technologies
(CCM 3.5) and (v) services for energy-efficient building technologies (CCM 7.5), both related to Smart Infrastructure businesses.
10.5 Significant agreements which take effect, alter or terminate upon a change of control of
the Company following a takeover bid
•
•
• The issue price of the new shares/bonds is not significantly lower than the stock market price of Siemens shares already listed or the
theoretical market price of the bonds computed in accordance with generally accepted actuarial methods (exclusion of subscription
rights, limited to 10% of the capital stock, in accordance with or by mutatis mutandis application of Section 186 para. 3 sentence 4
German Stock Corporation Act).
The new shares under Authorized Capital 2019 and the aforementioned bonds are to be issued against contributions in cash or in kind.
They are, as a matter of principle, to be offered to shareholders for subscription. The Managing Board is authorized to exclude, with the
approval of the Supervisory Board, subscription rights of shareholders in the event of capital increases against contributions in kind. In the
event of capital increases against contributions in cash, the Managing Board is authorized to exclude shareholders' subscription rights with
the approval of the Supervisory Board in the following cases:
Combined Management Report
35
The exclusion is necessary with regard to fractional amounts resulting from the subscription ratio.
By resolutions of the Shareholders' Meetings on January 30, 2019 and February 5, 2020, the Managing Board is authorized to issue bonds
with conversion, exchange or option rights or conversion obligations, or a combination of these instruments, entitling the holders/creditors
to subscribe to up to 80 million and up to 60 million Siemens shares, respectively. Based on these two authorizations, the Company or its
affiliated companies may issue such convertible bonds and/or warrant bonds until January 29, 2024 and February 4, 2025, respectively,
each in an aggregate principal amount of up to €15 billion. In order to grant shares of stock to holders/creditors of such convertible bonds
Furthermore, the Managing Board is authorized to increase, with the approval of the Supervisory Board, the capital stock until January 29,
2024 by up to €510 million through the issuance of up to 170 million Siemens shares against contributions in cash and/or in kind
(Authorized Capital 2019).
The Managing Board is authorized to increase, with the approval of the Supervisory Board, the capital stock until February 2, 2026 by up
to €90 million through the issuance of up to 30 million Siemens shares against contributions in cash (Authorized Capital 2021).
Subscription rights of existing shareholders are excluded. The new shares shall be offered exclusively to employees of the Company and
any of its affiliated companies. To the extent permitted by law, such employee shares may also be issued in such a manner that the
contribution to be paid on such shares is covered by that part of the annual net income which the Managing Board and the Supervisory
Board may allocate to other retained earnings under Section 58 para. 2 of the German Stock Corporation Act.
As of September 30, 2023, Siemens AG maintained lines of credit in the amount of €7.45 billion.
10.3 Legislation and provisions of the Articles of Association applicable to the appointment and
removal of members of the Managing Board and governing amendment to the Articles of
Association
10.4 Powers of the Managing Board to issue and repurchase shares
Resolutions of the Shareholders' Meeting require a simple majority vote, unless a greater majority is required by law (Section 23 para. 2 of
the Articles of Association). Pursuant to Section 179 para. 2 of the German Stock Corporation Act, amendments to the Articles of
Association require a majority of at least three-quarters of the capital stock represented at the time of the casting of the votes, unless
another capital majority is prescribed by the Articles of Association.
As of September 30, 2023, the total unissued authorized capital of Siemens AG therefore consisted of €600 million nominal that may be
used, in installments with varying terms, by issuing up to 200 million Siemens shares.
The exclusion is used to provide subscription rights as dilution compensation for holders/creditors of conversion or option rights/
obligations on Siemens shares.
and/or warrant bonds, the capital stock was conditionally increased by resolutions of the Shareholders' Meetings in 2019 and 2020, by up
to 80 million and up to 60 million Siemens shares, respectively (Conditional Capitals 2019 and 2020), i.e. in total by up to €420 million
nominal through the issuance of up to 140 million Siemens shares.
The appointment and removal of members of the Managing Board are subject to the provisions of Sections 84 and 85 of the German Stock
Corporation Act and Section 31 of the German Codetermination Act (Mitbestimmungsgesetz). According to Section 8 para. 1 of the Articles
of Association, the Managing Board is comprised of several members, the number of which is determined by the Supervisory Board.
According to Section 179 of the German Stock Corporation Act, any amendment to the Articles of Association requires a resolution of the
Shareholders' Meeting. The authority to adopt purely formal amendments to the Articles of Association was transferred to the Supervisory
Board under Section 13 para. 2 of the Articles of Association. In addition, by resolutions adopted during past Shareholders' Meetings, the
Supervisory Board has been authorized to amend Section 4 of the Articles of Association in accordance with the utilization of the
Authorized and Conditional Capitals, and after expiration of the then-applicable authorization and utilization period.
Combined Management Report
36
The new shares issued or to be issued against contributions in cash or in kind, and with shareholders' subscription rights excluded, may in
certain cases be subject to further restrictions. The details of those restrictions are described in the respective authorizations. In addition,
the Managing Board has declared, by way of a voluntary commitment, not to increase the capital stock from the Authorized Capital 2019
and the Conditional Capitals 2019 and 2020 by a total of more than 10% of the capital stock existing at the time of the Shareholders'
Meeting on February 5, 2020, to the extent that capital increases with shareholders' subscription rights excluded are made from the
Authorized Capital 2019 against contributions in cash or in kind or to service convertible bonds and/or warrant bonds issued under the
authorizations approved on January 30, 2019 or February 5, 2020 with shareholders' subscription rights excluded. This voluntary
commitment ends no later than February 4, 2025.
As of September 30, 2023, the Company held 10,079,918 shares of stock in treasury.
Furthermore, the Supervisory Board is authorized to use shares acquired on the basis of this or any previously given authorization to meet
obligations or rights to acquire Siemens shares that were or will be agreed with members of the Managing Board within the framework of
rules governing Managing Board compensation.
⚫ used to service or secure obligations or rights to acquire Siemens shares arising particularly from or in connection with convertible bonds
or warrant bonds of the Company or its affiliated companies. Moreover, the Managing Board is authorized to exclude subscription rights
in order to provide subscription rights as dilution compensation for holders/creditors of conversion or option rights/obligations on
Siemens shares, and to use Siemens shares to service such subscription rights.
• sold by the Managing Board, with the approval of the Supervisory Board, against payment in cash if the price at which such Siemens
shares are sold is not significantly lower than the market price of Siemens stock (exclusion of subscription rights, limited to 10% of the
capital stock, by mutatis mutandis application of Section 186 para. 3 sentence 4 German Stock Corporation Act); or
On June 24, 2021, the Company announced that it would launch a new five-year share buyback program, beginning in fiscal 2022. This
buyback, which began on November 15, 2021 and extends at the latest until September 15, 2026, is limited to a maximum value of €3
billion (excluding incidental transaction charges) on purchases of no more than 50 million Siemens shares. Using the authorization given
by the Annual Shareholders' Meeting on February 5, 2020, Siemens repurchased 21.0 million shares by September 30, 2023 under this
share buyback. This buyback has the exclusive purposes of retirement, of issuing shares to employees, board members of affiliated
companies and members of the Managing Board of Siemens AG, and of servicing/securing the obligations or rights to acquire Siemens
shares arising particularly from or in connection with convertible bonds and warrant bonds.
• used in connection with share-based compensation programs and/or employee share programs of the Company or any of its affiliated
companies and issued to individuals currently or formerly employed by the Company or any of its affiliated companies as well as to
board members of any of the Company's affiliated companies;
retired;
In addition to selling over the stock exchange or through a public sales offer to all shareholders, the Managing Board is authorized by
resolution of the Shareholders' Meeting on February 5, 2020 to also use Siemens shares repurchased on the basis of this or any previously
given authorization for every permissible purpose. In particular such shares may be:
•
The Company may not repurchase Siemens shares unless so authorized by a resolution duly adopted by the shareholders at a general
meeting or in other very limited circumstances set forth in the German Stock Corporation Act. On February 5, 2020, the Shareholders'
Meeting authorized the Company to acquire until February 4, 2025 up to 10% of its capital stock existing at the date of adopting the
resolution or if the value is lower - as of the date on which the authorization is exercised. The aggregate of shares of stock of Siemens
AG repurchased under this authorization and any other Siemens shares previously acquired and still held in treasury by the Company or
attributable to the Company pursuant to Sections 71d and 71e of the German Stock Corporation Act may at no time exceed 10% of the
then existing capital stock. Any repurchase of Siemens shares shall be accomplished at the discretion of the Managing Board either (1) by
acquisition over the stock exchange, (2) through a public share repurchase offer or (3) through a public offer to swap Siemens shares for
shares in a listed company within the meaning of Section 3 para. 2 German Stock Corporation Act. The Managing Board is additionally
authorized to complete the repurchase of Siemens shares in accordance with the authorization described above by using certain derivatives
(put and call options, forward purchases and any combination of these derivatives). In exercising this authorization, all stock repurchases
based on the derivatives are limited to a maximum volume of 5% of Siemens' capital stock existing at the date of adopting the resolution
at the Shareholders' Meeting. A derivative's term of maturity may not, in any case, exceed 18 months and must be chosen in such a way
that the repurchase of Siemens shares upon exercise of the derivative will take place no later than February 4, 2025.
⚫ offered and transferred, with the approval of the Supervisory Board, to third parties against non-cash contributions;
For details on the authorizations referred to above, especially the terms to exclude subscription rights, please refer to the relevant
resolution and to Section 4 of the Articles of Association.
3
Installation, maintenance and repair of charging stations for
electric vehicles in buildings (and parking spaces attached to
buildings)
7.5
Installation, maintenance and repair of instruments and devices
for measuring, regulation and controlling energy performance
of buildings
0.0%
7.4
0.0%
Renovation of existing buildings
16
7.3
Installation, maintenance and repair of energy efficiency
equipment
15
7.2
0.0%
0.2%
0.2%
OpEx of Taxonomy-eligible but not environmentally sustainable
7.6
8.2%
0
activities (not Taxonomy-aligned activities) (A.2.)
4.2%
307
0.1%
Total (A.1+ A.2)
Installation, maintenance and repair of renewable energy
technologies
9
Data-driven solutions for GHG emissions reductions
0.3%
21
7.7
Acquisition and ownership of buildings
0.0%
1
8.2
7.1
Y/N
0.0%
26
3.3
Manufacture of low carbon technologies for transport
E/T
%
Y/N
Y/N
0.4%
Y/N
Y/N
Y/N
T =
transitional)
of OpEx
Category
(E = enabling;
905
aligned
proportion
Y/N
Construction of new buildings¹
Manufacture of energy efficiency equipment for buildings
189
0
6.15
Infrastructure enabling low-carbon road transport and public
transport¹
0.0%
0
6.14
Infrastructure for rail transport¹
3.5
0.0%
4.9
Transmission and distribution of electricity
0.3%
24
3.6
Manufacture of other low carbon technologies
2.6%
2
12.4%
Note 22 Legal proceedings
OpEx of Taxonomy-non-eligible activities (B)
22
Note 16 Debt
19
Note 15 Other current liabilities
Note 14 Other financial assets
Note 13 Other intangible assets and property, plant and equipment
Note 11 Inventories and Other current assets
Note 12 Goodwill
67899
19
19
18
17
16
Note 10 Contract assets and liabilities
16
Note 17 Post-employment benefits
25
Note 18 Provisions
26
guards
37
Note 26 Share-based payment
35
Note 25 Financial risk management
32
Note 24 Derivative financial instruments and hedging activities
Note 9 Other current financial assets
31
28
27
Note 21 Commitments and contingencies
27
Note 20 Additional capital disclosures
26
Note 19 Equity
Note 23 Additional disclosures on financial instruments
16
Note 8 Trade and other receivables
Note 7 Income taxes
3
Consolidated Financial Statements
Table of contents
SIEMENS
This document is an English language translation of the authoritative German version and is not provided
in the European Single Electronic Format (ESEF). The legally required rendering in ESEF is filed in German
language with the operator of the German Company Register and published in the German Company
Register.
for fiscal 2023
Statements*
1. Consolidated Statements of Income
Consolidated Financial
Confidential
100.0%
7,274
87.6%
6,369
1 Value below €0.5 million, therefore rounded to zero.
Total (A+B)
44
B. Taxonomy-non-eligible activities
3
4
14
Note 6 Other operating expenses
Note 5 Other operating income
Note 4 Interests in other entities
Note 2 Material accounting policies and critical accounting estimates
Note 3 Acquisitions and dispositions
Note 1 Basis of presentation
6. Notes to Consolidated Financial Statements
2. Consolidated Statements of Comprehensive Income
5. Consolidated Statements of Changes in Equity
12
12
7772233456
6
4. Consolidated Statements of Cash Flows
5
3. Consolidated Statements of Financial Position
13
safe-
Y
Combined Management Report
0.4%
29
7.5
Installation, maintenance and repair of instruments and devices
for measuring, regulation and controlling energy performance
of buildings
E
0.0%
Y
Y
Y
Y
Y
Y
0%
100%
0.0%
100%
0%
Y
Y
Y
Y
Y
Y
0%
100%
0.0%
0
1
Installation, maintenance and repair of renewable energy
technologies
E
0.4%
Y
Y
Y
Y
7.6
7.4
Installation, maintenance and repair of charging stations for
electric vehicles in buildings (and parking spaces attached to
buildings)
E
Y
0%
100%
0.0%
3
6.16
Infrastructure enabling low carbon water transport
Y
E
Y
Y
Y
Y
Y
Y
0%
0.9%
Y
Note 27 Personnel costs
Y
0.1%
Y
Y
Y
Y
Y
Y
Y
0%
0.1%
5
7.3
Installation, maintenance and repair of energy efficiency
equipment
E
0.0%
Y
100%
Minimum Taxonomy-
Y
E
Absolute
OpEx
Codes
A.2. Taxonomy-Eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities)
Economic activities
EU Taxonomy - OpEx
Draft
43
Confidential
1 Value below €0.5 million, therefore rounded to zero.
8.2%
8.2%
597
OpEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
E
OpEx
Proportion of
OpEx
(in millions of €)
%
ecosystems
Biodiversity
and
Pollution
economy
Circular
resources
marine
0.0%
Water and
Climate
mitigation
change
DNSH criteria
Climate
800
Substantial contribution criteria
change
adaptation
Y
Y
Y
54
8.2
Data-driven solutions for GHG emissions reductions
0.1%
Y
Y
Y
0.7%
Y
Y
0%
100%
0.1%
7
7.7
Acquisition and ownership of buildings
Y
0.0%
100%
Y
Y
Y
Y
0%
100%
0.0%
0
0%
9.3
E
0.7%
Y
Y
Y
Y
Y
Professional services related to energy performance of
buildings¹
37
Other comprehensive income, net of income taxes
38
22,855
14, 23
4,955
3,014
4
11,733
11,938
13
12,196
10,641
3,13
33,861
32,224
3,12
58,829
25,903
7
2,231
2,459
1,601
Other current financial liabilities
10,317
10,130
Trade payables
6,658
7,483
60,639
16
Liabilities and equity
151,502
145,067
92,673
84,428
1,565
1,523
Short-term debt and current maturities of long-term debt
413
99
1,935
Note
Consolidated Financial Statements
Total assets
Total non-current assets
Other assets
Deferred tax assets
Other financial assets
Sep 30,
2023
Investments accounted for using the equity method
Other intangible assets
Goodwill
Total current assets
Assets classified as held for disposal
Other current assets
Current income tax assets
Inventories
Property, plant and equipment
1,616
Sep 30,
2022
10,465
1,955
11
1,432
1,363
10,626
11,548
11
10,084
7,559
10
9,696
10,605
9
16,701
17,405
8
7,581
Contract assets
Contract liabilities
12,571
Treasury shares, at cost
Other components of equity
Retained earnings
Capital reserve
2,550
2,400
4,19
96,697
92,007
54,011
47,106
1,654
1,666
1,867
1,453
Non-controlling interests
Total equity
7,411
7,174
4
151,502
145,067
54,805
53,060
5,910
5,270
Issued capital
48,895
Total equity attributable to shareholders of Siemens AG
(5,948)
(1,177)
6,159
2,282
38,959
36,874
47,791
Equity
Total liabilities
Total non-current liabilities
Total current liabilities
61
50
Liabilities associated with assets classified as held for disposal
7,448
8,182
15
44,901
Other current liabilities
2,566
Current income tax liabilities
2,156
2,320
18
Current provisions
12,049
2,381
10
42,686
16
Other liabilities
Other financial liabilities
1,857
1,794
18
Provisions
2,381
Long-term debt
1,655
Deferred tax liabilities
2,275
1,426
17
Provisions for pensions and similar obligations
43,978
39,113
7
Note 28 Earnings per share
Other current financial assets
Cash and cash equivalents
(12,857)
(13,941)
(5,591)
(6,183)
25,847
29,653
77,769 71,977
(48,116) (46,130)
2022
2023
Note
2,30
Fiscal year
Consolidated Financial Statements
Net income
Income (loss) from discontinued operations
Income from continuing operations
5
574
2,171
6
(2,741)
(2,687)
7
7,154
11,201
(987)
(387)
Diluted earnings per share
(689)
1,632
2,406
(2,085)
906
4
(285)
(454)
(1,373)
Net income
Income (loss) from discontinued operations
Income from continuing operations
(in millions of €, per share amounts in €)
1. Consolidated Statements of Income
Commercial Code
Note 35 List of subsidiaries and associated companies pursuant to Section 313 para. 2 of the German
43
Note 34 Subsequent events
42
Revenue
Note 33 Corporate governance
Note 32 Principal accountant fees and services
42
Note 31 Related party transactions
41
Note 30 Information about geographies
41
Note 29 Segment information
42
8,514
Cost of sales
Research and development expenses
Basic earnings per share
Shareholders of Siemens AG
Non-controlling interests
Attributable to:
Net income
Income (loss) from discontinued operations, net of income taxes
Income from continuing operations
Gross profit
Income tax expenses
Other financial income (expenses), net
Interest expenses
Interest income
Income (loss) from investments accounted for using the equity method, net
Other operating expenses
Other operating income
Selling and general administrative expenses
Income from continuing operations before income taxes
Trade and other receivables
4,413
(21)
398
(161)
Income (loss) from investments accounted for using the equity method, net
therein: Income tax effects
45
(15)
Derivative financial instruments
(74)
(8)
6,803
(4,262)
Currency translation differences
(516)
(135)
Items that will not be reclassified to profit or loss
Items that may be reclassified subsequently to profit or loss
(4,431)
7,127
100%
Assets
(in millions of €)
3. Consolidated Statements of Financial Position
3
9,553
3,972
1,450
72
(10)
Non-controlling interests
Attributable to:
Total comprehensive income
11,003
3,962
6,611
(4,566)
Shareholders of Siemens AG
10
Income (loss) from investments accounted for using the equity method, net
therein: Income tax effects
9.91
(0.03)
0.02
4.62
9.90
28
(0.03)
4.65
4.59
10.04
4.67
10.02
28
669
3,723
579
7,949
4,392
8,529
0.02
15
2. Consolidated Statements of Comprehensive Income
2023
(1)
Remeasurements of equity instruments
1
(41)
(560)
(84)
(589)
Fiscal year
(104)
4,392
8,529
therein: Income tax effects
Remeasurements of defined benefit plans
Net income
(in millions of €)
2022
17
0.9%
ecosystems
6.15
%
(in millions of €)
T =
transitional)
Category
(E = enabling;
aligned
proportion
of revenue
Revenue
Revenue
safe-
guards
Proportion of
%
Absolute
DNSH criteria
Substantial contribution criteria
Revenue
Combined Management Report
Codes
A.2. Taxonomy-Eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities)
Economic activities
EU Taxonomy - Revenue
Draft
Minimum Taxonomy-
39
%
Y/N
Transmission and distribution of electricity
0.2%
130
3.6
Manufacture of other low carbon technologies
1.3%
976
3.5
Manufacture of energy efficiency equipment for buildings
Y/N
1.7%
3.3
Manufacture of low carbon technologies for transport
E/T
%
Y/N
Y/N
Y/N
Y/N
Y/N
1,317
Confidential
16.5%
16.5%
0.3%
234
8.2
Data-driven solutions for GHG emissions reductions
0.0%
Y
Y
Y
Y
100%
Y
0%
100%
0.0%
4
7.7
Acquisition and ownership of buildings
E
0.2%
Y
Y
0%
Y
Y
12,822
Revenue of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
E
0.0%
Y
Y
Y
Y
Y
Y
0%
100%
0.0%
4
Professional services related to energy performance of buildings 9.3
E
0.3%
Y
Y
Y
Y
4.9
Y
241
Infrastructure for rail transport
E/T
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Biodiversity
%
%
(in millions of €)
Combined Management Report
Pollution
CapEx
CapEx
Proportion of
Absolute
DNSH criteria
%
Substantial contribution criteria
and
Minimum Taxonomy-
E
0.1%
Y
Y
Y
Y
Y
Y
0%
ecosystems
100%
2
3.1
Manufacture of renewable energy technologies
T =
transitional)
of CapEx
Category
(E = enabling;
aligned
proportion
guards
safe-
0.1%
CapEx
Codes
(Taxonomy-aligned)
Total (A.1+A.2)
sustainable activities (not Taxonomy-aligned activities) (A.2.)
Revenue of Taxonomy-eligible but not environmentally
Data-driven solutions for GHG emissions reductions
Acquisition and ownership of buildings
0.0%
25
7.4
Installation, maintenance and repair of charging stations for
electric vehicles in buildings (and parking spaces attached to
buildings)
B. Taxonomy-non-eligible activities
0.1%
7.3
Installation, maintenance and repair of energy efficiency
equipment
0.0%
10
6.15
Infrastructure enabling low-carbon road transport and public
transport
0.0%
15
6.14
92
Revenue of Taxonomy-non-eligible activities (B)
Total (A+B)
7.7
A.1. Environmentally sustainable activities
A. Taxonomy-eligible activities
Economic activities
EU Taxonomy - CapEx
Draft
40
Confidential
100.0%
77,769
79.7%
62,020
16.5%
20.3%
15,748
3.8%
2,927
0.0%
14
8.2
0.1%
105
0.3%
Y
Y
Y
E
6.4%
Y
Y
Y
Y
Y
Y
0%
Manufacture of energy efficiency equipment for buildings
100%
4,947
3.3
Manufacture of low carbon technologies for transport
E
0.1%
Y
Y
Y
Y
6.4%
Y
3.5
0.0%
Y
Y
Y
Y
0%
100%
0.2%
122
3.6
39
Manufacture of other low carbon technologies
0.0%
Y
Y
Y
Y
Y
Y
0%
100%
E
Y
0%
100%
%
%
(in millions of €)
Combined Management Report
economy
Circular
DNSH criteria
Substantial contribution criteria
Proportion of
%
Revenue
Absolute
Revenue
Codes
(Taxonomy-aligned)
A.1. Environmentally sustainable activities
A. Taxonomy-eligible activities
Economic activities
EU Taxonomy - Revenue
Draft
Revenue
Y/N
Y/N
Y/N
0.1%
58
3.1
Manufacture of renewable energy technologies
T =
transitional)
Category
(E = enabling;
of revenue
aligned
proportion
guards
safe-
Minimum Taxonomy-
ecosystems
and
Biodiversity
Pollution
E/T
%
Y/N
Y/N
Y/N
Y/N
Y
Y
0.2%
E
Y
Y
Y
Y
Y
Y
0%
100%
0.6%
0.6%
433
Installation, maintenance and repair of energy efficiency
E
0.0%
Y
Y
Y
Y
Y
Y
7.3
E
equipment
Installation, maintenance and repair of instruments and devices
for measuring, regulation and controlling energy performance
of buildings
Y
0%
100%
0.2%
119
7.6
Installation, maintenance and repair of renewable energy
technologies
E
3.3%
Y
Y
Y
Y
Y
Y
0%
90
100%
3.3%
2,574
7.5
0%
Manufacture of low carbon technologies for transport
100%
16
0%
100%
3.9%
3,013
6.14
Infrastructure for rail transport
E
0.1%
Y
Y
Y
Y
Y
Y
0%
100%
0.1%
100
4.9
Transmission and distribution of electricity
Y
Y
Y
Y
6.16
Infrastructure enabling low carbon water transport
transport
E
1.5%
Y
Y
Y
Y
Y
Y
0%
100%
1.5%
1,159
6.15
Infrastructure enabling low-carbon road transport and public
E
3.9%
Y
Y
0.0%
3.3
115
3.0%
7.6
Installation, maintenance and repair of renewable energy
technologies
0.1%
3
7.5
Installation, maintenance and repair of instruments and devices
for measuring, regulation and controlling energy performance
of buildings
0.0%
1
7.4
2
Installation, maintenance and repair of charging stations for
electric vehicles in buildings (and parking spaces attached to
buildings)
4
7.3
Installation, maintenance and repair of energy efficiency
equipment
1.4%
51
7.2
Renovation of existing buildings
0.0%
0
0.1%
6.15
0.1%
7.7
3,808
65.5%
2,496
1 Value below €0.5 million, therefore rounded to zero.
Total (A+B)
CapEx of Taxonomy-non-eligible activities (B)
B. Taxonomy-non-eligible activities
12.2%
34.5%
Acquisition and ownership of buildings
1,312
22.3%
848
CapEx of Taxonomy-eligible but not environmentally
0.0%
0
8.2
Data-driven solutions for GHG emissions reductions¹
17.1%
652
sustainable activities (not Taxonomy-aligned activities) (A.2.)
Total (A.1+A.2)
Infrastructure enabling low-carbon road transport and public
transport¹
0.0%
0
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
T =
transitional)
Category
(E = enabling;
aligned
proportion
of CapEx
Y/N
guards
Minimum Taxonomy-
Combined Management Report
ecosystems
Biodiversity
and
Pollution
economy
Circular
resources
marine
safe-
%
E/T
Manufacture of low carbon technologies for transport
6.14
Infrastructure for rail transport¹
1.8%
67
6.5
Transport by motorbikes, passenger cars and light commercial
vehicles
0.1%
4
4.9
Transmission and distribution of electricity
0.1%
6
3.6
Manufacture of other low carbon technologies
0.8%
30
3.5
Manufacture of energy efficiency equipment for buildings
0.7%
27
3.3
100.0%
Confidential
42
Draft
0.0%
1
4.9
Transmission and distribution of electricity
E
3.1%
Y
Y
Y
100%
Y
Y
0%
100%
3.1%
226
3.3
Manufacture of low carbon technologies for transport
E
0.1%
Y
0%
Y
Y
Infrastructure enabling low-carbon road transport and public
transport
E
2.7%
Y
Y
Y
Y
Y
Y
0%
100%
2.7%
196
6.14
Infrastructure for rail transport
E
0.0%
Y
Y
Y
Y
Y
Water and
Y
Y
Y/N
%
%
%
(in millions of €)
Combined Management Report
economy
Circular
DNSH criteria
Y/N
Substantial contribution criteria
Proportion of
OpEx
Absolute
OpEx
Codes
A.1. Environmentally sustainable activities
(Taxonomy-aligned)
A. Taxonomy-eligible activities
Economic activities
EU Taxonomy - OpEx
OpEx
Y/N
Y/N
Y/N
Y
Y
0%
100%
0.1%
8
3.1
Manufacture of renewable energy technologies
T =
transitional)
of OpEx
Category
(E = enabling;
aligned
proportion
guards
safe-
Minimum Taxonomy-
Biodiversity
and
Pollution
E/T
%
Y/N
Y/N
Y
69
change
adaptation
mitigation
0.1%
2
7.3
Installation, maintenance and repair of energy efficiency
equipment
E
0.5%
Y
Y
Y
100%
Y
Y
0%
100%
0.5%
18
6.15
Infrastructure enabling low-carbon road transport and public
transport
E
1.7%
Y
Y
0%
Y
E
0.0%
Y
Y
Y
Y
Y
Y
0%
Y
100%
2
7.4
Installation, maintenance and repair of charging stations for
electric vehicles in buildings (and parking spaces attached to
buildings)
E
0.1%
Y
Y
Y
Y
0.0%
Y
Y
Y
Y
Y
Y
Y
0%
100%
0.0%
1
4.9
Y
Transmission and distribution of electricity
3.0%
Y
Y
Y
Y
Y
Y
0%
100%
E
Y
0.0%
E
Y
Y
0%
100%
1.7%
65
6.14
Infrastructure for rail transport
T
0.3%
Y
Y
Y
Y
Y
Y
0%
100%
0.3%
6.5
Transport by motorbikes, passenger cars and light commercial
vehicles
Installation, maintenance and repair of instruments and devices
for measuring, regulation and controlling energy performance
of buildings
7.5
14
24
464
CapEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
buildings¹
E
0.0%
Y
Y
Y
Y
12.2%
Y
0%
100%
0.0%
0
9.3
Professional services related to energy performance of
E
0.3%
Y
Y
12.2%
'Value below €0.5 million, therefore rounded to zero.
Confidential
change
Climate
DNSH criteria
%
(in millions of €)
adaptation
change
Climate
change
mitigation
Climate
Proportion of
CapEx
CapEx
Absolute
Substantial contribution criteria
CapEx
Codes
A.2. Taxonomy-Eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities)
Economic activities
EU Taxonomy - CapEx
Draft
41
Y
Climate
Y
Y
Y
Y
Y
0%
100%
0.2%
7
7.6
Installation, maintenance and repair of renewable energy
technologies
Y
E
Y
Y
Y
Y
Y
Y
0%
100%
0.6%
0.6%
Y
Y
0.2%
Y
0%
100%
0.3%
10
8.2
Data-driven solutions for GHG emissions reductions
5.4%
Y
Y
Y
Y
Y
Y
0%
100%
5.4%
206
7.7
Acquisition and ownership of buildings
E
Y
12
Total liabilities and equity
78
NOTE 3 Acquisitions and dispositions
Acquisitions
In fiscal 2023, Siemens completed several individually minor acquisitions for a total purchase price of €373 million, mainly paid in cash. In
fiscal 2022 acquisitions totaled €2.0 billion. In fiscal 2023 and 2022, the (preliminary) purchase price allocations resulted in Other
intangible assets of €180 million and €1.1 billion, respectively, and in Goodwill of €203 million and €1.5 billion, respectively. Goodwill
comprises intangible assets that are not separable such as employee know-how and expected synergy effects. The purchase price
allocation for some of the acquired businesses is preliminary, as a detailed analysis of the assets and liabilities has not been finalized.
Disposals
In November 2022, Siemens sold its Commercial Vehicles business for a consideration of €184 million in cash and recognized a pre-tax gain
on the disposal of €148 million, which is presented in Other operating income. The business was previously reported at Portfolio
Companies.
NOTE 4 Interests in other entities
Consolidated Financial Statements
Investments accounted for using the equity method
Share of profit (loss), net
Gains (losses) on disposals, net
Impairments and reversals of impairment
Income (loss) from investments accounted for using the equity method, net
Sep 30,
2023
2022
(in millions of €)
11
Prior-year information - · The presentation of certain prior-year information has been reclassified to conform to the current year
presentation.
Insurance contracts - In June 2020, the IASB issued IFRS 17 Insurance contracts (IFRS 17), effective for reporting periods beginning on
or after January 1, 2023. Siemens will adopt the standard commencing with fiscal 2024. IFRS 17 introduces and applies uniform accounting
policies for insurance contracts and supersedes IFRS 4 Insurance contracts. The adoption of IFRS 17 is not expected to have a significant
impact on Siemens' Consolidated Financial Statements.
Valuation allowances are set up for expected credit losses, representing a forward-looking estimate of future credit losses involving
significant judgment. Expected credit loss is the gross carrying amount less collateral, multiplied by the probability of default and a factor
reflecting the loss in the event of default. Valuation allowances are not recognized as far as the gross carrying amount is sufficiently
collateralized. Probabilities of default are mainly derived from internal rating grades. A simplified approach is used to assess expected
credit losses from trade receivables, lease receivables and contract assets by applying their lifetime expected credit losses. The valuation
allowance for loans and other long-term debt instruments primarily held at Financial Services (SFS) is measured according to a three-stage
impairment approach:
Stage 1: At inception, twelve-month expected credit losses are recognized based on a twelve months probability of default.
Stage 2: If the credit risk of a financial asset increases significantly without being credit-impaired, lifetime expected credit losses are
recognized based on a lifetime probability of default. A significant increase in credit risk is determined for each individual financial
instrument using internal credit ratings. A rating deterioration does not trigger a transfer into Stage 2, if the credit rating remains within
the investment grade range. More than 30 days past due payments will not be transferred into Stage 2, if the delay is not credit-risk-
related.
Stage 3: If the financial asset is credit-impaired, valuation allowances equal lifetime expected credit losses. A financial asset is considered
credit-impaired when there is observable information about significant financial difficulties and a high vulnerability to default, however,
the definition of default is not yet met. Impairment triggers include liquidity problems, a request for debt restructuring or a breach of
contract. A credit-risk driven contractual modification always results in a credit-impaired financial asset.
Financial assets are written off as uncollectible if recovery appears unlikely. Generally, if the limitation period expired, when a debtor's
sworn statement of affairs is received, or when the receivable is not pursued due to its minor value. Receivables are written off when
bankruptcy proceedings close.
A financial asset is derecognized when the rights to cash flows expire or the financial asset is transferred to another party. Significant
modifications of contractual terms of a financial asset measured at amortized cost result in derecognition and recognition of a new
financial asset; for insignificant modifications, the carrying amount of the financial asset is adjusted without derecognition.
Cash and cash equivalents - The Company considers all highly liquid investments with less than three months maturity from the date of
acquisition to be cash equivalents. Cash and cash equivalents are measured at cost.
Loan Commitments
Expected credit losses for irrevocable loan commitments are determined using the three-stage impairment
approach for financial assets measured at amortized cost and recognized as a liability.
Financial liabilities
-
except for derivative financial instruments, Siemens measures financial liabilities at amortized cost using the
effective interest method.
Derivative financial instruments - Derivative financial instruments, such as foreign currency exchange contracts and interest rate swap
contracts are measured at fair value unless they are designated as hedging instruments, for which hedge accounting is applied. Changes
in the fair value of derivative financial instruments are recognized either in net income or, in the case of a cash flow hedge, in line item
Other comprehensive income, net of income taxes (applicable deferred income tax). Certain derivative instruments embedded in host
contracts are also accounted for separately as derivatives.
Fair value hedges: The carrying amount of the hedged item is adjusted by the gain or loss attributable to the hedged risk. Where an
unrecognized firm commitment is designated as hedged item, the subsequent cumulative change in its fair value is recognized as a
separate financial asset or liability with corresponding gain or loss recognized in net income. For hedged items carried at amortized cost,
the adjustment is amortized until maturity of the hedged item. For hedged firm commitments the initial carrying amount of the assets or
liabilities that result from meeting the firm commitments are adjusted to include the cumulative changes in the fair value that were
previously recognized as separate financial assets or liabilities.
Cash flow hedges: The effective portion of changes in the fair value of derivative instruments designated as cash flow hedges are
recognized in line item Other comprehensive income, net of income taxes, and any ineffective portion is recognized immediately in net
income. Amounts accumulated in equity are reclassified into net income in the same periods in which the hedged item affects net income.
Share-based payment - Share-based payment awards at Siemens are predominately designed as equity-settled. Fair value is measured
at grant date and is expensed over the vesting period. Fair value is determined as the price of the underlying shares, considering dividends
during the vesting period the grantees are not entitled to as well as market conditions and non-vesting conditions, if applicable. Plans
granting the rights to receive subsidiary shares constitute own shares and, accordingly, are accounted as equity-settled.
(1,298)
Financial assets measured at amortized cost: Loans, receivables and other debt instruments held in a hold-to-collect business model
with contractual cash flows that represent solely payments of principal and interest are measured at amortized cost using the effective
interest method less valuation allowances for expected credit losses.
(97)
609
17,279
31,599
27,941
8,487
7,134
2,802
16,321
10,870
10,528
Siemens interest in the net assets of Siemens Energy AG at fiscal year-end
Consolidation adjustments including goodwill
554
3,695
2,098
2,670
2,207
28,665
26,567
35.1%
(2,597)
(2,085)
Siemens Energy AG, an associate accounted for using the equity method, is globally active in the transmission and generation of electrical
power and is publicly listed. The fair value of our investment in Siemens Energy AG is €2.5 billion and €2.9 billion, respectively, as of
September 30, 2023 and 2022, determined based on Siemens Energy's market capitalization (level 1 of the fair value hierarchy). In fiscal
2023 and 2022, Siemens Energy AG added a loss to Share of profit (loss), net of €(1,478) million and €(207) million, respectively. The loss
includes Siemens' share of Siemens Energy AG's net losses of €(1,405) million and €(142) million as well as effects from fair value
adjustments at initial recognition of €(73) million and €(65) million, respectively. In fiscal 2023, Siemens Energy AG acquired and
redeemed shares of Siemens Gamesa Renewable Energy, S.A. from the minority shareholders. The acquisition and redemption of shares
of Siemens Gamesa Renewable Energy, S.A. reduced equity within Siemens Energy AG's consolidated financial statements. Recognizing
Siemens' share in this equity transaction decreased the carrying amount of our investment in Siemens Energy AG by €1,553 million, which
is recognized in Equity directly. In March 2023, Siemens Energy AG completed a capital increase, in which Siemens did not participate.
The transaction decreased Siemens' stake in Siemens Energy AG from 35.1% to 31.9%, which resulted in a gain of €235 million, disclosed
in Income (loss) from investments accounted for using the equity method and in Reconciling items of Segment information. As of March
31, 2023, the recoverable amount of our investment in Siemens Energy AG of €5.2 billion, determined based on its market capitalization
(level 1 of the fair value hierarchy), increased significantly compared to the level when the impairment was recorded in fiscal 2022. This
triggered a partial reversal of the previous impairment of €1,594 million, which is included in Income (loss) from investments accounted
for using the equity method and in Reconciling items of Segment information. In June 2023, Siemens contributed a 6.8% stake in Siemens
Energy AG (54 million shares) to the Siemens Pension-Trust e.V. at fair value (share price of €15.67; Level 1 of the fair value hierarchy).
Siemens' stake in Siemens Energy AG declined from 31.9% to 25.1%. The contribution resulted in a gain of €318 million disclosed at
Income (loss) from investments accounted for using the equity method and at Reconciling items of Segment information.
Below summarized consolidated financial information of Siemens Energy AG are disclosed at a 100 per cent basis. They are adjusted to
align with Siemens' accounting policies and to incorporate effects from fair value adjustments at initial recognition.
(in millions of €)
Ownership interest
Current assets
Non-current assets excluding goodwill
Current liabilities
Non-current liabilities
Net Assets
attributable to shareholders of Siemens Energy AG
Siemens Energy AG
registered in Munich, Germany
Sep 30, 2023
Sep 30, 2022
25.1%
618
1,586
906
Financial assets measured at fair value through other comprehensive income (FVOCI): are equity instruments for which Siemens
irrevocably elects to present subsequent fair value changes in OCI at initial recognition of the instrument. Unrealized gains and losses, net
of deferred income tax expenses, as well as gains and losses on the subsequent sale of the instruments are recognized in line item Other
comprehensive income, net of income taxes.
Consolidated Financial Statements
10
Associates and joint ventures - Associates are companies over which Siemens has the ability to exercise significant influence over
operating and financial policies (generally through direct or indirect ownership of 20% to 50% of the voting rights). Joint ventures are
entities over which Siemens and one or more parties have joint control. Joint control requires unanimous consent of the parties sharing
control in decision making on relevant activities.
Associates and joint ventures are recorded in the Consolidated Financial Statements using the equity method and are initially recognized
at cost. If the investment was retained in a transaction in which Siemens lost control of a subsidiary, the fair value of the investment
represents the cost on initial recognition. Siemens' share of its associate's or joint venture's post-acquisition profits or losses is recognized
in the Consolidated Statements of Income, and its share of post-acquisition changes in equity that have not been recognized in the
associate's or joint venture's profit or loss is recognized directly in equity. The cumulative post-acquisition changes also include effects
from fair value adjustments and are adjusted against the carrying amount of the investment. When Siemens' share of losses in an associate
or joint venture equals or exceeds its interest in the investment, Siemens does not recognize further losses, unless it incurs obligations or
makes payments on behalf of the associate or joint venture. The interest in an associate or joint venture is the carrying amount of the
investment together with any long-term interests that, in substance, form part of Siemens' net investment in the associate or joint venture.
Siemens reviews associates and joint ventures for impairment whenever there is objective evidence that its investment is impaired, for
example a significant or prolonged decline in the fair value of the investment below its cost. In addition, Siemens similarly assesses
whether there are indications that an impairment loss recorded in prior periods may no longer exist or may have decreased. If this is the
case, any reversal of an impairment loss is recognized to the extent that the recoverable amount subsequently increases, not exceeding
the carrying amount, had no impairment loss been recognized in previous periods. Impairments and reversal of impairments include the
use of judgements.
Foreign currency translation - Assets and liabilities of foreign subsidiaries, where the functional currency is other than the euro, are
translated using the spot exchange rate at the end of the reporting period, while the Consolidated Statements of Income are translated
using average exchange rates during the period. Differences arising from such translations are recognized within equity and reclassified
to net income when the gain or loss on disposal of the foreign subsidiary is recognized. The Consolidated Statements of Cash Flows are
translated at average exchange rates during the period, whereas cash and cash equivalents are translated at the spot exchange rate at the
end of the reporting period.
7
Consolidated Financial Statements
Foreign currency transaction - Transactions that are denominated in a currency other than the functional currency of an entity, are
recorded at that functional currency applying the spot exchange rate at the date when the underlying transactions are initially recognized.
At the end of the reporting period, foreign currency-denominated monetary assets and liabilities are revalued to functional currency
applying the spot exchange rate prevailing at that date. Gains and losses arising from these foreign currency revaluations are recognized
in net income. Those foreign currency-denominated transactions which are classified as non-monetary are remeasured using the historical
spot exchange rate.
Business combinations - Cost of an acquisition is measured at the fair value of the assets given and liabilities incurred or assumed at the
date of exchange. Identifiable assets acquired and liabilities assumed in a business combination (including contingent liabilities) are
initially measured at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. Non-controlling
interests are measured at the proportional fair value of assets acquired and liabilities assumed (partial goodwill method). If there is no loss
of control, transactions with non-controlling interests are accounted for as equity transactions not affecting net income. At the date control
is lost, any retained equity interests are remeasured to fair value. In case of a written put option on non-controlling interests the Company
assesses whether the prerequisites for the transfer of present ownership interest are fulfilled at the balance sheet date. If the Company is
not the beneficial owner of the shares underlying the put option, the exercise of the put option will be assumed at each balance sheet
date and treated as equity transaction between shareholders with the recognition of a purchase liability at the respective exercise price.
The non-controlling interests participate in profits and losses during the reporting period.
Revenue recognition - Siemens recognizes revenue when, or as control over distinct goods or services is transferred to the customer; i.e.
when the customer is able to direct the use of the transferred goods or services and obtains substantially all of the remaining benefits,
provided a contract with enforceable rights and obligations exists and amongst others collectability of consideration is probable taking our
customer's creditworthiness into account. Revenue is the transaction price Siemens expects to be entitled to. Variable consideration is
included in the transaction price if it is highly probable that a significant reversal of revenue will not occur once associated uncertainties
are resolved. The amount of variable consideration is calculated by either using the expected value or the most likely amount depending
on which is expected to better predict the amount of variable consideration. Consideration is adjusted for the time value of money if the
period between the transfer of goods or services and the receipt of payment exceeds twelve months and there is a significant financing
benefit either to the customer or Siemens. If a contract contains more than one distinct good or service, the transaction price is allocated
to each performance obligation based on relative stand-alone selling prices. If stand-alone selling prices are not observable, the Company
reasonably estimates those. Revenue is recognized for each performance obligation either at a point in time or over time.
The percentage-of-completion method places considerable importance on accurate estimates of the extent of progress towards
completion and may involve estimates on the scope of deliveries and services required to fulfill the contractually defined obligations. These
significant estimates include total estimated costs, total estimated revenues, contract risks, including technical, political and regulatory
risks, risks from supply chain constraints and other judgments. Under the percentage-of-completion method, changes in estimates may
lead to an increase or decrease of revenue. In addition, Siemens needs to assess whether the contract is expected to continue or whether
it is terminated. In determining whether the continuation or termination of a contract is expected to be the most likely scenario, all relevant
facts and circumstances relating to the contract are considered on an individual basis.
Revenues from maintenance and service contracts: Revenues are recognized over time on a straight-line basis or, if the performance
pattern is other than straight-line, as services are provided, i.e. under the percentage-of-completion method as described above. Payment
terms are usually 30 days from the date of invoice issued according to the contractual terms.
Revenues from product sales: Revenues are recognized at a point in time when control of the goods passes to the buyer, usually upon
delivery of the goods. Invoices are issued at that point in time and are usually payable within 30 days.
Revenues from software contracts: Software contracts usually comprise the sale of subscription licenses and perpetual licenses, which
are both on-premise, as well as technical support services including updates and unspecified upgrades and the sale of software-as-a-
service. Subscription contracts generally contain two separate performance obligations: time-based software license and technical support
service. Revenues for perpetual and time-based licenses granting the customer a right to use Siemens' intellectual property are recognized
at a point in time, i.e. when control of the license passes to the customer. Revenues for technical support services including updates and
unspecified upgrades are recognized over time on a straight-line basis as the customer simultaneously receives and consumes the benefits
provided by Siemens' services. Software-as-a-service contracts including related cloud services represent one performance obligation for
which revenues are recognized over time on a straight-line basis. Payment terms for all transactions are usually 30 days from the date of
invoice issued according to the contractual terms.
Income from interest - Interest is recognized using the effective interest method.
Functional costs - In general, operating expenses by types are assigned to the functions following the functional area of the
corresponding profit and cost centers. Amortization, depreciation and impairment of intangible assets and property, plant and equipment
are included in functional costs depending on the use of the assets.
Revenues from construction-type contracts: Revenues are recognized over time under the percentage-of-completion method, based on
the percentage of costs incurred to date compared to total estimated costs. An expected loss on the contract is recognized as an expense
immediately. Payment terms are usually 30 days from the date of invoice issued according to the contractual terms.
Basis of consolidation - The Consolidated Financial Statements include the accounts of Siemens AG and its subsidiaries over which the
Company has control. Siemens controls an investee if it has power over the investee. In addition, Siemens is exposed to, or has rights to,
variable returns from the involvement with the investee and Siemens is able to use its power over the investee to affect the amount of
Siemens' return.
Siemens operates in an increasingly complex and uncertain macroeconomic and geopolitical environment, particularly due to the war in
Ukraine and the conflict in Israel-Gaza/Middle East. Notably, we face continuing inflation, increased interest rates, volatile foreign
currencies and share prices along with a rising apprehension of a slow-down of economic growth in significant markets compared to prior
years. Uncertainties increase in prognosis and forecasts, in applying critical accounting estimates and in using management judgements.
Those trends could impact fair values and carrying amounts of assets and liabilities, amount and timing of results of operations and cash
flows of Siemens. Severity and duration of those trends are decisive on the magnitude of its impact on Siemens' Consolidated Financial
Statements. Siemens based its estimates and assumptions on existing knowledge and best information available.
Certain of the following accounting policies require critical accounting estimates that involve complex and subjective judgments and the
use of assumptions, some of which may be for matters that are inherently uncertain and susceptible to change. Such critical accounting
estimates could change from period to period and have a material impact on the Company's results of operations, financial positions and
cash flows. Critical accounting estimates could also involve estimates where Siemens reasonably could have used a different estimate in
the current accounting period. Siemens cautions that future events often vary from forecasts and that estimates routinely require
adjustment.
(53)
(89)
(1,177)
47,791
5,270
53,060
445
5,211
502
502
6
Consolidated Financial Statements
6. Notes to Consolidated Financial Statements
NOTE 1 Basis of presentation
The accompanying Consolidated Financial Statements present the operations of Siemens Aktiengesellschaft with registered offices in
Berlin (registry number HRB 12300) and Munich (registry number HRB 6684), Germany, and its subsidiaries (the Company or Siemens).
They have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union as well
as with the additional requirements set forth in Section 315e (1) of the German Commercial Code (HGB). The Consolidated Financial
Statements are in accordance with IFRS as issued by the International Accounting Standards Board (IASB). The Consolidated Financial
Statements were authorized for issue by the Managing Board on December 4, 2023. Siemens prepares and reports its Consolidated
Financial Statements in euros (€). Due to rounding, numbers presented may not add up precisely to totals provided. Siemens is a German
based multinational focused technology company.
NOTE 2 Material accounting policies and critical accounting estimates
Product-related expenses - Provisions for estimated costs related to product warranties are recorded in line item Cost of sales at the time
the related sale is recognized.
Research and development costs - Costs of research activities are expensed as incurred. Costs of development activities are capitalized
when the recognition criteria in IAS 38 are met. Capitalized development costs are stated at cost less accumulated amortization and
impairment losses with an amortization period of generally three to 25 years.
Earnings per share - Basic earnings per share are computed by dividing income from continuing operations, income from discontinued
operations and net income, all attributable to ordinary shareholders of Siemens AG by the weighted average number of shares outstanding
during the year. Diluted earnings per share are calculated by assuming conversion or exercise of all potentially dilutive securities and share-
based payment plans.
Goodwill - Goodwill is not amortized, instead, goodwill is tested for impairment annually, as well as whenever there are events or changes
in circumstances (triggering events) which suggest that the carrying amount may not be recoverable. Goodwill is carried at cost less
accumulated impairment losses. The goodwill impairment test is performed at the level of a cash-generating unit or a group of cash-
generating units, generally represented by a segment. Siemens Healthineers is tested one level below the segment. This is the lowest level
at which goodwill is monitored for internal management purposes.
Lessee: Siemens recognizes right-of-use assets and lease liabilities for leases with a term of more than twelve months if the underlying
asset is not of low value. Payments for short-term and low-value leases are expensed over the lease term. Extension options are included
in the lease term if their exercise is reasonably certain. Right-of-use assets are measured at cost less accumulated depreciation expense
and impairment losses adjusted for any remeasurements. Right-of-use assets are depreciated under the straight-line method over the
shorter of the lease term and the useful life of the underlying assets. Lease liabilities are measured at the present value of the lease
payments due over the lease term, generally discounted using the incremental borrowing rate. Lease liabilities are subsequently measured
at amortized cost using the effective interest method. They are remeasured in case of modifications or reassessments of the lease.
Discontinued operations and non-current assets held for disposal - Discontinued operations are reported when a component of an
entity is classified as held for disposal or has been disposed of, if the component represents a separate major line of business or
geographical area of operations and is part of a single coordinated plan to disposal. A non-current asset or a disposal group is held for
disposal, if its carrying amount will be recovered principally through a sale transaction or through a distribution to owners rather than
through continuing use. Depreciation and amortization cease for assets classified as held for disposal. In the Consolidated Statements of
Income and of Cash Flows, discontinued operations are reported separately from continuing operations; prior periods are presented on a
comparable basis. The disclosures in the Notes to the Consolidated Financial Statements outside of Note 3 relate to continuing operations
or assets and liabilities not held for disposal. The non-current asset held for disposal or the disposal group is measured at the lower of its
carrying amount and fair value less costs to sell. The determination of the fair value less costs to sell includes the use of estimates and
assumptions that tend to be uncertain.
Income taxes - Tax positions are calculated taking into consideration the respective local tax laws, relevant court decisions and applicable
tax authorities' views. Tax regulations can be complex and possibly subject to different interpretations of tax payers and local tax
authorities. Different interpretations of existing or new tax laws as a result of tax reforms or other tax legislative procedures may result in
additional tax payments for prior years and are taken into account based on management's considerations. Under the liability method,
deferred tax assets and liabilities are recognized for expected tax consequences of future periods attributable to differences between the
financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets are recognized if sufficient
future taxable profit is available, including income from forecasted operating earnings, the reversal of existing taxable temporary
differences and available tax planning opportunities that Siemens would execute. As of each period-end, Siemens evaluates the
recoverability of deferred tax assets, based on taxable income of past periods and projected future taxable profits. As future developments
are uncertain and partly beyond Siemens's control, assumptions are necessary to estimate future taxable profits as well as the period in
which deferred tax assets will recover. Estimates are revised in the period in which there is sufficient evidence to revise the assumption.
9
Consolidated Financial Statements
Expected tax effects, arising from prospectively applying the global minimum taxation rules (Pillar Two), are not considered in calculating
deferred tax assets and liabilities. Currently, it is expected to apply Pillar Two to the entire Siemens Group commencing with fiscal 2025.
Contract assets, contract liabilities, receivables – When either party to a contract with customers has performed, Siemens presents a
contract asset, a contract liability or a receivable depending on the relationship between Siemens' performance and the customer's
payment. Contract assets and liabilities are presented as current since incurred in the normal operating cycle. Receivables are recognized
when the right to consideration becomes unconditional. Valuation allowances for credit risks are made for contract assets and receivables
in accordance with the accounting policy for financial assets measured at amortized cost.
Inventories - Inventories are valued at the lower of acquisition or production costs and net realizable value, costs being generally
determined based on an average or first-in, first-out method. Determining net realizable value of inventories involves accounting estimates
for quantity, technical and price risks.
Defined benefit plans - Siemens measures the entitlements by applying the projected unit credit method. The approach reflects an
actuarially calculated net present value of the future benefit entitlement for services already rendered. In determining the net present
value of the future benefit entitlement for service already rendered (Defined Benefit Obligation (DBO)), the expected rates of salary and
pension increases are considered. The assumptions used for the calculation of the DBO as of the period-end of the preceding fiscal year
are used to determine the calculation of service cost and interest income and expense of the following year. Significant plans apply
individual spot rates from full discount rate curves to determine service cost and interest expense. The net interest income or expense for
the fiscal year will be based on the discount rate for the respective year multiplied by the net defined benefit liability (asset) at the
preceding fiscal year's period-end date.
Service cost, past service cost and settlement gains (losses) for pensions and similar obligations as well as administration costs unrelated
to the management of plan assets are allocated among functional costs. Past service cost and settlement gains (losses) are recognized
immediately in profit or loss. For unfunded plans, the amount in line item Provisions for pensions and similar obligations equals the DBO.
For funded plans, Siemens offsets the fair value of the plan assets from the DBO. Siemens recognizes the net amount, after adjustments
for effects relating to any asset ceiling.
Remeasurements comprise actuarial gains and losses as well as the difference between the return on plan assets and the amounts included
in net interest on the net defined benefit liability (asset). They are recognized in Other comprehensive income, net of income taxes.
Actuarial valuations rely on key assumptions including discount rates, expected compensation increases, rate of pension progression and
mortality rates. Discount rates used are determined by reference to yields on high-quality corporate bonds of appropriate duration and
currency at the end of the reporting period. In case such yields are not available, discount rates are based on government bonds yields.
Due to changing market, economic and social conditions, the underlying key assumptions may differ from actual developments.
Entitlements resulting from plans based on asset returns from underlying assets are generally measured at the fair value of the underlying
assets at period-end. If the performance of the underlying assets is lower than a guaranteed return, the DBO is measured by projecting
forward the contributions at the guaranteed fixed return and discounting back to a present value.
Provisions - A provision is recognized in the Statement of Financial Position when (1) it is probable that the Company has a present legal
or constructive obligation as a result of a past event and (2) it is probable that an outflow of economic benefits will be required to settle
the obligation and (3) a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are recognized
at present value by discounting the expected future cash flows at a pretax rate that reflects current market assessments of the time value
of money. When a contract becomes onerous, the present obligation under the contract is recognized as a provision.
Significant estimates are involved in the determination of provisions related to onerous contracts, warranty costs, asset retirement
obligations, legal and regulatory proceedings as well as governmental investigations (Legal Proceedings). Siemens records a provision for
onerous contracts with customers when current estimates of total estimated costs exceed estimated revenue. Onerous contracts with
customers are identified by monitoring the progress of the project and updating the estimates which requires significant judgment relating
to achieving certain performance standards as well as estimates involving warranty costs and estimates regarding project delays including
the assessment of responsibility splits between the contract partners for these delays.
Legal Proceedings often involve complex legal issues and are subject to substantial uncertainties. Accordingly, considerable judgment is
part of determining whether it is probable that there is a present obligation as a result of a past event at the end of the reporting period,
whether it is probable that such a Legal Proceeding will result in an outflow of resources and whether the amount of the obligation can
be reliably estimated. Internal and external counsels are generally part of the determination process. Due to new developments, it may be
necessary, to record a provision for an ongoing Legal Proceeding or to adjust the amount of a previously recognized provision. Upon
resolution of a Legal Proceeding, Siemens may incur charges in excess of the recorded provisions for such matters. The outcome of Legal
Proceedings may have a material effect on Siemens' financial position, its results of operations and/or its cash flows.
Termination benefits - Termination benefits are provided as a result of an entity's offer made in order to encourage voluntary redundancy
before the regular retirement date or from an entity's decision to terminate the employment. Termination benefits in accordance with IAS
19, Employee Benefits, are recognized as a liability and an expense when the entity can no longer withdraw the offer of those benefits.
Financial instruments - A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity. Based on their contractual cash flow characteristics and the business model they are held in, financial
instruments are classified as financial assets and financial liabilities measured at cost or amortized cost, measured at fair value, loan
commitments, contract assets and receivables from finance leases. Regular way purchases or sales of financial assets are accounted for at
the trade date. Initially, financial instruments are recognized at fair value and net of transaction costs, if not categorized at FVTPL.
Subsequently, financial assets and liabilities are measured according to the category to which they are assigned to:
Financial assets measured at fair value through profit and loss (FVTPL): a) mandatorily measured at FVTPL: Debt financial assets are
measured at FVTPL if the business model they are held in is not a hold-to-collect or a hold-and-sell business model, or if their contractual
cash flows do not represent solely payments of principal and interest. Equity instruments are measured at FVTPL unless the FVOCI-option
is elected. b) Financial assets designated as measured at FVTPL are irrevocably designated at initial recognition if the designation
significantly reduces accounting mismatches that would otherwise arise if assets and liabilities as well as recognizing gains (losses) were
measured on different bases.
Lessor: Leases are classified as either finance or operating leases, determined based on whether substantially all the risks and rewards
incidental to ownership of an underlying asset are transferred. If this is the case, the lease is classified as a finance lease; if not, it is an
operating lease. Receivables from finance leases are recognized at an amount equal to the net investment in the lease. The assets
underlying the operating leases are presented in Property, plant and equipment and depreciated on a straight-line basis over their useful
lives or to their estimated residual value. Operating lease income is recognized on a straight-line basis over the lease term.
Accumulated (impairment) and reversal of impairment (balance at fiscal year-end)
Carrying amount of Siemens Energy AG at fiscal year-end
Leases - A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. Further information on leases can be found in Notes 8, 13 and 16.
generally 5 years
generally 3 to 7 years
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the (group of) cash-generating unit(s)
that is expected to benefit from the synergies of the business combination. If the carrying amount of the (group of) cash-generating
unit(s), to which the goodwill is allocated, exceeds its recoverable amount, an impairment loss on goodwill allocated to that (group of)
cash-generating unit(s) is recognized. The recoverable amount is the higher of the (group of) cash-generating unit(s)' fair value less costs
to sell and its value in use. If either of these values exceeds the carrying amount, it is not always necessary to determine both values. These
8
Consolidated Financial Statements
values are generally determined based on discounted cash flow calculations. Impairment losses on goodwill are not reversed in future
periods.
The determination of the recoverable amount of a (group of) cash-generating unit(s) to which goodwill is allocated involves the use of
estimates by management. The outcome predicted by these estimates is influenced e.g. by the successful integration of acquired entities,
volatility of capital markets, interest rate developments, foreign exchange rate fluctuations and the outlook on economic trends. In
determining recoverable amounts, discounted cash flow calculations generally use five-year projections (in exceptional cases up to ten
years) that are based on financial forecasts. Cash flow projections consider past experience and represent management's best estimate
about future developments. Cash flows after the planning period are extrapolated using individual growth rates. Key assumptions on
which management has based its determination of fair value less costs to sell and value in use include estimated growth rates and weighted
average cost of capital. These estimates, including the methodology used, can have a material impact on the respective values and
ultimately the amount of any goodwill impairment.
Other intangible assets - The Company amortizes intangible assets with finite useful lives on a straight-line basis over their respective
estimated useful lives. Estimated useful lives for patents, licenses and other similar rights generally range from three to five years, except
for intangible assets with finite useful lives acquired in business combinations. Intangible assets acquired in business combinations
primarily consist of customer relationships and trademarks as well as technology. Useful lives in specific acquisitions ranged from two to
30 years for customer relationships and trademarks and for technology from five to 22 years.
Property, plant and equipment - Property, plant and equipment, is valued at cost less accumulated depreciation and impairment losses.
Depreciation expense is recognized using the straight-line method. The following useful lives are assumed:
Factory and office buildings
Other buildings
Technical machinery & equipment
Office & other equipment
Equipment leased to others
20 to 50 years
5 to 10 years
generally 10 years
Impairment of property, plant and equipment and other intangible assets - The Company reviews property, plant and equipment and
other intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. In addition, intangible assets not yet available for use are subject to an annual impairment test. Impairment testing of
property, plant and equipment and other intangible assets involves the use of estimates in determining the assets' recoverable amount,
which can have a material impact on the respective values and ultimately the amount of any impairment.
2,425
(873)
1,779
Other operating income in fiscal 2023 and 2022, mainly includes gains from disposals of businesses of €232 million and €1,884 million,
respectively, (thereof in fiscal 2022: mail and parcel-handling business of Siemens Logistics GmbH €1,084 million and Yunex Traffic €738
million) gains from sales of property, plant and equipment of €174 million and €125 million, respectively, as well as insurance related
income in both years.
NOTE 6 Other operating expenses
Other operating expenses in fiscal 2023, and 2022, include losses on the sale of property, plant and equipment as well as effects from
insurance, personnel, legal and regulatory matters.
13
NOTE 7 Income taxes
Income tax expenses (benefits) consist of the following:
(8)
Consolidated Financial Statements
Current taxes
Deferred taxes
Income tax expenses
Fiscal year
2023
2022
(in millions of €)
361
4,935
(464)
15,110
17,180
Fiscal year
2023
2022
372
514
273
251
21,680
21,714
1,525
2,054
1,989
2,881
3,250
12,024
3,163
(422)
Deferred taxes due to temporary differences
Intangible assets
Pensions and similar obligations
Current assets and liabilities
Non-current assets and liabilities
Tax loss carryforwards and tax credits
(in millions of €)
Total deferred taxes, net
Fiscal year
2023
2022
3,472
2,218
831
Minus amounts represent deferred tax liabilities.
Deferred income tax assets and (liabilities) on a net basis are summarized as follows:
Actual income tax expenses
Other, net (primarily German trade tax differentials)
2,687
2,741
Current income tax expenses in fiscal 2023 and 2022 include adjustments recognized for current taxes of prior years in the amount of €73
million and €220 million, respectively. In fiscal 2023 and 2022, deferred taxes include tax effects from the origination and reversal of
temporary differences of €(670) million and €(430) million, respectively. Deferred taxes include tax expenses of €125 million from the
write-down of previously recognized deferred tax assets on tax loss carryforwards and temporary differences (in fiscal 2022, €(202) million
tax from the recognition of previously unrecognized deferred taxes on tax loss carryforwards and temporary differences).
In Germany, the calculation of current taxes is based on a combined tax rate of 31%, consisting of a corporate tax rate of 15%, a solidarity
surcharge thereon of 5.5% and an average trade tax rate of 15%. For foreign subsidiaries, current taxes are calculated based on the local
tax law and applicable tax rates in the individual foreign countries. Deferred tax assets and liabilities in Germany and abroad are measured
at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled.
Global minimum taxation rules (Pillar Two) were enacted in some jurisdictions, in which Siemens currently operates. We expect to apply
Pillar Two worldwide commencing with fiscal 2025 and anticipate an increase in current taxes in a low double-digit million euro range.
Current and deferred income tax expenses differ from the amounts computed by applying a combined statutory German income tax rate
of 31% as follows:
(in millions of €)
Expected income tax expenses
Increase (decrease) in income taxes resulting from:
Non-deductible expenses
Tax-free income
Taxes for prior years
Change in realizability of deferred tax assets and tax credits
Change in tax rates
Foreign tax rate differential
Tax effect of investments accounted for using the equity method
(563)
13,440
35,677
32,548
(1,605)
(1)
As of September 30, 2023, and 2022, the carrying amount of all individually not material associates amounts to €901 million and €943
million, respectively. As of September 30, 2023, and 2022, the carrying amount of all individually not material joint ventures amounts to
€334 million and €350 million, respectively. The aggregate amount of the Siemens' share in the following line items of these associates
and joint ventures is presented below:
(in millions of €)
Income (loss) from continuing operations
Other comprehensive income
(2)
Total comprehensive income
Joint ventures
Sep 30,
2023
Sep 30,
2022
Sep 30,
Sep 30,
Associates
(5,075)
(211)
(5,057)
3,662
12
Consolidated Financial Statements
Revenue
Income (loss) from continuing operations, net of income taxes
Other comprehensive income, net of income taxes
Total comprehensive income (loss), net of income taxes
attributable to shareholders of Siemens Energy AG
attributable to Siemens
Fiscal year
2023
2022
31,119
(4,813)
28,997
(833)
(244)
622
2023
2022
95
20
Net income attributable to non-controlling interests
Dividends paid to non-controlling interests
Revenue
Income (loss) from continuing operations, net of income taxes
Other comprehensive income, net of income taxes
Total comprehensive income, net of income taxes
Total cash flows
NOTE 5 Other operating income
Siemens Healthineers AG
registered in Munich, Germany
Sep 30, 2022
24%
25%
4,341
4,887
14,136
13,379
Non-current liabilities
(2,703)
Current liabilities
Current assets
86
99
(21)
132
(14)
193
73
152
72
292
Subsidiary with material non-controlling interests
Summarized consolidated financial information, in accordance with IFRS and before intercompany eliminations, is presented below.
(in millions of €)
Ownership interests held by non-controlling interests
Accumulated non-controlling interests
Non-current assets
36,874
7,411
2,400
281
(23)
Cash flows from investing activities - continuing and discontinued operations
(3,176)
(2,490)
Cash flows from financing activities
Cash flows from investing activities - discontinued operations
Purchase of treasury shares
(1,565)
Re-issuance of treasury shares and other transactions with owners
(404)
(305)
Issuance of long-term debt
2,470
(884)
(2,467)
(3,458)
Cash flows from investing activities – continuing operations
Purchase of investments and financial assets for investment purposes
(723)
(1,404)
Change in receivables from financing activities
(1,461)
(1,100)
Disposal of intangibles and property, plant and equipment
237
276
Disposal of businesses, net of cash disposed
368
2,078
Disposal of investments and financial assets for investment purposes
746
1,973
4,969
(2,207)
Repayment of long-term debt (including current maturities of long-term debt)
(6,663)
Effect of changes in exchange rates on cash and cash equivalents
(721)
679
Change in cash and cash equivalents
(388)
927
(1)
(7,502)
Cash and cash equivalents at beginning of period
9,545
Cash and cash equivalents at end of period
10,084
10,472
Less: Cash and cash equivalents of assets classified as held for disposal and discontinued operations
at end of period
Cash and cash equivalents at end of period (Consolidated Statements of Financial Position)
10,472
(1)
(8,731)
Cash flows from financing activities - continuing and discontinued operations
(7,502)
Change in short-term debt and other financing activities
300
455
Interest paid
(1,208)
(824)
Dividends paid to shareholders of Siemens AG
Dividends attributable to non-controlling interests
Cash flows from financing activities - continuing operations
Cash flows from financing activities - discontinued operations
(3,362)
(3,215)
(389)
(354)
(8,730)
(5,252)
(407)
Acquisitions of businesses, net of cash acquired
(2,084)
Interest (income) expenses, net
(Income) loss related to investing activities
Other non-cash (income) expenses
Change in operating net working capital from
Contract assets
Inventories
2,741
Trade and other receivables
Contract liabilities
Additions to assets leased to others in operating leases
Change in other assets and liabilities
Income taxes paid
Dividends received
(1,033)
Trade payables
2,687
3,561
3,608
4. Consolidated Statements of Cash Flows
(in millions of €)
Consolidated Financial Statements
Fiscal year
2023
2022
Cash flows from operating activities
Net income
8,529
4,392
Adjustments to reconcile net income to cash flows from operating activities - continuing operations
(Income) loss from discontinued operations, net of income taxes
Amortization, depreciation and impairments
Income tax expenses
(15)
21
(942)
(979)
432
(652)
Interest received
2,205
1,481
Cash flows from operating activities - continuing operations
12,281
10,322
Cash flows from operating activities - discontinued operations
(41)
(81)
Cash flows from operating activities - continuing and discontinued operations
12,239
10,241
Cash flows from investing activities
Additions to intangible assets and property, plant and equipment
(2,218)
348
10,084
258
(2,902)
2,903
(425)
(432)
(1,345)
(1,456)
(1,655)
(972)
190
1,352
1,069
2,046
(444)
(394)
3,184
(2,584)
(2,173)
7
10,465
5
5. Consolidated Statements of Changes in Equity
Net income
7,949
7,949
579
8,529
Other comprehensive income, net of income taxes
54,805
(100)
(41)
45
(3,977)
(589)
(4,566)
Dividends
(3,881)
5,910
48,895
(5,948)
38,959
6,306
(12)
(134)
(5,948)
48,895
5,910
54,805
Balance as of October 1, 2022
2,550
7,174
38,959
6,306
(12)
(134)
(3,362)
-
(3,362)
(400)
(5,061)
14
14
14
(1,553)
(1,553)
(1,553)
3
71
3
75
(267)
(193)
3
37
41
(150)
7,174
57
Other changes in equity
(3,762)
Share-based payment
176
(46)
130
130
Purchase of treasury shares
(884)
(884)
(884)
Re-issuance of treasury shares
Cancellation of treasury shares
Disposal of equity instruments
Changes in equity resulting from major portfolio transactions
Other transactions with non-controlling interests
Balance as of September 30, 2023
1,947
2,550
3
Dividends
Share-based payment
Purchase of treasury shares
Re-issuance of treasury shares
Disposal of equity instruments
Transactions with non-controlling interests
Other comprehensive income, net of income taxes
Other changes in equity
2,550
7,040
39,607
3,723
(40)
(13)
(179)
Balance as of September 30, 2022
Net income
Balance as of October 1, 2021
(in millions of €)
Issued
capital
Capital
reserve
Retained
earnings
Currency
translation
differences
Equity
instruments
Derivative
financial
instruments
Treasury
shares
at cost
Total equity
attributable
to share-
holders of
Siemens AG
Consolidated Financial Statements
Non
controlling
interests
Total
equity
(4,804)
44,160
3,723
4,831
669
(1,588)
444
(1,588)
(1,588)
490
490
(41)
(41)
(41)
6
(153)
(146)
(19)
(166)
(331)
(331)
45
(328)
14
(69)
48,991
4,392
(562)
6,346
1
45
5,830
781
6,611
(3,215)
-
(3,215)
(354)
(3,569)
83
14
(1,142)
Sep 30, 2023
(8)
(6)
12
(752)
(591)
410
14
(154)
(106)
2,687
2,741
Sep 30,
2023
2022
(2,208)
1,709
(2,957)
1,943
640
459
(318)
(355)
753
989
576
(198)
(769)
14
215
36
105
NOTE 8 Trade and other receivables
An uncertain tax regulation arising from a foreign tax reform may result in potential future tax payments amounting to a middle three-
digit million euro range. Due to the low probability and the character of a contingent liability, no tax liability was recognized.
3,282
2,692
538
(4)
Income and expenses recognized directly in equity
(in millions of €)
3
2,741
2,687
Discontinued operations
Continuing operations
(in millions of €)
2022
2023
Fiscal year
Including items charged or credited directly to equity and the expenses (benefits) from continuing and discontinued operations, the
income tax expenses (benefits) consist of the following:
9
Trade receivables from the sale of goods and services
Receivables from finance leases
2022
Siemens has not recognized deferred tax liabilities for income taxes or foreign withholding taxes on the cumulative earnings of subsidiaries
of €29,720 million and €29,687 million, respectively in fiscal 2023 and 2022, because the earnings are intended to be permanently
reinvested in the subsidiaries.
1,653
1,721
2,299
2,384
2022
2023
Sep 30,
After three years but not more than four years
After four years but not more than five years
More than five years
After one year but not more than two years
After two years but not more than three years
Within one year
(in millions of €)
Future minimum lease payments to be received are as follows:
In fiscal 2023 and 2022, the long-term portion of receivables from finance leases is reported in Other financial assets amounting to €4,606
million and €4,277 million, respectively.
16,701
17,405
2,036
1,952
14,666
15,454
Sep 30,
2023
Of the tax loss carryforward, an amount of €189 million and €245 million for fiscal 2023 and 2022, respectively can be carried forward for
a limited period. A material portion thereof will expire until 2031 and 2030, respectively.
1,607
1,864
Tax loss carryforwards
Deductible temporary differences
(in millions of €)
Deferred tax assets have not been recognized with respect of the following items (gross amounts):
Minus amounts represent deferred tax assets.
Balance at end of fiscal year of deferred tax (assets) liabilities
Other (includes mainly currency translation differences)
Additions from acquisitions not impacting net income
Consolidated Financial Statements
Changes in items of the Consolidated Statements of Comprehensive Income
Balance at beginning of fiscal year of deferred tax (assets) liabilities
(in millions of €)
Deferred tax balances developed as follows:
550
1,692
8,182
7,448
In fiscal 2023 and 2022, Other includes miscellaneous tax liabilities of €899 million and €743 million, respectively, as well as various
accruals of €368 million and €419 million, respectively.
Income taxes presented in the Consolidated Statements of Income
Fiscal year
2023
2022
1,164
1,314
443
550
2022
2023
Sep 30,
(78)
(576)
184
(52)
172
18
515
99
(422)
(563)
(527)
(78)
1,243
1,171
829
758
3,419
3,715
3,631
4,029
3,197
3,516
2022
2023
Sep 30,
Finished goods and products held for resale
Advances to suppliers
Work in progress
Raw materials and supplies
(in millions of €)
Inventories
NOTE 11 Inventories and Other current assets
As of September 30, 2023, and 2022, amounts expected to be settled after twelve months are €1,487 million and €1,321 million for
contract assets and €1,812 million and €1,628 million for contract liabilities, respectively. In fiscal 2023, and 2022, revenue includes
€7,799 million and €6,158 million, respectively, which was included in contract liabilities at the beginning of the fiscal year.
9,696
10,605
1,285
287
1,397
379
10,626
2023
Fiscal year
Consolidated Financial Statements
Dispositions and reclassifications to assets classified as held for disposal
Impairment losses recognized during the period
Translation differences and other
Balance at begin of fiscal year
Accumulated impairment losses and other changes
Dispositions and reclassifications to assets classified as held for disposal
Balance at fiscal year-end
Acquisitions and purchase accounting adjustments
Translation differences and other
Balance at begin of fiscal year
Cost
(in millions of €)
NOTE 12 Goodwill
16
In fiscal 2023, and 2022, Other current assets include other tax receivables of €784 million and €810 million, prepaid expenses of €543
million and €509 million, respectively, and €283 million and €261 million, respectively, in reimbursement claims relating to activities in
Russia.
Other current assets
Cost of sales includes inventories recognized as expense amounting to €47,350 million and €45,159 million, respectively, in fiscal 2023
and 2022. Compared to prior year, write-downs increased by €131 million in fiscal 2023. In fiscal 2022, write-downs increased by €94
million compared to fiscal 2021.
11,548
957
573
1,239
7,475
2022
2023
Sep 30,
Consolidated Financial Statements
Net investment in the lease
Plus present value of unguaranteed residual value
Present value of future minimum lease payments
Less: Unearned finance income relating to future minimum lease payments
Future minimum lease payments
(in millions of €)
Future minimum lease payments reconcile to the net investment in the lease as follows:
15
7,106
7,475
769
808
456
489
7,106
(922)
(756)
6,552
1,047
6,216
7,588
2022
2023
Sep 30,
NOTE 10 Contract assets and liabilities
Other
Derivative financial instruments
NOTE 16 Debt
Interest-bearing debt securities
(in millions of €)
NOTE 9 Other current financial assets
In fiscal 2023 and 2022, finance income on the net investment in the lease is €372 million and €453 million.
Investments in finance leases primarily relate to industrial machinery, medical equipment, transportation systems, equipment for
information technology and office machines.
6,486
6,696
136
144
6,350
Loans receivable
(in millions of €)
Loans from banks
2022
361
159
(377)
2,745
Other financial indebtedness (current and non-current)
116
(453)
463
3
128
Lease liabilities (current and non-current)
2,929
(604)
(72)
127
622
3,002
Total debt
48,700
320
(1,829)
2,282
4,797
Non-cash changes
(in millions of €)
10/01/2021
(Acquisi-
tions)/Dis-
positions
Foreign
currency
translation
Fair value
hedge
adjustments
Reclassifi-
cations and
other
changes 09/30/2022
Non-current notes and bonds
Current notes and bonds
37,505 4,969
5,867 (6,060)
3,224
(1,255)
(4,480)
39,964
553
(19)
4,456
Loans from banks (current and non-current)
Cash flows
289
(1,274)
£
350
377
£
350
355
£
650
741
£
650
725
€
1,000
1,001
€
1,000
998
US$
millions of €1
4,526
(in millions)
(in millions)
224
50,636
In addition, other financing activities resulted in €590 million cash flows in fiscal 2022.
Credit facilities
As of September 30, 2023, and 2022, Siemens has €7.45 billion lines of credit, which are unused. The €7.0 billion syndicated loan facility
matures in February 2026. In September 2023, the unused €450 million revolving bilateral credit facility was extended to September
2024. The facilities are for general corporate purposes.
20
20
Notes and bonds
Sep 30, 2023
Consolidated Financial Statements
Sep 30, 2022
Currency
Notional amount
Carrying
amount in
Currency
Notional amount
Carrying
amount in
(interest/issued/maturity)
2.75%/2012/September 2025/GBP fixed-rate instruments
3.75%/2012/September 2042/GBP fixed-rate instruments
2.875%/2013/March 2028/EUR fixed-rate instruments
3.5%/2013/March 2028/US$ fixed-rate instruments
0.375%/2018/September 2023/EUR fixed-rate instruments
1.0%/2018/September 2027/EUR fixed-rate instruments
1.375%/2018/September 2030/EUR fixed-rate instruments
0.3%/2019/February 2024/EUR fixed-rate instruments
0.9%/2019/February 2028/EUR fixed-rate instruments
1.25%/2019/February 2031/EUR fixed-rate instruments
1.75%/2019/February 2039/EUR fixed-rate instruments
0.0%/2019/September 2024/EUR fixed-rate instruments
0.125%/2019/September 2029/EUR fixed-rate instruments
millions of €1
Notes and bonds
In addition, other financing activities resulted in €251 million cash flows in fiscal 2023.
725
703
2,230
2,299
7,483
6,658
39,113
43,978
In fiscal 2023 and 2022, Siemens recognized interest expenses on lease liabilities of €71 million and €48 million and expenses relating to
variable lease payments not included in the measurement of lease liabilities of €100 million and €93 million, respectively. In fiscal 2023
and 2022, cash flows to which Siemens is potentially exposed and which are not reflected in the measurement of lease liabilities, relate
primarily to lease contracts entered into, however which have not yet commenced as well as to extension options whose exercise is not
yet reasonably certain totaling €2.9 billion and €3.1 billion, respectively, and, in addition, to variable lease payments mainly relating to
incidental and operating costs for buildings leased by Siemens.
19
Changes in liabilities arising from financing activities
Cash flows
Consolidated Financial Statements
Non-cash changes
(Acquisi-
Foreign
tions)/Dis-
currency
(in millions of €)
Non-current notes and bonds
693
Current notes and bonds
42
1,461
38
Other financial indebtedness
Lease liabilities
Total debt
Current debt
Non-current debt
Sep 30,
2023
Sep 30,
2022
Sep 30,
Sep 30,
2023
5,545
4,797
35,383
2022
39,964
733
1,071
511
87
1,673
46,596
10/01/2022
translation
Other financial indebtedness (current and non-current)
128
546
(123)
(3)
549
Lease liabilities (current and non-current)
3,002
(771)
(3)
(97)
793
2,924
Total debt
50,636
(2,733)
35
(2,162)
94
2,194
positions
(41)
39
Fair value
hedge
adjustments
Reclassifi-
cations and
other
changes
09/30/2023
39,964
2,470
(1,911)
153
(5,291)
35,383
4,797
(4,574)
114
(59)
5,267
5,545
Loans from banks (current and non-current)
2,745
(404)
(144)
35,721
31,360
(1,899)
22
656
9,454
Land and buildings
(1,256)
12,196
(478)
5,815
9,484 (3,669)
(9,886)
22,082
(298)
345
1,169
2,017
18,849
Other intangible assets
(91)
911
698
888
7,966
337
10,610 (4,902)
(692)
80
627
-
320
5,406
Office and other equipment
(309)
1,519
(3,671)
5,190
(242)
149
201
256
4,826
Technical machinery and equipment
(802)
5,708
(746)
5,742
Customer relationships and trademarks
4,331
amount
Carrying
ment
ortization
and impair-
ciation/am-
Accumu-
lated depre-
nations
Gross
carrying
amount
09/30/2022
combi-
10/01/2021
business
amount
Retire-
ments¹
Reclassi-
fications
through
differences
carrying
Additions
Additions
09/30/2022
(579)
Deprecia-
tion/amorti-
in fiscal
2022
(4,052)
8,383
(89)
50
259
983
7,179
licenses and similar rights
Acquired technology including patents,
(199)
2,051
(2,164)
4,215
(119)
295
335
3,704
Internally generated technology
(in millions of €)
zation and
impairment
(4,420)
1,321
(631)
14,917
2022
Sep 30,
2023
Other
Equity instruments
Derivative financial instruments
Receivables from finance leases
Loans receivable
(in millions of €)
NOTE 14 Other financial assets
In fiscal 2023 and 2022, income from operating leases is €610 million and €687 million, respectively, thereof from variable lease payments
€137 million and €144 million, respectively.
1,323
1,272
130
139
111
101
163
161
16,551
228
4,606
1,213
Other
Accruals for pending invoices
Deferred Income
5,126
5,522
2022
2023
Liabilities to personnel
(in millions of €)
Sep 30,
NOTE 15 Other current liabilities
Item Loans receivable primarily relate to long-term loan transactions of SFS.
25,903
22,855
737
760
1,470
1,360
2,868
4,277
215
298
284
1,503
24,601
Property, plant and equipment
(568)
834
58
1,055
construction in progress
Advances to suppliers and
(543)
1,838
4,025 (2,188)
(608)
2
553
4
213
3,860
Equipment leased to others
26
3,104
(19)
(2,307)
1,359
26,926
392
372
2022
2023
Sep 30,
Consolidated Financial Statements
After one year but not more than two years
After two years but not more than three years
After three years but not more than four years
After four years but not more than five years
More than five years
Within one year
(in millions of €)
Gross Translation
100
18
In fiscal 2023 and 2022, expenses recognized for short-term leases are €64 million and €56 million, respectively; expenses for low-value
leases not accounted for under the right-of-use model are €27 million and €22 million, respectively. Sale and Leaseback transactions
resulted in gains of €2 million and €94 million, respectively, in fiscal 2023 and 2022.
Right-of-use assets are presented in Property, plant and equipment in accordance with their nature; right-of-use assets have a carrying
amount of €2,546 million and €2,608 million as of September 30, 2023, and 2022, respectively; additions are €924 million and €918
million and depreciation expense is €770 million and €760 million in fiscal 2023 and 2022. Right-of-use assets mainly relate to leases of
land and buildings with a carrying amount of €2,176 million and €2,309 million as of September 30, 2023, and 2022, additions of €604
million and €650 million and depreciation expense of €554 million and €558 million in fiscal 2023, and 2022. Equipment leased to others
mainly relate to Technical machinery and equipment as well as to Office and other equipment owned by Siemens with a carrying amount
of €1,248 million and €298 million, respectively, as of September 30, 2023 and €1,323 million and €337 million, respectively, as of
September 30, 2022.
In fiscal 2023, Siemens Healthineers incurred impairment losses in the endovascular robotics solution business of €262 million, mainly on
other intangible assets, due to a decision to refocus certain activities within this business. The impairment loss is primarily reported at Cost
of sales. The recoverable amount of the cash generating unit of €(69) million is fair value less costs to sell, determined by applying a
discounted cash flow model (Level 3 of the fair value hierarchy) using a 10% after tax discount rate and a term corresponding to the
expected useful life of the respective asset.
The carrying amount of Advances to suppliers and construction in progress includes €1,125 million and €1,218 million, respectively, of
property, plant and equipment under construction in fiscal 2023 and 2022. As of September 30, 2023, and 2022, contractual
commitments for purchases of property, plant and equipment are €694 million and €627 million, respectively.
1 Includes assets reclassified to Assets classified as held for disposal and dispositions of those entities.
(7)
1,347
(12)
(15,193) 11,733 (2,292)
Future minimum lease payments to be received under operating leases are:
79
'Includes assets reclassified to Assets classified as held for disposal and dispositions of those entities.
11,938
The sensitivity analysis for the groups of cash-generating units to which a significant amount of goodwill is allocated was based on a
reduction in after-tax future cash flows by 10% or an increase in after-tax discount rates by one percentage point or a reduction in the
terminal value growth rate by one percentage point. Siemens concluded that no impairment loss would need to be recognized on goodwill
in any of these groups of cash-generating units.
7.5%
Imaging of Siemens Healthineers
1.9%
7,260
After-tax
discount rate
9.0%
8.0%
1.9%
8,134
1.9%
rate
Goodwill
8,226
value growth
Terminal
Sep 30, 2022
Varian of Siemens Healthineers
Digital Industries
(in millions of €)
Revenue figures in the detailed forecast planning period of the groups of cash-generating units to which a significant amount of goodwill
is allocated are based on average revenue growth rates (excluding portfolio effects) of between 7.3% and 8.4% (8.3% and 10.3% in fiscal
2022).
8,0%
17
1,9%
NOTE 13 Other intangible assets and property, plant and equipment
Gross Translation
carrying
amount
10/01/2022
4,215
Internally generated technology
2023
in fiscal
Deprecia-
tion/amorti-
zation and
impairment
Carrying
amount
09/30/2023
ment
ortization
and impair-
Accumu-
lated depre-
ciation/am-
Consolidated Financial Statements
nations
carrying
amount
09/30/2023
combi-
business
Gross
Retire-
ments'
Additions Additions Reclassi-
fications
through
differences
(in millions of €)
(150)
6,782
1,9%
Carrying amount
Balance at fiscal year-end
1,859
1,686
(59)
(63)
13
569
217
(118)
1,688
1,859
35,721
33,910
(159)
(110)
1,505
198
3,014
Balance at begin of fiscal year
9,5%
Balance at fiscal year-end
29,672
7,828
8,5%
1,9%
7,874
After-tax
discount rate
value growth
rate
Goodwill
Imaging of Siemens Healthineers
Digital Industries
Varian of Siemens Healthineers
(in millions of €)
Terminal
Sep 30, 2023
The following table presents key assumptions used to determine fair value less costs to sell for impairment test purposes for the groups of
cash-generating units to which a significant amount of goodwill is allocated:
The fair value less costs to sell is mainly driven by the terminal value, which is particularly sensitive to changes in the assumptions on the
terminal value growth rate and discount rate. Both assumptions are determined individually for each cash-generating unit or group of
cash-generating units. Discount rates are based on the weighted average cost of capital (WACC). Siemens Financial Services' discount rate
represents its specific cost of equity. The discount rates are calculated based on a risk-free rate of interest and a market risk premium. In
addition, the discount rates reflect the current market assessment of the risks specific to each cash-generating unit or group of cash-
generating units by taking into account specific peer group information on beta factors, leverage and cost of debt as well as country
specific premiums. The parameters for calculating the discount rates are based on external sources of information. The peer group is
subject to an annual review and adjusted, if necessary. Terminal value growth rates take into consideration external macroeconomic
sources of data and industry specific trends.
To estimate the fair value less costs to sell of the cash-generating units or groups of cash-generating units, cash flows were projected for
the next five years (in exceptional cases up to ten years) based on past experience, actual operating results and management's best
estimate about future developments as well as market assumptions. The determined fair value of the cash-generating units or groups of
cash-generating units is assigned to level 3 of the fair value hierarchy.
Siemens performs the mandatory annual impairment test in the three months ended September 30. Key assumptions on which Siemens
based its determinations of the fair value less costs to sell for the (group of) cash-generating unit(s) being part of the segments include
terminal value growth rates up to 1.9% in fiscal 2023 and 2022, and after-tax discount rates of 7.5% to 9.5% in fiscal 2023 and 6.5% to
9.0% in fiscal 2022.
33,861
32,224
33,861
301
(202)
4,165
(675)
12
643
(149)
4,025
Equipment leased to others
(674)
1,418
(4,482)
5,900
(485)
103
748
15
(223)
5,742
Office and other equipment
(307)
1,642
3,857
(3,691)
(2,088)
(543)
(15,342)
27,280
(1,901)
3,252
17
(1,015)
26,926
Property, plant and equipment
(2)
1,288
(8)
1,296
(8)
(755)
742
(41)
1,359
construction in progress
Advances to suppliers and
1,769
5,333
(185)
215
Other intangible assets
(1,007)
160
(438)
9,484
Customer relationships and trademarks
(702)
3,417
7,882 (4,465)
(102)
48
43
(490)
8,383
licenses and similar rights
Acquired technology including patents,
(168)
1,995
(2,170)
22,082
(1,077)
203
349
289
(177)
5,190
Technical machinery and equipment
(753)
5,821
10,894 (5,073)
(548)
424
(2,279)
831
(425)
10,610
Land and buildings
(1,321)
10,641
(451)
5,229
8,200 (2,971)
20,247 (9,605)
(1,310)
1
8
1,985
Total
750
768
US$
1,700
1,602
US$
1,700
1,740
US$
1,000
937
US$
1,000
1,018
US$
1,000
929
1,404
1,500
US$
4.2%/2017/March 2047/US fixed-rate-instruments
1,280
1,250
US$
US$
1,250
US$
3.4%/2017/March 2027/US$ fixed-rate-instruments
992
1,000
US$
1,178
1,776
1,750
US$
735
750
€
492
500
€
21,842
1,244
€
997
1,000
€
997
1,000
1,250
US$
22,006
US$
1,635
1,750
US$
1,458
1,500
US$
6.125%/2006/August 2026/US$ fixed-rate instruments
3.25%/2015/May 2025/US$ fixed-rate-instruments
4.4%/2015/May 2045/US$ fixed-rate-instruments
2.0%/2016/September 2023/US$-fixed-rate-instruments
2.35%/2016/October 2026/US$-fixed-rate-instruments
3.3%/2016/September 2046/US$-fixed-rate-instruments
3.125%/2017/March 2024/US$ fixed-rate-instruments
1,350
US$
1,968
1,750
US$
1,758
1,750
1,500
€
1,500
0.4%/2021/March 2023/US$ fixed-rate-instruments
1,788
2.875%/2021/March 2041/US$ fixed-rate-instruments
US$
1,500
1,405
US$
1,500
1,527
2023/February 2024/EUR fixed-rate instruments
Total Stand Alone Bonds
€
60
60
19,087
22,755
1 Includes adjustments for fair value hedge accounting.
40,929
44,761
Defined benefit plans
NOTE 17 Post-employment benefits
As of September 30, 2023, and 2022, Siemens has a US$9.0 billion (€8.5 billion and €9.2 billion, respectively, as of September 30, 2023
and 2022) commercial paper program in place including US$ extendible notes capabilities. As of September 30, 2023, US$49 million (€46
million) were outstanding; as of September 30, 2022, none were outstanding. Siemens' commercial papers have a maturity of generally
less than 90 days. Interest rates ranged from 3.06% to 5.29% in fiscal 2023 and from 0.08% to 3.06% in fiscal 2022.
Commercial paper program
Of the two persisting bilateral term loan facilities of US$500 million (€472 million) each, one matures in fiscal 2024, and the second in
fiscal 2025. The existing bilateral €500 million term loan facility matures in fiscal 2025.
The previous bilateral €250 million term loan facility and the bilateral €350 million term loan facility, both maturing in fiscal 2023, were
redeemed as due.
1,750
In fiscal 2023, two bilateral term loan facilities were newly signed: one bilateral PLN 500 million (€108 million) term loan facility maturing
in fiscal 2026 with one one-year extension option and one bilateral US$250 million (€236 million) term loan facility maturing in fiscal
2025 with one one-year extension option, which was extended in October 2023 to mature in fiscal 2026 with no remaining extension
option.
Assignable and term loans
Stand Alone Bonds - In March 2023, the 0.4% US$1.25 billion fixed-rate instruments and in September 2023, the 2.0% US$750 million
fixed-rate instruments were redeemed at face value.
In February 2023, the 0.0% €1.25 billion fixed-rate instruments, in June 2023, the 0.875% £450 million fixed-rate instruments and in
September 2023, the 0.375% €1.0 billion fixed-rate instruments were redeemed at face value. In February 2023, Siemens issued fixed-
rate instruments totaling €2.5 billion in three tranches: 3.375% €1.25 billion due August 2031; 3.5% €500 million due February 2036 and
3.625% €750 million due February 2043.
Debt Issuance Program - The Company has a program in place to issue debt instruments under which, as of September 30, 2023 and
2022, up to €30.0 billion of instruments can be issued. As of September 30, 2023, €22.7 billion in notional amounts were issued and are
outstanding (€23.0 billion as of September 30, 2022).
Consolidated Financial Statements
21
As of September 30, 2023, and 2022, five bilateral term loan facilities are outstanding (in aggregate €1.8 billion and €2.1 billion,
respectively).
US$
1,645
1,750
US$
1,416
1,500
0.65%/2021/March 2024/US$ fixed-rate-instruments
1,025
1,000
1,500
US$
1,000
US$
Compounded SOFR+0.43%/2021/March 2024/US$ floating-rate instruments
1,282
1,250
US$
944
1,526
1,538
US$
US$
2.15%/2021/March 2031/US$ fixed-rate-instruments
1,277
1,250
US$
1,176
1.2%/2021/March 2026/US$ fixed-rate-instruments
1,250
1.7%/2021/March 2028/US$ fixed-rate-instruments
1,790
1,750
US$
1,649
1,750
US$
3.0%/2022/September 2033/EUR fixed-rate instruments
3.375%/2023/August 2031/EUR fixed-rate instruments
3.5%/2023/February 2036/EUR fixed-rate instruments
3.625%/2023/February 2043/EUR fixed-rate instruments
Total Debt Issuance Program
497
500
665
€
800
576
€
800
601
€
500
484
€
500
479
€
1,000
995
€
€
1,251
1,250
€
-
992
800
1,000
993
1,000
€
0.5%/2019/September 2034/EUR fixed-rate instruments
0.0%/2020/February 2023/EUR fixed-rate instruments
0.0%/2020/February 2026/EUR fixed-rate instruments
0.25%/2020/February 2029/EUR fixed-rate instruments
0.5%/2020/February 2032/EUR fixed-rate instruments
1.0%/2020/February 2025/GBP fixed-rate instruments
0.25%/2020/June 2024/EUR fixed-rate instruments
0.375%/2020/June 2026/EUR fixed-rate instruments
0.875%/2020/June 2023/GBP fixed-rate instruments
0.625%/2022/February 2027/EUR fixed-rate instruments
1.0%/2022/February 2030/EUR fixed-rate instruments
1.25%/2022/February 2035/EUR fixed-rate instruments
2.25%/2022/March 2025/EUR fixed-rate instruments
2.5%/2022/September 2027/EUR fixed-rate instruments
2.75%/2022/September 2030/EUR fixed-rate instruments
995
1,000
€
€
664
800
€
676
750
€
677
750
1,000
€
1,000
€
101
100
US$
93
999
1,000
996
1,000
€
569
650
€
572
650
€
€
750
€
737
750
€
995
724
953
€
1,000
€
739
750
€
746
750
750
€
750
€
454
500
€
455
746
500
738
1,000
€
497
500
€
499
500
€
€
500
€
997
1,000
€
998
499
The defined benefit plans open to new entrants are based predominantly on contributions made by the Company. Only to a certain extent,
those plans are affected by longevity, inflation and compensation increases and take country specific differences into account. The
Company's major plans are funded with assets in segregated entities. In accordance with local laws these plans are managed in the interest
of the beneficiaries by way of contractual trust agreements with each separate legal entity. The defined benefit plans cover 442,000
participants, including 183,000 actives, 82,000 deferreds with vested benefits and 177,000 retirees and surviving dependents.
Germany
€
450
850
748
750
€
748
750
932
€
1,000
€
998
1,000
€
950
997
497
£
878
£
-
921
1,000
€
924
850
1,000
962
1,000
€
976
1,000
€
€
In Germany, pension benefits are provided through the following plans: BSAV (Beitragsorientierte Siemens Altersversorgung), frozen
legacy plans as well as deferred compensation plans. The majority of active employees participate in the BSAV. Those benefits are based
predominantly on notional contributions and the return on the corresponding assets of this plan, subject to a minimum return guaranteed
by the employer. At inception of the BSAV, benefits provided under the frozen legacy plans were modified to substantially eliminate the
effects of compensation increases. However, the frozen plans still expose Siemens to investment risk, interest rate risk, inflation risk and
longevity risk. The pension plans are funded via contractual trust arrangements (CTA). In Germany no legal or regulatory minimum funding
requirements apply.
US$
In the U.S., the Pension Plans are sponsored by Siemens, which for the most part have been frozen to new entrants and to future benefit
accruals, except for interest credits on cash balance accounts. Siemens has appointed the Investment Committee as the named fiduciary
for the management of the assets of the Plans. The Plans' assets are held in Trusts and the trustees of the Trusts are responsible for the
administration of the assets of the Trusts, taking directions from the Investment Committee. The Plans are subject to the funding
requirements under the Employee Retirement Income Security Act of 1974 as amended (ERISA). There is a regulatory requirement to
maintain a minimum funding level of 80% in the defined benefit plans in order to avoid benefit restrictions. At their discretion, sponsoring
employers may contribute in excess of this regulatory requirement. Annual contributions are calculated by independent actuaries.
13
76
(159)
3,175
3,075
3,783
3,731
561
604
(47)
(52)
1,518
26,610 27,853
1,599
864
899
4
3
Net interest expenses relating to provisions for pensions and similar obligations amount to €97 million and €51 million, respectively, in
fiscal 2023 and 2022. The DBO is attributable to actives 29% and 29%, to deferreds with vested benefits 12% and 13% and to retirees and
surviving dependents 60% and 58%, respectively, in fiscal 2023 and 2022.
1 Total Defined benefit obligation (DBO) includes other post-employment benefits of €284 million and €299 million in fiscal 2023 and 2022 respectively, which primarily consist of transition payments to German employees after
retirement as well as post-employment health care and life insurance benefits to employees in the U.S.
2 Includes past service benefits/costs, settlement gains/losses and administration costs related to liabilities.
328
293
2,278
1,426
12
1,949
620
578
U.S.
26,055
704
658
1,132
4,105
3,591
3,933
Total
Other countries
CH
U.K.
U.S.
Germany
thereof provisions for pensions and similar obligations
27,853
Balance at fiscal year-end
(620)
(1,333)
1
(6)
(319)
26,610
The DBO remeasurements comprise actuarial (gains) and losses resulting from:
thereof net defined benefit assets (presented in Other assets)
26,055 26,523
16,676 15,760 15,475
3,654
254
183
-
2,314
2,057
16,023
2,240
2,568
262
-
1,949
1,132
620
578
1,201
Fiscal year
(in millions of €)
Changes in demographic assumptions
Effect on DBO due to a one-half percentage-point
decrease
increase
A one-half-percentage-point change of the above assumptions would result in the following increase (decrease) of the DBO:
2.0%
3.2%
3.0%
2.3%
increase
2022
Sensitivity analysis
U.K.
Germany
Pension increase
The mortality tables used in Germany (Siemens Bio 2017/2023) are mainly derived from data of the German Siemens population and to a
lesser extent from data of the Federal Statistical Office in Germany by applying formulas in accordance with recognized actuarial standards.
The weighted-average assumptions for pension increase for countries with significant effects are shown in the following table. Inflation
effects, if applicable, are included in the assumptions below.
Pri-2012 with generational projection from the US Social Security Administration's Long Range Demographic Assumptions
SAPS S3 (Standard mortality tables for Self Administered Pension Schemes with allowance for future mortality improvements)
BVG 2020 G with generational projection according to CMI model with a long-term trend rate of 1.25%
Sep 30,
2023
CH
decrease
(in millions of €)
24
As a significant risk, the Company considers a decline in the plans' funded status due to adverse developments of plan assets and/or defined
benefit obligations resulting from changing parameters. Accordingly, Siemens implemented a risk management concept aligned with the
defined benefit obligations (Asset Liability Matching). Risk management is based on a worldwide defined risk threshold (Value at Risk).
The concept, the Value at Risk and the asset development including the investment strategy are monitored and adjusted on an ongoing
basis under consultation of senior external experts. Independent asset managers are selected based on quantitative and qualitative
analyses, which include their performance and risk evaluation. Derivatives are used to reduce risks as part of risk management.
Asset Liability Matching Strategies
As in prior years, sensitivity determinations apply the same methodology as those applied in determining post-employment benefit
obligations. Sensitivities reflect changes in the DBO solely for the assumption changed.
The DBO effect of a 10% reduction in mortality rates for all beneficiaries would be an increase of €714 million and €800 million,
respectively, as of September 30, 2023 and 2022.
(813)
Sep 30,
1,450
2022
1,208
(642)
(1,123)
788
2023
Rate of pension increase
Discount rate
(1,328)
973
(660)
U.K.
Siemens specific tables (Siemens Bio 2017/2023)
USD
EUR
Discount rate
The weighted-average discount rate used for the actuarial valuation of the DBO was as follows:
Actuarial assumptions
23
Consolidated Financial Statements
DBO remeasurements in fiscal 2023 include losses of €813 million arising from inflation-related adjustments of pension benefits in
Germany.
(7,581)
(49)
(7,986)
454
2022
2023
(82)
(1,246)
631
(696)
Experience (gains) losses
Changes in financial assumptions
Total
U.S.
Sep 30,
2022
Germany
Discount rates are derived from high-quality corporate bonds in the respective currency zones. As of September 30, 2023, discount rates
are provided by external actuaries, which increased our weighted average discount rate by 0.21 percentage points.
Applied mortality tables are:
CHF
GBP
2.2%
2.1%
2023
4.8%
5.5%
5.9%
3.7%
4.5%
3.9%
4.6%
5.5%
(941)
26,523
Other reconciling items
2,015
386
482
-
-
386
482
1,056
366
14
1
1,070
367
Interest income
990
327
(990)
317
980
832
1,440
Consolidated Statements of income
Components of defined benefit costs recognized in the
1,949
(6)
(10)
(10)
(15)
(2)
Other²
(327)
8
16
2022
2023
(III)
(11)
(1,987)
Net defined benefit
balance
Effects of asset
ceiling
Fair value of
plan assets
(1 - 11 +111)
Defined benefit
obligation
Following the Swiss law of occupational benefits (BVG) each employer has to grant post-employment benefits for qualifying employees.
Accordingly, Siemens in Switzerland sponsors several cash balance plans. These plans are administered by external foundations. The board
of the main foundation is composed of equally many employer and employee representatives. The board of the foundation is responsible
for investment policy and asset management, as well as for any changes in the plan rules and the determination of contributions to finance
the benefits. The Company is required to make total contributions at least as high as the sum of the employee contributions set out in the
plan rules. In case of an underfunded plan the Company together with the employees may be asked to pay supplementary contributions
according to a well-defined framework of recovery measures.
Switzerland
Consolidated Financial Statements
22
Pension benefits are mainly offered through the Siemens Benefit Scheme for which, until the start of retirement, an inflation increase of
the majority of accrued benefits is mandatory. The required funding is determined by a funding valuation carried out every third year
based on legal requirements. Due to deviating guidelines for the determination of the discount rates, the technical funding deficit is usually
larger than the IFRS funding deficit. To reduce the deficit Siemens entered into an agreement with the trustees to provide annual payments
of £31 (€35) million until fiscal 2033. The agreement also provides for a cumulative advance payment by Siemens AG compensating the
remaining annual payments at the date of early termination of the agreement due to cancellation or insolvency.
U.K.
Development of the defined benefit plans
14
Fiscal year
Fiscal year
2022
2023
620
2022
33,543
26,523
35,542
27,853
Fiscal year
2023
2023
Interest expenses
Current service cost
Balance at begin of fiscal year
(in millions of €)
Fiscal year
2022
1
(DBO)¹
(I)
516
(15)
Settlement payments
(128)
(124)
-
(1,660)
(11)
(1,687)
(1,811)
Benefits paid
128
126
128
126
(1,788)
Plan participants' contributions
-
Business combinations, disposals and other
474
28
(83)
8
(6)
854
(5)
(8)
(154)
12
(204)
(155)
874
(281)
Foreign currency translation effects
(5)
(7)
(513)
(17)
513
(7,581)
(696)
-
(7,581)
(696)
Actuarial (gains) losses
Effects of asset ceiling
7,018
-
(7,018)
(788)
income and net interest expenses
(1,104)
Return on plan assets excluding amounts included in net interest
788
(50)
-
602
39
42
(50)
(7,018)
(788)
(7,581)
602
Comprehensive Income
(696)
(50)
602
Employer contributions
Remeasurements recognized in the Consolidated Statements of
1,104
(62)
+5%
(22)
62
19
71
72
12
(5)%
3
3
(3)
Many Siemens units are located outside the Eurozone. Because the financial reporting currency of Siemens is the euro, the financial
statements of these subsidiaries are translated into euro for the preparation of the Consolidated Financial Statements. To consider the
effects of foreign currency translation in the risk management, the general assumption is that investments in foreign-based operations
are permanent and that reinvestment is continuous. Effects from foreign currency exchange rate fluctuations on the translation of net
asset amounts into euro are reflected in the Company's consolidated equity position.
(71)
(72)
(12)
Translation risk
Liquidity risk results from the Company's inability to meet its financial liabilities. Siemens follows a deliberated financing policy that is
aimed towards a balanced financing portfolio, a diversified maturity profile and a comfortable liquidity cushion. Siemens mitigates liquidity
risk by the implementation of effective working capital and cash management, arranged credit facilities with highly rated financial
institutions, via a debt issuance program and via a global multi-currency commercial paper program. Liquidity risk may also be mitigated
by the Siemens Bank GmbH, which increases the flexibility of depositing cash or refinancing.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. This risk arises whenever interest terms of financial assets and liabilities are different. In order to manage the Company's
position with regard to interest rate risk, interest income and interest expenses, Corporate Treasury performs a comprehensive corporate
interest rate risk management by using fixed or variable interest rates from bond issuances and derivative financial instruments when
appropriate. The interest rate risk is mitigated by managing interest rate risk within an integrated Asset Liability Management approach
and results primarily from funding in the U.S. dollar, British pound and euro. This includes SFS business, for which the interest rate risk
was formerly managed separately.
If there are no conflicting country-specific regulations, all Siemens operating units generally obtain any required financing through
Corporate Treasury in the form of loans or intercompany clearing accounts. The same concept is adopted for deposits of cash generated
by the units.
As of September 30, 2023 and 2022, the VaR relating to the interest rate was €683 million and €864 million. The decrease was driven
mainly by a decrease in interest rate sensitivity for the U.S. dollar and a lower interest rate volatility for the euro.
33
(122)
Consolidated Financial Statements
Liquidity risk
(19)
3
USD
(27)
Foreign currency exchange rate risk
Any market sensitive instruments, including equity and interest-bearing investments that our Company's pension plans hold are not
included in the following quantitative and qualitative disclosures.
In addition, Siemens constantly monitors funding options available in the capital markets, as well as trends in the availability and costs of
such funding, with a view to maintaining financial flexibility and limiting repayment risks.
Transaction risk
Each Siemens unit conducting businesses with international counterparties leading to future cash flows denominated in a currency other
than its functional currency is exposed to risks from changes in foreign currency exchange rates. In the ordinary course of business,
Siemens units are exposed to foreign currency exchange rate fluctuations, particularly between the U.S. dollar and the euro. Foreign
currency exchange rate exposure is partly balanced by purchasing of goods, commodities and services in the respective currencies as well
as production activities and other contributions along the value chain in the local markets.
Operating units are prohibited from borrowing or investing in foreign currencies on a speculative basis. Intercompany financing or
investments of operating units are preferably carried out in their functional currency or on a hedged basis.
According to the Company policy, Siemens units are responsible for recording, assessing and monitoring their foreign currency transaction
exposure. Foreign currency transaction exposure of Siemens units from contracted business and cash balances in foreign currency is
generally hedged approximately by 100% with Corporate Treasury. Foreign currency transaction exposure of Siemens units from planned
business above defined thresholds has to be hedged with Corporate Treasury within a band of 75% to 100% for a hedging period of at
least three months.
Generally, the operating units conclude their hedging activities internally with Corporate Treasury. By applying a cost-optimizing portfolio
approach, Corporate Treasury itself hedges foreign currency exchange rate risks with external counterparties and limits them.
The following table demonstrates the sensitivity of net income and equity to a reasonably possible change in the euro versus the most
important currency exchange rates compared to the respective year-end exchange rates. The analysis does not include effects of foreign
currency translation. The effect on net income is due to changes in the fair values of monetary assets and liabilities including non-
designated foreign currency derivatives and embedded derivatives. The effect on equity is due to changes in the fair values of forward
exchange contracts designated as cash flow hedges. In fiscal 2023, the sensitivity of net income with regard to the U.S. dollar decreased
compared to the prior year mainly due to a decrease of monetary assets and liabilities and a higher hedge ratio. The sensitivity of equity
with regard to the U.S. dollar decreased due to a decline in the nominal amount of U.S. dollar forward exchange contracts designated as
cash flow hedges.
(in Mio. €)
Net income
Equity
Sep 30, 2023
Sep 30, 2022
Change in €
versus
GBP
CNY
USD
GBP
CNY
+5%
27
15
(3)
122
22
(3)
(5)%
(15)
The following table reflects our contractually fixed pay-offs for settlement, repayments and interest. The disclosed expected undiscounted
net cash outflows from derivative financial liabilities are determined based on each particular settlement date of an instrument and based
on the earliest date on which Siemens could be required to pay. Cash outflows for financial liabilities (including interest) without fixed
amount or timing are based on the conditions existing at September 30, 2023.
1,134
2024
186
170
8
760
307
355
262
411
3,370
325
156
6
3
1 Based on the maximum amounts Siemens could be required to settle in the event of default by the primary debtor.
Credit risk
Credit risk is defined as an unexpected loss in financial instruments if the contractual partner is failing to discharge its obligations in full
and on time or if the value of collateral declines.
Siemens provides its customers with various forms of direct and indirect financing particularly in connection with large projects. Hence,
credit risks are determined by the solvency of the debtors, the recoverability of the collaterals, the success of projects we invested in and
the global economic development.
The effective monitoring and controlling of credit risk through credit evaluations and ratings is a core competency of our risk management
system. In this context, Siemens has implemented a binding credit policy.
Siemens maintains a Credit Risk Intelligence Unit to which numerous operating units from the Siemens Group regularly transfer business
partner data as a basis for a centralized internal rating and credit limit recommendation process. Due to the identification, quantification
and active management of credit risks, this increases credit risk transparency.
Ratings and individually defined credit limits are based on generally accepted rating methodologies, with information obtained from
customers, external rating agencies, data service providers and Siemens' credit default experiences. Internal ratings consider appropriate
forward-looking information relevant to the specific financial instrument like expected changes in the debtor's financial position,
ownership, management or operational risks, as well as broader forward-looking information, such as expected macroeconomic, industry-
related and competitive developments. The ratings also consider a country-specific risk component derived from external country credit
ratings. Ratings and credit limits for financial institutions as well as Siemens' public and private customers, which are determined by
internal risk assessment specialists, are continuously updated and considered for investments in cash and cash equivalents and in
determining the conditions under which direct or indirect financing will be offered to customers.
An exposure is considered defaulted if the debtor is unwilling or unable to pay its credit obligations. A range of internally defined events
trigger a default rating, including the opening of bankruptcy proceedings, receivables being more than 90 days past due, or a default
rating by an external rating agency.
To analyze and monitor credit risks, the Company applies various systems and processes. A main element is a central IT application that
processes data from operating units together with rating and default information and calculates an estimate, which may be used as a basis
for individual bad debt provisions. Additionally, qualitative information is considered to particularly incorporate the latest developments.
The carrying amount is the maximum exposure to a financial asset's credit risk, without taking account of any collateral. Collateral reduces
the valuation allowance to the extent it mitigates credit risk. Collateral needs to be specific, identifiable and legally enforceable to be taken
into account. Those collaterals are mostly held in the portfolio of SFS.
As of September 30, 2023 and 2022, collateral of €863 million and €1,444 million, respectively, relate to financial assets measured at fair
value. Those collaterals are provided in connection with netting agreements for derivatives providing protection from the risk of a
counterparty's insolvency. As of September 30, 2023 and 2022, collateral held for credit-impaired receivables from finance leases
amounted to €66 million and €53 million, respectively. As of September 30, 2023 and 2022, collateral held for financial assets measured
at amortized cost amounted to €3,918 million and €3,817 million, respectively, including €135 million and €108 million, respectively, for
34
(in millions of €)
probability that losses could exceed the calculated VaR. The use of historical data as a basis for estimating the statistic behavior of the
relevant markets and finally determining the possible range of the future outcomes on the basis of this statistic behavior may not always
cover all possible scenarios, especially those of an exceptional nature.
2 A considerable portion result from asset-based lending transactions meaning that the respective loans can only be drawn after sufficient collateral has been provided by the borrower.
21
10,107
918
2025
2026 to
2028
2029 and
thereafter
(in millions of €)
Non-derivative financial liabilities
Notes and bonds
Loans from banks
Other financial indebtedness
Lease liabilities
Trade payables
Other financial liabilities
Derivative financial liabilities
Credit guarantees¹
Irrevocable loan commitments²
6,598
4,642
820
1,308
14,599
159
24,763
21
519
2
36
753
609
982
Fiscal year
Consolidated Financial Statements
Other components of equity, net of income taxes, relating to cash flow hedges reconciles as follows:
Actual results that are included in the Consolidated Statements of Income or Consolidated Statements of Comprehensive Income may
differ substantially from VaR figures due to fundamental conceptual differences. While the Consolidated Statements of Income and
Consolidated Statements of Comprehensive Income are prepared in accordance with IFRS, the VaR figures are the output of a model with
a purely financial perspective and represent the potential financial loss, which will not be exceeded within ten days with a probability of
99.5%. Although VaR is an important tool for measuring market risk, the assumptions on which the model is based give rise to some
limitations including the following. A ten day holding period assumes that it is possible to dispose of the underlying positions within this
period. This may not be valid during continuing periods of illiquid markets. A 99.5% confidence level means that there is a 0.5% statistical
(56)
(1,283)
2,126
29
Consolidated Financial Statements
Amounts include foreign currency gains (losses) from recognizing and measuring financial assets and liabilities. Net gains (losses) on
financial assets and liabilities measured at FVTPL resulted from those mandatorily measured at FVTPL and comprise fair value changes of
derivative financial instruments for which hedge accounting is not applied including interest income (expense), as well as dividends from
and fair value changes of equity instruments measured at FVTPL.
Interest income (expense) includes interest from financial assets and financial liabilities not at fair value through profit or loss:
(in millions of €)
Total interest income on financial assets
Total interest expenses on financial liabilities
Valuation allowances for expected credit losses
Fiscal year
2023
2022
2,380
1,626
(1,476)
(25)
(568)
(306)
87
651
925
925
325
325
Fair value of equity instruments quoted in an active market is based on price quotations at period-end date. Fair value of debt instruments,
is either based on prices provided by price service agencies or is estimated by discounting future cash flows using current market interest
rates.
Fair values of derivative financial instruments are determined in accordance with the specific type of instrument. Fair values of derivative
interest rate contracts are estimated by discounting expected future cash flows using current market interest rates and yield curves over
the remaining term of the instrument. Interest rate futures are valued based on quoted market prices, if available. Fair values of foreign
currency derivatives are based on forward exchange rates. Options are generally valued based on quoted market prices or based on option
pricing models. No compensating effects from underlying transactions (e.g. firm commitments and forecast transactions) are considered.
The Company limits default risks resulting from derivative financial instruments by generally transacting with financial institutions with a
minimum credit rating of investment grade. Based on Siemens' net risk exposure towards the counterparty, the resulting credit risk is
considered via a credit valuation adjustment.
As of September 30, 2023, and 2022, Level 3 financial assets include venture capital investments of €578 million and €607 million (Next47
investments). In fiscal 2023 and 2022, new level 3 investments and purchases amounted to €156 million and €221 million, respectively.
Sales of Level 3 financial assets amounted to €40 million and €100 million, respectively, in fiscal 2023 and 2022.
(841)
Net gains (losses) resulting from financial instruments are:
Cash and cash equivalents
Loans, receivables and other debt instruments measured at amortized cost
Financial liabilities measured at amortized cost
Financial assets and financial liabilities at FVTPL
Fiscal year
2023
2022
(38)
(in millions of €)
651
Loans, receivables and other debt instruments measured at
amortized cost
Assets
41
(1)
5
Write-offs charged against the allowance
n/a
n/a
(135)
(69)
(36)
Recoveries of amounts previously written off
n/a
n/a
4
9
4
Foreign exchange translation differences and other changes
(112)
74
3
106
Change in valuation allowances recorded in the Consolidated Statements of
Income in the current period
Lease
Receivables
Loans and other debt instruments
under the general approach
Trade
receivables
and other
debt instru-
ments under
the simplified
approach
(in millions of €)
Contract
Valuation allowance as of October 1, 2022
Stage 2
Stage 3
106
22
227
567
140
172
Stage 1
(6)
1,900
In connection with cash flow hedges
161
367
1,786
1,786
320
320
34
34
1,432
1,432
Financial liabilities measured at fair value - Derivative financial instruments
1,578
1,578
Not designated in a hedge accounting relationship (including embedded derivatives)
In connection with fair value hedges
296
296
954
71
136
665
663
Derivative financial instruments
Not designated in a hedge accounting relationship (including embedded derivatives)
In connection with fair value hedges
In connection with cash flow hedges
Sep 30, 2023
Level 1
Level 2
Level 3
954
Total
2,193
1,302
3,844
213
334
479
1,026
2
349
1,900
In connection with cash flow hedges
328
691
692
154
1
168
323
3,825
3,825
1,124
1,124
3
3
2,699
2,699
Financial liabilities measured at fair value - Derivative financial instruments
Not designated in a hedge accounting relationship (including embedded derivatives)
In connection with fair value hedges
2
1,075
372
336
(in millions of €)
Financial assets measured at fair value
Equity instruments measured at FVTPL
Equity instruments measured at FVOCI
Debt instruments measured at FVTPL
Derivative financial instruments
Not designated in a hedge accounting relationship (including embedded derivatives)
In connection with fair value hedges
In connection with cash flow hedges
328
Sep 30, 2022
Level 2
Level 3
Total
521
4,164
1,230
5,916
367
Level 1
104
(48)
(4)
Up to 12
More than
Sep 30, 2022
Up to 12
More than
months
12 months
months
12 months
8,325
11,538
5,872
16,751
3,090
10,597
763
11,210
205
Sep 30, 2023
therein: included in fair value hedges
therein: included in cash flow hedges
Interest rate swaps
3,711
1,559
1,864
1,705
3,711
1,558
1,863
863
3,090
1,444
1,449
842
2,266
694
414
NOTE 24 Derivative financial instruments and hedging activities
To hedge foreign currency exchange and interest rate risks, derivatives are contracted to achieve a 1:1 hedge ratio so that the main
characteristics match the underlying hedged items (e.g. nominal amount, maturity) in a critical term match, which ensures an economic
relationship between hedging instruments and hedged items suitable for hedge accounting. The nominal amounts of hedging instruments
by maturity are:
(in millions of €)
Foreign currency exchange contracts
865
1,705
10,597
11,210
644
1,088
49
therein: included in fair value hedges
34
954
3
925
Other (embedded derivatives, options, commodity swaps)
76
20
95
1,786
1,578
3,825
89
1,900
32
955
73
319
2,648
Fair values of each type of derivative financial instruments reported as financial assets or financial liabilities in line items Other current
financial assets (liabilities) or Other financial assets (liabilities) are:
Sep 30, 2023
Sep 30, 2022
(in millions of €)
Foreign currency exchange contracts
therein: included in cash flow hedges
Interest rate swaps and combined interest and currency swaps
therein: included in cash flow hedges
558
Asset
Asset
Liability
1,637
603
3,086
722
1,431
328
Liability
2022
2023
2022
Stage 1
Stage 2
Stage 3
Valuation allowance as of October 1, 2021
86
15
98
535
53
212
Change in valuation allowances recorded in the Consolidated Statements of
Income in the current period
132
4
13
116
82
620
(in millions of €)
the simplified
approach
ments under
debt instru-
(8)
Reclassifications to line item Assets held for disposal and dispositions of
entities
(2)
Valuation allowance as of September 30, 2023
100
18
274
498
Write-offs charged against the allowance
134
Loans, receivables and other debt instruments measured at
Contract
amortized cost
Assets
Lease
Receivables
Loans and other debt instruments
under the general approach
Trade
receivables
and other
137
n/a
n/a
(15)
567
140
172
Impairment losses on financial instruments are presented in line items Cost of sales, Selling and general administrative expenses and Other
financial income (expenses), net. Net losses (gains) in fiscal 2023 are €247 million and in fiscal 2022 €966 million (thereof €566 million
due to credit impaired lease receivables in connection with the sale of our leasing business in Russia). In fiscal 2023 and 2022, impairment
losses net of (gains) from reversal of impairments at SFS total €181 million and €259 million, respectively. Impairment losses and (gains)
from reversal of impairments at SFS are presented in Other financial income (expenses), net.
30
Consolidated Financial Statements
Offsetting
Siemens enters into master netting and similar agreements for derivative financial instruments. Potential offsetting effects are as follows:
227
(in millions of €)
Amounts offset in the Statement of Financial Position
Net amounts in the Statement of Financial Position
Related amounts not offset in the Statement of Financial Position
Net amounts
Financial assets
Financial liabilities
Sep 30,
Sep 30,
2023
Gross amounts
Debt instruments measured at FVTPL
(732)
22
(133)
(28)
Recoveries of amounts previously written off
n/a
n/a
1
16
6
(19)
Foreign exchange translation differences and other changes
3
131
52
6
93
Reclassifications to line item Assets held for disposal and dispositions of
entities
Valuation allowance as of September 30, 2022
106
(113)
Equity instruments measured at FVOCI
47,021
Financial assets measured at fair value
886
1,857
769
284
5
371
1,428
Usage
(388)
(156)
(11)
(198)
(753)
Reversals
Translation differences
(212)
(101)
185
235
551
4,013
Defined contribution plans and state plans
Amounts recognized as expenses for defined contribution plans are €611 million and €611 million in fiscal 2023 and 2022, respectively.
Contributions to state plans amount to €1,723 million and €1,630 million, respectively, in fiscal 2023 and 2022.
NOTE 18 Provisions
Order
related
losses and
(in millions of €)
Balance as of October 1, 2022
thereof: non-current
(2)
Additions
risks
Asset
retirement
obligations
Other
Total
1,497
481
564
1,471
Warranties
Employer contributions expected to be paid to defined benefit plans in fiscal 2024 are €230 million. Over the next ten fiscal years, average
annual benefit payments of €1,945 million and €1,869 million, respectively, are expected as of September 30, 2023 and 2022. The
weighted average duration of the DBO for Siemens defined benefit plans was 9 and 10 years, respectively, as of September 30, 2023 and
2022.
(189)
(46)
585
207
179
823
1,794
The majority of the Company's provisions are generally expected to result in cash outflows during the next five years.
Warranties mainly relate to products sold. Order related losses and risks are provided for anticipated losses and risks on uncompleted
construction, sales and leasing contracts.
The Company is subject to asset retirement obligations related to certain items of property, plant and equipment. Such asset retirement
obligations are primarily attributable to environmental clean-up costs and to costs primarily associated with the removal of leasehold
improvements at the end of the lease term.
Environmental clean-up costs relate to remediation and environmental protection liabilities which have been accrued based on the
estimated costs of decommissioning the site for the production of uranium and mixed-oxide fuel elements in Hanau, Germany (Hanau
facilities), as well as for a nuclear research and service center in Karlstein, Germany (Karlstein facilities). In May 2021, Siemens AG and the
Federal Republic of Germany entered into a contract under public-law, based on which the obligation of final disposal of nuclear waste is
transferred to the Federal Republic of Germany for a payment of €360 million. The contract and therefore the payment is subject to the
approval of the EU commission under state-aid rules. Estimation uncertainties still relate to assumptions made to measure the obligations
that remain with Siemens AG, regarding conditioning and packaging of nuclear waste, as well as intermediate storage and transport to
the final storage facility "Schacht Konrad" or a logistics depot until year-end 2032. As of September 30, 2023, and 2022, the provisions
total €480 million and €487 million, respectively.
25
Consolidated Financial Statements
Other includes provisions for life and industrial business reinsurance contracts (liability, property, construction) in connection with the
Siemens Energy business of €267 million and €339 million as of September 30, 2023 and 2022; thereof life €145 million and €159 million
and industrial business €122 million and €180 million, respectively, as of September 30, 2023 and 2022. The provisions are for incurred
and reported insurance losses as well as for incurred, hence, not yet reported insurance losses as of fiscal year-end. The provision is
determined using actuarial standard valuation methodologies, which are parameterized based on historical loss data. Life reinsurance
contracts have an average term of 19 years, whereas the cash outflows for the industrial business reinsurance contracts are expected
within the next five years. Other also includes provisions for Legal Proceedings, as far as the risks that are subject to such Legal Proceedings
are not already covered by project accounting. Provisions for Legal Proceedings amounted to €227 million and €236 million as of
September 30, 2023 and 2022, respectively. As of September 30, 2023, and 2022, €260 million and €181 million are included for claims
and charges resulting from the construction business. Furthermore, Other includes provision for indemnifications in connection with
dispositions of businesses of €82 million and €92 million as of September 30, 2023 and 2022. Such indemnifications may protect the
buyer from potential tax, legal and other risks in conjunction with the purchased business.
NOTE 19 Equity
As of September 30, 2023, and 2022, Siemens' issued capital is divided into 800 million and 850 million registered shares, respectively,
with no par value and a notional value of €3.00 per share. The shares are paid in full. At the Shareholders' Meeting, each share has one
vote and accounts for the shareholders' proportionate share in the Company's net income. All shares confer the same rights and
obligations. In fiscal 2023, Siemens cancelled 50 million treasury shares, thereby reducing issued capital by €150 million to €2.4 billion.
In fiscal 2023 and 2022, Siemens repurchased 6,853,091 shares and 14,185,791 shares, respectively. In fiscal 2023 and 2022, Siemens
transferred 4,227,344 and 4,376,201 treasury shares, respectively. As of September 30, 2023, and 2022, the Company has treasury shares
of 10,079,918 and 57,454,171 respectively.
Share based payment expenses increased Capital reserve by €444 million and €376 million (including non-controlling interests),
respectively, in fiscal 2023 and 2022. In connection with the settlement of share based payment awards, Siemens treasury shares (at cost)
were transferred to employees amounting to €265 million and €257 million, respectively, in fiscal 2023 and 2022, which decreased Capital
reserve and Retained earnings by €221 million and €44 million, respectively in 2023 and by €191 million and €66 million in fiscal 2022.
As of September 30, 2023, and 2022, total authorized capital of Siemens AG is €600 million nominal issuable in installments based on
various time-limited authorizations, by issuance of up to 200 million registered shares of no par value. Siemens AG's conditional capital is
€420.6 million or 140.2 million shares as of September 30, 2023 and 2022; which, primarily, can be used to serve convertible bonds or
warrants under warrant bonds that could or can be issued based on various time-limited authorizations approved by the respective
Shareholders' Meeting.
Dividends paid per share were €4.25 and €4.00, respectively, in fiscal 2023 and 2022. The Managing Board and the Supervisory Board
propose to distribute a dividend of €4.70 per share to holders entitled to dividends, in total representing approximately €3.7 billion in
expected payments. Payment of the proposed dividend is contingent upon approval at the Shareholders' Meeting on February 8, 2024.
NOTE 20 Additional capital disclosures
thereof: non-current
4,113
1,521
556
(37)
(5)
(30)
(118)
Accretion expense and effect of changes in discount rates
3
(3)
4
(504)
5
(57)
(1)
7
92
42
Balance as of September 30, 2023
1,566
470
Other changes including reclassifications to held for disposal and disposition of those entities
A key consideration of our capital structure management is to maintain ready access to capital markets through various debt instruments
and to sustain our ability to repay and service our debt obligations over time. In order to achieve our target, Siemens intends to maintain
an Industrial net debt divided by EBITDA (continuing operations) ratio of up to 1.5 in accordance with our Financial Framework. The ratio
indicates the approximate number of years that would be needed to cover the Industrial net debt through Income from continuing
operations, excluding interest, other financial income (expenses), taxes, depreciation, amortization and impairments.
Future cash flows
26,055
thereof: discontinued hedge accounting
(26)
(107)
(153)
24
(135)
(59)
(28)
241
75
(1)
(213)
(170)
53
reserve
hedging
Cost of
Amounts reclassified to net income in connection with interest rate risk hedges and non-operative foreign currency hedges are presented
in Other financial income (expenses), net. Reclassifications of foreign currency risk hedges with operative business purposes are presented
as functional costs. Costs of hedging reserve is the forward element of forward contracts that are not designated as hedge accounting and
which are amortized to interest expense on a straight-line basis as the hedged item is time-period related.
Foreign currency exchange rate risk management
Derivative financial instruments not designated in a hedging relationship
The Company manages its risks associated with fluctuations in foreign currency denominated receivables, payables, debt, firm
commitments and forecast transactions primarily through a Company-wide portfolio approach. Under this approach the Company-wide
risks are aggregated centrally, and various derivative financial instruments, primarily foreign currency exchange contracts, foreign currency
Equity instruments measured at FVTPL
Foreign currency exchange rate risk is quantified based on a sensitivity analysis. In order to quantify remaining market risks Siemens has
implemented a system based on Value at Risk (VaR), which is also used for internal management of Corporate Treasury activities. The VaR
figures are calculated based on historical volatilities and correlations of various risk factors, a ten day holding period, and a 99.5%
confidence level.
Increasing market fluctuations may result in significant earnings and cash flow volatility risk for Siemens. The Company's operating
business as well as its investment and financing activities are affected particularly by changes in foreign exchange rates and interest rates.
In order to optimize the allocation of financial resources across Siemens' segments and entities, as well as to achieve its aims, Siemens
identifies, analyzes and manages the associated market risks. The Company seeks to manage and control these risks primarily through its
regular operating and financing activities and uses derivative financial instruments when deemed appropriate.
NOTE 25 Financial risk management
The Company had interest rate swap contracts to pay variable rates of interest of an average of 3.00% and (0.86% as of September 30,
2023 and 2022, respectively and received fixed rates of interest (average rate of 1.81% and 1.07%, as of September 30, 2023 and 2022,
respectively). The notional amount of indebtedness hedged as of September 30, 2023 and 2022 was €13,687 million and €11,719 million,
respectively. This changed 33% and 26% of the Company's underlying notes and bonds from fixed interest rates into variable interest rates
as of September 30, 2023 and 2022, respectively. The notional amounts of these contracts mature at varying dates based on the maturity
of the underlying hedged items. The net fair value of interest rate swap contracts (excluding accrued interest) used to hedge indebtedness
as of September 30, 2023 and 2022 was €(844) million and €(959) million, respectively.
Under interest rate swap agreements outstanding in fiscal 2023 and 2022, the Company agreed to pay a variable rate of interest multiplied
by a notional principal amount, and to receive in return an amount equal to a specified fixed rate of interest multiplied by the same notional
principal amount. These interest rate swap agreements offset future changes in interest rates designated as hedged risk on the fair value
of the underlying fixed-rate debt obligations. As of September 30, 2023, and 2022, the carrying amounts of €13,164 million and €10,718
million, respectively, of fixed-rate debt obligations are designated in fair value hedges, including €(876) million and €(973) million
cumulative fair value hedge adjustments. Unamortized fair value hedge adjustments of €112 million and €169 million as of September
30, 2023 and 2022, respectively, relate to no longer applied hedge accounting. The amounts are amortized over the remaining term of
the underlying debt, maturing until 2042. Carrying amount adjustments to debt of €(95) million and €1,273 million, respectively, in fiscal
2023 and 2022 are included in Other financial income (expenses), net; the related swap agreements resulted in gains (losses) of €74
million and €(1,236) million, respectively, in fiscal 2023 and 2022. Net cash receipts and payments relating to such interest rate swap
agreements are recorded as interest expenses.
Fair value hedges of fixed-rate debt obligations
In September 2023, Siemens ended cash flow hedge accounting. Previously, Siemens applied cash flow hedge accounting to a revolving
portfolio of floating-rate commercial papers of nominal US$200 million.
Cash flow
hedge
reserve
Cash flow hedges of floating-rate commercial papers
Derivative financial instruments not designated in a hedging relationship
Interest rate risk management
Included are Siemens' foreign currency forward contracts, entered into in fiscal 2021, to hedge foreign currency risks relating to US$10
billion (€10 billion) bonds granted to Siemens Healthineers, through which a synthetic Euro financing structure is achieved. It factually,
also turns interest into € with volume weighted average interest rates of currently about 0.7% and 0.3%, respectively, in fiscal 2023 and
2022.
The Company's operating units apply hedge accounting to certain significant forecast transactions and firm commitments denominated
in foreign currencies. Particularly, the Company entered into foreign currency exchange contracts to reduce the risk of variability of future
cash flows resulting from forecast sales and purchases as well as firm commitments. The risk mainly results from contracts denominated
in US$ both from Siemens' operating units entering into long-term contracts e.g. from the project business and from the standard product
business. In fiscal 2023 and 2022, the risk is hedged against the euro at an average rate of 1.2780 €/US$ and 1.2293 €/US$ (forward
purchases of US$), respectively, and 1.1027 €/US$ and 1.0258 €/US$ (forward sales of US$), respectively. As of September 30, 2023, and
2022, the hedging transactions have an average remaining maturity until 2028 and 2027 (forward purchases of US$) as well as 2024 and
2023 (forward sales of US$), respectively.
Cash flow hedges
swaps and options, are utilized to minimize such risks. Such a strategy does not qualify for hedge accounting treatment. The Company
also accounts for foreign currency derivatives, which are embedded in sale and purchase contracts.
Consolidated Financial Statements
31
Interest rate risk management uses derivative financial instruments under a portfolio-based approach to manage interest risk actively. The
approach does not qualify for hedge accounting. Gains and losses in connection with interest rate swap agreements are recorded in Other
financial income (expenses), net. The interest rate risk management includes SFS business, for which the interest rate risk was formerly
managed separately.
Virtually all equity securities have quoted prices in active markets. The fair value of fixed income securities is based on prices provided by
price service agencies. The fixed income securities are traded in active markets and almost all fixed income securities are investment grade.
Alternative investments include hedge funds, private equity and real estate investments, thereof real estate used by the Company with a
fair value of €608 million and €734 million, respectively, as of September 30, 2023 and 2022. Multi strategy funds mainly comprise
absolute return funds and diversified growth funds that invest in various asset classes within a single fund and aim to stabilize return and
reduce volatility. Derivatives predominantly consist of financial instruments for hedging interest rate risk and inflation risk.
reserve
Cash flow
10,635
2,639
2,517
7,865
8,118
5,207
5,491
3,329
3,501
499
602
699
2,039
2,090
299
321
26,523
10,504
3,185
3,360
2022
Foreign currency risk
Interest
rate risk
Balance as of September 30, 2023
Reclassification to net income
Hedging gains (losses) presented in OCI
Disaggregation of plan assets
Consolidated Financial Statements
Sep 30,
hedge
(in millions of €)
Equity securities
Government bonds
Corporate bonds
Alternative investments
Multi strategy funds
Derivatives
Cash and cash equivalents
Insurance contracts
Other assets
Total
2023
Fixed income securities
(in millions of €)
818
Plus: Long-term debt
NOTE 23 Additional disclosures on financial instruments
The following table discloses the carrying amounts of each category of financial assets and financial liabilities:
(in millions of €)
Loans, receivables and other debt instruments measured at amortized cost¹
Cash and cash equivalents
Derivatives designated in a hedge accounting relationship
Financial assets mandatorily measured at FVTPL²
Financial assets designated as measured at FVTPL³
Equity instruments measured at FVOCI¹
Financial assets
Sep 30,
2023
2022
Balance as of October 1, 2022
46,386
10,084
10,465
As previously reported, in June 2015, Siemens Ltda. appealed to the Supreme Court against a decision of a previous court to suspend
Siemens Ltda. from participating in public tenders and signing contracts with public administrations in Brazil for a five year term based on
alleged irregularities in calendar 1999 and 2004 in public tenders with the Brazilian Postal authority. In June 2018, the court accepted
Siemens' appeal and declared the earlier instance decision as void. In June 2021, the court referred the case back to the court of first
instance. In February 2018, the Ministério Público in Brasilia filed a lawsuit based on the same set of facts, mainly claiming the exclusion
of Siemens Ltda. from public tenders for a ten year term. Siemens Ltda. is defending itself against the lawsuit. Siemens Ltda. is currently
not excluded from participating in public tenders.
As previously reported, in May 2014, the Public Affairs Office (Ministério Público) São Paulo initiated a lawsuit against Siemens Ltda. as
well as other companies and several individuals claiming, inter alia, damages in an amount of BRL2.5 billion (approximately €471 million
as of September 2023) plus adjustments for inflation and related interest in relation to train refurbishment contracts entered into between
2008 and 2011. In January 2015, the district court of São Paulo admitted a lawsuit of the State of São Paulo and two customers against
Siemens Ltda., Siemens AG and other companies and individuals claiming damages in an unspecified amount. In March 2015, the district
court of São Paulo admitted a lawsuit of the Public Affairs Office (Ministério Público) São Paulo against Siemens Ltda. and other companies
claiming, inter alia, damages in an amount of BRL487 million (approximately €92 million as of September 2023) plus adjustments for
inflation and related interest in relation to train maintenance contracts entered into in 2000 and 2002. In September 2015, the district
court of São Paulo admitted another lawsuit of the Public Affairs Office (Ministério Público) São Paulo against Siemens Ltda. and other
companies claiming, inter alia, damages in an amount of BRL918 million (approximately €173 million as of September 2023) plus
adjustments for inflation and related interest in relation to train maintenance contracts entered into in 2006 and 2007. Siemens is
defending itself against these actions. It cannot be excluded that further significant damage claims will be brought by customers or the
state against Siemens.
payment of damages by Siemens AG of at least €57 million to OTE for alleged bribery payments to OTE employees. In October 2014, OTE
increased its damage claim to the amount of at least €68 million. Siemens AG continues to defend itself against the expanded claim.
Consolidated Financial Statements
2023
Sep 30,
2022
411
515
Performance guarantees
5,746
9,309
6,156
1,466
9,824
Furthermore, Siemens issues performance guarantees, which mainly include performance bonds. In the event of non-fulfillment of
contractual obligations by the primary obligor, Siemens will be required to pay up to an agreed-upon maximum amount. These agreements
typically have terms of up to ten years. As of September 30, 2023, and 2022, Performance guarantees include €5,341 million and €8,562
million for which Siemens holds reimbursement rights towards Siemens Energy; the related contract liability amount for parent company
guarantees is generally reduced using the straight-line method over the planned term of the underlying delivery or service agreement. As
of September 30, 2023, and 2022, the Company accrued €58 million and €54 million, respectively, relating to performance guarantees.
As of September 30, 2023, and 2022, in addition to guarantees disclosed in the table above, there are contingent liabilities of €402 million
and €421 million which mainly result from other guarantees and legal proceedings. Other guarantees include €71 million and €99 million
for which Siemens holds reimbursement rights towards Siemens Energy.
NOTE 22 Legal proceedings
Siemens is involved in numerous Legal Proceedings in various jurisdictions. These Legal Proceedings could result, in particular, in Siemens
being subject to payment of damages and punitive damages, equitable remedies or sanctions, fines or disgorgement of profit. In individual
cases this may also lead to formal or informal exclusion from tenders or the revocation or loss of business licenses or permits. In addition,
further Legal Proceedings may be commenced or the scope of pending Legal Proceedings may be extended. Asserted claims are generally
subject to interest rates.
Some of these Legal Proceedings could result in adverse decisions for Siemens, which may have material effects on its business activities
as well as its financial position, results of operations and cash flows.
For Legal Proceedings information required under IAS 37, Provisions, Contingent Liabilities and Contingent Assets is not disclosed if the
Company concludes that disclosure can be expected to seriously prejudice the outcome of the matter.
Proceedings out of or in connection with alleged compliance violations
As previously reported, in July 2008, Hellenic Telecommunications Organization S.A. (OTE) filed a lawsuit against Siemens AG with the
district court of Munich, Germany, seeking to compel Siemens AG to disclose the outcome of its internal investigations with respect to
OTE. OTE seeks to obtain information with respect to allegations of undue influence and/or acts of bribery in connection with contracts
concluded between Siemens AG and OTE from calendar 1992 to 2006. At the end of July 2010, OTE expanded its claim and requested
27
Credit guarantees cover the financial obligations of third parties generally in cases where Siemens is the vendor and (or) contractual
partner or Siemens is liable for obligations of associated companies accounted for using the equity method. Additionally, credit guarantees
are issued in the course of the SFS business. Credit guarantees generally provide that in the event of default or non-payment by the primary
debtor, Siemens will be required to settle such financial obligations. The maximum amount of these guarantees is equal to the outstanding
balance of the credit or, in case a credit line is subject to variable utilization, the nominal amount of the credit line. These guarantees have
typically residual terms of up to three years (in fiscal 2022 four years). The Company held collateral mainly through inventories and trade
receivables. As of September 30, 2023, and 2022, Credit guarantees include €95 million and €123 million for which Siemens holds
reimbursement rights towards Siemens Energy. Siemens accrued €18 million and €2 million relating to credit guarantees as of September
30, 2023 and 2022, respectively.
Credit guarantees
2,701
136
(in millions of €)
Notes and bonds
Loans from banks and other financial indebtedness
Sep 30, 2023
Sep 30, 2022
Fair value
37,059
2,681
Carrying
amount
40,929
2,744
Fair value
40,622
2,821
Carrying
amount
44,764
2,870
Fixed-rate and variable-rate receivables with a remaining term of more than twelve months, including receivables from finance leases, are
evaluated by the Company based on parameters such as interest rates, specific country risk factors, individual creditworthiness of the
customer, and the risk characteristics of the financed project. Based on this evaluation, allowances for these receivables are recognized.
28
Consolidated Financial Statements
The fair value of notes and bonds is based on prices provided by price service agencies at the period-end date (Level 2). The fair value of
loans from banks and other financial indebtedness as well as other non-current financial liabilities are estimated by discounting future
cash flows using rates currently available for debt of similar terms and remaining maturities (Level 2).
Short-term debt and current maturities of long-term debt
(in millions of €)
The following table allocates financial assets and financial liabilities measured at fair value to the three levels of the fair value hierarchy:
The following table presents the fair values and carrying amounts of financial assets and financial liabilities measured at cost or amortized
cost for which the carrying amounts do not approximate fair value:
Cash and cash equivalents include €89 million and €164 million as of September 30, 2023 and 2022, respectively, which are not available
for use by Siemens mainly due to minimum reserve requirements with banks. As of September 30, 2023, and 2022, the carrying amount
of financial assets Siemens pledged as collateral is €164 million and €166 million, respectively.
* Includes fair value hedge adjustments. Reported in the following line items of the Statements of Financial Position: Short-term debt and current maturities of long-term debt, Trade payables, Other current financial liabilities, Long-
term debt and Other financial liabilities, except for separately disclosed derivative financial instruments of €1,578 million and €1,900 million as of September 30, 2023 and 2022, respectively.
5 Reported in line items Other current financial liabilities and Other financial liabilities.
3 Reported in Other financial assets.
154
665
692
60,950
62,766
Financial liabilities measured at amortized cost4
Derivatives not designated in a hedge accounting relationship5
Derivatives designated in a hedge accounting relationship 5
Financial liabilities
1,578
58,202
296
651
1,282
1,249
59,779
64,436
1 Reported in the following line items of the Statements of Financial Position as of September 30, 2023 and 2022, respectively: Trade and other receivables, Other current financial assets and Other financial assets, except for
separately disclosed €1,691 million and €1,767 million equity instruments in Other financial assets (thereof €665 million and €692 million at FVOCI), €136 million and €154 million financial assets designated as measured at
FVTPL and €1,786 million and €3,825 million derivative financial instruments (thereof in Other financial assets €1,213 million and €2,868 million) as well as €232 million and €169 million debt instruments measured at FVTPL
in Other financial assets. Includes €15,454 million and €14,666 million trade receivables from the sale of goods and services, thereof €640 million and €766 million with a term of more than twelve months as of September 30,
2023 and 2022.
2 Reported in line items Other current financial assets and Other financial assets.
62,536
(in millions of €)
2,368
guarantees:
(1,720)
34,843
37,212
(28,756)
(29,107)
1,426
2,275
411
7,924
(1,239)
515
10,896
7,154
(646)
45
3,608
3,561
14,163
10,759
0.6
11,201
1.0
(1,047)
(10,084)
Less: Cash and cash equivalents
Less: Current interest-bearing debt securities
Less: Fair value of foreign currency and interest hedges relating to short- and long-term debt¹
Net debt
Sep 30,
Less: Siemens Financial Services debt²
Plus: Provisions for pensions and similar obligations
Plus: Credit guarantees
Industrial net debt
(10,465)
Income from continuing operations before income taxes
EBITDA
Sep 30,
2023
2022
7,483
6,658
39,113
43,978
Plus/Less: Interest income, interest expenses and other financial income (expenses), net
Plus: Amortization, depreciation and impairments
Industrial net debt/EBITDA
(621)
2 The adjustment considers that both Moody's and S&P view Siemens Financial Services as a captive finance company. These rating agencies generally recognize and accept higher levels of debt attributable to captive
finance subsidiaries in determining credit ratings. Following this concept, Siemens excludes Siemens Financial Services debt.
Investors
Global
Service
Ratings
Sep 30, 2022
Moody's
Investors
Service
S&P
Ratings
Aa3
S&P
A+
The following table presents the undiscounted amount of maximum potential future payments for major groups of
A+
P-1
A-1+
1 Debt is generally reported at a value approximately representing the amount to be repaid. Accordingly, debt in a hedging relationship is adjusted for fair values of interest hedges as well as for foreign currency hedge effects.
Siemens deducts resulting changes in fair value, to derive an amount of debt that approximates the amount that will be repaid.
P-1
A-1+
NOTE 21 Commitments and contingencies
A1
Moody's
Global
Siemens Financial Services debt
Debt to equity ratio
26
Consolidated Financial Statements
Sep 30, 2023
The SFS business is capital intensive and operates with a larger amount of debt to finance its operations compared to the industrial
business.
(in millions of €)
Allocated equity
Sep 30,
2023
Sep 30,
2022
3,133
26
Equity allocated to SFS differs from the carrying amount of equity as it is mainly allocated based on the risks of the underlying business.
Siemens' current corporate credit ratings are:
28,756
29,107
9.18
9.43
3,087
Long-term debt
Short-term debt
|
201
178
468
3,313
88,082
468
4,016
2022
2023
21,919 19,517 4,947 3,892
17,353 3,074 2,222
9,692
882
794
21,715 2,527 3,369
10,277
498
1,520
2022
3,056
661
3,234
84,837
943
25
632
68,277
74,095
880
67,397
73,152
662
442
3,995 3,112
11,430
563
343
29
Sep 30, Sep 30,
2023 2022
10,946 10,861
6,386
2,244 2,547
34,415 36,948 2,221
53,991 56,857 10,376
32,915
482
393
Fiscal year
190
Portfolio Companies
188
771
1,046
343
205
284
6,501 2,908 2,203
Fiscal year
693
316
440
2022
2023
2022
2023
2022
2023
4,201 4,090
Fiscal year
612
Siemens Financial Services
Intersegment
Revenue
85
Fiscal year
Fiscal year
2023
2022
Fiscal year
2023
Digital Industries
(in millions of €)
Amortization,
depreciation &
impairments
Additions to
intangible
assets and
property, plant
& equipment
Consolidated Financial Statements
2022
Free cash flow
Profit
Total
revenue
External revenue
Orders
NOTE 29 Segment information
37
4.62
238
4.67
Assets
21,681
2023
Fiscal year
2023
108
24,499 25,556 21,574 21,630
10,549
10
12
9,683
19,946
419
366
381
2022
16,987
Industrial Business
Siemens Healthineers
Mobility
Smart Infrastructure
442
19,098
25,283 21,478
20,620
Fiscal year
22,333 20,798 19,564
20,629 13,200 10,537
248
Profit
817
Asset measurement principles
In contrast to performance measurement principles applied to other segments, interest income and expenses are included, since interest
is an important source of revenue and expense of SFS.
Profit of the segment SFS
Consolidated Financial Statements
39
Amortization expenses of intangible assets acquired in business combinations are not part of Profit. Furthermore, income taxes are
excluded from Profit since income tax is subject to legal structures, which typically do not correspond to the structure of the segments.
The effect of certain litigation and compliance issues is excluded from Profit, if such items are not indicative of performance. This may also
be the case for items that refer to more than one reportable segment, SRE and (or) POC or have a corporate or central character. Costs for
support functions are primarily allocated to the segments.
Decisions on essential pension items are made centrally. Accordingly, Profit primarily includes amounts related to service cost of pension
plans only, while all other regularly recurring pension related costs are included in reconciliations in line item Centrally carried pension
expense.
Interest income (expenses) are excluded from Profit. Decision-making regarding financing is typically made at the corporate level.
Siemens' Managing Board is responsible for assessing the performance of the segments (chief operating decision maker). The Company's
profitability measure of the segments except for SFS is earnings before interest, certain pension costs, income taxes and amortization
expenses of intangible assets acquired in business combinations as determined by the chief operating decision maker (Profit). The major
categories of items excluded from Profit are described below.
Management determined Assets (Net capital employed) as a measure to assess capital intensity of the segments except for SFS. Its
definition corresponds to the Profit measure except for amortization expenses of intangible assets acquired in business combinations
which are not part of Profit, however, the related intangible assets are included in the segments' Assets. Segment Assets is based on Total
assets of the Consolidated Statements of Financial Position, primarily excluding intragroup financing receivables, tax related assets and
assets of discontinued operations, since the corresponding positions are excluded from Profit. The remaining assets are reduced by non-
interest-bearing liabilities other than tax related liabilities, e.g. trade payables, to derive Assets. In contrast, Assets of SFS is Total assets. In
individual cases assets of Mobility include project-specific intercompany financing of long-term projects. Assets of Siemens Healthineers
include real estate, while real estate of all other segments is carried at SRE.
Profit
Revenue
Accounting policies for Segment information are generally the same as those used for the Consolidated Financial Statements. Segment
information is disclosed for continuing operations. For internal and segment reporting purposes, intercompany lease transactions,
however, are classified as operating leases by the lessor and are accounted for off-balance sheet by the lessee (except for intercompany
leases with Siemens Healthineers as lessees). Intersegment transactions are based on market prices.
Measurement - Segments
Financing, eliminations and other items - comprise activities of Advanta and Global Business Services, results from corporate projects,
equity interests and activities generally intended for closure as well as activities remaining from divestments, consolidation of transactions
within the segments, certain reconciliation and reclassification items as well as central financing activities. It also includes interest income
and expense, such as, for example, interest not allocated to segments or POC (referred to as financing interest), interest related to central
financing activities or resulting consolidation and reconciliation effects on interest.
Centrally carried pension expense - includes the Company's pension related income (expense) not allocated to the segments, POC or
Siemens Real Estate.
Governance - primarily includes Siemens brand fees and governance costs, group managing costs, IT and corporate services.
Innovation - mainly includes results from our units Technology and Next47.
Siemens Real Estate (SRE) - Siemens Real Estate is responsible for uniform and comprehensive management of Company real estate
worldwide (except for Siemens Healthineers) and supports the industrial businesses and corporate activities with customer-specific real
estate solutions.
Siemens Energy Investment - includes our investment in Siemens Energy accounted for using the equity method, and previously, a
smaller investment in connection with Siemens Energy sold in fiscal 2022.
Revenue includes revenue from contracts with customers and revenue from leasing activities. In fiscal 2023 and 2022, lease revenue is
€1,004 million and €1,104 million, respectively. In fiscal 2023 and 2022, Digital industries recognized €5,067 million and €4,691 million
revenue, respectively, from its software business, Smart Infrastructure recognized €4,243 million and €3,856 million in its service business.
Revenues of Mobility are mainly derived from construction-type business.
Reconciliation to Consolidated Financial Statements
Orders
As of September 30, 2023, and 2022, order backlog totaled €111 billion and €102 billion (continuing operations); thereof Digital Industries
€11 billion and €14 billion, Smart Infrastructure €16 billion and €15 billion, Mobility €45 billion and €36 billion and Siemens Healthineers
€34 billion and €34 billion. In fiscal 2024, Siemens expects to convert approximately €43 billion of the September 30, 2023 order backlog
into revenue; thereof at Digital Industries approximately €8 billion, Smart Infrastructure approximately €10 billion, Mobility approximately
€11 billion and Siemens Healthineers approximately €11 billion.
801,338
8,342
809,680
(2,911)
668
2022
2023
Centrally carried pension expense
Governance
Innovation
Siemens Real Estate
Orders are determined principally as estimated revenue of accepted purchase orders for which enforceable rights and obligations exist as
well as subsequent order value changes and adjustments, excluding letters of intent. To determine orders, Siemens considers termination
rights and customer's creditworthiness.
Siemens Energy Investment
Fiscal year
Reconciliation to Consolidated Financial Statements
The orderly wind down of business activities in Russia resulted in losses in Profit of Mobility of €0.6 billion in fiscal 2022. In fiscal 2023,
subsequent to the wind down, Profit of Mobility carried related gains of €153 million, which mainly stem from the reversal of provisions
and obligations as well as from the reversal of write downs and the sale of inventories.
POC follows the measurement principles of the segments except for SFS. Siemens Real Estate applies the measurement principles of SFS.
Additional segment information
Measurement - POC and Siemens Real Estate
Amortization, depreciation and impairments includes depreciation and impairments of property, plant and equipment as well as
amortization and impairments of intangible assets each net of reversals of impairment.
Amortization, depreciation and impairments
Free cash flow of the segments constitutes cash flows from operating activities less additions to intangible assets and property, plant and
equipment. Except for SFS, it excludes financing interest, except for cases where interest on qualifying assets is capitalized or classified as
contract costs; it also excludes income tax as well as certain other payments and proceeds. Free cash flow of SFS includes related financing
interest payments and proceeds; income tax payments and proceeds of SFS are excluded. In individual cases, free cash flow of Mobility
includes project-specific intercompany financing of long-term projects.
Free cash flow definition
(in millions of €)
Portfolio Companies comprise businesses which deliver a broad range of customized and application-specific products, software,
solutions, systems and services for different industries including oil and gas, chemical, mining, cement, logistics, energy, marine, water
and fiber.
Portfolio Companies (POC)
Siemens Financial Services provides financing solutions to Siemens' customers and other companies via debt and equity investments,
offering leasing, lending, working capital and structured financing solutions, equipment and project financing and financial advisory
services.
209
25
36
38
97
197
659
175
31
51
32
852
33,263
2,626
2,798
1,548
1,730
9,689
1,555 1,343
838
985
39
Reconciliation to
Consolidated Financial Statements
Siemens Healthineers provides healthcare solutions and services. It develops, manufactures, and sells a diverse range of innovative
diagnostic and therapeutic products and services to healthcare providers.
Mobility combines all Siemens businesses in the area of rail passenger and rail freight transportation, including rail vehicles, rail
automation systems, rail electrification systems, digital and cloud-based solutions and related services,
Smart Infrastructure offers products, systems, solutions, services and software to support a sustainable transition from fossil to renewable
energy sources, as well as a transition to smarter, more sustainable buildings and communities,
Digital Industries offers a comprehensive product portfolio and system solutions for automation used in discrete and process industries,
complemented by product lifecycle and data-driven services,
Description of reportable segments
Consolidated Financial Statements
38
3,561
3,608
2,084
2,218
687
584
469
418
(5,141) 57,680 60,724 (1,363) (2,533)
7,154 145,067 151,502 10,062 8,238
(195) (1,135)
71,977 11,201
(1,170) (1,087) (108)
77,769
892
71,977
(261) (483) 1,062
92,305 89,010 77,769
Siemens (continuing operations)
2,625
9,803
801,342
10.02
9.90
67
Basic earnings per share (from continuing operations)
(1,192,351)
778,012
897,484
2,401,240 1,951,223
624,775
2022
2023
1,131,311
8,670,111
8,956,287
(1,099,508)
(91,905) (125,993)
(1,667,914) (362,176)
(16,447) (77,370)
8,388,910 8,956,287
2022
Not subject to
performance conditions
Fiscal year
performance conditions
Fiscal year
Subject to
Share Matching Program and its underlying plans
Non-vested at period-end
Settled
Forfeited
Adjustments due to vesting conditions other than market conditions
Vested and fulfilled
2023
Granted
(365,913)
n/a
(68,404)
2022
1,389,016
557,839
(573,440)
1,255,825
655,177
(573,468)
Settled
Forfeited
Vested and fulfilled
Granted
Outstanding, beginning of period
2023
(198,524)
Fiscal year
Under the Base Share Program employees of Siemens AG and participating domestic Siemens companies may invest a fixed amount of
their compensation in Siemens shares, sponsored by Siemens. The shares are bought at market price at a predetermined date in the second
quarter and grant the right to receive matching shares under the same conditions applying to the Share Matching Plan described above.
Siemens' contributions to the Base Share Program recognized as expense were €23 and €24 in fiscal 2023 and 2022, respectively
Base Share Program
Under the Monthly Investment Plan employees other than senior managers may invest a specified part of their compensation in Siemens
shares on a monthly basis over a period of twelve months. Shares are purchased at market price at a predetermined date once a month.
If the Managing Board decides that shares acquired under the Monthly Investment Plan are transferred to the Share Matching Plan, plan
participants will receive the right to matching shares under the same conditions applying to the Share Matching Plan described above with
a vesting period of about two years. The Managing Board decided that shares acquired under the tranches issued in fiscal 2022 and 2021
are transferred to the Share Matching Plan as of February 2023 and February 2022, respectively.
Monthly Investment Plan
Under the Share Matching Plan, senior managers may invest a specified part of their variable compensation in Siemens shares (investment
shares). The shares are purchased at market price at a predetermined date in the second quarter. Plan participants receive the right to one
Siemens share without payment of consideration (matching share) for every three investment shares continuously held over a period of
about three years (vesting period) provided the plan participant has been continuously employed by Siemens until the end of the vesting
period.
Share Matching Plan
In fiscal 2023, Siemens issued a new tranche under each of the plans of the Share Matching Program.
(66,128) (71,512)
(3,484) (1,440)
1,593,270 1,131,311
n/a
Resulting Matching Shares:
(64,030)
Non-vested, beginning of period
The weighted average fair value of stock awards granted in fiscal 2023 and 2022 of €125.42 and €125.29 per share, respectively, was
determined as Siemens' share price, less the present value of expected dividends during the respective vesting period.
918
2,512
n/a
Stage 3
Stage 2
n/a
Stage 1
840
Stage 3
n/a
Stage 2
4
548
Stage 1
6,074
16,017
2,857
approach
Lease Re-
Financial guarantees and
loan commitments
Loans and other debt
instruments under the general
Non-Investment Grade Ratings
Investment Grade Ratings
(in millions of €)
SFS' external financing portfolio disaggregates into credit risk rating grades as of September 30, 2023 as follows (pre valuation
allowances):
credit-impaired loans in SFS' asset finance business. Those collaterals mainly comprised property, plant and equipment. Credit risks arising
from irrevocable loan commitments are equal to the expected future pay-offs resulting from these commitments.
Consolidated Financial Statements
ceivables
Changes in stock awards:
67
3,593
Each quarter, the Company grants stock awards not subject to performance conditions to selected employees. The awards are subject to
a ratable vesting period of one to four years, i.e. 25% of the number of awards granted are transferred each year.
Stock awards not subject to performance conditions
Siemens' share price of €133.66 and €153.58. Expected volatility was determined by reference to historic volatilities. The model applies a
risk-free interest rate of up to 2.68% and (0.23)% in fiscal 2023 and 2022, respectively, and an expected dividend yield of 3.18% in fiscal
2023 and 2.61% in fiscal 2022. Assumptions relating to correlations between the Siemens share price and the development of the MSCI
Index were derived from historic observations of share price and index changes. The fair value of the ESG component of €120.28 and
€140.52 per share in fiscal 2023 and 2022, respectively, was determined as Siemens' share price, less the present value of expected
dividends during the vesting period.
Consolidated Financial Statements
35
The fair value of stock awards granted in fiscal 2023 and 2022 (TSR-related) was calculated by applying a valuation model. In fiscal 2023
and 2022, inputs to that model include an expected weighted volatility of Siemens shares of 26.70% and 24.41%, respectively, and a
In fiscal 2023 and 2022, 1,784,892 and 1,459,182 equity-settled stock awards were granted relating to the TSR-Target with a fair value
of €114 million and €106 million, respectively. In fiscal 2023 and 2022, 446,237 and 365,610 equity-settled stock awards were granted
relating to the ESG-Target with a fair value of €54 million and €51 million, respectively.
Commitments to members of the senior management and other eligible employees
Fair values of TSR-related stock awards granted are €7 million and €6 million, respectively, in fiscal 2023 and 2022, calculated by applying
a valuation model. In fiscal 2023 and 2022, inputs to that model include an expected weighted volatility of Siemens shares of 26.71% and
24.41%, respectively, and a Siemens share price of €130.68 and €153.34. Expected volatility was determined by reference to historic
volatilities. The model applies a risk-free interest rate of up to 2.76% and (0.15)% in fiscal 2023 and 2022, respectively, and an expected
dividend yield of 3.25% in fiscal 2023 and 2.61% in fiscal 2022. Assumptions relating to correlations between the Siemens share price and
the development of the MSCI index were derived from historic observations of share price and index changes. The fair value of the ESG
component of €112.39 and €135.25 per share in fiscal 2023 and 2022, respectively, was determined as Siemens' share price, less the
present value of expected dividends during the vesting period.
118
Commitments to members of the Managing Board
The Company grants stock awards subject to performance conditions to members of the Managing Board, members of the senior
management and other eligible employees. The vesting period for awards granted to members of the senior management and other
eligible employees is three years respectively four years for awards granted prior to fiscal 2022. Awards granted to members of the
Managing Board are subject to a four year vesting period.
Stock awards granted by Siemens are distinguished between a) subject to performance conditions and b) no performance conditions.
Stock awards entitle the beneficiaries to Siemens shares without payment of consideration at the end of the respective vesting period.
Stock awards subject to performance conditions
Stock awards
Share-based payment awards may be settled in newly issued shares of capital stock of Siemens AG, in treasury shares or in cash. Share-
based payment awards may forfeit if the employment of the beneficiary terminates prior to the expiration of the vesting period. In fiscal
2023 and 2022, expense from equity-settled awards on a continuing basis are €444 million and €377 million; cash-settled awards on a
continuing basis resulted in expenses of €18 million and gains of €12 million in fiscal 2023 and 2022. Included is expense of €113 million
and €110 million in fiscal 2023 and 2022, respectively, relating to Siemens Healthineers plans. Siemens Healthineers plans are largely
similar to Siemens' plans, except for granting Siemens Healthineers AG shares.
NOTE 26 Share-based payment
Siemens' investment portfolio consists of direct and indirect investments in publicly traded companies that are classified as long term
investments. These investments are monitored based on their current market value, affected primarily by fluctuations on the volatile
technology-related markets worldwide. As of September 30, 2023 and 2022, the market value of Siemens' portfolio was €182 million and
€339 million, respectively. As of September 30, 2023 and 2022, the VaR relating to the equity price was €26 million and €74 million.
Equity Price Risk
Amounts above do not represent economic credit risk, since they consider neither collateral held nor valuation allowances already
recognized.
Trade receivables of operating units are generally rated internally; as of September 30, 2023 and 2022, approximately 45% and 45%,
respectively, have an investment grade rating and 55% and 55%, respectively, have a non-investment grade rating. Contract assets
generally show similar risk characteristics as trade receivables in operating units.
For stock awards subject to performance conditions, 80% of the target amount is linked to the relative total shareholder return of Siemens
compared to the total shareholder return of the MSCI World Industrials sector index (TSR-Target); the remaining 20% are linked to a
Siemens internal sustainability target considering environmental, social and governance targets (ESG-Target). The annual target amount
for stock awards up to and including tranche 2019 is linked to the share price performance of Siemens relative to the share price
performance of five important competitors. The target attainment for each individual performance criteria ranges between 0% and 200%.
Settlement of the awards is in shares corresponding to the actual target attainment.
(23,663)
(53,561)
Outstanding, end of period
316
308
316
26
27
26
26
47
50
308
47
56
57
56
57
179
183
179
183
2022
50
2023
Fiscal year
2023
Weighted average shares outstanding - diluted
Effect of dilutive share-based payment
791,538
Weighted average shares outstanding - basic
3,737
7,930
Income from continuing operations attributable to shareholders of Siemens AG to determine dilutive earnings per share
(7)
(4)
(shares in thousands; earnings per share in €)
Less: Dilutive effect from share based payment resulting from Siemens Healthineers
7,935
Income from continuing operations attributable to shareholders of Siemens AG
669
579
Less: Portion attributable to non-controlling interest
4,413
8,514
Income from continuing operations
2022
3,744
2022
2023
Fiscal year
22,659
24,683
2022
2023
2022
Fiscal year
Fiscal year
2023
Continuing and
discontinued operations
Continuing
operations
24,689
Statutory social welfare contributions and expenses for optional support
Expenses relating to post-employment benefits
(in millions of €)
NOTE 27 Personnel costs
For their 25th and 40th service anniversary eligible employees receive jubilee shares. There were 3.14 million and 3.11 million entitlements
to jubilee shares outstanding as of September 30, 2023 and 2022, respectively.
Jubilee Share Program
Consolidated Financial Statements
36
The weighted average fair value of matching shares granted in fiscal 2023 and 2022 of €107.60 and €121.35 per share, respectively, was
determined as Siemens' share price, less the present value of expected dividends; non-vesting conditions were taken into account.
1,255,825
1,245,467
Wages and salaries
22,669
3,774
3,442
Fiscal year
Continuing and
discontinued operations
Continuing
operations
NOTE 28 Earnings per share
Administration and general services
Research and development
Sales and marketing
Manufacturing and services
(in thousands)
Employees were engaged in (averages; based on headcount):
In fiscal 2023 and 2022, severance charges for continuing operations amount to €430 million and €272 million, thereof at Siemens
Healthineers €167 million and €71 million, respectively, and at Digital Industries €109 million and €64 million, respectively.
27,211
29,494
27,201
29,488
1,099
1,031
1,099
1,031
3,442
3,774
Diluted earnings per share (from continuing operations)
118
2022
(190)
Siemens Beteiligungen Management GmbH, Kemnath
Siemens Beteiligungen Inland GmbH, Munich
Siemens Beteiligungen Europa GmbH, Munich
Siemens Bank GmbH, Munich
100
10010
1009
10010
10010
Siemens Beteiligungen USA GmbH, Berlin
1009
10010
1007
1007
1007
1007
1007
1007
1007
10010
1007
Siemens Advanta Solutions GmbH, Munich
Siemens Beteiligungsverwaltung GmbH & Co. OHG, Kemnath
100
Siemens Healthcare Diagnostics Products GmbH, Marburg
Siemens Global Innovation Partners Management GmbH, Munich
Siemens Fonds Invest GmbH, Munich
Siemens Financial Services GmbH, Munich
Siemens Finance & Leasing GmbH, Munich
Siemens Electronic Design Automation GmbH, Munich
Siemens Digital Logistics GmbH, Frankenthal
Siemens Campus Erlangen Objekt 5 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 6 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 7 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objektmanagement GmbH, Grünwald
Siemens Campus Erlangen Verwaltungs-GmbH, Grünwald
Siemens Digital Business Builder GmbH, Munich
Consolidated Financial Statements
100
43
1009
Siemens Campus Erlangen Objekt 4 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 3 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Grundstücks-GmbH & Co. KG, Grünwald
1009,12
10010
1007
10010
10010
1009
1009
Siemens Healthcare GmbH, Munich
RISICOM Rückversicherung AG, Grünwald
OPTIO Grundstücks-Vermietungsgesellschaft mbH & Co. Objekt Tübingen KG, Grünwald
100
10010
85
10010
100
1009
10010
1007
KompTime GmbH, Munich
100
IPGD Grundstücksverwaltungs-Gesellschaft mbH, Grünwald
KACO new energy GmbH, Neckarsulm
Innomotics GmbH, Munich
ILLIT Grundstücksverwaltungs-Management GmbH, Grünwald
Innomotics Beteiligungs-GmbH, Munich
Geisenhausener Entwicklungs Management GmbH, Grünwald
Geisenhausener Entwicklungs-GmbH & Co. KG, Grünwald
HaCon Ingenieurgesellschaft mbH, Hanover
evosoft GmbH, Nuremberg
Dade Behring Grundstücks GmbH, Kemnath
eos.uptrade GmbH, Hamburg
Capta Grundstücks-Verwaltungsgesellschaft mbH, Grünwald
Berliner Vermögensverwaltung GmbH, Berlin
BEFUND24 GmbH, Erlangen
Alpha Verteilertechnik GmbH, Cham
Innomotics Real Estate GmbH & Co. KG, Nuremberg
REMECH Systemtechnik GmbH, Unterwellenborn
10010
1007
Next47 Services GmbH, Munich
Next47 GmbH, Munich
Moorenbrunn Entwicklungs-GmbH & Co. KG, Grünwald
Moorenbrunn Entwicklungs Management GmbH, Grünwald
Lincas Electro Vertriebsgesellschaft mbH, Grünwald
Kyros C AG, Munich
Kyros B AG, Munich
Kyros 71 GmbH, Munich
Kyros 70 GmbH, Munich
10010
Kyros 68 GmbH, Munich
Kyros 54 GmbH, Munich
100
100
1009
100
1007
85
10010
1009
Kyros 58 GmbH, Munich
Siemens Healthineers AG, Munich
Siemens Healthineers Beteiligungen GmbH & Co. KG, Röttenbach
Siemens Healthineers Beteiligungen Verwaltungs-GmbH, Röttenbach
Siemensstadt C1 Verwaltungs GmbH, Grünwald
Siemensstadt C1 GmbH & Co. KG, Grünwald
Siemens-Fonds S-8, Munich
Siemens-Fonds S-7, Munich
Siemens-Fonds Pension Captive, Munich
Siemens-Fonds C-1, Munich
Siemens Treasury GmbH, Munich
Siemens Trademark Management GmbH, Kemnath
Siemens Trademark GmbH & Co. KG, Kemnath
Siemensstadt CX GmbH & Co. KG, Grünwald
Siemens Traction Gears GmbH, Penig
Siemens Technology Accelerator GmbH, Munich
Siemens Real Estate Management GmbH, Kemnath
Siemens Real Estate GmbH & Co. KG, Kemnath
Siemens Real Estate Consulting Management GmbH, Grünwald
Siemens Real Estate Consulting GmbH & Co. KG, Munich
100
Siemens Private Finance Versicherungsvermittlungsgesellschaft mbH, Munich
Siemens Project Ventures GmbH, Erlangen
Siemens OfficeCenter Frankfurt GmbH & Co. KG, Grünwald
Siemens Nixdorf Informationssysteme GmbH, Grünwald
Siemens Technopark Nürnberg GmbH & Co. KG, Grünwald
1009
Siemensstadt CX Verwaltungs GmbH, Grünwald
Siemensstadt Grundstücks-GmbH & Co. KG, Grünwald
10010
44
1009
1007
1007
1007
100⁹
100
100
100
10010
100
1007
100⁹
10010
1009
10010
1007
100
100
100⁹
10010
100
1007
1009
1007
100
100⁹
1009
1009
Siemens Mobility Real Estate Management GmbH, Grünwald
Siemens Mobility Real Estate GmbH & Co. KG, Grünwald
Siemens Mobility GmbH, Munich
Siemens Middle East Services LP GmbH, Munich
100
Siemens Middle East Services GmbH & Co. KG, Munich
Siemens Liquidity One, Munich
Siemens Industry Software GmbH, Cologne
Siemens Industriepark Karlsruhe GmbH & Co. KG, Grünwald
Siemens Immobilien Management GmbH, Grünwald
Siemens Immobilien Besitz GmbH & Co. KG, Grünwald
Siemens Healthineers Innovation Verwaltungs-GmbH, Röttenbach
Siemens Healthineers Innovation GmbH & Co. KG, Röttenbach
Siemens Healthineers Holding III GmbH, Munich
Siemens Healthineers Holding I GmbH, Munich
Siemens Logistics GmbH, Nuremberg
100
100
100
10010
100
1009,13
10010
100
10010
100⁹
1007
1009
1007
100
100
100
1007
100
75
100
100
1007
10010
10010
AIT Verwaltungs-GmbH, Stuttgart
(195)
AIT Applied Information Technologies GmbH & Co. KG, Stuttgart
Acuson GmbH, Erlangen
23,492
34,470
37,886
33,481
36,664
Europe, C.I.S., Africa, Middle East
2022
2023
2022
23,033
2023
2023
(in millions of €)
Sep 30,
Fiscal year
Fiscal year
Non-current assets
Revenue by location
of companies
of customers
Revenue by location.
2022
60,724
Americas
20,680
12,718
thereof Germany
57,791
54,804
71,977
77,769
71,977
77,769
Siemens
22,615
7,105
16,749
17,214
17,816
18,489
Asia, Australia
27,653
24,844
20,757
22,669
6,468
11,961
(53,342)
37,518
Assets Siemens Real Estate
Siemens Energy Investment
(in millions of €)
Assets
40
In fiscal 2023, and 2022, Profit of SFS includes interest income of €1,942 million and €1,399 million, respectively and interest expenses
of €985 million and €428 million, respectively.
In fiscal 2023 and 2022, Financing, eliminations and other items includes a loss of €167 million and €308 million, respectively, mainly due
to measuring our investment in Thoughtworks Holding, Inc. at fair value through profit and loss at fiscal year-end.
(5,141)
(1,135)
Assets Innovation, Governance and Pensions
Reconciliation to Consolidated Financial Statements
(256)
Financing, eliminations and other items
(990)
(865)
Amortization of intangible assets acquired in business combinations
(113)
(104)
(582)
(451)
(474)
(49,602)
57,680
Asset-based adjustments:
Tax-related assets
38,509
3,769
3,499
62,765
57,137
1,129
1,211
5,215
5,126
Intragroup financing receivables
3,669
2022
2023
Sep 30,
Sep 30,
Consolidated Financial Statements
NOTE 30 Information about geographies
Reconciliation to Consolidated Financial Statements
Financing, eliminations and other items
Liability-based adjustments
1,801
14,778
13,537
7,535
(in millions of €)
Fees related to professional services rendered by the Company's principal accountant, EY, for fiscal 2023 and 2022 are:
NOTE 32 Principal accountant fees and services
Some of our board members hold, or in the last year have held, positions of significant responsibility with other entities. We have
relationships with almost all of these entities in the ordinary course of our business whereby we buy and sell a wide variety of products
and services on arm's length terms.
In fiscal 2023 and 2022, no other major transactions took place between the Company and the members of the Managing Board and the
Supervisory Board.
Compensation attributable to members of the Supervisory Board comprised in fiscal 2023 and 2022 base compensation and additional
compensation for committee work and amounted to €5.3 million and €5.1 million (including meeting fees), respectively.
Former members of the Managing Board and their surviving dependents received emoluments within the meaning of
Section 314 para. 1 No. 6 b of the German Commercial Code totaling €24.6 million and €23.6 million in fiscal 2023 and 2022, respectively.
The defined benefit obligation (DBO) of all pension commitments to former members of the Managing Board and their surviving
dependents as of September 30, 2023 and 2022 amounted to €140.3 million and €175.3 million, respectively.
In fiscal 2023 and 2022, expense related to share-based compensation amounted to €8.3 million and €4.7 million, respectively, including
expenses related to the additional cash payment compensation due to the spin-off of Siemens Energy.
Therefore, in fiscal 2023 and 2022, compensation and benefits, attributable to members of the Managing Board amounted to €31.6
million and €28.5 million in total, respectively.
Audit services
In fiscal 2023 and 2022, members of the Managing Board received cash compensation of €18.8 million and €16.0 million. The fair value
of share-based compensation amounted to €10.5 million and €10.3 million for 170,111 and 134,006 stock awards, respectively, granted
in fiscal 2023 and 2022. In fiscal 2023 and 2022, the Company granted contributions under the BSAV to members of the Managing Board
totaling €2.2 million and €2.2 million, respectively.
For information regarding the funding of our post-employment benefit plans see Notes 4 and 17.
As of September 30, 2023 and 2022, lease liabilities resulting from sale and leaseback transactions with pension entities amounted to
€264 million and €280 million, respectively.
Pension entities
Consolidated Financial Statements
41
As of September 30, 2023 and 2022, there were loan commitments to joint ventures amounting to €2 million and €4 million, respectively.
As of September 30, 2023 and 2022, the Company had commitments to make capital contributions to joint ventures and associates of
€108 million and €106 million, therein €86 million and €95 million related to joint ventures, respectively.
As of September 30, 2023 and 2022, loans given to joint ventures and associates amounted to €160 million and €166 million, therein
€126 million and €149 million related to joint ventures, respectively. The related book values amounted to €133 million and €143 million,
therein €112 million and €139 million related to joint ventures, respectively. Valuation adjustments recognized in fiscal 2023 and 2022
reduced book values of loans related to joint ventures by €5 million and €2 million, respectively.
As of September 30, 2023 and 2022, guarantees to joint ventures and associates amounted to €5,098 million and €8,165 million,
respectively, thereof €5,081 million and €8,147 million, respectively, to associates. These guarantees included mainly obligations from
performance and credit guarantees in connection with the Siemens Energy business. For these guarantees, Siemens has reimbursement
rights towards Siemens Energy.
Related individuals
As of September 30, 2023 and 2022, receivables to associates included reimbursement rights against Siemens Energy which were
recognized correspondingly with obligations from customer contracts in connection with Siemens Energy activities legally remaining at
Siemens. Liabilities to associates as of September 30, 2023 and 2022 were mainly due to trade receivables that also result from these
activities and that have economically to be allocated to Siemens Energy.
Other attestation services
Tax services
2023
Germany (121 companies)
Subsidiaries
September 30, 2023
in %
Equity interest
NOTE 35 List of subsidiaries and associated companies pursuant to Section 313 para. 2 of the
German Commercial Code
Consolidated Financial Statements
42
In November 2023, agreements were entered into with the intent to acquire 18% of the shares in Siemens Limited, India from the Siemens
Energy Group for a purchase price of €2.1 billion in cash. Closing of the transaction is expected in December 2023. Upon closing, the
acquisition will be accounted for as equity transaction not impacting net income and Siemens' share in Siemens Limited, India will increase
to 69%. Additionally, the Siemens Energy Group will receive a put option for up to an additional 5% of the shares in Siemens Limited, India.
If specific guarantee events occur, Siemens Energy can exercise the option for a fixed price totaling €750 million for the entire 5% stake
to be paid by Siemens. The transaction will be recognized in equity not impacting net income and a purchase liability measured at the
respective present value of the option price will be recorded.
Fiscal year
NOTE 34 Subsequent events
NOTE 33 Corporate governance
Audit Services relate primarily to services provided by EY for auditing Siemens' Consolidated Financial Statements, for auditing financial
statements of Siemens AG and its subsidiaries, for reviews of interim financial statements being integrated into the audit, for project-
accompanying IT audits, as well as for audits of the internal control system at service companies. Other Attestation Services include
primarily audits of financial statements as well as other attestation services in connection with M&A activities, audits of employee benefit
plans, attestation services relating to sustainability reporting, compensation reporting and disclosures in accordance with EU taxonomy,
comfort letters and other attestation services required under regulatory requirements, contractually agreed or requested on a voluntary
basis.
In fiscal 2023 and 2022, 39% and 40%, respectively, of the total fees related to Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft,
Germany.
43.3
44.5
5.0
3.3
38.2
41.2
The Managing and Supervisory Boards of Siemens Aktiengesellschaft and of Siemens Healthineers AG, a publicly listed subsidiary of
Siemens, provided the declaration required under Section 161 of the German Stock Corporation Act (AktG) on October 1, 2023 and
September 30, 2023, respectively. The declarations are available on the company's websites at siemens.com/gcg-code and at
corporate.siemens-healthineers.com/investor-relations/corporate-governance.
686
832
1,284
(in millions of €)
Joint ventures
Siemens has relationships with many joint ventures and associates in the ordinary course of business whereby Siemens buys and sells a
wide variety of products and services generally on arm's length terms. The transactions between continuing operations and joint ventures
and associates were as follows:
Joint ventures and associates
NOTE 31 Related party transactions
Non-current assets consist of property, plant and equipment, goodwill and other intangible assets.
26,543
23,644
17,727
19,072
Associates
17,241
therein U.S
50,792
47,269
58,440
62,991
60,016
65,051
thereof countries outside of Germany
6,999
18,561
Sales of goods and services
and other income
Fiscal Year
Purchases of goods and
services and other expenses
608
Sep 30,
2022
78
55
777
1,204
Sep 30,
2023
Sep 30,
2022
80
2023
42
1,436
1,478
563
580
517
487
1,384
1,491
2022
17
30
107
2023
2022
2023
116
1,527
1,643
Sep 30,
Fiscal Year
Liabilities
Receivables
Airport Munich Logistics and Services GmbH, Hallbergmoos
Siemens OfficeCenter Verwaltungs GmbH, Grünwald