Form 6-K
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

August 2, 2013

Commission File Number: 1-15174

Siemens Aktiengesellschaft

(Translation of registrant’s name into English)

Wittelsbacherplatz 2

80333 Munich

Federal Republic of Germany

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes ¨ No x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes ¨ No x

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ¨ No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

 

 

 


Table of Contents

TABLE OF CONTENTS

 

Key figures      2   
Interim group management report      3   
Condensed Interim Consolidated Financial Statements      23   
Notes to Condensed Interim Consolidated Financial Statements      27   
Review report      47   
Quarterly summary      48   
Financial calendar      49   

INTRODUCTION

Siemens AG’s Interim Report for the Siemens Group complies with the applicable legal requirements of the German Securities Trading Act (Wertpapierhandelsgesetz—WpHG) regarding quarterly financial reports, and comprises Condensed Interim Consolidated Financial Statements and an Interim group management report in accordance with section 37x (3) WpHG. The Condensed Interim Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and its interpretations issued by the International Accounting Standards Board (IASB), as adopted by the European Union (EU). The Condensed Interim Consolidated Financial Statements also comply with IFRS as issued by the IASB. This Interim Report should be read in conjunction with our Annual Report for fiscal 2012, which includes a detailed analysis of our operations and activities.

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.

 

1


Table of Contents

KEY FIGURES Q3 AND FIRST NINE MONTHS OF FISCAL 20131,2

unaudited; in millions of , except where otherwise stated

 

LOGO

  VOLUME                                                                
      Q3 2013     Q3 2012     Actual     % Change     1st nine months           % Change  
            Adjusted3     2013     2012     Actual     Adjusted3  
 

Continuing operations

                         
 

Orders

    21,141        17,770        19     21     61,984        55,458        12     12
 

Revenue

    19,248        19,542        (2 )%      (1 )%      55,404        56,741        (2 )%      (3 )% 
                 
 

EARNINGS

                                                               
      Q3 2013        Q3 2012          % Change     

 

1st nine months

  

      % Change   
                2013        2012       
 

Total Sectors

                   
 

Adjusted EBITDA

    1,823        2,299          (21 )%      5,855        6,735          (13 )% 
 

Total Sectors profit

    1,261        1,817          (31 )%      4,175        5,347          (22 )% 
 

in % of revenue (Total Sectors)

    6.5     9.2         7.5     9.3    
 

Continuing operations

                   
 

Adjusted EBITDA

    1,831        2,343          (22 )%      6,044        7,085          (15 )% 
 

Income from continuing operations

    1,004        1,152          (13 )%      3,131        3,417          (8 )% 
 

Basic earnings per share (in )4

    1.16        1.28          (9 )%      3.64        3.81          (4 )% 
 

Continuing and discontinued operations

                   
 

Net income

    1,098        770          43     3,341        3,092          8
 

Basic earnings per share (in )4

    1.27        0.85                50     3.88        3.43                13
                 
 

CAPITAL EFFICIENCY

                                                               
        Q3 2013          Q3 2012     

 
 

1st nine months
2013

  
  

 

 
 

1st nine months
2012

  
  

 

Continuing operations

               
 

Return on capital employed (ROCE) (adjusted)

            13.1             14.5             13.5             15.3
                 
 

CASH PERFORMANCE

                                                               
        Q3 2013          Q3 2012     

 
 

1st nine months
2013

  
  

 

 
 

1st nine months
2012

  
  

 

Continuing operations

                   
 

Free cash flow

      973          899          915          418   
 

Cash conversion rate

      0.97          0.78          0.29          0.12   
 

Continuing and discontinued operations

                   
 

Free cash flow

      1,053          967          992          291   
 

Cash conversion rate

            0.96                1.26                0.30                0.09   
                 
 

LIQUIDITY AND CAPITAL STRUCTURE

                                                               
   

 

June 30, 2013

  

 

 

September 30, 2012

  

 

Cash and cash equivalents

          6,071              10,891   
 

Total equity (Shareholders of Siemens AG)

          27,393              30,855   
 

Net debt

          16,219              9,292   
 

Adjusted industrial net debt

                            8,911                                2,271   
                 
 

EMPLOYEES (IN THOUSANDS)

                                                               
     

 

June 30, 2013

  

 

 

September 30, 2012

  

   

 
 

Continuing
operations

  
  

 

 

Total5

  

 

 
 

Continuing
operations

  
  

 

 

Total6

  

 

Employees

      368          404          370          410   
 

Germany

      119          129          119          130   
 

Outside Germany

      249          275          251          280   

 

1 Orders; Adjusted or organic growth rates of revenue and orders; Total Sectors profit; ROCE (adjusted); Free cash flow and cash conversion rate; Adjusted EBITDA; Net debt and adjusted industrial net debt are or may be non-GAAP financial measures. Definitions of these supplemental financial measures, a discussion of the most directly comparable IFRS financial measures, information regarding the usefulness of Siemens’ supplemental financial measures, the limitations associated with these measures and reconciliations to the most comparable IFRS financial measures are available on our Investor Relations website under LOGO WWW.SIEMENS.COM/NONGAAP
2 April 1 - June 30, 2013 and October 1, 2012 - June 30, 2013.
3 Adjusted for portfolio and currency translation effects.
4 Basic earnings per share - attributable to shareholders of Siemens AG. For fiscal 2013 and 2012 weighted average shares outstanding (basic) (in thousands) for the third quarter amounted to 843,107 and 879,228 and for the first nine months to 844,046 and 877,466 shares, respectively.
5 Calculated by dividing adjusted industrial net debt as of June 30, 2013 and 2012 by annualized adjusted EBITDA.
6 Continuing and discontinued operations.

 

2


Table of Contents

INTERIM GROUP MANAGEMENT REPORT

OVERVIEW OF FINANCIAL RESULTS FOR THE THIRD QUARTER OF FISCAL 2013

(THREE MONTHS ENDED JUNE 30, 2013)

 

   

Orders for the third quarter rose 19% year-over-year, to €21.141 billion. Revenue was €19.248 billion, 2% below the prior-year level.

 

   

The book-to-bill ratio was 1.10, and Siemens’ order backlog reached a new high at €102 billion.

 

   

Total Sectors profit declined to €1.261 billion, due primarily to third-quarter charges totaling €436 million for the “Siemens 2014” productivity improvement program.

 

   

Income from continuing operations was lower year-over-year, at €1.004 billion.

 

   

Net income rose to €1.098 billion. Corresponding basic EPS was €1.27, up from €0.85 in the prior-year period.

 

   

Free cash flow from continuing operations increased to €973 million.

Management’s perspective on third-quarter results. Our previous expectations for our markets are not likely to materialize. We therefore no longer expect to achieve a Total Sectors profit margin of at least 12% for fiscal 2014. We will continue to rigorously execute agreed measures under the Siemens 2014 program, to close the gap to our competitors. With the listing of OSRAM and sale of our stake in NSN, Siemens already has a clearer strategic focus.

Significant rise in orders, slight decline in revenue. Third-quarter orders rose 19% year-over-year, lifted by a higher volume of large orders. On a comparable basis, excluding currency translation and portfolio effects, orders were 21% higher. Reported revenue was 2% below the level a year earlier, and on a comparable basis revenue was less than 1% below the prior-year level. The book-to-bill ratio for Siemens was 1.10, and the order backlog (defined as the sum of the order backlogs of the Sectors) increased to a new high at €102 billion.

Orders climb on major contract win. Orders in the Infrastructure & Cities Sector rose on a contract win worth €3.0 billion for trains and maintenance in the U.K., one of Siemens’ largest train orders. Orders for the other three Sectors were close to their respective levels in the third quarter a year ago. On a geographic basis, the region comprising Europe, Commonwealth of Independent States (C.I.S.), Africa and Middle East reported sharp order growth due primarily to the large order mentioned above. Orders came in lower in the Asia, Australia and Americas regions. Emerging markets (according to the International Monetary Fund’s definition of Emerging Market and Developing Economies) on a global basis grew 6% year-over-year, and accounted for €7.096 billion, or 34%, of total orders for the quarter.

 

3


Table of Contents

 

LOGO

Revenue development shows mixed picture. The Sectors Infrastructure & Cities and Healthcare reported higher revenue compared to the prior-year quarter, with a majority of businesses in each Sector contributing to growth. These increases were more than offset by revenue declines in Energy and Industry compared to the third quarter a year earlier. On a regional basis, revenue rose in Asia, Australia and Europe, C.I.S., Africa, Middle East. In contrast, revenue fell in the Americas due primarily to the wind power market in the U.S. Emerging markets on a global basis reported a 2% increase in revenue year-over-year, and accounted for €6.458 billion, or 34%, of total revenue for the third quarter.

 

LOGO

 

LOGO

Update on “Siemens 2014.” In the third quarter, Siemens continued to implement “Siemens 2014,” a company-wide program aimed at improving profitability in the Sectors. One condition required for reaching the program’s ambitious target margin was a return to moderate revenue growth in fiscal 2014. This growth is not expected to materialize, due mainly to the market environment. As a result, Siemens no longer expects to achieve a Total Sectors profit margin of at least 12% by fiscal 2014. Measures for optimizing Siemens’ portfolio and reducing costs are largely on track.

Cost reduction measures in the Sectors focused primarily on improving regional footprints, adjusting capacity, and increasing process efficiency. These measures resulted in charges of €436 million overall, taken

 

4


Table of Contents

primarily in Infrastructure & Cities (€180 million), Industry (€140 million), and Energy (€102 million). Healthcare, which launched its productivity improvement measures a year ahead of “Siemens 2014,” recorded €14 million in related charges. Siemens expects substantial additional charges for “Siemens 2014” in the fourth quarter of the fiscal year.

Total Sectors profit declines on “Siemens 2014” charges. Total Sectors profit was €1.261 billion in the third quarter, down from the prior-year level due primarily to the “Siemens 2014” charges mentioned above. While Healthcare increased its profit year-over-year to €499 million, the other three Sectors reported lower profit compared to the prior-year period. Energy recorded a €91 million profit impact related to inspecting and retrofitting onshore wind turbine blades, and reported profit of €430 million. Industry’s profit declined to €347 million, and Infrastructure & Cities posted a loss of €15 million due to “Siemens 2014” charges.

 

LOGO

Positive effect from progress with portfolio optimization. Income from continuing operations came in at €1.004 billion, down from €1.152 billion a year earlier. Corresponding basic EPS was €1.16 in the current period compared to €1.28 a year earlier. The main factor in the decline was lower Total Sectors profit. This was partly offset by improved results outside the Sectors. In particular, Equity Investments included a positive €301 million stemming from a partial reversal of a fiscal 2009 impairment on our stake in Nokia Siemens Networks B.V. (NSN). In addition, the equity investment loss related to Siemens’ stake in NSN narrowed year-over-year.

Net income rises on income from discontinued operations. Net income for the third quarter increased to €1.098 billion from €770 million a year earlier. Corresponding basic EPS rose to €1.27 from €0.85 in the prior-year period. These increases were due primarily to discontinued operations, which recorded income of €94 million compared to a loss of €382 million a year earlier. The primary factor in this improvement was a positive contribution of €42 million from OSRAM, compared to a negative €354 million in the third quarter a year earlier. That prior-year period included a negative catch-up effect of €443 million (pretax), arising when Siemens deemed it no longer highly probable to complete its original plan to dispose of OSRAM via an initial public offering. After the close of the third quarter, Siemens completed the spin-off and listing of OSRAM. As of June 30, 2013, Siemens recognized a spin-off liability amounting to €2.2 billion, reflecting 80.5% of the fair value of OSRAM. For further information regarding OSRAM, see Notes 2 and 18 in Notes to Condensed Interim Consolidated Financial Statements. Income from discontinued operations related to Siemens IT Solutions and Services was a positive €47 million in the current period compared to a negative €10 million in the same period a year ago.

 

LOGO

 

5


Table of Contents

Increase in operating net working capital holds back Free cash flow. Free cash flow from continuing operations increased to €973 million from €899 million in the same period a year ago. Free cash flow was held back by an increase in operating net working capital of €1.3 billion, in part due to outstanding customer payments in the project business particularly in Energy and Infrastructure & Cities.

 

LOGO

ROCE declines on lower income from continuing operations. On a continuing basis, ROCE (adjusted) decreased to 13.1%, compared to 14.5% a year earlier. The difference was due to lower income from continuing operations, while average capital employed was nearly unchanged year-over-year.

Decrease in pension plan underfunding. The estimated underfunding of Siemens’ pension plans as of June 30, 2013 amounted to €8.5 billion, compared to an estimated underfunding of €9.0 billion at the end of the second quarter. Siemens’ defined benefit obligation (DBO) decreased in the third quarter due to an increase in the discount rate assumption as of June 30, 2013.

RESULTS OF SIEMENS FOR THE NINE MONTHS ENDED JUNE 30, 2013

Orders and revenue

In the first nine months, Siemens won major long-cycle contracts for trains and offshore wind farms that drove a 12% increase in orders year-over-year. In contrast, revenue came in 2% lower compared to the prior-year period. The book-to-bill ratio for Siemens was 1.12, and the order backlog increased to €102 billion.

 

     Orders (location of customer)  
     Nine months ended
June 30,
     % Change     therein  
     2013      2012      Actual     Adjusted(1)     Currency     Portfolio  
     (in millions of €)                           

Europe, C.I.S.(2), Africa, Middle East

     35,176         28,041         25     26     (1 )%      1

therein Germany

     9,222         7,473         23     23     0     0

Americas

     15,617         15,609         0     0     0     1

therein U.S.

     10,349         11,317         (9 )%      (10 )%      1     1

Asia, Australia

     11,190         11,808         (5 )%      (5 )%      (1 )%      1

therein China

     4,972         4,501         10     9     1     1

Siemens

     61,984         55,458         12     12     (1 )%      1

 

(1) Excluding currency translation and portfolio effects.

 

(2) Commonwealth of Independent States.

Orders related to external customers increased 12% compared to the prior-year period. The Infrastructure & Cities and Energy Sectors both won a number of major orders, including a contract win worth €3.0 billion for trains and maintenance in the U.K., which drove their double-digit order increases compared to the prior-year period. Healthcare showed slight order growth year-over-year with increases in most of its businesses. The market environment for Industry in the first nine months of fiscal 2013 was clearly more challenging than a year earlier and as a result orders for the Sector showed a clear and broad-based decline.

In the region comprising Europe, C.I.S., Africa, and the Middle East, nine-month orders increased substantially driven by double-digit increases in Energy and Infrastructure & Cities, due to higher volumes from large orders. Orders were stable year-over-year in the Americas, where a double-digit increase in Energy was offset by declines in the other Sectors. In the region Asia, Australia, Infrastructure & Cities showed a double- digit increase and Healthcare orders increased moderately compared to the first nine months a year ago. This growth was more than offset by a double-digit order decline in Energy and a moderate decline in Industry in the region. Emerging markets on a global basis grew more slowly than orders overall, at 8% year-over-year, and accounted for €20.925 billion, or 34%, of total orders for the first nine months of fiscal 2013.

 

6


Table of Contents
     Revenue (location of customer)  
     Nine months ended
June 30,
     % Change     therein  
     2013      2012      Actual     Adjusted(1)     Currency     Portfolio  
     (in millions of €)                           

Europe, C.I.S.(2), Africa, Middle East

     28,786         29,139         (1 )%      (2 )%      0     0

therein Germany

     7,800         8,081         (3 )%      (4 )%      0     0

Americas

     15,765         16,582         (5 )%      (5 )%      0     1

therein U.S.

     11,015         12,303         (10 )%      (11 )%      0     0

Asia, Australia

     10,854         11,019         (1 )%      (1 )%      (1 )%      1

therein China

     4,268         4,475         (5 )%      (6 )%      1     0

Siemens

     55,404         56,741         (2 )%      (3 )%      0     1

 

 

(1) Excluding currency translation and portfolio effects.

 

(2) Commonwealth of Independent States.

Revenue related to external customers declined 2% compared to the prior-year nine-month period, due in part to weaker investment sentiment in recent quarters. Slight increases in Infrastructure & Cities and Healthcare were more than offset by moderate declines in Energy and Industry.

Revenue declined slightly in the region Europe, C.I.S., Africa, Middle East, where a moderate increase at Infrastructure & Cities was more than offset by declines in the other Sectors. In the Americas revenue was down moderately, on declines in all Sectors. Asia, Australia also showed a slight decline in revenue, as clear growth in Healthcare was more than offset by declines in Industry and Energy. Emerging markets on a global basis were up 1% year-over-year, and accounted for €18.363 billion, or 33%, of total revenue for the first nine months.

Consolidated Statements of Income

 

     Nine months ended
June 30,
       
     2013     2012     % Change  
     (in millions of €)        

Gross profit

     15,430        16,174        (5 )% 

as percentage of revenue

     27.8     28.5       

Research and development expenses

     (3,122     (3,137       

as percentage of revenue

     5.6     5.5       

Marketing, selling and general administrative expenses

     (8,336     (8,101     (3 )% 

as percentage of revenue

     15.0     14.3       

Other operating income

     277        322        (14 )% 

Other operating expense

     (250     (171     (46 )% 

Income (loss) from investments accounted for using the equity

method, net

     352        (391     n/a   

Interest income

     710        704        1

Interest expense

     (578     (576       

Other financial income (expense), net

     (103     87        n/a   

Income from continuing operations before income taxes

     4,380        4,911        (11 )% 

Income taxes

     (1,249     (1,494     16

as percentage of income from continuing operations before

income taxes

     29     30       

Income from continuing operations

     3,131        3,417        (8 )% 

Income (loss) from discontinued operations, net of income taxes

     210        (326     n/a   

Net income

     3,341        3,092        8

Net income attributable to non-controlling interests

     64        79          

Net income attributable to shareholders of Siemens AG

     3,277        3,013        9

Income from continuing operations before income taxes for the first nine months declined to €4.380 billion from €4.911 billion a year earlier, due primarily to €593 million in charges in the Sectors for the “Siemens 2014” program. These charges resulted from measures taken in the current period to reduce costs by

 

7


Table of Contents

improving regional footprints, adjusting capacity, and increasing process efficiency. All Sectors took a portion of these charges. They were recognized primarily in cost of goods sold (and, accordingly, in gross profit) and in marketing, selling and general administrative expenses which as a result increased compared to the prior-year period. In addition to the “Siemens 2014” program charges, gross profit was held back by lower capacity utilization in Industry as well as pricing pressure and a less favorable business mix in a number of Siemens businesses. In contrast, project charges were lower year-over-year, with a substantial decline in Energy more than offsetting an increase in Infrastructure & Cities.

Income from investments accounted for using the equity method, net was €352 million in the first nine months of fiscal 2013, compared to a loss of €391 million in the same period a year earlier. The major factor in this positive swing was the equity investment result related to our stake in Nokia Siemens Networks B.V. (NSN), which was a loss of €76 million in the current nine months compared to a loss of €768 million in the same period a year earlier. The change was due in part to a positive effect of €301 million in the current period, stemming from a partial reversal of a fiscal 2009 impairment of our stake in NSN. Improved results related to NSN were partly offset by a loss of €93 million related to our share in Enterprise Networks Holding B.V. (EN). The loss was due largely to additions to Siemens’ net investment in EN, which resulted in the recognition of previously unrecognized losses. The prior-year period benefited from a gain of €78 million on the sale of a portion of Financial Services’ (SFS) stake in Bangalore International Airport Limited.

Other financial income (expense), net was a negative €103 million, compared to a positive €87 million in the first nine months a year earlier. The current period included impairments of investments in Healthcare and SFS. The same period a year earlier included a gain of €87 million from the sale of our interest in OAO Power Machines.

The effective tax rate was 29% in the current reporting period, compared to 30% in the same period a year earlier.

As a result of the developments described above, Income from continuing operations decreased 8%.

Income from discontinued operations, net of income taxes in the first nine months of fiscal 2013 was €210 million, compared to a loss of €326 million in the first nine months of fiscal 2012. This positive swing was due mainly to OSRAM, which posted a profit of €178 million in the current period, compared to a loss of €218 million in the first nine months of fiscal 2012. The prior-year amount for OSRAM included a negative catch-up effect of €443 million (pretax), arising when we deemed it no longer highly probable to complete our original plan to dispose of OSRAM via an initial public offering. We subsequently completed the spinoff and listing of OSRAM according to a new plan, in the fourth quarter of fiscal 2013.

In addition, the loss from discontinued operations, net of income taxes in the first nine months of fiscal 2012 included a burden of €142 million (pretax) from a settlement related to Greece. For additional information on discontinued operations, see Note 2 in Notes to Condensed Interim Consolidated Financial Statements.

As a result, nine-month net income for Siemens was 8% higher than in the same period a year earlier. Net income attributable to shareholders of Siemens AG increased to €3.277 billion.

Portfolio activities

At the beginning of January 2013, Siemens acquired all of the shares in LMS International NV, Belgium (LMS), a leading provider of mechatronic simulation solutions. With the acquisition, which is being integrated in the Industry Sector’s Industry Automation Division, Siemens intends to expand and complement the Industry Sector’s product lifecycle management portfolio with mechatronic simulation and testing software. The preliminary purchase price amounts to €702 million (including €32 million cash acquired).

At the beginning of May 2013, Siemens acquired all the shares of six entities constituting the rail automation business of Invensys plc., U.K. (Invensys Rail). With the acquisition, which is being integrated in the Infrastructure & Cities Sector’s Mobility and Logistics Division, Siemens intends to expand and complement the Infrastructure & Cities Sector’s rail automation business. The preliminary purchase price amounts to €2.037 billion (including €57 million cash acquired) of which €472 million was paid to the Invensys Pension Trust.

 

8


Table of Contents

At the beginning of the fourth quarter of fiscal 2013, Siemens successfully completed the spin-off and listing of OSRAM and also announced the planned sale of its share in NSN.

For further information on portfolio activities, see Equity Investments and Subsequent events in the Interim Group Management Report and Note 2 in Notes to Condensed Interim Consolidated Financial Statements.

SEGMENT INFORMATION ANALYSIS FOR THE NINE MONTHS ENDED JUNE 30, 2013

Energy Sector

 

Sector    Nine months ended
June 30,
    % Change     therein  
     2013     2012     Actual     Adjusted(1)     Currency     Portfolio  
     (in millions of €)                          

Profit

     1,392        1,737        (20 )%       

Profit margin

     7.2     8.6        

Orders

     21,188        18,244        16     15     0     1

Revenue

     19,201        20,089        (4 )%      (5 )%      0     1

 

(1) Excluding currency translation and portfolio effects.

Energy reported a profit of €1.392 billion for the first nine months of fiscal 2013, down 20% year-over-year. The Sector took €149 million in charges under the “Siemens 2014” program, primarily for reducing the Sector’s cost structure, adjusting capacity and optimizing its regional footprint. Profit was also held back by €91 million in charges in the Wind Power Division related to inspecting and retrofitting onshore turbine blades mainly in the U.S. Fossil Power Generation contributed lower earnings than a year earlier, but still accounted for most of the Sector’s profit and was the highest profit performer among all Siemens Divisions. Profit at Oil & Gas declined due mainly to charges related to Iran, and Wind Power’s profit was also lower year-over-year, due mainly to the burden mentioned above. Power Transmission narrowed its loss compared to the prior-year period, due mainly to substantially lower project charges year-over-year. The solar business, which was reclassified to continuing operations in the second quarter and is reported within Energy on a retrospective basis, posted a loss of €225 million compared to a loss of €76 million in the same period a year earlier.

Revenue declined 4% compared to the prior-year period on decreases in all Divisions and all three reporting regions, while orders came in 16% higher due mainly to large orders at Wind Power. Order intake increased substantially in Europe, C.I.S., Africa, Middle East, due mainly to the higher volume from large orders at Wind Power. Order intake was significantly higher in the Americas, while orders declined substantially in the Asia, Australia region. The book-to-bill ratio for Energy was 1.10, and its order backlog was €55 billion at the end of the period.

 

Businesses    Orders  
     Nine months ended
June 30,
     % Change     therein  
     2013      2012      Actual     Adjusted(1)     Currency     Portfolio  
     (in millions of €)                           

Fossil Power Generation

     7,802         7,751         1     0     0     0

Wind Power

     5,083         2,627         93     93     0     0

Oil & Gas

     4,073         3,778         8     5     0     3

Power Transmission

     4,168         4,273         (2 )%      (2 )%      (1 )%      0

 

(1) Excluding currency translation and portfolio effects.

 

9


Table of Contents
Businesses    Revenue  
     Nine months ended
June 30,
     % Change     therein  
     2013      2012      Actual     Adjusted(1)     Currency     Portfolio  
     (in millions of €)                           

Fossil Power Generation

     7,461         8,172         (9 )%      (9 )%      0     0

Wind Power

     3,555         3,595         (1 )%      (1 )%      0     0

Oil & Gas

     3,816         3,880         (2 )%      (5 )%      0     3

Power Transmission

     4,418         4,576         (3 )%      (3 )%      (1 )%      0

 

(1) Excluding currency translation and portfolio effects.

 

Businesses    Profit     Profit margin  
  

 

 

 
     Nine months ended
June 30,
    Nine months ended
June 30,
 
     2013     2012     % Change     2013     2012  
     (in millions of €)                    

Fossil Power Generation

     1,305        1,557        (16 )%      17.5     19.1

Wind Power

     126        170        (26 )%      3.6     4.7

Oil & Gas

     282        329        (14 )%      7.4     8.5

Power Transmission

     (114     (262     57     (2.6 )%      (5.7 )% 

Fossil Power Generation generated profit of €1.305 billion in the first nine months of fiscal 2013, significantly below the profit of €1.557 billion in the first nine months of fiscal 2012. The Division recorded €67 million in charges for the “Siemens 2014” program. Profit development was also held back by a decline in revenue, a lower contribution from the service business, and a less favorable revenue mix in the products business. Reported profit in the first nine months of fiscal 2012 included an €87 million gain on the Division’s divestment of its joint venture stake in OAO Power Machines. Revenue was 9% lower year-over-year, resulting mainly from declining order intake for turnkey projects in prior quarters. On a geographic basis, revenue declined significantly in the Europe, C.I.S., Africa, Middle East region. Order intake was up 1%, as increases in the Americas and Europe, C.I.S., Africa, Middle East regions were almost offset by a substantial decrease in Asia, Australia.

Profit at Wind Power of €126 million in the first nine months of fiscal 2013 was substantially lower than in the same period a year earlier. Both periods included burdens on profit. In the current period, the Division took €91 million in charges related to inspecting and retrofitting onshore turbine blades mainly in the U.S. A year earlier, profit was held back by a €32 million provision related to a wind turbine component from an external supplier and a charge of €20 million related to capacity adjustment. Revenue was close to the prior-year level as a sharp decline in the Americas was almost offset by increases in other regions. Order intake almost doubled year-over-year, due mainly to a much higher volume from large orders, which included several large offshore wind-farms in Europe, C.I.S., Africa, Middle East.

Nine-month profit at Oil & Gas declined year-over-year, to €282 million. A more favorable revenue mix was more than offset by €46 million in charges in the first quarter resulting from compliance with newly enacted sanctions on Iran, primarily on its oil and gas industries, and €25 million in charges for the “Siemens 2014” program. Revenue was slightly lower compared to the same period a year earlier. Order intake was up 8% as increases in Europe, C.I.S., Africa, Middle East and the Americas more than offset a decline in Asia, Australia.

Power Transmission sharply reduced its nine-month loss compared to a year earlier, to €114 million. The Division took €134 million in project charges related mainly to grid connections to offshore wind-farms, compared to €503 million in charges in the prior-year period. With respect to two of these projects, material milestones are expected to be reached in the fourth quarter of fiscal 2013, including the technically highly complex and challenging transport and installation of these platforms for grid connections. In addition, it recorded €51 million in charges for the “Siemens 2014” program. Furthermore, profit development in the current period was held back by margin impacts related to these projects and by conversion of orders booked in prior periods with significant pricing pressure. In addition, operational challenges strongly cut back profit in the transformers and high-voltage products businesses. The prior-year period benefited from the release of a provision of €64 million related to successful project completion. Current nine-month revenue was down 3% year-over-year as declines in Europe, C.I.S., Africa, Middle East and Asia, Australia were partly offset by an increase in the Americas. Orders came in 2% lower compared to the prior-year period, due in part to more selective order intake in Europe, C.I.S., Africa, Middle East. This was partly offset by order increases in other regions. The Division expects continuing challenges in coming quarters.

 

10


Table of Contents

Healthcare Sector

 

Sector    Nine months ended
June 30,
    % Change     therein  
     2013     2012     Actual     Adjusted(1)     Currency     Portfolio  
     (in millions of €)                          

Profit

     1,447        1,184        22      

Profit margin

     14.6     12.0        

Orders

     9,890        9,846        0     1     (1 )%      0

Revenue

     9,897        9,857        0     1     (1 )%      0

 

(1) Excluding currency translation and portfolio effects.

For the first nine months of fiscal 2013, profit in the Healthcare Sector rose to €1.447 billion, led by earnings performances in its imaging and therapy systems businesses. Profit development benefited from lower charges associated with the Sector’s ongoing Agenda 2013 initiative which declined to €35 million from €144 million in the prior-year period. Measures associated with this initiative resulted in an improved cost position. The current period was burdened by a €36 million impairment of an investment at Diagnostics in Italy. Effective January 1, 2013, results for Healthcare include an excise tax on medical devices which was introduced in the U.S., and affects most businesses in the Sector. For comparison, the prior-year period benefited from the successful pursuit of a patent infringement claim of €34 million.

Diagnostics contributed €268 million to Sector profit, up significantly from €227 million in the prior-year period. Profit development followed the pattern for the Sector with regard to Agenda 2013, including lower charges and improvements in cost position. In particular, the charges fell to €13 million from €66 million in the prior-year period. The current period included the €36 million profit burden mentioned above for the Sector. Purchase price allocation (PPA) effects related to past acquisitions at Diagnostics were €128 million in the first nine months. A year earlier, Diagnostics recorded €129 million in PPA effects.

Healthcare revenue and orders remained stable year-over-year. On a regional basis, clear revenue growth from Asia, Australia was largely offset by lower revenue in the other regions. Orders grew moderately in Asia, Australia but declined in the Americas. The book-to-bill ratio was 1.00, and Healthcare’s order backlog was €7 billion at the end of the first nine months.

Revenue at Diagnostics was nearly unchanged year-over year, at €2.916 billion in the current period compared to €2.914 billion in the prior-year period. Diagnostics showed the same development as the Sector with regard to the regions.

Industry Sector

 

Sector    Nine months ended
June 30,
    % Change     therein  
     2013     2012     Actual     Adjusted(1)     Currency     Portfolio  
     (in millions of €)                          

Profit

     1,196        1,740        (31 )%       

Profit margin

     8.4     11.7        

Orders

     14,268        15,161        (6 )%      (7 )%      0     1

Revenue

     14,243        14,874        (4 )%      (4 )%      0     0

 

(1) Excluding currency translation and portfolio effects.

While the market environment for Industry in the first nine months of fiscal 2013 was clearly more challenging than a year earlier, the Sector saw signs of stabilizing at the end of the current period. This was particularly evident for the Sector’s short-cycle businesses. Due mainly to lower capacity utilization and a less favorable business mix, particularly in the first half of the current fiscal year, profit at Industry declined to €1.196 billion. Another major factor in the decline was €197 million in charges in the current period for the “Siemens 2014” program primarily to reduce costs associated with administrative processes and improve the Sector’s global footprint.

Revenue and orders for Industry in the first nine months were down 4% and 6%, respectively, including declines in both Divisions and the metals technologies business. On a geographic basis, revenue and orders declined in all three reporting regions, including double-digit declines in orders in the Americas. The Sector’s book-to-bill ratio was 1.00 and its order backlog at the end of the first nine months of fiscal 2013 was €11 billion.

 

11


Table of Contents
Businesses    Orders  
     Nine months ended
June 30,
     % Change     therein  
     2013      2012      Actual     Adjusted(1)     Currency     Portfolio  
     (in millions of €)                           

Industry Automation

     6,705         7,160         (6 )%      (7 )%      0     1

Drive Technologies

     6,614         7,071         (6 )%      (7 )%      0     0

 

(1) Excluding currency translation and portfolio effects.

 

Businesses    Revenue  
     Nine months ended
June 30,
     % Change     therein  
     2013      2012      Actual     Adjusted(1)     Currency     Portfolio  
     (in millions of €)                           

Industry Automation

     6,695         6,915         (3 )%      (4 )%      0     1

Drive Technologies

     6,634         7,029         (6 )%      (6 )%      0     0

 

(1) Excluding currency translation and portfolio effects.

 

Businesses    Profit     Profit margin  
  

 

 

 
     Nine months ended
June 30,
    Nine months ended
June 30,
 
     2013      2012      % Change     2013     2012  
     (in millions of €)                     

Industry Automation

     745         931         (20 )%      11.1     13.5

Drive Technologies

     443         684         (35 )%      6.7     9.7

Nine-month profit at Industry Automation declined to €745 million from €931 million a year earlier, as lower revenue reduced capacity utilization and resulted in a less favorable revenue mix compared to the prior-year period. These factors were most prominent during the first six months. Toward the end of the current period, markets for Industry Automation saw signs of stabilizing and the Division’s business mix began to improve year-over-year. In the current nine months, Industry Automation took €78 million in charges for “Siemens 2014.” Revenue and orders were down 3% and 6%, respectively, on declines in most of the Division’s businesses. A notable exception was the Division’s industrial IT and software business, which benefited from recent acquisitions, including LMS. Revenue remained nearly stable in Asia, Australia and in Europe, C.I.S., Africa, Middle East, while it declined clearly in the Americas. The decline in orders was spread evenly across the regions. PPA effects related to the acquisition of UGS Corp. in fiscal 2007 were €111 million in the current period and €110 million in the prior-year period. PPA effects related to long-lived assets from the second-quarter acquisition of LMS were €22 million for the current nine months. Effects from deferred revenue adjustments and inventory step-ups related to LMS totaled an additional €28 million.

Profit at Drive Technologies for the first nine months declined to €443 million in the current period, down from €684 million a year earlier. This decline was due mainly to less favorable market conditions for the Division’s higher-margin short-cycle businesses and offerings for renewable energy year-over-year. Furthermore, profit in the current period was burdened by €96 million in charges for “Siemens 2014.” Revenue and orders were down 6% on declines in all three reporting regions.

Infrastructure & Cities Sector

 

Sector    Nine months ended
June 30,
    % Change     therein  
     2013     2012     Actual     Adjusted(1)     Currency     Portfolio  
     (in millions of €)                          

Profit

     140        686        (80 )%       

Profit margin

     1.1     5.5        

Orders

     17,078        12,760        34     35     (2 )%      1

Revenue

     12,658        12,582        1     0     0     1

 

(1) Excluding currency translation and portfolio effects.

Profit for the first nine months in Infrastructure & Cities was €140 million, down sharply from €686 million a year earlier. The two main factors in the decline were sharply higher project charges in the

 

12


Table of Contents

Transportation & Logistics Business, including €260 million related to high-speed trains, and €212 million in charges for “Siemens 2014,” taken mainly for increasing cost efficiency in the rail business and improving Building Technologies’ setup in Europe. As a result, profit at Transportation & Logistics turned negative and profit at Building Technologies declined year-over-year. In contrast, Power Grid Solutions & Products improved its profit compared to the prior-year period.

Revenue came in slightly above the prior-year level, as higher revenue at Power Grid Solutions & Products and Transportation & Logistics more than offset a decline at Building Technologies. Orders rose by more than one third year-over-year, driven by Transportation & Logistics with a sharply higher volume from major orders year-over-year including an order worth €3.0 billion for trains and maintenance in the U.K. On a geographic basis, revenue rose in Europe, C.I.S., Africa, Middle East, remained level in Asia, Australia and declined in the Americas. Europe, C.I.S., Africa, Middle East and Asia, Australia posted double-digit order growth, while the Americas reported a slight decline. The Sector’s book-to-bill ratio was 1.35 and its order backlog at the end of the first nine months of fiscal 2013 increased to €29 billion.

 

Businesses    Orders  
     Nine months ended
June 30,
     % Change     therein  
     2013      2012      Actual     Adjusted(1)     Currency     Portfolio  
     (in millions of €)                           

Transportation & Logistics

     8,289         4,155         99     102     (5 )%      3

Power Grid Solutions & Products

     4,753         4,613         3     3     0     0

Building Technologies

     4,245         4,228         0     0     0     0

 

(1) Excluding currency translation and portfolio effects.

 

Businesses    Revenue  
     Nine months ended
June 30,
     % Change     therein  
     2013      2012      Actual     Adjusted(1)     Currency     Portfolio  
     (in millions of €)                           

Transportation & Logistics

     4,333         4,264         2     (1 )%      0     3

Power Grid Solutions & Products

     4,369         4,284         2     2     0     0

Building Technologies

     4,158         4,221         (1 )%      (2 )%      0     0

 

(1) Excluding currency translation and portfolio effects.

 

Businesses    Profit     Profit margin  
     Nine months ended
June 30,
    Nine months ended
June 30,
 
     2013     2012      % Change     2013     2012  
     (in millions of €)                     

Transportation & Logistics

     (370     163         n/a        (8.5 )%      3.8

Power Grid Solutions & Products

     300        258         16     6.9     6.0

Building Technologies

     183        226         (19 )%      4.4     5.3

The Transportation & Logistics Business posted a loss of €370 million in the first nine months of fiscal 2013 compared to a profit of €163 million a year earlier. The largest factor in the change was sharply higher project charges year-over-year, which included the above mentioned €260 million for delays for receiving certification for new high-speed trains in the current period, up from €69 million for these matters in the same period a year earlier. In addition, the Business took €118 million in charges for “Siemens 2014.” Profitability was influenced also by low margins associated with large long-term contracts. The acquisition of Invensys Rail during the third quarter of fiscal 2013 led to €42 million in transaction and integration costs. PPA effects related to the Invensys Rail acquisition were €11 million in the current period. Revenue increased slightly while orders nearly doubled year-over-year, due to the large orders mentioned above, particularly in the U.K. The Transportation & Logistics Business expects continuing challenges in coming quarters related to fulfillment of certain contracts for high-speed rail projects.

The Power Grid Solutions & Products Business increased its profit for the first nine months of the fiscal year by 16% year-over-year, to €300 million. This was due primarily to a substantially improved profit performance at the Low and Medium Voltage Division compared to the prior-year period. The Smart Grid Division kept nine-month profit stable year-over-year. Charges for “Siemens 2014” totaled €23 million. Both revenue and orders rose compared to the prior-year period. The revenue increase of 2% included higher revenue in Asia, Australia and the Americas, partly offset by a slight decline in Europe, C.I.S., Africa, Middle East. Order growth of 3% year-over-year was supported by double-digit increases in Europe, C.I.S., Africa, Middle East and Asia, Australia, which more than offset a moderate decline in the Americas.

 

13


Table of Contents

Profit at Building Technologies came in at €183 million for the first nine months of the current fiscal year, below the prior-year level due to €71 million in “Siemens 2014” charges. Selective order intake resulted in a more favorable business mix compared to the prior-year period, particularly including the Division’s higher-margin product and service businesses. Revenue declined slightly year-over-year and orders remained stable.

Equity Investments

Equity Investments posted a profit of €286 million in the current nine-month period, compared to a loss of €593 million a year earlier. This improvement was due mainly to a substantially smaller loss related to our share in NSN. The loss was €76 million in the first nine months of fiscal 2013 compared to a loss of €768 million in the prior-year period. NSN reported to Siemens that in the first nine months of fiscal 2013 it took €694 million in restructuring charges and other associated items, including net charges related to country and contract exits. Restructuring charges and other associated items totaled €985 million in the same period a year earlier. Results related to NSN in the current period also benefited from a positive effect of €301 million stemming from partial reversal of a fiscal 2009 impairment of our stake in NSN. Improved results related to NSN were partly offset by a loss of €93 million related to our share in EN. The loss was due largely to additions to Siemens’ net investment in EN, which resulted in the recognition of previously unrecognized losses.

After the end of the third quarter of fiscal 2013, Siemens and Nokia Corporation (Nokia) signed an agreement that Nokia will acquire our 50% stake in NSN for a purchase price of €1.700 billion. The cash consideration amounts to €1.200 billion and the remaining €500 million comprise a loan to Nokia, maturing one year after the close of the transaction. Closing is expected in the fourth quarter of fiscal 2013.

Financial Services (SFS)

 

     Nine months ended
June 30,
        
     2013      2012      % Change  
     (in millions of €)         

Income before income taxes

     303         379         (20 )% 
     June 30,
2013
     September 30,
2012
        

Total assets

     18,046         17,405         4

SFS continued to execute its growth strategy. Higher total assets year-over-year helped generate a higher interest result compared to the first nine months a year ago. This was partly offset by a €42 million impairment of SFS’s equity stake in a power plant project in the U.S., and profit (defined as income before income taxes) came in at €303 million. For comparison, profit of €379 million in the prior-year period benefited from a €78 million gain on the sale of a portion of SFS’s stake in Bangalore International Airport Limited. Total assets rose to €18.046 billion, a moderate increase from the level at the beginning of the fiscal year.

Reconciliation to Consolidated Financial Statements

Reconciliation to Consolidated Financial Statements includes Centrally managed portfolio activities, Siemens Real Estate and various categories of items which are not allocated to the Sectors and to SFS because Management has determined that such items are not indicative of their respective performance.

Centrally managed portfolio activities

Centrally managed portfolio activities reported a profit of €35 million in the first nine months of fiscal 2013, compared to a loss of €5 million in the same period a year earlier. The main factor in the change was a higher contribution from activities remaining from Siemens IT Solutions and Services.

Siemens Real Estate

Income before income taxes at Siemens Real Estate was €59 million in the first nine months of fiscal 2013, compared to €27 million in the same period a year earlier.

 

14


Table of Contents

Corporate items and pensions

Corporate items and pensions reported a loss of €446 million in the first nine months of fiscal 2013 compared to a loss of €282 million in the same period a year earlier. The loss at Corporate items was €127 million, compared to a positive €14 million in the same period a year earlier which included positive effects related to legal and regulatory matters. Centrally carried pension expense totaled €319 million in the first nine months of fiscal 2013, compared to €297 million in the same period a year earlier.

Eliminations, Corporate Treasury and other reconciling items

Income before income taxes from Eliminations, Corporate Treasury and other reconciling items was a negative €31 million in the first nine months of fiscal 2013, compared to a positive €39 million in the same period a year earlier. The decrease year-over-year included lower results from Corporate Treasury activities, due mainly to lower interest income from liquidity compared to the prior-year period.

 

15


Table of Contents

Reconciliation to adjusted EBITDA (continuing operations)

The following table gives additional information on topics included in Profit and Income before income taxes and provides a reconciliation to adjusted EBITDA based on continuing operations.

For the nine months ended June 30, 2013 and 2012 (in millions of €)

 

    Profit(1)     Income (loss)
from investments
accounted for
using the equity
method, net(2)
    Financial income
(expense), net(3)
    Adjusted
EBIT(4)
    Amortization(5)     Depreciation
and impairments
of property, plant
and equipment
and goodwill(6)
    Adjusted
EBITDA
    Adjusted
EBITDA
margin
 
    2013     2012     2013     2012     2013     2012     2013     2012     2013     2012     2013     2012     2013     2012     2013     2012  

Sectors

                               

Energy Sector

    1,392        1,737        (42     43        (19     66        1,453        1,628        85        67        325        281        1,863        1,977        9.7     9.8

therein:

                               

Fossil Power Generation

    1,305        1,557        25        28        (10     72        1,291        1,457        14        15        103        100        1,408        1,572       

Wind Power

    126        170        (10     4        (4     (5     140        172        24        19        72        60        237        251       

Oil & Gas

    282        329                      (2     (3     284        332        37        25        59        50        380        407       

Power Transmission

    (114     (262     16        20        (7     (3     (123     (280     10        7        75        65        (38     (207    

Healthcare Sector

    1,447        1,184        5        5        (30     (9     1,471        1,188        238        293        241        259        1,950        1,740        19.7     17.7

therein:

                               

Diagnostics

    268        227                      (28     4        296        223        148        181        160        167        604        571       

Industry Sector

    1,196        1,740        (4     9        (14     (10     1,215        1,742        235        199        266        232        1,715        2,173        12.0     14.6

therein:

                               

Industry Automation

    745        931        1        2        (3     (4     747        933        186        155        106        97        1,039        1,186       

Drive Technologies

    443        684        (5     7        (10     (6     458        683        43        36        150        126        651        845       

Infrastructure & Cities Sector

    140        686        23        19        6        22        112        645        94        82        123        118        328        845        2.6     6.7

therein:

                               

Transportation & Logistics

    (370     163        17        12        (5     (11     (381     162        23        9        34        33        (324     205       

Power Grid Solutions & Products

    300        258        6        7        (5     (2     298        253        27        29        53        50        378        333       

Building Technologies

    183        226                             (2     183        227        44        44        34        35        261        306       

Total Sectors

    4,175        5,347        (18     76        (57     69        4,250        5,202        651        642        954        890        5,855        6,735       
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

Equity Investments

    286        (593     264        (611     6        6        15        12                                    15        12       

Financial Services (SFS)

    303        379        67        145        289        288        (53     (54     4        5        173        196        124        147       

Reconciliation to Consolidated Financial Statements

                               

Centrally managed portfolio activities

    35        (5     42        4        (1            (6     (9     2        3        1        1        (3     (4    

Siemens Real Estate (SRE)

    59        27                      (83     (82     142        109        1        1        213        243        355        352       

Corporate items and pensions

    (446     (282                   (155     (191     (291     (91     13        11        59        37        (218     (43    

Eliminations, Corporate Treasury and other reconciling items

    (31     39        (4     (5     30        126        (58     (82                   (26     (32     (84     (113    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

Siemens

    4,380        4,911        352        (391     29        216        3,999        5,087        670        662        1,374        1,336        6,044        7,085       
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

(1) Profit of the Sectors as well as of Equity Investments and Centrally managed portfolio activities is earnings before financing interest, certain pension costs and income taxes. Certain other items not considered performance indicative by Management may be excluded. Profit of SFS and SRE is Income before income taxes. Profit of Siemens is Income from continuing operations before income taxes. For a reconciliation of Income from continuing operations before income taxes to Net income see Consolidated Statements of Income.

 

(2) Includes impairments and reversals of impairments of investments accounted for using the equity method.

 

(3) Includes impairment of non-current available-for-sale financial assets. For Siemens, Financial income (expense), net comprises Interest income, Interest expense and Other financial income (expense), net as reported in the Consolidated Statements of Income.

 

(4) Adjusted EBIT is Income from continuing operations before income taxes less Financial income (expense), net and Income (loss) from investments accounted for using the equity method, net.

 

(5) Amortization and impairments, net of reversals, of intangible assets other than goodwill.

 

(6) Depreciation and impairments of property, plant and equipment, net of reversals. Includes impairments of goodwill of €— million and €— million for the nine months ended June 30, 2013 and 2012, respectively.

 

16


Table of Contents

LIQUIDITY, CAPITAL RESOURCES AND REQUIREMENTS

Cash flows

The following discussion presents an analysis of our cash flows from operating, investing and financing activities for the first nine months of fiscal 2013 and 2012 for both continuing and discontinued operations.

 

Cash flows

   Continuing operations     Discontinued operations     Continuing and
discontinued operations
 
     Nine months ended June 30,  
     2013     2012     2013     2012     2013     2012  
     (in millions of €)  

Net cash provided by (used in):

            

Operating activities

     2,055        1,866        190        (9     2,246        1,857   

Investing activities

     (4,800     (3,379     (198     (530     (4,998     (3,909

therein: Additions to intangible assets and property, plant and equipment

     (1,140     (1,448     (113     (118     (1,253     (1,566

Free cash flow

     915        418        77        (126     992        291   

Financing activities

     (1,792     (2,123     8        539        (1,784     (1,584

Cash flows from operating activitiesContinuing operations provided net cash of €2.055 billion in the first nine months of fiscal 2013, compared to net cash provided of €1.866 billion in the same period a year earlier. In the current period, the major component of cash inflows was income from continuing operations of €3.131 billion. Included therein were amortization, depreciation and impairments of €2.045 billion. A build-up of operating net working capital led to cash outflows of €3.5 billion. These cash outflows were due mainly to the Energy Sector, which in part was due to an increase in outstanding customer payments. In the prior-year period, income from continuing operations was €3.417 billion. Included therein were amortization, depreciation and impairments of €1.998 billion. A build-up of operating net working capital led to cash outflows of €3.0 billion in the same period a year ago. The prior-year period also included cash outflows due to a higher decrease in liabilities related to personnel costs and outflows of approximately €0.3 billion related to Healthcare’s particle therapy business.

Discontinued operations provided net cash of €190 million in the first nine months of fiscal 2013, compared to net cash used of €9 million in the prior-year period. The change was due largely to a strong operating cash flow performance at OSRAM.

Cash flows from investing activitiesNet cash used in investing activities for continuing operations amounted to €4.800 billion in the first nine months of fiscal 2013, compared to net cash used of €3.379 billion in the prior-year period. The increase in cash outflows from investing activities was mainly due to acquisitions, net of cash acquired. Acquisitions, net of cash acquired, totaling €2.727 billion in the current period including the preliminary purchase price (excluding cash acquired) of €1.980 billion related to Infrastructure & Cities’ acquisition of Invensys Rail and of €670 million related to Industry’s acquisition of LMS International NV. The prior-year period included acquisitions, net of cash acquired, totaling €1.272 billion, including among others the acquisition of the Connectors and Measurements Division of Expro Holdings UK 3 Ltd. Proceeds from sales of investments, intangibles and property, plant and equipment of €424 million in the first nine months of fiscal 2013 included proceeds related to the sale of AtoS convertible bonds of €0.3 billion. Proceeds from sales of investments, intangibles and property, plant and equipment were €466 million in the first nine months a year earlier including proceeds from the sale of our interest in OAO Power Machines.

Discontinued operations used net cash of €198 million in the first nine months of fiscal 2013, compared to net cash used of €530 million in the prior-year period. The change was primarily related to Siemens IT Solutions and Services, particularly including payments in the prior-year period for a cash purchase price adjustment related to net debt and net working capital of Siemens IT Solutions and Services.

Free cash flow from continuing operations amounted to €915 million in the first nine months of fiscal 2013, compared to €418 million a year earlier. The change year-over-year resulted from higher cash flows from operating activities as discussed above and lower additions to intangible assets and property, plant and equipment, due mainly to lower investments within the Sectors.

 

17


Table of Contents

On a sequential basis, Free cash flow during the first nine months of fiscal 2013 and during fiscal 2012 was as follows:

 

LOGO

Cash flows from financing activitiesContinuing operations used net cash of €1.792 billion in the first nine months of fiscal 2013, compared to net cash used of €2.123 billion in the same period a year earlier. As described in more detail below, the current period included proceeds from the issuance of long-term debt of €3.772 billion related to the bonds issued and term loans taken, and also cash inflows for short-term debt and other financing activities of €978 million, primarily related to net cash inflows from the issuance of commercial paper. These cash inflows were partly offset by the repayment of long-term debt of €2.153 billion related to redemption of the fixed-rate-instruments and by the cash outflows for the purchase of common stock totaling €1.394 billion primarily under Siemens’ share buyback program, completed in November 2012. For comparison, prior-year period proceeds from the issuance of long-term debt were €2.473 billion, including the issuance of US$3.0 billion bonds with warrant units. Cash inflows from the change in short-term debt and other financing activities were €2.206 billion, which also included the cash inflows from the issuance of commercial paper. These cash inflows were partly offset by the repayment of long-term debt of €3.193 billion in the prior-year period for the redemption of €1.55 billion in 5.25%-fixed-rate-instruments, €0.7 billion in floating rate assignable loans, US$0.5 billion in floating rate notes and US$0.75 billion in 5.5% notes. Both periods included cash outflows for dividends, which were €2.528 billion (for fiscal 2012) in the first nine months of fiscal 2013 compared to €2.629 billion in the prior-year period (for fiscal 2011).

Capital resources and requirements

We have a US$9.0 billion (€6.9 billion) global multi-currency commercial paper program in place. As of June 30, 2013, we had commercial paper outstanding in several currencies with a total amount corresponding to €1.4 billion.

Under the debt issuance program, in February 2009, we issued fixed rated instruments with an aggregate amount of €4.0 billion comprising two tranches. The first tranche, €2.0 billion in 4.125%-fixed-rate-instruments, matured in February 2013 and was redeemed at face value.

In the first nine months of fiscal 2013, we issued the following instruments under our debt issuance program:

 

   

€1.25 billion in 1.75% instruments due in March 2021;

 

   

€1.0 billion in 2.875% instruments due in March 2028;

 

   

US$500 million in 1.5% instruments due in March 2018;

 

   

US$100 million privately placed fixed rate instruments due in March 2028; and

 

   

US$400 million privately placed floating rate instruments due in June 2020

The nominal amount of these instruments outstanding as of June 30, 2013 was a total corresponding to €3.0 billion.

In March 2013, we took two bilateral US$500 million floating rate term loans, bearing interest of 0.79% above the three months London Interbank Offered Rate (LIBOR). These loans are due in March 2018 and include options for two one-year extensions. The nominal amount outstanding as of June 30, 2013 was €0.8 billion.

In April 2012 we signed a €4.0 billion syndicated multi-currency revolving credit facility with an original term of five years. In February 2013, we extended this facility by one year, until April 2018. This facility has another one-year extension option still remaining.

 

18


Table of Contents

In June 2013, we redeemed at face value €113.5 million in 5.283% assignable loans.

Capital structure

A key consideration for Siemens is maintenance of ready access to the capital markets through various debt products and preservation of our ability to repay and service our debt obligation over time. Siemens set a capital structure target range of 0.5–1.0. The capital structure ratio is defined as the item Adjusted industrial net debt divided by the item Adjusted EBITDA (continuing operations). As of June 30, 2013 and September 30, 2012 the ratios were as follows:

 

     June 30,
2013
    September 30,
2012
 
     (in millions of €)  

Short-term debt and current maturities of long-term debt(1)

     3,656        3,826   

Plus: Long-term debt(1)

     19,140        16,880   

Less: Cash and cash equivalents

     (6,071     (10,891

Less: Current available-for-sale financial assets

     (506     (524
  

 

 

   

 

 

 

Net debt

     16,219        9,292   

Less: SFS Debt(2)

     (15,004     (14,558

Plus: Pension plans and similar commitments(3)

     9,325        9,801   

Plus: Credit guarantees

     581        326   

Less: 50% nominal amount hybrid bond(4)

     (887     (920

Less: Fair value hedge accounting adjustment(5)

     (1,323     (1,670
  

 

 

   

 

 

 

Adjusted industrial net debt

     8,911        2,271   
  

 

 

   

 

 

 

Adjusted EBITDA (continuing operations)

     6,044        9,669   
  

 

 

   

 

 

 

Adjusted industrial net debt / adjusted EBITDA (continuing operations)(6)

     1.11        0.23   
  

 

 

   

 

 

 

 

(1) The item Short-term debt and current maturities of long-term debt as well as the item Long-term debt included in total fair value hedge accounting adjustments of €1,323 million as of June 30, 2013 and €1,670 million as of September 30, 2012.

 

(2) The adjustment considers that both Moody’s and S&P view SFS as a captive finance company. Both rating agencies generally recognize and accept higher levels of debt attributable to captive finance subsidiaries in determining credit ratings. Following this concept, we exclude SFS Debt in order to derive an adjusted industrial net debt which is not affected by SFS’s financing activities.

 

(3) To reflect Siemens’ total pension liability, adjusted industrial net debt includes line item Pension plans and similar commitments as presented in Consolidated Statements of Financial Position.

 

(4) The adjustment for our hybrid bond considers the calculation of this financial ratio applied by rating agencies to classify 50% of our hybrid bond as equity and 50% as debt. This assignment reflects the characteristics of our hybrid bond such as a long maturity date and subordination to all senior and debt obligations.

 

(5) 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 by changes in market value mainly due to changes in interest rates. Accordingly we deduct these changes in market value in order to end up with an amount of debt that approximately will be repaid. We believe this is a more meaningful figure for the calculation presented above. For further information on fair value hedges see Note 31 in D.6 Notes to Consolidated Financial Statements in our Annual Report for fiscal 2012.

 

(6) In order to calculate this ratio, adjusted EBITDA (continuing operations) needs to be annualized.

Credit ratings

On May 14, 2013 Moody’s changed its outlook for Siemens’ credit rating from “stable” to “negative”, saying that “despite the group’s substantial cost reduction initiatives, we expect its profitability, cash flow generation and capital structure to be weaker than anticipated in 2013 and 2014.” The Moody’s rating outlook is an opinion regarding the likely direction of an issuer’s rating over the medium-term. At the same time, Moody’s affirmed our “Aa3” long-term and “P-1” short-term credit rating.

S&P made no rating changes in fiscal 2013.

We expect no significant impact on our funding costs as a consequence of the changed rating outlook by Moody’s.

 

19


Table of Contents

Funding of pension plans and similar commitments

At the end of the first nine months of fiscal 2013, the combined funded status of Siemens’ pension plans showed an estimated underfunding of €8.5 billion, compared to an underfunding of €8.9 billion at the end of fiscal 2012. The decrease in Siemens’ DBO was partly offset by a decrease in the fair value of Siemens’ funded pension plan assets.

 

LOGO

The estimated DBO of Siemens’ pension plans, which takes into account future compensation and pension increases, amounted to €32.3 billion on June 30, 2013, lower than the DBO of €33.0 billion on September 30, 2012. The decrease was due primarily to benefits paid during the nine-month period and an increase in the discount rate assumption as well as positive currency translation effects. These positive factors were partly offset by accrued service and interest cost and an increase in the inflation rate assumption in the U.K.

The fair value of Siemens’ funded pension plan assets as of June 30, 2013 was €23.8 billion compared to €24.1 billion on September 30, 2012. The decrease resulted from benefits paid and negative currency translation effects during the nine-month period. These negative effects were partly offset by the actual return on plan assets and by employer contributions. The actual return on plan assets for the first nine months of fiscal 2013 amounted to €746 million, resulting mainly from equity investments. Employer contributions amounted to €407 million.

The combined funded status of Siemens’ predominantly unfunded other post-employment benefit plans amounted to an underfunding of €0.6 billion and €0.7 billion, respectively, as of June 30, 2013 and September 30, 2012.

For more information on Siemens’ pension plans and similar commitments, see Note 8 in Notes to Condensed Interim Consolidated Financial Statements.

REPORT ON RISKS AND OPPORTUNITIES

Within the scope of its entrepreneurial activities and the variety of its operations, Siemens encounters numerous risks and opportunities which could negatively or positively affect business development. For the early recognition and successful management of relevant risks and opportunities we employ a number of coordinated risk management and control systems. Risk management facilitates the sustainable protection of our future corporate success and is an integral part of all our decisions and business processes.

In our Annual Report for fiscal 2012 we described certain risks which could have a material adverse effect on our financial condition, including effects on assets, liabilities and cash flows, and results of operations, certain opportunities as well as the design of our risk management system.

As previously disclosed, business with customers in Iran is subject to export control regulations, embargoes, sanctions or other forms of trade restrictions imposed by the U.S., the EU and other countries or organizations. The sanction regime against Iran was further tightened. Following the approval of Council Regulation (EU) No. 267/2012 on March 23, 2012 concerning restrictive measures against Iran and repealing Regulation (EU) No. 961/2010, the Implementing Regulations (EU) No. 945/2012 dated October 15, 2012 and No. 1264/2012 dated December 21, 2012, which were based on Council Regulation (EU) No. 267/2012, specify numerous additional companies and institutions as designated parties (primarily from the oil and gas industries). In addition, Amending Regulation (EU) No. 1263/2012 dated December 21, 2012, enhanced in particular the restrictions related to goods and products and sets time-limits for the execution of transactions under pre-existing contracts. Furthermore, the signing into law of the American “Iran Threat Reduction and Syria Human Rights Act of 2012” on August 10, 2012 tightened the restrictions on the ability of non-U.S. companies to do business or trade with Iran and Syria and imposed additional disclosure obligations. As described in our Annual Report of fiscal 2012, we have issued, and regularly update, restrictive internal guidelines governing business with customers in Iran. We may, however, still conduct certain business activities and provide products and services to customers in Iran under limited circumstances. Although we believe that our business activities have not had a material negative impact on our reputation or share value, we cannot exclude any such impact in the future. New or tightened export control regulations, sanctions, embargoes or other forms of trade restrictions imposed on Iran, Syria or on other sanctioned countries in which we do business may result in a curtailment of our existing business in such countries and in an adaptation of our policies. In addition, the termination of our activities in Iran, Syria or other sanctioned countries may expose us to customer claims and other actions.

 

20


Table of Contents

During the first nine months of fiscal 2013 we identified no further significant risks and opportunities besides those presented in our Annual Report for fiscal 2012 and in the sections of this Interim Report entitled “Overview of financial results for the third quarter of fiscal 2013,” “Segment information analysis for the nine months ended June 30, 2013,” and “Legal proceedings.” Additional risks not known to us or that we currently consider immaterial could also impair our business operations. We do not expect to incur any risks that alone or in combination would appear to jeopardize the continuity of our business.

We refer also to Notes and forward-looking statements at the end of this Interim group management report.

LEGAL PROCEEDINGS

For information on legal proceedings, see Note 12 in Notes to Condensed Interim Consolidated Financial Statements.

SUBSEQUENT EVENTS

At the beginning of the fourth quarter, Siemens successfully completed its planned spin-off and listing of OSRAM. As a result, Siemens derecognized the net carrying amount of the disposal group OSRAM and the associated spin-off liability. Siemens will present its remaining 17.0% stake in OSRAM within Equity Investments and has contributed an additional 2.5% stake to the Siemens Pension Trust e.V. Siemens expects a modest positive result related to the OSRAM spin-off within discontinued operations in the fourth quarter.

Joe Kaeser was appointed as new CEO of Siemens AG, effective August 1, 2013. Peter Löscher resigned as CEO and Member of the Managing Board, effective at the close of July 31, 2013 by mutual consent. These changes were unanimously approved by the Supervisory Board of Siemens AG.

OUTLOOK

For fiscal 2013, we expect clear order growth and a moderate decline in revenue compared to the prior year, both on an organic basis. Charges associated with the “Siemens 2014” program in the Sectors are expected to total approximately €1.0 billion for the full fiscal year.

Given these developments and financial results for the first nine months, we expect income from continuing operations of €4.0 billion in fiscal 2013 including the solar business and NSN. This outlook excludes other significant portfolio effects and legal and regulatory matters in the fourth quarter.

 

21


Table of Contents

NOTES AND FORWARD-LOOKING STATEMENTS

This document includes supplemental financial measures that are or may be non-GAAP financial measures. Orders and order backlog; adjusted or organic growth rates of revenue and orders; book-to-bill ratio; Total Sectors profit; return on equity (after tax), or ROE (after tax); return on capital employed (adjusted), or ROCE (adjusted); Free cash flow, or FCF; cash conversion rate, or CCR; adjusted EBITDA; adjusted EBIT; adjusted EBITDA margins, earnings effects from purchase price allocation, or PPA effects; net debt and adjusted industrial net debt are or may be such non-GAAP financial measures. These supplemental financial measures should not be viewed in isolation as alternatives to measures of Siemens’ financial condition, results of operations or cash flows as presented in accordance with IFRS in its Consolidated Financial Statements. Other companies that report or describe similarly titled financial measures may calculate them differently. Definitions of these supplemental financial measures, a discussion of the most directly comparable IFRS financial measures, information regarding the usefulness of Siemens’ supplemental financial measures, the limitations associated with these measures and reconciliations to the most comparable IFRS financial measures are available on Siemens’ Investor Relations website at www.siemens.com/nonGAAP. For additional information, see supplemental financial measures and the related discussion in Siemens’ most recent annual report on Form 20-F, which can be found on our Investor Relations website or via the EDGAR system on the website of the United States Securities and Exchange Commission.

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 “expects,” “looks forward to,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “project” or words of similar meaning. We may also make forward-looking statements in other reports, in presentations, in material delivered to stockholders 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, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond Siemens’ control, affect Siemens’ operations, performance, business strategy and results and could cause the actual results, performance or achievements of Siemens to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements or anticipated on the basis of historical trends. These factors include in particular, but are not limited to, the matters described in Item 3: Key information—Risk factors of our most recent annual report on Form 20-F filed with the SEC, in the chapter “Risks” of our most recent annual report prepared in accordance with the German Commercial Code, and in the chapter “Report on risks and opportunities” of our most recent interim report.

Further information about risks and uncertainties affecting Siemens is included throughout our most recent annual and interim reports, as well as our most recent earnings release, which are available on the Siemens website, www.siemens.com, and throughout our most recent annual report on Form 20-F and in our other filings with the SEC, which are available on the Siemens website, www.siemens.com, and on the SEC’s website, www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results, performance or achievements of Siemens may vary materially from those described in the relevant forward-looking statement as being expected, anticipated, intended, planned, believed, sought, estimated or projected. Siemens neither intends, nor assumes any obligation, to update or revise these forward-looking statements in light of developments which differ from those anticipated.

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.

 

22


Table of Contents

SIEMENS

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

For the three and nine months ended June 30, 2013 and 2012

(in millions of €, per share amounts in €)

 

       Three months
ended June 30,
    Nine months
ended June 30,
 
     Note      2013     2012(1)     2013     2012(1)  

Revenue

        19,248        19,542        55,404        56,741   

Cost of goods sold and services rendered

        (14,103     (14,004     (39,975     (40,566
     

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

        5,145        5,539        15,430        16,174   

Research and development expenses

        (1,081     (1,083     (3,122     (3,137

Marketing, selling and general administrative expenses

        (2,938     (2,848     (8,336     (8,101

Other operating income

     3         78        98        277        322   

Other operating expense

     4         (57     (41     (250     (171

Income (loss) from investments accounted for using the equity method, net

     5         188        (26     352        (391

Interest income

     6         251        235        710        704   

Interest expense

     6         (203     (190     (578     (576

Other financial income (expense), net

        (32     68        (103     87   
     

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations before income taxes

        1,350        1,753        4,380        4,911   

Income taxes

        (346     (600     (1,249     (1,494
     

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations

        1,004        1,152        3,131        3,417   

Income (loss) from discontinued operations, net of income taxes

     2         94        (382     210        (326
     

 

 

   

 

 

   

 

 

   

 

 

 

Net income

        1,098        770        3,341        3,092   
     

 

 

   

 

 

   

 

 

   

 

 

 

Attributable to:

           

Non-controlling interests

        27        27        64        79   

Shareholders of Siemens AG

        1,071        743        3,277        3,013   

Basic earnings per share

     14            

Income from continuing operations

        1.16        1.28        3.64        3.81   

Income (loss) from discontinued operations

        0.11        (0.43     0.24        (0.38
     

 

 

   

 

 

   

 

 

   

 

 

 

Net income

        1.27        0.85        3.88        3.43   
     

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

     14            

Income from continuing operations

        1.15        1.27        3.61        3.77   

Income (loss) from discontinued operations

        0.11        (0.43     0.24        (0.37
     

 

 

   

 

 

   

 

 

   

 

 

 

Net income

        1.26        0.84        3.84        3.40   
     

 

 

   

 

 

   

 

 

   

 

 

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

For the three and nine months ended June 30, 2013 and 2012

(in millions of €)

 

     Three months
ended June 30,
    Nine months
ended June 30,
 
     2013     2012(1)     2013     2012(1)  

Net income

     1,098        770        3,341        3,092   

Items that will not be reclassified to profit or loss:

        

Remeasurements of defined benefit plans

     404        (1,124     349        (1,193

Items that may be reclassified subsequently to profit or loss:

        

Currency translation differences

     (585     613        (619     1,062   

Available-for-sale financial assets

     34        41        42        122   

Derivative financial instruments

     41        (146     83        (76
  

 

 

   

 

 

   

 

 

   

 

 

 
     (510     508        (494     1,108   
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income, net of tax (2)

     (106     (616     (145     (85
  

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income

     992        154        3,196        3,006   
  

 

 

   

 

 

   

 

 

   

 

 

 

Attributable to:

        

Non-controlling interests

     6        42        45        95   

Shareholders of Siemens AG

     985        112        3,152        2,911   

 

(1) Adjusted for effects of adopting IAS 19R, see Note 1 Basis of presentation.

 

(2) Includes income (expense) resulting from investments accounted for using the equity method of €(12) million and €(22) million, respectively, for the three months ended June 30, 2013 and 2012, and €(126) million and €2 million for the nine months ended June 30, 2013 and 2012, respectively. Thereof €- million and €(40) million, respectively, for the three months ended June 30, 2013 and 2012, and €(117) million and €(89) million for the nine months ended June 30, 2013 and 2012, respectively, are attributable to items that will not be reclassified to profit or loss.

The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.

 

 

23


Table of Contents

SIEMENS

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of June 30, 2013 (unaudited) and September 30, 2012

(in millions of €)

 

     Note      6/30/13     9/30/12(1)  
ASSETS        

Current assets

       

Cash and cash equivalents

        6,071        10,891   

Available-for-sale financial assets

        506        524   

Trade and other receivables

        15,918        15,220   

Other current financial assets

        3,372        2,901   

Inventories

        16,807        15,679   

Income tax receivables

        698        836   

Other current assets

        1,353        1,277   

Assets classified as held for disposal

     2         6,763        4,799   
     

 

 

   

 

 

 

Total current assets

        51,488        52,128   
     

 

 

   

 

 

 

Goodwill

        18,225        17,069   

Other intangible assets

        5,399        4,595   

Property, plant and equipment

        10,180        10,763   

Investments accounted for using the equity method

        2,997        4,436   

Other financial assets

        14,213        14,666   

Deferred tax assets.

        3,055        3,748   

Other assets.

        958        846   
     

 

 

   

 

 

 

Total assets

        106,514        108,251   
     

 

 

   

 

 

 

LIABILITIES AND EQUITY

       

Current liabilities

       

Short-term debt and current maturities of long-term debt

     7         3,656        3,826   

Trade payables

        7,067        8,036   

Other current financial liabilities

        1,806        1,460   

Current provisions

        4,630        4,750   

Income tax payables

        1,751        2,204   

Other current liabilities

        21,689        20,302   

Liabilities associated with assets classified as held for disposal

     2         2,075        2,049   
     

 

 

   

 

 

 

Total current liabilities

        42,674        42,627   
     

 

 

   

 

 

 

Long-term debt

     7         19,140        16,880   

Pension plans and similar commitments

     8         9,325        9,801   

Deferred tax liabilities

        593        494   

Provisions

     9         3,715        3,908   

Other financial liabilities

        1,040        1,083   

Other liabilities

        2,118        2,034   
     

 

 

   

 

 

 

Total liabilities

        78,605        76,827   
     

 

 

   

 

 

 

Equity

     10        

Common stock, no par value (2)

        2,643        2,643   

Additional paid-in capital

        5,463        6,173   

Retained earnings

        21,669        22,877   

Other components of equity

        583        1,058   

Treasury shares, at cost (3)

        (2,966     (1,897
     

 

 

   

 

 

 

Total equity attributable to shareholders of Siemens AG

        27,393        30,855   
     

 

 

   

 

 

 

Non-controlling interests

        516        569   
     

 

 

   

 

 

 

Total equity

        27,909        31,424   
     

 

 

   

 

 

 

Total liabilities and equity

        106,514        108,251   
     

 

 

   

 

 

 

 

(1) Adjusted for effects of adopting IAS 19R, see Note 1 Basis of presentation.

 

(2) Authorized: 1,084,600,000 and 1,084,600,000 shares, respectively. Issued: 881,000,000 and 881,000,000 shares, respectively.

 

(3) 38,250,330 and 24,725,674 shares, respectively.

The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.

 

24


Table of Contents

SIEMENS

CONSOLIDATED STATEMENTS OF CASH FLOW (unaudited)

For the nine months ended June 30, 2013 and 2012

(in millions of €)

 

     Nine months
ended June 30,
 
     2013     2012(1)  

Cash flows from operating activities

    

Net income

     3,341        3,092   

Adjustments to reconcile net income to cash provided by (used in) operating activities—continuing operations

    

(Income) loss from discontinued operations, net of income taxes

     (210     326   

Amortization, depreciation and impairments

     2,045        1,998   

Income taxes

     1,249        1,494   

Interest (income) expense, net

     (131     (128

(Gains) losses on sales and disposals of businesses, intangibles and property, plant and equipment, net

     (40     (41

(Gains) losses on sales of investments, net (2)

     (6     (198

(Gains) losses on sales and impairments of current available-for-sale financial assets, net

     (2     1   

(Income) losses from investments (2)

     (326     486   

Other non-cash (income) expenses

     470        41   

Change in assets and liabilities

    

(Increase) decrease in inventories

     (943     (1,569

(Increase) decrease in trade and other receivables

     (879     (601

Increase (decrease) in trade payables

     (976     (306

Change in other assets and liabilities

     (337     (2,167

Additions to assets held for rental in operating leases

     (295     (264

Income taxes paid

     (1,782     (1,133

Dividends received

     255        191   

Interest received

     624        644   
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities—continuing operations

     2,055        1,866   

Net cash provided by (used in) operating activities—discontinued operations

     190        (9
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities—continuing and discontinued operations

     2,246        1,857   

Cash flows from investing activities

    

Additions to intangible assets and property, plant and equipment

     (1,140     (1,448

Acquisitions, net of cash acquired

     (2,727     (1,272

Purchases of investments (2)

     (223     (217

Purchases of current available-for-sale financial assets

     (43     (135

(Increase) decrease in receivables from financing activities

     (1,126     (943

Proceeds and (payments) from sales of investments, intangibles and property, plant and equipment (2)

     424        466   

Proceeds and (payments) from disposals of businesses

     (27     79   

Proceeds from sales of current available-for-sale financial assets

     62        92   
  

 

 

   

 

 

 

Net cash provided by (used in) investing activities—continuing operations

     (4,800     (3,379

Net cash provided by (used in) investing activities—discontinued operations

     (198     (530
  

 

 

   

 

 

 

Net cash provided by (used in) investing activities—continuing and discontinued operations

     (4,998     (3,909

Cash flows from financing activities

    

Purchase of common stock

     (1,394       

Proceeds (payments) relating to other transactions with owners

     (14     121   

Proceeds from issuance of long-term debt

     3,772        2,473   

Repayment of long-term debt (including current maturities of long-term debt)

     (2,153     (3,193

Change in short-term debt and other financing activities

     978        2,206   

Interest paid

     (328     (407

Dividends paid

     (2,528     (2,629

Dividends paid to non-controlling interest holders

     (134     (127

Financing discontinued operations (3)

     11        (568
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities—continuing operations

     (1,792     (2,123

Net cash provided by (used in) financing activities—discontinued operations

     8        539   
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities—continuing and discontinued operations

     (1,784     (1,584

Effect of exchange rates on cash and cash equivalents

     (44     121   

Net increase (decrease) in cash and cash equivalents

     (4,580     (3,516

Cash and cash equivalents at beginning of period

     10,950        12,512   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

     6,370        8,996   

Less: Cash and cash equivalents of assets classified as held for disposal and discontinued operations at end of period

     298        32   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period (Consolidated Statements of Financial Position)

     6,071        8,963   
  

 

 

   

 

 

 

 

(1) Adjusted for effects of adopting IAS 19R, see Note 1 Basis of presentation.

 

(2) Investments include equity instruments either classified as non-current available-for-sale financial assets, accounted for using the equity method or classified as held for disposal. Purchases of investments includes certain loans to investments accounted for using the equity method.

 

(3) Discontinued operations are financed principally through Corporate Treasury. The item Financing discontinued operations includes these intercompany financing transactions.

The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.

 

25


Table of Contents

SIEMENS

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited)

For the nine months ended June 30, 2013 and 2012

(in millions of €)

 

                  Total comprehensive income                          
                        Other components of equity                                
                       

Items that may be reclassified subsequently

to profit or loss

                               
     Common
stock
     Additional
paid-in
capital
    Retained
earnings
    Currency
translation
differences
    Available-
for-sale
financial
assets
     Derivative
financial
instruments
    Total     Treasury
shares at
cost
    Total equity
attributable
to shareholders
of Siemens AG
    Non-controlling
interests
    Total
equity
 

Balance as of October 1, 2011 (as previously reported)

     2,743         6,011        25,881        2        36         (106     25,813        (3,037     31,530        626        32,156   

Effect of retrospectively adopting IAS 19R

                    116                              116               116               116   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of October 1, 2011(1)

     2,743         6,011        25,996        2        36         (106     25,929        (3,037     31,645        626        32,271   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income(1)

                    3,013                              3,013               3,013        79        3,092   

Other comprehensive income, net of tax(1)

                    (1,193 )(2)      1,045        122         (76     (102            (102     16        (85 )(3) 

Dividends

                    (2,629                           (2,629            (2,629     (137     (2,766

Share-based payment

             1        (128                           (128            (127            (127

Re-issuance of treasury stock

             (6                                         377        372               372   

Transactions with non-controlling interests

                    (469                           (469            (469     1        (468

Other changes in equity

             126        6                              6               132        (5     127   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of June 30, 2012

     2,743         6,133        24,597        1,046        158         (181     25,620        (2,660     31,836        581        32,417   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of October 1, 2012 (as previously reported)

     2,643         6,173        22,756        857        245         (44     23,814        (1,897     30,733        569        31,302   

Effect of retrospectively adopting IAS 19R

                    122                              122               122               122   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of October 1, 2012(1)

     2,643         6,173        22,877        857        245         (44     23,936        (1,897     30,855        569        31,424   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

                    3,277                              3,277               3,277        64        3,341   

Other comprehensive income, net of tax

                    349 (2)      (598     42         82        (125            (125     (20     (145 )(3) 

Dividends

                    (2,528                           (2,528            (2,528     (111     (2,640

Share-based payment

             2        (35                           (35            (33            (33

Purchase of common stock

                                                        (1,349     (1,349            (1,349

Re-issuance of treasury stock

             3                                            280        284               284   

Transactions with non-controlling interests

                    (24                           (24            (24     1        (22

Spin-off related changes in equity

             (163     (2,240                           (2,240            (2,403            (2,403

Other changes in equity

             (553     (7                           (7            (560     12        (548
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of June 30, 2013

     2,643         5,463        21,669        258        287         38        22,253        (2,966     27,393        516        27,909   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Adjusted for effects of adopting IAS 19R, see Note 1 Basis of presentation.

 

(2) Items of other comprehensive income that will not be reclassified to profit or loss consist of remeasurements of defined benefit plans of €349 million and €(1,193) million, respectively in the nine months ended June 30, 2013 and 2012. Remeasurements of defined benefit plans are included in line item Retained earnings.

 

(3) In the nine months ended June 30, 2013 and 2012, Other comprehensive income, net of tax, includes non-controlling interests of €- million and €- million relating to remeasurements of defined benefit plans, €(21) million and €17 million relating to currency translation differences, €- million and €- million relating to available-for-sale financial assets and €1 million and €(1) million relating to derivative financial instruments.

The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.

 

26


Table of Contents

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SIEMENS

SEGMENT INFORMATION (continuing operations—unaudited)

As of and for the three months ended June 30, 2013 and 2012 and as of September 30, 2012

(in millions of €)

 

    Orders(1)     External
revenue
    Intersegment
revenue
    Total revenue     Profit(2)     Assets(3)     Free cash
flow(4)
    Additions to
intangible assets
and property, plant
and equipment
    Amortization,
depreciation and
impairments(5)
 
    2013     2012     2013     2012     2013     2012     2013     2012     2013     2012     6/30/13     9/30/12     2013     2012     2013     2012     2013     2012  

Sectors

                                   

Energy

    5,353        5,246        6,578        6,962        61        63        6,639        7,025        430        683        2,503        1,116        (54     (259     85        116        136        124   

Healthcare

    3,274        3,316        3,362        3,329        5        15        3,367        3,343        499        396        11,565        11,757        678        786        77        89        159        170   

Industry

    5,135        5,116        4,569        4,691        422        411        4,990        5,102        347        523        7,670        7,014        614        660        95        109        167        153   

Infrastructure & Cities

    7,505        4,185        4,285        4,061        172        210        4,456        4,271        (15     215        6,669        4,012        (196     (71     51        68        81        69   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Sectors

    21,266        17,863        18,793        19,042        660        699        19,453        19,741        1,261        1,817        28,407        23,899        1,043        1,115        308        382        543        516   

Equity Investments

                                                            143        (74     2,793        2,715        115        98                               

Financial Services (SFS)

    286        274        245        267        41        8        286        274        73        105        18,046        17,405        183        83        8        6        58        64   

Reconciliation to Consolidated Financial Statements

  &nb