The global technology powerhouse – Siemens AG – generated revenue of €83bn and net income of €6.2bn for the fiscal year 2017 ended September 30; the Europe’s largest industrial conglomerate announced in its Annual Report 2017 on November 29.
Germany engineering giant poled a cumulative growth rate of 7.4% in a global economic consolidating environment in 2017. Most of the reportable segments witnessed strong growth though Healthineers has been the star performer.
Siemens Healthineers reported net income of €2.5bn – the largest amongst all segments – in fiscal year 2017; powered by revenue increase of 3% to €13.8bn as compared to prior fiscal year – posting second largest (18.1%) return on capital employed (ROCE).
Order intake also grew slightly to €14.2bn in most areas, led by diagnostic imaging business which continued to account for the largest share of Healthineers profit overall, and by the advanced therapies business.
Siemens has several operating segments, the Divisions – Power & Gas; Energy Management; Building Technologies; Mobility; Digital Factory; and Process Industries and Devices; as well as Strategic Units Healthineers and Siemens Gamesa Renewable Energy, which together form its industrial business.
The Financial Services (SFS) supports the activities of Siemens industrial business and also conducts its own business with external customers. Business description of each operating segment is outlined in the company’s annual report.
In healthcare portfolio – Siemens Healthineers is the leading provider of medical equipment such as X-ray, computed tomography (CT) and magnetic resonance (MR) imaging systems and is also a leader in laboratory diagnostics and clinical IT.
The leader in diagnostic imaging and laboratory diagnosis was organized into six business areas in fiscal year 2017: Diagnostic Imaging; Laboratory Diagnostics; Advanced Therapies; Ultrasound; Point of Care Diagnostics; and Services.
Markets served by Healthineers grew moderately in FY2017 driven by growth in Latin America and Asia, Australia, including further stabilization in China. The market volume in Europe and the United States however remained at near prior-year levels.
The diagnostic imaging market segment also grew moderately. While demand for imaging procedures continued to grow, this trend was partly offset by price pressure on new purchases and increased utilization rates for installed systems.
Market for ultrasound and in-vitro diagnostics grew even more strongly. The market for in-vitro diagnostics is expanding due to populations and income growth in emerging markets and the rising importance of diagnostics in improving healthcare quality.
Growth in the area of molecular diagnostics was particularly strong, driven by technological advances and a broader spectrum of applications.
For the healthcare industry as a whole, the trend towards consolidation continues. Competition among the leading companies is strong, including with respect to price.
Meanwhile, the Managing Board of the Munich-based group also intended to publicly list monitory stake of its separately operated €35bn to €40bn Healthineers on Frankfurt Stock Exchange instead of London – in the aftereffects of Brexit or New York.
The manufacturing unit has already hired legendary financial groups such as Deutsche Bank, Goldman Sachs, and JP Morgan for Siemens Healthineers initial public offering (IPO) – to selling up to 25% stakes.
This planned Siemens Healthineers IPO – in the first half of 2018, depending on the market conditions – is set to be the Germany’s largest floatation in two decades since Deutsche Telekom €13bn float in 1997.
Power and Gas was one of the few business segments that witnessed significant decline in fiscal year 2017 amid highly competitive market environment. The Division reported a sharply lower volume from larger orders in comparison with prior year.
Power and Gas orders and revenue fell by 31% and 6% to €13.4bn and €1.6bn respectively for the fiscal year 2017. As a result, the profit by 15% to €1.6 billion – at profit margin of 10.3% in FY2017 from 11.4% in FY2016.
Nonetheless, the growth in the revenues of other Divisions aided Siemens to offset decline in Power and Gas and others.
Siemens pays handsome monthly salaries to its top executives and members of Managing Board. Since 01-October-2016, base compensation – paid as monthly salary – of President and CEO Joe Kaeser has amounted to €2,130,000 per year.
The base compensation of CFO and of those members of Managing Board who are responsible for Divisions or for Healthineers has been €1,065,000 per year. For the other members of the Managing Board, it has been €1,011,000 per year.
Siemens employed a total of 372,000 people at the close of fiscal year ended 30 September.
Financial Results of Siemens Pakistan for FY2017
For the fiscal year 2017 ended September 30, Siemens Pakistan went through a penitent phase as the company almost halved its net profit only Rs. 1.1bn from prior year’s Rs. 2.1bn as a result of higher cost of sales and services.
Although the net sales and services for the fiscal year 2017 grew to Rs.14.6bn from Rs. 10.2bn in FY2016 – the upswing in cost of sales and service to Rs. 12.1bn in FY2017 from Rs. 9.2bn in FY2016 bugged the syndicate’s productivity.
Siemens Pakistan however announced a final cash dividend of 750% @ Rs. 75.00 per share – in financial results submitted with Pakistan Stock Exchange.