The Financial Services (SFS) Division supports its customers'
investments with leasing solutions and equipment, project and
A.9
and associated material opportunities
and risks
Report on expected developments
Financial Statements
Notes to Consolidated
P 22
A.8
p 62
B.6
p 35
Subsequent events
A.7
of Changes in Equity
Consolidated Statements
of the economic position
p 60
B.5
Overall assessment
P 20
A.6
P 21
of Cash Flows
Siemens AG
p 37
The Wind Power and Renewables Division designs, manufac-
tures and installs wind turbines for onshore and offshore appli-
cations. This includes both geared turbines and direct drive tur-
bines. The product portfolio is based on four product platforms,
two each for onshore and offshore applications. The Division
The Power and Gas Division offers a broad spectrum of products
and solutions for generating electricity from fossil fuels and for
producing and transporting oil and gas. The portfolio includes
gas turbines, steam turbines, generators to be applied to gas or
steam power plants, compressor trains, integrated power plant
solutions, and instrumentation and control systems for power
generation. Customers are public utilities and independent power
producers; companies in engineering, procurement and construc-
tion that serve these companies; international and national oil
companies; and industrial customers that generate power for
their own consumption. Due to the broad range of its offerings,
the Division's revenue mix may vary from reporting period to re-
porting period depending on the share of revenue attributable to
products, solutions and services. Because typical profitability levels
differ among these three revenue sources, the revenue mix in a
reporting period accordingly affects Division profit for that period.
A.1.1.2 BUSINESS DESCRIPTION
Our reportable segments may do business with each other, lead-
ing to corresponding orders and revenue. Such orders and reve-
nue are eliminated on the Group level.
Siemens has the following reportable segments: the Divisions
Power and Gas; Wind Power and Renewables; Energy Man-
agement; Building Technologies; Mobility; Digital Factory;
and Process Industries and Drives as well as the separately
managed business Healthineers (formerly called Healthcare),
which together form our Industrial Business. The Division Finan-
cial Services (SFS) supports the activities of our Industrial Busi-
ness and also conducts its own business with external customers.
As "global entrepreneurs" our Divisions and Healthineers carry
business responsibility worldwide, including with regard to their
operating results.
We are a technology company with core activities in the fields of
electrification, automation and digitalization, and activities in
nearly all countries of the world. Siemens comprises Siemens AG,
a stock corporation under the Federal laws of Germany, as the
parent company and its subsidiaries. Our Company is incorpo-
rated in Germany, with our corporate headquarters situated in
Munich. As of September 30, 2016, Siemens had around 351,000
employees.
A.1.1.1 ORGANIZATION AND BASIS
OF PRESENTATION
A.1.1 The Siemens Group
A.1 Business and economic environment
A.10
MANAGEMENT REPORT
Notes and forward-looking
statements
p 133
Corporate Governance
p 124
Report of the Supervisory Board
Takeover-relevant information
p 51
A.11
Compensation Report
COMBINED
primarily serves large utilities and independent power producers.
Due to the significant offshore business of the Division and its
activities in the Northern hemisphere, production and installa-
tions are typically higher during spring and summer months be-
cause of the more favorable weather and marine conditions
during those seasons. The Division's revenue mix may vary from
reporting period to reporting period depending on the project
mix between onshore and offshore projects in the respective
period. The Division also includes a minority stake in a hydro
power business.
Consolidated Statements
C.5
Consolidated Statements
of Income
Business and economic environment
p 118
C.1
p 56
B.1
p2
A.1
Independent Auditor's Report
A.2
Responsibility Statement
Consolidated Financial Statements
C.
B.
Combined Management Report
A.
Table of contents
siemens.com
Annual Report
2016
SIEMENS
Ingenuity for life
Additional Information
Financial position
p 8
Financial performance system
P 10
p 59
B.4
p 16
A.5
of Financial Position
Net assets position
C.4
Consolidated Statements
P 15
A.3
A.4
P 121
Results of operations
C.3
of Comprehensive Income
Consolidated Statements
p 57
B.2
p 119
C.2
B.3
In June 2016, Siemens and Gamesa Corporación Tecnológica, S.A.
(Gamesa) signed binding agreements to merge the Siemens wind
power business, including service, with Gamesa. The two busi-
nesses are highly complementary regarding global footprint, ex-
isting product portfolios and technologies. The combined busi-
ness is expected to have a global reach across all relevant regions
and manufacturing footprints on all continents. Accordingly, the
transaction will result in a product offering covering all wind
classes and addressing all key market segments. Siemens will own
59% of the shares of the combined entity. As part of the merger,
Siemens will fund a cash payment of €1 billion which will be dis-
tributed to Gamesa's shareholders (excluding Siemens) immedi-
ately following the completion of the merger. Closing of the trans-
action is subject to the approvals of the antitrust and regulatory
authorities.
p 58
The Energy Management Division offers a wide spectrum of
products, systems, solutions, software and services for transmit-
ting and distributing power and for developing intelligent grid
infrastructure. The Division's customers include power providers,
network operators, industrial companies, infrastructure develop-
ers and construction companies. The offerings are used to pro-
cess and transmit electrical power from the source down to var-
ious load points along the power transmission and distribution
networks to the power consumers. Our solutions for smart grids
enable a bidirectional flow of energy and information, which is
required for the integration of more renewable energy sources
into conventional power transmission and distribution networks.
The Division also offers solutions and energy storage systems for
integrating renewable energy into power grids, together with
Within the framework of One Siemens, we aim to grow our reve-
nue faster than the average weighted revenue growth of our most
relevant competitors. Our primary measure for managing and
controlling our revenue growth is comparable growth, because it
shows the development in our business net of currency transla-
tion effects, which arise from the external environment outside
of our control, and portfolio effects, which involve business activ-
ities which are either new to or no longer a part of our business.
A.2.2 Revenue growth
Within One Siemens, we have established a financial framework –
for revenue growth, for profitability and capital efficiency, for our
capital structure, and for our dividend policy.
A.2.1 Overview
A.2 Financial performance system
7
Combined Management Report
Markets served by Healthineers grew moderately in fiscal 2016
as growth in the U.S. and in Europe more than offset weakness
in Latin America. Growth in China was stabilizing, though growth
rates came in lower than at the beginning of the decade. The
diagnostic imaging market segment grew slightly. While demand
for imaging procedures continued to grow, this trend was partly
offset by price pressure and increased utilization rates. The mar-
kets for ultrasound and in-vitro diagnostics grew moderately.
Development in the ultrasound market segment benefits from
increasing access to healthcare services. The market for in-vitro
diagnostics is expanding due to population and income growth
in emerging markets and the rising importance of diagnostics
in improving healthcare quality. For the healthcare industry as
a whole, the trend towards consolidation continues. Competi-
tion among the leading companies is strong, including with re-
spect to price.
Market volume for the markets addressed by the Process Indus-
tries and Drives Division declined moderately in fiscal 2016. This
was due mainly to reductions in capital expenditures by custom-
ers in commodity-related industries such as oil and gas, mining,
cement and metals. Towards the end of the fiscal year, demand
from those industries began to stabilize. As described for Digital
Factory above, global manufacturing production grew only mod-
estly while the consumer-oriented industries served by Process
Industries and Drives, such as food and beverage and pharma-
ceuticals continued their growth path. Competitors of the Divi-
sion's business activities can be grouped into two categories:
multinational companies that offer a relatively broad portfolio
and companies that are active only in certain geographic or prod-
uct markets. Consolidation is taking place mostly in particular
market segments and not across the broad base of the Division's
portfolio. In particular, consolidation in solution-driven markets
is going in the direction of in-depth niche market expertise. Most
major competitors have established global bases for their busi-
nesses. In addition, the competition has become increasingly
focused on technological improvements and cost position.
Currency translation effects are the difference between revenue
for the current period calculated using the exchange rates of
the current period and revenue for the current period calculated
using the exchange rates of the comparison period. For calculat-
ing the percentage change year-over-year, this absolute differ-
ence is divided by revenue for the comparison period. A portfolio
effect arises in the case of an acquisition or a disposition and is
calculated as the change year-over-year in revenue of the relevant
business resulting specifically from the acquisition or disposition.
For calculating the percentage change, this absolute change is
divided by revenue for the comparison period. For orders, we
apply the same calculations for currency translation and portfolio
effects as described above.
2015. Global manufacturing production grew only modestly
but showed some signs of growth stabilization towards the end
of the fiscal year. Consumer-oriented industries and the global
automotive industry, which is one of the most important end-
customer industries of the Division, remained on a stable growth
path. In contrast, mining- and oil-related industries continued to
suffer from low raw material prices. Demand from the machine-
building industry declined modestly year-over-year as invest-
ments were held back due mainly to uncertainties in the global
political and economic environment. The competition for Digital
Factory's business activities can be grouped into two categories:
multinational companies that offer a relatively broad portfolio
and companies that are active only in certain geographic or prod-
uct markets.
Markets for the Mobility Division grew moderately in fiscal 2016,
with all regions contributing to growth. Market development in
the Europe, C.I.S., Africa, Middle East region was characterized by
continuous investment and awards of large orders. This was par-
ticularly evident in Germany and the U.K. Demand in the Middle
East and in Africa was mainly driven by turnkey and rail infrastruc-
ture projects. In the Americas region, growth continued to bene-
fit from demand for passenger locomotives and urban transport
products in the U.S. Within the Asia, Australia region, Chinese
markets saw ongoing investments in high-speed trains, urban
transport and rail infrastructure, while India awarded large orders
as part of the country's transportation infrastructure build-out.
The Division's principal competitors are multinational companies.
Consolidation among Mobility's competitors is continuing.
Markets for the Building Technologies Division grew moderately
in fiscal 2016. Growth was driven by solid demand from the U.S.
and Asia, despite softening growth rates in China. Within the
Europe, C.I.S., Africa, Middle East region, markets in the Middle
East grew stronger than the region overall. The recovery of the
European market was weaker than expected but included sta-
ble growth in Germany. The Division's principal competitors are
multinational companies. Its solutions and services business also
competes with system integrators and small local companies.
The Division faces continuing price pressure, particularly in its
solutions business, due to strong competition from system houses
and some larger competitors.
Markets addressed by the Energy Management Division grew
moderately in fiscal 2016. The utilities market, the Division's single
largest customer segment, showed clear growth, benefiting from
major energy transmission investments in Egypt and Qatar and
from large interconnection projects, particularly in China and
India. The chemicals and the construction industries grew slightly.
Growth in the chemicals industry was driven by the Americas,
where some process industries showed a trend towards re-indus-
trialization in the U.S. and a build-up of capacities within the
region overall. Within the construction industry, increased invest-
ments in North America were largely offset by a slow-down in
investing activities in Asia, particularly in China. Demand from
the metals industry remained on the prior-year level, while the
oil and gas industry continued to reduce capital expenditures due
to low oil prices. Competitors of the Energy Management Division
consist mainly of a small number of large multinational compa-
nies. International competition is increasing from manufacturers
in emerging countries such as China, India and Korea.
and cost reduction, dependency on subsidy schemes is expected
to decrease in the long term.
Combined Management Report
6
Following strong demand in fiscal 2015, market volume for the
markets served by the Wind Power and Renewables Division
declined moderately in fiscal 2016. The decline was due to the
onshore wind power market segment, only partly offset by
growth in the relatively smaller offshore wind power market seg-
ment. On a regional basis, the decline was most evident in the
Americas, particularly including Brazil and the U.S., and in Asia,
Australia, particularly including China, where the largest national
wind market in the world remains largely closed to foreign man-
ufacturers. In Europe, in contrast, demand for wind power grew
in both the onshore and the offshore market segments. The com-
petitive situation in wind power differs in the two major market
segments. In the markets for onshore wind farms, competition is
widely dispersed without any one company holding a dominant
share of the market, while markets for offshore wind farms con-
tinue to consist of a few experienced players. Consolidation is
moving forward in both on- and offshore segments, including
exits of smaller players. The key drivers of consolidation are in-
creasing price pressure as well as technology challenges and
market access challenges, which increase development costs and
the importance of risk-sharing in offshore wind power. Market
development continues to depend strongly on energy policy, in-
cluding tax incentives in the U.S. and regulatory frameworks in
Germany and the U.K. With continued technological progress
The markets of the Power and Gas Division remained challeng-
ing in fiscal 2016. This was again particularly evident in the mar-
ket for steam turbines, where volume shrank substantially year-
over-year due to an ongoing shift from coal-fired to gas-fired
power generation in the U.S. and emission regulation such as in
China. Demand in compression markets also fell year-over-year
due to continued reduction in capital expenditure for oil and gas
upstream applications. In contrast, demand in the gas turbine
market continued to grow in fiscal 2016, driven by rising demand
for energy in emerging countries, demand for replacement of
aged, inefficient and inflexible power plants; the above-men-
tioned shift from coal to gas, particularly in the U.S.; an energy
market reform in Mexico; large projects in Egypt; diversification
towards gas power plants in China and countries in Latin America
and the Middle East. The Division's competition consists mainly
of two groups: a relatively small number of equipment manufac-
turers, some with very strong positions in their domestic markets,
and on the other hand a large number of engineering, procure-
ment and construction contractors. The gas turbine market is
experiencing overcapacity among original equipment manufac-
turers and engineering, procurement and construction contrac-
tors, which is leading to market consolidation.
A.1.2.2 MARKET DEVELOPMENT
In fiscal 2016, market volume for the markets addressed by the
Digital Factory Division came in slightly below the level in fiscal
The partly estimated figures presented here for GDP and fixed
investments are calculated by Siemens based on an IHS Markit
report dated October 15, 2016.
A.2.3 Profitability and capital
efficiency
Profit margin ranges
The Power Generation Services Division offers a comprehensive
set of services for products, solutions and technologies of the
Power and Gas and Wind Power and Renewables Divisions, cov-
ering performance enhancements, maintenance services, cus-
tomer training and professional consulting. Financial results of
these two Divisions include the corresponding financial results of
the Power Generation Services Division, which itself is not a re-
portable segment. Based on this business model, all discussions
of the services business for Power and Gas as well as Wind Power
and Renewables concern the Power Generation Services Division.
8 Combined Management Report
Within the framework of One Siemens, we seek to work as prof-
itably and efficiently as possible with the capital provided by our
shareholders and lenders. For purposes of managing and con-
trolling our capital efficiency, we use return on capital employed,
or ROCE, as our primary measure. We aim to achieve a range of
15% to 20%.
To emphasize and evaluate our continuous efforts to improve
productivity, we incorporated a measure called total cost produc-
tivity into our One Siemens framework. We define this measure
as the ratio of cost savings from defined productivity improve-
ment measures to the aggregate of functional costs for the
Siemens Group. We aim to achieve an annual value of 3% to 5%
for total cost productivity.
For purposes of managing and controlling profitability at the
Group level, we use net income as our primary measure. This
measure is the main driver of basic earnings per share (EPS)
from net income, which we use in communication to the capital
markets.
In line with common practice in the financial services business,
our financial indicator for measuring capital efficiency at the
Financial Services Division (SFS) is return on equity after tax, or
ROE after tax. ROE is defined as SFS' profit after tax, divided by
the Division's average allocated equity.
15-20%
SFS (ROE after tax)
Digital Factory
Within the framework of One Siemens, we aim to achieve margins
through the entire business cycle that are comparable to those of
our relevant competitors. Therefore, we have defined profit mar-
gin ranges for our industrial businesses, which are based on the
profit margins of the respective relevant competitors.
15-19%
Process Industries and Drives
Healthineers
14-20%
6-9%
8-11%
7-10%
5-8%
11-15%
Wind Power and Renewables
Energy Management
Building Technologies
Mobility
Power and Gas
8-12%
All in all, the negative effects outweighed the positive ones.
During the course of the fiscal year, growth forecasts for global
gross domestic product (GDP) for calendar 2016 declined from
2.9% in October 2015 to 2.4% in October 2016. Fixed investments
are expected to expand by 1.7% in calendar 2016, down from
3.4% previously forecast in October 2015.
Margin range
In Europe, economic activity also decelerated considerably in the
second and third quarters of fiscal 2016. Risks in the European
banking system resurfaced. The largely unexpected Brexit vote in
June 2016 added uncertainty - though the consequences in the
following months did not match the initial concerns.
> turning unstructured data into value-adding information, e.g.
when providing services such as preventive maintenance;
> advancing the integration of medical imaging technology, in
vitro diagnostics and IT for medical engineering to support
improved patient outcomes.
> creating the highly flexible, connected factories of tomorrow
using advanced automation and digitalization technologies;
> promoting the efficient utilization of energy, especially in
buildings, industry and transportation, e.g. through highly
efficient drives for production facilities or for local and long-
distance trains;
➤ finding novel solutions for smart grids and for the storage of
energy from renewable sources with irregular availability;
enabling energy supplies that are economically sustainable;
> further enhancing efficiency in the generation of renewable
and conventional power and minimizing losses during power
transmission;
Our research and development (R&D) activities are ultimately
geared to developing innovative, sustainable solutions for our
customers and the Siemens businesses - and simultaneously
safeguarding our competitiveness. For these reasons, we focus
in particular on
A.1.1.3 RESEARCH AND DEVELOPMENT
structured financing in the form of debt and equity investments.
Based on its comprehensive financing know-how and specialist
technology expertise in the areas of Siemens businesses, SFS pro-
vides financial solutions for Siemens customers as well as other
companies, and also manages financial risks of Siemens. SFS op-
erates the Corporate Treasury of the Siemens Group, which in-
cludes managing liquidity, cash and interest risks as well as cer-
tain foreign exchange, credit and commodities risks. Business
activities and tasks of Corporate Treasury are reported in the seg-
ment information within Reconciliation to Consolidated Financial
Statements.
Combined Management Report 3
Beyond these points of focus, we recognize how important
highly sophisticated software solutions are for all the fields of
business in which Siemens is active. R&D activities are carried
out by our businesses as well as our Corporate Technology (CT)
department.
-
CONSOLIDATED FINANCIAL STATEMENTS.
expanded its software business by acquiring CD-adapco, a U.S.-
based provider of simulation software. For more information on
the acquisition of CD-adapco, see NOTE 3 in → B.6 NOTES TO
The Digital Factory Division offers a comprehensive product
portfolio and system solutions used in manufacturing industries,
complemented by lifecycle and data-driven services. These offer-
ings enable customers to optimize entire value chains from prod-
uct design and development to production and services. With its
comprehensive offering, the Division supports manufacturing
companies with the transformation towards the "Digital Enter-
prise," resulting in increased flexibility and efficiency of produc-
tion processes and reduced time to market for new products.
The Division supplies customers in discrete, process and hybrid
manufacturing industries. Changes in the level of demand are
strongly driven by macroeconomic cycles, and can lead to signif-
icant short-term variation in market performance. In the third
quarter of fiscal 2016, Digital Factory further strengthened and
The Mobility Division combines all Siemens businesses in the
area of passenger and freight transportation, including rail vehi-
cles, rail automation systems, rail electrification systems, road
traffic technology, IT solutions and related services. The Division
provides its customers with consulting, planning, financing, con-
struction, service and operation of turnkey mobility systems.
Mobility also provides integrated mobility solutions for network-
ing of different types of traffic systems. The principal customers
of the Mobility Division are public and state-owned companies
in the transportation and logistics sectors. Markets served by
Mobility are driven primarily by public spending. Customers usu-
ally have multi-year planning and implementation horizons, and
their contract tenders therefore tend to be independent of short-
term economic trends.
The Building Technologies Division is a leading provider of au-
tomation technologies and digital services for safe, secure and
efficient buildings and infrastructures throughout their lifecycles.
The Division offers products, solutions, services and software for
fire safety, security, building automation, heating, ventilation,
air conditioning and energy management. The large customer
base is widely dispersed. It includes owners, operators and ten-
ants for both public and commercial buildings; building construc-
tion general contractors; and system houses. Changes in the
overall economic environment generally have a delayed effect on
the Division's business activities. Particularly in the solutions and
service businesses, Building Technologies is affected by changes
in the non-residential construction markets with a time lag of two
to four quarters.
vertical IT software applications that link energy consumers and
producers. In addition, the Division's portfolio includes power
supply solutions for conventional power plants and renewable
energy systems as well as substations for urban and rural distri-
bution networks. The Division also offers energy-efficient solu-
tions for heavy industry, the oil and gas industry and the process
industries.
Combined Management Report
While raw material prices increased following a slump in the sec-
ond quarter of fiscal 2016, commodity exporting countries still
were burdened with overcapacities due to former investment
overhangs in extractive sectors. Associated reductions in govern-
ment spending further weighed on economic activity.
2
The Process Industries and Drives Division offers a comprehen-
sive product, software, solution and service portfolio for moving,
measuring, controlling and optimizing all kinds of mass flows.
With its know-how in vertical industries including oil and gas,
shipbuilding, mining, cement, fiber, chemicals, food and bever-
age, and pharmaceuticals, the Division increases productivity,
reliability and flexibility of machinery and installations along
their entire life cycle jointly with its customers. Based on data
models and analysis methods, Process Industries and Drives
paves the way together with its customers to create a "Digital
Enterprise," from process simulation via plant design and docu-
mentation through to asset and performance management. The
Division's offerings include an integrated portfolio with prod-
ucts, components and systems such as couplings, gears, motors
and converters, process instrumentation systems, process ana-
lytics devices, wired and wireless communication, industrial
identification and power supplies up to systems level with de-
centralized control systems, industrial software as well as cus-
tomized, application-specific systems and solutions. It also sells
gears, couplings and drive solutions to other Siemens Divisions,
which use them in rail transport and wind turbines. Demand
within the industries served by the Division generally shows a
delayed response to changes in the overall economic environ-
ment. Even so, the Division is strongly dependent on invest-
ment cycles in its key industries. In commodity-based process
industries such as oil and gas or mining, these cycles are driven
mainly by commodity price fluctuations rather than changes in
produced volumes.
Corporate Technology is both a creative driver of disruptive inno-
vations and a partner to the Siemens businesses. Its R & D activi-
ties are focused on the Company's core activities in the fields of
electrification, automation and digitalization. In many research
projects, CT works closely with scholars from leading universities
and research institutions. These partnerships, along with close
collaborations with start-ups, are an important part of Siemens'
open innovation concept, which is designed to make the Com-
pany even more innovative.
Healthineers ("Healthcare" before renaming in May 2016) is one
of the world's largest suppliers of technology to the healthcare
industry and a leader in medical imaging and laboratory diagnos-
tics. We provide medical technology and software solutions as
well as clinical consulting services, supported by a complete set of
training and service offerings. Therefore, we offer our customers
a comprehensive portfolio of medical solutions along the contin-
uum of care from prevention and early detection to diagnosis,
treatment and follow-up care. Because large portions of our rev-
enue stem from recurring business, our business activities are to
a certain extent resilient to short-term economic trends. They are,
however, dependent on regulatory and public policy develop-
ments around the world. Healthineers is organized into six busi-
ness areas: Diagnostic Imaging, Laboratory Diagnostics, Advanced
Therapies, Ultrasound, Point of Care Diagnostics and Services.
In fiscal 2016, we reported research and development expenses
of €4.7 billion, compared to €4.5 billion in fiscal 2015. The result-
ing R&D intensity, defined as the ratio of R&D expenses and
revenue, was 5.9% - the same level as in fiscal 2015. Additions to
capitalized development expenses amounted to €0.3 billion in
both fiscal 2016 and 2015, mainly at Healthineers. As of Septem-
ber 30, 2016, Siemens held approximately 59,800 granted patents
worldwide in its continuing operations. As of September 30,
2015, it held approximately 56,200 granted patents. On average,
we had 33,000 R&D employees in fiscal 2016.
The growth slowdown was especially evident in the U.S. econ-
omy in the second and third quarters of fiscal 2016, followed by
modest acceleration of economic activity in the fourth quarter.
The main reason for this development was an inventory reduc-
tion which was substantially resolved by the end of the fiscal
year. In addition, the strong US$ weighed on U.S. exports and
improved conditions for imports.
In fiscal 2016, Siemens announced the creation of an autono-
mous unit that will place the Company's partnership with start-
ups on a much higher level: next47. The unit went into operation
in October 2016. It has been given a budget of €1 billion for its
first five years. With the creation of next47, Siemens plans to
further enhance its innovativeness and speed up the introduction
of innovations to the marketplace. next47 is focusing on five in-
novation fields: artificial intelligence, distributed electrification,
autonomous machines, blockchain applications and connected
electric mobility. Electrically powered flight is an example of a
disruptive development being pursued by next47. In cooperation
with Airbus, Siemens intends to demonstrate by 2020 that elec-
tricity can be used to power large planes.
As in recent years, sluggish aggregate demand, particularly for
investment goods, held back growth. This was influenced signifi-
cantly by high levels of political and economic uncertainty arising
from conflicts in Syria and Iraq, the failed coup in Turkey and
U.K.'s vote to leave the European Union, among other factors.
A.1.2.1 WORLDWIDE ECONOMIC ENVIRONMENT
The development of the world economy in fiscal 2016 again
resulted in diminished expectations through the course of the
year. After a slight improvement in sentiment indicators in the
first quarter, economic activity unexpectedly slowed down in
the second and third quarters of fiscal 2016. The growth slow-
down was also evident in the development of international
trade volume.
A.1.2 Economic environment
5
The R&D activities of Healthineers are directed toward our
growth fields in therapy, molecular diagnostics, and services. We
want to tap the full potential of imaging solutions in therapy and
to establish a closer connection between diagnostics and therapy
in cardiology, interventional clinical disciplines, surgery, and ra-
diation oncology. Strategic partnerships are an essential part of
our strategy to reach this goal. Expanding our innovation map
beyond our established portfolio, and investing in new ideas will
help us tap new business fields. For example, we will extend our
activities in the highly dynamic growth field of molecular diag-
nostics. We will expand our services business beyond product-
related services by adding a digital services portfolio and increas-
ing enterprise transformation services to help customers in their
transition to value-based care within more and more provider
organizations across geographical borders.
The focus of R & D activities in the Process Industries and Drives
Division is on the digital transformation of products, solutions
and services for all sectors in the process industry, such as oil and
gas, chemicals and pharmaceuticals. Information and communi-
cation technologies (ICT) play a crucial role in areas such as im-
provements in instrumentation, analytics, industrial communi-
cation and process control systems. The end-to-end use of ICT is
as essential a prerequisite for the expansion of drive and trans-
mission platforms by means of integrated condition monitoring
and service cloud connections as it is for the commissioning and
operation of processing plants or the use of computer-assisted
simulations to support their operators. The same applies for new
service offerings that complement operational engineering data
with additional condition-related data (condition monitoring)
and use it for purposes such as asset management. The digitali-
zation of our comprehensive process automation and industrial
communication portfolio includes a holistic industrial security
concept. Another central objective of our R&D activities is to fur-
ther increase energy efficiency while reducing the consump-
tion of raw materials and cutting emissions. This applies to our
own product creation processes as well as to our customers' pro-
cesses that are facilitated by our products (systems, solutions
and services).
less link to simulation tools enhances the benefits of virtual com-
missioning, which is used to identify flaws at an early stage and
in a cost-effective manner. Data-based services are another field
of research. Siemens offers MindSphere, an industry cloud that
industrial companies can use to develop and provide their own
digital services. As a result, new types of services such as predic-
tive maintenance and resource optimization can be provided.
Machinery and plant builders can use it to monitor production
operations around the world. MindSphere helps them reduce
downtimes and offer new business models.
through planning and engineering to production and service. In
addition, the TIA (Totally Integrated Automation) Portal engi-
neering platform is being intensively improved. Thanks to its
open interfaces, it exchanges data with other systems. The seam-
Combined Management Report
The Chinese economy continued its path of rebalancing toward
a more consumption- and domestic-demand-driven economy,
which has so far been accompanied by a steady decline in eco-
nomic growth rates. However, the stability of China's economy
was partly caused by stimulus measures which have slowed the
country's progress on this path.
One of the R&D priorities at the Digital Factory Division is the
Digital Enterprise Software Suite. It includes Teamcenter software.
Serving as a data backbone, Teamcenter digitizes the entire prod-
uct lifecycle management (PLM) process from product design
The Mobility Division's R&D strategy addresses customers'
demand for maximum availability, high throughput and en-
hanced passenger experience. Although there is a growing need
for mobility worldwide, possibilities for building new roads and
railways are limited. Meeting the demand for mobility requires
intelligent solutions that make transport more efficient, safe and
environmentally friendly. Reflecting this, Mobility's R&D activi-
ties emphasize digitalization in developing state-of-the art rail
vehicles, automation solutions for rail and road traffic, and rail
electrification systems. Most of these goals can be achieved only
with intelligent IT solutions such as WLAN-based control systems
for driverless and conductorless metro train operation, decentral-
ized wayside architecture for rail automation, cloud-based prod-
uct solutions, and Integrated Mobility Platforms that intelli-
gently network passengers, mobility service providers and traffic
management centers.
R&D work at the Building Technologies Division focuses on op-
timizing comfort, operational and energy efficiency in buildings
and infrastructures, protecting against fire and security hazards,
and minimizing related risks. We aim to create a portfolio of prod-
ucts and services ranging from the field to the cloud, based on
open standards wherever possible. This includes data-based ser-
vices for new ways of optimizing energy consumption, easily
scalable and reasonably priced services, a new and harmonized
system landscape with effective integration of electrical con-
sumption, fire detection and HVAC (heating, ventilation, air con-
ditioning) systems, and a complete range of products tailored
specifically to growing markets.
The R&D activities of our Energy Management Division focus
on preparing our portfolio for changes on all voltage levels in the
world of electricity. The increasing infeed of renewable energy
to power grids requires that those grids become more flexible
and efficient, particularly with distributed generation on the rise.
The digitalization of future grids will enable intelligent grid oper-
ation and data-driven services. Cost-out programs and optimiza-
tion of our footprint are improving the competitiveness of our
product portfolio on global markets. Our innovations are cen-
tered on power electronics, digitalization or grid stabilization.
The full integration of energy supply systems with process auto-
mation is a core portfolio element for industrial applications and
infrastructures.
Combined Management Report
4
-
Research and Development in our Businesses
R&D at the Power and Gas Division concentrates on developing
products and solutions for enhancing efficiency, flexibility and
economy in power generation and in the oil and gas industry.
These products and solutions include turbomachinery - primarily
high-performance, low-emission gas turbines for single operation
or for combined cycle power plants - and compressor solutions
for various process industries. The Division's current technology
initiative, which started in fiscal 2015, is aimed at intensifying
R&D in innovative materials, advanced manufacturing methods
and plant optimization. Along with promoting digitalization in
overall product lifecycles, Power and Gas is on track preparing for
changing energy markets and their increasingly diversified cen-
tralized and decentralized structures.
At the Wind Power and Renewables Division, our R&D efforts
are focused on innovative products and solutions that allow us to
take the lead in performance, improve our competitiveness, and
build a stronger business case for customers. This includes find-
ing ways to more intelligently monitor and analyze turbine con-
ditions, and smart diagnostic services. Our R&D efforts also fo-
cus on digitalization. At our remote diagnostics center in Brande,
Denmark, we collect digital data from more than 10,000 turbines
in more than 30 countries, which total more than 24 million data
sets annually. We use this data to provide value for our custom-
ers: in 85% of cases, issues can be corrected and turbines re-
started without sending out a service team.
230
577
553
1,324
1,337
86
546
57
678
Siemens enters into master netting agreements and similar agree-
ments for derivative financial instruments. The requirements to
offset recognized financial instruments are usually not met. The
following table reflects financial assets and financial liabilities that
are subject to netting agreements and similar agreements:
85
598
66
895
185
195
691
375
3,929
4,335
570
132
137
119
588
389
223
218
2,868
618
497
2,184
330
2,325
240
231
165
160
591
2,152
1,800
581
243
281
304
184
179
1,790
1,771
4,906
5,731
1,685
1,690
126
132
127
99
118
2,526
(346)
It is not part of the Consolidated Financial Statements subject to the audit opinion.
160
Siemens Real Estate (SRE) - manages the Group's entire real
estate business portfolio, operates the properties, and is respon-
sible for building projects and the purchase and sale of real estate.
the equity method or as available-for-sale financial assets and
that for strategic reasons are not allocated to a segment, Siemens
Real Estate (SRE), Corporate items or Corporate Treasury. CMPA
also includes activities generally intended for divestment or clo-
sure as well as activities remaining from divestments and discon-
tinued operations.
CONSOLIDATED FINANCIAL STATEMENTS
Centrally managed portfolio activities (CMPA) – in general,
comprises equity stakes held by Siemens that are accounted for
RECONCILIATION TO
> Financial Services (SFS) supports its customers' investments
with leasing solutions and equipment, project and structured
financing in the form of debt and equity investments.
> Healthineers, a supplier of technology to the healthcare indus-
try and a leader in medical imaging and laboratory diagnostics,
> Process Industries and Drives (PD) offers a comprehensive
product, software, solution and service portfolio for moving,
measuring, controlling and optimizing all kinds of mass flows,
> Digital Factory (DF) offers a comprehensive product portfolio
and system solutions used in manufacturing industries, com-
plemented by lifecycle and data-driven services,
> Mobility (MO) combines all Siemens businesses in the area of
passenger and freight transportation, including rail vehicles,
rail automation systems, rail electrification systems, road traf-
fic technology, IT solutions and related services,
> Building Technologies (BT) is a provider of automation tech-
nologies and digital services for safe, secure and efficient
buildings and infrastructures throughout their lifecycles,
> Energy Management (EM) offers a wide spectrum of prod-
ucts, systems, solutions, software and services for transmit-
ting and distributing power and for developing intelligent grid
infrastructure,
> Power and Gas (PG), which offers a broad spectrum of prod-
ucts, solutions and services for generating electricity from
fossil fuels and for producing and transporting oil and gas,
> Wind Power and Renewables (WP) designs, manufactures and
installs wind turbines and provides services for onshore and
offshore applications,
DESCRIPTION OF REPORTABLE SEGMENTS
Siemens has nine reportable segments, being:
1 This supplemental information on Orders is provided on a voluntary basis.
(2,391)
75,636
(2,447)
79,644
(3,690)
(3,694)
1,299
75,636
1,247
79,644
82,340
86,480
Siemens (continuing operations)
(2,432)
(2,300)
Consolidated Financial Statements
11,211
Corporate items - includes corporate costs, such as group man-
aging costs, basic research of Corporate Technology, corporate
projects and non-operating investments or results of corpo-
rate-related derivative activities.
(190)
96 Consolidated Financial Statements
Assets
464
350
522
225
206
1,272
1,149
8,871
9,066
1,415
1,872
2015
2016
2015
2016
2015
2016
Sep 30, 2015
Sep 30, 2016
2015
2016
Fiscal year
Amortization,
depreciation & impairments
Additions to intangible assets
and property, plant & equipment
Fiscal year
Fiscal year
Fiscal year
Free cash flow
Profit
11,153
Consolidated Financial Statements
2,048
(349)
(543)
(674)
acquired in business combinations
Eliminations, Corporate Treasury,
and other reconciling items
Reconciliation to
Amortization of intangible assets
(440)
(439)
Centrally carried pension expense
(690)
(449)
205
132
714
(215)
Centrally managed portfolio activities
Siemens Real Estate
Corporate items
2015
2016
Fiscal year
(in millions of €)
Profit
CONSOLIDATED FINANCIAL STATEMENTS
RECONCILIATION TO
Centrally managed portfolio activities follow the measurement
principles of the segments except for SFS. SRE applies the mea-
surement principles of SFS.
CENTRALLY MANAGED
PORTFOLIO ACTIVITIES AND SRE
-
MEASUREMENT
Amortization, depreciation and impairments:
Amortization, depreciation and impairments includes deprecia-
tion and impairments of property, plant and equipment as well
as amortization and impairments of intangible assets each net of
reversals of impairment.
(366)
Free cash flow of the segments, except for SFS, constitutes cash
flows from operating activities less additions to intangible assets
and property, plant and equipment. It excludes financing inter-
est, except for cases where interest on qualifying assets is capi-
talized or classified as contract costs and it also excludes income
tax as well as certain other payments and proceeds. Free cash
flow of SFS includes related financing interest payments and pro-
ceeds; income tax payments and proceeds of SFS are excluded.
(1,994)
Reconciliation to
98 Consolidated Financial Statements
60,851
63,126
(34,315)
(35,423)
42,282
42,086
Liability-based adjustments
Eliminations, Corporate Treasury, other items
Reconciliation to Consolidated Financial
Statements
3,103
4,089
45,576
47,072
Intragroup financing receivables
Tax-related assets
(2,012)
(1,474)
Assets Corporate items and pensions
Asset-based adjustments:
4,895
4,964
1,322
1,812
Assets Centrally managed portfolio activities
Assets Siemens Real Estate
2015
2016
(in millions of €)
Sep 30,
Assets
In fiscal 2016 and 2015, Profit of SFS includes interest income of
€1,161 million and €1,086 million, respectively and interest ex-
penses of €377 million and €340 million, respectively.
(1,119)
2,154
Free cash flow definition:
Orders:
63,126
(1,119)
7,218
(1,994)
7,404
219
216
17
18
884
680
24,970
26,446
600
653
1,990
2,191
1,409
1,521
7,446
7,493
34,527
36,145
7,737
8,744
545
563
346
392
60,851
Orders are determined principally as estimated revenue of ac-
cepted purchase orders and order value changes and adjust-
ments, excluding letters of intent.
125,717
(2,640)
5,533
Management determined Assets (Net capital employed) as a
measure to assess capital intensity of the segments except for
SFS. Its definition corresponds to the Profit measure except for
amortization expenses of intangible assets acquired in business
combinations which are not part of Profit, however, the related
intangible assets are included in the segments' Assets. Segment
Assets is based on Total assets of the Consolidated Statements
of Financial Position, primarily excluding intragroup financing
receivables, tax related assets and assets of discontinued opera-
tions, since the corresponding positions are excluded from Profit.
Assets of Mobility include the project-specific intercompany
financing of a long-term project. The remaining assets are re-
duced by non-interest-bearing liabilities other than tax related
liabilities, e.g. trade payables, to derive Assets. In contrast, Assets
of SFS is Total assets.
Asset measurement principles:
Profit of the segment SFS is Income before income taxes. In con-
trast to performance measurement principles applied to other
segments, interest income and expenses is an important source
of revenue and expense of SFS.
Profit of the segment SFS:
ments.
performance. This may also be the case for items that refer to
more than one reportable segment, SRE and (or) Centrally man-
aged portfolio activities or have a corporate or central character.
Costs for support functions are primarily allocated to the seg-
Consolidated Financial Statements 97
Amortization expenses of intangible assets acquired in business
combinations are not part of Profit. Furthermore, income taxes
are excluded from Profit since income tax is subject to legal
structures, which typically do not correspond to the structure of
the segments. The effect of certain litigation and compliance
issues is excluded from Profit, if such items are not indicative of
Decisions on essential pension items are made centrally. Accord-
ingly, Profit primarily includes amounts related to service cost of
pension plans only, while all other regularly recurring pension
related costs are included in reconciliations in line item Centrally
carried pension expense.
Financing interest, excluded from Profit, is any interest income or
expense other than interest income related to receivables from
customers, from cash allocated to the segments and interest ex-
penses on payables to suppliers. Financing interest is excluded
from Profit because decision-making regarding financing is typi-
cally made at the corporate level.
earnings before financing interest, certain pension costs, income
taxes and amortization expenses of intangible assets acquired in
business combinations as determined by the chief operating de-
cision maker (Profit). The major categories of items excluded
from Profit are presented below.
Siemens' Managing Board is responsible for assessing the perfor-
Imance of the segments (chief operating decision maker). The
Company's profitability measure of the segments except for SFS is
Profit
Accounting policies for Segment information are generally the
same as those used for the Consolidated Financial Statements.
Lease transactions, however, are classified as operating leases for
internal and segment reporting purposes. Intersegment transac-
tions are based on market prices.
SEGMENTS
MEASUREMENT
Eliminations, Corporate Treasury and other reconciling
items - comprise consolidation of transactions within the seg-
ments, certain reconciliation and reclassification items and the
activities of the Company's Corporate Treasury. It also includes
interest income and expense, such as, for example, interest not
allocated to segments or Centrally managed portfolio activities
(referred to as financing interest), interest related to Corporate
Treasury activities or resulting consolidation and reconciliation
effects on interest.
Pensions - includes the Company's pension related income (ex-
pense) not allocated to the segments, SRE or Centrally managed
portfolio activities.
2,549
2,764
1,897
2,135
341
357
471
597
(3,346)
4,984
120,348
1,048
OFFSETTING
76,978
Trade payables
23
56
30
107
8,006
31
6
5
Other financial liabilities
Derivative financial liabilities
Credit guarantees¹
1,264
118
Obligations under
finance leases
84
768
277
526
177
799
Irrevocable loan commitments²
3,068
184
125
11
1 Based on the maximum amounts Siemens could be required to settle in the event of default
by the primary debtor.
2 A considerable portion result from asset-based lending transactions meaning that the respective
loans can only be drawn after sufficient collateral has been provided by the borrower.
25
CREDIT RISK
50
22
LIQUIDITY RISK
Liquidity risk results from the Company's inability to meet its finan-
cial liabilities. Siemens follows a deliberated financing policy that
is aimed towards a balanced financing portfolio, a diversified
maturity profile and a comfortable liquidity cushion. Siemens
mitigates liquidity risk by the implementation of an effective
working capital and cash management, arranged credit facilities
with highly rated financial institutions, via a debt issuance pro-
gram and via a global multi-currency commercial paper program.
Liquidity risk may also be mitigated by the Siemens Bank GmbH,
which increases the flexibility of depositing cash or refinancing.
In addition, Siemens constantly monitors funding options avail-
able in the capital markets, as well as trends in the availability
and costs of such funding, with a view to maintaining financial
flexibility and limiting repayment risks.
The following table reflects the contractually fixed pay-offs for
settlement, repayments and interest. The disclosed expected
undiscounted net cash outflows from derivative financial liabilities
are determined based on each particular settlement date of an
instrument and based on the earliest date on which Siemens
could be required to pay. Cash outflows for financial liabilities
(including interest) without fixed amount or timing are based on
the conditions existing at September 30, 2016.
(in millions of €)
Fiscal year
2022
2019
2017
2018
to
2021
15
and
there-
after
Notes and bonds
5,793
4,271
9,585
15,570
Loans from banks
Other financial
414
89
941
6
indebtedness
818
Non-derivative financial
liabilities
These investments are monitored based on their current market
value, affected primarily by fluctuations in the volatile technol-
ogy-related markets worldwide. As of September 30, 2016 and
2015 the market value of Siemens' portfolio in publicly traded
companies was €2,169 million compared to €1,814 million in the
prior year. As of September 30, 2016 and 2015, the VaR relating
to the equity price was €227 and €189 million. The increases in
the market value and of the VaR were due mainly to higher mar-
ket values of our stakes in OSRAM and Atos.
Credit risk is defined as an unexpected loss in financial instru-
ments if the contractual partner is failing to discharge its obliga-
tions in full and on time or if the value of collateral declines.
The effective monitoring and controlling of credit risk through
credit evaluations and ratings is a core competency of our risk
management system. In this context, Siemens has implemented
a binding credit policy for all entities.
Settled
Non-vested, end of period
2,044,213
(834,605)
(1,029,991)
(57,437)
6,171,430
(159,754)
(305,951)
6,049,250
SHARE MATCHING PROGRAM
AND ITS UNDERLYING PLANS
In fiscal 2016, Siemens issued a new tranche under each of the
plans of the Share Matching Program.
Share Matching Plan
Under the Share Matching Plan senior managers may invest a
specified part of their variable compensation in Siemens shares
(investment shares). The shares are purchased at the market
price at a predetermined date in the second quarter. Plan partic-
ipants receive the right to one Siemens share without payment
of consideration (matching share) for every three investment
shares continuously held over a period of about three years (vest-
ing period) provided the plan participant has been continuously
employed by Siemens until the end of the vesting period.
Monthly Investment Plan
Under the Monthly Investment Plan employees other than senior
managers may invest a specified part of their compensation in
Siemens shares on a monthly basis over a period of twelve
months. Shares are purchased at market price at a predetermined
date once a month. If the Managing Board decides that shares
acquired under the Monthly Investment Plan are transferred to the
Share Matching Plan, plan participants will receive the right to
matching shares under the same conditions applying to the Share
Matching Plan described above with a vesting period of about two
years since fiscal 2016 (previously about three years). The Manag-
ing Board decided that shares acquired under the tranches issued
in fiscal 2015 and 2014 are transferred to the Share Matching Plan
as of February 2016 and February 2015, respectively.
Base Share Program
Forfeited
Under the Base Share Program employees of Siemens AG and par-
ticipating domestic Siemens companies may invest a fixed amount
of their compensation in Siemens shares, sponsored by Siemens.
The shares are bought at market price at a predetermined date in
the second quarter and grant the right to receive matching shares
under the same conditions applying to the Share Matching Plan
described above. The fair value of the Base Share Program amounted
to €35 million and €33 million in fiscal 2016 and 2015, respectively.
94
94
Consolidated Financial Statements
2016
Fiscal year
2015
Outstanding, beginning of period
1,655,780
Granted
Vested and fulfilled
1,750,176
785,000
610,771
(538,837) (548,947)
Forfeited
Settled
Resulting Matching Shares
Siemens provides its customers with various forms of direct and
indirect financing particularly in connection with large projects.
Hence, credit risks arise are determined by the solvency of the
debtors, the recoverability of the collaterals and the global eco-
nomic development.
Vested and fulfilled
6,049,250
Ratings, defined and analyzed by SFS, and individually defined
credit limits are based on generally accepted rating method-
ologies, with the input consisting of information obtained from
the customer, external rating agencies, data service providers
and Siemens' credit default experiences. Ratings and credit limits
for financial institutions as well as Siemens' public and private
customers, which are determined by internal risk assessment
22
92
Consolidated Financial Statements
specialists, are continuously updated and considered by invest-
ments in cash and cash equivalents, and in determining the con-
ditions under which direct or indirect financing will be offered to
customers.
reflect losses incurred within the respective portfolios. When sub-
stantial expected payment delays become evident, overdue
financial instruments are assessed individually for additional
impairment and are further allowed for as appropriate.
For analysis and monitoring of the credit risk the Company
applies different systems and processes. A central IT application
processes data from the operating units together with rating
and default information and calculates an estimate which may
be used as a basis for individual bad debt provisions. In addition
to this automated process, qualitative information is considered,
in particular to incorporate the latest developments.
Corporate Treasury has established the Siemens Credit Ware-
house to which numerous operating units from the Siemens
Group regularly transfer business partner data as a basis for a
centralized rating process. Furthermore, the Siemens Credit
Warehouse purchases trade receivables from numerous operat-
ing units with a remaining term up to one year. Due to the iden-
tification, quantification and active management of the credit
risk the Siemens Credit Warehouse increases the transparency
with regard to credit risk. In addition, the Siemens Credit Ware-
house may provide Siemens with an additional source of liquidity
and strengthens Siemens' funding flexibility.
The maximum exposure to credit risk of financial assets, without
taking account of any collateral, is represented by their carrying
amount. As of September 30, 2016 and 2015 the collateral for
financial instruments classified as financial assets measured at
fair value in the form of netting agreements for derivatives in the
event of insolvency of the respective counterparty amounted to
€994 million and €1,065 million, respectively. As of Septem-
ber 30, 2016 and 2015 the collateral held for financial instru-
ments classified as receivables from finance leases amounted to
€1,949 million and €2,003 million, respectively, mainly in the
form of the leased equipment. As of September 30, 2016 and
2015 the collateral held for financial instruments classified as fi-
nancial assets measured at cost or amortized cost amounted to
€3,590 million and €3,165 million, respectively. The collateral
mainly consisted of property, plant and equipment. Credit risks
arising from irrevocable loan commitments are equal to the ex-
pected future pay-offs resulting from these commitments. As of
September 30, 2016 and 2015 the collateral held for these com-
mitments amounted to €1,177 million and €1,445 million, respec-
tively, mainly in the form of inventories and receivables.
Concerning trade receivables and other receivables, as well as
loans or receivables included in line item Other financial assets
that are neither impaired nor past due, there were no indications
that defaults in payment obligations will occur, which lead to
a decrease in the net assets of Siemens. Overdue financial instru-
ments are generally impaired on a portfolio basis in order to
NOTE 25 Share-based payment
Share-based payment awards may be settled in newly issued
shares of capital stock of Siemens AG, in treasury shares or in
cash. Share-based payment awards may forfeit if the employ-
ment of the beneficiary terminates prior to the expiration of the
vesting period. Total pretax expense for share-based payment
amounted to €332 million and €203 million for the years ended
September 30, 2016 and 2015, respectively, and refers primarily
to equity-settled awards.
Granted
STOCK AWARDS
Stock awards are tied to performance criteria. The annual target
amount for stock awards can be bound to the average of earnings
per share (EPS, basic) of the past three fiscal years and/or to the
share price performance of Siemens relative to the share price
performance of five important competitors during the four-year
restriction period. The target attainment for the performance
criteria ranges between 0% and 200%. If the target attainment
of the prospective performance-based target of Siemens stock
relative to five competitors exceeds 100%, an additional cash pay-
ment results corresponding to the outperformance. The vesting
period is four years and five years for stock awards granted to
members of the Managing Board until fiscal 2014.
Until fiscal 2014, additionally one portion of the variable compen-
sation component (bonus) for members of the Managing Board
was granted in the form of non-forfeitable awards of Siemens
stock (Bonus Awards) subject to a vesting period of one year.
Beneficiaries will receive one Siemens share without payment of
consideration for each Bonus Award, following an additional
waiting period of four years.
Commitments to members of the Managing Board
In fiscal 2016 and 2015, agreements were entered into which en-
title members of the Managing Board to stock awards contingent
upon attaining the prospective performance-based target of
Siemens stock relative to five competitors. The fair value of these
entitlements amounting to €9 million and €9 million, respectively,
in fiscal 2016 and 2015, was calculated by applying a valuation
Consolidated Financial Statements 93
model. In fiscal 2016 and 2015, inputs to that model include an
expected weighted volatility of Siemens shares of 22% and 22%,
respectively, and a market price of €92.86 and €88.03 per
Siemens share. Expected volatility was determined by reference
to historic volatilities. The model applies a risk-free interest rate
of up to 0.1% and 0.3% in fiscal 2016 and 2015, respectively and
an expected dividend yield of 3.8% in fiscal 2016 and 2015. As-
sumptions concerning share price correlations were determined
by reference to historic correlations.
Commitments to members of the senior
management and other eligible employees
In fiscal 2016 and 2015, 2,044,213 and 1,162,028 stock awards,
respectively, were granted contingent upon attaining the pro-
spective performance-based target of Siemens stock relative to
five competitors. The fair value of equity-settled stock awards
amounting to €117 million and €57 million, respectively, in fiscal
2016 and 2015, was calculated by applying a valuation model. In
fiscal 2016 and 2015, inputs to that model include an expected
weighted volatility of Siemens shares of 22% and 22%, respec-
tively, and a market price of €92.86 and €88.03 per Siemens
share. Expected volatility was determined by reference to historic
volatilities. The model applies a risk-free interest rate of up to
0.1% in fiscal 2016 and up to 0.3% in fiscal 2015 and an expected
dividend yield of 3.8% in fiscal 2016 and 3.8% in fiscal 2015. As-
sumptions concerning share price correlations were determined
by reference to historic correlations.
Changes in the stock awards held by members of the senior man-
agement and other eligible employees are:
4,985,998
1,528,957
2016
Fiscal year
2015
Non-vested, beginning of period
The Company grants stock awards to members of the Managing
Board, members of the senior management and other eligible em-
ployees. Stock awards are subject to a restriction period of about
four years and entitle the beneficiary to Siemens shares without
payment of consideration following the restriction period.
(95,658)
(38,304)
Siemens' investment portfolio consists of direct and indirect in-
vestments in publicly traded companies held for purposes other
than trading. The direct participations result mainly from strate-
gic partnerships, strengthening Siemens' focus on its core busi-
ness activities or compensation from merger and acquisitions
transactions; indirect investments in fund shares are mainly
transacted for financial reasons.
As of September 30, 2016 and 2015 the VaR relating to the inter-
est rate was €485 million and €500 million.
Net amounts
off in the
Statement of
in the
Statement of
Financial
Position
Related
amounts not
set off in the
Statement of
Financial
Position
Net
amounts
2,678
10
2,668
Financial liabilities - Derivative financial liabilities
1,885
Amounts set
11
1,065
1,032
1,604
843
NOTE 23 Derivative financial
instruments and hedging activities
Fair values of each type of derivative financial instruments recorded
as financial assets or financial liabilities are:
570
880
713
1,297
(in millions of €)
Asset
1,874
Sep 30, 2016
Liability
Position
Financial assets
979
(in millions of €)
Financial assets
Financial liabilities - Derivative financial liabilities
Sep 30, 2016
Amounts set
off in the
Statement of
Gross
Financial
amounts
Position
Net amounts
in the
Statement of
Financial
Position
Related
amounts not
set off in the
Statement of
amounts
Financial
Position
2,641
1,440
7
2,634
994
6
1,433
838
amounts
1,640
595
Sep 30, 2015
Gross
Financial
(in millions of €)
Net
EQUITY PRICE RISK
Asset
Foreign currency
INTEREST RATE RISK MANAGEMENT
Derivative financial instruments not designated
in a hedging relationship
Interest rate risk management relating to the Group, excluding
SFS' business, uses derivative financial instruments under a port-
folio-based approach to manage interest risk actively relative to
a benchmark. The interest rate management relating to the SFS
business remains to be managed separately, considering the
term structure of SFS' financial assets and liabilities on a portfolio
basis. Neither approach qualifies for hedge accounting treat-
ment. Net cash receipts and payments in connection with inter-
est rate swap agreements are recorded as interest expense in
Other financial income (expenses), net.
Cash flow hedges of floating-rate commercial
papers
Since fiscal 2015, Siemens applies cash flow hedge accounting to
a revolving portfolio of floating-rate commercial papers of nom-
inal US$700 million. To benefit from low interest rates in the USA,
Siemens pays a fixed rate of interest and receives a variable rate
of interest, offsetting future changes in interest payments of the
underlying floating-rate commercial papers. Net cash receipts
and payments are recorded as interest expenses.
Fair value hedges of fixed-rate debt obligations
Under the interest rate swap agreements outstanding during the
years ended September 30, 2016 and 2015, the Company has
agreed to pay a variable rate of interest multiplied by a notional
principle amount, and to receive in return an amount equal to a
specified fixed rate of interest multiplied by the same notional
principal amount. These interest rate swap agreements offset an
impact of future changes in interest rates designated as the
hedged risk on the fair value of the underlying fixed-rate debt
obligations. Carrying amount adjustments to debt for fair value
changes attributable to the respective interest rate risk being
hedged are included in Other financial income (expenses),
net resulted in a gain (loss) of €149 million and €103 million,
respectively, in fiscal 2016 and 2015; the related swap agreements
resulted in a gain (loss) of €(152) million and €(135) million,
respectively. Net cash receipts and payments relating to such
interest rate swap agreements are recorded as interest expenses.
The Company had interest rate swap contracts to pay variable
rates of interest of an average of (0.2)% and 0.1% as of Septem-
ber 30, 2016 and 2015, respectively and received fixed rates of
interest (average rate of 3.3% and 4.3%, as of September 30,
2016 and 2015, respectively). The notional amount of indebted-
ness hedged as of September 30, 2016 and 2015 was €3,650 mil-
lion and €6,012 million, respectively. This changed 14% and 26%
of the Company's underlying notes and bonds from fixed interest
rates into variable interest rates as of September 30, 2016 and
2015, respectively. The notional amounts of these contracts ma-
ture at varying dates based on the maturity of the underlying
hedged items. The net fair value of interest rate swap contracts
(excluding accrued interest) used to hedge indebtedness as of
September 30, 2016 and 2015 was €93 million and €242 million,
respectively.
NOTE 24 Financial risk management
Increasing market fluctuations may result in significant earnings
and cash flow volatility risk for Siemens. The Company's operat-
ing business as well as its investment and financing activities are
affected particularly by changes in foreign exchange rates, inter-
est rates and equity prices. In order to optimize the allocation of
the financial resources across the Siemens segments and entities,
as well as to achieve its aims, Siemens identifies, analyzes and
manages the associated market risks. The Company seeks to
manage and control these risks primarily through its regular op-
erating and financing activities, and uses derivative financial in-
struments when deemed appropriate.
90 Consolidated Financial Statements
In order to quantify market risks Siemens has implemented a sys-
tem based on parametric variance-covariance Value at Risk (VAR),
which is also used for internal management of the Corporate
Treasury activities. The VaR figures are calculated based on his-
torical volatilities and correlations of various risk factors, a ten
day holding period, and a 99.5% confidence level.
Actual results that are included in the Consolidated Statements
of Income or Consolidated Statements of Comprehensive Income
may differ substantially from VaR figures due to fundamental
conceptual differences. While the Consolidated Statements of
Income and Consolidated Statements of Comprehensive Income
are prepared in accordance with IFRS, the VaR figures are the
output of a model with a purely financial perspective and repre-
sent the potential financial loss which will not be exceeded
within ten days with a probability of 99.5%. Although VaR is an
important tool for measuring market risk, the assumptions on
which the model is based give rise to some limitations including
the following. A ten day holding period assumes that it is possible
to dispose of the underlying positions within this period. This
may not be valid during continuing periods of illiquidity markets.
A 99.5% confidence level means, that there is a 0.5% statistical
probability that losses could exceed the calculated VaR. The use
of historical data as a basis for estimating the statistic behavior
of the relevant markets and finally determining the possible
range of the future outcomes on the basis of this statistic behav-
ior may not always cover all possible scenarios, especially those
of an exceptional nature.
Any market sensitive instruments, including equity and inter-
est bearing investments, that our Company's pension plans
hold are not included in the following quantitative and quali-
tative disclosures.
30
FOREIGN CURRENCY EXCHANGE RATE RISK
Transaction risk
Operating units (Industrial business and SFS) are prohibited
from borrowing or investing in foreign currencies on a specula-
tive basis. Intercompany financing or investments of operating
units are preferably carried out in their functional currency or on
a hedged basis.
According to the company policy each Siemens unit is responsi-
ble for recording, assessing and monitoring its foreign currency
transaction exposure. The net foreign currency position of each
unit serves as a central performance measure and has to be
hedged within a band of at least 75% but no more than 100%.
Generally, the operating units conclude their hedging activities
internally with Corporate Treasury. By applying a cost-optimizing
portfolio approach Corporate Treasury itself hedges foreign cur-
rency exchange rate risks with external counterparties and limits
them Company-wide.
As of September 30, 2016 and 2015 the VaR relating to foreign
currency exchange rates was €86 million and €179 million. This
VaR was calculated under consideration of items of the Consoli-
dated Statement of Financial Position in addition to firm commit-
ments which are denominated in foreign currencies, as well as
foreign currency denominated cash flows from forecast transac-
tions for the following twelve months. A lower volatility between
the U.S. dollar and the euro in comparison to the prior year re-
sulted in a decrease of the VaR.
Translation risk
Many Siemens units are located outside the euro zone. Since the
financial reporting currency of Siemens is the euro, the financial
statements of these subsidiaries are translated into euro for the
preparation of the Consolidated Financial Statements. To con-
sider the effects of foreign currency translation in the risk man-
agement, the general assumption is that investments in for-
eign-based operations are permanent and that reinvestment is
continuous. Effects from foreign currency exchange rate fluctu-
ations on the translation of net asset amounts into euro are re-
flected in the Company's consolidated equity position.
INTEREST RATE RISK
Interest rate risk is the risk that the fair value or future cash flows
of a financial instrument will fluctuate because of changes in
market interest rates. This risk arises whenever interest terms of
financial assets and liabilities are different. In order to manage
the Company's position with regard to interest rate risk, interest
income and interest expenses, Corporate Treasury performs a
comprehensive corporate interest rate risk management by using
fixed or variable interest rates from bond issuances and deriva-
tive financial instruments when appropriate. The interest rate risk
relating to the Group, excluding SFS' business, is mitigated by
managing interest rate risk actively relatively to a benchmark.
The interest rate risk relating to the SFS' business is managed
Consolidated Financial Statements 91
separately, considering the term structure of SFS's financial
assets and liabilities. The Company's interest rate risk results
primarily from the funding in U.S. dollar, British pound and euro.
If there are no conflicting country-specific regulations, all Siemens
operating units generally obtain any required financing through
Corporate Treasury in the form of loans or intercompany clearing
accounts. The same concept is adopted for deposits of cash gen-
erated by the units.
Each Siemens unit conducting businesses with international
counterparties leading to future cash flows denominated in a
currency other than its functional currency is exposed to risks
from changes in foreign currency exchange rates. In the ordinary
course of business Siemens units are exposed to foreign currency
exchange rate fluctuations, particularly between the U.S. dollar
and the euro. Foreign currency exchange rate exposure is partly
balanced by purchasing of goods, commodities and services in
the respective currencies as well as production activities and
other contributions along the value chain in the local markets.
Sep 30, 2015
Liability
67
(22)
exchange contracts
Interest rate swaps
and combined interest
and currency swaps
Other (embedded
derivatives, options,
commodity swaps)
491
1,824
381
596
3,051
129
1,500
691
3,228
241
1,919
FOREIGN CURRENCY EXCHANGE RATE
RISK MANAGEMENT
6
Derivative financial instruments
Consolidated Financial Statements 89
Cash flow hedges
The Company's operating units apply hedge accounting for cer-
tain significant forecast transactions and firm commitments de-
nominated in foreign currencies. Particularly, the Company has
entered into foreign currency exchange contracts to reduce the
risk of variability of future cash flows resulting from forecast sales
and purchases as well as firm commitments. This risk results
mainly from contracts denominated in US$ both from Siemens'
operating units entering into long-term contracts e.g. project
business and from standard product business.
Periods in which the hedged forecast transactions or the firm
commitments denominated in foreign currency are expected to
impact profit or loss:
(in millions of €)
2017
2018
2019
to
2021
Expected gain (loss) to be
reclassified from line item
Other comprehensive income,
net of income taxes into
revenue or cost of sales
Fiscal year
2022
and
there-
after
not designated in a hedging relationship
The Company manages its risks associated with fluctuations in
foreign currency denominated receivables, payables, debt, firm
commitments and forecast transactions primarily through a
Company-wide portfolio approach. Under this approach the
Company-wide risks are aggregated centrally, and various deriv-
ative financial instruments, primarily foreign currency exchange
contracts, foreign currency swaps and options, are utilized to
minimize such risks. Such a strategy does not qualify for hedge
accounting treatment. The Company also accounts for foreign
currency derivatives, which are embedded in sale and purchase
contracts.
(85,056)
1,885
Outstanding, end of period
5,660
Energy Management
12,963
12,956
11,238
11,344
702
578
11,940
5,976
11,922
6,435
6,099
5,982
5,860
174
139
6,156
5,999
Mobility
Building Technologies
2
2
5,658
2016
2015
2016
2015
2016
2015
2016
2015
Power and Gas
19,454
15,742
16,412
13,330
58
88
16,471
13,418
Wind Power and Renewables
7,973
6,136
5,974
7,875
(in millions of €)
10,262
7,477
12,896
38
35
13,535
12,930
Industrial Business
87,802
83,723
77,573
13,497
73,481
Financial Services (SFS)
979
1,048
824
855
154
3,497
193
(71,164)
81,112
3,539
13,349
13,830
Healthineers
31
7,825
7,508
Digital Factory
10,332
10,036
9,390
9,140
781
847
10,172
9,988
Process Industries and Drives
8,939
9,144
7,285
7,777
1,753
1,777
9,038
9,553
7,794
Fiscal year
31
Fiscal year
349
345
349
349
NOTE 27
Earnings per share
(shares in thousands; earnings per share in €)
Income from continuing operations
Less: Portion attributable to
non-controlling interest
Fiscal year
2016
5,396
5,349
(134)
(98)
Income from continuing operations
attributable to shareholders of Siemens AG
Weighted average shares outstanding - basic
Effect of dilutive share-based payment
5,262
5,251
808,686
(from continuing operations)
Fiscal year
Diluted earnings per share
6.38
6.51
(from continuing operations)
35
Basic earnings per share
819,914
Weighted average shares outstanding - diluted
NOTE 26 Personnel costs
9,425
11,228
823,408
832,832
35
34
35
Fiscal year
operations
operations
discontinued
Continuing
Continuing and
Fiscal year
(in thousands)
JUBILEE SHARE PROGRAM
The Managing Board decides annually on the issuance of a new
Siemens Profit Sharing tranche and determines the targets to be
met for the current fiscal year. At fiscal year-end, based on the
actual target achievement, the Managing Board decides in its
discretion on the amount to be transferred to the Profit-Shar-
ing-Pool; this transfer is limited to a maximum of €400 million
annually. If the Pool amounts to a minimum of €400 million after
one or more fiscal years, it will be transferred to eligible employ-
ees below senior management in full or partially through the
grant of free Siemens shares. As of September 30, 2016,
€200 million are in the Profit-Sharing-Pool. Expense is recognized
pro rata over the estimated vesting period.
SIEMENS PROFIT SHARING
The weighted average fair value of matching shares granted in
fiscal 2016 and 2015 amounting to €64.56 and €69.43 per share
was determined as the market price of Siemens shares less the
present value of expected dividends taking into account non-vest-
ing conditions.
Fiscal year
1,655,780
For their 25th and 40th service anniversary eligible employees re-
ceive jubilee shares. There were 4.39 million and 4.46 million
entitlements to jubilee shares outstanding as of September 30,
2016 and 2015, respectively.
6.42
2016
2016
33
33
32
33
68
65
2015
67
214
216
212
216
Manufacturing and services
Sales and marketing
Research and development
Administration
and general services
2015
65
6.30
2015
2016
3,562
3,404
Expenses relating to
post-employment benefits
1,218
28,210
(in millions of €)
Severance charges amount to €598 million and €804 million
(thereof at segment Process Industries and Drives €254 million
and €74 million) in fiscal 2016 and 2015, respectively. Item
Expenses relating to post-employment benefits includes service
costs for the period. Personnel costs for continuing and discon-
tinued operations amount to €28,232 million and €27,584 million,
respectively, in fiscal 2016 and 2015. Employees were engaged
in (averages; part time employees are included proportionally):
The dilutive earnings per share computation in fiscal 2016 and
2015 does not contain 22,8 million and 22,7 million shares, re-
spectively, relating to warrants issued with bonds. The inclusion
of those shares would have been antidilutive in the years pre-
sented. In the future, the warrants could potentially dilute basic
earnings per share.
Consolidated Financial Statements 95
NOTE 28
Segment information
Orders¹
External revenue
Intersegment Revenue
Total revenue
Fiscal year
and expenses for optional support
1,767,980
1,163
27,177
23,431
2015
22,611
Statutory social welfare contributions
Wages and salaries
Luxembourg/Luxembourg
100
Siemens Limited, Dublin/Ireland
100
100
Siemens Plant Operations Tahaddart SARL, Tangier/Morocco
Siemens S.A., Casablanca/Morocco
100
Swords, County Dublin/Ireland
Siemens Healthcare Medical Solutions Limited,
1008
97
97
Siemens Wind Power Blades, SARL AU, Tangier/Morocco
Teheran/Iran, Islamic Republic of
100
Casablanca/Morocco
SCIENTIFIC MEDICAL SOLUTION DIAGNOSTICS S.A.R.L.,
100
100
Siemens Healthcare SARL, Casablanca/Morocco
100
Siemens Concentrated Solar Power Ltd., Rosh HaAyin/Israel
100
100
Airport City/Israel
100
Dresser-Rand B.V., Spijkenisse/Netherlands
Siemens Product Lifecycle Management Software 2 (IL) Ltd.,
100
Amsterdam/Netherlands
1008
Siemens Israel Projects Ltd., Rosh HaAyin/Israel
D-R International Holdings (Netherlands) B.V.,
Guascor Maroc, S.A.R.L., Agadir/Morocco
100
100
Castor III B.V., Amsterdam/Netherlands
100
Siemens Industry Software Ltd., Airport City/Israel
100
Siemens Pty. Ltd., Windhoek/Namibia
100
Siemens HealthCare Ltd., Rosh HaAyin/Israel
100
Siemens Lda., Maputo/Mozambique
Siemens Israel Ltd., Rosh HaAyin/Israel
100
Siemens Zrt., Budapest/Hungary
100
100
Siemens Lease Services SAS, Saint-Denis/France
100
100
Siemens Electrical & Electronic Services K.S.C.C.,
Kuwait City/Kuwait
492
SIEMENS Postal Parcel Airport Logistics SAS, Paris/France
100
Siemens SAS, Saint-Denis/France
100
Trench France SAS, Saint-Louis/France
100
Siemens Oil & Gas Equipment Limited, Accra/Ghana
90
D-R Luxembourg Holding 1, SARL, Luxembourg/Luxembourg
D-R Luxembourg Holding 2, SARL, Luxembourg/Luxembourg
D-R Luxembourg Holding 3, SARL, Luxembourg/Luxembourg
D-R Luxembourg International SARL,
100
100
Dresser-Rand International B.V., Spijkenisse/Netherlands
100
100
Siemens A.E., Elektrotechnische Projekte und Erzeugnisse,
Athens/Greece
Siemens Industry Software SAS, Châtillon/France
Siemens Sherkate Sahami (Khass),
100
100
Siemens Healthcare Kft., Budapest/Hungary
100
Siemens d.o.o., Podgorica/Montenegro
Budapest/Hungary
100
TFM International S.A. i.L., Luxembourg/Luxembourg
evosoft Hungary Szamitastechnikai Kft.,
100
Luxembourg/Luxembourg
100
Dresser-Rand Holding (Delaware) LLC, SARL,
Siemens Healthcare Industrial and Commercial Société
Anonyme, Athens/Greece
100
D-R Luxembourg Partners 1 SCS, Luxembourg/Luxembourg
in %
Siemens Financial Services SAS, Saint-Denis/France
Siemens France Holding SAS, Saint-Denis/France
Siemens Healthcare SAS, Saint-Denis/France
100
Siemens Healthcare Limited Liability Partnership,
100
Almaty/Kazakhstan
100
Siemens TOO, Almaty/Kazakhstan
100
8 Not consolidated due to immateriality.
100
000 Legion II, Moscow/Russian Federation
Siemens Gas Turbine Technologies Holding B.V.,
100
"Dresser-Rand", Moscow/Russian Federation
100
The Hague/Netherlands
Obschestwo s ogranitschennoj Otwetstwennostju (in parts)
Siemens Financieringsmaatschappij N.V.,
100
SIMEA SIBIU S. R.L., Sibiu/Romania
100
Siemens Finance B.V., The Hague/Netherlands
100
Siemens S.R.L., Bucharest/Romania
100
Siemens D-R Holding B.V., The Hague/Netherlands
in %
September 30, 2016
in %
September 30, 2016
Equity interest
100
September 30, 2016
The Hague/Netherlands
000 Siemens, Moscow/Russian Federation
Siemens Nederland N.V., The Hague/Netherlands
100
Moscow/Russian Federation
100
The Hague/Netherlands
000 Siemens Industry Software,
Siemens Medical Solutions Diagnostics Holding I B.V.,
100
Oblast/Russian Federation
100
Siemens International Holding B.V., The Hague/Netherlands
000 Siemens Gas Turbine Technologies, Leningrad
100
's-Hertogenbosch/Netherlands
100
St. Petersburg/Russian Federation
Siemens Industry Software B.V.,
000 Siemens Elektroprivod,
100
Siemens Healthcare Nederland B.V., The Hague/Netherlands
100
65
Equity interest
105
Consolidated Financial Statements
100
100
Ellessrob 5-VII B.V., Amsterdam/Netherlands
NEM Energy B.V., The Hague/Netherlands
100
Siemens Postal, Parcel & Airport Logistics S.r.I., Milan/Italy
100
Siemens Industry Software S.r.I., Milan/Italy
100
Ellessrob 5-VI B.V., Amsterdam/Netherlands
100
Siemens Healthcare S.r.I., Milan/Italy
100
Ellessrob 3-VIII B.V., Amsterdam/Netherlands
100
Samtech Italia S.r.I., Milan/Italy
100
Ellessrob 20-V B.V., Amsterdam/Netherlands
100
Dresser-Rand Italia S.r.I., Tribogna/Italy
100
Dresser-Rand Services B.V., Spijkenisse/Netherlands
Siemens Renting s.r.l. in Liquidazione, Milan/Italy
100
next47 B.V., The Hague/Netherlands
1008
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances
6 No significant influence due to contractual arrangements or legal circumstances.
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
UGS Israeli Holdings (Israel) Ltd., Airport City/Israel
100
100
Trench Italia S.r.I., Savona/Italy
100
Pollux III B.V., Amsterdam/Netherlands
100
Siemens Transformers S.p.A., Trento/Italy
100
Omnetric B.V., The Hague/Netherlands
100
Siemens S.p.A., Milan/Italy
Siemens Diagnostics Holding II B.V., The Hague/Netherlands
in %
Priamos Grundstücksgesellschaft m.b.H., Vienna/Austria
Siemens Aktiengesellschaft Österreich, Vienna/Austria
Siemens Convergence Creators GmbH, Eisenstadt/Austria
Siemens Convergence Creators GmbH, Vienna/Austria
Equity interest
Siemens Healthcare SA/NV, Beersel/Belgium
Europe, Commonwealth of Independent States
(C.I.S.), Africa, Middle East (without Germany)
(310 companies)
in %
September 30, 2016
in %
September 30, 2016
Equity interest
Equity interest
103
Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances
6 No significant influence due to contractual arrangements or legal circumstances.
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
100
10011
100
Siemens Industry Software NV, Leuven/Belgium
ESTEL Rail Automation SPA, Algiers/Algeria
Koncar-Energetski Transformatori, d.o.o., Zagreb/Croatia
69
100
Siemens Healthcare EOOD, Sofia/Bulgaria
ITH icoserve technology for healthcare GmbH,
Innsbruck/Austria
100
100
100
Siemens d.o.o. Sarajevo, Sarajevo/Bosnia and Herzegovina
Siemens Medicina d.o.o, Sarajevo/Bosnia and Herzegovina
Siemens EOOD, Sofia/Bulgaria
100
Hochquellstrom-Vertriebs GmbH, Vienna/Austria
100
ETM professional control GmbH, Eisenstadt/Austria
51
Siemens S.A., Luanda/Angola
100
Siemens S.A./N.V., Beersel/Belgium
100
Siemens Product Lifecycle Management Software II (BE)
BVBA, Anderlecht/Belgium
51
100
Siemens Spa, Algiers/Algeria
100
51
Weiss Spindeltechnologie GmbH, Maroldsweisach
VVK Versicherungsvermittlungs- und Verkehrskontor GmbH,
Munich
Siemens Postal, Parcel & Airport Logistics GmbH, Constance
10011
Trench Germany GmbH, Bamberg
10011
Siemens Power Control GmbH, Langen
10011
Siemens Private Finance Versicherungsvermittlungs-
Verwaltung SeaRenergy Offshore Projects GmbH i.L.,
Hamburg
100
gesellschaft mbH, Munich
10011
Siemens Project Ventures GmbH, Erlangen
10011
VIB Verkehrsinformationsagentur Bayern GmbH, Munich
VMZ Berlin Betreibergesellschaft mbH, Berlin
51
100
Siemens Real Estate GmbH & Co. KG, Grünwald
10010
VR-LEASING IKANA GmbH & Co. Immobilien KG, Eschborn
943
Siemens Real Estate Management GmbH, Grünwald
Siemens Spezial-Investmentaktiengesellschaft mit TGV,
Munich
10011
100
SYKATEC Systeme, Komponenten, Anwendungstechnologie
GmbH, Erlangen
Siemens Nixdorf Informationssysteme GmbH, Grünwald
100
10011
SIMAR Nordwest Grundstücks-GmbH, Grünwald
10011
Siemens Insulation Center GmbH & Co. KG, Zwönitz
1008
10010
SIMAR Ost Grundstücks-GmbH, Grünwald
10011
Siemens Insulation Center Verwaltungs-GmbH, Zwönitz
1008
SIMAR Süd Grundstücks-GmbH, Grünwald
10011
Siemens Liquidity One, Munich
100
SIMAR West Grundstücks-GmbH, Grünwald
10011
Siemens Medical Solutions Health Services GmbH,
Grünwald
SIMOS Real Estate GmbH, Munich
10011
100
100
September 30, 2016
KDAG Beteiligungen GmbH, Vienna/Austria
Omnetric GmbH, Vienna/Austria
100
100
Minsk/Belarus
100
D-R Holdings (France) SAS, Le Havre/France
Limited Liability Company Siemens Technologies,
100
CD-adapco France SAS, Bobigny/France
51
Siemens W.L.L., Manama/Bahrain
100
Siemens Osakeyhtiö, Espoo/Finland
100
100
Siemens Healthcare Oy, Espoo/Finland
VVK Versicherungs-Vermittlungs- und Verkehrs-Kontor
GmbH, Vienna/Austria
90
Siemens Technologies S.A.E., Cairo/Egypt
100
100
Siemens Limited for Trading, Cairo/Egypt
52
Dresser-Rand SAS, Le Havre/France
Steiermärkische Medizinarchiv GesmbH, Graz/Austria
Trench Austria GmbH, Leonding/Austria
100
Flender-Graffenstaden SAS, Illkirch-Graffenstaden/France
Equity interest
104 Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances
6 No significant influence due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
5 No control due to contractual arrangements or legal circumstances.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
100
Samtech France SAS, Massy/France
79
Samtech SA, Angleur/Belgium
100
PETNET Solutions SAS, Lisses/France
100
Antwerp/Belgium
100
Dresser-Rand Machinery Repair Belgie N.V.,
100
100
75
Siemens Electric Machines s.r.o., Drasov/Czech Republic
Siemens Healthcare, s.r.o., Prague/Czech Republic
100
Siemens Gebäudemanagement & -Services G.m.b.H.,
Vienna/Austria
100
Prague/Czech Republic
100
100
Polarion Software s.r.o., Prague/Czech Republic
Siemens Convergence Creators, s.r.o.,
Siemens Convergence Creators Holding GmbH,
Vienna/Austria
100
100
100
J. N. Kelly Security Holding Limited, Larnaka/Cyprus
OEZ s.r.o., Letohrad/Czech Republic
100
100
100
Siemens Healthcare d.o.o., Zagreb/Croatia
100
100
100
Siemens Convergence Creators d.o.o., Zagreb/Croatia
Siemens d.d., Zagreb/Croatia
100
Siemens Healthcare S.A.E., Cairo/Egypt
100
100
1008
Siemens Health Care LLC, Cairo/Egypt
100
NEM Energy Egypt LLC, Alexandria/Egypt
100
Siemens Personaldienstleistungen GmbH, Vienna/Austria
Siemens Urban Rail Technologies Holding GmbH,
Vienna/Austria
100
Siemens Wind Power A/S, Brande/Denmark
100
100
Siemens Industry Software A/S, Ballerup/Denmark
100
Siemens Healthcare A/S, Ballerup/Denmark
100
100
Siemens A/S, Ballerup/Denmark
100
100
100
Siemens Industry Software, s.r.o., Prague/Czech Republic
Siemens, s.r.o., Prague/Czech Republic
100
Siemens Healthcare Diagnostics GmbH, Vienna/Austria
Siemens Industry Software GmbH, Linz/Austria
Siemens Konzernbeteiligungen GmbH, Vienna/Austria
Siemens Liegenschaftsverwaltung GmbH, Vienna/Austria
Siemens Metals Technologies Vermögensverwaltungs
GmbH, Vienna/Austria
Termotron Rail Automation Holding B.V.,
100
100
100
Buckinghamshire/United Kingdom
100
Siemens Financial Services Holdings Ltd., Stoke Poges,
SIEMENS HEALTHCARE LIMITED LIABILITY COMPANY,
Kiev/Ukraine
573
SBS Pension Funding (Scotland) Limited Partnership,
Edinburgh/United Kingdom
100
100% foreign owned subsidiary "Siemens Ukraine",
Kiev/Ukraine
in %
September 30, 2016
in %
September 30, 2016
Equity interest
Equity interest
107
Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
Dresser-Rand Field Operations Middle East LLC,
7 Significant influence due to contractual arrangements or legal circumstances
Siemens Financial Services Ltd.,
492
Frimley, Surrey/United Kingdom
492
Siemens LLC, Abu Dhabi/United Arab Emirates
Siemens Healthcare Diagnostics Products Ltd,
492
Siemens Healthcare L.L.C., Dubai/United Arab Emirates
100
Frimley, Surrey/United Kingdom
100
Siemens Healthcare FZ LLC, Dubai/United Arab Emirates
Siemens Healthcare Diagnostics Manufacturing Ltd,
492
SD (Middle East) LLC, Dubai/United Arab Emirates
100
Frimley, Surrey/United Kingdom
100
Dubai/United Arab Emirates
Siemens Healthcare Diagnostics Ltd.,
Gulf Steam Generators L.L.C.,
100
Stoke Poges, Buckinghamshire/United Kingdom
Abu Dhabi/United Arab Emirates
100
6 No significant influence due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
Guascor Wind, S. L., Vitoria-Gasteiz/Spain
100
systransis AG, Risch/Switzerland
100
Guascor Solar S.A., Vitoria-Gasteiz/Spain
100
Siemens Schweiz AG, Zurich/Switzerland
Vitoria-Gasteiz/Spain
100
Siemens Power Holding AG, Zug/Switzerland
Guascor Solar Operacion and Mantenimiento, S.L.,
100
Zurich/Switzerland
100
Guascor Solar Corporation, S.A., Vitoria-Gasteiz/Spain
Siemens Postal, Parcel & Airport Logistics AG,
100
Guascor Servicios, S.A., Madrid/Spain
100
Siemens Industry Software AG, Zurich/Switzerland
1008
100
5 No control due to contractual arrangements or legal circumstances.
Inversiones Analcima 6 S.L., Vitoria-Gasteiz/Spain
Siemens Tanzania Ltd., Dar es Salaam/Tanzania,
United Republic of
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
100
Dresser-Rand Turkmen Company, Ashgabat/Turkmenistan
100
SIEMENS HEALTHCARE, S.L.U., Getafe/Spain
100
100
Siemens Healthcare Saglik Anonim Sirketi, Istanbul/Turkey
Siemens Sanayi ve Ticaret A.S., Istanbul/Turkey
100
Samtech Iberica Engineering & Software Services S.L.,
Barcelona/Spain
100
Siemens Finansal Kiralama A.S., Istanbul/Turkey
100
Microenergía Vasca, S.A., Vitoria-Gasteiz/Spain
100
Siemens S.A., Tunis/Tunisia
1008
Microenergía 21, S.A., Zumaia/Spain
100
100
Guascor Proyectos, S.A., Madrid/Spain
Siemens Middle East Limited,
100
Frimley, Surrey/United Kingdom
100
Frimley, Surrey/United Kingdom
Preactor International Limited,
Siemens Rail Systems Project Holdings Limited,
100
Frimley, Surrey/United Kingdom
100
Frimley, Surrey/United Kingdom
Materials Solutions Limited,
Siemens Rail Automation Limited,
100
Frimley, Surrey/United Kingdom
100
Frimley, Surrey/United Kingdom
Materials Solutions Holdings Limited,
Siemens Rail Automation Holdings Limited,
100
Frimley, Surrey/United Kingdom
Siemens Industry Software GmbH, Cologne
100
100
Frimley, Surrey/United Kingdom
Siemens Rail Systems Project Limited,
Frimley, Surrey/United Kingdom
Consolidated Financial Statements
108
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances
6 No significant influence due to contractual arrangements or legal circumstances.
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
100
Frimley, Surrey/United Kingdom
100
Samtech UK Limited, Frimley, Surrey/United Kingdom
Siemens Transmission & Distribution Limited,
100
Frimley, Surrey/United Kingdom
100
Project Ventures Rail Investments | Limited,
Siemens Healthcare Limited, Frimley, Surrey/United Kingdom
Industrial Turbine Company (UK) Limited,
100
100
D-R Holdings (UK) Ltd., Frimley, Surrey/United Kingdom
Siemens Industry Software Simulation and Test Limited,
100
D-R Dormant Ltd., Frimley, Surrey/United Kingdom
100
Frimley, Surrey/United Kingdom
100
Frimley, Surrey/United Kingdom
Siemens Industry Software Limited,
Computational Dynamics Limited,
100
Frimley, Surrey/United Kingdom
100
Frimley, Surrey/United Kingdom
Siemens Industrial Turbomachinery Ltd.,
CD-adapco New Hampshire Co., Ltd.,
100
Siemens Holdings plc, Frimley, Surrey/United Kingdom
100
Masdar City/United Arab Emirates
Frimley, Surrey/United Kingdom
Siemens Protection Devices Limited,
100
Siemens Pension Funding (General) Limited,
Frimley, Surrey/United Kingdom
100
Frimley, Surrey/United Kingdom
GYM Renewables ONE Limited,
Siemens Postal, Parcel & Airport Logistics Limited,
100
GYM Renewables Limited, Frimley, Surrey/United Kingdom
100
Siemens plc, Frimley, Surrey/United Kingdom
100
Electrium Sales Limited, Frimley, Surrey/United Kingdom
100
Frimley, Surrey/United Kingdom
100
Frimley, Surrey/United Kingdom
Siemens Pension Funding Limited,
Dresser-Rand Company Ltd.,
100
Frimley, Surrey/United Kingdom
100
Frimley, Surrey/United Kingdom
Dresser-Rand (U.K.) Limited,
000 Siemens Transformers, Voronezh/Russian Federation
Siemens Finance LLC, Vladivostok/Russian Federation
100
100
Siemens d.o.o., Ljubljana/Slovenia
402
Siemens W.L.L., Doha/Qatar
100
SIPRIN s.r.o., Bratislava/Slovakia
100
Siemens S.A., Amadora/Portugal
100
Siemens s.r.o., Bratislava/Slovakia
100
Lisbon/Portugal
100
Siemens Healthcare s.r.o., Bratislava/Slovakia
Siemens Postal, Parcel & Airport Logistics, Unipessoal Lda,
100
Siemens Convergence Creators, s. r. o., Bratislava/Slovakia
100
Siemens Healthcare, Lda., Amadora/Portugal
60
SAT Systémy automatizacnej techniky spol. s.r.o.,
Bratislava/Slovakia
100
100
Siemens Sp. z o.o., Warsaw/Poland
SIEMENS (AUSTRIA) PROIECT SPITAL COLTEA SRL,
100
6 No significant influence due to contractual arrangements or legal circumstances.
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
100
Midrand/South Africa
100
Siemens Industry Software S.R.L., Brasov/Romania
Dresser-Rand Southern Africa (Pty) Ltd.,
100
Siemens Healthcare S.R.L., Bucharest/Romania
100
Dresser-Rand Service Centre (Pty) Ltd., Midrand/South Africa
100
Siemens Convergence Creators S.R.L., Brasov/Romania
100
Dresser-Rand Property (Pty) Ltd., Midrand/South Africa
100
Bucharest/Romania
Siemens Healthcare d.o.o, Ljubljana/Slovenia
7 Significant influence due to contractual arrangements or legal circumstances
100
100
Dresser-Rand Arabia LLC, Al Khobar/Saudi Arabia
100
Siemens Healthcare AS, Oslo/Norway
51
Arabia Electric Ltd. (Equipment), Jeddah/Saudi Arabia
100
Siemens AS, Oslo/Norway
1008
Technologies of Rail Transport Limited Liability Company,
Moscow/Russian Federation
100
Dresser-Rand AS, Kongsberg/Norway
100
Siemens Ltd., Lagos/Nigeria
100
Moscow/Russian Federation
100
Dresser-Rand (Nigeria) Limited, Lagos/Nigeria
Siemens Healthcare Limited Liability Company,
501
The Hague/Netherlands
100
501
Siemens Industry Software Sp. z o.o., Warsaw/Poland
Siemens Wind Power AS, Oslo/Norway
Siemens L.L.C., Muscat/Oman
OEZ Slovakia, spol. s r.o., Bratislava/Slovakia
100
Siemens Healthcare Sp. z o.o., Warsaw/Poland
Siemens Healthcare d.o.o. Beograd, Belgrade/Serbia
100
Siemens Finance Sp. z o.o., Warsaw/Poland
100
Siemens d.o.o. Beograd, Belgrade/Serbia
100
AXIT Sp. z o.o., Wroclaw/Poland
51
VA TECH T&D Co. Ltd., Riyadh/Saudi Arabia
75
Siemens Pakistan Engineering Co. Ltd., Karachi/Pakistan
51
Siemens Ltd., Riyadh/Saudi Arabia
100
Siemens Healthcare (Private) Limited, Lahore/Pakistan
51
ISCOSA Industries and Maintenance Ltd.,
Riyadh/Saudi Arabia
51
1008
Siemens Healthcare Diagnostics GmbH, Zurich/Switzerland
8 Not consolidated due to immateriality.
10 Exemption pursuant to Section 264b German Commercial Code.
100
Vitoria-Gasteiz/Spain
100
SKR Lager 20 KB, Finspång/Sweden
Guascor Explotaciones Energéticas, S.A.,
100
Siemens Industry Software AB, Kista/Sweden
708
Guascor Borja AIE, Zumaia/Spain
100
Finspång/Sweden
100
Grupo Guascor, S.L., Vitoria-Gasteiz/Spain
Siemens Industrial Turbomachinery AB,
100
Fábrica Electrotécnica Josa, S.A., Barcelona/Spain
100
Siemens Healthcare AB, Stockholm/Sweden
100
Enviroil Vasca, S.A., Vitoria-Gasteiz/Spain
100
Dresser-Rand Sales Company S.A., Freiburg/Switzerland
Siemens Financial Services AB, Stockholm/Sweden
100
100
Guascor Promotora Solar, S.A., Vitoria-Gasteiz/Spain
100
Siemens Healthcare AG, Zurich/Switzerland
100
Guascor Power, S.A., Zumaia/Spain
100
Zug/Switzerland
100
Vitoria-Gasteiz/Spain
Siemens Fuel Gasification Technology Holding AG,
Guascor Power Investigacion y Desarollo, S.A.,
100
Polarion AG, Gossau/Switzerland
898
Guascor Postensa AIE, Zumaia/Spain
100
Komykrieng AG, Gossau/Switzerland
608
Guascor Isolux AIE, Vitoria-Gasteiz/Spain
100
Huba Control AG, Würenlos/Switzerland
Guascor Ingenieria S.A., Vitoria-Gasteiz/Spain
9 Not accounted for using the equity method due to immateriality.
678
Siemens AB, Upplands Väsby/Sweden
100
SIEMENS POSTAL, PARCEL & AIRPORT LOGISTICS, S.L.
Sociedad Unipersonal, Madrid/Spain
Siemens Healthcare Proprietary Limited,
03
Johannesburg/South Africa
100
Siemens Industry Software S.L., Barcelona/Spain
Siemens Employee Share Ownership Trust,
100
Siemens Holding S.L., Madrid/Spain
03
Linacre Investments (Pty) Ltd., Kenilworth/South Africa
in %
September 30, 2016
in %
September 30, 2016
Equity interest
Equity interest
Consolidated Financial Statements
106
11 Exemption pursuant to Section 264 (3) German Commercial Code.
Halfway House/South Africa
100
100
100
100
Madrid/Spain
100
ay
Telecomunicación, Electrónica y Conmutación S.A.,
1008
Sistemas y Nuevas Energias, S.A, Vitoria-Gasteiz/Spain
70
100
Desimpacte de Purines Altorricón S.A., Altorricón/Spain
Desimpacto de Purines Turégano, S.A., Turégano/Spain
Dresser-Rand Holdings Spain S. L. U., Vitoria-Gasteiz/Spain
Empresa de Reciclajes de Residuos Ambientales, S.A.,
Vitoria-Gasteiz/Spain
100
Siemens Wind HoldCo, S.L., Zamudio/Spain
858
B2B Energía, S.A., Vitoria-Gasteiz/Spain
100
Siemens S.A., Madrid/Spain
100
Axastse Solar, S. L., Vitoria-Gasteiz/Spain
100
Siemens Renting S.A., Madrid/Spain
70
Siemens Proprietary Limited, Midrand/South Africa
Siemens Rail Automation S.A.U., Madrid/Spain
10011
100
0.4
Equity interest
September 30, 2016
in %
Mannesmann Demag Krauss-Maffei GmbH, Munich
100
NEO New Oncology GmbH, Cologne
100
next47 GmbH, Munich
10011
Omnetric GmbH, Munich
51
OPTIO Grundstücks-Vermietungsgesellschaft mbH & Co.
Objekt Tübingen KG, Grünwald
NOTE 34 List of subsidiaries and
associated companies pursuant to
Section 313 para. 2 of the German
Commercial Code
10010
Equity interest
in %
Partikeltherapiezentrum Kiel Holding GmbH, Erlangen
10011
SUBSIDIARIES
Project Ventures Butendiek Holding GmbH, Erlangen
Projektbau-Arena-Berlin GmbH, Grünwald
10011
10011
Germany (117 companies)
R&S Restaurant Services GmbH, Munich
100
Airport Munich Logistics and Services GmbH, Hallbergmoos
10011
September 30, 2016
REMECH Systemtechnik GmbH, Kamsdorf
101
In November 2016, Siemens announced its intention to further
strengthen Healthineers in Siemens for the future and is there-
fore planning to publicly list its healthcare business. Siemens will
announce more precise details regarding the date and scope of
the placement when plans for the public listing are further ad-
vanced. The listing will also depend, among other things, on the
stock market environment.
2016
2015
Audit services
45.9
43.7
Other attestation services
3.2
7.1
Tax services
0.1
Other services
0.1
Consolidated Financial Statements
49.5
In fiscal 2016 and 2015, 41% and 45%, respectively, of the total
fees related to Ernst & Young GmbH Wirtschaftsprüfungsgesell-
schaft, Germany.
100
Consolidated Financial Statements
Audit Services relate primarily to services provided by EY for au-
diting Siemens' Consolidated Financial Statements and for audit-
ing the statutory financial statements of Siemens AG and its sub-
sidiaries. Other Attestation Services include primarily audits of
financial statements in connection with M&A activities, comfort
letters and other attestation services required under regulatory
requirements, agreements or requested on a voluntary basis.
NOTE 32
Corporate Governance
The Managing Board and the Supervisory Board of Siemens
Aktiengesellschaft provided the declaration required by Sec-
tion 161 of the German stock corporation law (AktG) as of Octo-
ber 1, 2016, which is available on the Company's website at:
WWW.SIEMENS.COM/GCG-CODE
NOTE 33
Subsequent events
In June 2016, Siemens and Gamesa Corporación Tecnológica, S.A.
(Gamesa) signed binding agreements to merge the Siemens
wind power business, including service, with Gamesa. Siemens
will own 59% of the shares of the combined entity. As part of the
merger, Siemens will fund a cash payment of €1 billion, which
will be distributed to Gamesa's shareholders (excluding Siemens)
immediately following the completion of the merger. In Octo-
ber 2016, the Gamesa shareholders approved the merger. Closing
of the transaction is subject to the approvals of the antitrust and
regulatory authorities.
In November 2016, Siemens announced the acquisition of Mentor
Graphics (U.S.), a design automation and industrial software pro-
vider. The purchase price is US$37.25 per share in cash, which
represents an enterprise value of US$4.5 billion. Mentor Graphics
will be integrated in the Digital Factory Division. Closing of the
transaction is subject to customary conditions and is expected in
the third quarter of fiscal 2017.
51.0
(in millions of €)
10011
10011
100
Siemens Beteiligungsverwaltung GmbH & Co. OHG, Grünwald
10010
Dade Behring Grundstücks GmbH, Marburg
100
Dresser-Rand GmbH, Oberhausen
10011
10010
evosoft GmbH, Nuremberg
10011
FACTA Grundstücks-Entwicklungsgesellschaft mbH & Co. KG,
Munich
Siemens Campus Erlangen Objekt 1 GmbH & Co. KG,
Grünwald
Dade Behring Beteiligungs GmbH, Eschborn
10010
HanseCom Gesellschaft für Informations- und
Siemens Campus Erlangen Objekt 2 GmbH & Co. KG,
Grünwald
10010
Kommunikationsdienstleistungen mbH, Hamburg
HanseCom Public Transport Ticketing Solutions GmbH,
Hamburg
74
Siemens Campus Erlangen Objekt 3 GmbH & Co. KG,
Grünwald
10010
74
HSP Hochspannungsgeräte GmbH, Troisdorf
10011
Siemens Campus Erlangen Objekt 4 GmbH & Co. KG,
Grünwald
10010
10010
Alpha Verteilertechnik GmbH, Cham
10011
100
Anlagen- und Rohrleitungsbau Ratingen GmbH, Ratingen
1008
RISICOM Rückversicherung AG, Grünwald
Samtech Deutschland GmbH, Hamburg
100
100
Atecs Mannesmann GmbH, Erlangen
100
AXIT GmbH, Frankenthal
100
Berliner Vermögensverwaltung GmbH, Berlin
10011
Siemens Automotive ePowertrain Systems GmbH, Erlangen
Siemens Automotive ePowertrain Systems Holding GmbH,
Erlangen
Siemens Beteiligungen USA GmbH, Berlin
100
BWI Services GmbH, Meckenheim
100
Siemens Bank GmbH, Munich
100
CAPTA Grundstücksgesellschaft mbH & Co. KG i.L., Grünwald
10010
Siemens Beteiligungen Inland GmbH, Munich
10011
Capta Grundstücks-Verwaltungsgesellschaft mbH, Grünwald
DA Creative GmbH, Munich
100
Siemens Beteiligungen Management GmbH, Grünwald
1008
100
ILLIT Grundstücksverwaltungs-Management GmbH, Grünwald
IPGD Grundstücksverwaltungs-Gesellschaft mbH, Grünwald
Jawa Power Holding GmbH, Erlangen
Fiscal year
Principal accountant fees
and services
15,135
11,959
79,644
11,765
75,636
42,057
assets
Sep 30,
2015
20,085
21,702
18,577
15,118
111
79,644
2,791
41,453
10,739
68,905
64,392
18,579
61,065
18,443
57,194
16,769
15,263
17,776
16,540
34,546
17,576
75,636
6,748
34,705
17,296
Non-current
19,912
NOTE 29 Information about geographies
(in millions of €)
Europe, C.I.S., Africa, Middle East
Americas
Asia, Australia
Siemens
thereof Germany
thereof foreign countries
therein U.S.
2016
41,819
Revenue by location
of customers
19,013
3,132
Revenue by location
Fiscal year
2015
38,799
2016
45,325
22,360
of companies
Fiscal year
2015
42,432
21,440
2016
22,707
Fees related to professional services rendered by the Company's
principal accountant, EY, for fiscal 2016 and 2015 are:
11,244
Non-current assets consist of property, plant and equipment,
goodwill and other intangible assets.
333
167
227
377
Associates
114
113
343
638
447
280
569
Joint ventures
1,015
Consolidated Financial Statements 99
RELATED INDIVIDUALS
In fiscal 2016 and 2015, members of the Managing Board
received cash compensation of €20.2 million and €19.6 million.
The fair value of stock-based compensation amounted to
€8.7 million and €7.9 million for 113,230 and 113,281 Stock
Awards, respectively, in fiscal 2016 and 2015. In fiscal 2016 and
2015, the Company granted contributions under the BSAV to
members of the Managing Board totaling €4.6 million and
€4.8 million, respectively.
Therefore in fiscal 2016 and 2015, compensation and benefits,
attributable to members of the Managing Board amounted to
€33.5 million and €32.2 million in total, respectively.
In fiscal 2016 and 2015, expense related to share-based pay-
ment and to the Share Matching Program amounted to
€8.3 million and 8.1 million (including Stock Awards in connec-
tion with the departure from members of the Managing Board),
respectively.
Former members of the Managing Board and their surviving
dependents received emoluments within the meaning of Sec-
tion 314 para. 1 No. 6 b of the German Commercial Code totaling
€52.3 million and €30.5 million (including €9.6 million in con-
nection with the departure from members of the Managing
Board) in fiscal 2016 and 2015, respectively.
The defined benefit obligation (DBO) of all pension commitments
to former members of the Managing Board and their survivors as
of September 30, 2016 and 2015 amounted to €216.3 million and
€228.3 million, respectively.
Compensation attributable to members of the Supervisory Board
comprises in fiscal 2016 and 2015 of a base compensation and
additional compensation for committee work and amounted to
€5.2 million and €5.1 million (including meeting fees), respectively.
Information regarding the remuneration of the members of the
Managing Board and Supervisory Board is disclosed on an indi-
vidual basis in the Compensation Report, which is part of the
combined management report.
In fiscal 2016 and 2015, no other major transactions took place
between the Company and the members of the Managing Board
and the Supervisory Board.
Some of our board members hold, or in the last year have held,
positions of significant responsibility with other entities. We have
relationships with almost all of these entities in the ordinary
course of our business whereby we buy and sell a wide variety of
products and services on arm's length terms.
NOTE 31
As of September 30, 2016 and 2015, guarantees to joint ventures
and associates amounted to €1,500 million and €2,145 million,
respectively, including the HERKULES obligations of €600 million
and €1,090 million, respectively. As of September 30, 2016 and
2015, guarantees to joint ventures amounted to €553 million and
€472 million, respectively. As of September 30, 2016 and 2015,
loans given to joint ventures and associates amounted to €82 mil-
lion and €68 million, therein €78 million and €54 million related
to joint ventures, respectively. As of September 30, 2016 and
2015, the Company had commitments to make capital contribu-
tions of €48 million and €38 million to its joint ventures and as-
sociates, therein €39 million and €26 million related to joint ven-
tures, respectively. For a loan raised by a joint venture, which is
secured by a Siemens guarantee, Siemens granted an additional
collateral. As of September 30, 2016 and 2015 the outstanding
amount totaled to €116 million and €124 million, respectively.
As of September 30, 2016 and 2015 there were loan commit-
ments to joint ventures and associates amounting to €72 million
and €134 million, respectively, therein €72 million and €58 mil-
lion, respectively related to joint ventures.
7,511
Sep 30,
2015
2015
NOTE 30 Related party transactions
JOINT VENTURES AND ASSOCIATES
Siemens has relationships with many joint ventures and associ-
ates in the ordinary course of business whereby Siemens buys
and sells a wide variety of products and services generally on
arm's length terms.
Sales of goods
and services and
other income
Purchases of goods
and services
and other expenses
Fiscal year
2015
(in millions of €)
2016
Fiscal year
2015
2016
Joint ventures
1,052
365
2016
48
1,379
687
174
2,431
1,052
223
39
197
236
Receivables
Liabilities
Sep 30,
(in millions of €)
2016
Associates
85
Siemens Campus Erlangen Grundstücks-GmbH & Co. KG,
Grünwald
Siemens Campus Erlangen Objekt 5 GmbH & Co. KG,
Grünwald
100
Siemens Healthcare Diagnostics GmbH, Eschborn
100
Siemens-Fonds C-1, Munich
1008
1008
Siemens Wind Power Management GmbH, Hamburg
Siemens Global Innovation Partners Management GmbH,
Munich
1008
Siemens Wind Power GmbH & Co. KG, Hamburg
1008
10011
Siemens Venture Capital GmbH, Munich
Siemens Fuel Gasification Technology Verwaltungs GmbH,
Freiberg
10011
Siemens Turbomachinery Equipment GmbH, Frankenthal
10010
10011
Siemens Treasury GmbH, Munich
Siemens Fuel Gasification Technology GmbH & Co. KG,
Freiberg
100
Siemens Technopark Nürnberg Verwaltungs GmbH,
Grünwald
10011
Siemens-Fonds Pension Captive, Munich
Siemens Fonds Invest GmbH, Munich
100
100
100
10010
SIM 2. Grundstücks-GmbH & Co. KG, Grünwald
SIMAR Nordost Grundstücks-GmbH, Grünwald
10010
Siemens Industriepark Karlsruhe GmbH & Co. KG,
Grünwald
10010
SIM 16. Grundstücksverwaltungs- und -beteiligungs-
GmbH & Co. KG, Munich
10011
Siemens Industriegetriebe GmbH, Penig
1008
100
SILLIT Grundstücks-Verwaltungsgesellschaft mbH,
Munich
10010
100
Siemens Immobilien Chemnitz-Voerde GmbH, Grünwald
Siemens Immobilien GmbH & Co. KG, Grünwald
100
Siemens-Fonds S-8, Munich
10011
100
Siemens-Fonds S-7, Munich
100
100
Siemens-Fonds Principals, Munich
Siemens Healthcare Diagnostics Holding GmbH, Eschborn
Siemens Healthcare Diagnostics Products GmbH, Marburg
Siemens Healthcare GmbH, Erlangen
10011
Siemens Immobilien Management GmbH, Grünwald
10010
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
1008
Siemens Campus Erlangen Objektmanagement GmbH,
Grünwald
100
Lincas Electro Vertriebsgesellschaft mbH, Hamburg
1008
Kyros 52 GmbH, Munich
10010
Siemens Campus Erlangen Objekt 7 GmbH & Co. KG,
Grünwald
1008
Kyros 51 GmbH, Munich
10011
10010
Siemens Campus Erlangen Objekt 6 GmbH & Co. KG,
Grünwald
10011
KompTime GmbH, Munich
10011
Siemens Financial Services GmbH, Munich
10010
6 No significant influence due to contractual arrangements or legal circumstances.
7 Significant influence due to contractual arrangements or legal circumstances
Kyra 1 GmbH, Erlangen
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
Siemens Technopark Nürnberg GmbH & Co. KG, Grünwald
Siemens Finance & Leasing GmbH, Munich
100
Siemens Technopark Mülheim Verwaltungs GmbH,
Grünwald
10011
Siemens Convergence Creators Management GmbH,
Hamburg
10010
Siemens Technopark Mülheim GmbH & Co. KG, Grünwald
10010
10011
Siemens Technology Accelerator GmbH, Munich
1008
in %
1008
11 Exemption pursuant to Section 264 (3) German Commercial Code.
102 Consolidated Financial Statements
September 30, 2016
Siemens Campus Erlangen Verwaltungs-GmbH, Grünwald
Siemens Convergence Creators GmbH & Co. KG, Hamburg
Equity interest
Equity interest
in %
September 30, 2016
10 Exemption pursuant to Section 264b German Commercial Code.
100
100
IBS Industrial Business Software (Shanghai), Ltd.,
Shanghai/China
1008
MWB (Shanghai) Co Ltd., Shanghai/China
Caracas/Venezuela, Bolivarian Republic of
Siemens Healthcare S.A.,
Siemens Rail Automation, C.A.,
Guascor Venezuela S.A.,
100
Caracas/Venezuela, Bolivarian Republic of
Dresser-Rand Engineered Equipment (Shanghai) Ltd.,
100
DPC (Tianjin) Co., Ltd., Tianjin/China
100
100
Maracaibo/Venezuela, Bolivarian Republic of
Shanghai/China
65
10
100
Siemens Eco-City Innovation Technologies (Tianjin) Co.,
Ltd., Tianjin/China
1008
CD-adapco Software Technology (Shanghai) Co.,Ltd.,
Shanghai/China
75
Siemens Circuit Protection Systems Ltd., Shanghai,
Shanghai/China
100
100
Australia Hospital Holding Pty Limited, Bayswater/Australia
CD-ADAPCO AUSTRALIA PTY LTD, Melbourne/Australia
Exemplar Health (NBH) 2 Pty Limited, Bayswater/Australia
Exemplar Health (NBH) Holdings 2 Pty Limited,
Bayswater/Australia
100
Siemens Business Information Consulting Co., Ltd,
Beijing/China
Asia, Australia (140 companies)
70
Siemens Building Technologies (Tianjin) Ltd.,
Tianjin/China
100
Dade Behring Hong Kong Holdings Corporation,
Tortola/Virgin Islands, British
100
Siemens Automotive ePowertrain Systems (Shanghai) Co.,
Ltd., Shanghai/China
100
Siemens S.A., Caracas/Venezuela, Bolivarian Republic of
Caracas/Venezuela, Bolivarian Republic of
Dresser-Rand de Venezuela, S.A.,
51
Via Stylos S.A., Montevideo/Uruguay
Asia Care Holding Limited, Hong Kong/Hong Kong
1008
Shanghai/China
51
Siemens Mechanical Drive Systems (Tianjin) Co., Ltd.,
Tianjin/China
Camstar Systems (Hong Kong) Limited,
Hong Kong/Hong Kong
100
100
Siemens Manufacturing and Engineering Centre Ltd.,
Samtech HK Limited, Hong Kong/Hong Kong
Siemens Medium Voltage Switching Technologies (Wuxi)
Ltd., Wuxi/China
Siemens Healthcare Limited, Hong Kong/Hong Kong
100
85
Siemens Industry Software Limited,
Siemens Numerical Control Ltd., Nanjing, Nanjing/China
Siemens Power Automation Ltd., Nanjing/China
60
80
100
Yangtze Delta Manufacturing Co. Ltd., Hangzhou,
Hangzhou/China
100
Siemens Ltd., China, Beijing/China
Siemens Wind Power Blades (Shanghai) Co., Ltd.,
Shanghai/China
100
Siemens Industry Software (Shanghai) Co., Ltd.,
Siemens Wiring Accessories Shandong Ltd., Zibo/China
100
Shanghai/China
100
Siemens International Trading Ltd., Shanghai,
Shanghai/China
100
Siemens X-Ray Vacuum Technology Ltd., Wuxi, Wuxi/China
Smart Metering Solutions (Changsha) Co. Ltd.,
Changsha/China
100
60
Siemens Investment Consulting Co., Ltd., Beijing/China
100
Siemens Logistics Automation Systems (Beijing) Co., Ltd,
Beijing/China
Trench High Voltage Products Ltd., Shenyang,
Shenyang/China
65
100
100
100
100
100
90
Siemens Technology Development Co., Ltd. of Beijing,
Beijing/China
Siemens High Voltage Switchgear Co., Ltd.,
51
55
Siemens Switchgear Ltd., Shanghai, Shanghai/China
Siemens High Voltage Circuit Breaker Co., Ltd., Hangzhou,
Hangzhou/China
100
90
Siemens Surge Arresters Ltd., Wuxi/China
Siemens Healthcare Ltd., Shanghai/China
100
Siemens Standard Motors Ltd., Yizheng/China
77
Changzhi/China
Siemens Special Electrical Machines Co. Ltd.,
51
Siemens Gas Turbine Parts Ltd., Shanghai, Shanghai/China
Siemens Healthcare Diagnostics (Shanghai) Co. Ltd.,
Shanghai/China
100
70
Shanghai, Shanghai/China
Siemens High Voltage Switchgear Guangzhou Ltd.,
Hong Kong/Hong Kong
Siemens Industry Software (Beijing) Co., Ltd., Beijing/China
84
100
100
Siemens Venture Capital Co., Ltd., Beijing/China
Siemens Industrial Turbomachinery (Huludao) Co. Ltd.,
Huludao/China
100
51
Siemens Transformer (Wuhan) Company Ltd.,
Wuhan City/China
Chengdu, Chengdu/China
Siemens Industrial Automation Products Ltd.,
90
Siemens Transformer (Jinan) Co., Ltd, Jinan/China
94
Guangzhou/China
63
Siemens Transformer (Guangzhou) Co., Ltd.,
Guangzhou/China
100
100
Siemens Signalling Co. Ltd., Xi'an, Xi'an/China
100
Siemens Electrical Drives (Shanghai) Ltd., Shanghai/China
September 30, 2016
in %
September 30, 2016
Equity interest
111
Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
100
10 Exemption pursuant to Section 264b German Commercial Code.
8 Not consolidated due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances
6 No significant influence due to contractual arrangements or legal circumstances.
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
9 Not accounted for using the equity method due to immateriality.
Siemens Power Plant Automation Ltd., Nanjing/China
Equity interest
in %
Shenzhen/China
Siemens Gas Turbine Components (Jiangsu) Co., Ltd.,
Yixing/China
Siemens Shenzhen Magnetic Resonance Ltd.,
100
Siemens Financial Services Ltd., Beijing/China
100
Siemens Shanghai Medical Equipment Ltd., Shanghai/China
100
Siemens Finance and Leasing Ltd., Beijing/China
100
Siemens Sensors & Communication Ltd., Dalian/China
100
Beijing/China
100
Siemens Real Estate Management (Beijing) Ltd., Co.,
Beijing/China
Siemens Factory Automation Engineering Ltd.,
85
Siemens Electrical Drives Ltd., Tianjin/China
100
Siemens Electrical Apparatus Ltd., Suzhou, Suzhou/China
100
118 Additional Information
100
100
ASSOCIATED COMPANIES AND JOINT VENTURES
Siemens Japan Holding K.K., Tokyo/Japan
100
Germany (27 companies)
Siemens K.K., Tokyo/Japan
100
ATS Projekt Grevenbroich GmbH, Schüttorf
Siemens Healthcare K.K., Tokyo/Japan
259
100
BELLIS GmbH, Braunschweig
499
Dresser-Rand Korea, Ltd., Seoul/Korea, Republic of
100
BWI Informationstechnik GmbH, Meckenheim
505
Siemens Healthcare Limited, Seoul/Korea, Republic of
CD-adapco Korea, Ltd., Seoul/Korea, Republic of
100
100
100
PT Dresser-Rand Services Indonesia, Cilegon/Indonesia
PT. Siemens Industrial Power, Kota Bandung/Indonesia
100
Dresser-Rand (Thailand) Limited, Rayong/Thailand
100
60
Siemens Healthcare Limited, Bangkok/Thailand
100
Acrorad Co., Ltd., Okinawa/Japan
Siemens Healthcare Diagnostics K.K., Tokyo/Japan
63
99
CD-adapco Co., Ltd., Yokohama/Japan
100
Siemens Healthcare Limited, Ho Chi Minh City/Viet Nam
100
Dresser Rand Japan K.K., Tokyo/Japan
100
Siemens Ltd., Ho Chi Minh City/Viet Nam
Siemens Limited, Bangkok/Thailand
Caterva GmbH, Pullach i. Isartal
50
Siemens Industry Software Ltd., Seoul/Korea, Republic of
Siemens Ltd. Seoul, Seoul/Korea, Republic of
in %
September 30, 2016
in %
Compagnie Electrique de Bretagne SAS, Paris/France
40
499
TRIXELL SAS, Moirans/France
25
IFTEC GmbH & Co. KG, Leipzig
50
40
Eviop-Tempo A.E. Electrical Equipment Manufacturers,
Vassiliko/Greece
48
Infineon Technologies Bipolar Verwaltungs-GmbH, Warstein
409
Parallel Graphics Ltd., Dublin/Ireland
575,9
LIB Verwaltungs-GmbH, Leipzig
Infineon Technologies Bipolar GmbH & Co. KG, Warstein
FEAG Fertigungscenter für Elektrische Anlagen GmbH,
Erlangen
September 30, 2016
Equity interest
100
100
DKS Dienstleistungsgesellschaft f. Kommunikationsanlagen
des Stadt- und Regionalverkehrs mbH, Cologne
499
1 Control due to a majority of voting rights.
6 No significant influence due to contractual arrangements or legal circumstances.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to substantive removal or participation rights held by other parties.
5 No control due to contractual arrangements or legal circumstances.
7 Significant influence due to contractual arrangements or legal circumstances
8 Not consolidated due to immateriality.
9 Not accounted for using the equity method due to immateriality.
10 Exemption pursuant to Section 264b German Commercial Code.
11 Exemption pursuant to Section 264 (3) German Commercial Code.
Consolidated Financial Statements
113
114
Equity interest
100
Siemens Ltd., Hong Kong/Hong Kong
Siemens Ltd., Taipei/Taiwan, Province of China
P.T. Siemens Indonesia, Jakarta/Indonesia
Dresser-Rand & Enserv Services Sdn. Bhd.,
Kuala Lumpur/Malaysia
492,8
100
100
PETNET Radiopharmaceutical Solutions Pvt. Ltd.,
New Delhi/India
100
Powerplant Performance Improvement Ltd.,
New Delhi/India
100
501
100
Siemens Convergence Creators Private Limited,
Mumbai/India
100
Siemens Financial Services Private Limited,
Dresser-Rand Asia Pacific Sdn. Bhd., Kuala Lumpur/Malaysia
HRSG Systems (Malaysia) SDN. BHD., Kuala Lumpur/Malaysia
Reyrolle (Malaysia) Sdn. Bhd., Kuala Lumpur/Malaysia
Siemens Healthcare Sdn. Bhd., Petaling Jaya/Malaysia
Siemens Industry Software Sdn. Bhd., Penang/Malaysia
Siemens Malaysia Sdn. Bhd., Petaling Jaya/Malaysia
VA TECH Malaysia Sdn. Bhd., Kuala Lumpur/Malaysia
Siemens (N.Z.) Limited, Auckland/New Zealand
Siemens Healthcare Limited, Auckland/New Zealand
Siemens Healthcare Inc., Manila/Philippines
100
100
Preactor Software India Private Limited, Bangalore/India
100
in %
September 30, 2016
100
1 Control due to a majority of voting rights.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to substantive removal or participation rights held by other parties.
5 No control due to contractual arrangements or legal circumstances.
6 No significant influence due to contractual arrangements or legal circumstances.
7 Significant influence due to contractual arrangements or legal circumstances
Equity interest
8 Not consolidated due to immateriality.
10 Exemption pursuant to Section 264b German Commercial Code.
11 Exemption pursuant to Section 264 (3) German Commercial Code.
112 Consolidated Financial Statements
Equity interest
September 30, 2016
Siemens Postal, Parcel & Airport Logistics Limited,
Hong Kong/Hong Kong
CD-adapco India Private Limited, Bangalore/India
Dresser-Rand India Private Limited, Mumbai/India
in %
9 Not accounted for using the equity method due to immateriality.
100
100
100
Siemens Industry Software Pte. Ltd., Singapore/Singapore
100
1008
Siemens Postal Parcel & Airport Logistics Private Limited,
Mumbai/India
Siemens Postal, Parcel & Airport Logistics PTE. LTD.,
Singapore/Singapore
100
100
Siemens Pte. Ltd., Singapore/Singapore
Siemens Postal and Parcel Logistics Technologies Private
Limited, Mumbai/India
100
100
Siemens Healthcare Limited, Taipei/Taiwan, Province of China
100
Siemens Technology and Services Private Limited,
Mumbai/India
Siemens Industry Software (TW) Co., Ltd.,
100
Taipei/Taiwan, Province of China
100
Siemens Rail Automation Pvt. Ltd., Mumbai/India
100
Siemens Healthcare Pte. Ltd., Singapore/Singapore
75
100
100
100
100
100
Mumbai/India
100
Siemens Healthcare Private Limited, Mumbai/India
100
Siemens Power Operations, Inc., Manila/Philippines
Siemens, Inc., Manila/Philippines
100
100
Siemens Industry Software (India) Private Limited,
New Delhi/India
CD-adapco S.E.A. Pte. Ltd., Singapore/Singapore
100
100
CSI Services Pte. Ltd., Singapore/Singapore
100
Siemens Ltd., Mumbai/India
100
Camstar Systems, Software (Shanghai) Company Limited,
Shanghai/China
Dresser-Rand Canada, ULC, Vancouver/Canada
100
Dresser-Rand Participações Ltda., São Paulo/Brazil
100
Siemens S.A., Tenjo/Colombia
100
100
Siemens Healthcare S.A.S., Tenjo/Colombia
100
Dresser-Rand Comercio e Industria Ltda., Campinas/Brazil
Dresser-Rand do Brasil, Ltda., Santa Bárbara D'Oeste/Brazil
100
100
100
Cinco Rios Geracao de Energia Ltda., Manaus/Brazil
100
Siemens S.A., Santiago de Chile/Chile
100
Rio de Janeiro/Brazil
100
Acciones, Santiago de Chile/Chile
Dresser-Rand Colombia S.A.S., Bogotá/Colombia
Chemtech Servicos de Engenharia e Software Ltda.,
Siemens Healthcare Diagnostics S.A., San José/Costa Rica
Guascor do Brasil Ltda., São Paulo/Brazil
100
Siemens-Healthcare Cia. Ltda., Quito/Ecuador
90
Guascor Wind do Brasil, Ltda., São Paulo/Brazil
Siemens S.A., Quito/Ecuador
90
Guascor Solar do Brasil, Taboão da Serra/Brazil
Higüey/Dominican Republic
100
60
Sociedad Energética Del Caribe, S.R.L.,
90
100
Siemens, S.R.L., Santo Domingo/Dominican Republic
Guascor Empreendimentos Energéticos, Ltda.,
Taboão da Serra/Brazil
100
Siemens S.A., San José/Costa Rica
85
Guascor Serviços Ltda., Taboão da Serra/Brazil
Siemens Healthcare Equipos Médicos Sociedad por
100
São Paulo/Brazil
Siemens Transformers Canada Inc.,
100
Siemens Healthcare S.A., Buenos Aires/Argentina
100
Siemens Postal, Parcel & Airport Logistics Ltd.,
Oakville/Canada
100
Guascor Argentina, S.A., Buenos Aires/Argentina
100
Siemens IT Services S.A., Buenos Aires/Argentina
Artadi S.A., Buenos Aires/Argentina
Siemens Industry Software Ltd., Oakville/Canada
Americas (129 companies)
100
Siemens Healthcare Limited, Oakville/Canada
100
Siemens Financial Ltd., Oakville/Canada
100
Zenco Systems Limited, Frimley, Surrey/United Kingdom
100
100
Trois-Rivières, Québec/Canada
Siemens S.A., Buenos Aires/Argentina
100
Grand Cayman/Cayman Islands
CD-adapco Solucoes Cae Suporte de Programas Ltda.,
Siemens Healthcare Diagnostics Manufacturing Limited,
100
Santa Cruz de la Sierra/Bolivia, Plurinational State of
100
Ontario/Canada
Siemens Soluciones Tecnologicas S.A.,
Wheelabrator Air Pollution Control (Canada) Inc.,
100
Buenos Aires/Argentina
100
1008
100
Trench Ltd., Saint John/Canada
VA TECH International Argentina SA,
Siemens Wind Power Limited, Oakville/Canada
100
100
100
1008
Siemens Healthcare, Sociedad Anonima,
100
Omnetric Corp., Wilmington, DE/United States
100
Mexico City/Mexico
100
Bingham Farms, MI/United States
Siemens Healthcare Servicios S. de R.L. de C.V.,
Nimbus Technologies, LLC,
Siemens Industry Software, S.A. de C.V., Mexico City/Mexico
100
100
NEM USA Corp., Wilmington, DE/United States
Siemens Healthcare Diagnostics, S. de R.L. de C.V.,
100
100
100
100
100
Mexico City/Mexico
100
100
51
100
Red Cedar Technology, Inc., East Lansing, MI/United States
100
Siemens S.A., Managua/Nicaragua
100
PETNET Solutions, Inc., Knoxville, TN/United States
100
63
P.E.T.NET Houston, LLC, Austin, TX/United States
Wilmington, DE/United States
Siemens Servicios S.A. de C.V., Mexico City/Mexico
Siemens, S.A. de C.V., Mexico City/Mexico
PETNET Solutions Cleveland, LLC,
100
Siemens Innovaciones S.A. de C.V., Mexico City/Mexico
501
PETNET Indiana LLC, Indianapolis, IN/United States
100
Siemens Inmobiliaria S.A. de C.V., Mexico City/Mexico
100
Dresser-Rand LLC, Wilmington, DE/United States
Dresser-Rand Power LLC, Wilmington, DE/United States
Dresser-Rand Services, LLC, Wilmington, DE/United States
eMeter Corporation, Wilmington, DE/United States
Guascor Inc., Baton Rouge, LA/United States
Mannesmann Corporation, New York, NY/United States
100
Ciudad Juárez/Mexico
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances
6 No significant influence due to contractual arrangements or legal circumstances.
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
Consolidated Financial Statements
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
1 Control due to a majority of voting rights.
100
100
Siemens S.A., San Salvador/El Salvador
89
Jaguarí Energética, S.A., Jaguari/Brazil
Antiguo Cuscatlán/El Salvador
100
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
109
Equity interest
September 30, 2016
Indústria de Trabajos Eléctricos S.A. de C.V.,
100
Grupo Siemens S.A. de C.V., Mexico City/Mexico
100
Dresser-Rand de Mexico S.A. de C.V., Mexico City/Mexico
100
Siemens S.A., Tegucigalpa/Honduras
100
Siemens S.A., Guatemala/Guatemala
100
Wilmington, DE/United States
100
Guatemala/Guatemala
Dresser-Rand International Inc.,
SIEMENS HEALTHCARE DIAGNOSTICS GUATEMALA, S.A.,
in %
Equity interest
September 30, 2016
in %
Iriel Indústria e Comercio de Sistemas Eléctricos Ltda.,
Canoas/Brazil
100
Siemens Canada Limited, Oakville/Canada
Oxfordshire/United Kingdom
110 Consolidated Financial Statements
Equity interest
Equity interest
September 30, 2016
in %
September 30, 2016
in %
Siemens Medical Solutions USA, Inc.,
11 Exemption pursuant to Section 264 (3) German Commercial Code.
Exemplar Health (NBH) Trust 2, Bayswater/Australia
Wilmington, DE/United States
100
Exemplar Health (SCUH) 3 Pty Limited, Bayswater/Australia
1008
Siemens Molecular Imaging, Inc., Wilmington, DE/United States
100
Exemplar Health (SCUH) 4 Pty Limited, Bayswater/Australia
1008
100
Siemens Postal, Parcel & Airport Logistics LLC,
10 Exemption pursuant to Section 264b German Commercial Code.
8 Not consolidated due to immateriality.
100
Wilmington, DE/United States
100
Siemens Healthcare Diagnostics Inc.,
Dresser-Rand International Holdings, LLC,
Los Angeles, CA/United States
Wilmington, DE/United States
100
9 Not accounted for using the equity method due to immateriality.
Siemens Industry, Inc., Wilmington, DE/United States
100
1 Control due to a majority of voting rights.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to substantive removal or participation rights held by other parties.
5 No control due to contractual arrangements or legal circumstances.
6 No significant influence due to contractual arrangements or legal circumstances.
7 Significant influence due to contractual arrangements or legal circumstances
100
Wilmington, DE/United States
100
Exemplar Health (SCUH) Holdings 3 Pty Limited,
Bayswater/Australia
Winergy Drive Systems Corporation,
Wilmington, DE/United States
Engines Rental, S.A., Montevideo/Uruguay
Siemens S.A., Montevideo/Uruguay
100
SIEMENS RAIL AUTOMATION PTY. LTD., Bayswater/Australia
Siemens Wind Power Pty. Ltd., Bayswater/Australia
100
1008
100
Baltimore, MD/United States
Siemens Bangladesh Ltd., Dhaka/Bangladesh
Siemens Healthcare Ltd., Dhaka/Bangladesh
1008
100
Beijing Siemens Automotive E-Drive Systems Co., Ltd.,
Changzhou, Changzhou/China
60
100
Beijing Siemens Cerberus Electronics Ltd., Beijing/China
100
100
Wheelabrator Air Pollution Control Inc.,
Synchrony, Inc., Salem, VA/United States
SMI Holding LLC, Wilmington, DE/United States
100
Siemens Power Generation Service Company, Ltd.,
Wilmington, DE/United States
100
Exemplar Health (SCUH) Holdings 4 Pty Limited,
Bayswater/Australia
100
Siemens Product Lifecycle Management Software Inc.,
Wilmington, DE/United States
Exemplar Health (SCUH) Trust 3, Bayswater/Australia
100
100
Siemens Public, Inc., Wilmington, DE/United States
100
Siemens USA Holdings, Inc., Wilmington, DE/United States
Siemens Wind Power Inc., Wilmington, DE/United States
100
Exemplar Health (SCUH) Trust 4, Bayswater/Australia
Siemens Healthcare Pty. Ltd., Melbourne/Australia
Siemens Ltd., Bayswater/Australia
100
100
100
1008
Wilmington, DE/United States
100
Dresser-Rand Holding (Luxembourg) LLC,
100
75
Minuano Participações Eólicas Ltda., São Paulo/Brazil
OMNETRIC Group Tecnologia e Servicos de Consultoria
Ltda., Belo Horizonte/Brazil
The Preactor Group Limited,
1008
in %
September 30, 2016
in %
Siemens Wind Power Limited,
Frimley, Surrey/United Kingdom
100
September 30, 2016
Equity interest
Panama City/Panama
100
Siemens Convergence Creators Corp.,
Siemens S.A., Panama City/Panama
100
Wilmington, DE/United States
100
Equity interest
Siemens Healthcare S.A.C., Surquillo/Peru
Frimley, Surrey/United Kingdom
Siemens Eletroeletronica Limitada, Manaus/Brazil
100
100
509
VTW Anlagen UK Ltd., Banbury,
1008
Siemens Wind Power Ergia Eolica LTDA, São Paulo/Brazil
100
VA TECH T&D UK Ltd., Frimley, Surrey/United Kingdom
100
100
100
Siemens Healthcare Diagnósticos S.A., São Paulo/Brazil
Siemens Industry Software Ltda., São Caetano do Sul/Brazil
Siemens Ltda., São Paulo/Brazil
100
Frimley, Surrey/United Kingdom
VA Tech Reyrolle Distribution Ltd.,
100
VA TECH (UK) Ltd., Frimley, Surrey/United Kingdom
100
100
100
Siemens Corporation, Wilmington, DE/United States
100
100
Wilmington, DE/United States
100
D-R Steam LLC, Wilmington, DE/United States
100
Siemens Financial, Inc., Wilmington, DE/United States
100
Dresser-Rand Company, Bath, NY/United States
Wilmington, DE/United States
100
100
Dresser-Rand Global Services, Inc.,
Siemens Generation Services Company,
Wilmington, DE/United States
100
Wilmington, DE/United States
100
Dresser-Rand Group Inc., Wilmington, DE/United States
Siemens Fossil Services, Inc., Wilmington, DE/United States
Siemens Financial Services, Inc.,
D-R International Sales Inc.,
100
Siemens S.A.C., Lima/Peru
100
Siemens Credit Warehouse, Inc.,
Dresser-Rand Trinidad & Tobago Limited,
Wilmington, DE/United States
100
Couva/Trinidad and Tobago
100
Siemens Demag Delaval Turbomachinery, Inc.,
Analysis & Design Application Co. Ltd.,
Wilmington, DE/United States
100
Melville, NY/United States
100
Siemens Electrical, LLC, Wilmington, DE/United States
100
CD-adapco Battery Design LLC, Dover, DE/United States
502
Siemens Energy, Inc., Wilmington, DE/United States
Siemens Government Technologies, Inc.,
Metropolitan Transportation Solutions Ltd.,
London/United Kingdom
259
1
0
1005,6
Paderborn
Ausbildungszentrum für Technik, Informationsverarbeitung und Wirtschaft gemeinnützige GmbH (ATIW),
Germany (10 companies)
OTHER INVESTMENTS 12
in millions of €
in millions of €
BOMA Verwaltungsgesellschaft mbH & Co. KG, Grünwald
1.1
Ludwig Bölkow Campus GmbH, Taufkirchen
Net income
Equity interest
in %
September 30, 2016
115
Consolidated Financial Statements
11 Exemption pursuant to Section 264 (3) German Commercial Code.
10 Exemption pursuant to Section 264b German Commercial Code.
9 Not accounted for using the equity method due to immateriality.
Equity
1005,6
3
(36)
506
2,488
157
18
(89)
5
975,6
Siemens Global Innovation Partners | GmbH & Co. KG, Munich
OSRAM Licht AG, Munich
MAENA Grundstücks-Verwaltungsgesellschaft mbH & Co. KG, Grünwald
452
47
1005,6
3
0
206
125
5
1005,6
INPRO Innovationsgesellschaft für fortgeschrittene Produktionssysteme in der Fahrzeugindustrie mbH, Berlin
Kyros Beteiligungsverwaltung GmbH, Grünwald
BSAV Kapitalbeteiligungen und Vermögensverwaltungs Management GmbH, Grünwald
8 Not consolidated due to immateriality.
7
7 Significant influence due to contractual arrangements or legal circumstances
5 No control due to contractual arrangements or legal circumstances.
Panda Hummel Station Intermediate Holdings I LLC,
50
259
26
Bangalore International Airport Ltd., Bangalore/India
Transparent Energy Systems Private Limited, Pune/India
P.T. Jawa Power, Jakarta/Indonesia
219
Frustum, Inc., New York, NY/United States
32
Echogen Power Systems, Inc., Wilmington, DE/United States
PT Asia Care Indonesia, Jakarta/Indonesia
329
50
Zhenjiang Siemens Busbar Trunking Systems Co. Ltd.,
Yangzhong/China
27
CEF-L Holding, LLC, Wilmington, DE/United States
23
Bytemark Inc., New York, NY/United States
43
50
Tianjin ZongXi Traction Motor Ltd., Tianjin/China
Xi'An X-Ray Target Ltd., Xi'an/China
Cyclos Semiconductor, Inc., Wilmington, DE/United States
40
Wilmington, DE/United States
32
4 No control due to substantive removal or participation rights held by other parties.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
1 Control due to a majority of voting rights.
409
Bangkok/Thailand
309
Rether networks, Inc., Berkeley, CA/United States
Modern Engineering and Consultants Co. Ltd.,
219
Powerit Holdings, Inc., Seattle, WA/United States
49
Power Automation Pte. Ltd., Singapore/Singapore
33
PhSiTh LLC, New Castle, DE/United States
43
50
Yaskawa Siemens Automation & Drives Corp., Tokyo/Japan
Advance Gas Turbine Solutions SDN. BHD.,
Kuala Lumpur/Malaysia
37
Wilmington, DE/United States
Panda Stonewall Intermediate Holdings I, LLC,
6 No significant influence due to contractual arrangements or legal circumstances.
Americas (15 companies)
80
0
Exemption pursuant to Section 264b German Commercial Code.
10
9 Not accounted for using the equity method due to immateriality.
8 Not consolidated due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances
6 No significant influence due to contractual arrangements or legal circumstances.
5 No control due to contractual arrangements or legal circumstances.
4 No control due to substantive removal or participation rights held by other parties.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
11
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
78
3
8
34
(3)
9
16
(4)
19
1 Control due to a majority of voting rights.
Exemption pursuant to Section 264 (3) German Commercial Code.
12 Values according to the latest available local GAAP financial statements;
the underlying fiscal year may differ from the Siemens fiscal year.
N/A No financial data available.
Dr. Ralf P. Thomas
Prof.Dr Siegfried Russwurm
Janina Kuge
да пошел
Klaus Helmrich
Alaus Helmch
Sha
for Siemens Aktiengesellschaft, includes a fair review of the
development and performance of the business and the position
of the Group, together with a description of the material oppor-
tunities and risks associated with the expected development
of the Group.
Lisa Davis
Dr. Roland Busch
2.гл
Joe Kaeser
An
Siemens Aktiengesellschaft
The Managing Board
Munich, November 28, 2016
To the best of our knowledge, and in accordance with the appli-
cable reporting principles, the Consolidated Financial Statements
give a true and fair view of the assets, liabilities, financial posi-
tion and profit or loss of the Group, and the Group Management
Report, which has been combined with the Management Report
C.1 Responsibility Statement
INFORMATION
ADDITIONAL
C.
116 Consolidated Financial Statements
N/A
100 5,6
N/A
Atlantis Resources Limited, Singapore/Singapore
1,312
(56)
1005,6
4,097
437
12
4
(3)
506
456
Medical Systems S.p.A., Genoa/Italy
ATOS SE, Bezons/France
SMATRICS GmbH & Co KG, Vienna/Austria
Europe, Commonwealth of Independent States (C.I.S.),
Africa, Middle East (without Germany) (9 companies)
SIM 9. Grundstücksverwaltungs- und -beteiligungs-GmbH, Munich
Siemens Pensionsfonds AG, Grünwald
6
(2)
1005,6
8
Oceanic Global Investment Funds PLC, Dublin/Ireland
6
98
Corporate XII S.A. (SICAV-FIS), Luxembourg/Luxembourg
Asia, Australia (1 company)
¡BAHN Corporation, South Jordan, UT/United States
BuildingIQ, Inc., San Mateo, CA/United States
Guascor México S.A. de CV, Mexico City/Mexico
Americas (3 companies)
0
0
744,6
Siemens Benefits Scheme Limited, Frimley, Surrey/United Kingdom
(6)
(4)
236
0
0
1005,6
Dresser-Rand Company Retirement Plan Trustees Limited, Frimley, Surrey/United Kingdom
Pyreos Limited, Edinburgh/United Kingdom
1005,6
MEASD SPC DWC-LLC, Dubai/United Arab Emirates
7,402
14
1005,6
506
50
Siemens Capital Company LLC, Wilmington, DE/United States
499
209
Wirescan AS, Trollaasen/Norway
339
Arelion GmbH in Liqu., Pasching b. Linz/Austria
259
Rousch (Pakistan) Power Ltd., Lahore/Pakistan
26
Aspern Smart City Research GmbH, Vienna/Austria
449
ZeeEnergie Management B.V., Eemshaven/Netherlands
000 Transconverter, Moscow/Russian Federation
Aspern Smart City Research GmbH & Co KG, Vienna/Austria
44
OIL AND GAS PROSERV LLC, Baku/Azerbaijan
259
OOO VIS Automation mit Zusatz »>Ein Gemeinschafts-
unternehmen von VIS und Siemens<<,
T-Power NV, Brussels/Belgium
20
Moscow/Russian Federation
40
359
207
ZeeEnergie C.V., Amsterdam/Netherlands
Europe, Commonwealth of Independent States
(C.I.S.), Africa, Middle East (without Germany)
(58 companies)
207
509
ubimake GmbH, Berlin
50
Buitengaats Management B.V., Eemshaven/Netherlands
Infraspeed Maintainance B.V., Zoetermeer/Netherlands
209
50
Veja Mate Offshore Project GmbH, Gadebusch
41
Voith Hydro Holding GmbH & Co. KG, Heidenheim
Voith Hydro Holding Verwaltungs GmbH, Heidenheim
WERKBLIQ GmbH, Bielefeld
35
Ural Locomotives Holding Besloten Vennootschap,
The Hague/Netherlands
50
359
Windpark Monarch C.V., Amsterdam/Netherlands
259
g|
50
Windpark Monarch Management B.V.,
Amsterdam/Netherlands
259
Meomed s.r.o., Prerov/Czech Republic
Buitengaats C.V., Amsterdam/Netherlands
479
46
10 Exemption pursuant to Section 264b German Commercial Code.
11 Exemption pursuant to Section 264 (3) German Commercial Code.
Consolidated Financial Statements
Equity interest
Equity interest
September 30, 2016
in %
September 30, 2016
in %
9 Not accounted for using the equity method due to immateriality.
Explotaciones y Mantenimientos Integrales, S.L.,
Getxo/Spain
Siemens First Capital Commercial Finance, LLC,
Wilmington, DE/United States
515
Gate Solar Gestión, S.L. Unipersonal, Vitoria-Gasteiz/Spain
Hydrophytic, S.L., Vitoria-Gasteiz/Spain
509
509
USARAD Holdings, Inc., Fort Lauderdale, FL/United States
Veo Robotics, Inc., Cambridge, MA/United States
279
309
Zhuzhou/China
509
8 Not consolidated due to immateriality.
7 Significant influence due to contractual arrangements or legal circumstances
6 No significant influence due to contractual arrangements or legal circumstances.
A2SEA A/S, Fredericia/Denmark
Kriegers Flak ApS, Copenhagen/Denmark
Noliac A/S, Kvistgaard/Denmark
BioMensio Oy, Tampere/Finland
49
339
ZAO Systema-Service, St. Petersburg/Russian Federation
Impilo Consortium (Pty.) Ltd., La Lucia/South Africa
26
31
249
Nertus Mantenimiento Ferroviario y Servicios S.A.,
Barcelona/Spain
Ardora, S.A., Vigo/Spain
359
239
Desgasificación de Vertederos, S.A, Madrid/Spain
509
1 Control due to a majority of voting rights.
2 Control due to rights to appoint, reassign or remove members of the
key management personnel.
3 Control due to contractual arrangements to determine the direction of the
relevant activities.
4 No control due to substantive removal or participation rights held by other parties.
5 No control due to contractual arrangements or legal circumstances.
ZAO Interautomatika, Moscow/Russian Federation
Transrapid International Verwaltungsgesellschaft mbH i.L.,
Berlin
49
Admiraal De Ruyter Windpark Management B.V.,
Amsterdam/Netherlands
DBEST (Beijing) Facility Technology Management Co., Ltd.,
309
Shanghai/China
Galloper Wind Farm Holding Company Limited, Swindon,
Wiltshire/United Kingdom
ChinaInvent (Shanghai) Instrument Co., Ltd,
49
Ethos Energy Group Limited, Aberdeen/United Kingdom
259
50
Lincs Renewable Energy Holdings Limited,
50
33
Exemplar Health (SCUH) Partnership, Sydney/Australia
Exemplar Health (NBH) Partnership, Melbourne/Australia
Cross London Trains Holdco 2 Limited,
London/United Kingdom
50
Asia, Australia (20 companies)
50
509
207,9
PHM Technology Pty Ltd, Melbourne/Australia
Beijing/China
25
Siemens Healthcare Diagnostics Panama, S.A.,
Joint Venture Service Center, Chirchik/Uzbekistan
Siemens Traction Equipment Ltd., Zhuzhou,
50
339
Aberdeen/United Kingdom
40
40
Shanghai Electric Power Generation Equipment Co., Ltd.,
Shanghai/China
RWG (Repair & Overhauls) Limited,
49
Primetals Technologies, Limited, London/United Kingdom
509
Nanjing/China
509
Plessey Holdings Ltd., Frimley, Surrey/United Kingdom
Saitong Railway Electrification (Nanjing) Co., Ltd.,
509
Odos Imaging Ltd., Edinburgh/United Kingdom
50
GSP China Technology Co., Ltd., Beijing/China
50
Caracas/Venezuela, Bolivarian Republic of
50
25
Certas AG, Zurich/Switzerland
Temir Zhol Electrification LLP, Astana/Kazakhstan
49
OWP Butendiek GmbH & Co. KG, Bremen
23
Electrogas Malta Limited, Marsaskala/Malta
33
Siemens EuroCash, Munich
67
Energie Electrique de Tahaddart S.A., Tangier/Morocco
20
Siemens Venture Capital Fund 1 GmbH, Munich
1005,9
Admiraal de Ruyter Windpark C.V.,
Sternico GmbH, Wendeburg
329
Amsterdam/Netherlands
339
Interessengemeinschaft TUS, Männedorf/Switzerland
655,9
thinkstep AG, Leinfelden-Echterdingen
29
499
MeVis BreastCare Verwaltungsgesellschaft mbH, Bremen
Symeo GmbH, Neubiberg
VAL 208 Torino GEIE, Milan/Italy
865,9
Tusso Energía, S.L., Sevilla/Spain
Innovex Capital En Tecnologia, C.A.,
50
Soleval Renovables S.L., Sevilla/Spain
409
Empresa Nacional De Maquinas Eléctricas ENME, S.A.,
Caracas/Venezuela, Bolivarian Republic of
Solucia Renovables 1, S.L., Lebrija/Spain
Rosh HaAyin/Israel
20
515
50
49
Magazino GmbH, Munich
499
Transfima S.p.A., Milan/Italy
MeVis BreastCare GmbH & Co. KG, Bremen
Maschinenfabrik Reinhausen GmbH, Regensburg
429
Transfima GEIE, Milan/Italy
26
Nicola Leibinger-
Kammüller, Dr. phil.
Gérard Mestrallet
January 25,
2012
Norbert Reithofer, Dr.-Ing.
Dr.-Ing. E.h.
President and Chairwoman of the
Managing Board of TRUMPF GmbH
+ Co. KG
December 15, January 24,
1959
2008
Chairman of the Board of Directors
of ENGIE S.A.
German positions:
January 23,
2013
Chairman of the Supervisory Board
of Bayerische Motoren Werke
Aktiengesellschaft
May 29,
1956
January 27,
2015
German positions:
> Airbus Operations GmbH, Hamburg
> MAN SE, Munich (Deputy Chairman)
> Premium Aerotec GmbH, Augsburg
(Deputy Chairman)
1969
> Axel Springer SE, Berlin
> Voith GmbH, Heidenheim
Positions outside Germany:
April 1,
1949
January 22,
Jürgen Kerner*
March 16,
1960
> ENGIE S.A., France (Chairman)
> Société Générale S.A., France
> Suez S.A., France (Chairman)
German positions:
Chairwoman of the Combine Works
Council of Siemens AG
Chairman of the Works Council
of Siemens Erlangen Süd, Germany
Deputy Chairman of the Central
Works Council of Siemens AG
Chairman of the Siemens Europe
Committee
Executive Managing Board Member
of IG Metall
Date of birth
June 24,
1956
Member since
January 27,
2015
January 24,
2008
Memberships in supervisory boards whose establish-
ment is required by law or in comparable domestic
or foreign controlling bodies of business enterprises
(as of September 30, 2016)
> Pfleiderer GmbH, Neumarkt
(Deputy Chairman)
> Siemens Healthcare GmbH, Munich
March 14,
1959
April 1,
2007
March 10,
1952
January 27,
2009
March 13,
1971
January 23,
2013
German positions:
Bayerische Motoren Werke
The Chairman's Committee makes proposals, in particular,
regarding the appointment and dismissal of Managing Board
members and handles contracts with members of the Managing
Board. When making recommendations for first-time appoint-
ments, it takes into account that the terms of these appoint-
ments shall not, as a rule, exceed three years. In preparing rec-
ommendations on the appointment of Managing Board members,
the Chairman's Committee takes into account the candidates'
professional qualifications, international experience and leader-
ship qualities, the age limit specified for Managing Board mem-
bers, the Managing Board's long-range plans for succession as
well as its diversity. It also takes into account the targets for the
proportion of women on the Managing Board specified by the
Supervisory Board. The Chairman's Committee concerns itself
with questions regarding the Company's corporate governance
and prepares the resolutions to be approved by the Supervisory
Board regarding the Declaration of Conformity with the Code -
> Henkel AG & Co. KGaA, Düsseldorf¹
> SAP SE, Walldorf
Positions outside Germany:
> A.P. Møller-Mærsk A/S, Denmark
Bang & Olufsen A/S, Denmark
(Deputy Chairman)
German positions:
> Daimler AG, Stuttgart
Additional Information
127
Objectives of the Supervisory Board's composition
The composition of the Supervisory Board is to be such that its
members as a group have the knowledge, skills and professional
experience necessary to perform its duties properly. In fiscal
2015, the Supervisory Board - taking into account the recom-
mendations of the German Corporate Governance Code (Code)
– approved the following concrete objectives for its composition:
> Allianz SE, Munich
> The composition of the Supervisory Board of Siemens AG shall
be such that qualified control and advice for the Managing
Board is ensured. The candidates proposed for election to the
Supervisory Board shall have the expertise, skills and profes-
sional experience necessary to carry out the functions of a
Supervisory Board member in a multinational company and
safeguard the reputation of Siemens in public. In particular,
care shall be taken in regard to the personality, integrity, com-
mitment, professionalism and independence of the individuals
proposed for election. The goal is to ensure that, in the Super-
visory Board, as a group, all know-how and experience is avail-
able that is considered essential in view of Siemens' activities.
➤ Taking the Company's international orientation into account,
care shall also be taken to ensure that the Supervisory Board
has an adequate number of members with extensive inter-
national experience. Our goal is to make sure that the present
considerable share of Supervisory Board members with exten-
sive international experience is maintained.
> An adequate number of independent members shall belong to
the Supervisory Board. Material and not only temporary con-
flicts of interest, such as organizational functions or advisory
capacities with major competitors of the Company, shall be
avoided. Under the presumption that the mere exercise of
Supervisory Board duties as an employee representative gives
no cause to doubt the compliance with the independence cri-
teria pursuant to Section 5.4.2 of the Code, the Supervisory
Board shall have a minimum of sixteen members who are in-
dependent in the meaning of the Code. In any case, the Super-
visory Board shall be composed in such a way that a number
of at least six independent shareholder representatives in the
meaning of Section 5.4.2 of the Code is achieved. In addition,
the Supervisory Board members shall have sufficient time to
be able to devote the necessary regularity and diligence to
their mandate.
> The limits on age and length of membership established in the
Bylaws for the Supervisory Board will be taken into consider-
ation. In addition, no more than two former members of the
Managing Board of Siemens AG shall belong to the Super-
visory Board.
These objectives for the Supervisory Board's composition have
been fully achieved: a considerable number of Supervisory Board
members are currently engaged in international activities and/or
have many years of international experience. Since the Super-
visory Board election in 2015, the Supervisory Board has had six
female members. Dr. Nicola Leibinger-Kammüller is a member of
the Nominating Committee. The Supervisory Board has an ade-
quate number of independent members. In the opinion of the
Supervisory Board, a minimum of 16 Supervisory Board members
are independent in the meaning of Section 5.4.2 of the Code.
Some Supervisory Board members hold – or have held in the past
fiscal year high-ranking positions at other companies with
which Siemens does business. Transactions between Siemens
and such companies are carried out on an arm's-length basis. We
believe that these transactions do not compromise the indepen-
dence of the Supervisory Board members in question. The regu-
lations establishing limits on age and limiting membership in the
Supervisory Board to three full terms of office (15 years) are com-
plied with.
-
Supervisory Board Committees
The Supervisory Board has seven committees, whose duties, re-
sponsibilities and procedures fulfill the requirements of the Ger-
man Stock Corporation Act (Aktiengesetz) and the Code. The
chairmen of these committees provide the Supervisory Board
with regular reports on their committees' activities.
128 Additional Information
Harald Kern*
> In its election proposals, the Supervisory Board shall also pay
particular close attention to ensuring diversity. In accordance
with the German Law for Equal Participation of Women and
Men in Management Positions in the Private and Public Sec-
tors, the Supervisory Board is composed of at least 30 percent
women and at least 30 percent men. The Nominating Commit-
tee shall continue to include at least one female member.
Qualified women shall be included during the initial process
of selecting potential candidates for new elections or for the
filling of Supervisory Board positions that have become va-
cant, and they shall be given appropriate consideration in
nominations.
Aktiengesellschaft, Munich (Chairman)
German positions:
> Messer Group GmbH, Sulzbach
Güler Sabancı
Nathalie von Siemens,
Dr. phil.
Michael Sigmund*
Jim Hagemann Snabe
August 14,
1955
January 23,
2013
January 27,
2015
Chairwoman and Managing Director
of Hacı Ömer Sabancı Holding A.Ş.
Managing Director and Spokesperson July 14,
of Siemens Stiftung
Chairman of the Committee
of Spokespersons of the Siemens
Group; Chairman of the Central
Committee of Spokespersons
of Siemens AG
> Siemens Healthcare GmbH, Munich
1971
Supervisory Board Member
October 27,
1965
October 1,
2013
Sibylle Wankel*
General Counsel, Managing Board
of IG Metall
March 3,
1964
April 1,
2009
1 Shareholders' Committee.
German positions:
September 13, March 1,
1957
2014
Robert Kensbock*
2013
Bettina Haller*
Currently, there is one Managing Board committee, the Equity
and Employee Stock Committee. This committee oversees, in par-
ticular, the utilization of authorized capital in connection with
the issuance of employee stock and the implementation of cer-
tain capital measures. It also determines the scope and condi-
tions of the share-based compensation components and/or pro-
grams for employees and managers (with the exception of the
Managing Board).
Board cooperate closely for the benefit of the Company. The
Managing Board informs the Supervisory Board regularly, com-
prehensively and without delay on all issues of importance to the
Company with regard to strategy, planning, business develop-
ment, financial position, earnings, compliance and risks. When
filling managerial positions at the Company, the Managing Board
takes diversity into consideration and, in particular, aims for an
appropriate consideration of women and internationality. The
Managing Board has defined targets for the proportion of women
at the two management levels below the Managing Board.
The Managing Board prepares the Company's Quarterly State-
ments and Half-year Financial Report, the Annual Financial State-
ments of Siemens AG, the Consolidated Financial Statements
and the Combined Management Report of Siemens AG and the
Siemens Group. In addition, the Managing Board must ensure
that the Company adheres to statutory requirements, official reg-
ulations and internal Company policies (compliance) and works
to achieve compliance with these provisions and policies within
the Siemens Group. The Managing Board and the Supervisory
As the Company's top management body, the Managing Board is
committed to serving the interests of the Company and achieving
sustainable growth in company value. The members of the Man-
aging Board are jointly responsible for the entire management of
the Company and decide on the basic issues of business policy
and corporate strategy as well as on the Company's annual and
multi-year plans.
C.4.1.1 MANAGING BOARD
Siemens AG is subject to German corporate law. Therefore, it has
a two-tier board structure, consisting of a Managing Board and a
Supervisory Board.
and control structure
C.4.1 Management
C.4 Corporate Governance
123
Additional Information
In fiscal 2016, the committee comprised Joe Kaeser (Chairman),
Janina Kugel and Dr. Ralf P. Thomas.
Dr. Gerhard Cromme
Chairman
For the Supervisory Board
On behalf of the Supervisory Board, I would like to thank the
members of the Managing Board as well as the employees and
employee representatives of Siemens AG and all Group compa-
nies for their outstanding commitment and constructive cooper-
ation in fiscal 2016.
CHANGES IN THE COMPOSITION OF THE
SUPERVISORY AND MANAGING BOARDS
The Annual Shareholders' Meeting on January 26, 2016, approved
the early reelection of Dr. Nicola Leibinger-Kammüller, Jim Hage-
mann Snabe and Werner Wenning for additional five-year terms
as shareholder representatives on the Supervisory Board. There
were no changes in the Managing Board in fiscal 2016.
The Supervisory Board concurs with the results of the audit.
Following the definitive findings of the Audit Committee's exam-
ination and our own examination, we have no objections. The
Managing Board prepared the Annual Financial Statements of
Siemens AG and the Consolidated Financial Statements of the
Siemens Group. We approved the Annual Financial Statements
and the Consolidated Financial Statements. In view of our ap-
proval, the Annual Financial Statements of Siemens AG are ad-
opted as submitted. We endorsed the Managing Board's proposal
that the net income available for distribution be used to pay out
a dividend of €3.60 per share entitled to a dividend and that the
amount of net income attributable to shares of stock not entitled
to receive a dividend for fiscal 2016 be carried forward.
of Siemens AG, the Consolidated Financial Statements of the
Siemens Group and the Combined Management Report in detail
at its meeting on November 29, 2016. The audit reports prepared
by the independent auditors were distributed to all members of
the Supervisory Board and comprehensively reviewed at the
Supervisory Board's meeting on November 30, 2016, in the pres-
ence of the independent auditors, who reported on the scope,
focal points and main findings of their audit. No major weak-
nesses in the Company's internal control or risk management
systems were reported. At this meeting, the Managing Board ex-
plained the financial statements of Siemens AG and the Siemens
Group as well as the Company's risk management system.
The independent auditors, Ernst & Young GmbH Wirtschaftsprü-
fungsgesellschaft, audited the Annual Financial Statements of
Siemens AG, the Consolidated Financial Statements of the
Siemens Group and the Combined Management Report for
Siemens AG and the Siemens Group for fiscal 2016 and issued an
unqualified opinion. Ernst & Young GmbH Wirtschaftsprüfungs-
gesellschaft, of Stuttgart, Germany, has served as independent
auditors of Siemens AG and the Siemens Group since fiscal 2009.
Katharina Breitsameter has signed as auditor since fiscal 2016, and
Thomas Spannagl has signed as auditor responsible for the audit
since fiscal 2014. The Annual Financial Statements of Siemens AG
and the Combined Management Report for Siemens AG and the
Siemens Group were prepared in accordance with the require-
ments of German law. The Consolidated Financial Statements of
the Siemens Group were prepared in accordance with the Inter-
national Financial Reporting Standards (IFRS) as adopted by the
EU and with the additional requirements of German law set out
in Section 315a (1) of the German Commercial Code (Handels-
gesetzbuch). The Consolidated Financial Statements of the
Siemens Group also comply with the IFRS as issued by the Inter-
national Accounting Standards Board (IASB). The independent
auditors conducted their audit in accordance with Section 317 of
the German Commercial Code and German generally accepted
standards for the audit of financial statements promulgated by
the Institut der Wirtschaftsprüfer (IDW) as well as in supplemen-
tary compliance with the International Standards on Auditing
(ISA). The abovementioned documents as well as the Managing
Board's proposal for the appropriation of net income were sub-
mitted to us by the Managing Board in advance. The Audit Com-
mittee discussed the dividend proposal in detail at its meeting on
November 8, 2016. It discussed the Annual Financial Statements
DETAILED DISCUSSION OF THE AUDIT
OF THE FINANCIAL STATEMENTS
for Siemens AG and the Siemens Group. The Audit Committee
discussed the Half-year Financial Report and the quarterly state-
ments with the Managing Board and the independent auditors.
In the presence of the independent auditors, it also discussed the
report on the auditors' review of the Company's Half-year Con-
solidated Financial Statements and of its Interim Group Manage-
ment Report. The Committee recommended that the Supervisory
Board propose to the Annual Shareholders' Meeting the election
of Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft as the
independent auditors. The Committee appointed the indepen-
dent auditors for fiscal 2016, defined the audit focal points and
determined the auditors' fee. The Committee monitored the se-
lection, independence, qualification, rotation and efficiency of
the independent auditors. Furthermore, the Audit Committee
dealt with the Company's accounting process, risk management
system and the effectiveness, resources and findings of the inter-
nal audit as well as with reports concerning potential and pend-
ing legal disputes.
122 Additional Information
The Audit Committee met six times. In the presence of the inde-
pendent auditors as well as the President and Chief Executive
Officer and the Chief Financial Officer, the Committee dealt with
the financial statements and the Combined Management Report
The Innovation and Finance Committee met four times. The
focuses of its meetings included the Committee's recommenda-
tion regarding the budget for fiscal 2016, the discussion of the
Company's strategy and pension system as well as the prepara-
tion and approval of investment and divestment projects. The
Committee also concerned itself intensively with the Company's
innovation and technology focuses. For example, at the Commit-
tee's meeting on December 1, 2015, the Managing Board re-
ported as part of a technology focus - on Germany's Energy
Transition 2.0. At this meeting, the Committee also received a
report on the organization of and business situation at the Wind
Power and Renewables Division. At the Committee's meeting on
May 2, 2016, the Managing Board reported in detail on the Com-
pany's participation in the 2016 Hannover Messe. Finally, at its
meeting on August 2, 2016, the Innovation and Finance Commit-
tee discussed the technology focus "decentralized energy sys-
tems" and the next47 initiative, the establishment of a separately
managed unit for startups.
Gerhard Comme
Information on the compensation paid to the members of the
Managing Board is provided in chapter → A.10 COMPENSATION
REPORT.
124 Additional Information
Janina Kugel
March 31,
2021
April 1,
2011
May 24,
1958
Klaus Helmrich
July 31,
2019
August 1,
2014
October 15,
1963
Lisa Davis
2011
1964
Dr. rer. nat.
November 22, April 1,
Roland Busch,
July 31,
2018
Term expires
First
appointed
May 1,
2006
June 23,
1957
Date of birth
Chief Executive Officer
President and
Joe Kaeser
Name
In fiscal 2016, the Managing Board comprised the following
members:
Members of the Managing Board and positions
held by Managing Board members
-
January 12,
1970
The Compensation Committee met three times. It also made
one decision by written circulation. The Compensation Commit-
tee prepared, in particular, proposals for the full Supervisory
Board regarding the determination of targets for variable com-
pensation, the determination and review of the appropriateness
of Managing Board compensation and the approval of the Com-
pensation Report.
The Compliance Committee met four times. It primarily dis-
cussed the quarterly reports and the annual report of the Chief
Compliance Officer.
[German Public Auditor]
Spannagl
Wirtschaftsprüfer
дашия
Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft
Munich, November 28, 2016
In our opinion, based on the findings of our audit of the consol-
idated financial statements and group management report, the
group management report is consistent with the consolidated
financial statements, and as a whole provides a suitable view of
the Group's position and suitably presents the opportunities and
risks of future development.
Pursuant to Sec. 322 (3) Sentence 1 HGB, we state that our audit
of the group management report has not led to any reservations.
We have audited the accompanying group management report,
which is combined with the management report of Siemens
Aktiengesellschaft, for the business year from October 1, 2015 to
September 30, 2016. The management of the company is respon-
sible for the preparation of the group management report in
compliance with the applicable requirements of German commer-
cial law pursuant to Sec. 315a (1) HGB. We are required to conduct
our audit in accordance with Sec. 317 (2) HGB and German gener-
ally accepted standards for the audit of the group management
report promulgated by the IDW. Accordingly, we are required to
plan and perform the audit of the group management report to
obtain reasonable assurance about whether the group manage-
ment report is consistent with the consolidated financial state-
ments and the audit findings, and as a whole provides a suitable
view of the Group's position and suitably presents the opportuni-
ties and risks of future development.
REPORT ON THE GROUP MANAGEMENT REPORT
119
Additional Information
Buiber
In our opinion, based on the findings of our audit, the consoli-
dated financial statements comply in all material respects with
IFRS as adopted by the EU, the supplementary requirements of
German commercial law pursuant to Sec. 315a (1) HGB and full
IFRS as issued by the IASB and give a true and fair view of the net
assets and financial position of the Group as at September 30,
2016 as well as the results of operations for the business year
then ended, in accordance with these requirements.
Audit Opinion
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
An audit involves performing audit procedures to obtain audit
evidence about the amounts and disclosures in the consolidated
financial statements. The selection of audit procedures depends
on the auditor's professional judgment. This includes the assess-
ment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In assessing
those risks, the auditor considers the internal control system rel-
evant to the entity's preparation of the consolidated financial
statements that give a true and fair view. The aim of this is to plan
and perform audit procedures that are appropriate in the given
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the group's internal control system. An
audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates
made by management, as well as evaluating the overall presen-
tation of the consolidated financial statements.
Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. We conducted our audit
in accordance with Sec. 317 HGB and German generally accepted
standards for the audit of financial statements promulgated by
the Institut der Wirtschaftsprüfer [Institute of Public Auditors in
Germany] (IDW) as well as in supplementary compliance with
International Standards on Auditing (ISA). Accordingly, we are
required to comply with ethical requirements and plan and per-
form the audit to obtain reasonable assurance about whether the
consolidated financial statements are free from material mis-
statement.
Auditor's Responsibility
The management of Siemens Aktiengesellschaft is responsible
for the preparation of these consolidated financial statements.
This responsibility includes preparing these consolidated finan-
cial statements in accordance with International Financial Re-
porting Standards (IFRS) as adopted by the European Union (EU),
the supplementary requirements of German law pursuant to
Sec. 315a (1) HGB ["Handelsgesetzbuch": German Commercial
Code] and full IFRS as issued by the International Accounting
Standards Board (IASB), to give a true and fair view of the net
assets, financial position and results of operations of the group
in accordance with these requirements. The company's manage-
ment is also responsible for the internal controls that manage-
ment determines are necessary to enable the preparation of
consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
Management's Responsibility for the
Consolidated Financial Statements
We have audited the accompanying consolidated financial state-
ments of Siemens Aktiengesellschaft, Berlin and Munich, and its
subsidiaries, which comprise the consolidated statements of in-
come, comprehensive income, financial position, cash flow and
changes in equity, and notes to the consolidated financial state-
ments for the business year from October 1, 2015 to Septem-
ber 30, 2016.
REPORT ON THE CONSOLIDATED
FINANCIAL STATEMENTS
To Siemens Aktiengesellschaft, Berlin and Munich
C.2 Independent Auditor's Report
Pursuant to Sec. 322 (3) Sentence 1 HGB, we state that our audit
of the consolidated financial statements has not led to any reser-
vations.
Breitsameter
Wirtschaftsprüferin
[German Public Auditor]
The Nominating Committee met once. It concerned itself with
the long-term succession planning for the Supervisory Board and
prepared the Supervisory Board's proposal to the Annual Share-
holders' Meeting on January 26, 2016, regarding the early reelec-
tion of three shareholder representatives on the Supervisory
Board. The Nominating Committee based this decision on the
consideration that a high degree of continuity beyond the year
2018 and the regular election of Supervisory Board members
scheduled for that year would also have to be guaranteed in the
work of the Supervisory Board in order to ensure the successful
implementation of Siemens "Vision 2020".
the assumption by Managing Board members of positions at
other companies and institutions.
The Chairman's Committee met five times. It also made five
decisions by written circulation. Between meetings, I discussed
topics of major importance with the members of the Chairman's
Committee. The Committee concerned itself, in particular, with
personnel topics and corporate governance issues as well as with
AND CONTROL STRUCTURE.
WORK IN THE SUPERVISORY BOARD COMMITTEES
The Supervisory Board has established seven standing commit-
tees, which prepare proposals and issues to be dealt with at its
plenary meetings. Some of the Supervisory Board's decision-
making powers have also been delegated to these committees
within the permissible legal framework. The committee chairper-
sons report to the Supervisory Board on their committees' work
at the subsequent Board meetings. A list of the members and a
detailed explanation of the tasks of the individual Supervisory
Board committees are contained in chapter c.4.1 MANAGEMENT
SECTION 289A OF THE GERMAN COMMERCIAL CODE.
At our meeting on September 23, 2016, we approved an unqual-
ified Declaration of Conformity in accordance with Section 161 of
the German Stock Corporation Act (Aktiengesetz). Information
on corporate governance at Siemens is available in chapter
→ C.4 CORPORATE GOVERNANCE. Our Declaration of Conformity has
been made permanently available to our shareholders on our
website. The current Declaration of Conformity is also available
in chapter c.4.2 CORPORATE GOVERNANCE STATEMENT PURSUANT TO
CORPORATE GOVERNANCE CODE
At our meeting on September 23, 2016, the Managing Board re-
ported to us on the state of the Company and on the business
position of the Energy Management, Power and Gas, and Power
Generation Services Divisions. As part of our regular review, we
adjusted - following preparation by the Compensation Commit-
tee - the amount of Managing Board compensation for fiscal 2017.
After the Supervisory Board and Prof. Dr. Siegfried Russwurm had
mutually agreed that his contract, which expires on March 31,
2017, would not be renewed, the Supervisory Board decided, as
recommended by the Chairman's Committee, not to extend
Prof. Dr. Siegfried Russwurm's Managing Board appointment,
which is in effect until March 31, 2017. Finally, we discussed the
efficiency review of our activities.
business situation of the Financial Services Division. In addition,
the Managing Board informed us in detail about regional busi-
ness developments in the U.S. At the same meeting, the Super-
visory Board also approved various Managing Board proposals
regarding financing measures. Finally, as part of a focus on tech-
nology, the Supervisory Board concerned itself with the next47
initiative, the establishment of a separate unit for startups, and
with the activities and recommendations of the Siemens Tech-
nology & Innovation Council.
121
Additional Information
At our meeting on August 3, 2016, the Managing Board reported
to us on the Company's business and financial position follow-
ing the conclusion of the third quarter - in particular, on the
status of the planned merger of Siemens Wind Power with the
publicly-listed Spanish company Gamesa Corporación Tecno-
lógica, S.A. as well as on the status of the implementation of
Siemens "Vision 2020". We also dealt with the business model and
At our meeting on May 3, 2016, the Managing Board reported to
us on the Company's current business and financial position fol-
lowing the conclusion of the second quarter. We also discussed
the strategic orientation of the Digital Factory Division. In addi-
tion, the Managing Board reported in detail on the Company's
participation in the 2016 Hannover Messe. The Managing Board
also provided a report on the personnel strategy that the Com-
pany was pursuing in order to foster leadership development.
Following preparation by the Audit Committee, the Supervisory
Board concerned itself with the changed legal requirements re-
sulting from the European Union (EU) rules on statutory audits
and the German Audit Reform Act and, in this context, approved
an amendment to the Bylaws for the Audit Committee.
At our extraordinary meeting on February 9, 2016, we approved
the planned merger of Siemens' wind power business with the
publicly-listed Spanish company Gamesa Corporación Tecno-
lógica, S.A.
At our meeting on January 25, 2016, the Managing Board re-
ported to us on the Company's business and financial position
following the conclusion of the first quarter. The Supervisory
Board approved the acquisition of the U.S.-based simulation soft-
ware company CD-adapco Ltd. The Managing Board also reported
on the further development of the organizational setup of the
Process Industries and Drives Division.
On December 2, 2015, we discussed the financial statements and
the Combined Management Report for Siemens AG and the
Siemens Group as of September 30, 2015, and the Annual Report
for 2015, including the Report of the Supervisory Board, the Cor-
porate Governance Report and the Compensation Report as well
as the agenda for the Annual Shareholders' Meeting on Janu-
ary 26, 2016. The Managing Board reported on the current status
of acquisitions and divestments – in particular, on the status of
the integration of the Dresser Rand Group Inc., which had been
acquired, and of the aeroderivative gas turbine and compressor
business acquired from Rolls-Royce plc as well as on the status of
the implementation of the Siemens "Vision 2020" strategy. We
also discussed the annual report of the Chief Compliance Officer.
the Company's stake in Unify Holdings B.V. At this meeting, we
also approved a share buyback with a volume of up to €3 billion
extending through November 15, 2018 at the latest.
At our meeting on November 11, 2015, we discussed the Compa-
ny's key financial figures for fiscal 2015 and approved the budget
for 2016. On the basis of reported target achievement, we also
defined the compensation of the Managing Board members for
fiscal 2015. The appropriateness of this compensation was con-
firmed by an internal review. On the recommendation of the
Compensation Committee, we also approved the targets for Man-
aging Board compensation for fiscal 2016. The remuneration sys-
tem for the Managing Board members for fiscal 2016 is un-
changed vis-à-vis the remuneration system for fiscal 2015, which
the Annual Shareholders' Meeting approved by a majority of
more than 92% on January 27, 2015. At our meeting on Novem-
ber 11, 2015, the Managing Board also informed us about the
Company's business position, plans for the future setup of
Siemens' Process Industries and Drives Division, and the sale of
We held a total of six regular plenary meetings and one extraor-
dinary Supervisory Board meeting in fiscal 2016. Topics of discus-
sion at our regular plenary meetings were revenue, profit and
employment development at Siemens AG, at the Company's op-
erating units and at the Siemens Group as well as the Company's
financial position and the results of its operations. We also con-
cerned ourselves as required with major investment and divest-
ment projects and with particular risks to the Company.
TOPICS AT THE PLENARY MEETINGS
OF THE SUPERVISORY BOARD
In fiscal 2016, the Supervisory Board performed, in accordance
with its obligations, the duties assigned to it by law, the Siemens
Articles of Association and the Bylaws for the Supervisory Board.
We regularly advised the Managing Board on the management
of the Company and monitored the Managing Board's activities.
We were directly involved at an early stage in all major decisions
regarding the Company. In written and oral reports, the Manag-
ing Board regularly provided us with timely and comprehensive
information on Company planning and business operations as
well as on the strategic development and current state of the
Company. On the basis of reports submitted by the Managing
Board, we considered in detail business development and all de-
cisions and transactions of major significance to the Company.
Deviations from business plans were explained to us in detail and
intensively discussed. The Managing Board coordinated the Com-
pany's strategic orientation with us. The proposals made by the
Managing Board were approved by the Supervisory Board and/or
the relevant Supervisory Board committees after in-depth exam-
ination and consultation. In my capacity as Chairman of the Su-
pervisory Board, I was also in regular contact with the Managing
Board and, in particular, with the President and Chief Executive
Officer and was kept up-to-date on current developments in the
Company's business situation and on key business transactions.
Berlin and Munich, November 30, 2016
C.3 Report of the Supervisory Board
120 Additional Information
The Mediation Committee did not have to meet.
Hans-Jürgen Hartung*
February 1,
2015
Siegfried Russwurm,
Prof. Dr.-Ing.
2008
January 24,
March 26,
1960
January 23,
2003
Member since
Date of birth
February 25,
1943
Michael Diekmann
Olaf Bolduan*
Chairman of the Supervisory Board
of Bayer AG
Chairwoman of the Central Works
Council of Siemens AG
Chairman of the Supervisory Board
of Siemens AG
October 21,
1946
Occupation
Birgit Steinborn*
First Deputy Chairwoman
Gerhard Cromme, Dr. iur.
Chairman
Name
In fiscal 2016, the Supervisory Board comprised the following
members:
Members of the Supervisory Board and positions
held by Supervisory Board members
The Supervisory Board of Siemens AG has 20 members. As stipu-
lated by the German Codetermination Act (Mitbestimmungs-
gesetz), half of the members represent Company shareholders,
and half represent Company employees. The employee represen-
tatives' names are marked below with an asterisk (*). The terms
of office of the Supervisory Board members will, as a general rule,
expire at the conclusion of the Annual Shareholders' Meeting in
2018. The terms of office of Dr. Leibinger-Kammüller, Mr. Snabe
and Mr. Wenning will expire at the conclusion of the Annual
Shareholders' Meeting in 2021.
Information on the work of the Supervisory Board is provided in
chapter c.3 REPORT OF THE SUPERVISORY BOARD. The compensa-
tion paid to the members of the Supervisory Board is explained
in chapter A.10 COMPENSATION REPORT.
Board specify that such authority be delegated to the Innovation
and Finance Committee of the Supervisory Board. In the Bylaws
for the Managing Board, the Supervisory Board has established
the rules that govern the Managing Board's work.
The Supervisory Board oversees and advises the Managing Board
in its management of the Company's business. At regular inter-
vals, the Supervisory Board discusses business development,
planning, strategy and strategy implementation. It reviews the
Annual Financial Statements of Siemens AG, the Consolidated
Financial Statements and the Combined Management Report of
Siemens AG and the Siemens Group, and the proposal for the
appropriation of net income. It approves the Annual Financial
Statements of Siemens AG as well as the Consolidated Financial
Statements, based on the results of the preliminary review con-
ducted by the Audit Committee and taking into account the re-
ports of the independent auditors. The Supervisory Board de-
cides on the Managing Board's proposal for the appropriation of
net income and the Report of the Supervisory Board to the An-
nual Shareholders' Meeting. In addition, the Supervisory Board
or the Compliance Committee, which is described in more detail
below, concern themselves with monitoring the Company's
adherence to statutory provisions, official regulations and inter-
nal Company policies (compliance). The Supervisory Board also
appoints the members of the Managing Board and determines
each member's portfolios. Important Managing Board deci-
sions - such as those regarding major acquisitions, divestments,
fixed asset investments or financial measures require Super-
visory Board approval, unless the Bylaws for the Supervisory
C.4.1.2 SUPERVISORY BOARD
125
Werner Wenning
Second Deputy Chairman
January 23,
Chairman of the Works Council
of Siemens Dynamowerk, Berlin,
Germany
July 24,
1952
Trade Union Secretary of
the Managing Board of IG Metall
Occupation
Reinhard Hahn*
Name
> HSBC Trinkaus & Burkhardt AG, Düsseldorf
> BDO AG Wirtschaftsprüfungsgesellschaft,
Hamburg (Deputy Chairman)
German positions:
> Linde AG, Munich (Deputy Chairman)
> Fresenius SE & Co. KGaA, Bad Homburg
(Deputy Chairman)
> Fresenius Management SE, Bad Homburg
> BASF SE, Ludwigshafen am Rhein
(Deputy Chairman)
German positions:
January 24,
2008
2008
March 2,
1942
December 23, January 24,
1954
> Henkel Management AG, Düsseldorf
➤ Bayer AG, Leverkusen (Chairman)
> Henkel AG & Co. KGaA, Düsseldorf¹
German positions:
Memberships in supervisory boards whose establish-
ment is required by law or in comparable domestic
or foreign controlling bodies of business enterprises
(as of September 30, 2016)
126 Additional Information
1 Shareholders' Committee.
Hans Michael Gaul, Dr. iur. Supervisory Board Member
Supervisory Board Member
July 11,
2014
Additional Information
January 31,
2020
(Deputy Chairman)
Österreich, Austria
> Konecranes Plc., Finland
Positions outside Germany:
> Pensions-Sicherungs-Verein
Versicherungsverein auf Gegen-
seitigkeit, Cologne
German positions:
> inpro Innovationsgesellschaft
für fortgeschrittene Produktions-
systeme in der Fahrzeugindustrie
mbH, Berlin
> EOS Holding AG, Krailling
German positions:
> OSRAM GmbH, Munich
(Deputy Chairman)
Positions outside Germany:
> Atos SE, France
> OSRAM Licht AG, Munich
(Deputy Chairman)
German positions:
> NXP Semiconductors B.V.,
Netherlands
German positions:
Positions outside Germany:
German positions:
(as of September 30, 2016)
or in comparable domestic or foreign controlling bodies of business enterprises
External positions
Memberships in supervisory boards whose establishment is required by law
September 18, September 17,
2013
2018
March 7,
1961
Dr. rer. pol.
Ralf P. Thomas,
March 31,
2017
January 1,
2008
June 27,
1963
> Allianz Deutschland AG, Munich
> Daimler AG, Stuttgart
> Deutsche Messe AG, Hanover
Group company positions
(as of September 30, 2016)
Positions outside Germany:
> Siemens Aktiengesellschaft
Positions outside Germany:
> Siemens Healthcare GmbH, Munich
German positions:
> VA TECH T&D Co. Ltd., Saudi Arabia
> Siemens W.L.L., Qatar
> Siemens Ltd., Saudi Arabia
> ISCOSA Industries and Maintenance
Ltd., Saudi Arabia (Deputy Chairman)
> Siemens Healthcare GmbH, Munich
Positions outside Germany:
>Arabia Electric Ltd. (Equipment),
Saudi Arabia
German positions:
> Siemens Healthcare GmbH, Munich
German positions:
> Siemens Schweiz AG, Switzerland
(Chairman)
> Siemens Proprietary Ltd., South
Africa (Chairman)
> Siemens Aktiengesellschaft
Österreich, Austria (Chairman)
> Siemens AB, Sweden (Chairman)
Positions outside Germany:
> Siemens Corp., USA (Chairwoman)
Positions outside Germany:
> Siemens Ltd., India
> Siemens Ltd., China (Chairman)
Logistics GmbH, Constance
Positions outside Germany:
> Siemens Postal, Parcel & Airport
German positions:
> Siemens Ltd., India
> Siemens Corp., USA
March 31,
2021
90%
Order no. CGXX-C10020-00-7600
meeting to vote by proxy. Furthermore, shareholders may exer-
cise their right to vote in writing or by means of electronic com-
munications (absentee voting). The Managing Board may enable
shareholders to participate in the Annual Shareholders' Meeting
without the need to be present at the venue and without a proxy
and to exercise some or all of their rights fully or partially by
means of electronic communications. Shareholders may submit
proposals regarding the proposals of the Managing and Super-
visory Boards and may contest decisions of the Annual Share-
holders' Meeting. Shareholders owning Siemens stock with an
aggregate notional value of €100,000 or more may also demand
the judicial appointment of special auditors to examine specific
issues. The reports, documents and information required by law,
including the Annual Report, may be downloaded from our web-
site. The same applies to the agenda for the Annual Shareholders'
Meeting and to any counterproposals or shareholders' nomina-
tions that require disclosure.
As part of our investor relations activities, we inform our inves-
tors comprehensively about developments within the Company.
For communication purposes, Siemens makes extensive use of
the Internet. We publish quarterly statements, half-year financial
and annual reports, earnings releases, ad hoc announcements,
analyst presentations, letters to shareholders and press releases
as well as the financial calendar for the current year, which con-
tains the publication dates of significant financial communica-
tions and the date of the Annual Shareholders' Meeting, at:
WWW.SIEMENS.COM/INVESTORS
Our Articles of Association, the Bylaws for the Supervisory Board,
the Bylaws for the most important Supervisory Board commit-
tees, the Bylaws for the Managing Board, all our Declarations
of Conformity with the Code and a variety of other corporate-
governance-related documents are posted on our website at:
WWW.SIEMENS.COM/CORPORATE-GOVERNANCE
C.4.1.4 ANNUAL SHAREHOLDERS' MEETING
AND INVESTOR RELATIONS
Shareholders exercise their rights in the Annual Shareholders'
Meeting. An ordinary Annual Shareholders' Meeting normally
takes place within the first four months of each fiscal year. The
Annual Shareholders' Meeting decides, among other things, on
the appropriation of unappropriated net income, the ratification
of the acts of the Managing and Supervisory Boards, and the
appointment of the independent auditors. Amendments to the
Articles of Association and measures that change the Company's
capital stock are approved at the Annual Shareholders' Meeting
and are implemented by the Managing Board. The Managing
Board facilitates shareholder participation in this meeting
through electronic communications – in particular, via the Inter-
net and enables shareholders who are unable to attend the
C.4.2 Corporate Governance
statement pursuant to Section 289a
of the German Commercial Code
The Corporate Governance statement pursuant to Section 289a
of the German Commercial Code (Handelsgesetzbuch) is an inte-
gral part of the Combined Management Report. In accordance
with Section 317 para. 2 sentence 3 of the German Commercial
Code, the disclosures made within the scope of Section 289a
of the German Commercial Code are not subject to the audit by
the auditors.
WWW.SIEMENS.COM/DIRECTORS-DEALINGS
Additional Information
C.4.2.1 DECLARATION OF CONFORMITY WITH
THE GERMAN CORPORATE GOVERNANCE CODE
The Managing Board and the Supervisory Board of Siemens AG
approved the following Declaration of Conformity pursuant to
Section 161 of the German Stock Corporation Act as of Octo-
ber 1, 2016:
"Declaration of Conformity by the Managing Board and the
Supervisory Board of Siemens Aktiengesellschaft with the
German Corporate Governance Code
Siemens AG fully complies and will continue to comply with
the recommendations of the German Corporate Governance
Code ("Code") in the version of May 5, 2015, published by the
Federal Ministry of Justice in the official section of the Fed-
eral Gazette ("Bundesanzeiger").
Since making its last Declaration of Conformity dated Octo-
ber 1, 2015, Siemens AG has complied with the recommenda-
tions of the Code.
Berlin and Munich, October 1, 2016
Siemens Aktiengesellschaft
The Managing Board The Supervisory Board"
131
Pursuant to Article 19 of EU Regulation No. 596/2014 of the Euro-
pean Parliament and Council on market abuse (Market Abuse
Regulation), members of the Managing Board and the Super-
visory Board are legally required to disclose all transactions con-
ducted on their own account relating to the shares or debt instru-
ments of Siemens AG or to derivatives or financial instruments
linked thereto if the total value of such transactions entered into
by a board member or any closely associated person reaches or
exceeds €5,000 in any calendar year. All transactions reported to
Siemens AG in accordance with this requirement have been duly
published and are available on the Company's website at:
-
As of the same date, the Supervisory Board's current members
held Siemens shares representing less than 0.01% of the capital
stock of Siemens AG, which totaled 850,000,000 shares. These
figures do not include the 10,878,800 shares (as of Septem-
ber 30, 2016) or 1.28% of the capital stock of Siemens AG, which
totaled 850,000,000 shares, over which the von Siemens-
Vermögensverwaltung GmbH (vSV) has voting control under
powers of attorney based on an agreement between among
others - members of the Siemens family, including Dr. Natalie
von Siemens, and VSV. These shares are voted together by vSV,
taking into account the proposals of a family partnership estab-
lished by the family's members or of one of its governing bodies.
7
7
100%
Michael Sigmund
7
7
100%
Jim Hagemann Snabe
21
21
100%
Sibylle Wankel
11
11
100%
130
Additional Information
C.4.1.3 SHARE OWNERSHIP AND SHARE TRANS-
ACTIONS BY MEMBERS OF THE MANAGING AND
SUPERVISORY BOARDS
As of September 30, 2016, the Managing Board's current mem-
bers held a total of 205,009 Siemens shares, representing 0.02%
of the capital stock of Siemens AG, which totaled 850,000,000
shares.
C.4.2.2 INFORMATION ON CORPORATE
GOVERNANCE PRACTICES
Nathalie von Siemens, Dr. phil.
Suggestions of the Code
Pursuant to Section 3.7 para. 3 of the Code, in the case of a take-
over offer, a management board should convene an extraordi-
nary general meeting at which shareholders discuss the takeover
offer and may decide on corporate actions. The convening of a
shareholders' meeting – even taking into account the shortened
time limits stipulated in the German Securities Acquisition and
Takeover Act (Wertpapiererwerbs- und Übernahmegesetz) - is an
organizational challenge for large publicly listed companies. It
appears doubtful whether the associated effort is justified in
cases where no relevant decisions by the shareholders' meeting
are intended. Therefore, extraordinary shareholders' meetings
shall be convened only in appropriate cases.
Address
Internet
Siemens AG
Wittelsbacherplatz 2
80333 Munich
Germany
WWW.SIEMENS.COM
Phone
133
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© 2016 by Siemens AG, Berlin and Munich
DIGITALIZATION
ELECTRIFICATION
AUTOMATION
siemens.com
Hans Michael Gaul, Dr. iur.
E-mail
Additional Information
WWW.SIEMENS.
COM/INVESTOR/EN/
Further corporate governance practices applied beyond legal
requirements are contained in our Business Conduct Guidelines.
Our Company's values and Business Conduct
Guidelines
In the 169 years of its existence, our Company has built an excel-
lent reputation around the world. Technical performance, inno-
vation, quality, reliability, and international engagement have
made Siemens one of the leading companies in electronics and
electrical engineering. It is top performance with the highest eth-
ics that has made Siemens strong. This is what the Company
should continue to stand for in the future.
The Business Conduct Guidelines provide the ethical and legal
framework within which we want to maintain our successful ac-
tivities. They contain the basic principles and rules for our con-
duct within our Company and in relation to our external partners
and the general public. They set out how we meet our ethical and
legal responsibility as a Company and give expression to our cor-
porate values of being "Responsible" - "Excellent" - "Innovative".
C.4.2.3 OPERATION OF THE MANAGING BOARD
AND THE SUPERVISORY BOARD, AND COMPOSITION
AND OPERATION OF THEIR COMMITTEES
A general description of the functions and operation of the Man-
aging Board and the Supervisory Board can be found in chapter
C.4.1 MANAGEMENT AND CONTROL STRUCTURE. Further details can
be derived from the bylaws for the corporate bodies concerned.
This information and these documents, including the Code and
the Business Conduct Guidelines, are available at: www.
SIEMENS.COM/289A
C.4.2.4 TARGETS FOR THE QUOTA OF WOMEN
ON THE MANAGING BOARD AND AT THE TWO
MANAGEMENT LEVELS IMMEDIATELY BELOW
THE MANAGING BOARD; INFORMATION ON SUPER-
VISORY BOARD COMPLIANCE WITH MINIMUM
GENDER QUOTA REQUIREMENTS
At Siemens AG, the target for the share of women on the Manag-
ing Board has been set at a minimum of 2/7 and the correspond-
ing target for each of the two management levels immediately
below the Managing Board has been set at 10%, applicable in
each case until June 30, 2017.
The composition of the Supervisory Board fulfilled the legal re-
quirements regarding the minimum gender quota in the report-
ing period.
132
Additional Information
C.5 Notes and forward-looking statements
This document contains statements related to our future business
and financial performance and future events or developments
involving Siemens that may constitute forward-looking state-
ments. These statements may be identified by words such as
"expect," "look forward to," "anticipate," "intend," "plan," "believe,"
"seek," "estimate," "will," "project" or words of similar meaning.
We may also make forward-looking statements in other reports,
in presentations, in material delivered to shareholders and in
press releases. In addition, our representatives may from time to
time make oral forward-looking statements. Such statements are
based on the current expectations and certain assumptions of
Siemens' management, of which many are beyond Siemens' con-
trol. These are subject to a number of risks, uncertainties and
factors, including, but not limited to those described in disclo-
sures, in particular in the chapter Risks in this Annual Report.
Should one or more of these risks or uncertainties materialize,
or should underlying expectations not occur or assumptions
prove incorrect, actual results, performance or achievements of
Siemens may (negatively or positively) vary materially from those
described explicitly or implicitly in the relevant forward-looking
statement. Siemens neither intends, nor assumes any obligation,
to update or revise these forward-looking statements in light of
developments which differ from those anticipated.
-
This document includes - in the applicable financial reporting
framework not clearly defined – supplemental financial mea-
sures that are or may be alternative performance measures
(non-GAAP-measures). These supplemental financial measures
should not be viewed in isolation or as alternatives to measures
of Siemens' net assets and financial positions or results of opera-
tions as presented in accordance with the applicable financial
reporting framework in its Consolidated Financial Statements.
Other companies that report or describe similarly titled alterna-
tive performance measures may calculate them differently.
Due to rounding, numbers presented throughout this and other
documents may not add up precisely to the totals provided and
percentages may not precisely reflect the absolute figures.
This document is an English language translation of the German
document. In case of discrepancies, the German language docu-
ment is the sole authoritative and universally valid version.
The "Sustainability Information 2016” which reports on Sustain-
ability and Citizenship at Siemens is available at:
Siemens voluntarily complies with the Code's non-binding sug-
gestions, with the following exception:
100%
For technical reasons, there may be differences between the
accounting records appearing in this document and those pub-
lished pursuant to legal requirements.
7
Birgit Steinborn
Gerhard Cromme, Dr. iur.
(Chairman)
Supervisory Board Members
Disclosure of participation by individual Super-
visory Board members in meetings of the Super-
visory Board of Siemens AG and its Committees
in fiscal 2016
In fiscal 2016, the Innovation and Finance Committee comprised
Dr. Gerhard Cromme (Chairman), Robert Kensbock, Harald Kern,
Jürgen Kerner, Dr. Norbert Reithofer, Jim Hagemann Snabe, Birgit
Steinborn and Werner Wenning.
and resolutions regarding questions relating to the Company's
financial situation and structure - including annual planning
(budget) - as well as the Company's fixed asset investments and
its financial measures. In addition, the Innovation and Finance
Committee has been authorized by the Supervisory Board to
decide on the approval of transactions and measures that require
Supervisory Board approval and have a value of less than
€600 million.
―
129
(First Deputy Chairwoman)
Additional Information
In fiscal 2016, the Mediation Committee comprised Dr. Gerhard
Cromme (Chairman), Jürgen Kerner, Birgit Steinborn and Werner
Wenning.
The Mediation Committee submits proposals to the Supervisory
Board in the event that the Supervisory Board cannot reach the
two-thirds majority required for the appointment or dismissal of
a Managing Board member.
In fiscal 2016, the Nominating Committee comprised Dr. Gerhard
Cromme (Chairman), Dr. Hans Michael Gaul, Dr. Leibinger-
Kammüller and Werner Wenning.
The Nominating Committee is responsible for making recom-
mendations to the Supervisory Board on suitable candidates for
election as shareholder representatives on the Supervisory Board
by the Annual Shareholders' Meeting. In preparing these recom-
mendations, the objectives specified by the Supervisory Board
regarding its composition - including, in particular, indepen-
dence and diversity – are to be taken into account as well as the
required knowledge, abilities and professional experience of the
proposed candidates. Attention shall also be paid to an appropri-
ate participation of women and men in accordance with the legal
requirements relating to the gender quota.
In fiscal 2016, the Compliance Committee comprised Dr. Gerhard
Cromme (Chairman), Dr. Hans Michael Gaul, Bettina Haller, Harald
Kern, Dr. Nicola Leibinger-Kammüller, Jim Hagemann Snabe,
Birgit Steinborn and Sibylle Wankel.
The Compliance Committee concerns itself, in particular, with
monitoring the Company's adherence to statutory provisions,
official regulations and internal Company policies.
In fiscal 2016, the Audit Committee comprised Dr. Hans Michael
Gaul (Chairman), Dr. Gerhard Cromme, Bettina Haller, Robert
Kensbock, Jürgen Kerner, Dr. Nicola Leibinger-Kammüller, Jim
Hagemann Snabe and Birgit Steinborn. Pursuant to the German
Stock Corporation Act, the Audit Committee must include at least
one Supervisory Board member with knowledge and experience
in the areas of accounting or the auditing of financial statements.
Pursuant to the Code, the chairman or chairwoman of the Audit
Committee shall have specialist knowledge and experience in the
application of accounting principles and internal control pro-
cesses, shall be independent and may not be a former Managing
Board member whose appointment ended less than two years
ago. The Chairman of the Audit Committee, Dr. Hans Michael
Gaul, fulfills these requirements.
The Audit Committee oversees, in particular, the accounting
process and conducts a preliminary review of the Annual Finan-
cial Statements of Siemens AG, the Consolidated Financial State-
ments and the Combined Management Report of Siemens AG
and the Siemens Group. On the basis of the independent audi-
tors' report on their audit of the annual financial statements, the
Audit Committee makes, after its preliminary review, recom-
mendations regarding Supervisory Board approval of the Annual
Financial Statements of Siemens AG and the Consolidated Finan-
cial Statements. The Audit Committee discusses the Quarterly
Statements and Half-year Financial Report with the Managing
Board and independent auditors and deals with the auditors' re-
port on the review of the Half-year Consolidated Financial State-
ments and Interim Group Management Report. It concerns itself
with the Company's risk monitoring system and oversees the
effectiveness of the internal control, risk management and the
internal audit systems. The Audit Committee receives regular re-
ports from the Internal Audit Department. It prepares the Super-
visory Board's recommendation to the Annual Shareholders'
Meeting concerning the election of the independent auditors and
submits the corresponding proposal to the Supervisory Board. It
awards the audit contract to the independent auditors elected by
the Annual Shareholders' Meeting and monitors the independent
audit of the financial statements as well as the auditors' selec-
tion, independence, qualification, rotation and efficiency.
The Innovation and Finance Committee discusses, in particular,
based on the Company's overall strategy, the Company's focuses
of innovation and prepares the Supervisory Board's discussions
Werner Wenning
Supervisory Board
and Committee meetings
9
7
10
Michael Diekmann
86%
6
7
Olaf Bolduan
100%
20
20
(Second Deputy Chairman)
29
29
100%
30
30
Presence
Participation
In fiscal 2016, the Compensation Committee comprised Werner
Wenning (Chairman), Dr. Gerhard Cromme, Michael Diekmann,
Robert Kensbock, Jürgen Kerner and Birgit Steinborn.
The Compensation Committee prepares, in particular, the pro-
posals for decisions by the Supervisory Board's plenary meetings
regarding the system of Managing Board compensation, includ-
ing the implementation of this system in Managing Board con-
tracts, the definition of the targets for variable Managing Board
compensation, the determination and review of the appropriate-
ness of the total compensation of individual Managing Board
members and the approval of the annual Compensation Report.
100%
including the explanation of deviations from the Code and
regarding the approval of the Corporate Governance Report as
well as the Report of the Supervisory Board to the Annual Share-
holders' Meeting. Furthermore, the Chairman's Committee sub-
mits recommendations to the Supervisory Board regarding the
composition of the Supervisory Board committees and decides
whether to approve contracts and business transactions with
Managing Board members and parties related to them.
15
100%
Jürgen Kerner
25
22
88%
Nicola Leibinger-Kammüller, Dr. phil.
18
18
100%
Gérard Mestrallet
5
71%
Norbert Reithofer, Dr.-Ing. Dr.-Ing. E.h.
11
10
In fiscal 2016, the Chairman's Committee comprised Dr. Gerhard
Cromme (Chairman), Jürgen Kerner, Birgit Steinborn and Werner
Wenning.
Güler Sabancı
91%
15
Harald Kern
7
20
18
100%
-
100%
Reinhard Hahn
18
7
100%
Bettina Haller
17
7
100%
Hans-Jürgen Hartung
7
7
100%
17
Robert Kensbock
20
number of orders for large offshore wind-farms in the U.K., in-
cluding service. Order intake in the Americas and Asia, Australia
showed a double-digit decline year-over-year. Revenue was up
clearly due to strong conversion from the backlog, which resulted
in increases in all of the Division's businesses. On a regional basis,
substantial increases in Europe, C.I.S., Africa, Middle East and
Asia, Australia more than offset a substantial decline in the Amer-
icas. Strong profitability in fiscal 2016 included a more favorable
revenue mix including a higher share from the offshore and ser-
vice businesses, lower production and installation costs, and pos-
itive effects from project execution and completion. In fiscal 2015,
profit was held back by expenses from ramping up commercial-
scale production of certain turbine offerings.
6,136
% Change
Comp.
35%
9%
2.8%
7.8%
Profit margin
160
464
Profit
5,660
Revenue
5,976
Actual
30%
6%
190%
A.3.2.3 ENERGY MANAGEMENT
12,963
2016
Fiscal year
2015
% Change
Actual
Comp.
12,956
0%
2%
11,940
Profit margin
895
7.5%
7,973
11,922
570
4.8%
0%
57%
(in millions of €)
Orders
Orders
Revenue
2016
A.3.2 Segment information analysis
2%
A.3.2.1 POWER AND GAS
(in millions of €)
Orders
2016
Fiscal year
2015
% Change
Actual
Comp.
19,454
15,742
24%
16%
16,471
Fiscal year
2015
13,418
12%
Profit
1,872
1,415
32%
Profit margin
11.4%
10.5%
10
10
Combined Management Report
Revenue and orders benefited from portfolio effects. Dresser-
Rand and the Rolls-Royce Energy aero-derivative gas turbine and
compressor business, which were both acquired in fiscal 2015,
contributed nine and 12 percentage points to fiscal 2016 order
and revenue growth, respectively. Orders increased year-over-
year, due mainly to a higher volume from large orders in the
solutions business, including in particular large orders for power
plants, including service, from Egypt totaling €4.7 billion. The
regional picture was mixed; order intake increased substantially
in the reporting regions Europe, C.I.S., Africa, Middle East and
the Americas and declined clearly in Asia, Australia. Revenue was
also up, due mainly to growth in the solutions and large gas tur-
bine businesses. On a regional basis, strong order execution led
to substantial revenue growth in Europe, C.I.S., Africa, Middle
East, particularly including in Egypt. Revenue also increased in
the other two reporting regions. Profit was substantially higher
year-over-year and included a continuing strong contribution
from the service business. In fiscal 2016, profit benefited from
positive effects totaling €118 million from the measurement of
inventories. Both years included positive and negative effects
related to large projects. In total, the effect in fiscal 2016 was
positive, including €130 million from revised estimates related to
resumption of long-term construction and service contracts in
Iran following the ending or easing of EU and U.S. sanctions. In
contrast, it was negative in fiscal 2015, including charges of
€106 million related to a project which incurred higher costs for
materials and from customer delays. Costs for the integration of
Dresser-Rand were €59 million in fiscal 2016 compared to
€19 million in fiscal 2015. Finally, severance charges were sharply
lower in fiscal 2016, at €69 million compared to €192 million in
fiscal 2015. The Division continues to face challenges in an ag-
gressively competitive market for large gas turbines arising from
overcapacities across the industry, which results in increased
price pressure.
A.3.2.2 WIND POWER AND RENEWABLES
(in millions of €)
23%
Revenue
553
Order intake was flat year-over-year, burdened by negative cur-
rency translation effects, as a decline in the solutions business
was offset by growth in the Division's other businesses. On a re-
gional basis, a substantial increase in Asia, Australia and slight
growth in Europe, C.I.S., Africa, Middle East were offset by a sig-
nificant decline in the Americas. Revenue was also burdened by
negative currency translation effects. A decline in the medium
voltage and system business was offset by growth in the Divi-
sion's other businesses, in particular in the solutions, high volt-
age products and transformer businesses. On a regional basis,
moderate growth in the Americas was offset by a moderate de-
cline in Europe, C.I.S., Africa, Middle East, while revenue in Asia,
Australia was flat year-over-year. Stronger profitability in a major-
ity of the Division's businesses compared to the prior-year in-
cluded significant improvements in the high voltage products
business and in the solutions business due to stringent project
execution. The prior year included a higher proportion of projects
with low margins. Severance charges were €71 million and
€88 million in fiscal 2016 and fiscal 2015, respectively.
10,172
9,988
2%
2%
Profit
577
5%
Profit margin
9.4%
9.2%
Profit
Profit margin
1,690
1,685
0%
16.6%
16.9%
Orders and revenue in Building Technologies increased in both
the solutions and service business and the product and systems
business. On a geographic basis, orders were up in all regions,
while revenue rose in the Americas and Asia, Australia but de-
clined slightly in the Europe, C.I.S., Africa, Middle East region.
Growth was particularly strong in the U.S., for both orders and
revenue. Profit improvement was due to an increase in the Divi-
sion's product business, only partly offset by a modest decline in
profit in the solutions and service business. Profit in both periods
included severance charges, which were €16 million in fiscal
2016, down from €24 million in fiscal 2015.
A.3.2.5 MOBILITY
% Change
(in millions of €)
2016
Fiscal year
2015
Actual
Orders
7,875
10,262
Revenue
7,825
Reported revenue related to external customers went up moder-
ately year-over-year and increased in most industrial businesses.
Key growth drivers in Europe, C.I.S., Africa, Middle East in-
cluded Power and Gas, Wind Power and Renewables and Mobility
due to strong conversion from their respective order backlogs.
These increases were partly offset by declines in Energy Manage-
ment and in Process Industries and Drives. In Germany, revenues
decreased moderately, primarily due to Wind Power and Renew-
ables. In the Americas, revenue came in higher year-over-year,
driven primarily by increases in Power and Gas, in Healthineers
and in Mobility. Wind Power and Renewables reported a substan-
tial decline. The pattern in the U. S. was nearly the same as for
the region. Revenue in Asia, Australia came in near the prior-
year level, as declines in Mobility and Process Industries and
Drives offset growth in all other industrial businesses. In China,
only Power and Gas, Healthineers and Building Technologies were
able to increase revenue for the fiscal year.
Revenue
3%
3%
5,999
Order intake reached a new high for a fiscal year, due mainly to
a higher volume from large orders, particularly in the offshore
business, which for Siemens means primarily in Europe. As a
result, orders more than doubled in the Europe, C.I.S., Africa,
Middle East reporting region and included, among others, a
Combined Management Report 11
A.3.2.4 BUILDING TECHNOLOGIES
A.3.2.6 DIGITAL FACTORY
Fiscal year
% Change
Fiscal year
% Change
(in millions of €)
2016
2015
Actual
Comp.
(in millions of €)
Profit
2016
Actual
Comp.
Orders
6,435
6,099
6%
6%
Orders
10,332
10,036
3%
3%
Revenue
6,156
2015
1 As defined by the International Monetary Fund.
Combined Management Report
1 As defined by the International Monetary Fund.
1 Item Other interest expenses/income, net primarily consists of interest relating to corporate
debt, and related hedging activities, as well as interest income on corporate assets.
Average capital employed is determined using the average of the
respective balances as of the quarterly reporting dates in the
period under review.
Calculation of capital employed
Total equity
Plus: Long-term debt
Plus: Short-term debt and current maturities of long-term debt
Less: Cash and cash equivalents
Less: Current available-for-sale financial assets
Plus: Post-employment benefits
Less: SFS Debt
Less: Fair value hedge accounting adjustment
Plus: Adjustments from assets classified as held for disposal and
liabilities associated with assets classified as held for disposal
Less: Adjustment for deferred taxes on net accumulated
actuarial gains/losses on post-employment benefits
Capital employed (continuing and discontinued operations)
7,508
A.3 Results of operations
A.3.1 Orders and revenue by region
Negative currency translation effects took one percentage point
each from order and revenue development; portfolio effects
added one percentage point to order development and two per-
centage points to revenue growth. The resulting ratio of orders
to revenue (book-to-bill) for Siemens in fiscal 2016 was 1.09,
again well above 1. The order backlog (defined as the sum of
order backlogs of the industrial businesses) was €113 billion as of
September 30, 2016.
and in Healthineers. These increases were partly offset by de-
creases in Mobility, in Wind Power and Renewables and in Process
Industries and Drives.
Revenue (location of customer)
(in millions of €)
2016
Fiscal year
2015
Actual
% Change
Comp.
Europe, C.I.S., Africa,
Middle East
therein: Germany
Americas
41,819 38,799
10,739 11,244
22,707
21,702
8%
8%
(4)%
(5)%
5%
(II) Average capital employed
(I)/(II) ROCE
21.0%
14.3%
36,367
A.2.4 Capital structure
Sustainable revenue and profit development is supported by a
healthy capital structure. Accordingly, a key consideration within
the framework of One Siemens is to maintain ready access to the
capital markets through various debt products and preserve our
ability to repay and service our debt obligations over time. Our
primary measure for managing and controlling our capital struc-
ture is the ratio of industrial net debt to EBITDA. This financial
measure indicates the approximate amount of time in years that
would be needed to cover industrial net debt through income
from continuing operations, without taking into account inter-
est, taxes, depreciation and amortization. We aim to achieve a
ratio of up to 1.0.
A.2.6 Calculation of return
on capital employed
Calculation of ROCE
(in millions of €)
Net income
Less: Other interest expenses/income, net¹
Plus: SFS Other interest expenses/income
Plus: Net interest expenses from
post-employment benefits
Fiscal year
2016
2015
5,584
7,380
(544)
(662)
784
1%
746
263
A.2.5 Dividend
We intend to continue providing an attractive return to our share-
holders. Therefore, we intend to propose a dividend whose dis-
tribution volume is within a dividend payout range of 40% to
60% of net income, which we may adjust for this purpose to ex-
clude selected exceptional non-cash effects. As in the past, we
intend to fund the dividend payout from Free cash flow.
At the Annual Shareholders' Meeting, the Managing Board, in
agreement with the Supervisory Board, will submit the follow-
ing proposal to allocate the unappropriated net income of
Siemens AG for fiscal 2016: to distribute a dividend of €3.60 on
each share of no par value entitled to the dividend for fiscal year
2016 existing at the date of the Annual Shareholders' Meeting,
with the remaining amount to be carried forward. Payment of the
proposed dividend is contingent upon approval by Siemens
shareholders at the Annual Shareholders' Meeting on February 1,
2017. The prior-year dividend was €3.50 per share.
The proposed dividend of €3.60 per share for fiscal 2016 rep-
resents a total payout of €2.9 billion based on the estimated
number of shares entitled to dividend at the date of the Annual
Shareholders' Meeting. Based on net income of €5.6 billion for
fiscal 2016, the dividend payout percentage is 52%.
Less: Interest adjustments
(discontinued operations)
Less: Taxes on interest adjustments
(tax rate (flat) 30%)
(156)
(104)
(I) Income before interest after tax
5,949
7,623
41,573
282
Despite further softening in the macroeconomic environment
in fiscal 2016, reported orders related to external customers in-
creased moderately year-over-year. Within the regions, order de-
velopment depended strongly on the timing and location of large
contract wins in the Divisions that typically take in such orders.
In the Europe, C.I.S., Africa, Middle East region, orders in-
creased clearly, as substantial growth in Wind Power and Renew-
ables and in Power and Gas more than offset a substantial decline
in Mobility. All three results were due to changes in the volume
from large orders. Orders came in significantly lower in Germany,
due to lower levels of large orders in Wind Power and Renewables
and in Mobility compared to fiscal 2015. Orders in the Americas
region were flat year-over-year, as growth primarily in Power and
Gas, in Building Technologies and in Healthineers offset double-
digit declines in Wind Power and Renewables and in Energy Man-
agement, both due to a lower volume of large orders. U.S. orders
increased moderately, supported by portfolio and currency trans-
lation effects, and mainly followed the pattern for the region,
with the exception that Energy Management came in near the
prior-year level. Orders went up in the Asia, Australia region due
mainly to a higher volume from large orders in Energy Manage-
ment and a clear increase in Healthineers, only partially offset by
declines primarily in Power and Gas and in Wind Power and Re-
newables. China increased orders moderately, in particular with
double-digit growth in Power and Gas, in Energy Management
Orders (location of customer)
16,769 15,263
8%
9%
(13)%
0%
(3)%
therein: U.S.
18,162 17,357
5%
(2)%
Asia, Australia
15,501 15,033
3%
3%
therein: China
6,850
6,623
3%
7%
Siemens
86,480
82,340
5%
4%
therein: emerging
markets¹
30,512
29,730
3%
5%
25,239
27,268
markets¹
therein: emerging
10%
3%
Asia, Australia
15,118
15,135
0%
(1)%
(in millions of €)
2016
Fiscal year
2015
% Change
therein: China
6,439
6,938
therein: U.S.
(7)%
Actual
Comp.
Siemens
79,644
75,636
5%
4%
Europe, C.I.S., Africa,
Middle East
46,185
therein: Germany
Americas
42,539
10,525 11,991 (12)%
24,794 24,769
9%
9%
(6)%
Combined Management Report 9
Profit
588
20,368
20,437
Other current liabilities
14%
1,828
2,085
Current income tax liabilities
(7)%
4,489
4,166
Current provisions
(7)%
2,085
1,933
Other current financial liabilities
4%
7,774
8,048
Trade payables
108%
2,979
6,206
Short-term debt and current maturities of long-term debt
0%
Liabilities associated with assets classified as held for disposal
40
39
829
40%
9,811
13,695
Total liabilities and equity
Non-controlling interests
Total equity attributable to shareholders of Siemens AG
Equity ratio
Debt ratio
Total liabilities
Total non-current liabilities
Other liabilities
% Change
Other financial liabilities
Deferred tax liabilities
Post-employment benefits
(7)%
26,682
24,761
Long-term debt
8%
39,562
42,916
Total current liabilities
5%
Provisions
609
2015
(in millions of €)
20,610
Other financial assets
2%
2,947
3,012
Investments accounted for using the equity method
(1)%
10,210
10,157
Property, plant and equipment
(4)%
8,077
7,742
Other intangible assets
4%
23,166
24,159
8%
51,442
55,329
56%
122
190
20,821
(1)%
Deferred tax assets
Other assets
Sep 30,
Our capital structure developed as follows:
A.5.1 Capital structure
A.5 Financial position
16
15
Combined Management Report
Deferred tax assets increased mainly due to income tax effects
related to remeasurement of defined benefits plans.
The increase in goodwill included the acquisition of CD-adapco.
The increase in inventories was driven mainly by a build-up in
Energy Management, Power and Gas and Wind Power and
Renewables.
The increase in other current financial assets was driven by
higher loans receivable at SFS. These higher current loans receiv-
ables were mainly due to new business and the reclassification of
non-current loans receivables.
2016
Our total assets in fiscal 2016 were influenced by negative cur-
rency translation effects of €1.1 billion, primarily involving the
British pound.
120,348
2%
68,906
70,388
125,717
17%
1,094
1,279
32%
2,591
3,431
Total non-current assets
Total assets
4%
36%
5,087
4,865
(4,144)
Cash flows from investing activities - continuing and discontinued operations
262
Cash flows from investing activities – discontinued operations
(4,406)
Cash flows from investing activities - continuing operations
1,417
Other disposals of assets
(1,409)
Other purchases of assets
(1,356)
Change in receivables from financing activities of SFS
(922)
Acquisitions of businesses, net of cash acquired
(2,135)
Additions to intangible assets and property, plant and equipment
Cash flows from investing activities
7,611
Cash flows from operating activities - continuing and discontinued operations
(57)
Cash flows from operating activities - discontinued operations
7,668
Cash flows from operating activities – continuing operations
Cash flows from financing activities
Purchase of treasury shares
(463)
Issuance of long-term debt
18
The change in short-term debt and other financing activities
included the net cash outflows related to commercial paper and
from loans to banks.
The cash inflows from investing activities
operations - included proceeds from the sale of the remaining
assets in the hearing aid business.
discontinued
The cash inflows from other disposals of assets primarily in-
cluded disposals from above-mentioned eligible collateral, pro-
ceeds from the sale of shares in a fund at Corporate Treasury, and
real estate disposals at SRE.
The cash outflows for other purchases of assets primarily in-
cluded additions of assets eligible as central bank collateral and
to a lesser extent payments related to equity investments.
The cash outflows for acquisitions of businesses, net of cash
acquired, primarily included payments totaling €0.9 billion re-
lated to the acquisition of CD-adapco.
The conversion of profit into cash inflows from operating activ-
ities was mainly driven by Healthineers as well as the Digital Fac-
tory and Power and Gas Divisions. This conversion was affected
by a build-up of operating net working capital primarily driven
by an increase in the line items Inventories and Trade and other
receivables in the Industrial Business, which was primarily due to
Power and Gas and Energy Management.
(2,710)
Cash flows from financing activities - continuing and discontinued operations
Cash flows from financing activities - discontinued operations
3,324
Cash flows from financing activities - continuing operations
(249)
Other cash flows from financing activities - continuing operations
(2,827)
(809)
(1,408)
Dividends paid to shareholders of Siemens AG
Interest paid
Change in short-term debt and other financing activities
(2,253)
5,300
Repayment of long-term debt (including current maturities of long-term debt)
(2,710)
Other reconciling items to cash flows from operating activities – continuing operations
(1,241)
Change in operating net working capital
4%
120,348
125,717
4%
581
29%
(1)%
34,474
34,211
28%
605
71%
72%
The increase in short-term debt and current maturities of
long-term debt was due mainly to reclassifications of long-term
fixed-rate instruments totaling €5.0 billion. This increase was
partly offset by repayments of commercial paper of €0.9 billion
and fixed-rate instruments of €0.5 billion.
7%
90,901
5%
45,730
47,986
8%
2,297
2,471
(22)%
1,466
1,142
5%
85,292
5%
Long-term debt decreased mainly due to the above mentioned
reclassifications and the redemption of hybrid capital bonds to-
taling €1.8 billion. This decrease was partly offset by the issu-
ance in September 2016 of instruments totaling US$6.0 billion
(€5.4 billion) in six tranches with different maturities up to
30 years.
Combined Management Report
5,584
Net income
2016
Fiscal year
Cash flows from operating activities
(in millions of €)
A.5.2 Cash flows
17
Combined Management Report
Irrevocable loan commitments amounted to €3.4 billion (Septem-
ber 30, 2015: €3.6 billion). A considerable portion of these com-
mitments resulted from asset-based lending transactions, mean-
ing that the respective loans can be drawn only after the borrower
has provided sufficient collateral.
Future payment obligations under non-cancellable operating
leases amounted to €3.5 billion (September 30, 2015: €3.4 bil-
lion).
The main factors relating to the change in total equity attribut-
able to shareholders of Siemens AG were a negative €2.9 bil-
lion in other comprehensive income, net of income taxes, mainly
due to remeasurements of defined benefit plans, and dividend
payments of €2.8 billion (for fiscal 2015). These negative factors
were nearly offset by fiscal 2016 net income attributable to share-
holders of Siemens AG of €5.5 billion.
In addition to these commitments, we issued other guarantees.
To the extent future claims are not considered remote, maximum
future payments from these commitments amounting to €0.9 bil-
lion (September 30, 2015: €1.8 billion). The decrease in other
guarantees is related to indemnifications issued in connection
with dispositions of businesses.
Off-balance-sheet commitments
STATEMENTS.
For further information about our debt see → NOTE 15 in → B.6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. For further informa-
tion about the functions and objectives of our financial manage-
ment see NOTE 24 in →B.6 NOTES TO CONSOLIDATED FINANCIAL
We have three credit facilities at our disposal for general corpo-
rate purposes. These credit facilities amounted to €7.1 billion and
were unused as of September 30, 2016.
As of September 30, 2016 we recorded, in total, €28.6 billion in
notes and bonds (maturing until 2046), €1.4 billion in loans from
banks (maturing until 2023), €0.9 billion in other financial in-
debtedness (maturing until 2027) and €0.1 billion in obligations
under finance leases. Notes, bonds and loans from banks were
issued mainly in the euro and U.S. dollar, and to a lower extent
in the British pound.
Debt and credit facilities
In November 2015, we announced a share buyback of up to €3 bil-
lion ending at the latest on November 15, 2018. The buybacks will
be made under the current authorization granted at the Annual
Shareholders' Meeting on January 27, 2015. Shares repurchased
may be used solely for cancelling and reducing capital stock; for
issuing shares to employees, to members of the Managing Board
and board members of affiliated companies; and for meeting ob-
ligations from or in connection with convertible bonds or warrant
bonds. Under the program we repurchased 2,517,727 treasury
shares at an average cost per share of €91.24, totaling €0.2 bil-
lion (including incidental transaction charges).
Our capital structure ratio as of September 30, 2016 increased
from 0.6 a year earlier to 1.0, which was in line with our target
established in our One Siemens financial framework. The change
was due primarily to the increase in post-employment benefits
compared to the prior year, reflecting the above-mentioned in-
crease in the underfunding of our defined benefit plans.
Capital structure ratio
The funded status of our defined benefit plans - meaning de-
fined benefit obligation (DBO) less fair value of plan assets -
showed an underfunding of €13.4 billion as of September 30,
2016 (€9.5 billion as of September 30, 2015). Within these fig-
ures, the underfunding for pension benefit plans amounted to
€12.8 billion as of September 30, 2016 (€9.0 billion as of Septem-
ber 30, 2015) and the underfunding of other post-employment
benefit plans amounted to €0.5 billion (€0.5 billion as of Sep-
tember 30, 2015). The increase in the underfunding of our de-
fined benefit plans was mainly due to lower discount rate as-
sumptions. This effect was partly offset by a significant increase
in return on plan assets and a lower pension progression assump-
tion in Germany.
Post-employment benefits
As of September 30, 2016 the undiscounted amount of maximum
potential future payments related to credit guarantees, guaran-
tees of third-party performance and HERKULES obligations
amounted to €3.7 billion (September 30, 2015: €4.2 billion).
678
1,151
23%
Eliminations, Corporate Treasury
and other reconciling items
Reconciliation to Consolidated
Financial Statements
16.9%
6%
2,184
2,325
17.2%
Profit margin
Profit
5%
5%
12,930
13,535
Revenue
(543)
(674)
acquired in business combinations
4%
4%
Amortization of intangible assets
(440)
(439)
Centrally carried pension expense
Comp.
Actual
(349)
(366)
(1,994)
(1,119)
(in millions of €, earnings per share in €)
Fiscal year
A.3.3 Income
13
Combined Management Report
Expenses in Eliminations, Corporate Treasury and other rec-
onciling items were lower despite an increase in interest ex-
penses mainly associated with US$7.75 billion in bonds issued
end of May 2015. For comparison, fiscal 2015 was burdened even
more by negative effects from changes in the fair value of inter-
est rate derivatives related to interest rate management at Cor-
porate Treasury.
Corporate items were influenced by a number of items, includ-
ing €43 million in severance charges for corporate reorganization
of support functions compared to €198 million in such charges in
fiscal 2015.
Income from Siemens Real Estate continues to be highly depen-
dent on the disposals of real estate. In fiscal 2016, the profit of
disposals of real estate were lower than in the prior year.
Centrally managed portfolio activities (CMPA) included pri-
marily a loss from at-equity investments (including impairments)
after a positive result in the prior year. In particular, fiscal 2015
included a gain of €1.4 billion on the disposal of Siemens' stake
in BSH Bosch und Siemens Hausgeräte GmbH (BSH). This was
partly offset by an equity investment loss of €275 million related
to Unify Holdings B.V. (Unify), an impairment of €138 million re-
lated to Siemens' stake in Primetals Technologies Ltd. and losses
from other businesses.
24,970
26,446
(690)
Sep 30,
2015
Fiscal year
2015
600
20.9%
Total assets
(in millions of €)
21.6%
ROE (after taxes)
653
Income before income taxes
2016
(in millions of €)
A.3.2.9 FINANCIAL SERVICES
All businesses posted order increases and nearly all recorded rev-
enue growth, led by the diagnostic imaging business. Orders
grew in the Asia, Australia region, most notably in China, and in
the Americas region, due to the U.S. All regions contributed to
revenue growth, particularly the Americas region, due to the U.S,
and the Asia, Australia region. Profit growth was driven by the
diagnostic imaging business, which continued to account for the
largest share of Healthineers profit overall. Profit was burdened
by severance charges in both periods, totaling €61 million in fis-
cal 2016 and €62 million in fiscal 2015. Profit development in
fiscal 2016 benefited from currency tailwinds. For comparison,
fiscal 2015 included a €64 million gain from divestment of the
microbiology business.
2016
(449)
Corporate items
% Change
(4)%
(5)%
9,553
9,038
(1)%
(2)%
9,144
8,939
Comp.
Actual
2015
Profit
Profit margin
2016
% Change
Fiscal year
Orders in Mobility declined due mainly to a sharply lower volume
from large orders year-over-year. The largest contract wins in fis-
cal 2016 included an order for light rail vehicles in the U.S., a
commuter rail contract in Germany and a rail automation order in
Algeria, totaling €1.2 billion. Large orders in fiscal 2015 included
an order worth €1.7 billion for regional trains and maintenance
in Germany and a €1.6 billion long-term order for maintenance
in Russia. Revenue grew in all businesses except for the rail infra-
structure business where revenue was down moderately year-
over-year. The strongest contribution to revenue growth came
from execution of large rolling stock projects. On a geographic
basis, strong revenue increases in Europe, C.I.S., Africa, Middle
East and the Americas more than offset a decline in Asia, Austra-
lia, which reported a sharp drop in China. Profit development
benefited from positive effects related to solid project execution
on large contracts, and from a sharp reduction in severance
charges which fell to €16 million from €68 million a year earlier.
A.3.2.7 PROCESS INDUSTRIES AND DRIVES
Despite challenging market conditions, Digital Factory increased
orders, revenue and profit year-over-year. The driving force for all
three was the Division's PLM software business, which achieved
double-digit growth in orders and revenue, supported by the ac-
quisition of CD-adapco which closed in the third quarter of fiscal
2016. The Division's high-margin factory automation business
contributed to order and revenue growth to a significantly lesser
extent, while volume in the motion control business declined
slightly year-over-year. On a regional basis, orders and revenue
increased in all regions, with the strongest growth coming from
the Europe, C.I.S., Africa, Middle East region. Profit came in
slightly above the prior-year level as a double-digit increase in the
PLM business and a slight increase in the factory automation
business were largely offset by declines in other businesses. Prof-
itability in fiscal 2016 was held back by deferred revenue adjust-
ments and transaction and integration costs related to the acqui-
sition of CD-adapco, totaling €43 million. In addition, Division
profit included severance charges in both periods, €49 million in
fiscal 2016 compared to €53 million in fiscal 2015.
7.8%
8.7%
Profit margin
6%
Comp.
(22)%
(23)%
4%
15%
(in millions of €)
Orders
2016
243
(58)%
Fiscal year
2015
13,349
13,830
Orders
2016
(in millions of €)
205
132
714
(215)
Centrally managed portfolio activities
Siemens Real Estate
2015
581
2016
(in millions of €)
Profit
A.3.2.10 RECONCILIATION TO CONSOLIDATED
FINANCIAL STATEMENTS
Financial Services (SFS) recorded stable results in the debt busi-
ness. Results from the equity investments business came in above
the high level of fiscal 2015, due primarily to a positive effect of
€92 million resulting from an at-equity investment. Fiscal 2015
included a net gain in connection with the sale of renewable
energy projects. Despite substantial early terminations of financ-
ings, total assets have increased since the end of fiscal 2015.
A.3.2.8 HEALTHINEERS
partly offset by growth from the wind power components busi-
ness. On a regional basis, orders were down in Asia, Australia,
particularly in China, and in Europe, C.I.S., Africa, Middle East,
while they increased in the Americas, due mainly to strong de-
Imand for the Division's offerings for the wind power industry.
Revenue was down in all three reporting regions. Underutiliza-
tion and a shift in demand particularly in the large drives and the
oil & gas and marine businesses heavily impacted the Division's
profit in fiscal 2016. To reduce the size of its manufacturing ca-
pacity and align its global footprint to changed market demand,
the Division took €254 million in severance charges. For compar-
ison, profit in the prior fiscal year was burdened by a warranty
charge of €96 million and severance charges of €74 million.
12 Combined Management Report
The global weakness in oil and gas and other commodity-related
markets continued to impact Process Industries and Drives. This
was particularly evident in the Division's oil & gas and marine busi-
ness, where orders fell by a quarter compared to fiscal 2015, and
in its large drives business, which saw a moderate decline in or-
ders. These decreases were only partly offset by order growth in
the Division's wind power components business. Revenue shows
a similar development, as both the oil & gas and marine and the
large drives businesses saw considerable declines in revenue only
Revenue
6.1%
2.7%
Fiscal year
2015
% Change
Power and Gas
Cash and cash equivalents
(in millions of €)
Sep 30,
A.4 Net assets position
Combined Management Report
14
The decrease in Basic earnings per share reflects the lower net
income compared to fiscal 2015, which included the substantial
disposal gains related to the sale of the hearing aid business and
the BSH stake that added €3.66 to basic earnings per share.
At 14.3%, ROCE was below the range established in our One
Siemens financial framework, as expected. ROCE declined com-
pared to fiscal 2015 due to lower net income and a significant
increase in average capital employed with the acquisition of
Dresser-Rand at the end of the third quarter of fiscal 2015.
Income from discontinued operations, net of income taxes
was substantially lower compared to the prior year. In fiscal 2016,
it primarily included a gain of €102 million from the sale of the
remaining assets in the hearing aid business and €76 million re-
lated to the former Siemens IT Solutions and Services activities.
In the prior year, the line item primarily included gains from the
disposal of the hearing aid and hospital information businesses,
totaling €1.7 billion and €0.2 billion, respectively.
The tax rate of 27% was positively influenced by successful ap-
peals of tax decisions for prior years. In fiscal 2015, the tax rate
was lower, due mainly to the disposition of the stake in BSH
which was mostly tax-free. As a result, Income from continuing
operations increased 1%.
As a result of the development described for the segments,
Income from continuing operations before income taxes
increased 3%. This amount also included higher expenses - as
planned for selling and R&D, primarily at Digital Factory and
Healthineers, as we continued targeted investments aimed at
organic volume growth and strengthening our capacities for
innovation. Severance charges for continuing operations were
€598 million, of which €541 million were in the Industrial Busi-
ness. In fiscal 2015, severance charges for continuing operations
were €804 million, of which €564 million were in the Industrial
Business.
-
2016
21.0%
8.84
6.74
14.3%
Basic earnings per share
ROCE
(24)%
7,380
5,584
(91)%
2,031
188
Income from discontinued operations, net of income taxes
Net income
1%
(24)%
5,349
2015
10,604
644
790
5%
17,253
32%
5,157
6,800
Goodwill
Total current assets
Assets classified as held for disposal
Other current assets
% Change
Current income tax assets
Other current financial assets
2%
15,982
16,287
Trade and other receivables
10%
1,175
1,293
Available-for-sale financial assets
6%
9,957
Inventories
1,204
5,396
(7)%
15%
588
678
5%
553
577
57%
570
895
Industrial Business
Healthineers
Process Industries and Drives
Digital Factory
Mobility
Building Technologies
Energy Management
190%
160
464
Wind Power and Renewables
32%
1,415
1,872
1,690
Income from continuing operations
1,685
243
(1,869)
(2,008)
Income tax expenses
3%
7,218
7,404
Income from continuing operations before income taxes
9%
(78)%
600
(1,119)
(1,994)
Reconciliation to Consolidated Financial Statements
653
Financial Services (SFS)
10.1%
10.8%
Profit margin Industrial Business
13%
7,737
8,744
6%
2,184
2,325
(58)%
581
0%
18,160
Operational optimization alignments and cost reduction ini-
tiatives: We are in a continuous process of operational optimiza-
tion alignments and constantly engage in cost-reduction initia-
tives, including ongoing capacity adjustment measures and
structural initiatives. Consolidation of business activities and
28 Combined Management Report
and associated material opportunities and risks
We expect revenue growth to benefit from conversion of our or-
der backlog (defined as the sum of order backlogs of our indus-
trial businesses) which totaled €113 billion as of September 30,
2016. From this backlog, we expect to convert approximately
€39 billion of past orders into current revenue in fiscal 2017.
Within this amount, we expect for fiscal 2017 approximately
€12 billion in revenue conversion from the €44 billion backlog of
the Power and Gas Division, approximately €7 billion in revenue
conversion from the €12 billion backlog of the Energy Manage-
ment Division, approximately €7 billion in revenue conversion
from the €26 billion backlog of the Mobility Division, approxi-
mately €4 billion in revenue conversion from the €15 billion
backlog of the Wind Power and Renewables Division, approxi-
mately €3 billion in revenue conversion from the €5 billion back-
log of the Process Industries and Drives Division, approximately
€2 billion in revenue conversion from the €3 billion backlog of
the Building Technologies Division, approximately €2 billion in
revenue conversion from the €2 billion backlog of the Digital Fac-
tory Division and approximately €2 billion in revenue conversion
from the €5 billion backlog of Healthineers.
We intend to continue providing an attractive return to share-
holders. As in the past, we intend to fund our dividend payout
from Free cash flow. The Siemens Managing Board, in agreement
with the Supervisory Board, proposes a dividend of €3.60 per
share, up from €3.50 a year earlier.
We evaluate our capital structure using the ratio of industrial net
debt to EBITDA. For fiscal 2016, this ratio was 1.0, up from 0.6 in
fiscal 2015. This was close to our forecast, which was to reach a
ratio below but near 1.0.
ROCE was 14.3% in fiscal 2016. We thus reached our forecast for
fiscal 2016, which was to achieve a double-digit ROCE but to
come in substantially below the amount of fiscal 2015, which
was 21.0%. This decline was due to a combination of lower net
income, which in the prior fiscal year benefited from the
above-mentioned divestment gains, and an increase in average
capital employed, resulting mainly from the acquisition of
Dresser-Rand.
Net income in fiscal 2016 was €5.6 billion and basic EPS from net
income was €6.74 both down 24% compared to the prior fiscal
year, which included a gain of €3.0 billion within net income and
€3.66 within earnings per share from the sale of our hearing aid
business and our stake in BSH. Excluding these gains, net income
rose 28%. We thus exceeded our fiscal 2016 forecast for a signif-
icant increase in net income excluding these gains. This in turn
enabled us to exceed our forecast for basic EPS from net income,
which we raised twice during fiscal 2016: first from the range of
€5.90 to €6.20 to the range of €6.00 to €6.40, and then from the
latter range to €6.50 to €6.70. Net income development bene-
fited from our continuous efforts to increase productivity. In fiscal
2016, total cost productivity improved by 5%, above our fiscal
2016 target of 3% to 4%.
A.7 Subsequent events
20 Combined Management Report
Outside the Industrial Business, the loss was higher than in fiscal
2015, which included a gain of €1.4 billion from the sale of our
stake in BSH. In contrast, the loss from other at-equity invest-
ments was lower and costs related to Corporate Items declined
substantially compared to the prior year.
The profit margin of the Industrial Business increased to 10.8%,
up from 10.1% in fiscal 2015. We thus reached the upper end of
the range of 10% to 11% that was forecast for fiscal 2016. All
industrial businesses except for Process Industries and Drives
reached their margin ranges, with three Divisions that were
below their margin ranges in fiscal 2015, entering their ranges
in fiscal 2016: Power and Gas, Wind Power and Renewables and
Energy Management. SFS, which is outside our Industrial Business,
achieved a return on equity after tax of 21.6%, again above the
upper end of its margin range.
Industrial Business profit grew 13% to €8.7 billion. As with reve-
nue, all industrial businesses except for Process Industries and
Drives increased their profit year-over-year. Wind Power and Re-
newables nearly tripled its profit compared to fiscal 2015, sup-
ported by a number of factors including successful implementa-
tion of measures for ramping up commercial-scale production of
turbine offerings. The Energy Management Division continued
its strong turnaround, with high double-digit profit growth.
Power and Gas achieved double-digit profit growth, benefiting
from among others a positive effect following the ending or eas-
ing of sanctions on Iran; Power and Gas took significant project
charges and higher severance in the prior year. Mobility contin-
ued its solid project execution and also achieved double-digit
profit growth. Healthineers and our Digital Factory and Building
Technologies Divisions exceeded the already high profit levels
they had reached in fiscal 2015. The decline in profit at Process
Industries and Drives was due to the above-mentioned market
conditions and charges related to measures taken to address
those challenges.
Revenue rose to €79.6 billion, also up 5% compared to fiscal
2015. All our industrial businesses increased revenue year-over-
year, except for the Process Industries and Drives Division. Exclud-
ing currency translation effects, overall revenue rose 6%. Our
forecast was to achieve moderate revenue growth excluding cur-
rency translation effects. As expected, portfolio effects added
2 percentage points to growth. The strongest contribution to
revenue growth came from the Power and Gas Division, which
achieved a double-digit growth rate even after excluding positive
portfolio effects, primarily related to the acquisition of Dresser-
Rand at the end of the third quarter of fiscal 2015. Revenue
growth at Power and Gas included strong contributions from
project execution on orders from Egypt.
Orders increased 5% year-over-year to €86.5 billion, for a book-
to-bill ratio of 1.09, thus fulfilling our expectation for a ratio
clearly above 1.0. All industrial businesses contributed to order
growth except for the Mobility Division, which recorded lower
volume from large orders year-over-year, and the Process Indus-
tries and Drives Division, which is suffering from weak demand
in commodity-related markets. Order growth was particularly
impressive in the Power and Gas and the Wind Power and Renew-
ables Divisions. While Power and Gas recorded among others
large orders for power plants in Egypt, Wind Power and Renew-
ables won among others a number of contracts for large offshore
wind-farms including service in the U.K.
In fiscal 2016, we were particularly successful in executing on our
financial target system, enabling us to twice raise our forecast for
basic earnings per share (EPS) (net income) and to gain market
share in most of our businesses. Despite an unfavorable economic
environment and rising global uncertainties, we reached or ex-
ceeded the targets set for our primary measures for fiscal 2016.
We achieved revenue growth of 6%, net of effects from currency
translation, including two percentage points from portfolio
effects. Net income and basic earnings per share (EPS) (net
income) rose by more than a quarter compared to fiscal 2015
excluding the portfolio gains from the divestment of the hearing
aid business and our stake in BSH. As forecast, Return on capital
employed (ROCE) was double-digit. Our capital structure ratio
was 1.0, close to our forecast.
We also made further progress in streamlining our management
structures and processes. Following cost savings of approximately
€0.4 billion in fiscal 2015, we reduced cost by an additional
€0.6 billion in fiscal 2016, thus achieving cost savings of €1.0 bil-
lion compared to fiscal 2014.
In fiscal 2016, most of our industrial businesses contributed to
organic revenue growth, and we expect a similar development in
fiscal 2017. The principle exception is the Power and Gas Division,
which contributed double-digit growth in fiscal 2016.
In fiscal 2016, we successfully continued implementing our "Vision
2020" concept. We made further significant steps to strengthen
our business focus in electrification, automation and digitaliza-
tion by acquiring CD-adapco, a U.S.-based provider of simulation
software, and by signing binding agreements to merge our wind
power business, including service, with Gamesa to strengthen
our wind power business both regionally and in the global on-
shore market. We sold our remaining financial assets in the hear-
ing aid business and our share in Unify Holdings B.V. to Atos SE.
For Process Industries and Drives we implemented measures to
address the Division's structural challenges with regard to adjust-
ing regional footprint and reducing overcapacities. We also
made substantial progress in our ongoing initiative to improve
profitability of low-margin businesses throughout our Industrial
Business. Beginning with fiscal 2017 we founded next47, a sepa-
rate unit that pools our existing startup activities to foster disrup-
tive ideas more vigorously and accelerate the development of
new technologies.
19
Combined Management Report
Healthineers' investments are mainly driven by enhancing com-
petitiveness and innovation notably in the diagnostics busi-
nesses, including large amounts relating to intangible assets,
particularly capitalized development expenses for new platforms
and to upcoming spending for factories, especially in China.
Process Industries and Drives makes most of its capital expen-
ditures for the purpose of rationalization, replacement and mod-
ification required for transition to innovative products, particu-
larly relating to the large drives business.
Major spending of Digital Factory relates to the factory automa-
tion, motion control systems and control products businesses,
including investments in production facilities in China.
Mobility's investments mainly focus on meeting project de-
mands and maintaining or enhancing its production and service
facilities, including capital expenditures for improving its respec-
tive positions in growing market segments.
The investments of Building Technologies mainly relate to the
products and systems business, particularly innovation projects,
such as control and service platforms.
Energy Management is spending the larger portion of its capital
expenditures for innovation, particularly in the low voltage and
products business. Further investments are primarily related to
the expansion of factories and technical equipment and to the
replacement of fixed assets.
The investments of Wind Power and Renewables are focused
on the extension, modernization and optimization of existing
plants to allow for the large-scale manufacturing of innovative
products, including construction of production and service facil-
ities such as in the U.K., Germany, Morocco and Egypt. To a lesser
extent, Wind Power and Renewables also focuses on transporta-
tion solutions particularly for delivering large turbines.
The investments of Power and Gas are focused on replacement,
enhancing productivity and innovation, mainly relating to our
large gas turbines and generators business, including upcoming
spending for a new technology platform.
Focus areas of ongoing investing activities of the Industrial
Business are:
With regard to capital expenditures for continuing operations, we
expect a moderate spending increase in fiscal 2017. In addition
we plan to invest significant amounts in coming years in attrac-
tive innovation fields in connection with next47.
Additions to intangible assets and property, plant and equipment
from continuing operations totaled €2.1 billion in fiscal 2016.
Within the Industrial Business ongoing investments related
mainly to technological innovations; extending our capacities for
designing, manufacturing and marketing new solutions; improv-
ing productivity and our global footprint; and replacements of
fixed assets. These investments amounted to €1.5 billion in fiscal
2016. The remaining portion in fiscal 2016, €0.6 billion, related
mainly to SRE, including significant amounts related to office proj-
ects, such as new corporate office buildings in Germany, and to
support investing activities particularly at Wind Power and Renew-
ables. SRE is responsible for uniform and comprehensive manage-
ment of Company real estate worldwide, and supports the Indus-
trial Business and corporate activities with customer-specific real
estate solutions.
Investing activities
A.6 Overall assessment of the economic position
complex geopolitical environment. Therefore, we expect modest
growth in revenue, net of effects from currency translation and
portfolio transactions.
23
Combined Management Report
In October 2016, the shareholders of Gamesa approved binding
agreements to merge Siemens's wind power business, including
service, with Gamesa. Closing of the transaction is subject to the
approval of the antitrust and regulatory authorities.
In November 2016, Siemens announced the acquisition of Mentor
Graphics (U.S.), a design automation and industrial software pro-
vider. The purchase price is US$37.25 per share in cash, which
represents an enterprise value of US$4.5 billion. Mentor Graphics
will be integrated in the Digital Factory Division. Closing of the
transaction is subject to customary conditions and is expected in
the third quarter of fiscal 2017.
In November 2016, Siemens announced its intention to further
strengthen Healthineers in Siemens for the future and is there-
fore planning to publicly list its healthcare business. Siemens will
announce more precise details regarding the date and scope of
the placement when plans for the public listing are further ad-
vanced. The listing will also depend, among other things, on the
stock market environment.
Combined Management Report
21
A.8 Report on expected developments
A.8.1 Report on expected
developments
A.8.1.1 WORLDWIDE ECONOMY
In fiscal year 2017, the world economy is expected to grow only
slightly faster than in fiscal 2016, but still well below the long-
term historical trend. Global GDP is expected to expand by 2.8%,
with fixed investments growing by 3.2%. Fixed investments in
emerging countries (+4.4%) are expected to grow faster than in
advanced economies (+1.9%).
The U.S. has substantially resolved its inventory reduction, en-
abling GDP to grow substantially faster (+2.2%) than in 2016
(+1.4%). The good shape of the country's labor markets and in-
creasing wage growth support consumer spending, which is ex-
pected to remain the mainstay of the economy. Improved trends
in housing and capital spending are also expected to support
growth. In particular, business fixed investment is expected to
pick up, as a recovery in commodity prices is increasing capital
spending in resource extraction and related industries. Never-
theless, potential impacts resulting from political uncertainty in
the wake of the U.S. presidential election have to be monitored.
In China, economic growth is projected to slow to 6.3% in 2017
after 6.6% in 2016. Some questions exist about the sustainability
of development in the country's financial and real estate sectors.
With China's debt-to-GDP ratio rising strongly in recent years,
the risks of a financial imbalance have increased. In addition,
large housing price increases in several large cities have raised
concerns about another real estate bubble.
In Europe, economic activity is expected to remain hampered by
political risks. Negotiations between the U.K. and the European
Union regarding the U.K.'s exit from the EU have been announced
for spring 2017 and could become contentious. The exit process
could heighten business and consumer uncertainty, reduce in-
vestment in the U.K., and pose some risk to financial markets.
This is also true for the banking sector which in some countries
suffers from non-performing loans and a capital shortage. GDP
growth is forecast at 1.5% in 2017 after 1.8% in 2016.
Despite the positive developments expected for the world econ-
omy in 2017, first and foremost the acceleration of the U.S. econ-
omy, the risks remain substantial, particularly in the geopolitical
sphere (see A.8.3. RISKS). In addition, central banks raising
interest rates might induce financial turbulence, substantial
swings in capital flows, and readjustment of exchange rates.
Emerging markets might be especially vulnerable to these
shocks.
The forecasts presented here for GDP and fixed investments are
based on a report from IHS Markit dated October 15, 2016.
A.8.1.2 MARKET DEVELOPMENT
For fiscal 2017, we expect market volume for the markets served
by the Power and Gas Division to remain near the level of fiscal
2016. We anticipate a decline in the gas turbine market and a
slight recovery in the compression market. Our expectation for
the compression market is based on the assumptions that oil
prices will continue to recover and replacement demand will
grow, particularly to support enhanced extraction techniques
employed in partially depleted fields. We expect flat demand in
the steam turbine market, and a decline in demand for coal-fired
power plants in China. Overall, we assume a shift to more flexible
power generation and stronger demand for combined heat and
power generation.
We expect the markets served by the Wind Power and Renew-
ables Division to return to moderate growth in fiscal 2017.
Growth is expected to be driven by the Americas, particularly the
U.S. and continued growth in the offshore wind power market
segment. Overall, we expect a continuation of the trend towards
an increasing share of renewable energy within the energy mix.
Within the onshore wind power market, we expect demand in
the low-wind segment to remain significant.
We continue to anticipate headwinds for macroeconomic growth
and investment sentiment in our markets in fiscal 2017 due to the
Revenue growth
We are exposed to currency translation effects, particularly involv-
ing the US$, the British £ and currencies of emerging markets,
particularly the Chinese yuan. During fiscal 2016, the average ex-
change rate conversion for our large volume of US$-denominated
revenue was US$1.11 per €. While we expect volatility in global
currency markets to continue in fiscal 2017, we have improved
our natural hedge on a global basis through geographic distribu-
tion of our production facilities during the past. Nevertheless,
Siemens is still a net exporter from the Euro zone to the rest of
the world, so a weak Euro is principally favorable for our business
and a strong Euro is principally unfavorable. In addition to the
natural hedging strategy just mentioned, we also hedge currency
risk in our export business using derivative financial instruments.
We expect these steps to help us limit effects on income related
to currency in fiscal 2017.
We are basing our outlook for fiscal 2017 for the Siemens Group
and its segments on the above-mentioned expectations and
assumptions regarding the overall economic situation and spe-
cific market conditions for the next fiscal year. Furthermore, this
outlook is based on the current business portfolio of Siemens,
excluding potential burdens associated with pending portfolio
matters in fiscal 2017. An acquisition of Mentor Graphics to ex-
pand our digital industrial leadership and a merger of our wind
power business, including service with Gamesa would among
other things result in additional revenue, purchase price allo-
cation effects, integration costs as well as assets and liabilities.
The merger with Gamesa would also result in increases in
non-controlling interests. In addition, we are further strengthening
Healthineers in Siemens for the future and are therefore planning
to publicly list our healthcare business. We will announce more
precise details regarding the date and scope of the placement
when plans for the public listing are further advanced. The listing
will also depend, among other things, on the stock market
environment.
A.8.1.3 SIEMENS GROUP
Our SFS Division is geared to Siemens' Industrial Business and its
markets. As such SFS is, among other factors, influenced by the
business development of the markets served by our Industrial
Business. SFS will continue to focus its business scope on areas
of intense domain know-how, thereby limiting risk and exposure
going forward.
With our ability to generate positive operating cash flows, our
total liquidity (defined as cash and cash equivalents as well as
available-for-sale financial assets) of €11.9 billion, our €7.1 billion
in unused lines of credit, and given our credit ratings at year-end,
we believe that we have sufficient flexibility to fund our capital
requirements. Also in our opinion, our operating net working
capital is sufficient for our present requirements.
such as centralized tendering and reimbursement budget con-
trol. For Brazil, the recession is expected to continue to impact
healthcare investments.
In fiscal 2017, market volume for the markets served by the Pro-
cess Industries and Drives Division is expected to come in
slightly below the level of fiscal 2016. While this decline is fore-
cast to be driven by an ongoing fall in investments in the oil and
gas and the mining markets, we expect this downturn to gradu-
ally come to an end during fiscal 2017.
Conditions for the markets addressed by the Digital Factory
Division are expected to improve modestly in fiscal 2017. Global
manufacturing production is forecasted to grow slightly in fiscal
2017, though global political and economic uncertainties are ex-
pected to continue to restrain investment decisions of key cus-
tomers. Market growth is expected to benefit from ongoing rising
demand from consumer-oriented manufacturing industries, es-
pecially in industrialized countries. Also, price stabilization in
some raw material markets is anticipated to end the economic
downturn in a number of emerging countries. Overall, we see
potential for the machine-building industry to return to slight
growth during the course of fiscal 2017, and the trend towards
digitalization is expected to continue to drive growth in the
industry software market.
For fiscal 2017, we expect markets served by the Mobility Divi-
sion to continue to grow moderately. We anticipate that rail op-
erators in Germany will continue to make significant invest-
ments. In the Middle East and Africa, we expect tenders of
further large turnkey and rolling stock projects. In China, we
expect investments in high-speed trains, urban transport and
rail infrastructure to continue to drive growth. In India, market
growth should continue from planned projects for commuter
and high-speed passenger lines, freight rail, and related infra-
structure as part of the transportation infrastructure build-out.
Overall, local rail transport is expected to gain importance as
urbanization is progressing. In emerging countries, rising in-
comes are expected to result in greater demand for public trans-
port solutions.
22 Combined Management Report
For the markets served by the Building Technologies Division,
we expect solid growth in fiscal 2017. The regional differences in
growth dynamics are narrowing further, with modestly increas-
ing growth rates in developed countries and slowing growth in
emerging markets. Above-average growth is anticipated in the
Middle East, China, India and the U.S. A majority of the European
countries are anticipated to continue their recovery, led by Ger-
many, Spain and some of the Northern European countries. On
the other hand, growth might be impacted in countries with sig-
nificant exposure to weak commodity markets and in countries
with geopolitical uncertainties.
For the markets served by the Energy Management Division, we
expect slight overall growth in fiscal 2017. The Division's markets
are experiencing rising power consumption due to urbanization
and electrification in emerging countries. Also the energy mix is
changing, with a rising share of renewable energy. Furthermore,
there is a trend towards decentralized power generation. Within
the Division's key industries, we expect moderate growth in de-
mand from the metals markets, driven by the Europe, C.I.S.,
Africa, Middle East and the Asia, Australia regions and from the
construction markets. For the oil and gas market, a slight recov-
ery is expected. Demand from data centers is also expected to
contribute to growth. The base market for utilities is expected
to continue to grow, but with large investments such as in the
Middle East not reaching the level of fiscal 2016.
For fiscal 2017, we expect markets for Healthineers to stay on a
moderate growth path. Healthineers' markets continue to benefit
from long-term trends such as growing and aging populations
and from broader access to healthcare, but are restricted by
public spending constraints and by consolidation of healthcare
providers. On a geographic basis, we expect slight to moderate
growth in the U.S., held back by continued pressure to increase
utilization of existing equipment and to reduce reimbursement
rates. For Europe, we expect slight growth, with equipment re-
placement and business with large customers such as hospital
chains gaining further importance. For China, we expect health-
care spending to rise, due to an aging population, urbanization,
growing chronic disease incidence and expanded access to
health insurance, partly held back by governmental restrictions
(2,135)
5,476
Free cash flow from continuing and discontinued operations
for fiscal 2016 rose to €5.5 billion, up 17% compared to the prior
fiscal year.
discontinued operations
A.8.2.2 ENTERPRISE RISK MANAGEMENT PROCESS
We have implemented and coordinated a set of risk manage-
ment and control systems which support us in the early recogni-
tion of developments that could jeopardize the continuity of our
business. The most important of these systems include our en-
terprise-wide processes for strategic planning and management
reporting. Strategic planning is intended to support us in consid-
ering potential risks well in advance of major business decisions,
while management reporting is intended to enable us to moni-
tor such risks more closely as our business progresses. Our inter-
nal auditors regularly review the adequacy and effectiveness of
our risk management system. Accordingly, if deficits are de-
tected, it is possible to adopt appropriate measures for their elim-
ination. This coordination of processes and procedures is in-
tended to help ensure that the Managing Board and the
Supervisory Board are fully informed about significant risks in a
timely manner.
Risk management at Siemens builds on a comprehensive, inter-
active and management-oriented Enterprise Risk Management
(ERM) approach that is integrated into the organization and that
addresses both risks and opportunities. Our ERM approach is
based on the worldwide accepted Enterprise Risk Management -
Integrated Framework (2004) developed by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
The framework connects the ERM process with our financial re-
porting process and our internal control system. It considers a
company's strategy, the efficiency and effectiveness of its busi-
ness operations, the reliability of its financial reporting as well
as compliance with relevant laws and regulations to be equally
important.
The ERM process aims for early identification and evaluation of,
and response regarding, risks and opportunities that could mate-
rially affect the achievement of our strategic, operational, finan-
cial and compliance objectives. The time horizon covered by ERM
is typically three years. Our ERM is based on a net risk approach,
addressing risks and opportunities remaining after the execution
of existing control measures. If risks have already been consid-
ered in plans, budgets, forecasts or the financial statements (e.g.
as a provision or risk contingency), they are supposed to be in-
corporated with their financial impact in the entity's business
objectives. As a consequence, only additional risks arising from
the same subject (e.g. deviations from business objectives, dif-
ferent impact perspectives) should be considered for the ERM. In
order to provide a comprehensive view on our business activities,
risks and opportunities are identified in a structured way combin-
ing elements of both top-down and bottom-up approaches. Risks
and opportunities are generally reported on a quarterly basis.
This regular reporting process is complemented by an ad-hoc
reporting process that aims to escalate critical issues in a timely
manner. Relevant risks and opportunities are prioritized in terms
of impact and likelihood, considering different perspectives, in-
cluding business objectives, reputation and regulatory matters.
The bottom-up identification and prioritization process is supple-
mented by workshops with the respective managements of the
Industrial Business, SFS, regions and Corporate Units. This top-
down element ensures that potential new risks and opportunities
are discussed at management level and are included in the sub-
sequent reporting process, if found to be relevant. Reported risks
and opportunities are analyzed regarding potential cumulative
Combined Management Report
25
26
effects and are aggregated within and for each of the organiza-
tions mentioned above.
Responsibilities are assigned for all relevant risks and opportuni-
ties, with the hierarchical level of responsibility depending on the
significance of the respective risk or opportunity. In a first step,
assuming responsibility for a specific risk or opportunity involves
choosing one of our general response strategies. Our general
response strategies with respect to risks are avoidance, transfer,
reduction or acceptance of the relevant risk. Our general re-
sponse strategy with respect to opportunities is to 'seize' the rel-
evant opportunity. In a second step, responsibility for a risk or
opportunity also involves the development, initiation and moni-
toring of appropriate response measures corresponding to the
chosen response strategy. These response measures have to be
specifically tailored to allow for effective risk management.
Accordingly, we have developed a variety of response measures
with different characteristics. For example, we mitigate the risk
of fluctuations in currency and interest rates by engaging in
hedging activities. Regarding our long-term projects, systematic
and comprehensive project management with standardized proj-
ect milestones, including provisional acceptances during project
execution and complemented by clearly defined approval pro-
cesses, assists us in identifying and responding to project risks at
an early stage, even before the bidding phase. Furthermore, we
maintain appropriate insurance levels for potential cases of dam-
age and liability risks in order to reduce our exposure to such risks
and to avoid or minimize potential losses. Among others, we ad-
dress the risk of fluctuation in economic activity and customer
demand by closely monitoring the macroeconomic conditions
and developments in relevant industries, and by adjusting capac-
ity and implementing cost-reduction measures in a timely and
consistent manner, if deemed necessary.
A.8.2.3 RISK MANAGEMENT ORGANIZATION
AND RESPONSIBILITIES
To oversee the ERM process and to further drive the integration
and harmonization of existing control activities to align with legal
and operational requirements, the Managing Board established
a Risk Management and Internal Control Organization, headed by
the Chief Risk & Internal Control Officer, and a Corporate Risk and
Internal Control Committee (CRIC). The CRIC obtains risk and op-
portunity information from the Risk Committees established at
the Industrial Business, SFS, and regional organizations and from
the heads of Corporate Units. In order to allow for a meaningful
discussion on Siemens group level individual risk and opportuni-
ties of similar cause-and-effect nature are aggregated into risk
and opportunity themes. This aggregation naturally results in a
mixture of risks, including those with a primarily qualitative as-
sessment and those with a primarily quantitative risk assessment.
Accordingly, we do not foresee a purely quantitative assessment
of risk themes. This information then forms the basis for the eval-
uation of the company-wide risk and opportunity situation. The
CRIC reports to and supports the Managing Board on matters
relating to the implementation, operation and oversight of the
risk and internal control system and assists the Managing Board
for example in reporting to the Audit Committee of the Super-
visory Board. The CRIC is composed of the Chief Risk & Internal
Control Officer, as the chairperson, members of the Managing
Board and selected heads of Corporate Units.
A.8.3 Risks
Below we describe the risks that could have a material adverse
effect on our business, financial condition (including effects on
assets, liabilities and cash flows), results of operations and repu-
tation. The order in which the risks are presented in each of the
four categories reflects the currently estimated relative exposure
for Siemens associated with these risks and thus provides an in-
dication of the risks' current importance to us. Additional risks
not known to us or that we currently consider immaterial may
also negatively impact our business objectives and operations.
Unless otherwise stated, the risks described below relate to all of
our segments.
A.8.3.1 STRATEGIC RISKS
Competitive environment: The worldwide markets for our prod-
ucts and solutions are highly competitive in terms of pricing,
product and service quality, product development and introduc-
tion time, customer service, financing terms and shifts in market
demands. We face strong existing competitors and also compet-
itors from emerging markets, which may have a better cost struc-
ture. Some industries in which we operate are undergoing con-
solidation, which may result in stronger competition and a
change in our relative market position. Furthermore, we notice
that suppliers (and to some extent even customers), especially
from emerging countries (e.g. China), could develop into serious
competitors for Siemens. We address these risks with various
measures, for example, benchmarking, strategic initiatives, sales
push initiatives, executing productivity measures and target cost
projects, rightsizing of our factory footprint, exporting from low-
cost countries to price-sensitive markets, and optimizing our
product portfolio. We continuously monitor and analyze compet-
itive and market information in order to be able to anticipate
unfavorable changes in the competitive environment rather than
reacting to such changes.
Economic, political and geopolitical conditions (macroeco-
nomic environment): We see a high level of uncertainty regard-
ing the global economic outlook. Significant downside risks stem
e.g. from consequences of the Brexit vote in June of 2016, from
political uncertainty in the wake of the U.S. presidential election
and from an increasing trend towards populism. The U.K. exit
Operational failures and quality problems in our value chain
processes: Our value chain comprises all steps, from research
and development to supply chain management, production, mar-
keting, sales and services. Operational failures in our value chain
processes could result in quality problems or potential product,
labor safety, regulatory or environmental risks. Such risks are par-
ticularly present in our Industrial Business in relation to our pro-
duction and manufacturing facilities, which are located all over
the world and have a high degree of organizational and techno-
logical complexity. From time to time, some of the products we
sell might have quality issues resulting from the design or man-
ufacture of the products or of the commissioning of the products
or from the software integrated into them. Our Healthineers
business, for example, is subject to regulatory authorities includ-
ing the U.S. Food and Drug Administration and the European
Commission's Health and Consumer Policy Department, which
require us to make specific efforts to safeguard our product
safety. If we are not able to comply with these requirements, our
business and reputation may be adversely affected. Several mea-
sures for quality improvement and claim prevention are estab-
lished and the increased use of quality management tools is im-
proving visibility and assists us strengthen the root cause and
prevention process.
IT security: Our business portfolio is dependent on digital tech-
nologies. We observe a global increase of IT security threats and
higher levels of professionalism in computer crime, which pose a
risk to the security of products, systems and networks and the
confidentiality, availability and integrity of data. Like other large
multinational companies we are facing active cyber threats from
sophisticated adversaries that are supported by organized crime
and nation states engaged in economic espionage. We attempt
to mitigate these risks by employing a number of measures, in-
cluding employee training, comprehensive monitoring of our
networks and systems through Cyber Security Operation Centers,
and maintenance of backup and protective systems such as fire-
walls and virus scanners. Our contractual arrangements with ser-
vice providers, aim to ensure that these risks are reduced. None-
theless, our systems, products, solutions and services, as well as
those of our service providers remain potentially vulnerable to
attacks. Such attacks could potentially lead to the publication,
manipulation, espionage or leakage of information, improper use
of our systems, defective products, production downtimes and
supply shortages, with potential adverse effects on our reputa-
tion, our competitiveness and results of our operations.
A.8.3.2 OPERATIONAL RISKS
Portfolio measures, at-equity investments, other investments
and strategic alliances: Our strategy includes divesting activi-
ties in some business areas and strengthening others through
portfolio measures, including mergers and acquisitions. With
respect to divestments, we may not be able to divest some of our
activities as planned, and the divestitures we do carry out could
have a negative impact on our business, financial condition, re-
sults of operations and our reputation. Mergers and acquisitions
are inherently risky because of difficulties that may arise when
integrating people, operations, technologies and products. There
can be no assurance that any of the businesses we acquired can
be integrated successfully and in a timely manner as originally
planned, or that they will perform as anticipated once integrated.
In addition, we may incur significant acquisition, administrative,
tax and other expenditure in connection with these transactions,
including costs related to integration of acquired businesses. Fur-
thermore, portfolio measures may result in additional financing
needs and adversely affect our capital structure. Acquisitions led
to substantial addition to intangible assets, including goodwill in
our Statements of Financial Position. If we were to encounter
continuing adverse business developments or if we were other-
wise to perform worse than expected at acquisition activities,
then these intangible assets, including goodwill, might have to
be impaired, which could adversely affect our business, financial
condition and results of operations. Our investment portfolio
consists of investments held for purposes other than trading.
Furthermore, we hold other investments, for example, Atos SE
and OSRAM Licht AG. Any factors negatively influencing the fi-
nancial condition and results of operations of our at-equity in-
vestments and other investments, could have an adverse effect
on our equity pick-up related to these investments or may result
in a related write-off. In addition, our business, financial condi-
tion and results of operations could also be adversely affected in
connection with loans, guarantees or non-compliance with fi-
nancial covenants related to these at-equity investments and
other investments. Furthermore, such investments are inherently
risky as we may not be able to sufficiently influence corporate
governance processes or business decisions taken by our equity
investments, other investments and strategic alliances that may
have a negative effect on our business. In addition, joint ventures
bear the risk of difficulties that may arise when integrating peo-
ple, operations, technologies and products. Strategic alliances
may also pose risks for us because we compete in some business
areas with companies with which we have strategic alliances.
Besides other measures, we handle these risks with standardized
processes as well as dedicated roles and responsibilities in the
areas of mergers, acquisitions, divestments and carve outs. This
includes post closing actions as well as claim management and
centrally managed portfolio activities.
7,611
27
A.8.2.1 BASIC PRINCIPLES OF RISK MANAGEMENT
Our risk management policy stems from a philosophy of pursuing
sustainable growth and creating economic value while managing
appropriate risks and opportunities and avoiding inappropriate
risks. As risk management is an integral part of how we plan and
execute our business strategies, our risk management policy is
set by the Managing Board. Our organizational and accountabil-
ity structure requires each of the respective managements of our
Industrial Business, SFS, regions and Corporate Units to imple-
ment risk management programs that are tailored to their spe-
cific industries and responsibilities, while being consistent with
the overall policy.
Combined Management Report
Continuous low Oil/Commodity Prices: The longer than ex-
pected low oil price could reduce demand for Oil & Gas products.
Additionally, countries depending on high oil and commodity
prices (e.g. Russia, Venezuela, Middle East) might reduce public
spending. Both would result in a decline in order intake and reve-
nue for our businesses that serve oil and gas markets, as well as
underutilization of resources. We attempt to mitigate these risks
by close monitoring of the market situation, especially in the oil
and gas business. We consistently strive to adjust our capacity,
improve our cost structure, and increase our competitiveness in
this market.
Disruptive Technologies (incl. Digitalization): The markets in
which our businesses operate experience rapid and significant
changes due to the introduction of innovative and disruptive tech-
nologies. In the fields of digitalization (e.g. internet of things,
web of systems, Industrie 4.0), there are risks of new competi-
tors, substitutions of existing products/solutions/services, new
business models (e.g. in terms of pricing) and finally the risk that
our competitors may have faster time-to-market strategies and
introduce their digital products and solutions faster than
Siemens. Our operating results depend to a significant extent on
our ability to anticipate and adapt to changes in our markets and
to reduce the costs of producing our products. Introducing new
products and technologies requires a significant commitment to
research and development, which in return requires expenditure
of considerable financial resources that may not always result in
success. Our results of operations may suffer if we invest in tech-
nologies that do not operate or may not be integrated as ex-
pected, or that are not accepted in the marketplace as antici-
pated, or if our products or systems are not introduced to the
market in a timely manner, particularly compared to our compet-
itors, or become obsolete. We constantly apply for new patents
and actively manage our intellectual property portfolio to secure
our technological position. However, our patents and other intel-
lectual property may not prevent competitors from independently
developing or selling products and services that are similar to or
duplicates of ours.
which could negatively impact our financial condition. Siemens'
global setup with operations in almost all relevant economies,
the wide variety of our offerings following different business
cycles, and our varying business models (e.g. product, software,
solution, project and service-business) help us to absorb the im-
pact of an adverse development in a single market.
In general, due to the significant proportion of long-cycle busi-
nesses in our Divisions and the importance of long-term con-
tracts for Siemens, there is usually a time lag between the devel-
opment of macroeconomic conditions and their impact on our
financial results. In contrast, short-cycle business activities of the
Digital Factory Division and parts of Process Industries and Drives
Division and in the Energy Management Division react quickly to
volatility in market demand. If the moderate recovery of macro-
economic growth stalls again and if we are not successful in
adapting our production and cost structure to subsequent
changes in conditions in the markets in which we operate, there
can be no assurance that we will not experience adverse effects.
For example, it may become more difficult for our customers
to obtain financing. As a result, they may modify, delay or cancel
plans to purchase our products and services, or fail to follow
through on purchases or contracts already executed. Further-
more, the prices for our products and services may decline, as a
result of adverse market conditions, to a greater extent than we
currently anticipate. In addition, contracted payment terms, es-
pecially regarding the level of advance payments by our custom-
ers relating to long-term projects, may become less favorable,
process could heighten business and consumer uncertainty, re-
duce investment in the U.K., pose risks to financial markets and
may increase the uncertainties about the future of the EU in the
course of the U.K. exit negotiations. A further and massive loss
of economic confidence and a prolonged period of reluctance in
investment decisions and awarding of new orders would hit our
businesses. We continuously monitor the exit process and es-
tablished, for example, a task force team coordinating our local
and global mitigation measures. Further, a substantial business
risk stems from a significant weakening of Chinese economic
growth and the potential for corrections or even a collapse in
the country's real estate market, banking sector or stock market.
The downturn could get worse, if Chinese authorities fail to re-
form the state-owned enterprises in the industry and banking
sector and to further liberalize and open the economy. Both
global and regional investment climates could collapse due to
political upheavals, further independence debates within coun-
tries in the European Union, or sustained success for protection-
ist, anti-EU and anti-business parties and policy. A rapid tighten-
ing of monetary policy by the U.S. Federal Reserve could cause
a depreciation spiral among emerging market currencies. This
could lead to a renewed emerging market crisis because debt
levels of emerging market enterprises have risen, making them
dependent on favorable global financial conditions to ser-
vice debts denominated in foreign currencies. A terrorist mega-
attack, or a series of such attacks in major economies, could
depress economic activity globally and undermine consumer
and business confidence. Further risks stem from political ten-
sions (e.g. Syria, Turkey, Ukraine) and a loss of confidence in the
automotive sector.
Combined Management Report
Footprint: The risk is that we are not flexible enough in adjusting
our manufacturing footprint to quickly respond to changing mar-
kets, resulting in a non-competitive cost position and a loss of
business. To mitigate this risk, we continuously monitor and
analyze competitive and market information. Furthermore, we
closely monitor the implementation of the planned measures,
A.8.2 Risk management
maintain strict cost management, and conduct ongoing discus-
sions with all concerned interest groups.
This outlook assumes stabilization in the market environment
for our high-margin short-cycle businesses. It further excludes
charges related to legal and regulatory matters as well as poten-
tial burdens associated with pending portfolio matters.
Overall, the actual development for Siemens and its Segments
may vary, positively or negatively, from our outlook due to the
risks and opportunities described below or if our expectations
and assumptions do not materialize.
Continuing and
Fiscal year 2016
5,533
(2,135)
(57)
7,668
Discontinued
operations
Continuing
operations
Additions to intangible assets and property, plant and equipment
Free cash flow
Cash flows from operating activities
(in millions of €)
Free cash flow
We report Free cash flow as a supplemental liquidity measure:
We anticipate that orders will exceed revenue for a book-to-bill
ratio above 1.
(57)
We expect higher net income year-over-year, and basic EPS from
net income in the range of €6.80 to €7.20 as compared to €6.74
in fiscal 2016 which included €0.23 from discontinued operations.
Our forecast for net income and corresponding basic EPS is based
on a number of assumptions: We assume stabilization in the mar-
ket environment for our high-margin short-cycle businesses in
fiscal 2017. As part of our One Siemens framework, we target a
total cost productivity improvement of 3% to 5% in fiscal 2017.
Also, we assume continued solid project execution. Furthermore,
we anticipate no material currency-related effects on income.
Along with these assumptions, we anticipate pricing pressure on
our offerings of around 2% to 3% in fiscal 2017 along the lines of
fiscal 2016, with the Power and Gas Division and the Wind Power
and Renewables Division being affected the most. Furthermore,
we expect wage inflation of around 3% to 4%. Also, we plan to
increase R&D and selling expenses aimed at strengthening our
capacities for innovation and organic growth. Our forecast for net
income and corresponding basic EPS further excludes charges
related to legal and regulatory matters.
For fiscal 2017, we expect all but one of our industrial businesses
to be in their ranges for profit margin as defined in our financial
performance system (see → A.2 FINANCIAL PERFORMANCE SYSTEM).
The exception is Process Industries and Drives, which initiated
measures during fiscal 2016 to reduce the size of its manufactur-
ing capacity and align its global footprint to changed market
demand. We expect these measures to become effective largely
after fiscal 2017. Overall, we expect a profit margin for our Indus-
trial Business of 10.5% to 11.5%, compared to 10.8% in fiscal 2016,
in part due to our ongoing initiative to improve profitability of
low-margin businesses. We expect SFS, which is reported outside
Industrial Business, to achieve a return on equity (ROE) within its
margin range in fiscal 2017 and to keep its profit near the prior-
year level excluding the positive effect of €92 million, which re-
sulted from an at-equity investment.
Within our Reconciliation to Consolidated Financial Statements,
we expect results related to CMPA to continue to be highly vola-
tile from quarter to quarter during fiscal 2017. Expenses for Cor-
porate items are expected to be approximately €0.6 billion, with
costs in the second half-year higher than in the first half and
to include expenses related to our newly founded next47 startup
unit. While we anticipate that SRE will continue with real estate
disposals depending on market conditions, we expect gains from
disposals to be lower in fiscal 2017 than in fiscal 2016. Centrally
carried pension expenses are expected to total approximately
€0.5 billion in fiscal 2017. Amortization of intangible assets ac-
quired in business combinations was €674 million in fiscal 2016
and we expect a similar level in fiscal 2017, based on our current
business portfolio. Eliminations, Corporate Treasury and other
reconciling items are also anticipated to be on the prior-year level
despite higher interest expense related primarily to bonds issued
in fiscal 2016.
We do not expect material influence on financial results from
discontinued operations in fiscal 2017. For comparison, income
from discontinued operations in fiscal 2016 was €0.2 billion. We
anticipate our tax rate for fiscal 2017 to be in the range of 26%
to 30%.
Capital efficiency
Within our One Siemens financial framework, we aim in general
to achieve a ROCE in the range of 15% to 20%. We expect ROCE
for fiscal 2017 to come close to or reach the lower end of our
target range, compared to 14.3% for fiscal 2016. Burdens from
pending portfolio matters, which are excluded from our outlook,
could materially reduce our expectation for ROCE for fiscal 2017.
24
Profitability
Combined Management Report
Capital structure
We aim in general for a capital structure, defined as the ratio of
industrial net debt to EBITDA, of up to 1.0, and expect to achieve
this in fiscal 2017.
We continue to anticipate headwinds for macroeconomic growth
and investment sentiment in our markets due to the complex
geopolitical environment. Therefore, we expect modest growth
in revenue, net of effects from currency translation and portfolio
transactions. We further anticipate that orders will exceed reve-
nue for a book-to-bill ratio above 1. For our Industrial Business,
we expect a profit margin of 10.5% to 11.5%. We expect basic
EPS from net income in the range of €6.80 to €7.20, compared
to €6.74 in fiscal 2016 which included €0.23 from discontinued
operations.
A.8.1.4 OVERALL ASSESSMENT
(in millions of €)
25,763 26,454
(19,818) (20,161)
% Change
(3)%
Revenue
6,293
24%
Gross profit
5,945
as percentage of revenue
23%
2%
(6)%
Cost of Sales
Fiscal year
2015
The Annual Financial Statements of Siemens AG have been pre-
pared in accordance with the rules set out in the German Com-
mercial Code (Handelsgesetzbuch).
Statement of Income of Siemens AG in accordance
with German Commercial Code (condensed)
A.9.1 Results of operations
As of September 30, 2016, the number of employees was 94,363.
We intend to continue providing an attractive return to share-
holders. Therefore, we intend to propose a dividend whose distri-
bution volume is within a dividend payout range of 40% to 60%
of net income of the Siemens Group, which we may adjust for this
purpose to exclude selected exceptional non-cash effects.
Siemens AG is the parent company of the Siemens Group. Results
for Siemens AG are significantly influenced by directly or indi-
rectly owned subsidiaries and investments. The business devel-
opment of Siemens AG is fundamentally subject to the same risks
and opportunities as the Siemens Group. Due to the interrela-
tions between Siemens AG and its subsidiaries and the relative
size of Siemens AG within the Group, the outlook of the Group
also largely reflects our expectations for Siemens AG. Therefore,
the foregoing explanations for the Siemens Group apply also for
Siemens AG. We expect that income from investments will sig-
nificantly influence the profit of Siemens AG.
A.9 Siemens AG
Combined Management Report
34
Our internal audit function systematically evaluates our financial
reporting integrity, the effectiveness of the control system and
the risk management system, and the adherence to our compli-
ance policies. In addition, the Audit Committee is integrated into
our control system. In particular, it oversees the accounting pro-
cess and the effectiveness of the control system, the risk manage-
ment system and the internal audit system. Furthermore, we have
set up a Disclosure Committee which is responsible for reviewing
certain financial and non-financial information prior to publica-
tion. Moreover, we have rules for accounting-related complaints.
On a quarterly basis, an internal certification process is executed.
Management of different levels of our organization, supported
by confirmations of management of entities under their respon-
sibility, confirms the accuracy of the financial data that has been
reported to Siemens' corporate headquarters and reports on the
effectiveness of the related control systems.
level. In particular cases, such as valuations relating to post-
employment benefits, external experts are used. The reported
closing data is used to prepare the financial statements in the
consolidation system. The steps necessary to prepare the financial
statements are subject to both manual and automated controls.
Research and
Qualification of employees involved in the accounting process is
ensured through appropriate selection processes and regular
training. As a fundamental principle, based on materiality con-
siderations, the four eyes principle applies and specific proce-
dures must be adhered to for data authorization. Additional con-
trol mechanisms include target-performance comparisons and
analyses of the composition of and changes in individual line
items, both in the closing data submitted by reporting units and
in the Consolidated Financial Statements. In line with our infor-
mation security requirements, accounting-related IT systems
contain defined access rules protecting them from unauthorized
access. The manual and system-based control mechanisms re-
ferred to above generally also apply when reconciling the IFRS
closing data to the Annual Financial Statements of Siemens AG.
2016
development expenses
(49)%
(2,417)
The base data used in preparing our financial statements consists
of the closing data reported by the operations of Siemens AG and
its subsidiaries. The preparation of the closing data of most of our
entities is supported by an internal shared services organization.
Furthermore, other accounting activities, such as governance
and monitoring related activities, are usually bundled on regional
Allocation to other
(47)%
47%
(47)%
43%
179
256
Profit carried forward
5,618
2,999
Net income
(300)
(160)
Income taxes
5,918
(2,454)
3,158
6,122
3,092
ments 3,732 (prior year 8,142)
thereof Income from invest-
Financial income, net
Other operating income
(expenses), net
n/a
134
7%
(3,558) (3,810)
administrative expenses
Selling and general
(2)%
Result from ordinary activities
Our Consolidated Financial Statements are prepared on the basis
of a centrally issued conceptual framework which primarily con-
sists of uniform Financial Reporting Guidelines and a chart of
accounts. For Siemens AG and other companies within the
Siemens group required to prepare financial statements in accor-
dance with German Commercial Code, this conceptual frame-
work is complemented by mandatory regulations specific to the
German Commercial Code. The need for adjustments in the con-
ceptual framework due to regulatory changes is analyzed on an
ongoing basis. Accounting departments are informed quarterly
about current topics and deadlines from an accounting and clos-
ing process perspective.
ment's attention and resources from other issues facing our busi-
ness. Furthermore, we might be exposed to compliance risks in
connection with recently acquired operations that are in the
ongoing process of integration.
Our ERM approach is based on COSO's "Enterprise Risk Manage-
ment - Integrated Framework". As one of the objectives of
this framework is reliability of a company's financial reporting, it
includes an accounting-related perspective. Our accounting-
related internal control system (control system) is based on
the internationally recognized "Internal Control - Integrated
Framework" also developed by COSO. The two systems are com-
plementary.
Environmental, health & safety and other governmental reg-
ulations: Some of the industries in which we operate are highly
regulated. Current and future environmental, health & safety and
other governmental regulations or changes thereto may require
us to change the way we run our operations and could result in
significant increases in our operating or production costs. Fur-
thermore, we see the risk of potential environment, health & safety
incidents as well as potential non-compliance with environment,
health & safety regulations affecting Siemens and our contractors
or sub-suppliers, resulting in e.g. serious injuries, penalties, loss
of reputation and internal or external investigations.
Changes of regulations, laws and policies: As a diversified com-
pany with global businesses we are exposed to various product-
and country-related regulations, laws and policies influencing our
processes. We exercise our duty within the supply chain, as our
customers request transparency in the supply chain and as the
obligation to do so already forms an element of customer con-
tracts. If we are unable to achieve sufficient confidence through-
out our supply chain, or if any risks associated with these kinds
of regulations, laws and policies were to materialize, our reputa-
tion could also be adversely affected. We continuously monitor
the political and regulatory landscape in all our key markets to
anticipate potential problem areas, so that we are able to quickly
adjust our business activities accordingly upon any change in
conditions.
Besides other measures, Siemens established a global compliance
organization which conducts among others compliance risk miti-
gation processes such as Compliance Risk Assessments, and which
has been reviewed by external compliance experts.
In addition, future developments in ongoing and potential future
investigations, such as responding to the requests of governmen-
tal authorities and cooperating with them, could divert manage-
A considerable part of our business activities involve govern-
ments and companies with public shareholders. We also partici-
pate in a number of projects funded by government agencies and
intergovernmental and supranational organizations, such as mul-
tilateral development banks. Ongoing or potential future investi-
gations into allegations of corruption, of antitrust violations or of
other violations of law could also impair relationships with such
business partners or could result in the exclusion of public con-
tracts. Such investigations may also adversely affect existing pri-
vate business relationships and our ability to pursue potentially
important strategic projects and transactions, such as strategic
alliances, joint ventures or other business cooperation, or could
result in the cancellation of certain of our existing contracts.
Moreover, third parties, including our competitors, could initiate
significant litigation.
Current and future investigations regarding allegations of
corruption, of antitrust violations and of other violations of
law: Proceedings against us regarding allegations of corruption,
of antitrust violations and of other violations of law may lead to
criminal and civil fines as well as penalties, sanctions, injunctions
against future conduct, profit disgorgements, disqualifications
from directly and indirectly engaging in certain types of business,
the loss of business licenses or permits or other restrictions and
legal consequences. Accordingly, we may among other things be
required to comply with potential obligations and liabilities
arising in connection with such investigations and proceedings,
including potential tax penalties. Moreover, any findings related
to public corruption that are not covered by the 2008 and
2009 corruption charge settlements, which we concluded with
American and German authorities, may endanger our business
with government agencies and intergovernmental and supra-
national organizations. Monitors could again be appointed to
review future business practices and we may otherwise be
required to further modify our business practices and our com-
pliance program.
uct, economic and governmental instability, the potential for
nationalization of private assets and the imposition of exchange
controls. Asian markets in particular are important for our long-
term growth strategy, and our sizeable activities in China operate
under a legal system that is still developing and is subject to
change. Our long-term growth strategy could be limited by gov-
ernments preferentially supporting local competitors. With our
dedicated regional organizations we tackle these risks by con-
stantly monitoring the latest trends and defining our response
strategies which include an ongoing evaluation of our localiza-
tion approach.
30 Combined Management Report
Emerging market operations involve various risks, including civil
unrest, health concerns, cultural differences such as employ-
ment and business practices, volatility in gross domestic prod-
Regulatory risks and potential sanctions: As a globally operat-
ing organization, we conduct business with customers in coun-
tries which are subject to export control regulations, embargoes,
economic sanctions or other forms of trade restrictions (hereaf-
ter referred to as "sanctions") imposed by the U.S., the European
Union or other countries or organizations. New or expanded
sanctions in countries in which we do business may result in a
curtailment of our existing business in such countries or indirectly
in other countries. We are also aware of initiatives by institutional
investors, such as pension funds or insurance companies, to
adopt or consider adopting policies prohibiting investment in and
transactions with, or requiring divestment of interests in entities
doing business with, countries identified as state sponsors of ter-
rorism by the U.S. Department of State. It is possible that such
initiatives may result in us being unable to gain or retain inves-
tors, customers or suppliers. In addition, the termination of our
activities in sanctioned countries may expose us to customer
claims and other actions. Our reputation could also suffer due to
our activities with counterparties in or affiliated with these coun-
tries. Due to the political agreement based on the Joint Compre-
hensive Plan of Action (JCPOA) regarding the Iranian nuclear
program, Siemens has revised its group-wide policies to allow
new business activities with customers or end customers in Iran
that are not designated on the EU or U.S. sanctions lists, provided
that these activities do not breach the EU sanctions regulations
or the U.S. Secondary Sanctions (if applicable).
A.8.3.4 COMPLIANCE RISKS
TO CONSOLIDATED FINANCIAL STATEMENTS.
For further information on post-employment benefits, derivative
financial instruments, hedging activities, financial risk manage-
ment and measurements, see → NOTE 16, 23 AND 24 in → B.6 NOTES
In addition, while we have procedures in place to ensure compli-
ance with applicable governmental regulations in the conduct of
our business operations, it cannot be excluded that violations of
applicable governmental regulations may be caused either by us
or by third parties that we contract with, including suppliers or
service providers, whose activities may be attributed to us. Any
such violations expose us to the risk of liability, reputational dam-
age or loss of licenses or permits that are important to our busi-
ness operations. In particular, we could also face liability for
damage or remediation for environmental contamination at
the facilities we design or operate. With regard to certain envi-
ronmental risks, we maintain liability insurance at levels that
our management believes are appropriate and consistent with
industry practice. We may incur environmental losses beyond the
limits, or outside the coverage, of such insurance, and such
Examinations by tax authorities and changes in tax regula-
tions: We operate in nearly all countries of the world and there-
fore are subject to many different tax regulations. Changes in tax
law in any of these jurisdictions could result in higher tax ex-
pense and payments. Furthermore, legislative changes could
impact our tax receivables and liabilities as well as deferred tax
assets and deferred tax liabilities. In addition, the uncertain tax
environment in some regions could limit our ability to enforce
our rights. As a globally operating organization, we conduct busi-
ness in countries subject to complex tax rules, which may be
interpreted in different ways. Future interpretations or develop-
ments of tax regimes may affect our business, financial condi-
tion and results of operations. We are regularly examined by tax
authorities in various jurisdictions and we continuously identify
and assess resulting risks.
Credit Risks: We provide our customers with various forms of
direct and indirect financing of orders and projects. SFS in partic-
ular bears credit risks due to its financing activities. In part, we
take a security interest in the assets we finance, or we receive
additional collateral. Our business, financial condition and results
of operations may be adversely affected if the credit quality of
our customers deteriorates or if they default on their payment
obligation to us, if the value of the assets in which we have taken
a security interest or additional collateral declines, or if the proj-
ects in which we invest are unsuccessful. Positive market values
from derivatives and deposits with banks induce credit risk
against these banks. We monitor these market value develop-
ments very closely. A default by a major trading partner may have
negative impact on our financial position and the results of finan-
cial operations.
Liquidity and financing risks: Political and economic develop-
ments in the EU as well as the ongoing euro zone sovereign debt
crisis continue to influence global capital markets. Our treasury
and financing activities could face adverse deposit and/or financ-
ing conditions from negative developments related to financial
markets, such as (1) limited availability of funds (particularly U.S.
dollar funds) and hedging instruments; (2) an updated evalua-
tion of our solvency, particularly from rating agencies; (3) nega-
tive interest rates; and (4) impacts arising from more restrictive
regulation of the financial sector, central bank policy, or financial
instruments. Widening credit spreads due to uncertainty and risk
aversion in the financial markets might lead to adverse changes
of fair market values of our financial assets, in particular our de-
rivative financial instruments. Negative developments could also
further increase the costs for buying protection against credit risks
due to a potential increase in counterparty risks. Siemens reduces
funding risks through diversification into different funding instru-
ments, currencies, markets and investor groups. Liquidity risks are
mitigated by depositing cash into different categories of instru-
ments and with a range of counterparties of investment grade
credit quality; the associated counterparty risks are centrally and
closely monitored (including risks resulting from derivatives).
significant effects on our business, financial condition and results
of operations.
29
Combined Management Report
Market price risks: We are exposed to fluctuations in exchange
rates, especially between the U.S. dollar and the euro, because a
high percentage of our business volume is conducted in U.S. dol-
lar and as exports from Europe. In addition, we are exposed to
currency effects involving the currencies of emerging markets, in
particular the Chinese yuan. A strengthening of the euro (partic-
ularly against the U.S. dollar) may change our competitive posi-
tion, as many of our competitors may benefit from having a
substantial portion of their costs based in weaker currencies,
enabling them to offer their products at lower prices. As a result,
a strong euro in relation to the U.S. dollar and other currencies
could have an adverse impact on our results of operations. We
are also exposed to fluctuations in interest rates. Negative devel-
opments in the financial markets and changes in the central bank
policies may negatively impact our results. Certain currency risks
as well as interest rate risks are hedged using derivative financial
instruments. Depending on the development of foreign cur-
rency exchange and interest rates, hedging activities could have
A.8.3.3 FINANCIAL RISKS
Interruption of the supply chain: The financial performance of
our Industrial Business depends on reliable and effective supply
chain management for components, sub-assemblies and materi-
als. Capacity constraints and supply shortages resulting from
ineffective supply chain management may lead to delays and
additional cost. We rely on third parties to supply us with parts,
components and services. Using third parties to manufacture,
assemble and test our products reduces our control over manu-
facturing yields, quality assurance, product delivery schedules
and costs. Although we work closely with our suppliers to avoid
supply-related problems, there can be no assurance that we will
not encounter supply problems in the future. Shortages and de-
lays could materially harm our business. Unanticipated increases
in the price of components or raw materials due to market short-
ages or other reasons could also adversely affect performance.
Furthermore, we may be exposed to the risk of delays and inter-
ruptions in the supply chain as a consequence of catastrophic
events, particularly if we are unable to identify alternative sources
of supply or means of transportation in a timely manner or at all.
Besides other measures, we mitigate fluctuation in the global raw
material markets with various hedging instruments.
tense in the industries and regions in which our businesses oper-
ate. We have ongoing demand for highly skilled employees. Our
future success depends in part on our continued ability to hire,
integrate, develop and retain engineers and other qualified per-
sonnel. We address this risk for example with structured succes-
sion planning, employer branding, retention and career manage-
ment. Furthermore the company is strengthening the capabilities
and skills of our Talent Acquisition teams and has defined a strat-
egy of pro-active search for people with the required skills in our
respective industries and markets.
Shortage of Skilled Personnel: Competition for highly qualified
personnel (e.g. specialists, experts, "digital" talents) remains in-
Cost overruns or additional payment obligations related to
the management of our long-term, fixed-price or turnkey proj-
ects: A number of our industrial businesses conduct activities,
especially large projects, under long-term contracts that are
awarded on a competitive bidding basis. Such contracts typically
arise in Power and Gas, Wind Power and Renewables, Mobility,
and parts of Energy Management and Process Industries and
Drives. Some of these contracts are inherently risky because we
may assume substantially all of the risks associated with complet-
ing a project and meeting post-completion warranty obligations.
For example, we may face the risk that we must satisfy technical
requirements of a project even though we have not gained expe-
rience with those requirements before we win the project. The
profit margins realized on fixed-priced contracts may vary from
original estimates as a result of changes in costs and productivity
over the contract's term. We sometimes bear the risk of unantic-
ipated project modifications, shortage of key personnel, quality
problems, financial difficulties of our customers and/or signifi-
cant partners, cost overruns or contractual penalties caused by
unexpected technological problems, unforeseen developments
at the project sites, unforeseen changes or difficulties in the reg-
ulatory or political environment, performance problems with our
suppliers, subcontractors and consortium partners or other logis-
tical difficulties. Some of our multi-year contracts also contain
demanding installation and maintenance requirements in addi-
tion to other performance criteria relating to timing, unit cost
and compliance with government regulations requirements,
which, if not satisfied, could subject us to substantial contractual
penalties, damages, non-payment and contract termination.
There can be no assurance that contracts and projects, in partic-
ular those with long-term duration and fixed-price calculation,
can be completed profitably. To tackle those risks we imple-
mented a global project management organization to systemat-
ically improve the know-how of the project management person-
nel. For very complex projects we conduct dedicated risk
assessments in very early stages of the sales phase before we
decide to hand over a binding offer to our customer.
manufacturing facilities, and the streamlining of product port-
folios, are also part of these cost-reduction efforts. These mea-
sures may not be implemented as planned, may turn out to be
less effective than anticipated, may become effective later than
estimated or may not become effective at all. Any future contri-
bution of these measures to our profitability will be influenced
by the actual savings achieved and by our ability to sustain them.
Furthermore, a delay in critical R&D projects could lead to nega-
tive impacts in running projects. We constantly control and mon-
itor the progress of these projects and initiatives using standard-
ized controlling and milestone tracking approaches.
retained earnings
Risks from pension obligations: The funded status of our pen-
sion plans may be affected by change in actuarial assumptions,
including the discount rate, as well as movements in financial
markets or a change in the mix of assets in our investment port-
folio. A significant increase in the underfunding may have a neg-
ative effect on our capital structure and rating, and thus may
tighten refinancing options and increase costs. In order to com-
ply with local pension regulations in selected foreign countries,
we may face a risk of increasing cash outflows to reduce an
underfunding of our pension plans in these countries.
At the end of each fiscal year, our management performs an eval-
uation of the effectiveness of the implemented control system,
both in design and operating effectiveness. We have a standard-
ized procedure under which necessary controls are defined, doc-
umented in accordance with uniform standards, and tested reg-
ularly on their effectiveness. Nevertheless, there are inherent
limitations on the effectiveness of any control system, and no
system, including one determined to be effective, may prevent
or detect all misstatements.
Combined Management Report
32
33
Combined Management Report
The overarching objective of our accounting-related internal con-
trol and risk management system is to ensure that financial re-
porting is conducted in a proper manner, such that the Consoli-
dated Financial Statements and the Combined Management
Report of Siemens group as well as the Annual Financial State-
ments of Siemens AG as the parent company are prepared in
accordance with all relevant regulations.
The following discussion describes information required pursu-
ant to Section 289 (5) and Section 315 (2) no. 5 of the German
Commercial Code (Handelsgesetzbuch) and explanatory report.
A.8.5 Significant characteristics of
the accounting-related internal
control and risk management system
Assessment of the overall opportunities situation: The most
significant opportunity for Siemens is "Success from innovation
along electrification, automation and digitalization" compared to
"Mergers, acquisitions, equity investments, partnerships and di-
vestments" as disclosed in our prior year reporting. Even though
our assessment of individual opportunities has changed during
fiscal year 2016 due to developments in the external environ-
ment, our endeavors to profit from them and the revision of our
plans, the overall opportunity situation did not change signifi-
cantly compared to the prior year.
Climate change: While climate change is widely considered a
risk, we consider climate change mitigation an opportunity for
Siemens. In line with the global agreement in Paris (COP21) which
entered into force in November 2016. Siemens strives to support
a trend towards reducing CO2 emissions both in own operations
as well as for our customers based on technologies from our en-
vironmental portfolio, such as low-carbon power generation
from renewable energy sources.
Localizing value chain activities: Localizing certain value chain
activities, such as procurement, manufacturing, maintenance
and service in emerging markets, could enable us to reduce costs
and strengthen our global competitive position, in particular
compared to competitors based in countries where they can op-
erate with more favorable cost structures. Moreover, our local
footprint in many countries might help us to take advantage of a
possible growth of markets and leverage a shift in markets, re-
sulting in increased market penetration and market share.
finding a consensus with customers while also improving cus-
tomer relationship management. At the same time, we reduce
quality problems by proactively addressing supplier issues up front.
Excellent project execution: By expanding project management
efforts as well as learning from our mistakes in project execution
through a formalized lessons learned approach, we see an oppor-
tunity to continuously reduce non-conformance costs and ensure
on-time delivery of our projects and solutions. Furthermore, strin-
gent project risk and opportunity management, time schedule
management, performance bonuses and highly professional man-
agement of consortium partners and suppliers all help us to avoid
liquidated damages and ultimately improve our profit position. In
addition, improvements of our claim management processes en-
able us to reduce costs incurred as a result of customer claims by
Political stabilization of certain critical countries and resil-
ience of worldwide economic environment: We see an oppor-
tunity that political stabilization of certain critical countries and
lifting of sanctions (e.g. Iran) may lead to higher revenue volume
that was unavailable in past years. Furthermore, a return to more
robust macroeconomic growth could also lead to additional vol-
ume and profit for Siemens.
Continuously developing and implementing initiatives to
reduce costs, boost sales efforts, adjust capacities, improve
our processes, realize synergies: In an increasingly competitive
market environment, a competitive cost structure complements
the competitive advantage of being innovative. We believe that
further improvements in our cost position can strengthen our
global competitive position and secure our market presence
against emerging and incumbent competitors. For example, we
expect to create sustainable value from productivity measures in
connection with our "Vision 2020" concept. Moreover, establish-
ing a stringent claim management process can help us realize
opportunities by enforcing our claims on our contract partners
even more strongly.
Mergers, acquisitions, equity investments, partnerships di-
vestments and streamline our portfolio: We constantly monitor
our current and future markets for opportunities for strategic
mergers and acquisitions, equity investments or partnerships to
complement our organic growth. Such activities may help us to
strengthen our position in our existing markets, provide access to
new markets or complement our technological portfolio in selected
areas. Opportunities might also arise from well executed divest-
ments that further optimize our portfolio while generating gains.
31
chains, we have identified several growth fields in which we see
our greatest long-term potential. We are orienting our resource
allocation toward these growth fields and have announced con-
crete measures in this direction. Across all Divisions, Siemens is
profiting from its undisputed strength in the digital enterprise. For
example, the company's new cloud based MindSphere platform
enhances the availability of customers' digital products and sys-
tems and improves their productivity and efficiency.
Success from innovation along electrification, automation
and digitalization: Innovation is a central part of Siemens "Vision
2020," an entrepreneurial concept leading Siemens into the
future in three stages: first we "drive performance," then we
"strengthen core," and finally we "scale up" to attain our Vision
2020 goals. We do this by investing significantly in R&D in order
to develop innovative, sustainable solutions for our customers and
to simultaneously safeguard our competitiveness. We are an in-
novative company and invent new technologies that we expect
will meet future demands arising from the megatrends of demo-
graphic change, urbanization, climate change and globalization.
We are granted thousands of new patents every year and contin-
uously develop new concepts and convincing business models.
We open up access to new markets and customers through new
marketing and sales strategies as well as Divisional master plans.
For example, we established next47, an independent unit de-
signed to found, partner with and invest in start-ups with innova-
tive ideas for shaping the future of electrification, automation and
digitalization, and thereby turn those ideas into viable businesses.
This will help Siemens create the next generation of path-break-
ing innovations in such fields as artificial intelligence, decentral-
ized electrification, autonomous machines, block chain applica-
tions and connected e-mobility. Siemens is positioned along the
value chains of electrification, automation and digitalization in
order to increase future market penetration. Along these value
Within our Enterprise Risk Management (ERM) we regularly iden-
tify, evaluate and respond to opportunities that present them-
selves in our various fields of activity. Below we describe our most
significant opportunities. Unless otherwise stated, the opportu-
nities described below relate to all of our segments. The order in
which the opportunities are presented reflects the currently esti-
mated relative exposure for Siemens associated with these oppor-
tunities and thus provides an indication of the opportunities'
current importance to us. The described opportunities are not
necessarily the only ones we encounter. In addition, our assess-
ment of opportunities is subject to change as our Company, our
markets and technologies are constantly developing. It is also
possible that opportunities we see today will never materialize.
A.8.4 Opportunities
At present, no risks have been identified that either individually
or in combination could endanger our ability to continue as a
going concern.
Even though the assessments of individual risk exposures have
changed during fiscal 2016 due to developments in the external
environment, effects of our own mitigation measures and the
revision of our plans, the overall risk situation for Siemens did not
change significantly as compared to the prior year.
The most significant challenges have been mentioned first in
each of the four categories Strategic, Operations, Financial and
Compliance. The risks caused by highly competitive environment
continue to be the most significant as in the prior year.
A.8.3.5 ASSESSMENT OF THE
OVERALL RISK SITUATION
For additional information with respect to specific proceedings, see
NOTE 21 in B.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
Siemens maintains liability insurance for certain legal risks at lev-
els our management believes are appropriate and consistent with
industry practice. The insurance policy, however, does not protect
Siemens against reputational damage. Moreover, Siemens may
incur losses relating to legal proceedings beyond the limits, or out-
side the coverage, of such insurance or exceeding any provisions
made for legal proceedings related losses. Finally, there can be no
assurance that Siemens will be able to maintain adequate insur-
ance coverage on commercially reasonable terms in the future.
Some of these legal disputes and proceedings could result in ad-
verse decisions for Siemens that may have material effects on our
financial position, the results of operations and/or cash flows.
Current or future litigation: Siemens is and will be in the course
of its normal business operations involved in numerous legal dis-
putes and proceedings in various jurisdictions. These legal dis-
putes and proceedings could result, in particular, in Siemens
being subject to payment of damages and punitive damages,
equitable remedies or criminal or civil sanctions, fines or dis-
gorgement of profit. In individual cases this may also lead to for-
mal or informal exclusion from tenders or the revocation or loss
of business licenses or permits. In addition, further legal disputes
and proceedings may be commenced or the scope of pending
legal disputes and proceedings may be expanded. Asserted
claims are generally subject to interest rates.
Protectionism (incl. Localization): Protectionist trade policies
and changes in the political and regulatory environment in the
markets in which we operate, such as import and export controls,
tariffs and other trade barriers including debarment from certain
markets and price or exchange controls, could affect our business
in several national markets; could impact our business, financial
position and results of operations; and may expose us to penal-
ties, other sanctions and reputational damage. In addition, the
uncertainty of the legal environment in some regions could limit
our ability to enforce our rights and subject us to increasing costs
related to appropriate compliance programs.
losses may have an adverse effect on our business, financial con-
dition and results of our operations.
Combined Management Report
(195)
(270)
3,060
This report is based on the recommendations of the German
Corporate Governance Code (Code) and the requirements of the
German Commercial Code (Handelsgesetzbuch), the German
Accounting Standards (Deutsche Rechnungslegungs Standards)
and the International Financial Reporting Standards (IFRS).
A.10.1 Remuneration of Managing
Board members
A.10.1.1 REMUNERATION SYSTEM
The remuneration system for the Siemens Managing Board is in-
tended to provide an incentive for successful corporate manage-
ment with an emphasis on sustainability. Managing Board mem-
bers are expected to make a long-term commitment to and on
behalf of the Company and may benefit from any sustained in-
crease in the Company's value. For this reason, a substantial
portion of their total remuneration is linked to the long-term
performance of Siemens stock. Their remuneration is to be com-
mensurate with the Company's size and economic position. Ex-
ceptional achievements are to be rewarded adequately, while
falling short of targets is to result in an appreciable reduction in
remuneration. Their compensation is also structured so as to be
attractive in comparison to that of competitors, with a view to
attracting outstanding managers to the Company and retaining
them for the long term.
The system and levels for the Managing Board's remuneration are
determined and regularly reviewed by the full Supervisory Board,
based on proposals by the Compensation Committee. The Super-
visory Board reviews remuneration levels annually to ensure that
they are appropriate. In this process, the Company's economic
situation, performance and outlook as well as the tasks and per-
formance of the individual Managing Board members are taken
into account. In addition, the Supervisory Board considers the
common level of remuneration in comparison with peer compa-
nies and with the compensation structure in place in other areas
of the Company. It also takes due account of the relationship
between the Managing Board's remuneration and that of senior
management and staff, both overall and with regard to its devel-
opment over time. For this purpose, the Supervisory Board has
also determined how senior management and the relevant staff
are to be differentiated. The remuneration system that has been
in place for Managing Board members since fiscal 2015 was ap-
proved at the Annual Shareholders' Meeting on January 27, 2015.
The individual components of compensation - base compensa-
tion, variable compensation (Bonus) and long-term stock-based
compensation - are weighted equally, and each comprises about
one-third of target compensation. This equal weighting is also
applied to the three target parameters of variable compensation.
Remuneration system for Managing Board members
Target compensation
A.10 Compensation Report
Maximum amounts of compensation
Stock-based
component
(Stock Awards):
max. 300% of
target amount
Long-term stock-based compensation
> Target parameter: stock price
compared to 5 competitors
> Variability: 0-200%
Variable compensation (Bonus)
Share Ownership Guidelines
Combined Management Report
36
5%
(3)%
Financial assets went up due to a €0.5 billion increase in loans
and an increase of €0.3 billion in shares in affiliated companies.
The decrease in Receivables and other assets was due primarily
to lower receivables from affiliated companies as a result of intra-
group financing activities.
Cash and cash equivalents and marketable securities are sig-
nificantly affected by the liquidity management of Siemens AG.
The liquidity management is based on the finance strategy of the
Siemens Group. Therefore, the change in liquidity of Siemens AG
was not driven only by business activities of Siemens AG.
The increase in Equity was attributable to net income for the year
of €3.0 billion and issuance of treasury stock of €0.4 billion in
conjunction with our share-based compensation program. These
factors were partly offset by dividends paid in fiscal 2016 (for
fiscal 2015) of €2.8 billion. In addition, equity was reduced due
to share buybacks during the year amounting to €0.4 billion. The
equity ratios at September 30, 2016 and 2015 were 28% and 27%,
respectively.
The decrease in Pension and similar commitments resulted
mainly from a €0.8 billion reduction related to the above-men-
tioned adjustments of the discount rate and from lower interest
and service costs, which declined €0.3 billion, partly offset by a
decrease of €0.4 billion in transfers of pension obligations.
Other provisions increased due primarily to higher provisions for
losses from derivative financial transactions, increased tax provi-
sions and higher provisions for personnel costs, each of which
increased by €0.3 billion.
The decrease in Trade payables, liabilities to affiliated compa-
nies and other liabilities was due primarily to lower liabilities to
affiliated companies as a result of intra-group financing activities.
A.9.3 Corporate Governance
statement
The Corporate Governance statement pursuant to Section 289a
of the German Commercial Code is an integral part of the Com-
bined Management Report and is presented in → C.4.2 CORPORATE
GOVERNANCE STATEMENT PURSUANT TO SECTION 289A OF THE GERMAN
COMMERCIAL CODE.
Deferred income
Total liabilities and equity
29,118
29,752
385
69,814
31,545
32,494
(8)%
(8)%
367
71,880
> 3 targets
(3)%
11%
3%
one-third each
add. ±20% adjustment
In fiscal 2016, the Managing Board's remuneration system had
the following components:
Non-performance-based components
Base compensation
Base compensation is paid as a monthly salary. Since October 1,
2015, the base compensation of President and CEO Joe Kaeser
has amounted to €2,034,000 per year. The base compensation
of the CFO and of those members of the Managing Board who
are responsible for Divisions (including Healthineers) has been
€1,042,800 per year. For the other member of the Managing
Board, it has been €988,800 per year.
Fringe benefits
Fringe benefits include the costs, or the cash equivalent, of non-
monetary benefits and other perquisites, such as the provision of
a company car, contributions toward the cost of insurance, the
reimbursement of expenses for legal advice and tax advice, ac-
commodation and moving expenses, including a gross-up
for
any
taxes due in this regard, currency adjustment payments and costs
relating to preventive medical examinations.
Performance-based components
Variable compensation (Bonus)
Variable compensation (Bonus) is based on the Company's busi-
ness performance in the past fiscal year. The Bonus depends on
an equal one-third weighting of target achievement of the target
parameters return on capital employed, earnings per share and
individual targets. To achieve a consistent target system Compa-
ny-wide, corresponding targets - in addition to other factors -
also apply to senior managers.
38
For 100% target achievement (target amount), the amount of the
Bonus equals the amount of base compensation. The Bonus is
subject to a ceiling (cap) of 200%. If targets are substantially
missed, variable compensation may not be paid at all (0%).
Long-term stock-based compensation
Long-term stock-based compensation consists of a grant of for-
feitable stock commitments (Stock Awards) at the beginning of
the fiscal year. Beneficiaries receive one free share of Siemens
stock per Stock Award after an approximately four-year restriction
period and subject to target achievement. If the employment
agreement begins during the fiscal year, an equivalent number
of Siemens Phantom Stock Awards will be granted instead of
Stock Awards. In lieu of a transfer of shares, only a cash equiva-
lent is given at the end of the restriction period for Siemens Phan-
tom Stock Awards. Beyond that, the same provisions agreed upon
for Siemens Stock Awards apply. In the event of extraordinary
unforeseen developments that impact the share price, the Super-
visory Board may decide to reduce the number of promised Stock
Awards retroactively, or it may decide that in lieu of a transfer of
Siemens stock only a cash settlement in a defined and limited
amount will be paid, or may decide to postpone transfers of
Siemens stock for payable Stock Awards until the developments
have ceased to impact the share price.
In the event of 100% target achievement, the annual target
amount for the monetary value of the Stock Awards commitment
is €2,120,000 for the President and CEO (effective October 1,
2015). For the CFO and for those members of the Managing
Board who are responsible for Divisions (including Healthineers)
it is €1,080,000. For the other member of the Managing Board,
it is €1,040,000. Since fiscal 2015, the Supervisory Board has had
the option of increasing the target amount for each member of
the Managing Board, on an individual basis, by as much as 75%
for one fiscal year at a time. This option enables the Supervisory
Board to take account of each Managing Board member's indi-
vidual accomplishments and experience as well as the scope and
demands of his or her position.
-
Long-term stock-based compensation is linked to the performance
of Siemens stock compared to its competitors. The Supervisory
Board will decide on a target system (target value for 100% and
target line) for the performance of Siemens stock relative to the
stock of - at present – five competitors (ABB, General Electric,
Rockwell, Schneider Electric and Toshiba). If significant changes
occur among these competitors during the period under consid-
eration, the Supervisory Board may take these changes into ac-
count, as appropriate, in determining the values for comparison
and/or calculating the relevant stock prices of those competitors.
Changes in the share price are measured on the basis of a twelve-
month reference period (compensation year) over three years
(performance period), while Stock Awards are restricted for a
period of four years. When this restriction period expires, the
Supervisory Board determines how much better or worse
Siemens stock has performed relative to the stock of its compet-
itors. This determination yields a target achievement of between
Combined Management Report
Unappropriated net income
37
Combined Management Report
2 times
base com-
pensation
Bonus: 0-200%
add. +20%
adjustment
Compensation
overall
max. 1.7 times
target compensation
Base
compensation
Performance-based component with deferred payout
Non-performance-based component
Base
compensation
Performance-based component
Base
compensation
יו
Obligation to hold shares during term of office on the Managing Board
President
and CEO:
3 times base
compensation
Managing
Board
member:
> Variability: 0-200%
11,553
7,511
19,064
At its duty-bound discretion, the Supervisory Board may revise
the amount resulting from target achievement upward or down-
ward by as much as 20%; the adjusted amount of the Bonus paid
can thus be as much as 240% of the target amount. In choosing
the factors to be considered in deciding on possible revisions of
the Bonus payouts (±20%), the Supervisory Board takes account
of incentives for sustainable corporate management. Decisions
to make discretionary adjustments may take factors such as the
results of an employee survey or a customer satisfaction survey
into account as well as the Company's economic situation. The
revision option may also be exercised in recognition of Managing
Board members' individual achievements. The Bonus is paid en-
tirely in cash.
11,250
8,360
(in millions of €)
Assets
Non-current assets
Intangible and tangible assets
2,472
Financial assets
44,611
% Change
47,083
1%
2%
2%
Current assets
Receivables and other assets
16,717
19,492
(14)%
Cash and cash equivalents,
2,439
43,688
46,127
Sep 30,
2015
2016
Statement of Financial Position of Siemens AG in accordance
with German Commercial Code (condensed)
19,610
(2,714)
3,084
93%
(1)%
Revenue decreased moderately as declines of €1.3 billion in En-
ergy Management and €0.2 billion in Power and Gas more than
offset a sharp increase of €0.9 billion in Wind Power and Renew-
ables. On a geographical basis, 73% of revenue was generated in
the Europe, C.I.S., Africa, Middle East region, 18% in the Asia,
Australia region and 9% in the Americas region. Exports from Ger-
many accounted for 64% of overall revenue. In fiscal 2016, orders
for Siemens AG amounted to €28.9 billion. Within Siemens AG,
the development of revenue, primarily in connection with large
orders, depends strongly on the completion of contracts.
Gross profit was lower year-over-year due mainly to declines of
€0.5 billion in Power and Gas and €0.1 billion in Energy Manage-
Research and development (R&D) expenses as a percentage
of revenue (R&D intensity) increased by one percentage point
year-over year, to 10%. On an average basis, we employed 10,100
people in R&D in fiscal 2016. For additional information see
→ A.1.1.3 RESEARCH AND DEVELOPMENT.
Other operating income (expenses), net came in higher year-
over-year due to a decrease of €0.5 billion in other operating
expenses, only partly offset by a decline of €0.1 billion in other
operating income. The increase is explained mainly by factors in
the prior year. For comparison, fiscal 2015 included, within other
operating expenses, additions to post-closing provisions in con-
nection with the disposal of businesses.
The decrease in Financial income, net was primarily attributable
to lower income from investments, net which decreased by
€4.4 billion. Other financial income (expenses), net increased by
€1.3 billion compared to the prior year.
Income from investments, net declined due to a decrease of
€2.1 billion in income from profit transfers - in particular from
Siemens Beteiligungen Inland GmbH, which came in €2.0 billion
lower and an increase of €0.1 billion from losses from the dis-
posal of investments. These factors were only partly offset by an
increase of €0.5 billion from profit distribution - in particular
from Siemens Beteiligungsverwaltung GmbH & Co. OHG amount-
ing to €0.9 billion and a decline of €0.2 billion from impair-
ments on investments. For comparison, fiscal 2015 included a
gain of €2.8 billion on the disposal of Siemens' stake in BSH.
-
-
The improvement in other financial income (expenses), net re-
sulted mainly from a €0.8 billion reduction in expenses from accre-
tion of pension provisions – due to a regulatory change which in-
creased the weighted average discount rate - and from a €0.7 billion
decrease in the realized loss related to interest and foreign currency
derivatives. These positive factors were only partly offset by €0.3
billion lower gains on the realization of monetary balance sheet
items denominated in foreign currencies and provisions for risks in
Combined Management Report
35
derivatives, which were €0.2 billion higher. For comparison, fiscal
2015 included impairments of loan receivables of Unify Holdings
B.V. and Unify Germany Holdings B.V. amounting to €0.2 billion.
The decline in Income taxes resulted from lower income tax ex-
penses due to the absence of burdens of tax audits from the prior
year as well as tax refunds that arose from positive appeal deci-
sions for prior years in fiscal 2016. That was partly offset by changes
in deferred taxes due primarily to an adjusted discount rate ap-
plied for the provision for Pensions and similar commitments.
A.9.2 Net assets and financial position
securities
3,642
ment.
Prepaid expenses
700
708
(1)%
Provisions
Pensions and similar
commitments
Other provisions
Liabilities
Liabilities to banks
14
Advance payments received
619
62
887
and other liabilities
Trade payables, liabilities
to affiliated companies
20,359
with an equity portion
Special reserve
(78)%
(30)%
2,256
1%
Deferred tax assets
3,816
23,308
83
2,333
(5)%
(13)%
(3)%
(3)%
Active difference
resulting from offsetting
35
81
69,814
29
71,880
23%
(3)%
Liabilities and equity
Equity
19,368
Total assets
19,247
129,425
28,043
25,273
8,666
25,631
138,923
Dr. Roland Busch
14,286
72,383
13,773
5,330
19,425
41,025
Lisa Davis
75,263
27,122
of Stock
of Bonus
Awards
serving as of September 30, 2016
commitments
Vested and
fulfilled
during
fiscal year
Commitments
Forfeited
during
fiscal year²
Commitments
of Bonus
Awards and
Stock Awards
of Stock
Awards
Non-
forfeitable
commitments
Balance at end of
fiscal 20163
Forfeitable
commitments
of Stock
Awards
(Amounts in number of units)
Awards
Managing Board members
Joe Kaeser
576
35,437
14,286
20,043
78,633
Dr. Ralf P. Thomas
Total
51,124
14,286
4,347
3,813
5,030
57,250
463,708
113,230
Forfeitable
32,212
82,903
8,666
38,975
25,273
82,892
576
53,261
Klaus Helmrich
27,233
73,254
14,286
14,237
5,737
19,536
75,263
Janina Kugel
15,655
13,757
29,412
Prof. Dr. Siegfried Russwurm
14,286
of Stock
Awards
2016
Forfeitable
commitments
4,607,800
565,824
583,968
3,126,396
3,817,196
565,824
583,968
3,243,101
4,342,427
565,824
583,968
8,056,163
10,391,542
1,051,680
1,139,040
3,522,681
2015
553,728
1,084,971
2 The expenses (service cost) recognized in accordance with
the IFRS in fiscal 2016 for Managing Board members' entitle-
90,241
1 Compared to the amount presented in the 2015 Compensa-
tion Report, the total figure for 2015 does not include the
contribution of €565,824 for former Managing Board
member Prof. Dr. Hermann Requardt or this defined benefit
obligation of €6,977,620.
26,437,481
34,624,669
3,225,678
4,297,199
565,824
4,231,360
4,612,608
583,968
4,824,749
6,083,534
565,824
583,968
438,713
350,560
of Bonus
Awards
Defined benefit obligation³ for all pension
commitments excluding deferred compensation4
2016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
Other
No loans or advances from the Company are provided to mem-
bers of the Managing Board.
46
Combined Management Report
A.10.1.3 ADDITIONAL INFORMATION ON
STOCK-BASED COMPENSATION INSTRUMENTS
IN FISCAL 2016
Stock commitments
The following table shows the changes in the balance of the
stock commitments held by Managing Board members in fiscal
2016:
Balance at beginning of
fiscal 2016
Granted
during
fiscal year¹
Non-
forfeitable
commitments
The defined benefit obligation (DBO) of all pension commitments
to former members of the Managing Board and their surviving
dependents as of September 30, 2016, amounted to €216,3 (2015:
€228.3) million. This figure is included in → NOTE 16 in → B.6
Total
contributions² for
2015
In fiscal 2016, former members of the Managing Board and their
surviving dependents received emoluments within the meaning
of Section 314 para. 1 No. 6 b of the German Commercial Code
totaling €52.3 million (2015: €30.5 million). This figure includes
the lump-sum payments of the pension benefit balance of the
former Managing Board members Prof. Dr. Hermann Requardt
and Peter Y. Solmssen. In the case of Mr. Solmssen, the special
contribution to the pension benefit balance allocated in Janu-
ary 2009 in the amount of €10.518 million takes effect. This
special contribution was promised at appointment to compen-
sate him for short-term and long-term pecuniary disadvantages
with his former employer. The figure also includes the agreed-
upon cash settlement for Stock Awards granted in the past to
Prof. Dr. Hermann Requardt.
3 The defined benefit obligations reflect one-time special
contributions to the BSAV for new appointments from
outside the Company and for special contributions in
connection with departures from the Managing Board,
amounting to €0 (2015: €279,552).
Total¹
Dr. Ralf P. Thomas
Prof. Dr. Siegfried Russwurm
Janina Kugel
Klaus Helmrich
Lisa Davis
Dr. Roland Busch
Joe Kaeser
serving as of September 30, 2016
Managing Board members
(Amounts in €)
The following table shows individualized details of the contribu-
tions (allocations) under the BSAV for fiscal 2016 as well as the
defined benefit obligations for pension commitments.
The contributions under the BSAV are added to the personal pen-
sion accounts each January, following the close of the fiscal year.
Until a beneficiary's date of retirement, his or her pension ac-
count is credited with an annual interest payment (guaranteed
interest) on January 1 of each year. The interest rate is currently
1.25%.
For fiscal 2016, the members of the Managing Board were granted
contributions under the BSAV totaling €4.6 million (2015: €4.8 mil-
lion), based on a resolution of the Supervisory Board dated No-
vember 9, 2016. Of this amount, €0.1 million (2015: €0.1 million)
related to the funding of pension commitments earned prior to
transfer to the BSAV.
ments under the BSAV in fiscal 2016 amounted to
€4,615,543 (2015: €4,804,639).
4 Deferred compensation totals €3,829,397 (2015: €4,947,717),
including €3,428,243 for Joe Kaeser (2015: €3,207,002),
€343,953 for Klaus Helmrich (2015: €305,023) and €57,201
for Dr. Ralf P. Thomas (2015: €49,794) as well as €0 (2015:
€1,385,898) for former Managing Board member
Prof. Dr. Hermann Requardt.
508,005
683
2 For one half of the Stock Awards 2011, target attainment
depended on the EPS value for the past three fiscal years
and amounted to 114%. For the other half, target attainment
Earnings per share, basic EPS1 (02014-2016)
Pension benefit commitments
53
Return on capital employed, ROCE¹
Target parameter
The following targets were set and attained with respect to the
two target parameters ROCE and EPS for variable compensation:
Variable compensation (Bonus)
ings per share (EPS) for all members of the Managing Board, in
each case on the basis of continuing and discontinued opera-
tions. The target values for the EPS component were defined on
a multi-year basis. In defining the target for variable compensa-
tion, the Supervisory Board also defined individual targets so as
to take fuller account of the individual performance of each Man-
aging Board member. As a rule, up to five individual targets were
defined for this purpose. These targets take account of business-
related targets such as market coverage and business perfor-
mance as well as targets such as customer and employee satis-
faction, innovation and sustainability. An internal review of the
appropriateness of Managing Board compensation for fiscal 2016
has confirmed that the remuneration of the Managing Board re-
sulting from target achievement for fiscal 2016 is to be consid-
ered appropriate. In light of this review and following a review of
the achievement of the targets defined at the beginning of the
fiscal year, the Supervisory Board has decided to define the
amounts of variable compensation, stock commitments and pen-
sion benefit contributions as follows:
At the beginning of the fiscal year, the Supervisory Board set the
target parameters return on capital employed (ROCE) and earn-
A.10.1.2 REMUNERATION OF MANAGING BOARD
MEMBERS FOR FISCAL 2016
Stock commitments that were made as long-term stock-based
compensation and for which the restriction period is still in effect
will be forfeited without replacement if the employment agree-
ment is not extended after the end of an appointment period,
either at the Managing Board member's request or because there
is serious cause that would have entitled the Company to revoke
the appointment or terminate the contract. However, once
granted, Stock Awards are not forfeited if the employment agree-
ment is terminated by mutual agreement at the Company's re-
quest, or because of retirement, disability or death or in connec-
tion with a spinoff, the transfer of an operation, or a change of
activity within the corporate group. In these cases, the Stock
Awards will remain in effect upon termination of the employ-
ment agreement and will be honored on expiration of the restric-
tion period.
payment that was calculated without taking into account the first
six months of the remaining term of the Managing Board mem-
ber's employment contract.
Combined Management Report
Compensatory or severance payments also cover non-monetary
benefits by including an amount of 5% of the total compensation
or severance amount. Compensatory or severance payments will
be reduced by 10% as a lump-sum allowance for discounted val-
ues and for income earned elsewhere. However, this reduction
will apply only to the portion of the compensatory or severance
In the event of a change of control that results in a substantial
change in a Managing Board member's position - for example,
due to a change in corporate strategy or a change in the Manag-
ing Board member's duties and responsibilities - the Managing
Board member has the right to terminate his or her contract with
the Company. A change of control exists one or more share-
holders acting jointly or in concert acquire a majority of the vot-
ing rights in Siemens AG and exercise a controlling influence or if
Siemens AG becomes a dependent enterprise as a result of enter-
ing into an intercompany agreement within the meaning of Sec-
tion 291 of the German Stock Corporation Act (Aktiengesetz) or
if Siemens AG is to be merged into an existing corporation or
other entity. If this right of termination is exercised, the Manag-
ing Board member is entitled to a severance payment in the
amount of not more than two years' compensation. The calcula-
tion of the annual compensation will include not only the base
compensation and the target amount for the Bonus, but also the
target amount for Stock Awards, in each case based on the most
recent fiscal year completed prior to the termination of the mem-
ber's contract. The stock-based components for which a firm
commitment already exists will remain unaffected. There is no
entitlement to a severance payment if the Managing Board mem-
ber receives benefits from third parties in connection with a
change of control. Moreover, there is no right to terminate if the
change of control occurs within a period of twelve months prior
to a Managing Board member's retirement.
1 Continuing and discontinued operations.
nated prematurely by mutual agreement and without serious
cause. The amount of this payment must not exceed the value of
two years' compensation and compensate no more than the re-
maining term of the contract (cap). The amount of the compen-
satory payment is calculated on the basis of base compensation,
together with the variable compensation and the long-term
stock-based compensation actually received during the last fiscal
year before termination. The compensatory payment is payable
in the month when the member leaves the Managing Board. In
addition, a one-time special contribution is made to the BSAV.
The amount of this contribution is based on the BSAV contribu-
tion that the Managing Board member received in the previous
year and on the remaining term of his or her appointment, but
is limited to not more than two years' contributions (cap). The
above benefits are not paid if an amicable termination of the
member's activity on the Managing Board is agreed upon at the
member's request, or if there is serious cause for the Company
to terminate the employment relationship.
100% of target
12.76%
€6.76
14.31%
€7.32
Performance-based
based components
Non-performance-
(Amounts in thousands of €)
Managing Board members serving as of September 30, 2016
42
41
Combined Management Report
The compensation presented on the following pages was granted
to the members of the Managing Board for fiscal 2016 (individual
disclosure). Due to rounding, the figures presented in the table
may not add up precisely to the totals provided.
On the basis of the Supervisory Board's decisions described
above, Managing Board compensation for fiscal 2016 totaled
€28.90 million, an increase of 5.4% (2015: €27.42 million). Of this
total amount, €20.19 million (2015: €19.56 million) was attribut-
able to cash compensation and €8.71 million (2015: €7.86 mil-
lion) to stock-based compensation.
Total compensation
Since beneficiaries are not entitled to receive dividends, the num-
ber of stock commitments granted was based on the closing
price of Siemens stock in Xetra trading on the date of award less
the present value of dividends expected during the restriction
period. The share price used to determine the number of stock
commitments was €75.60 (2015: €72.30).
Long-term stock-based compensation
The achievement of individual targets was also taken into ac-
count when determining overall target achievement. In its overall
assessment, the Supervisory Board decided not to make any dis-
cretionary adjustments to the Bonus payout amounts. In fiscal
2016, Bonus-related target achievement by Managing Board
members was between 126.34% and 136.33%.
Target achievement
151.67%
137.33%
Actual FY 2016 figure
components
Managing Board employment contracts provide for a compensa-
tory payment if membership on the Managing Board is termi-
Like other eligible employees of Siemens AG, Managing Board
members who were employed by the Company on or before Sep-
tember 30, 1983, are entitled to receive transition payments for
the first six months after retirement, equal to the difference be-
tween their final base compensation and the retirement benefits
payable under the corporate pension plan if they retire immedi-
ately after the termination of their Managing Board membership.
The provisions of the German Company Pensions Act (Betriebs-
rentengesetz) do not apply to this benefit.
Earnings
per share
ROCE
1/3
1/3
1/3
Variable compensation
(Bonus)
Base compensation
13
1/3
Three equally balanced components within the remuneration system and three equally balanced targets within the Bonus
Transparency through simplicity:
With regard to the further terms of the Stock Awards, the same
principles apply in general to the Managing Board and to senior
managers. These principles are discussed in more detail in
→ NOTE 25 in B.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
300% of the respective target amount. If this maximum amount
of compensation is exceeded, the corresponding entitlement to
stock commitments will be forfeited without replacement.
The value of the Siemens stock to be transferred for Stock Awards
after the end of the restriction period is subject to a ceiling of
0% and 200% (cap). If target attainment is above 100%, an addi-
tional cash payment corresponding to the outperformance will
be made. If target attainment is less than 100%, a number of
stock commitments equivalent to the shortfall from the target
will expire without replacement.
Individual
targets
Commitments in connection with the termination
of Managing Board membership
1/3
stock-based compensation
(Siemens Stock Awards)
Benefits from the retirement benefit system that was in place
before the BSAV was established are normally granted as pension
benefits with a surviving dependent's pension. In this case also,
payout in installments or a lump-sum payment may be chosen
instead of pension payments.
Managing Board members are eligible to receive benefits under
the BSAV at the age of 60 or - in the case of benefit commitments
made on or after January 1, 2012 - the age of 62. As a rule, the
accrued pension benefit balance is paid out to Managing Board
members in twelve annual installments. A Managing Board mem-
ber or his or her surviving dependents may also request that his
or her pension benefit balance be paid out in fewer installments
or as a lump sum, subject to the Company's consent. The accrued
pension benefit balance may also be paid out as a pension. As a
further alternative, Managing Board members may choose to
combine pension payments with payments in one to twelve install-
ments. If the pension option is chosen, a decision must be made
as to whether the payout should include pensions for surviving
dependents. If a member of the Managing Board dies while receiv-
ing a pension, benefits will be paid to his or her surviving depen-
dents if the member has chosen such benefits. The Company will
then provide a limited-term pension to surviving children until
they reach the age of 27 or, in the case of benefit commitments
made on or after January 1, 2007, until they reach the age of 25.
the length of time he or she has been a Managing Board member
as well as the annual and long-term expense to the Company
resulting from that provision. The non-forfeitability of pension
benefit commitments is determined in compliance with the pro-
visions of the German Company Pensions Act (Betriebsrentenge-
setz). Special contributions may be granted to Managing Board
members on the basis of individual decisions by the Supervisory
Board. If a member of the Managing Board earned a pension ben-
efit entitlement from the Company before the BSAV was intro-
duced, a portion of his or her contributions went toward
financing that prior commitment.
40
39
Combined Management Report
Like employees of Siemens AG, the members of the Managing
Board are included in the Siemens Defined Contribution Benefit
Plan (BSAV). Under the BSAV, Managing Board members receive
contributions that are credited to their personal pension accounts.
The amount of these annual contributions is based on a pre-
determined percentage related to their base compensation and
the target amount for their Bonuses. This percentage is decided
upon annually by the Supervisory Board. Most recently it was
set at 28%. In making its decisions, the Supervisory Board takes
account of the intended level of provision for each individual and
Pension benefit commitments
Compliance with these guidelines must be proven for the first
time after a four-year buildup phase. Thereafter, it must be proven
annually. If the value of a Managing Board member's accrued
holdings declines below the required minimum due to fluctua-
tions in the market price of Siemens stock, he or she must acquire
additional shares.
Changes that have been made to base compensation in the mean-
time are included. Non-forfeitable stock commitments (Bonus
Awards) which were granted until fiscal 2014 are taken into
account in determining compliance with the Share Ownership
Guidelines.
The Siemens Share Ownership Guidelines are an integral part of
the remuneration system for the Managing Board and senior ex-
ecutives. These guidelines require that – after a specified buildup
phase Managing Board members hold Siemens stock worth a
multiple of their base compensation – 300% for the President
and CEO, 200% for the other members of the Managing Board -
throughout their terms of office on the Managing Board. The
determining figure in this context is the average base compensa-
tion that a member of the Managing Board has received over the
four years before the applicable dates of proof of compliance.
-
Share Ownership Guidelines
Maximum amount for compensation overall
In addition to the maximum amounts of compensation for vari-
able compensation and long-term stock-based compensation, a
maximum amount for compensation overall has been defined.
Since fiscal 2014, this amount cannot be more than 1.7 times
higher than target compensation. Target compensation comprises
base compensation, the target amount for variable compensation
and the target amount for long-term stock-based compensation,
excluding fringe benefits and pension benefit commitments.
When fringe benefits and pension benefit commitments for a
given fiscal year are included, the maximum amount of compen-
sation overall for that year will increase accordingly.
Performance of Siemens stock
compared to 5 competitors
Long-term
Fixed compensation (base compensation)
Fringe benefits¹
Total
without long-term incentive effect,
non-stock-based
of shares 3
Managing Board members serving
as of September 30, 2016, and required
to show proof as of March 11, 2016
Joe Kaeser
Dr. Roland Busch
Klaus Helmrich
Prof. Dr. Siegfried Russwurm
Total
300%
4,656,938
51,732
604%
9,371,982
104,110
Value²
200%
Number
Number
of shares²
was linked to the performance of Siemens stock compared
to defined competitors during the four-year vesting period.
It amounted to 0%. Siemens Stock Awards 2011 that had
already been granted were thus forfeited without replace-
ment in accordance with the plan rules.
3 Amounts also include stock commitments (Stock Awards)
granted in November 2015 for fiscal 2016. These amounts
may further include stock commitments received as com-
pensation by the Managing Board member before joining
the Managing Board.
Shares from the Share Matching Plan
Fiscal 2011 was the last year in which Managing Board members
were entitled to participate in the Siemens Share Matching Plan.
Under the plan, they were entitled to invest up to 50% of the
annual gross amount of their variable cash compensation, as de-
termined for fiscal 2010, in Siemens shares. After the expiration
of a vesting period of approximately three years, plan partici-
pants are entitled to receive one free matching share of Siemens
stock for every three Siemens shares acquired and continuously
held under the plan, provided the participants were employed
without interruption at Siemens AG or a Siemens company until
the end of the vesting period. At the beginning of fiscal 2016, the
following members of the Managing Board had entitlements to
matching shares, which they had acquired before joining the
Managing Board: Dr. Ralf P. Thomas, 780 shares and Janina Kugel,
three shares. In fiscal 2016, no entitlements to matching shares
were acquired. In fiscal 2016, the following entitlements to
matching shares were due: 780 shares, Dr. Ralf P. Thomas. During
fiscal 2016, no entitlements to matching shares were forfeited.
Entitlements to matching shares at the end of fiscal 2016 show
the following balance: Janina Kugel, three shares with a fair value
of €174.
Combined Management Report
47
Share Ownership Guidelines
The deadlines by which the individual Managing Board members
must provide first-time proof of compliance with the Siemens
Share Ownership Guidelines vary from member to member, de-
pending on when he or she was appointed to the Managing
Board. The following table shows the number of Siemens shares
that were held by Managing Board members in office at Septem-
ber 30, 2016, as of the March 2016 deadline for proving compli-
ance with the Share Ownership Guidelines as well as the number
that are to be held permanently with a view to future deadlines.
Obligations under Share Ownership Guidelines
Required
Proven
(Amounts in number of units or €)
Percentage
of base
compensation¹
Value¹
Percentage
of base
compensation¹
1,967,900
21,861
324%
48 Combined Management Report
3 As of March 11, 2016 (date of proof), including Bonus
Awards.
One-year variable compensation
(Bonus) - Payout amount
without long-term incentive effect,
non-stock-based
Total compensation
components
Performance-based
Total compensation of all Managing Board members for fiscal 2016, in accordance with the applicable reporting standards, amounted to €28.90 million
(2015: €27.42 million). The payout amount presented below is to be used instead of the target value according to the Code for one-year variable
compensation. Service costs for pension benefits are not included.
Multi-year variable compensation 2,3
Siemens Stock Awards 4
(restriction period: 4 years)
(Bonus) - Target amount
One-year variable compensation
Total (Code) 6
Service Cost
Total 5
with long-term incentive effect,
stock-based
2 Based on the average Xetra opening price of €90.02 for the
fourth quarter of 2015 (October-December).
1 The amount of the obligation is based on the average base
compensation for the four years prior to the respective dates
of proof.
258,895
23,305,728
3,190,849
35,446
200%
1,934,150
21,486
350%
3,388,083
1 The weighted average fair value as of the grant date for
fiscal 2016 was €76.95 per granted share.
37,637
1,967,900
21,861
747%
7,354,814
81,702
10,526,888
116,940
200%
45
5,030
136,423
5 "Other" includes the adjustment of the Siemens Stock
Awards 2011 and Bonus Awards 2011 (transfer in Novem-
ber 2015) in accordance with Section 23 and Section 125 of
the German Transformation Act (Umwandlungsgesetz)
due to the spin-off of OSRAM.
1,693
3,664 3,835
602
602
602
604
5,382
1,091
3,233
3,061
3,240
0
1,099
998
0 3,240
1,726 5,382
576
576
2,301 5,957
1,099
3,868
611
576
3,857 4,443
5,984
1,700
3,843
3,675
603
603
603
5,984
2,683 2,773
6,535 7,066
1,444
1,387
CFO
Managing Board member
2016
2016
2016 (min) (max)
1,043
1,043 1,043
78
78
78
1,121 1,121 1,121
1,010
78
1,088
1,027 1,027
1,027
651
989
39
39
39
25
989
604
989
2015
2016
2016
(min) (max)
2016
2015
Managing Board member
Dr. Ralf P. Thomas
Prof. Dr. Siegfried Russwurm
Janina Kugel
1,376 1,370
3,427 3,560
1,477 1,387
3,713 4,212
3,505 3,584
626
2016
998
3,246
1,098
48
1,043
1,043
1,043
1,010
42
1,052
(max)
2016 (min)
2015
2016
2016
2016
2016
(min) (max)
1,043
683
1,726
1,043 1,043
683
1,726
683
1,726
227
1,238
1,098
1,098
1,098
1,063
55
55
55
1,010
1,043
48
48
1,091
1,091
3,240
3,071
3,240
0
1,099
998
0 6,360
5,729 6,328 2,136 10,520
1,096 1,101 1,101 1,101
6,825 7,428 3,236 11,620
1,871 2,158
2,503
0
1,010 1,043
5,382
2,503
1,043
1,010
2,503
0
1,043
1,010
4,882
0
2,034
1,878
1,091
0
2016
2015
1,010
67
1,078
Managing Board member
Klaus Helmrich
Managing Board member
2016
2015
2016
2015
2016
2015
2016
2015
2,034
1,878
1,043
1,010
1,043
1,010
1,043
1,010
102
102
55
Combined Management Report
Lisa Davis
Managing Board member
Dr. Roland Busch
President and CEO
One-year variable compensation (Bonus) - Payout amount²
Multi-year variable compensation
Siemens Stock Awards (restriction period: 2011-2015)³
Bonus Awards (waiting period: 2011-2015)4
Share Matching Plan (vesting period: 2013-2015)
Share Matching Plan (vesting period: 2012 - 2014)
Other5
Total
Service Cost
Total (Code)
Managing Board members serving as of September 30, 2016
(Amounts in thousands of €)
Non-performance-
based components
Performance-based
components
Fixed compensation (base compensation)
Fringe benefits¹
without long-term incentive effect, non-stock-based
with long-term incentive effect, stock-based
Total
One-year variable compensation (Bonus) - Payout amount²
Multi-year variable compensation
Siemens Stock Awards (restriction period: 2011-2015)³
Bonus Awards (waiting period: 2011 - 2015)4
Share Matching Plan (vesting period: 2013-2015)
Share Matching Plan (vesting period: 2012 - 2014)
Other5
Total
Service Cost
Total (Code)
1 Fringe benefits include the costs, or the cash equivalent,
of non-monetary benefits and other perquisites, such as
the provision of company cars in the amount of €159,687
(2015: €158,131), contributions toward the cost of insur-
ance in the amount of €139,795 (2015: €134,170), the
reimbursement of expenses for legal advice and tax
advice, accommodation and moving expenses, including
any taxes due in this regard, currency adjustment pay-
ments and costs relating to preventive medical examina-
tions in the amount of €765,327 (2015: €330,620).
2 The payout amount of one-year variable compensation
(Bonus) presented above therefore represents the amount
awarded for fiscal 2016, which will be paid out in January
2017.
3 Starting with the Siemens Stock Awards tranche of 2011,
the restriction period was extended from three to four
years. Shares from the Siemens Stock Awards 2011 were
thus only transferred in November 2015. Therefore, no
allocation for Siemens Stock Awards was made in fiscal
2015. For one half of these Stock Awards target attainment
depended on the EPS for the past three fiscal years and
44 Combined Management Report
Joe Kaeser
without long-term incentive effect, non-stock-based
with long-term incentive effect, stock-based
Total
Fixed compensation (base compensation)
Fringe benefits¹
components
3,120
1,027 5,130
530 530
1,557 5,660
0
1,059
1,942 3,075
103
530
2,045 3,604
665
2,503
0
1,010 1,043
2,503
1,043
1,010
2,373
998 1,099
3,097 3,263
603
602
3,700 3,865
0
626
1,104
1,104
1,104
61
61
1,043
1,043
(max)
(min)
2016
1,043
61
989
1,043
0 3,240
1,121 5,382
602
602
1,723 5,983
0
Performance-based
Non-performance-
based components
(Amounts in thousands of €)
Managing Board members serving as of September 30, 2016
multi-year variable compensation granted for fiscal 2016 and
shown above, this table includes the actual figure for multi-year
variable compensation granted in previous years and allocated in
fiscal 2016. Due to rounding, the figures presented in the table
may not add up precisely to the totals provided.
The following table shows allocations for fiscal 2016 for fixed
compensation, fringe benefits, one-year variable compensation
and multi-year variable compensation - by reference year - as
well as the expense of pension benefits. In deviation from the
Allocations
43
Combined Management Report
7 Ms. Davis's compensation is paid out in Germany in euros. It has
been agreed that any tax liability that arises due to tax rates that
are higher in Germany than in the U.S. will be reimbursed. For
base compensation of calendar year 2015 as well as for the
Bonus of fiscal 2015, a currency-adjustment payment was
granted.
6 Total compensation reflects the current fair value of stock-based
compensation components on the award date. On the basis of
the current monetary values of stock-based compensation
components, total compensation amounted to €28,747,477
(2015: €27,756,633).
998 1,099
3,086 3,246
604
603
3,690 3,849 1,707
nents.
4 For Stock Awards granted in fiscal 2016, target attainment
depends solely on the performance of Siemens stock compared
to defined competitors. The monetary values relating to 100%
target achievement were €8,560,190 (2015: €8,190,219). The
amounts for individual Managing Board members were as
follows: Joe Kaeser €2,120,051 (2015: €1,950,003), Dr. Roland
Busch €1,080,022 (2015: €1,040,036), Lisa Davis €1,080,022
(2015: €1,040,036), Klaus Helmrich €1,080,022 (2015:
€1,040,036), Janina Kugel €1,040,029 (2015: €693,357),
Prof. Dr. Siegfried Russwurm €1,080,022 (2015: €1,040,036),
Dr. Ralf P. Thomas €1,080,022 (2015: €1,040,036) and for former
Managing Board member Prof. Dr. Hermann Requardt €0 (2015:
€346,679).
1,370
3,573
1,410
3,486
1,317
3,538
1,376
3,463
832 1,282
2,148 3,368
5,984
603
5,382
1,104
603
3,240
5 Total maximum compensation for fiscal 2016 represents the
contractual maximum amount for overall compensation, exclud-
ing fringe benefits and pension benefit commitments. At 1.7
times target compensation (base compensation, target amount
for the Bonus and the target amount for long-term stock-based
compensation), the maximum amount is less than the total of
the individual contractual caps for performance-based compo-
1,043
0
2,034 2,034
102
102
2,136 2,136 2,136
2015
2016
2015
2016
2015
989
626
1,043
1,010
1,043
1,010
39
25
78
78
61
67
1,027
651
1,088
1,104
1,078
1,282
2016
CFO
Managing Board member
Managing Board member
0
7,316
4,664
3,797
2,507
3,113
2,715
3,816
2,429
1,101
1,096
832
603
5,760
4,399
604
3,111
576
3,688
611
3,326
602
4,418
604
3,032
Janina Kugel
Prof. Dr. Siegfried Russwurm
Dr. Ralf P. Thomas
8,416
55
1,317
4 One half of the Bonus for fiscal 2011 was granted in the
form of non-forfeitable awards of Siemens stock (Bonus
Awards). After the expiration of the four-year waiting
period in November 2015, the beneficiaries received one
share of Siemens stock for each Bonus Award.
0
0
0
0
0
0
1,407
0
0
0
397
0
903
0
0
177
465
0
2,310
0
0
1,410
1,370
0
67
0
0
amounted to 114%. For the other half, target attainment
was linked to the performance of Siemens stock compared
to defined competitors during the four-year vesting period.
It amounted to 0%. Siemens Stock Awards 2011 that had
already been granted were thus forfeited without replace-
ment in accordance with the plan rules.
604
3,269
603
3,561
603
3,068
602
5,447
103
1,586
530
2,839
1,010
53
0
2,665
2,958
2,465
1,376
4,845
2,309
20
0
97
0
0
177
0
0
0
0
1,482
0
1,121
0
3 The expenses recognized for stock-based compensation
for members of the Managing Board in accordance with
the IFRS in fiscal 2016 and fiscal 2015 amounted to
€8,294,921 and €8,109,155, respectively. The following
amounts pertained to the members of the Managing
Board in fiscal 2016: Joe Kaeser €2,378,584 (2015:
€2,003,783), Dr. Roland Busch €1,283,779 (2015:
€1,129,224), Lisa Davis €698,432 (2015: €284,928), Klaus
Helmrich €1,284,349 (2015: €1,076,237), Janina Kugel
€704,026 (2015: €140,185), Prof. Dr. Siegfried Russwurm
€1,302,593 (2015: €1,239,596), and Dr. Ralf P. Thomas
€872,394 (2015: €516,915). The corresponding expense,
determined in the same way, for former Managing Board
members was as follows: Brigitte Ederer - €42,052 (2015:
€105,227), Barbara Kux - €42,052 (2015: €105,227), Peter
Löscher - €103,403 (2015: €230,387), Prof. Dr. Hermann
Requardt - €5,624 (2015: €1,107,522), Peter Y. Solmssen -
€35,857 (2015: €141,258), and Dr. Michael Süß - €248
(2015: €28,666). In fiscal 2016, the development of the
OSRAM share price lead to a respective adjustment of the
OSRAM cash compensation and thus to earnings in the
amount of €301,027. Especially for former Managing
Board members those earnings are evident, since they
were set off against the usual liabilities arising from other
share based payments and with respect to former Manag-
ing Board members, no essential amount of accruals has
been built up for the remaining tranches.
Combined Management Report
Joe Kaeser
President and CEO
Dr. Roland Busch
Managing Board member
Lisa Davis'
Managing Board member
0
Klaus Helmrich
Managing Board member
2 The figures for individual maximums for multi-year vari-
able compensation reflect the possible maximum value in
accordance with the maximum amount agreed upon for
fiscal 2016 - that is, 300% of the applicable target amount.
2015
2016
(min) (max)
2016
2015
2016
2016
2016
(min) (max)
2015
2016
1,878
102
2,034
102
1,980
Performance-based
2016
1,238
1 Fringe benefits include the costs, or the cash equivalent,
of non-monetary benefits and other perquisites, such as
the provision of company cars in the amount of €159,687
(2015: €158,131), contributions toward the cost of insur-
ance in the amount of €139,795 (2015: €134,170), the
reimbursement of expenses for legal advice and tax advice,
accommodation and moving expenses, including any
taxes due in his regard, currency adjustment payments
and costs relating to preventive medical examinations
in the amount of €765,327 (2015: €330,620).
One-year variable compensation
(Bonus) Payout amount
Total compensation of all Managing Board members for fiscal 2016, in accordance with the applicable reporting standards, amounted to €28.90 million
(2015: €27.42 million). The payout amount presented below is to be used instead of the target value according to the Code for one-year variable
compensation. Service costs for pension benefits are not included.
Multi-year variable compensation 2,3
Siemens Stock Awards4
(restriction period: 4 years)
One-year variable compensation
(Bonus) - Target amount
Total (Code) 6
Service Cost
Total 5
with long-term incentive effect,
stock-based
without long-term incentive effect,
non-stock-based
Total
Fixed compensation (base compensation)
Fringe benefits¹
components
Total compensation
Performance-based
(Amounts in thousands of €)
Managing Board members serving as of September 30, 2016
227
48
42
2,136
1,980
1,098
1,063
1,726
without long-term incentive effect,
non-stock-based
Non-performance-
based components
1,091
components
2,773
0
0
703
0
1,407
0
598
0
0
0
555
0
903
0
1,301
0
0
0
0
1,052
703
0
53
0
97
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,259
1,376
1,370
1,477
1,387
2,683
1,387
1,444
2,310
4,865
2,643
2,550
Treasury shares, at cost
Other components of equity
Retained earnings
85,292
Issued capital
18
90,901
45,730
47,986
2,297
2,471
Capital reserve
5,733
1,921
30,152
1,466
Other comprehensive income, net of income taxes
58 Consolidated Financial Statements
120,348
35,056
581
605
34,816
125,717
1,142
Total liabilities and equity
Total equity
Non-controlling interests
34,474
34,211
Total equity attributable to shareholders of Siemens AG
(6,218)
(3,605)
2,163
27,454
5,890
8.74
Items that may be reclassified subsequently to profit or loss
Income from discontinued operations
Income from continuing operations
Basic earnings per share
Shareholders of Siemens AG
Non-controlling interests
Attributable to:
Net income
Income from discontinued operations, net of income taxes
Income from continuing operations
7,380
5,584
2,031
188
3
5,349
5,396
(1,869)
(2,008)
7
Income tax expenses
7,218
7,404
Income from continuing operations before income taxes
(500)
(373)
Other financial income (expenses), net
5,087
(989)
(818)
Net income
therein: Income (loss) from investments accounted for using the equity method, net
Diluted earnings per share
56 Consolidated Financial Statements
therein: Income tax effects
Derivative financial instruments
therein: Income tax effects
Available-for-sale financial assets
Currency translation differences
therein: Income (loss) from investments accounted for using the equity method, net
Items that will not be reclassified to profit or loss
therein: Income tax effects
Remeasurements of defined benefit plans
Net income
(in millions of €)
B.2 Consolidated Statements of Comprehensive Income
6.65
2.44
0.23
6.30
6.42
27
8.84
6.74
2.47
0.23
6.38
6.51
7,282
98
134
5,450
22
27
Income from continuing operations
Income from discontinued operations
Net income
609
15,982
9,811
Goodwill
Total current assets
Assets classified as held for disposal
Other current assets
Current income tax assets
Inventories
Other current financial assets
Trade and other receivables
Available-for-sale financial assets
Cash and cash equivalents
Assets
(in millions of €)
B.3 Consolidated Statements of Financial Position
Consolidated Financial Statements 57
40
Other intangible assets
Property, plant and equipment
Investments accounted for using the equity method
Other financial assets
6,800
9
16,287
8
1,175
1,293
9,957
133
8,275
10,604
2016
Note
September 30,
Total assets
Total non-current assets
Other assets
Deferred tax assets
2015
5,157
2,571
8,408
(2,636)
(107)
1,065
(370)
(2,636)
16
7,380
5,584
2015
2016
Note
Fiscal year
Shareholders of Siemens AG
Interest expenses
Non-controlling interests
(370)
(42)
(888)
1,089
2,705
1,029
(2,879)
149
(141)
1,399
(244)
134
(7)
(43)
210
22, 23
(7)
4
354
434
(89)
829
10
17,253
40
3
Liabilities associated with assets classified as held for disposal
20,368
20,437
14
Other current liabilities
1,828
2,085
Current income tax liabilities
4,489
4,166
17
Current provisions
2,085
39
Total current liabilities
42,916
39,562
13,695
26,682
24,761
5677
17
Equity
Total liabilities
1,933
Total non-current liabilities
Other financial liabilities
Provisions
Deferred tax liabilities
16
Post-employment benefits
15
Long-term debt
Other liabilities
18,160
Other current financial liabilities
8,048
8,077
7,742
23,166
24,159
122437
11
51,442
55,329
122
190
3
1,151
1,204
644
790
10,157
10,210
3,012
2,947
Trade payables
2,979
6,206
15
Short-term debt and current maturities of long-term debt
Liabilities and equity
120,348
7,774
125,717
70,388
1,094
1,279
2,591
3,431
20,821
20,610
68,906
1,260
30,000
Interest income
140,000
80,000
24,000
244,000
Hans-Jürgen Hartung
140,000
10,500
150,500
140,000
9,000
149,000
Robert Kensbock¹
140,000
180,000
30,000
245,500
25,500
80,000
140,000
140,000
160,000
27,000
327,000
140,000
160,000
27,000
350,000
327,000
140,000
10,500
150,500
105,000
4,500
109,500
Bettina Haller¹
Reinhard Hahn¹
Dr. Hans Michael Gaul
140,000
350,000
80,000
27,000
247,000
140,000
33,333
15,000
188,333
Gérard Mestrallet
126,667
7,500
134,167
140,000
9,000
149,000
Dr. Norbert Reithofer
140,000
Dr. Nicola Leibinger-Kammüller
333,722
31,500
Harald Kern¹
140,000
80,000
22,500
242,500
140,000
80,000
180,000
21,000
Jürgen Kerner¹
140,000
200,000
33,000
373,000
132,222
170,000
241,000
133,333
202,389
56,667
Additional
2015
Base
compen-
sation
compen-
sation for
committee
work
Meeting
attendance
fee
Total
Base
compen-
sation
compen-
sation for
committee
work
Meeting
attendance
fee
Total
2016
Additional
Dr. Gerhard Cromme
September 30, 2016
Attributable to:
A.10.2 Remuneration of Supervisory
Board members
The current remuneration policies for the Supervisory Board were
authorized at the Annual Shareholders' Meeting held on Janu-
ary 28, 2014, and are effective as of fiscal 2014. Details are set out
in Section 17 of the Articles of Association of Siemens AG. The
remuneration of the Supervisory Board consists entirely of fixed
compensation; it reflects the responsibilities and scope of the
work of the Supervisory Board members. The Chairman and Dep-
uty Chairmen of the Supervisory Board as well as the Chairmen
and members of the Audit Committee, the Chairman's Commit-
tee, the Compensation Committee, the Compliance Committee
and the Innovation and Finance Committee receive additional
compensation.
Under current rules, the members of the Supervisory Board re-
ceive an annual base compensation of €140,000; the Chair-
man of the Supervisory Board receives a base compensation of
€280,000, and each of the Deputy Chairmen receives €220,000.
The members of the Supervisory Board committees receive the
following additional fixed compensation for their committee
work: the Chairman of the Audit Committee receives €160,000,
and each of the other members of the Committee receives
€80,000; the Chairman of the Chairman's Committee receives
€120,000, and each of the other members of the Committee re-
ceives €80,000; the Chairman of the Compensation Committee
receives €100,000, and each of the other members of the Com-
mittee receives €60,000 (compensation for any work on the
Chairman's Committee counts toward compensation for work on
the Compensation Committee); the Chairman of the Innovation
and Finance Committee receives €80,000, and each of the other
members of the Committee receives €40,000; the Chairman of
the Compliance Committee receives €80,000, and each of the
other members of the Committee receives €40,000. However, no
additional compensation is paid for work on the Compliance
Committee if a member of that Committee is already entitled to
compensation for work on the Audit Committee.
If a Supervisory Board member does not attend a meeting of the
Supervisory Board, one-third of the aggregate compensation due
to that member is reduced by the percentage of Supervisory
Board meetings not attended by the member in relation to the
total number of Supervisory Board meetings held during the fis-
cal year. In the event of changes in the composition of the Super-
visory Board and/or its committees, compensation is paid on a
pro rata basis, rounding up to the next full month.
280,000
In addition, the members of the Supervisory Board are entitled to
receive a fee of €1,500 for each meeting of the Supervisory Board
and its committees that they attend.
No loans or advances from the Company are provided to mem-
bers of the Supervisory Board.
Combined Management Report
49
The compensation shown below was determined for each of the
members of the Supervisory Board for fiscal 2016 (individualized
disclosure).
(Amounts in €)
Supervisory Board members
serving as of
The members of the Supervisory Board are reimbursed for out-
of-pocket expenses incurred in connection with their duties and
for any value-added taxes to be paid on their remuneration. For
the performance of his duties, the Chairman of the Supervisory
Board is also entitled to an office with secretarial support and the
use of a carpool service.
13,500
280,000
605,000
33,000
393,000
Olaf Bolduan¹
133,333
9,000
142,333
140,000
9,000
149,000
Michael Diekmann
133,333
57,143
13,500
203,976
132,222
140,000
220,000
390,000
30,000
280,000
280,000
48,000
608,000
Birgit Steinborn¹
Werner Wenning
220,000
45,000
200,000
463,500
200,000
200,000
45,000
445,000
220,000
140,000
43,500
1,314
38,095
186,429
For details on the authorizations referred to above, especially
with the restrictions to exclude subscription rights and the terms
to include shares when calculating such restrictions, please re-
fer to the relevant resolution and to Section 4 of the Articles of
Association.
A.11.5 Significant agreements which
take effect, alter or terminate upon
a change of control of the Company
following a takeover bid
Siemens AG maintains two lines of credit in an amount of €4 bil-
lion and an amount of US$3 billion, respectively, which provide its
lenders with a right of termination in the event that (1) Siemens AG
becomes a subsidiary of another company or (2) a person or a
group of persons acting in concert acquires effective control over
Siemens AG by being able to exercise decisive influence over its
activities (Art. 3(2) of Council Regulation (EC) 139/2004).
In March 2013, a consolidated subsidiary as borrower and
Siemens AG as guarantor entered into two bilateral loan agree-
ments, each of which has been drawn in the full amount of
US$500 million. Both agreements provide their respective lend-
ers with a right of termination in the event that (1) Siemens AG
becomes a subsidiary of another company or (2) a person or a
group of persons acting in concert acquires effective control over
Siemens AG by being able to exercise decisive influence over its
activities (Art. 3(2) of Council Regulation (EC) 139/2004).
Framework agreements concluded by Siemens AG under Interna-
tional Swaps and Derivatives Association Inc. documentation
(ISDA Agreements) grant the counterparty a right of termination
when Siemens AG consolidates with, merges into, or transfers
substantially all its assets to a third party. However, this right of
termination exists only, if (1) the resulting entity's creditworthi-
ness is materially weaker than Siemens AG's immediately prior to
such event or (2) the resulting entity fails to simultaneously as-
sume Siemens AG's obligations under the ISDA Agreement. Addi-
tionally, some ISDA Agreements grant the counterparty a right of
termination if a third party acquires beneficial ownership of eq-
uity securities that enable it to elect a majority of Siemens AG's
Supervisory Board or otherwise acquire the power to control
Siemens AG's material policy-making decisions and if the credit-
worthiness of Siemens AG is materially weaker than it was imme-
diately prior to such an event. In either situation, ISDA Agree-
ments are designed such that upon termination all outstanding
payment claims documented under them are to be netted.
In February 2012, Siemens issued bonds with warrant units with
a volume of US$3 billion. Siemens exchanged the major part of
Combined Management Report
53
54
the warrants issued in 2012 against new warrants in Septem-
ber 2015. In case of a change of control, the terms and conditions
of each warrant enable their holders to receive a higher number
of Siemens shares in accordance with an adjusted strike price if
they exercise their option rights within a certain period of time
after the change of control. This period of time shall end either
(1) not less than 30 days and no more than 60 days after publica-
tion of the notice of the issuer regarding the change of control,
as determined by the issuer or (2) 30 days after the change
of control first becomes publicly known. The strike price adjust-
ment decreases depending on the remaining term of the war-
rants and is determined in detail in the terms and conditions of
the warrants. In this context, a change of control occurs if control
of Siemens AG is acquired by a person or by persons acting in
concert.
A.11.6 Compensation agreements
with members of the Managing
Board or employees in the event
of a takeover bid
In the event of a change of control that results in a substantial
change in the position of a Managing Board member (for exam-
ple, due to a change in corporate strategy or a change in the
Managing Board member's duties and responsibilities), the
member of the Managing Board has the right to terminate his or
her contract with the Company for good cause. A change of con-
trol exists if one or several shareholders acting jointly or in con-
cert acquire a majority of the voting rights in Siemens AG and
exercise a controlling influence, or if Siemens AG becomes a de-
pendent enterprise as a result of entering into an intercompany
agreement within the meaning of Section 291 of the German
Stock Corporation Act, or if Siemens AG is to be merged into an
existing corporation or other entity. If this right of termination is
exercised, the Managing Board member is entitled to a severance
payment in the amount of no more than two years' compensa-
tion. The calculation of the annual compensation includes not
only the base compensation and the target amount for the bo-
nus, but also the target amount for the stock awards, in each case
based on the most recent completed fiscal year prior to termina-
tion of the contract. The stock-based compensation components
for which a firm commitment already exists will remain un-
affected. Additionally, the severance payments cover non-mone-
tary benefits by including an amount of 5% of the total severance
amount. Severance payments will be reduced by 10% as a lump-
sum allowance for discounted values and for income earned else-
where. However, this reduction will apply only to the portion of
the severance payment that was calculated without taking ac-
count of the first six months of the remaining term of the Man-
aging Board member's contract. There is no entitlement to a
severance payment if the Managing Board member receives ben-
efits from third parties in connection with a change of control.
A right to terminate the contract does not exist if the change
of control occurs within a period of twelve months prior to a
Managing Board member's retirement.
A.11.7 Other takeover-relevant
information
In November 2015, the Company announced that it would carry
out a share buyback of up to €3 billion in volume within the fol-
lowing up to 36 months. The buyback commenced on Febru-
ary 2, 2016 using the authorizations given by the Annual Share-
holders' Meeting on January 27, 2015. Under this share buyback
Siemens repurchased 2,517,727 shares by September 30, 2016.
The total consideration paid for these shares amounted to about
€230 million (excluding incidental transaction charges). The buy-
back has the sole purposes of retirement, of issuing shares to
employees, board members of affiliated companies and mem-
bers of the Managing Board of Siemens AG, as well as of servic-
ing/securing the obligations or rights to acquire Siemens shares
arising particularly from or in connection with convertible bonds
and warrant bonds. As of September 30, 2016, the Company held
41,721,682 shares of stock in treasury.
Furthermore, the Supervisory Board is authorized to use shares
acquired on the basis of this or any previously given authorization
to meet obligations or rights to acquire Siemens shares that were
or will be agreed with members of the Managing Board within the
framework of rules governing Managing Board compensation.
> used to service or secure obligations or rights to acquire
Siemens shares arising particularly from or in connection with
convertible bonds or warrant bonds issued by the Company or
any of its consolidated subsidiaries (exclusion of subscription
rights, limited to 10% of the capital stock, by mutatis mutandis
application of Section 186 para. 3 sentence 4 German Stock
Corporation Act).
> sold, with the approval of the Supervisory Board, to third par-
ties against payment in cash if the price at which such Siemens
shares are sold is not significantly lower than the market price
of Siemens stock (exclusion of subscription rights, limited to
10% of the capital stock, by mutatis mutandis application of
Section 186 para. 3 sentence 4 German Stock Corporation
Act) or
As of September 30, 2016, the total unissued authorized capital
of Siemens AG therefore consisted of €618.6 million nominal
that may be issued, with varying terms by issuance, in install-
ments of up to 206.2 million registered shares of no par value.
By resolutions of the Shareholders' Meetings of January 28, 2014
and January 27, 2015, the Managing Board is authorized to issue
bonds with conversion rights or with warrants attached, or a
combination of these instruments, each entitling the holders to
subscribe to up to 80 million registered shares of Siemens AG of
no par value. Based on these two authorizations the Company or
consolidated subsidiaries of the Company may issue bonds until
January 27, 2019 and January 26, 2020, respectively, each in an
aggregate principal amount of up to €15 billion. In order to grant
shares of stock to holders/creditors of such convertible bonds or
warrant bonds, the capital stock was conditionally increased by
resolutions of the Shareholders' Meetings 2014 and 2015, each
by up to 80 million registered shares of no par value (Condi-
tional Capitals 2014 and 2015), i.e. in total by up to €480 million
through the issuance of up to 160 million shares of no par value.
The new shares under Authorized Capital 2014 and the bonds
under the aforementioned authorizations are to be issued
against cash or non-cash contributions. They are, as a matter of
principle, to be offered to shareholders for subscription. The
Managing Board is authorized to exclude, with the approval of
the Supervisory Board, subscription rights of shareholders in the
event of capital increases against contributions in kind. In the
event of capital increases against contributions in cash, the Man-
aging Board is authorized to exclude shareholders' subscription
rights with the approval of the Supervisory Board in the follow-
ing cases:
> The issue price of the new shares/bonds is not significantly
lower than the stock market price of the Siemens shares al-
ready listed or the theoretical market price of the bonds com-
puted in accordance with generally accepted actuarial meth-
ods (exclusion of subscription rights, limited to 10% of the
capital stock, in accordance with or by mutatis mutandis
application of Section 186 para. 3 sentence 4 German Stock
Corporation Act).
> The exclusion is necessary with regard to fractional amounts
resulting from the subscription ratio.
> The exclusion is necessary in order to grant holders of conver-
sion or option rights or conversion or option obligations on
Siemens shares a compensation for the effects of dilution.
The total amount of new shares issued or to be issued under
Authorized Capitals or in accordance with the bonds mentioned
above, in exchange for contributions in cash and in kind and with
shareholders' subscription rights excluded, may in certain cases
be subject to further restrictions, such as the restriction that they
may not exceed 20% of the capital stock. The details of those
restrictions are described in the relevant authorization.
We are not aware of, nor have we during the last fiscal year been
notified of, any shareholder directly or indirectly holding 10%
or more of the voting rights. There are no shares with special
rights conferring powers of control. Shares of stock issued by
Siemens AG to employees under its employee share program
and/or as share-based compensation are transferred directly to
the employees. The beneficiary employees who hold shares of
employee stock may exercise their control rights in the same way
as any other shareholder directly in accordance with applicable
laws and the Articles of Association.
In February 2012, Siemens issued bonds with warrant units with
a volume of US$3 billion. Siemens exchanged the major part of
the warrants issued in 2012 against new warrants in Septem-
ber 2015; for this purpose, Siemens issued new bonds with war-
rants. At exchange, the new warrants resulted in option rights
entitling their holders to receive approximately 20.3 million
Siemens shares. The terms and conditions of the warrants enable
Siemens to service exercised option rights using either condi-
tional capital or treasury stock, and also enable Siemens to buy
back the warrants.
62
52
Combined Management Report
In addition to selling them over the stock exchange or through a
public sales offer to all shareholders, the Managing Board is au-
thorized by resolution of the Shareholders' Meeting on Janu-
ary 27, 2015 to also use Siemens shares repurchased on the basis
of this or any previously given authorization for every permissible
purpose, in particular as follows: Such Siemens shares may be
> retired
used in connection with share-based compensation programs
and/or employee share programs of the Company or any of its
affiliated companies and issued to individuals currently or for-
merly employed by the Company or any of its affiliated com-
panies as well as to board members of any of the Company's
affiliated companies
> offered and transferred, with the approval of the Supervisory
Board, to third parties against non-cash contributions
The Company may not repurchase its own shares unless so au-
thorized by a resolution duly adopted by the shareholders at a
general meeting or in other very limited circumstances set forth
in the German Stock Corporation Act. On January 27, 2015, the
Shareholders' Meeting authorized the Company to acquire until
January 26, 2020 up to 10% of its capital stock existing at the
date of adopting the resolution or - if this value is lower - as of
the date on which the authorization is exercised. The aggregate
of shares of stock of Siemens AG repurchased under this autho-
rization and any other Siemens shares previously acquired and
still held in treasury by the Company or attributable to the Com-
pany pursuant to Sections 71d and 71e of the German Stock Cor-
poration Act may at no time exceed 10% of the then existing
capital stock. Any repurchase of Siemens shares shall be accom-
plished at the discretion of the Managing Board either (1) by ac-
quisition over the stock exchange or (2) through a public share
repurchase offer. The Managing Board is additionally authorized
to complete the repurchase of Siemens shares in accordance with
the authorization described above by using certain derivatives
(put and call options, forward purchases and any combination of
these derivatives). In exercising this authorization, all stock re-
purchases based on the derivatives are limited to a maximum
volume of 5% of Siemens' capital stock existing at the date of
adopting the resolution at the Shareholders' Meeting. A deriva-
tive's term of maturity may not, in any case, exceed 18 months
and must be chosen in such a way that the repurchase of Siemens
shares upon exercise of the derivative will take place no later
than January 26, 2020.
Furthermore, the Managing Board is authorized to increase, with
the approval of the Supervisory Board, the capital stock until Jan-
uary 27, 2019 by up to €528.6 million through the issuance of up
to 176.2 million registered shares of no par value against cash con-
tributions and/or contributions in kind (Authorized Capital 2014).
Combined Management Report
CONSOLIDATED
Selling and general administrative expenses
(11,669)
(11,409)
Other operating income
5
328
476
Other operating expenses
6
(427)
(389)
Income (loss) from investments accounted for using the equity method, net
4
134
1,235
(4,483)
(4,732)
Research and development expenses
21,847
FINANCIAL
STATEMENTS
B.1 Consolidated Statements of Income
Fiscal year
(in millions of €, per share amounts in €)
Revenue
Cost of sales
B.
Gross profit
2016
2015
79,644
75,636
(55,826)
(53,789)
23,819
Note
15,000
and the Supervisory Board may allocate to other retained earnings
under Section 58 para. 2 of the German Stock Corporation Act.
Combined Management Report
10,500
150,500
140,000
9,000
149,000
Jim Hagemann Snabe
140,000
120,000
31,500
291,500
132,222
113,333
28,500
274,056
Sibylle Wankel¹
140,000
Michael Sigmund
109,500
4,500
93,333
14,815
4,500
112,648
Güler Sabancı
140,000
10,500
Total²
150,500
9,000
149,000
Dr. Nathalie von Siemens
140,000
10,500
150,500
105,000
140,000
51
140,000
3,066,667
16,500
A.11.1 Composition of common stock
A.11.3 Legislation and provisions of
the Articles of Association applicable
to the appointment and removal
of members of the Managing Board
and governing amendment to the
rights and obligations. The shareholders' rights and obligations Articles of Association
As of September 30, 2016, the Company's common stock totaled
€2.550 billion. The capital stock is divided into 850 million regis-
tered shares with no par value and a notional value of €3.00 per
share. The shares are fully paid in. All shares confer the same
are governed in detail by the provisions of the German Stock Cor-
poration Act, in particular by Sections 12, 53a et seq., 118 et seq.
and 186 of the German Stock Corporation Act.
A.11.2 Restrictions on voting rights
or transfer of shares
At the Shareholders' Meeting, each share of stock has one vote
and accounts for the shareholders' proportionate share in the
Company's net income. An exception from this rule applies with
regard to treasury shares held by the Company, which do not
entitle the Company to any rights. Under Section 136 of the Ger-
man Stock Corporation Act the voting right of the affected shares
is excluded by law.
Shares issued to employees worldwide under the employee share
program implemented since the beginning of fiscal 2009, in par-
ticular the Share Matching Plan, are freely transferable unless
applicable local laws provide otherwise. Under the rules of the
program, however, in order to receive one matching share free
of charge for each three shares purchased, participants are re-
quired to hold the shares purchased by them for a vesting period
of several years, during which the participants have to be contin-
uously employed by Siemens AG or another Siemens company.
The right to receive matching shares is forfeited if the purchased
shares are sold, transferred, hedged on, pledged or hypothecated
in any way during the vesting period.
The von Siemens-Vermögensverwaltung GmbH (VSV) has, on a
sustained basis, powers of attorney allowing it to exercise the
voting rights for 10,878,800 shares (as of September 30, 2016) on
The appointment and removal of members of the Managing
Board is subject to the provisions of Sections 84 and 85 of the
German Stock Corporation Act and Section 31 of the German
Codetermination Act (Mitbestimmungsgesetz). According to Sec-
tion 8 para. 1 of the Articles of Association, the Managing Board
is comprised of several members, the number of which is deter-
mined by the Supervisory Board.
According to Section 179 of the German Stock Corporation Act,
any amendment to the Articles of Association requires a resolu-
tion of the Shareholders' Meeting. The authority to adopt purely
formal amendments to the Articles of Association was trans-
ferred to the Supervisory Board under Section 13 para. 2 of the
Articles of Association. In addition, by resolutions of the Share-
holders' Meetings the Supervisory Board has been authorized to
amend Section 4 of the Articles of Association in accordance with
the utilization of the Authorized and Conditional Capitals, and
after expiration of the then-applicable authorization and utiliza-
tion period.
Resolutions of the Shareholders' Meeting require a simple major-
ity vote, unless a greater majority is required by law. Pursuant to
Section 179 para. 2 of the German Stock Corporation Act, amend-
ments to the Articles of Association require a majority of at least
three-quarters of the capital stock represented at the time of the
casting of the votes, unless another capital majority is prescribed
by the Articles of Association.
A.11.4 Powers of the Managing Board
behalf of members of the Siemens family. These shares are part to issue and repurchase shares
of the total number of shares held by the family's members. The
powers of attorney are based on an agreement between the VSV
and, among others, members of the Siemens family. The shares
are voted together by VSV, taking into account the proposals of a
family partnership established by the family's members or of one
of this partnership's governing bodies.
The Managing Board is authorized to increase, with the approval
of the Supervisory Board, the capital stock until January 25, 2021
by up to €90 million through the issuance of up to 30 million
registered shares of no par value against contributions in cash
(Authorized Capital 2016). Subscription rights of existing share-
holders are excluded. The new shares shall be issued under the
condition that they are offered exclusively to employees of
Siemens AG and any of its affiliated companies. To the extent
permitted by law, employee shares may also be issued in such a
manner that the contribution to be paid on such shares is covered
by that part of the annual net income which the Managing Board
(pursuant to Sections 289 para. 4 and 315 para. 4 of the German Commercial Code)
and explanatory report
A.11 Takeover-relevant information
Combined Management Report
50
196,500
1,655,238
429,000
5,150,905
132,222
2,932,221
37,778
1,545,926
13,500
388,500
40,000
183,500
1 These employee representatives on the Supervisory Board
and the representatives of the trade unions on the Super-
visory Board have declared their willingness to transfer their
compensation to the Hans Boeckler Foundation, in accor-
dance with the guidelines of the Confederation of German
Trade Unions (DGB).
2 The total figure, compared to the amount presented in the
2015 Compensation Report, does not include the total
compensation of €252,185 paid to former Supervisory Board
members Gerd von Brandenstein, Prof. Dr. Peter Gruss and
Berthold Huber.
A.10.3 Other
The Company provides a group insurance policy for Supervisory
and Managing Board members and certain other employees of
the Siemens Group. The policy is taken out for one year at a time
renewed annually. It covers the personal liability of the insured
in cases of financial loss associated with their activities on behalf
of the Company. The insurance policy for fiscal 2016 includes a
deductible for the members of the Managing Board and the
Supervisory Board that complies with the requirements of the
German Stock Corporation Act and the Code.
4,866,648
Total comprehensive income
1,049
B.4 Consolidated Statements of Cash Flows
5,450
35,056
581
34,474
(6,218)
(357)
726
1,794
35,056
581
34,474
(6,218)
(357)
726
1,794
129
33
96
289
134
5,584
(885)
434
36
37
51
92
(42)
2,668
390
390
391
289
(446)
(446)
91
91
(3,066)
(239)
(2,827)
(2,879)
(2,879)
208
(446)
909
256
(2,703)
373
745
Treasury
shares at cost
Derivative financial
instruments
financial assets
Available-for-sale
Currency trans-
lation differences
27,454
5,890
2,550
(2,575)
(42)
(93)
(1)
(67)
158
(2,827)
(2,637)
5,450
30,152
(314)
(3,747)
Total equity
attributable to
shareholders
of Siemens AG
30,954
(2,703)
(2,703)
233
36
36
(2,873)
(145)
(2,728)
1,029
35
256
993
354
7,380
98
7,282
31,514
560
Total equity
interests
Non controlling
(42)
1,160
(148)
(3,605)
66 Consolidated Financial Statements
Loans and receivables - Financial assets classified as loans and
receivables are measured at amortized cost using the effective
interest method less any impairment losses. Impairment losses on
trade and other receivables are recognized using separate allow-
ance accounts. The allowance for doubtful accounts involves
significant management judgment and review of individual re-
ceivables based on individual customer creditworthiness, current
Available-for-sale financial assets - Investments in equity instru-
ments, debt instruments and fund shares are measured at fair
value, if reliably measurable. Unrealized gains and losses, net of
applicable deferred income tax expenses, are recognized in line
item Other comprehensive income, net of income taxes. Pro-
vided that fair value cannot be reliably determined, Siemens
measures available-for-sale financial assets at cost. This applies
to equity instruments that do not have a quoted market price in
an active market, and decisive parameters cannot be reliably es-
timated to be used in valuation models for the determination of
fair value. Siemens considers all available evidence such as mar-
ket conditions and prices, investee-specific factors and the dura-
tion as well as the extent to which fair value is less than acquisi-
tion cost in evaluating potential impairment of its available-for-sale
financial assets. The Company considers a decline in fair value as
objective evidence of impairment, if the decline exceeds 20% of
costs or continues for more than six months.
Cash and cash equivalents - The Company considers all highly
liquid investments with less than three months maturity from the
date of acquisition to be cash equivalents. Cash and cash equiv-
alents are measured at cost.
Financial instruments - A financial instrument is any contract
that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity. Siemens does not
use the category held to maturity and does not use the option to
designate financial assets or financial liabilities at fair value
through profit or loss at inception (Fair Value Option). Based on
their nature, financial instruments are classified as financial as-
sets and financial liabilities measured at cost or amortized cost
and financial assets and financial liabilities measured at fair value
and as receivables from finance leases. Regular way purchases or
sales of financial assets are accounted for at the trade date. Ini-
tially, financial instruments are recognized at their fair value.
Transaction costs are only included in determining the carrying
amount, if the financial instruments are not measured at fair
value through profit or loss. Receivables from finance leases are
recognized at an amount equal to the net investment in the
lease. Subsequently, financial assets and liabilities are measured
according to the category to which they are assigned cash and
cash equivalents, available-for-sale financial assets, loans and
receivables, financial liabilities measured at amortized cost or
financial assets and liabilities classified as held for trading.
Termination benefits - Termination benefits are provided as a
result of an entity's offer made in order to encourage voluntary
redundancy before the normal retirement date or from an enti-
ty's decision to terminate the employment. Termination benefits
in accordance with IAS 19, Employee Benefits, are recognized as
a liability and an expense when the entity can no longer with-
draw the offer of those benefits.
Legal Proceedings often involve complex legal issues and are
subject to substantial uncertainties. Accordingly, considerable
judgment is part of determining whether it is probable that
there is a present obligation as a result of a past event at the
end of the reporting period, whether it is probable that such a
Legal Proceeding will result in an outflow of resources and
whether the amount of the obligation can be reliably estimated.
Internal and external counsels are generally part of the deter-
mination process. Due to new developments, it may be neces-
sary, to record a provision for an ongoing Legal Proceeding or
to adjust the amount of a previously recognized provision. Upon
resolution of a Legal Proceeding, Siemens may incur charges in
excess of the recorded provisions for such matters. The out-
come of Legal Proceedings may have a material effect on
Siemens' financial position, its results of operations and/or its
cash flows.
Significant estimates are involved in the determination of provi-
sions related to onerous contracts, warranty costs, asset retire-
ment obligations, legal and regulatory proceedings as well as
governmental investigations (Legal Proceedings). Siemens re-
cords a provision for onerous sales contracts when current esti-
mates of total contract costs exceed expected contract revenue.
Onerous sales contracts are identified by monitoring the prog-
ress of the project and updating the estimate of total contract
costs which also requires significant judgment relating to
achieving certain performance standards as well as estimates
involving warranty costs and estimates regarding project delays
including the assessment of responsibility splits between the
contract partners for these delays. Uncertainties regarding asset
retirement obligations include the estimated costs of decom-
missioning and final waste storage because of the long time
frame over which future cash outflows are expected to occur
including the respective interest accretion. Amongst others, the
estimated cash outflows could alter significantly if, and when,
political developments affect the government's plans to develop
the final storage.
amount of the obligation. If the effect is material, provisions are
recognized at present value by discounting the expected future
cash flows at a pretax rate that reflects current market assess-
ments of the time value of money. When a contract becomes
onerous, the
present obligation under the contract is recognized
as a provision.
Consolidated Financial Statements 65
Provisions - A provision is recognized in the Statement of Finan-
cial Position when it is probable that the Company has a present
legal or constructive obligation as a result of a past event, it is
probable that an outflow of economic benefits will be required
to settle the obligation and a reliable estimate can be made of the
Actuarial valuations rely on key assumptions including discount
rates, expected compensation increases, rate of pension progres-
sion and mortality rates. Discount rates used are determined
by reference to yields on high-quality corporate bonds of appro-
priate duration and currency at the end of the reporting period.
In case such yields are not available discount rates are based on
government bonds yields. Due to changing market, economic
and social conditions the underlying key assumptions may differ
from actual developments.
Remeasurements comprise actuarial gains and losses as well as
the difference between the return on plan assets and the
amounts included in net interest on the net defined benefit lia-
bility (asset). They are recognized in Other comprehensive in-
come, net of income taxes.
Service cost and past service cost for post-employment benefits
and administration costs unrelated to the management of plan
assets are allocated among functional costs. Past service cost and
settlement gains (losses) are recognized immediately in profit or
loss. For unfunded plans, the amount of line item Post-employ-
ment benefits equals the DBO. For funded plans, Siemens offsets
the fair value of the plan assets with the DBO. Siemens recog-
nizes the net amount, after adjustments for effects relating to
any asset ceiling.
Defined benefit plans - Siemens measures the entitlements by
applying the projected unit credit method. The approach reflects
an actuarially calculated net present value of the future benefit
entitlement for services already rendered. In determining the
net present value of the future benefit entitlement for service
already rendered (Defined Benefit Obligation (DBO)), the ex-
pected rates of future salary increase and expected rates of fu-
ture pension progression are considered. The assumptions used
for the calculation of the DBO as of the period-end of the preced-
ing fiscal year are used to determine the calculation of service
cost and interest income and expense of the following year. The
net interest income or expense for the fiscal year will be based
on the discount rate for the respective year multiplied by the net
defined benefit liability (asset) at the preceding fiscal year's pe-
riod-end date.
Inventories - Inventories are valued at the lower of acquisition
or production costs and net realizable value, costs being gener-
ally determined on the basis of an average or first-in, first-out
method.
Income taxes - Tax positions under respective local tax laws
and tax authorities' views can be complex and subject to differ-
ent interpretations of tax payers and local tax authorities.
Different interpretations of tax laws may result in additional tax
payments for prior years and are taken into account based on
management's considerations. Under the liability method,
deferred tax assets and liabilities are recognized for future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets are recog-
nized if sufficient future taxable profit is available, including
income from forecasted operating earnings, the reversal of
existing taxable temporary differences and established tax
planning opportunities. As of each period-end, Siemens evalu-
ates the recoverability of deferred tax assets, based on pro-
jected future taxable profits. Based upon the level of historical
taxable income and projections for future taxable income over
the periods in which the deferred tax assets are deductible,
Siemens believes it is probable the Company will realize the
benefits of these deductible differences. As future develop-
ments are uncertain and partly beyond Siemens's control,
assumptions are necessary to estimate future taxable profits as
well as the period in which deferred tax assets will recover.
Estimates are revised in the period in which there is sufficient
evidence to revise the assumption.
Siemens classifies a non-current asset or a disposal group as held
for disposal if its carrying amount will be recovered principally
through a sale transaction rather than through continuing use.
The disclosures in the Notes to Consolidated Financial State-
ments outside NOTE 3 ACQUISITIONS, DISPOSITIONS AND DISCON-
TINUED OPERATIONS that refer to the Consolidated Statements of
Financial Position generally relate to assets that are not held for
disposal. Siemens reports non-current assets or disposal groups
held for disposal separately in → NOTE 3 ACQUISITIONS, DISPOSITIONS
AND DISCONTINUED OPERATIONS. Non-current assets classified as
held for disposal and disposal groups are measured at the lower
of their carrying amount and fair value less costs to sell. Depreci-
ation and amortization ceases. The determination of the fair
value less costs to sell includes the use of estimates and assump-
tions that tend to be uncertain.
separately from income and expenses from continuing opera-
tions; prior periods are presented on a comparable basis. In the
Consolidated Statements of Cash Flow, the cash flows from dis-
continued operations are presented separately from cash flows
of continuing operations; prior periods are presented on a com-
parable basis. The disclosures in the Notes to the Consolidated
Financial Statements outside NOTE 3 ACQUISITIONS, DISPOSITIONS
AND DISCONTINUED OPERATIONS that refer to the Consolidated State-
ments of Income and the Consolidated Statements of Cash Flow
relate to continuing operations.
economic trends and analysis of historical bad debts on a port-
folio basis. For the determination of the country-specific compo-
nent of the individual allowance, Siemens also considers country
credit ratings, which are centrally determined based on informa-
tion from external rating agencies. Regarding the determination
of the valuation allowance derived from a portfolio-based analy-
sis of historical bad debts, a decline of receivables in volume re-
sults in a corresponding reduction of such provisions and vice
versa. As of September 30, 2016 and 2015, Siemens recorded a
valuation allowance for trade and other receivables (including
leases) of €1,211 million and €1,123 million, respectively.
Financial liabilities - Siemens measures financial liabilities, ex-
cept for derivative financial instruments, at amortized cost using
the effective interest method.
Derivative financial instruments - Derivative financial instru-
ments, such as foreign currency exchange contracts and interest
rate swap contracts are measured at fair value and classified as
held for trading unless they are designated as hedging instru-
ments, for which hedge accounting is applied. Changes in the fair
value of derivative financial instruments are recognized either in
net income or, in the case of a cash flow hedge, in line item Other
comprehensive income, net of income taxes (applicable deferred
income tax). Certain derivative instruments embedded in host
contracts are also accounted for separately as derivatives.
Fair value hedges: The carrying amount of the hedged item is
adjusted by the gain or loss attributable to the hedged risk.
Where an unrecognized firm commitment is designated as
hedged item, the subsequent cumulative change in its fair value
is recognized as a separate financial asset or liability with corre-
sponding gain or loss recognized in net income. For hedged
items carried at amortized cost, the adjustment is amortized un-
til maturity of the hedged item. For hedged firm commitments
the initial carrying amount of the assets or liabilities that result
from meeting the firm commitments are adjusted to include the
cumulative changes in the fair value that were previously recog-
nized as separate financial assets or liabilities.
Consolidated Financial Statements
68
In fiscal 2016 and 2015, Income from discontinued operations,
net of income taxes, includes gains related to the sale of the
hearing aid business of €102 million and €1.7 billion, respec-
tively; in fiscal 2015, Siemens recognized a pretax gain on
disposal for the sale of its hospital information business of
€516 million.
DISCONTINUED OPERATIONS
In December 2014, Siemens acquired the Rolls-Royce Energy aero-
derivative gas turbine and compressor business of Rolls-Royce
plc, U.K. (Rolls-Royce). The purchase price allocation was final-
ized in the first quarter of fiscal 2016. The contractually agreed
purchase price amounts to £785 million (€990 million as of the
acquisition date) paid in cash. That amount was subject to
post-closing adjustments amounting to £29 million (€37 million
as of the acquisition date). In addition, as part of the transaction,
Siemens paid Rolls-Royce £200 million (€252 million as of the
acquisition date) for a 25 year exclusive technology licensing
agreement and for preferred access to supply and engineering
services of Rolls-Royce. Goodwill amounts to €408 million and is
largely based on synergies, such as cost synergies, especially in
manufacturing, purchasing, research and development, as well
as general administration functions, and sales synergies mainly
resulting from the extension of the gas turbine portfolio.
In June 2015, Siemens acquired all shares of Dresser-Rand Group
Inc., Houston, Texas (U.S.) and Paris (France). The purchase price
allocation was finalized in the third quarter of fiscal 2016. The
purchase price amounts to US$6,692 million (€5,981 million as
of the acquisition date) paid in cash. The following figures result
from the purchase price allocation as of the acquisition date:
Other intangible assets €2,839 million, Property, plant and equip-
ment €240 million, Trade and other receivables €318 million,
Inventories €480 million, Other current financial assets €145 mil-
lion, Cash and cash equivalents €175 million, Debt including out-
standing financial debt settled €1,043 million, Trade payables
€219 million, Provisions €118 million, Other current liabilities
€386 million and Deferred tax liabilities €935 million. Intangible
assets mainly relate to customer relationships of €2,383 million
and technology of €393 million. The gross contractual amount of
the trade and other receivables acquired is €469 million. Good-
will amounts to €4,580 million and is largely based on synergies,
such as sales synergies mainly resulting from the extended port-
folio and enhanced service opportunities, and cost synergies,
especially in research and development, purchasing, general ad-
ministration functions, as well as manufacturing.
In April 2016, Siemens acquired all shares of CD-adapco Ltd.,
U.S., a global engineering simulation company with software
solutions covering a wide range of engineering disciplines. The
acquisition supplements Siemens' industry software portfolio
and delivers on Siemens' strategy to further expand the digital
enterprise portfolio. The acquired business will be integrated in
the Digital Factory Division. The purchase price amounts to
US$971 million (€853 million as of the acquisition date) paid in
cash and is subject to customary cash/debt and working capital
adjustments. The preliminary purchase price allocation as of the
acquisition date resulted in Other intangible assets of €395 mil-
lion and Deferred tax liabilities of €105 million. Other intangible
assets mainly relate to technology of €273 million and customer
relationships of €118 million. Preliminary goodwill of €569 mil-
lion comprises intangible assets that are not separable such as
employee know-how and expected synergy effects. Including
earnings effects from purchase price allocation and integration
costs, the acquired business contributed revenue of €63 million
and a net income of €(27) million to Siemens for the period from
acquisition to September 30, 2016. Revenue and net income of
the combined entity in fiscal 2016 would have been €79,722 mil-
lion and €5,566 million, respectively, had CD-adapco been in-
cluded as of October 1, 2015.
ACQUISITIONS
NOTE 3 Acquisitions, dispositions
and discontinued operations
64 Consolidated Financial Statements
In January 2016, the IASB issued IFRS 16, Leases. IFRS 16 elimi-
nates the current classification model for lessee's lease contracts
as either operating or finance leases and, instead, introduces a
single lessee accounting model requiring lessees to recognize
right-of-use assets and lease liabilities for leases with a term of
more than twelve months. This brings the previous off-balance
leases on the balance sheet in a manner largely comparable to
current finance lease accounting. IFRS 16 is effective for annual
periods beginning on or after January 1, 2019; earlier application
is permitted if IFRS 15 is already applied. The Company is cur-
rently assessing the impact of adopting IFRS 16 on the Company's
Consolidated Financial Statements and will adopt the standard
for the fiscal year beginning as of October 1, 2019.
Consolidated Financial Statements 67
In May 2014, the IASB issued IFRS 15, Revenue from Contracts with
Customers. According to the new standard, revenue is recog-
nized to depict the transfer of promised goods or services to a
customer in an amount that reflects the consideration to which
the Company expects to be entitled in exchange for those goods
or services. Revenue is recognized when, or as, the customer ob-
tains control of the goods or services. IFRS 15 also includes guid-
ance on the presentation of contract balances, that is, assets and
liabilities arising from contracts with customers, depending on
the relationship between the entity's performance and the cus-
tomer's payment. IFRS 15 supersedes IAS 11, Construction Con-
tracts and IAS 18, Revenue as well as related interpretations. The
standard is effective for annual periods beginning on or after
January 1, 2018; early application is permitted. The Company will
adopt the standard for the fiscal year beginning as of October 1,
2017 retrospectively, i.e. the comparable period will be presented
in accordance with IFRS 15. Currently, it is expected that changes
in the total amount of revenue to be recognized for a customer
contract will be very limited. In addition, for certain types of con-
tracts, the timing for recognizing revenue will change, in partic-
ular revenue may be recognized earlier if variable consideration
components exist, re-allocations of the transaction price be-
tween performance obligations take place or licenses are trans-
ferred to the customer. Based on analyses performed, the vast
majority of construction-type contracts currently accounted for
In July 2014, the IASB issued IFRS 9, Financial Instruments. IFRS 9
introduces a single approach for the classification and measure-
ment of financial assets according to their cash flow characteris-
tics and the business model they are managed in, and provides a
new impairment model based on expected credit losses. IFRS 9
also includes new regulations regarding the application of hedge
accounting to better reflect an entity's risk management activi-
ties especially with regard to managing non-financial risks. The
new standard is effective for annual reporting periods beginning
on or after January 1, 2018, while early application is permitted.
The Company will adopt IFRS 9 for the fiscal year beginning as of
October 1, 2018 and is currently assessing the impacts of its adop-
tion on the Company's Consolidated Financial Statements.
The following pronouncements, issued by the IASB, are not yet
effective and have not yet been adopted by the Company:
RECENT ACCOUNTING PRONOUNCEMENTS,
NOT YET ADOPTED
Prior-year information - The presentation of certain prior-year
information has been reclassified to conform to the current year
presentation.
considering dividends during the vesting period the grantees are
not entitled to and market conditions and non-vesting condi-
tions, if applicable.
Share-based payment - Share-based payment awards at Siemens
are predominately designed as equity-settled. Fair value is mea-
sured at grant date and is expensed over the vesting period.
Fair value is determined as the market price of Siemens shares,
Cash flow hedges: The effective portion of changes in the fair
value of derivative instruments designated as cash flow hedges
are recognized in line item Other comprehensive income, net of
income taxes (applicable deferred income tax), and any ineffec-
tive portion is recognized immediately in net income. Amounts
accumulated in equity are reclassified into net income in the
same periods in which the hedged item affects net income.
under the percentage-of-completion method is expected to fulfill
the requirements for revenue recognition over time. Besides,
changes to the Statement of Financial Position are expected, e.g.
separate line items for contract assets and contract liabilities are
required, and quantitative and qualitative disclosures are added.
The Company does not expect significant impacts on its Consol-
idated Financial Statements.
Discontinued operations and non-current assets held for dis-
posal - Discontinued operations are reported when a component
of an entity is classified as held for disposal or has been disposed
of, if the component represents a separate major line of business
or geographical area of operations and is part of a single co-ordi-
nated plan to dispose of a separate major line of business or geo-
graphical area of operations. In the Consolidated Statements of
Income, income (loss) from discontinued operations is reported
Impairment of property, plant and equipment and other
intangible assets - The Company reviews property, plant and
equipment and other intangible assets for impairment whenever
events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. In addition, intangi-
ble assets not yet available for use are subject to an annual im-
pairment test. Impairment testing of property, plant and equip-
ment and other intangible assets involves the use of estimates in
determining the assets' recoverable amount which can have a
material impact on the respective values and ultimately the
amount of any impairment.
5 to 10 years
generally 5 years
generally 3 to 5 years
Sales from construction contracts: When the outcome of a con-
struction contract can be estimated reliably, revenues from con-
struction-type projects are recognized under the percent-
age-of-completion method, based on the percentage of costs
incurred to date compared to the total estimated contract costs.
An expected loss on the construction contract is recognized as an
expense immediately. Siemens applies the requirements of IAS 11
regarding contract variations to contract terminations, since con-
tract terminations are also changes to the agreed delivery and
service scope.
Sale of goods: Revenue is recognized when the significant risks
and rewards of ownership of the goods have passed to the buyer,
usually on delivery of the goods.
Revenue recognition - Under the condition that persuasive
evidence of an arrangement exists, revenue is recognized to the
extent that it is probable that the economic benefits will flow to
the Company and the revenue can be reliably measured, regard-
less of when the payment is being made. In cases where the in-
flow of economic benefits is not probable due to customer re-
lated credit risks, the revenue recognized is subject to the amount
of payments irrevocably received.
Foreign currency transaction - Transactions that are denomi-
nated in a currency other than the functional currency of an en-
tity, are recorded at that functional currency applying the spot
exchange rate at the date when the underlying transactions are
initially recognized. At the end of the reporting period, foreign
currency-denominated monetary assets and liabilities are reval-
ued to functional currency applying the spot exchange rate pre-
vailing at that date. Gains and losses arising from these foreign
currency revaluations are recognized in net income. Those for-
eign currency-denominated transactions which are classified as
non-monetary are remeasured using the historical spot ex-
change rate.
62 Consolidated Financial Statements
Foreign currency translation - Assets and liabilities of foreign
subsidiaries, where the functional currency is other than the
euro, are translated using the spot exchange rate at the end of
the reporting period, while the Consolidated Statements of In-
come are translated using average exchange rates during the
period. Differences arising from such translations are recognized
within equity and reclassified to net income when the gain or loss
on disposal of the foreign subsidiary is recognized. The Consoli-
dated Statements of Cash Flow are translated at average ex-
change rates during the period, whereas cash and cash equiva-
lents are translated at the spot exchange rate at the end of the
reporting period.
Joint ventures - Joint ventures are entities over which Siemens
and one or more parties have joint control. Joint control requires
unanimous consent of the parties sharing control in decision
making on relevant activities.
Associates - Associates are companies over which Siemens has
the ability to exercise significant influence over operating and
financial policies (generally through direct or indirect ownership
of 20% to 50% of the voting rights). These are recorded in the
Consolidated Financial Statements using the equity method and
are initially recognized at cost. Siemens' share of its associate's
post-acquisition profits or losses is recognized in the Consolidated
Statements of Income, and its share of post-acquisition changes
in equity that have not been recognized in the associate's profit
or loss is recognized directly in equity. The cumulative post-acqui-
sition changes are adjusted against the carrying amount of the
investment in the associate. When Siemens' share of losses in an
associate equals or exceeds its interest in the associate, Siemens
does not recognize further losses, unless it incurs obligations or
makes payments on behalf of the associate. The interest in an
associate is the carrying amount of the investment in the associ-
ate together with any long-term interests that, in substance, form
part of Siemens' net investment in the associate.
tional fair value of assets acquired and liabilities assumed (partial
goodwill method). If there is no loss of control, transactions with
non-controlling interests are accounted for as equity transactions
not affecting profit and loss. At the date control is lost, any re-
tained equity interests are remeasured to fair value. In case of a
written put option on non-controlling interests the Company as-
sesses whether the prerequisites for the transfer of present own-
ership interest are fulfilled at the balance sheet date. If the Com-
pany is not the beneficial owner of the shares underlying the put
option, the exercise of the put option will be assumed at each
balance sheet date and treated as equity transaction between
shareholders with the recognition of a purchase liability at the
respective exercise price. The non-controlling interests partici-
pate in profits and losses during the reporting period.
The percentage-of-completion method places considerable im-
portance on accurate estimates of the extent of progress to-
wards completion and may involve estimates on the scope of
deliveries and services required for fulfilling the contractually
defined obligations. These significant estimates include total
contract costs, total contract revenues, contract risks, including
technical, political and regulatory risks, and other judgments.
Under the percentage-of-completion method, changes in esti-
mates may lead to an increase or decrease of revenue. The cred-
itworthiness of our customers is taken into account in estimating
the probability that economic benefits associated with a contract
will flow to the Company. In addition, we need to assess whether
the contract is expected to continue or to be terminated. In de-
termining whether the continuation or termination of a contract
Business combinations - Cost of an acquisition is measured at
the fair value of the assets given and liabilities incurred or as-
sumed at the date of exchange. Identifiable assets acquired and
liabilities assumed in a business combination (including contin-
gent liabilities) are measured initially at their fair values at the
acquisition date, irrespective of the extent of any non-controlling
interest. Non-controlling interests are measured at the propor-
NOTE 2 Significant accounting policies
and critical accounting estimates
Siemens prepares and reports its Consolidated Financial State-
ments in euros (€). Due to rounding, numbers presented may not
add up precisely to totals provided. Siemens is a German based
multinational technology company with core activities in the
fields of electrification, automation and digitalization.
The accompanying Consolidated Financial Statements present
the operations of Siemens AG with registered offices in Berlin
and Munich, Germany, and its subsidiaries (the Company or
Siemens). They have been prepared in accordance with Interna-
tional Financial Reporting Standards (IFRS), as adopted by the
European Union as well as with the additional requirements set
forth in Section 315a (1) of the German Commercial Code (HGB).
The financial statements are also in accordance with IFRS as is-
sued by the International Accounting Standards Board (IASB).
The Consolidated Financial Statements were authorized for issue
by the Managing Board on November 28, 2016.
NOTE 1 Basis of presentation
B.6 Notes to Consolidated Financial Statements
Consolidated Financial Statements 61
34,816
605
34,211
Basis of consolidation - The Consolidated Financial Statements
include the accounts of Siemens AG and its subsidiaries over
which the Company has control. Siemens controls an investee if
it has power over the investee. In addition, Siemens is exposed
to, or has rights to, variable returns from the involvement with
the investee and Siemens has the ability to use its power over the
investee to affect the amount of Siemens' return.
5,733
is expected to be the most likely scenario, all relevant facts and
circumstances relating to the contract are considered on an in-
dividual basis.
Sales from multiple element arrangements: Sales of goods and
services as well as software arrangements sometimes involve the
provision of multiple elements. In these cases, the Company de-
termines whether the contract or arrangement contains more
than one unit of accounting. If certain criteria are met, foremost
if the delivered element(s) has (have) value to the customer on
a stand-alone basis, the arrangement is separated and the appro-
priate revenue recognition convention is then applied to each
separate unit of accounting. Generally, the total arrangement
consideration is allocated to the separate units of accounting
based on their relative fair values. If the criteria for the separation
of units of accounting are not met, revenue is deferred until such
criteria are met or until the period in which the last undelivered
element is delivered.
5 to 10 years
20 to 50 years
Technical machinery & equipment
Furniture & office equipment
Equipment leased to others
Factory and office buildings
Other buildings
Property, plant and equipment - Property, plant and equip-
ment, is valued at cost less accumulated depreciation and impair-
ment losses. Depreciation expense is recognized using the
straight-line method. The following useful lives are assumed:
Other intangible assets - The Company amortizes intangible
assets with finite useful lives on a straight-line basis over their
respective estimated useful lives. Estimated useful lives for pat-
ents, licenses and other similar rights generally range from three
to five years, except for intangible assets with finite useful lives
acquired in business combinations. Intangible assets acquired in
business combinations primarily consist of customer relation-
ships and trademarks as well as technology. Useful lives in spe-
cific acquisitions ranged from four to 20 years for customer rela-
tionships and trademarks and from seven to 25 years for
technology.
its determination of fair value less costs to sell and value in use
include estimated growth rates and weighted average cost of
capital. These estimates, including the methodology used, can
have a material impact on the respective values and ultimately
the amount of any goodwill impairment.
The determination of the recoverable amount of a cash-generat-
ing unit or a group of cash-generating units to which goodwill
is allocated involves the use of estimates by management. The
outcome predicted by these estimates is influenced e.g. by the
successful integration of acquired entities, volatility of capital
markets, interest rate developments, foreign exchange rate fluc-
tuations and the outlook on economic trends. In determining
recoverable amounts, discounted cash flow calculations use five-
year projections that are based on financial forecasts. Cash flow
projections take into account past experience and represent
management's best estimate about future developments. Cash
flows after the planning period are extrapolated using individual
growth rates. Key assumptions on which management has based
For the purpose of impairment testing, goodwill acquired in a
business combination is allocated to the cash-generating unit or
the group of cash-generating units that is expected to benefit
from the synergies of the business combination. If the carrying
amount of the cash-generating unit or the group of cash-gener-
ating units, to which the goodwill is allocated, exceeds its recov-
erable amount, an impairment loss on goodwill allocated to this
cash-generating unit or this group of cash-generating units is
recognized. The recoverable amount is the higher of the
cash-generating unit's or the group of cash-generating units' fair
value less costs to sell and its value in use. If either of these
amounts exceeds the carrying amount, it is not always necessary
to determine both amounts. These values are generally deter-
mined based on discounted cash flow calculations. Impairment
losses on goodwill are not reversed in future periods.
Rendering of services: For long-term service contracts, revenues
are recognized on a straight-line basis over the term of the con-
tract or, if the performance pattern is other than straight-line, as
the services are provided, i.e. under the percentage-of-comple-
tion method as described above.
The goodwill impairment test is performed at the level of a cash-
generating unit or a group of cash-generating units, generally
represented by a segment. As of fiscal 2016, this also applies to
Healthineers as a result of a change in the organization of the
business and the related reporting structure. In fiscal 2015, the
impairment tests for Healthineers were performed one level be-
low the segment. This is the lowest level at which goodwill is
monitored for internal management purposes.
Earnings per share - Basic earnings per share are computed by
dividing income from continuing operations, income from dis-
continued operations and net income, all attributable to ordinary
shareholders of Siemens AG by the weighted average number of
shares outstanding during the year. Diluted earnings per share
are calculated by assuming conversion or exercise of all poten-
tially dilutive securities and share-based payment plans.
Consolidated Financial Statements 63
Research and development costs - Costs of research activities
are expensed as incurred. Costs of development activities are
capitalized when the recognition criteria in IAS 38 are met. Capi-
talized development costs are stated at cost less accumulated
amortization and impairment losses with an amortization period
of generally three to ten years.
Product-related expenses - Provisions for estimated costs re-
lated to product warranties are recorded in line item Cost of sales
at the time the related sale is recognized.
Functional costs - In general, operating expenses by types are
assigned to the functions following the functional area of the cor-
responding profit and cost centers. Amortization, depreciation and
impairment of intangible assets and property, plant and equipment
are included in functional costs depending on the use of the assets.
term.
Income from operating leases: Operating lease income for equip-
ment rentals is recognized on a straight-line basis over the lease
Income from royalties: Royalties are recognized on an accrual ba-
sis in accordance with the substance of the relevant agreement.
Income from interest: Interest is recognized using the effective
interest method.
Goodwill - Goodwill is not amortized, but instead tested for im-
pairment annually, as well as whenever there are events or
changes in circumstances (triggering events) which suggest that
the carrying amount may not be recoverable. Goodwill is carried
at cost less accumulated impairment losses.
2,643
Certain of these accounting policies require critical accounting
estimates that involve complex and subjective judgments and
the use of assumptions, some of which may be for matters that
are inherently uncertain and susceptible to change. Such critical
accounting estimates could change from period to period and
have a material impact on the Company's results of operations,
financial positions and cash flows. Critical accounting estimates
could also involve estimates where Siemens reasonably could
have used a different estimate in the current accounting period.
Siemens cautions that future events often vary from forecasts
and that estimates routinely require adjustment.
5,733
Acquisitions of businesses, net of cash acquired
(1,897)
(2,135)
Additions to intangible assets and property, plant and equipment
Cash flows from investing activities
6,612
7,611
Cash flows from operating activities - continuing and discontinued operations
(270)
(57)
Cash flows from operating activities - discontinued operations
6,881
7,668
Cash flows from operating activities - continuing operations
1,138
1,219
Interest received
495
302
Purchase of investments
Purchase of current available-for-sale financial assets
Change in receivables from financing activities
Disposal of businesses, net of cash disposed
Cash flows from investing activities - discontinued operations
(8,716)
(4,406)
Cash flows from investing activities - continuing operations
651
1,031
Disposal of current available-for-sale financial assets
445
9
(2,306)
3,474
Disposal of investments, intangibles and property, plant and equipment
(1,667)
(1,356)
(899)
(1,139)
(568)
(271)
(8,254)
(922)
377
(1,718)
Dividends received
Income taxes paid
(325)
1,869
2,008
Interest (income) expenses, net
Income tax expenses
2,549
2,764
Amortization, depreciation and impairments
(2,031)
(442)
(188)
7,380
5,584
Net income
Cash flows from operating activities
2015
2016
Fiscal year
30,152
(in millions of €)
Adjustments to reconcile net income to cash flows from operating activities - continuing operations
Income from discontinued operations, net of income taxes
262
(373)
400
852
Change in other assets and liabilities
(451)
(484)
914
20
Billings in excess of costs and estimated earnings on uncompleted contracts and related advances
Additions to assets leased to others in operating leases
(247)
327
(1,603)
Trade payables
(579)
Trade and other receivables
(793)
(1,009)
Inventories
Change in operating net working capital
Other non-cash (income) expenses
(Income) loss related to investing activities
366
(811)
2,889
(281)
(4,144)
Net income
Balance as of October 1, 2015
Balance as of September 30, 2015
Other changes in equity
Transactions with non-controlling interests
Re-issuance of treasury shares
Purchase of treasury shares
Share-based payment
Dividends
Other comprehensive income, net of income taxes
Net income
Balance as of October 1, 2014
(in millions of €)
B.5 Consolidated Statements of Changes in Equity
Consolidated Financial Statements 59
9,957
10,604
13
Cash and cash equivalents at end of period (Consolidated Statements of Financial Position)
Other comprehensive income, net of income taxes
Share-based payment
Purchase of treasury shares
Re-issuance of treasury shares
2,643
(10)
Cash flows from investing activities - continuing and discontinued operations
106
289
23
(43)
79
(2,728)
Less: Cash and cash equivalents of assets classified as held for disposal and discontinued
operations at end of period
(367)
25,729
Retained earnings
Capital reserve
5,525
Issued capital
2,643
60 Consolidated Financial Statements
Balance as of September 30, 2016
Other changes in equity
Transactions with non-controlling interests
Cancellation of treasury shares
7,282
9,958
Dividends
Cash and cash equivalents at end of period
(596)
(809)
Interest paid
351
(1,408)
Change in short-term debt and other financing activities
(354)
Repayment of long-term debt (including current maturities of long-term debt)
7,213
Dividends paid to shareholders of Siemens AG
5,300
Issuance of long-term debt
10
(13)
Other transactions with owners
(2,700)
(463)
10,618
Purchase of treasury shares
Cash flows from financing activities
(5,827)
(2,827)
(2,253)
(98)
(2,728)
9,958
Cash and cash equivalents at beginning of period
1,923
660
Change in cash and cash equivalents
83
8,034
Effect of changes in exchange rates on cash and cash equivalents
1,056
(2,710)
5
Cash flows from financing activities - discontinued operations
1,051
(2,710)
Cash flows from financing activities - continuing operations
(145)
(236)
Dividends attributable to non-controlling interests
Cash flows from financing activities - continuing and discontinued operations
1,750
1,564 US$
1,750
US$
1,546
889
1,000
893 US$
1,000
2.90%/2015/May 2022/US$-fixed-rate-instruments
1,557
US$
US$
1,500
1,336 US$
1,500
1,331
4.40%/2015/May 2045/US$-fixed-rate-instruments
1,750
1,750
US$
US$
3.25%/2015/May 2025/US$-fixed-rate-instruments
2.15%/2015/May 2020/US$-fixed-rate-instruments
1,600
1,250
US$
1,750
1,539
5.75%/2006/October 2016/US$ fixed-rate instruments
1,570 US$
1,750
6.125%/2006/August 2026/US$ fixed-rate instruments
US$
1,750
1,982 US$
1,750
2,023
US$3m LIBOR+0.28%/2015/May 2018/US$ floating-rate instruments
US$
500
448 US$
500
446
1.45%/2015/May 2018/US$-fixed-rate-instruments
US$
1,250
1,119
US$
1,114
US$3m LIBOR+0.32%/2016/September 2019/US$ floating-rate instruments
1,500
350
750
1,055
1,989
1.05%/2012/August 2017 US$ fixed-rate instruments
1.65%/2012/August 2019 US$ fixed-rate instruments
US$
US$
1,500
1,332
US$
1,500
1,314
1,500
1,309
US$
1,292
3m EURIBOR+0.2%/2015/September 2017/EUR floating-rate instruments
3m EURIBOR+0.2% /2015/September 2017/EUR floating-rate instruments
Total Bonds with Warrant Units
€
33
33
€
33
10,799
33
£
US$
6.125%/2006/September 2066/GBP fixed-rate instruments
Total Hybrid Capital Bonds
900
308
1.30%/2016/September 2019/US$-fixed-rate-instruments
US$
1,100
984
1.70%/2016/September 2021/US$-fixed-rate-instruments
US$
1,100
983
2.00%/2016/September 2023/US$-fixed-rate-instruments
2.35%/2016/October 2026/US$-fixed-rate-instruments
3.30%/2016/September 2046/US$-fixed-rate-instruments
Total US$ Bonds
US$
750
666
US$
1,700
1,517
US$
1,000
887
15,801
10,497
5.25%/2006/September 2066/EUR fixed-rate instruments
€
934
10,048
amount
400
5.125%/2009/February 2017/EUR fixed-rate instruments
€
2,000
2,028
€
2,000
2,090
US$3m LIBOR+1.4%/2012/February 2019/US$ floating-rate instruments
US$
400
358
US$
400
357
1.5%/2012/March 2020/EUR fixed-rate instruments
€
1,000
997
€
1,000
996
2.75%/2012/September 2025/GBP fixed-rate instruments
£
1,779
350
1,600
1,719
NOTES AND BONDS
€
(interest/issued/maturity)
5.625%/2006/March 2016/US$ fixed-rate instruments
Currency
notional
amount
(in millions)
Sep 30, 2016
Carrying
amount
in millions
of €¹
notional
Currency
Sep 30, 2015
Carrying
amount
in millions
(in millions)
of €¹
US$
500
456
5.625%/2008/June 2018/EUR fixed-rate instruments
€
1,600
€
357
405
350
445
US$
100
87
US$
100
87
US$
400
358
US$
400
356
US$
300
268
US$
300
267
US$
400
358
US$
500
£
US$
500
472
3.75%/2012/September 2042/GBP fixed-rate instruments
£
650
740
£
650
863
1.75%/2013/March 2021/EUR fixed-rate instruments
2.875%/2013/March 2028/EUR fixed-rate instruments
1.5%/2013/March 2018/US$ fixed-rate instruments
3.5%/2013/March 2028/US$ fixed-rate instruments
2013/June 2020/US$ floating-rate instruments
2014/March 2019/US$ floating-rate instruments
2014/September 2021/US$ floating-rate instruments
Total Debt Issuance Program
€
1,250
1,285
€
1,250
1,278
€
1,000
996
€
1,000
996
US$
447
31
10,184
€
(1,694)
(1,616)
(160)
(137)
Settlement payments
(53)
(47)
(45)
(47)
(8)
Business combinations, disposals and other
(10)
602
(9)
515
(2)
88
Foreign currency translation effects
(758)
897
(792)
793
7
(1,753)
(1)
(1,854)
133
1
(109)
1
Remeasurements recognized
in the Consolidated Statements
of Comprehensive Income
6,284
(41)
2,473
(245)
(109)
1
3,703
205
Employer contributions
618
611
(618)
(611)
Plan participants' contributions
144
133
144
Benefits paid
(109)
40
Other reconciling items
3,162
1,512
1,435
6,188
5,612
6,047
5,696
9
107
151
22
3,671
3,432
3,064
2,947
68
66
675
551
1 Includes past service benefit/costs, settlement gains/losses and administration costs related to liabilities.
78
Consolidated Financial Statements
76
3,347
103
4,597
6,930
(2,531)
Balance at fiscal year-end
42,176
(167) (1,777)
36,818 28,809
390
7
(749)
(557)
27,296
119
214
13,486
9,737
thereof:
Germany
U.S.
U.K.
CH
25,460
21,469
15,275
14,539
for using the equity method
4,859
31
(41)
245
Siemens plc offers benefits through the Siemens Benefit Scheme
for which, until the start of retirement, an inflation increase of
the accrued benefits is mandatory. The required funding is deter-
mined by a funding valuation carried out every third year based
on legal requirements. Due to deviating guidelines for the deter-
mination of the discount rates, the technical funding deficit is
usually larger than the IFRS funding deficit. To reduce the deficit
Siemens entered into an agreement with the trustees to provide
annual payments of GB£31 (€42) million until fiscal 2033. The
agreement also provides for a cumulative advance payment by
Siemens AG compensating the remaining annual payments at
the date of early termination of the agreement due to cancella-
tion or insolvency.
Switzerland:
Following the Swiss law of occupational benefits (BVG) each em-
ployer has to grant post-employment benefits for qualifying em-
ployees. Accordingly Siemens in Switzerland sponsors several
cash balance plans. These plans are administered by foundations.
The board of the main foundation is composed of equally many
employer and employee representatives. The board of the foun-
dation is responsible for investment policy and the asset manage-
ment, as well as for any changes in the plan rules and the deter-
mination of contributions to finance the benefits. The Company
is required to make total contributions at least as high as the sum
of the employee contributions set out in the plan rules. In case of
an underfunded plan the Company together with the employees
may be asked to pay supplementary contributions according to a
well defined framework of recovery measures.
Development of the defined benefit plans
Defined benefit
obligation (DBO)
Fair value of
plan assets
Effects of
asset ceiling
Net defined
benefit balance
(1)
(11)
(III)
Fiscal year
Fiscal year
Fiscal year
(1 - 11 + 111)
Fiscal year
(in millions of €)
2016
2015
2016
2015
2016
2015
U.K.:
2016
Consolidated Financial Statements 77
U.S.:
31
31
2,705
2,670
28,554
25,955
1 Includes adjustments for fair value hedge accounting.
Consolidated Financial Statements
Debt Issuance Program - The Company has a program for the
issuance of debt instruments in place under which instruments
up to €15.0 billion can be issued as of September 30, 2016 and
2015, respectively. As of September 30, 2016 and 2015 €9.9 bil-
lion and €10.5 billion in notional amounts were issued and are
outstanding. Siemens redeemed the 5.625% US$ 500 million
fixed-rate instrument at face value on March 16, 2016 as due.
US$ Bonds - In September 2016, Siemens issued instruments
totaling US$6 billion (€5.4 billion as of September 30, 2016) in
six tranches.
Hybrid Capital Bond - On August 1, 2016 Siemens has irrevoca-
bly called for redemption of the hybrid bonds and redeemed
them at face value on September 14, 2016.
Bond with Warrant Units - Each of the US$1.5 billion instru-
ments were issued with 6,000 detachable warrants. As of Sep-
tember 30, 2016 and 2015, terms for 10,661 warrants exchanged
in fiscal 2015 entitle the holder to receive 1,914.0511 and
1,902.0024 Siemens AG shares, respectively, per warrant at an
exercise price of €98.1389 and €98.7606, respectively, per share;
terms for the 1,339 not exchanged warrants entitle the holder to
receive 1,823.4130 and 1,811.9349 Siemens AG shares, respec-
tively, per warrant as well as 151.5630 and 160.4987 OSRAM
shares, respectively, at an exercise price of €187,842.81. As of
September 30, 2016, one warrant was exercised. The number of
shares may be adjusted under the terms of the warrants. As of
September 30, 2016 and 2015, the warrants offer option rights to
22.8 million and 22.7 million Siemens AG shares, respectively.
ASSIGNABLE AND TERM LOANS
As of September 30, 2016 and 2015, two bilateral US$500 million
term loan facilities (in aggregate €896 million and €893 million
respectively) are outstanding until March 26, 2020.
COMMERCIAL PAPER PROGRAM
Siemens has a US$9.0 billion (€8.1 billion as of September 30,
2016) commercial paper program in place including US$ extend-
ible notes capabilities. As of September 30, 2016 and 2015,
US$700 million (€627 million) and US$1.7 billion (€1.5 billion),
respectively, were outstanding. Siemens' commercial papers
have a maturity of generally less than 90 days. Interest rates
ranged from 0.13% to 0.74% in fiscal 2016 and from 0.11% to
0.32% in fiscal 2015.
NOTE 16
Post-employment benefits
Siemens provides post-employment defined benefit plans or de-
fined contribution plans to almost all of the Company's domestic
employees and the majority of the Company's foreign employees.
DEFINED BENEFIT PLANS
The defined benefit plans open to new entrants are based pre-
dominantly on contributions made by the Company. Only to a
certain extent, those plans are affected by longevity, inflation
and compensation increases and take into account country spe-
cific differences. The Company's major plans are funded with
assets in segregated entities. In accordance with local laws and
bilateral agreements with benefit trusts (trust agreement) those
plans are managed in the interest of the beneficiaries. The de-
fined benefit plans cover 509,000 participants, including 214,000
active employees, 93,000 former employees with vested benefits
and 202,000 retirees and surviving dependents.
Germany:
In Germany, Siemens AG provides pension benefits through the
plan BSAV (Beitragsorientierte Siemens Altersversorgung), fro-
zen legacy plans and deferred compensation plans. The majority
of Siemens' active employees participate in the BSAV. Those ben-
efits are predominantly based on contributions made by the
Company and returns earned on such contributions, subject to a
minimum return guaranteed by the Company. In connection with
the implementation of the BSAV, benefits provided under the
frozen legacy plans were modified to substantially eliminate the
effects of compensation increases. However, these frozen plans
still expose the Company to investment risk, interest rate risk and
longevity risk. The pension plans are funded via contractual trust
arrangements (CTA). In Germany no legal or regulatory minimum
funding requirements apply.
Siemens Corporation sponsors the Siemens Pension Plans, which
for the most part have been frozen to new entrants and to future
benefit accruals, except for interest credits on cash balance ac-
counts. Siemens Corporation has appointed the Investment Com-
mittee as the named fiduciary for the management of the assets
of the Plans. The Plans' assets are held in a Master Trust and the
trustee of the Master Trust is responsible for the administration
of the assets of the trust, taking directions from the Investment
Committee. The Plans are subject to the funding requirements
under the Employee Retirement Income Security Act of 1974 as
amended, (ERISA). There is a regulatory requirement to maintain
a minimum funding level of 80% in the defined benefit plans in
order to avoid benefit restrictions. At its discretion, Siemens Cor-
poration may contribute in excess of this regulatory requirement.
Annual contributions are calculated by independent actuaries.
6,284
2015
36,818
(4)
2
Components of defined benefit
costs recognized in the
Consolidated Statements of income
1,605
1,436
818
646
7
11
795
801
Return on plan assets excluding
amounts included in net interest
income and net interest expenses
Actuarial (gains) losses
2,473
(245)
6,284
(41)
Effects of asset ceiling
(2,473)
(179)
Balance at begin of fiscal year
8
5
35,591
27,296
26,505
214
202
9,737
9,288
Current service cost
Interest expenses
523
1,078
536
1,076
523
536
7
11
1,085
1,087
Interest income
809
825
(809)
(825)
Other¹
(177)
Consolidated Financial Statements 75
Tax effect of investments accounted
20,437
Internally generated
technology
2,995
324
(252)
3,067
(1,562)
1,505
(189)
Acquired technology
including patents, licenses
and similar rights
4,725
(37)
260
64
(143)
4,870
(2,974)
fiscal 2016
ment in
amount
09/30/2016
tion and
impairment
carrying
lation
business
carrying
Accumu-
lated depre-
ciation/
amortiza-
Deprecia-
tion/amor-
1,896
tization
amount
diffe-
combi-
(in millions of €)
10/01/2015
rences
nations Additions
Reclassi-
fications
Retire-
amount
ments¹ 09/30/2016
Carrying and impair-
(253)
Customer relationships
and trademarks
(3,673)
4,186
(253)
Technical machinery
and equipment
7,770
(67)
(39)
288
7,859
270
7,950
(5,412)
2,539
(542)
Furniture and office
equipment
5,829
(29)
22
(271)
Gross
(333)
274
7,542
(77)
68
7,532
(3,191)
4,341
(490)
Other intangible assets
15,262
218
(115)
388
(395)
15,469
(7,727) 7,742
(932)
Land and bulidings
7,745
(65)
20
328
through
Trans-
Gross
2
140
1
3
1
(1)
1,909
1,905
23,166
24,159
1,763
17,783
The goodwill impairment test is performed at the level of a
cash-generating unit or a group of cash-generating units, gener-
ally represented by a segment. As of fiscal 2016, this also applies
to Healthineers as a result of a change in the organization of the
business and the related reporting structure. In fiscal 2015, the
impairment tests for Healthineers were performed one level be-
low the segment.
Siemens performs the mandatory annual impairment test in the
three months ended September 30. The recoverable amounts for
the annual impairment test 2016 for Siemens' groups of cash-
generating units were estimated to be higher than the carrying
amounts. Key assumptions on which Siemens based its determi-
nations of the fair value less costs to sell for the groups of
cash-generating units include terminal value growth rates up to
1.7% in fiscal 2016 and 2.5% in fiscal 2015, respectively and af-
ter-tax discount rates of 5.0% to 9.0% in fiscal 2016 and 6.0% to
9.5% in fiscal 2015. Where possible, reference to market prices is
made.
For the purpose of estimating the fair value less costs to sell of
the groups of cash-generating units, cash flows were projected
for the next five years based on past experience, actual operating
results and management's best estimate about future develop-
ments as well as market assumptions. The determined fair value
of the groups of cash-generating units is assigned to level 3 of
the fair value hierarchy.
72
Consolidated Financial Statements
The fair value less costs to sell is mainly driven by the terminal
value which is particularly sensitive to changes in the assump-
tions on the terminal value growth rate and discount rate. Both
assumptions are determined individually for each group of
cash-generating units. Discount rates are based on the weighted
average cost of capital (WACC) for the groups of cash-generating
units (for SFS the discount rate represents cost of equity). The
discount rates are calculated based on a risk-free rate of interest
and a market risk premium. In addition, the discount rates reflect
the current market assessment of the risks specific to each group
of cash-generating units by taking into account specific peer
group information on beta factors, leverage and cost of debt.
The parameters for calculating the discount rates are based on
external sources of information. The peer group is subject to an
annual review and adjusted, if necessary. Terminal value growth
rates take into consideration external macroeconomic sources of
data and industry specific trends.
The following table presents key assumptions used to determine
fair value less costs to sell for impairment test purposes for the
groups of cash-generating units to which a significant amount of
goodwill is allocated:
23,166
(in millions of €)
1,905
Carrying amount
2016
2015
25,071
19,546
(127)
1,187
Acquisitions and purchase accounting adjustments
1,144
4,599
Balance at beginning of year
Balance at year-end
Dispositions and reclassifications to assets classified as held for disposal
(261)
Balance at year-end
26,068
25,071
Accumulated impairment losses and other changes
Balance at beginning of year
Translation differences and other
Impairment losses recognized during the period
Dispositions and reclassifications to assets classified as held for disposal
Balance at year-end
(20)
632
Healthineers
Power and Gas (without part of Power Generation Services)
Power Generation Services (part of Power and Gas)
Power and Gas (without part of Power Generation Services)
3,587
1.7%
8.0%
Digital Factory
3,328
1.7%
8.5%
Imaging & Therapy Systems of Healthineers
6.5%
2,790
6.5%
Power Generation Services (part of Power and Gas)
2,613
1.7%
8.0%
The sensitivity analysis for the groups of cash-generating units
to which a significant amount of goodwill is allocated was based
on a reduction in after-tax future cash flows by 10% or an in-
crease in after-tax discount rates by one percentage point or a
reduction in the terminal value growth rate by one percentage
point. Siemens concluded that no impairment loss would need
to be recognized on goodwill in any of the groups of cash-gen-
erating units.
Consolidated Financial Statements 73
NOTE 12 Other intangible assets and
property, plant and equipment
Additions
2.0%
Digital Factory
2.5%
Terminal value
growth rate
Revenue figures in the five-year planning period of the groups of
cash-generating units to which a significant amount of goodwill
is allocated include average revenue growth rates (excluding
portfolio effects) of between 0.3% and 5.3% (2.6% and 5.9% in
fiscal 2015).
Terminal value
Goodwill
growth rate
Sep 30, 2016
After-tax
discount rate
8,301
1.7%
6.5%
3,933
Sep 30, 2015
After-tax
discount rate
1.7%
3,552
1.7%
8.0%
3,158
1.7%
8.0%
(in millions of €)
Diagnostics of Healthineers
Goodwill
5,108
8.0%
85
(448)
6,092
(513)
Furniture and office
equipment
5,786
109
49
580
73
(768)
2,660
5,829
1,319
(662)
Equipment leased to others
2,927
117
57
457
(4)
(521)
(4,510)
3,033
(5,111)
(252)
8,077
(778)
Land and bulidings
7,356
169
143
199
135
(257)
7,770
7,745
4,089
(256)
Technical machinery
and equipment
7,140
167
172
282
263
(3,656)
(7,185)
(1,746)
(345)
The gross carrying amount of Advances to suppliers and con-
struction in progress includes €677 million and €787 million, re-
spectively of property, plant and equipment under construction
in fiscal 2016 and 2015. As of September 30, 2016 and 2015, con-
tractual commitments for purchases of property, plant and
equipment are €643 million and €474 million, respectively.
Minimum future lease payments under operating leases are:
NOTE 15 Debt
(in millions of €)
Notes and bonds
(maturing until 2046)
Loans from banks
(maturing until 2023)
Current debt
Sep 30,
Non-current debt
Sep 30,
2016
2015
Consolidated Financial Statements
2016
4,994
456 23,560
25,498
380
755
992
1,000
Other financial indebted-
Sep 30,
2015
1,287
74
(1,769)
Advances to suppliers and
construction in progress
760
5
66
500
(467)
(7)
856
1 Included assets reclassified to Assets classifed as held for disposal and dispositions of those entites.
(1)
6
Property, plant
and equipment
23,968
566
487
2,018
(1,805) 25,234
(15,024) 10,210
855
Fiscal year
(370)
(2,715)
799
2
Property, plant
and equipment
25,234
(260)
(14)
2,273
(1,516)
(2)
25,717
10,157
(1,831)
1 Included assets reclassified to Assets classifed as held for disposal and dispositions of those entites.
Additions
Gross
carrying
Trans-
through
lation
business
(15,560)
amount
801
(582)
(4,764)
1,328
(690)
Equipment leased to others
3,033
(83)
23
484
10
(12)
(452)
(1,710)
1,305
(348)
Advances to suppliers and
construction in progress
856
(16)
(40)
595
3,015
4,827
diffe-
Reclassi-
190
923
53
34
4,725
(2,851)
1,874
(231)
Customer relationships
3,525
and trademarks
293
2,873
(176)
Other intangible assets
10,826
693
3,796
390
7,542
(444) 15,262
4,552
combi-
and similar rights
Acquired technology
(in millions of €)
10/01/2014
rences
nations Additions fications
Gross
carrying
Retire-
amount
ments¹ 09/30/2015
Accumu-
lated depre-
ciation/
amortiza-
tion and
impairment
Carrying
amount
09/30/2015
Deprecia-
tion/amor-
tization
and impair-
including patents, licenses
ment in
fiscal 2015
technology
2,750
211
337
(302)
2,995
(1,619)
1,376
(176)
Internally generated
ness (maturing until 2027)
Translation differences and other
Cost
235
2,014
1,773
2015
2016
Fiscal year
Income tax expenses
Deferred tax
(in millions of €)
Current tax
Income tax expense (benefit) consists of the following:
NOTE 7 Income taxes
Other operating expenses in fiscal 2016 and 2015 include losses
on sales of property, plant and equipment, and effects from in-
surance, legal and regulatory matters.
NOTE 6 Other operating expenses
In fiscal 2016 and 2015, Other operating income includes gains
on sales of property, plant and equipment of €177 million and
€232 million, respectively.
NOTE 5 Other operating income
Item Income (loss) from investments accounted for using the eq-
uity method, net, includes Siemens' share in BWI Informations-
technik GmbH's (BWI) earnings of €16 million and €27 million,
respectively, in fiscal 2016 and 2015. The carrying amount of all
individually not material associates includes the carrying amount
of BWI, amounting to €95 million and €114 million, respectively,
as of September 30, 2016 and 2015. Siemens holds a 50.05%
stake in BWI. BWI is not controlled by Siemens due to significant
participating rights of the two other shareholders. Together with
the HERKULES obligations the Company's maximum exposure to
loss from BWI as of September 30, 2016 and 2015 amounts to
€695 million and €1,204 million, respectively. BWI finances its
operations on its own.
20
58
(31)
257
Total comprehensive income
(145)
2,008
1,869
The current income tax expenses in fiscal 2016 and 2015 include
adjustments recognized for current tax of prior years in the
amount of €(29) million and €79 million, respectively. The de-
ferred tax expense (benefit) in fiscal 2016 and 2015 includes tax
effects of the origination and reversal of temporary differences
of €54 million and €(30) million, respectively.
2,013
Tax loss carryforward
2,238
2,295
192
188
Deductible temporary differences
2015
2016
net of income taxes
2015
(in millions of €)
Fiscal year
Sep 30,
(in millions of €)
Deferred tax assets have not been recognized with respect of the
following items (gross amounts):
Income tax expense (current and deferred) differs from the
amounts computed by applying a combined statutory German
income tax rate of 31% as follows:
70
Consolidated Financial Statements 69
In Germany, the calculation of current tax is based on a com-
bined tax rate of 31%, consisting of a corporate tax rate of 15%,
a solidarity surcharge thereon of 5.5% and an average trade tax
rate of 15%. For foreign subsidiaries, current taxes are calculated
based on the local tax laws and applicable tax rates in the indi-
vidual foreign countries. Deferred tax assets and liabilities in
Germany and abroad are measured at the tax rates that are ex-
pected to apply to the period when the asset is realized or the
liability is settled.
2016
Other comprehensive income,
1
Income (loss) from discontinued operations
Fiscal year
(in millions of €)
Investments accounted for using the equity method
NOTE 4 Interests in other entities
(92)
26
Other, net
(6)
2
2015
Actual income tax expenses
1,869
Deferred income tax assets and liabilities on a gross basis are
summarized as follows:
As of September 30, 2016 and 2015, €953 and €458 million of the
unrecognized tax loss carryforwards expire over the periods to 2031.
Siemens has not recognized deferred tax liabilities for income
taxes or foreign withholding taxes on the cumulative earnings of
subsidiaries of €26,585 million and €27,507 million, respectively
in fiscal 2016 and 2015 because the earnings are intended to be
permanently reinvested in the subsidiaries.
Including items charged or credited directly to equity and the
expense (benefit) from continuing and discontinued operations,
the income tax expense (benefit) consists of the following:
Fiscal year
(in millions of €)
2016
Sep 30,
2015
2,008
1,142
(87)
Share of profit (loss), net
38
288
2016
Fiscal year
2015
Income (loss) from continuing operations
(in millions of €)
As of September 30, 2016 and 2015, the carrying amount of all
individually not material associates amounts to €2,242 million
and €2,046 million, respectively. Summarized financial infor-
mation for all individually not material associates adjusted for
the percentage of ownership held by Siemens, is presented be-
low. Items included in the Statements of Comprehensive In-
come are presented for the twelve month period applied under
the equity method.
In fiscal 2015, Siemens recognized proportionate losses of
€275 million as a consequence of a funding commitment pro-
vided to Unify Holdings B.V. The investment was sold in the
second quarter of fiscal 2016.
1,235
2016
134
investments accounted for
Income (loss) from
(155)
(129)
Impairment and reversals of impairment
1,477
(53)
Gains (losses) on sales, net
316
using the equity method, net
2,201
1,334
Expected income tax expenses
2,464
2,662
Available-for-sale financial assets
2,398
2,293
Derivative financial instruments
3,557
Receivables from finance leases
12,477
Other
11,838
2016
(in millions of €)
As of September 30, 2016 and 2015, €7.1 billion and €7.1 billion
of lines of credit are unused. The facilities are for general corpo-
rate purposes. The €4.0 billion syndicated credit facility was
extended by one year until June 25, 2021. The US$3.0 billion
syndicated credit facility matures on September 27, 2020. The
€450 million revolving bilateral credit facility is unused and was
extended from September 30, 2016 to September 30, 2017.
CREDIT FACILITIES
Interest rates in this Note are per annum. In fiscal 2016 and 2015,
weighted-average interest rates for loans from banks, other finan-
cial indebtedness and obligations under finance leases were
3.9% (2015: 2.8%), 0.5% (2015: 0.2%) and 4.8% (2015: 4.7%),
respectively.
217
3,264
Sep 30,
2015
NOTE 13 Other financial assets
Loans receivable
1,063
260
20,821
2,708
2,968
Other
1,242
1,175
Accruals for pending invoices
5,437
5,401
Liabilities to personnel
20,610
10,982
contracts and related advances
estimated earnings on uncompleted
Billings in excess of costs and
2015
2016
Sep 30,
(in millions of €)
NOTE 14 Other current liabilities
Item Loans receivable primarily relate to long-term loan trans-
actions of SFS.
10,892
(in millions of €)
1,099
85
(107)
(280)
Foreign tax rate differential
8
(43)
(15)
Change in tax rates
(44)
deferred tax assets and tax credits
Change in realizability of
817
(20)
Taxes for prior years
(709)
(227)
Tax-free income
474
600
Non-deductible losses and expenses
income taxes resulting from:
Increase (decrease) in
(223)
92
1,737
68
More than five years
26,682
2,979 24,761
6,206
115
123
31
15
Total debt
87
652
After one year but not more than five years
finance leases
319
326
Within one year
Obligations under
2015
2016
(in millions of €)
689
2016
2015
Continuing operations
3,358
752
6,488
2,474
3,322
246
6,042
NOTE 10 Inventories
The following table shows a reconciliation of minimum future lease
payments to the gross and net investment in leases and to the
present value of the minimum future lease payments receivable:
(in millions of €)
Sep 30,
2016
After one year but not more than five years
More than five years
2015
2,487
2,631
Work in progress
4,281
4,417
Costs and earnings in excess
of billings on uncompleted contracts
10,046
9,162
Raw materials and supplies
(in millions of €)
2,378
2016
of Income in the current period
284
168
Write-offs charged against the allowance
Recoveries of amounts previously written-off
Foreign exchange translation differences
Reclassifications to line item Assets held for
disposal and dispositions of those entities
Valuation allowance as of fiscal year-end
(181)
(145)
9
7
(33)
Within one year
(9)
1,013
933
Minimum future lease payments to be received are as follows:
2015
Investments in finance leases primarily relate to industrial ma-
chinery, medical equipment, transportation systems, equipment
for information technology and office machines. Actual cash
flows will vary from contractual maturities due to future sales of
finance receivables, prepayments and write-offs.
NOTE 9 Other current financial assets
As of September 30, 2016 and 2015, Other current financial as-
sets include loans receivables of €4,910 million and €3,128 mil-
lion, respectively and derivative financial instruments of
€758 million and €830 million, respectively.
Sep 30,
(in millions of €)
(26)
recorded in the Consolidated Statements
2016
Minimum future lease payments
5,762
5,527
Less: Allowance for doubtful accounts
(198)
(190)
Less: Present value of unguaranteed
residual value
(108)
(72)
Net investment in leases
Present value of minimum future
5,457
5,265
Cost of sales include inventories recognized as expense amount-
ing to €54,706 million and €51,735 million, respectively, in fiscal
2016 and 2015. Compared to prior year, write-downs increased
(decreased) by €(3) million and €97 million as of September 30,
2016 and 2015.
Consolidated Financial Statements 71
In the second quarter of fiscal 2016, Siemens revised project calcu-
lations related to the resumption of long-term contracts with cus-
tomers in Iran following the ending or easing of EU and U.S. sanc-
tions in accordance with accounting guidance for construction
and service contracts. The resulting adjustments increased reve-
nue by €174 million as well as profit at Power and Gas and Income
from continuing operations before income taxes by €130 million.
Construction contracts, here and as follows, include service con-
tracts accounted for under the percentage of completion method.
The aggregate amount of costs incurred and recognized profits
less recognized losses for construction contracts in progress, as
of September 30, 2016 and 2015 amounted to €83,556 million
and €82,196 million, respectively. Revenue from construction
contracts amounted to €32,635 million and €30,261 million, re-
spectively, for fiscal 2016 and 2015. Advance payments received
on construction contracts in progress were €8,705 million and
€8,674 million as of September 30, 2016 and 2015. Retentions in
connection with construction contracts were €288 million and
€225 million in fiscal 2016 and 2015, respectively.
NOTE 11 Goodwill
(in millions of €)
lease payments receivable
Sep 30,
2015
(601)
Less: Unearned finance income
6,488
6,042
Finished goods and products held for resale
Advances to suppliers
3,261
3,046
591
551
20,666
19,807
(1,078)
Plus: Unguaranteed residual values
87
Advance payments received
(2,506)
(2,554)
Gross investment in leases
6,840
6,129
18,160
17,253
353
Balance at beginning of year
Increase in valuation allowances
Valuation allowance as of
11,240
10,322
Liabilities
Non-current and current assets
7,588
7,272
NOTE 8 Trade and other receivables
Liabilities
930
Deferred tax assets
732
120
336
Deferred tax liabilities
8,638
8,339
Total deferred tax assets, net
2,602
1,983
(in millions of €)
Other
2016
610
Tax loss and credit carryforward
2,008
1,869
Assets
Discontinued operations
(2)
210
Non-current and current assets
1,836
1,936
547
Liabilities and Post-employment benefits
7,539
Income and expenses recognized
directly in equity
(996)
139
1,010
2,218
Other
114
237
8,742
beginning of fiscal year
Sep 30,
2015
14,280
2015
933
938
Within one year
One to five years
Thereafter
2,397
2,492
1,952
2,072
3,405
2016
3,374
2,965
1,038
263
564
228
6,840
6,129
5,457
5,265
2,940
Trade receivables from the sale
of goods and services
2015
(in millions of €)
13,909
As of September 30, 2016, the Company has certain tax losses
subject to significant limitations. For those losses deferred tax
assets are not recognized, as it is not probable that gains will be
generated to offset those losses.
Receivables from finance leases
2,007
2,073
16,287
15,982
Consolidated Financial Statements
In fiscal 2016 and 2015, the long-term portion of receivables from
finance leases is reported in Other financial assets and amounts
to €3,557 million and €3,264 million, respectively.
2016
Changes to the valuation allowance of current and long-term re-
ceivables which belong to the class of financial assets measured
at (amortized) cost are as follows (excluding receivables from
finance leases):
Gross investment
in leases
Present value of
minimum future lease
payments receivable
(in millions of €)
Fiscal year
Sep 30,
Sep 30,
2016
2015
The gross investment in leases and the present value of minimum
future lease payments receivable are due as follows:
20,368
Fiscal year
3 Reported in the following line items of the Statements of
Financial Position: Short-term debt and current maturities
of long-term debt, Trade payables, Other current financial
1 The adjustment considers that both Moody's and S&P view SFS as a captive finance company.
These rating agencies generally recognize and accept higher levels of debt attributable to
captive finance subsidiaries in determining credit ratings. Following this concept, Siemens
excludes SFS Debt in order to derive an industrial net debt which is not affected by SFS's
financing activities.
0.6
1.0
2,549
9,825
2,764
10,216
58
48
7,218
7,404
Industrial net debt/EBITDA
Plus/Less: Interest income, interest expenses
and other financial income (expenses), net
Plus: Amortization,
depreciation and impairments
EBITDA
Income from continuing operations
before income taxes
Industrial net debt
Less: 50% nominal amount hybrid bond
Less: Fair value hedge accounting adjustment²
Plus: Post-employment benefits
Plus: Credit guarantees
Less: SFS Debt¹
6,107
10,505
(936)
(643)
(958)
2 Debt is generally reported with a value representing approximately the amount to be repaid.
However, for debt designated in a hedging relationship (fair value hedges), this amount is
adjusted for changes in market value mainly due to changes in interest rates. Accordingly,
Siemens deducts these changes in market value in order to end up with an amount of debt
that approximately will be repaid.
82 Consolidated Financial Statements
The SFS business is capital intensive and operates a larger
amount of debt to finance its operations compared to the indus-
trial business.
(in millions of €)
Standard &
Poor's
Ratings
Services
Service
Moody's
Investors
Ratings
Services
Service
Poor's
Moody's
Investors
Sep 30, 2016
Sep 30, 2015
Standard &
859
Siemens' current corporate credit ratings are:
Equity allocated to SFS differs from the carrying amount of equity
as it is mainly allocated based on the risks of the underlying busi-
8.77
2,417
21,198
2015
Sep 30,
22,418
8.55
2016
2,623
Debt to equity ratio
SFS debt
Allocated equity
ness.
799
9,811
13,695
Other includes transaction-related and post-closing provisions in
connection with portfolio activities as well as provisions for Legal
Proceedings, as far as the risks that are subject to such Legal
Proceedings are not already covered by project accounting. Pro-
visions for Legal Proceedings amounted to €430 million and
€398 million as of September 30, 2016 and 2015, respectively.
total expected payments until the 2070's. Declined discount rates
increased the carrying amount of the provision by €355 million
as of September 30, 2016 and by €283 million as of Septem-
ber 30, 2015. At the same time, the provision was decreased by
€170 million as of September 30, 2016, due to reduced cost esti-
mates, and €282 million as of September 30, 2015, mainly due to
reduced assumed inflation rates.
Consolidated Financial Statements 81
As of September 30, 2016 and 2015, the provision totals
€1,551 million and €1,359 million, respectively, and is recorded
net of a present value discount of €206 million and €594 million,
respectively, reflecting the assumed continuous outflow of the
waste. This process will be supported by continuing engineering
studies and radioactive sampling under the supervision of Ger-
man federal and state authorities. The decontamination, disas-
sembly and final waste conditioning are planned to continue
until 2018; thereafter, the Company is responsible for intermedi-
ate storage of the radioactive materials until they are handed
over to a final storage facility. With respect to the Hanau facility,
the asset retirement has been completed and intermediate stor-
age has been set up. On September 21, 2006, the Company re-
ceived official notification from the authorities that the Hanau
facility has been released from the scope of application of the
German Atomic Energy Act and that its further use is unrestricted.
The ultimate costs of the remediation are contingent on the de-
cision of the federal government on the location of the final stor-
age facilities and the date of their availability. Several parameters
relating to the development of a final storage facility for radioac-
tive waste are based on the assumptions for the so called Schacht
Konrad final storage. Parameters related to the life-span of the
German nuclear reactors assume a phase-out until 2022. The val-
uation uses assumptions to reflect the current and detailed cost
estimates, price inflation and discount rates as well as a continu-
ous outflow until the 2070's related to the costs for dismantling
as well as intermediate and final storage. Amongst others, the
estimated cash outflows related to the asset retirement obliga-
tion could alter significantly if, and when, political developments
affect the government's plans to develop the so called Schacht
Konrad. For discounting the cash outflows, the Company uses
current interest rates as of the balance sheet date.
Environmental clean-up costs relate to remediation and environ-
mental protection liabilities which have been accrued based on
the estimated costs of decommissioning facilities for the produc-
tion of uranium and mixed-oxide fuel elements in Hanau, Ger-
many (Hanau facilities), as well as a nuclear research and service
center in Karlstein, Germany (Karlstein facilities). According to
the German Atomic Energy Act, when such a facility is closed, the
resulting radioactive waste must be collected and delivered to a
government-developed final storage facility. In this regard, the
Company has developed a plan to decommission the Hanau and
Karlstein facilities in the following steps: clean-out, decontami-
nation and disassembly of equipment and installations, decon-
tamination of the facilities and buildings, sorting of radioactive
materials, and intermediate and final storage of the radioactive
The Company is subject to asset retirement obligations related to
certain items of property, plant and equipment. Such asset retire-
ment obligations are primarily attributable to environmental
clean-up costs and to costs primarily associated with the removal
of leasehold improvements at the end of the lease term.
In fiscal 2016, order related losses and risks include project
charges for the construction of a power plant mainly due to in-
creased cost estimates which reduced earnings by €172 million
(primarily presented in cost of sales).
Warranties mainly relate to products sold. Order related losses
and risks are provided for anticipated losses and risks on uncom-
pleted construction, sales and leasing contracts.
Except for asset retirement obligations, the majority of the Com-
pany's provisions are generally expected to result in cash out-
flows during the next one to 15 years.
NOTE 19 Additional capital disclosures
5,087
1,877
796
1,611
1,593
1,517
675
4,249
2,022
77
34
5
23
15
378
9,253
Long-term debt
A key consideration of our capital structure management is to
maintain ready access to capital markets through various debt
instruments and to sustain our ability to repay and service our
debt obligations over time. In order to achieve this, Siemens in-
tends to maintain an Industrial net debt divided by EBITDA (con-
tinuing operations) ratio of up to 1.0. The ratio indicates the ap-
proximate number of years that would be needed to cover the
Industrial net debt through continuing income, without taking
into account interest, taxes, depreciation and amortization.
Equity
(22,418) (21,198)
18,528
19,071
(1,175)
(1,293)
Less: Current available-for-sale financial assets
Net debt
(9,957)
(10,604)
Less: Cash and cash equivalents
26,682
NOTE 18
24,761
2,979
6,206
Short-term debt and current maturities
of long-term debt
Sep 30,
2015
2016
(in millions of €)
Dividends paid per share were €3.50 and €3.30, respectively, in
fiscal 2016 and 2015. The Managing Board and the Supervisory
Board propose to distribute a dividend of €3.60 per share entitled
to the dividend, in total representing approximately €2.9 billion
in expected payments. Payment of the proposed dividend is con-
tingent upon approval at the Shareholders' Meeting on Febru-
ary 1, 2017.
As of September 30, 2016 and 2015, total authorized capital of
Siemens AG is €618.6 million nominal, issuable in installments
based on various time-limited authorizations, by issuance of up
to 206.2 million registered shares of no par value. In addition, as
of September 30, 2016 and 2015, Siemens AG's conditional capi-
tal is €1,080.6 million nominal or 360.2 million shares. It can
primarily be used for serving convertible bonds or warrants un-
der warrant bonds that could or can be issued based on various
time-limited authorizations approved by the respective Share-
holders' Meeting.
In fiscal 2016 and 2015, Siemens repurchased 4,888,596 and
29,419,671 shares, respectively. In fiscal 2016 and 2015, Siemens
transferred 4,543,673 and 2,788,059 treasury shares, respec-
tively, in connection with share-based payments. As of Septem-
ber 30, 2016 and 2015, the Company has treasury shares of
41,721,682 and 72,376,759, respectively.
Siemens' issued capital is divided into 850 million and 881 million
registered shares with no par value and a notional value of €3.00
per share as of September 30, 2016 and 2015, respectively;
31 million shares were retired in fiscal 2016. The shares are fully
paid in. At the Shareholders' Meeting, each share has one vote
and accounts for the shareholders' proportionate share in the
Company's net income. All shares confer the same rights and
obligations.
Plus: Long-term debt
A1
A+
A1
Financial assets
Available-for-sale financial assets²
Financial assets held for trading
Derivatives designated in a hedge accounting relationship
Cash and cash equivalents
Loans and receivables¹
(in millions of €)
category of financial assets and financial liabilities:
The following table discloses the carrying amounts of each
on financial instruments
Financial liabilities measured at amortized cost³
NOTE 22 Additional disclosures
For Legal Proceedings information required under IAS 37, Provisions,
Contingent Liabilities and Contingent Assets is not disclosed if the
Company concludes that disclosure can be expected to seriously
prejudice the outcome of the matter.
Some of these Legal Proceedings could result in adverse decisions
for Siemens that may have material effects on its financial position,
the results of its operations and/or its cash flows in the respective
reporting period. At present, Siemens does not expect any matters
not described in this Note to have material effects on its financial
position, the results of its operations and/or its cash flows.
Siemens is in the course of its normal business operations involved
in numerous Legal Proceedings in various jurisdictions. These Legal
Proceedings could result, in particular, in Siemens being subject to
payment of damages and punitive damages, equitable remedies or
criminal or civil sanctions, fines or disgorgement of profit. In individ-
ual cases this may also lead to formal or informal exclusion from
tenders or the revocation or loss of business licenses or permits. In
addition, further Legal Proceedings may be commenced or the scope
of pending Legal Proceedings may be expanded. Asserted claims are
generally subject to interest rates.
As previously reported, the Vienna public prosecutor in Austria is
conducting an investigation into payments between calendar 1999
and calendar 2006 relating to Siemens Aktiengesellschaft Österre-
ich, Austria, for which adequate services rendered could not be iden-
tified. In September 2011, the Vienna public prosecutor extended the
investigations to include a tax evasion matter for which Siemens AG
Österreich is potentially liable. In November 2016, the proceedings
against Siemens Aktiengesellschaft Österreich were stopped.
As previously reported, in June 2015, Siemens Ltda. once again
appealed to the Supreme Court against a decision confirming the
decision of the previous court to suspend Siemens Ltda. from par-
ticipating in public tenders and signing contracts with public ad-
ministrations in Brazil for a five year term based on alleged irregu-
larities in calendar 1999 and 2004 public tenders with the Brazilian
Postal authorities. In July 2015, the court suspended enforcement
of the debarment decision pending the appeal.
As previously reported, CADE is conducting unrelated to the
above mentioned proceedings two further investigations into
possible antitrust behavior in the field of gas-insulated and air-
insulated switchgear from the 1990's to 2006. Siemens is cooperat-
ing with the authorities.
€252 million as of September 2016) plus adjustments for inflation
and related interest in relation to train maintenance contracts
entered into in 2006 and 2007. Siemens will defend itself against
these actions. It cannot be excluded that further significant damage
claims will be brought by customers or the state against Siemens.
As previously reported, in May 2014, the Public Affairs Office
(Ministério Público) São Paulo initiated a lawsuit against Siemens
Ltda. as well as other companies and several individuals claiming,
inter alia, damages in an amount of BRL2.5 billion (approximately
€687 million as of September 2016) plus adjustments for inflation
and related interest in relation to train refurbishment contracts en-
tered into between 2008 and 2011. A technical note issued by the
Brazilian cartel authority CADE earlier in 2014 had not identified ev-
idence suggesting Siemens Ltda.'s involvement in anticompetitive
conduct in relation to these refurbishment contracts. In January 2015
the district court of São Paulo admitted a lawsuit of the State of São
Paulo and two customers against Siemens Ltda., Siemens AG and
other companies and individuals claiming damages in an unspeci-
fied amount. In March 2015, the district court of São Paulo admitted
a lawsuit of the Public Affairs Office (Ministério Público) São Paulo
against Siemens Ltda. and other companies claiming, inter alia, dam-
ages in an amount of BRL487 million (approximately €134 million as
of September 2016) plus adjustments for inflation and related inter-
est in relation to train maintenance contracts entered into in 2000
and 2002. In September 2015, the district court of São Paulo admit-
ted another lawsuit of the Public Affairs Office (Ministério Público)
São Paulo against Siemens Ltda. and other companies claiming,
inter alia, damages in an amount of BRL918 million (approximately
As previously reported, in March 2014, Siemens was informed that
in connection with the above mentioned metro and urban train proj-
ects the Public Prosecutor's Office São Paulo has requested criminal
proceedings at court into alleged violations of Brazilian antitrust law
against a number of individuals including current and former
Siemens employees. The proceedings continue; the Public Prosecu-
tor's Office São Paulo has, in the meantime, appealed all decisions
where the courts denied opening criminal trials.
As previously reported, in May 2013, Siemens Ltda., Brazil, (Siemens
Ltda.) entered into a leniency agreement with the Administrative
Council for Economic Defense (CADE) and other relevant Brazilian
authorities relating to possible antitrust violations in connection with
alleged anticompetitive irregularities in metro and urban train proj-
ects, in which Siemens Ltda. and partially Siemens AG, as well as a
number of other companies participated as contractor. In March 2014,
CADE commenced administrative proceedings, confirming Siemens
Ltda.'s immunity from administrative fines for the reported potential
misconduct. In connection with the above mentioned metro and
urban train projects, several Brazilian authorities initiated investiga-
tions relating to alleged criminal acts (corruptive payments, anti-
competitive conduct, undue influence on public tenders).
Consolidated Financial Statements 85
with the Israeli authorities. On May 2, 2016, the DA filed criminal
charges versus Siemens Israel Ltd. Siemens AG was not indicted, as
it was possible for Siemens AG to conclude a non-prosecution
agreement with the DA that obliged Siemens AG to pay an amount
in the mid double-digit euro million range.
Financial liabilities held for trading4
Sep 30,
thereof €665 million and €726 million with a term of more
than twelve months.
1 Reported in the following line items of the Statements
of Financial Position: Trade and other receivables, Other
current financial assets and Other financial assets, except
for separately disclosed €2,662 million and €2,464 million
available-for-sale financial assets and €3,051 million
and €3,228 million derivative financial instruments as
of September 30, 2016 and 2015, respectively. Includes
€14,280 million and €13,909 million trade receivables from
the sale of goods and services in fiscal 2016 and 2015,
40,986
536
310
42,091
1,383
1,190
39,067
40,591
53,092
Derivatives designated in a hedge accounting relationship4
Financial liabilities
55,594
3,955
2,620
2,518
608
534
9,957
10,604
2015
36,268
37,984
2016
3,639
9
84 Consolidated Financial Statements
Based on the above mentioned conclusion of the Israeli Antitrust
Authority, two electricity consumer groups filed motions to certify
a class action for cartel damages against a number of companies
including Siemens AG with an Israeli State Court in Septem-
ber 2013. One of the class actions has been dismissed by the court
in fiscal year 2015. The remaining class action seeks compensation
for alleged damages amounting to ILS2.8 billion (approximately
€667 million as of September 2016). In addition, the Israel Electric
Corporation (IEC) filed at the end of December 2013 with an Israeli
State Court a separate ILS3.8 billion (approximately €898 million as
of September 2016) claim for damages against Siemens AG and
other companies that allegedly formed a cartel in the Israeli gas-
insulated switchgear market. Siemens AG is defending itself against
the actions.
default or non-payment by the primary debtor, Siemens will be
required to settle such financial obligations. The maximum
amount of these guarantees is equal to the outstanding balance
of the credit or, in case where a credit line is subject to variable
utilization, the nominal amount of the credit line. These guaran-
tees have terms up to 22 years and 18 years, respectively, in fiscal
2016 and 2015. For credit guarantees amounting to €270 million
and €271 million as of September 30, 2016 and 2015, respec-
tively, the Company held collateral mainly in the form of inven-
tories and trade receivables. The Company accrued €73 million
and €93 million relating to credit guarantees as of September 30,
2016 and 2015, respectively.
Item Credit guarantees covers the financial obligations of third
parties generally in cases where Siemens is the vendor and (or)
contractual partner or Siemens is liable for obligations of associ-
ated companies accounted for using the equity method. Addi-
tionally, credit guarantees are issued in the course of the SFS
business. Credit guarantees generally provide that in the event of
1,090
4,241
3,718
600
2,292
2,319
Guarantees of third-party performance
HERKULES obligations
859
799
Furthermore, Siemens issues guarantees of third-party perfor-
mance, which mainly include performance bonds and guaran-
tees of advanced payments in a consortium. In the event of
non-fulfillment of contractual obligations by the consortium
partner(s), Siemens will be required to pay up to an agreed-upon
maximum amount. These agreements typically have terms of up
to ten years. Generally, consortium agreements provide for fall-
back guarantees as a recourse provision among the consortium
partners. As of September 30, 2016 and 2015, the Company ac-
crued €4 million and €3 million, respectively, relating to perfor-
mance guarantees.
Credit guarantees
2016
Sep 30,
(in millions of €)
The following table presents the undiscounted amount of maxi-
mum potential future payments for major groups of guarantees:
NOTE 20 Commitments and
contingencies
A+
A-1+
P-1
A-1+
P-1
Short-term debt
2015
As previously reported, the Israeli Exchange Supervisory Authority
(ISA) concluded its investigation regarding potentially illegal
payments that were allegedly paid to Israeli Electric Company-
representatives in the early 2000's, and transferred the investigation
files to the Israeli District Attorney (DA) in August 2015, in order to
decide whether or not to take any legal steps against any of the
suspects named in the ISA investigation. Siemens fully cooperated
In fiscal 2007, The Federal Republic of Germany commissioned
a consortium consisting of Siemens and IBM Deutschland
GmbH (IBM) to modernize and operate the non-military infor-
mation and communications technology of the German Federal
Armed Forces (Bundeswehr). This project is called HERKULES.
A project company, BWI Informationstechnik GmbH, provides
the services required by the terms of the contract. Siemens is
a shareholder in the project company. The guarantees issued
by Siemens in connection with the project are connected to
each other legally and economically. The guarantees ensure
that BWI has sufficient resources to provide the required ser-
vices and to fulfill its contractual obligations. After expiration
of the contract in December 2016, there will be a maximum
remaining guarantee amount of €200 million until April 2019
at the latest.
Consolidated Financial Statements 83
As previously reported, in September 2011, the Israeli Antitrust
Authority requested that Siemens present its legal position regard-
ing an alleged anti-competitive arrangement between April 1988
and April 2004 in the field of gas-insulated switchgear. In Septem-
ber 2013, the Israeli Antitrust Authority concluded that Siemens AG
was a party to an illegal restrictive arrangement regarding the
Israeli gas-insulated switchgear market between 1988 and 2004,
with an interruption from October 1999 to February 2002. The
Company appealed against this decision in May 2014.
PROCEEDINGS OUT OF OR IN CONNECTION
WITH ALLEGED COMPLIANCE VIOLATIONS
As previously reported, in July 2008, Hellenic Telecommunications
Organization S.A. (OTE) filed a lawsuit against Siemens AG with the
district court of Munich, Germany, seeking to compel Siemens AG to
disclose the outcome of its internal investigations with respect to
OTE. OTE seeks to obtain information with respect to allegations of
undue influence and/or acts of bribery in connection with contracts
concluded between Siemens AG and OTE from calendar 1992 to
2006. At the end of July 2010, OTE expanded its claim and requested
payment of damages by Siemens AG of at least €57 million to OTE
for alleged bribery payments to OTE employees. In October 2014 OTE
increased its damage claim to the amount of at least €68 million.
Siemens AG continues to defend itself against the expanded claim.
As previously reported, during fiscal year 2014, Siemens Indus-
trial Turbomachinery Ltd., United Kingdom, was sued before an
Iranian Court. The Parties have finalized their dispute at the end
of calendar year 2015.
As previously reported, Siemens AG is a member of a supplier con-
sortium that has been contracted to construct the nuclear power
plant "Olkiluoto 3" in Finland for Teollisuuden Voima Oyj (TVO) on
a turnkey basis. The agreed completion date for the nuclear power
plant was April 30, 2009. Siemens AG's share of the contract value
is approximately 27%. The other member of the supplier consor-
tium is a further consortium consisting of Areva NP S.A.S. and its
wholly-owned subsidiary, Areva GmbH. Completion of the power
plant has been delayed for reasons which are in dispute. In De-
cember 2008, the supplier consortium filed a request for arbitra-
tion against TVO demanding an extension of the construction
time, additional compensation, milestone payments, damages
and interest. TVO rejected the claims and asserted counterclaims
against the supplier consortium consisting primarily of damages
due to the delay. In August 2015, TVO updated its counterclaims
to approximately €2.3 billion. In February 2016, the supplier con-
sortium updated its monetary claims to approximately €3.5 bil-
lion. The amounts claimed by the parties do not cover the total
period of delay and may be updated further. On November 7, 2016
a partial award on certain preliminary questions identified for
early treatment was issued. The majority of the facts underlying
the claims regarding delay and disruption that occurred during
project execution are not covered by the partial award. A further
partial award on additional preliminary questions for early treat-
ment is expected during the first half of calendar year 2017. A final
arbitration judgment on the claims and counterclaims is expected
at the earliest during the second half of calendar year 2017.
PROCEEDINGS OUT OF OR IN CONNECTION
WITH ALLEGED BREACHES OF CONTRACT
Legal proceedings
NOTE 21
The Company is jointly and severally liable and has capital contri-
bution obligations as a partner in commercial partnerships and
as a participant in various consortiums.
Total operating rental expenses for the years ended September 30,
2016 and 2015 were €1,158 million and €1,118 million, respectively.
1,662
993
3,428
In addition to guarantees disclosed in the table above, the Com-
pany issued other guarantees. To the extent future claims are not
considered remote, maximum future payments from these obli-
gations amount to €853 million and €1,755 million as of Septem-
ber 30, 2016 and 2015, respectively. These commitments include
indemnifications issued in connection with dispositions of busi-
nesses. Such indemnifications may protect the buyer from po-
tential tax, legal and other risks in conjunction with the pur-
chased business. As of September 30, 2016 and 2015, the
accrued amount for such other commitments is €456 million
and €559 million, respectively.
3,458
1,707
After one year but not more than five years
More than five years
773
882
Within one year
2015
2016
Sep 30,
(in millions of €)
Future payment obligations under non-cancellable operating
leases are:
870
369
3
(2)
1.0%
0.4%
(93)
101
(105)
113
sation increase
3.9%
2.4%
Rate of compen-
Rate of pension
progression
4.3%
Sep 30, 2015
decrease
2,380
increase
(2,121)
Sep 30, 2016
decrease
3,174
(2,774)
increase
(in millions of €)
Discount rate
2.7%
1.0%
3.0%
1.7%
3.6%
2015
2,107
1,717
1,366
872
U.S. equities
6,285
5,206
Equity securities
2016
DEFINED CONTRIBUTION PLANS AND STATE PLANS
The amount recognized as expense for defined contribution
plans amounts to €676 million and €594 million in fiscal 2016
and 2015, respectively. Contributions to state plans amount to
€1,423 million and €1,372 million in fiscal 2016 and 2015, respec-
tively.
Employer contributions expected to be paid to defined benefit
plans in fiscal 2017 are €690 million. Over the next ten fiscal
years, average annual benefit payments of €1,908 million and
€1,912 million, respectively, are expected as of September 30,
2016 and 2015. The weighted average duration of the DBO for
Siemens defined benefit plans was 14 years as of September 30,
2016 and 13 years as of September 30, 2015.
Future cash flows
(1,858)
Virtually all equity securities have quoted prices in active mar-
kets. The fair value of fixed income securities is based on prices
provided by price service agencies. The fixed income securities
are traded in highly liquid markets and almost all fixed income
securities are investment grade.
Sep 30,
(in millions of €)
Disaggregation of plan assets
As a significant risk, the Company considers a decline in the
plans' funded status due to adverse developments of plan assets
and/or defined benefit obligations resulting from changing pa-
rameters. Accordingly, Siemens implemented a risk management
concept aligned with the defined benefit obligations (Asset Lia-
bility Matching). Risk management is based on a worldwide de-
fined risk threshold (value-at-risk). The concept, the value at risk
and the asset development including the investment strategy are
monitored and adjusted on an ongoing basis under consultation
of senior external experts. Independent asset managers are se-
lected based on quantitative and qualitative analysis, which in-
cludes their performance and risk evaluation. Derivatives are
used to reduce risks as part of risk management.
Asset Liability Matching Strategies
Consolidated Financial Statements 79
As in prior year, sensitivity determinations apply the same meth-
odology as applied for the determination of the post-employ-
ment benefit obligation. Sensitivities reflect changes in the DBO
solely for the assumption changed.
The DBO effect of a 10% reduction in mortality rates for all ben-
eficiaries would be an increase of €1,395 million and €1,021 mil-
lion, respectively, as of September 30, 2016 and 2015.
The discount rate was derived from high-quality corporate bonds
with an issuing volume of more than 100 million units in the re-
spective currency zones, which have been awarded an AA rating
(or equivalent) by at least one of the three rating agencies
Moody's Investor Service, Standard & Poor's Rating Services or
Fitch Ratings.
(1,379)
2015
European equities
2016
Sep 30,
(41)
6,284
Total
(59)
(93)
Experience (gains) losses
(8)
6,506
Changes in financial assumptions
26
The rates of compensation increase and pension progression for
countries with significant effects are shown in the following table.
Inflation effects, if applicable, are included in the assumptions below.
(129)
Fiscal year
2015
2016
(in millions of €)
BVG 2015 G
SAPS S2 (Standard mortality tables
for Self Administered Pension Schemes
with allowance for future mortality
improvements)
The net defined benefit balance of €13,486 million and
€9,737 million as of September 30, 2016 and 2015 comprised
€13,695 million and €9,811 million net defined benefit liability
and €209 million and €75 million net defined benefit asset, re-
spectively. Net interest expenses amounted to €282 million and
€263 million, respectively, in fiscal 2016 and 2015. Similar to the
prior year, the DBO is attributable to active employees 33%, to
former employees with vested rights 15% and to retirees and sur-
viving dependants 52%.
The remeasurements comprise actuarial (gains) and losses result-
ing from:
Applied mortality tables are:
Germany
U.S.
Heubeck Richttafeln 2005G (modified)
RP-2015 mortality table with MP-2015
generational projection
Changes in demographic assumptions
Effect on DBO due to a one-half percentage-point
Sep 30,
2015
CH
U.K.
U.S.
Germany
Discount rate
A one-half-percentage-point change of the above assumptions
would result in the following increase (decrease) of the DBO:
2.9%
2.9%
1.7%
1.4%
2016
Sensitivity analysis
Pension progression
1.5%
1.5%
CH
3.6%
3.6%
Compensation increase
U.K.
The weighted-average discount rate used for the actuarial valua-
tion of the DBO at period-end was as follows:
Actuarial assumptions
The changes in financial assumptions include a reduction of the
pension progression rate for a German frozen legacy plan from
1.8% as of September 30, 2015 to 1.5% as of September 30, 2016
due to a lower inflation assumption which reduced the DBO by
€487 million.
Germany
U.K.
2 Includes equity instruments classified as available-for-sale,
for which a fair value could not be reliably measured and
which are therefore recognized at cost.
1,610
Emerging markets
1,415
1,829
4,220
Total
Other
obligations
losses and risks
Warranties
retirement
Order related
1,888
Asset
Other changes
Accretion expense and effect of changes in discount rates
Translation differences
Reversals
Usage
Additions
Thereof non-current
Balance as of October 1, 2015
(in millions of €)
NOTE 17 Provisions
Balance as of September 30, 2016
Thereof non-current
80 Consolidated Financial Statements
9,353
689
(41)
5
(24)
(21)
(1,781)
(391)
(175)
(393)
(822)
(1,891)
1,981
(364)
(493)
(1,027)
3,158
696
4
572
1,887
4,865
801
1,393
(7)
1,783
1 Multi strategy funds comprise absolute return funds and diversified growth funds that invest
in various asset classes within a single fund and aim to stabilize return and reduce volatility.
28,809
827
Private Equity
1,403
2,074
Hedge Funds
3,526
3,622
Alternative investments
10,488
10,899
772
Corporate bonds
5,496
Government bonds
15,206
16,395
Fixed income securities
1,993
1,903
Global equities
1,143
821
4,718
27,296
Real estate
1,351
Total
572
928
Other assets
483
465
Cash and cash equivalents
(614)
(572)
Credit/Inflation/Price risks
721
26
Foreign currency risk
1,079
1,022
Interest risk
491
497
Derivatives
733
1,696
Multi strategy funds'
47
U.K.
CH
4 Reported in line items Other current financial liabilities and
Other financial liabilities.
Consolidated Financial Statements 87
534
534
1,383
1,383
1,919
1,919
279
279
329
329
2,620
46
2,574
In connection with cash flow hedges
Not designated in a hedge accounting relationship
(including embedded derivatives)
Derivative financial instruments
6,667
1,980
318
2,299
1,131
10
The fair value of available-for-sale financial equity instruments
quoted in an active market is based on price quotations at the
period-end date. The fair value of debt instruments is either based
on prices provided by price service agencies or estimated by dis-
counting future cash flows using current market interest rates.
1,141
46
3,228
Not designated in a hedge accounting relationship
(including embedded derivatives)
In connection with fair value hedges
In connection with cash flow hedges
Financial liabilities measured at fair value -
3,181
Non-current available-for-sale financial assets measured at
fair value include interests in Atos SE (Atos) and OSRAM of
€2,156 million and €1,703 million, respectively, as of Septem-
ber 30 2016 and 2015. Unrealized gains (losses) in fiscal 2016 and
2015 resulting from non-current available-for-sale financial as-
sets measured at fair value are €445 million and €367 million
and, respectively.
Siemens determines the fair values of derivative financial instru-
ments depending on the specific type of instrument. Fair values
of derivative interest rate contracts are estimated by discounting
expected future cash flows using current market interest rates
and yield curves over the remaining term of the instrument. In-
terest rate futures are valued on the basis of quoted market
prices, if available. Fair values of foreign currency derivatives are
based on forward exchange rates. Options are generally valued
based on quoted market prices or based on option pricing mod-
els. In determining the fair values of the derivative financial in-
struments, no compensating effects from underlying transac-
tions (e.g. firm commitments and forecast transactions) are
taken into consideration.
The Company limits default risks resulting from derivative finan-
cial instruments by generally transacting with financial institu-
tions with a minimum credit rating of investment grade. Based
on Siemens' net risk exposure towards the counterparty, the re-
sulting credit risk is taken into account via a credit valuation ad-
justment.
In fiscal 2016 and 2015, gains (losses) reclassified from Other
comprehensive income to the Consolidated Statements of In-
come relating to cash flow hedges were €(61) million and €(268)
million, respectively; unrealized gains (losses) recognized in
Other comprehensive income amounted to €149 million and
€(311) million, respectively.
(739)
(874)
1,248
1,291
2015
88
2016
Total interest income on financial assets
Total interest expenses on financial liabilities
(in millions of €)
Interest income (expense) includes interest from financial assets
and financial liabilities not at fair value through profit or loss:
Net gains (losses) in fiscal 2016 and 2015, on financial liabilities
measured at amortized cost are comprised of gains (losses) from
derecognition and the ineffective portion of fair value hedges.
Net gains (losses) in fiscal 2016 and 2015 on financial assets and
financial liabilities held for trading consist of changes in the fair
value of derivative financial instruments, including interest in-
come and expense, for which hedge accounting is not applied.
The amounts presented include foreign currency gains and losses
from the realization and valuation of the financial assets and lia-
bilities mentioned above.
Financial assets and financial
liabilities held for trading
liabilities, Long-term debt and Other financial liabilities,
except for separately disclosed derivative financial instru-
ments of €1,500 million and €1,919 million, respectively,
as of September 30, 2016 and 2015.
Fiscal year
374
Consolidated Financial Statements
(211)
The unquoted equity instrument allocated to level 3 of the fair
value hierarchy relates to an investment in an offshore wind
farm. The fair value is determined based on discounted cash flow
calculations. The most significant unobservable input used to
determine the fair value is the cash flow forecast which is mainly
based on the future power generation income. This income is
generally subject to future market developments and thus price
volatility. Since a long-term power purchase agreement is in
place that mitigates price volatility, significant changes to the
cash flow forecast are unlikely and thus, no significant effects on
Other comprehensive income, net of income taxes, are expected.
Net gains (losses) of financial instruments are:
(in millions of €)
2016
2015
Cash and cash equivalents
Available-for-sale financial assets
Loans and receivables
(945)
(19)
70
39
(42)
Financial liabilities measured
at amortized cost
168
(1,049)
(24)
4,313
(442)
Financial assets measured at fair value:
Available-for-sale financial assets: equity instruments
Available-for-sale financial assets: debt instruments
Derivative financial instruments
Not designated in a hedge accounting relationship
(including embedded derivatives)
Derivative financial instruments
Financial liabilities measured at fair value -
In connection with cash flow hedges
In connection with fair value hedges
Not designated in a hedge accounting relationship
(including embedded derivatives)
Financial assets measured at fair value:
Available-for-sale financial assets: equity instruments
Available-for-sale financial assets: debt instruments
Derivative financial instruments
(in millions of €)
The following table allocates financial assets and financial liabil-
ities measured at fair value to the three levels of the fair value
hierarchy:
The fair value of notes and bonds is based on prices provided
by price service agencies at the period-end date (Level 2). The fair
value of loans from banks and other financial indebtedness, ob-
ligations under finance leases as well as other non-current finan-
cial liabilities is estimated by discounting future cash flows using
rates currently available for debt of similar terms and remaining
maturities (Level 2).
Fixed-rate and variable-rate receivables with a remaining term of
more than twelve months, including receivables from finance
leases, are evaluated by the Company based on parameters such
as interest rates, specific country risk factors, individual credit-
worthiness of the customer, and the risk characteristics of the
financed project. Based on this evaluation, allowances for these
receivables are recognized.
147
207
3,559
25,955
26,516
3,544
2,276
138
Cash and cash equivalents includes €330 million and €378 million
as of September 30, 2016 and 2015, respectively, which are not
available for use by Siemens mainly due to minimum reserve re-
quirements with banks. As of September 30, 2016 and 2015, the
carrying amount of financial assets Siemens has pledged as col-
lateral amounted to €214 million and €345 million, respectively.
1,980
The following table presents the fair values and carrying amounts
of financial assets and financial liabilities measured at cost or
amortized cost for which the carrying amounts do not approxi-
mate fair value:
(in millions of €)
Notes and bonds
Loans from banks and other financial indebtedness
Obligations under finance leases
In connection with cash flow hedges
86 Consolidated Financial Statements
Fair value
30,235
2,270
203
Carrying
amount
Sep 30, 2015
Carrying
amount
28,554
Sep 30, 2016
Sep 30, 2016
Fair value
Level 2
371
371
1,500
1,500
1,190
1,190
163
305
(in millions of €)
Level 1
Level 2
Level 1
Level 3
Total
Sep 30, 2015
163
305
2,518
2,191
2,518
Total
4,311
310
6,812
301
Level 3
2,191
1,259
10
1,269
3,051
3,051
2,492
'Item Other interest expenses/income, net primarily consists of interest relating to corporate debt, and related hedging activities, as well as interest income on corporate assets.
4,397
6,778
51,723
56,190
13.1%
7.8%
5
Plus: Long-term debt
Combined Management Report
purposes of calculating ROCE in interim periods, Income before interest after tax is annualized. Average capital employed is determined
using the average of the respective balances as of the quarterly reporting dates for the periods under review.
Calculation of capital employed
Total equity
Plus: Short-term debt and current maturities of long-term debt
Less: Cash and cash equivalents
Less: Current interest-bearing debt securities
(84)
Plus: Provisions for pensions and similar obligations
Less: Fair value of foreign currency and interest hedges relating to short- and long-term debt
For
(34)
(I) Income before interest after tax
(11)
(in millions of €)
Less: SFS debt
Net income
Less: Other interest expenses/income, net¹
Plus: SFS Other interest expenses/income
Plus: Net interest expenses related to provisions for pensions and similar obligations
Less: Interest adjustments (discontinued operations)
Less: Taxes on interest adjustments (tax rate (flat) 30%)
(II) Average capital employed
(1)/(II) ROCE
Fiscal year
2021
2020
6,697
4,200
(769)
(692)
842
806
53
66
100
Plus: Adjustments from assets classified as held for disposal and liabilities associated with assets classified as held for disposal
Less: Adjustment for deferred taxes on net accumulated actuarial gains/losses on provisions for pensions and similar obligations
Capital employed (continuing and discontinued operations)
14,997
6
Comp.
18,427
15,896
16%
18%
16,514
10%
13%
4,290
4,144
4%
7%
3,362
3,252
3%
20.4%
21.7%
Significant order growth for Digital Industries was driven by the automation businesses, particularly factory automation and motion
control, on a recovery of their most important customer industries such as the automotive and machine building industries, which a year
earlier were strongly impacted by effects related to COVID-19. Orders in the software business came in lower compared to fiscal 2020,
which included a sharply higher volume from large orders, most notably in the EDA business. Revenue rose in all businesses, including
significant growth contributions from the factory automation and motion control businesses and successful mitigation of supply chain
risks primarily associated with electronics components. On a geographic basis, order and revenue were up in all regions with growth
mainly driven by the region Asia, Australia, due primarily to substantial increases in China, and the region comprising Europe,
Commonwealth of Independent States (C.I.S.), Africa, Middle East, including a strong growth contribution from Germany. Adjusted EBITA
rose moderately even though the prior fiscal year included a €767 million positive effect related to Digital Industries' former stake in
Bentley. The effect resulted mainly from revaluation of the stake following Bentley's public listing. Excluding this effect, Adjusted EBITA
rose on double-digit increases in all businesses and improved profitability compared to the prior fiscal year, with the strongest growth
contributions coming from the factory automation and motion control businesses. Adjusted EBITA improved also from successful execution
of the cost structure improvement program in prior periods, which strengthened current profitability. Furthermore, severance charges,
which resulted primarily from the ongoing program, fell substantially to €114 million from €210 million in the prior year. During the first
half of fiscal 2021, Adjusted EBITA development benefited from expense reductions year-over-year related to COVID-19 restrictions, such
as lower travel and marketing expenses. Digital Industries' order backlog was €7 billion at the end of the fiscal year, of which €6 billion are
expected to be converted into revenue in fiscal 2022.
In fiscal 2021 the market environment for Digital Industries improved strongly as global manufacturing production recovered throughout
the fiscal year from burdens related to COVID-19, which were most noticeable in the second and third quarter a year earlier. The rebound
was faster and stronger than assumed and led to constraints in global value chains over the course of the fiscal year. The main driver of
the upswing was China where the growth dynamic was extremely strong in the first half of the fiscal year. Other countries followed with
a delay of around three to six months, but their recovery was less pronounced than in China resulting in moderate growth in the regions
Americas and Europe, C.I.S., Africa, Middle East. Discrete industries recovered particularly quickly and strongly, benefiting in part from
restocking effects, while recovery in the more project-related process industries was delayed. The automotive industry started strongly
into fiscal 2021, but the recovery was held back by supply chain constraints which impacted production especially in the second half of
the fiscal year. This led to slowing or even limited contraction of production during the last months of the fiscal year. The machine building
industry also recovered faster than expected, with the recovery starting in China and benefiting from demand for general investment
goods. This development was evident in demand for automation equipment which in addition benefited from the trend towards
digitalization and from stock-building effects to mitigate risks from supply chain constraints. The pharmaceutical and the chemicals
industries expanded during the entire fiscal year. While the pharmaceuticals industry benefited from COVID-19 vaccine demand among
other factors, the chemicals industry steadily improved in line with the overall economic recovery. The development in the food and
beverage industry followed a similar pattern and grew steadily throughout the fiscal year. Global production of electronics and
semiconductors was not held back by effects related to COVID-19, and experienced strong growth during fiscal 2021. However, market
shifts within the semiconductor industry led to global shortages of semiconductors for certain customer segments that grew worse through
the fiscal year and increasingly affected the automotive and machine building industries. In addition, supply constraints for plastics, metals
and freight delivery impacted Digital Industries' market environment. Price increases affected all markets and were stronger than usually
experienced during periods of economic rebound. While prices started to surge in the first quarter of fiscal 2021 mainly in the raw material
sector (e. g. copper), they spread further to intermediate goods and to all markets, including electrical equipment, in the following
8
Calculation of ROCE
% Change
Actual
Beginning with fiscal 2022, ROCE will exclude defined Varian-related acquisition effects. For that purpose, in the numerator, Income before
interest after tax is adjusted for effects resulting from purchase price allocation which are comprised of amortization of tangible and
intangible assets, inventory step-ups, deferred revenue adjustments and related income taxes. The denominator Average capital employed
is adjusted for goodwill and other intangible assets resulting from purchase price allocation. ROCE adjusted for Varian-related acquisition
effects was 15.1% in fiscal 2021.
2020
Adjusted EBITA margin
Combined Management Report
3. Segment information
3.1 Overall economic conditions
The global economic development in fiscal 2021 was still dominated by the coronavirus pandemic (COVID-19) and its many repercussions.
After the recession in calendar 2020, in which global gross domestic product (GDP) contracted by 3.4%, calendar 2021 is expected to show
a very strong rebound with global GDP increasing by 5.5%.
Global economic activity expanded at very high rates in the third quarter of calendar 2020 after the first wave of COVID-19 ebbed.
Subsequent infection waves in winter months caused fears of a new global recession. But economic activity had already adapted to the
pandemic and was supported by massive stimulus programs, especially in Europe and the U.S. Globally, governments allocated nearly USD
11 trillion in stimulus programs and more than USD 6 trillion in liquidity support to businesses and households in response to the pandemic.
Central banks gave support with expansionary measures, in particular new quantitative easing programs, while short-term interest rates
were at or near zero. Accordingly, the global economy continued to expand also in the fourth quarter of calendar 2020 and the first quarter
of calendar 2021, despite renewed outbreaks and lockdowns. In December 2020, the first countries approved new COVID-19 vaccines,
which were developed in a very short time and which are of paramount importance in order to solve the health crisis and economic
challenges.
However, momentum again weakened in the first half of calendar 2021, due to increasing infections in many countries. The new Delta
variant was more contagious than previous virus strains. Vaccine roll-out could not keep up with the spread of this new variant, especially
in emerging countries. In addition, supply disruptions, which were both caused and magnified by the pandemic, impaired the recovery.
Bottlenecks had impacts across the value chains from raw materials to high tech goods, especially semiconductors, and were exemplified
by extraordinary disruptions in global logistics systems. In addition, many companies were surprised by the strong recovery and high
demand for goods which often exceeded their production plans and short-term capacity. The extraordinarily high demand for goods was
caused by consumers with high excess savings and limited spending alternatives as many service offerings were still not available
("services-to-products shift"). Limited supply, logistics bottlenecks and record high consumer demand for goods caused substantial
increases of producer prices for many products, which partly translated to an increase of general inflation. In addition, energy prices
increased, and base effects from reduced 2020 price levels as well as temporary effects (e.g. provisional changes in taxation) contributed
to the elevated rate of inflation.
The Chinese economy - with the world's largest manufacturing sector - benefited particularly from the high global demand for goods and
is expected to grow by 8.2% in calendar 2021. However, tensions in the property sector and energy shortages weighed on economic
activity in the second half of calendar 2021.
Overall, the other major economies have experienced very strong economic rebounds and GDP is expected to grow strongly in calendar
2021: European Union (EU) 5.0%, U.S. 5.4%, Japan 2.3%, India 7.7%. For advanced countries in aggregate, calendar 2021 GDP is expected
to expand by 4.9%. For emerging markets, the increase in calendar 2021 GDP is estimated at 6.4%.
The partly estimated figures presented here for GDP are based on an IHS Markit report dated October 15, 2021.
3.2 Digital Industries
Digital Industries offers a comprehensive product portfolio and system solutions for automation used in discrete and process industries;
these offerings include automation systems and software for factories, numerical control systems, motors, drives and inverters and
integrated automation systems for machine tools and production machines. Digital Industries also provides process control systems,
machine-to-machine communication products, sensors (for measuring pressure, temperature, level, flow rate, distance or shape) and
radio frequency identification systems. Furthermore, Digital Industries offers production and product lifecycle management (PLM)
software, and software for simulation and testing of mechatronic systems. These leading software offerings are integrated with an
electronic design automation (EDA) software portfolio, and the open, cloud-based industrial internet of things (IoT) operating system
MindSphere, which connects machines and physical infrastructure to the digital world. All these software offerings are complemented by
the Mendix cloud-native low-code application development platform, which allows customers to significantly reduce app development
times through visual representation of underlying code. Digital Industries also provides customers with lifecycle and data-driven services.
During the first quarter of fiscal 2021, Digital Industries' stake in Bentley Systems, Inc. (Bentley) was transferred to Siemens Pension-Trust
e.V. In August 2021, Digital Industries closed the acquisition of Supplyframe, Inc. (Supplyframe), a marketplace for the global electronics
value chain, to significantly strengthen and accelerate growth of its offerings in digital marketplaces. For further information on the
acquisition see Note 3 in Notes to Consolidated Financial Statements for fiscal 2021.
Taken together, Digital Industries' offerings enable customers to optimize entire value chains from product design and development
through production and post-sale services. With its advanced software solutions in particular, Digital Industries supports customers in their
evolution towards the "Digital Enterprise," resulting in increased flexibility and efficiency of production processes and reduced time to
market for new products. The most important markets include the automotive industry, the machine building industry, the pharmaceutical
and chemicals industry, the food and beverage industry and the electronics and semiconductor industry. Digital Industries serves its
customers through a common regional sales organization spanning all its businesses, using various sales channels depending on the type
of customer and industry and also enhancing customer choice across all channels. Changes in customer demand, especially for standard
products, are driven strongly by macroeconomic cycles, and can lead to significant short-term fluctuation in Digital Industries' profitability.
Volume from large contracts in the software business, particularly for EDA, may also result in strong fluctuations in quarterly volume and
profitability. Starting in fiscal 2022, Digital Industries intends to transition parts of its software business, particularly PLM, from largely
upfront revenue recognition towards Software as a Service (SaaS), which yields more predictable recurring revenue and offers growth
opportunities by opening access to new customers, especially small and medium-sized companies seeking to reduce costs associated with
owning complex IT infrastructure. During the transition, Digital Industries expects impacts on revenue growth rates and profit margin
development in the software business. Competition with Digital Industries' business activities comes primarily from multinational
corporations that offer a relatively broad portfolio and from smaller companies active only in certain geographic or product markets.
7
Combined Management Report
Digital Industries sees three trends influencing its business and providing long-term growth opportunities. Producers of investment goods
in today's increasingly digital environment must modernize their production capacity, particularly to increase production flexibility and
reduce time to market. This environment also spurs producers to complement their core products with vertical solutions and service
offerings, which their customers either need or want in order to take full advantage of the investment goods. Finally, there is a trend from
globalization to regionalization, to support local economic development or to better adapt solutions to local needs. This is increasingly
accompanied by more differentiated regulatory requirements.
Research & Development (R&D) activities at Digital Industries are aimed at providing its customers with solutions that allow them to
exploit the potential of data in their businesses and to combine the real and the digital worlds. Digital Industries is developing and
integrating technologies such as artificial intelligence (AI), edge computing, cloud technologies, additive manufacturing and industrial 5G
wireless technology. For example, Digital Industries cooperated with Schaeffler Group by combining its lloT platform Sidrive IQ, which
augments drive systems with Al-based analytics and digital content, with Schaeffler's products and services in the area of designing,
manufacturing, and servicing bearings. Digital Industries introduced a new Industrial Edge Management system with which users can
remotely monitor the status of every connected device and remotely install edge apps and software functions on distributed edge devices.
Also in fiscal 2021, Digital Industries announced a cooperation with Google Cloud which aims at the integration of factory automation
systems from Digital Industries with Google's data cloud, Al and machine learning technologies. In the field of additive manufacturing,
Digital Industries worked with EOS and DyeMansion to present the first virtual additive manufacturing reference factory for selective laser
sintering and industrial post-processing. During the 2021 Hanover Fair, Digital Industries demonstrated its first industrial 5G router and
set up a private 5G campus network with a focus on industrial use cases such as automated guided vehicles, augmented reality, and
autonomous mobile robots. Major investments of Digital Industries in fiscal 2021 relate to its own factory automation, motion control
and process automation businesses, to further automate and digitalize facilities particularly in Germany, China and the Czech Republic.
(in millions of €)
Orders
Revenue
therein: software business
Adjusted EBITA
Fiscal year
2021
2.6 Calculation of return on capital employed
11-15%
Beginning with fiscal 2022, we use the cash conversion rate for the Siemens Group to reinforce our commitment to cash generation on a
Group level. It is defined as the ratio of Free cash flow (continuing and discontinued operations) to Net income. We aim to achieve a cash
conversion rate of 1 minus the annual comparable revenue growth rate for the Group over a cycle of three to five years.
3.
Segment information
16
4.
Results of operations
19
5.
Net assets position
2355 3
20
6.
7
Financial position
Overall assessment of the economic position
8.
Report on expected developments and associated material opportunities and risks
9. Siemens AG
37
10.
Takeover-relevant information
Combined Management Report
1. Organization of the Siemens Group and basis of
presentation
Siemens is a technology group that is active in nearly all countries of the world, focusing on the areas of automation and digitalization in
the process and manufacturing industries, intelligent infrastructure for buildings and distributed energy systems, smart mobility solutions
for rail and road and medical technology and digital healthcare services.
Siemens comprises Siemens Aktiengesellschaft (Siemens AG), a stock corporation under the Federal laws of Germany, as the parent
company, and its subsidiaries. Our Company is incorporated in Germany, with our corporate headquarters situated in Munich. As of
September 30, 2021, Siemens had around 303,000 employees.
7.
Financial performance system
Organization of the Siemens Group and basis of presentation
Combined Management Report
Siemens Report
FOR FISCAL 2021
SIEMENS
Table of contents
Combined Management Report
Consolidated Financial Statements
Responsibility Statement (Siemens Group)
Independent Auditor's Report (Siemens Group)
Annual Financial Statements
Responsibility Statement (Siemens AG)
Independent Auditor's Report (Siemens AG)
Five-Year Summary
Compensation Report (including Auditor's Report)
Report of the Supervisory Board
Corporate Governance Statement
Notes and forward-looking statements
Combined Management
Report
FOR FISCAL 2021
SIEMENS
Table of contents
3
At the Annual Shareholders' Meeting, the Managing Board, in agreement with the Supervisory Board, will submit the following proposal
to allocate the unappropriated net income of Siemens AG for fiscal 2021: to distribute a dividend of €4.00 on each share of no par value
entitled to the dividend for fiscal 2021 existing at the date of the Annual Shareholders' Meeting; the remaining amount is to be carried
forward. Payment of the proposed dividend is contingent upon approval by Siemens shareholders at the Annual Shareholders' Meeting on
February 10, 2022. The prior-year dividend was €3.50 per share.
4
2.
As of September 30, 2021, Siemens has the following reportable segments: Digital Industries, Smart Infrastructure, Mobility and
Siemens Healthineers, which together form our "Industrial Business" and Siemens Financial Services (SFS), which supports the activities
of our industrial businesses and also conducts its own business with external customers. Furthermore, we report results for Portfolio
Companies, which comprises businesses that are managed separately to improve their performance.
Our reportable segments and Portfolio Companies may do business with each other, leading to corresponding orders and revenue. Such
orders and revenue are eliminated on the Group level.
1.
Siemens has policies for environmental, employee and social matters, for the respect of human rights, and anti-corruption and bribery
matters, among others. Our business model is described in chapters 1 and 3 of this Combined Management Report. Reportable information
that is necessary for an understanding of the development, performance, position and the impact of our activities on these matters is
included in this Combined Management Report, in particular in chapters 3 through 7. Forward-looking information, including risk
disclosures, is presented in chapter 8. Chapter 9 includes additional information that is required to be reported in the Combined
Management Report related to the parent company Siemens AG. As supplementary information, amounts reported in the Consolidated
Financial Statements and the Annual Financial Statements of Siemens AG related to such non-financial matters, and additional
explanations thereto, are included in Notes to Consolidated Financial Statements for fiscal 2021, Notes 17, 18, 22, 26 and 27, and in the
Notes to the Annual Financial Statements for fiscal 2021, Notes 16, 17, 20, 21 and 25. In order to inform the users of the financial reports
in a focused manner, these disclosures are not subject to a specific non-financial framework – in contrast to the disclosures in our separate
"Sustainability Report 2021" document, which are based on the standards developed by the Global Reporting Initiative (GRI). Said
document also includes detailed information on DEGREE, Siemens' new sustainability framework which was introduced during fiscal 2021.
With DEGREE, Siemens intends to manage and track its progress on selected ambitions in the environmental, social and governance areas.
Digital Industries
Smart Infrastructure
Mobility
Siemens Healthineers
Siemens Financial Services (ROE after tax)
Margin range
17-23%
11-16%
10-13%
17-21%
15-20%
Margin ranges from fiscal 2022
For Siemens Healthineers, we present the margin range we expect as that company's majority shareholder.
4
Combined Management Report
Beginning with fiscal 2022, we will in addition report EPS before purchase price allocation accounting (EPS pre PPA) to increase
transparency regarding our operating performance. EPS pre PPA is defined as basic earnings per share from net income adjusted for
amortization of intangible assets acquired in business combinations and related income taxes. Like for EPS, EPS pre PPA includes the
amounts attributable to shareholders of Siemens AG. We aim to achieve high-single-digit annual growth in EPS pre PPA over a cycle of
three to five years. EPS pre PPA for fiscal 2021 was €8.32.
We seek to work profitably and as efficiently as possible with the capital provided by our shareholders and lenders. For purposes of
managing and controlling our capital efficiency, we use return on capital employed, or ROCE, as our primary measure in our Siemens
Financial Framework.
Beginning with fiscal 2022, ROCE excludes defined acquisition-related effects for Varian Medical Systems, Inc. (Varian), which was acquired
by Siemens Healthineers in fiscal 2021, to further increase the transparency on our operating performance. Our goal is to achieve a ROCE
within a range of 15% to 20% over a cycle of three to five years.
2.4 Capital structure
Sustainable revenue and profit development is supported by a healthy capital structure. Accordingly, a key consideration within the
Siemens Financial Framework is to maintain ready access to the capital markets through various debt products and preserve our ability to
repay and service our debt obligations over time. Our primary measure for managing and controlling our capital structure is the ratio of
Industrial net debt to EBITDA (continuing operations). This financial measure indicates the approximate amount of time in years that would
be needed to cover Industrial net debt through income from continuing operations, without taking into account interest, taxes,
depreciation and amortization. In fiscal 2021, we aimed to achieve a ratio of up to 1.0. Beginning with fiscal 2022, this ratio was raised to
up to 1.5.
2.5 Liquidity and dividend
We intend to continue providing an attractive return to our shareholders under the Siemens Financial Framework. Beginning with fiscal
2022, this includes striving for a dividend per share that exceeds the amount of the preceding year, or that at least matches the prior-year-
level.
As in the past, we intend to fund the dividend payout from Free cash flow. To provide an assessment of our ability to generate cash, and
ultimately to pay dividends, in fiscal 2021 we used the cash conversion rate of Industrial Business, defined as the ratio of Free cash flow
from Industrial Business to Adjusted EBITA Industrial Business. Because growth requires investments, we aimed to achieve a cash
conversion rate of 1 minus the annual comparable revenue growth rate of Industrial Business.
Non-financial matters of the Group and Siemens AG
For purposes of managing and controlling profit and profitability at the Group level, we use net income as our primary measure. This
measure is the primary driver of basic earnings per share from net income (EPS).
The margin ranges were set as follows:
In line with common practice in the financial services business, our financial indicator for measuring capital efficiency at Siemens Financial
Services is return on equity after tax, or ROE after tax. ROE is defined as Siemens Financial Services' profit after tax, divided by its average
allocated equity.
17-22%
3
Beginning with fiscal 2022, the profit definition no longer adjusts EBITA for operating financial income (expenses), net to present a more
transparent view on operating earnings. Operating financial income, net for Industrial Business was €23 million in fiscal 2021, without a
change to the reported margin.
Combined Management Report
2. Financial performance system
2.1 Overview
The Siemens Financial Framework includes targets that we aim to achieve over a cycle of three to five years. During fiscal 2021, we
modified this framework. The resulting changes became effective starting with fiscal 2022.
2.2 Revenue growth
Our primary measure for managing and controlling our revenue growth is comparable growth, because it shows the development in our
business net of currency translation effects, which arise from the external environment outside of our control, and portfolio effects, which
involve business activities which are either new to or no longer a part of the respective business.
Currency translation effects are the difference between revenue for the current period calculated using the exchange rates of the current
period and revenue for the current period calculated using the exchange rates of the comparison period. For calculating the percentage
change year-over-year, this absolute difference is divided by revenue for the comparison period. A portfolio effect arises in the case of an
acquisition or a disposition and is calculated as the change year-over-year in revenue related to the transaction. For calculating the
percentage change, this absolute change is divided by revenue for the comparison period. Any portfolio effect is excluded for the 12
months following the relevant transaction after which both current and past reporting periods fully reflect the portfolio change. For orders,
we apply the same calculations for currency translation and portfolio effects as described above.
Under the modified framework, we aim to achieve comparable revenue growth in the range of 5% to 7% per year over a cycle of three to
five years.
2.3 Profitability and capital efficiency
Within the Siemens Financial Framework, we aim to achieve margins that are comparable to those of our relevant competitors. Therefore,
we have defined profit margin ranges for our industrial businesses which also consider the profit margins of their respective relevant
competitors. Profit margin is defined as profit of the respective business divided by its revenue.
In the Siemens Financial Framework, up to and including fiscal 2021, we aimed to achieve a revenue growth range of 4% to 5% per year
on a comparable basis.
Margin range
Margin ranges until fiscal 2021
Digital Industries
Smart Infrastructure
Mobility
Siemens Healthineers
Industrial Business
Siemens Financial Services (ROE after tax)
17-21%
17-23%
10-15%
For our industrial businesses, in fiscal 2021 profit represented EBITA adjusted for operating financial income (expenses), net, and
amortization of intangible assets not acquired in business combinations (Adjusted EBITA).
The margin ranges for our industrial businesses were as follows:
9-12%
100
100
100
1007
100
100
100
100
100
100
100
100
100
100
Aimsun Inc., New York, NY / United States
100
1007
100
100
97
100
100
Siemens Mobility S.A.C., Lima / Peru
Siemens S.A.C., Surquillo / Peru
Varian Medical Systems Puerto Rico, LLC, Guaynabo / Puerto Rico
Acuson, LLC, Wilmington, DE / United States
Building Robotics Inc., Wilmington, DE / United States
Bytemark Inc., Dover, DE / United States
100
100
100
100
100
Siemens Large Drive Applications S.A., Panama City / Panama
Siemens Healthcare S.A.C., Surquillo / Peru
Consolidated Financial Statements
100
100
100
100
10013
100
100
100
100
100
10013
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Siemens Healthcare Limited Liability Company, Moscow / Russian Federation
SIEMENS SERVICIOS COMERCIALES SA DE CV, SOFOM, ENR, Mexico City / Mexico
51
51
51
51
75
100
100
100
1007
100
1007
Supplyframe d.o.o, Beograd-Vracar, Belgrade / Serbia
Yunex Traffic d.o.o. Beograd, Belgrade / Serbia
Acuson Slovakia s. r. o., Bratislava / Slovakia
OEZ Slovakia, spol. s r.o., Bratislava / Slovakia
SAT Systémy automatizacnej techniky spol. s.r.o., Bratislava / Slovakia
Siemens Mobility d.o.o. Cerovac, Kragujevac / Serbia
Siemens Healthcare s.r.o., Bratislava / Slovakia
Siemens Healthcare d.o.o. Beograd, Belgrade / Serbia
Varian Medical Systems Arabia Commercial Limited, Riyadh / Saudi Arabia
100
100
100
1007
100
100
100
100
100
100
100
_3
Siemens Healthcare Limited, Riyadh / Saudi Arabia
Siemens Ltd., Riyadh / Saudi Arabia
Siemens Mobility Saudi Ltd, Al Khobar / Saudi Arabia
Siemens d.o.o. Beograd, Belgrade / Serbia
100
100
Siemens s.r.o., Bratislava / Slovakia
Siemens Healthcare Employee Share Ownership Trust, Midrand / South Africa
Siemens Healthcare Proprietary Limited, Halfway House / South Africa
SIEMENS INDUSTRY SOFTWARE SA (PTY) LTD, Centurion / South Africa
Siemens Mobility (Pty) Ltd, Randburg / South Africa
Siemens Proprietary Limited, Midrand / South Africa
Varian Medical Systems Africa (Pty) Ltd., Midrand / South Africa
Aimsun S.L., Barcelona / Spain
Fábrica Electrotécnica Josa, S.A.U., Tres Cantos / Spain
SIEMENS HEALTHCARE, S.L.U., Getafe / Spain
Siemens Holding S.L., Madrid / Spain
Siemens Industry Software S.L., Tres Cantos / Spain
Siemens Logistics S.L. Unipersonal, Madrid / Spain
SIEMENS MOBILITY, S.L.U., Tres Cantos / Spain
Siemens Rail Automation S.A.U., Tres Cantos / Spain
Siemens Renting S.A., Madrid / Spain
Siemens S.A., Madrid / Spain
S'Mobility Employee Stock Ownership Trust, Johannesburg / South Africa
Siemens Employee Share Ownership Trust, Johannesburg / South Africa
Siemens Mobility, s.r.o., Bratislava / Slovakia
KACO NEW ENERGY AFRICA (PTY) LTD, Midrand / South Africa
Linacre Investments (Pty) Ltd., Kenilworth/South Africa
Consolidated Financial Statements
SIPRIN s.r.o., Bratislava Slovakia
Yunex, s.r.o., Bratislava / Slovakia
Siemens Healthcare d.o.o., Ljubljana / Slovenia
Siemens Mobility d.o.o., Ljubljana / Slovenia
Siemens Trgovsko in storitveno podjetje, d.o.o., Ljubljana / Slovenia
60
100
100
100
100
100
100
100
100
50
Crabtree South Africa Pty. Limited, Midrand / South Africa
100
100
100
Siemens Healthcare S.A., Caracas / Venezuela, Bolivarian Republic of
Siemens S.A., Montevideo / Uruguay
Varian Medical Systems Africa Holdings, Inc., Wilmington, DE / United States
Varian Medical Systems Canada Holdings, Inc., Wilmington, DE / United States
Varian Medical Systems India Private Limited, Wilmington, DE / United States
Varian Medical Systems International Holdings, Inc., Wilmington, DE / United States
Varian Medical Systems Latin America, Ltd., Wilmington, DE / United States
Varian Medical Systems Netherlands Holdings, Inc., Wilmington, DE / United States
Varian Medical Systems Pacific, Inc., Wilmington, DE / United States
Varian Medical Systems, Inc., Wilmington, DE / United States
Yunex LLC, Wilmington, DE / United States
Varian BioSynergy, Inc., Wilmington, DE / United States
TimeSeries US, Inc., Centennial, CO / United States
Supplyframe, Inc., Pasadena, CA / United States
SMI Holding LLC, Wilmington, DE / United States
Siemens USA Holdings, Inc., Wilmington, DE / United States
Siemens Process Systems Engineering Inc., Wilmington, DE / United States
Siemens Public, Inc., Iselin, NJ / United States
Siemens Mobility, Inc, Wilmington, DE / United States
Siemens Medical Solutions USA, Inc., Wilmington, DE / United States
Siemens Logistics LLC, Wilmington, DE / United States
Siemens Industry, Inc., Wilmington, DE / United States
Siemens Government Technologies, Inc., Wilmington, DE / United States
Siemens Healthcare Diagnostics Inc., Los Angeles, CA / United States
Siemens Healthcare Laboratory, LLC, Wilmington, DE / United States
Siemens Healthineers Holdings, LLC, Wilmington, DE / United States
Siemens Industry Software Inc., Wilmington, DE / United States
Siemens Financial Services, Inc., Wilmington, DE / United States
Siemens Financial, Inc., Wilmington, DE / United States
Siemens Rail Automation, C.A., Caracas / Venezuela, Bolivarian Republic of
Siemens Electrical, LLC, Wilmington, DE / United States
Dade Behring Hong Kong Holdings Corporation, Tortola Virgin Islands, British
63
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
501
100
51
100
J2 Innovations, Inc., Los Angeles, CA / United States
Mannesmann Corporation, New York, NY / United States
Mansfield Insurance Company, Burlington, VT / United States
Next47 Inc., Wilmington, DE / United States
Executive Consulting Group, LLC, Wilmington, DE / United States
Enlighted, Inc., Wilmington, DE / United States
eMeter Corporation, Wilmington, DE / United States
ECG TopCo Holdings, LLC, Wilmington, DE / United States
Consolidated Financial Statements
53
100
80
100
Dedicated 21maging LLC, Wilmington, DE / United States
ECG Acquisition, Inc., Wilmington, DE / United States
D3 Oncology Inc., Wilmington, DE / United States
Corindus, Inc., Wilmington, DE / United States
CD-adapco Battery Design LLC, Dover, DE / United States
55
Next47 Mid-Tier GP 2018, L.P., Wilmington, DE / United States
Next47 Mid-Tier GP 2019, L.P., Wilmington, DE / United States
Next47 Mid-Tier GP 2020, L.P., Wilmington, DE / United States
Next47 Mid-Tier GP 2021, L.P., Wilmington, DE / United States
Next47 Mid-Tier GP 2022, L.P., Wilmington, DE / United States
Next47 TTGP, L.L.C., Wilmington, DE / United States
Omnetric Corp., Wilmington, DE / United States
P.E.T.NET Houston, LLC, Austin, TX / United States
Page Mill Corporation, Boston, MA / United States
PETNET Indiana, LLC, Indianapolis, IN / United States
PETNET Solutions Cleveland, LLC, Wilmington, DE / United States
PETNET Solutions, Inc., Knoxville, TN / United States
PolyDyne Software Inc., Austin, TX / United States
Rail-Term Corp., Plymouth, MI / United States
100
100
100
100
100
100
100
Telecomunicación, Electrónica y Conmutación S.A., Madrid / Spain
100
100
100
100
100
73
Siemens Corporation, Wilmington, DE / United States
Siemens Capital Company LLC, Wilmington, DE / United States
100
Varian Medical Systems Iberica SL, Alcobendas / Spain
100
100
Next47 Fund 2021, L.P., Palo Alto, CA / United Kingdom
Next47 Fund 2022, L.P., Palo Alto, CA / United Kingdom
Project Ventures Rail Investments | Limited, Frimley, Surrey / United Kingdom
Samacsys Limited, London / United Kingdom
SBS Pension Funding (Scotland) Limited Partnership, Edinburgh / United Kingdom
Siemens Financial Services Holdings Ltd., Stoke Poges, Buckinghamshire / United Kingdom
Siemens Financial Services Ltd., Stoke Poges, Buckinghamshire / United Kingdom
Siemens Healthcare Diagnostics Ltd, Frimley, Surrey / United Kingdom
Siemens Healthcare Diagnostics Manufacturing Ltd, Frimley, Surrey / United Kingdom
Siemens Healthcare Diagnostics Products Ltd, Frimley, Surrey / United Kingdom
492
492
100
492
1007
100
100
100
100
100
Data Sheet Archive Limited, London / United Kingdom
Electrium Sales Limited, Frimley, Surrey / United Kingdom
Flomerics Group Limited, Frimley, Surrey / United Kingdom
GYM Renewables Limited, Frimley, Surrey / United Kingdom
Mendix Technology Limited, Frimley, Surrey / United Kingdom
Mentor Graphics (UK) Limited, Frimley, Surrey / United Kingdom
MRX Technologies Limited, Frimley, Surrey / United Kingdom
Next47 Fund 2018, L.P., Palo Alto, CA / United Kingdom
Next47 Fund 2019, L.P., Palo Alto, CA / United Kingdom
Next47 Fund 2020, L.P., Palo Alto, CA / United Kingdom
1007
ByteToken, Ltd, Edinburgh / United Kingdom
Acuson United Kingdom Ltd., Frimley, Surrey / United Kingdom
100
PSE Software and Consulting L.L.C., Abu Dhabi / United Arab Emirates
Samateq FZ LLC, UAE, Abu Dhabi / United Arab Emirates
SD (Middle East) LLC, Dubai / United Arab Emirates
Siemens Capital Middle East Ltd, Abu Dhabi / United Arab Emirates
Siemens Healthcare FZ LLC, Dubai / United Arab Emirates
492
100
492
100
100
51
155
Consolidated Financial Statements
Siemens Healthcare L.L.C., Dubai / United Arab Emirates
Siemens Industrial LLC, Masdar City / United Arab Emirates
Siemens Middle East Limited, Masdar City / United Arab Emirates
SIEMENS MOBILITY LLC, Dubai United Arab Emirates
AIMSUN LIMITED, London / United Kingdom
100
100
100
100
Siemens Logistics Limited, Frimley, Surrey / United Kingdom
100
Siemens Mobility Limited, London / United Kingdom
100
Siemens Pension Funding (General) Limited, Frimley, Surrey / United Kingdom
100
Siemens plc, Frimley, Surrey / United Kingdom
Siemens Rail Automation Limited, London / United Kingdom
Siemens Pension Funding Limited, Frimley, Surrey / United Kingdom
Siemens Process Systems Engineering Limited, Frimley, Surrey / United Kingdom
Siemens Rail Systems Project Holdings Limited, London / United Kingdom
The Preactor Group Limited, Frimley, Surrey / United Kingdom
100
100
Siemens Industry Software Limited, Frimley, Surrey / United Kingdom
100
Siemens Industry Software Computational Dynamics Limited, Frimley, Surrey / United Kingdom
100
100
100
100
100
100
100
100
100
573
100
100
100
100
Siemens Healthcare Limited, Frimley, Surrey / United Kingdom
100
Siemens Holdings plc, Frimley, Surrey / United Kingdom
100
100
100% foreign owned subsidiary "Siemens Ukraine", Kiev / Ukraine
SIEMENS HEALTHCARE LIMITED LIABILITY COMPANY, Kiev / Ukraine
YUNEX ULAŞIM TEKNOLOJILERI ANONIM ŞIRKETI, Kartal/Istanbul / Turkey
100
100
100
100
Siemens AB, Solna / Sweden
Siemens Financial Services AB, Solna / Sweden
Siemens Healthcare AB, Solna / Sweden
Siemens Industry Software AB, Solna / Sweden
100
100
100
100
Siemens Mobility AB, Solna / Sweden
100
BlueWatt engineering Sàrl, Lausanne / Switzerland
100
Siemens Healthcare AG, Zurich / Switzerland
100
100
_3
_3
_3
_3
90
100
75
70
100
100
100
100
100
100
100
100
Siemens Industry Software GmbH, Zurich / Switzerland
Siemens Logistics AG, Zurich / Switzerland
Siemens Mobility AG, Wallisellen / Switzerland
100
100
100
Siemens AG - Siemens Sanayi ve Ticaret AS Velaro Joint Venture, Kartal - Istanbul / Turkey
100
Siemens Finansal Kiralama A.S., Istanbul / Turkey
100
Siemens Healthcare Saglik Anonim Sirketi, Istanbul / Turkey
100
Siemens Mobility Ulasim Sistemleri Anonim Sirketi, Istanbul / Turkey
100
Siemens Sanayi ve Ticaret Anonim Sirketi, Istanbul / Turkey
100
V.O.S.S. Varinak Onkoloji Sistemleri Satis Ve Servis Anonim Sirketi, Istanbul / Turkey
100
KACO New Enerji Limited Sirketi, Pendik / Turkey
Siemens S.A., Tunis / Tunisia
Siemens Mobility S.A.R.L., Tunis / Tunisia
100
Siemens Schweiz AG, Zurich / Switzerland
Varian Medical Systems Imaging Laboratory G.m.b.H., Dättwil / Switzerland
Varian Medical Systems International AG, Steinhausen / Switzerland
Yunex AG, Zurich / Switzerland
Siemens Tanzania Ltd. i.L., Dar es Salaam Tanzania, United Republic of
100
100
100
100
100
100
100
100
100
100
Mentor Graphics Tunisia SARL, Tunis / Tunisia
100
Siemens, S.A. de C.V., Mexico City / Mexico
100
100
000 Siemens Industry Software, Moscow / Russian Federation
Siemens Finance and Leasing LLC, Vladivostok / Russian Federation
100
Siemens Mobility LLC, Moscow / Russian Federation
Varian Medical Systems (RUS) Limited Liability Company, Moscow / Russian Federation
Arabia Electric Ltd. (Equipment), Jeddah / Saudi Arabia
100
51
100
100
75
100
100
100
100
000 Siemens, Moscow / Russian Federation
100
000 Legion II, Moscow / Russian Federation
Acuson RUS Limited Liability Company, Moscow / Russian Federation
Siemens Industry Software Sp. z o.o., Warsaw / Poland
Siemens Mobility Sp. z o.o., Warsaw / Poland
Siemens Sp. z o.o., Warsaw / Poland
Varian Medical Systems Poland Sp. z o.o., Warsaw / Poland
YUNEX Sp. z o.o., Warsaw / Poland
SIEMENS HEALTHCARE, UNIPESSOAL, LDA, Amadora / Portugal
Siemens Logistics, Unipessoal Lda, Lisbon Portugal
SIEMENS MOBILITY, UNIPESSOAL LDA, Amadora / Portugal
Siemens S.A., Amadora / Portugal
YUTRAFFIC, UNIPESSOAL LDA, Amadora / Portugal
Siemens W.L.L., Doha Qatar
J2 Innovative Concepts Europe SRL, Bucharest / Romania
Siemens Healthcare S.R.L., Bucharest / Romania
Siemens Industry Software S.R.L., Brasov / Romania
Siemens Mobility S.R.L., Bucharest / Romania
Siemens S.R.L., Bucharest / Romania
SIMEA SIBIU S.R.L., Sibiu / Romania
Varinak Europe SRL (Romania), Pantelimon / Romania
LIMITED LIABILITY COMPANY SIEMENS ELEKTROPRIVOD, St. Petersburg / Russian Federation
Siemens Healthcare Sp. z o.o., Warsaw / Poland
100
100
Siemens Technology and Services Private Limited, Navi Mumbai / India
Siemens Rail Automation Pvt. Ltd., Navi Mumbai / India
Siemens Logistics India Private Limited, Navi Mumbai / India
Siemens Limited, Mumbai / India
Siemens Industry Software (India) Private Limited, New Delhi / India
SIEMENS HEALTHINEERS INDIA MANUFACTURING PRIVATE LIMITED, Mumbai / India
Siemens Healthineers India LLP, Bangalore / India
Siemens Healthcare Private Limited, Mumbai / India
Siemens Financial Services Private Limited, Mumbai / India
Siemens Factoring Private Limited, Navi Mumbai / India
100
Preactor Software India Private Limited, Bangalore / India
PETNET Radiopharmaceutical Solutions Pvt. Ltd., Mumbai / India
Mentor Graphics (Sales and Services) Private Limited, New Delhi / India
Mentor Graphics (India) Private Limited, New Delhi / India
Varian Medical Systems International (India) Private Limited, Mumbai / India
100
P.T. Siemens Indonesia, Jakarta / Indonesia
PT Siemens Mobility Indonesia, Jakarta / Indonesia
100
100
100
100
100
Acuson Korea Ltd., Seongnam-si / Korea, Republic of
Varian Medical Systems K.K., Tokyo / Japan
Siemens PLM Software Computational Dynamics K.K., Yokohama / Japan
Siemens K.K., Tokyo / Japan
Siemens Healthcare K.K., Tokyo / Japan
Siemens Healthcare Diagnostics K.K., Tokyo / Japan
Siemens Electronic Design Automation Japan K.K., Tokyo / Japan
OneSpin Solutions Japan K.K., Yokohama / Japan
Avatar Integrated Systems Kabushiki Kaisha, Yokohama / Japan
Acrorad Co., Ltd., Okinawa / Japan
PT Siemens Healthineers Indonesia, Jakarta / Indonesia
Siemens Finance Sp. z o.o., Warsaw / Poland
Siemens Healthcare (Private) Limited, Lahore / Pakistan
Siemens Pakistan Engineering Co. Ltd., Karachi / Pakistan
Mentor Graphics Polska Sp. z o.o., Katowice / Poland
Siemens Digital Logistics Sp. z o.o., Wroclaw / Poland
Mentor Graphics Pakistan Development (Private) Limited, Lahore / Pakistan
Siemens S.A., Santiago de Chile / Chile
Siemens Mobility SpA, Santiago de Chile / Chile
Siemens Healthcare Equipos Médicos Sociedad por Acciones, Santiago de Chile / Chile
Nimbic Chile SpA, Las Condes / Chile
Talent Choice Investment Limited, George Town / Cayman Islands
Monarch Capital, Limited, Grand Cayman Cayman Islands
Varian Medical Systems Canada, Inc., Ottawa / Canada
TimeSeries Canada Inc., Montreal / Canada
SIEMENS MOBILITY LIMITED, Oakville / Canada
Siemens Logistics Ltd., Oakville / Canada
Siemens Industry Software ULC, Vancouver / Canada
Siemens Healthcare Limited, Oakville / Canada
Siemens Financial Ltd., Oakville / Canada
Siemens Canada Limited, Oakville / Canada
RailTerm Systems Inc., Dorval / Canada
J. Restrepo Equiphos S.A.S, Bogotá / Colombia
RAIL-TERM INC., Mississauga / Canada
Siemens Healthcare S.A.S., Tenjo / Colombia
YUNEX S.A.S., Bogotá / Colombia
Siemens Mobility S. de R.L. de C.V., Mexico City / Mexico
Siemens Logistics S. de R.L. de C.V., Mexico City / Mexico
Siemens Inmobiliaria S.A. de C.V., Mexico City / Mexico
Siemens Industry Software, S.A. de C.V., Mexico City / Mexico
Siemens Healthcare Diagnostics, S. de R.L. de C.V., Mexico City / Mexico
Indústria de Trabajos Eléctricos S.A. de C.V., Ciudad Juárez / Mexico
Grupo Siemens S.A. de C.V., Mexico City / Mexico
Siemens S.A., Guatemala Guatemala
Siemens S.A., Antiguo Cuscatlán / El Salvador
Siemens Healthcare, Sociedad Anonima, Antiguo Cuscatlán / El Salvador
Siemens-Healthcare Cia. Ltda., Quito / Ecuador
Siemens S.A., Quito Ecuador
Siemens Mobility, S.R.L., Santo Domingo / Dominican Republic
Siemens S.A., San José / Costa Rica
Siemens Healthcare Diagnostics S.A., San José / Costa Rica
Siemens S.A., Tenjo / Colombia
Mentor Graphics (Canada) ULC, Vancouver / Canada
EPOCAL INC., Toronto / Canada
10125032 CANADA INC, Mississauga / Canada
10262595 Canada Inc., Mississauga / Canada
12241510 CANADA INC., Mississauga / Canada
Bytemark Canada Inc., Saint John / Canada
Siemens Industrial S.A., Buenos Aires / Argentina
Siemens Healthcare S.A., Buenos Aires / Argentina
100
100
100
100
Americas (124 companies)
Yunex Limited, Poole, Dorset / United Kingdom
Varian Medical Systems UK Limited, Crawley, West Sussex / United Kingdom
Varian Medical Systems UK Holdings Limited, Crawley, West Sussex / United Kingdom
UltraSoc Technologies Limited, Frimley, Surrey / United Kingdom
100
Consolidated Financial Statements
Siemens Mobility AS, Oslo / Norway
Siemens Industrial LLC, Muscat / Oman
Siemens IT Services S.A., Buenos Aires Argentina
Siemens Mobility S.A., Munro / Argentina
Iriel Indústria e Comercio de Sistemas Eléctricos Ltda., Canoas / Brazil
Siemens Healthcare Diagnósticos Ltda., São Paulo / Brazil
Siemens Industry Software Ltda., São Caetano do Sul / Brazil
Siemens Infraestrutura e Indústria Ltda., São Paulo / Brazil
62
52
100
100
100
100
100
Flomerics India Private Limited, Mumbai / India
100
100
100
100
100
Varian Medical Systems Brasil Ltda., São Paulo / Brazil
Siemens Participações Ltda., São Paulo / Brazil
Siemens Mobility Soluções de Mobilidade Ltda., São Paulo/ Brazil
100
Enlighted Energy Systems Pvt Ltd, Chennai / India
Cancer Treatment Services Hyderabad Private Limited, Hyderabad / India
C&S Electric Limited, New Delhi / India
100
100
1007
100
100
100
Consolidated Financial Statements
Siemens Finance and Leasing Ltd., Beijing / China
Siemens Factory Automation Engineering Ltd., Beijing / China
Siemens Electrical Drives Ltd., Tianjin / China
Siemens Electrical Drives (Shanghai) Ltd., Shanghai / China
Siemens Electrical Apparatus Ltd., Suzhou, Suzhou / China
Siemens Commercial Factoring Ltd., Shanghai / China
Siemens Business Information Consulting Co., Ltd, Beijing / China
Siemens Circuit Protection Systems Ltd., Shanghai, Shanghai / China
Siemens Building Technologies (Tianjin) Ltd., Tianjin / China
100
Scion Medical Technologies (Shanghai) Ltd., Shanghai / China
100
100
75
100
70
100
100
100
100
100
1007
100
100
100
100
100
100
100
Mentor Graphics (Shanghai) Electronic Technology Co., Ltd., Shanghai / China
Hangzhou Alicon Pharm Sci & Tec Co., Ltd., Hangzhou / China
Green Matrix (Suzhou) Network Technology Co., Ltd., Suzhou / China
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
1007
100
100
54
Beijing Siemens Cerberus Electronics Ltd., Beijing / China
Acuson (Shanghai) Co., Ltd., Shanghai / China
Siemens Industrial Limited, Dhaka / Bangladesh
Siemens Healthcare Ltd., Dhaka / Bangladesh
Varian Medical Systems Australasia Pty Ltd., Belrose / Australia
YUNEX PTY. LTD., Sydney / Australia
SIEMENS RAIL AUTOMATION PTY. LTD., Bayswater / Australia
Siemens Mobility Pty Ltd, Bayswater / Australia
100
Siemens Ltd., Bayswater / Australia
J.R.B. Engineering Pty Ltd, Bayswater / Australia
Siemens Healthcare Pty. Ltd., Melbourne / Australia
Exemplar Health (NBH) Holdings 2 Pty Limited, Bayswater / Australia
Exemplar Health (NBH) Trust 2, Bayswater / Australia
Exemplar Health (NBH) 2 Pty Limited, Bayswater / Australia
ALDRIDGE TRAFFIC CONTROLLERS PTY. LTD, Sydney / Australia
Australia Hospital Holding Pty Limited, Bayswater / Australia
Aimsun Pty Ltd, Sydney / Australia
Asia, Australia (154 companies)
54
Siemens Industry Software Pty Ltd, Bayswater / Australia
100
100
85
Siemens Wiring Accessories Shandong Ltd., Zibo / China
Siemens Venture Capital Co., Ltd., Beijing / China
Siemens Technology Development Co., Ltd. of Beijing, Beijing / China
Siemens Switchgear Ltd., Shanghai, Shanghai / China
Siemens Standard Motors Ltd., Yizheng / China
Siemens Signalling Co., Ltd., Xi'an / China
55
100
100
100
100
80
100
100
100
Siemens X-Ray Vacuum Technology Ltd., Wuxi, Wuxi / China
51
Suzhou Ling Dong Zhen GE Network Technology Co., Ltd., Suzhou / China
Varian Medical Systems Trading (Beijing) Co., Ltd., Beijing / China
Bytemark Technology Solutions India Pvt Ltd, Bangalore / India
Bytemark India LLP, Bangalore / India
Artmed Healthcare Private Limited, Hyderabad / India
American Institute of Pathology and Laboratory Sciences Private Limited, Hyderabad / India
AIS Design Automation Private Limited, Bangalore / India
YUTRAFFIC LTD., Hong Kong / Hong Kong
Vertice Investment Limited, Hong Kong / Hong Kong
Supply Frame (Hong Kong) Limited, Hong Kong / Hong Kong
Siemens Mobility Limited, Hong Kong / Hong Kong
Siemens Logistics Limited, Hong Kong / Hong Kong
Siemens Limited, Hong Kong / Hong Kong
Siemens Industry Software Limited, Hong Kong / Hong Kong
Siemens Healthcare Limited, Hong Kong / Hong Kong
Scion Medical Limited, Hong Kong / Hong Kong
Yutraffic Technologies (Beijing) Co., Ltd., Beijing / China
Varian Medical Systems China Co., Ltd., Beijing / China
85
51
100
Siemens Ltd., China, Beijing / China
Siemens Logistics Automation Systems (Beijing) Co., Ltd, Beijing / China
Siemens Investment Consulting Co., Ltd., Beijing / China
Siemens International Trading Ltd., Shanghai, Shanghai / China
Siemens Intelligent Signalling Technologies Co. Ltd., Foshan / China
Siemens Industry Software (Shanghai) Co., Ltd., Shanghai / China
Siemens Industry Software (Beijing) Co., Ltd., Beijing / China
100
Siemens Industrial Automation Products Ltd., Chengdu, Chengdu / China
Siemens Healthcare Diagnostics Manufacturing Ltd., Shanghai, Shanghai / China
Siemens Healthineers Diagnostics (Shanghai) Co., Ltd., Shanghai / China
Siemens Healthineers Digital Technology (Shanghai) Co., Ltd., Shanghai / China
Siemens Healthineers Ltd., Shanghai / China
Siemens Financial Services Ltd., Beijing / China
100
100
100
100
Siemens Manufacturing and Engineering Centre Ltd., Shanghai / China
Siemens Medium Voltage Switching Technologies (Wuxi) Ltd., Wuxi / China
Siemens Mobility Electrification Equipment (Shanghai) Co., Ltd., Shanghai / China
Siemens Mobility Equipment (China) Co., Ltd, Shanghai Pilot Free Trade Zone / China
100
100
100
60
100
100
100
100
100
Siemens Shenzhen Magnetic Resonance Ltd., Shenzhen / China
Siemens Shanghai Medical Equipment Ltd., Shanghai / China
Siemens Sensors & Communication Ltd., Dalian / China
Siemens Power Automation Ltd., Nanjing / China
Siemens Numerical Control Ltd., Nanjing, Nanjing / China
Siemens Mobility Technologies (Beijing) Co., Ltd, Beijing / China
Siemens Mobility Rail Equipment (Tianjin) Ltd., Tianjin / China
100
Mentor Graphics (Scandinavia) AB, Solna / Sweden
100
29
48
Shanghai Electric Power Generation Equipment Co., Ltd., Shanghai / China
Siemens Traction Equipment Ltd., Zhuzhou, Zhuzhou / China
DBEST (Beijing) Facility Technology Management Co., Ltd., Beijing / China
Guangzhou Suikai Smart Energy Co., Ltd., Guangzhou / China
PHM Technology Pty Ltd, Melbourne / Australia
Forest Wind Investment Company (1) Pty Limited, Sydney / Australia
Forest Wind Holdings Pty Limited, Sydney / Australia
Exemplar Health (NBH) Partnership, Melbourne / Australia
Asia, Australia (22 companies)
Wi-Tronix Group Inc., Dover, DE / United States
USARAD Holdings, Inc., Fort Lauderdale, FL / United States
Software.co Technologies, Inc., Wilmington, DE / United States
Rether networks, Inc., Berkeley, CA / United States
PTG Holdings Company LLC, Dover, DE / United States
Panda Stonewall Intermediate Holdings I, LLC, Wilmington, DE / United States
PhSiTh LLC, New Castle, DE / United States
MSS Energy Holdings, LLC, New York, NY / United States
Hickory Run Holdings, LLC, Wilmington, DE / United States
Fluence Energy, LLC, Wilmington, DE / United States
48
CEF-L Holding, LLC, Wilmington, DE / United States
DeepHow Corp., Princeton, NJ / United States
22
33
378
50
50
50
30
308
24
308
26
33
37
20
206
43
238
27
Consolidated Financial Statements
2013
25
Union Temporal Recaudo y Tecnologia, Santiago de Cali / Colombia
Akuo Energy Dominicana, S.R.L, Santo Domingo / Dominican Republic
DELARO, S.A.P.I. DE C.V., Mexico City / Mexico
MPC Serviços Energéticos 1A S.A, Navegantes / Brazil
Americas (21 companies)
Galloper Wind Farm Holding Company Limited, Swindon, Wiltshire / United Kingdom
Plessey Holdings Ltd., Frimley, Surrey / United Kingdom
Five Estuaries Offshore Wind Farm Limited, Swindon, Wiltshire / United Kingdom
Cross London Trains Holdco 2 Limited, London / United Kingdom
Awel Y Môr Offshore Wind Farm Limited, Swindon, Wiltshire / United Kingdom
Interessengemeinschaft TUS, Volketswil / Switzerland
Certas AG, Zurich / Switzerland
Stavro Holding | AB, Stockholm / Sweden
WS Tech Energy Global S.L., Viladecans / Spain
Nertus Mantenimiento Ferroviario y Servicios S.A., Madrid / Spain
Impilo Consortium (Pty.) Ltd., La Lucia / South Africa
OOO Transconverter, Moscow / Russian Federation
Rousch (Pakistan) Power Ltd., Islamabad / Pakistan
208
206, 13
50
50
Brasol Participações e Empreendimentos S.A., Brazil, São Paulo / Brazil
MPC Serviços Energéticos 1B S.A., Cabo de Santo Agostinho / Brazil
UTE GNA II GERAÇÃO DE ENERGIA S.A., Rio de Janeiro / Brazil
GNA 1 Geração de Energia S.A., São João da Barra / Brazil
26
Consolidated Financial Statements
58
20
22
974
508
25
25
33
106
5013
50
40
49
514
31
358
Micropower Comerc Energia S.A., São Paulo / Brazil
35
40
Smart Metering Solutions (Changsha) Co. Ltd., Changsha / China
100
100
100
100
100
100
100
100
100
1007
100
51
100
100
100
100
100
100
100
100
100
_3
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
99
100
96
100
49
SINGAPORE AQUACULTURE TECHNOLOGIES (SAT) PTE LTD, Singapore / Singapore
Power Automation Pte. Ltd., Singapore / Singapore
BE C&I Solutions Holding Pte. Ltd., Singapore / Singapore
P.T. Jawa Power, Jakarta / Indonesia
Pune IT City Metro Rail Limited, Pune / India
Orange Sironj Wind Power Private Limited, New Delhi / India
HEALTH CONTINUUM PRIVATE LIMITED, Bangalore / India
Bangalore International Airport Ltd., Bangalore / India
Zhi Dao Railway Equipment Ltd., Taiyuan / China
Zhenjiang Siemens Busbar Trunking Systems Co. Ltd., Yangzhong / China
Xi'An X-Ray Target Ltd., Xi'an / China
Tieke Intelligent Signalling Railway Equipment Co., Ltd., Tianjin / China
50
49
50
TianJin ZongXi Traction Motor Ltd., Tianjin / China
438
50
50
20
100
100
100
100
100
100
100
1007
ZeeEnergie Management B.V., Eemshaven / Netherlands
56
59
24
49
24
50
26
46
308
59
100
Ural Locomotives Holding Besloten Vennootschap, The Hague / Netherlands
ZeeEnergie C.V., Amsterdam / Netherlands
50
100
100
100
100
502
100
100
100
100
100
100
100
1007
100
100
100
100
100
100
100
Siemens Limited, Bangkok Thailand
BELLIS GmbH, Braunschweig
ATS Projekt Grevenbroich GmbH, Schüttorf
Alchemist Accelerator Europe Fund I GmbH & Co. KG, Grünwald
Germany (24 companies)
Associated companies and joint ventures
Varian Medical Systems Vietnam Co Ltd, Ho Chi Minh City / Viet Nam
100
100
100
100
100
100
100
Siemens Ltd., Ho Chi Minh City / Viet Nam
Siemens Healthcare Limited, Ho Chi Minh City I Viet Nam
Siemens Mobility Limited, Bangkok/Thailand
Siemens Logistics Automation Systems Ltd., Bangkok / Thailand
100
418
100
100
Mentor Graphics Asia Pte Ltd, Singapore / Singapore
Aimsun Pte Ltd, Singapore / Singapore
Acuson Singapore Pte. Ltd., Singapore / Singapore
Varian Medical Systems Philippines, Inc., City of Pasig / Philippines
Siemens, Inc., Manila / Philippines
Siemens Healthcare Inc., Manila / Philippines
Siemens Healthcare Limited, Auckland New Zealand
Siemens (N.Z.) Limited, Auckland / New Zealand
Varian Medical Systems Malaysia Sdn Bhd, Kuala Lumpur / Malaysia
Siemens Mobility Sdn. Bhd., Kuala Lumpur / Malaysia
Siemens Malaysia Sdn. Bhd., Petaling Jaya Malaysia
Siemens Industry Software Sdn. Bhd., George Town, Penang / Malaysia
Siemens Healthcare Sdn. Bhd., Petaling Jaya / Malaysia
Varian Medical Systems Korea, Inc., Seoul / Korea, Republic of
Dresser-Rand Asia Pacific Sdn. Bhd., Kuala Lumpur / Malaysia
Siemens Process Systems Engineering Limited, Daejeon / Korea, Republic of
Siemens Mobility Ltd., Seoul / Korea, Republic of
Siemens Ltd. Seoul, Seoul / Korea, Republic of
Siemens Healthcare Pte. Ltd., Singapore / Singapore
100
Siemens Industry Software Pte. Ltd., Singapore / Singapore
Siemens Mobility Pte. Ltd., Singapore / Singapore
100
100
100
100
100
100
100
100
100
100
Siemens Healthcare Limited, Bangkok / Thailand
Varian Medical Systems Taiwan Co., Ltd., Taipei / Taiwan, Province of China
Siemens Industry Software (TW) Co., Ltd., Taipei / Taiwan, Province of China
Siemens Limited, Taipei / Taiwan, Province of China
Fang Chi Health Management Co., Ltd, Taipei / Taiwan, Province of China
Hong Tai Health Management Co. Ltd., Taipei / Taiwan, Province of China
New Century Technology Co. Ltd., Taipei / Taiwan, Province of China
Siemens Healthcare Limited, Taipei / Taiwan, Province of China
Asiri A O I Cancer Centre (Private) Limited, Colombo/Sri Lanka
YUNEX PTE. LTD., Singapore / Singapore
Siemens Pte. Ltd., Singapore / Singapore
Siemens Logistics PTE. LTD., Singapore / Singapore
258
49
BentoNet GmbH, Baden-Baden
50
498
46
35
338
33
498
49
238
258
508
Consolidated Financial Statements
Infraspeed Maintainance B.V., Dordrecht / Netherlands
Infraspeed EPC Consortium V.O.F., Zoetermeer / Netherlands
Buitengaats Management B.V., Eemshaven / Netherlands
Buitengaats C.V., Amsterdam / Netherlands
Energie Electrique de Tahaddart S.A., Tangier / Morocco
20
EGM Holding Limited, Marsaskala / Malta
458
448
508, 13
208
206,13
20
33
49
498
498
428, 13
33
574,8
48
25
238
674, 8, 12, 13
478
44
40
Temir Zhol Electrification LLP, Astana / Kazakhstan
KACO New Energy Co., Amman / Jordan
Transfima S.p.A., Milan / Italy
LIB Verwaltungs-GmbH, Leipzig
57
57
338
INPRO Innovationsgesellschaft für fortgeschrittene Produktionssysteme in der Fahrzeugindustrie mbH, Berlin
50
IFTEC GmbH & Co. KG, Leipzig
50
498
498
30
GuD Herne GmbH, Essen
DKS Dienstleistungsgesellschaft f. Kommunikationsanlagen des Stadt- und Regionalverkehrs mbH, Cologne
FEAG Fertigungscenter für Elektrische Anlagen GmbH, Erlangen
Curagita Holding GmbH, Heidelberg
50
50
Caterva GmbH, Pullach i. Isartal
Ludwig Bölkow Campus GmbH, Taufkirchen
MetisMotion GmbH, Munich
MeVis BreastCare GmbH & Co. KG, Bremen
MeVis BreastCare Verwaltungsgesellschaft mbH, Bremen
Nordlicht Holding GmbH & Co. KG, Frankfurt
Transfima GEIE, Milan / Italy
Reindeer Energy Ltd., Bnei Berak / Israel
Parallel Graphics Ltd., Dublin Ireland
EVIOP-TEMPO S.A. Electrical Equipment Manufacturers, Vassiliko / Greece
TRIXELL SAS, Moirans / France
BioMensio Oy, Tampere / Finland
Siemens Aarsleff Konsortium I/S, Ballerup / Denmark
Meomed s.r.o., Prerov / Czech Republic
Locomotive Workshop Rotterdam B.V., Zoetermeer / Netherlands
Aspern Smart City Research GmbH & Co KG, Vienna / Austria
Europe, Commonwealth of Independent States (C.I.S.), Africa, Middle East (without Germany) (37 companies)
Armpower CJSC, Yerevan / Armenia
WUN H2 GmbH, Wunsiedel
Veja Mate Offshore Project GmbH, Oststeinbek
Valeo Siemens eAutomotive GmbH, Erlangen
Sternico GmbH, Wendeburg
Siemens EuroCash, Munich
Siemens Energy AG, Munich
Nordlicht Holding Verwaltung GmbH, Frankfurt
Aspern Smart City Research GmbH, Vienna / Austria
100
100
90
Siemens Industry Software Ltd., Seoul / Korea, Republic of
Consolidated Financial Statements
Siemens Electronic Design Automation (Korea) LLC, Seoul / Korea, Republic of
Siemens Healthineers Ltd., Seoul / Korea, Republic of
100
55
70
Independent Auditor's Report (Group)
2
Auditor's response: Our audit procedures in relation to the preliminary purchase price allocation included the assessment of the
consideration transferred by Siemens and an evaluation of the methodology applied by the external appraiser engaged by management
with respect to the identification and valuation of the assets acquired and liabilities assumed in accordance with the requirements of IFRS
The accounting for the acquisition, including financing and hedging of foreign currency risks, was a key audit matter due to the estimation
uncertainties and judgments involved in the preliminary purchase price allocation (particularly regarding the measurement of acquired
intangible assets) and due to the overall significant impact on the assets, liabilities, financial position and financial performance of the
Group, the complexity of the transaction and the associated significant risk of material misstatement.
Reasons why the matter was determined to be a key audit matter: The acquisition of Varian Medical Systems, Inc., USA (Varian), was
completed on April 15, 2021. Since then, Siemens AG indirectly holds all the shares in Varian via its subsidiary Siemens Healthineers AG.
The acquisition was accounted for in accordance with IFRS 3, Business Combinations, on the basis of a preliminary purchase price
allocation. To finance the acquisition, a further capital increase was carried out at the level of Siemens Healthineers AG in fiscal year 2021
by issuing new shares, resulting in an increase of non-controlling interests in the Siemens consolidated financial statements. Furthermore,
the Group issued bonds denominated in US dollars to finance the transaction. To hedge foreign currency risks in connection with the
acquisition and its financing, the Group entered into hedging transactions which were designated as hedging instruments in hedging
relationships.
Accounting for the acquisition of Varian
Below, we describe what we consider to be the key audit matters:
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial
statements for the fiscal year from October 1, 2020 to September 30, 2021. These matters were addressed in the context of our audit of
the consolidated financial statements as a whole, and in forming our opinion thereon; we do not provide a separate opinion on these
matters.
Key audit matters in the audit of the consolidated financial statements
Basis for the opinions
3. We assessed the suitability of the preliminary external appraisal as audit evidence, among other things, through inquiries of
management as well as of the external appraiser. With the assistance of internal valuation specialists, we also analyzed whether the
assumptions and estimates (particularly growth rates, cost of capital, royalty rates and remaining useful lives) used in determining the fair
values of the identifiable assets acquired (particularly the acquired customer relationships and trade names as well as technologies) and
liabilities assumed correspond to general and industry-specific market expectations. In addition, we used the expertise of internal industry
specialists for the assessment of the recognition and valuation of identified intangible assets and liabilities assumed. Further, we
reperformed the calculations in the valuation models and reconciled the expected future cash flows underlying the valuations with, inter
alia, internal business plans. As part of our audit procedures, we also assessed the earnings effects in fiscal year 2021 resulting from the
subsequent accounting for assets acquired and liabilities assumed, particularly taking into account the remaining useful lives of the
acquired assets. As part of our audit of the accounting for the capital increase, we compared the change in equity with the underlying
resolutions of the Managing Board and the Supervisory Board of Siemens Healthineers, the register entries as well as other contractual
agreements with third parties. For the bonds issued, we compared the recognized amounts with the respective underlying contractual
agreements. With regard to the accounting for hedging relationships we assessed whether the requirements for hedge accounting in
accordance with IFRS 9, Financial Instruments, were satisfied based on the documentation prepared by management and the underlying
contractual agreements. We also assessed the accounting for hedging relationships and reconciled the amounts with the respective line
items in the consolidated statement of financial position, consolidated statement of income and consolidated statement of comprehensive
income. In this context, we further assessed the methodology applied to determine the fair values of hedging instruments and the clerical
accuracy of the respective calculations.
⚫ the accompanying group management report as a whole provides an appropriate view of the Group's position. In all material respects,
this group management report is consistent with the consolidated financial statements, complies with German legal requirements and
appropriately presents the opportunities and risks of future development. Our opinion on the group management report does not cover
the content of the Corporate Governance Statement referred to above.
In our opinion, on the basis of the knowledge obtained in the audit,
.
We have audited the consolidated financial statements of Siemens Aktiengesellschaft, Berlin and Munich, and its subsidiaries (the Group),
which comprise the consolidated statements of income and comprehensive income for the fiscal year from October 1, 2020 to September
30, 2021, the consolidated statements of financial position as of September 30, 2021, the consolidated statements of cash flows and
changes in equity for the fiscal year from October 1, 2020 to September 30, 2021, and notes to the consolidated financial statements,
including a summary of significant accounting policies. In addition, we have audited the group management report of Siemens
Aktiengesellschaft, which is combined with the management report of Siemens Aktiengesellschaft, for the fiscal year from October 1,
2020 to September 30, 2021. In accordance with the German legal requirements, we have not audited the content of the Corporate
Governance Statement which is published on the website stated in the combined management report.
Opinions
Report on the audit of the consolidated financial statements and of the group management
report
To Siemens Aktiengesellschaft, Berlin and Munich
Independent Auditor's Report (Group)
SIEMENS
TO THE CONSOLIDATED FINANCIAL STATEMENTS AND THE
GROUP MANAGEMENT REPORT FOR FISCAL 2021
Independent
Auditor's Report
2
Judith Wiese
the accompanying consolidated financial statements comply, in all material respects, with the International Financial Reporting
Standards (IFRSs) as adopted by the European Union (EU), and the additional requirements of German commercial law pursuant to
Sec. 315e (1) HGB ["Handelsgesetzbuch”: German Commercial Code] as well as with full IFRSS as issued by the International Accounting
Standards Board (IASB), and, in compliance with these requirements, give a true and fair view of the assets, liabilities and financial
position of the Group as of September 30, 2021 and of its financial performance for the fiscal year from October 1, 2020 to September
30, 2021, and
Furthermore, we assessed the application of uniform accounting policies, tax effects resulting from the acquisition and the accounting for
the first-time consolidation of the Varian entities in the consolidation system. In addition, we assessed the acquisition-related disclosures
(including financing and hedging) in the notes to the consolidated financial statements taking into account the respective IFRS
requirements.
Our audit procedures did not lead to any reservations relating to the accounting for the acquisition of Varian.
Reference to related disclosures: With regard to the accounting and measurement policies applied in connection with the business
combination, refer to Note 2 Material accounting policies and critical accounting estimates in the notes to the consolidated financial
statements. An explanation of the transaction including the related financing and hedging transactions as well as disclosures on the
preliminary purchase price allocation is included in Note 3 Acquisitions, dispositions and discontinued operations, Note 16 Debt and Note
24 Derivative financial instruments and hedging activities in the notes to the consolidated financial statements.
•
•
•
The Supervisory Board is responsible for the Report of the Supervisory Board in the Annual Report 2021 within the meaning of ISA [DE]
720 (Revised). Management and the Supervisory Board are responsible for the declaration pursuant to Sec. 161 AktG ["Aktiengesetz":
German Stock Corporation Act] on the Corporate Governance Code, which is part of the Corporate Governance Statement, and for the
Compensation Report. In all other respects, management is responsible for the other information. The other information comprises the
Corporate Governance Statement referred to above. In addition, the other information comprises parts to be included in the Annual Report,
of which we received a version prior to issuing this auditor's report, in particular:
In assessing the recoverability of deferred tax assets, we above all analyzed management's assumptions with respect to tax planning
strategies and projected future taxable income, also in view of the implications of the COVID-19 pandemic, and compared them to internal
business plans. In the course of our audit procedures regarding deferred tax liabilities, we examined in particular the assumptions regarding
reinvestment of subsidiaries' retained profits for an indefinite period and assessed these taking into account dividend planning.
Our audit procedures did not lead to any reservations relating to the accounting for uncertain tax positions and deferred taxes.
Reference to related disclosures: With regard to the recognition and measurement policies applied in accounting for income taxes, refer
to Note 2 Material accounting policies and critical accounting estimates in the notes to the consolidated financial statements. With respect
to disclosures for deferred tax assets and liabilities, refer to Note 7 Income taxes in the notes to the consolidated financial statements.
Other information
In order to assess measurement and completeness, we also obtained confirmations from external tax advisors. Further, we evaluated
management's assessments with respect to the prospects of success of appeal and tax court proceedings by inquiring of the employees of
the Siemens tax department and by considering current tax case law.
Independent Auditor's Report (Group)
4
Auditor's response: With the assistance of internal tax specialists who have knowledge of relevant local tax law, we examined the
processes installed by management for the identification, recognition and measurement of tax positions. In the course of our audit
procedures relating to uncertain tax positions, we evaluated whether management's assessment of the tax implications of significant
business transactions or events in fiscal year 2021, which could result in uncertain tax positions or influence the measurement of existing
uncertain tax positions, was in compliance with tax law. In particular, this includes the tax implications arising from the results of tax field
audits, the acquisition or disposal of company shares, corporate (intragroup) restructuring activities and cross-border matters, such as the
determination of transfer prices.
Reasons why the matter was determined to be a key audit matter: Siemens operates in numerous countries with different local tax
legislation. The accounting for uncertain tax positions as well as deferred taxes requires management to exercise considerable judgment
and make estimates and assumptions, and was therefore a key audit matter. In particular, this affects the measurement and completeness
of uncertain tax positions, the recoverability of deferred tax assets, the measurement and completeness of deferred tax liabilities as well
as management's assessments regarding the tax implications of the COVID-19 pandemic.
Uncertain tax positions and deferred taxes
Reference to related disclosures: With regard to the recognition and measurement policies applied in accounting for provisions, refer to
Note 2 Material accounting policies and critical accounting estimates in the notes to the consolidated financial statements. With respect
to proceedings out of or in connection with alleged compliance violations, refer to Note 22 Legal proceedings. With respect to the
uncertainties and estimates relating to asset retirement obligations, refer to Note 18 Provisions of the notes to the consolidated financial
statements.
Our audit procedures did not lead to any reservations relating to the accounting for proceedings out of or in connection with alleged
compliance violations as well as for asset retirement obligations.
Furthermore, we evaluated the disclosures on proceedings out of or in connection with alleged compliance violations as well as on asset
retirement obligations in the notes to the consolidated financial statements.
We further considered alleged or substantiated non-compliance with legal provisions, official regulations and internal company policies
(compliance violations) by inspecting internal and external statements on specific matters, obtaining written statements from external
legal advisors, and by inquiring of the compliance organization. In this regard, among other procedures, we evaluated the conduct and
results of internal investigations by inspecting internal reports and the measures taken to remediate identified weaknesses, and assessed
on this basis whether management's evaluation of any risks to be accounted for in the consolidated financial statements is plausible.
Based on the aforementioned uncertainties, our audit procedures with respect to asset retirement obligations focused on the remediation
and environmental protection liabilities in connection with the decommissioning of the facilities in Hanau, Germany (Hanau facilities), as
well as for the nuclear research and service center in Karlstein, Germany (Karlstein facilities). Our audit procedures included, among others,
assessing the estimated costs for waste treatment and packaging for final storage, for interim storage as well as transport to the final
nuclear waste storage facility, and the valuation methods used by drawing on the expertise of our valuation specialists. We evaluated
management's assessments, particularly regarding the accounting effects of the contractually agreed transfer of the nuclear waste disposal
obligation to the Federal Republic of Germany, which is still subject to the approval of the EU commission under state-aid-rules, and the
expected costs to fulfill the obligations remaining with Siemens through inquiries of persons entrusted with the matter and inspections of
internal and external documents.
Auditor's response: During our audit of the financial reporting of proceedings out of or in connection with alleged compliance violations,
we examined the processes implemented by Siemens for identifying, assessing and accounting for legal and regulatory proceedings. To
determine what potentially significant pending legal proceedings or claims asserted are known and to assess management's estimates of
the expected cash outflows, our audit procedures included inquiring of management and other persons within the Group entrusted with
these matters, obtaining written statements from in-house legal counsels with respect to the assessment of estimated cash outflows and
their probability, obtaining confirmations from external legal advisors and evaluating internal statements concerning the accounting
treatment in the consolidated financial statements. Furthermore, we examined legal consulting expense accounts for any indications of
legal matters not yet considered.
Reasons why the matter was determined to be a key audit matter: We considered the accounting for provisions for proceedings out
of or in connection with alleged compliance violations, including allegations of corruption and antitrust violations, and for asset retirement
obligations to be a key audit matter. These matters are subject to inherent uncertainties and require estimates that could have a significant
impact on the recognition and measurement of the respective provision and, accordingly, on assets, liabilities and financial performance.
The proceedings out of or in connection with alleged compliance violations are subject to uncertainties because they involve complex
legal issues and accordingly, considerable management judgment, in particular when determining whether and in what amount a
provision is required to account for the risks. The uncertainties and estimates with respect to asset retirement obligations pertain especially
to the estimated costs for waste treatment and packaging for final storage, for interim storage as well as transport to the final nuclear
waste storage facility.
Provisions for proceedings out of or in connection with alleged compliance violations as well as provisions for asset retirement
obligations
Reference to related disclosures: With regard to the recognition and measurement policies applied in accounting for construction-type
contracts, refer to Note 2 Material accounting policies and critical accounting estimates in the notes to the consolidated financial
statements. With respect to contract assets and liabilities as well as provisions for order related losses and risks, refer to Note 10 Contract
assets and liabilities, Note 18 Provisions and Note 21 Commitments and contingencies in the notes to the consolidated financial
statements.
Our audit procedures did not lead to any reservations relating to revenue recognition on construction-type contracts.
Due to the large contract volume and risk profile, our audit procedures focused on large contracts for delivery of high-speed and commuter
trains.
Independent Auditor's Report (Group)
3
As part of our substantive audit procedures, which particularly involved project reviews, we evaluated management's estimates and
assumptions based on a risk-based selection of a sample of contracts. Our sample primarily included projects that are subject to significant
future uncertainties and risks, such as projects with complex safety/technical and regulatory requirements or projects with a large portion
of materials and services to be provided by suppliers or consortium partners, fixed-price or turnkey projects, cross-border projects, projects
in regions particularly affected by the COVID-19 pandemic and projects with changes in cost estimates, delays and/or low or negative
margins. Our audit procedures included, among others, review of the contracts and their terms and conditions including contractually
agreed partial deliveries and services, termination rights, penalties for delay and breach of contract, liquidated damages as well as joint
and several liability. In order to evaluate whether revenues were recognized on an accrual basis for the selected projects, we analyzed
revenues attributable to the fiscal year and corresponding cost of sales to be recognized in the statement of income considering the extent
of progress towards completion and examined the accounting for the associated items in the statement of financial position. Considering
the requirements of IFRS 15, we also assessed the accounting for contract amendments or contractually agreed options. We further
performed inquiries of project management (both commercial and technical project managers) with respect to the development of the
projects including the effects of COVID-19 on project execution, the reasons for deviations between planned and actual costs, the current
estimated costs to complete the projects, and management's assessments on probabilities that contract risks and claims from joint and
several liability will materialize. To identify anomalies in the development of margins and other project KPIs, we also applied data analysis
procedures. In designing our audit procedures, we also considered results from project audits conducted by the internal audit function.
Furthermore, we obtained evidence from third parties for selected projects (e.g., project acceptance documentation, contractual terms
and conditions, and lawyers' confirmations regarding alleged breaches of contract and asserted claims).
Auditor's response: As part of our audit, we obtained an understanding of the Group's internally established methods, processes and
control mechanisms for project management in the bid and execution phase of construction-type contracts. In this regard, we assessed
the design and operating effectiveness of the accounting-related internal controls in the project business by obtaining an understanding
of business transactions specific to construction-type contracts, from the initiation of the transaction through presentation in the
consolidated financial statements. We also tested controls addressing the timely assessment of changes in cost estimates and the timely
and complete recognition of such changes in the project calculation.
Reasons why the matter was determined to be a key audit matter: The Group conducts a significant portion of its business under
construction-type contracts, particularly in the Mobility business. Revenue from long-term construction-type contracts is recognized in
accordance with IFRS 15, Revenue from Contracts with Customers, generally over time under the percentage-of-completion method. We
consider the accounting for construction-type contracts to be an area posing a significant risk of material misstatement (including the
potential risk of management override of internal controls) and accordingly a key audit matter, because management's assessments
significantly impact the determination of the extent of progress towards completion. These assessments include, in particular, the scope
of deliveries and services required to fulfill contractually defined obligations, total estimated contract costs, remaining costs to completion
and total estimated contract revenues, as well as contract risks including technical, political, regulatory and legal risks. Revenues, total
estimated contract costs and profit recognition may deviate significantly from original estimates based on new knowledge about cost
overruns and changes in project scope over the term of a construction-type contract. The effects of the coronavirus pandemic (COVID-19)
on the project business, such as delays in project execution or disruptions in supply chains as well as change in law clauses with regard to
compensation for damages or contractual penalties for delays in delivery and their accounting treatment remained of key significance for
our audit.
Revenue recognition on construction-type contracts
Matthias Rebellius
Prof. Dr. Ralf P. Thomas
Cedrik Neike
Dr. Roland Busch
Babson Diagnostics, Inc., Dover, DE / United States
Americas (2 companies)
5,592
1,307
2
Siemens Gas and Power Holding B.V., Zoeterwoude / Netherlands
Europe, Commonwealth of Independent States (C.I.S.), Africa, Middle East (without Germany) (1
company)
170
1004,5
SPT Beteiligungen GmbH & Co. KG, Grünwald
257
1004,5
Munipolis GmbH, Munich
(1)
(1)
1004,5
of €
in millions
in millions
of €
in %
Equity
Net income
Equity
interest
Consolidated Financial Statements
Erlapolis 20 GmbH, Munich
Germany (3 companies)
Other investments11
Thoughtworks Holding Inc., Wilmington, DE / United States
the Responsibility Statement (to the Consolidated Financial Statements and the Group Management Report),
1 Control due to a majority of voting rights.
3 Control due to contractual arrangements to determine the direction of the relevant activities.
The Managing Board
Siemens Aktiengesellschaft
Munich, November 30, 2021
To the best of our knowledge, and in accordance with the applicable reporting principles, the Consolidated Financial Statements give a
true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the Group Management Report, which has
been combined with the Management Report for Siemens Aktiengesellschaft, includes a fair review of the development and performance
of the business and the position of the Group, together with a description of the material opportunities and risks associated with the
expected development of the Group.
Responsibility Statement (Group)
SIEMENS
TO THE CONSOLIDATED FINANCIAL STATEMENTS AND THE
GROUP MANAGEMENT REPORT FOR FISCAL 2021
Responsibility Statement
60
60
395
65
8
7
(4)
205
n/a = No financial data available.
13 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability of this company.
12 Siemens AG is a shareholder with unlimited liability of this company.
11 Values according to the latest available local GAAP financial statements; the underlying fiscal year may differ from the Siemens fiscal year.
10 Exemption pursuant to Section 264 (3) German Commercial Code.
⁹ Exemption pursuant to Section 264 b German Commercial Code.
8 Not accounted for using the equity method due to immateriality.
7 Not consolidated due to immateriality.
6 Significant influence due to contractual arrangements or legal circumstances.
5 No significant influence due to contractual arrangements or legal circumstances.
* No control due to contractual arrangements or legal circumstances.
2 Control due to rights to appoint, reassign or remove members of the key management personnel.
the Responsibility Statement (to the Annual Financial Statements and the Management Report),
Pursuant to Sec. 322 (3) Sentence 1 HGB, we declare that our audit has not led to any reservations relating to the legal compliance of the
consolidated financial statements and of the group management report.
•
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the
audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in
our auditor's report unless law or regulation precludes public disclosure about the matter.
Other legal and regulatory requirements
Report on the assurance on the electronic rendering of the consolidated financial statements and the group
management report prepared for publication purposes in accordance with Sec. 317 (3a) HGB
Opinion
We have performed assurance work in accordance with Sec. 317 (3a) HGB to obtain reasonable assurance about whether the rendering
of the consolidated financial statements and the group management report (hereinafter the "ESEF documents") contained in the file
SIEMENS 2021.zip (SHA-256 checksum: c2fee878a23005add85c87b5f4a7cf3e7883b81d2626892870c12ff3d2a977f8) and prepared for
publication purposes complies in all material respects with the requirements of Sec. 328 (1) HGB for the electronic reporting format ("ESEF
6
Independent Auditor's Report (Group)
format"). In accordance with German legal requirements, this assurance work extends only to the conversion of the information contained
in the consolidated financial statements and the group management report into the ESEF format and therefore relates neither to the
information contained within these renderings nor to any other information contained in the file identified above.
In our opinion, the rendering of the consolidated financial statements and the group management report contained in the file identified
above and prepared for publication purposes complies in all material respects with the requirements of Sec. 328 (1) HGB for the electronic
reporting format. Beyond this assurance opinion and our audit opinions on the accompanying consolidated financial statements and the
accompanying group management report for the fiscal year from October 1, 2020 to September 30, 2021 contained in the "Report on the
audit of the consolidated financial statements and of the group management report" above, we do not express any assurance opinion on
the information contained within these renderings or on the other information contained in the file identified above.
Basis for the opinion
We conducted our assurance work on the rendering, of the consolidated financial statements and the group management report contained
in the file identified above in accordance with Sec. 317 (3a) HGB and the IDW Assurance Standard: Assurance on the Electronic Rendering
of Financial Statements and Management Reports Prepared for Publication Purposes in Accordance with Sec. 317 (3a) HGB (IDW ASS 410)
and the International Standard on Assurance Engagements 3000 (Revised). Our responsibility in accordance therewith is further described
in the "Group auditor's responsibilities for the assurance work on the ESEF documents" section. Our audit firm applies the IDW Standard
on Quality Management 1: Requirements for Quality Management in the Audit Firm (IDW QS 1).
Responsibilities of management and the Supervisory Board for the ESEF documents
Management is responsible for the preparation of the ESEF documents including the electronic rendering of the consolidated financial
statements and the group management report in accordance with Sec. 328 (1) Sentence 4 No. 1 HGB and for the tagging of the
consolidated financial statements in accordance with Sec. 328 (1) Sentence 4 No. 2 HGB.
In addition, management is responsible for such internal control as it has determined necessary to enable the preparation of ESEF
documents that are free from material intentional or unintentional non-compliance with the requirements of Sec. 328 (1) HGB for the
electronic reporting format.
The Supervisory Board is responsible for overseeing the process for preparing the ESEF documents as part of the financial reporting process.
Group auditor's responsibilities for the assurance work on the ESEF documents
We also provide those charged with governance with a statement that we have complied with the relevant independence requirements,
and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where
applicable, the related safeguards.
Our objective is to obtain reasonable assurance about whether the ESEF documents are free from material intentional or unintentional
non-compliance with the requirements of Sec. 328 (1) HGB. We exercise professional judgment and maintain professional skepticism
throughout the assurance work. We also:
•
Identify and assess the risks of material intentional or unintentional non-compliance with the requirements of Sec. 328 (1) HGB, design
and perform assurance procedures responsive to those risks, and obtain assurance evidence that is sufficient and appropriate to provide
a basis for our assurance opinion.
Obtain an understanding of internal control relevant to the assurance on the ESEF documents in order to design assurance procedures
that are appropriate in the circumstances, but not for the purpose of expressing an assurance opinion on the effectiveness of these
controls.
• Evaluate the technical validity of the ESEF documents, i.e., whether the file containing the ESEF documents meets the requirements of
Commission Delegated Regulation (EU) 2019/815, in the version in force at the date of the financial statements, on the technical
specification for this file.
• Evaluate whether the ESEF documents enable an XHTML rendering with content equivalent to the audited consolidated financial
statements and to the audited group management report.
•
Evaluate whether the tagging of the ESEF documents with Inline XBRL technology (iXBRL) in accordance with the requirements of Arts.
4 and 6 of Commission Delegated Regulation (EU) 2019/815, in the version in force at the date of the financial statements, enables an
appropriate and complete machine-readable XBRL copy of the XHTML rendering.
Further information pursuant to Art. 10 of the EU Audit Regulation
We were elected as group auditor by the Annual Shareholders' Meeting on February 3, 2021. We were engaged by the Supervisory Board
on February 3, 2021. We have been the group auditor of Siemens Aktiengesellschaft without interruption since the fiscal year from October
1, 2008 to September 30, 2009.
We declare that the opinions expressed in this auditor's report are consistent with the additional report to the Audit Committee pursuant
to Art. 11 of the EU Audit Regulation (long-form audit report).
Other matter - use of the auditor's report
Our auditor's report must always be read together with the audited consolidated financial statements and the audited group management
report as well as the assured ESEF documents. The consolidated financial statements and the group management report converted to the
ESEF format - including the versions to be published in the Bundesanzeiger [German Federal Gazette] ― are merely electronic renderings
of the audited consolidated financial statements and the audited group management report and do not take their place. In particular, the
ESEF report and our assurance opinion contained therein are to be used solely together with the assured ESEF documents made available
in electronic form.
7
the Five-Year Summary,
.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We conducted our audit of the consolidated financial statements and of the group management report in accordance with Sec. 317 HGB
and the EU Audit Regulation (No 537/2014, referred to subsequently as "EU Audit Regulation") and in compliance with German Generally
Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in
Germany] (IDW). In conducting the audit of the consolidated financial statements we also complied with International Standards on
Auditing (ISA). Our responsibilities under those requirements, principles and standards are further described in the "Auditor's
responsibilities for the audit of the consolidated financial statements and of the group management report" section of our auditor's report.
We are independent of the group entities in accordance with the requirements of European law and German commercial and professional
law, and we have fulfilled our other German professional responsibilities in accordance with these requirements. In addition, in accordance
with Art. 10 (2) f) of the EU Audit Regulation, we declare that we have not provided non-audit services prohibited under Art. 5 (1) of the
EU Audit Regulation. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions
on the consolidated financial statements and on the group management report.
•
Perform audit procedures on the prospective information presented by management in the group management report. On the basis of
sufficient appropriate audit evidence we evaluate, in particular, the significant assumptions used by management as a basis for the
prospective information, and evaluate the proper derivation of the prospective information from these assumptions. We do not express
a separate opinion on the prospective information and on the assumptions used as a basis. There is a substantial unavoidable risk that
future events will differ materially from the prospective information.
the Compensation Report,
the Report of the Supervisory Board,
• Notes and forward-looking statements,
but not the consolidated financial statements and the annual financial statements, not the disclosures of the combined management
report whose content is audited and not our auditor's reports thereon.
Our opinions on the consolidated financial statements and on the group management report do not cover the other information, and
consequently we do not express an opinion or any other form of assurance conclusion thereon.
•
In connection with our audit, our responsibility is to read the other information and, in so doing, to consider whether the other information
⚫ otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Responsibilities of management and the Supervisory Board for the consolidated financial statements and the
group management report
Management is responsible for the preparation of the consolidated financial statements that comply, in all material respects, with IFRSS
as adopted by the EU and the additional requirements of German commercial law pursuant to Sec. 315e (1) HGB as well as with full IFRSS
as issued by the IASB, and that the consolidated financial statements, in compliance with these requirements, give a true and fair view of
the assets, liabilities, financial position and financial performance of the Group. In addition, management is responsible for such internal
control as management has determined necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going
concern. It also has the responsibility for disclosing, as applicable, matters related to going concern. In addition, management is
responsible for financial reporting based on the going concern basis of accounting, unless there is an intention to liquidate the Group or
to cease operations, or there is no realistic alternative but to do so.
Furthermore, management is responsible for the preparation of the group management report that, as a whole, provides an appropriate
view of the Group's position and is, in all material respects, consistent with the consolidated financial statements, complies with German
legal requirements and appropriately presents the opportunities and risks of future development. In addition, management is responsible
for such arrangements and measures (systems) as management has considered necessary to enable the preparation of a group
management report that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropriate
evidence for the assertions in the group management report.
The Supervisory Board is responsible for overseeing the Group's financial reporting process for the preparation of the consolidated financial
statements and of the group management report.
is materially inconsistent with the consolidated financial statements, with the group management report or our knowledge obtained in
the audit, or
Independent Auditor's Report (Group)
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group
to express opinions on the consolidated financial statements and on the group management report. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our opinions.
• Evaluate the consistency of the group management report with the consolidated financial statements, its conformity with German law,
and the view of the Group's position it provides.
5
•
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether
the consolidated financial statements present the underlying transactions and events in a manner that the consolidated financial
statements give a true and fair view of the assets, liabilities, financial position and financial performance of the Group in compliance
with IFRSS as adopted by the EU and the additional requirements of German commercial law pursuant to Sec. 315e (1) HGB as well as
with full IFRSS as issued by the IASB.
• Evaluate the appropriateness of accounting policies used by management and the reasonableness of estimates made by management
and related disclosures.
Obtain an understanding of internal control relevant to the audit of the consolidated financial statements and of arrangements and
measures (systems) relevant to the audit of the group management report in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of these systems.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor's report
to the related disclosures in the consolidated financial statements and in the group management report or, if such disclosures are
inadequate, to modify our respective opinions. Our conclusions are based on the audit evidence obtained up to the date of our auditor's
report. However, future events or conditions may cause the Group to cease to be able to continue as a going concern.
•
•
We exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and whether the group management report as a whole provides an appropriate view of the
Group's position and, in all material respects, is consistent with the consolidated financial statements and the knowledge obtained in the
audit, complies with the German legal requirements and appropriately presents the opportunities and risks of future development, as well
as to issue an auditor's report that includes our opinions on the consolidated financial statements and on the group management report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Sec. 317 HGB and
the EU Audit Regulation as well as in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated
by the IDW and in supplementary compliance with ISA will always detect a material misstatement. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements and this group management report.
Auditor's responsibilities for the audit of the consolidated financial statements and of the group
management report
Identify and assess the risks of material misstatement of the consolidated financial statements and of the group management report,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Revenue by lines of business
Classification of items in the annual financial statements: Siemens AG aggregates individual line items of the Income Statement and
Balance Sheet if the individual line item is not material for providing a true and fair view of the Company's financial position and if such
an aggregation improves the clarity of the presentation. Siemens AG discloses these items separately in the notes.
NOTE 1 Revenue
3.3 Notes to the Income Statement
The business and economic environment continues to be affected by the coronavirus pandemic (COVID-19). Due to the spread of the
virus, it is difficult to predict the duration and extent of the resulting impact on Siemens AG's assets, provisions, liabilities and results.
However, the Company does not anticipate that COVID-19-related effects will have a material impact on the financial statements.
Derivative financial instruments are used by Siemens AG almost exclusively for hedging purposes and - if the relevant conditions are
met- are aggregated with the underlying hedged item into valuation units. When a valuation unit is created, changes in values or cash
flows from the hedged item and hedging contract are compared. A provision is recognized only for a negative surplus from the ineffective
part of the market value changes. The unrealized gains and losses from the effective part offset each other completely and are not
recognized in the Balance Sheet or the Income Statement.
Annual Financial Statements
Foreign currency translation: Receivables, other current assets, securities, cash and cash equivalents, provisions and liabilities (excluding
advance payments received on orders) as well as commitments and contingencies denominated in foreign currency are generally
measured applying the mean spot exchange rate on the balance sheet date. Balance Sheet line items denominated in foreign currency
which are part of a valuation unit used to hedge foreign currency risk are measured using the mean spot exchange rate on the transaction
date. Non-current assets and inventories acquired in foreign currency are generally measured applying the mean spot exchange rate on
the transaction date.
Other provisions are recognized in an appropriate and sufficient amount to cover individual obligations for all identifiable risks relating
to liabilities of uncertain timing and amount and for anticipated losses on onerous contracts, taking account of price and cost increases
expected to arise in the future. Provisions for agreed personnel restructuring measures were recognized for legal and constructive
obligations. Significant provisions with a remaining term of more than one year are discounted using a discount rate which corresponds
to the average market interest rate appropriate for the remaining term of the obligations, as calculated and published by Deutsche
Bundesbank.
According to the Act on the Improvement of Company Pensions (Gesetz zur Verbesserung der betrieblichen Altersversorgung), Siemens
AG is secondarily liable for pension benefits provided under an indirect pension funding vehicle (mittelbarer Durchführungsweg). Siemens
AG recognizes the underfunding in the item Provisions for pensions and similar commitments as far as the respective assets of the pension
fund or of the pension and support fund (Pensions- und Unterstützungskasse) do not cover the settlement amount of the respective
pension obligations.
Entitlements resulting from plans based on asset returns from underlying assets are generally measured at the fair value of the underlying
assets at the balance sheet date. If the performance of the underlying assets is lower than a guaranteed return, the pension provision is
measured by projecting forward the contributions at the guaranteed fixed return and discounting to a present value.
5
(in millions of €)
Guarantees and other commitments: Siemens AG issues parent company guarantees, i.e. guarantees to ensure performance obligations
incurred from the delivery of goods or provision of services by affiliated and long-term investee companies or their parent companies. For
measurement purposes, the contract amount of the secured delivery or service agreement is reduced using the straight-line method over
the planned term of the delivery or service agreement, unless there are reasons for a different risk assessment and an increased liability
amount ("risk-adequate liability amount"). Credit lines included in the guarantee obligations in the context of financing affiliated
companies are recognized at their nominal amount.
Digital Industry
2,086
Other revenue
Fiscal year
15,094
Pensions and similar commitments: Siemens AG measures its pension obligations using the settlement amount calculated with the
actuarial projected unit credit method on the basis of biometric probabilities. The discount rate used corresponds to the average market
interest rate for instruments with an assumed remaining maturity of 15 years as published by German Federal Reserve Bank (Deutsche
Bundesbank).
4,832
8,176
2021
Smart Infrastructure
Fiscal year
Asia, Australia
Americas
Europe, C.I.S., Africa, Middle East
(in millions of €)
Revenue by region
Revenue
Revenue
Offsetting of assets and of income and expenses: Siemens AG measures assets at fair value that are designated as being held exclusively
to settle specified pension obligations and obligations for early retirement ("Altersteilzeit") arrangements and which cannot be accessed
by other creditors. Income and expenses relating to these designated assets are offset against the expenses arising from compounding
the corresponding obligations and are reported within the line item Other financial income (expenses), net.
Negative interest from financial investments is presented as a deduction in interest income, and positive interest from borrowings as a
deduction in interest expenses.
Allowances on receivables are determined on the basis of the probability of default and country risks.
Annual Financial Statements
4
102,975
101,487
271
67,145
1,632
1,293
62,890
249
1 Conditional Capital as of September 30, 2021 and 2020 amounted to €421 million and €421 million, respectively.
Total shareholders' equity and liabilities
Deferred income
63,638
58,985
98
1,777
2,111
|| 3. Notes to Annual Financial Statements
Deferred tax assets for differences between valuations of balance sheet line items in accordance to commercial and tax law and tax loss
carryforwards are recognized if a future tax benefit is expected. Deferred tax assets are netted with deferred tax liabilities. Recognized
deferred tax assets and liabilities comprise temporary differences of assets, liabilities, and deferred items of entities forming part of the
Siemens AG tax group and partnerships to the extent that the recovery or settlement of the carrying amount of assets, liabilities, or deferred
items result in a deductible or taxable amount in the taxable profit (loss) of Siemens AG.
3.1 General Disclosures
The Annual Financial Statements of Siemens AG have been prepared in accordance with the regulations set forth in the German
Commercial Code (Handelsgesetzbuch, HGB) and the German Stock Corporation Act (Aktiengesetz, AktG). Amounts are presented in
millions of euros (€ million). Due to rounding, numbers presented may not add up precisely to totals provided.
Financial assets: Impairment losses are recognized if the decline in value is presumed to be other than temporary. This applies, if objective
evidence, particularly events or changes in circumstances, indicate a significant or other than temporary decline in value. In case of an
impairment in prior periods, a lower recognized value may not be maintained if the reasons for the impairment do no longer exist.
Inventories are measured at the lower of average acquisition or production costs and daily values. Production costs comprise, in addition
to direct costs, an appropriate portion of production and material overheads and depreciation of property, plant and equipment. General
administration expenses, expenses for social facilities, voluntary social costs and company pension scheme costs are not capitalized. Write-
downs are recorded to cover inventory risks for reduced usability and technological obsolescence as well as in the context of loss-free
valuation of unbilled contracts in construction-type and service businesses.
Special reserve with an equity portion includes reserves pursuant to Section 6b of the German Income Tax Act
(Einkommensteuergesetz), recognized and transferred in fiscal years prior to the transition to regulations of the German Accounting Law
Modernisation Act (Bilanzrechtsmodernisierungsgesetz).
3 to 8 years
mostly 3 to 5 years
20 to 50 years
5 to 10 years
mostly 10 years
Other equipment, plant and office equipment
Equipment leased to others
Technical equipment and machines
Other buildings
Factory and office buildings
Useful lives of property, plant and equipment
Property, plant and equipment: The components of production costs are described in the context of the explanations for inventories. In
general, property, plant and equipment is depreciated using the straight-line method. In certain cases, the declining balance method is
applied, whereby a switch is made from the declining balance to the straight-line method as soon as the latter results in higher depreciation
expense. Items are depreciated on a pro rata temporis basis in the year of acquisition. Low-value non-current assets that are subject to
wear and tear, movable, and capable of being used independently, are expensed immediately or capitalized and fully depreciated in the
year of acquisition.
Acquired goodwill is generally amortized systematically over the expected useful life of five to 15 years. The expected useful life is based
on the expected use of the acquired businesses and is determined in particular by economic factors such as future growth and profit
expectations, synergy effects and employee base.
Intangible assets acquired for consideration are capitalized at acquisition costs and amortized on a straight-line basis over a maximum of
five years or, if longer, the contractually agreed useful life. Items are amortized on a pro rata temporis basis in the year of acquisition. The
capitalization option for internally generated intangible assets is not used.
2021
Revenue are proceeds from selling and leasing products, providing services and granting licenses, including licensing contracts for the
use of the Siemens trademark.
3.2 Accounting and Measurement Principles
Siemens AG has registered offices in Berlin and Munich, Germany. The Company is registered in the commercial register maintained by
the local courts in Berlin Charlottenburg, Germany, under the entry number HRB 12300, and in Munich, Germany, under the entry number
HRB 6684.
11,507
Reversals of impairments on investments
2,529
8,078
Income from investments included in particular profit distributions from Siemens Ltd., China, amounting to €1,331 million, from Siemens
Holdings plc., United Kingdom, amounting to €698 million and from Siemens Healthineers AG, Germany, amounting to €534 million.
Income from profit transfer agreements with affiliated companies included profit transfers from Siemens Beteiligungen Inland GmbH,
Germany, amounting to €307 million.
Gains from the disposal of investments included gains from the disposal of Flender GmbH, Germany, amounting to €875 million, of Kyros
Beteiligungsverwaltung GmbH, Germany, amounting to €411 million and of BSAV Kapitalbeteiligungen und Vermögensverwaltungs
Management GmbH, Germany, amounting to €301 million.
NOTE 4 Interest income and interest expenses
Interest income presented in the income statement included interest income from affiliated companies of €209 (2020: €326) million.
Interest expenses included interest income from borrowing from affiliated companies of €166 (2020: interest expenses from borrowing
of €88) million.
Interest income from loans of non-current financial assets amounted to €79 (2020: €81) million.
5,303
NOTE 5 Other financial income (expenses), net
(in millions of €)
H2021
2020
Interest component of changes in the pension provisions that are not offset against designated plan assets
(1,058)
(815)
Fiscal year
(21)
(39)
2,452
2021
2020
3,599
4,666
3,534
4,655
610
1,968
(4)
(6)
(619)
(1,646)
32
664
1,724
Financial income (expenses), (net) relating to the pension and personnel-related provisions that are offset against designated plan
1,058
assets
(31)
Gains from the disposal of investments
Losses from the disposal of investments
Income from investments, net
Impairments on investments
Expenses from loss transfers from affiliated companies
Income from profit transfer agreements with affiliated companies
thereof from affiliated companies
Income from investments
Fiscal year
(in millions of €)
Other operating expenses included expenses of €191 million for an intragroup service contract and expenses of €109 million for the
recognition of a provision related to guarantees and expected obligations from consortium contracts.
Other operating income included income of €171 million from the release of a provision related to an investment and income from the
release of the special reserve with an equity portion of €78 (2020: €49) million.
NOTE 2 Other operating income and expenses
Annual Financial Statements
6
15,094
NOTE 3 Income (loss) from investments, net
Income taxes
Income tax expenses
Deferred taxes
(in millions of €)
Other financial income
1,424
218
(206)
(132)
(895)
39
(1,800)
Other financial expenses
Impairments and reversal of impairments of loans and securities of non-current and current assets
Other financial income (expenses), net
Financial income (expenses), net relating to the pension and personnel-related provisions that are offset against designated plan assets
represented a net amount from offset income totaling €57 (2020: €18) million and expenses totaling €46 (2020: €50) million.
Other financial income resulted from gains from non-current securities, in fiscal 2021 primarily from the transfer of investment funds to
SPT Beteiligungen GmbH & Co. KG, totaling €692 (2020: €186) million, the release of provisions for risks relating to derivative financial
instruments totaling €213 (2020: expenses of €48) million, from derivative instruments related to interest rate hedging totaling €312
(2020: expenses of €10) million, and from derivative financial instruments related to foreign currency hedging amounting to €197 (2020:
expenses of €176) million.
Other financial expenses included expenses from monetary balance sheet items denominated in foreign currencies totaling €186 (2020:
income of €32) million. In addition, the position included expenses from compounding of other provisions amounting to €18 (2020: €33)
million.
Impairments and reversal of impairments of loans and securities of non-current and current assets included an impairment of €149 million
of a long-term loan related to an investment.
7
NOTE 6 Income taxes
11
(277)
Subscribed capital¹
Annual Financial Statements
197
(2,289)
876
897
Financial assets
Shares in affiliated companies
Shares in investments
59,672
9,738
285
(4,910)
8,896
282
(285)
(1,324)
64,786
7,570
(1,154)
(441)
32
81
(1,482)
73
64
(211)
(2,275)
290
Equipment leased to others
164
7
(6)
165
(95)
(11)
4
(101)
63,304
64
Advanced payments made and construction in
progress
73
40
(49)
(1)
64
3,172
199
(205)
3,165
69
58,517
(1,523)
(178)
(12,063)
78,520
(3,255)
(770)
36
321
(3,668)
74,852
74,877
Non-current assets
12,450
81,911
(12,356)
82,213
(5,912)
(1,023)
37
606
(6,293)
75,920
75,999
9
12,659
264
78,133
1,718
216
(1,485)
6,084
7,373
Loans
4,115
1,229
(897)
4,447
(554)
5,426
(151)
(701)
3,746
3,561
Securities
5,450
1,202
(4,933)
1,718
(24)
24
4
(919)
135
(127)
Reclassifi-
cations
Disposals
Concessions and industrial property rights
Goodwill
404
10
203
606
10
Property, plant and equipment
Annual Financial Statements
Additions
Accumulated depreciation/amortization
Disposals
Sep 30, 2021
Sep 30, 2021
Sep 30, 2020
Sep 30, 2021
Oct 01, 2020
Depreciation/
amortization
Write-ups
(88)
325
Carrying amount
(298)
Oct 01, 2020
Intangible assets
Fiscal year
2021
2020
(229)
(126)
209
204
(20)
78
Income tax expenses resulted primarily from foreign withholding taxes as well as from expenses for previous years from the completion
of a tax audit. Tax income from the remedy of appeals filed had an offsetting effect.
Acquisition or production costs
Deferred taxes included income from the increase of deferred tax assets related to pension provisions.
Other taxes of €16 (2020: €16) million were included in functional costs.
NOTE 8 Impact of tax regulations on net income
The use of tax incentives had a positive effect on net income of €78 million.
NOTE 9 Income and expenses relating to prior periods
The income statement of Siemens AG included expenses and income relating to prior periods of €253 million and €512 million,
respectively. Expenses relating to prior periods included tax expenses related to the completion of a tax audit. Income relating to prior
periods resulted mainly from the release of provisions as well as tax income, particularly related to the remedy of appeals filed.
00
8
3.4 Notes to the Balance Sheet
NOTE 10 Non-current assets
(in millions of €)
NOTE 7 Other taxes
501
(26)
(236)
(252)
175
146
Technical equipment and machinery
1,326
37
23
(59)
1,326
(1,008)
2
(65)
(1,016)
310
318
Other equipment, plant and office equipment
1,217
98
6
(137)
1,183
(927)
56
88
(7)
427
89
106
203
(84)
(16)
(100)
103
119
(88)
528
(246)
(382)
88
(336)
192
225
Land, land rights and buildings, including
buildings on third-party land
392
17
20
(2)
(42)
Other liabilities
192
Trade payables
137
4
Interest expenses
(18)
(26)
thereof negative interest from financial investment
411
319
4
Interest income
8,078
5,303
3
Income (loss) from investments, net
(1,365)
(631)
Income (loss) from operations
(757)
(475)
2
Other operating expenses
202
279
(131)
thereof positive interest from borrowing
395
286
5,270
5,147
171
27
Unappropriated net income
Allocation to other retained earnings
Asset reduction due to spin-off
Withdrawals from other retained earnings
Profit carried forward
Net income
Appropriation of net income
5,270
2
5,147
(20)
6
Net income
Income taxes
5,192
5,166
Income from business activity
(1,800)
39
5
Other financial income (expenses), net
78
141
12,694
(12,694)
(1,359)
(2,131)
4
Income Statement
1.
3
Annual Financial Statements
Table of contents
SIEMENS
* This document is an English language translation of the decisive German version and is not provided in
the European Single Electronic Format (ESEF). The legally required rendering in ESEF is filed in German
language with the operator of the German Federal Gazette and published in the German Federal Gazette.
FOR FISCAL 2021
Annual Financial
Statements*
8
00
Independent Auditor's Report (Group)
Dr. Gaenslen
Wirtschaftsprüfer
[German Public Auditor]
[German Public Auditor]
Wirtschaftsprüferin
Breitsameter
Wirtschaftsprüfungsgesellschaft
Ernst & Young GmbH
Munich, November 30, 2021
The German Public Auditor responsible for the engagement is Katharina Breitsameter.
German Public Auditor responsible for the engagement
Liabilities to affiliated companies
2.
Balance Sheet
5
3.
(1,999)
(1,677)
(1,570)
4,135
(12,032)
(10,960)
16,389
15,094
1
2020
2021
(1,001)
Note
General administrative expenses
Selling expenses
Research and development expenses
Gross profit
Cost of sales
Revenue
(in millions of €)
Fiscal year
Annual Financial Statements
1. Income Statement
Notes
Other operating income
(1,918)
3,400
4,357
2,975
(143)
2,550
2,550
15
Special reserve with an equity portion
Unappropriated net income
Other retained earnings
Capital reserve
Issued capital
Treasury shares
Shareholders' equity
Shareholders' equity and liabilities
102,975
101,487
85
51
14
1,034
1,243
13
133
184
25,724
(152)
24,089
2,398
8,156
Liabilities to banks
(2,436)
18
Liabilities
11,700
636
3,687
16,023
16,592
3,592
17
Other provisions
628
Provisions for taxes
12,372
16
Provisions for pensions and similar commitments
Provisions
619
541
18,917
21,216
2,975
3,400
5,387
7,119
8,289
8,351
2,407
215
2,082
Note
Sep. 30,
Annual Financial Statements
Total assets
Active difference resulting from offsetting
Deferred tax assets
Prepaid expenses
Cash and cash equivalents
Other Securities
Receivables from affiliated companies
Trade receivables
2021
Receivables and other assets
Inventories
Current assets
Financial assets
Property, plant and equipment
Intangible assets
Non-current assets
Assets
(in millions of €)
435
2. Balance Sheet
3
Advance payments received
2020
Other receivables and other assets
12
1,583
12,694
17,564
1,442
1,696
863
949
(1,005)
(986)
10
20,844
1,869
1,934
11
75,999
75,920
74,877
74,852
897
876
225
16,074
1,937
RWE AG and of ProSiebenSat.1 Media SE
Deputy Chairman of the Central Works
Council and of the Combine Works
Council of Siemens AG
Second Deputy Chairman
(since February 3, 2021)
Tobias Bäumler²
(since October 16, 2020)
Michael Diekmann
Chairman of the Supervisory Board of
Allianz SE
-A.P. Møller-Mærsk A/S, Denmark (Chairman)³
2018
October 10,
1979
(Dr. rer. pol.)
October
16, 2020
2023
December 23, January 24, 2023
1954
2008
1954
Annual Financial Statements
Birgit Steinborn²
German positions:
January 31, 2023
January 24, 2023
2008
1960
January 3,
Chairman of the Supervisory Board of
of Siemens AG
First Deputy Chairwoman
Werner Brandt
Chairwoman of the Central Works Council March 26,
- C3.ai, Inc., USA³
enterprises (as of September 30, 2021)
Andrea Fehrmann²
(Dr. phil.)
German positions:
- Allianz SE, Munich (Deputy Chairman)³
Positions outside Germany:
18
Trade Union Secretary, IG Metall Regional June 21,
Office for Bavaria
German positions:
1970
Nicola Leibinger-
Siemens Mobility GmbH, Munich (Deputy
Chairwoman)
Kammüller
expires
2025
Siemens Energy Management GmbH, Munich
German positions:
- Siemens Energy AG, Munich³
Fresenius SE & Co. KGaA, Bad Homburg (Deputy
Chairman)³
- Fresenius Management SE, Bad Homburg
- Allianz SE, Munich (Chairman)³
German positions:
- RWE AG, Essen (Chairman)³
- ProSiebenSat.1 Media SE, Munich (Chairman)³
2012
1969
Chief Treasurer and Executive Member of January 22,
the Managing Board of IG Metall
Jürgen Kerner²
2008
January 24, 2023
March 16,
1960
Chairman of the Siemens Europe
Committee
Harald Kern²
2023
April 1,
2007
March 14,
1959
Chairwoman of the Combine Works
Council of Siemens AG
Bettina Haller²
2018
January 31, 2023
domestic or foreign controlling bodies of business
Daimler AG, Stuttgart¹
Member
since
October 1,
2013
Positions outside Germany:
- Siemens Ltd., India¹
Positions outside Germany:
Siemens Energy Management GmbH,
Munich
Siemens Energy AG, Munich¹
German positions:
Munich
Siemens Energy Management GmbH,
Siemens Energy AG, Munich'
German positions:
- Atos SE, France¹
- Evonik Industries AG, Essen¹
Positions outside Germany:
- NXP Semiconductors N.V., Netherlands'
German positions:
- Siemens Aktiengesellschaft Österreich,
Austria (Chairman)
Positions outside Germany:
- Siemens Energy Management GmbH,
- Siemens Energy AG, Munich (Chairman)¹
- Mercedes-Benz AG, Stuttgart
German positions:
2023
September 18, September 17,
2013
March 7, 1961
Ralf P. Thomas
(Prof. Dr. rer. pol.)
September 30,
2025
October 1,
2020
Matthias Rebellius
(Dr. phil.)
January 2,
1965
Munich (Chairman)
Term
- Siemens France Holding S.A., France
- Arabia Electric Ltd., Saudi Arabia
Date of birth
October 27,
1965
Chairman of the Supervisory Board of
Siemens AG and of the Board of Directors
of A.P. Møller-Mærsk A/S
Jim Hagemann Snabe
Chairman
Occupation
Name
Memberships in supervisory boards whose
establishment is required by law or in comparable
In fiscal 2021, the Supervisory Board had the following members:
Members of the Supervisory Board and positions held by Supervisory Board members
- European School of Management and
Technology GmbH, Berlin
German positions:
1 Publicly listed.
September 30,
2023
October 1,
2020
Positions outside Germany:
January 30,
1971
- Siemens Proprietary Ltd., South Africa
(Chairman)
Positions outside Germany:
- Siemens Healthineers AG, Munich
(Chairman)1
- Siemens Healthcare GmbH, Munich
(Chairman)
German positions:
- Siemens W.L.L., Qatar
(Chairman)
- Siemens Schweiz AG, Switzerland
Chairman)
- Siemens Ltd., Saudi Arabia (Deputy
- Siemens Ltd., India¹
- Siemens Ltd., Australia
(Deputy Chairman)
Judith Wiese
(until February 3, 2021)
2020
Benoît Potier
Deputy Chairman of the Central Works
Gunnar Zukunft²
Chairman of the Board of Management of November 8,
LANXESS AG³
as of February 3, 2021
Matthias Zachert
Siemens Industry Software GmbH, Cologne
German positions:
January 31, 2023
2018
January 31, 2023
2018
1967
June 21,
1965
until February 3, 2021)
January 23, 2021
2013
October 21,
1946
Member of the Supervisory Board
Siemens Healthcare GmbH, Munich
German positions:
2023
October 1,
2017
February 3, 2025
2021
23, 1969
1969
September
Airbus Special Advisor
(Second Deputy Chairman
and member of the
Supervisory Board
(since February 3, 2021)
Werner Wenning
Grazia Vittadini
of Siemens Healthcare GmbH
Dorothea Simon²
Chairwoman of the Central Works Council August 3,
Spokespersons of Siemens AG
Council of Siemens Industry Software
GmbH
1 As a rule, the term of office ends at the conclusion of the (relevant) ordinary Annual Shareholders' Meeting.
2 Employee representative.
3 Publicly listed.
231
62,890
5,377
1,669
67,145
55,226
8,756
3,163
Liabilities to affiliated companies resulted primarily from intragroup-financing activities.
3.5 Other disclosures
NOTE 19 Material expenses
(in millions of €)
Expenses for raw materials, supplies and purchased merchandise
2023
Costs of purchased services
NOTE 20 Personnel expenses
Fiscal year
2021
May 31, 2025
(4,713)
(5,299)
(3,009)
(3,211)
(7,722)
19
1
5 Shareholders' Committee.
4 Group company position.
Material expenses
March 1,
2014
Spokespersons of the Siemens Group and 13, 1957
Chairman of the Central Committee of
September
Chief Executive Officer and Board
Member of adidas AG³
(since February 3, 2021)
Kasper Rørsted
May 29, 1956 January 27, 2023
2015
Chairman of the Supervisory Board of
Bayerische Motoren Werke
Aktiengesellschaft
(Dr.-Ing. Dr.-Ing. E.h.)
Norbert Reithofer
2019
January 30, 2023
April 26,
1967
Trade Union Secretary of the Managing
Board of IG Metall
Hagen Reimer²
January 31, 2023
February 24,
1962
- TRUMPF Schweiz AG, Switzerland4
- ThyssenKrupp AG, Essen (Deputy Chairman)³
Traton SE, Munich³
- Siemens Energy Management GmbH, Munich
- Siemens Energy AG, Munich³
Chairman)
- Premium Aerotec GmbH, Augsburg (Deputy
- MAN Truck & Bus SE, Munich (Deputy Chairman)
German positions:
2018
September 3,
1957
December 15, January 24, 2021
1959
2008
January 25, 2023
Chairman and Chief Executive Officer of
Air Liquide S.A.
Chief Executive Officer (CEO) - President
and Chairwoman of the Group
Management of TRUMPF GmbH + Co. KG
Positions outside Germany:
as of February 3, 2021
February 3, 2025
2021
Nathalie von Siemens
(Dr. phil.)
Chairman of the Committee of
Michael Sigmund²
EssilorLuxottica SA, France³
Positions outside Germany:
- TÜV Süd AG, Munich
Siemens Healthineers AG, Munich³
Siemens Healthcare GmbH, Munich
Messer Group GmbH, Sulzbach
German positions:
- Member of the Board of Directors, Nestlé S.A.,
Switzerland³
Positions outside Germany:
Henkel Management AG, Düsseldorf
Henkel AG & Co. KGaA, Düsseldorf³,5
Economics
Munich (Chairman)³
- Siemens Energy Management GmbH, Munich
German positions:
- Siemens Energy AG, Munich³
The Hydrogen Company S.A., France4
German positions:
American Air Liquide Holdings, Inc., USA4
- Air Liquide International Corporation (ALIC), USA
(Chairman)4
- Air Liquide International S.A., France (Chairman and
Chief Executive Officer) 3,4
Positions outside Germany:
2015
January 27, 2023
January 31, 2023
2018
August 13,
1962
July 14, 1971
Baroness Nemat Shafik Director of the London School of
(DBE, DPhil)
Member of supervisory boards
Bayerische Motoren Werke Aktiengesellschaft,
March 7, 1973 April 1, 2017
Interest rate options
At the end of
the 2021
Annual
Deviation
Sep 30, 2021
Annual Financial Statements
Shares in investment assets according to investment objects
Money market funds
Share-based funds
Bond-based funds
Mixed funds
(in million of €)
The following shares in investment funds according to investment objects were held:
NOTE 22 Shares in investment funds
14
±
737,581
The pro rata intrinsic value of all matching shares issued to beneficiaries of Siemens AG amounted to €64 million.
Outstanding, end of fiscal year
4,975
(20,289)
(36,845)
(268,767)
314,473
744,034
2021
Fiscal year
Organizational changes
Settled
Forfeited
Carrying
amount
2,157
Market value
from carrying
amount
114,226
15,658
20,011
75,845
111,515
2,711
2021
Sep 30,
Guarantees and other commitments
thereof Others
thereof relating to performance guarantees on behalf of affiliated companies
thereof relating to financing of affiliated companies
Warranty obligations
Vested and fulfilled
Obligations from guarantees
NOTE 23 Guarantees and other commitments
Generally, shares in investment funds are accounted for securities held as non-current financial assets. Exceptions were those shares which
represented plan assets and therefor were not accessible by all other creditors. These shares are held exclusively for the purpose of settling
liabilities arising from post-employment obligations or comparable obligations with a long-term maturity, and are to be offset against such
liabilities.
226
2,809
2,583
59
59
37
37
331
331
226
2,383
(in millions of €)
Granted
Outstanding, beginning of fiscal year
(in number of shares)
27,100
2021
Fiscal year
Annual Financial Statements
Employees
Administration and general functions
Research and development
Sales
Production
The breakdown of employees per function is as follows:
13
Personnel expenses did not include the expenses resulting from the compounding of the pension and personnel-related provisions, which
are included in other financial income (expenses), net.
(6,168)
8,300
(5,624)
(437)
(738)
(657)
(383)
Expenses for pensions
Social security contributions and expenses for other employee benefits
(4,993)
(4,584)
2020
Fiscal year
2021
Wages and salaries
(in millions of €)
231
(8,510)
Personnel expenses
Warranty obligations relating to financing of affiliated companies included guarantees towards banks for credit lines granted to affiliated
companies.
7,000
49,500
The following table shows the changes in the entitlements to matching shares of beneficiaries of Siemens AG:
Matching shares granted to beneficiaries of Siemens AG are expensed as incurred over the vesting period and are measured at the intrinsic
value (= share price of the Siemens stock) at the balance sheet date on a pro rata basis for the proportion of the vesting period expired at
the balance sheet date.
Plan participants receive the right to one Siemens share without payment (matching share) for every three investment shares continuously
held over a vesting period.
The pro rata intrinsic value of all stock awards issued to beneficiaries of Siemens AG amounted to €288 million at the balance sheet date.
Share Matching Program
4,678,418
114,516
(90,280)
(3,591)
(227,627)
(663,086)
1,402,547
4,145,939
2021
7,200
Fiscal year
Organizational changes
Change in connection with the adjustment of the ESG target
Settled
Forfeited
Vested and fulfilled
Granted
Non-vested, beginning of fiscal year
(in number of shares)
The following table shows the changes in the stock awards held by beneficiaries of Siemens AG:
Siemens AG grants stock awards to members of the Managing Board, members of the senior management and other eligible employees.
Stock awards to beneficiaries of Siemens AG are expensed as incurred over the vesting period and are measured at the intrinsic value
(= share price of the Siemens stock) at the balance sheet date on a pro rata basis for the proportion of the vesting period expired
considering the estimated target attainment at the balance sheet date.
Stock Awards
Siemens AG allows employees and members of the Managing Board to participate in share-based payment programs. For the purpose of
servicing share-based payment programs Siemens AG also delivers Siemens shares, which have been granted by affiliated companies.
NOTE 21 Share-based payment
Non-vested, end of fiscal year
Shareholders'
Meeting
Effective January 1, 2020, the Gas and Power business line was transferred to Siemens Energy Global GmbH & Co. KG in preparation for
the spin-off of the Siemens Energy business, which occurred on September 25, 2020. The items Obligations from guarantees and Others
included guarantees and other commitments for the benefit of companies of the Siemens Energy Group totaling €0.8 billion and €12.3
billion, respectively, with corresponding full reimbursement rights towards Siemens Energy Global GmbH & Co. KG. In addition, the
position included indemnifications issued in connection with dispositions of businesses. Such indemnifications, if customary to the
relevant transactions, may protect the buyer from potential tax, legal and other risks in conjunction with the purchased business.
Warranty obligations included obligations of Siemens AG towards affiliated companies totaling €414 million.
NOTE 24 Financial payment obligations under lease and rental arrangements
Compensation attributable to members of the Supervisory Board comprises a base compensation and additional compensation for
committee work and amounted to €5.2 million (including meeting fees).
Remuneration of the members of the Supervisory Board
Annual Financial Statements
17
Siemens recognized pension provisions totaling €131.7 million for the pension entitlements to former members of the Managing Board
and their surviving dependents.
Former members of the Managing Board and their surviving dependents received a total of €30.1 million according to Section 285 para.
1 number 9b of the German Commercial Code.
Total remuneration of former members of the Managing Board
Therefore, the compensation and benefits attributable to members of the Managing Board amounted to €36.0 million in total.
Members of the Managing Board, including members who retired from the Managing Board during the fiscal year, received cash
compensation of €21.4 million. The fair value of share-based compensation amounted to €11.6 million for 202,139 stock awards. The
Company granted contributions under the BSAV to members of the Managing Board totaling €3.0 million.
Remuneration of the members of the Managing Board
note 28 Remuneration of the members of the Managing Board and the Supervisory Board
The Supervisory Board and the Managing Board propose the unappropriated net income of Siemens AG for the fiscal year ended September
30, 2021, amounting to €3,400 million to be appropriated as follows: Distribution of a dividend of €4.00 on each share of no par value
entitled to the dividend, and carry-forward of the unappropriated net income for shares of no par value not entitled to the dividend.
NOTE 27 Proposal for the appropriation of net income
To hedge payables to affiliated companies against interest rate risk, Siemens AG has entered into interest rate derivatives with external
counterparties. The payables hedged within this micro valuation unit had a nominal volume of €2,147 million as of September 30, 2021
and maximum maturity terms until the year 2025. As of September 30, 2021, negative cumulative changes in market value of these
liabilities of €101 million were matched by external interest rate derivatives with identical maturities whose market value was €109 million.
The amount of interest rate risks hedged with the valuation unit that did not lead to a provision for anticipated losses accordingly totaled
€227 million.
To hedge receivables from affiliated companies against interest rate risk, Siemens AG has entered into interest rate derivatives with
external counterparties and combined these instruments with the underlying transactions in a macro valuation unit. As of September 30,
2021, the notional amount of the receivables, which had a maximum maturity until the year 2045, amounted to €13,904 million. As of
September 30, 2021, the cumulative market value changes of these receivables of €131 million were matched by offsetting interest rate
derivatives with a positive net fair value of €37 million and maximum maturity terms until the year 2040, of which positive fair values
were €148 million and negative fair values were €111 million.
Siemens AG has entered into interest rate derivatives with external counterparties to hedge interest rate swaps transacted with its affiliated
companies against interest rate risk. As of September 30, 2021, the interest rate swaps transacted with affiliated companies included in
this macro valuation unit had a notional amount of €2,080 million and fair values of €(255) million and had maximum maturity terms
until the year 2028. At balance sheet date, these underlying transactions were matched by external interest rate derivatives with fair values
of €115 million, and maximum maturity terms until the year 2028. As of September 30, 2021, the negative surplus for the macro valuation
unit, recorded in provisions for onerous contracts, amounted to €139 million.
The interest rate hedging contracts used by Siemens AG serve mainly to hedge against interest rate risks and to optimize the interest result
in accordance with internal interest rate benchmarks.
Valuation unit used to hedge the interest rate risk
The net fair value of derivative financial instruments from foreign currency hedge accounting was €320 million as of September 30, 2021;
positive fair values were €1,328 million and negative fair values were €1,008 million. Accordingly, no provision for anticipated losses was
recognized for the derivative financial instruments with negative fair values that were included in this macro valuation unit.
Firm commitments and forecast transactions concern business transactions for which a legally binding contract was concluded but not yet
performed on by either contracting party, as well as contingent payment claims for already partially completed performance obligations
in the project and product businesses.
(133)
(6,998)
7,289
292
(425)
(312)
779
NOTE 29 Declaration of Compliance with the German Corporate Governance Code
As of October 1, 2021, the mandatory statement pursuant to Section 161 of the German Stock Corporation Act (AktG) has been issued by
the Managing Board and the Supervisory Board and is permanently accessible on www.SIEMENS.DE/CORPORATE-GOVERNANCE.
NOTE 30 Members of the Managing Board and Supervisory Board
Members of the Managing Board and positions held by Managing Board members
Cedrik Neike
as of February 3, 2021
until February 3, 2021)
(President and Chief
Executive Officer,
member of the
Managing Board
May 1, 2006
June 23, 1957
(until March 31, 2021)
as of March 31, 2021
Joe Kaeser
German positions:
March 31, 2021
April 1, 2011
May 24, 1958
(since February 3, 2021)
Klaus Helmrich
EOS Holding AG, Krailling
466
- Siemens Mobility GmbH, Munich
(Chairman)
(as of September 30, 2021)
German positions:
Group company positions
(as of September 30, 2021)
External positions
Memberships in supervisory boards whose establishment is required by law or in
comparable domestic or foreign controlling bodies of business enterprises
Term expires
March 31, 2025
First appointed
April 1, 2011
Date of birth
November 22,
1964
President and Chief
Executive Officer
(Dr. rer. nat.)
Roland Busch
Name
In fiscal 2021, the Managing Board had the following members:
- Siemens Healthineers AG, Munich¹
(15,426)
14,534
(891)
The following table presents the carrying amounts, if existing, of derivative financial instruments not included in valuation units and the
balance sheet line items in which these amounts were recognized.
Fair values of interest rate derivative financial instruments are determined by discounting expected future cash flows over the remaining
term of the instrument using current market interest rates and yield curves. If option components are included, fair values are determined
based on an option price model or quoted market prices.
-
The notional amounts equal the contractual amounts of the individual derivative financial instrument which – irrespective of the nature
of the concluded position (sale or purchase) – are presented on a gross basis (gross notional amounts).
30
5
24
6,275
5,325
950
Existing derivative financial instruments
Interest rate swaps
Interest rate hedging contracts
(in millions of €)
(in millions of €)
Fair values
Sep 30, 2021
The following table presents the notional amounts and fair values of those existing derivative financial instruments that were not included
in a valuation unit at the balance sheet date:
As a consequence of its global operating, investing and financing activities, Siemens AG is in particular exposed to risks resulting from
changes in exchange rates and interest rates, managed in line with a proven risk management system in consideration of defined risk
limits. As the parent company of the Siemens Group, Siemens AG has the central role within the group-wide management of financial
market risks. To manage the risks resulting from changes in exchange rates and interest rates, Siemens uses primarily foreign currency
forward contracts, interest rate swaps, combined interest and foreign currency swaps as well as interest rate options and interest rate
futures. Thereby the operating units of Siemens AG are not allowed to enter into derivative financial instruments for speculative purposes.
The contract partners of the Company for derivative financial instruments are banks, brokers and affiliated companies. The credit rating
for banks and brokers is constantly monitored.
NOTE 26 Derivative financial instruments and valuation units
being subject to payment of damages and punitive damages, equitable remedies or criminal or civil sanctions, fines or disgorgements of
profit. In individual cases, this may also lead to formal or informal exclusion from tenders or the revocation or loss of business licenses or
permits. In addition, further Legal Proceedings may be commenced or the scope of pending Legal Proceedings may be expanded. Some
of these legal proceedings could result in adverse decisions for Siemens AG that may have material effects on its financial position, the
results of its operations and/or its cash flows in the respective reporting period. In addition, Siemens is jointly and severally liable within
consortia. As far as not recognized in the financial statements, Siemens AG did not expect any material negative effects on its financial
position, the results of its operations and/or its cash flows at balance sheet date.
Annual Financial Statements
15
In the course of its normal business operations, Siemens AG is involved in numerous legal and regulatory proceedings as well as
governmental investigations (legal proceedings) in various jurisdictions. These legal proceedings could result in particular in the Company
Approximately €2.2 billion were outstanding as of September 30, 2021 from an outsourcing agreement with a maturity of several years.
Siemens AG has entered into a contract to pay its affiliated company Siemens Trademark GmbH & Co. KG, Germany, a running royalty for
the use of the Siemens trademark rights. The fee is calculated by applying business-specific royalty rates to brand-related revenue. The
contract has an indefinite duration. For fiscal 2021, the corresponding expenses amounted to €725 million. For fiscal 2022, the royalty is
expected to be in the same magnitude.
Obligations for equity and debt contributions amounted to €379 million, of which €165 million related to associates.
NOTE 25 Other financial obligations
Payment obligations under lease and rental arrangements amounted to €1,155 million, of which €74 million resulted from transactions
with affiliated companies. Payment obligations under lease and rental arrangements due within the next fiscal year amounted to €259
million.
Expenses for lease and rental arrangements with third parties in which the economic ownership of the leased/rented asset was not
attributable to Siemens AG and the relevant items were not recognized as assets by Siemens AG amounted to €195 million. Object of
these contracts were mainly real estate and other non-current assets.
Notional
amount
Siemens AG only enters into guarantees and other commitments after careful consideration of the risks concerned and in general only in
relation to its own business activities or those of affiliated companies as well as to business activities of companies, if it holds an investment
in them or their parent companies. Based on an ongoing risk evaluation of the arrangements entered into and taking into account all
information available up to the date on which the Annual Financial Statements were issued for approval, Siemens AG concluded that the
relevant primary debtors are able to fulfill the underlying obligations. For this reason, Siemens AG considered it not probable that it will
be called upon in conjunction with any of the guarantees and commitments described above.
Interest rate hedging contracts
Other assets
2021
Sep 30,
Net foreign currency position (after hedging)
thereof with affiliated companies
thereof with external contract partners
Foreign currency exchange contracts (net face value)
Net foreign currency position (before hedging)
thereof expected cash inflows from firm commitments and forecasted transactions
thereof expected cash outflows from firm commitments and forecasted transactions
Foreign currency risk from firm commitments and forecast transactions
thereof liabilities
thereof assets
Foreign currency risk from balance sheet items
(in millions of €)
Interest rate swaps
Annual Financial Statements
The remaining foreign currency risk after offsetting cash flows in the same currency is hedged by the Corporate Treasury of Siemens AG
with external contract partners. The net foreign currency position (before hedging) of Siemens AG is combined with the offsetting foreign
currency exchange contracts to a macro valuation unit. For this purpose, hedged items and hedging instruments are measured with the
respective underlying discounted cash flows. For foreign currency derivative financial instruments, the determination is based on the
changes in relevant forward exchange rates. The existing derivative currency hedging contracts are included in the valuation unit in their
entirety and had maturity terms until the year 2041. The cash in- and outflows from the foreign currency exchange contracts, firm
commitments and forecast transactions are disclosed on a net basis in the following table.
According to the Company policy, Siemens units are responsible for recording, assessing and monitoring their foreign currency transaction
exposure. The net foreign currency position of the Siemens units serves as a central performance measure and has to be hedged within a
band of at least 75% but no more than 100% with the Corporate Treasury of Siemens AG.
Valuation unit used to hedge the foreign currency risk
Provided the relevant conditions are met, derivative financial instruments are aggregated with the underlying hedged item into valuation
units. Using the freezing method, the hedging transactions are not recognized in the balance sheet. The effectiveness of the valuation
unit is either ensured through risk management, or is demonstrated both prospectively and retrospectively based on appropriate methods
used to demonstrate effectiveness (e.g. dollar offset method, regression method, sensitivity analysis). Valuation gains and losses from
derivative financial instruments and hedged items are netted for each valuation unit. A provision for anticipated losses on onerous
contracts is recognized for the respective valuation unit in the amount of an existing loss surplus. Profit surpluses are not recognized.
(10)
(10)
(283)
1
1
(283)
Derivative financial instruments requiring recognition
Interest rate options
Sep 30, 2021
Other
provisions Other liabilities
16
209
55,844
39
2021
Sep 30,
Annual Financial Statements
based payments
and employee
share programs
Oct 01, 2020 Share buybacks Issuance of treasury
shares under share-
Subscribed capital
Shareholders' equity
Unappropriated net income
Other retained earnings
Capital reserve
Issued capital
Subscribed capital
Treasury shares
(in millions of €)
NOTE 15 Shareholders' equity
Active difference resulting from offsetting
Acquisition cost of designated plan assets
Settlement amount for offset personnel-related provisions
Settlement amount for offset pension provisions
Fair value of designated plan assets
(in millions of €)
NOTE 14 Active difference resulting from offsetting
10
10
For the measurement of deferred taxes, a tax rate of 31.33% was applied. Deviating from this, a tax rate of 15.83% was applied for
temporary differences related to assets, liabilities and prepaid/deferred items of partnerships.
Deferred tax assets resulted mainly from pension provisions and pension-related assets as well as deferred taxes of companies within the
consolidated tax group. Deferred taxes from partnerships had an offsetting effect.
NOTE 13 Deferred tax assets
1,089
Receivables from affiliated companies resulted primarily from intragroup-financing activities and included trade receivables totaling €6
(2020: €31) million.
(751)
51
3,229
(2,804)
2,975
7,119
1,918
359
(544)
5,387
8,289
133
8,156
2,407
12
(3)
2,398
(143)
12
(3)
(152)
2,550
2,550
Sep 30, 2021
Net income
Dividend
for 2020
950
(287)
3,400
3,084
4,632
491
2020
2021
Sep 30,
Receivables and other assets
thereof other assets
thereof from long-term investees
Other receivables and other assets
Receivables from affiliated companies
Trade receivables
(in millions of €)
NOTE 12 Receivables and other assets
Advance payments made
Inventories
Cost of unbilled contracts
Finished products and goods
Work in progress
Raw materials and supplies
(in millions of €)
NOTE 11 Inventories
Total impairments of non-current assets were €772 (2020: €2,193) million.
For the investment in Siemens Energy AG, the market price as of September 30, 2021, was around 11% below the carrying amount of
€5.3 billion. However, the investment is not considered to be permanently impaired due to the unchanged expected value potential.
Loans included loans to affiliated companies amounting to €3,327 (2020: €3,249) million, loans to investments amounting to €43 (2020:
€0) million, and other loans amounting to €375 (2020: €312) million.
Disposals of investments resulted primarily from the sale of shares in Siemens Energy AG held by Siemens Pension-Trust e.V., totaling
€1.0 billion. Proceeds from the sales were also contributed to SPT Beteiligungen GmbH & Co. KG.
Additions and disposals in Shares in affiliated companies and Securities were mainly related to supplemental fundings of Siemens
Pension Trust e.V. as well as to corporate law measures to simplify the investment structure of the pension assets. The additions to Shares
in affiliated companies resulted primarily from the increase in the carrying amount of the shares in SPT Beteiligungen GmbH & Co. KG of
€7.8 billion. This increase was due, on the one hand, from the fair value transfer of investment funds by disclosing unrealized gains of
€4.8 billion, which led to a corresponding disposal in Securities with a carrying amount of €4.1 billion. On the other hand, the additions
included supplemental fundings, including shares in Bentley Systems, Inc. in the amount of €1.0 billion and in Charge Point Holdings, Inc.
in the amount of €0.3 billion as well as zero-coupon receiver swaps in the amount of €0.3 billion. In connection with the contribution of
the shares in Bentley Systems, Inc., there was a corresponding capital reduction at Siemens Beteiligungsverwaltung GmbH & Co. OHG in
the same amount, which resulted in a disposal in Shares in affiliated companies. Also, the intragroup sale of a stake in Atecs Mannesmann
GmbH of €1.1 billion and the sale of Flender GmbH of €1.0 billion to Carlyle Group Inc. were reflected in disposals in Shares in affiliated
companies.
Annual Financial Statements
209
404
16,074
264
253
20,844
1,936
186
1,582
2
2
170
1,937
186
1,583
69
2,845
1,442
12,694
one year
thereof
maturities
more than
Sep 30, 2020
thereof
maturities
more than
one year
40
4,407
17,564
Sep 30, 2021
1,696
1,869
1,934
73
70
874
856
280
238
18,917
170
503
39
2,072
2,111
98
98
501
501
thereof
maturities
more than
5 years
1 year up
to 5 years
up to
1 year
Sep 30,
2020
thereof
maturities
more than
5 years
1 year up
to 5 years
up to 1
year
2021
Sep 30,
Liabilities
therein for social security
therein from taxes
thereof miscellaneous liabilities
thereof to long-term investees
Other liabilities
Liabilities to affiliated companies
Trade payables
Advance payments received
1,777
Liabilities to banks
1,708
52,047
39
(547)
50
14
1,618
1,632
68
1,220
1,288
50
1
1
5
5
14
1,619
1,632
68
1,224
1,293
3,163
8,674
51,802
63,638
1,669
5,270
58,985
(in million of €)
69
In May 2021, Siemens AG and the Federal Republic of Germany entered into a public-law contract based on which the obligation of final
disposal of nuclear waste is transferred to the Federal Republic of Germany for a payment of €360 million. The contract and therefore the
payment is subject to the approval of the EU commission under state-aid rules. Estimation uncertainties still relate to assumptions made
to measure the obligations that remain with Siemens AG, with regard to conditioning and packaging of nuclear waste, as well as
intermediate storage and transport to the final storage facility "Schacht Konrad" or a logistics depot until year-end 2032.
On September 24, 2021, the share buyback announced on November 8, 2018 with a volume of up to €3 billion was completed. The share
buyback, which began on December 3, 2018, was executed in the reporting period based on the authorization granted by the Annual
Shareholders' Meeting on February 5, 2020. In addition to the dividend policy, the share buyback was intended to allow shareholders to
continuously participate in the success of the company. In fiscal 2021, Siemens AG repurchased a total of 976,346 treasury shares under
this share buyback program. This represented a nominal amount of €3 million or 0.1% of capital stock. In this reporting period, €137
million (excluding incidental transaction charges) were spent for this purpose; this represents a weighted average stock price of €140.22
per share. The purchases were made in the reporting period on 228 Xetra trading days and were carried out by a bank that had been
commissioned by Siemens AG; the shares were purchased exclusively on the electronic trading platform of the Frankfurt Stock Exchange
(Xetra). The average volume on these trading days was about 4,282 shares.
Annual Financial Statements
11
Siemens AG held 47,644,581 treasury shares, equaling a nominal amount of €143 million, representing 5.6% of the capital stock.
47,644,581
976,346
(4,022,053)
2021
50,690,288
Fiscal year
Treasury shares, end of fiscal year
Issuance under share-based payments and employee share programs
Treasury shares, beginning of fiscal year
(in number of shares)
The following table presents the development of treasury shares:
Treasury shares
Further, by resolution of the Annual Shareholders' Meeting of January 30, 2019, the Managing Board is authorized to increase, with the
approval of the Supervisory Board, the capital stock until January 29, 2024 by up to €510 million through the issuance of up to 170
million registered no-par value shares against cash contributions and/or contributions in kind (Authorized Capital 2019). Under certain
conditions, the Managing Board is authorized, with the consent of the Supervisory Board, to exclude shareholders' subscription rights
in the event of issue against contributions in kind. In the case of issue against cash payment, the shares are generally to be offered to
shareholders for subscription. However, the Managing Board is authorized, with the consent of the Supervisory Board, to exclude
subscription rights, firstly for any fractional amounts, secondly, to grant dilution compensation in connection with convertible bonds or
bonds with warrants already issued, and thirdly, under certain further conditions, if the issue price of the new shares does not fall
significantly below the stock exchange price of the company's already listed shares.
By resolution of the Annual Shareholders' Meeting of February 3, 2021, the Managing Board is authorized to increase the capital stock
until February 2, 2026 by up to €90 million through the issuance of up to 30 million Siemens shares against contributions in cash
(Authorized Capital 2021). Subscription rights of existing shareholders are excluded. The new shares may exclusively be offered to
employees of Siemens AG and its affiliated companies (employee shares). To the extent permitted by law, employee shares may also be
issued in such a manner that the contribution to be paid on such shares is covered by that part of the annual net income which the
Managing Board and the Supervisory Board may allocate to other retained earnings under Section 58 para. 2 of the German Stock
Corporation Act.
•
.
In detail, there are the following authorizations to increase the capital stock:
As of September 30, 2021, Siemens AG had authorized capital totaling a nominal amount of €600 million, which can be issued in
instalments and with different time limits by issuing up to 200 million registered no-par value shares.
The capital stock of Siemens AG is divided into 850,000,000 registered shares of no-par value with a notional value of €3.00 per share.
Authorized capital (not issued)
21,216
NOTE 18 Liabilities
5,147
(2,804)
In addition, a final payment of €410 million was made to the executing bank in fiscal 2021, which led to weighted average acquisition
costs of €100.42 per share in relation to the total share buyback from 2018 to 2021 of 29,385,132 shares with a buyback volume including
the final payment of €2,951 million. The final payment was recognized in the balance sheet as a purchase price adjustment against other
retained earnings.
On June 24, 2021, Siemens again announced a share buyback with a volume of up to €3 billion in the period from the beginning of fiscal
2022 to 2026. The share buyback, which began on November 15, 2021, will be executed based on the authorizations granted by the
Annual Shareholders' Meeting on February 5, 2021. In addition to the dividend policy, the share buyback is intended to allow shareholders
to continuously participate in the success of the company.
Share buyback
In Germany, Siemens AG provides pension benefits through the BSAV (Beitragsorientierte Siemens Altersversorgung), frozen legacy plans
and deferred compensation plans. The majority of Siemens' active employees participate in the BSAV. The benefits are predominantly
based on nominal contributions by the Company and investment returns on assets designated to that plan, subject to a minimum return
guaranteed by the Company. In connection with the implementation of the BSAV, benefits provided under the frozen legacy plans were
modified to substantially eliminate the effects of compensation increases. Therefore, valuation assumptions for salary and pension
increases including career trend are no longer significant for the pension obligation of Siemens AG. The pension benefits are funded via
contractual trust arrangements (CTA). A portion of these trust assets also covers the pension obligations of other domestic subsidiaries.
The treasury shares purchased under the share buybacks may be used for purposes of retirement, distribution to employees, members of
the executive bodies of companies affiliated with Siemens and members of the Managing Board, as well as the servicing of convertible
bonds with attached warrants.
The actuarial valuation of the settlement amount of €13,123 million as of September 30, 2021 was based, among others, on a discount
rate of 1.98% and on a rate of pension progression of 1.50% per year, except for the BSAV and deferred compensation plans with 1.00%
per year. The mortality tables used (Siemens Bio 2017/2021) are primarily based on data of the German Siemens population, using a set
of formulas that corresponds to generally accepted actuarial standards.
AG.
Therefore, the assets do not meet the criteria for offsetting against the pension obligation and are presented as financial assets of Siemens
Annual Financial Statements
12
The main amounts in other provisions were contributed by provisions related to personnel costs of €1,271 million, provisions for
decontamination obligations of €496 million, and provisions for onerous contracts from derivative financial instruments amounting to
€422 million.
NOTE 16 Provisions for pensions and similar commitments
The Werner Siemens-Stiftung, Zug, Switzerland, notified us on January 21, 2008, that its percentage of voting rights (held either directly
or indirectly) in Siemens AG exceeded the threshold of 3% of the voting rights in our Company on January 2, 2008 and amounted to 3.03%
(27,739,285 voting rights) as per this date.
The State of Qatar, Doha, acting by and through the DIC Company Limited, notified us on May 10, 2012, that its percentage of voting
rights (held either directly or indirectly) in Siemens AG exceeded the threshold of 3% of the voting rights in our Company on May 7, 2012
and amounted to 3.04% (27,758,338 voting rights) as per this date.
As of September 30, 2021, the following information on shareholdings subject to reporting requirements was available to the Company
pursuant to Section 160 para 1 No. 8 German Stock Corporation Act (Aktiengesetz):
Disclosures on shareholdings of Siemens AG
BlackRock, Inc., Wilmington, USA, notified us on April 14, 2021, that its percentage of voting rights (held either directly or indirectly) in
Siemens AG amounted to 6.17% (52,408,410 voting rights) on April 9, 2021.
These amounts subject to dividend payout restrictions face other retained earnings in a sufficiently high amount. The unappropriated net
income of €3,400 million is available for distribution.
In fiscal 2021, Siemens AG re-issued in total 4,022,053 treasury shares under the exclusion of subscription rights in connection with share-
based payments and employee share programs in the Group, equaling a nominal amount of €12 million and 0.5% of the capital stock. The
Company received in total €203 million for 1,729,089 shares, re-issued against payment of a purchase price. Siemens AG received this
amount for unrestricted use. All shares were sold as investment shares in connection with the share matching program to plan participants.
In each case, the purchase price was determined on the basis of the closing rate in Xetra trading, determined on a monthly effective date.
Therefore, in the reporting period, in total 1,199,097 shares related to the monthly investment plan at a weighted average share price of
€130.61 per share, 158,769 shares related to the share matching plan at a weighted average share price of €134.02 per share, and
371,223 shares related to the base share program at a weighted average share price of €67.01 per share (after consideration of a 50%
subsidy by the Company). The other shares re-issued during the reporting period can be primarily attributed to the servicing of stock
awards granted in fiscal 2017 totaling 1,555,044 shares, to 624,480 matching shares under the share matching program for fiscal 2018,
and to 113,440 jubilee shares.
Information on amounts subject to dividend payout restrictions
(in millions of €)
2021
Amount representing the difference of the recognition of provisions and similar commitments based on average interest rates covering ten and
seven years, respectivly
Fiscal Year
Amounts from the capitalization of deferred taxes
1,243
Amounts from the capitalization of assets at fair value
38
890
NOTE 17 Other provisions
284
100
3
13
463
100
100
100
17
44
100
(2)
77
26
100
Grupo Siemens S.A. de C.V., Mexico City / Mexico
Siemens S.A., Tenjo / Colombia
Siemens S.A., Santiago de Chile / Chile
Siemens Healthcare Limited, Oakville / Canada
Siemens Financial Ltd., Oakville / Canada
Siemens Canada Limited, Oakville / Canada
Annual Financial Statements
22
22
74
116
3
46
Siemens, S.A. de C.V., Mexico City / Mexico
100
eMeter Corporation, Wilmington, DE / United States
Enlighted, Inc., Wilmington, DE / United States
83
176
(12)
100
530
(46)
ECG TopCo Holdings, LLC, Wilmington, DE / United States
ECG Acquisition, Inc., Wilmington, DE / United States
Corindus, Inc., Wilmington, DE / United States
4
n/a
n/a
ChargePoint Holdings, Inc., Campbell, CA / United States
275
58
247
CEF-L Holding, LLC, Wilmington, DE / United States
95,7
278
101
Bentley Systems, Incorporated, Wilmington, DE / United States
205
7
(4)
Babson Diagnostics, Inc., Dover, DE / United States
100
111
6
100
7
100
100
16
101
18
Siemens Industry Software Limited, Frimley, Surrey / United Kingdom
100
378
2
Siemens Industry Software Computational Dynamics Limited, Frimley, Surrey / United Kingdom
100
1,214
577
Siemens Holdings plc, Frimley, Surrey / United Kingdom
100
(26)
100
34
100
170
3
100
180
6
341
41
100
137
23
57
100
Siemens Healthcare Limited, Frimley, Surrey / United Kingdom
78
Siemens Mobility Limited, London / United Kingdom
750
100
138
20
225
277
(11)
100
19
(1)
GNA 1 Geração de Energia S.A., São João da Barra / Brazil
Siemens Healthcare Diagnósticos Ltda., São Paulo / Brazil
Siemens Infraestrutura e Indústria Ltda., São Paulo / Brazil
Siemens Participações Ltda., São Paulo/ Brazil
EPOCAL INC., Toronto / Canada
Siemens Industrial S.A., Buenos Aires / Argentina
Americas (47 companies)
100
111
60
100
105
(15)
Siemens Process Systems Engineering Limited, Frimley, Surrey / United Kingdom
100
1,053
22
Siemens plc, Frimley, Surrey / United Kingdom
100
480
(2)
Siemens Pension Funding Limited, Frimley, Surrey / United Kingdom
100
Yunex Limited, Poole, Dorset / United Kingdom
(21)
Siemens Mobility Pty Ltd, Bayswater / Australia
73
246
100
423
214
Varian Medical Systems Netherlands Holdings, Inc., Wilmington, DE / United States
Varian Medical Systems, Inc., Wilmington, DE / United States
100
7,415
6,587
Varian Medical Systems International Holdings, Inc., Wilmington, DE / United States
85
395
65
Thoughtworks Holding Inc., Wilmington, DE / United States
8,620
100
(1)
Supplyframe, Inc., Pasadena, CA / United States
100
7
(6)
SMI Holding LLC, Wilmington, DE / United States
100
10,376
-
Siemens USA Holdings, Inc., Wilmington, DE / United States
100
1,476
27
60
Siemens Public, Inc., Iselin, NJ / United States
100
94
10
Shanghai Electric Power Generation Equipment Co., Ltd., Shanghai / China
100
62
2
Mentor Graphics (Shanghai) Electronic Technology Co., Ltd., Shanghai / China
100
30
22
Beijing Siemens Cerberus Electronics Ltd., Beijing / China
100
159
22
Dade Behring Hong Kong Holdings Corporation, Tortola / Virgin Islands, British
591
102
12
Siemens Ltd., Bayswater / Australia
100
-
100
22
1
J.R.B. Engineering Pty Ltd, Bayswater / Australia
Australia Hospital Holding Pty Limited, Bayswater / Australia
Asia, Australia (53 companies)
100
33
100
100
938
70
6
1
PolyDyne Software Inc., Austin, TX / United States
100
158
28
375
-
PETNET Solutions, Inc., Knoxville, TN / United States
Panda Stonewall Intermediate Holdings I, LLC, Wilmington, DE / United States
-
100
43
1005
205
4
43
(18)
(44)
Mannesmann Corporation, New York, NY / United States
Hickory Run Holdings, LLC, Wilmington, DE / United States
Fluence Energy, LLC, Wilmington, DE / United States
100
3
(15)
100
98
(4)
275
Siemens Capital Company LLC, Wilmington, DE / United States
(48)
1,497
Siemens Mobility, Inc, Wilmington, DE / United States
100
16,362
165
Siemens Medical Solutions USA, Inc., Wilmington, DE / United States
100
6,852
461
100
4,675
160
100
13,895
100
6,632
(14)
100
422
5
Siemens Government Technologies, Inc., Wilmington, DE / United States
Siemens Healthcare Diagnostics Inc., Los Angeles, CA / United States
Siemens Healthineers Holdings, LLC, Wilmington, DE / United States
Siemens Industry Software Inc., Wilmington, DE / United States
Siemens Industry, Inc., Wilmington, DE / United States
100
1,607
124
Siemens Financial Services, Inc., Wilmington, DE / United States
100
5,327
58
Siemens Corporation, Wilmington, DE / United States
100
129
15
100
8
100
4,420
170
2
5,592
1,307
100
83
8
Siemens Financieringsmaatschappij N.V., The Hague / Netherlands
Siemens Gas and Power Holding B.V., Zoeterwoude / Netherlands
Siemens Healthineers Holding III B.V., The Hague / Netherlands
Siemens Healthineers Holding IV B.V., The Hague / Netherlands
Siemens Healthineers Nederland B.V., The Hague / Netherlands
Siemens Industry Software Netherlands B.V., Eindhoven / Netherlands
100
3
-
13,895
100
Mentor Graphics (Netherlands) B.V., Eindhoven / Netherlands
Pollux III B.V., The Hague / Netherlands
100
122
(73)
Mendix Technology B.V., Rotterdam / Netherlands
100
3
Dresser-Rand International B.V., The Hague / Netherlands
100
3
Castor III B.V., The Hague / Netherlands.
100
77
57
Varian Medical Systems Mauritius Ltd., Ebene / Mauritius
100
1,029
100
6,273
27
Varian Medical Systems Nederland B.V., Houten / Netherlands
505
100
11
Ural Locomotives Holding Besloten Vennootschap, The Hague / Netherlands
100
166
29
Siemens Nederland N.V., The Hague / Netherlands
100
114
960
Siemens Mobility Holding B.V., The Hague / Netherlands
100
2
(1)
Siemens International Holding III B.V., The Hague / Netherlands
100
12,299
1,452
Siemens International Holding B.V., The Hague / Netherlands
100
459
61
100
86
1004
(2)
SPT Invest Management, SARL, Luxembourg Luxembourg
Siemens Concentrated Solar Power Ltd., Rosh HaAyin / Israel
Mentor Graphics Development Services (Israel) Ltd., Rehovot / Israel
100
13
2
100
1,836
146
1003
1,995
348
100
62
Siemens Industry Software Ltd., Airport City / Israel
1
Mentor Graphics (Ireland) Limited, Shannon, County Clare / Ireland
Mentor Graphics (Holdings) Unlimited Company, Shannon, County Clare / Ireland
SIEMENS HEALTHCARE INDUSTRIAL AND COMMERCIAL SINGLE MEMBER SOCIETE ANONYME,
Chalandri / Greece
100
92
7
Siemens A.E., Electrotechnical Projects and Products, Athens / Greece
100
183
44
Siemens SAS, Saint-Denis / France
100
106
Siemens Limited, Dublin Ireland
116
100
(1)
1004
36
(146)
SPT Holding SARL, Luxembourg / Luxembourg
100
105
33
FAST TRACK DIAGNOSTICS LUXEMBOURG S.à r.l., Esch-sur-Alzette / Luxembourg
100
22
3
Varian Medical Systems Italy SpA, Segrate / Italy
100
198
35
Siemens S.p.A., Milan / Italy
100
254
17
Siemens Healthcare S.r.l., Milan / Italy
100
1
-
UGS Israeli Holdings (Israel) Ltd., Airport City / Israel
100
51
14
100
81
21
Annual Financial Statements
SIEMENS HEALTHCARE, UNIPESSOAL, LDA, Amadora / Portugal
4
1,103
35
100
110
29
100
142
7
Varian Medical Systems International AG, Steinhausen / Switzerland
Siemens Schweiz AG, Zurich / Switzerland
Siemens Mobility AG, Wallisellen / Switzerland
Siemens Industry Software GmbH, Zurich / Switzerland
100
100
157
Siemens Healthcare AG, Zurich / Switzerland
100
214
26
Siemens Financial Services AB, Solna / Sweden
100
188
20
Siemens S.A., Madrid / Spain
100
639
27
Siemens Rail Automation S.A.U., Tres Cantos / Spain
4
74
5,968
100
15
Project Ventures Rail Investments I Limited, Frimley, Surrey / United Kingdom
SBS Pension Funding (Scotland) Limited Partnership, Edinburgh / United Kingdom
Siemens Financial Services Holdings Ltd., Stoke Poges, Buckinghamshire / United Kingdom
Siemens Financial Services Ltd., Stoke Poges, Buckinghamshire / United Kingdom
Siemens Healthcare Diagnostics Manufacturing Ltd, Frimley, Surrey / United Kingdom
Siemens Healthcare Diagnostics Products Ltd, Frimley, Surrey / United Kingdom
100
162
Next47 Fund 2021, L.P., Palo Alto, CA / United Kingdom
100
124
Next47 Fund 2020, L.P., Palo Alto, CA / United Kingdom
100
94
Next47 Fund 2019, L.P., Palo Alto, CA / United Kingdom
100
92
255
99
38
Galloper Wind Farm Holding Company Limited, Swindon, Wiltshire / United Kingdom
Next47 Fund 2018, L.P., Palo Alto, CA / United Kingdom
100
81
(6)
100
93
35
100
49
11
Electrium Sales Limited, Frimley, Surrey / United Kingdom
Siemens Sanayi ve Ticaret Anonim Sirketi, Istanbul / Turkey
Siemens Healthcare Saglik Anonim Sirketi, Istanbul / Turkey
100
100
65
SIEMENS MOBILITY, S.L.U., Tres Cantos / Spain
19
Siemens Healthcare Limited Liability Company, Moscow / Russian Federation
100
115
50
Siemens Finance and Leasing LLC, Vladivostok / Russian Federation
100
51
20
000 Siemens, Moscow / Russian Federation
100
74
3
14
000 Legion II, Moscow / Russian Federation
25
5
LIMITED LIABILITY COMPANY SIEMENS ELEKTROPRIVOD, St. Petersburg / Russian Federation
55
25
11
Siemens W.L.L., Doha Qatar
100
108
11
Siemens S.A., Amadora / Portugal
100
91
507
100
Siemens Mobility LLC, Moscow / Russian Federation
16
100
76
9
Siemens Holding S.L., Madrid / Spain
100
277
12
SIEMENS HEALTHCARE, S.L.U., Getafe / Spain
100
45
2
70
43
(12)
100
29
5
100
34
(9)
Fábrica Electrotécnica Josa, S.A.U., Tres Cantos / Spain
Siemens Proprietary Limited, Midrand / South Africa
Siemens Mobility d.o.o. Cerovac, Kragujevac / Serbia
Siemens s.r.o., Bratislava / Slovakia
51
40
20
Siemens Healthcare Limited, Riyadh / Saudi Arabia
100
25
1
405
(31)
21
Basis for the opinions
We conducted our audit of the annual financial statements and of the management report in accordance with Sec. 317 HGB and the EU
Audit Regulation (No 537/2014, referred to subsequently as "EU Audit Regulation") and in compliance with German Generally Accepted
Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW).
In conducting the audit of the annual financial statements we also complied with International Standards on Auditing (ISA). Our
responsibilities under those requirements, principles and standards are further described in the "Auditor's responsibilities for the audit of
the annual financial statements and of the management report" section of our auditor's report. We are independent of the Company in
accordance with the requirements of European law and German commercial and professional law, and we have fulfilled our other German
professional responsibilities in accordance with these requirements. In addition, in accordance with Art. 10 (2) f) of the EU Audit
Regulation, we declare that we have not provided non-audit services prohibited under Art. 5 (1) of the EU Audit Regulation. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions on the annual financial statements
and on the management report.
Key audit matters in the audit of the annual financial statements
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the annual financial
statements for the fiscal year from October 1, 2020 to September 30, 2021. These matters were addressed in the context of our audit of
the annual financial statements as a whole, and in forming our opinion thereon; we do not provide a separate opinion on these matters.
Below, we describe what we consider to be the key audit matters:
Impairment of non-current financial assets
Reasons why the matter was determined to be a key audit matter: The impairment test of non-current financial assets was a key audit
matter, as in particular shares in affiliated companies and investments entail a significant risk of material misstatement due to the
materiality of these assets as well as the judgment involved in assessing whether there is objective evidence to indicate a lower net
realizable value and permanent impairment. The valuations of non-current financial assets also depend to a large extent on the assessment
of future cash inflows, particularly given the continuing effects of the COVID-19 pandemic, and the discount rate applied.
Auditor's response: In assessing whether there was objective evidence to indicate a lower net realizable value and permanent impairment,
we obtained an understanding of management's evaluation and also obtained external evidence of ratings, stock market prices, analyst
assessments and observable valuation inputs in this regard.
With regard to the net realizable values calculated by management and its assessment as to whether an impairment is expected to be
permanent, we examined the underlying processes related to the planning of future cash flows as well as to the calculation of net realizable
value. We assessed the underlying valuation models for the determination of net realizable value in terms of methodology and reperformed
the calculations with the assistance of internal valuation specialists. We further obtained explanations from management regarding
material value drivers of the planning, including the effects of the COVID-19 pandemic, and examined whether the budget planning
reflects general and industry-specific market expectations.
Forecast accuracy was assessed on a sample basis using budget-to-actual comparisons of historically forecast data with the actual results,
also considering the effects attributable to the COVID-19 pandemic. The parameters used to estimate net realizable value such as the
estimated growth rates and the weighted average cost of capital rates were assessed by comparing them to publicly available market data.
We also performed our own sensitivity analyses to assess the impairment risk in the case of a reasonably possible change in one of the
significant assumptions.
Our audit procedures did not lead to any reservations relating to assessing the impairment of non-current financial assets.
2
Independent Auditor's Report (Siemens AG)
Reference to related disclosures: With regard to the recognition and measurement policies applied for the impairment of non-current
financial assets, refer to chapter 3.2 Accounting and Measurement Principles in the notes to the financial statements and with respect to
write-downs and write-ups of non-current financial assets, refer to chapter 3.3 Notes to the Income Statement, Note 3 Income (loss) from
investments, net as well as chapter 3.4 Notes to the Balance Sheet, Note 10 Non-current assets in the notes to the financial statements.
Other provisions
Reasons why the matter was determined to be a key audit matter: We considered the accounting for other provisions, especially for
legal disputes, regulatory proceedings and governmental investigations (legal proceedings) resulting from or in connection with alleged
compliance violations as well as for decontamination to be a key audit matter. These matters are subject to inherent uncertainties and
require estimates that could have a significant impact on the recognition and measurement of the respective provision and, accordingly,
on assets, liabilities and financial performance. Legal proceedings resulting from or in connection with alleged compliance violations are
subject to uncertainties because they involve complex legal issues and accordingly, considerable management judgment, in particular
when determining whether and in what amount a provision is required to account for the risks. The uncertainties and estimates with
respect to provisions for decontamination pertain especially to the estimated costs for waste treatment and packaging for final storage,
for interim storage as well as transport to the final nuclear waste storage facility.
Auditor's response: During our audit of the financial reporting of legal proceedings resulting from or in connection with alleged
compliance violations, we examined the processes implemented by Siemens for identifying, assessing and accounting for legal and
regulatory proceedings. To determine what potentially significant pending legal proceedings or claims asserted also in connection with
joint and several liability are known and to assess management's estimates of the expected cash outflows, our audit procedures included
inquiring of management and other persons within the Company entrusted with these matters, obtaining written statements from in-
house legal counsels with respect to the assessment of estimated cash outflows and their probability, obtaining confirmations from
external legal advisors and evaluating internal statements concerning the accounting treatment in the annual financial statements.
Furthermore, we examined legal consulting expense accounts for any indications of legal matters not yet considered.
We further considered alleged or substantiated non-compliance with legal provisions, official regulations and internal company policies
(compliance violations) by inspecting internal and external statements on specific matters, obtaining written statements from external
legal advisors, and by inquiring of the compliance organization. In this regard, among other procedures, we evaluated the conduct and
results of internal investigations by inspecting internal reports and the measures taken to remediate identified weaknesses, and assessed
on this basis whether management's evaluation of any risks to be accounted for in the annual financial statements is plausible.
Based on the aforementioned uncertainties, our audit procedures with respect to the provisions for decontamination focused on the
remediation and environmental protection liabilities in connection with the decommissioning of the facilities in Hanau, Germany (Hanau
facilities), as well as for the nuclear research and service center in Karlstein, Germany (Karlstein facilities). Our audit procedures included,
among others, assessing the estimated costs for waste treatment and packaging for final storage, for interim storage as well as transport
to the final nuclear waste storage facility, and the valuation methods used by drawing on the expertise of our valuation specialists. We
evaluated management's assessments particularly regarding the accounting effects of the contractually agreed transfer of the nuclear
waste disposal obligation to the Federal Republic of Germany, which is still subject to the approval of the EU commission under state-aid
rules, and the expected costs to fulfill the obligations remaining with Siemens through inquiries of persons entrusted with the matter and
inspections of internal and external documents.
Furthermore, we evaluated the disclosures on provisions for decontamination in the notes to the financial statements.
Our audit procedures did not lead to any reservations relating to the accounting for other provisions.
Reference to related disclosures: With regard to the recognition and measurement policies applied in accounting for other provisions,
refer to chapter 3.2 Accounting and Measurement Principles in the notes to the financial statements. With respect to the legal proceedings,
regulatory proceedings and governmental investigations, refer to chapter 3.5 Other Disclosures, Note 25 Other financial obligations and
with respect to the uncertainties and estimates relating to the provisions for decontamination, refer to chapter 3.4 Notes to the Balance
Sheet, Note 17 Other provisions in the notes to the financial statements.
Uncertain tax positions and recoverability of deferred tax assets
Reasons why the matter was determined to be a key audit matter: The accounting for uncertain tax positions as well as deferred taxes
requires management to exercise considerable judgment and make estimates and assumptions, and was therefore a key audit matter. In
particular, this affects the measurement and completeness of uncertain tax positions, the recoverability of deferred tax assets as well as
management's assessments regarding the tax implications of the COVID-19 pandemic.
Auditor's response: With the assistance of internal tax specialists who have knowledge of tax law, we examined the processes installed
by management for the identification, recognition and measurement of tax positions. In the course of our audit procedures relating to
uncertain tax positions, we evaluated whether management's assessment of the tax implications of significant business transactions or
events in fiscal year 2021, which could result in uncertain tax positions or influence the measurement of existing uncertain tax positions,
was in compliance with tax law. In particular, this includes the tax implications arising from the results of tax field audits, the acquisition
or disposal of company shares, corporate (intragroup) restructuring activities and cross-border matters, such as the determination of
transfer prices. In order to assess measurement and completeness, we also obtained confirmations from external tax advisors. Further, we
evaluated management's assessments with respect to the prospects of success of appeal and tax court proceedings by inquiring of the
employees of the Siemens tax department and by considering current tax case law.
Pursuant to Sec. 322 (3) Sentence 1 HGB, we declare that our audit has not led to any reservations relating to the legal compliance of the
annual financial statements and of the management report.
In assessing the recoverability of deferred tax assets, we above all analyzed management's assumptions with respect to tax planning
strategies and projected future taxable income, also in view of the implications of the COVID-19 pandemic, and compared them to internal
business plans.
the accompanying management report as a whole provides an appropriate view of the Company's position. In all material respects, this
management report is consistent with the annual financial statements, complies with German legal requirements and appropriately
presents the opportunities and risks of future development. Our opinion on the management report does not cover the content of the
Corporate Governance Statement referred to above.
•
SIEMENS
Responsibility Statement (Siemens AG)
To the best of our knowledge, and in accordance with the applicable reporting principles, the Annual Financial Statements give a true and
fair view of the assets, liabilities, financial position and profit or loss of the Company, and the Management Report for Siemens
Aktiengesellschaft, which has been combined with the Group Management Report, includes a fair review of the development and
performance of the business and the position of the Company, together with a description of the material opportunities and risks
associated with the expected development of the Company.
Munich, November 30, 2021
Siemens Aktiengesellschaft
The Managing Board
Dr. Roland Busch
Cedrik Neike
Prof. Dr. Ralf P. Thomas
Matthias Rebellius
Judith Wiese
2
Independent
Auditor's Report
TO THE ANNUAL FINANCIAL STATEMENTS AND THE MANAGEMENT REPORT
FOR FISCAL 2021
SIEMENS
Independent Auditor's Report (Siemens AG)
To Siemens Aktiengesellschaft, Berlin and Munich
Report on the audit of the annual financial statements and of the management report
Opinions
We have audited the annual financial statements of Siemens Aktiengesellschaft, Berlin and Munich, (the Company) which comprise the
income statement for the fiscal year from October 1, 2020 to September 30, 2021, the balance sheet as of September 30, 2021 and notes
to the financial statements, including the recognition and measurement policies presented therein. In addition, we have audited the
management report of Siemens Aktiengesellschaft, which is combined with the group management report, for the fiscal year from October
1, 2020 to September 30, 2021. In accordance with the German legal requirements, we have not audited the content of the Corporate
Governance Statement which is published on the website stated in the combined management report.
In our opinion, on the basis of the knowledge obtained in the audit,
.
the accompanying annual financial statements comply, in all material respects, with the requirements of German commercial law
applicable to business corporations and give a true and fair view of the assets, liabilities and financial position of the Company as of
September 30, 2021 and of its financial performance for the fiscal year from October 1, 2020 to September 30, 2021 in compliance
with German legally required accounting principles, and
TO THE ANNUAL FINANCIAL STATEMENTS AND THE MANAGEMENT REPORT
FOR FISCAL 2021
Our audit procedures did not lead to any reservations relating to the accounting for uncertain tax positions and the assessment of the
recoverability of deferred tax assets.
100
44
Siemens, s.r.o., Prague / Czech Republic
100
27
12
Siemens Mobility, s.r.o., Prague / Czech Republic
100
52
17
100
84
14
100
24
7
100
388
23
OEZ s.r.o., Letohrad / Czech Republic
Siemens S.A./N.V., Beersel / Belgium
Siemens Mobility S.A. / N.V, Beersel / Belgium
Siemens Industry Software NV, Leuven / Belgium
100
103
3
100
6
53
7
Siemens Industry Software SAS, Châtillon / France
100
222
22
Siemens Healthcare SAS, Saint-Denis / France
100
224
74
Siemens France Holding SAS, Saint-Denis / France
105
6,871
(262)
ATOS SE, Bezons / France
100
40
9
Siemens Osakeyhtiö, Espoo / Finland
672,3
Siemens Aarsleff Konsortium I/S, Ballerup / Denmark
100
40
Siemens A/S, Ballerup / Denmark
Responsibility Statement
224
24
Siemens Financial Services Private Limited, Mumbai / India
8
69
100
Siemens Healthcare Private Limited, Mumbai / India
31
171
100
Siemens Limited, Mumbai / India
120
1,523
51
Siemens Technology and Services Private Limited, Navi Mumbai / India
28
65
100
P.T. Jawa Power, Jakarta / Indonesia
195
909
505
Siemens Healthcare Diagnostics K.K., Tokyo / Japan
7
207
100
100
85
Mentor Graphics (India) Private Limited, New Delhi / India
29
49
55
Siemens Wiring Accessories Shandong Ltd., Zibo / China
7
14
100
Zhenjiang Siemens Busbar Trunking Systems Co. Ltd., Yangzhong / China
21
33
505
Siemens Limited, Hong Kong / Hong Kong
9
24
100
Bangalore International Airport Ltd., Bangalore / India
(64)
318
206
C&S Electric Limited, New Delhi / India
(4)
248
99
7
Siemens Healthcare K.K., Tokyo / Japan
25
251
39
92
100
Siemens Limited, Taipei / Taiwan, Province of China
13
44
100
Siemens Mobility Limited, Bangkok/Thailand
11
10
100
Siemens Ltd., Ho Chi Minh City / Viet Nam
1
25
100
1 The values correspond to the annual financial statements after a possible profit transfer, for subsidiaries according to the IFRS closing.
2 Siemens AG is a shareholder with unlimited liability of this company.
3 A consolidated affiliated company of Siemens AG is a shareholder with unlimited liability of this company.
4 Values from fiscal year October 01, 2019 - September 30, 2020
5 Values from fiscal year January 01, 2020 - December 31, 2020
6 Values from fiscal year April 01, 2020 - March 31, 2021
7 Therein are 2% held via an investment fund managed by Siemens Fonds Invest GmbH.
n/a = No financial data available.
Siemens Pte. Ltd., Singapore / Singapore
Siemens, Inc., Manila / Philippines
100
3
100
Siemens K.K., Tokyo / Japan
5
180
100
Varian Medical Systems K.K., Tokyo / Japan
10
77
100
Siemens Healthineers Ltd., Seoul / Korea, Republic of
27
99
100
Siemens Ltd. Seoul, Seoul / Korea, Republic of
13
126
100
Dresser-Rand Asia Pacific Sdn. Bhd., Kuala Lumpur / Malaysia
6
100
Siemens Malaysia Sdn. Bhd., Petaling Jaya Malaysia
6
86
100
100
Siemens Switchgear Ltd., Shanghai, Shanghai / China
10
100
69
(9)
Siemens Electronic Design Automation GmbH, Munich
100
31
14
Siemens Campus Erlangen Grundstücks-GmbH & Co. KG, Grünwald
100²
23,511
1,058
Siemens Beteiligungsverwaltung GmbH & Co. OHG, Kemnath
100
13,723
(17)
Siemens Beteiligungen USA GmbH, Berlin
100
21,257
(97)
Siemens Beteiligungen Inland GmbH, Munich
100
5,159
47
Siemens Beteiligungen Europa GmbH, Munich
100
100
Siemens Energy AG, Munich
13,021
1,377
Siemens Healthineers AG, Munich
100
1,619
138
Siemens Healthcare GmbH, Munich
100
473
(13)
Siemens Healthcare Diagnostics Products GmbH, Marburg
100
12
1
100
2,033
8
Siemens Fonds Invest GmbH, Munich
Siemens Financial Services GmbH, Munich
100
130
6
Siemens Finance & Leasing GmbH, Munich
40
200
24,363
1,149
Siemens Bank GmbH, Munich
(7)
100
8
2
1004
(1)
(1)
in %
Equity interest
Equity in
millions of €¹
Net income in
millions of €1
Next47 Services GmbH, Munich
NEO New Oncology GmbH, Cologne
Munipolis GmbH, Munich
KACO new energy GmbH, Neckarsulm
HaCon Ingenieurgesellschaft mbH, Hanover
evosoft GmbH, Nuremberg
Erlapolis 20 GmbH, Munich
Germany (46 companies)
September 30, 2021
NOTE 31 List of subsidiaries and associated companies pursuant to Section 285 para. 11, 11a and
11b of the German Commercial Code
Annual Financial Statements
Siemens Mobility SAS, Châtillon / France
150
29
100
47
100
316
70
RISICOM Rückversicherung AG, Grünwald
1006
66
Project Ventures Butendiek Holding GmbH, Munich
235
648
119
OWP Butendiek GmbH & Co. KG, Bremen
100
53
(1)
Onespin Solutions Holding GmbH, Munich
100
1
(28)
100
1,142
1004
257
100
(16)
75
Siemens Healthineers Beteiligungen GmbH & Co. KG, Röttenbach
95
Siemens Spa, Algiers / Algeria
Europe, Commonwealth of Independent States (C.I.S.), Africa, Middle East (without
Germany) (104 companies)
100
69
2
Yunex GmbH, Munich
100
220
3
VMS Deutschland Holdings GmbH, Darmstadt
205
347
137
Veja Mate Offshore Project GmbH, Oststeinbek
1003
150
(18)
Varian Medical Systems Particle Therapy GmbH & Co. KG, Troisdorf
505
153
(12)
Valeo Siemens eAutomotive GmbH, Erlangen
1004
19
170
40
20
(153)
20
100
42
Siemens Metals Technologies Vermögensverwaltungs GmbH, Vienna / Austria
Siemens Mobility Austria GmbH, Vienna / Austria
100
1,818
359
Siemens Konzernbeteiligungen GmbH, Vienna / Austria
100
112
14
Siemens Healthcare Diagnostics GmbH, Vienna / Austria
100
1,374
160
Siemens Aktiengesellschaft Österreich, Vienna / Austria
100
21
14
ETM professional control GmbH, Eisenstadt / Austria
Annual Financial Statements
20
100
SPT Beteiligungen GmbH & Co. KG, Grünwald
100
(30)
Siemens Mobility GmbH, Munich
100
80
28
Siemens Logistics GmbH, Constance
100
308
13
Siemens Industry Software GmbH, Cologne
100
92
68
Siemens Immobilien GmbH & Co. KG, Grünwald
100
101
101
Siemens Healthineers Innovation GmbH & Co. KG, Röttenbach
100
(4,811)
(60)
Siemens Healthineers Holding I GmbH, Munich
100
23,648
212
2,178
100
Siemens Mobility Real Estate GmbH & Co. KG, Grünwald
(1)
904
321
6
SIM 2. Grundstücks-GmbH & Co. KG, Grünwald
SIMAR Ost Grundstücks-GmbH, Grünwald
100
3
2
100
1,841
653
Siemens Healthcare NV, Beersel / Belgium
100
14
100
263
(26)
Siemens Project Ventures GmbH, Erlangen
Siemens Real Estate GmbH & Co. KG, Kemnath
Siemens Trademark GmbH & Co. KG, Kemnath
Siemens Treasury GmbH, Munich
100
28
Siemens Nixdorf Informationssysteme GmbH, Grünwald
100
121
7
115
100
87
60
100
23
Annual Financial Statements
Siemens Financial Services Ltd., Beijing / China
25
433
100
Siemens Healthcare Diagnostics Manufacturing Ltd., Shanghai, Shanghai / China
(7)
77
100
Siemens Healthineers Diagnostics (Shanghai) Co., Ltd., Shanghai / China
41
333
100
Siemens Healthineers Ltd., Shanghai / China
96
132
182
23
30
Siemens Circuit Protection Systems Ltd., Shanghai, Shanghai / China
25
Siemens Finance and Leasing Ltd., Beijing / China
Siemens Factory Automation Engineering Ltd., Beijing / China
85
134
63
Siemens Electrical Drives Ltd., Tianjin / China
100
40
32
Siemens Electrical Drives (Shanghai) Ltd., Shanghai / China
100
122
74
Siemens Electrical Apparatus Ltd., Suzhou, Suzhou / China
75
100
100
29
162
100
19
123
100
Siemens Numerical Control Ltd., Nanjing, Nanjing / China
73
80
Siemens Shanghai Medical Equipment Ltd., Shanghai / China
102
128
100
Siemens Shenzhen Magnetic Resonance Ltd., Shenzhen / China
60
99
100
Siemens Standard Motors Ltd., Yizheng / China
Siemens Industrial Automation Products Ltd., Chengdu, Chengdu / China
93
17
89
85
Siemens Mobility Equipment (China) Co., Ltd, Shanghai Pilot Free Trade Zone / China
Siemens Mobility Technologies (Beijing) Co., Ltd, Beijing / China
192
Siemens Industry Software (Shanghai) Co., Ltd., Shanghai / China
39
81
100
Siemens Ltd., China, Beijing / China
Siemens Medium Voltage Switching Technologies (Wuxi) Ltd., Wuxi / China
Siemens International Trading Ltd., Shanghai, Shanghai / China
41
100
851
2,333
100
50
55
13
100
Cash flows from operating activities – continuing operations¹
Amortization, depreciation and impairments¹
Five-Year Summary
Cash flows from investing activities - continuing operations¹
Additions to intangible assets and property, plant and equipment¹
Cash flows from financing activities - continuing operations¹
Change in cash and cash equivalents
Free cash flow - continuing and discontinued operations
Free cash flow - continuing operations¹
Employees
Continuing operations (in thousands)¹
56,797
FY 2020
FY 2019
FY 2018
FY 2017
62,265
55,254
55,538
Cash flows
FY 2021
Total assets
7
Provisions for pensions and similar obligations
Equity (including non-controlling interests)
Independent Auditor's Report (Siemens AG)
82,863
Five-Year Summary
FOR THE FIVE YEARS UNTIL FISCAL 2021
SIEMENS
(in millions of €, except where otherwise stated)
Revenue and profit
Revenue¹
Gross profit¹
Income from continuing operations¹
Net income
Assets, liabilities and equity2
Current assets
Current liabilities
Debt
Long-term debt
Net debt
as a percentage of total assets
22,737
Sep 30,
21,381
2017
52,340
52,968
70,370
64,556
60,750
39,952
34,117
50,723
47,874
46,077
48,700
44,567
36,449
32,177
32,224
40,879
2018
19,888
2019
2021
20,535
25,043
5,636
4,156
5,063
5,084
6,041
6,697
4,200
5,648
6,120
6,094
Sep 30,
Sep 30,
Sep 30,
[German Public Auditor]
Sep 30,
2020
Wirtschaftsprüfer
Evaluate whether the ESEF documents enable an XHTML rendering with content equivalent to the audited annual financial statements
and to the audited management report.
[German Public Auditor]
In preparing the annual financial statements, management is responsible for assessing the Company's ability to continue as a going
concern. It also has the responsibility for disclosing, as applicable, matters related to going concern. In addition, management is
responsible for financial reporting based on the going concern basis of accounting, provided no actual or legal circumstances conflict
therewith.
Furthermore, management is responsible for the preparation of the management report that as a whole provides an appropriate view of
the Company's position and is, in all material respects, consistent with the annual financial statements, complies with German legal
requirements and appropriately presents the opportunities and risks of future development. In addition, management is responsible for
such arrangements and measures (systems) as management has considered necessary to enable the preparation of a management report
that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropriate evidence for the
assertions in the management report.
The Supervisory Board is responsible for overseeing the Company's financial reporting process for the preparation of the annual financial
statements and of the management report.
Auditor's responsibilities for the audit of the annual financial statements and of the management report
Our objectives are to obtain reasonable assurance about whether the annual financial statements as a whole are free from material
misstatement, whether due to fraud or error, and whether the management report as a whole provides an appropriate view of the
Company's position and, in all material respects, is consistent with the annual financial statements and the knowledge obtained in the
audit, complies with the German legal requirements and appropriately presents the opportunities and risks of future development, as well
as to issue an auditor's report that includes our opinions on the annual financial statements and on the management report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Sec. 317 HGB and
the EU Audit Regulation as well as in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated
by the IDW and in supplementary compliance with ISA will always detect a material misstatement. Misstatements can arise from fraud or
4
Independent Auditor's Report (Siemens AG)
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these annual financial statements and this management report.
We exercise professional judgment and maintain professional skepticism throughout the audit. We also:
•
•
Identify and assess the risks of material misstatement of the annual financial statements and of the management report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
Obtain an understanding of internal control relevant to the audit of the annual financial statements and of arrangements and measures
(systems) relevant to the audit of the management report in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of these systems of the Company.
Evaluate the appropriateness of accounting policies used by management and the reasonableness of estimates made by management
and related disclosures.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor's
report to the related disclosures in the annual financial statements and in the management report or, if such disclosures are inadequate,
to modify our respective opinions. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report.
However, future events or conditions may cause the Company to cease to be able to continue as a going concern.
•
•
Management is responsible for the preparation of the annual financial statements that comply, in all material respects, with the
requirements of German commercial law applicable to business corporations, and that the annual financial statements give a true and fair
view of the assets, liabilities, financial position and financial performance of the Company in compliance with German legally required
accounting principles. In addition, management is responsible for such internal control as it, in accordance with German legally required
accounting principles, has determined necessary to enable the preparation of annual financial statements that are free from material
misstatement, whether due to fraud or error.
Evaluate the overall presentation, structure and content of the annual financial statements, including the disclosures, and whether the
annual financial statements present the underlying transactions and events in a manner that the annual financial statements give a true
and fair view of the assets, liabilities, financial position and financial performance of the Company in compliance with German legally
required accounting principles.
Responsibilities of management and the Supervisory Board for the annual financial statements and the
management report
⚫ is materially inconsistent with the annual financial statements, with the management report or our knowledge obtained in the audit, or
• otherwise appears to be materially misstated.
Independent Auditor's Report (Siemens AG)
Reference to related disclosures: With regard to the recognition and measurement policies applied in accounting for income taxes, refer
to chapter 3.2 Accounting and Measurement Principles and chapter 3.3 Notes to the Income Statement, Note 6 Income taxes and with
respect to disclosures for deferred tax assets, refer to chapter 3.4 Notes to the Balance Sheet, Note 13 Deferred tax assets in the notes to
the financial statements.
Other information
The Supervisory Board is responsible for the Report of the Supervisory Board in the Annual Report 2021 within the meaning of ISA [DE]
720 (Revised). Management and the Supervisory Board are responsible for the declaration pursuant to Sec. 161 AktG ["Aktiengesetz":
German Stock Corporation Act] on the Corporate Governance Code, which is part of the Corporate Governance Statement, and for the
Compensation Report. In all other respects, management is responsible for the other information. The other information comprises the
Corporate Governance Statement referred to above.
In addition, the other information comprises parts to be included in the Annual Report, of which we received a version prior to issuing this
auditor's report, in particular:
•
the Responsibility Statement (to the annual financial statements and the management report),
⚫ the Responsibility Statement (to the consolidated financial statements and the group management report),
•
the Five-Year Summary,
•
the Compensation Report,
⚫ the Report of the Supervisory Board,
• Notes and forward-looking statements,
but not the consolidated financial statements and the annual financial statements, not the disclosures of the combined management
report whose content is audited and not our auditor's reports thereon.
Our opinions on the annual financial statements and on the management report do not cover the other information, and consequently
we do not express an opinion or any other form of assurance conclusion thereon.
In connection with our audit, our responsibility is to read the other information, and, in so doing, to consider whether the other information
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Evaluate the consistency of the management report with the annual financial statements, its conformity with German law and the view
of the Company's position it provides.
• Perform audit procedures on the prospective information presented by management in the management report. On the basis of
sufficient appropriate audit evidence we evaluate, in particular, the significant assumptions used by management as a basis for the
prospective information, and evaluate the proper derivation of the prospective information from these assumptions. We do not express
a separate opinion on the prospective information and on the assumptions used as a basis. There is a substantial unavoidable risk that
future events will differ materially from the prospective information.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Further information pursuant to Art. 10 of the EU Audit Regulation
We were elected as auditor by the Annual Shareholders' Meeting on February 3, 2021. We were engaged by the Supervisory Board on
February 3, 2021. We have been the auditor of Siemens Aktiengesellschaft without interruption since the fiscal year from October 1, 2008
to September 30, 2009.
We declare that the opinions expressed in this auditor's report are consistent with the additional report to the Audit Committee pursuant
to Art. 11 of the EU Audit Regulation (long-form audit report).
In addition to the financial statement audit, we have provided to the Company or entities controlled by it the following services that are
not disclosed in the annual financial statements or in the management report:
In addition to auditing the statutory financial statements of Siemens AG, we performed the statutory audit of Siemens' consolidated
financial statements, audits of financial statements of subsidiaries of Siemens AG, reviews of interim financial statements integrated in
the audit, project-based IT audits, audit services in connection with the implementation of new accounting standards as well as service
organization control engagements.
Audit-related services include primarily audits of financial statements as well as other attestation services in connection with M&A
activities, attestation services related to the sustainability reporting, comfort letters and other attestation services required under
regulatory requirements, contractually agreed or requested on a voluntary basis. Permitted tax services were rendered in connection with
audit-related support for the analysis of the design of the tax compliance management system performed by Siemens.
Other matter use of the auditor's report
-
Our auditor's report must always be read together with the audited annual financial statements and the audited management report as
well as the assured ESEF documents. The annual financial statements and the management report converted to the ESEF format -
including the versions to be published in the Bundesanzeiger [German Federal Gazette] - are merely electronic renderings of the audited
annual financial statements and the audited management report and do not take their place. In particular, the ESEF report and our
assurance opinion contained therein are to be used solely together with the assured ESEF documents made available in electronic form.
6
German Public Auditor responsible for the engagement
The German Public Auditor responsible for the engagement is Katharina Breitsameter.
Munich, November 30, 2021
Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft
Breitsameter
Wirtschaftsprüferin
Evaluate the technical validity of the ESEF documents, i.e., whether the file containing the ESEF documents meets the requirements of
Commission Delegated Regulation (EU) 2019/815, in the version in force at the date of the financial statements, on the technical
specification for this file.
Obtain an understanding of internal control relevant to the assurance on the ESEF documents in order to design assurance procedures
that are appropriate in the circumstances, but not for the purpose of expressing an assurance opinion on the effectiveness of these
controls.
•
•
We also provide those charged with governance with a statement that we have complied with the relevant independence requirements,
and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where
applicable, the related safeguards.
38,005
Other legal and regulatory requirements
Report on the assurance on the electronic rendering of the annual financial statements and the management
report prepared for publication purposes in accordance with Sec. 317 (3a) HGB
Opinion
We have performed assurance work in accordance with Sec. 317 (3a) HGB to obtain reasonable assurance about whether the rendering
of the annual financial statements and the management report (hereinafter the "ESEF documents") contained in the file SIEMENS_2021.zip
(SHA-256-checksum: c2fee878a23005add85c87b5f4a7cf3e7883b81d2626892870c12ff3d2a977f8) and prepared for publication
purposes complies in all material respects with the requirements of Sec. 328 (1) HGB for the electronic reporting format ("ESEF format").
In accordance with German legal requirements, this assurance work extends only to the conversion of the information contained in the
annual financial statements and the management report into the ESEF format and therefore relates neither to the information contained
within these renderings nor to any other information contained in the file identified above.
In our opinion, the rendering of the annual financial statements and the management report contained in the file identified above and
prepared for publication purposes complies in all material respects with the requirements of Sec. 328 (1) HGB for the electronic reporting
format. Beyond this assurance opinion and our audit opinions on the accompanying annual financial statements and the accompanying
management report for the fiscal year from October 1, 2020 to September 30, 2021 contained in the "Report on the audit of the annual
financial statements and of the management report" above, we do not express any assurance opinion on the information contained within
these renderings or on the other information contained in the file identified above.
Basis for the opinion
Dr. Gaenslen
We conducted our assurance work on the rendering of the annual financial statements and the management report contained in the file
identified above in accordance with Sec. 317 (3a) HGB and the IDW Assurance Standard: Assurance on the Electronic Rendering of Financial
Statements and Management Reports Prepared for Publication Purposes in Accordance with Sec. 317 (3a) HGB (IDW ASS 410) and the
International Standard on Assurance Engagements 3000 (Revised). Our responsibility in accordance therewith is further described in the
Independent Auditor's Report (Siemens AG)
"Auditor's responsibilities for the assurance work on the ESEF documents" section. Our audit firm applies the IDW Standard on Quality
Management 1: Requirements for Quality Management in the Audit Firm (IDW QS 1).
Responsibilities of management and the Supervisory Board for the ESEF documents
Management is responsible for the preparation of the ESEF documents including the electronic rendering of the annual financial
statements and the management report in accordance with Sec. 328 (1) Sentence 4 No. 1 HGB.
In addition, management is responsible for such internal control as it has determined necessary to enable the preparation of ESEF
documents that are free from material intentional or unintentional non-compliance with the requirements of Sec. 328 (1) HGB for the
electronic reporting format.
The Supervisory Board is responsible for overseeing the process for preparing the ESEF documents as part of the financial reporting process.
Auditor's responsibilities for the assurance work on the ESEF documents
Our objective is to obtain reasonable assurance about whether the ESEF documents are free from material intentional or unintentional
non-compliance with the requirements of Sec. 328 (1) HGB. We exercise professional judgment and maintain professional skepticism
throughout the assurance work. We also:
• Identify and assess the risks of material intentional or unintentional non-compliance with the requirements of Sec. 328 (1) HGB, design
and perform assurance procedures responsive to those risks, and obtain assurance evidence that is sufficient and appropriate to provide
a basis for our assurance opinion.
5
30,414
7,225
26,777
3 For FY 2021 to be proposed to the Annual Shareholders' Meeting.
2
Compensation Report
2021
SIEMENS
Siemens Aktiengesellschaft
Berlin and Munich
Compensation Report 2021
This Compensation Report provides an explanation and a clear and com-
prehensible presentation of the compensation individually awarded
and due to the current and former members of the Managing Board and
the Supervisory Board of Siemens AG for fiscal 2021 (October 1, 2020 to
September 30, 2021). The Report complies with the requirements of the
German Stock Corporation Act (Aktiengesetz, AktG). Detailed information
regarding the compensation systems for members of the Managing Board
and the Supervisory Board of Siemens AG is available on the Siemens
Global Website www.SIEMENS.COM/CORPORATE-GOVERNANCE.
Due to rounding, numbers presented throughout this document may not
add up precisely to the totals provided and percentages may not precisely
reflect the absolute figures.
Table of
contents
A. Fiscal 2021 in retrospect
4
B. Compensation of Managing Board members
6
B.1 The compensation system at a glance
B.2 Principles of the determination of compensation
6
9
B.2.1 Target compensation and compensation structure
2 Beginning with September 30, 2018 under consideration of IFRS 9.
9
1 In FY 2020, Gas and Power and Siemens Gamesa Renewable Energy were classified as discontinued operations. Prior-period amounts beginning with FY 2018 are presented on a comparable basis.
In FY 2021, Flender GmbH was classified as discontinued operation. Prior-period amounts beginning with FY 2019 are presented on a comparable basis.
€3.80
€4.77
€5.82
€5.94
€7.27
Diluted earnings per share - continuing and discontinued operations
Diluted earnings per share - continuing operations¹
€7.59
€4.93
€6.32
€7.01
€7.19
€6.28
€4.70
€5.74
€5.84
€7.13
Dividend per share³
€4.00
€3.50
€3.90
€3.70
B.2.2 Maximum compensation
B.2.3 Appropriateness of compensation
11
Other
Independent auditor's report
32
KE
35
38
39
Compensation Report → A. Fiscal 2021 in retrospect
| A. Fiscal 2021 in retrospect
The Managing Board and the Supervisory Board of
Siemens AG have decided to voluntarily implement
ahead of time the new legal requirements regarding the
issuance of the Compensation Report that are set out in
Section 162 of the German Stock Corporation Act. The
emphasis of the Report continues to be on providing
clear, transparent and comprehensive reporting. The
Managing Board and the Supervisory Board have also
decided to commission the independent auditor to con-
duct a substantive audit of the Compensation Report,
over and above the requirement set out in Section 162
para. 3 sent. 1 and 2 of the German Stock Corporation Act.
What did the economic and
political environment look like
at the start of fiscal 2021?
In the fall of 2020, the outlook for the fiscal year ahead
was anything but stable. Due to the ongoing COVID-19
pandemic, Siemens and its customers and partners
worldwide faced major challenges. In the U.S., the presi-
dential election was imminent, and it wasn't clear what
economic consequences the tense relations between the
U.S. and China would have. There were also structural
problems in Siemens' key customer sectors such as ma-
chine building due to low capacity utilization - and in
the automobile industry, which is undergoing a dramatic
structural transformation. All these factors are having an
impact on Siemens' business. In retrospect, we've experi-
enced an exciting and a very challenging, but also a very
successful fiscal year. The employees of Siemens have
delivered a stellar performance in difficult times.
-
Changes in the
Managing Board and the
Compensation Committee
In fiscal 2021, there were also changes in the Managing
Board. Matthias Rebellius and Judith Wiese were ap-
pointed full members of the Managing Board effective
October 1, 2020. Joe Kaeser left the Managing Board
effective the end of the Annual Shareholders' Meeting on
February 3, 2021. Klaus Helmrich left the Managing
Board effective March 31, 2021. The Supervisory Board is
very grateful to both Mr. Kaeser and Mr. Helmrich for
their many years of successful work on behalf of Siemens
and for their extraordinary services to the Company.
Dr. Roland Busch was appointed President and CEO effec-
tive the end of the 2021 Annual Shareholders' Meeting.
He combines entrepreneurial farsightedness with a de-
sire to optimally support customers in their digital and
sustainable transformation. The Company is driving this
transformation with technologies that add real value for
customers - technologies that will continue to be crucial
for Siemens in the future and of which Dr. Roland Busch
has a deep and broad understanding.
Following the scheduled departure of Werner Wenning,
the previous, long-serving Chairman of the Compensa-
tion Committee of the Supervisory Board of Siemens AG,
from the Supervisory Board and thereby also from the
Compensation Committee, the Compensation Commit-
tee elected Michael Diekmann to serve as its new Chair-
man effective February 4, 2021. The Compensation Com-
mittee also acquired two new members: Harald Kern,
who joined the Committee in October 2020, succeeding
Robert Kensbock, who left the Supervisory Board
on September 25, 2020, the effective date of the
Siemens Energy spin-off, and Matthias Zachert, who
joined the Committee in February 2021.
FISCAL 2021 4
E.
profit development and annual
change in compensation
D. Comparative information on
C. Compensation of Supervisory Board members
12
B.3 Variable compensation in fiscal 2021
12
B.3.1 Short-term variable compensation (Bonus)
14
B.3.2 Long-term variable compensation (Stock Awards)
18
B.3.3 Malus and clawback regulations
25
€6.36
B.4 Share Ownership Guidelines
B.5 Pension benefit commitment
26
B.6 Compensation awarded and due
27
B.6.1 Active Managing Board members in fiscal 2021
B.6.2 Former members of the Managing Board
27
30
B.7 Outlook for fiscal 2022
31
26
27,120
€7.34
€6.41
FY 2018
FY 2017
10,109
7,851
6,825
7,539
3,075
3,098
2,222
2,131
3,211
(17,192)
(4,050)
(4,166)
(3,288)
(7,456)
(1,730)
(1,498)
(1,739)
FY 2019
(1,820)
FY 2020
136,111
38,022
29,270
22,726
19,840
22,607
2,839
6,360
9,896
7,684
9,582
49,274
35%
139,608
39,823
50,984
48,046
44,619
32%
123,897
34%
150,248
35%
138,915
33%
FY 2021
(2,406)
785
4,267
2020
2019
2018
2017
303
285
287
288
377
Stock market information
Basic earnings per share - continuing and discontinued operations
Basic earnings per share - continuing operations¹
FY 2021
FY 2020
FY 2019
FY 2018
FY 2017
€7.68
€5.00
2021
Sep 30,
Sep 30,
Sep 30,
(1,214)
(2,376)
(1,560)
(4,509)
1,663
1,325
2,677
(2,228)
8,237
€7.12
6,404
5,824
4,769
8,379
6,352
5,086
5,719
4,819
Sep 30,
Sep 30,
5,845
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the
audit of the annual financial statements of the current period and are therefore the key audit matters. We describe these matters in our
auditor's report unless law or regulation precludes public disclosure about the matter.
Compensation Report → A. Fiscal 2021 in retrospect
compensation
861
26%
1,102
26%
2,205
26%
551
26%
755
+ Long-term variable compensation
2021 Stock Awards (vesting: 2020-2024)
2020 Stock Awards (vesting: 2019-2023)
= Total target compensation (TTC)
Bonus for fiscal 2020
Bonus for fiscal 2021
+ Short-term variable compensation
Variable
compensation
43%
1,801
43%
+ BSAV contribution/amount for free disposal
= Total
423
15%
1,235
15%
308
30%
15%
15%
1,234
43%
3,605
43%
901
617
83
630
2,850 100%
Base salary
Fixed
(€ thousand)
March 31, 2021)
Klaus
Helmrich
(until
(until
Feb. 3, 2021)
Judith
Wiese
Kaeser
Prof. Dr.
Ralf P.
Thomas
Matthias
Rebellius
Cedrik
Neike
Busch
Dr. Roland
Joe
Managing Board members
who left during the fiscal year
in office on September 30, 2021
Managing Board members
2,516
8,326 100%
30%
1,259
30%
2,081 100%
4,162
30%
100%
2 Pro-rated compensation for the period from October 1, 2020, up to and including March 31, 2021.
3 For fiscal 2021, each Managing Board member was awarded fringe benefits equal to a maximum 7.5% of his or her base salary.
The target amount reported here is also equal to the maximum amount for the fiscal year on a pro-rated basis.
B.2.2 Maximum compensation
The maximum compensation of each Managing Board
member is determined annually by the Supervisory Board
in accordance with Section 87a para. 1 sent. 2 No. 1 of the
German Stock Corporation Act. Maximum compensation
is equal to the total of the maximum amounts of all com-
pensation components that can possibly be paid out to
each Managing Board member for the relevant fiscal
year. It is calculated by adding base salary, maximum
fringe benefits, the BSAV contribution (or the amount
for free disposal) as well as two times the Bonus target
Maximum compensation fiscal 2021
amount and three times the Stock Awards target amount.
Twice the Bonus target amount and triple the Stock
Awards target amount also correspond to the respective
limits (individual caps) on the amount of variable com-
pensation.
The following table shows the maximum compensation
of each Managing Board member as approved by the
Supervisory Board for fiscal 2021 in accordance with Sec-
tion 87a para. 1 sent. 2 No. 1 of the German Stock Corpo-
ration Act.
1 Pro-rated compensation for the period from October 1, 2020, up to and including February 3, 2021.
1,770
2%
2%
1,259
2021 Stock Awards (vesting: 2020-2024)
+ Long-term variable compensation
Bonus for fiscal 2020
27%
1,102
+ Short-term variable compensation
Bonus for fiscal 2021
Variable
compensation
42%
1,735
= Total
13%
551
+ BSAV contribution/amount for free disposal³
2%
83
+Fringe benefits²
35%
4,096
100%
4,447
100% 4,447 100%
Judith Wiese
31%
Managing Board member since Oct. 1, 2020
2020
€ thousand in % of TTC € thousand in % of TTC
27%
Fixed
Base salary
1,102
compensation
2021
41
2020 Stock Awards (vesting: 2019-2023)
4,096
165
2%
57
+ Fringe benefits³
compensation
26%
1,102
26%
551
26%
2,205
26%
755
Base salary
Fixed
€ thousand in % of TTC € thousand in % of TTC
€ thousand in % of TTC € thousand in % of TTC
100%
1 Dr. Roland Busch was first appointed a full member of the Managing Board effective April 1, 2011. He served as Deputy CEO from October 1, 2019, until the
end of the Annual Shareholders' Meeting on February 3, 2021, when he succeeded Joe Kaeser as President and CEO.
2 For fiscal 2021, each Managing Board member was awarded fringe benefits equal to a maximum 7.5% of his or her base salary. The target amount reported
here is also equal to the maximum amount.
3 Matthias Rebellius and Judith Wiese are not included in the Siemens Defined Contribution Pension Plan (BSAV). Instead of BSAV contributions, they receive
a fixed cash amount for free disposal.
FISCAL 2021 10
Target compensation fiscal 2021 (cont.)
= Total target compensation (TTC)
Compensation Report → B. Compensation of Managing Board members
Klaus Helmrich²
Managing Board member until March 31, 2021
Managing Board members
who left during the fiscal year
2021
2020
2021
2020
Joe Kaeser¹
President and CEO until Feb. 3, 2021
1,544
1,102
1,102
The focus topics in fiscal 2021 comprised business development, optimization/efficiency
enhancement, the implementation of portfolio measures and the implementation of
other strategic measures.
The individual targets for executing the Company strategy enable the Company to focus
on specific factors that are aligned with its short- and medium-term targets and measures
in order to ensure its long-term strategic development.
index
Siemens-internal
ESG/Sustainability
Diverse focus
topics
Diverse focus
topics
Sustainability
of Company
strategy
Execution
TSR is a yardstick for measuring the achievement of Siemens' strategic goal of sustainably
increasing Company value. It indicates total value creation for shareholders in the form
of increases in the Siemens share price and dividends paid.
Further accelerating high-value qualitative growth is a key element of Siemens' strategy.
As a focused technology company, Siemens wants to expand its position on all targeted
markets and tap additional profitable markets.
CCR measures the ability to convert profit into cash flow in order to finance growth and
offer our shareholders an attractive, progressive dividend policy.
ROCE, which is the primary measure for managing capital efficiency at Group level,
reflects our focus on profitable growth, the implementation of measures to sustainably
increase competitiveness and stringent working capital management.
EPS reflects the net income attributable to the shareholders of Siemens AG and incen-
tivizes the sustainable increase in profit - particularly by focusing on profitable growth.
This key performance indicator provides a comprehensive perspective that encompasses
all units of the Siemens Group.
Awards Link to strategy
Stock
Total shareholder
return (TSR)
Compensation Report → B. Compensation of Managing Board members
Performance
criterion
Key performance
indicator/focus topic Bonus
Profit
Profitability/
capital efficiency
→ Succession planning – Thorough succession planning ensures sustainable
Company development and fosters talents and young employees.
Liquidity
Long-term
value creation
Earnings per
share (EPS)
Return on capital
employed (ROCE)
Cash conversion
rate (CCR)
Comparable
revenue growth
Growth
Performance criteria of variable compensation and link to strategy
→ Innovation performance - Innovation is the basis of our success. The development
and introduction of future-oriented technologies, products and services create opportu-
nities for a sustainable and better future by, among other things, reducing emissions
and waste and enhancing resource efficiency.
→ Sustainability/diversity - Siemens honors its social responsibility by achieving
ambitious sustainability targets and by fostering diversity, inclusion and equal
opportunity.
14
FISCAL 2021
33.33%
Individual
targets
Board portfolio
33.33%
Managing
payout amount
Bonus
Group
X
33.34%
Siemens
Weighted average target achievement (0%-200%)
target amount
Bonus
At the end of the fiscal year, target achievement for the
individual key performance indicators and the achieve-
ment of the Managing Board members' individual tar-
gets are determined and aggregated to form a weighted
average. The percentage of weighted target achieve-
ment multiplied by the individual target amount yields
the Bonus payout amount for the past fiscal year. The
payable Bonus is capped at two times the target amount
and is paid in cash, at the latest, together with the com-
pensation paid at the end of February of the following
fiscal year.
cators. Within the "Individual targets" dimension, the
financial performance criteria growth and liquidity can be
employed as can additional non-financial performance
criteria. In the case of non-financial performance criteria,
the Supervisory Board considers the degree to which a
Managing Board member has fulfilled so-called focus
topics, which comprise operations-related aspects of the
execution of the Company's strategy as well as sustain-
ability-related aspects.
Bonus design and calculation of payout amount
Performance criteria are assigned to each of the three
target dimensions based on Company priorities and the
responsibilities of each Managing Board member. One
financial performance criterion is assigned to the
"Siemens Group" dimension and another to the "Manag-
ing Board portfolio" dimension. The fulfillment of these
criteria is measured on the basis of key performance indi-
The Siemens-internal ESG/Sustainability index for the 2021 Stock Awards tranche
includes:
→ CO2 emissions - Climate neutrality by 2030 in order to support the 1.5-degree target
and thus combat global warming.
→ Digital learning hours - Focus on learning in order to empower our people to
remain resilient and relevant in a constantly changing environment.
→ Net Promoter Score - Strong customer relationships are the basis for sustainable
development both for Siemens and for our customers.
The Supervisory Board aims to ensure that the targets
for variable compensation are demanding and ambitious.
If they are not reached, variable compensation can be
reduced to zero. If the targets are significantly exceeded,
target achievement is capped at 200%.
FISCAL 2021
→ Employee satisfaction - Satisfied employees feel valued. They are motivated
and resilient, tackle challenges gladly and thus make a major contribution to the
Company's success.
13
B.3.1 Short-term variable
compensation (Bonus)
B.3.1.1 BASIC PRINCIPLES AND FUNCTIONING
The Bonus system is based on three equally weighted
target dimensions, which take account of the overall re-
sponsibility of the Managing Board as well as each Man-
aging Board members' specific business responsibilities
and individual challenges:
→ "Siemens Group"
→ "Managing Board portfolio"
→ "Individual targets."
Compensation Report → B. Compensation of Managing Board members
1,102
FINANCIAL TARGETS
12
2,203
3,540
= Maximum compensation
(three times target amount)'
+
vesting: 2020-2024
2021 Stock Awards
compensation + (two times target amount)
Bonus for fiscal 2021
Variable
308
423
551
617
551
617
991
1,102
755
551
+
Fringe benefits (maximum amount)
133
2,203
83
83
83
57
41
BSAV contribution/amount for
+ free disposal
83
NON-FINANCIAL, QUALITATIVE TARGETS
2,203
1,509
FISCAL 2021
The performance criteria relevant for fiscal 2021, the key
performance indicators, the focus topics and the ex-
planations of how these foster the Company's long-term
development are shown in the following table.
The performance criteria and the key performance indi-
cators used to measure performance for variable com-
pensation in fiscal 2021 are derived from the Company's
strategic goals and operational steering and are in line
with the current compensation system. As a rule, all the
performance criteria measure successful value creation
in all its different forms, as strategically envisioned.
In line with Siemens' social responsibility, sustainability
is also included in the performance criteria.
Variable compensation is tied to performance and
accounts for a significant proportion of the total compen-
sation of Managing Board members. It consists of a short-
term variable component (Bonus) and a long-term variable
component (Stock Awards).
B.3 Variable compensation
in fiscal 2021
The appropriateness review of Managing Board com-
pensation for fiscal 2021 has shown that the Managing
Board compensation resulting from target achievement
in fiscal 2021 is appropriate.
to a status quo analysis, the vertical comparison took into
account the development of compensation ratios over
time. Since Siemens Healthineers is a separately man-
aged, publicly listed company, its workforce was not in-
cluded in the vertical comparison.
B.2.3 Appropriateness of compensation
The Supervisory Board conducted the annual review of
Managing Board compensation in order to determine
the latter's appropriateness and conformity with market
conditions. For this purpose, the Supervisory Board
assessed with the assistance of an external and inde-
pendent compensation consultant and in accordance
with the compensation system the compensation's
level and structure relative to the companies included in
the DAX 40, the German blue-chip stock index, and rela-
tive to the companies included in the STOXX Europe 50
(horizontal comparison). In the course of its review, the
Supervisory Board also assessed the development of
Managing Board compensation relative to the compen-
sation of Senior Management and Siemens' total work-
force in Germany (vertical comparison). Senior Manage-
ment comprises executive employees. The total
workforce comprises Senior Management as well as the
Siemens employees who are covered by collective bar-
gaining agreements and those who are not. In addition
-
The final assessment of compliance with the maximum
compensation for fiscal 2021 will be included in the Com-
pensation Report for fiscal 2025.
be exceeded even if the value of the Siemens shares
transferred equals 300% of the Stock Awards target
amount (cap).
Since the 2021 Stock Awards tranche is not due until No-
vember 2024, compliance with the maximum limit of the
Stock Awards for fiscal 2021 can only be finally assessed
in November 2024, when the 2021 Stock Awards tranche
is settled. However, compliance with the maximum com-
pensation for fiscal 2021 in accordance with Section 87a
of the German Stock Corporation Act is already ensured
since the maximum compensation for fiscal 2021 will not
The base salary and the BSAV contribution (or the amount
for free disposal) are fixed amounts. In no case did the
fringe benefits awarded to a Managing Board member
exceed the maximum amount defined for fiscal 2021. The
Bonus cap was not reached in fiscal 2021.
Compensation Report B. Compensation of Managing Board members
FISCAL 2021 11
1 The value of the Siemens shares transferred after the expiration of the vesting period is capped at 300% of the Stock Awards target amount.
If this cap is exceeded, a corresponding number of Stock Awards is forfeited without refund or replacement.
3,891
1,102
7,170
3,777
3,777
4,632
3,777
2,203
2,583
13,604
7,781
7,715
8,636
7,715
5,327
1,889
35%
2%
31%
in compensation
system
Implementation
Link to strategy
Compensation Report B. Compensation of Managing Board members
7
FISCAL 2021
No application in fiscal 2021
In cases of severe breaches of duty or
compliance and/or unethical behavior
or in cases of grossly negligent or willful
breaches of duty of care or in cases in
which variable compensation compo-
nents linked to the achievement of
specific targets have been unduly paid
out on the basis of incorrect data, the
Supervisory Board can withhold
or reclaim variable compensation.
Aim to ensure sustainable Company
development and avoid inappropriate
risks.
Malus and clawback
regulations
→ Other Managing Board members:
€1,259,000
→ President and CEO: €2,390,000
→ CFO: €1,544,000
Target amounts (based on 100% target
achievement)
Net Promoter Score
80%: development of TSR relative
to MSCI World Industrials index
20%: ESG key performance
indicators: CO2 emissions,
digital learning hours and
→ Performance criteria:
→
€1,101,600
VARIABLE COMPENSATION
Long-term variable
compensation (Stock Awards)
Fosters long-term commitment and
provides incentives for sustainable
value creation in accordance with
the interests of shareholders and
for the achievement of strategic sus-
tainability targets.
Performance-oriented plan settled
by share transfer after the end of
an approximately four-year vesting
period
→ Performance range: 0% to 200%,
using linear interpolation
Application
in 2021
→ Two performance criteria:
•
36-month performance period
Outperformance relative to
sector index-/+20 percent-
age points
- 20%: Siemens-internal ESG/Sus-
tainability index with three equally
weighted key performance indica-
tors and annual interim targets
→ Payout cap: 300% of target amount
2021 Stock Awards tranche
→ Grant date: November 13, 2020
End of vesting period: in Novem-
ber 2024
80%: development of total
shareholder return (TSR) relative
to an international sector index
• 12-month reference and
→ President and CEO: €1,770,000
→ Other Managing Board members:
OTHER BENEFITS
→ Commitments granted in connec-
tion with the commencement of
Managing Board appointments:
Compensation for the loss of
benefits from a former employer
Moving expenses due to a change
of the regular place of work at the
request of the Company
and compensation structure
B.2.1 Target compensation
B.2 Principles of the
determination of compensation
FISCAL 2021 8
→ Verification date: March 12, 2021
→ Relevant share price: €111.13
→ Fulfilled by all the Managing Board
members obligated to provide
verification
→ Obligation to purchase additional
shares if the value of the accu-
mulated shareholding falls below
the respective amounts to be
verified due to fluctuations in
the Siemens share price
→ Relevant share price: average Xetra
opening price of the fourth quarter
of the previous calendar year
→ Verification date on second Friday
in March
→ Four-year build-up phase
→ Obligates Managing Board members
to permanently hold Siemens shares
of an amount equal to a multiple of
their base salary during their terms
of office on the Managing Board
President and CEO: 300%
- Other Managing Board
members: 200%
Foster an alignment of Managing
Board and shareholder interests and
provide additional incentives to
sustainably increase Company value.
SHARE OWNERSHIP GUIDELINES
→ Reporting in Compensation Report
for fiscal 2025
→ Final assessment of compliance with
maximum compensation when the
2021 Stock Awards tranche is settled
in fiscal 2025
→ Maximum compensation for each
Managing Board member for fiscal
2021 determined in accordance
with the compensation system
+ three times the Stock Awards
target amount
+ two times the Bonus
target amount
-
→ Commitments in connection with
the termination of Managing Board
appointments:
Termination by mutual agreement
and without serious cause
Change of control (only for
first-time appointments and/or
reappointments before Novem-
ber 2019)
→ Compensation alloted to Judith Wiese
for the loss of benefits granted by her
former employer: €1,469,124 (gross)
50% in the form of Stock Awards
additionally to the 2021 tranche
-
in November 2020
Are part of competitive compensation
and help the Company obtain the
best candidates worldwide for the
Managing Board.
50% in cash in March 2021
Caps Managing Board members'
compensation in order to avoid
uncontrollably high payments and
thus disproportionate costs and risks
for the Company.
→ Determined annually by the
Supervisory Board
→ Equals the sum of maximum
amounts that can possibly be
paid out to each Managing Board
member from all compensation
components for the relevant fiscal
year and is calculated as follows:
Base salary
+ maximum fringe benefits
+ BSAV contribution or amount
for free disposal
MAXIMUM COMPENSATION
The Supervisory Board has determined, in accordance
with the compensation system for the Managing Board
members, the amount of each Managing Board mem-
ber's total target compensation for fiscal 2021. In making
this determination, the Supervisory Board has ensured
that the proportion of long-term variable compensation
always exceeds that of short-term variable compensation
and that the proportions of the individual compensation
components are within the ranges defined in the com-
pensation system.
Target amounts (based on 100% target
achievement)
Growth (for Managing Board
members with business responsi-
bility and the President and CEO)
→ Other Managing Board members:
€1,101,600 p.a.
→ President and CEO:
€1,770,000 p.a.
→ Payment in 12 monthly installments
→ Contractually agreed fixed annual
compensation based on a
Managing Board member's duties
and related responsibilities and his
or her experience
Base salary
Competitive compensation in order to obtain the best candidates worldwide to develop and execute the Company's
strategy and manage its operations and in order to retain these individuals at the Company over the long term
FIXED COMPENSATION
Application
in 2021
in compensation
system
Implementation
Link to strategy
The following table provides an overview of the compo-
nents of the compensation system for Managing Board
members, the underlying goals (including the link to the
Company's strategy) and the components' concrete im-
plementation in fiscal 2021.
The Managing Board compensation system is also sup-
plemented by commitments granted in connection with
the commencement and termination of appointments to
the Managing Board as well as any change in the regular
place of work.
The Share Ownership Guidelines are a further key com-
ponent of the compensation system. They obligate Man-
aging Board members to permanently hold Siemens
shares worth a defined multiple of their base salary and
to purchase additional shares in the event that the value
of their shares falls below the defined amount.
The compensation of the Managing Board members con-
sists of fixed and variable components. Fixed compensa-
tion, which is not performance-based, comprises base
salary, fringe benefits and a pension benefit commit-
ment. Short-term variable compensation (Bonus) and
long-term variable compensation (Stock Awards) are per-
formance-based compensation and thus variable.
The current compensation system for the members of
the Managing Board of Siemens AG has been in place
since fiscal 2020 and was endorsed by the Annual Share-
holders' Meeting on February 5, 2020, by a majority of
94.51%.
B.1 The compensation system
at a glance
How is the new strategy
reflected in Managing Board
compensation?
The Managing Board presented the new Company strat-
egy for accelerated high value growth at Capital Market
Day on June 24, 2021: Siemens as a focused technology
company, active in highly attractive growth markets that
are the backbone of the global economy: industry, infra-
structure, transportation and healthcare. The Supervisory
Board is convinced that this strategy positions Siemens to
meet the challenges of the future. The Managing Board
compensation that has been determined by the Supervi-
sory Board fosters the implementation of the Company's
strategic targets by providing incentives for increasing
profit and capital efficiency and for cash generation.
Taking into account all the changes and the existing chal-
lenges, the Compensation Committee of the Supervisory
Board intensively discussed the key performance indica-
tors for variable compensation as well as the individual
targets for Managing Board members. As a result of its
decision to place the focus on the Managing Board's over-
all responsibility and cross-business collaboration, two-
thirds of the short-term variable compensation (Bonus)
of all Managing Board members were determined on the
basis of the same criteria. Strategic and sustainability-
related aspects, which are measured on the basis of the
members' individual areas of responsibility, are anchored
in the remaining third of short-term variable compensa-
tion, the "individual targets."
-
-
Sustainability strategic goal and an expression of
Siemens' social responsibility – is also firmly anchored in
the long-term variable compensation of both the Manag-
ing Board and the roughly 7,000 other Company manag-
ers worldwide. At Capital Market Day in 2021, DEGREE, a
framework that addresses sustainability from every angle
and defines ambitious targets, was introduced. As a re-
sult, the environment, society and good governance will
play a significantly stronger role. The key performance
indicators applied in long-term variable compensation are
part of this framework (CO2 emissions and digital learning
hours) and/or reflect the Company's priorities (Net Pro-
moter Score as an expression of customer satisfaction).
Fringe benefits
How did Siemens perform
in fiscal 2021?
-
In line with the principle anchored in the compensation
system namely, that exceptional performance should
be appropriately rewarded and that failure to achieve tar-
gets should result in a perceptible reduction in compen-
sation (the pay for performance principle) – the excellent
results of fiscal 2021 are reflected in the Managing
Board's variable compensation, which takes into account
not only financial success but also environmental and
social aspects. As a result, the compensation of the Man-
aging Board members is also oriented toward the inter-
ests of the shareholders as well as the other stakeholders
of Siemens AG.
FISCAL 2021
5
Compensation Report B. Compensation of Managing Board members
B. Compensation of
Managing Board members
Despite the challenges and the economic and pandem-
ic-related uncertainty, Siemens has achieved outstanding
results. For example, the Company succeeded in main-
taining its supply chains and its delivery capacity during
the fiscal year and continued to be a reliable partner to its
customers. These developments were reflected in the
strong financial performance in fiscal 2021. Siemens
raised its outlook several times during the fiscal year,
most recently after the third quarter, and reached or ex-
ceeded all the targets set for the primary measures for
fiscal 2021. Return on capital employed (ROCE) was in
double-digits, and the capital structure ratio came in at
1.5. Basic EPS from net income increased 54% to €7.68. In
addition, free cash flow from continuing and discontin-
ued operations for fiscal 2021 increased 29% year-over-
year to €8.2 billion, reaching a new high. Revenue also
was higher at all industrial businesses, rising to €62.3 bil-
lion. Siemens achieved revenue growth of 11.5% net of
currency translation and portfolio effects and delivered
net income of €6.7 billion. Discontinued operations,
largely related to the sale of Flender, contributed income
of €1.1 billion in fiscal 2021.
1,544
→ Determination of a maximum
amount relative to base salary, cover-
ing expenses incurred to the benefit
of the Managing Board member
Includes in-kind compensation
and fringe benefits granted by the
Company, for example:
In fiscal 2021, Managing Board members
were entitled to fringe benefits equal to
a maximum of 7.5% of their base salary.
the area of responsibility
-
- Cash conversion rate (CCR) in
→33.33% individual targets:
employed (ROCE)
→ Payout: February 2022 (at the latest)
→ 33.34% earnings per share (EPS)
→ 33.33% return on capital
→ Performance period: October 1,
2020, to September 30, 2021
Bonus for fiscal 2021
→ Consideration of extraordinary
developments in justified, infre-
quent special cases possible
- Managing Board portfolio
- Individual targets: two to four
equally weighted financial
targets or focus topics
-Siemens Group
→ Performance range: 0% to 200%,
using linear interpolation
→Three equally weighted target
dimensions:
Performance-oriented annual
Bonus, paid in cash in the subsequent
fiscal year
Provides incentives for strong
annual financial and non-financial
performance as the basis for
long-term Company strategy
and sustainable value creation.
Short-term variable
compensation (Bonus)
Application
in 2021
Implementation
in compensation
system
→ President and CEO:
max. €132,750
→ Other Managing Board members:
max. €82,620
Pension benefit commitment
→ Annual contributions to the
Siemens Defined Contribution
Pension Plan (BSAV)
→ Newly appointed Managing Board
members as of October 1, 2019:
fixed cash amount for free disposal
→ Commitment at beginning
of fiscal year
- Provision of a company car
- Insurance allowances
- Costs of medical checkups
→ Credit to pension account (BSAV
contribution) or payout (amount
for free disposal) in January after
the end of the fiscal year
→ Other Managing Board members:
€616,896
Amount for free disposal
(payment in January 2022)
→ Other Managing Board members:
€550,800
FISCAL 2021 6
Compensation Report B. Compensation of Managing Board members
Link to strategy
BSAV contribution
(credit in January 2022)
→ President and CEO:
€991,200
Composition of total target compensation
- One to three additional individual
targets with focus topics from
the Bonus topic catalogue
Compensation Report B. Compensation of Managing Board members
2021
Bonus for fiscal 2020
+ Short-term variable compensation
Bonus for fiscal 2021
Variable
compensation
+ BSAV contribution/amount for free disposal³
= Total
+ Fringe benefits²
compensation
Base salary
Fixed
100%
100% 4,162
4,162
30%
1,259
1,594 32%
4,942 100%
100%
7,054
43%
1,801
43%
1,770 25%
1,102 26%
1,277
Matthias Rebellius
Managing Board member since Oct. 1, 2020
2020
26%
26%
+ Long-term variable compensation
2021 Stock Awards (vesting: 2020-2024)
2020 Stock Awards (vesting: 2019-2023)
= Total target compensation (TTC)
2,390
34%
1,259
30%
1,102
2021
2020
27%
1,735
42%
1,801
41%
1,801
41%
14%
1,102 27%
25%
1,102
25%
+ Long-term variable compensation
2021 Stock Awards (vesting: 2020-2024)
2020 Stock Awards (vesting: 2019-2023)
Total target compensation (TTC)
1,259
Base salary
1,102
1,801
617
617
€ thousand in % of TTC € thousand in % of TTC
1,102
€ thousand in % of TTC € thousand in % of TTC
1,102
25%
1,102
25%
14%
83
83
2%
83
2%
551
13%
2%
42%
Prof. Dr. Ralf P. Thomas
Managing Board member since Sept. 18, 2013
The following table shows the individualized target com-
pensation of each Managing Board member and the rela-
tive proportions of total target compensation represented
by each of the individual compensation components.
Bonus for fiscal 2020
Bonus for fiscal 2021
+ Short-term variable compensation
Variable
compensation
+ BSAV contribution/amount for free disposal³
= Total
compensation
Base salary
Fixed
in office on September 30, 2021
Managing Board members
Target compensation fiscal 2021
FISCAL 2021 9
1 Joe Kaeser held this position until the end of the Annual Shareholders'
Meeting on February 3, 2021, when he was succeeded by Dr. Roland Busch,
who has held the position since that date.
As in previous years, all components of the compen-
sation of the position of President and CEO¹ were differ-
entiated. As in fiscal 2020, the target amount of
Prof. Dr. Ralf P. Thomas's Stock Awards was differentiated
due to his particular responsibilities as CFO.
In line with the decision not to adjust, as a rule, employee
compensation worldwide in fiscal 2021 due to the ongo-
ing COVID-19 pandemic, the total target compensation of
the Managing Board members was not increased except
in the case of Dr. Roland Busch and is unchanged com-
pared to fiscal 2020. The total target compensation of
Dr. Roland Busch was increased as of October 1, 2020,
due to his appointment as President and CEO effec-
tive the end of the Annual Shareholders' Meeting on
February 3, 2021, and the related expansion of his duties
already at the beginning of fiscal 2021.
of total target compensation
30% to 42%
TOTAL TARGET COMPENSATION
2,071
FIXED COMPENSATION
+ Fringe benefits
+
Pension benefit
commitment
Compensation Report → B. Compensation of Managing Board members
36% to 43%
+
VARIABLE COMPENSATION
Short-term variable
compensation
(Bonus)
Long-term variable
compensation
(Stock Awards)
20% to 28%
of total target compensation
of total target compensation
Dr. Roland Busch'
President and CEO since Feb. 3, 2021
+ Fringe benefits²
2021
2%
83
2%
83
991
14%
101
617
617
15%
617
15%
2,894
41%
12%
2%
2%
Cedrik Neike
Managing Board member since April 1, 2017
2020
26%
1,102
26%
1,102
27%
1,352
25%
1,770
2020
€ thousand in % of TTC € thousand in % of TTC
€ thousand in % of TTC € thousand in % of TTC
133
2021
Prof. Dr. Ralf
P. Thomas
Performance of Siemens Financial Services and optimization
of finance organization
134.00%
131.00%
75%
avg. 113.33%
Implementation of portfolio measures and drive performance
of Portfolio Companies
160.00%
avg. 130.00%
132.50%
140.00%
avg. 130.00%
Expansion and use of innovative loT solution building blocks
CCR IB
125.00%
25%
1.36
75%
50%
Further development of the strategy for Smart Infrastructure
and Supply Chain Management
Joe Kaeser
50%
who left during the fiscal year
Managing Board members
avg. 123.33%
126.00%
Strengthening employee responsibility and people development
Implementation and realization of CO2 climate targets; succession
planning, taking into consideration Siemens' diversity targets
Expansion of Global Business Services
Sustainability/diversity
134.00%
CCR IB
Preserve rating and safeguard deleveraging
Implementation of other
strategic measures
Cash conversion rate
Business development
Employee satisfaction
Judith
Wiese
Expansion of the software and digital businesses
Floor
Further development of the strategy for Digital Industries
and Advanta
avg. 133.33%
133.50%
Further development of the strategy for the Mobility business
Total target
achievement
achievement
134.00%
Target
Succession planning, taking into consideration Siemens'
diversity targets
Performance range
(0.4)
target
Cap
100%
0.96
33%
+0.4
Expansion und use of innovative loT solution building blocks
CCR SI
Succession planning
Cash conversion rate
Growth
Expansion of the software and digital businesses
CCR DI
enhancement
Optimization/efficiency
Implementation of other
strategic measures
Innovation performance
Cash conversion rate
Implementation of
portfolio measures
25%
25%
75%
Matthias
Cash conversion rate
Growth
25%
Implementation of other
strategic measures
Innovation performance
75%
Cedrik
Neike
Rebellius
Klaus
Helmrich
48,621
CCR IB
40,557
40,557
Managing Board members
who left during the fiscal year
Joe Kaeser (until Feb. 3, 2021)
Klaus Helmrich (until March 31, 2021)
108,332
152,528
17,519
12,806
21,442
10,721
2,650
1,325
145,955
77,074
1 The settlement of Stock Awards from the 2018 tranche will be by share transfer up to a target achievement of 100%, and above 100% in cash. For this reason, the number
of Stock Awards from the 2018 tranche, as set out in the table, is based on a target achievement of 100%. Starting with the 2019 tranche, settlement of Stock Awards will be
entirely by share transfer. For this reason, the number of Stock Awards, as set out in the table, is based on a target achievement of 200%. At the end of the vesting period,
a final number of Siemens shares to be transferred will be determined on the basis of actual target achievement and taking into account the Stock Awards cap.
76,314
1,325
10,721
31,411
Other changes²
0.56
Balance at the end
of fiscal 2021
83,308
10,721
1,325
119,883
70,291
25,613
5,360
663
89,881
25,612
25,612
88,967
2 The target achievement of the Stock Awards from the 2017 tranche, which were due and settled in fiscal 2021, was 89%. As the Stock Awards from the 2017 tranche were
allocated on the basis of 100% target achievement, a number equivalent to this shortfall was forfeited without refund or replacement, in accordance with plan requirements.
3 In addition to his position as a member of the Managing Board, Cedrik Neike served as Executive Chairman of the Board of Directors of Siemens Ltd. China from May 1, 2017,
to March 31, 2019. The reported figures include the Stock Awards allocated to Cedrik Neike by Siemens Ltd. China due to this position.
Cash conversion rate
Succession planning
Cash conversion rate
Growth
4 The reported figures also include the Stock Awards allocated to Judith Wiese in November 2020 as compensation for the loss of benefits granted by her former employer
in addition to the regular allocation of Stock Awards from the 2021 tranche.
€1,770,000
Bonus for fiscal 2021
Total target achievement for the
17
FISCAL 2021
Target achievement: 118.00% to 133.50%
Successful transition of the Digital Industries business to Cedrik Neike
Total target achievement and the resulting Bonus payout
amount for each Managing Board member are summa-
rized in the following table.
Succession planning
67%
118.00%
Optimization of the regional growth concept
122.00%
134.00%
110.00%
134.00%
Successful transition to new CEO Dr. Roland Busch
CCR IB
avg. 110.00%
Total target achievement and Bonus payout amounts for fiscal 2021
Managing Board members
in office on September 30, 2021
€0
Bonus
payout amount
Total target
achievement
(based on 200%
target achievement)
Cap
Target amount
(based on 100%
target achievement)
target achievement)
Floor
(based on 0%
Compensation range
Compensation Report B. Compensation of Managing Board members
Judith Wiese
Prof. Dr. Ralf P. Thomas
Matthias Rebellius
Cedrik Neike
Dr. Roland Busch
FISCAL 2021 24
CCR
2 The Stock Awards settled by share transfer were valued at €112.78, the German low price of the Siemens share on November 13, 2020.
1.20
Return on capital employed (ROCE): Target setting and target achievement
for the "Managing Board portfolio" target dimension for
fiscal 2021 for all Managing Board members. ROCE is
defined as profit before interest and after tax divided by
average capital employed. The target amount for ROCE
is based on the budget plans. To focus on the operating
performance of Siemens AG, Varian and main effects
relating to the stake in Siemens Energy (profit "Siemens
Energy Investment" and asset "Siemens Energy Invest-
ment") were disregarded in target setting and in deter-
mining ROCE target achievement.
Because of the new structure of Siemens AG and the
changes in the assignment of Managing Board respon-
sibilities as of October 1, 2020, target setting for the
Bonus for fiscal 2021 focused on the Managing Board's
overall responsibility, cross-business collaboration and
Siemens' strategic realignment. For this reason, the
Supervisory Board of Siemens AG established "profit-
ability/capital efficiency" measured in terms of return on
capital employed (ROCE) as the performance criterion
"Managing Board portfolio" target dimension
Compensation Report → B. Compensation of Managing Board members
FISCAL 2021 15
33.33% Managing Board portfolio
Return on capital employed (ROCE)
Target achievement: 141.33%
For fiscal 2018 through 2020: comparable EPS
of continuing operations
+€1.50
€(1.50)
target
(actual value)
Cap
Performance range
Target achievement
200%
200.00%
Cap
points
18.56%
+5.46 percentage
13.10%
ROCE (as reported)
Varian and
Siemens Energy-related effects
Actual ROCE value
8.54% 11.54% 14.54%
Floor
100%
target
ROCE
0%
18.56%
2021
value
100%
Actual
Calculation:
100%
+
Floor
€7.68
Actual
EPS
FY
141.33%
Calculation of target and actual value:
200%
100%
Target achievement
33.34% Siemens Group
Earnings per share (EPS): Target setting and target achievement
For both target setting and target achievement, the
average EPS of three consecutive fiscal years is used. The
averaged values take account of the Company's long-term
performance and provide incentives for a sustainable in-
crease in profit. Because of the significant change in the
portfolio of Siemens AG due to the spin-off of Siemens
Energy at the end of fiscal 2020, the EPS target for fiscal
2021 was defined on the basis of the comparable EPS of
continuing operations in the years 2018 through 2020. In
this process, the Flender sale in the first half of fiscal 2021
was also taken into account.
For the "Siemens Group" target dimension in fiscal 2021,
the Supervisory Board of Siemens AG approved the perfor-
mance criterion "profit," measured in terms of basic earn-
ings per share (EPS). EPS is calculated by dividing income
from continuing operations, income from discontinued
operations and net income - all attributable to ordinary
shareholders of Siemens AG - by the weighted average
number of shares outstanding during the fiscal year.
"Siemens Group" target dimension
Vested and settled
Basic earnings per share (EPS), three-year average
2018
€5.83
value
2021
€6.97
€5.47
€3.97
EPS
0%
€4.77
2020
avg.
€6.09
(100% target)
avg. 2018-2020 --> €5.47
€5.82
2019
2021
avg. 2019-2021 €6.09
0%
(3.0) ppts. +3.0 ppts.
Performance range
"Individual targets" target dimension
+0.4
(0.4)
target
Cap
100%
Floor
Performance range
1.36
0.56
CCR
0%
1.12
2021
Actual
value
0.96
Individual targets per Managing Board member
Key performance
Weighting indicator/focus topic
25%
2021
value
100%
Actual
Smart Infrastructure
160.00%
200%
Target achievement
75%
Dr. Roland
Busch
Expansion of the software and digital businesses
CCR IB
Target setting
Implementation of other
strategic measures
Cash conversion rate
Growth
100%
Target achievement: 200.00%
140.00%
Digital Industries
134.00%
-200%
Average achievement of the equally weighted individual targets: CCR as reported, growth and/or further non-financial, qualitative individual targets
Calculation:
2 to 4 individual targets, target achievement between 0% and 200% each
33.33% Individual targets
100%
Compensation Report → B. Compensation of Managing Board members
Target achievement
FISCAL 2021 16
The other individual targets were defined on the basis of
the Managing Board members' respective areas of re-
sponsibility.
For the Managing Board members with business respon-
sibility for Digital Industries (DI) and Smart Infrastructure
(SI), the CCR targets are business-specific and defined as
the ratio of free cash flow to Adjusted EBITA at each busi-
ness. The target amounts for CCR were based on the
budget plans.
When setting the targets for fiscal 2021, the Supervisory
Board took into account both the shared tasks and the
individual responsibilities of the Managing Board mem-
bers. For this reason, the cash conversion rate (CCR) was
defined as a target for all Managing Board members. The
CCR reflects a company's ability to convert profit into
available cash. For the President and CEO and the
Managing Board members with primarily functional
responsibility, the CCR target was defined on the basis of
Siemens' Industrial Businesses (IB). The CCR IB is defined
as the ratio of free cash flow from IB to Adjusted EBITA IB.
The "Individual targets" target dimension comprises two
to four equally weighted individual targets, achievement
of each of which may be between 0% and 200%.
Individual targets: Target setting and target achievement
Industrial Businesses
Actual
value
2021
Cash conversion rate
Target achievement
Performance range
+0.5
(0.5)
target
Cap
100%
Floor
1.45
0.95
0.45
CCR
0%
1.12
200%
Allocated
€2,203,200
Balance at beginning
Number of
Stock Awards
based on target
achievement
Xetra closing price
of Siemens share
on transfer date
Value of
Stock Awards
in euros
(Cap: 300%)
>300% of target amount
Number of Stock Awards
based on target achievement
is reduced by amount by which
cap is exceeded
≤300% of target amount
Number of Stock Awards
based on target achievement
= final number of Stock Awards
Maximum number
of Stock Awards
(based on 200%
target achievement)
Final number of
Stock Awards
FISCAL 2021 20
Compensation Report B. Compensation of Managing Board members
B.3.2.2 ALLOCATION OF STOCK AWARDS
IN FISCAL 2021
The Supervisory Board approved the following perfor-
mance criteria for the 2021 Stock Awards tranche:
→ "Long-term value creation," measured in terms of the
development of the TSR of Siemens AG relative to the
international sector index MSCI World Industrials and
→ "Sustainability," measured in terms of the Siemens-
internal ESG/Sustainability index, which is based on
the following three equally weighted key performance
indicators:
Settlement by
transfer of Siemens
shares to Managing
Board member
ESG key performance indicators for 2021 Stock Awards tranche
110%
TSR
OCT
Environmental, social and governance The Siemens-
internal ESG/Sustainability index is based on three
equally weighted, structured and verifiable ESG key per-
formance indicators. At the beginning of each tranche,
the Supervisory Board defines ambitious target values for
each of the ESG key performance indicators. Target mea-
surement is based on defined interim targets for each
fiscal year. Target achievement for the Siemens-internal
ESG/Sustainability index is finally determined at the end
of the approximately four-year vesting period on the
basis of the weighted average of the target achievement
values calculated for each of the key performance indi-
cators.
FISCAL 2021 19
Compensation Report → B. Compensation of Managing Board members
Determination of total target achievement
Adjustment to actual
target achievement
120%
At the end of the approximately four-year vesting period,
the Supervisory Board determines the degree of target
achievement. The target achievement range for TSR and for
the Siemens-internal ESG/Sustainability index is between
0% and 200%. If target achievement is less than 200%, a
number of Siemens Stock Awards equivalent to the short-
fall are forfeited without refund or replacement and a
correspondingly smaller number of shares is transferred.
The value of the Siemens shares transferred after the ex-
piration of the vesting period is also capped at 300% of
the target amount. If this cap is exceeded, a correspond-
ing number of Stock Awards is forfeited without refund
or replacement.
The remaining number of Stock Awards is settled by the
transfer of Siemens shares to the relevant Managing
Board member.
ESG
(Weighting: 20%)
ESG
TSR
(Weighting: 80%)
Calculation of Siemens shares to be transferred (illustrative)
CO2 emissions
Amount of greenhouse gases emitted
by the Company's business operations
in tons of CO2 equivalent, excluding
carbon offsets (for example, certifi-
cates).
Digital learning hours per employee
ESG performance measurement based on interim targets for each fiscal year
The target amounts, the maximum allocation amounts,
the maximum number of Stock Awards allocated and
the fair value at allocation date in accordance with IFRS 2
Share-based Payment are shown in the following table.
The allocation price applicable for the 2021 tranche was
€98.31.
FISCAL 2021 21
Information on the allocation of 2021 Stock Awards tranche
Managing Board members
in office on September 30, 2021
TSR performance period
Dr. Roland Busch
Matthias Rebellius²
Prof. Dr. Ralf P. Thomas
Judith Wiese³
Managing Board members
who left during the fiscal year
Joe Kaeser (until Feb. 3, 2021)
Cedrik Neike
TSR reference period
Performance
measurement
NOV '24
The total number of digital learning
hours completed in virtual trainer-led
training sessions, self-paced learning,
learning on the job, community-based
virtual learning and hybrid training
sessions, divided by the total number
of employees.
Net Promoter Score (NPS)
Customer intention to recommend us,
measured on a scale of 1 (extremely
unlikely) to 10 (extremely likely). NPS
is defined as the number of promoters
(%) minus the number of detractors (%).
The Supervisory Board set the allocation date for the
2021 Stock Awards tranche at November 13, 2020. The
time sequence of this tranche is as follows.
Time sequence for the 2021 Stock Awards tranche
Allocation and four-year vesting period
Transfer
Process sequence
OCT '20
NOV '20
OCT '21
NOV '21
2022
2023
SEPT '24 OCT '24
FYn+4
If the change in the TSR of Siemens AG is between
20 percentage points above and 20 percentage points
below that of the sector index, target achievement is
calculated using linear interpolation.
→ If the change in the TSR of Siemens AG is equal to
that of the sector index, target achievement is 100%.
If the change in the TSR of Siemens AG is at least
20 percentage points below that of the sector index,
target achievement is 0%.
→ If the change in the TSR of Siemens AG is at least
20 percentage points above that of the sector index,
target achievement is 200%.
155.78%
€1,716,072
Managing Board members
who left during the fiscal year
Joe Kaeser (until Feb. 3, 2021)
€0
€2,203,200
€754,688
€0
€550,800
€1,509,376
€1,101,600
154.44%
153.11%
€1,165,540
€843,330
Klaus Helmrich (until March 31, 2021)
€1,101,600
€0
€1,734,359
€2,801,379
€0
€1,101,600
€2,203,200
157.94%
€1,739,867
€0
€1,101,600
€2,203,200
155.44%
€1,712,327
€0
€1,101,600
B.3.1.2 BONUS FOR FISCAL 2021
157.44%
B.3.2 Long-term variable
compensation (Stock Awards)
Klaus Helmrich (until March 31, 2021)
B.3.2.1 BASIC PRINCIPLES AND FUNCTIONING
Siemens grants long-term variable compensation in the
form of Stock Awards. A Stock Award is the claim to one
share-conditional on target achievement - after the ex-
piration of a defined vesting period. The vesting period
is, accordingly, the term of each tranche.
An approximately four-year vesting period begins with
the allocation of Stock Awards, after the expiration of
which Siemens shares are transferred. The beneficiary
Managing Board members are not entitled to dividends
during the vesting period.
36 months
TSR performance values for
→ MSCI World Industrials index
→ Siemens AG
The following applies for the determination of target
achievement.
Calculation of TSR target achievement
→ MSCI World Industrials index
→ Siemens AG
Target achievement
100%
0%
(20) ppts.
+20 ppts.
Relative
TSR
Siemens compared to MSCI World Industrials index
200%
TSR reference values for
12 months
NOV
Performance criteria
Since fiscal 2020, the number of Siemens shares that is
actually transferred depends 80% on the financial perfor-
mance criterion "long-term value creation," measured on
the basis of the key performance indicator "total share-
holder return" (TSR), and 20% on the non-financial per-
formance criterion "sustainability." For measuring the
"sustainability" performance criterion, Siemens AG's per-
formance in the environmental, social and governance
(ESG) area is assessed on the basis of a Siemens-internal
ESG/Sustainability index, the composition of which is de-
termined annually by the Supervisory Board.
Total shareholder return - TSR is indicative of the perfor-
mance of one share over a specified period of time - in
the case of Siemens, over the approximately four-year
vesting period. It takes into account changes in the
share price and the dividends paid during this period. To
reflect the Company's international footprint, the TSR of
Siemens AG is compared at the end of the vesting period
with the TSR of an international sector index, the MSCI
World Industrials or a comparable successor index.
Target achievement for TSR is concretely determined
by first calculating a TSR reference value for Siemens AG
and a TSR reference value for the sector index. The TSR
FISCAL 2021 18
Compensation Report → B. Compensation of Managing Board members
reference value is equal to the average of the end-of-
month values over the first 12 months of the vesting
period (reference period).
In order to determine at the end of the vesting period
how well the TSR of Siemens AG has performed rela-
tive to the TSR of the sector index, the TSR perfor-
mance value is calculated over the subsequent 36 months
(performance period). The TSR performance value is the
average of the end-of-month values during the perfor-
mance period.
At the end of the vesting period, the change in Siemens'
TSR as well as that of the sector index is determined by
comparing the TSR reference values with the TSR perfor-
mance values.
Calculation of TSR reference values and TSR performance values for Stock Awards
FYn
FYn+1
OCT
NOV
At the beginning of a fiscal year, the Supervisory Board
defines a target amount in euros based on 100% target
achievement for each Managing Board member. This tar-
get amount is extrapolated to target achievement of 200%
("maximum allocation amount"). Stock Awards for this
maximum allocation amount are then allocated to the
Managing Board members. The number of Stock Awards is
calculated by dividing the maximum allocation amount by
the price of the Siemens share on the allocation date, less
the estimated discounted dividends ("allocation price").
of fiscal 2021
Target amount
(based on 100%
target achievement)
Compensation Report → B. Compensation of Managing Board members
Number
of Stock
Awards¹
calculated
Value at
transfer date
Cash payment
Siemens Energy
Nov. 13, 2020²
spin-off
Dr. Roland Busch
Target
achievement
of share price
performance
€1,100,000 /
12,046 x
Cedrik Neike (since April 1, 2017)³
€550,000 /
Prof. Dr. Ralf P. Thomas
€1,100,000 /
€91.32 =
€91.32 =
€91.32 =
6,023 x
12,046 x
of Stock
Awards¹
allocated
Number
(12.03)%
Target achievement: 89%
A = (2.16)
percentage
points
FISCAL 2021
22
Compensation Report → B. Compensation of Managing Board members
Nov. 11, 2016
The following table provides a summary of the key pa-
rameters of the 2017 Stock Awards tranche. In connection
with the due date and settlement of the Stock Awards for
fiscal 2017, the table also includes an additional cash pay-
ment to the Managing Board members as a result of the
Siemens Energy spin-off. The spin-off of Siemens Energy
in fiscal 2020 led to adjustments in the stock-based com-
pensation commitments agreed upon until the spin-off
-
ble employees were, accordingly, entitled to receive an
additional cash payment based on the spin-off ratio of 2:1
and on the Siemens Energy share price of €22.20 on the
date when their stock-based compensation commit-
ments became due.
Information on the transfer of the 2017 Stock Awards tranche
Managing Board
members in office on
September 30, 2021
Target amount
(based on
100% target
achievement)
Allocation
price
date. At the time when the 2017 Stock Awards became
due, the Managing Board members - like all other eligi-
89% =
89% =
89% =
10,721 >
5,360 >
10,721 >
€1,209,114 +
€608,849 +
€1,209,114 +
B.3.2.4 CHANGES IN STOCK AWARDS
IN FISCAL 2021
The following overview shows the changes in the balance
of the Stock Awards held by Managing Board members in
fiscal 2021.
Changes in Stock Awards in fiscal 2021
(Amounts in number of units)1
Managing Board members
23
in office on September 30, 2021
Cedrik Neike3
Matthias Rebellius
Prof. Dr. Ralf P. Thomas
Judith Wiese4
Compensation Report B. Compensation of Managing Board members
During fiscal year
Dr. Roland Busch
FISCAL 2021
In the course of transferring the 2017 Stock Awards
tranche, compliance with the maximum amounts of total
compensation for fiscal 2017 was also reviewed. The ap-
plicable maximum amount was not exceeded in the case
of any active or former Managing Board member.
3 The amount reported for Cedrik Neike under "Value at transfer date" comprises the 4,345 Phantom Stock Awards allocated by Siemens AG that were valued
at €113.72, the Xetra closing price of the Siemens share on November 12, 2020, in accordance with the plan requirements applicable to the Managing Board as well
as the 1,015 Stock Awards allocated by Siemens Ltd. China that were valued at €113.04, the Xetra closing price of the Siemens share on November 13, 2020, in
accordance with the plan requirements applicable to Senior Management. For the calculation of the additional cash payment resulting from the Siemens Energy
spin-off, the Xetra closing prices of the Siemens Energy share on November 12, 2020, of €22.20 and on November 13, 2020, of €22.87, respectively, were used in
accordance with the relevant plan requirements.
€119,003
€59,836
€119,003
Managing Board
members who left during
the fiscal year
Joe Kaeser (until Feb. 3, 2021)
Klaus Helmrich (until March 31, 2021)
€2,200,000/
€1,100,000/
€91.32 =
€91.32 =
24,092 x
12,046 x
89% =
89% =
21,442 >
10,721 >
€2,418,229 +
€1,209,114 +
€238,006
€119,003
1 Cedrik Neike was appointed a full member of the Managing Board effective April 1, 2017. Due to his intra-year appointment, his Stock Awards target amount for fiscal
2017 was determined on a pro-rated basis and, instead of Stock Awards, a corresponding number of Phantom Stock Awards was allocated to him in accordance with
plan requirements. In contrast to Stock Awards, these Phantom Stock Awards were settled after the end of the vesting period by cash payment rather than by share.
transfer. In addition to his position as a member of the Managing Board, Cedrik Neike served as Executive Chairman of the Board of Directors of Siemens Ltd. China
from May 1, 2017, to March 31, 2019. Of the allocated number of Phantom Stock Awards reported here, 1,141 are attributable to the commitment by Siemens Ltd.
China. Of the calculated number of Phantom Stock Awards reported here, 1,015 were awarded and paid by Siemens Ltd. China.
€95.29
€108.32
(9.87)%
20.08%
20,490
5,122
€1,472,362
€1,544,000
€3,088,000
25,129
€2,518,000
6,282
€1,259,000
€2,518,000
20,490
5,123
€1,472,460
€861,131
€629,500
€1,805,745
€1,259,000
€1,472,460
5,123
Based on 200% target achievement
Maximum number
of Stock Awards
Fair value at
allocation date¹
Siemens-internal
Total shareholder return
(Weighting 80%)
ESG/Sustainability index
(Weighting 20%)
€2,390,000
€4,780,000
38,897
9,724
€2,795,114
€1,259,000
€2,518,000
20,490
€1,722,262
€1,259,000
Maximum
allocation amount
14,015
3,504
Rockwell
Schneider
Competitors (average)
Siemens AG
CHF 23.26 CHF 21.33
$10.42
$26.40
MHI
¥4,607.00 ¥3,867.60
€65.55
€78.71
(8.27)%
(60.54)%
(16.05)%
15.42%
$159.09 $183.62
GE
ABB
performance price
€1,007,142
2,561
€736,181
1 The fair value on the allocation date is calculated for the TSR component on the basis of a valuation model and amounts to €47.37. The fair value for the ESG component of
€97.96 is equal to the Xetra closing price of the Siemens share on the allocation date, less the discounted expected dividends. For the 2021 tranche, the allocation date in
accordance with IFRS 2 was December 14, 2020 (the date of communication to the Managing Board members).
2 In addition to his position as a member of the Managing Board of Siemens AG, Matthias Rebellius is Chairman of the Board of Directors and CEO of Siemens Schweiz AG.
The corresponding legal relationship is defined in a separate contract between Matthias Rebellius and Siemens Schweiz AG. The entire compensation he receives under
the terms of his contract with Siemens Schweiz AG is deducted from his Managing Board compensation. Of the target amount reported here (based on 100% target
achievement), €600,000 is attributable to Siemens Schweiz AG.
3 As compensation for the loss of benefits granted by her former employer, the Supervisory Board allotted to Judith Wiese one-time compensation of €1,469,124 (gross)
in fiscal 2021 -50% in cash and the remaining 50% in the form of Stock Awards from the 2021 tranche. Accordingly, a further 14,944 Stock Awards from the 2021 tranche
with a fair value of €859,111 were allocated to Judith Wiese in November 2020, based on target achievement of 200%.
Concrete target setting and the degree of target achieve-
ment for the Siemens-internal ESG/Sustainability index
of the 2021 Stock Awards tranche will be published to-
gether with the degree of target achievement for the
TSR in the Compensation Report for fiscal 2025, after the
expiration of the vesting period.
B.3.2.3 TRANSFER OF STOCK AWARDS
IN FISCAL 2021 (2017 TRANCHE)
The 2017 Stock Awards tranche became due and was
settled in fiscal 2021. The 2017 Stock Awards tranche de-
pended on the performance of the Siemens share com-
pared to the share performance of five relevant compet-
itors during the approximately four-year vesting period
from November 11, 2016, to November 12, 2020.
Overview of target achievement for the 2017 Stock Awards tranche
Performance of the Siemens share compared to the share performance of five relevant competitors
Reference
price
Performance
price
Reference price versus
10,245
Compensation Report → B. Compensation of Managing Board members
€3,540,000
158.27%
2 Cedrik Neike was appointed a full member of the Managing Board effective April 1, 2017. Due to his intra-year appointment, his Stock Awards target amount for fiscal 2017 was
determined on a pro-rated basis and, instead of Stock Awards, a corresponding number of Phantom Stock Awards was allocated to him in accordance with plan requirements.
In contrast to Stock Awards, these Phantom Stock Awards were settled after the expiration of the vesting period by cash payment rather than by share transfer.
1 Dr. Roland Busch was first appointed a full member of the Managing Board effective April 1, 2011. He served as Deputy CEO from October 1, 2019, until the end of the Annual
Shareholders' Meeting on February 3, 2021, when he succeeded Joe Kaeser as President and CEO.
601
4,688
4,823
588
3,435
= Total compensation (incl. service costs)
+ Service costs
100% 4,087 100%
4,235
3,435 100%
Total compensation (TC)
(according to Section 162 AktG)
3 In addition to his position as a member of the Managing Board, Cedrik Neike served as Executive Chairman of the Board of Directors of Siemens Ltd. China from May 1, 2017, to
March 31, 2019. The amount reported under "2017 Stock Awards (vesting: 2016-2020)" includes the value of the Stock Awards allocated by Siemens Ltd. China. Likewise, a portion
of the additional cash payment attributable to the Stock Awards allocated by Siemens Ltd. China is included under "Cash payment Siemens Energy spin-off." For details, see "Trans-
fer of Stock Awards in fiscal 2021 (2017 tranche)."
Basic
3%
119
51%
2,092
1,209 29%
20%
812
41%
1,734
1,712 50%
29%
1,183
=
4 In addition to his position as a member of the Managing Board of Siemens AG, Matthias Rebellius is Chairman of the Board of Directors and CEO of Siemens Schweiz AG. The corre-
sponding legal relationship is defined in a separate contract between Matthias Rebellius and Siemens Schweiz AG. The entire compensation he receives under the terms of his
contract with Siemens Schweiz AG is deducted from his Managing Board compensation. Of the base salary and fringe benefits reported here, €615,367 and €29,579, respectively,
were awarded and paid by Siemens Schweiz AG. Of the Bonus for fiscal 2021 reported here, €859,802 (corresponding to CHF931,165 and converted into euros as of September 30,
2021) will be paid by Siemens Schweiz AG. Furthermore, employer contributions to pension plans paid by Siemens Schweiz AG are deducted from the amount for free disposal.
FISCAL 2021 28
Compensation awarded and due in accordance with Section 162 para. 1 sent 1 AktG -
Active Managing Board members in fiscal 2021 (cont.)
Bonus for fiscal 2021
+ Short-term variable compensation
Variable
compensation
41%
1,734
Total
=
13%
551
+ Amount for free disposal
2%
82
28%
26%
+ Fringe benefits
compensation
Base salary
Fixed
€ thousand in % of TC € thousand in % of TC
2020
2021
Managing Board member since Oct. 1, 2020
Judith Wiese¹
Compensation Report → B. Compensation of Managing Board members
in office on September 30, 2021
Managing Board members
1,102
1,172
50%
1,723
2%
60
2%
119
2,092 47%
17%
609
1,209 20%
44%
879
20%
899
6,008 100% 4,441
49%
47%
2,801
56%
1,138
1,116 32%
33%
1,450
1,879 31%
2%
36
55%
€ thousand in % of TC € thousand in % of TC
1,102 31% 1,102
14
0%
1,740
1,716
100%
2,017
16%
551
2%
27%
1,102
81
2%
€ thousand in % of TC € thousand in % of TC
26%
1,102
71
2%
32%
1,102
70
€ thousand in % of TC € thousand in % of TC
3,524 100%
2020
2020
2021
Prof. Dr. Ralf P. Thomas
Managing Board member since Sept. 18, 2013
Matthias Rebellius4
Managing Board member since Oct. 1, 2020
621
2,638
4,119
594
5,049
608
6,941
933
100%
2021
41%
Bonus for fiscal 2020
+ Long-term variable compensation
2017 Stock Awards (vesting: 2016-2020)
2016 Stock Awards (vesting: 2015-2019)
Cash payment Siemens Energy spin-off
+ Other
611
4,797
3,050
294
3 Pro-rated compensation for the period from October 1, 2020, up to and including March 31, 2021.
2 Pro-rated compensation for the period from October 1, 2020, up to and including February 3, 2021.
1 As compensation for the loss of benefits granted by her former employer, the Supervisory Board allotted to Judith Wiese one-time
compensation of €1,469,124 (gross) in fiscal 2021. 50% of this compensation was allocated in November 2020 in the form of Stock
Awards, and the remaining 50% was awarded in cash in March 2021. The cash payment is included under "Other."
1,220
9,271
4,616
= Total compensation (incl. service costs)
+ Service costs
2,756 100% 4,186 100%
8,051 100%
100%
4,616
Total compensation (TC)
(according to Section 162 AktG)
=
+ Other
4%
119
5%
238
50%
2,092
51%
4,106
FISCAL 2021 29
B.6.2 Former members
of the Managing Board
The following table shows the compensation awarded
571
14
1,328
1,247
4,646
21
106
Managing Board member
until Feb. 29, 2020
Lisa Davis
Michael Sen
Managing Board member
until March 31, 2020
Joe Kaeser4
President and CEO
until Feb. 3, 2021
Klaus Helmrich
Managing Board member
until March 31, 2021
1,209 44%
Compensation Report B. Compensation of Managing Board members
Other
Fringe benefits²
Fixed and
variable
Capital payment (partial or full)
2017 Stock Awards (vesting: 2016-2020) 3
Annuity
Pensions
Other
Fringe benefits²
Fixed and
variable
compensation
(€ thousand)
Compensation awarded and due in accordance with Section 162 para. 1 sent 1 AktG -
Former members of the Managing Board'
and due to former members of the Managing Board in
fiscal 2021 in accordance with Section 162 para. 1 sent. 1
of the German Stock Corporation Act. In accordance with
Section 162 para. 5 of the German Stock Corporation Act,
the personal information of former Managing Board
members is no longer included if they left the Managing
Board before September 30, 2011.
compensation
2,418 52%
+ Long-term variable compensation
2017 Stock Awards (vesting: 2016-2020)
2016 Stock Awards (vesting: 2015-2019)
Cash payment Siemens Energy spin-off
23%
2020
2021
2020
2021
Klaus Helmrich 3
Managing Board member until March 31, 2021
Joe Kaeser²
President and CEO until Feb. 3, 2021
Bonus for fiscal 2020
Bonus for fiscal 2021
+ Short-term variable compensation
= Total
+ Amount for free disposal
+ Fringe benefits
€ thousand in % of TC € thousand in % of TC
Variable
compensation
compensation
Fixed
who left during the fiscal year
Managing Board members
4,185
= Total compensation (incl. service costs)
+ Service costs
100%
4,185
Total compensation (TC)
(according to Section 162 AktG)
18%
735
Base salary
2%
€ thousand in % of TC € thousand in % of TC
16%
947
1,626 20%
31%
843
1,166 25%
27%
1,147
21%
585
29%
2,320
17%
755
40
794
45
1%
34
1%
115
1%
26%
1,102
20%
551
27%
2,205
1%
30%
1,352
98
2%
Prof. Dr. Ralf P. Thomas
29,515
3,280,002
shares³
Number of
Value
in €²
Percentage of
base salary'
268%
22,013
2,446,325
200%
Dr. Roland Busch4
Number of
shares²
200%
Value
in €¹
compliance on March 12, 2021
Percentage of
in office on September 30, 2021,
and required to verify
Managing Board members
Verified
Required
on September 30, 2021, the following table shows the
number of Siemens shares that each held in order to
comply with the SOG on March 12, 2021, the verification
date. It also shows the number of shares to be held
throughout the Managing Board members' terms of of-
fice with a view to future verification dates.
Obligations under the Share Ownership Guidelines
The deadlines by which the individual Managing Board
members must first verify compliance with the Share
Ownership Guidelines (SOG) vary from member to mem-
ber, depending on when they were appointed to the
Managing Board. For Managing Board members in office
B.4 Share Ownership Guidelines
Compensation Report → B. Compensation of Managing Board members
base salary'
FISCAL 2021 25
2,181,725
299%
in office on September 30, 2021
Managing Board members
2020
2021
(Amounts in €)
Defined benefit obligation
for all pension commitments
excluding deferred compensation²
2020
2021
2020
2021
Service costs
according to IAS 19R
Contributions¹
19,632
Information on the BSAV
Most of the members of the Managing Board are in-
cluded in the Siemens Defined Contribution Pension Plan
(BSAV). Newly appointed members of the Managing Board
can be awarded, instead of BSAV contributions, a fixed
cash amount for free disposal.
B.5 Pension benefit commitment Contributions under the BSAV are credited to the individ-
4 Dr. Roland Busch was appointed President and CEO only after the reference date relevant for the calculation of the SOG target.
As a result, the amount of his obligation on the verification date of March 12, 2021, was still 200% of his relevant average base salary.
3 As of March 12, 2021 (verification date).
1 The amount of the obligation is based on the average base salary during the four years prior to the respective verification dates.
2 Based on the average Xetra opening price of €111.13 for the fourth quarter of 2020 (October to December).
58,890
6,544,446
41,645
4,628,050
Total
29,375
3,264,444
ual pension accounts in the January following each fiscal
year. Until pension payments begin, members' pension
accounts are credited with an annual interest payment
(guaranteed interest) in January of each year. The inter-
est rate is currently 0.90%.
Dr. Roland Busch
In fiscal 2021, the Supervisory Board did not exercise this
authority.
B.3.3 Malus and clawback regulations
Under existing malus and clawback regulations, the Super-
visory Board is authorized to withhold or reclaim variable
compensation in cases of severe breaches of duty or
compliance and/or unethical behavior or in cases of
grossly negligent or willful breaches of the duty of care or
in cases in which variable compensation components
linked to the achievement of specific targets have been
unduly paid out on the basis of incorrect data.
Nov '17 Oct '18 Nov '18
Reference period
Share price performance
compared to competitors¹
Nov '21
Nov 10, '17
2024
2023
2022
2021
2020
2019
2018
End of vesting period
and transfer
Oct '21
Vesting
period
Compensation Report B. Compensation of Managing Board members
Performance
criteria
2021
tranche
Performance
criteria
tranche
2020
Performance
criterion
2019
tranche
Performance
criterion
2018
tranche
Outstanding Stock Awards tranches on September 30, 2021
As of the end of fiscal 2021, the following Stock Awards
tranches were within the vesting period and are there-
fore included in the balance at the end of the fiscal year.
Allocation
The Supervisory Board exercises its authority to withhold
or reclaim variable compensation components at its duty-
bound discretion.
Performance period
Nov 9, '18
1 The 2018 and 2019 Stock Awards tranches depend on the performance of the Siemens share relative to the share performance
of five relevant competitors during the approximately four-year vesting period.
Performance period
Sept '24
Oct '20
Performance period
Oct '24
Nov '21
Nov '20 Oct '21
Reference period
Total shareholder return compared to
MSCI World Industrials index (80%)
Siemens-internal
ESG/Sustainability index (20%)
Nov '24
Nov 13, '20
Performance period
Share price performance
compared to competitors¹
Sept '23
Siemens-internal
ESG/Sustainability index (20%)
Performance period
Oct '23
Nov '19 Oct '20 Nov '20
Reference period
Total shareholder return compared to
MSCI World Industrials index (80%)
Nov '23
Nov 8, '19
Performance period
Oct '22
Nov '19
Nov '18 Oct '19
Reference period
Nov '22
Oct '19
1,103
3,085
991,200
Cedrik Neike
+ Short-term variable compensation
Total
=
+ Amount for free disposal
Variable
compensation
+ Fringe benefits
compensation
Base salary
Fixed
in office on September 30, 2021
Managing Board members
Compensation awarded and due in accordance with Section 162 para. 1 sent 1 AktG -
Active Managing Board members in fiscal 2021
Bonus for fiscal 2021
27
Although the service costs for Company pension plans
are not to be classified as awarded and due compensa-
tion, they are also reported in the following table for pur-
poses of transparency.
accordance with Section 162 para. 1 sent. 1 of the German
Stock Corporation Act.
In addition to the amounts of compensation, Section 162
para. 1 sent. 2 No. 1 of the German Stock Corporation Act
requires disclosure of the relative proportion of total
compensation represented by all fixed and variable
compensation components. The relative proportions
reported here refer to the compensation components
"awarded" and "due" in the respective fiscal years in
Fixed compensation
Variable compensation
Other
2022
plus cash payment relating to Siemens Energy spin-off
Compensation granted in connection with the
commencement/termination of appointments
in Feb '22
Payout latest
Short-term variable compensation: Bonus for 2021
Payout in
Jan '22
2021
Settlement in
Nov '20
FISCAL 2021
Amount for free disposal
Bonus for fiscal 2020
Total compensation (TC)
(according to Section 162 AktG)
29%
1,770
109
€ thousand in % of TC € thousand in % of TC
2020
2021
2020
2021
Cedrik Neike 2,3
Managing Board member since April 1, 2017
Dr. Roland Busch¹
President and CEO since Feb. 3, 2021
Compensation Report → B. Compensation of Managing Board members
+ Other
Cash payment Siemens Energy spin-off
+ Long-term variable compensation
2017 Stock Awards (vesting: 2016-2020)
2016 Stock Awards (vesting: 2015-2019)
Cash payment Siemens Energy spin-off
+ Other
2016 Stock Awards (vesting: 2015-2019)
Bonus for fiscal 2020
Bonus for fiscal 2021
+ Short-term variable compensation
Variable
compensation
= Total
+ Amount for free disposal
+ Fringe benefits
compensation
Base salary
Fixed
= Total compensation (incl. service costs)
+ Service costs
+ Long-term variable compensation
2017 Stock Awards (vesting: 2016-2020)
616,896
Sep
July
13,028,557
7,397,589
1,219,888
611,168
1,831,056
294,170
294,170
0
1,234,800
616,896
1,851,696
308,448
731,073
Total
Klaus Helmrich (until March 31, 2021)
422,625
Joe Kaeser (until Feb. 3, 2021)
who left during the fiscal year
Managing Board members
15,592,209
16,207,039
2,938,080
6,566,101
8,538,765
4,069,811
8,431,412
21,039,988
608,225
621,266
601,098
1,830,589
932,613
594,468
588,070
2,115,151
616,896
1,850,688
2,224,992
Total
616,896
Prof. Dr. Ralf P. Thomas
616,896
616,896
6,702,858
Aug
7,026,562
22,618,771
June
May
March April
Feb
Jan
Dec
Nov
€ Oct
Monthly payout
Base salary and fringe benefits
2017 Stock Awards tranche
Long-term variable compensation:
20,426,146
2017
In connection with the due date and settlement of the
Stock Awards for fiscal 2017, the table also includes the
additional cash payment to eligible Managing Board
members as a result of the Siemens Energy spin-off.
The spin-off of Siemens Energy in fiscal 2020 led to ad-
justments in the stock-based compensation allocations
agreed upon until the spin-off date. At the time when
the 2017 Stock Awards became due, the Managing
Board members like all other eligible employees -
were, accordingly, entitled to receive an additional
cash payment based on the spin-off ratio of 2:1 and on
the Siemens Energy share price of €22.20 on the date
when their stock-based compensation allocations be-
came due.
Furthermore, in fiscal 2021 and 2020, the Stock Awards
from the 2017 and 2016 tranches allocated in fiscal 2017
and 2016, respectively, became due and were settled by
transfer of Siemens shares. The value of Siemens shares
at the time of transfer is reported under "Long-term vari-
able compensation."
for the reporting year are reported, although payout only
occurs after the end of each reporting year, in order to
make reporting transparent and comprehensible and in
order to guarantee a connection between performance
and compensation in the reporting period.
Compensation awarded and due in fiscal 2021
The Bonus is reported under "Short-term variable com-
pensation" as "due compensation" since the underlying
services were fully rendered by the end of each period
(September 30). Therefore, the Bonus payout amounts
The following tables show the compensation awarded
and due to the active members of the Managing Board in
fiscal 2021 and fiscal 2020 in accordance with Sec-
tion 162, para. 1, sent. 1 of the German Stock Corporation
Act. As a result, they include all the amounts actually paid
to individual Managing Board members in the reporting
period ("awarded compensation") and/or all the compen-
sation that is legally due but not yet received ("due com-
pensation").
B.6.1 Active Managing Board members
in fiscal 2021
B.6 Compensation awarded
and due
Judith Wiese and Matthias Rebellius, who were newly
appointed to the Managing Board as of October 1, 2020,
are not included in the BSAV. Instead of BSAV contribu-
tions, the Supervisory Board awarded them for fiscal 2021
a fixed cash amount of €550,800 each for free disposal.
This amount will be paid in January 2022.
Compensation Report → B. Compensation of Managing Board members
FISCAL 2021 26
1 As in the previous year, a total of €22,950 is attributable to the funding of personal pension benefit commitments earned prior to the transfer to the BSAV.
2 Deferred compensation totals €4,164,429 (2020: €3,911,848), including €3,741,588 for Joe Kaeser (2020: €3,512,020), €359,363 for Klaus Helmrich (2020: €342,276)
and €63,478 for Prof. Dr. Ralf P. Thomas (2020: €57,552).
-
Janina Kugel
Managing Board member
until Jan. 31, 2020
Prof. Dr.
Siegfried Russwurm
Managing Board member
until March 31, 2017
Prof. Dr.
Hermann Requardt
Managing Board member
until Jan. 31, 2015
43,500
11%
383,500
(since Jan. 2012)
2020
140,000
35%
200,000
50%
61,500
15%
401,500
Benoît Potier
2021
140,000
90%
15,000
10%
155,000
(since Jan. 2018)
2020
135,758
87%
21,000
13%
52%
200,000
37%
140,000
55%
80,000
31%
36,000
14%
256,000
Harald Kern¹
2021
140,000
53%
100,000
38%
156,758
24,000
264,000
(since Jan. 2008)
2020
140,000
57%
80,000
32%
27,000
11%
247,000
Jürgen Kerner¹
2021
9%
Hagen Reimer¹
2021
140,000
2021
93,333
72%
26,667
20%
10,500
8%
130,500
(since Feb. 2021)
2020
Baroness Nemat Shafik (DBE, DPhil)
2021
Kasper Rørsted
129,630
10,500
7%
140,130
(since Jan. 2018)
2020
140,000
89%
18,000
11%
158,000
Dr. Nathalie von Siemens
2021
93%
140,000
194,045
19,500
91%
13,500
9%
153,500
(since Jan. 2019)
2020
140,000
89%
18,000
11%
158,000
Dr.-Ing. Dr.-Ing. E.h. Norbert Reithofer
10%
2021
71%
38,519
20%
16,500
9%
189,833
(since Jan. 2015)
2020
135,758
70%
38,788
20%
134,815
2020
(since April 2007)
242,500
2021
220,000
47%
200,000
43%
46,500
10%
466,500
(since Jan. 2008, First Deputy Chairwoman since Jan. 2015)
2020
220,000
46%
Birgit Steinborn¹
200,000
61,500
13%
481,500
Dr. Werner Brandt²
2021
193,333
44%
213,333
49%
31,500
7%
438,167
42%
(since Jan. 2018, Second Deputy Chairman since Feb. 2021)
632,000
72,000
in office on September 30, 2021
compensation
Comittee
compensation
Meeting
attendence fee
compensation
(TC)
in €
in % of TC
Jim Hagemann Snabe
2021
280,000
46%
11%
in €
280,000
46%
in €
48,000
in % of TC
in €
8%
608,000
(since Oct. 2013, Chairman since Jan. 2018)
2020
280,000
44%
280,000
44%
in % of TC
140,000
2020
42%
140,000
63%
60,000
27%
22,500
10%
222,500
2021
140,000
91%
13,500
9%
2020
153,500
140,000
89%
18,000
11%
158,000
2021
140,000
58%
80,000
33%
22,500
9%
2020
140,000
Bettina Haller¹
Dr. Andrea Fehrmann¹
160,000
48%
36,000
11%
336,000
Tobias Bäumler¹
2021
140,000
49%
120,000
42%
27,000
(since Jan. 2018)
9%
(since Oct. 2020)
2020
Michael Diekmann
2021
140,000
57%
86,667
35%
19,500
8%
246,167
(since Jan. 2008)
287,000
81%
16,667
10%
Chair
€160,000
Chairman's Committee
Audit Committee
Additional compensation for committee work
Deputy Chair
€220,000
Base compensation of Supervisory Board
Chairman
€280,000
Compensation of members of the Supervisory Board and its committees
Under the rules for fiscal 2021, the members of the Super-
visory Board receive an annual base compensation, and
the members of the Supervisory Board committees re-
ceive additional compensation for their committee work.
the Innovation and Finance Committee receive additional
compensation. The compensation authorized by the Arti-
cles of Association for work in the Compliance Committee
was no longer paid in fiscal 2021 since the Compliance
Committee was reintegrated into the Audit Committee
and the duties of the Compliance Committee were trans-
ferred to the Audit Committee effective October 1, 2020.
The rules for Supervisory Board compensation for fiscal
2021 were approved by the Annual Shareholders' Meeting
on January 28, 2014, and have been in effect since fiscal
2014. They are set out in Section 17 of the Articles of
Association of Siemens AG in the version applicable for
fiscal 2021. Supervisory Board compensation consists
entirely of fixed compensation; it reflects the responsibil-
ities and scope of the work of the Supervisory Board
members. The Chairman and Deputy Chairs of the Super-
visory Board as well as the chairs and members of the
Audit Committee, the Chairman's Committee, the Com-
pensation Committee, the Compliance Committee and
Supervisory Board members
C. Compensation of
Compensation Report → C. Compensation of Supervisory Board members
31
FISCAL 2021
→ Net Promoter Score
→ Digital learning hours per employee
The Siemens-internal ESG/Sustainability index for the 2022 Stock Awards tranche
is based on the following three equally weighted key performance indicators:
→ CO2 emissions
Siemens-
internal ESG/
Sustainability
index
Sustainability
Long-term
value creation
Sustainability
Company
strategy
Growth
Member
€80,000
Chair
€120,000
Member
€80,000
Member
€140,000
1 These employee representatives on the Supervisory Board and the representatives of the trade unions on the Supervisory Board have agreed
to transfer their compensation to the Hans Böckler Foundation, in accordance with the guidelines of the Confederation of German Trade Unions.
2 Werner Brandt has been a member of the Supervisory Board since January 31, 2018, and was elected Second Deputy Chairman
of the Supervisory Board, effective the end of the Annual Shareholders' Meeting on February 3, 2021.
3 Compared to the amounts reported in the 2020 Compensation Report, the total does not include the compensation of €359,000
paid to former Supervisory Board member Robert Kensbock.
FISCAL 2021 33
Pursuant to Section 113 para. 3 of the German Stock Cor-
poration Act in the version amended by the German Act
Implementing the Second Shareholders' Rights Directive
(Gesetz zur Umsetzung der zweiten Aktionärsrechtericht-
linie, ARUG II), the annual shareholders' meeting of a
listed company must resolve on compensation for the
members of the supervisory board at least every four
years. In accordance with Section 113 para. 3 of the Ger-
man Stock Corporation Act, the Annual Shareholders'
Meeting on February 3, 2021, therefore adopted a resolu-
tion regarding the compensation of Supervisory Board
members and voted to amend Section 17 of the Articles
of Association. The compensation system for Supervisory
Board members submitted to the Annual Shareholders'
Meeting and the proposed new version of Section 17 of
the Articles of Association were approved by a majority of
97.49% of the valid votes cast. The provisions of the new
version of Section 17 of the Articles of Association, which
came into effect on October 1, 2021, replace the previous
provisions of the Articles of Association regarding Super-
visory Board compensation as of that date. The compen-
sation system approved by the Annual Shareholders'
Meeting as well as the Articles of Association are publicly
available on the Siemens Global Website at ☐ www.
SIEMENS.COM/CORPORATE-GOVERNANCE.
Compensation Report → C. Compensation of Supervisory Board members
FISCAL 2021 34
Total
Compensation awarded and due in accordance with Section 162 para. 1 sent 1 AktG -
Supervisory Board members
The following table shows the compensation awarded and due to the members of the Supervisory Board in
fiscal 2021 and fiscal 2020 in accordance with Section 162, para. 1, sent. 1 of the German Stock Corporation Act.
Compensation Report →C. Compensation of Supervisory Board members
Cash
conversion
rate (CCR)
32
The members of the Supervisory Board are reimbursed
for out-of-pocket expenses incurred in connection with
their duties and for any value-added tax to be paid on
their compensation. For the performance of his duties,
the Chairman of the Supervisory Board is also entitled to
an office with secretarial support and the use of a car
service. No loans or advances from the Company are pro-
vided to members of the Supervisory Board.
In addition, the members of the Supervisory Board re-
ceive €1,500 for each meeting of the Supervisory Board
and its committees they attend.
If a Supervisory Board member is absent from any Super-
visory Board meetings, one-third of the aggregate com-
pensation due to that member is reduced by the percent-
age of Supervisory Board meetings he or she does not
attend in relation to the total number of Supervisory
Board meetings held during the fiscal year. In the event
of changes in the composition of the Supervisory Board
or its committees, compensation is paid on a pro-rated
basis, rounding up to the next full month.
Compensation for any work on the Chairman's Commit-
tee is deducted from compensation for work on the Com-
pensation Committee.
Member
€40,000
Chair
€80,000
€60,000
Member
Chair
€100,000
Finance Committee
Innovation and
Compensation
Committee
FISCAL 2021
Liquidity
Individual
targets
Development of the TSR of Siemens AG relative to the international sector index
MSCI World Industrials
indicator
performance
Performance
criterion
Target
dimension
Key
VARIABLE COMPENSATION
Matthias Rebellius
€7,715,220
Cedrik Neike
€7,781,316
Dr. Roland Busch
€15,295,950
MAXIMUM COMPENSATION
Compensation Report B. Compensation of Managing Board members
Outlook fiscal 2022
Bonus
fiscal 2022
B.7 Outlook for fiscal 2022
4 Like other eligible employees of Siemens AG who were employed by the Company before September 30, 1983, Joe Kaeser was entitled to transition payments
in the first six months of his retirement equal to the difference between his last base salary and his pension entitlement under the Company pension plan. The
transition payments that Joe Kaeser received in each month from March through August 2021 amounted to €178,080 and are included under "Pensions: Annuity."
5 Michael Sen's appointment as a member of the Managing Board of Siemens AG was terminated by mutual agreement as of March 31, 2020, prior to the end
of his contractual term of office. His employment relationship remained unaffected until the end of the day on March 31, 2021. The amount reported under
"Other" contains the base salary of €550,800 awarded to Michael Sen for the period from October 1, 2020, until the early termination of his employment
contract on March 31, 2021, his pro-rated Bonus for fiscal 2021 of €550,800 and a severance payment in the gross amount of €3,544,427, which was due
and payable on the termination date of March 31, 2021.
3 The amounts reported under "2017 Stock Awards (vesting: 2016-2020)" also include the additional cash payment relating to the settlement of the 2017 Stock Awards
tranche due to the Siemens Energy spin-off.
2 Fringe benefits include in-kind compensation and fringe benefits awarded by the Company such as the provision of a company car and insurance allowances.
In the case of Lisa Davis, they also include contractually agreed payments for tax adjustments.
1 The table includes only compensation that was awarded to former members after they left the Managing Board.
588
42
664
1,274
Capital payment (partial or full)
2017 Stock Awards (vesting: 2016-2020)³
Annuity
Pensions
Peter Löscher
President and CEO
until July 31, 2013
FISCAL 2021 30
4,984,470
Siemens
Group
Basic earnings
per share (EPS)
Sucession planning; sustainability/diversity
Business development; implementation of portfolio measures; optimization/
efficiency enhancement; implementation of other strategic measures
→ the relevant business for Managing Board members with business responsibility
→ Siemens for Managing Board members with primarily functional responsibility
Comparable revenue growth, measured on the basis of:
→ all-in for Managing Board members with primarily functional responsibility
→ the relevant business for Managing Board members with business responsibility
CCR, measured on the basis of:
With return on capital employed (ROCE), we aim to focus on Siemens' operating
performance, analogously to fiscal 2021. Thus ROCE excludes defined Varian-
related acquisition effects and the main Siemens Energy-related effects in order to
further increase the transparency of Siemens' operating performance.
This approach is aligned with external communications and the modified Financial
Framework for the financial steering of the Company, presented at Capital Market
Day 2021.
Beginning with fiscal 2022, EPS before purchase price allocation (EPS pre PPA)
will be used in order to increase transparency regarding the operating performance
of Siemens. EPS pre PPA is defined as basic earnings per share from net income
adjusted for amortization of intangible assets acquired in business combinations
and related income taxes. As for EPS, EPS pre PPA includes the amounts attributable
to shareholders of Siemens AG.
To strengthen the focus and connection between performance in the reporting year
and target achievement, the actual value of the reporting year is used. The target
value continues to be based on the average of the previous three fiscal years and
thus on the concept of continuous improvement.
Details
Profit
Total
shareholder
return (TSR)
Diverse
focus topics
growth
revenue
Comparable
Return on
capital
employed
(ROCE)
Judith Wiese
€7,715,220
Prof. Dr. Ralf P. Thomas
€8,636,316
efficiency
Profitability/
capital
Managing
Board
portfolio
Stock Awards
tranche
2022
Diverse
focus topics
Supervisory Board members
9% 5,225,324
12%
465,000
2021
140,000
91%
13,500
9%
153,500
2020
140,000
89%
18,000
11%
158,000
158,000
2021
50%
80,000
42%
15,000
8%
188,333
2020
2021
140,000
49%
120,000
42%
93,333
25,500
11%
89%
16,500
10%
173,167
(since Jan. 2015)
2020
140,000
70%
40,000
20%
21,000
10%
201,000
18,000
Michael Sigmund
(since March 2014)
Grazia Vittadini
(since Feb. 2021)
Matthias Zachert
(since Jan. 2018)
2021
140,000
91%
13,500
9%
153,500
2020
140,000
Dorothea Simon¹
(since Oct. 2017)
9%
285,500
2020
(until Feb. 2021)
2020
Total³
2021
2020
220,000
53,472
131,515
3,109,583
2,943,030
55%
54%
57%
55%
60%
59%
58,333
140,000
30,556
35%
16,500
10%
166,500
2021
34%
12%
411,000
33%
9,000
10%
93,028
75,152
1,650,741
1,433,939
31%
34,500
14%
241,167
32%
29%
51,000
607,500
Dr. Nicola Leibinger-Kammüller
(Second Deputy Chairman until Feb. 2021)
140,000
55%
80,000
31%
36,000
14%
256,000
2021
140,000
91%
13,500
9%
2020
153,500
140,000
89%
18,000
11%
158,000
Gunnar Zukunft¹
(since Jan. 2018)
Supervisory Board members
who left during the fiscal year
2021
Werner Wenning
91,667
2020
The following overview shows the maximum compen-
sation and the performance criteria for variable compensa-
tion for fiscal 2022, as approved by the Supervisory Board
of Siemens AG on September 23, 2021.
(since Jan. 2008, First Deputy Chairwoman since Jan. 2015)
468
4
Jim Hagemann Snabe
(since Oct. 2013, Chairman since Jan. 2018)
279
536 92.0%
613
14.3%
632
3.2%
608
IV. SUPERVISORY BOARD MEMBERS' COMPENSATION (in € thousand)
(3.8)%
The Chairman's Committee met nine times. It also made
two decisions using other customary means of commu-
nication. In my capacity as Chairman of the Chairman's
Committee, I discussed topics of major importance with
the other Committee members also between meetings.
In fiscal 2021, the Supervisory Board had six standing
committees. These committees prepare proposals and
issues to be dealt with at the Supervisory Board's plenary
meetings. Some of the Supervisory Board's decision-mak-
ing powers have been delegated to these committees
within the permissible legal framework. The committee
chairpersons report to the Supervisory Board on their
committees' work at the subsequent Board meeting.
A list of the members and a detailed explanation of the
tasks of the individual Supervisory Board committees are
set out in the Corporate Governance Statement.
Work in the Supervisory Board
committees
At our meeting on September 23, 2021, we approved a
Declaration of Conformity in accordance with Section 161
of the German Stock Corporation Act (Aktiengesetz,
AktG). Information on corporate governance is provided
in the Corporate Governance Statement, which is pub-
licly available on the Siemens Global Website at ☐ www.
SIEMENS.COM/CORPORATE-GOVERNANCE. The Company's Dec-
laration of Conformity has been made permanently avail-
able to shareholders on the Siemens Global Website at
WWW.SIEMENS.COM/DECLARATION OF CONFORMITY. The cur-
rent Declaration of Conformity is also available in the
Corporate Governance Statement.
Corporate Governance Code
auditor for the Compensation Report for fiscal 2021. In
addition, we dealt with matters relating to corporate gov-
ernance, in particular with the Declaration of Conformity
with the German Corporate Governance Code and with
the independence of the shareholder representatives on
the Supervisory Board. We approved amendments to the
Bylaws for the Managing Board, the Bylaws for the Super-
visory Board and the bylaws for the Chairman's Commit-
tee, the Audit Committee and the Compensation Commit-
tee of the Supervisory Board. In addition, we amended
the objectives for the composition of the Supervisory
Board as well as the profile of skills and expertise and the
diversity concept for the Supervisory Board. Finally, we
conducted a self-assessment of our activities.
At our meeting on September 23, 2021, the Managing
Board reported on the state of the Company. One focus of
this meeting was the Company's human resources strat-
egy - including talent and leadership development, suc-
cession planning for the Managing Board and diversity.
The Managing Board reported on the current situation at
the Portfolio Companies. We concerned ourselves with
the annual review of Managing Board compensation and -
after preparation by and on a recommendation of the
Compensation Committee - defined each Managing Board
member's individual target total compensation and max-
imum compensation as well as the performance criteria
for variable compensation for fiscal 2022. At this meeting,
we also discussed the Compensation Report for fiscal 2021
and made a decision regarding the engagement of an
At our meeting on August 4, 2021, the Managing Board
reported on the Company's current business and finan-
cial position following the conclusion of the third quarter.
One focus of this meeting was the sustainability strategy
(DEGREE). We were informed about the current business
situation at Siemens Healthineers. We approved the Man-
aging Board's decision to acquire SQCAP B.V. (Sqills),
Netherlands, a leading supplier of SaaS solutions for the
rail industry.
On May 16, 2021, we approved – in a decision using other
customary means of communication and on the recom-
mendation of the Innovation and Finance Committee -
the Managing Board's decisions to acquire Supplyframe,
Inc., U.S., a marketplace for the global electronics value
chain. On May 21, 2021, we made another decision using
other customary means of communication to exercise
ownership rights in subsidiaries of Siemens AG in accor-
dance with Section 32 of the German Codetermination
Act (Mitbestimmungsgesetz, MitbestG). At an extraordi-
nary Supervisory Board meeting on June 22, 2021, the
Managing Board presented the reporting planned for
Capital Market Day on June 24, 2021. We approved the
Managing Board's decision on the share buyback. On
July 28, 2021, we were informed about matters concern-
ing Siemens Healthineers.
FISCAL 2021
Board reported to us in detail in particular on the digital
marketplace strategy of the Digital Industries Business
and the SaaS business model. We also discussed Manag-
ing Board compensation. Finally, we concerned ourselves
with the Company's stake in Siemens Energy.
Change
in %
Change
in %
2,202
Prof. Dr. Siegfried Russwurm 4 (until March 2017)
4,363
Michael Sen (from April 2017 until March 2020)
1,272
2,661 (5.8)% 7,969 199.5% 6,562 (17.6)% 1,434 (78.2)%
2,718 23.4% 4,192 54.3% 2,631 (37.2)% 1,274 (51.6)%
3,244 (25.7)% 4,330
33.5% 2,905 (32.9)% 664 (77.1)%
2,841 123.4% 2,448 (13.8)% 1,991 (18.7)% 5,914 197.1%
1 Revenue as reported. In fiscal 2020, the segments "Gas and Power" and "Siemens Gamesa Renewable Energy" were classified as discontinued operations and are therefore not
included in the amount reported for fiscal 2020.
2 The primary measure for managing and controlling revenue growth is comparable growth, because it shows the development of Siemens' business net of currency translation
effects, which arise from the external environment outside the Company's control, and portfolio effects, which involve business activities that are either new to or no longer a
part of the relevant business.
3 Basic earnings per share from continuing and discontinued operations as reported.
2021
4 The increase in compensation in fiscal 2019 is primarily attributable to the one-time benefit from two Stock Awards tranches - the 2014 and 2015 tranches in November 2018,
due to a reduction in the duration of the Stock Awards to the customary four-year period starting with the 2015 tranche.
Compensation Report → D. Comparative information on profit development and annual change in compensation
Comparative information on profit development and change in compensation
of employees, Managing Board and Supervisory Board members (cont.)
Fiscal
2017
2018
Change
in %
2019
Change
in %
2020
FISCAL 2021 36
Report of the Supervisory Board
3
FISCAL 2021
SIEMENS
Report of the
Supervisory Board
40
FISCAL 2021
Independent auditor's report
Compensation Report →
[German Public Auditor]
Wirtschaftsprüfer
Dr. Gaenslen
| Report of the Supervisory Board
[German Public Auditor]
Breitsameter
Wirtschaftsprüfungsgesellschaft
Ernst & Young GmbH
Munich, December 2, 2021
The "General Engagement Terms for Wirtschaftsprüfer
and Wirtschaftsprüfungsgesellschaften [German Public
Auditors and Public Audit Firms]" as issued by the IDW
on January 1, 2017, are applicable to this engagement
and also govern our responsibility and liability to third
parties in the context of this engagement (☐ wWW.DE.EY.
COM/GENERAL-ENGAGEMENT-TERMS).
Limitation of liability
FISCAL 2021 39
The audit of the content of the Compensation Report de-
scribed in this auditor's report comprises the formal audit
of the Compensation Report required by Sec. 162 (3) AktG
and the issue of a report on this audit. As we are issuing
an unqualified opinion on the audit of the content of the
Compensation Report, this also includes the opinion that
the disclosures pursuant to Sec. 162 (1) and (2) AktG are
made in the Compensation Report in all material respects.
Other matter – formal audit
of the Compensation Report
Wirtschaftsprüferin
Berlin and Munich, December 2, 2021
Report of the Supervisory Board
Dear Shareholders,
At our meeting on May 7, 2021, the Managing Board
reported to us on the Company's current business and
financial position following the conclusion of the second
quarter. As part of a strategic focus, we concerned our-
selves at this meeting - on the basis of the strategy dis-
cussions conducted in smaller groups with the Managing
Board in the previous weeks - comprehensively and
in detail with the strategic priorities of Siemens AG and
the strategic orientation of its businesses. The Managing
In April 2021, the members of the Managing and Super-
visory Boards met several times in smaller groups of a few
participants each for strategy discussions (so-called multi-
lateral strategy sessions) in order to conduct detailed con-
sultations and discussions regarding topics of strategic
importance for Siemens AG.
The regular terms of office of three shareholder represen-
tatives on the Supervisory Board, who had been reelected
early to five-year terms of office by the Annual Sharehold-
ers' Meeting on January 26, 2016, ended at the Annual
Shareholders' Meeting on February 3, 2021. Three share-
holder representatives on the Supervisory Board were
elected for new, four-year terms of office - that is, for the
electoral period 2021 to 2025 - by the Annual Sharehold-
ers' Meeting on February 3, 2021. The constituent meet-
ing of the Supervisory Board took place immediately after
the Annual Shareholders' Meeting on February 3, 2021.
At this Supervisory Board meeting, Jim Hagemann Snabe
was reelected Chairman of the Supervisory Board.
The Supervisory Board confirmed Birgit Steinborn in
her position as First Deputy Chairwoman and elected
Dr. Werner Brandt Second Deputy Chairman of the Super-
visory Board. The Supervisory Board also elected the
members of its committees.
At our meeting on February 2, 2021, the Managing Board
reported on the Company's current business and finan-
cial position following the conclusion of the first quarter.
and the Compensation Report - and the agenda for the
ordinary Annual Shareholders' Meeting on February 3,
2021. On the recommendation of the Compensation
Committee, we also made a further decision regarding
the target setting for Managing Board compensation for
fiscal 2021. In addition, we concerned ourselves with the
annual reporting of the Chief Compliance Officer and the
Cybersecurity Officer.
On December 1, 2020, we discussed the financial state-
ments and the Combined Management Report for
Siemens AG and the Siemens Group as of September 30,
2020, the Annual Report for 2020 - including the Report
of the Supervisory Board, corporate governance reporting
At our meeting on November 11, 2020, we discussed the
key financial figures for fiscal 2020 and approved the bud-
get for fiscal 2021. On a recommendation by the Compen-
sation Committee, we also defined the Managing Board
members' compensation for fiscal 2020 on the basis of
calculated target achievement. An internal review con-
firmed the appropriateness of this compensation. We had
already defined the performance criteria for the Manag-
ing Board's variable compensation for fiscal 2021 at our
meeting on September 22, 2020. On this basis and on the
recommendation of the Compensation Committee, we
made a decision on target setting for Managing Board
compensation for fiscal 2021 at our meeting on Novem-
ber 11, 2020. At this meeting, we also approved a Manag-
ing Board decision on financing measures.
At an extraordinary meeting on October 29, 2020,
we approved the Managing Board's decision to sell
Flender GmbH, a producer of mechanical and electrical
drive systems, to The Carlyle Group, U.S.
We held a total of six regular plenary meetings and two
extraordinary meetings in fiscal 2021. Another extraordi-
nary meeting the Supervisory Board's constituent meet-
ing was held immediately after the Annual Sharehold-
ers' Meeting on February 3, 2021. We also made two
decisions using other customary means of communica-
tion. Topics of discussion at our regular plenary meetings
were revenue, profit and employment development at
Siemens AG and the Siemens Group as well as the Com-
pany's financial position and the results of its operations.
In addition, we concerned ourselves, as occasion required,
with acquisition and divestment projects and with risks
to the Company. We received regular reports from the
Managing Board regarding the impact on Siemens of the
COVID-19 pandemic. In addition, we met regularly in
closed sessions without the Managing Board in atten-
dance. In these sessions, we dealt with agenda items that
concerned either the Managing Board itself or internal
Supervisory Board matters.
-
Topics at the plenary meetings
of the Supervisory Board
Report of the Supervisory Board
FISCAL 2021 2
A special focus of our activities in fiscal 2021 was the
Company's further strategic development after the suc-
cessful spin-off and subsequent public listing of Siemens
Energy. At our meetings and in additional informational
sessions, we concerned ourselves intensively with the
goals and priorities of Siemens' businesses and with the
Managing Board's technology and personnel strategy.
In this connection, we focused our attention on innova-
tion, digitalization and the related opportunities for
growth. Together with the Managing Board, we dis-
cussed the markets, trends and growth fields. The sus-
tainability strategy of Siemens AG was another focus of
our work in fiscal 2021.
-
basis of detailed written and oral reports provided by the
Managing Board, we monitored the Managing Board and
advised it on the management of the Company. In my
capacity as Chairman of the Supervisory Board, I regu-
larly exchanged information with the President and CEO
and the other Managing Board members. As a result, the
Supervisory Board was always kept up to date on pro-
jected business policies, Company planning - including
financial, investment and personnel planning – and the
Company's profitability and business operations as well
as on the state of Siemens AG and the Siemens Group.
We were directly involved at an early stage in all deci-
sions of fundamental importance to the Company and
discussed these decisions with the Managing Board
intensively and in detail. To the extent that Supervisory
Board approval of the decisions and measures of Com-
pany management was required by law, the Siemens
Articles of Association or our Bylaws, the members of
the Supervisory Board - prepared in some cases by the
Supervisory Board's committees – issued such approval
after intensive review and discussion. The relevant Man-
aging Board members informed us - within the limits of
the applicable legal framework - about critically impor-
tant measures and decisions at the Company's equity
investments.
In fiscal 2021, the Supervisory Board performed in full the
duties assigned to it by law, the Siemens Articles of Asso-
ciation and the Bylaws for the Supervisory Board. On the
-
In close dialogue with the Supervisory Board, the new
management team also succeeded in further accelerating
business and technological innovation. The extensive in-
troduction of Software-as-a-Service (SaaS) offerings by
Siemens' industry software business is an excellent exam-
ple of this success. In addition, the Companywide DEGREE
program intensified the focus of all Siemens businesses
on ambitious sustainability targets – targets for environ-
mental and social sustainability and good governance -
even further.
This move-intensively promoted by the Supervisory
Board - successfully concluded Siemens' strategic, struc-
tural and personnel realignment, which provided a
strong foundation for the outstanding achievements of
the Company's roughly 300,000 employees in fiscal 2021.
Despite the uncertainties due to the ongoing COVID-19
pandemic, Siemens AG seized the opportunities provided
by the economic recovery and the accelerated drive to-
ward digitalization and sustainability that is transforming
its key markets. The broad-based growth and high profit-
ability achieved by the Company's businesses are impres-
sive and speak for themselves. Siemens proved that sus-
tainable technologies designed to benefit society are
already a model for success.
Fiscal 2021 was Siemens AG's first year as a newly posi-
tioned, focused technology company. It was also the
first year for the Company's new Managing Board
team. Together with his Managing Board colleagues,
Dr. Roland Busch pursued clear strategic objectives and
positioned Siemens' operations for faster growth. As
planned, Dr. Busch succeeded Joe Kaeser as President
and CEO at the conclusion of the ordinary Annual Share-
holders' Meeting on February 3, 2021.
Janina Kugel (until Jan. 2020)
-
2,825
Former Managing Board members
83,044
(0.0)%
86,849
4.6%
57,139
(34.2)%
62,265
9.0%
Comparable revenue growth² (in %)
83,049
3
n.a.
3
n.a.
(2)
n.a.
11.5
n.a.
Earnings per share³ (in €)
7.44
2
7.12
Revenue (in € billion)
Change
in %
Birgit Steinborn¹
Compensation Report → D. Comparative information on profit development and annual change in compensation
D. Comparative information on
profit development and annual
change in compensation
The following table shows, in accordance with Sec-
tion 162 para. 1 sent. 2 No. 2 of the German Stock Corpo-
ration Act, Siemens' profit development, the annual
change in the Managing Board and Supervisory Board
members' compensation and the annual change in aver-
age employee compensation on a full-time equivalent
basis over the last five fiscal years.
Profit development is presented on the basis of the
Siemens Group's key performance indicators revenue,
comparable revenue growth and earnings per share. The
latter is also one of the financial targets for the short-
term variable compensation (Bonus) of the Managing
Board and thus has a significant influence on the amount
of the compensation of the Managing Board members. In
accordance with Section 275 para. 3 No. 16 of the German
Commercial Code (Handelsgesetzbuch, HGB), the devel-
opment of the net income of Siemens AG is also shown.
The compensation awarded and due to the Managing
Board and Supervisory Board members in each fiscal year
is presented in accordance with Section 162 para. 1 sent. 1
of the German Stock Corporation Act.
The presentation of average employee compensation is
based on the size of the workforce, including trainees,
employed by Siemens in Germany. In fiscal 2021, this
workforce comprised on average 71,838 employees
(full-time equivalent). By way of comparison, the
Siemens Group had about 241,000 employees and train-
ees worldwide as of September 30, 2021. The figures
exclude the workforce of Siemens Healthineers, which
is not included in the presentation since it is a separately
managed, publicly listed company.
Average employee compensation comprises the person-
nel costs for wages and salaries, fringe benefits, employer
contributions to social insurance and any short-term
variable compensation components attributable to the
fiscal year. For compensation in connection with share
plans, the amounts received in the fiscal year are taken
into account. Therefore, employee compensation is also
equivalent, in principle, to awarded and due compensa-
tion within the meaning of Section 162 para. 1 sent. 1 of
the German Stock Corporation Act and thus in line with
Managing Board and Supervisory Board compensation.
FISCAL 2021 35
I. PROFIT DEVELOPMENT
Compensation Report → D. Comparative information on profit development and annual change in compensation
Fiscal
2017
2018
Change
in %
2019
Change
in %
2020
Change
in %
2021
Comparative information on profit development and change in compensation
of employees, Managing Board and Supervisory Board members
(4.3)%
6.41
Net income according to HGB (in € billion)
4,556 (16.9)%
3,710 45.1%
Matthias Rebellius (since Oct. 2020)
Prof. Dr. Ralf P. Thomas 4 (since Sept. 2013)
3,347
3,143
(6.1)%
6,740 114.5% 4,087
Judith Wiese (since Oct. 2020)
3.6%
2,556
Managing Board members
Joe Kaeser (President and CEO until Feb. 2021)
9,643
8,391
Klaus Helmrich 4 (until March 2021)
5,586
(13.0)% 12,978
4,608 (17.5)% 6,679
54.7%
45.0%
8,051 (38.0)%
4,186 (37.3)%
4,616 (42.7)%
2,756 (34.2)%
who left during the fiscal year
Cedrik Neike (since April 2017)
5,482
(since April 2011, President and CEO since Feb. 2021)
4,076
4,547
11.6% 11,219
(10.0)%
146.7%
5.00
(22.0)%
5,270 (53.0)% 5,147
7.68
53.6%
(2.3)%
II. AVERAGE EMPLOYEE COMPENSATION (in € thousand)
Workforce in Germany
91
94
3.3%
95
1.1%
96
1.1%
99
3.1%
III. MANAGING BOARD MEMBERS' COMPENSATION (in € thousand)
Dr. Roland Busch 4
Lisa Davis (until Feb. 2020)
In our opinion, on the basis of the knowledge obtained in
the audit, the Compensation Report for the fiscal year
from October 1, 2020 to September 30, 2021 and the re-
lated disclosures comply, in all material respects, with the
financial reporting provisions of Sec. 162 AktG. Our opin-
ion on the Compensation Report does not cover the con-
tent of the abovementioned disclosures in the Compen-
sation Report that is beyond the scope of Sec. 162 AktG.
6,730 47.7% 4,441 (34.0)% 6,008 35.3%
2,331 (37.2)% 2,017 (13.5)% 3,524 74.7%
3,435
(39.4)% 4,235
4,185
We believe that the evidence we have obtained is suffi-
cient and appropriate to provide a basis for our opinion.
113
Benoît Potier (since Jan. 2018)
(4.5)%
384
2.7%
402
(0.8)%
391
3.5%
141
394
Jürgen Kerner¹ (since Jan. 2012)
6.9%
264
3.1%
247
(1.8)%
240
6.5%
244
381
229
25.5%
11.0%
Kasper Rørsted (since Feb. 2021)
(2.2)%
190
6.6%
194
(3.7)%
182
0.6%
189
157
188
Dr.-Ing. Dr.-Ing. E.h. Norbert Reithofer
(2.8)%
154
44.3%
158
110
Hagen Reimer' (since Jan. 2019)
(1.1)%
155
(since Jan. 2015)
Harald Kern (since Jan. 2008)
(5.3)%
243
287
Tobias Bäumler' (since Oct. 2020)
30.4%
438
3.7%
336
35.0%
324
240
Michael Diekmann (since Jan. 2008)
(since Jan. 2018, Second Deputy Chairman since Feb. 2021)
(3.1)%
467
2.2%
482
(1.3)%
471
1.9%
Opinion
477
Dr. Werner Brandt²
204
217
6.1%
4.9%
256
0.0%
5.8%
244
231
Bettina Haller¹ (since April 2007)
(2.8)%
154
6.0%
158
32.4%
149
113
Dr. Andrea Fehrmann1 (since Jan. 2018)
10.6%
246
3.5%
223
(0.7)%
215
131
Baroness Nemat Shafik (DBE, DPhil) (since Jan. 2018)
244
140
2 Werner Brandt has been a member of the Supervisory Board since January 31, 2018, and was elected Second Deputy Chairman of the Supervisory Board,
effective the end of the Annual Shareholders' Meeting on February 3, 2021.
1 These employee representatives on the Supervisory Board and the representatives of the trade unions on the Supervisory Board have agreed to transfer
their compensation to the Hans Böckler Foundation, in accordance with the guidelines of the Confederation of German Trade Unions.
93 (61.4)%
(1.8)%
241
(1.2)%
246
2.5%
249
FISCAL 2021
243
3.4%
411
(1.5)%
398
0.4%
404
402
Dr. Nicola Leibinger-Kammüller (until Feb. 2021)
(Second Deputy Chairman until Feb. 2021)
167 (59.5)%
37
Compensation Report E. Other
The Company provides a group insurance policy for
Supervisory and Managing Board members and certain
other employees of the Siemens Group. The policy is taken
out for one year at a time or renewed annually. It covers
the personal liability of the insured individuals in cases of
An audit involves performing audit procedures to obtain
audit evidence about the amounts in the Compensation
Report and the related disclosures. The audit procedures
selected depend on the auditor's judgment, including
the assessment of the risks of material misstatement of
the Compensation Report and the related disclosures,
whether due to fraud or error. In making those risk as-
sessments, the auditor considers internal control relevant
to the preparation of the Compensation Report and the
related disclosures in order to plan and perform audit
procedures that are appropriate under the given circum-
stances, but not for the purpose of expressing an opinion
on the effectiveness of the entity's internal control. An
audit also includes evaluating the accounting policies
used and the reasonableness of accounting estimates
made by management and the Supervisory Board, as
well as evaluating the overall presentation of the Com-
pensation Report and the related disclosures.
Our responsibility is to express an opinion on this Com-
pensation Report and the related disclosures based on
our audit. We conducted our audit in compliance with
German Generally Accepted Standards for Financial State-
ment Audits promulgated by the Institut der Wirtschafts-
prüfer [Institute of Public Auditors in Germany] (IDW).
Those standards require that we comply with ethical re-
quirements and plan and perform the audit to obtain
reasonable assurance about whether the Compensation
Report and the related disclosures are free from material
misstatement.
113
Auditor's responsibility
Management and the Supervisory Board of Siemens AG
are responsible for the preparation of the Compensation
Report and the related disclosures in compliance with the
requirements of Sec. 162 AktG. In addition, management
and the Supervisory Board are responsible for such inter-
nal control as they determine is necessary to enable the
preparation of a Compensation Report and the related
disclosures that are free from material misstatement,
whether due to fraud or error.
Responsibilities of management
and the Supervisory Board
We have audited the attached Compensation Report of
Siemens Aktiengesellschaft, Berlin and Munich, prepared
to comply with Sec. 162 AktG ["Aktiengesetz": German
Stock Corporation Act] for the fiscal year from October 1,
2020 to September 30, 2021 and the related disclosures.
We have not audited the content of disclosures regarding
appropriateness and marketability of the compensation
in chapter 7 B.2.3 APPROPRIATENESS OF THE COMPENSATION that
is beyond the scope of Sec. 162 AktG.
To Siemens Aktiengesellschaft, Berlin and Munich
Compensation Report → Independent auditor's report
I Independent auditor's report
FISCAL 2021 38
Chairman of the Supervisory Board
of Siemens AG
of Siemens AG
Chief Financial Officer
Jim Hagemann Snabe
Prof. Dr. Ralf P. Thomas
For the Supervisory Board
President and Chief Executive Officer
of Siemens AG
Dr. Roland Busch
For the Managing Board
financial loss associated with their activities on behalf
of the Company. The insurance policy for fiscal 2021 in-
cludes a deductible for the members of the Managing
Board that complies with the requirements of the Ger-
man Stock Corporation Act.
Werner Wenning
154 (2.8)%
| E. Other
158
6.0%
158
(2.0)%
149
1.0%
152
151
Michael Sigmund (since March 2014)
3.9%
201
4.6%
194
22.9%
185
151
Dr. Nathalie von Siemens (since Jan. 2015)
140 (11.3)%
6.0%
13.1%
158
24.2%
154 (2.8)%
Dorothea Simon' (since Oct. 2017)
173 (13.8)%
37.9%
149
286
4.9%
256
113
244
177
who left during the fiscal year
152
Supervisory Board members
Matthias Zachert (since Jan. 2018)
Gunnar Zukunft' (since Jan. 2018)
188
Grazia Vittadini (since Feb. 2021)
(2.8)%
154
6.0%
158
(2.0)%
149
32.4%
11.5%
9,029
7,094
27%
10,646
71,374
58,030
23%
20%
21%
23%
23%
16,780
16,589
26%
24%
14,212
17,555
24%
22%
20,474
9%
12,118
19,208
14%
13,473
15,234
2021
25%
27,252
20%
14%
31,138
Comp.
Actual
2020
% Change
Fiscal year
As defined by the International Monetary Fund.
therein: emerging markets'
26%
Siemens (continuing operations)
Asia, Australia
therein: U.S.
Americas
therein: Germany
Europe, C.I.S., Africa, Middle East
(in millions of €)
Revenue (location of customer)
In the Asia, Australia region, orders overall rose substantially due to double-digit increases in all four industrial businesses, with the
highest contributions from Siemens Healthineers and Digital Industries. The pattern of order development in China was largely the same
as for the region.
Order growth in the Americas and in the U.S. was due mainly to a higher volume from large orders in Mobility, particularly including the
large order in the U.S. mentioned above. Overall, order intake both in the region and in the U.S. was subject to significantly negative
currency translation effects, partly offset by portfolio effects which related primarily to the acquisition of Varian.
In the Europe, C.I.S., Africa, Middle East region, order intake was up substantially year-over-year with increases in all four industrial
businesses. Sharp order growth in Siemens Healthineers included high volume from rapid coronavirus antigen tests. Digital Industries and
Smart Infrastructure also recorded double-digit growth, while orders in Mobility were up clearly year-over year. In Germany, order intake
in Siemens Healthineers almost doubled due mainly to the high volume from rapid coronavirus antigens tests. Digital Industries and Smart
Infrastructure posted double-digit growth, while Mobility posted a substantial decline due to a lower volume from large orders which in
fiscal 2020 had included a €1.1 billion order for high-speed trains.
Orders related to external customers were up substantially year-over-year on double-digit growth in all four industrial businesses, reflecting
a very strong rebound in economic activity even though the economic environment was still strongly impacted by COVID-19. Orders in
Mobility increased sharply on a higher volume from large orders which included a €2.8. billion order for trainsets including dual powered
and hybrid battery vehicles and associated services in the U.S., its largest-ever order in the Americas. Siemens Healthineers, Digital
Industries and Smart Infrastructure also posted double-digit order growth year-over-year. The broad-based increase in emerging markets
was driven by China and, to a lesser degree, India.
therein: China
24%
2021
34,311
(1,739)
(243)
(94)
(691)
(738)
(211)
(170)
(887)
(435)
325
94
(1,731)
(24)
2020
Fiscal year
Eliminations, Corporate Treasury and other reconciling items
Reconciliation to Consolidated Financial Statements
Amortization of intangible assets acquired in business combinations
Centrally carried pension expense
Corporate items
Siemens Real Estate
Siemens Energy Investment
(in millions of €)
12%
Profit
(396)
The result for Siemens Energy Investment included Siemens' share of Siemens Energy AG's result after tax and, in addition, expenses
from amortization of assets resulting from purchase price allocation due to the initial recognition of the investment at fair value in
September 2020. In fiscal 2021, Siemens' share of Siemens Energy AG's net loss amounted to €159 million, which was due mainly to
planned restructuring measures by Siemens Energy to improve its competitiveness, while the expenses from amortization amounted to a
€237 million.
Lower profit at Siemens Real Estate was due mainly to reduced gains related to disposals. The prior year included a gain of €219 million
from the transfer of an investment.
The positive change in Corporate items was mainly due to the following factors in fiscal 2021: Firstly, a positive result, primarily resulting
from revaluation gains, totaling €358 million related to the transfers of assets to Siemens Pension-Trust e.V. in Germany, which included
the stakes in Bentley and ChargePoint Holdings, Inc. (ChargePoint). Secondly, a gain of €314 million related to the revaluation of, and
dividends received for the stake in, Thoughtworks Holdings Inc. (Thoughtworks), which completed its initial public offering in the U.S. in
September 2021. These factors were partly offset by expenses of €94 million from revised estimates related to provisions for a legacy
project. Severance charges within Corporate items were €73 million (€68 million in fiscal 2020).
Comp.
% Change
Actual
2020
Fiscal year
2021
1 As defined by the International Monetary Fund.
therein: emerging markets¹
Siemens (continuing operations)
therein: China
Asia, Australia
therein: U.S.
Americas
therein: Germany
Europe, C.I.S., Africa, Middle East
(in millions of €)
Orders (location of customer)
Currency translation effects took three percentage points each from order and revenue growth, respectively. Portfolio transactions, in
particular the acquisition of Varian by Siemens Healthineers, added five percentage points to order and four percentage points to revenue
growth year-over-year. The resulting ratio of orders to revenue (book-to-bill) for Siemens in fiscal 2021 was 1.15. The order backlog was
€85 billion as of September 30, 2021.
4.1 Orders and revenue by region
4. Results of operations
Combined Management Report
15
15
Beginning with fiscal 2022, governance costs and Siemens brand fees, previously included in Corporate items, will be included within the
new item Governance; results related to Technology and Next47, also previously included in Corporate items, will be disclosed under the
new item Innovation. Other components of corporate items, including the businesses Advanta and Global Business Solution, will be
transferred to the item Financing, eliminations and other items (formerly Eliminations, Corporate Treasury and other reconciling items).
In line with the change to a new profit definition, this item will also include operating financial income (expenses), net. As a result of the
changes described above, Corporate items will be retired as a disclosure line item. If this new reporting structure had already existed in
fiscal 2021, the items Innovation; Governance; and Financing, eliminations and other items would have recorded €(207) million, €(751)
million and €452 million in profit, respectively.
Combined Management Report
14
Improved results in Eliminations, Corporate Treasury and other reconciling items were due mainly to lower interest expenses on debt
and positive effects related to reinsurance contracts.
27,778
11,249
54%
20%
(1,346)
(1,861)
36%
5,502
7,496
0%
(1,731)
(1,739)
87%
(673)
(85)
(38)%
48%
512
14.3%
15.0%
17%
7,560
8,808
30%
2,184
2,847
4%
822
345
5,636
4,156
36%
3.8 Reconciliation to Consolidated Financial Statements
18
age of digitalization.
Siemens' global venture capital unit, Next47, provides capital to help start-ups expand and scale. It serves as the creator of next-generation
businesses for Siemens by building, buying and partnering with innovative companies at any stage. Next47 is focused on anticipating how
emerging technologies will influence our end markets. This foreknowledge enables Siemens and our customers to grow and thrive in the
Combined Management Report
17
We advance certain of these technologies also through our open innovation concept. We are working closely with scholars from leading
universities and research institutions, not only under bilateral cooperation agreements but also in publicly funded collective projects. Our
focus here is on our strategic research partners, and especially the eight Centers of Knowledge Interchange that we maintain at leading
universities worldwide.
Our research and development activities are ultimately geared to developing innovative, sustainable solutions for our customers - and the
Siemens businesses while also strengthening our own competitiveness. Joint implementation by the operating units and Technology,
our central R&D department, ensures that research activities and business strategies are closely aligned with one another, and that all
units benefit equally and quickly from technological developments. As in previous years, we focused on the following technologies:
additive manufacturing, autonomous robotics, blockchain applications, connected (e-)mobility, connectivity and edge devices, cyber
security, data analytics and artificial intelligence, distributed energy systems, energy storage, future of automation, materials, power
electronics, simulation and digital twin, and software systems and processes.
-
In fiscal 2021, we reported research and development expenses of €4.9 billion, compared to €4.6 billion in fiscal 2020. The resulting R&D
intensity, defined as the ratio of R&D expenses and revenue, was 7.8% (fiscal 2020: 8.3%). Additions to capitalized development expenses
amounted to €0.3 billion in fiscal 2021, compared to €0.4 billion in fiscal 2020. As of September 30, 2021 and 2020, Siemens held
approximately 43,400 and 40,900 respectively, granted patents worldwide in its continuing operations. On average, we had 42,500 R&D
employees in fiscal 2021.
4.3 Research and development
As expected, ROCE improved year-over-year, but was below the target range set in our Siemens Financial Framework. The increase year-
over-year was due both to sharply higher income before interest after tax and to clearly lower average capital employed following the
spin-off of Siemens Energy at the end of fiscal 2020.
The increase in basic earnings per share reflects an increase of Net income attributable to Shareholders of Siemens AG, which was €6,161
million in fiscal 2021 compared to €4,030 million in fiscal 2020, combined with a lower number of weighted average shares outstanding.
The tax rate in fiscal 2021 was 25%, close to the 24% rate in fiscal 2020, benefiting from reversal of income tax provisions and largely tax-
free gains resulting from the transfers of assets to Siemens Pension-Trust e.V. mentioned above. These benefits were partly offset by losses
related to equity investments which were not tax-deductible. As a result, the increase in Income from continuing operations was 36%.
Income from discontinued operations, net of income taxes in fiscal 2021 included a gain of €0.9 billion from the sale of Flender and
also benefited from reversal of income tax provisions. The prior year included a pretax gain of €0.9 billion, net of related expenses, from
the spin-off of Siemens Energy AG (Siemens Energy), as well as a positive contribution from Flender. These positive factors were largely
offset, however, by losses at the former operating businesses Gas and Power and Siemens Gamesa Renewable Energy (now part of Siemens
Energy) and €0.3 billion in income tax expenses mainly related to the carve-out of Siemens Energy.
As a result of the developments described above, Income from continuing operations before income taxes increased 36%. Severance
charges for continuing operations were €410 million, of which €251 million were in Industrial Business. In fiscal 2020, severance charges
for continuing operations were €589 million, of which €490 million were in Industrial Business.
7.8%
13.1%
5.00
7.68
59%
4,200
6,697
>200%
44
1,062
857
9,373
34%
1,743
Revenue related to external customers went up significantly year-over-year, led by double-digit growth in Siemens Healthineers and Digital
Industries. Smart Infrastructure recorded a clear increase, while Mobility posted slightly higher revenue year-over-year. The revenue
increase in emerging markets was driven by substantially higher demand in China and, to a lesser degree, India.
15%
15%
15,323
11%
55,254
62,265
17,651
21%
25%
6,594
8,232
Revenue in Europe, C.I.S., Africa, Middle East increased significantly on growth in all four industrial businesses. Within the region,
Germany showed sharp growth particularly due to Siemens Healthineers which doubled its revenue in the country through sales of rapid
coronavirus antigen tests. The other industrial businesses posted sizeable increases in Germany.
13%
12,784
14,815
9%
6%
12,761
13,521
10%
7%
15,218
16,312
16%
16%
16
Combined Management Report
In the Americas, revenue was up in all four industrial businesses, led by Siemens Healthineers. As with orders, revenue was subject to
significantly negative currency translation effects, partly offset by portfolio effects related primarily to the acquisition of Varian. The pattern
of revenue growth in the U.S. was largely the same as for the region.
3%
3,252
3,362
% Change
2020
2021
Fiscal year
ROCE
Basic earnings per share
Income from discontinued operations, net of income taxes
Net income
Income from continuing operations
Income tax expenses
Income from continuing operations before income taxes
Reconciliation to Consolidated Financial Statements
Portfolio Companies
Siemens Financial Services
Adjusted EBITA margin Industrial Business
Industrial Business
Siemens Healthineers
Mobility
Smart Infrastructure
Digital Industries
(in millions of €, earnings per share in €)
4.2 Income
In Asia, Australia, Digital Industries, Siemens Healthineers and Smart Infrastructure all posted double-digit growth, while Mobility reported
a decline. Growth in the region was primarily due to increases in China and India.
1,302
Although the broad range of businesses are operating in diverse markets, overall the main markets served by Portfolio Companies are
generally impacted by uncertainties regarding geopolitical and economic developments and by cautiousness of investment sentiment.
However, ongoing recovery is expected to continue in most end-customer vertical markets in fiscal 2022.
13%
(2.8)%
9,169
12,696
Comp.
% Change
Actual
2020
2021
Fiscal year
38%
Adjusted EBITA
Revenue
Orders
(in millions of €)
connectivity, simulation and digital twin, data analytics and Al, additive manufacturing and software systems and processes. Mobility's
investments focus mainly on maintaining or enhancing its production facilities, on meeting project demands and enhancing its depot
services.
Combined Management Report
10
Mobility's R&D strategy is focused on making trains and infrastructures more intelligent, thereby increasing its customers' return on
investment, improving the passenger experience, and guaranteeing availability. Decarbonization and seamlessly connected (e-)mobility
are also key factors for the future of transportation. Mobility's major R&D areas include the development of efficient vehicle platforms with
optimized lifecycle cost and maximum customization flexibility; eco-friendly, alternative power supplies for trains (batteries, hydrogen,
dual mode) and trucks (eHighway); digital services for railways via its Railigent application suite; "signaling in the cloud," a new system
architecture for rail infrastructure and loT/cloud-based technologies; solutions for more automated and autonomous driving for rail and
road; innovative brake monitoring systems for freight trains; and digital technologies and loT solutions including cyber security,
therein: service business
41%
9,232
9,052
11
Siemens is majority shareholder in the publicly listed Siemens Healthineers AG, Germany (Siemens Healthineers). Siemens Healthineers
is a global provider of healthcare solutions and services. It develops, manufactures, and sells a diverse range of innovative diagnostic and
therapeutic products and services to healthcare providers. In addition, it also provides clinical consulting services, complemented by
extensive training and service offerings. This comprehensive portfolio supports customers all along the care continuum, from prevention
and early detection to diagnosis, treatment, and follow-up care. The customer spectrum ranges from public and private healthcare
providers, including hospitals and hospital systems, public and private clinics and laboratories, universities, physicians/physician groups,
public health agencies, state-run and private health insurers, to pharmaceutical companies and clinical research institutes. The imaging
business provides imaging products, services and solutions. Its most important products are equipment for magnetic resonance, computed
tomography, X-ray systems, molecular imaging, and ultrasound. The diagnostics business offers in-vitro diagnostic products and services
to healthcare providers in laboratory, molecular and point-of-care diagnostics. The portfolio of the advanced therapies business consists
of highly integrated products, solutions and services across multiple clinical fields that are designed to support image-guided minimally
invasive treatments, in areas such as cardiology, interventional radiology and surgery. On April 15, 2021, Siemens acquired Varian, which
is active in the field of cancer care, with solutions especially in radiation oncology and related digital solutions and applications. Varian
thus offers a good complement to Siemens Healthineers' businesses in medical imaging, laboratory diagnostics and interventional
procedures. The purchase price paid in cash amounted to USD 16.4 billion (€13.9 billion as of the acquisition date). To partially finance
this acquisition, Siemens Healthineers carried out a capital increase during fiscal 2021 without the participation of Siemens, consequently
3.5 Siemens Healthineers
Markets served by Mobility grew moderately in fiscal 2021 as they partly recovered from impacts related to COVID-19. The market for
rolling stock saw large orders across all segments, especially for high-speed trains, commuter trains and locomotives. The rail infrastructure
market has seen growth both in urban and mainline segments due to the renewal and extension of mainline tracks and the ongoing trend
towards automatic train protection (ATP), including communications-based train control (CBTC) and European train control system (ETCS)
technologies. Service demand partly recovered from prior-year impacts related to COVID-19, due to growing installed bases which drove
a corresponding increase in the spare parts and maintenance market. On a geographic basis, market development in Europe continued to
be characterized by awards of mid-size to large orders, particularly in Germany, Denmark and in Switzerland. While demand in the Middle
East rose, demand in Africa was held back by ongoing uncertainties related to budget constraints and political climates. In the Americas
region, investment activities were driven by demand for urban and mainline transport, especially in the U.S. and Canada. Within the Asia,
Australia region, markets saw ongoing rail investments, particularly in China. For fiscal 2022, markets served by Mobility are expected to
further recover from impacts related to COVID-19 and to grow clearly, partly benefiting from fiscal stimulus and investment programs.
Mobility anticipates that rail operators in Europe, particularly in Germany and in the U.K., will continue making significant investments and
that customers in the Middle East and Africa will tender large turnkey systems, especially for additional rail lines in Egypt and Saudi Arabia.
Markets in the Americas region are expected to remain strong, especially due to ongoing investments in urban and mainline transport and
large investment programs dedicated to transportation and enhancements of existing infrastructure in the U.S. In China, investments in
high-speed trains, urban transport, freight logistics and rail infrastructure are expected to continue to drive growth. In India, privatization
is expected to drive infrastructure enhancements and upgrades and to lead to strong market growth through investments in mainline
(high-speed, freight infrastructure, additional rolling stock), urban metro and rail electrification with ambitious electrification targets for
the broad-gauge network. Despite an adverse short-term impact from COVID-19, rail transport and intermodal mobility solutions are
expected to remain a high priority as urbanization continues to progress around the world. In emerging countries, rising incomes are
expected to result in greater demand for public transport solutions.
Orders grew on sharply higher volume from large orders, which Mobility won across the three reporting regions, highlighted by a €2.8
billion order for trainsets including dual powered and hybrid battery vehicles and associated services in the U.S., Mobility's largest-ever
order in the Americas. Large contract wins in the region Europe, C.I.S., Africa, Middle East included an order for passenger coaches in the
Czech Republic, an order for regional trains in Austria and an order for light rail vehicles in Germany, each worth €0.4 billion, and in the
region Asia, Australia a €0.2 billion order for a signaling system in Taiwan. Revenue growth was driven by the rail infrastructure business,
including significant growth in its mainline activities. On a geographic basis, revenue rose in the Americas due particularly to a significant
growth contribution from the U.S., and in the region Europa, C.I.S., Africa, Middle East, including clear growth in Germany. These increases
were only partly offset by lower revenue in the region Asia, Australia. Adjusted EBITA rose in the majority of the businesses, most strongly
in the rail infrastructure business. For Mobility overall, impacts related to COVID-19, such as measures in the rolling stock business to
safeguard employee health in manufacturing facilities, held back revenue and Adjusted EBITA growth, albeit to a lesser extent than a year
earlier. Severance charges were €22 million, compared to €20 million a year earlier. Mobility's order backlog reached €36 billion at the
end of the fiscal year, of which €9 billion are expected to be converted into revenue in fiscal 2022.
Adjusted EBITA margin
9.1%
9.3%
4%
822
857
3%
2%
1,392
1,416
3%
2%
The main trends driving Mobility's markets are urbanization and the need to reduce emissions, particularly from transportation. Increasing
populations in urban centers need daily mobility that is simpler, faster, and more flexible, reliable and affordable. At the same time, cities
and national economies face the challenge of cutting CO₂ and noise emissions and reducing space requirements and costs of
transportation. The pressure on mobility providers to meet all these needs is expected to rise continuously. Furthermore, improving
availability, connectivity, and sustainability of rail infrastructures increasingly requires digital solutions, which provide growth
opportunities. While a significant drop in ridership driven by COVID-19 has strongly impacted mobility operators, overall trends towards
urbanization and decarbonization persist unchanged and recovery programs in many countries have been allocating significant funds to
rail and public transport operators to address these trends.
Combined Management Report
Mobility sells its products, systems and solutions through its worldwide network of sales units. The principal customers of Mobility are
public and state-owned companies in the transportation and logistics sectors, so its markets are driven primarily by public spending.
Customers usually have multi-year planning and implementation horizons, and their contract tenders therefore tend to be independent
of short-term economic trends. Large contracts in the rolling stock and the rail infrastructure business are often awarded together with
service contracts, which start to generate revenue only after the respective products and solutions have been put in operation, which can
be a number of years after the contract award. Mobility's principal competitors are multinational companies. Consolidation among
Mobility's competitors is continuing: In January 2021, Alstom SA of France announced the closing of the acquisition of Bombardier
Transportation. In August 2021, Hitachi Ltd., Japan, announced an agreement of Hitachi Rail to acquire the Ground Transportation Systems
business of Thales. Market consolidation may lead to increased competitive pressure within the rail supply industry and also to fewer
sourcing options for rail customers.
3.4 Mobility
% Change
Actual
2020
Fiscal year
2021
Adjusted EBITA margin
Adjusted EBITA
therein: products business
Revenue
Comp.
Orders
Smart Infrastructure's R&D activities focus on sustainable and decarbonized infrastructures in electrification, distribution grids and
buildings. It develops digital offerings for the energy market such as for integrating renewable energy into conventional grids.
Furthermore, R&D efforts strengthen Smart Infrastructure's capabilities to create comfortable, safe and energy-efficient buildings and
infrastructures that support increased efficiency for occupants, equipment and the use of building space. Smart Infrastructure is expanding
its digital offerings such as cloud solutions using field data from controllers and loT devices. Furthermore, it develops technologies for
environmentally friendly and increasingly renewable-based energy systems, ranging from photovoltaic and battery storage inverters to
charging solutions for e-mobility. In this regard, data from field devices is the basis for intelligent grid control and protection, providing
grid stability and flexibility and continuously matching energy supply and demand while protecting grid assets. For electrical distribution
systems and industrial plants, Smart Infrastructure continuously drives digitalization of its switching and control products with built-in
intelligence, connectivity to the cloud, and increasingly remote diagnostics and edge computing capability. Its digital twins of products,
building systems or grids deliver customer value from online configuration and parametrization, to operation, to maintenance planning.
Smart Infrastructure also develops data-driven applications and digital services. To a large extent, its capital expenditures relate to the
products businesses. Main investment areas are replacement of fixed assets and further digitalization of factories and technical
equipment, with a strong focus on innovation.
Smart Infrastructure's customer base is diverse. It encompasses infrastructure developers, construction companies and contractors;
owners, operators and tenants of both public and commercial buildings including hospitals, campuses, airports and data centers;
companies in heavy industries such as oil and gas, mining and chemicals; companies in discrete manufacturing industries such as
automotive and machine building; and utilities and power grid network operators (transmission and distribution). Smart Infrastructure
serves its customers through a broad range of channels, including its global sales organization, distributors and partners such as panel
builders, original equipment manufacturers (OEM) and value-added resellers and installers, all complemented by direct sales such as
through the branch offices of its regional solutions and services units worldwide and e-commerce channels. Smart Infrastructure's principal
competitors consist mainly of large multinational companies and smaller manufacturers in emerging countries. Its solutions and services
business also competes with local players such as system integrators and facility management firms. Smart Infrastructure's businesses are
impacted by changes in the overall economic environment to varying degrees, depending on customer segment. While customer demand
in discrete manufacturing industries changes quickly and strongly with macroeconomic cycles, it reacts more slowly in infrastructure,
construction, heavy industries and the utilities sector. The building solutions business in particular is affected by economic cycles in the
non-residential building construction markets with a time lag of two to four quarters. Overall, Smart Infrastructure has developed a
balanced and resilient business mix with its diversified regional and vertical markets; its range of products, systems, solutions and services;
and its participation in both long- and short-cycle markets. To further strengthen the resilience of its portfolio, Smart Infrastructure aims
at increasing the share of service revenue and beginning with fiscal 2022 will report revenue generated from service activities.
Smart Infrastructure benefits from a number of favorable trends. These include urbanization, demographic change, climate change, and
digitalization. Urbanization and demographic change drive a need for smarter and more human-centric buildings. Climate change drives
the need for decarbonization. This results in an increasing demand for flexible and resilient energy infrastructures and rapid growth in
electric mobility. Digitalization is an enabler for such changes in both buildings and grids, making it possible to develop smarter buildings
and manage electricity distribution with a higher share of renewables. The markets served are experiencing shifts that present
opportunities where building technologies and electrification meet.
Smart Infrastructure offers products, systems, solutions, services and software to support a sustainable transition in energy generation
sources, from fossil to renewable and a transition to smarter, more sustainable buildings and communities. This versatile portfolio is
structured into three businesses: buildings, electrification and electrical products. The buildings business addresses the needs of operators,
owners, occupants and users of buildings. It spans integrated building management systems and software; heating, ventilation and air
conditioning (HVAC) controls; fire safety and security products and systems; and solutions and services such as energy and performance
services. The electrification business makes grids more resilient, flexible and efficient. Its offerings cover grid simulation, operation and
control software; substation automation and protection; medium-voltage primary and secondary switchgear (including SF6-free medium-
voltage switchgear); and low-voltage switchboards and eMobility charging infrastructure. The electrical products business supplies
electrification and buildings. Its offerings include low-voltage switching, measuring and control equipment; low-voltage distribution
systems and switchgear; and circuit breakers, contactors and switching for medium-voltage. In fiscal 2021, Smart Infrastructure acquired
C&S Electric Limited (C&S Electric), India, a provider of electrical and electronic equipment for infrastructure, power generation,
transmission and distribution to strengthen its position in India as a supplier of low-voltage power distribution and electrical installation
technology.
3.3 Smart Infrastructure
quarters. Digital Industries expects its primary markets, as described above, to show clear growth in fiscal 2022, with somewhat diminished
momentum compared to fiscal 2021 and more geographic balance among the three reporting regions.
Combined Management Report
Even though volume development was held back by adverse currency translation effects and impacts related to COVID-19, orders still
increased significantly, driven by Siemens Logistics and Large Drives Applications. However, Portfolio Companies recorded lower revenue
compared to fiscal 2020, as Large Drives Applications in particular could not offset these headwinds. Fully consolidated units made good
progress with profitability and delivered overall a sharply improved earnings performance, even though Portfolio Companies recorded
higher severance charges of €74 million, up from €21 million in fiscal 2020, related to cost structure improvement measures mainly at
Large Drives Applications. A positive Adjusted EBITA for fully consolidated units was more than offset by continued negative results from
the at-equity investment in Valeo Siemens eAutomotive GmbH. For comparison, fiscal 2020 included an impairment of €453 million on
the at-equity investment and a goodwill impairment of €99 million related to Siemens Energy Assets. Portfolio Companies' order backlog
was €4 billion at the end of fiscal 2021, of which €2 billion was expected to be converted into revenue in fiscal 2022.
(in millions of €)
16,071
14,734
9%
Overall, markets served by Smart Infrastructure grew moderately in fiscal 2021, experiencing a recovery from COVID-19-related effects
that had a strong impact on most customer industries a year earlier. Industrial markets developed well, with strong growth in the machine
building and pharmaceutical industries, followed by the automotive, food and beverage, oil and gas and chemicals industries. Grid markets
grew clearly as utilities continued to prioritize investments in making legacy networks more automated, intelligent, flexible and reliable.
Ongoing strong demand for remote working and cloud services resulted in strong growth in the data center market. Conditions in non-
residential construction markets were challenging, while residential construction markets, in which Smart Infrastructure has a significantly
lower exposure, grew strongly. On a geographic basis, market growth in fiscal 2021 was mainly driven by the region Asia, Australia, which
recovered earlier from impacts related to COVID-19, while market volume in the Americas declined. Smart Infrastructure also experienced
a number of supply chain constraints, especially in the areas of base metals (copper, aluminum, steel), plastics, semiconductors and
transportation services. Whereas the management of these constraints required additional effort, Smart Infrastructure's supply chains have
proven to be resilient, so that major interruptions could be avoided and delivery ability was maintained. In fiscal 2022, markets served by
Smart Infrastructure are expected to grow slightly faster than in fiscal 2021. Demand from the pharmaceutical industry, data centers and
utilities are expected to be main growth drivers, while growth rates of the non-residential construction markets are expected to come in
below the average growth of markets served by Smart Infrastructure. On a geographic basis, Asia, Australia is expected to continue to be
the fastest-growing region. Growth in the region Europe, C.I.S., Africa, Middle East is expected to accelerate and markets in the region
Americas are expected to return to growth.
and services business was due to negative currency translation effects. Despite more challenging supply conditions, Smart Infrastructure
maintained its delivery capacity by successfully avoiding major supply chain disruptions. On a geographic basis, orders and revenue were
up in all regions, with double-digit volume growth in the region Asia, Australia including a particularly strong contribution from China.
Volume growth in the Americas included strong demand from residential markets in the U.S. Overall, growth in this region was sharply
impacted by negative currency translation effects, which eased towards the end of the fiscal year. Adjusted EBITA and profitability rose
in all businesses, with the strongest growth contributions coming from the products business and the systems business on higher revenue
and increased capacity utilization. Adjusted EBITA overall rose also due to cost savings related to prior execution of Smart Infrastructure's
competitiveness program, while severance associated with the program fell sharply, to €47 million from €195 million a year earlier.
Particularly during the first half of fiscal 2021, Adjusted EBITA development benefited from expense reductions year-over-year related to
COVID-19 restrictions. These effects were only partly offset by negative currency effects. For comparison, Adjusted EBITA in fiscal 2020
benefited from a €159 million gain from the sale of a business. Smart Infrastructure's order backlog was €11 billion at the end of the fiscal
year, of which €7 billion are expected to be converted into revenue in fiscal 2022.
Combined Management Report
9
Orders at Smart Infrastructure rose in all businesses on broad-based improvements in its main customer markets. The strongest growth
contributions came from the products business, which saw a clear recovery in demand from industrial customers, and from the systems
business, which won a number of significant contracts including orders from semiconductor manufacturers in the U.S. Orders in the
solutions and services business grew slightly as the business saw first signs of recovery in relevant markets towards the end of the fiscal
year. Revenue growth also was driven mainly by the products business and the systems business, while a slight decline in the solutions
34%
1,302
9.1%
1,743
11.6%
15%
11%
5,182
5,769
8%
5%
14,323
15,015
12%
Mobility combines all Siemens businesses in the area of passenger and freight transportation. Within its rolling stock business, its offerings
encompass trains for urban and regional transport such as vehicles for metro systems, trams and light rail, and commuter trains as well as
trains and passenger coaches for intercity and long-distance services, such as high-speed rail. Rolling stock offerings furthermore include
locomotives for freight or passenger transport and solutions for automated transportation such as automated people movers. Offerings in
its rail infrastructure business include products and solutions for rail automation, such as automatic train control systems, interlocking,
operations control and telematic systems, digital station solutions and railway communication systems, signaling on-board and crossing
products and yard and depot solutions; for electrification such as AC and DC traction power supply, contact lines and network control; and
intermodal solutions, such as platforms for fleet management, route planning, ticketing and payments solutions and data analytics. With
its service business, Mobility provides customer services for rolling stock and rail infrastructure throughout the entire lifecycle, such as
maintenance and digital services. In its turnkey business, it bundles consulting, planning, financing, construction, service and operation
of completed mobility systems. Its intelligent traffic systems business provides solutions for traffic management such as autonomous
driving, eHighway systems and tolling solutions. During fiscal 2021, Mobility carved out the intelligent traffic systems business to form a
separately managed entity, which operates under the brand name Yunex Traffic.
reducing Siemens' stake in Siemens Healthineers from about 79% to slightly over 75%. Competition in the imaging, Varian and advanced
therapies businesses consists mainly of a small number of large multinational companies, while the diagnostics market is fragmented with
a variety of global players that compete with each other across market segments and also with several regional players and specialized
companies in niche technologies. The business activities of Siemens Healthineers are to a certain extent resilient to short-term economic
trends because large portions of its revenue stem from recurring business. They are, however, directly and indirectly dependent on trends
in healthcare markets and on developments in health policy, and geopolitical developments around the world.
In October 2021, Mobility closed the acquisition of SQCAP B.V. (Sqills), Netherlands, a provider of cloud-based inventory management,
reservation, and ticketing software for public transport operators to enhance its offerings that increase the availability, capacity and
utilization of public transportation. The purchase price is €537 million paid in cash plus a contingent consideration recognized at the
acquisition date at its maximum amount of €79 million. For further information see Note 34 in Notes to Consolidated Financial Statements
for fiscal 2021.
R&D activities at Siemens Healthineers are aimed at delivering innovative, sustainable solutions to its customers while safeguarding and
improving its competitiveness. Particularly in the field of digitalization and artificial intelligence, it has further expanded its activities and
has 67 products and applications on the market that are designed to further improve its customers' productivity, while enabling clinical
decisions to be more precise and tailored to the individual patient. Furthermore, Siemens Healthineers is continuously expanding its
portfolio of digital services to support customers in their transition to value-based care. The teamplay digital health platform brings
together data, applications and services to make better decisions for patients in an efficient way. In addition, in fiscal 2021 Siemens
Healthineers extended its portfolio in the field of cancer care with the Varian acquisition. The combined company pursues an intelligent
cancer care strategy, harnessing advanced technologies such as Al and data analytics to improve cancer treatment and expand global
access to cancer care. In addition to continually updating its portfolio, Siemens Healthineers also improves existing products and solutions.
Siemens Healthineers focuses its investments mainly on enhancing competitiveness and innovation. The main capital expenditures were
for spending for factories to expand manufacturing and technical capabilities, in particular in China and the U.S., and for additions to
intangible assets, including capitalized development expenses within the Atellica Solution and Central Lab product lines.
(in millions of €)
Demand within the industries served by Portfolio Companies mainly shows a delayed response to changes in the overall economic
environment. The results of fully consolidated units are strongly dependent, however, on customer investment cycles in their key
industries. In commodity-based industries such as oil and gas or mining, these cycles are driven mainly by commodity price fluctuations
rather than changes in produced volumes. The broad range of fully consolidated units and their heterogonous industrial customer base
are reflected in the use of various sales and marketing channels, requiring a dedicated sales approach based on in-depth understanding
of specific industries and customer requests.
After this disposal, Portfolio Companies consists mainly of three fully consolidated, separately managed units at the end of fiscal 2021.
Large Drives Applications, which offers electric motors, converters and solutions for mining, will be carved out beginning with fiscal 2022
to increase its entrepreneurial freedom and thereby unlock its full potential. Similarly, Siemens Logistics, which offers sorting technology
and solutions, will be reorganized to separate its mail and parcel activities from its airport logistics activities, which focuses on baggage
and cargo handling. The third fully consolidated unit, Siemens Energy Assets, comprises certain regional remaining business activities of
the former Gas and Power segment; as part of the Siemens Energy carve-out these activities remained with Siemens due to country-specific
regulatory restrictions or economic considerations. Portfolio Companies also holds an at-equity investment in Valeo Siemens eAutomotive
GmbH.
Combined Management Report
13
In March 2021 Siemens sold Flender GmbH, Germany, (Flender) to Carlyle Group Inc., U.S. During the first quarter of fiscal 2021 the
businesses of Flender (previously reported in Portfolio Companies) were classified as held for disposal and discontinued operations. Prior-
period amounts are presented on a comparable basis. For further information see Note 3 in Notes to Consolidated Financial Statements
for fiscal 2021.
Portfolio Companies comprise businesses which deliver a broad range of customized and application-specific products, software,
solutions, systems and services for different industries including oil and gas, chemical, mining, cement, logistics, energy, marine, water
and fiber. Unrealized potential within these businesses requires adjustment in their approach using defined measures including internal
re-organization, digitalization, cost improvements, and optimizing procurement, production and service activities. After achieving certain
threshold performance targets, businesses may be transferred to one of Siemens industrial businesses, combined with an external business
from the same industry, sold or placed into an external private equity partnership.
Orders
3.7 Portfolio Companies
The increase in total assets since the end of fiscal 2020 was due to growth in the debt business and positive currency translation effects.
Net cash from operations (defined as the sum of cash flows from operating and investing activities) amounted to €105 million compared
to €(284) million in fiscal 2020. In fiscal 2021 and fiscal 2020, net cash from operations comprised Free cash flow of €820 million and
€611 million, respectively, and remaining cash flows from investing activities, including from change in receivables from financing
activities, of €(715) million and €(895) million, respectively.
A high earnings contribution from the debt business resulted in a sharp increase in Earnings before taxes and was also the main factor
for the increase of the ROE. The improvement was due mainly to sharply lower expenses for credit risk provisions compared to fiscal 2020,
when results were significantly influenced by effects related to COVID-19. However, results from the equity business were affected by high
ongoing uncertainty in the macroeconomic environment. Additionally, sales of investments in the previous fiscal year lifted profit for that
period. This led also, along with seasonal effects on offshore wind-farm projects, to a lower share of profit from investments accounted
for using the equity method in fiscal 2021. For comparison, results in the equity business in fiscal 2020 included a loss of €98 million from
an impairment of an equity investment in the U.S.
28,946
2020
Sep 30,
Sep 30,
2021
30,384
(in millions of €)
Total assets
SFS is de-risking its business profile by reducing exposure in connection with energy-related equity investments as a consequence of the
spin-off of Siemens Energy. This has the additional benefit of more tightly focusing SFS's business scope and capital allocation on areas of
intense domain know-how closely aligned with Siemens' customers and markets, particularly for Digital Industries, Smart Infrastructure
and Mobility. Accordingly, SFS is influenced by the business development of the markets served by our industrial businesses, among other
factors, including effects related to COVID-19. In addition to its high level of diversification across industries, SFS has a strong regional
footprint in investment-grade countries, with the highest share in the U.S. SFS intends to maintain a highly diversified portfolio across
regions, while participating in the strong economic development of selected Asian markets.
Revenue
Adjusted EBITA
Adjusted EBITA margin
(21.0)%
The addressable markets of Siemens Healthineers are shaped by four major trends. The first is demographic, in particular the growing and
aging global population. This trend poses major challenges for global healthcare systems and, at the same time, offers opportunities for
players in the healthcare industry as the demand for cost-efficient healthcare solutions continues to intensify. The second trend is
economic development in emerging countries, which opens up improved access to healthcare for many people. Significant investment in
the expansion of private and public healthcare systems will persist, driving overall demand for healthcare products and services and hence
market growth. The third trend is the increase in chronic diseases as a consequence of an aging population and environmental and lifestyle-
related changes. This trend results in far more patients with multiple morbidities, putting further pressure on healthcare systems and
leading to higher costs; it also increases the need for new, more timely ways to detect and treat diseases. The fourth global trend, the
transformation of healthcare providers, results from a combination of societal and market forces that are driving healthcare providers to
operate and organize their businesses differently. Increasing cost pressure on the healthcare sector is prompting the introduction of new
remuneration models for healthcare services, such as value-based rather than treatment-based reimbursement. Digitalization and artificial
intelligence are thereby likely to be key enablers for healthcare providers as they increasingly focus on enhancing the overall patient
experience, with better outcomes and overall reduction in cost of care. This development is driven partly by society's increasing resistance
to healthcare costs, payers' increasing professionalization, burdens from chronic disease, rapid scientific progress and staff shortages. As
a result of these factors, healthcare providers are consolidating into networked structures, resulting in larger clinic and laboratory chains,
often operating internationally, which act increasingly like large corporations. Applying this industrial logic to the healthcare market can
lead to systematic improvements in quality, while at the same time reducing costs.
87%
(673)
(85)
(2)%
(5)%
3,209
20%
16%
3,024
3,516
Comp.
% Change
Actual
2020
2021
Fiscal year
11.7%
15.4%
3,058
49
24%
14,460
17,997
18%
26%
16,163
20,320
Comp.
Actual
2020
% Change
Adjusted EBITA margin
Adjusted EBITA
Revenue
(in millions of €)
82
Orders
19%
2,847
15.8%
Fiscal year
2021
30%
345
512
2,184
2021
Fiscal year
ROE (after taxes)
therein: equity business
Earnings before taxes (EBT)
(in millions of €)
2020
Siemens Financial Services provides financing solutions for Siemens' customers as well as other companies in the form of debt and equity
investments. Based on its comprehensive financing know-how and specialist technology expertise in the areas of Siemens businesses, SFS
supports its customers' investments with leasing, lending and working capital financing solutions as well as equipment, project and
structured financing. In addition, SFS supports Siemens' industrial businesses via a joint go-to-market that includes SFS's risk management
expertise, such as to assess the risk profiles of projects or business models. Furthermore, SFS collaborates with the industrial businesses
to co-develop new digital business models. Recent examples include energy as a service or pay-per-use and pay-for-outcome options that
give customers more financial flexibility.
3.6 Siemens Financial Services
Markets addressed by the imaging business grew significantly, mainly due to large COVID 19-driven demand for computer tomography
systems and initial signs of normalization in all other modalities. For the Imaging market, it is expected that a normalization of growth to
pre-COVID-19 levels will occur in fiscal year 2022. In the diagnostics business, the markets for point-of-care tests for patient monitoring
and for lab tests increased in fiscal 2021. On the one hand, the backlog of purchasing decisions and capital expenditure by laboratories
and hospitals from the previous year dissipated while, on the other, demand for certain diagnostic reagents, particularly tests for routine
care, increased. The markets for combating the COVID-19 pandemic posted sharp growth. Vaccination rates in the population and further
COVID-19 implications such as future waves and testing guidelines are key factors for determining expected growth in the market for the
diagnostics business. Siemens Healthineers expects demand for tests for acute infection with SARS-CoV-2 to decrease sharply. In the Varian
business, growth was driven primarily by new and replacement business. In markets such as the U.S. and Western Europe, product
innovations led to higher customer investment. The market for Varian is expected to continue to grow throughout fiscal 2022. The recovery
in the advanced therapies markets was made possible through a combination of a resumption in elective surgical procedures and the
gradual return of patients. The expectation is that the slight market recovery already seen in fiscal 2021 will continue on a broad basis in
fiscal 2022.
Combined Management Report
12
15.1%
In fiscal 2021, Siemens Healthineers recorded double-digit growth both in orders and revenue, with both metrics developing similarly.
While all businesses contributed to growth, the increases were highest in the diagnostics and imaging businesses. On a geographic basis,
growth was particularly strong in the region Europe, C.I.S. Africa, Middle East. The reporting regions Asia, Australia and Americas also saw
double-digit increases, the latter one despite significant currency translation effects. Portfolio effects primarily following the acquisition
of Varian added twelve percentage points to order growth and nine percentage points to revenue growth. Adjusted EBITA was
substantially higher year-over-year, due primarily to strong earnings development in the diagnostics business that was driven by high
demand for rapid coronavirus antigen tests. The imaging business again posted strong earnings, which were higher than in the prior year.
Varian delivered a positive contribution to earnings on an operating basis. In contrast, Adjusted EBITA in the advanced therapies business
was lower year-over-year. Adjusted EBITA included subsequent measurement effects from purchase price allocation related to the Varian
acquisition totaling €0.1 billion and expenses totaling €0.1 billion related to the closing of the Varian transaction and its ongoing
integration. Profitability was also burdened by negative currency effects. Severance charges were €68 million in fiscal 2021 and €65 million
in fiscal 2020. The order backlog for Siemens Healthineers was €27 billion at the end of the fiscal year, of which €9 billion are expected to
be converted into revenue in fiscal 2022.
In general, the markets addressed by Siemens Healthineers showed significant growth in fiscal 2021. Nearly two years after the first case
of COVID-19 was identified, the virus continues to impact health systems worldwide. Competition among the leading healthcare
companies remained at elevated high levels. While the long-term market trends generally remained intact, the COVID-19 pandemic did
reinforce some of these trends and has, for example, raised the already increasing cost pressure on health systems and customers to
unprecedented levels. Especially in countries with severe COVID-19 outbreaks such as the U.S., India, and Brazil, a significant impact on
healthcare economics was apparent in the form of additional cost increases combined with simultaneous revenue losses for hospitals.
Staff shortages became more acute, leading to significant care disruptions at many hospitals and overburdening healthcare systems. The
pandemic served to drive efforts toward innovation and digital transformation in healthcare. From a regional perspective, China is one of
the biggest markets for medical technology and a major incremental growth driver. In the course of the last fiscal year, China's healthcare
market recovered almost fully from effects related to the coronavirus pandemic during the fiscal year. In the region Europe, C.I.S., Africa,
Middle East, public investment programs as well as a rise in COVID-19-related demand helped drive a market rise in several countries. The
private market also began to recover. In the U.S., business began to return to normal as progress was made in the vaccination campaign.
Nominating
Committee
(Number of meetings/
participation in %)
FISCAL 2021 6
Disclosure of participation by individual
Supervisory Board members in meetings
The average rate of participation by members in the
meetings of the Supervisory Board and its committees
was 98%. Due to the exceptional circumstances caused
by the COVID-19 pandemic, all meetings in fiscal 2021
were held either in a virtual format or as in-person meet-
ings in which virtual participation was possible. The par-
ticipation rate of individual members in the meetings of
the Supervisory Board and its committees is set out in the
following chart:
New Supervisory Board members can meet with Manag-
ing Board members and other managers with specialist
responsibility to exchange views on current topics and
topics of fundamental importance and thus gain an
overview of Company-relevant matters (onboarding). In
fiscal 2021, a separate informational event was held for
the new Supervisory Board members on March 12, 2021,
in order to acquaint them, in particular, with the Compa-
ny's business model and strategy and with the structures
of the Siemens Group. The new members of the Audit
Committee participated in discussions with the indepen-
dent auditors on April 14, 2021. On April 15, 2021, they
also took part in an introductory event regarding the
Audit Committee's tasks and processes and the areas of
the Group relevant for the Audit Committee.
The Supervisory Board members take part, on their own
responsibility, in the educational and training measures
necessary for the performance of their duties - measures
relating, for example, to changes in the legal framework
and new, groundbreaking technologies. The Company
supports them in this regard. Internal informational
events are offered when necessary to support targeted
training measures. Two internal training events for all
Supervisory Board members were held in fiscal 2021: one
event on April 14, 2021, concerning strategically relevant
technology-related topics, and another on July 19, 2021,
concerning Group finance.
5
Report of the Supervisory Board
FISCAL 2021
The Audit Committee held six regular meetings. In the
presence of the independent auditors, of the President
and CEO, of the Deputy Chairman and of the Chief Finan-
cial Officer, the Audit Committee dealt with the financial
statements and the Combined Management Report for
Siemens AG and the Siemens Group. The Audit Commit-
tee discussed the Half-year Financial Report and the quar-
terly statements with the Managing Board and the inde-
pendent auditors. In the presence of the independent
auditors, it also discussed the report on the auditors'
review of the Company's Half-year Consolidated Financial
Statements and of its Interim Group Management Re-
port. As part of the preparation and implementation of
the audit, the Audit Committee regularly exchanged
views with the independent auditors without the Manag-
ing Board in attendance. In addition, it met regularly in
closed sessions without the Managing Board and inde-
pendent auditors in attendance. The Audit Committee
recommended that the Supervisory Board propose to the
Annual Shareholders' Meeting that Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft, Stuttgart, be elected
independent auditors for fiscal 2021. It awarded the audit
The Innovation and Finance Committee met three
times. It also made one decision using other customary
means of communication. The Innovation and Finance
Committee's work focused on its recommendation re-
garding the budget for fiscal 2021, the discussion of the
pension system and the preparation and approval of in-
vestment and divestment projects and/or financial mea-
sures. For example, the Innovation and Finance Commit-
tee prepared the Supervisory Board's decision regarding
the acquisition of Supplyframe, Inc., U.S. It also con-
cerned itself with M&A action fields and with Next47, the
independent unit established by Siemens in 2016 to bun-
dle the Company's venture capital activities in order to
foster disruptive ideas more intensively and expedite the
development of new technologies. Innovation and tech-
nology-related topics were a further focus. The Managing
Board reported to the Innovation and Finance Committee
regarding user-centered product design and experience
(UX). A guest speaker explained this topic from an exter-
nal perspective (outside-in). Within the limits of the ap-
plicable legal framework, the relevant Managing Board
members informed the Innovation and Finance Commit-
tee about critically important measures and decisions at
the Company's equity investments.
The Compensation Committee met four times. It also
made one decision using other customary means of com-
munication. The Compensation Committee prepared, in
particular, Supervisory Board decisions regarding the
definition of performance criteria and the targets for vari-
able compensation, the determination and review of the
appropriateness of Managing Board compensation and
the approval of the Compensation Report. In addition,
the Compensation Committee prepared the Supervisory
Board's decision regarding the engagement of an auditor
for the Compensation Report for fiscal 2021.
contract for fiscal 2021 to the independent auditors, who
had been elected by the Annual Shareholders' Meeting,
defined the Audit Committee's focus areas and deter-
mined the auditors' fee. The Audit Committee monitored
the selection, independence, qualification, rotation and
efficiency of the independent auditors as well as the ser-
vices they provided and concerned itself with the review
of the quality of the audit of the financial statements.
In fiscal 2021, against the backdrop of the Wirecard situ-
ation, the Audit Committee regularly discussed the role
of Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft,
Stuttgart, as the independent auditors of Wirecard AG.
The Audit Committee questioned the independent audi-
tors regarding this matter and assessed the impact on
Siemens AG. No impediments were identified that would
preclude Ernst & Young GmbH Wirtschaftsprüfungs-
gesellschaft, Stuttgart, from being elected to serve as
independent auditors for fiscal 2022. The Audit Commit-
tee also dealt with the Company's accounting and ac-
counting process, the effectiveness of its internal control
system, its risk management system and the effective-
ness, resources and findings of its internal audit as well
as with reports concerning potential and pending legal
disputes. In addition, the Audit Committee concerned
itself with compliance-related matters and, in particular,
with the Chief Compliance Officer's quarterly reports and
annual report. Due to the regular external rotation of
independent auditors at the conclusion of fiscal 2023
required in accordance with the current legal situation,
the Audit Committee's work in fiscal 2021 also focused on
the preparation and implementation of a transparent and
non-discriminatory process for the selection of the inde-
pendent auditors for fiscal 2024. At its meeting on
August 3, 2021, the Audit Committee approved for this
purpose the introduction of a tendering process in accor-
dance with Article 16 of the EU audit regulation (Regula-
tion (EU) No. 537/2014 of the European Parliament and of
the Council of April 16, 2014, on specific requirements
regarding the statutory audit of public-interest entities
and repealing Commission Decision 2005/909/EG,
"EU audit regulation"). The members of the Audit Commit-
tee participated as guests in the Innovation and Finance
Committee's discussion of the budget for fiscal 2021.
Jim Hagemann Snabe
First Deputy Chairwoman
Birgit Steinborn
Supervisory
Board (plenary
meetings)
Chairman's
Compensation
Committee
Committee
Report of the Supervisory Board
Audit
Committee
Innovation
and Finance
Committee
The Mediation Committee had no need to meet.
No.
Chairman
The Nominating Committee met once. It also made one
decision using other customary means of communica-
tion. The Nominating Committee gave in-depth consid-
eration to succession planning for the Supervisory Board
and prepared the Supervisory Board's nominations of
shareholder representatives on the Supervisory Board for
election by the 2021 Annual Shareholders' Meeting. The
Nominating Committee was supported in this connection
by an external consulting firm. In selecting the potential
candidates and in preparing a recommendation for the
Supervisory Board decision, the Nominating Committee
gave particular consideration to the objectives that the
Supervisory Board had previously approved for its com-
position, including the profile of required skills and
expertise and the diversity concept for the Supervisory
Board. With a view to the regular Supervisory Board elec-
tions scheduled for 2023, the Nominating Committee
defined the topics for its work over the next few years
and examined the regulatory framework conditions for
the Supervisory Board's composition.
9/9
Report of the Supervisory Board
Corporate Governance Statement
in %
Combined Management Report of Siemens AG and the
Siemens Group. Together with the Supervisory Board,
the Managing Board prepares the Compensation Report.
The Managing Board has established an appropriate and
effective internal control system and risk management
system. It also ensures that the Company adheres to stat-
utory requirements, official regulations and internal
Company policies and works to achieve compliance with
these provisions and policies within the Siemens Group.
The Managing Board has established a comprehensive
compliance management system. Protection is offered
to employees and third parties who provide informa-
tion on unlawful behavior within the Company. Details
on the compliance management system are available
on the Siemens Global Website at
SUSTAINABILITYINFORMATION.
Norbert Reithofer (Dr. Ing. Dr. Ing. E.h.)
100
9/9
Hagen Reimer
100
1/1
100
3/3
75
28
100
Benoît Potier
3/4
100
Jürgen Kerner
9/9
100
8/9
89
The Committee concerned itself, in particular, with per-
sonnel-related matters, succession planning for the com-
position of the Managing Board, corporate governance
issues and the acceptance by Managing Board members
of positions at other companies and institutions. Within
the limits of the applicable legal framework, the Chair-
man's Committee was informed of and/or approved crit-
ically important, personnel-related measures at Siemens'
businesses and equity investments.
3/4
6/6
100
3/3
100
Nicola Leibinger-Kammüller (Dr. phil.)
(until February 3, 2021)
75
No.
Andrea Fehrmann (Dr. phil.)
No.
Michael Diekmann
4
Bettina Haller
22222
100
5/5
100
100
55
100
6/6
100
6/6
100
4/4
100
13
100
4/4
100
9/9
Harald Kern
100
Tobias Bäumler
6/6
100
100
3/3
33
100
1/1
100
in %
Second Deputy Chairman
100
in %
No.
in %
No.
in %
No.
in %
99
9/9
100
9/9
100
4/4
100
6/6
100
3/3
33
3/3
100
6/6
100
4/4
Werner Brandt (Dr. rer. pol.)
100
100
9/9
100
=1
1/1
100
9/9
The Managing Board prepares the Company's Quarterly
Statements and Half-year Financial Report, the Annual
Financial Statements of Siemens AG, the Consolidated
Financial Statements of the Siemens Group and the
Corporate Governance Statement
SUSTAINABILITYINFORMATION.
100
3/3
100
5/5
Grazia Vittadini (since February 3, 2021)
100
1/1
100
1/1
78
100
2/2
100
3/3
2/2
88828 % 8
9/9
Dorothea Simon
100
9/9
Michael Sigmund
100
Nathalie von Siemens (Dr. phil.)
7/9
Baroness Nemat Shafik (DBE, DPhil)
100
5/5
Kasper Rørsted (since February 3, 2021)
8/9
The Supervisory Board concurs with the results of the
audit. Following the definitive findings of the Audit Com-
mittee's examination and our own examination, we have
no objections. The Managing Board prepared the Annual
Financial Statements of Siemens AG and the Consoli-
dated Financial Statements of the Siemens Group.
We approved the Annual Financial Statements and the
Consolidated Financial Statements. In view of our ap-
proval, the financial statements are accepted as submit-
ted. We endorsed the Managing Board's proposal that
the net income available for distribution be used to pay
out a dividend of €4.00 per share entitled to a dividend
and that the amount of net income attributable to shares
of stock not entitled to receive a dividend for fiscal 2021
be carried forward.
100
100
Werner Wenning (until February 3, 2021)
4/4
the Managing Board's proposal for the appropriation of
net income were submitted to us by the Managing Board
in advance. The Audit Committee discussed the dividend
proposal in detail at its meeting on November 9, 2021. It
discussed the Annual Financial Statements of Siemens AG,
the Consolidated Financial Statements of the Siemens
Group and the Combined Management Report in detail
at its meeting on December 1, 2021. In this context, the
Audit Committee concerned itself, in particular, with the
key audit matters described in the independent auditors'
respective opinions, including the audit procedures im-
plemented. The Audit Committee's review also covered
the non-financial information for Siemens AG and the
Siemens Group that is included in the Combined Man-
agement Report. The audit reports prepared by the inde-
pendent auditors were distributed to all members of the
Supervisory Board and comprehensively reviewed at the
Supervisory Board meeting on December 2, 2021, in the
presence of the independent auditors, who reported on
the scope,
focal points and main findings of their audit,
addressing, in particular, key audit matters and the audit
procedures implemented. No major weaknesses in the
Company's internal control or risk management systems
were reported. At this meeting, the Managing Board ex-
plained the financial statements of Siemens AG and the
Siemens Group as well as the Company's risk manage-
ment system.
Report of the Supervisory Board
7
FISCAL 2021
were prepared in accordance with the requirements of
German law. The Consolidated Financial Statements of
the Siemens Group were prepared in accordance with
the International Financial Reporting Standards (IFRS) as
adopted by the EU and with the additional requirements
of German law set out in Section 315 e (1) of the German
Commercial Code (Handelsgesetzbuch, HGB). The Con-
solidated Financial Statements of the Siemens Group also
comply with the IFRS as issued by the International Ac-
counting Standards Board (IASB). The independent audi-
tors conducted their audit in accordance with Section 317
of the German Commercial Code and the EU Audit Regu-
lation and German generally accepted standards for the
audit of financial statements as promulgated by the Insti-
tut der Wirtschaftsprüfer (IDW) as well as in supplemen-
tary compliance with the International Standards on Au-
diting (ISA). The abovementioned documents as well as
The independent auditors, Ernst & Young GmbH Wirt-
schaftsprüfungsgesellschaft, Stuttgart, audited the An-
nual Financial Statements of Siemens AG, the Consoli-
dated Financial Statements of the Siemens Group and the
Combined Management Report for Siemens AG and the
Siemens Group for fiscal 2021 and issued an unqualified
opinion for each. Ernst & Young GmbH Wirtschaftsprü-
fungsgesellschaft, Stuttgart, has served as the indepen-
dent auditors of Siemens AG and the Siemens Group
since fiscal 2009. Katharina Breitsameter has signed as
auditor since fiscal 2016 and as auditor responsible for
the audit since fiscal 2021. Dr. Philipp Gaenslen has
signed as auditor since fiscal 2021. The Annual Financial
Statements of Siemens AG and the Combined Manage-
ment Report for Siemens AG and the Siemens Group
of the financial statements
Detailed discussion of the audit
100
100
100
96
97
98
100
9/9
Gunnar Zukunft
100
4/4
100
2/2
100
1/1
Changes in the composition of the
Supervisory and Managing Boards
100
9/9
100
2/2
100
6/6
100
Matthias Zachert
-
Matthias Rebellius and Judith Wiese have been full mem-
bers of the Managing Board since October 1, 2020.
Joe Kaeser left the Managing Board effective the end of
the Annual Shareholders' Meeting on February 3, 2021.
Klaus Helmrich left the Managing Board effective
March 31, 2021. Joe Kaeser worked for Siemens for more
than 40 years. For seven years, he headed the Company
as President and CEO. Klaus Helmrich retired at the expi-
ration of his term of office after nine years on the Man-
aging Board and 35 years at the Company. The Super-
visory Board would like to thank both Mr. Kaeser and
Mr. Helmrich for their many years of successful work on
behalf of Siemens and their extraordinary services to the
Company. We would especially like to thank Joe Kaeser,
who shaped the Company as few others have done and
left behind a strong foundation for future generations.
Dr. Nicola Leibinger-Kammüller and Werner Wenning left
the Supervisory Board at the end of the Annual Share-
holders' Meeting on February 3, 2021, when their terms
of office as shareholder representatives on the Super-
visory Board expired. We thanked Dr. Nicola Leibinger-
Kammüller and Werner Wenning for their many years of
trust-based cooperation and for their professional com-
mitment and contribution to the Company's success. We
are especially grateful to Mr. Wenning, who, as Second
Deputy Chairman of the Supervisory Board and Chairman
of the Compensation Committee, decisively shaped the
Supervisory Board's work over a period of many years.
as its new Chairman, effective February 4, 2021. governance practices
Mr. Diekmann has been a member of the Supervisory
Board of Siemens AG since January 24, 2008, and is
therefore not regarded as independent in terms of the
Code's independence indicators. In the view of the
Compensation Committee, however, Mr. Diekmann is
currently the most suitable candidate for the position
of Chairman because of his professional experience -
due, among other things, to his many years of work
on the Compensation Committee and because his
election will help ensure continuity in the Commit-
tee's work.
Berlin and Munich, October 1, 2021
Siemens Aktiengesellschaft
-
The Managing Board The Supervisory Board"
The current Declaration of Conformity and the Declara-
tions of Conformity of the previous five years are avail-
able on the Siemens Global Website at www.SIEMENS.
COM/DECLARATION OF CONFORMITY.
Suggestions of the Code
Siemens AG voluntarily complies with the Code's sugges-
tions, with only the following exceptions:
According to the suggestion in A.5 of the Code, in the
case of a takeover event, the Managing Board should
convene an Extraordinary General Meeting at which
shareholders will discuss the takeover offer and may
decide on corporate actions. The convening of a share-
holders' meeting - even taking into account the short-
ened time limits stipulated in the German Securities
Acquisition and Takeover Act (Wertpapiererwerbs- und
Übernahmegesetz, WpÜG) – is an organizational chal-
lenge for large publicly listed companies. It appears
doubtful whether the associated effort is justified also
in cases where no relevant decisions by the sharehold-
ers' meeting are intended. Therefore, extraordinary
shareholders' meetings shall be convened only in appro-
priate cases.
-
According to the suggestion in D.8 sent. 2, participation
by telephone or video conference in the meetings of the
Supervisory Board and its committees should not be the
rule. At Siemens AG, participation in meetings is, as a rule,
in person. Participation by telephone takes place only
in exceptional cases. Due to the special circumstances
3
3. Information on corporate
Corporate Governance Statement
Further corporate governance practices applied beyond
the applicable legal requirements are contained in our
Business Conduct Guidelines, which are publicly available
on the Siemens Global Website at WWW.SIEMENS.COM/
COMPLIANCE.
The Company's values and Business
Conduct Guidelines
In the 174 years of its existence, our Company has built an
excellent reputation around the world. Technical perfor-
mance, innovation, quality, reliability and international
engagement have made Siemens a leading company in
its areas of activity. It is top performance with the highest
ethics that has made Siemens strong. This is what the
Company will continue to stand for in the future.
The Business Conduct Guidelines provide the ethical and
legal framework within which we want to conduct our
activities and remain on course for success. They contain
the basic principles and rules for our conduct within our
Company and in relation to our external partners and the
general public. They set out how we meet our ethical and
legal responsibility as a Company and give expression to
our Company values: "Responsible" - "Excellent" - "Inno-
vative." Our Business Conduct Guidelines are publicly
available on the Siemens Global Website at www.
SIEMENS.COM/COMPLIANCE.
4. Description of the operation
of the Managing Board and the
Supervisory Board and of the
composition and operation of
their committees
Siemens AG is subject to German corporate law. There-
fore, it has a two-tier board structure, consisting of a
Managing Board and a Supervisory Board. The duties and
powers of the Managing Board and the Supervisory
Board as well as the regulations regarding their operation
and composition are defined primarily by the German
Stock Corporation Act, the Articles of Association of
Siemens AG and the bylaws for the Company's governing
bodies. The Articles of Association of Siemens AG,
the Bylaws for the Managing Board, the Bylaws for
the Supervisory Board and the bylaws for the Super-
visory Board's most important committees are available
on the Siemens Global Website at WWW.SIEMENS.COM/
CORPORATE-GOVERNANCE.
Managing Board
In fiscal 2021, the Managing Board of Siemens AG
comprised Dr. Roland Busch (President and CEO since
the conclusion of the ordinary Annual Shareholders'
Meeting on February 3, 2021, previously Deputy CEO),
Cedrik Neike, Matthias Rebellius, Prof. Dr. Ralf P. Thomas
and Judith Wiese as well as Klaus Helmrich (until
March 31, 2021) and Joe Kaeser (President and CEO until
the conclusion of the ordinary Annual Shareholders'
Meeting on February 3, 2021). Further information
regarding the Managing Board members and their mem-
berships, which are to be disclosed pursuant to Sec-
tion 285 No. 10 of the German Commercial Code, are set
out in Section 10 of this Corporate Governance State-
ment. Information about the Managing Board members'
areas of responsibility and their curricula vitae are avail-
able on the Siemens Global Website at www.SIEMENS.
COM/MANAGEMENT.
As the top management body, the Managing Board is
committed to serving the interests of the Company and
achieving sustainable growth in company value. The
members of the Managing Board are jointly responsible
for the entire management of the Company and decide
on basic issues of business policy and corporate strategy,
including Siemens' sustainability strategy, as well as on
the Company's annual and multi-year plans, unless spe-
cific circumstances are taken into account for companies
that are separately managed and publicly listed them-
selves (Siemens Healthineers). The Companywide DEGREE
program, which was approved by the Managing Board in
fiscal 2021, intensified the focus of all Siemens businesses
on ambitious sustainability targets – targets for environ-
mental and social sustainability and good governance -
even further. More details on sustainability are available
on the Siemens Global Website at www.SIEMENS.COM/
created by the COVID-19 pandemic, several meetings of
the Supervisory Board and its committees in fiscal 2021
took place as virtual meetings or with the possibility of
participation in a virtual format.
The current compensation system for the Managing
Board members pursuant to Section 87a para. 1 and 2
sent. 1 of the German Stock Corporation Act, which was
endorsed by the Annual Shareholders' Meeting on Febru-
ary 2, 2020, and the decision of the Annual Shareholders'
Meeting on February 3, 2021, pursuant to Section 113
para. 3 of the German Stock Corporation Act regarding
the compensation of the Supervisory Board members are
publicly available on the Siemens Global Website at
WWW.SIEMENS.COM/CORPORATE-GOVERNANCE. The Compen-
sation Report and the Independent Auditor's Report in
accordance with Section 162 of the German Stock Cor-
poration Act are publicly available at the same Internet
address.
Following the regular departure of Werner Wenning,
the previous, long-serving Chairman of the Compen-
sation Committee of the Supervisory Board of
Siemens AG, from the Supervisory Board and thereby
also from the Compensation Committee, the Compen-
sation Committee elected Michael Diekmann to serve
fications and experience that he or she has acquired
over many years in management positions within the
Siemens Group. With regard to the number of man-
dates accepted by Managing Board and Supervisory
Board members, an assessment is also to be possible
in each individual case in order to determine if the
number of accepted mandates relevant within the
meaning of the Code is deemed appropriate. This as-
sessment is to consider the expected personal work-
load caused by the accepted mandates, which can
vary from mandate to mandate.
The Annual Shareholders' Meeting reelected
Jim Hagemann Snabe, whose regular term of office also
expired at the end of the Annual Shareholders' Meeting
on February 3, 2021, to a four-year term of office as
shareholder representative on the Supervisory Board,
FISCAL 2021 8
and the Supervisory Board reelected Mr. Snabe its Chair-
man. The Annual Shareholders' Meeting on February 3,
2021, newly elected Kasper Rørsted and Grazia Vittadini
to four-year terms of office as shareholder representa-
tives on the Supervisory Board.
On behalf of the Supervisory Board, I would like to thank
the members of the Managing Board and all the employ-
ees and employee representatives of Siemens AG and of
all Group Companies for their outstanding commitment
and constructive cooperation in fiscal 2021.
For the Supervisory Board
Jim Hagemann Snabe
Chairman
Report of the Supervisory Board
FISCAL 2021 9
Corporate Governance
Statement
pursuant to Sections 289f and 315d
of the German Commercial Code
SIEMENS
Corporate Governance Statement
pursuant to Sections 289f and 315d
of the German Commercial Code
Corporate Governance Statement
In this Statement, the Managing Board and the Super-
visory Board report as of November 8, 2021, on corporate
governance at the Company in fiscal 2021 (October 1,
2020, to September 30, 2021) pursuant to Sections 289f
and 315d of the German Commercial Code (Handels-
gesetzbuch, HGB) and as prescribed in Principle 22 of the
German Corporate Governance Code ("Code"). Further
information regarding corporate governance – for exam-
ple, the Bylaws for the Supervisory Board, the Bylaws
for the Managing Board, the bylaws for the Supervisory
Board committees and the Corporate Governance State-
ments of the previous fiscal years is also available
on the Siemens Global Website at www.SIEMENS.COM/
member to be appointed and, in particular, the quali- Compensation system
2. Compensation Report/
qualifications and experience of the Managing Board
2
Instead of regarding the recommended maximum pe-
riod of the first-time appointment of Managing Board
members and the recommended maximum number
of mandates for Managing Board and Supervisory
Board members as rigid upper limits, an assessment is
to be possible in each individual case. While the period
of the first-time appointment of a Managing Board
member shall not, as a rule, exceed three years, an
assessment is to be possible in each individual case in
order to determine what period of appointment is
deemed appropriate within the legally permissible pe-
riod. This assessment is to consider the individual
→ Siemens AG does not comply with the recommen-
dation in C.10 sent. 1 variant 3. According to this
recommendation, the chair of the committee that
addresses Managing Board compensation shall
be independent from the company and the Man-
aging Board.
Robert Kensbock left the Supervisory Board on Septem-
ber 25, 2020, the effective date of the spin-off of Siemens
Energy. In a decision of October 16, 2020, the Charlotten-
burg District Court appointed Tobias Bäumler to succeed
Mr. Kensbock as an employee representative on the
Supervisory Board for the remainder of Mr. Kensbock's
term of office.
→ Siemens AG does not comply with the recommen-
dations in C.4 and C.5. According to the recom-
mendation in C.4, a Supervisory Board member
who is not a member of any Managing Board of a
listed company shall not accept more than five
Supervisory Board mandates at non-group listed
companies or comparable functions, with an ap-
pointment as chair of the Supervisory Board being
counted twice. According to the recommendation
in C.5, members of the Managing Board of a listed
company shall not have, in aggregate, more than
two Supervisory Board mandates in non-group
listed companies or comparable functions and shall
not accept the chairmanship of a Supervisory Board
in a non-group listed company.
Since making its last Declaration of Conformity dated
February 4, 2021, Siemens AG has complied, and will
continue to comply, with all the recommendations of
the Government Commission on the German Corpo-
rate Governance Code in the version of December 16,
2019 ('Code') published by the Federal Ministry of
Justice and Consumer Protection in the official section
of the Federal Gazette (Bundesanzeiger), with the fol-
lowing exceptions:
"Declaration of Conformity by the Managing Board and
the Supervisory Board of Siemens Aktiengesellschaft
with the German Corporate Governance Code pursu-
ant to Section 161 of the German Stock Corporation Act
The Managing Board and the Supervisory Board of
Siemens AG approved the following Declaration of Con-
formity pursuant to Section 161 of the German Stock Cor-
poration Act (Aktiengesetz, AktG) as of October 1, 2021:
1. Declaration of Conformity
with the German Corporate
Governance Code
-
CORPORATE-GOVERNANCE.
→ Siemens AG does not comply with the recommen-
dation in B.3. According to this recommendation,
the first-time appointment of Managing Board
members shall be for a period of not more than
three years.
9/9
33
The members of the Managing Board are subject to a com-
prehensive prohibition on competitive activity for the pe-
riod of their employment at Siemens AG. They are commit-
ted to serving the interest of the Company. When making
their decisions, they may not be guided by personal inter-
ests, nor may they exploit for their own advantage busi-
ness opportunities offered to the Company. Managing
Board members may engage in secondary activities - in
particular, supervisory board positions outside the Siemens
Group-only with the approval of the Chairman's Commit-
tee of the Supervisory Board. The Supervisory Board is re-
sponsible for decisions regarding any adjustments to Man-
aging Board compensation that are necessary in order to
take account of compensation for secondary activities.
Every Managing Board member is under an obligation to
disclose conflicts of interest without delay to the Chairman
or Chairwoman of the Supervisory Board and to inform the
other members of the Managing Board thereof.
In fiscal 2021, the Managing Board had one committee,
the Equity and Compensation Committee. The Equity
and Compensation Committee was dissolved effective
October 1, 2021. The duties assigned to it were trans-
ferred back to the Managing Board at that time. The
Equity and Compensation Committee was responsible for
the duties assigned to it by a decision of the Managing
Board - including, in particular, duties in connection with
capital measures and equity-linked financial instruments
relating to the compensation of all employees and man-
agers of the Siemens Group except the members of the
EQUITY AND COMPENSATION COMMITTEE
OF THE MANAGING BOARD
The Managing Board and the Supervisory Board cooper-
ate closely for the benefit of the Company. The Managing
Board informs the Supervisory Board regularly, compre-
hensively and without delay on all issues of importance
to the entire Company with regard to strategy, planning,
business development, financial position, results of oper-
ations, compliance and entrepreneurial risks. At regular
intervals, the Managing Board also discusses the status
of strategy implementation with the Supervisory Board.
BYLAWS-MANAGINGBOARD.
Board demands a prior decision by the Managing Board.
The President and CEO is responsible for the coordina-
tion of all Managing Board portfolios. Further details
are available in the Bylaws for the Managing Board
on the Siemens Global Website at ☐ wWW.SIEMENS.COM/
5
As a rule, the portfolio assigned to an individual member
is that member's own responsibility. Activities and trans-
actions in a particular Managing Board portfolio that are
considered to be extraordinarily important for the Com-
pany or associated with an extraordinary economic risk
require the prior consent of the full Managing Board. The
same applies to activities and transactions for which the
President and CEO or another member of the Managing
3/3
www.SIEMENS.COM/
The Supervisory Board has issued Bylaws for the Manag-
ing Board that contain the assignment of different port-
folios and the rules for cooperation both within the Man-
aging Board and between the Managing Board and the
Supervisory Board as well as rules for the so-called Equity
Investments. In accordance with these Bylaws, the Man-
aging Board is divided into the portfolio of the President
and CEO and a variety of Managing Board portfolios. The
Managing Board members responsible for the individual
Managing Board portfolios are defined in a business as-
signment plan that is determined by the Supervisory Board.
As the Managing Board member with responsibility for
the People & Organization portfolio, the Labor Director
(Arbeitsdirektor) is appointed in accordance with the re-
quirements of Section 33 of the German Codetermina-
tion Act (Mitbestimmungsgesetz, MitbestG). While the
first-time appointment of Managing Board members is
not, as a rule, to exceed a period of three years, an assess-
ment is to be made in each individual case in order to
determine what period of appointment is deemed appro-
priate within the legally permissible period. This matter is
explained in greater detail in Section 1 of this Corporate
Governance Statement.
The Mediation Committee submits proposals to the
Supervisory Board in the event that the Supervisory
Board cannot reach the two-thirds majority required for
the appointment or dismissal of a Managing Board mem-
ber on the first ballot.
As of September 30, 2021, the Nominating Committee
comprised Jim Hagemann Snabe (Chairman), Dr. Werner
Brandt, Benoît Potier and Dr. Nathalie von Siemens.
As of September 30, 2021, the Mediation Committee
comprised Jim Hagemann Snabe (Chairman), Dr. Werner
Brandt, Jürgen Kerner and Birgit Steinborn.
The Nominating Committee is responsible for making rec-
ommendations to the Supervisory Board on suitable can-
didates for the election by the Annual Shareholders' Meet-
ing of shareholder representatives on the Supervisory
Board. In preparing these recommendations, the objec-
tives defined by the Supervisory Board for its composition
and the approved diversity concept - in particular, inde-
pendence and diversity - are to be appropriately consid-
ered, as are the proposed candidates' required knowledge,
abilities and professional experience. Fulfillment of the
required profile of skills and expertise is also to be aimed
at. Attention shall be paid to an appropriate participation
of women and men in accordance with the legal require-
ments relating to the gender quota as well as to ensuring
that the members of the Supervisory Board are, as a group,
familiar with the sector in which the Company operates.
As of September 30, 2021, the Audit Committee com-
prised Dr. Werner Brandt (Chairman), Tobias Bäumler,
Bettina Haller, Jürgen Kerner, Jim Hagemann Snabe,
Birgit Steinborn, Grazia Vittadini and Matthias Zachert.
The members of the Audit Committee are, as a group,
familiar with the sector in which the Company operates.
Pursuant to the German Stock Corporation Act, the Audit
Committee has had to include to date at least one Super-
visory Board member with knowledge and experience in
the areas of accounting or the auditing of financial state-
ments. Pursuant to the German Stock Corporation Act in
the version of the Financial Market Integrity Strengthen-
ing Act (Finanzmarktintegritätsstärkungsgesetz, FISG),
the Supervisory Board must - after the conclusion of a
defined transition period - have at least one member
with knowledge and expertise in the area of accounting,
and at least one additional member with knowledge and
expertise in the auditing of financial statements. In the
person of Mr. Zachert, the Supervisory Board and the Au-
dit Committee have at least one member with knowledge
and expertise in the area of accounting and in the person
of Dr. Brandt at least one additional member with knowl-
edge and expertise in the auditing of financial statements.
Pursuant to the Code, the chair of the Audit Committee
shall have specialist knowledge and experience in the ap-
plication of accounting principles and internal control
processes, be familiar with the auditing of financial state-
ments and be independent. The Chairman of the Audit
Committee, Dr. Werner Brandt, fulfills these requirements.
Based on the Company's overall strategy, the Innovation
and Finance Committee discusses, in particular, the
Company's innovation focuses and prepares the Super-
visory Board's discussions and resolutions regarding ques-
tions relating to the Company's financial situation and
structure - including annual planning (budget) – as well
as the Company's fixed asset investments and its finan-
cial measures. In addition, the Innovation and Finance
Committee has been authorized by the Supervisory
Board to decide on the approval of transactions and mea-
sures that require Supervisory Board approval and have a
value of between €300 million and €600 million.
Tobias Bäumler²
(since February 3, 2021)
8
Corporate Governance Statement
Further details regarding the operation and composition
of the Supervisory Board and its committees are pro-
vided in the Bylaws for the Supervisory Board and the
bylaws for its committees, which are publicly available
on the Siemens Global Website at ☐ www.SIEMENS.COM/
CORPORATE-GOVERNANCE.
SUPERVISORY BOARD SELF-ASSESSMENT
As of September 30, 2021, the Innovation and Finance
Committee comprised Jim Hagemann Snabe (Chair-
man), Tobias Bäumler, Harald Kern, Jürgen Kerner,
Dr.-Ing. Dr.-Ing. E.h. Norbert Reithofer, Kasper Rørsted,
Birgit Steinborn and Grazia Vittadini.
Corporate Governance Statement
Supervisory Board regarding the composition of the Super-
visory Board committees and decides whether to approve
contracts and business transactions with Managing
Board members and parties related to them.
The Audit Committee oversees, in particular, the ac-
counting and the accounting process and conducts a
preliminary review of the Annual Financial Statements
of Siemens AG, the Consolidated Financial Statements of
the Siemens Group and the Combined Management
Report of Siemens AG and the Siemens Group (including
non-financial measures). On the basis of the indepen-
dent auditors' report on their audit of the annual finan-
cial statements, the Audit Committee makes, after its
preliminary review, recommendations regarding Super-
visory Board approval of the Annual Financial Statements
of Siemens AG and the Consolidated Financial Statements
of the Siemens Group. The Audit Committee discusses
the Quarterly Statements and Half-year Financial Report
with the Managing Board and the independent auditors
and deals with the auditors' reports on the review of the
Half-year Consolidated Financial Statements and Interim
Group Management Report. It also monitors the Compa-
ny's adherence to statutory provisions, official regula-
tions and internal Company policies (compliance). The
Chief Compliance Officer reports regularly to the Audit
Committee. The Audit Committee concerns itself with the
Company's risk monitoring system and oversees the ap-
propriateness and effectiveness of its internal control, risk
management and internal audit systems as well as the
As of September 30, 2021, the Compensation Committee
comprised Michael Diekmann (Chairman), Harald Kern,
Jürgen Kerner, Jim Hagemann Snabe, Birgit Steinborn
and Matthias Zachert.
The Compensation Committee prepares, in particular,
the proposals for decisions by the Supervisory Board's
plenary meetings regarding the system of Managing
Board compensation, including the implementation of
this system in Managing Board contracts, the definition
of the targets for variable Managing Board compensa-
tion, the determination and review of the appropriate-
ness of the total compensation of individual Managing
Board members and the annual Compensation Report.
As of September 30, 2021, the Chairman's Committee
comprised Jim Hagemann Snabe (Chairman), Dr. Werner
Brandt, Jürgen Kerner and Birgit Steinborn.
The Supervisory Board and its committees regularly con-
duct reviews - either internally or with the involvement
of external consultants - in order to determine how effi-
ciently they perform their duties. In fiscal 2021, the Super-
visory Board conducted an internal self-assessment at its
meeting on September 23, 2021. The results of this as-
The Chairman's Committee makes proposals, in particu-
lar, regarding the appointment and dismissal of Manag-
ing Board members and is responsible for concluding,
amending, extending and terminating employment con-
tracts with members of the Managing Board. When mak-
ing recommendations for first-time appointments, it
takes into account that the terms of these appointments
shall not, as a rule, exceed three years, whereby it is to be
determined in each individual case what period of ap-
pointment is to be deemed appropriate within the legally
permissible period. In preparing recommendations re-
garding the appointment of Managing Board members,
the Chairman's Committee takes into account the candi-
dates' professional qualifications, international experi-
ence and leadership qualities, the age limit specified for
Managing Board members and the long-range plans for
succession as well as diversity. It also takes into account
the targets for the proportion of women on the Manag-
ing Board that have been defined by the Supervisory
Board and the diversity concept for the Managing Board
that has been approved by the Supervisory Board. The
Chairman's Committee concerns itself with questions re-
garding the Company's corporate governance and pre-
pares the resolutions to be approved by the Supervisory
Board regarding the Declaration of Conformity with the
Code - including the explanation of deviations from the
Code and regarding corporate governance reporting
and the Report of the Supervisory Board to the Annual
Shareholders' Meeting. It is responsible for approving the
Company's related party transactions. Furthermore, the
Chairman's Committee submits recommendations to the
In fiscal 2021, the Supervisory Board had six committees,
whose duties, responsibilities and procedures fulfill the
requirements of the German Stock Corporation Act and
the Code. The chairmen of these committees provide the
Supervisory Board with regular reports on their commit-
tees' activities.
SUPERVISORY BOARD COMMITTEES
Details regarding the work of the Supervisory Board are
provided in the Report of the Supervisory Board, which
will be made publicly available for each previous fiscal
year on the Siemens Global Website.
and new, groundbreaking technologies. The Company
supports them in this regard. Internal informational
events are offered when necessary to support targeted
training measures.
Corporate Governance Statement
6
Separate preparatory meetings of the shareholder repre-
sentatives and of the employee representatives are held
regularly in order to prepare the Supervisory Board meet-
ings. The Supervisory Board also meets regularly without
the Managing Board in attendance. Every Supervisory
Board member must disclose conflicts of interest to the
Supervisory Board. Information regarding conflicts of in-
terest that may have arisen and their handling is provided
in the Report of the Supervisory Board. Special informa-
tional (onboarding) events are held in order to familiarize
new Supervisory Board members with the Company's
business model and the structures of the Siemens Group.
The Supervisory Board members take part, on their own
responsibility, in the educational and training measures
necessary for the performance of their duties – measures
relating, for example, to changes in the legal framework
7
sessment confirm that cooperation within the Super-
visory Board and with the Managing Board is professional,
constructive and characterized by a high degree of trust
and openness. The results also confirm that meetings are
organized and conducted efficiently and that the partici-
pants receive sufficient information. The review did not
reveal a need for any fundamental changes. Individual
suggestions for improvement are also discussed and im-
plemented during the year.
5. Targets for the quota of
women on the Managing Board
and at the two management
levels below the Managing
Board; Information on Managing
Board and Supervisory Board
compliance with minimum gen-
der quota requirements
Jointly with the Managing Board and with the support of
the Chairman's Committee, the Supervisory Board conducts
long-term succession planning for the Managing Board. In
its long-term succession planning, the Supervisory Board
takes into account the target it has defined for the propor-
tion of women on the Managing Board and the criteria set
out in the diversity concept it has approved for the Manag-
ing Board's composition as well as the requirements of the
German Stock Corporation Act, the Code and the Bylaws for
the Chairman's Committee. Considering the concrete qual-
ification requirements and the above-mentioned criteria,
the Chairman's Committee prepares an ideal profile, on the
basis of which it compiles a shortlist of the available candi-
dates. Structured interviews are then conducted with these
candidates. After the interviews, a proposal is submitted to
the Supervisory Board for approval. When developing the
profile of requirements and selecting candidates, the Super-
visory Board and the Chairman's Committee are supported,
if necessary, by external consultants.
10
Corporate Governance Statement
7. Objectives regarding the
Supervisory Board's composition
as well as the profile of required
skills and expertise and the
diversity concept for the Super-
visory Board
In September 2021, the Supervisory Board approved
changes to the objectives for its composition including
the profile of required skills and expertise and the diver-
sity concept:
"The composition of the Supervisory Board of
Siemens AG shall be such that the Supervisory Board's
ability to effectively monitor and advise the Managing
Board is ensured. In this connection, mutually comple-
mentary collaboration among members with a wide
range of personal and professional backgrounds and
diversity with regard to internationality, age and gen-
der are considered helpful.
Profile of required skills and expertise
The candidates proposed for election to the Super-
visory Board shall have the knowledge, skills and ex-
perience necessary to carry out the functions of a
Supervisory Board member in a multinational com-
pany oriented toward the capital markets and to safe-
guard the reputation of Siemens in public. In particu-
lar, care shall be taken with regard to the personality,
integrity, commitment and professionalism of the in-
dividuals proposed for election.
The goal is to ensure that, in the Supervisory Board, as
a group, all the knowhow and experience is available
that is considered essential in view of Siemens' activi-
ties. This includes, for instance, knowledge and expe-
rience in the areas of technology (including informa-
tion technology and digitalization), procurement,
manufacturing and sales, finance, law (including
compliance) and human resources. In addition, the
members of the Supervisory Board shall collectively
have knowledge and experience in the business areas
that are important for Siemens, in particular, in the
areas of industry, energy, healthcare and infrastruc-
ture. As a group, the members of the Supervisory
Board are to be familiar with the sector in which the
Company operates. In accordance with the German
Stock Corporation Act, at least one member of the
Long-term succession planning
for the Managing Board
Supervisory Board must have knowledge and exper-
tise in the area of accounting, and at least one addi-
tional member of the Supervisory Board must have
knowledge and expertise in the area of financial state-
ments. These two Supervisory Board members shall
be independent. At least one member of the Super-
visory Board shall have specific knowledge and expe-
rience in applying accounting principles and internal
control processes. This member shall, in addition, be
familiar with the auditing of financial statements and
independent. In particular, the Supervisory Board
shall also include members who have leadership expe-
rience as senior executives or members of a super-
visory board (or comparable body) at a major com-
pany with international operations.
Internationality
Taking the Company's international orientation into
account, care shall be taken to ensure that the Super-
visory Board has an adequate number of members
with extensive international experience. The goal is to
make sure that the present considerable share of Su-
pervisory Board members with extensive international
experience is maintained.
Diversity
With regard to the composition of the Supervisory
Board, attention shall be paid to achieving sufficient
diversity. Not only is appropriate consideration to be
given to women. Diversity of cultural heritage and a
wide range of educational and professional back-
grounds, experiences and ways of thinking are also to
be promoted. When considering possible candidates
for new elections or for filling Supervisory Board posi-
tions that have become vacant, the Supervisory Board
shall give appropriate consideration to diversity at an
early stage in the selection process.
In accordance with the German Stock Corporation
Act, the Supervisory Board is composed of at least
30% women and at least 30% men. The Nominating
Committee shall continue to include at least one fe-
male member.
11
Corporate Governance Statement
Independence
When a new member is to be appointed, a review shall
be performed to determine which of the areas of ex-
pertise deemed desirable for the Supervisory Board
are to be strengthened.
review conducted by the Audit Committee and taking
into account the reports of the independent auditors.
The Supervisory Board approves the Managing Board's
proposal for the appropriation of net income and the Re-
port of the Supervisory Board to the Annual Sharehold-
ers' Meeting. The Supervisory Board is jointly responsible
with the Managing Board for the preparation of the Com-
pensation Report. In addition, the Company's adherence
to statutory provisions, official regulations and internal
Company policies (compliance) are monitored by the
Supervisory Board and/or the Audit Committee. The Super-
visory Board also appoints the members of the Managing
Board and determines each member's portfolios. The
Supervisory Board approves - on the basis of a proposal
by the Compensation Committee the compensation
system for Managing Board members and defines their
concrete compensation in accordance with this system.
It sets the individual targets for the variable compensa-
tion and the total compensation of each individual Man-
aging Board member, reviews the appropriateness of to-
tal compensation and regularly reviews the Managing
Board compensation system. Effective October 1, 2019,
the Supervisory Board adopted - on the basis of a pro-
posal by the Compensation Committee - an adjusted
compensation system, which was approved by the An-
nual Shareholders' Meeting on February 5, 2020. Import-
ant Managing Board decisions - such as those regarding
major acquisitions, divestments, fixed asset investments
or financial measures - require Supervisory Board ap-
proval unless the Bylaws for the Supervisory Board spec-
ify that such authority be delegated to the Innovation
and Finance Committee of the Supervisory Board.
In the summer of 2020, the Supervisory Board appointed
Judith Wiese and Matthias Rebellius to the Managing
Board as of October 1, 2020, taking into account the diver-
sity concept and the Company's best interest. In the
course of fiscal 2021, Joe Kaeser and Klaus Helmrich left
the Managing Board at the completion of their regular
terms of office. The target for June 30, 2022, continues
to apply. The appropriate consideration of women is a
key component of long-term succession planning for the
Managing Board. Different age groups are represented
on the Managing Board. No Managing Board member is
currently older than 63 years of age.
Implementation of the diversity concept
for the Managing Board in fiscal 2021
The diversity concept for the Managing Board is imple-
mented as part of the process for making appointments
to the Managing Board. When selecting candidates and/
or making proposals for the appointment of Managing
Board members, the Supervisory Board and/or the Chair-
man's Committee of the Supervisory Board take into ac-
count the requirements defined in the diversity concept
for the Managing Board.
At Siemens AG, the Supervisory Board has set a target for
the proportion of women on the Managing Board at a
minimum of 25% until June 30, 2022. Pursuant to the Ger-
man Stock Corporation Act in the version of the Second
Management Positions Act (Zweites Führungspositionen-
Gesetz, FÜPOG II), the Managing Board must include at
least one woman and at least one man (minimum partic-
ipation requirement). In fiscal 2021, Siemens AG already
complied with this requirement.
When filling managerial positions at the Company, the
Managing Board takes diversity into account and, in par-
ticular, aims for an appropriate consideration of women
and internationality. In 2017, the Managing Board set the
target for the percentage of women at each of the two
management levels below the Managing Board at 20%,
applicable in each case until June 30, 2022.
The composition of the Supervisory Board fulfilled the
legal requirements regarding the minimum gender quota
in the reporting period.
Statutory provisions on the equal participation of men
and women in management positions that may be appli-
cable to Group Companies other than Siemens AG re-
main unaffected.
6. Diversity concept for the
Managing Board and long-term
succession planning
In September 2018, the Supervisory Board approved the
following diversity concept for the composition of the
Managing Board:
"The goal is to achieve a composition that is as diverse
as possible and comprises individuals who comple-
ment one another in a Managing Board that provides
strong leadership as well as to ensure that, as a group,
the members of the Managing Board have all the
knowhow and skills that are considered essential in
view of Siemens' activities.
In its current composition, the Managing Board fulfills all
the requirements of the diversity concept. The Managing
Board members have a broad range of knowledge, expe-
rience and educational and professional backgrounds as
well as international experience. The Managing Board has
all the knowledge and experience that is considered es-
sential in view of Siemens' activities. As a group, the Man-
aging Board has experience in the business areas that are
important for Siemens - in particular, in the industry, en-
ergy, healthcare and infrastructure sectors - as well as
many years of experience in technology (including infor-
mation technology and digitalization), research and devel-
opment, procurement, manufacturing and sales, finance,
law (including compliance) and human resources.
When selecting members of the Managing Board, the
Supervisory Board pays close attention to candidates'
personal suitability, integrity, convincing leadership
qualities, international experience, expertise in their
prospective areas of responsibility, achievements to
date and knowledge of the Company as well as their
ability to adjust business models and processes in a
changing world. Diversity with respect to such charac-
teristics as age and gender as well as professional and
educational background is an important selection cri-
terion for appointments to Managing Board positions.
When selecting members of the Managing Board, the
Supervisory Board also gives special consideration to
the following factors:
9
Corporate Governance Statement
→ Taking the Company's international orientation
into account, the composition of the Managing
Board shall reflect internationality with respect to
different cultural backgrounds and international
experience (such as extensive professional experi-
ence in foreign countries and responsibility for
business activities in foreign countries in areas that
are relevant for Siemens).
→ As a group, the Managing Board shall have experi-
ence in the business areas that are important for
Siemens in particular, in the industry, energy,
healthcare and infrastructure sectors.
→ As a group, the Managing Board shall have many
years of experience in technology (including infor-
mation technology and digitalization), research
and development, procurement, manufacturing
and sales, finance, law (including compliance) and
human resources.
→ When selecting individuals for Managing Board po-
sitions, the targets set by the Supervisory Board for
the proportion of women on the Managing Board
shall be taken into account. The Supervisory Board
has established as a target that - until June 30,
2022-25% of the Managing Board positions are to
be held by women.
→It is considered helpful if different age groups are
represented on the Managing Board. In accordance
with the recommendation of the Code, the Super-
visory Board has defined an age limit for the mem-
bers of the Managing Board. In keeping with this
limit, the members of the Managing Board are, as
a rule, to be not older than 63 years of age.
When making an appointment to a specific Manag-
ing Board position, the decisive factor is always the
Company's best interest, taking into consideration all
circumstances in the individual case."
→ In addition to the expertise and management and
leadership experience required for their specific
tasks, the Managing Board members shall have the
broadest possible range of knowledge and experi-
ence and the widest possible educational and pro-
fessional backgrounds.
-
Further details regarding the operation and composition
of the Managing Board and its committees are provided
in the Bylaws for the Managing Board, which are publicly
available on the Siemens Global Website at www.
The Supervisory Board of Siemens AG has 20 members.
As stipulated by the German Codetermination Act, half of
its members represent Company shareholders, and half
represent Company employees. The shareholder repre-
sentatives on the Supervisory Board are elected at the
Annual Shareholders' Meeting by a simple majority vote.
Elections to the Supervisory Board are conducted, as a
rule, on an individual basis. The employee representatives
on the Supervisory Board are elected in accordance with
the provisions of the German Codetermination Act. Fur-
ther information regarding the Supervisory Board mem-
bers and their memberships, which are to be disclosed
pursuant to Section 285 No. 10 of the German Commer-
cial Code, are set out in Section 11 of this Corporate Gov-
ernance Statement. The curricula vitae of the Supervisory
Board members are publicly available on the Siemens
Global Website at www.SIEMENS.COM/SUPERVISORY-BOARD
and updated annually.
Positions outside Germany:
→ Traton SE, Munich³
(Deputy Chairman)³
→ Thyssenkrupp AG, Essen
→ Siemens Energy Management GmbH,
Munich
→ Siemens Energy AG, Munich³
Premium Aerotec GmbH, Augsburg
(Deputy Chairman)
(Deputy Chairman)
→ MAN Truck & Bus SE, Munich
German positions:
→ Siemens Mobility GmbH, Munich
(Deputy Chairwoman)
German positions:
→ Siemens Energy Management GmbH,
Munich
→ Siemens Energy AG, Munich³
German positions:
→ TRUMPF Schweiz AG, Switzerland
Bad Homburg (Deputy Chairman)³
Chairman and Chief Executive Officer
September 3,
1957
15
5 Shareholders' Committee.
4 Group company position.
3 Publicly listed.
→ The Hydrogen Company S.A., France4
Inc., USA4
→ American Air Liquide Holdings,
→ Air Liquide International Corporation
(ALIC), USA (Chairman)4
→ Air Liquide International S.A., France
(Chairman and Chief Executive
Officer) 3,4
Positions outside Germany:
2 Employee representative.
1 As a rule, the term of office ends at the conclusion of the (relevant) ordinary Annual Shareholders' Meeting.
2018
2023
January 31,
of Air Liquide S.A
→Fresenius SE & Co. KGaA,
Bad Homburg
→ Fresenius Management SE,
March 16,
1960
Chief Executive Officer (CEO) - President
and Chairwoman of the Group Management
of TRUMPF GmbH + Co. KG
Benoît Potier
as of February 3, 2021
(until February 3, 2021)
(Dr. phil.)
Leibinger-Kammüller
Nicola
Chief Treasurer and Executive Member
of the Managing Board of IG Metall
Siemens Europe Committee
Corporate Governance Statement
Managing Board and of Top Management and relating to
share-based compensation components and employee
share plans. The Equity and Compensation Committee
comprised the President and CEO, the Managing Board
member with responsibility for the People & Organization
portfolio, the Managing Board member with responsibil-
ity for the Controlling and Finance portfolio and - as of
October 1, 2020 - the Deputy CEO. As of September 30,
2021, its members were Dr. Roland Busch (Chairman),
Prof. Dr. Ralf P. Thomas and Judith Wiese.
The Supervisory Board shall include what the share-
holder representatives on the Supervisory Board con-
sider to be an appropriate number of independent
shareholder representatives. More than half of the
shareholder representatives shall be independent of
the Company and its Managing Board. Substantial -
and not merely temporary - conflicts of interest are to
be avoided.
SIEMENS.COM/BYLAWS-MANAGINGBOARD.
Supervisory Board
January 24,
2008
2023
January 22,
1969
January 25,
→ Allianz SE, Munich (Chairman)³
German positions:
→ RWE AG, Essen (Chairman)³
→ ProSiebenSat.1 Media SE, Munich
(Chairman)³
German positions:
C3.ai, Inc., USA³
→ A.P. Møller-Mærsk A/S, Denmark
(Chairman)³
The Supervisory Board oversees and advises the Manag-
ing Board in its management of the Company's business.
At regular intervals, the Supervisory Board discusses
business development, planning, strategy and strategy
implementation. It reviews the Annual Financial State-
ments of Siemens AG, the Consolidated Financial State-
ments of the Siemens Group, the Combined Manage-
ment Report of Siemens AG and the Siemens Group, and
the proposal for the appropriation of net income. It ap-
proves the Annual Financial Statements of Siemens AG as
well as the Consolidated Financial Statements of the
Siemens Group, based on the results of the preliminary
→ Allianz SE, Munich (Deputy Chairman)³
Positions outside Germany:
Memberships in supervisory boards
whose establishment is required by law
or in comparable domestic or foreign
controlling bodies of business enterprises
(as of September 30, 2021)
Corporate Governance Statement
2021
January 24,
2008
December 15,
1959
2012
2023
German positions:
No more than two former members of the Managing
Board of Siemens AG shall belong to the Supervisory
Board.
internal process for related party transactions. The Audit
Committee receives regular reports from the internal au-
dit department. It prepares the Supervisory Board's rec-
ommendation to the Annual Shareholders' Meeting con-
cerning the election of the independent auditors and
submits the corresponding proposal to the Supervisory
Board. Prior to submitting this proposal, the Audit Com-
mittee obtains a statement from the prospective indepen-
dent auditors affirming that their independence is not in
question. It awards the audit contract to the independent
auditors elected by the Annual Shareholders' Meeting and
monitors the independent audit of the financial state-
ments as well as the auditors' selection, independence,
qualification, rotation and efficiency and the services ren-
dered by the auditors. The Audit Committee assesses the
quality of the audit of the financial statements on a regu-
lar basis. Outside its meetings, the Supervisory Board is
also in regular communication with the independent au-
ditors via the Chairman of the Audit Committee.
Limits on age and on length of
membership
October 1,
2020
1 Publicly listed.
September 30, German positions:
2023
→ European School of Management
and Technology GmbH, Berlin
14
11. Members of the Supervisory Board and
positions held by Supervisory Board members
In fiscal 2021, the Supervisory Board had the following members:
January 30,
1971
Name
Occupation
Date of birth
Member since
Term
expires¹
Chairman
of Siemens AG and of the Board of
Directors of A. P. Møller-Mærsk A/S
October 27,
1965
Jim Hagemann Snabe Chairman of the Supervisory Board
October 1,
2013
Judith Wiese
→ Siemens Healthcare GmbH,
Munich (Chairman)
→ Siemens Energy Management GmbH,
Munich
Positions outside Germany:
→ Siemens Ltd., India¹
Positions outside Germany:
→ Siemens Aktiengesellschaft Österreich,
Austria (Chairman)
→ Siemens France Holding S.A., France
Positions outside Germany:
→ Siemens Healthineers AG,
Munich (Chairman)'
Positions outside Germany:
→ Siemens Proprietary Ltd.,
South Africa (Chairman)
→ Arabia Electric Ltd., Saudi Arabia
(Deputy Chairman)
→Siemens Ltd., India'
→ Siemens Ltd., Saudi Arabia
(Deputy Chairman)
→ Siemens Schweiz AG, Switzerland
(Chairman)
→ Siemens W.L.L., Qatar
German positions:
→ Siemens Ltd., Australia
2025
Birgit Steinborn²
First Deputy Chairwoman
October 16,
2020
October 10,
1979
2023
January 31,
2018
January 3,
1954
2023
January 24,
2008
2023
March 26,
1960
Combine Works Council of Siemens AG
Central Works Council and of the
Deputy Chairman of the
of RWE AG and of ProSiebenSat.1 Media SE
Chairman of the Supervisory Board
Michael Diekmann
(since October 16, 2020)
Chairman of the Supervisory Board
of Allianz SE
December 23,
1954
January 24,
2008
2023
Chairwoman of the Central Works
Council of Siemens AG
Werner Brandt
(Dr. rer. pol.)
Second Deputy Chairman
Chairman of the
Jürgen Kerner²
Harald Kern²
2023
April 1,
2007
March 14,
1959
Chairwoman of the Combine
Works Council of Siemens AG
Bettina Haller²
2023
January 31,
2018
June 21,
1970
IG Metall Regional Office for Bavaria
Trade Union Secretary,
The Supervisory Board members shall have sufficient
time to exercise their mandates with the necessary
regularity and diligence.
→ Siemens Energy AG, Munich'
German positions:
Andrea Fehrmann²
(Dr. phil.)
→ Siemens Energy AG, Munich'
In fiscal 2021, the Managing Board had the following members:
Name
Roland Busch
(Dr. rer. nat.)
President and
Chief Executive Officer
(since February 3, 2021)
Date of birth
November 22,
1964
10. Members of the Managing Board and
positions held by Managing Board members
First appointed Term expires
April 1,
2011
Corporate Governance Statement
Memberships in supervisory boards whose establishment is required by law
or in comparable domestic or foreign controlling bodies of business enterprises
External positions
(as of September 30, 2021)
Group company positions
(as of September 30, 2021)
German positions:
→ Siemens Healthineers AG, Munich'
→ Siemens Mobility GmbH, Munich
(Chairman)
March 31,
2025
13
WWW.SIEMENS.COM/CORPORATE-GOVERNANCE.
The Articles of Association of Siemens AG, the Bylaws for
the Supervisory Board, the bylaws for the most important
Supervisory Board committees, the Bylaws for the Man-
aging Board, our Declarations of Conformity with the
Code and a variety of other corporate-governance-related
documents are posted on the Siemens Global Website at
→ Siemens Energy Management GmbH,
Munich
In compliance with the age limit stipulated by the
Supervisory Board in its Bylaws, only individuals who
are no older than 70 years of age shall, as a rule, be
nominated for election to the Supervisory Board.
Nominations shall take into account the regular limit
established by the Supervisory Board, which restricts
membership on the Supervisory Board to a maximum
of three full terms of office. It is considered helpful if
different age groups are represented on the Super-
visory Board."
Implementation of the objectives
regarding the Supervisory Board's
composition as well as the profile of
required skills and expertise and the
diversity concept for the Supervisory
Board in fiscal 2021; independent
members of the Supervisory Board
Within the framework of the selection process and the
nomination of candidates for the Supervisory Board, the
Supervisory Board as well as the Nominating Committee
of the Supervisory Board take into account the objectives
regarding the Supervisory Board's composition and the
requirements defined in its diversity concept. The Super-
visory Board and the Nominating Committee have re-
cently taken the objectives - including the profile of re-
quired skills and expertise and the diversity concept - into
consideration in the nominations of three shareholder
representatives to be elected by the Annual Shareholders'
Meeting in 2021. As an additional criterion, the Super-
visory Board takes into account expertise in the area of
sustainability.
The Supervisory Board is of the opinion that, with its cur-
rent composition, it meets the objectives for its composi-
tion and fulfills the profile of required skills and expertise
as well as the diversity concept. The Supervisory Board
members have the specialist and personal qualifications
considered necessary. As a group, they are familiar with
the sector in which the Company operates and have the
knowledge, skills and experience essential for Siemens.
A considerable number of Supervisory Board members
are engaged in international activities and/or have many
years of international experience. Appropriate consider-
ation has been given to diversity in the Supervisory Board.
In fiscal 2021, the Supervisory Board had seven female
members, of whom three are shareholder representatives
and four are employee representatives. As a result, 35% of
the Supervisory Board members are women. Dr. Nathalie
von Siemens is a member of the Nominating Committee.
In the estimation of the shareholder representatives, the
Supervisory Board now has at least nine independent
shareholder representatives – namely, Dr. Werner Brandt,
Benoît Potier, Dr.-Ing. Dr.-Ing. E.h. Norbert Reithofer,
Kasper Rørsted, Baroness Nemat Shafik, Dr. Nathalie von
Siemens, Jim Hagemann Snabe, Grazia Vittadini and
Matthias Zachert - and thus an appropriate number of
members who are independent in the meaning of the
Code. The regulations establishing limits on age and re-
stricting membership in the Supervisory Board to three
full terms of office are complied with.
8. Share transactions by
members of the Managing and
Supervisory Boards
Pursuant to Article 19 of EU Regulation No. 596/2014 of
the European Parliament and Council of April 16, 2014,
on market abuse (Market Abuse Regulation), members
of the Managing Board and the Supervisory Board are
legally required to disclose all transactions conducted on
their own account relating to the shares or debt instru-
ments of Siemens AG or to the derivatives or financial
instruments linked thereto if the total value of such
transactions entered into by a board member or any
closely associated person in any calendar year reaches or
12
Corporate Governance Statement
exceeds €20,000. All transactions reported to Siemens AG
in fiscal 2021 have been duly published and are available
on the Siemens Global Website at WWW.SIEMENS.COM/
DIRECTORS-DEALINGS.
In accordance with Section 1 para. 2 of the German Act
Concerning Measures Under the Law of Companies,
Cooperative Societies, Associations, Foundations and
Commonhold Property to Combat the Effects of the
COVID-19 Pandemic (Gesetz über Maßnahmen im Gesell-
schafts-, Genossenschafts-, Vereins-, Stiftungs- und
9. Annual Shareholders' Meeting Wohnungseigentumsrecht zur Bekämpfung der Aus-
and investor relations
Shareholders exercise their rights at the Annual Share-
holders' Meeting. An ordinary Annual Shareholders'
Meeting normally takes place within the first five months
of each fiscal year. The Annual Shareholders' Meeting de-
cides, among other things, on the appropriation of net
income, the ratification of the acts of the members of the
Managing and Supervisory Boards, and the appointment
of the independent auditors. Amendments to the Articles
of Association and measures that change the Company's
capital stock are approved at the Annual Shareholders'
Meeting and implemented by the Managing Board. The
Managing Board facilitates shareholder participation in
this meeting through electronic communications - in
particular, via the Internet - and enables shareholders
who are unable to attend the meeting to vote by proxy.
Proxies can also be reached during the Annual Sharehold-
ers' Meeting. Furthermore, shareholders may exercise
their right to vote in writing or by means of electronic
communications (absentee voting). The Managing Board
may enable shareholders to participate in the Annual
Shareholders' Meeting without the need to be present at
the venue and without a proxy and to exercise some or all
of their rights fully or partially by means of electronic
communications. The Company enables shareholders to
follow the entire Annual Shareholders' Meeting via the
Internet. Shareholders may submit motions regarding
the proposals of the Managing and Supervisory Boards
and may contest decisions of the Annual Shareholders'
Meeting. Shareholders owning Siemens stock with an
aggregate notional value of €100,000 or more may also
demand the judicial appointment of special auditors to
examine specific issues. The reports, documents and in-
formation required by law for the Annual Shareholders'
Meeting, including the Annual Report, can be down-
loaded from the Siemens Global Website. The same ap-
plies to the agenda for the Annual Shareholders' Meeting
and to any counterproposals or shareholders' nomina-
tions that may require disclosure. For the election of
shareholder representatives on the Supervisory Board, a
detailed curriculum vitae of every candidate is published.
wirkungen der COVID-19-Pandemie, GesRua COVBekG)
of March 27, 2020 (Federal Law Gazette | No. 14 2020,
p. 570) whose application was extended until Decem-
ber 31, 2021 by the Ordinance on the Extension of the
Measures Under the Law of Companies, Cooperative
Societies, Associations and Foundations to Combat the
Effects of the COVID-19 Pandemic (Verordnung zur Ver-
längerung von Maßnahmen im Gesellschafts-, Genossen-
schafts-, Vereins- und Stiftungsrecht zur Bekämpfung
der Auswirkungen der COVID-19-Pandemie, GesRGen-
RCOVMVV) of October 20, 2020 (Federal Law Gazette |
No. 48 2020, p. 2258), the ordinary Shareholders' Meet-
ing on February 3, 2021, was conducted as a virtual
shareholders' meeting without the physical presence of
shareholders or their proxies due to the special circum-
stances created by the COVID-19 pandemic.
As part of our investor relations activities, we inform our
investors comprehensively about developments within
the Company. For communication purposes, Siemens
makes extensive use of the Internet. We publish Quar-
terly Statements, Half-year Financial and Annual Reports,
earnings releases, ad hoc announcements, analyst pre-
sentations, letters to shareholders and press releases as
well as the financial calendar for the current year, which
contains the publication dates of significant financial
communications and the date of the Annual Sharehold-
ers' Meeting, at ☐ WWW.SIEMENS.COM/INVESTORS. The Chair-
man of the Supervisory Board regularly discusses Super-
visory-Board-specific topics with investors.
Klaus Helmrich
May 24,
September 17,
2023
April 1,
2011
September 30,
2025
March 7,
1961
September 18,
2013
German positions:
→EOS Holding AG, Krailling
German positions:
→Daimler AG, Stuttgart'
→Mercedes-Benz AG, Stuttgart
→ Siemens Energy AG,
Munich (Chairman)1
→ Siemens Energy Management GmbH,
Munich (Chairman)
→ NXP Semiconductors N.V.,
Netherlands'
German positions:
→ Evonik Industries AG, Essen¹
Positions outside Germany:
→ Atos SE, France¹
1958
German positions:
Ralf P. Thomas
(Prof. Dr. rer. pol.)
October 1,
2020
Positions outside Germany:
Matthias Rebellius
(until March 31, 2021)
March 31,
2021
January 2,
1965
as of March 31, 2021
Joe Kaeser
May 1,
2006
At the end
(President and Chief
June 23,
1957
of the Managing Board
until February 3, 2021)
as of February 3, 2021
May 31,
2025
of the 2021
Annual
Shareholders'
Meeting
Cedrik Neike
Executive Officer, member
April 1,
2017
March 7,
1973
2018
Gunnar Zukunft²
Deputy Chairman of the Central
Works Council of Siemens Industry
Software GmbH
2023
January 31,
2018
German positions:
→ Siemens Industry Software GmbH,
Cologne
2023
1 As a rule, the term of office ends at the conclusion of the (relevant) ordinary Annual Shareholders' Meeting.
June 21,
1965
January 31,
February 3,
2021
Matthias Zachert
Chairman of the Board of
Management of LANXESS AG³
2021
January 23,
2013
October 21,
1946
Member of the Supervisory Board
2025
September 23,
1969
→ Siemens Healthcare GmbH, Munich
German positions:
2023
October 1,
2017
2 Employee representative.
November 8,
1967
3 Publicly listed.
E-mail
5
© 2021 by Siemens AG, Berlin and Munich
investorrelations@siemens.com
press@siemens.com
+49 89 636-1332474 (Investor Relations)
+49 89 636-33443 (Media Relations)
+49 89 636-32474 (Investor Relations)
+49 89 636-30085 (Media Relations)
www.siemens.com
Germany
80333 Munich
Werner-von-Siemens-Str. 1
Siemens AG
August 3,
1969
Fax
Phone
Internet
Address
2
The Sustainability Report 2021 which reports on Sustainability and Citizenship at Siemens is available at: siemens.com/investor/en/
For technical reasons, there may be differences between the accounting records appearing in this document and those published pursuant
to legal requirements.
This document is an English language translation of the German document. In case of discrepancies, the German language document is
the sole authoritative and universally valid version.
Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and
percentages may not precisely reflect the absolute figures.
This document includes – in the applicable financial reporting framework not clearly defined – supplemental financial measures that are
or may be alternative performance measures (non-GAAP-measures). These supplemental financial measures should not be viewed in
isolation or as alternatives to measures of Siemens' net assets and financial positions or results of operations as presented in accordance
with the applicable financial reporting framework in its Consolidated Financial Statements. Other companies that report or describe
similarly titled alternative performance measures may calculate them differently.
-
This document contains statements related to our future business and financial performance and future events or developments involving
Siemens that may constitute forward-looking statements. These statements may be identified by words such as "expect," "look forward
to," "anticipate," "intend," "plan," "believe," "seek," "estimate," "will," "project" or words of similar meaning. We may also make forward-
looking statements in other reports, in prospectuses, in presentations, in material delivered to shareholders and in press releases. In
addition, our representatives may from time to time make oral forward-looking statements. Such statements are based on the current
expectations and certain assumptions of Siemens' management, of which many are beyond Siemens' control. These are subject to a
number of risks, uncertainties and factors, including, but not limited to, those described in disclosures, in particular in the chapter Report
on expected developments and associated material opportunities and risks in the Annual Report. Should one or more of these risks or
uncertainties materialize, events of force majeure, such as pandemics, occur or should underlying expectations including future events
occur at a later date or not at all or assumptions prove incorrect, actual results, performance or achievements of Siemens may (negatively
or positively) vary materially from those described explicitly or implicitly in the relevant forward-looking statement. Siemens neither
intends, nor assumes any obligation, to update or revise these forward-looking statements in light of developments which differ from
those anticipated.
Notes and forward-looking statements
SIEMENS
Notes and forward-
looking statements
Shareholders' Committee.
4 Group company position.
2023
→ Bayerische Motoren Werke Aktien-
gesellschaft, Munich (Chairman)³
September 13,
1957
(DBE, DPhil)
2023
January 31,
2018
August 13,
1962
Director of the London
School of Economics
2025
February 24,
1962
Chief Executive Officer and
Board Member of adidas AG3
2023
January 27,
2015
May 29,
1956
Baroness
Nemat Shafik
Nathalie
(since February 3, 2021)
Chairman of the Supervisory Board
of Bayerische Motoren Werke
Aktiengesellschaft
Norbert Reithofer
(Dr.-Ing. Dr.-Ing. E.h.)
2023
January 30,
2019
April 26,
1967
Trade Union Secretary of the
Managing Board of IG Metall
Hagen Reimer2
Term
expires¹
Member since
Date of birth
Occupation
Name
Kasper Rørsted
March 1,
2014
Member of supervisory boards
July 14,
1971
Airbus Special Advisor
Chairwoman of the Central Works
Council of Siemens Healthcare GmbH
of Spokespersons of the Siemens Group
and Chairman of the Central Committee
of Spokespersons of Siemens AG
Chairman of the Committee
until February 3, 2021)
as of February 3, 2021
(Second Deputy Chairman
and member of the
Supervisory Board
Grazia Vittadini
(since February 3, 2021)
Werner Wenning
Dorothea Simon²
Michael Sigmund²
→ EssilorLuxottica SA, France³
Positions outside Germany:
→ Siemens Healthcare GmbH, Munich
→Siemens Healthineers AG, Munich³
→ TÜV Süd AG, Munich
von Siemens
→ Messer Group GmbH, Sulzbach
Member of the Board of Directors,
Nestlé S.A., Switzerland³
Positions outside Germany:
→ Henkel AG & Co. KGaA, Düsseldorf 3,5
→ Henkel Management AG, Düsseldorf
German positions:
→ Siemens Energy Management GmbH,
Munich
→ Siemens Energy AG, Munich³
German positions:
Memberships in supervisory boards
whose establishment is required by law
or in comparable domestic or foreign
controlling bodies of business enterprises
(as of September 30, 2021)
Corporate Governance Statement
(Dr. phil.)
2023
January 27,
2015
German positions:
February 3,
2021
16
(in millions of €)
Other current liabilities
7,628
6,209
23%
Liabilities associated with assets classified as held for disposal
10
35
(71)%
Total current liabilities
39,952
The share buyback announced in November 2018 was completed on September 24, 2021 with a total volume of €3 billion. On June 24,
2021, Siemens announced that it intends to launch a new five-year share buyback program of up to €3 billion, beginning in fiscal 2022.
6.2 Cash flows
17%
Long-term debt
40,879
38,005
8%
Provisions for pensions and similar obligations
2,839
6,360
(21)%
(55)%
2,281
Current income tax liabilities
7,821
6,562
19%
Trade payables
8,832
7,873
12%
Other current financial liabilities
1,731
1,958
(12)%
Contract liabilities
9,858
7,524
31%
Current provisions
2,263
1,674
35%
1,809
Short-term debt and current maturities of long-term debt
Deferred tax liabilities
664
68%
Total equity attributable to shareholders of Siemens AG
Equity ratio
Non-controlling interests
Total liabilities and equity
44,373
36,390
22%
35%
32%
4,901
3,433
43%
139,608
123,897
13%
The increase in short-term debt and current maturities of long-term debt was due mainly to reclassifications of long-term U.S. dollar
and euro instruments totaling €5.7 billion, and to higher loans from banks totaling €0.9 billion. This was offset by repayment of euro and
U.S. dollar instruments totaling €3.5 billion, and by a €1.9 billion decrease in commercial papers.
Increases in deferred tax liabilities and contract liabilities year-over-year were due mainly to the acquisition of Varian. For further
information see Note 3 in Notes to Consolidated Financial Statements for fiscal 2021.
Long-term debt increased due primarily to the issuance of U.S. dollar instruments of €8.4 billion. Set against this were mainly decreases
from the above-mentioned reclassifications and currency translation effects for bonds issued in the U.S. dollar and British pound.
Provisions for pensions and similar obligations substantially decreased mainly due to a positive return on plan assets and extraordinary
fundings in Germany, including the transfer of Siemens' stake in Bentley to Siemens Pension-Trust e.V.
The decrease of provisions is due mainly to reclassification of a large part of a major asset retirement obligation to current provisions.
The main factors for the increase in total equity attributable to shareholders of Siemens AG were €6.2 billion in net income attributable
to shareholders of Siemens AG; positive other comprehensive income, net of income taxes, of €3.5 billion resulting mainly from positive
effects from remeasurements of defined benefit plans and from currency translation; and higher retained earnings of €1.2 billion due to
Siemens Healthineers' increase in share capital. The increase was partly offset by dividend payments of €2.8 billion (for fiscal 2020) and
the repurchase of 976,346 treasury shares totaling €0.5 billion (including final payment to a commissional bank).
65%
2,337
7%
90,333
>200%
Provisions
Other financial liabilities
Other liabilities
Total non-current liabilities
Total liabilities
Debt ratio
1,723
2,352
(27)%
679
769
(12)%
1,925
1,808
6%
50,381
49,957
1%
84,074
The share capital increase of Siemens Healthineers mentioned above contributed also to higher non-controlling interests totaling €1.0
billion. For further information see Note 3 in Notes to Consolidated Financial Statements for fiscal 2021.
% Change
2021
2020
% Change
9,545
14,041
(32)%
15,518
14,074
10%
7,985
8,382
(5)%
6,688
5,545
21%
8,836
7,795
13%
1,795
1,523
2021
18%
Sep 30,
Total assets
5. Net assets position
(in millions of €)
Cash and cash equivalents
Trade and other receivables
Other current financial assets
Contract assets
Inventories
Current income tax assets
Other current assets
Assets classified as held for disposal
Total current assets
Goodwill
Other intangible assets
Property, plant and equipment
Investments accounted for using the equity method
Other financial assets
Deferred tax assets
Other assets
Total non-current assets
Combined Management Report
2020
1,751
38%
(4)%
2,183
1,769
23%
87,267
70,928
23%
139,608
123,897
13%
Our total assets at the end of fiscal 2021 were influenced by positive currency translation effects of €2.3 billion (mainly goodwill), primarily
involving the U.S. dollar.
In fiscal 2021, the acquisition of Varian was the major factor related to the increase of Siemens' assets, mainly goodwill, other intangible
assets, inventories, property, plant and equipment, and trade and other receivables. The increase of the latter was driven also by
higher business volume, primarily at Siemens Healthineers. Goodwill increased also due to the acquisition of Supplyframe. These increases
were partly offset by the sale of Flender, among other factors. This applies mainly to inventories, trade and other receivables, and property,
plant and equipment. For further information see Note 3 in Notes to Consolidated Financial Statements for fiscal 2021.
The increase in other financial assets was driven mainly by increased equity investments as well as higher receivables from finance leases
and higher loans receivable at SFS. The increase of the latter two was mainly due to new business and – in case of loans receivable - also
to a reassessment of the expected repayment dates. Set against these factors was a decrease resulting mainly from contributions of assets
to Siemens Pension-Trust e.V., including the stake in Bentley.
19
| 6. Financial position
6.1 Capital structure
Combined Management Report
Sep 30,
(in millions of €)
2,988
1,271
2,865
22,771
223
338
(34)%
52,340
52,968
(1)%
29,729
20,449
45%
10,964
4,838
127%
11,023
10,250
8%
7,539
7,862
(4)%
22,964
1%
Capital structure ratio
34,117
Debt and credit facilities
Cash inflows from investing activities from discontinued operations were driven by the sale of Flender, which resulted in cash inflows
(net of cash disposed) of €1.8 billion.
Cash outflows from the change in short-term debt and other financing activities mainly included net cash outflows related to
commercial paper, partly offset by cash inflows from new bank loans.
Combined Management Report
21
Cash inflows from the re-issuance of treasury shares and other transactions with owners mainly included proceeds of €2.3 billion
related to Siemens Healthineers AG's issuance of 53 million new shares to institutional investors.
Cash outflows for purchase of treasury shares included a final payment of €0.4 billion to the commissioned bank, which was due with
completion of the share buyback program 2018-2021.
Cash inflows from other disposals of assets mainly included disposals of assets eligible as central bank collateral.
Cash outflows from change in receivables from financing activities of SFS related mainly to SFS' debt business.
Cash outflows for purchase of investments and financial assets for investment purposes primarily included additions of assets eligible
as central bank collateral and payments for debt or equity investments related to certain businesses or projects, including the acquisition
of an equity stake in Thoughtworks for €0.3 billion.
Cash outflows from acquisitions of businesses, net of cash acquired, were due mainly to the acquisitions of Varian by Siemens
Healthineers for €13.4 billion and Supplyframe by Digital Industries for €0.6 billion.
Led by Digital Industries, all industrial businesses delivered strong conversion of their Adjusted EBITA to Cash flows from operating
activities, including only minor cash flows from changes in operating net working capital in all industrial businesses.
785
Cash flows from financing activities - continuing and discontinued operations
Cash flows from financing activities - discontinued operations
Cash flows from financing activities continuing operations
Dividends attributable to non-controlling interests
Dividends paid to shareholders of Siemens AG
Interest paid
785
We report Free cash flow as a supplemental liquidity measure:
(285)
Free cash flow
Cash flows from operating activities
Additions to intangible assets and property, plant and equipment from continuing operations totaled €1.7 billion in fiscal 2021. Within
the industrial businesses, ongoing investments related mainly to technological innovations; maintaining and extending our capacities for
designing, manufacturing and marketing new solutions; improving productivity; and replacements of fixed assets. These investments
amounted to €1.3 billion in fiscal 2021. The remaining portion related mainly to Siemens Real Estate, including significant amounts for
projects such as new office buildings in Germany. Siemens Real Estate is responsible for uniform and comprehensive management of
Company real estate worldwide (except for Siemens Healthineers) and supports the industrial businesses and corporate activities with
customer-specific real estate solutions.
Investing activities
With our ability to generate positive operating cash flows from continuing and discontinued operations of €10.0 billion in fiscal 2021, our
total liquidity (defined as cash and cash equivalents plus current interest-bearing debt securities) of €10.7 billion, our unused lines of
credit, and our credit ratings at year-end, we believe that we have sufficient flexibility to fund our capital requirements. Also in our opinion,
our operating net working capital is sufficient for our present requirements.
The Free cash flow for the Industrial Business amounted to €9,847 million, resulting in a cash conversion rate of 1.12. The cash conversion
rate for the Siemens Group was 1.23.
8,237
(142)
8,379
(1,759)
(29)
(1,730)
9,996
(113)
10,109
operations
Continuing and
discontinued
Discontinued
operations
Continuing
operations
Fiscal year 2021
Additions to intangible assets and property, plant and equipment
Free cash flow
(in millions of €)
With regard to capital expenditures for continuing operations, we expect a significant increase in fiscal 2022. In the coming years, up to
€0.6 billion are to be invested in Siemensstadt Square. This project initiated in fiscal 2019 aims to transform Siemens' existing industrial
area in Berlin into a modern urban district supporting a diverse range of purposes, including strengthening key technologies. Further
investments are planned in relation to Siemens Campus Erlangen. In addition, we continue to invest in attractive innovation fields through
Next47, our global venture capital unit.
(2,804)
(952)
(1,730)
9,996
(113)
10,109
3,599
(187)
6,697
2021
Fiscal year
Acquisitions of businesses, net of cash acquired
Additions to intangible assets and property, plant and equipment
Cash flows from investing activities
Cash flows from operating activities - continuing and discontinued operations
Cash flows from operating activities - discontinued operations
Cash flows from operating activities - continuing operations
Other reconciling items to cash flows from operating activities - continuing operations
Change in operating net working capital
Net income
Cash flows from operating activities
(14,391)
(704)
Purchase of investments and financial assets for investment purposes
Change in receivables from financing activities of SFS
(4,294)
8,316
2,055
(547)
Change in short-term debt and other financing activities
Repayment of long-term debt (including current maturities of long-term debt)
Issuance of long-term debt
Re-issuance of treasury shares and other transactions with owners
Our capital structure ratio as of September 30, 2021 increased to 1.5 from 1.3 a year earlier. The change was due primarily to the above-
mentioned increase in long-term debt and decreased cash and cash equivalents related to the acquisition of Varian.
Cash flows from financing activities
(15,494)
Cash flows from investing activities - continuing and discontinued operations
1,698
Cash flows from investing activities - discontinued operations
(17,192)
Cash flows from investing activities - continuing operations
1,084
Other disposals of assets
(631)
(1,523)
22
Purchase of treasury shares
Combined Management Report
Responsibilities are assigned for all relevant risks and opportunities, with the hierarchical level of responsibility depending on the
significance of the respective risk or opportunity. In a first step, assuming responsibility for a specific risk or opportunity involves choosing
one of our general response strategies. Our general response strategies with respect to risks are avoidance, transfer, reduction or
acceptance of the relevant risk. Our general response strategy with respect to opportunities is to "seize" the relevant opportunity. In a
second step, responsibility for a risk or opportunity also involves the development, initiation and monitoring of appropriate response
measures corresponding to the chosen response strategy. These response measures have to be specifically tailored to allow for effective
risk management. Accordingly, we have developed a variety of response measures with different characteristics. For example, we mitigate
the risk of fluctuations in currency and interest rates by engaging in hedging activities. Regarding our projects, systematic and
comprehensive project management with standardized project milestones, including provisional acceptances during project execution
and complemented by clearly defined approval processes, assists us in identifying and responding to project risks at an early stage, even
before the bidding phase. Furthermore, we maintain appropriate insurance levels for potential cases of damage and liability risks in order
to reduce our exposure to such risks and to avoid or minimize potential losses. Among others, we address the risk of fluctuation in
economic activity and customer demand by closely monitoring macroeconomic conditions and developments in relevant industries, and
by adjusting capacity and implementing cost-reduction measures in a timely and consistent manner if they are deemed necessary.
Worldwide there are risks from the transmission of infectious agents from animals to humans, from humans to humans and in other ways.
Epidemic, pandemic or other infectious developments such as bioterrorism to cause high disease rates in countries, regions or continents.
We constantly check information from the World Health Organization (WHO), the - Centers for Disease Control and Prevention in the U.S.
and Europe, the Robert Koch Institute in Germany and other institutions in order to be able to identify early epidemic or pandemic risks
and determine and initiate related mitigation actions as early as possible.
Our ERM process aims for early identification and evaluation of, and response regarding, risks and opportunities that could materially
affect the achievement of our strategic, operational, financial and compliance objectives. The time horizon is typically three years, and we
take a net risk approach, addressing risks and opportunities remaining after the execution of existing and effective measures and controls.
If risks have already been considered in plans, budgets, forecasts or the consolidated financial statements (e.g. as a provision or risk
contingency), they are supposed to be incorporated with their financial impact in the entity's business objectives. As a consequence, only
additional risks arising from the same subject (e.g. deviations from business objectives, different impact perspectives) should be
considered. In order to provide a comprehensive view of our business activities, risks and opportunities are identified in a structured way
combining elements of both top-down and bottom-up approaches. Reporting generally follows a quarterly cycle; we complement this
periodic reporting with an ad-hoc reporting process that aims to escalate critical issues in a timely manner. Relevant risks and opportunities
are evaluated in terms of impact and likelihood, considering different impact perspectives, including business objectives, reputation and
regulatory requirements. The bottom-up identification and prioritization process is supplemented by workshops with the respective
managements of our organizational units. The top-down element ensures that potential new risks and opportunities are discussed at
different management levels and are included in the subsequent reporting process, if found to be relevant. Reported risks and
opportunities are analyzed regarding potential cumulative effects and are aggregated within and for each of the organizational units
mentioned above.
Risk management at Siemens builds on a comprehensive, interactive and management-oriented Enterprise Risk Management (ERM)
approach that is integrated into the organization and that addresses both risks and opportunities. Our ERM approach is based on the
globally accepted COSO Standard (Committee of Sponsoring Organizations of the Treadway Commission) Enterprise Risk Management –
Integrating with Strategy and Performance (2017) and the ISO (International Organization for Standardization) Standard 31000 (2018)
and is adapted to Siemens requirements. The frameworks connect the ERM process with our financial reporting process and our internal
control system. They consider a company's strategy, the efficiency and effectiveness of its business operations, the reliability of its financial
reporting and compliance with relevant laws and regulations to be equally important.
We have implemented and coordinated a set of risk management and control systems which support us in the early recognition of
developments that could jeopardize the continuity of our business. The most important of these systems include our enterprise-wide
processes for strategic planning and management reporting. Strategic planning is intended to support us in considering potential risks and
opportunities well in advance of major business decisions, while management reporting is intended to enable us to monitor such risks
more closely as our business progresses. Our internal auditors regularly review the adequacy and effectiveness of our risk management.
Accordingly, if deficits are detected, it is possible to adopt appropriate measures for their elimination. This coordination of processes and
procedures is intended to help ensure that the Managing Board and the Supervisory Board are fully informed about significant risks in a
timely manner.
8.2.2 Enterprise risk management process
Our risk management policy stems from a philosophy of pursuing sustainable growth and creating economic value while managing
appropriate risks and opportunities and avoiding inappropriate risks. As risk management is an integral part of how we plan and execute
our business strategies, our risk management policy is set by the Managing Board. Our organizational and accountability structure requires
each of the respective managements of our organizational units to implement risk management programs that are tailored to their specific
industries and responsibilities, while being consistent with the overall policy.
8.2.1 Basic principles of risk management
Combined Management Report
8.2 Risk management
26
Overall, the actual development for Siemens and its segments may vary, positively or negatively, from our outlook due to the risks and
opportunities described below or if our expectations and assumptions do not materialize.
This outlook excludes burdens from legal and regulatory matters.
We expect profitable growth of our industrial businesses to drive an increase in EPS pre PPA to a range of €8.70 to €9.10, up from €8.32
in fiscal 2021. We assume that rigorous execution of our portfolio optimization strategy will contribute similarly as in fiscal 2021, when
we generated €1.5 billion in net income from the sale of our Flender business, divestment of our stakes in Bentley and ChargePoint, and
revaluation of our stake in Thoughtworks.
For the Siemens Group we expect mid-single-digit comparable revenue growth, net of currency translation and portfolio effects, and a
book-to-bill ratio above 1.
Our outlook for fiscal 2022 is based on continuing healthy growth in global GDP, albeit with slowing momentum, and our expectation that
the challenges to our businesses from COVID-19 and supply chain constraints will ease during fiscal 2022. With these conditions and given
our very strong fiscal year 2021, we expect our industrial businesses to continue their profitable growth.
8.1.3 Overall assessment
For our capital structure, defined as the ratio of industrial net debt to EBITDA (continuing operations), we expect in fiscal 2022 to achieve
a ratio below the prior-year figure of 1.5. We assume that our targeted cash conversion rate of 1 minus the annual comparable revenue
growth rate of the Group over a cycle of three to five years will support the achievement of the capital structure target in fiscal 2022.
Capital structure
For fiscal 2022, we expect ROCE adjusted for defined Varian-related acquisition effects, which was 15.1% in fiscal 2021, to improve in our
target range of 15% to 20%.
8.2.3 Risk management organization and responsibilities
Capital efficiency
To oversee the ERM process and to further drive the integration and harmonization of existing control activities to align with legal and
operational requirements, the Managing Board established a Risk Management and Internal Control Organization, led by the Head of
Assurance. In order to allow for a meaningful discussion of risk at the Siemens Group level, this organization aggregates individual risks
and opportunities of similar cause-and-effect nature into broader risk and opportunity themes. This aggregation naturally results in a
mixture of risks, including those with a primarily qualitative assessment and those with a primarily quantitative risk assessment.
Accordingly, we do not adopt a purely quantitative assessment of risk and opportunity themes. Thematic risk and opportunity assessments
Combined Management Report
7. Overall assessment of the economic position
As of September 30, 2021, we recorded, in total, €43.4 billion in notes and bonds, €2.3 billion in loans from banks, €0.1 billion in other
financial indebtedness and €2.9 billion in lease liabilities. Notes and bonds were issued mainly in the U.S. dollar and euro, and to a lesser
extent in the British pound.
We have credit facilities totaling €7.5 billion which were unused as of September 30, 2021.
For further information about our debt see Note 16 in Notes to Consolidated Financial Statements for fiscal 2021. For further information
about the functions and objectives of our financial risk management see Note 25 in Notes to Consolidated Financial Statements for fiscal
2021.
20
Combined Management Report
Off-balance-sheet commitments
As of September 30, 2021, the undiscounted amount of maximum potential future payments related primarily to credit and performance
guarantees amounted to €15.6 billion. This included primarily Siemens' obligations from performance and credit guarantees in connection
with the Siemens Energy business, for which Siemens has reimbursement rights towards Siemens Energy.
In addition to these commitments, there are contingent liabilities of €0.5 billion which mainly result from other guarantees, legal
proceedings and from joint and several liabilities of consortia. Other guarantees include €0.2 billion in connection with the Siemens Energy
business, for which Siemens has reimbursement rights towards Siemens Energy.
Irrevocable loan commitments amounted to €3.9 billion. A considerable portion of these commitments resulted from asset-based lending
transactions, meaning that the respective loans can be drawn only after the borrower has provided sufficient collateral.
For further information about our commitments and contingencies see Note 21 in Notes to Consolidated Financial Statements for fiscal
2021.
Share buyback
28
Competitive environment: The worldwide markets for our products, solutions and services are highly competitive in terms of pricing,
product and service quality, product development and introduction time, customer service, financing terms and shifts in market demands.
We face strong, established competitors as well as rising competitors from emerging markets and new industries, which may have a better
cost structure. Some industries in which we operate are undergoing consolidation, which may result in stronger competition, a change in
our relative market position, an increase in inventory of finished or work-in-progress goods, or unexpected price erosion. Furthermore,
Disruptive technologies: The markets in which our businesses operate experience rapid and significant changes due to the introduction
of innovative and disruptive technologies. In the fields of digitalization (e.g. IoT, artificial intelligence, cloud computing, Industry 4.0),
there are risks associated with new competitors, substitutions of existing products/solutions/services, new business models (e.g. in terms
of pricing, financing, extended scopes for project business or subscription models in the software business) and finally the risk that our
competitors may have more advanced time-to-market strategies and introduce their disruptive products and solutions faster than Siemens.
Our operating results depend to a significant extent on our technological leadership, our ability to anticipate and adapt to changes in our
markets and to optimize our cost base accordingly. Introducing new products and technologies requires a significant commitment to
research and development, which in return requires expenditure of considerable financial resources that may not always result in success.
Our results of operations may suffer if we invest in technologies that do not operate or may not be integrated as expected, or that are not
accepted in the marketplace as anticipated, or if our products, solutions or systems are not introduced to the market in a timely manner,
particularly compared to our competitors, or even become obsolete. We constantly apply for new patents and actively manage our
intellectual property portfolio to secure our technological position. However, our patents and other intellectual property may not prevent
competitors from independently developing or selling products and services that are similar to ours.
Economic, political and geopolitical conditions: We see significant uncertainties regarding the global economic outlook. In particular, a
renewed intensity of the COVID-19 pandemic could stall the recovery achieved to date, and even lead to a new recession, for example if
current vaccines are less effective with new variants, leading to the return of contact restrictions or lockdowns. There is also great
uncertainty about the long-term consequences of the pandemic for important Siemens customer industries, such as aerospace and non-
residential construction. Moreover, during the COVID-19 pandemic significant macroeconomic challenges have not been defused and in
some cases, they have intensified. A renewed escalation of the trade conflict between the U.S. and China and an intensified de-coupling
would significantly worsen global growth prospects. Adverse effects on confidence and investment activity would severely hit Siemens'
business. Increasing trade barriers, protectionism, sanctions and in particular technical regulations would negatively impact production
costs and productivity along our many value chains, as well as significantly impede or even hinder access to sales markets. A significant
risk to our sales potential and cost structure is coming from mounting supply chain bottlenecks, due to growing lack of availability of
intermediate goods, in particular electronic components. Bottlenecks in energy supply on the one hand and in access to raw materials on
the other would substantially reduce industrial production potential. The escalating possibility of major defaults in the Chinese property
sector, with potential spillover effects into the entire real estate market and financial markets, would significantly impact growth prospects
of one of our core geographic markets and might have reverberations even on the global financial system and the world economy. A
substantial increase in inflation rates could lead to serious distortions in global currency, capital, and foreign exchange markets, if central
banks initiate the tightening cycle too fast and too aggressively. Highly indebted (emerging and industrialized) countries could suffer from
increasing financing costs and a loss of investor confidence. Additional threats to the outlook could arise as well, ranging from market
pressure to intensify austerity measures to declining confidence in individual currency markets. Additionally, a strong increase of raw
material and intermediate goods prices would negatively impact Siemens's cost structure. Other significant risks could arise from
geopolitical tensions (particularly in the Near and Middle East, Hong Kong and Taiwan), the European Union's relations with Russia, the
economic vulnerability of several emerging markets (including Argentina, Turkey, Venezuela) and political upheavals. We are dependent
on the economic development of certain industries; a continuation or even an intensification of the cyclical and structural headwinds in
core customer industries, e.g., automotive or construction, would have adverse impact on our business prospects. Further business risk
would result from an abrupt weakening of Chinese economic growth. A terrorist mega-attack or a significant cybercrime incident, or a
series of such attacks or incidents in major economies, could depress economic activity globally and undermine consumer and business
confidence. Additionally, the highly interconnected global economy remains vulnerable to natural disasters or further pandemics.
In general, due to long-cycle businesses in our organizational units and the importance of long-term contracts for Siemens, there is usually
a time lag between changes in macroeconomic conditions and their impact on our financial results. In contrast, short-cycle business
activities react quickly to volatility in market demand. If the moderate growth of certain markets stalls again and if we are not successful
in adapting our production and cost structure to subsequent changes in conditions in the markets in which we operate, there can be no
assurance that we will not experience adverse effects. For example, our customers may modify, delay or cancel plans to purchase our
products, solutions and services, or fail to follow through on purchases or contracts already executed. Furthermore, the prices for our
products, solutions and services may decline to a greater extent than we currently anticipate. In addition, it may become more difficult for
our customers to obtain financing. Contracted payment terms, especially regarding the level of advance payments by our customers
relating to long-term projects, may become less favorable, which could negatively impact our financial condition. Siemens' global setup
with operations in almost all relevant economies, our wide range of offerings with varied exposures to business cycles, and our balanced
mix of business models (e.g. equipment, components, systems, software, services and solutions) help us to absorb impacts from adverse
developments in any single market.
Below we describe the risks that could have a material adverse effect on our business situation, financial condition (including effects on
assets, liabilities and cash flows), results of operations and reputation. The order in which the risks are presented in each of the four
categories reflects the currently estimated relative exposure for Siemens associated with these risks and thus provides an indication of the
risks' current importance to us. Additional risks not known to us or that we currently consider immaterial may also negatively impact our
business objectives and operations. Unless otherwise stated, the risks described below relate to all our organizational units.
8.3 Risks
as well as our risk-bearing capacity then form the basis for the evaluation of the company-wide risk and opportunity situation during the
quarterly board meetings. The Head of Assurance assists the Managing Board with the operation and oversight of the risk and internal
control system and reporting to the Audit Committee of the Supervisory Board.
27
Our forecast for net income takes into account a number of additional factors. We assume solid project execution to continue in fiscal
2022. We plan to increase the ratio of R&D expenses to revenue, which was 7.8% in fiscal 2021, to approximately 8% with a strong focus
on software and digital technologies. Severance charges, which were €0.4 billion in fiscal 2021, are expected at €0.2 billion in fiscal 2022.
Given the above-mentioned assumptions, we expect profitable growth of our industrial businesses to drive an increase in net income and
EPS pre PPA to a range of €8.70 to €9.10, up from €8.32 in fiscal 2021.
8.3.1 Strategic risks
In addition, results for Siemens Energy Investment, which includes Siemens' share of Siemens Energy AG's profit after tax, amounting to
a negative €0.2 billion in fiscal 2021, is expected to improve; amortization of assets resulting from purchase price allocation due to the
initial recognition of the investment at fair value in September 2020, which are also included in Siemens Energy Investment, are expected
to decline to €0.1 billion in fiscal 2022, from €0.2 billion in fiscal 2021. We anticipate that Siemens Real Estate will continue with real
estate disposals depending on market conditions, at a similar level as in fiscal 2021. Results for Innovation also are expected on the prior-
year level, which was a negative €0.2 billion. Results related to Governance, were a negative €0.8 billion in fiscal 2021; we expect a
substantial improvement in fiscal 2022, to a negative €0.5 billion. Centrally carried pension expense are expected to be on prior-year level,
which was a negative €0.2 billion. Amortization of intangible assets acquired in business combinations, which was €0.7 billion in fiscal
2021, is expected at €0.9 billion due mainly to the acquisition of Varian in April 2021. Financing, eliminations and other items, which were
a positive €0.5 billion in fiscal 2021, are expected to include substantial parts of gains from revaluation and from divestments in fiscal
2022, resulting from our portfolio optimization strategy, among them the above-mentioned gain related to Fluence.
8.1.1 Worldwide economy
8.1 Report on expected developments
8. Report on expected developments and associated material
opportunities and risks
Combined Management Report
224
24
We intend to continue providing an attractive shareholder return. The Siemens Managing Board, in agreement with the Supervisory Board,
proposes a dividend of €4.00 per share, up from €3.50 per share a year earlier.
Free cash flow from continuing and discontinued operations for fiscal 2021 increased 29% year-over-year to €8.2 billion, reaching a new
high.
We evaluate our capital structure using the ratio of Industrial net debt to EBITDA. Due primarily to an increase in net debt year-over-year,
this ratio rose to 1.5, compared to 1.3 in fiscal 2020. We thus achieved our forecast given in our Annual Report 2020, which was for a ratio
above 1.0 in fiscal 2021.
Combined Management Report
23
Net income in fiscal 2021 rose 59% to €6.7 billion, and basic EPS from net income increased 54% to €7.68. We thus exceeded the forecast
given in our Annual Report 2020, which was for a moderate increase in net income, and also exceeded our raised forecast after the third
quarter, which was for net income in the range of €6.1 billion to €6.4 billion. This improvement was due mainly to the aforementioned
significantly higher Adjusted EBITA Industrial Business and the lower loss outside Industrial Business. In addition, discontinued operations,
largely related to the sale of Flender, contributed income of €1.1 billion in fiscal 2021.
Adjusted EBITA margin Industrial Business rose to 15.0%, up from 14.3% a year earlier. With Adjusted EBITA margins of 11.6%, 15.8% and
9.3%, respectively, Smart Infrastructure, Siemens Healthineers and Mobility improved their Adjusted EBITA margins year-over-year. The
Adjusted EBITA margin of 20.4% at Digital Industries came in below the prior-year level of 21.7%, which included the above-mentioned
substantial positive effect related to Bentley, which added 5.1 percentage points to Digital Industries' Adjusted EBITA margin.
Siemens Financial Services sharply increased earnings before taxes due to lower expenses for credit risk provisions year-over-year, resulting
in a return on equity after tax of 15.4%. In addition, results outside Industrial Business in fiscal 2021 benefited from a €0.3 billion
revaluation gain and gains related to transfers of assets to Siemens Pension Trust e.V. in Germany were higher in the current period. A
€0.4 billion loss related to Siemens Energy Investment was due mainly to Siemens Energy's execution of planned restructuring measures
to improve its competitiveness and expenses from amortization of assets resulting from purchase price allocation. For comparison, results
outside Industrial Business a year earlier included an impairment of €0.5 billion on our equity investment stake in Valeo Siemens
eAutomotive GmbH.
Adjusted EBITA Industrial Business rose 17% to €8.8 billion on growth in all industrial businesses, led by Siemens Healthineers on strong
earnings development in its diagnostics business driven by strong demand for rapid coronavirus antigen tests and by Smart Infrastructure
on increases in all its businesses. Adjusted EBITA at Digital Industries rose moderately even though prior-year results benefited from a €0.8
billion positive effect related mainly to a revaluation of the stake in Bentley. Adjusted EBITA at Mobility also rose moderately, driven by its
rail infrastructure business.
Orders rose 23% year-over-year to €71.4 billion, for a book-to-bill ratio of 1.15, thus fulfilling our expectation of a ratio above 1. All our
four industrial businesses increased orders year-over-year. Mobility achieved the highest growth rate due to a sharply higher volume from
large orders, including its largest ever order in the Americas, worth €2.8 billion, for trainsets and associated services. Substantial order
growth at Siemens Healthineers included new volume from the acquisition of Varian. Significant order growth at Digital Industries was
driven mainly by its factory automation and motion control businesses, while orders at Smart Infrastructure increased clearly on growth
in all its businesses, with the strongest contributions coming from the products business and the systems business.
Revenue was also higher in all our industrial businesses, rising to €62.3 billion, a 13% increase year-over-year. The strongest increases
came from Siemens Healthineers and Digital Industries, which both posted double-digit growth. Revenue growth at Siemens Healthineers
included all businesses with the highest increases coming from the diagnostics and imaging businesses. Revenue development at Digital
Industries also included increases in all its businesses led by factory automation and motion control. Revenue growth at Smart
Infrastructure was driven by its products business and its systems business. Revenue at Mobility rose slightly, as parts of its businesses
continued to be impacted by restrictions related to COVID-19. Excluding currency translation and portfolio effects, revenue for Siemens
grew 11.5%. We thus exceeded our forecast given in our Annual Report 2020, which was to achieve moderate comparable revenue growth
and we met our raised guidance given after the third quarter of fiscal 2021, which was to achieve comparable revenue growth of 11% to
12%.
Following the deep recession during fiscal 2020, many of Siemens' key customer industries including automotive, machine building,
pharmaceuticals, chemicals, electronics, and cloud services recovered or continued to grow during fiscal 2021. Although COVID-19 led to
a significant drop in public transit ridership, recovery programs in many countries have been allocating significant funds to transport
providers, resulting in strong order development. During the fiscal year, Siemens succeeded in maintaining its supply chains and delivery
capacity and continued to be a reliable partner for its customers, despite more challenging supply condition. These developments were
reflected in our strong financial performance for fiscal 2021. We raised our outlook during the fiscal year, most recently after the third
quarter, and reached or exceeded all the targets set for our primary measures for fiscal 2021. We achieved revenue growth of 11.5% net
of currency translation and portfolio effects and delivered net income of €6.7 billion. Return on capital employed (ROCE) was double-digit
at 13.1% and our capital structure ratio came in at 1.5.
In fiscal 2021, Siemens made further progress in sharpening its business focus by divesting activities such as the Flender business on one
side, while on the other side strengthening our industrial businesses with a number of significant acquisitions. Important examples are: in
the second quarter of fiscal 2021, the acquisition of C&S Electric, a provider of electrical and electronic equipment for infrastructure, power
generation, transmission and distribution in India, to strengthen Smart Infrastructure's position in that country as a supplier of low-voltage
power distribution and electrical installation technology; in the third quarter of fiscal 2021, the acquisition of Varian, a global leader in the
field of cancer care, with solutions especially in radiation oncology and related digital solutions and applications, which provides a good
complement to Siemens Healthineers' activities in medical imaging, laboratory diagnostics and interventional procedures; in the fourth
quarter of fiscal 2021, the acquisition of Supplyframe, a marketplace for the global electronics value chain, with which Digital Industries
intends to significantly strengthen digital marketing and accelerate sales of its offerings to small and medium-sized companies. At the
beginning of the first quarter of fiscal 2022, Mobility closed the acquisition of Sqills, a provider of cloud-based inventory management,
reservation, and ticketing software for public transport operators, which enhances Mobility's existing offerings for increasing the
availability, capacity and utilization of public transportation.
We anticipate our tax rate for fiscal 2022 to be in the range of 25% to 29%, depending strongly on portfolio-related gains, compared to
25% in fiscal 2021. This assumption does not take into consideration possible impacts from potential major tax reforms. We do not expect
material influence on financial results from discontinued operations in fiscal 2022.
Siemens successfully executed on its strategy as a focused technology company in fiscal 2021, following the spin-off and public listing of
Siemens Energy in September 2020. All our industrial businesses are addressing highly attractive markets in industrial automation,
infrastructure, transportation and healthcare. With our offerings we are taking advantage of growth trends such as digitalization and
decarbonization, for example by helping our customers to combine the real and the digital worlds. With the financial framework that we
presented in June 2021, we have set ambitious new targets: we aim to further accelerate our profitable growth while placing an even
greater emphasis on free cash flow.
After the deepest recession and the fastest rebound in decades, in calendar 2020 and calendar 2021, respectively, the global economic
recovery is expected to continue with slowing momentum in fiscal 2022. Global gross domestic product (GDP) is expected to expand by
4.3% in calendar 2022. The outlook is still subject to a high level of uncertainty. The biggest source of concern remains COVID-19. New
variants could emerge before widespread vaccination is reached globally, or they could escape existing immunity, while vaccine
effectiveness might fade more quickly than expected.
However, in our baseline forecast we assume the impact of the Delta variant will recede further, vaccination rates will continue to rise,
especially in developing countries, and the global economy gradually will return to normal. The service sector will reopen further, and
consumer spending for services will recover, which will contribute significantly to the global recovery. This is supported by consumers still
having substantial pent-up savings which will continue to fuel consumer demand. In addition, companies in general have low levels of
inventory and will seek to re-stock, adding to demand, even if consumer spending should slow. Also, many companies might want to have
structurally higher inventory levels to improve supply chain resilience, as supply chains were often stressed during the pandemic. However,
we expect supply shortages to continue in the first half of calendar 2022.
ROCE for fiscal 2021 rose to 13.1%, up from 7.8% in fiscal 2020. This increase was due to a combination of sharply higher net income and
clearly lower average capital employed year-over-year. We thus exceeded our forecast for ROCE given in our Annual Report 2020, which
was for ROCE to remain in the single-digit range in fiscal 2021.
The necessary adjustments in the Chinese property sector, a high ratio of debt to GDP and worsening business conditions will limit China's
GDP growth in calendar 2022 to 5.7%. The European Union economy is expected to expand by 4.0% in calendar 2022, still supported by
catch-up effects and announced stimulus programs becoming effective. In the U.S., GDP is expected to expand by 4.3%, where government
spending has a negative effect on GDP growth, as it is reduced from calendar 2021 on, implying a negative fiscal impulse. An important
pre-requisite is preventing federal limits on borrowing (the debt ceiling) from disrupting government operations and spending programs.
Global fixed investments are expected to expand by 4.4% in calendar 2022, after already growing by 6.4% in calendar 2021. Important
customer industries for Siemens are participating in the global recovery (e.g. electronics, pharma, materials, chemicals). Yet persistent
supply bottlenecks have the potential to significantly derail this recovery, such as in the automotive sector due to semiconductor shortages.
The infrastructure sector (particularly public transport and electricity grids) will benefit from various green stimulus programs.
Overall, the market environment for Siemens is expected to remain favorable in fiscal 2022, but with some deceleration compared to fiscal
2021. Risks for the outlook are still substantial.
We assume that rigorous execution of our portfolio optimization strategy in fiscal 2022 will contribute similarly as in fiscal 2021, when we
generated €1.5 billion in net income from the sale of our Flender business, divestment of our stakes in Bentley and ChargePoint, Inc., and
revaluation of our stake in Thoughtworks. In October 2021, Siemens already recognized a €0.3 billion pretax gain (€0.2 billion after tax)
related to its investment in Fluence Energy, LLC (Fluence).
Besides a potential re-emergence of the pandemic, further risks exist for fiscal 2022. Supply bottlenecks might last longer and restrain the
recovery. While we expect price pressures to subside for the most part in fiscal 2022 in our baseline outlook, persistent supply bottlenecks
or further energy price increases could fuel inflation and inflation expectations, and thus prompt a faster-than-anticipated monetary
tightening. This could reverberate in financial markets and weigh on investment spending. Risks for financial markets could also emerge
from other sources, e.g. an escalation of the U.S.-China trade and technology conflict, high corporate or government debt levels or China's
property sector which could undergo a substantial correction after a period of over-investment.
Profitability
As of September 30, 2021, our order backlog totaled €85 billion, and we expect conversion from the backlog to strongly support revenue
growth in fiscal 2022 with approximately €34 billion of past orders converted to current revenue. For expected conversion of order backlog
to revenue for our respective segments, see chapter 3 Segment information.
For comparable revenue, net of currency translation and portfolio effects, we expect the Siemens Group to achieve mid-single-digit
growth. Furthermore, we anticipate that orders in fiscal 2022 will exceed revenue for a book-to-bill ratio above 1.
Revenue growth
Siemens Healthineers expects to achieve comparable revenue growth in the range of 0% to 2% in fiscal 2022. The profit margin, which
was 15.8% in fiscal 2021, is expected to continue to improve.
Combined Management Report
25
Smart Infrastructure expects for fiscal 2022 comparable revenue growth of 5% to 8%. The profit margin is expected to be 12% to 13%.
Mobility expects for fiscal 2022 comparable revenue growth of 5% to 8%. The profit margin is expected to be 10.0% to 10.5%.
Siemens Financial Services expects to further improve Earnings before taxes year-over-year. Return on equity (ROE) (after tax) is expected
to reach the lower half of the new target range of 15% to 20%.
We expect our fully consolidated units within Portfolio Companies to reach profit margins above 5%, while results from the equity
investment are expected to be volatile and negative.
We expect our industrial businesses to continue their profitable growth.
Segments
This outlook excludes burdens from legal and regulatory matters.
We are exposed to currency translation effects, mainly involving the U.S. dollar, the British pound and currencies of emerging markets,
particularly the Chinese yuan. While we expect volatility in global currency markets to continue in fiscal 2022, we have improved our
natural hedge on a global basis through geographic distribution of our production facilities in the past. Nevertheless, Siemens is still a net
exporter from the Eurozone to the rest of the world, so a weak euro is principally favorable for our business and a strong euro is principally
unfavorable. In addition to the natural hedging strategy just mentioned, we also hedge currency risk in our export business using derivative
financial instruments. We expect these steps to help us limit effects on income related to currency in fiscal 2022. Based on currency
exchange rates as of the beginning of November 2021, we do not expect significant currency effects on nominal growth rates in volume
and profit for our businesses in fiscal 2022.
We are basing our outlook for fiscal 2022 on the above-mentioned expectations and assumptions regarding the overall economic situation,
including continuing healthy growth in global GDP albeit with slowing momentum, and also on the specific market conditions we expect
for our respective industrial businesses, as described in chapter 3 Segment information. Furthermore, we assume that the challenges to
our businesses from COVID-19 will ease during fiscal 2022. Although we also expect supply chain constraints to recede somewhat during
fiscal 2022, we expect continued impacts from higher prices for raw materials and components and from wage increases, which we intend
to mitigate by adjusting prices for our own products, solutions and services.
The forecasts presented here for GDP and fixed investments are based on a report from IHS Markit dated October 15, 2021.
Digital Industries expects for fiscal 2022 to achieve comparable revenue growth of 5% to 8%. The profit margin is expected to be 19% to
21%, including known headwinds of up to two percentage points associated with the strategic transition to software as a service (SaaS)
in parts of its large software business.
8.1.2 Siemens Group
Gross profit
as percentage of revenue
Research and development expenses
Selling and general administrative expenses
Income taxes
Financial income, net
Income from business activity
Profit carried forward
Cost of Sales
Net income
Other operating income (expenses), net
thereof Income from investments, net 5,303 (prior year 8,078)
9. Siemens AG
(in millions of €)
Statement of Income of Siemens AG in accordance with German Commercial Code (condensed)
9.1 Results of operations
As of September 30, 2021, the number of employees was 49.100.
The Supervisory Board and the Managing Board propose from the unappropriated net income of Siemens AG for the fiscal year ended
September 30, 2021, amounting to €3,400 million to distribute a dividend of €4.00 per share of no par value entitled to the dividend. The
proposed dividend represents a total payout of €3.2 billion based on the estimated number of shares entitled to dividend at the date of
the Annual Shareholders' Meeting. Based on Net income of Siemens group attributable to shareholders of Siemens AG of €6.2 billion for
fiscal 2021, the dividend payout percentage is 52%. We intend to continue providing an attractive return to our shareholders. This includes
striving for a dividend per share that exceeds the amount of the preceding year, or that at least matches the prior-year-level. For fiscal
2022, we expect that net income of Siemens AG will be sufficient to fund the distribution of a corresponding dividend.
In fiscal 2021, results for Siemens AG arise mainly from the business activities of Digital Industries and Smart Infrastructure and are
influenced significantly by the results of subsidiaries and investments we own either directly or indirectly. The business development of
Siemens AG is fundamentally subject to the same risks and opportunities as the Siemens Group. Therefore, the foregoing explanations for
the Siemens Group apply also for Siemens AG.
The Annual Financial Statements of Siemens AG have been prepared in accordance with the regulations set forth in the German
Commercial Code (Handelsgesetzbuch) and the German Stock Corporation Act (Aktiengesetz).
Combined Management Report
34
Allocation to other retained earnings
Our internal audit function systematically evaluates our financial reporting integrity, the effectiveness of the control system and the risk
management system, and adherence to our compliance policies. Siemens Healthineers has its own internal audit department and annual
audit plan. Topics from the annual audit plan of Siemens Healthineers that are also relevant for our Managing Board and Audit Committee
must be mandated first by Siemens Healthineers' Managing Board and Audit Committee and subsequently by our Managing Board and
Audit Committee. The audit procedures for these topics will be generally executed by joint teams including members of our and Siemens
Healthineers' internal audit functions, thus respecting the interests of both Siemens AG and Siemens Healthineers. In addition, the Audit
Committee is integrated into our control system. In particular, it oversees the accounting and accounting process and the effectiveness of
the internal control system, the risk management system and the internal audit system. Moreover, we have rules for accounting-related
complaints.
After the acquisition of Varian, Siemens Healthineers has commenced to integrate the former Varian entities into our accounting-related
internal control and risk management system. The integration efforts for the accounting-related internal control system will continue in
fiscal 2022.
Revenue
Fiscal year
5,797
2021
15,094
(10,960)
Siemens Healthineers is subject to our Group-wide principles for the accounting-related internal control and risk management system and
is responsible for adhering to those principles. The management of Siemens Healthineers provides periodic signoffs to the Managing Board
of Siemens AG, certifying the effectiveness of its accounting-related internal control system as well as the completeness, accuracy, and
reliability of the financial data reported to us.
78
(20)
0%
5,192
5,166
(12)%
6,557
65%
(555)
(196)
14%
% Change
(3,490)
6%
(1,677)
(1,570)
27%
27%
(5)%
4,357
4,135
9%
(8)%
16,389
(12,032)
2020
(2,999)
On a quarterly basis, we execute an internal certification process. Management at different levels of our organization, supported by
confirmations by managements of entities under their responsibility, confirms the accuracy of the financial data that has been reported to
Siemens' corporate headquarters and reports on the effectiveness of the related control systems.
Combined Management Report
The base data used in preparing our financial statements consists of the closing data reported by the operations of Siemens AG and its
subsidiaries. The preparation of the closing data of most of our entities is supported by an internal shared services organization.
Furthermore, other accounting activities, such as governance and monitoring activities, are usually bundled on a regional level. In
particular cases, such as valuations relating to post-employment benefits, we use external experts. The reported closing data is used to
prepare the financial statements in the consolidation system. The steps necessary to prepare the financial statements are subject to both
manual and automated controls.
Changes of regulations, laws and policies: As a diversified company with global businesses we are exposed to various product- and
country-related regulations, laws and policies influencing our business activities and processes. According to observations and analysis,
there is an increasing risk that existing technical regulations in target markets will suddenly change, or new ones will be set in force, which
determine market access criteria that our products do not meet. The affected products would lose marketability in this market. The way
of resolving the risk of a sales-stop depends on the case of how to correct the non-conformity. In case the product can technically stay as
is, while it has to undergo new and additional conformity assessment and certification, there will be considerable effort and cost to carry
out the needed testing and certification procedures. In a worse case, the affected product will need re-engineering or re-design to meet
the requirements of the changed or new technical regulation even before it can become re-assessed and certified for market approval.
Along with other measures, Siemens has established a global compliance organization that conducts among others compliance risk
mitigation processes such as Compliance Risk Assessments or initiates internal audit activities performed by the internal assurance
department.
In addition, future developments in ongoing and potential future investigations, such as responding to the requests of governmental
authorities and cooperating with them, could divert management's attention and resources from other issues facing our business.
Furthermore, we might be exposed to compliance risks in connection with recently acquired operations that are in the ongoing process of
integration.
In its global business, Siemens does part of its business with state-owned enterprises and governments. We also participate in a number
of projects funded by government agencies and intergovernmental and supranational organizations, such as multilateral development
banks. Ongoing or potential future investigations into allegations of corruption, antitrust violations or other violations of law could as well
impair relationships with such parties or could result in our exclusion from public contracts. Such investigations may also adversely affect
existing private business relationships and our ability to pursue potentially important strategic projects and transactions, such as strategic
alliances, joint ventures or other business alliances, or could result in the cancellation of certain of our existing contracts. Moreover, third
parties, including our competitors, could initiate significant litigation.
Current and future investigations regarding allegations of corruption, of antitrust violations and of other violations of law:
Proceedings against us or our business partners regarding allegations of corruption, of antitrust violations and of other violations of law
may lead to fines as well as penalties, sanctions, injunctions against future conduct, profit disgorgements, disqualifications from directly
and indirectly engaging in certain types of business, the loss of business licenses or permits, other restrictions and legal consequences as
well as negative public media coverage. Accordingly, we may, among other things, be required to comply with potential obligations and
liabilities arising in connection with such investigations and proceedings, including potential tax penalties. Moreover, any findings related
to public corruption that are not covered by the 2008 and 2009 corruption charge settlements, which we concluded with U.S. and German
authorities, may endanger our business with government agencies and intergovernmental and supranational organizations. Monitors
could again be appointed to review future business practices and we may otherwise be required to further modify our business practices
and our compliance program.
8.3.4 Compliance risks
For further information on post-employment benefits, derivative financial instruments, hedging activities, financial risk management and
related measures, see Notes 17, 24 and 25 in Notes to Consolidated Financial Statements for fiscal 2021.
Credit risks: We provide our customers with various forms of direct and indirect financing of orders and projects, including guarantees.
Siemens Financial Services in particular bears credit risks due to such financing activities if, for example, customers do not meet obligations
arising from these financing arrangements, meet them only partially, or meet them late.
Liquidity and financing risks: Our treasury and financing activities could face adverse deposit and/or financing conditions from negative
developments related to financial markets, such as limited availability of funds and hedging instruments, an updated evaluation of our
solvency, particularly from rating agencies, negative interest rates, and impacts arising from more restrictive regulation of the financial
sector, central bank policy, or the usage of financial instruments. Widening credit spreads due to uncertainty and risk aversion in the
financial markets might lead to adverse changes in the market values of our financial assets, in particular our derivative financial
instruments.
Market price risks: We are exposed to fluctuations in exchange rates, especially between the U.S. dollar and the euro, because a high
percentage of our business volume is conducted as exports from Europe to areas using the U.S. dollar. In addition, we are exposed to
effects involving the currencies of emerging markets, in particular the Chinese yuan. Appreciable changes in euro exchange rates could
materially change our competitive position. We are also exposed to fluctuations in interest rates. Even hedging activities to mitigate such
risks may result in a reverse effect. Fluctuations in exchange or interest rates, negative developments in the financial markets and changes
in central bank policies could therefore negatively impact our financial results.
Risks from pension obligations: The provisions for pensions and similar obligations may be affected by changes in actuarial assumptions,
including the discount rate, as well as by movements in financial markets or a change in the mix of assets in our investment portfolio.
Additionally, they are subject to legal risks with regard to plan design among other factors. A significant increase in the underfunding may
have a negative effect on our capital structure and rating, and thus may tighten refinancing options and increase costs. In order to comply
with local pension regulations in selected foreign countries, we may face an economic risk of increasing cash outflows due to change in
funding level according to local regulations of our pension plans in these countries or to changes in the regulations themselves.
Audits by tax authorities and changes in tax regulations: We operate in nearly all countries of the world and therefore are subject to
many different tax regulations. Changes in tax laws in any of these jurisdictions could result in higher tax expenses and increased tax
payments. Furthermore, legislative changes could impact our tax receivables and liabilities as well as deferred tax assets and deferred tax
liabilities. In addition, the uncertain legal environment in some regions could limit our ability to enforce our rights. As a globally operating
organization, we conduct business in countries subject to complex tax rules, which may be interpreted in different ways. Future
interpretations or developments of tax regimes may affect our business situation, financial condition and results of operations. We are
regularly audited by tax authorities in various jurisdictions and we continuously identify and assess relevant risks.
8.3.3 Financial risks
30
Project-related risks: A number of our segments conduct activities under long-term contracts that are awarded on a competitive bidding
basis. Such contracts typically arise at Mobility and in various activities of Smart Infrastructure or Portfolio Companies. Some of these
contracts are inherently risky because we may assume substantially all of the risks associated with completing a project and meeting post-
completion warranty obligations. For example, we may face the risk that we must satisfy technical requirements of a project even though
we have not gained experience with those requirements before winning the project. The profit margins realized on fixed-priced contracts
may vary from original estimates as a result of changes in costs and productivity over a contract's term. We sometimes bear the risk of
unanticipated project modifications, shortage of key personnel, quality problems, financial difficulties of our customers and/or significant
partners, cost overruns or contractual penalties caused by unexpected technological problems, unexpected developments at the project
sites, unforeseen changes or difficulties in the regulatory or political environment, performance problems with our suppliers,
subcontractors and consortium partners or other logistical difficulties. Some of our multi-year contracts also contain demanding
installation and maintenance requirements in addition to other performance criteria relating to timing, unit cost and compliance with
government regulations, which, if not satisfied, could subject us to substantial contractual penalties, damages, non-payment and contract
termination. There can be no assurance that contracts and projects, in particular those with long-term duration and fixed-priced
calculation, can be completed profitably. To tackle those risks, we established a global project management organization to systematically
improve the technical and commercial capabilities of our project management personnel. For very complex projects we conduct dedicated
risk assessments in very early stages of the sales phase before we decide to hand over a binding offer to our customers.
Shortage of skilled personnel: Competition for diverse and highly qualified personnel (e.g. specialists, experts, digital talent) remains
intense in the industries and regions in which our businesses operate. We have ongoing demand for highly skilled employees and a need
to enhance diversity, inclusion and sense of belonging in our workforce. Our future success depends in part on our continued ability to
identify, assess and hire engineers, digital talent and other qualified personnel. We must also integrate, develop and retain them after they
join us, which appears especially relevant in times of a new, increasingly virtual working environment. We address these topics for example
by strengthening the capabilities and skills of our talent acquisition teams and a strategy of proactive search for people with the required
capabilities in our respective industries and markets. Technology and digitalization help us to be more effective in attracting and selecting
diverse talent. Furthermore, we have a focus on diversity and structured succession planning.
Internal programs and initiatives: We are in a continuous process of operational optimization and constantly engage in cost-reduction
initiatives, including ongoing capacity adjustment measures and structural initiatives. Consolidation of business activities and
manufacturing facilities, outsourcings, joint ventures and the streamlining of product portfolios are all part of these cost-reduction efforts.
These measures may not be implemented as planned, may turn out to be less effective than anticipated, may become effective later than
estimated or may not become effective at all. Any future contribution of these measures to our profitability will be influenced by the actual
savings achieved and by our ability to sustain them. In case of restructuring and outsourcing activities, there could be delays in product
deliveries or we might even experience delivery failures. Furthermore, delays in critical R&D projects could lead to negative impacts in
running projects. We constantly control and monitor the progress of these projects and initiatives using standardized controlling and
milestone tracking approaches.
Supply chain management: The financial performance of our operating units depends on reliable and effective supply chain management
for components, sub-assemblies and materials. Capacity constraints and supply shortages resulting from ineffective supply chain
management may lead to production bottlenecks, delivery delays, quality issues and additional costs. We also rely on third parties to supply
us with parts, components and services. Using third parties to manufacture, assemble and test our products may reduce our control over
manufacturing yields, quality assurance, product delivery schedules and costs. Although we work closely with our suppliers to avoid supply-
related problems, there can be no assurance that we will not encounter supply problems in the future, especially if we use single-source
suppliers for critical components. Shortages and delays could materially harm our businesses. Unanticipated increases in the price of
components or raw materials due to market shortages or other reasons could also adversely affect performance. Furthermore, we may be
exposed to the risk of delays and interruptions in the supply chain as a consequence of catastrophic events (including pandemics), cyber
incidents or suppliers' financial difficulties, particularly if we are unable to identify alternative sources of supply or means of transportation
in a timely manner or at all. Besides other measures, we mitigate price fluctuation in global raw material markets with various hedging
instruments.
of cybersecurity threats and higher levels of professionalism in computer crime, which pose a risk to the security of products, systems and
networks and the confidentiality, availability and integrity of data. According to various external data sources, this trend has accelerated
during the COVID-19 pandemic. Especially the number of phishing attacks as well as the number of malicious websites have increased
significantly. Moreover, the information technology market is concentrated among a small number of information technology and
software vendors, which could lead to dependence on a single provider. There can be no assurance that the measures aimed at protecting
our intellectual property and portfolio will address these threats under all circumstances. There is a risk that confidential information (data
privacy) may be stolen or that the integrity of our portfolio may be compromised, e.g. by attacks on our networks, social engineering, data
manipulations in critical applications and a loss of critical resources, resulting in financial damages. Cybersecurity covers the IT of our entire
enterprise including office IT, systems and applications, special purpose networks, and our operating environments such as manufacturing
and research and development (R&D). Like other large multinational companies, we face active cyber threats from sophisticated
adversaries that are supported by organized crime and nation-states engaged in economic espionage or even sabotage. We strive to
mitigate these risks by employing a number of measures, including employee training, considering new models of flexible working
environments, and comprehensive monitoring of our networks and systems through cyber defense with an artificial intelligence solution
to identify attacks faster and prevent damage to society and especially to critical infrastructures, our customers, our partners and Siemens
overall. We initiated the industrial "Charter of Trust," signed by a growing group of global companies, which sets out principles for building
trust in digital technologies and creating a more secure digital world. Nonetheless, our systems, products, solutions and services, as well
as those of our service providers, remain potentially vulnerable to attacks. Such attacks could potentially lead to the publication,
manipulation or leakage of information such as through industrial espionage. They could also result in deliberate improper use of our
systems, vulnerable products, production downtimes and supply shortages, with potential adverse effects on our reputation, our
competitiveness and results of operations. For increased protection of Siemens and reduction of a potential financial impact caused by
cyber incidents, the risk transfer possibilities have been evaluated. As a result of an international insurance tender, the currently insurable
cybersecurity risks have been to a partial extent transferred to a consortium of insurance companies.
Combined Management Report
29
Cyber/Information security: Digital technologies are deeply integrated into our business portfolio. Further integration of information
technology into products and services in conjunction with changing business strategies (such as outsourcing, globally distributed
development, a lesser degree of sole production) are leading to an increasingly distributed supply chain, making efficient controls difficult.
The fact of a large number of suppliers requires a significant effort for the initial and regular verification of the effective implementation
of cybersecurity requirements by suppliers. Siemens business entities might lose market access if their products, solutions and services do
not comply with increased regulations and legal requirements for cybersecurity in their respective countries. We observe a global increase
8.3.2 Operational risks
Portfolio measures, at-equity investments, other investments and strategic alliances: Our strategy includes divesting our activities in
some business areas and strengthening others through portfolio measures, including mergers and acquisitions. With respect to
divestments, we may not be able to divest some of our activities as planned, and the divestitures we do carry out could have a negative
impact on our business situation, financial condition, results of operations and reputation. Mergers and acquisitions are inherently risky
because of difficulties that may arise when integrating people, operations, technologies and products. There can be no assurance that any
of the businesses we acquire can be integrated successfully and in a timely manner as originally planned, or that they will perform as
anticipated once integrated. In addition, we may incur significant acquisition, administrative, tax and other expenditures in connection
with these transactions, including costs related to integration of acquired businesses. Furthermore, portfolio measures may result in
additional financing needs and adversely affect our capital structure. Acquisitions can lead to substantial additions to intangible assets,
including goodwill, in our statements of financial position. If we were to encounter continuing adverse business developments or if we
were otherwise to perform worse than expected at acquisition activities, then these intangible assets, including goodwill, might have to
be impaired, which could adversely affect our business situation, financial condition and results of operations. Our investment portfolio
includes investments held for purposes other than trading and other investments. Any factors negatively influencing the financial
condition and results of operations of our at-equity investments and other investments could have an adverse effect on our equity pick-
up related to these investments or may result in a related write-off. In addition, our business situation, financial condition and results of
operations could also be adversely affected in connection with loans, guarantees or non-compliance with financial covenants related to
these investments. Furthermore, such investments are inherently risky as we may not be able to sufficiently influence corporate
governance processes or business decisions taken by our at-equity investments, other investments and strategic alliances, which may have
a negative effect on our business and especially on our reputation. In addition, joint ventures bear the risk of difficulties that may arise
when integrating people, operations, technologies and products. Strategic alliances may also pose risks for us because we compete in
some business areas with companies with which we have strategic alliances. Besides other measures, we handle these risks with
standardized processes as well as dedicated roles and responsibilities in the areas of mergers, acquisitions, divestments and carve-outs.
This includes the systematic treatment of all contractual obligations and post-closing claims.
there is a risk that critical suppliers are taken over by competitors and a risk that competitors are increasingly offering services to our
installed base. We address these risks with various measures, for example benchmarking, strategic initiatives, sales push initiatives,
executing productivity measures and target cost projects, rightsizing of our footprint, outsourcings, mergers and joint ventures and
optimizing our product and service portfolio. We continuously monitor and analyze competitive, market and industry information in order
to be able to anticipate unfavorable changes in the competitive environment rather than merely reacting to such changes.
COVID-19 pandemic (COVID-19): The COVID-19 situation may worsen, as the number of new infections is rising again in many countries.
At the same time, the number of cases and the severe course of the disease will develop very differently depending on the respective
vaccination rate in the countries. The impact of the pandemic therefore varies considerably between regions and customer sectors.
Governments and other local authorities are working to contain the spread of infection by implementing various countermeasures such
as contact restrictions, adherence to minimum hygienic standards, wearing of respiratory masks, vaccine mandates, and vaccination and
testing services to avoid widespread curfews and restrictions on the opening of certain sectors of the economy. Depending on
epidemiological trends and political pressure, governments are expected to relax existing restrictions and avoid new ones to reduce the
associated economic harm. The extent and duration of the individual impacts on our business are difficult to predict. For example, if
containment measures are initiated at short notice or last an unpredictably long time, our business may be significantly impacted in ways
that exceed current expectations and go beyond mitigation measures already in place. We could face unexpected closures of sites, factories
or office buildings of our suppliers, customers or our own operations, which would affect our ability to produce or deliver our products,
solutions and services. The most material uncertainties of the COVID-19 crisis are its continued duration, including for example potential
further waves of infection, mutations of the virus and the evolution of global vaccination progress, and the economic costs of restrictions.
Since the second quarter of fiscal 2020, we have felt the impact in our businesses, both our short-cycle businesses and project businesses,
as, for example, customers cancelled orders or postponed investments, we were exposed to increased default risk, and our supply chain
experienced difficulties in certain areas. Now we are seeing a recovery in many business sectors, and travel is also becoming easier. The
longer the restrictive measures such as curfews last, the deeper the resulting recession will be. Possible consequences include an
unchecked increase of public and private debt which hampers the post-crisis recovery, serious disruptions in the financial system and
insolvencies among Siemens customers and suppliers. In the long term, a reversal of globalization could reduce potential future growth.
Various task forces and crisis teams have been set up in all areas of Siemens to carefully monitor and mitigate the various impacts of
COVID-19, with a focus on the health and safety of our employees through operational vaccination offers, testing concepts and making
treatment offers available, and on business continuity. At the Group level, an executive-level crisis team at Group headquarters has worked
out overarching decisions and coordinated the flow of information through the different levels of the organization, while empowering
responsible management in each business and country to take appropriate action according to national and regional guidelines.
Increasing sustainability focus: The increasing environmental, social and governance (ESG) requirements from governments and
customers as well as financing restrictions from governments, customer demands and financing restrictions for greenhouse gas emitting
technologies could result in additional costs. Additionally, business involvement in sensitive environmental, social or governance activities
might be negatively perceived and trigger adverse media attention. This could lead to reputational damage and have an impact on
achieving our business goals. In fiscal 2021 we introduced a binding ESG risk framework and with it an optimized due diligence process.
This supports Siemens businesses with due diligence in the customer-oriented environment with a view to possible environmental and
social risks as well as related human rights and reputational risks.
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The latter case will cause significant extra effort and cost to do the needed product changes and to maintain the country-specific product
variant as an additional derivate item in the portfolio. In the worst case, if the two aforementioned ways of maintaining the product's
marketability prove to be not feasible, sale of the affected product in the market has to be stopped. We monitor the political and regulatory
landscape in all our key markets to anticipate potential problem areas, with the aim of quickly adjusting our business activities and
processes to changed conditions. However, any changes in regulations, laws and policies could adversely affect our business activities and
processes as well as our financial condition and results of operations.
Protectionism (including tariffs/trade war): Protectionist trade policies, de-coupling and changes in the political and regulatory
environment in the markets in which we operate, such as import and export controls, tariffs and other trade barriers including debarment
from certain markets and price or exchange controls, could affect our business in national markets and could impact our business situation,
financial position and results of operations; and may expose us to penalties, other sanctions and reputational damage. In addition, the
uncertainty of the legal environment in some regions could limit our ability to enforce our rights and subject us to increasing costs related
to appropriate compliance programs.
is analyzed on an ongoing basis. Accounting departments are informed quarterly about current topics and deadlines from an accounting
and closing process perspective.
Combined Management Report
33
At the end of each fiscal year, our management performs an evaluation of the effectiveness of the implemented control system, both in
design and operating effectiveness. We have a standardized procedure under which necessary controls are defined, documented in
accordance with uniform standards, and tested regularly for their effectiveness. Nevertheless, there are inherent limitations on the
effectiveness of any control system, and no system, including one determined to be effective, may prevent or detect all misstatements.
Our Consolidated Financial Statements are prepared on the basis of a centrally issued conceptual framework which primarily consists of
uniform Financial Reporting Guidelines and a chart of accounts. For Siemens AG and other companies within the Siemens Group required
to prepare financial statements in accordance with German Commercial Code, this conceptual framework is complemented by mandatory
regulations specific to the German Commercial Code. The need for adjustments in the conceptual framework due to regulatory changes
The overarching objective of our accounting-related internal control and risk management system is to ensure that financial reporting is
conducted in a proper manner, such that the Consolidated Financial Statements and the Combined Management Report of Siemens Group
as well as the Annual Financial Statements of Siemens AG as the parent company are prepared in accordance with all relevant regulations.
Our ERM approach is based on the globally accepted COSO Standard (Committee of Sponsoring Organizations of the Treadway
Commission) Enterprise Risk Management - Integrating with Strategy and Performance (2017) and the ISO (International Organization
for Standardization) Standard 31000 (2018) and is adapted to Siemens requirements. The frameworks connect the ERM process with our
financial reporting process and our internal control system. They consider a company's strategy, the efficiency and effectiveness of its
business operations, the reliability of its financial reporting and compliance with relevant laws and regulations to be equally important.
Our accounting-related internal control system is based on the internationally recognized Internal Control - Integrated Framework (2013)
also developed by COSO. The two systems are complementary.
8.5 Significant characteristics of the accounting-related internal control and risk management
system
While our assessments of individual opportunities have changed during fiscal 2021 due to developments in the external environment,
changes in our business portfolio, our endeavors to profit from them and revision of our strategic plans, the overall opportunity situation
for Siemens did not change significantly as compared to the prior year.
Assessment of the overall opportunities situation: The most significant opportunity for Siemens is favorable political and regulatory
environment (including sustainability) as described above.
Optimization of organization and processes: On the one hand, we leverage ideas to drive further improvements in our processes and
cost structure, such as common computing architecture for image processing or optimizing factory capacities for shorter lead times. On
the other hand, we see an opportunity of further penetrating markets by ramping up local business excellence (e.g. engineering) and
increasing local sourcing and local manufacturing.
Turning COVID-19 challenges into opportunities: The participation in governmental COVID-19 recovery programs such as the European
Union's "Next Generation EU" recovery plan is an opportunity for Siemens. There is also the chance to strengthen our customer relationship
through additional market offerings that specifically address use cases related directly to the COVID-19 pandemic. Potential growth areas
might arise through the optimization program "new normal" with, for example, more working flexibility for our employees.
Value creation through innovation: We drive innovation by investing significantly in R&D in order to develop sustainable solutions for
our customers while also strengthening our own competitiveness. Being an innovative company and constantly inventing new
technologies that we expect will meet future demands arising from the megatrends of demographic change, urbanization, climate change
and globalization is one of our core purposes. We are granted thousands of new patents every year and continuously develop new concepts
and convincing new digital and data-driven business models. This helps us create the next generation of ground-breaking innovations in
such fields as digitalization, artificial intelligence, autonomous machines and edge computing. Across our operating units, we are profiting
from our strength in the "Digital Enterprise." Foremost, our cloud-based MindSphere platform enhances the availability of our customers'
digital products and systems and improves their productivity and efficiency. We offer edge computing apps along with MindSphere in
individual facilities, so that customers can connect all their facilities to create an integrated data network. We see also significant
opportunities to generate additional volume and profit from innovative digital products, services and solutions, including cyber security
and applications for optimized energy consumption. We see growth opportunities in opening up access to new markets and customers
through new marketing and sales strategies, which we implement in our operating units. Our position along the value chains of
automation and digitalization allows us to further increase market penetration. Along these value chains, we have identified several
concrete growth fields in which we see our greatest long-term potential. Hence, we are combining and developing our resources and
capabilities for these growth fields.
Mergers, acquisitions, equity investments, partnerships, divestments and streamlining our portfolio: We constantly monitor our
current and potential markets to identify opportunities for strategic mergers, acquisitions, equity investments and partnerships, which
may complement our organic growth. Such activities may help us to strengthen our position in our existing markets, provide access to
new or underserved markets, or complement our technological portfolio in strategic areas. Opportunities might also arise when portfolio
optimization measures generate gains, which enable us to further pursue our other strategies for growth and profitability.
Qualification of employees involved in the accounting process is ensured through appropriate selection processes and training. As a
fundamental principle, based on materiality considerations, the "four eyes" principle applies, and specific procedures must be adhered to
for data authorization. Additional control mechanisms include target-performance comparisons and analyses of the composition of and
changes in individual line items, both in the closing data submitted by reporting units and in the Consolidated Financial Statements. In
line with our information security requirements, accounting-related IT systems contain defined access rules protecting them from
unauthorized access. The manual and system-based control mechanisms referred to above generally also apply when reconciling the
International Financial Reporting Standards (IFRS) closing data to the Annual Financial Statements of Siemens AG.
Favorable political and regulatory environment (including sustainability): We see opportunities from potential improvement in the
geopolitical policy environment, which could quickly restore a more positive industrial investment sentiment that supports the growth of
our markets. In addition, government initiatives and subsidies (including tax reforms, recovery plans among others) may lead to more
government spending (e.g. infrastructure, healthcare or digitalization investments) and ultimately result in an opportunity for us to
participate in ways that increase our revenue and profit. By enabling our customers to lower their GHG (Greenhouse Gas) emissions across
our portfolio and by reducing CO2 emission in our own operation, Siemens strives to support the trend towards a low-carbon economy.
Siemens also welcomes and supports from an opportunity perspective, recent legislative and governmental accelerate to mitigate climate
change worldwide, especially in Europe through e.g. the Green Deal or Sustainable Finance Initiative.
Combined Management Report
32
Within our ERM we regularly identify, evaluate and respond to opportunities that present themselves in our various fields of activity. Below
we describe our most significant opportunities. Unless otherwise stated, the opportunities described relate to all organizational units. The
order in which the opportunities are presented reflects the currently estimated relative exposure for Siemens associated with these
opportunities and thus provides an indication of the opportunities' current importance to us. The described opportunities are not
8.4 Opportunities
concern.
At present, no risks have been identified that either individually or in combination could endanger our ability to continue as a going
While our assessments of individual risks have changed during fiscal 2021 due to developments in the external environment, changes in
our business portfolio, effects of our own mitigation measures and the revision of our risk assessment, the overall risk situation for Siemens
did not change significantly as compared to the prior year. We currently see the operational risk cyber/information security as the most
significant challenge for us followed by the strategic risk arising from economic, political and geopolitical conditions.
The most significant challenges have been mentioned first in each of the four risk categories: strategic, operational, financial and
compliance.
For additional information with respect to specific proceedings, see Note 22 in Notes to Consolidated Financial Statements for fiscal 2021.
8.3.5 Assessment of the overall risk situation
In addition, while we have procedures in place to ensure compliance with applicable governmental regulations in the conduct of our
business operations, it cannot be excluded that violations of applicable governmental regulations may be caused either by us or by third
parties that we contract with, including suppliers or service providers whose activities may be attributed to us. Any such violations
particularly expose us to the risk of liability, penalties, fines, reputational damage or loss of licenses or permits that are important to our
business operations. In particular, we could also face liability for damage or remediation for environmental contamination at the facilities
we design or operate. With regard to certain environmental risks, we maintain liability insurance at levels that our management believes
are appropriate and consistent with industry practice. We may incur environmental losses beyond the limits, or outside the coverage, of
such insurance, and such losses may have an adverse effect on our business situation, financial condition and results of operations.
Current or future litigation and legal and regulatory proceedings: Siemens is and potentially will be involved in numerous legal disputes
and proceedings in various jurisdictions. These legal disputes and proceedings could result, in particular, in Siemens being subject to
payment of damages and punitive damages, equitable remedies or sanctions, fines or disgorgement of profit. In individual cases this may
also lead to formal or informal exclusion from tenders or the revocation or loss of business licenses or permits. Asserted claims are generally
subject to interest rates. Some of these legal disputes and proceedings could result in adverse decisions for Siemens or decisions,
assessments or requirements of regulatory authorities could deviate from our expectations, which may have material effects on our
business activities as well as our financial position, results of operations and cash flows. Siemens maintains liability insurance for certain
legal risks at levels our management believes are appropriate and consistent with industry practice. The insurance policy, however, does
not protect Siemens against reputational damage. Moreover, Siemens may incur losses relating to legal proceedings beyond the limits, or
outside the coverage, of such insurance or exceeding any provisions made for losses related to legal proceedings. Finally, there can be no
assurance that Siemens will be able to maintain adequate insurance coverage on commercially reasonable terms in the future.
Environmental, health & safety and other governmental regulations: Some of the industries in which we operate are highly regulated.
Current and future environmental, health and safety and other governmental regulations or changes thereto may require us to change
the way we run our operations and could result in significant increases in our operating or production costs. Furthermore, we see the risk
of potential environmental and health and safety incidents as well as potential non-compliance with environmental and health and safety
regulations affecting Siemens and our contractors or sub-suppliers, resulting for example in serious injuries, business interruptions,
penalties, loss of reputation and internal or external investigations.
Geopolitical uncertainties including sanctions and export control: As a globally operating organization, we conduct business with
customers in countries which are subject to export control regulations, embargoes, economic sanctions, debarment policies or other forms
of trade restrictions (hereafter referred to as "sanctions") imposed by the U.S., the EU, China or other countries or organizations. New or
expanded sanctions in countries in which we do business may result in a curtailment of our existing business in such countries or indirectly
in other countries. We are also aware of policies of national authorities and institutional investors, such as pension funds or insurance
companies, requiring divestment of interests in and prohibiting investment in and transactions with entities doing business with countries
identified by the U.S. Department of State as state sponsors of terrorism. As a result, it is possible that such policies may result in our being
unable to gain or retain certain investors or customers. In addition, the termination of our activities in sanctioned countries may expose
us to customer claims and other actions. Our reputation could also suffer due to our activities with counterparties in or affiliated with these
countries.
necessarily the only ones we encounter. In addition, our assessment of opportunities is subject to change because the Company, our
markets and technologies are constantly advancing. It is also possible that opportunities we see today will never materialize.
5,147
•
(2)%
271
(8)%
101,487
102,975
(1)%
During fiscal 2021 Siemens contributed supplemental fundings to Siemens Pension-Trust e.V. and took measures under company law to
simplify the investment structure of pension assets, which for the most part had overall no impact on the carrying amount of the financial
assets as of September 2021 compared to the prior year. The supplemental fundings included stakes in Bentley Systems, Inc. in the amount
of €1.0 billion and in ChargePoint Holdings, Inc. in the amount of €0.3 billion, as well as zero-coupon receiver swaps in the amount of
€0.3 billion. The measures to simplify the investment structure included a transfer of investment funds at fair value of €4.8 billion
(including realization of hidden reserves) to shares in affiliated companies, which led to a disposal of securities with a carrying amount of
€4.1 billion in the fixed assets register. In addition to these transactions Siemens recorded the disposal of Flender GmbH in the fixed assets
register, at a carrying amount of €1.0 billion.
The change in cash and cash equivalents, other securities related to the liquidity management of the Corporate Treasury of Siemens
AG, which was focused not solely on the business activities of Siemens AG. The liquidity management is based on the financing policy of
the Siemens Group, which is aimed towards a balanced financing portfolio, a diversified maturity profile and a comfortable liquidity
cushion. Intra-group financing activities drove both an increase in receivables from affiliated companies, which resulted in higher
inventories, receivables and other assets, and lower liabilities to affiliated companies, which was the main reason for the reduction of
trade payables, liabilities to affiliated companies and other liabilities.
The increase in provisions for pensions and similar commitments was mainly due to recording of current service and interest costs and
to lower discount rates partly offset by payments for pensions and similar commitments.
The increase in equity was attributable to net income for the year of €5.1 billion and the transfer of €0.5 billion in treasury shares to
employees in connection with our share-based payments programs. These factors were partly offset by dividends paid in fiscal 2021 (for
fiscal 2020) of €2.8 billion and share buybacks during the year amounting to €0.5 billion (including a €0.4 billion final payment to the
commissioned bank). The equity ratio as of September 30, 2021 increased to 21%, from 18% a fiscal year earlier. For the disclosures in
accordance with Section 160 para. 1 no. 2 of the German Stock Corporation Act about treasury shares, refer to Note 15 of our Notes to
Annual Financial Statements for fiscal 2021.
9.3 Corporate Governance statement
The Corporate Governance statement pursuant to Sections 289f and 315d of the German Commercial Code is publicly available on the
company's website at siemens.de/corporate-governance.
36
Combined Management Report
10. Takeover-relevant information (pursuant to Sections 289a
and 315a of the German Commercial Code) and
explanatory report
(6)%
10.1 Composition of common stock
(7)%
>200%
21,216
18,917
12%
541
619
(13)%
12,372
4,220
16,592
11,700
6%
4,323
(2)%
16,023
4%
501
62,389
62,890
249
98
67,047
67,145
As of September 30, 2021, the Company's common stock totaled €2.550 billion. The capital stock is divided into 850 million registered
shares of no par value (Siemens shares). The shares are fully paid in. All shares confer the same rights and obligations. The shareholders'
rights and obligations are governed in detail by the provisions of the German Stock Corporation Act, in particular by Sections 12, 53a et
seq., 118 et seq. and 186 of the German Stock Corporation Act.
10.2 Restrictions on voting rights or transfer of shares
At the Shareholders' Meeting, each share of stock has one vote and accounts for the shareholder's proportionate share in the Company's
net income. An exception to this rule applies with regard to treasury shares held by the Company, which do not entitle the Company to
any rights. Under Section 136 of the German Stock Corporation Act the voting right of the affected shares is excluded by law.
In addition to selling them over the stock exchange or through a public sales offer to all shareholders, the Managing Board is authorized
by resolution of the Shareholders' Meeting on February 5, 2020 to also use Siemens shares repurchased on the basis of this or any
previously given authorization for every permissible purpose, in particular as follows: Such Siemens shares may be
•
•
•
•
retired;
used in connection with share-based compensation programs and/or employee share programs of the Company or any of its affiliated
companies and issued to individuals currently or formerly employed by the Company or any of its affiliated companies as well as to
board members of any of the Company's affiliated companies;
offered and transferred, with the approval of the Supervisory Board, to third parties against non-cash contributions;
sold by the Managing Board, with the approval of the Supervisory Board, against payment in cash if the price at which such Siemens
shares are sold is not significantly lower than the market price of Siemens stock (exclusion of subscription rights, limited to 10% of the
capital stock, by mutatis mutandis application of Section 186 para. 3 sentence 4 German Stock Corporation Act); or
used to service or secure obligations or rights to acquire Siemens shares arising particularly from or in connection with convertible bonds
or warrant bonds of the Company or its affiliated companies. Moreover, the Managing Board is authorized to exclude subscription rights
in order to grant holders/creditors of conversion or option rights or respective conversion or option obligations on Siemens shares
subscription rights as compensation against effects of dilution to the extent to which they would be entitled after exercise of such rights
or fulfillment of such obligations, and to use Siemens shares to service such subscription rights.
Furthermore, the Supervisory Board is authorized to use shares acquired on the basis of this or any previously given authorization to meet
obligations or rights to acquire Siemens shares that were or will be agreed with members of the Managing Board within the framework of
rules governing Managing Board compensation.
In November 2018, the Company announced that it would carry out a share buyback of up to €3 billion in volume until November 15,
2021 at the latest. The buyback commenced on December 3, 2018 and terminated on September 24, 2021. Using the authorizations given
by the Annual Shareholders' Meetings on January 27, 2015 and February 5, 2020, Siemens repurchased 29.4 million shares by September
30, 2021 under this share buyback. This buyback had the exclusive purposes of retirement, of issuing shares to employees, board members
of affiliated companies and members of the Managing Board of Siemens AG, and of servicing/securing the obligations or rights to acquire
Siemens shares arising particularly from or in connection with convertible bonds and warrant bonds. On June 24, 2021, Siemens
announced that it intends to launch a new five-year share buyback program of up to €3 billion, beginning in fiscal 2022.
As of September 30, 2021, the Company held 47,644,581 shares of stock in treasury.
38
5,270
The Company may not repurchase its own shares unless so authorized by a resolution duly adopted by the shareholders at a general
meeting or in other very limited circumstances set forth in the German Stock Corporation Act. On February 5, 2020, the Shareholders'
Meeting authorized the Company to acquire until February 4, 2025 up to 10% of its capital stock existing at the date of adopting the
resolution or - if this value is lower - as of the date on which the authorization is exercised. The aggregate of shares of stock of Siemens
AG repurchased under this authorization and any other Siemens shares previously acquired and still held in treasury by the Company or
attributable to the Company pursuant to Sections 71d and 71e of the German Stock Corporation Act may at no time exceed 10% of the
then existing capital stock. Any repurchase of Siemens shares shall be accomplished at the discretion of the Managing Board either (1) by
acquisition over the stock exchange, (2) through a public share repurchase offer or (3) through a public offer to swap Siemens shares for
shares in a listed company within the meaning of Section 3 para. 2 German Stock Corporation Act. The Managing Board is additionally
authorized to complete the repurchase of Siemens shares in accordance with the authorization described above by using certain derivatives
(put and call options, forward purchases and any combination of these derivatives). In exercising this authorization, all stock repurchases
based on the derivatives are limited to a maximum volume of 5% of Siemens' capital stock existing at the date of adopting the resolution
at the Shareholders' Meeting. A derivative's term of maturity may not, in any case, exceed 18 months and must be chosen in such a way
that the repurchase of Siemens shares upon exercise of the derivative will take place no later than February 4, 2025.
The new shares issued or to be issued in exchange for contributions in cash and in kind and with shareholders' subscription rights excluded,
may in certain cases be subject to further restrictions. The details of those restrictions are described in the relevant authorization. In
addition, the Managing Board has issued the commitment not to increase the capital stock from the Authorized Capital 2019 and the
Conditional Capitals 2019 and 2020 by a total of more than 10% of the capital stock existing at the time of the Shareholders' Meeting on
February 5, 2020, to the extent that capital increases with shareholders' subscription rights excluded are made from the Authorized Capital
2019 against contributions in cash or in kind or to service convertible bonds and/or warrant bonds issued under the authorizations
approved on January 30, 2019 or February 5, 2020 with shareholders' subscription rights excluded. This commitment ends no later than
February 4, 2025.
• The exclusion is used to grant holders of conversion or option rights or conversion or option obligations on Siemens shares a
compensation for the effects of dilution.
The exclusion is necessary with regard to fractional amounts resulting from the subscription ratio.
Siemens shares issued to employees worldwide under the employee share programs implemented since the beginning of fiscal 2009, in
particular the Share Matching Plan, are freely transferable unless applicable local laws provide otherwise. Under the rules of the Share
Matching Plan, however, in order to receive one matching share free of charge for each three shares purchased, participants are required
to hold the shares purchased by them for a vesting period of several years, during which the participants must be continuously employed
by Siemens AG or any of its affiliated companies. The right to receive matching shares is forfeited if the purchased shares are sold,
transferred, hedged on, pledged or hypothecated in any way during the relevant vesting period.
The von Siemens-Vermögensverwaltung GmbH (VSV) has, on a sustained basis, powers of attorney allowing it to exercise the voting rights
for 10,716,740 shares (as of September 30, 2021) on behalf of members of the Siemens family. These shares are part of the total number
of shares held by the family's members. The powers of attorney are based on an agreement between the VSV and, among others, members
of the Siemens family. The shares are voted together by VSV, taking into account the suggestions of a family partnership established by
the family's members or of one of this partnership's governing bodies.
10.3 Legislation and provisions of the Articles of Association applicable to the appointment and
removal of members of the Managing Board and governing amendment to the Articles of
Association
The appointment and removal of members of the Managing Board are subject to the provisions of Sections 84 and 85 of the German Stock
Corporation Act and Section 31 of the German Codetermination Act (Mitbestimmungsgesetz). According to Section 8 para. 1 of the Articles
of Association, the Managing Board is comprised of several members, the number of which is determined by the Supervisory Board.
According to Section 179 of the German Stock Corporation Act, any amendment to the Articles of Association requires a resolution of the
Shareholders' Meeting. The authority to adopt purely formal amendments to the Articles of Association was transferred to the Supervisory
Board under Section 13 para. 2 of the Articles of Association. In addition, by resolutions adopted during past Shareholders' Meetings, the
Supervisory Board has been authorized to amend Section 4 of the Articles of Association in accordance with the utilization of the
Authorized and Conditional Capitals, and after expiration of the then-applicable authorization and utilization period.
Resolutions of the Shareholders' Meeting require a simple majority vote, unless a greater majority is required by law (Section 23 para. 2 of
the Articles of Association). Pursuant to Section 179 para. 2 of the German Stock Corporation Act, amendments to the Articles of
Association require a majority of at least three-quarters of the capital stock represented at the time of the casting of the votes, unless
another capital majority is prescribed by the Articles of Association.
10.4 Powers of the Managing Board to issue and repurchase shares
The Managing Board is authorized to increase, with the approval of the Supervisory Board, the capital stock until February 2, 2026 by up
to €90 million through the issuance of up to 30 million Siemens shares against contributions in cash (Authorized Capital 2021).
Subscription rights of existing shareholders are excluded. The new shares shall be offered exclusively to employees of the Company and
any of its affiliated companies. To the extent permitted by law, such employee shares may also be issued in such a manner that the
contribution to be paid on such shares is covered by that part of the annual net income which the Managing Board and the Supervisory
Board may allocate to other retained earnings under Section 58 para. 2 of the German Stock Corporation Act.
Total liabilities and equity
Furthermore, the Managing Board is authorized to increase, with the approval of the Supervisory Board, the capital stock until January 29,
2024 by up to €510 million through the issuance of up to 170 million Siemens shares against cash contributions and/or contributions in
kind (Authorized Capital 2019).
By resolutions of the Shareholders' Meetings on January 30, 2019 and February 5, 2020, the Managing Board is authorized to issue bonds
with conversion, exchange or option rights or with warrants attached, or a combination of these instruments, entitling the holders to
subscribe to up to 80 million and up to 60 million Siemens shares, respectively. Based on these two authorizations, the Company or its
affiliated companies may issue bonds until January 29, 2024 and February 4, 2025, respectively, each in an aggregate principal amount
of up to €15 billion. In order to grant shares of stock to holders/creditors of such convertible bonds or warrant bonds, the capital stock was
conditionally increased by resolutions of the Shareholders' Meetings in 2019 and 2020, by up to 80 million and up to 60 million Siemens
37
Combined Management Report
shares, respectively (Conditional Capitals 2019 and 2020), i.e. in total by up to €420 million through the issuance of up to 140 million
Siemens shares.
The new shares under Authorized Capital 2019 and the aforementioned bonds are to be issued against cash or non-cash contributions.
They are, as a matter of principle, to be offered to shareholders for subscription. The Managing Board is authorized to exclude, with the
approval of the Supervisory Board, subscription rights of shareholders in the event of capital increases against contributions in kind. In the
event of capital increases against contributions in cash, the Managing Board is authorized to exclude shareholders' subscription rights with
the approval of the Supervisory Board in the following cases:
•
The issue price of the new shares/bonds is not significantly lower than the stock market price of the Siemens shares already listed or the
theoretical market price of the bonds computed in accordance with generally accepted actuarial methods (exclusion of subscription
rights, limited to 10% of the capital stock, in accordance with or by mutatis mutandis application of Section 186 para. 3 sentence 4
German Stock Corporation Act).
As of September 30, 2021, the total unissued authorized capital of Siemens AG therefore consisted of €600 million nominal that may be
used, in installments with varying terms, by issuance of up to 200 million Siemens shares.
Deferred income
.
Liabilities to banks
Statement of Financial Position of Siemens AG in accordance with German Commercial Code (condensed)
(in millions of €)
Assets
Non-current assets
Intangible and tangible assets
Combined Management Report
Sep. 30,
% Change
2021
2020
1,068
1,122
(5)%
74,852
74,877
9.2 Net assets and financial position
0%
35
The change in other operating income (expenses), net, was mainly due to higher expenses in fiscal 2020, which included expenses
related to the valuation of an investment as well as expenses related to the spin-off of Siemens Energy.
Trade payables, liabilities to affiliated companies and other liabilities
171
141
22%
(1,918)
(2,436)
21%
3,400
14%
Unappropriated net income
2,975
The decrease of revenue and cost of sales was due mainly to the business activities of Gas and Power which, effective with the beginning
of calendar year 2020, were transferred to Siemens Energy Global GmbH & Co. KG in preparation of the Siemens Energy spin-off completed
in September 2020.
On a geographical basis, 76% of revenue was generated in the Europe, C.I.S., Africa, Middle East region, 17% in the Asia, Australia region
and 7% in the Americas region. Exports from Germany accounted for 54% of overall revenue. In fiscal 2021, orders for Siemens AG
amounted to €15.7 billion.
Research and development expenses and selling and general administrative expenses decreased due mainly to the above-mentioned
transfer of the business activities of Gas and Power.
The R&D intensity (R&D as a percentage of revenue) was 10%, on the same level as fiscal 2020. The research and development activities
of Siemens AG are fundamentally the same as for its corresponding business activities within the Siemens Group. Research and
development expenses in both periods related mainly to Digital Industries. On an average basis, we employed 7,000 people in R&D in
fiscal 2021.
The decrease in financial income, net was due primarily to lower income from investments, net, partly offset by a positive change in
other financial income (expenses), net. The primary factors in lower income from investments, net were the following: a profit transfer
agreement with Siemens Beteiligungen Inland GmbH, Germany, which reduced income by €0.9 billion; a decline in income from the
investment in Siemens Holdings plc, Ltd., United Kingdom, of €0.7 billion; and a decrease of €0.5 billion in income from Siemens Ltd,
China. Furthermore, fiscal 2020 included a gain of €2.1 billion from the disposal of Siemens Limited, India, which was partly offset by an
impairment of €1.3 billion on the stake in Siemens Energy AG. In contrast, a gain of €0.9 billion from the sale of Flender GmbH, Germany
in fiscal 2021 was recorded in income from investments, net. The positive change in other financial income (expenses), net included an
increase in gains from non-current securities by €0.5 billion and a reduction of expenses by €0.4 billion from impairments of loan
receivables related to an investment. Higher gains from non-current securities were driven by a transfer of investment funds and
corresponding realization of hidden reserves as mentioned below.
75,920
Financial assets
0%
20%
Active difference resulting from offsetting
51
85
(41)%
Total assets
101,487
1,034
75,999
Liabilities and equity
Equity
Special reserve with an equity portion
Provisions
Provisions for pensions and similar commitments
Provisions for taxes and other provisions
Liabilities
(1)%
1,243
102,975
39%
Inventories, receivables and other assets
Deferred tax assets
Current assets
Cash and cash equivalents, other securities
Prepaid expenses
21,792
16,937
2,297
8,786
29%
24,089
133
25,724
(6)%
184
(74)%
Re-issuance of treasury shares and other transactions with owners
2,055
2,624
Issuance of long-term debt
8,316
(4,294)
Repayment of long-term debt (including current maturities of long-term debt)
(1,517)
10,255
(4,472)
(547)
1,698
Cash flows from financing activities
(5,184)
(15,494)
Cash flows from investing activities - continuing and discontinued operations
(1,134)
Cash flows from investing activities - discontinued operations
(4,050)
(17,192)
Change in short-term debt and other financing activities
Cash flows from investing activities - continuing operations
1,174
985
Purchase of treasury shares
(952)
(4,509)
Interest paid
1,663
Disposal of investments and financial assets for investment purposes
Change in cash and cash equivalents
(525)
204
Effect of changes in exchange rates on cash and cash equivalents
(4,663)
Effect of deconsolidation of Siemens Energy on cash and cash equivalents
3,172
785
Cash flows from financing activities - continuing and discontinued operations
1,592
(1,095)
4,267
785
Cash flows from financing activities continuing operations
(208)
(285)
Dividends attributable to non-controlling interests
(3,174)
(2,804)
Dividends paid to shareholders of Siemens AG
(833)
(704)
Cash flows from financing activities - discontinued operations
218
(500)
Disposal of businesses, net of cash disposed
293
238
(1,632)
(2,324)
1,183
1,403
(463)
418
1,132
67
1,286
Interest received
214
(414)
(444)
(723)
(934)
373
586
(644)
(243)
(731)
(839)
Cash and cash equivalents at beginning of period
(1,227)
2
1,369
Cash flows from operating activities - continuing operations
47
98
Disposal of intangibles and property, plant and equipment
(994)
(631)
Change in receivables from financing activities
(1,269)
(1,523)
Purchase of investments and financial assets for investment purposes
(1,727)
(14,391)
1,347
Acquisitions of businesses, net of cash acquired
(1,730)
Additions to intangible assets and property, plant and equipment
Cash flows from investing activities
8,862
9,996
Cash flows from operating activities - continuing and discontinued operations
1,012
(113)
Cash flows from operating activities - discontinued operations
7,851
10,109
(1,498)
14,054
365
Cash and cash equivalents at end of period
(677)
(663)
(15)
(15)
Other changes in equity
1,969
1,603
366
1,346
1
Other transactions with non-controlling interests
Balance as of September 30, 2020
(9,589)
(9,589)
Changes in equity resulting from major portfolio transactions
(2)
(2)
(2)
550
550
(1,511)
(1,511)
(1,511)
545
5
(9,589)
Disposal of equity instruments
2,550
33,078
2,175
Other comprehensive income, net of income taxes
6,697
537
6,161
39,823
3,433
36,390
(4,629)
(115)
(42)
6,840
(1,292)
Net income
6,840
2,550
Balance as of October 1, 2020
39,823
3,433
36,390
(4,629)
(115)
(42)
(1,292)
33,078
6,161
Re-issuance of treasury shares
Purchase of treasury shares
(147)
Net income
Balance as of October 1, 2019
(in millions of €)
Total
equity
controlling
interests
Non
to share-
holders of
Siemens AG
Total equity
attributable
Treasury
shares
at cost
Consolidated Financial Statements
Derivative
financial
instruments
Other comprehensive income, net of income taxes
Equity
instruments
Retained
earnings
Capital
reserve
Issued
capital
5. Consolidated Statements of Changes in Equity
5
13
14,041
9,545
Cash and cash equivalents at end of period (Consolidated Statements of Financial Position)
Less: Cash and cash equivalents of assets classified as held for disposal and discontinued operations
at end of period
14,054
9,545
Currency
translation
differences
Dividends
Share-based payment
2,550
(147)
(141)
(6)
(3,492)
(318)
(3,174)
(3,174)
(2,986)
(218)
(2,769)
111
(2,701)
(185)
4,200
170
4,030
51,508
2,858
48,650
(3,663)
(226)
(49)
1,409
41,790
4,030
6,839
12,391
1,861
2,352
3,075
(in millions of €)
Assets
Cash and cash equivalents
Trade and other receivables
Other current financial assets
Contract assets
Inventories
Current income tax assets
Other current assets
Assets classified as held for disposal
Total current assets
Goodwill
3. Consolidated Statements of Financial Position
Other intangible assets
Other financial assets
Deferred tax assets
Other assets
Total non-current assets
Total assets
Note
Sep 30,
2021
Sep 30,
2020
9,545
14,041
Property, plant and equipment
8
Consolidated Financial Statements
1,261
Derivative financial instruments
(237)
148
therein: Income tax effects
31
(38)
Income (loss) from investments accounted for using the equity method, net
88
(89)
Items that may be reclassified subsequently to profit or loss
1,438
3
(2,746)
3,647
(2,986)
10,345
1,214
Total comprehensive income
Attributable to:
Non-controlling interests
Shareholders of Siemens AG
693
(47)
9,652
Other comprehensive income, net of income taxes
15,518
14,074
9
7,539
7,862
14, 23
22,964
22,771
7
2,865
2,988
2,183
1,769
87,267
4
70,928
123,897
Liabilities and equity
Short-term debt and current maturities of long-term debt
16
7,821
6,562
Trade payables
8,832
7,873
Other current financial liabilities
1,731
139,608
Investments accounted for using the equity method
10,250
11,023
7,985
8,382
10
6,688
5,545
11
8,836
7,795
7
1,795
1,523
1,751
1,271
3
223
338
52,340
52,968
3, 12
29,729
20,449
3,12
10,964
4,838
13
(2,805)
3,098
1,587
(240)
4. Consolidated Statements of Cash Flows
4
123,897
139,608
39,823
49,274
3,433
4,901
3
36,390
44,373
(in millions of €)
Total equity attributable to shareholders of Siemens AG
(4,804)
(1,449)
(19)
33,078
39,607
6,840
7,040
Total liabilities and equity
Total equity
Non-controlling interests
Treasury shares, at cost
(4,629)
Other components of equity
Consolidated Financial Statements
2021
Amortization, depreciation and impairments
(44)
(1,062)
Income from discontinued operations, net of income taxes
Adjustments to reconcile net income to cash flows from operating activities - continuing operations
4,200
6,697
Net income
Cash flows from operating activities
Dividends received
Income taxes paid
Fiscal year
Change in other assets and liabilities
Contract liabilities
Trade payables
Trade and other receivables
Inventories
Contract assets
Change in operating net working capital from
Other non-cash (income) expenses
(Income) loss related to investing activities
Interest (income) expenses, net
Income tax expenses
2020
Additions to assets leased to others in operating leases
Retained earnings
Capital reserve
2,550
40,879
16
Long-term debt
34,117
39,952
Total current liabilities
35
10
3
Liabilities associated with assets classified as held for disposal
6,209
38,005
7,628
Other current liabilities
2,281
1,809
Current income tax liabilities
1,674
2,263
18
Current provisions
7,524
9,858
10
15
Provisions for pensions and similar obligations
17
2,839
2,550
3, 19
84,074
90,333
49,957
50,381
1,808
1,925
769
679
Issued capital
Equity
Total liabilities
Total non-current liabilities
Other liabilities
Other financial liabilities
1,465
1,723
18
Provisions
664
2,337
7
Deferred tax liabilities
6,360
Currency translation differences
29
Product-related expenses - Provisions for estimated costs related to product warranties are recorded in line item Cost of sales at the time
the related sale is recognized.
3,492
19,888
22,737
(39,527) (35,366)
55,254
62,265
2020
2021
Note
2,30
Gross profit
Cost of sales
Revenue
(in millions of €, per share amounts in €)
Fiscal year
Consolidated Financial Statements
1. Consolidated Statements of Income
Research and development expenses
Notes to Consolidated Financial Statements
(4,859)
Selling and general administrative expenses
Interest income
(596)
(478)
4
Income (loss) from investments accounted for using the equity method, net
(396)
(431)
6
Other operating expenses
630
236
5
Other operating income
(10,682)
(11,189)
(4,569)
Consolidated Statements of Changes in Equity
6.
7
Statements*
Consolidated Financial
39
We are not aware of, nor have we during the last fiscal year been notified of, any shareholder directly or indirectly holding 10% or more
of the voting rights. There are no Siemens shares with special rights conferring powers of control. Shares of stock issued by Siemens AG
to employees under its employee share program and/or as share-based compensation are transferred to the employees. The beneficiary
employees who hold shares of employee stock may exercise their control rights in the same way as any other shareholder in accordance
with applicable laws and the Articles of Association.
10.7 Other takeover-relevant information
On September 18, 2019, the Supervisory Board of Siemens AG resolved that the contracts with members of the Managing Board should
not contain such right of termination in the future. This has already been taken into account in the case of contract extensions and in the
case of new contracts with the newly appointed members of the Managing Board as of October 1, 2020.
The contracts with the members of the Managing Board previously contained the right of the member to terminate his or her contract
with the Company for good cause in the event of a change of control that results in a substantial change in the position of a Managing
Board member (for example, due to a change in corporate strategy or a change in the Managing Board member's duties and
responsibilities). A change of control exists if one or several shareholders acting jointly or in concert acquire a majority of the voting rights
in Siemens AG and exercise a controlling influence, or if Siemens AG becomes a dependent enterprise as a result of entering into an
intercompany agreement within the meaning of Section 291 of the German Stock Corporation Act, or if Siemens AG is to be merged into
an existing corporation or other entity. If this right of termination is exercised, the Managing Board member is entitled to a severance
payment in the amount of no more than two years' compensation. The calculation of the annual compensation includes not only the base
compensation and the target amount for the bonus, but also the target amount for the stock awards, in each case based on the most
recent completed fiscal year prior to termination of the contract. The stock-based compensation components for which a firm commitment
already exists will remain unaffected. Additionally, the severance payments cover non-monetary benefits by including an amount of 5%
of the total severance amount. Severance payments will be reduced by 10% as a lump-sum allowance for discounted values and for income
earned elsewhere. However, this reduction will apply only to the portion of the severance payment that was calculated without taking
account of the first six months of the remaining term of the Managing Board member's contract. There is no entitlement to a severance
payment if the Managing Board member receives benefits from third parties in connection with a change of control. A right to terminate
the contract does not exist if the change of control occurs within a period of twelve months prior to a Managing Board member's
retirement.
10.6 Compensation agreements with members of the Managing Board or employees in the
event of a takeover bid
Framework agreements concluded by Siemens AG under International Swaps and Derivatives Association Inc. documentation (ISDA
Agreements) grant each counterparty a right of termination, including in certain cases of (i) a transformation (for example mergers and
changes of form), (ii) an asset transfer or (iii) acquisition of ownership interests that enables the acquirer to exercise control over Siemens
AG or its controlling bodies. Partially this right of termination exists only, if (1) the resulting entity fails to simultaneously assume Siemens
AG's obligations under the ISDA Agreements or (2) the resulting entity's creditworthiness is materially weaker than Siemens AG's
immediately prior to such event. Generally, ISDA Agreements are designed such that upon termination all outstanding payment claims
documented under them are to be netted.
The lines of credit, and the relevant loan agreements mentioned above provide their respective lenders with a right of termination in the
event that (1) Siemens AG becomes a subsidiary of another company or (2) a person or a group of persons acting in concert acquires
effective control over Siemens AG by being able to exercise decisive influence over its activities (Art. 3(2) of Council Regulation (EC) 139/
2004).
In addition, in March 2020 and in June 2019 respectively, a consolidated subsidiary as borrower and Siemens AG as guarantor entered
into a bilateral loan agreement, each of which has been drawn in the full amount of US$ 500 million. In February 2021, a consolidated
subsidiary as borrower entered into two bilateral loan agreements in the total amount of US$ 500 million; both loan agreements have
been guaranteed by Siemens AG and have been fully drawn.
In March 2021, Siemens AG entered into a bilateral loan agreement, which has been drawn in the full amount of € 500 million.
As of September 30, 2021, Siemens AG maintained lines of credit in the amount of € 7.45 billion.
10.5 Significant agreements which take effect, alter or terminate upon a change of control of
the Company following a takeover bid
For details on the authorizations referred to above, especially with the restrictions to exclude subscription rights and the terms to include
shares when calculating such restrictions, please refer to the relevant resolution and to Section 4 of the Articles of Association.
FOR FISCAL 2021
* This document is an English language translation of the decisive German version and is not provided in
the European Single Electronic Format (ESEF). The legally required rendering in ESEF-format is filed in
German language with the operator of the German Federal Gazette and published in the German Federal
Gazette.
SIEMENS
Table of contents
5.
Consolidated Statements of Cash Flows
4.
45
6
5
Consolidated Statements of Financial Position
1,483
3.
Consolidated Statements of Comprehensive Income
2.
3
Consolidated Statements of Income
1.
3
Consolidated Financial Statements
4
Combined Management Report
1,545
(644)
Fiscal year
2021
therein: Income tax effects
Remeasurements of defined benefit plans
Net income
(in millions of €)
|| 2. Consolidated Statements of Comprehensive Income
4.93
7.59
0.23
1.31
4.70
6.28
28
5.00
7.68
2020
0.23
6,697
17
2,210
Items that will not be reclassified to profit or loss
17
57
Income (loss) from investments accounted for using the equity method, net
(3)
(1)
therein: Income tax effects
5
30
Remeasurements of equity instruments
33
(45)
(261)
2,123
4,200
1.32
4.77
6.36
Income from discontinued operations, net of income taxes
4,156
5,636
Income from continuing operations
(1,346)
(1,861)
7
Income tax expenses
5,502
7,496
Income from continuing operations before income taxes
496
641
Other financial income (expenses), net
(814)
3
1,062
44
Net income
28
170
4,030
6,161
537
Income from discontinued operations
Net income
Income from continuing operations
Diluted earnings per share
Interest expenses
Net income
Income from continuing operations
Basic earnings per share
Shareholders of Siemens AG
Non-controlling interests
Attributable to:
4,200
6,697
Income from discontinued operations
(178)
Contract liabilities
Income from royalties: Royalties are recognized on an accrual basis in accordance with the substance of the relevant agreement.
Income from interest - Interest is recognized using the effective interest method.
Earnings per share - Basic earnings per share are computed by dividing income from continuing operations, income from discontinued
operations and net income, all attributable to ordinary shareholders of Siemens AG by the weighted average number of shares outstanding
during the year. Diluted earnings per share are calculated by assuming conversion or exercise of all potentially dilutive securities and share-
based payment plans.
Research and development costs - Costs of research activities are expensed as incurred. Costs of development activities are capitalized
when the recognition criteria in IAS 38 are met. Capitalized development costs are stated at cost less accumulated amortization and
impairment losses with an amortization period of generally three to ten years.
1,958
Functional costs - In general, operating expenses by types are assigned to the functions following the functional area of the
corresponding profit and cost centers. Amortization, depreciation and impairment of intangible assets and property, plant and equipment
are included in functional costs depending on the use of the assets.
terms.
Sale of goods: Revenues are recognized at a point in time when control of the goods passes to the buyer, usually upon delivery of the
goods. Invoices are issued at that point in time and are usually payable within 30 days. For licensing transactions granting the customer a
right to use Siemens' intellectual property, payment terms are usually 30 days from the date of invoice issued according to the contractual
Revenues from services: Revenues are recognized over time on a straight-line basis or, if the performance pattern is other than straight-
line, as services are provided, i.e. under the percentage-of-completion method as described above. Payment terms are usually 30 days
from the date of invoice issued according to the contractual terms.
The percentage-of-completion method places considerable importance on accurate estimates of the extent of progress towards
completion and may involve estimates on the scope of deliveries and services required to fulfill the contractually defined obligations. These
significant estimates include total estimated costs, total estimated revenues, contract risks, including technical, political and regulatory
risks, risks from supply chain constraints and other judgments. Under the percentage-of-completion method, changes in estimates may
lead to an increase or decrease of revenue. In addition, Siemens needs to assess whether the contract is expected to continue or whether
it is terminated. In determining whether the continuation or termination of a contract is expected to be the most likely scenario, all relevant
facts and circumstances relating to the contract are considered on an individual basis.
Sales from construction-type contracts: Revenues are recognized over time under the percentage-of-completion method, based on the
percentage of costs incurred to date compared to total estimated costs. An expected loss on the contract is recognized as an expense
immediately. Payment terms are usually 30 days from the date of invoice issued according to the contractual terms.
Revenue recognition - Siemens recognizes revenue when, or as control over distinct goods or services is transferred to the customer; i.e.
when the customer is able to direct the use of the transferred goods or services and obtains substantially all of the remaining benefits,
provided a contract with enforceable rights and obligations exists and amongst others collectability of consideration is probable taking our
customer's creditworthiness into account. Revenue is the transaction price Siemens expects to be entitled to. Variable consideration is
included in the transaction price if it is highly probable that a significant reversal of revenue will not occur once associated uncertainties
are resolved. The amount of variable consideration is calculated by either using the expected value or the most likely amount depending
on which is expected to better predict the amount of variable consideration. Consideration is adjusted for the time value of money if the
period between the transfer of goods or services and the receipt of payment exceeds twelve months and there is a significant financing
benefit either to the customer or Siemens. If a contract contains more than one distinct good or service, the transaction price is allocated
to each performance obligation based on relative stand-alone selling prices. If stand-alone selling prices are not observable, the Company
reasonably estimates those. Revenue is recognized for each performance obligation either at a point in time or over time.
Goodwill - Goodwill is not amortized, instead, goodwill is tested for impairment annually, as well as whenever there are events or changes
in circumstances (triggering events) which suggest that the carrying amount may not be recoverable. Goodwill is carried at cost less
accumulated impairment losses. The goodwill impairment test is performed at the level of a cash-generating unit or a group of cash-
generating units, generally represented by a segment. Siemens Healthineers is tested one level below the segment. This is the lowest level
at which goodwill is monitored for internal management purposes.
in net income. Those foreign currency-denominated transactions which are classified as non-monetary are remeasured using the historical
spot exchange rate.
7
Foreign currency transaction - Transactions that are denominated in a currency other than the functional currency of an entity, are
recorded at that functional currency applying the spot exchange rate at the date when the underlying transactions are initially recognized.
At the end of the reporting period, foreign currency-denominated monetary assets and liabilities are revalued to functional currency
applying the spot exchange rate prevailing at that date. Gains and losses arising from these foreign currency revaluations are recognized
Foreign currency translation - Assets and liabilities of foreign subsidiaries, where the functional currency is other than the euro, are
translated using the spot exchange rate at the end of the reporting period, while the Consolidated Statements of Income are translated
using average exchange rates during the period. Differences arising from such translations are recognized within equity and reclassified
to net income when the gain or loss on disposal of the foreign subsidiary is recognized. The Consolidated Statements of Cash Flows are
translated at average exchange rates during the period, whereas cash and cash equivalents are translated at the spot exchange rate at the
end of the reporting period.
Associates and joint ventures - Associates are companies over which Siemens has the ability to exercise significant influence over
operating and financial policies (generally through direct or indirect ownership of 20% to 50% of the voting rights). Joint ventures are
entities over which Siemens and one or more parties have joint control. Joint control requires unanimous consent of the parties sharing
control in decision making on relevant activities.
Business combinations - Cost of an acquisition is measured at the fair value of the assets given and liabilities incurred or assumed at the
date of exchange. Identifiable assets acquired and liabilities assumed in a business combination (including contingent liabilities) are
initially measured at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. Non-controlling
interests are measured at the proportional fair value of assets acquired and liabilities assumed (partial goodwill method). If there is no loss
of control, transactions with non-controlling interests are accounted for as equity transactions not affecting net income. At the date control
is lost, any retained equity interests are remeasured to fair value. In case of a written put option on non-controlling interests the Company
assesses whether the prerequisites for the transfer of present ownership interest are fulfilled at the balance sheet date. If the Company is
not the beneficial owner of the shares underlying the put option, the exercise of the put option will be assumed at each balance sheet
date and treated as equity transaction between shareholders with the recognition of a purchase liability at the respective exercise price.
The non-controlling interests participate in profits and losses during the reporting period.
Certain of these accounting policies require critical accounting estimates that involve complex and subjective judgments and the use of
assumptions, some of which may be for matters that are inherently uncertain and susceptible to change. Such critical accounting estimates
could change from period to period and have a material impact on the Company's results of operations, financial positions and cash flows.
Critical accounting estimates could also involve estimates where Siemens reasonably could have used a different estimate in the current
accounting period. Siemens cautions that future events often vary from forecasts and that estimates routinely require adjustment.
COVID-19 - Impacts of the pandemic coronavirus spread on Siemens' Consolidated Financial Statements are contingent on the further
evolution of virus variants, the progress of worldwide vaccinations and the vaccines' effectiveness. Potential impacts may also result from
increasingly phased out financial and non-financial measures originally taken by governments and organizations globally. Related impacts
could influence fair value and carrying amounts of assets and liabilities, amount and timing of results of operations and cash flows. Effects
vary considerably by region and customer industries. Siemens based its estimates and assumptions on existing knowledge and best
information available. We expect that related effects on Siemens' Consolidated Financial Statements will not reach a substantial degree.
Basis of consolidation - The Consolidated Financial Statements include the accounts of Siemens AG and its subsidiaries over which the
Company has control. Siemens controls an investee if it has power over the investee. In addition, Siemens is exposed to, or has rights to,
variable returns from the involvement with the investee and Siemens is able to use its power over the investee to affect the amount of
Siemens' return.
note 2 Material accounting policies and critical accounting estimates
The accompanying Consolidated Financial Statements present the operations of Siemens Aktiengesellschaft with registered offices in
Berlin (registry number HRB 12300) and Munich (registry number HRB 6684), Germany, and its subsidiaries (the Company or Siemens).
They have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union as well
as with the additional requirements set forth in Section 315e (1) of the German Commercial Code (HGB). The financial statements are in
accordance with IFRS as issued by the International Accounting Standards Board (IASB). The Consolidated Financial Statements were
authorized for issue by the Managing Board on November 30, 2021. Siemens prepares and reports its Consolidated Financial Statements
in euros (€). Due to rounding, numbers presented may not add up precisely to totals provided. Siemens is a German based multinational
focused technology company.
NOTE 1 Basis of presentation
| 6. Notes to Consolidated Financial Statements
Consolidated Financial Statements
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the cash-generating unit or the group
of cash-generating units that is expected to benefit from the synergies of the business combination. If the carrying amount of the cash-
generating unit or the group of cash-generating units, to which the goodwill is allocated, exceeds its recoverable amount, an impairment
loss on goodwill allocated to that (group of) cash-generating unit(s) is recognized. The recoverable amount is the higher of the cash-
generating unit's or the group of cash-generating units' fair value less costs to sell and its value in use. If either of these values exceeds the
carrying amount, it is not always necessary to determine both values. These values are generally determined based on discounted cash
flow calculations. Impairment losses on goodwill are not reversed in future periods.
The determination of the recoverable amount of a cash-generating unit or a group of cash-generating units to which goodwill is allocated
involves the use of estimates by management. The outcome predicted by these estimates is influenced e.g. by the successful integration
of acquired entities, volatility of capital markets, interest rate developments, foreign exchange rate fluctuations and the outlook on
economic trends. In determining recoverable amounts, discounted cash flow calculations generally use five-year projections (in
exceptional cases up to ten years) that are based on financial forecasts. Cash flow projections take into account past experience and
represent management's best estimate about future developments. Cash flows after the planning period are extrapolated using individual
growth rates. Key assumptions on which management has based its determination of fair value less costs to sell and value in use include
8
9
Defined benefit plans Siemens measures the entitlements by applying the projected unit credit method. The approach reflects an
actuarially calculated net present value of the future benefit entitlement for services already rendered. In determining the net present
value of the future benefit entitlement for service already rendered (Defined Benefit Obligation (DBO)), the expected rates of future salary
-
Inventories - Inventories are valued at the lower of acquisition or production costs and net realizable value, costs being generally
determined based on an average or first-in, first-out method. Determining net realizable value of inventories involves accounting estimates
for quantity, technical and price risks.
Income taxes - Tax positions are calculated taking into consideration the respective local tax laws, relevant court decisions and applicable
tax authorities' views. Tax regulations can be complex and possibly subject to different interpretations of tax payers and local tax
authorities. Different interpretations of existing or new tax laws as a result of tax reforms or other tax legislative procedures may result in
additional tax payments for prior years and are taken into account based on management's considerations. Under the liability method,
deferred tax assets and liabilities are recognized for expected tax consequences of future periods attributable to differences between the
financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets are recognized if sufficient
future taxable profit is available, including income from forecasted operating earnings, the reversal of existing taxable temporary
differences and available tax planning opportunities that Siemens would execute. As of each period-end, Siemens evaluates the
recoverability of deferred tax assets, based on taxable income of past periods and projected future taxable profits. As future developments
are uncertain and partly beyond Siemens's control, assumptions are necessary to estimate future taxable profits as well as the period in
which deferred tax assets will recover. Estimates are revised in the period in which there is sufficient evidence to revise the assumption.
Contract assets, contract liabilities, receivables - When either party to a contract with customers has performed, Siemens presents a
contract asset, a contract liability or a receivable depending on the relationship between Siemens' performance and the customer's
payment. Contract assets and liabilities are presented as current since incurred in the normal operating cycle. Receivables are recognized
when the right to consideration becomes unconditional. Valuation allowances for credit risks are made for contract assets and receivables
in accordance with the accounting policy for financial assets measured at amortized cost.
Discontinued operations and non-current assets held for disposal - Discontinued operations are reported when a component of an
entity is classified as held for disposal or has been disposed of, if the component represents a separate major line of business or
geographical area of operations and is part of a single coordinated plan to disposal. A non-current asset or a disposal group is held for
disposal if its carrying amount will be recovered principally through a sale transaction or through a distribution to owners rather than
through continuing use. In the Consolidated Statements of Income and of Cash Flows, discontinued operations is reported separately from
continuing operations; prior periods are presented on a comparable basis. The disclosures in the Notes to the Consolidated Financial
Statements outside Note 3 relate to continuing operations or assets and liabilities not held for disposal. The determination of the fair value
less costs to sell includes the use of estimates and assumptions that tend to be uncertain.
Lessee - Siemens recognizes right-of-use assets and lease liabilities for leases with a term of more than twelve months if the underlying
asset is not of low value. Payments for short-term and low-value leases are expensed over the lease term. Extension options are included
in the lease term if their exercise is reasonably certain. Right-of-use assets are measured at cost less accumulated depreciation and
impairment losses adjusted for any remeasurements. Right-of-use assets are depreciated under the straight-line method over the shorter
of the lease term and the useful life of the underlying assets. Lease liabilities are measured at the present value of the lease payments due
over the lease term, generally discounted using the incremental borrowing rate. Lease liabilities are subsequently measured at amortized
cost using the effective interest method. They are remeasured in case of modifications or reassessments of the lease.
Lessor - Leases are classified as either finance or operating leases, determined based on whether substantially all the risks and rewards
incidental to ownership of an underlying asset are transferred. If this is the case, the lease is classified as a finance lease; if not, it is an
operating lease. Receivables from finance leases are recognized at an amount equal to the net investment in the lease. The assets
underlying the operating leases are presented in Property, plant and equipment and depreciated on a straight-line basis over their useful
lives or to their estimated residual value. Operating lease income is recognized on a straight-line basis over the lease term.
Leases - A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. Further information on leases can be found in Notes 8, 13 and 16.
Impairment of property, plant and equipment and other intangible assets - The Company reviews property, plant and equipment and
other intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. In addition, intangible assets not yet available for use are subject to an annual impairment test. Impairment testing of
property, plant and equipment and other intangible assets involves the use of estimates in determining the assets' recoverable amount,
which can have a material impact on the respective values and ultimately the amount of any impairment.
generally 5 years
generally 3 to 7 years
generally 10 years
5 to 10 years
20 to 50 years
Equipment leased to others
Office & other equipment
Technical machinery & equipment
Other buildings
Factory and office buildings
Property, plant and equipment - Property, plant and equipment, is valued at cost less accumulated depreciation and impairment losses.
Depreciation expense is recognized using the straight-line method. The following useful lives are assumed:
Other intangible assets - The Company amortizes intangible assets with finite useful lives on a straight-line basis over their respective
estimated useful lives. Estimated useful lives for patents, licenses and other similar rights generally range from three to five years, except
for intangible assets with finite useful lives acquired in business combinations. Intangible assets acquired in business combinations
primarily consist of customer relationships and trademarks as well as technology. Useful lives in specific acquisitions ranged from four to
30 years for customer relationships and trademarks (in fiscal 2020 four to 20 years) and for technology from five to 22 years (in fiscal
2020 five to 18 years).
estimated growth rates and weighted average cost of capital. These estimates, including the methodology used, can have a material
impact on the respective values and ultimately the amount of any goodwill impairment.
Consolidated Financial Statements
Consolidated Financial Statements
60
Associates and joint ventures are recorded in the Consolidated Financial Statements using the equity method and are initially recognized
at cost. If the investment was retained in a transaction in which Siemens lost control of a subsidiary, the fair value of the investment
represents the cost on initial recognition. Siemens' share of its associate's or joint venture's post-acquisition profits or losses is recognized
in the Consolidated Statements of Income, and its share of post-acquisition changes in equity that have not been recognized in the
associate's or joint venture's profit or loss is recognized directly in equity. The cumulative post-acquisition changes also include effects
from fair value adjustments and are adjusted against the carrying amount of the investment. When Siemens' share of losses in an associate
or joint venture equals or exceeds its interest in the investment, Siemens does not recognize further losses, unless it incurs obligations or
makes payments on behalf of the associate or joint venture. The interest in an associate or joint venture is the carrying amount of the
investment together with any long term interests that, in substance, form part of Siemens' net investment in the associate or joint venture.
Siemens reviews associates and joint ventures for impairment whenever there is objective evidence that its investment is impaired, for
example a significant or prolonged decline in the fair value of the investment below its cost. This includes the use of estimates and
assumptions also related to observable valuation inputs that tend to be uncertain.
4,901
Other transactions with non-controlling interests
Changes in equity resulting from major portfolio transactions
Disposal of equity instruments
430
430
(547)
(547)
49,274
58
Re-issuance of treasury shares
Purchase of treasury shares
74
74
(63)
137
Share-based payment
(3,088)
(284)
(2,804)
(2,804)
Dividends
3,647
156
8
8
(547)
372
1,229
44,373
(4,804)
8
9
115
114
(179)
(13)
173
39,607
7,040
2,550
124
Balance as of September 30, 2021
1
1,229
(178)
(174)
5
2,325
(219)
Other changes in equity
1,095
(45)
Reclassi-
Additions Additions
business
carrying
amount
10/01/20191
differences
through
fications
Retire-
ments²
combi-
ment
nations
Accumu-
lated depre-
ciation/am-
ortization
and impair-
Carrying
amount
09/30/2020
Deprecia-
tion/amorti-
in fiscal
zation and
impairment
Translation
Gross
carrying
amount
09/30/2020
Gross
1,714
18
19
2020
construction in progress
736
16
47
711
(420)
Property, plant and equipment
Consolidated Financial Statements
23,443
568
2,739
(35)
(2,529)
1,055
24,601
(1)
(13,578)
1,053
11,023
(2,071)
'Includes assets reclassified to Assets classified as held for disposal and dispositions of those entities.
379
(in millions of €)
Internally generated technology
3,885
(273)
1,421
(3,699)
5,120
(4,523)
222
Office and other equipment
288
(233)
9,360
Technical machinery and equipment
(685)
5,067
8,656 (3,589)
7
7,239
(206)
10
3,456
3,682
(545)
38
656
(168)
3,700
Equipment leased to others
(571)
1,171
(4,078)
5,249
(2,523)
124
604
(3,902)
396
1,108
40
(333)
9,434
Customer relationships and trademarks
(443)
1,729
(2,902)
4,631
(2,618)
70
373
(202)
7,008
licenses and similar rights
Acquired technology including patents,
(194)
331
1,856
9
5,037 (3,642)
(306)
11,319
Land and buildings
(952)
4,838
(8,286)
13,124
(7,772)
495
704
(630)
20,326
Other intangible assets
(315)
1,395
(4,401)
(1,741)
(524)
construction in progress
Equity instruments
Derivative financial instruments
Receivables from finance leases
Loans receivable
(in millions of €)
Sep 30,
Other
NOTE 14 Other financial assets
1,586
1,505
186
166
129
124
In fiscal 2021 and 2020, income from operating leases is €668 million and €571 million, respectively, thereof from variable lease payments
€127 and €110 million, respectively.
2021
2020
14,446
(95)
419
(753)
Item Loans receivable primarily relate to long-term loan transactions of SFS.
22,771
22,964
623
710
1,670
1,556
2,044
1,552
4,245
4,700
14,189
188
182
261
247
23,443
(11,911)
3,168
58
(951)
33,080
Property, plant and equipment
735
(1)
736
(418)
(780)
512
(39)
1,461
(13,194)
Advances to suppliers and
10,250
1 Opening balance as of October 1, 2019 including effect of adopting IFRS 16
369
336
454
449
2020
2021
Sep 30,
After four years but not more than five years
More than five years
After one year but not more than two years
After two years but not more than three years
After three years but not more than four years
Within one year
(in millions of €)
Future minimum lease payments to be received under operating leases are:
In fiscal 2021 and 2020, expenses recognized for short-term leases are €50 million and €71 million, respectively; expenses for low-value
leases not accounted for under the right-of-use model are €21 million and €23 million, respectively.
The gross carrying amount of Advances to suppliers and construction in progress includes €959 million and €639 million, respectively, of
property, plant and equipment under construction in fiscal 2021 and 2020. As of September 30, 2021 and 2020, contractual commitments
for purchases of property, plant and equipment are €625 million and €563 million, respectively. Right-of-use assets are presented in
Property, plant and equipment in accordance with their nature; right-of-use assets have a carrying amount of €2,641 million and €2,474
as of September 30, 2021 and 2020, respectively; additions are €901 million and €1,273 million and depreciation expense is €726 million
and €706 million in fiscal 2021 and 2020. Right-of-use assets mainly relate to leases of land and buildings with a carrying amount of
€2,320 million and €2,187 million as of September 30, 2021 and 2020, additions of €659 million and €1,029 million and depreciation
expense of €534 million and €509 million in fiscal 2021 and 2020. Equipment leased to others mainly relate to Technical machinery and
equipment as well as to Office and other equipment owned by Siemens with a carrying amount of €1,279 million and €404 million,
respectively, as of September 30, 2021 and €1,223 million and €448 million, respectively, as of September 30, 2020.
2 Includes assets reclassified to Assets classified as held for disposal and dispositions of those entities.
(2,054)
(1,826)
ciation/am-
ortization
and impair-
(511)
632
(598)
825
2.446
700
1,423
1.746
14,460
17.997
132
192
241
409
Fiscal year 2020
Fiscal year 2021
5,294
(233)
NOTE 5 Other operating income
In fiscal 2021 and 2020, Other operating income mainly includes gains on sales of property, plant and equipment of €73 million and €308
million, respectively, as well as insurance related income. Fiscal 2020 included gains on the sales of businesses of €177 million.
NOTE 6 Other operating expenses
1,346
1,861
(217)
211
1,563
1,650
2020
15,758
2021
Income tax expenses
Deferred taxes
Current taxes
(in millions of €)
Income tax expenses (benefits) consist of the following:
NOTE 7 Income taxes
Other operating expenses in fiscal 2021 and 2020 include losses on the sale of businesses as well as effects from insurance, personnel,
legal and regulatory matters.
Fiscal year
7,289
10,065
14,827
Ownership interests held by non-controlling interests
(in millions of €)
Summarized financial information, in accordance with IFRS and before inter-company eliminations, is presented below.
Subsidiary with material non-controlling interests
Siemens Energy AG is globally active in the transmission and generation of electrical power and is publicly listed. The market capitalization
of Siemens Energy is €16.6 billion and €16.5 billion, respectively, as of September 30, 2021 and 2020.
Consolidated Financial Statements
13
Accumulated non-controlling interests
(24)
Total comprehensive income, net of income taxes, attributable to Siemens (2020: since initial recognition on Sep. 25)
(2,630)
(793)
attributable to shareholders of Siemens Energy AG
(2,993)
(867)
Total comprehensive income (loss), net of income taxes
(278)
Current income tax expenses in fiscal 2021 and 2020 include adjustments recognized for current taxes of prior years in the amount of
€(359) million and €(64) million, respectively. The deferred tax expenses (benefits) in fiscal 2021 and 2020 include tax effects of the
origination and reversal of temporary differences of €94 million and €(289) million, respectively.
Current assets
Current liabilities
31,338
10,268
10,824
2,623
4,031
21%
Sep 30, 2020
Non-current assets
Sep 30, 2021
25%
Total comprehensive income, net of income taxes
Total cash flows
Other comprehensive income, net of income taxes
Income (loss) from continuing operations, net of income taxes
Revenue
Dividends paid to non-controlling interests
Net income attributable to non-controlling interests
Non-current liabilities
Siemens Healthineers AG
registered in Munich, Germany
In Germany, the calculation of current taxes is based on a combined tax rate of 31%, consisting of a corporate tax rate of 15%, a solidarity
surcharge thereon of 5.5% and an average trade tax rate of 15%. For foreign subsidiaries, current taxes are calculated based on the local
tax law and applicable tax rates in the individual foreign countries. Deferred tax assets and liabilities in Germany and abroad are measured
at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled.
±
14
(417)
(600)
362
2,921
(1,302)
(2,931)
2,724
437
2020
898
2021
1,346
1,861
(109)
(91)
33
147
(437)
Sep 30,
(496)
760
2,324
61
1,620
8
(217)
211
15
Other
Changes due to Siemens Energy
527
Additions from acquisitions not impacting net income
Income taxes presented in the Consolidated Statements of Income
(1,869)
2020
2021
(2,324)
Balance at beginning of fiscal year of deferred tax (assets) liabilities
(in millions of €)
Fiscal year
Changes in items of the Consolidated Statements of Comprehensive Income
(1,120)
7
(75)
(in millions of €)
Deferred income tax assets and (liabilities) on a net basis are summarized as follows:
Actual income tax expenses
Other, net (primarily German trade tax differentials)
Tax effect of investments accounted for using the equity method
Foreign tax rate differential
Change in tax rates
Deferred taxes due to temporary differences
Change in realizability of deferred tax assets and tax credits
Tax-free income
Non-deductible expenses
Increase (decrease) in income taxes resulting from:
Expected income tax expenses
(in millions of €)
Current and deferred income tax expenses differ from the amounts computed by applying a combined statutory German income tax rate
of 31% as follows:
Consolidated Financial Statements
Taxes for prior years
54
Intangible assets
Current assets and liabilities
100
(56)
(398)
(377)
(386)
655
607
Pensions and similar obligations
1,705
2020
2021
Fiscal year
Deferred tax balances and expenses (benefits) developed as follows in fiscal 2021 and 2020:
Total deferred taxes, net
Tax loss carryforwards and tax credits
Non-current assets and liabilities
2,324
Advances to suppliers and
369
(1,236)
170
995
(5)
885
1,885
(1,710)
FY 2020
FY 2021
928
(818)
Income (loss) from discontinued operations before income taxes
Disposal gain net of disposal costs
Expenses
Revenue
(in millions of €)
In October 2020, Siemens signed an agreement to sell 100% of its shares in Flender GmbH including Siemens' Wind Energy Generation
business (Flender) to The Carlyle Group, U.S. Both businesses were previously reported under Portfolio Companies. In the first quarter of
fiscal 2021, the businesses of Flender (the disposal group) met the criteria for classification as held for disposal as well as for discontinued
operation, and, accordingly, Siemens ceased depreciation and amortization of assets within the disposal group. Upon closing of the
transaction in March 2021, Siemens no longer controls Flender. The consideration was €1.875 billion. Derecognized net assets amounted
to €954 million. The results of Flender are reported as discontinued operations in the Consolidated Statements of Income and Cash Flows
for all periods presented:
Sale of Flender GmbH
In March 2021, Siemens Healthineers placed 53 million new shares to institutional investors, receiving gross proceeds of €2.3 billion and
increasing its share capital to €1.128 billion. Siemens did not participate in the placement, thus, Siemens' stake in Siemens Healthineers
decreased from 79% to 75%. The dilution is accounted for as equity transaction, which increased Non-controlling interests by €1.0 billion
and Total equity attributable to shareholders of Siemens AG by €1.3 billion (mainly due to an increase in Retained earnings of €1.2 billion).
Income taxes on ordinary activities
Other income taxes
(8)
(36)
Goodwill
Inventories
Other current financial assets
Trade and other receivables
Cash and cash equivalents
(in millions of €)
Consolidated Financial Statements
Dilution of the stake in Siemens Healthineers
12
134
946
thereof attributable to Siemens AG shareholders
134
946
Income (loss) from discontinued operations, net of income taxes
(40)
The carrying amounts of the major classes of assets and liabilities derecognized were as follows:
In addition, Siemens closed several smaller acquisitions in fiscal 2021 and 2020 for a total purchase price of €429 million and €551 million,
respectively, mainly paid in cash. The (preliminary) purchase price allocations resulted in Other intangible assets of €147 million and
€263 million and Goodwill of €254 million and €298 million, respectively, which comprises intangible assets that are not separable such
as employee know-how and expected synergy effects. The purchase price allocation for some of the acquired businesses is preliminary, as
a detailed analysis of the assets and liabilities has not been finalized.
In August 2021, Siemens acquired all shares in Supplyframe Inc., USA (Supplyframe). Supplyframe is a design-to-source platform for the
global electronics value chain. The transaction provides value to both Supplyframe's and Siemens' customers through access to both
Siemens' offerings and Supplyframe's marketplace intelligence. The acquired business is integrated into Digital Industries. The
preliminary purchase price paid in cash is €556 million as of the acquisition date. The preliminary purchase price allocation as of the
acquisition date resulted in Other intangible assets of €111 million, thereof customer-related intangible assets and trademark rights
€83 million and technology €28 million as well as in liabilities of €87 million. Goodwill of €491 million comprises intangible assets that
are not separable such as employee know-how and expected synergy effects. The acquired business contributed Revenue of €11 million
and Net income of €(7) million for the period from its acquisition date to September 30, 2021, including earnings effects from the
purchase price allocation and integration costs. If Supplyframe had been included in the Consolidated Financial Statements since
October 1, 2020, Revenue and Net income, including earnings effects from the purchase price allocation and integration costs, would
have been €62,314 million and €6,694 million, respectively, in fiscal 2021.
activities. The gross contractual amounts of Trade and other receivables is €603 million, of which €24 million were expected to be
uncollectable at the date of acquisition. The gross contractual amount of loans and bonds receivables is €227 million, of which
€207 million are probably uncollectible at the acquisition date. The acquired business contributed Revenue of €1,241 million and a net loss
of €50 million for the period from the acquisition date to September 30, 2021, including earnings effects from the purchase price allocation
and integration costs. If Varian had been included in the Consolidated Financial Statements since October 1, 2020, Revenue and
Net income, including earnings effects from the purchase price allocation and integration costs, would have been €63.6 billion and
€6.6 billion, respectively, in fiscal 2021. The purchase price allocation of Varian is preliminary as, in particular, the allocation of intangible
assets including goodwill to currency areas is not finalized. Adjustments may lead to changes, such as, in intangible assets including
goodwill and in deferred tax liabilities.
Stage 1: At inception, twelve-month expected credit losses are recognized based on a twelve months probability of default.
allowance for loans and other long-term debt instruments primarily held at Financial Services (SFS) is measured according to a three-stage
impairment approach:
Consolidated Financial Statements
10
Valuation allowances are set up for expected credit losses, representing a forward-looking estimate of future credit losses involving
significant judgment. Expected credit loss is the gross carrying amount less collateral, multiplied by the probability of default and a factor
reflecting the loss in the event of default. Valuation allowances are not recognized when the gross carrying amount is sufficiently
collateralized. Probabilities of default are mainly derived from internal rating grades. A simplified approach is used to assess expected
credit losses from trade receivables, lease receivables and contract assets by applying their lifetime expected credit losses. The valuation
Financial assets measured at amortized cost: Loans, receivables and other debt instruments held in a hold-to-collect business model
with contractual cash flows that represent solely payments of principal and interest are measured at amortized cost using the effective
interest method less valuation allowances for expected credit losses.
Financial assets measured at fair value through other comprehensive income (FVOCI): are equity instruments for which Siemens
irrevocably elects to present subsequent fair value changes in OCI at initial recognition of the instrument. Unrealized gains and losses, net
of deferred income tax expenses, as well as gains and losses on the subsequent sale of the instruments are recognized in line item Other
comprehensive income, net of income taxes.
Stage 2: If the credit risk of a financial asset increases significantly without being credit-impaired, lifetime expected credit losses are
recognized based on a lifetime probability of default. A significant increase in credit risk is determined for each individual financial
instrument using internal credit ratings. A rating deterioration does not trigger a transfer into Stage 2, if the credit rating remains within
the investment grade range. More than 30 days past due payments will not be transferred into Stage 2, if the delay is not credit-risk-
related.
Financial assets measured at fair value through profit and loss (FVTPL): a) mandatorily measured at FVTPL: Debt financial assets are
measured at FVTPL if the business model they are held in is not a hold-to-collect or a hold-and-sell business model, or if their contractual
cash flows do not represent solely payments of principal and interest. Equity instruments are measured at FVTPL unless the FVOCI-option
is elected. b) Financial assets designated as measured at FVTPL are irrevocably designated at initial recognition if the designation
significantly reduces accounting mismatches that would otherwise arise if assets and liabilities as well as recognizing gains (losses) were
measured on different bases.
Legal Proceedings often involve complex legal issues and are subject to substantial uncertainties. Accordingly, considerable judgment is
part of determining whether it is probable that there is a present obligation as a result of a past event at the end of the reporting period,
whether it is probable that such a Legal Proceeding will result in an outflow of resources and whether the amount of the obligation can
be reliably estimated. Internal and external counsels are generally part of the determination process. Due to new developments, it may be
necessary, to record a provision for an ongoing Legal Proceeding or to adjust the amount of a previously recognized provision. Upon
resolution of a Legal Proceeding, Siemens may incur charges in excess of the recorded provisions for such matters. The outcome of Legal
Proceedings may have a material effect on Siemens' financial position, its results of operations and/or its cash flows.
Significant estimates are involved in the determination of provisions related to onerous contracts, warranty costs, asset retirement
obligations, legal and regulatory proceedings as well as governmental investigations (Legal Proceedings). Siemens records a provision for
onerous contracts with customers when current estimates of total estimated costs exceed estimated revenue. Onerous contracts with
customers are identified by monitoring the progress of the project and updating the estimates which requires significant judgment relating
to achieving certain performance standards as well as estimates involving warranty costs and estimates regarding project delays including
the assessment of responsibility splits between the contract partners for these delays.
Provisions - A provision is recognized in the Statement of Financial Position when it is probable that the Company has a present legal or
constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are recognized at
present value by discounting the expected future cash flows at a pretax rate that reflects current market assessments of the time value of
money. When a contract becomes onerous, the present obligation under the contract is recognized as a provision.
Remeasurements comprise actuarial gains and losses as well as the difference between the return on plan assets and the amounts included
in net interest on the net defined benefit liability (asset). They are recognized in Other comprehensive income, net of income taxes.
Actuarial valuations rely on key assumptions including discount rates, expected compensation increases, rate of pension progression and
mortality rates. Discount rates used are determined by reference to yields on high-quality corporate bonds of appropriate duration and
currency at the end of the reporting period. In case such yields are not available, discount rates are based on government bonds yields.
Due to changing market, economic and social conditions, the underlying key assumptions may differ from actual developments.
Entitlements resulting from plans based on asset returns from underlying assets are generally measured at the fair value of the underlying
assets at period-end. If the performance of the underlying assets is lower than a guaranteed return, the DBO is measured by projecting
forward the contributions at the guaranteed fixed return and discounting back to a present value.
Service cost, past service cost and settlement gains (losses) for pensions and similar obligations as well as administration costs unrelated
to the management of plan assets are allocated among functional costs. Past service cost and settlement gains (losses) are recognized
immediately in profit or loss. For unfunded plans, the amount in line item Provisions for pensions and similar obligations equals the DBO.
For funded plans, Siemens offsets the fair value of the plan assets with the DBO. Siemens recognizes the net amount, after adjustments
for effects relating to any asset ceiling.
increases and expected rates of future pension progression are considered. The assumptions used for the calculation of the DBO as of the
period-end of the preceding fiscal year are used to determine the calculation of service cost and interest income and expense of the
following year. Significant plans apply individual spot rates from full discount rate curves to determine service cost and interest expense.
The net interest income or expense for the fiscal year will be based on the discount rate for the respective year multiplied by the net
defined benefit liability (asset) at the preceding fiscal year's period-end date.
Consolidated Financial Statements
Termination benefits - Termination benefits are provided as a result of an entity's offer made in order to encourage voluntary redundancy
before the regular retirement date or from an entity's decision to terminate the employment. Termination benefits in accordance with IAS
19, Employee Benefits, are recognized as a liability and an expense when the entity can no longer withdraw the offer of those benefits.
Financial instruments - A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity. Based on their contractual cash flow characteristics and the business model they are held in, financial
instruments are classified as financial assets and financial liabilities measured at cost or amortized cost, measured at fair value, loan
commitments, contract assets and receivables from finance leases. Regular way purchases or sales of financial assets are accounted for at
the trade date. Initially, financial instruments are recognized at fair value and net of transaction costs, if not categorized at FVTPL.
Subsequently, financial assets and liabilities are measured according to the category to which they are assigned to:
Property, plant and equipment
Stage 3: If the financial asset is credit-impaired, valuation allowances equal lifetime expected credit losses. A financial asset is considered
credit-impaired when there is observable information about significant financial difficulties and a high vulnerability to default, however,
the definition of default is not yet met. Impairment triggers include liquidity problems, a request for debt restructuring or a breach of
contract. A credit-risk driven contractual modification always results in a credit-impaired financial asset.
A financial asset is derecognized when the rights to cash flows expire or the financial asset is transferred to another party. Significant
modifications of contractual terms of a financial asset measured at amortized cost result in derecognition and recognition of a new
financial asset; for insignificant modifications, the carrying amount of the financial asset is adjusted without derecognition.
Consolidated Financial Statements
11
On April 15, 2021, Siemens completed the acquisition of all shares in Varian Medical Systems, Inc., USA (Varian). Varian is active in the
field of cancer care, with solutions especially in radiation oncology and related digital solutions and applications. The acquired business is
integrated into Siemens Healthineers. Varian thus offers a good complement to Siemens Healthineers' businesses in medical imaging,
laboratory diagnostics and interventional procedures. The purchase price paid in cash amounted to US$16.4 billion (€13.9 billion as of the
acquisition date). The preliminary purchase price allocation as of the acquisition date resulted in the following assets and liabilities:
Cash and cash equivalents €0.6 billion, Trade and other receivables €0.6 billion, Inventories €0.8 billion, various other
current assets €0.4 billion, Goodwill €8.0 billion, Other intangible assets €6.3 billion, Property, plant and equipment €0.5 billion,
miscellaneous assets €0.2 billion, Trade payables €0.2 billion, Contract liabilities €0.7 billion, Current income tax liabilities €0.2 billion,
Other current liabilities €0.3 billion, Deferred tax liabilities €1.6 billion and miscellaneous liabilities €0.5 billion. Resulting intangible assets
mainly relate to technologies for oncology solutions, customer relationships, and the acquired order backlog. As of the acquisition date,
goodwill was allocated to the groups of cash-generating units Varian €7.5 billion and Imaging €0.5 billion in accordance with the expected
synergies. Goodwill relates to inseparable intangible assets such as synergy effects and employee know-how. Synergies from the
acquisition are mainly expected from broader regional coverage of the sales network, cross-selling opportunities into our existing customer
base and from expanded integrated service offerings (e.g. "Oncology-as-a-Service" program) and value partnerships, and joint product
innovation. In addition, the business combination is expected to generate cost synergies in the administrative field and in procurement
Acquisitions
NOTE 3 Acquisitions, dispositions and discontinued operations
The presentation of certain prior-year information has been reclassified to conform to the current year
Cash flow hedges: The effective portion of changes in the fair value of derivative instruments designated as cash flow hedges are
recognized in line item Other comprehensive income, net of income taxes, and any ineffective portion is recognized immediately in net
income. Amounts accumulated in equity are reclassified into net income in the same periods in which the hedged item affects net income.
Share-based payment - Share-based payment awards at Siemens are predominately designed as equity-settled. Fair value is measured
at grant date and is expensed over the vesting period. Fair value is determined as the market price of the underlying shares, considering
dividends during the vesting period the grantees are not entitled to as well as market conditions and non-vesting conditions, if applicable.
Plans granting the rights to receive subsidiary shares constitute own shares and, accordingly, are accounted as equity-settled.
Prior-year information
presentation.
Financial assets are written off as uncollectible if recovery appears unlikely. Generally, if the limitation period expired, when a debtor's
sworn statement of affairs is received, or when the receivable is not pursued due to its minor value. Receivables are written off when
bankruptcy proceedings close.
Fair value hedges: The carrying amount of the hedged item is adjusted by the gain or loss attributable to the hedged risk. Where an
unrecognized firm commitment is designated as hedged item, the subsequent cumulative change in its fair value is recognized as a
separate financial asset or liability with corresponding gain or loss recognized in net income. For hedged items carried at amortized cost,
the adjustment is amortized until maturity of the hedged item. For hedged firm commitments the initial carrying amount of the assets or
liabilities that result from meeting the firm commitments are adjusted to include the cumulative changes in the fair value that were
previously recognized as separate financial assets or liabilities.
effective interest method.
except for derivative financial instruments, Siemens measures financial liabilities at amortized cost using the
-
Financial liabilities
Loan Commitments Expected credit losses for irrevocable loan commitments are determined using the three-stage impairment
approach for financial assets measured at amortized cost and recognized as a liability.
-
Cash and cash equivalents - The Company considers all highly liquid investments with less than three months maturity from the date of
acquisition to be cash equivalents. Cash and cash equivalents are measured at cost.
Derivative financial instruments - Derivative financial instruments, such as foreign currency exchange contracts and interest rate swap
contracts are measured at fair value unless they are designated as hedging instruments, for which hedge accounting is applied. Changes
in the fair value of derivative financial instruments are recognized either in net income or, in the case of a cash flow hedge, in line item
Other comprehensive income, net of income taxes (applicable deferred income tax). Certain derivative instruments embedded in host
contracts are also accounted for separately as derivatives.
Miscellaneous current and non-current assets
Assets classified as held for disposal
Trade payables
18,792
16,874
Siemens Energy AG
registered in Munich, Germany
Sep 30, 2020
35.1%
23,136
23,397
35.1%
Sep 30, 2021
Carrying amount of Siemens Energy AG at end of fiscal year
22,602
Siemens interest in the net assets of Siemens Energy AG at fiscal year-end
Consolidation adjustments (including goodwill)
Net Assets
Non-current liabilities
Current liabilities
Non-current assets excluding goodwill
Current assets
Ownership interest
(in millions of €)
attributable to shareholders of Siemens Energy AG
Below summarized financial information of Siemens Energy AG are disclosed at a 100 per cent basis. They are adjusted to align with
Siemens' accounting policies and to incorporate effects from fair value adjustments at initial recognition. These adjustments were
preliminary in fiscal 2020 and have been finalized in fiscal 2021.
21,669
8,080
Income (loss) from continuing operations, net of income taxes
Other comprehensive income, net of income taxes
27,457
28,482
Revenue
Fiscal year 2020
Fiscal year 2021
6,645
7,514
6,352
3,009
4,118
3,343
11,731
9,525
12,179
10,155
2,527
(1,873)
In fiscal 2021, share of profit (loss) from investments accounted for using the equity method includes a loss of €396 million (loss of €24
million in fiscal 2020) from Siemens Energy AG. In fiscal 2021, the loss includes Siemens' share of Siemens Energy AG's net losses of €(159)
million as well as effects from fair value adjustments at initial recognition of €(237) million.
(478)
193
355
1,862
92
359
123
540
244
143
95
Mar 10, 2021
Spin-off Siemens Energy AG in fiscal 2020
Liabilities associated with assets classified as held for disposal
Miscellaneous non-current liabilities
Miscellaneous current liabilities
Other current financial liabilities
510
(596)
116
Income from discontinued operations, net of income taxes includes €119 million from Siemens Energy AG in fiscal 2021, which are mainly
attributable to the reversal of income tax provisions.
(590)
(21)
108
57
(114)
(514)
2020
907
2021
Income (loss) from investments accounted for using the equity method, net
Impairment and reversals of impairment
Gains (losses) on sales, net
Share of profit (loss), net
(in millions of €)
Investments accounted for using the equity method
NOTE 4 Interests in other entities
Fiscal year
(49)
(301)
Balance at end of fiscal year of deferred tax (assets) liabilities
NOTE 13 Other intangible assets and property, plant and equipment
The sensitivity analysis for the groups of cash-generating units to which a significant amount of goodwill is allocated was based on a
reduction in after-tax future cash flows by 10% or an increase in after-tax discount rates by one percentage point or a reduction in the
terminal value growth rate by one percentage point. Siemens concluded that no impairment loss would need to be recognized on goodwill
in any of these groups of cash-generating units.
7.5%
1.5%
2,114
discount rate
8.5%
7.0%
1.7%
5,827
1.7%
6,732
rate
Goodwill
After-tax
Sep 30, 2020
Terminal
value growth
Smart Infrastructure
Gross Translation
carrying differences
amount
10/01/2020
Additions Additions
through
Reclassi-
fications
Retire-
ments¹
22
3,456
Internally generated technology
(in millions of €)
in fiscal
2021
zation and
impairment
tion/amorti-
Imaging of Siemens Healthineers
Deprecia-
Carrying
amount
09/30/2021
nations
Accumu-
lated depre-
carrying
amount
09/30/2021
combi-
business
Gross
ment
Digital Industries
(in millions of €)
Revenue figures in the detailed forecast planning period of the groups of cash-generating units to which a significant amount of goodwill
is allocated are based on average revenue growth rates (excluding portfolio effects) of between 7.3% and 9.3% (3.1% and 6.1% in fiscal
2020).
Siemens performs the mandatory annual impairment test in the three months ended September 30. Key assumptions on which Siemens
based its determinations of the fair value less costs to sell for the cash-generating units or groups of cash-generating units include terminal
value growth rates up to 1.7% in fiscal 2021 and fiscal 2020, respectively and after-tax discount rates of 5.5% to 12.0% in fiscal 2021 and
5.5% to 12.5% in fiscal 2020.
20,449
30,160
20,449
29,729
1,666
1,688
(271)
To estimate the fair value less costs to sell of the cash-generating units or groups of cash-generating units, cash flows were projected for
the next five years (in exceptional cases up to ten years) based on past experience, actual operating results and management's best
estimate about future developments as well as market assumptions. The determined fair value of the cash-generating units or groups of
cash-generating units is assigned to level 3 of the fair value hierarchy.
99
22
1,938
1,666
Balance at fiscal year-end
Balance at begin of fiscal year
Carrying amount
Balance at fiscal year-end
(100)
277
The fair value less costs to sell is mainly driven by the terminal value, which is particularly sensitive to changes in the assumptions on the
terminal value growth rate and discount rate. Both assumptions are determined individually for each cash-generating unit or group of
cash-generating units. Discount rates are based on the weighted average cost of capital (WACC). Siemens Financial Services' discount rate
represents its specific cost of equity. The discount rates are calculated based on a risk-free rate of interest and a market risk premium. In
addition, the discount rates reflect the current market assessment of the risks specific to each cash-generating unit or group of cash-
generating units by taking into account specific peer group information on beta factors, leverage and cost of debt as well as country
specific premiums. The parameters for calculating the discount rates are based on external sources of information. The peer group is
subject to an annual review and adjusted, if necessary. Terminal value growth rates take into consideration external macroeconomic
sources of data and industry specific trends.
Consolidated Financial Statements
7.5%
1.7%
6,525
After-tax
discount rate
7.8%
8.5%
1.7%
7,417
1.7%
17
7,692
Goodwill
Sep 30, 2021
Terminal
value growth
Imaging of Siemens Healthineers
Digital Industries
Varian of Siemens Healthineers
(in millions of €)
The following table presents key assumptions used to determine fair value less costs to sell for impairment test purposes for the groups of
cash-generating units to which a significant amount of goodwill is allocated:
rate
(51)
3,704
(1,910)
Office and other equipment
(270)
1,421
(3,405)
4,826
(732)
142
5,249
136
86
5,120
Technical machinery and equipment
(707)
5,425
(4,029)
9,454
73
(629)
75
511
1,882
(1,979)
3,860
(538)
1
626
14
85
76
Equipment leased to others
(582)
1,242
(4,164)
5,406
(595)
81
3,682
(6)
195
349
5,037
and trademarks
Customer relationships
(458)
3,987
(3,158)
7,144
176
(243)
2,576
138
4,631
licenses and similar rights
Acquired technology including patents,
(208)
1,794
43
756
3,978
8,139
126
8,656
Land and buildings
(1,004)
10,964
(8,023)
18,987
(1,051)
(1,345)
6,553
335
13,124
Other intangible assets
(338)
5,184
(2,956)
319
Impairment losses recognized during the period
Dispositions and reclassifications to assets classified as held for disposal
Balance at begin of fiscal year
2021
After four years but not more than five years
More than five years
After one year but not more than two years
After two years but not more than three years
After three years but not more than four years
Within one year
(in millions of €)
Sep 30,
Future minimum lease payments to be received are as follows:
2020
In fiscal 2021 and 2020, the long-term portion of receivables from finance leases is reported in Other financial assets amounting to €4,700
million and €4,245 million, respectively.
15,518
2,003
2,250
12,071
13,267
2020
2021
14,074
Sep 30,
2,711
1,911
2020
2021
(in millions of €)
Sep 30,
Future minimum lease payments reconcile to the net investment in the lease as follows:
7,153
7,914
2,441
717
422
452
732
807
1,156
1,284
1,685
748
Translation differences and other
Trade receivables from the sale of goods and services
Receivables from finance leases
NOTE 8 Trade and other receivables
As of September 30, 2021 and 2020, €82 million and €221 million respectively, expire over the periods to 2029.
The amount of €2,280 million for tax loss carryforwards for which no deferred tax asset has been recognized does include material loss
carryforwards for local taxes only.
2,364
2,474
2,172
2,280
2020
192
Siemens has not recognized deferred tax liabilities for income taxes or foreign withholding taxes on the cumulative earnings of subsidiaries
of €31,628 million and €25,003 million, respectively in fiscal 2021 and 2020, because the earnings are intended to be permanently
reinvested in the subsidiaries.
194
Sep 30,
Tax loss carryforwards
Deductible temporary differences
(in millions of €)
Deferred tax assets have not been recognized with respect of the following items (gross amounts):
(2,324)
(527)
2021
(in millions of €)
15
Including items charged or credited directly to equity and the expenses (benefits) from continuing and discontinued operations, the
income tax expenses (benefits) consist of the following:
An uncertain tax regulation arising from a foreign tax reform may result in potential future tax payments amounting to a middle three-
digit million euro range. Due to the low probability and the character of a contingent liability, no tax liability was recognized.
1,192
1,690
(588)
(55)
435
(116)
Consolidated Financial Statements
1,346
2020
2021
Fiscal year
Income and expenses recognized directly in equity
Discontinued operations
Continuing operations
(in millions of €)
1,861
7,914
Future minimum lease payments
Less: Unearned finance income relating to future minimum lease payments
NOTE 12 Goodwill
Cost of sales includes inventories recognized as expense amounting to €39,227 million and €35,017 million, respectively, in fiscal 2021
and 2020. Compared to prior year, write-downs increased by €61 million as of September 30, 2021. As of September 30, 2020, write-
downs decreased by €18 million compared to FY 2019.
7,795
8,836
600
616
2,355
(in millions of €)
2,825
3,421
1,796
1,974
2020
2021
Sep 30,
Finished goods and products held for resale
Advances to suppliers
3,043
7,153
Cost
Translation differences and other
Accumulated impairment losses and other changes
22,115
31,417
Balance at fiscal year-end
(9,588)
(123)
Dispositions and reclassifications to assets classified as held for disposal
Balance at begin of fiscal year
1,247
Acquisitions and purchase accounting adjustments
(1,642)
657
32,098
22,115
2020
Fiscal year
2021
8,768
Raw materials and supplies
Work in progress
NOTE 11 Inventories
Loans receivable
(in millions of €)
NOTE 9 Other current financial assets
In fiscal 2021 and 2020, finance income on the net investment in the lease is €412 million and €398 million.
Investments in finance leases primarily relate to industrial machinery, medical equipment, transportation systems, equipment for
information technology and office machines.
6,475
7,162
(in millions of €)
Net investment in the lease
115
Plus present value of unguaranteed residual value
6,375
7,047
Present value of future minimum lease payments
(778)
(867)
100
Derivative financial instruments
Interest-bearing debt securities
Sep 30,
As of September 30, 2021 and 2020, amounts expected to be settled after twelve months are €1,319 million and €960 million for contract
assets and €1,824 million and €1,112 million for contract liabilities, respectively. In fiscal 2021, contract assets and liabilities increased by
€141 million and €724 million, respectively, due to business combinations (mainly Varian). In fiscal 2021 and 2020, revenue includes
€4,966 million and €4,616 million, respectively, which was included in contract liabilities at the beginning of the fiscal year.
NOTE 10 Contract assets and liabilities
Consolidated Financial Statements
16
8,382
7,985
Other
1,370
1,424
398
1,256
1,132
4,904
5,085
2020
2021
798
Some of these Legal Proceedings could result in adverse decisions for Siemens, which may have material effects on its business activities
as well as its financial position, results of operations and cash flows.
29
For Legal Proceedings information required under IAS 37, Provisions, Contingent Liabilities and Contingent Assets is not disclosed if the
Company concludes that disclosure can be expected to seriously prejudice the outcome of the matter.
Siemens is involved in numerous Legal Proceedings in various jurisdictions. These Legal Proceedings could result, in particular, in Siemens
being subject to payment of damages and punitive damages, equitable remedies or sanctions, fines or disgorgement of profit. In individual
cases this may also lead to formal or informal exclusion from tenders or the revocation or loss of business licenses or permits. In addition,
further Legal Proceedings may be commenced or the scope of pending Legal Proceedings may be extended. Asserted claims are generally
subject to interest rates.
Consolidated Financial Statements
As previously reported, in May 2014, the Public Affairs Office (Ministério Público) São Paulo initiated a lawsuit against Siemens Ltda. as
well as other companies and several individuals claiming, inter alia, damages in an amount of BRL2.5 billion (approximately €399 million
as of September 2021) plus adjustments for inflation and related interest in relation to train refurbishment contracts entered into between
2008 and 2011. In January 2015, the district court of São Paulo admitted a lawsuit of the State of São Paulo and two customers against
Siemens Ltda., Siemens AG and other companies and individuals claiming damages in an unspecified amount. In March 2015, the district
court of São Paulo admitted a lawsuit of the Public Affairs Office (Ministério Público) São Paulo against Siemens Ltda. and other companies
claiming, inter alia, damages in an amount of BRL487 million (approximately €78 million as of September 2021) plus adjustments for
inflation and related interest in relation to train maintenance contracts entered into in 2000 and 2002. In September 2015, the district
court of São Paulo admitted another lawsuit of the Public Affairs Office (Ministério Público) São Paulo against Siemens Ltda. and other
companies claiming, inter alia, damages in an amount of BRL918 million (approximately €147 million as of September 2021) plus
adjustments for inflation and related interest in relation to train maintenance contracts entered into in 2006 and 2007. Siemens is
defending itself against these actions. It cannot be excluded that further significant damage claims will be brought by customers or the
state against Siemens.
6.125%/2006/August 2026/US$ fixed-rate instruments
23,449
20,867
491
450
£
522
450
£
0.875%/2020/June 2023/GBP fixed-rate instruments
Total Debt Issuance Program
998
1,000
€
998
1,000
€
997
1,000
€
998
1,000
€
1,496
1,500
€
1,498
1,500
US$
1,750
1,697
US$
US$
646
750
US$
939
1,100
US$
1,476
1,750
US$
1,493
1,750
US$
€
1,401
US$
1,369
1,500
US$
1,493
1,750
US$
1,511
1,750
US$
2.9%/2015/May 2022/US$-fixed-rate-instruments
3.25%/2015/May 2025/US$ fixed-rate-instruments
4.4%/2015/May 2045/US$ fixed-rate-instruments
1.7% /2016/September 2021/US$-fixed-rate-instruments
2.0%/2016/September 2023/US$-fixed-rate-instruments
2.35%/2016/October 2026/US$-fixed-rate-instruments
3.3%/2016/September 2046/US$-fixed-rate-instruments
1,718
1,750
1,500
750
929
₤
€
1,251
1,250
€
3m EURIBOR+0.7%/2019/December 2021/EUR floating-rate instrument
991
1,000
€
991
1,000
€
0.5%/2019/September 2034/EUR fixed-rate instruments
993
1,000
€
994
1,000
€
503
500
€
503
500
€
1,002
1,000
As previously reported, in June 2015, Siemens Ltda. appealed to the Supreme Court against a decision of a previous court to suspend
Siemens Ltda. from participating in public tenders and signing contracts with public administrations in Brazil for a five year term based on
alleged irregularities in calendar year 1999 and 2004 in public tenders with the Brazilian Postal authority. In June 2018, the court accepted
Siemens' appeal and declared the earlier instance decision as void. In June 2021, the court referred the case back to the court of first
instance. In February 2018, the Ministério Público in Brasilia filed a lawsuit based on the same set of facts, mainly claiming the exclusion
of Siemens Ltda. from public tenders for a ten year term. Siemens Ltda. is defending itself against the lawsuit. Siemens Ltda. is currently
not excluded from participating in public tenders.
1,250
1,256
0.0%/2020/February 2023/EUR fixed-rate instruments
€
985
850
£
747
750
€
748
750
€
996
1,000
€
997
850
1,000
0.25%/2020/February 2029/EUR fixed-rate instruments
0.5%/2020/February 2032/EUR fixed-rate instruments
1.0%/2020/February 2025/GBP fixed-rate instruments
0.125%/2020/June 2022/EUR fixed-rate instruments
0.25%/2020/June 2024/EUR fixed-rate instruments
0.375%/2020/June 2026/EUR fixed-rate instruments
997
1,000
€
998
1,000
€
0.0%/2020/February 2026/EUR fixed-rate instruments
1,253
1,250
€
1,252
1,250
€
638
US$
1,700
In Germany, pension benefits are provided through the following plans: BSAV (Beitragsorientierte Siemens Altersversorgung), frozen
legacy plans as well as deferred compensation plans. The majority of active employees participate in the BSAV. Those benefits are
predominantly based on notional contributions and the return on the corresponding assets of this plan, subject to a minimum return
guaranteed by the employer. At inception of the BSAV, benefits provided under the frozen legacy plans were modified to substantially
eliminate the effects of compensation increases. However, the frozen plans still expose Siemens to investment risk, interest rate risk and
longevity risk. The pension plans are funded via contractual trust arrangements (CTA). In Germany no legal or regulatory minimum funding
requirements apply.
The defined benefit plans open to new entrants are based predominantly on contributions made by the Company. Only to a certain extent,
those plans are affected by longevity, inflation and compensation increases and take into account country specific differences. The
Company's major plans are funded with assets in segregated entities. In accordance with local laws these plans are managed in the interest
of the beneficiaries by way of contractual trust agreements with each separate legal entity. The defined benefit plans cover 442,000
participants, including 178,000 actives, 84,000 deferreds with vested benefits and 180,000 retirees and surviving dependents.
Germany
Defined benefit plans
NOTE 17 Post-employment benefits
Siemens has a US$9.0 billion (€7.8 billion and €7.7 billion as of September 30, 2021 and 2020) commercial paper program in place
including US$ extendible notes capabilities as of September 30, 2021 and 2020. As of September 30, 2021 and 2020, US$15 million (€13
million) and US$2.3 billion (€2.0 billion), respectively, were outstanding. Siemens' commercial papers have a maturity of generally less
than 90 days. Interest rates ranged from 0.05% to 0.21% in fiscal 2021 and from 0.06% to 1.98% in fiscal 2020.
Commercial paper program
As of September 30, 2021 and 2020, five respectively two bilateral term loan facilities are outstanding (in aggregate € 1.8 billion and
€0.85 billion). In fiscal 2021 three bilateral term loan facilities were newly signed: one bilateral €500 million term loan facility maturing
in March 2022 with a one-year extension option; one bilateral US$150 million term loan facility (€130 million) maturing in February 2022
with a one-year extension option and one bilateral US$350 million term loan facility (€302 million) maturing in February 2022 with a one-
year extension option. One existing bilateral US$500 million term loan facility (€432 million) has a maturity until March 2024 with a one-
year extension option remaining and the second existing bilateral US$500 million term loan facility (€432 million) has a maturity until
June 2024.
Assignable and term loans
US$ Bonds - In September 2021, the 1.7% US$1.1 billion fixed-rate instruments were redeemed at face value. In March 2021, Siemens
issued instruments totaling US$10.0 billion (€8.6 billion at September 30, 2021) in seven tranches.
Debt Issuance Program - The Company has a program for the issuance of debt instruments in place under which, as of September 30,
2021, up to €30.0 billion of instruments can be issued (€25.0 billion as of September 30, 2020). As of September 30, 2021, €20.8 billion
in notional amounts were issued and are outstanding (€23.2 billion as of September 30, 2020). In March 2021 the 1.75% €1.25 billion
fixed-rate instrument was redeemed at face value. In September 2021, the US$ 400 million floating rate instruments were redeemed at
face value. In September 2021 the 0.0% €1.0 billion fixed-rate instrument was redeemed at face value.
Consolidated Financial Statements
22
38,265
43,372
1 Includes adjustments for fair value hedge accounting.
Total
14,816
22,505
1,284
1,500
US$
2.875%/2021/March 2041/US$ fixed-rate-instruments
Total US$ Bonds
1,503
1,750
US$
2.15%/2021/March 2031/US$ fixed-rate-instruments
1,074
U.S.
In the US, the Siemens Pension Plans are sponsored, which for the most part have been frozen to new entrants and to future benefit
accruals, except for interest credits on cash balance accounts. Siemens has appointed the Investment Committee as the named fiduciary
for the management of the assets of the Plans. The Plans' assets are held in Master Trusts and the trustees of the Master Trusts are
responsible for the administration of the assets of the trust, taking directions from the Investment Committee. The Plans are subject to the
funding requirements under the Employee Retirement Income Security Act of 1974 as amended (ERISA). There is a regulatory requirement
to maintain a minimum funding level of 80% in the defined benefit plans in order to avoid benefit restrictions. At their discretion,
sponsoring employers may contribute in excess of this regulatory requirement. Annual contributions are calculated by independent
actuaries.
U.K.
Pension benefits are mainly offered through the Siemens Benefit Scheme for which, until the start of retirement, an inflation increase of
the majority of accrued benefits is mandatory. The required funding is determined by a funding valuation carried out every third year
based on legal requirements. Due to deviating guidelines for the determination of the discount rates, the technical funding deficit is usually
larger than the IFRS funding deficit. To reduce the deficit Siemens entered into an agreement with the trustees to provide annual payments
of £31 (€35) million until fiscal 2033. The agreement also provides for a cumulative advance payment by Siemens AG compensating the
remaining annual payments at the date of early termination of the agreement due to cancellation or insolvency.
2021
2020
2021
Other³
Interest income
Interest expenses
Current service cost
Balance at begin of fiscal year
(in millions of €)
Fiscal year
Fiscal year
Fiscal year
Fiscal year
1,250
(1 - 11 + 111)
(II)
(DBO)²
(I)
Net defined benefit
balance
ceiling
Effects of asset
Fair value of
plan assets
Defined benefit
obligation
Development of the defined benefit plans¹
plan rules. In case of an underfunded plan the Company together with the employees may be asked to pay supplementary contributions
according to a well-defined framework of recovery measures.
Consolidated Financial Statements
23
Following the Swiss law of occupational benefits (BVG) each employer has to grant post-employment benefits for qualifying employees.
Accordingly, Siemens in Switzerland sponsors several cash balance plans. These plans are administered by external foundations. The board
of the main foundation is composed of equally many employer and employee representatives. The board of the foundation is responsible
for investment policy and asset management, as well as for any changes in the plan rules and the determination of contributions to finance
the benefits. The Company is required to make total contributions at least as high as the sum of the employee contributions set out in the
Switzerland
(III)
US$
1.7%/2021/March 2028/US$ fixed-rate-instruments
1,505
902
1,000
US$
3.125%/2017/March 2024/US$ fixed-rate-instruments
725
850
US$
734
850
US$
US$ 3m LIBOR+0.61%/2017/March 2022/US$ floating-rate instruments
884
1,000
US$
US$
1,000
US$
2.7%/2017/March 2022/US$ fixed-rate-instruments
846
1,000
US$
856
1,000
US$
1,446
1,700
US$
1,463
873
€
1,000
3.4%/2017/March 2027/US$ fixed-rate-instruments
1,750
US$
1.2%/2021/March 2026/US$ fixed-rate-instruments
1,293
1,500
US$
0.65%/2021/March 2024/US$ fixed-rate-instruments
862
1,000
US$
Compounded SOFR+0.43%/2021/March 2024/US$ floating-rate instruments
1,078
1,250
915
US$
1,269
1,500
US$
1,283
1,500
US$
4.2%/2017/March 2047/US fixed-rate-instruments
1,064
1,250
US$
1,077
1,250
US$
0.4%/2021/March 2023/US$ fixed-rate-instruments
963
800
€
6
(9)
(1,957)
2,076
2,282
(42)
22
67
839
1,397
5,867
5,726
5
110
37,505
(5,758)
(242)
461
34,728 8,316
3,537 (3,511)
changes 09/30/2021
other
Fair value
changes
Reclassifi-
cations and
Foreign
currency
translation
(Acquisi-
tions)/Dis-
positions
10/01/2020
Non-cash changes
116
2,829
(745)
92
changes 09/30/2020
other
Reclassifi-
cations and
Fair value
changes
Foreign
currency
translation
(1,276)
29,176 10,256
4,029 (3,959)
(Acquisi-
tions)/Dis-
positions
10/01/2019
Non-cash changes
Cash flows
Total debt
Lease liabilities (current and non-current)
Other financial indebtness (current and non-current)
Cash flows
Loans from banks (current and non-current)
Non-current notes and bonds
(in millions of €)
In addition, other financing activities resulted in €130 million cash flows in fiscal 2021.
48,700
659
(236)
610
159
2,941
44,567
2,929
726
26
Current notes and bonds
Total debt
Lease liabilities (current and non-current)
Other financial indebtness (current and non-current)
Sep 30,
Sep 30,
Non-current debt
Current debt
Other financial indebtedness
Loans from banks
Notes and bonds
(in millions of €)
NOTE 16 Debt
Other includes miscellaneous tax liabilities of €742 million and €576 million, respectively, in fiscal 2021 and 2020.
6,209
7,628
1,280
Sep 30,
1,616
541
108
96
Other
Accruals for pending invoices
Deferred Income
4,304
5,375
2020
2021
Liabilities to personnel
(in millions of €)
Sep 30,
518
120
Sep 30,
2020
Loans from banks (current and non-current)
Current notes and bonds
Non-current notes and bonds
(in millions of €)
In fiscal 2021 and 2020, Siemens recognized interest expenses on lease liabilities of €43 million and €39 million and expenses relating to
variable lease payments not included in the measurement of lease liabilities of €64 million and €100 million, respectively. In fiscal 2021
and 2020, cash flows to which Siemens is potentially exposed and which are not reflected in the measurement of lease liabilities relate
primarily to lease contracts entered into, however which have not yet commenced as well as to extension options whose exercise is not
yet reasonably certain totaling €2.9 billion and €2.6 billion, respectively, and, in addition, to variable lease payments mainly relating to
incidental and operating costs for buildings leased by Siemens, for which no significant fluctuations are expected in the future.
Changes in liabilities arising from financing activities
Total debt
Lease liabilities
38,005
40,879
6,562
7,821
2,146
2,228
2021
55
2,021
683
701
70
1,076
1,100
321
1,183
34,728
37,505
3,537
5,867
2020
2021
46
2020
(3,549)
(46)
€
998
1,000
€
999
1,000
€
342
400
US$
84
100
US$
85
100
US$
998
1,000
€
998
1,000
€
1,254
1,250
-
€
700
750
747
€
750
884
800
€
882
800
€
846
800
€
690
650
€
673
650
650
764
750
€
759
750
€
994
1,000
€
994
1,000
€
746
€
£
743
650
1,191
124
(1,865)
(2,123)
7,664
39,576
2,829
1,351
(108)
2,076
24
-
(209)
44,567
(1)
(735)
3,233
1,388
875
1,397
(144)
-
(225)
(1,387)
891
2,262
3,537
3,509
4
(911)
34,728
In addition, other financing activities resulted in €(99) million cash flows in fiscal 2020.
As of September 30, 2021 and 2020, Siemens has €7.45 billion and €22.95 billion lines of credit, thereof unused €7.45 billion and €22.95
billion, respectively. In fiscal 2021, the unused €7.0 billion syndicated credit facility maturing in 2025 was extended to mature in 2026
£
383
350
£
350
£
406
millions of €1
(in millions)
millions of €1
(in millions)
2.75%/2012/September 2025/GBP fixed-rate instruments
3.75%/2012/September 2042/GBP fixed-rate instruments
1.75%/2013/March 2021/EUR fixed-rate instruments
2.875%/2013/March 2028/EUR fixed-rate instruments
3.5%/2013/March 2028/US$ fixed-rate instruments
2014/September 2021/US$ floating-rate instruments
0.375%/2018/September 2023/EUR fixed-rate instruments
1.0%/2018/September 2027/EUR fixed-rate instruments
1.375%/2018/September 2030/EUR fixed-rate instruments
0.3%/2019/February 2024/EUR fixed-rate instruments
0.9%/2019/February 2028/EUR fixed-rate instruments
1.25%/2019/February 2031/EUR fixed-rate instruments
1.75%/2019/February 2039/EUR fixed-rate instruments
0.0%/2019/September 2021/EUR fixed-rate instruments
0.0%/2019/September 2024/EUR fixed-rate instruments
0.125%/2019/September 2029/EUR fixed-rate instruments
(interest/issued/maturity)
Credit facilities
amount in
amount in
Notional amount
Carrying
Sep 30, 2020
Currency
Carrying
Currency
Sep 30, 2021
Consolidated Financial Statements
Notes and bonds
21
with no extension option remaining. The €3.0 billion unused syndicated credit facility matured in December 2020. The €12.5 billion
unused syndicated bridge facility to secure Siemens Healthineers AG's financing of the acquisition of Varian Medical Systems, Inc. was
cancelled by Siemens in March 2021. In September 2021, the unused €450 million revolving bilateral credit facility was extended to
September 2022. The facilities are for general corporate purposes.
Consolidated Financial Statements
20
Notional amount
2021
31,307
2021
40,879
38,005
(9,545) (14,041)
Less: Current interest bearing debt securities
(1,132)
(1,256)
Less: Fair value of foreign currency and interest hedges relating to short- and long-term debt¹
Net debt
(1,012)
37,010
(777)
28,492
Less: Siemens Financial Services debt²
(26,519)
(25,267)
6,562
Plus: Provisions for pensions and similar obligations
6,360
Plus: Credit guarantees
Industrial net debt
530
604
13,861
10,189
Income from continuing operations before income taxes
Plus/Less: Interest income, interest expenses and other financial income (expenses), net
Plus: Amortization, depreciation and impairments
EBITDA
7,496
5,672
(1,480)
2,839
(1,228)
7,821
2021
thereof: non-current
539
138
199
847
1,723
The majority of the Company's provisions are generally expected to result in cash outflows during the next five years.
Warranties mainly relate to products sold. Order related losses and risks are provided for anticipated losses and risks on uncompleted
construction, sales and leasing contracts.
The Company is subject to asset retirement obligations related to certain items of property, plant and equipment. Such asset retirement
obligations are primarily attributable to environmental clean-up costs (disclosed in Corporate items of the Segment information) and to
costs primarily associated with the removal of leasehold improvements at the end of the lease term.
Environmental clean-up costs relate to remediation and environmental protection liabilities which have been accrued based on the
estimated costs of decommissioning the site for the production of uranium and mixed-oxide fuel elements in Hanau, Germany (Hanau
facilities), as well as for a nuclear research and service center in Karlstein, Germany (Karlstein facilities). In May 2021, Siemens AG and the
Federal Republic of Germany entered into a public-law contract based on which the obligation of final disposal of nuclear waste is
transferred to the Federal Republic of Germany for a payment of €360 million. The contract and therefore the payment is subject to the
approval of the EU commission under state-aid rules. Estimation uncertainties still relate to assumptions made to measure the obligations
that remain with Siemens AG, with regard to conditioning and packaging of nuclear waste, as well as intermediate storage and transport
to the final storage facility "Schacht Konrad" or a logistics depot until year-end 2032. As of September 30, 2021 and 2020, the provisions
total €507 million and €638 million, respectively. The decrease results primarily from the reversal of advance payments to the federal
26
Consolidated Financial Statements
government in the amount of €95 million which were capitalized and included in the carrying amount of the provision as well as from
interest rate adjustments.
Other includes provisions for life and industrial business reinsurance contracts (liability, property, construction) in connection with the
Siemens Energy business of €487 million and €499 million as of September 30, 2021 and 2020; thereof life €248 million and €262 million
and industrial business €239 million and €237 million, respectively, as of September 30, 2021 and 2020. The provisions are for incurred
and reported insurance losses as well as for incurred, hence, not yet reported insurance losses as of fiscal year-end. The provision is
determined using actuarial standard valuation methodologies, which are parameterized based on historical loss data. Life reinsurance
contracts have an average term of 20 years, whereas the cash outflows for the industrial business reinsurance contracts are expected
within the next five years. Other also includes provisions for Legal Proceedings, as far as the risks that are subject to such Legal Proceedings
are not already covered by project accounting. Provisions for Legal Proceedings amounted to €251 million and €248 million as of
September 30, 2021 and 2020, respectively. Furthermore, Other includes provision for indemnifications in connection with dispositions
of businesses of €96 million and €87 million as of September 30, 2021 and 2020. Such indemnifications may protect the buyer from
potential tax, legal and other risks in conjunction with the purchased business.
2020
NOTE 19 Equity
In fiscal 2021 and 2020, Siemens repurchased 976,346 shares and 19,071,746 shares, respectively. In fiscal 2021 and 2020, Siemens
transferred 4,022,053 and 5,613,506 treasury shares, respectively. As of September 30, 2021 and 2020, the Company has treasury shares
of 47,644,581 and 50,690,288 respectively.
Share based payment expenses increased Capital reserve by €294 million and €295 million (including non-controlling interests),
respectively, in fiscal 2021 and 2020. In connection with the settlement of share based payment awards Siemens treasury shares (at cost)
were transferred to employees of €226 million in fiscal 2021 and €310 million in fiscal 2020 which decreased Capital reserve and Retained
earnings by €165 million and €61 million, respectively in 2021 and by €218 million and €92 million in fiscal 2020.
As of September 30, 2021 and 2020, total authorized capital of Siemens AG is €600 million nominal issuable in installments based on
various time-limited authorizations, by issuance of up to 200 million registered shares of no par value. Siemens AG's conditional capital is
€420.6 million or 140.2 million shares as of September 30, 2021 and 2020. Primarily, it can be used to serve convertible bonds or warrants
under warrant bonds that could or can be issued based on various time-limited authorizations approved by the respective Shareholders'
Meeting.
Dividends paid per share were €3.50 and €3.90, respectively, in fiscal 2021 and 2020. The Managing Board and the Supervisory Board
propose to distribute a dividend of €4.00 per share to holders entitled to dividends, in total representing approximately €3.2 billion in
expected payments. Payment of the proposed dividend is contingent upon approval at the Shareholders' Meeting on February 10, 2022.
In November 2018, Siemens announced a share-buyback program of up to €3 billion. The program ceased in September 2021. On June
24, 2021, Siemens announced that it intends to launch a new five-year share buyback program of up to €3 billion, beginning in fiscal
2022.
NOTE 20 Additional capital disclosures
A key consideration of our capital structure management is to maintain ready access to capital markets through various debt instruments
and to sustain our ability to repay and service our debt obligations over time. In order to achieve this, Siemens intended to maintain an
Industrial net debt divided by EBITDA (continued operations) ratio of up to 1.0 as of September 30, 2021 and 2020, respectively. In line
with our updated Financial Framework we target an Industrial net debt divided by EBITDA (continuing operations) ratio of up to 1.5 for
fiscal 2022 and beyond. The ratio indicates the approximate number of years that would be needed to cover the Industrial net debt through
Income from continuing operations, excluding interest, other financial income (expenses), taxes, depreciation, amortization and
impairments. The fiscal 2020 ratio is disclosed as computed in the prior year, it is disclosed before retrospective classification of
discontinued operation.
27
Consolidated Financial Statements
Sep 30,
(in millions of €)
Short-term debt and current maturities of long-term debt
Plus: Long-term debt
Less: Cash and cash equivalents
Siemens' issued capital is divided into 850 million registered shares with no par value and a notional value of €3.00 per share as of
September 30, 2021 and 2020, respectively. The shares are paid in full. At the Shareholders' Meeting, each share has one vote and
accounts for the shareholders' proportionate share in the Company's net income. All shares confer the same rights and obligations.
3,985
3,075
9,091
A1
A+
A1
A+
P-1
A-1+
P-1
A-1+
The following table presents the undiscounted amount of maximum potential future payments for major groups of guarantees:
(in millions of €)
Credit guarantees
Performance guarantees
Sep 30,
Ratings
Sep 30,
2020
530
604
15,116
27,917
15,646
28,521
Item Credit guarantees covers the financial obligations of third parties generally in cases where Siemens is the vendor and (or) contractual
partner or Siemens is liable for obligations of associated companies accounted for using the equity method. Additionally, credit guarantees
are issued in the course of the SFS business. Credit guarantees generally provide that in the event of default or non-payment by the primary
debtor, Siemens will be required to settle such financial obligations. The maximum amount of these guarantees is equal to the outstanding
balance of the credit or, in case a credit line is subject to variable utilization, the nominal amount of the credit line. These guarantees have
typically residual terms of up to four years. The Company held collateral mainly through inventories and trade receivables. As of September
30, 2021 and 2020, Credit guarantees include €124 million and €271 million for which Siemens holds reimbursement rights towards
Siemens Energy. Siemens accrued €3 million and €18 million relating to credit guarantees as of September 30, 2021 and 2020,
respectively.
Furthermore, Siemens issues performance guarantees, which mainly include performance bonds. In the event of non-fulfillment of
contractual obligations by the primary obligor, Siemens will be required to pay up to an agreed-upon maximum amount. These agreements
typically have terms of up to ten years. As of September 30, 2021 and 2020, Performance guarantees include €14,508 million and €27,425
28
Consolidated Financial Statements
million for which Siemens holds reimbursement rights towards Siemens Energy; the related contract liability amount for parent company
guarantees is generally reduced using the straight-line method over the planned term of the underlying delivery or service agreement. As
of September 30, 2021 and 2020, the Company accrued €51 million and €1 million, respectively, relating to performance guarantees.
As of September 30, 2021 and 2020, in addition to guarantees disclosed in the table above, there are contingent liabilities of €475 million
and €405 million which mainly result from other guarantees, legal proceedings and from joint and several liabilities of consortia, in
particular from the construction of a power plant in Finland. Other guarantees include €189 million and €261 million for which Siemens
holds reimbursement rights towards Siemens Energy.
NOTE 22 Legal proceedings
2021
3,157
S&P
Global
S&P
Global
Ratings
7,601
Industrial net debt/EBITDA
1.5
1.3
1 Debt is generally reported with a value representing approximately the amount to be repaid. Accordingly, debt in a hedging relationship is adjusted for fair values of interest hedges as well as for foreign currency hedge effects;
the latter commencing with financing the acquisition of Varian Medical Systems, Inc. in fiscal 2021. Siemens deducts resulting changes in fair value, to derive an amount of debt that approximates the amount that will be repaid.
2 The adjustment considers that both Moody's and S&P view Siemens Financial Services as a captive finance company. These rating agencies generally recognize and accept higher levels of debt attributable to captive
finance subsidiaries in determining credit ratings. Following this concept, Siemens excludes Siemens Financial Services debt.
The SFS business is capital intensive and operates with a larger amount of debt to finance its operations compared to the industrial
business.
(in millions of €)
Allocated equity
Siemens Financial Services debt
Debt to equity ratio
Sep 30,
Sep 30,
Sep 30, 2020
Moody's
Investors
Service
2021
2,774
2,672
26,519
25,267
9.56
9.46
Equity allocated to SFS differs from the carrying amount of equity as it is mainly allocated based on the risks of the underlying business.
Siemens' current corporate credit ratings are:
Long-term debt
Short-term debt
NOTE 21 Commitments and contingencies
Sep 30, 2021
Moody's
Investors
Service
2020
1,552
577
351
Government bonds
Corporate bonds
Alternative investments
Multi strategy funds
Derivatives
Cash and cash equivalents
Insurance contracts
Other assets
Total
Sep 30,
2021
2020
5,773
5,166
Fixed income securities
13,811
3,782
3,583
10,030
9,583
4,627
4,078
4,288
3,154
1,510
750
547
813
2,690
13,166
2,565
(in millions of €)
Equity securities
Disaggregation of plan assets
2020
3.1%
2.7%
A one-half-percentage-point change of the above assumptions would result in the following increase (decrease) of the DBO:
increase
Effect on DBO due to a one-half percentage-point
decrease
increase
decrease
Sep 30,
(in millions of €)
Discount rate
Rate of compensation increase
Rate of pension progression
Consolidated Financial Statements
2021
95
1,559
2,259
(89)
(1,386)
(2,134)
95
2,412
(90)
1,689
(1,367)
The DBO effect of a 10% reduction in mortality rates for all beneficiaries would be an increase of €1,196 million and €1,285 million,
respectively, as of September 30, 2021 and 2020.
As in prior years, sensitivity determinations apply the same methodology as applied for the determination of the post-employment benefit
obligation. Sensitivities reflect changes in the DBO solely for the assumption changed.
Asset Liability Matching Strategies
As a significant risk, the Company considers a decline in the plans' funded status due to adverse developments of plan assets and/or defined
benefit obligations resulting from changing parameters. Accordingly, Siemens implemented a risk management concept aligned with the
defined benefit obligations (Asset Liability Matching). Risk management is based on a worldwide defined risk threshold (Value at Risk).
The concept, the Value at Risk and the asset development including the investment strategy are monitored and adjusted on an ongoing
basis under consultation of senior external experts. Independent asset managers are selected based on quantitative and qualitative
analyses, which include their performance and risk evaluation. Derivatives are used to reduce risks as part of risk management.
25
55
(2,045)
297
277
33,543
Usage
(375)
(98)
(100)
(199)
(773)
Reversals
(246)
(68)
(8)
(164)
(486)
Translation differences
1,195
12
1
7
24
Accretion expense and effect of changes in discount rates
(24)
(24)
Other changes including reclassifications to held for disposal and disposition of those entities
Balance as of September 30, 2021
(93)
(2)
3
115
23
1,505
4
424
3
134
29,970
Virtually all equity securities have quoted prices in active markets. The fair value of fixed income securities is based on prices provided by
price service agencies. The fixed income securities are traded in active markets and almost all fixed income securities are investment grade.
Alternative investments include hedge funds, private equity and real estate investments, thereof real estate used by the Company with a
fair value of €530 million and €527 million, respectively, as of September 30, 2021 and 2020. Multi strategy funds mainly comprise
absolute return funds and diversified growth funds that invest in various asset classes within a single fund and aim to stabilize return and
reduce volatility. Derivatives predominantly consist of financial instruments for hedging interest rate risk and inflation risk.
Future cash flows
Employer contributions expected to be paid to defined benefit plans in fiscal 2022 are €212 million. Over the next ten fiscal years, average
annual benefit payments of €1,754 million and €1,730 million, respectively, are expected as of September 30, 2021 and 2020. The
weighted average duration of the DBO for Siemens defined benefit plans was 12 and 13 years, respectively, as of September 30, 2021 and
2020.
Defined contribution plans and state plans
Amounts recognized as expenses for defined contribution plans are €484 million and €710 million in fiscal 2021 and 2020, respectively.
Contributions to state plans amount to €1,449 million and €1,844 million in fiscal 2021 and 2020. Amounts are based on continuing and
discontinued operations.
NOTE 18 Provisions
Order
related
losses and
(in millions of €)
Balance as of October 1, 2020
thereof: non-current
Additions
Warranties
risks
Asset
retirement
obligations
Other
Total
1,574
380
702
1,369
4,026
581
183
690
898
2,352
633
Proceedings out of or in connection with alleged compliance violations
As previously reported, in July 2008, Hellenic Telecommunications Organization S.A. (OTE) filed a lawsuit against Siemens AG with the
district court of Munich, Germany, seeking to compel Siemens AG to disclose the outcome of its internal investigations with respect to
OTE. OTE seeks to obtain information with respect to allegations of undue influence and/or acts of bribery in connection with contracts
concluded between Siemens AG and OTE from calendar year 1992 to 2006. At the end of July 2010, OTE expanded its claim and requested
payment of damages by Siemens AG of at least €57 million to OTE for alleged bribery payments to OTE employees. In October 2014, OTE
increased its damage claim to the amount of at least €68 million. Siemens AG continues to defend itself against the expanded claim.
2020
(121)
5,062
U.S.
U.K.
CH
2,795
2,958
2,648
2,617
-
1,768
-
341
6,005
5,637
6,339
6,000
8
8
(325)
(356)
147
-
-
5,819
(2)
1
(1,097)
Other reconciling items
(1,091)
Balance at fiscal year-end
Germany
(634)
388
(5,812) 1,089
35,542 35,777 33,543 29,970
21,697 22,223 19,929 17,161
(535)
1
(2)
(17)
(101)
(1,576)
1
(4)
(2,179)
(4,240)
16
11
2,015
3,402
3,328
3,702
3,355
6,360
825
541
1 Discloses figures including Flender and Siemens Energy AG. Accordingly, it comprises the total of continuing and discontinuing operations.
2 Total Defined benefit obligation (DBO) includes other post-employment benefits of €345 million and €393 million in fiscal 2021 and 2020 respectively, which primarily consist of transition payments to German employees after
retirement as well as post-employment health care and life insurance benefits to employees in the U.S. and India.
3 Includes past service benefits/costs, settlement gains/losses and administration costs related to liabilities.
Line item Business combinations, disposals and other includes the acquisition of Varian in fiscal 2021: DBO €303 million, Fair value of plan
assets €271 million.
Net interest expenses relating to provisions for pensions and similar obligations amount to €53 million and €66 million, respectively, in
fiscal 2021 and 2020. The DBO is attributable to actives 29% and 28%, to deferreds with vested benefits 15% and 14% and to retirees and
surviving dependents 57% and 57%, respectively, in fiscal 2021 and 2020.
The DBO remeasurements comprise actuarial (gains) and losses resulting from:
(in millions of €)
Changes in demographic assumptions
Changes in financial assumptions
Experience (gains) losses
Total
Fiscal year
2021
2020
(224)
(3)
(156)
402
455
2,839
-
5,819
11
-
-
(300)
(27)
Other countries
1,643
1,632
925
838
8
4
726
798
Total
thereof provisions for pensions and similar obligations
thereof net defined benefit assets (presented in Other assets)
35,542
35,777
33,543
29,970
16
2,015
(97)
(2,394)
(3,489)
(4)
(31)
(13)
(20)
-
-
9
(11)
Components of defined benefit costs recognized in the
(333)
Consolidated Statements of income
970
241
313
2
540
658
Return on plan assets excluding amounts included in net interest
income and net interest expenses
2,243
780
(254)
-
-
2020
40,317
29,970
NOTE 15 Other current liabilities
11
33
5,819
9,042
485
595
-
485
595
299
406
-
2
299
407
254
333
(74)
(2,243)
74
Actuarial (gains) losses
(2,041)
(2,898)
Plan participants' contributions
102
142
102
142
-
Benefits paid
(1,759)
(1,828)
(1,638)
(1,685)
Settlement payments
(3)
(2)
-
(143)
(1)
Business combinations, disposals and other
Foreign currency translation effects
195
371
-
195
-
2,041
75
303
-
75
303
Effects of asset ceiling
4
(18)
4
(18)
Remeasurements recognized in the Consolidated Statements of
Comprehensive Income
75
303
2,243
(74)
4
(18)
(2,165)
358
Employer contributions
2,898
75
Employer contributions in fiscal 2021 include fundings in Germany of €1,887 million, thereof a contribution of a stake in Bentley Systems,
Inc. amounting to €1,146 million, the contribution of various zero-coupon receiver swaps at total value of €368 million and the
contribution of a stake in an equity instrument in the amount of €270 million. In fiscal 2020, Employer contributions include fundings in
Germany of €2,730 million, including the contribution of a 9.9% interest in Siemens Energy AG of €1,881 million and real estate
contributions from Siemens Real Estate.
24
U.K.
CH
Siemens specific tables (Siemens Bio 2017/2021), (in fiscal 2020 Siemens Bio 2017/2020)
Pri-2012 with generational projection from the US Social Security Administration's Long Range Demographic Assumptions
SAPS S3 (Standard mortality tables for Self Administered Pension Schemes with allowance for future mortality improvements), (in fiscal 2020
SAPS S2)
BVG 2020 G (in fiscal 2020 BVG 2015 G)
The mortality tables used in Germany (Siemens Bio 2017/2021) are mainly derived from data of the German Siemens population and to a
lesser extent from data of the Federal Statistical Office in Germany by applying formulas in accordance with recognized actuarial standards.
The rates of compensation increase and pension progression for countries with significant effects are shown in the following table.
Inflation effects, if applicable, are included in the assumptions below.
Compensation increase
U.K.
CH
Pension progression
Germany
U.S.
U.K.
Sep 30,
2021
2020
3.0%
2.6%
1.4%
1.5%
1.5%
35,777
303
Sensitivity analysis
Germany
1.4%
The discount rate was derived from high-quality corporate bonds with an issuing volume of more than 100 million units in the respective
currency zones, which have been awarded an AA rating (or equivalent) by at least one of the three rating agencies Moody's Investors
Service, S&P Global Ratings or Fitch Ratings.
Actuarial assumptions
Applied mortality tables are:
The weighted-average discount rate used for the actuarial valuation of the DBO was as follows:
EUR
USD
Consolidated Financial Statements
Sep 30,
2021
2020
1.3%
1.1%
Discount rate
0.8%
CHF
GBP
0.9%
0.2%
0.3%
14
1.9%
2.8%
2.5%
1.6%
36
Notes and bonds
Loans from banks
Other financial indebtedness
Lease liabilities
Trade payables
Other financial liabilities
Derivative financial liabilities
5,178
14,768
24,290
4
176
914
16
70
6
Non-derivative financial liabilities
6,600
1,217
In addition, Siemens constantly monitors funding options available in the capital markets, as well as trends in the availability and costs of
such funding, with a view to maintaining financial flexibility and limiting repayment risks.
2027 and
thereafter
According to the Company policy, Siemens units are responsible for recording, assessing and monitoring their foreign currency transaction
exposure. The net foreign currency position of Siemens units serves as a central performance measure and has to be hedged within a band
of at least 75% but no more than 100%.
731
Generally, the operating units conclude their hedging activities internally with Corporate Treasury. By applying a cost-optimizing portfolio
approach, Corporate Treasury itself hedges foreign currency exchange rate risks with external counterparties and limits them.
As of September 30, 2021 and 2020, the VaR relating to foreign currency exchange rates was €39 million and €90 million. This VaR was
calculated under consideration of items of the Consolidated Statements of Financial Position in addition to firm commitments, which are
denominated in foreign currencies, as well as foreign currency denominated cash flows from forecast transactions for the following twelve
months. The decrease in the VaR resulted mainly from a lower net foreign currency position after hedging activities and a lower volatility
between the U.S. dollar and the euro.
Translation risk
Many Siemens units are located outside the Eurozone. Because the financial reporting currency of Siemens is the euro, the financial
statements of these subsidiaries are translated into euro for the preparation of the Consolidated Financial Statements. To consider the
effects of foreign currency translation in the risk management, the general assumption is that investments in foreign-based operations
are permanent and that reinvestment is continuous. Effects from foreign currency exchange rate fluctuations on the translation of net
asset amounts into euro are reflected in the Company's consolidated equity position.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. This risk arises whenever interest terms of financial assets and liabilities are different. In order to manage the Company's
position with regard to interest rate risk, interest income and interest expenses, Corporate Treasury performs a comprehensive corporate
interest rate risk management by using fixed or variable interest rates from bond issuances and derivative financial instruments when
appropriate. The interest rate risk relating to the Group, excluding SFS' business, is mitigated by managing interest rate risk within an
integrated Asset Liability Management approach. The interest rate risk relating to SFS' business is managed separately, considering the
term structure of financial assets and liabilities. The Company's interest rate risk results primarily from funding in the U.S. dollar, British
pound and euro.
If there are no conflicting country-specific regulations, all Siemens operating units generally obtain any required financing through
Corporate Treasury in the form of loans or intercompany clearing accounts. The same concept is adopted for deposits of cash generated
by the units.
As of September 30, 2021 and 2020, the VaR relating to the interest rate was €529 million and €424 million. The increase was driven
mainly by higher interest rate volatilities for the U.S. dollar and an increase in interest rate sensitivity for the U.S. dollar related to the
US$10 billion instrument issued in March 2021.
Liquidity risk
Liquidity risk results from the Company's inability to meet its financial liabilities. Siemens follows a deliberated financing policy that is
aimed towards a balanced financing portfolio, a diversified maturity profile and a comfortable liquidity cushion. Siemens mitigates liquidity
risk by the implementation of effective working capital and cash management, arranged credit facilities with highly rated financial
institutions, via a debt issuance program and via a global multi-currency commercial paper program. Liquidity risk may also be mitigated
by the Siemens Bank GmbH, which increases the flexibility of depositing cash or refinancing.
The following table reflects our contractually fixed pay-offs for settlement, repayments and interest. The disclosed expected undiscounted
net cash outflows from derivative financial liabilities are determined based on each particular settlement date of an instrument and based
on the earliest date on which Siemens could be required to pay. Cash outflows for financial liabilities (including interest) without fixed
amount or timing are based on the conditions existing at September 30, 2021.
35
Consolidated Financial Statements
Fiscal year
2022
2023
2024 to
2026
(in millions of €)
therein: included in cash flow hedges
13
971
450
4,435
12 months
More than
Up to 12
months
10,739
14,676
5,752
873
3,605
More than
12 months
Up to 12
months
Sep 30, 2020
Sep 30, 2021
therein: included in fair value hedges
therein: included in cash flow hedges
Interest rate swaps
Foreign currency exchange contracts
(in millions of €)
To hedge foreign currency exchange and interest rate risks, derivatives are contracted to achieve a 1:1 hedge ratio so that the main
characteristics match the underlying hedged items (e.g. nominal amount, maturity) in a critical term match, which ensures an economic
relationship between hedging instruments and hedged items suitable for hedge accounting. The nominal amounts of hedging instruments
by maturity are:
NOTE 24 Derivative financial instruments and hedging activities
143
7,110
Operating units are prohibited from borrowing or investing in foreign currencies on a speculative basis. Intercompany financing or
investments of operating units are preferably carried out in their functional currency or on a hedged basis.
605
921
8,776
25
30
1
1,430
147
111
14
556
429
(in millions of €)
Sep 30, 2020
Sep 30, 2021
Fair values of each type of derivative financial instruments reported as financial assets or financial liabilities in line items Other current
financial assets (liabilities) or Other financial assets (liabilities) are:
6,512
450
5,147
859
598
Foreign currency exchange contracts
Each Siemens unit conducting businesses with international counterparties leading to future cash flows denominated in a currency other
than its functional currency is exposed to risks from changes in foreign currency exchange rates. In the ordinary course of business,
Siemens units are exposed to foreign currency exchange rate fluctuations, particularly between the U.S. dollar and the euro. Foreign
currency exchange rate exposure is partly balanced by purchasing of goods, commodities and services in the respective currencies as well
as production activities and other contributions along the value chain in the local markets.
The Company manages its risks associated with fluctuations in foreign currency denominated receivables, payables, debt, firm
commitments and forecast transactions primarily through a Company-wide portfolio approach. Under this approach the Company-wide
risks are aggregated centrally, and various derivative financial instruments, primarily foreign currency exchange contracts, foreign currency
swaps and options, are utilized to minimize such risks. Such a strategy does not qualify for hedge accounting treatment. The Company
also accounts for foreign currency derivatives, which are embedded in sale and purchase contracts.
Foreign currency exchange rate risk
Other (embedded derivatives, options, commodity swaps)
70
45
74
33
1,950
769
2,842
978
Other components of equity, net of income taxes, relating to cash flow hedges reconciles as follows:
Interest
rate risk
Foreign currency risk
(in millions of €)
Balance as of October 1, 2020
Hedging gains (losses) presented in OCI
Reclassification to net income
Other
Balance as of September 30, 2021
thereof: discontinued hedge accounting
554
Cash flow
307
107
Consolidated Financial Statements
therein: included in cash flow hedges
Asset
Liability
Asset
Liability
893
569
933
617
544
231
231
106
987
155
1,835
328
31
therein: included in fair value hedges
hedge
Cash flow
hedge
Cost of
hedging
33
Consolidated Financial Statements
hedging transactions have an average remaining maturity until 2026 and 2022 (forward purchases of US$) as well as 2022 and 2021
(forward sales of US$).
Included are Siemens' foreign currency forward contracts, entered into in fiscal 2021, to hedge foreign currency risks relating to US$10
billion (€8.5 billion) bonds granted to Siemens Healthineers, through which a synthetic Euro financing structure is achieved. It factually,
also turns interest into € with volume weighted average interest rates of currently about 0.3%.
Interest rate risk management
Derivative financial instruments not designated in a hedging relationship
Interest rate risk management relating to the Group, excluding SFS' businesses, uses derivative financial instruments under a portfolio-
based approach to manage interest risk actively relative to a benchmark. Interest rate management of the SFS and businesses remains to
be managed separately, considering the term structure of SFS' financial assets and liabilities on a portfolio basis. Neither approach qualifies
for hedge accounting treatment. Net cash receipts and payments in connection with interest rate swap agreements are recorded as interest
expense in Other financial income (expenses), net.
Cash flow hedges of floating-rate commercial papers
Siemens applies cash flow hedge accounting to a revolving portfolio of floating-rate commercial papers of nominal US$700 million.
Siemens pays a fixed rate of interest and receives a variable rate of interest, offsetting future changes in interest payments of the
underlying floating-rate commercial papers. Net cash receipts and payments are recorded as interest expenses. The Company had interest
rate swap contracts to receive variable rates of interest of an average of 0.13% and 0.23% as of September 30, 2021 and 2020, respectively,
and paid fixed rates of interest (average rate of 1.95% and 1.95%, as of September 30, 2021 and 2020, respectively).
Fair value hedges of fixed-rate debt obligations
Under interest rate swap agreements outstanding in fiscal 2021 and 2020, the Company agreed to pay a variable rate of interest multiplied
by a notional principal amount, and to receive in return an amount equal to a specified fixed rate of interest multiplied by the same notional
principal amount. These interest rate swap agreements offset future changes in interest rates designated as hedged risk on the fair value
of the underlying fixed-rate debt obligations. As of September 30, 2021 and 2020, the carrying amounts of €6,305 million and €6,938
million, respectively, of fixed-rate debt obligations are designated in fair value hedges, including €304 million and €540 million cumulative
fair value hedge adjustments. Unamortized fair value hedge adjustments of €181 million and €220 million as of September 30, 2021 and
2020, respectively, relate to no longer applied hedge accounting. The amounts are amortized over the remaining term of the underlying
debt, maturing until 2042. Carrying amount adjustments to debt of €236 million and €(123) million, respectively, in fiscal 2021 and 2020
are included in Other financial income (expenses), net; the related swap agreements resulted in gains (losses) of €(243) million and €91
million, respectively, in fiscal 2021 and 2020. Net cash receipts and payments relating to such interest rate swap agreements are recorded
as interest expenses.
The Company had interest rate swap contracts to pay variable rates of interest of an average of (0.14)% and (0.13)% as of September 30,
2021 and 2020, respectively and received fixed rates of interest (average rate of 1.50% and 1.49%, as of September 30, 2021 and 2020,
respectively). The notional amount of indebtedness hedged as of September 30, 2021 and 2020 was €6,007 million and €6,423 million,
respectively. This changed 15% and 18% of the Company's underlying notes and bonds from fixed interest rates into variable interest rates
as of September 30, 2021 and 2020, respectively. The notional amounts of these contracts mature at varying dates based on the maturity
of the underlying hedged items. The net fair value of interest rate swap contracts (excluding accrued interest) used to hedge indebtedness
as of September 30, 2021 and 2020 was €277 million and €520 million, respectively.
NOTE 25 Financial risk management
Increasing market fluctuations may result in significant earnings and cash flow volatility risk for Siemens. The Company's operating
business as well as its investment and financing activities are affected particularly by changes in foreign exchange rates and interest rates.
In order to optimize the allocation of financial resources across Siemens' segments and entities, as well as to achieve its aims, Siemens
identifies, analyzes and manages the associated market risks. The Company seeks to manage and control these risks primarily through its
regular operating and financing activities and uses derivative financial instruments when deemed appropriate.
In order to quantify market risks Siemens has implemented a system based on Value at Risk (VaR), which is also used for internal
management of Corporate Treasury activities. The VaR figures are calculated based on historical volatilities and correlations of various risk
factors, a ten day holding period, and a 99.5% confidence level.
Actual results that are included in the Consolidated Statements of Income or Consolidated Statements of Comprehensive Income may
differ substantially from VaR figures due to fundamental conceptual differences. While the Consolidated Statements of Income and
Consolidated Statements of Comprehensive Income are prepared in accordance with IFRS, the VaR figures are the output of a model with
a purely financial perspective and represent the potential financial loss, which will not be exceeded within ten days with a probability of
99.5%. Although VaR is an important tool for measuring market risk, the assumptions on which the model is based give rise to some
limitations including the following. A ten day holding period assumes that it is possible to dispose of the underlying positions within this
period. This may not be valid during continuing periods of illiquid markets. A 99.5% confidence level means that there is a 0.5% statistical
probability that losses could exceed the calculated VaR. The use of historical data as a basis for estimating the statistic behavior of the
relevant markets and finally determining the possible range of the future outcomes on the basis of this statistic behavior may not always
cover all possible scenarios, especially those of an exceptional nature.
Any market sensitive instruments, including equity and interest-bearing investments that our Company's pension plans hold are not
included in the following quantitative and qualitative disclosures.
34
Consolidated Financial Statements
The Company's operating units apply hedge accounting to certain significant forecast transactions and firm commitments denominated
in foreign currencies. Particularly, the Company entered into foreign currency exchange contracts to reduce the risk of variability of future
cash flows resulting from forecast sales and purchases as well as firm commitments. The risk mainly results from contracts denominated
in US$ both from Siemens' operating units entering into long-term contracts e.g. from the project business and from the standard product
business. In fiscal 2021 and 2020, the risk is hedged against the euro at an average rate of 1.2808 €/US$ and 1.2013 €/US$ (forward
purchases of US$), respectively and 1.2070 €/US$ and 1.1950 €/US$ (forward sales of US$). As of September 30, 2021 and 2020, the
Cash flow hedges
Derivative financial instruments not designated in a hedging relationship
Foreign currency exchange rate risk management
reserve
reserve
reserve
(59)
133
117
36
(263)
97
Transaction risk
6
(121)
114
(17)
(28)
93
Interest rate swaps and combined interest and currency swaps
(11)
(3)
Amounts reclassified to net income in connection with interest rate risk hedges and non-operative foreign currency hedges are presented
in Other financial income (expenses), net. Reclassifications of foreign currency risk hedges with operative business purposes are presented
as functional costs. Costs of hedging reserve is the forward element of forward contracts that are not designated as hedge accounting and
which are amortized to interest expense on a straight-line basis as the hedged item is time-period related. In fiscal 2021, €114 million in
Other relate to designated foreign currency swaps to hedge risks of the highly probable purchase price payment made for the Varian
acquisition. The amount was removed from the cash flow hedge reserve and included in the initial cost of Varian.
(12)
32
Financial assets designated as measured at FVTPL³
221
(25)
n/a
n/a
Write-offs charged against the allowance
15
(22)
48
2
(10)
18
Change in valuation allowances recorded in the Consolidated Statements of
Income in the current period
227
36
537
111
27
73
Valuation allowance as of October 1, 2020
Stage 3
(89)
Stage 2
(38)
n/a
86
37
27
22
-
-
Valuation allowance as of September 30, 2021
Reclassifications to line item Assets held for disposal and dispositions of
those entities
5
1
5
8
(3)
(5)
Foreign exchange translation differences and other changes
2
7
2
n/a
Recoveries of amounts previously written off
Stage 1
(in millions of €)
Lease
Receivables
Financial assets and financial liabilities at FVTPL
552
1,020
1,291
22
(526)
74
(168)
(17)
2020
2021
Fiscal year
Loans, receivables and other debt instruments measured at amortized cost
Financial liabilities measured at amortized cost
Cash and cash equivalents
(in millions of €)
Net gains (losses) resulting from financial instruments are:
In fiscal 2021, a Level 3 equity investment mandatorily measured at FVTPL was merged with a public holding company in exchange for
shares in the new entity, ChargePoint. The transaction resulted in a gain of €220 million derived from now available Level 1 quoted prices.
The gain is disclosed in Other financial income (expenses), net and in Next47 of Corporate items. Subsequently, the investment was
contributed to the Siemens Pension-Trust e.V. at fair value of €270 million.
As of September 30, 2021 and 2020, Level 3 financial assets include venture capital investments of €515 million and €386 million (Next47
investments). In fiscal 2021 and 2020, new level 3 investments and purchases amounted to €522 million and €249 million, respectively.
Sales of Level 3 financial assets amounted to €305 million and €327 million, respectively, in fiscal 2021 and 2020.
In fiscal 2021, Siemens Advanta acquired equity stakes for €279 million in cash (Thoughtworks). The financial asset is mandatorily
measured at fair value through profit and loss (FVTPL). The company went public in September 2021 resulting in a gain from fair value
measurement including foreign currency effects of €289 million at Siemens disclosed in Corporate items of segment information and
presented in Other financial income (expenses), net.
Amounts include foreign currency gains (losses) from recognizing and measuring financial assets and liabilities. Net gains (losses) on
financial assets and liabilities measured at FVTPL resulted from those mandatorily measured at FVTPL and comprise fair value changes of
derivative financial instruments for which hedge accounting is not applied including interest income (expense), as well as dividends from
and fair value changes of equity instruments measured at FVTPL.
Interest income (expense) includes interest from financial assets and financial liabilities not at fair value through profit or loss:
(in millions of €)
Total interest income on financial assets
Contract
Assets
the simplified
approach
ments under
debt instru-
and other
Trade
receivables
Loans and other debt instruments
under the general approach
amortized cost
Loans, receivables and other debt instruments measured at
15
Consolidated Financial Statements
31
(702)
(672)
1,503
1,434
2020
2021
Fiscal year
Total interest expenses on financial liabilities
Valuation allowances for expected credit losses
98
535
53
Gross amounts
Sep 30,
2021
(in millions of €)
Financial liabilities
Financial assets
Siemens enters into master netting and similar agreements for derivative financial instruments. Potential offsetting effects are as follows:
Offsetting
Impairment losses on financial instruments are presented in line items Cost of sales, Selling and general administrative expenses and Other
financial income (expenses), net. Net losses in fiscal 2021 and 2020 are €50 million and €404 million, respectively. Impairment losses net
of (gains) from reversal of impairments are €(19) million and €33 million in fiscal 2021 and 2020 are mostly attributable to the SFS
business and presented in Other financial income (expenses), net.
227
36
213
537
111
27
73
Valuation allowance as of September 30, 2020
(169)
(458)
Reclassifications to line item Assets held for disposal and dispositions of
those entities
1,910
2020
2,571
Sep 30,
2021
753
163
1,739
1,157
Net amounts
571
586
829
748
Related amounts not offset in the Statement of Financial Position
(11)
793
2,569
1,905
Net amounts in the Statement of Financial Position
2
5
2
5
Amounts offset in the Statement of Financial Position
2020
795
748
22
(2)
35
68
12
54
54
Valuation allowance as of October 1, 2019
Stage 3
Stage 2
Stage 1
(in millions of €)
Lease
Receivables
Assets
Contract
the simplified
approach
ments under
debt instru-
Trade
receivables
and other
Loans and other debt instruments
under the general approach
Loans, receivables and other debt instruments measured at
amortized cost
212
891
198
184
Change in valuation allowances recorded in the Consolidated Statements of
Income in the current period
4
(48)
Foreign exchange translation differences and other changes
2
6
n/a
n/a
Recoveries of amounts previously written off
(46)
(17)
(60)
n/a
n/a
Write-offs charged against the allowance
97
9
175
43
11
67
(35)
72
874,793
530
1
104
385
491
220
18
238
2,842
2,842
2,052
2,052
554
554
236
236
Financial liabilities measured at fair value – Derivative financial instruments
Not designated in a hedge accounting relationship (including embedded derivatives)
In connection with cash flow hedges
978
978
1,353
765
209
1,067
263
30
(in millions of €)
Financial assets measured at fair value
Equity instruments measured at FVTPL
Equity instruments measured at FVOCI
Debt instruments measured at FVTPL
Derivative financial instruments
Not designated in a hedge accounting relationship (including embedded derivatives)
In connection with fair value hedges
In connection with cash flow hedges
Consolidated Financial Statements
Sep 30, 2020
Level 1
Level 2
Level 3
Total
1,288
3,023
612
4,923
77
263
765
213
Weighted average shares outstanding - basic
3,842
5,094
Credit guarantees¹
(3)
(5)
Less: Dilutive effect from share based payment resulting from Siemens Healthineers
3,845
5,099
Income from continuing operations attributable to shareholders of Siemens AG
311
537
Less: Portion attributable to non-controlling interest
4,156
5,636
Income from continuing operations
2020
2021
(shares in thousands; earnings per share in €)
801,829
213
Effect of dilutive share-based payment
806,335
11,029
Fair value of equity instruments quoted in an active market is based on price quotations at period-end date. Fair value of debt instruments,
is either based on prices provided by price service agencies or is estimated by discounting future cash flows using current market interest
rates.
Fair values of derivative financial instruments are determined in accordance with the specific type of instrument. Fair values of derivative
interest rate contracts are estimated by discounting expected future cash flows using current market interest rates and yield curves over
the remaining term of the instrument. Interest rate futures are valued based on quoted market prices, if available. Fair values of foreign
currency derivatives are based on forward exchange rates. Options are generally valued based on quoted market prices or based on option
pricing models. No compensating effects from underlying transactions (e.g. firm commitments and forecast transactions) are considered.
The Company limits default risks resulting from derivative financial instruments by generally transacting with financial institutions with a
minimum credit rating of investment grade. Based on Siemens' net risk exposure towards the counterparty, the resulting credit risk is taken
into account via a credit valuation adjustment.
Derivatives designated in a hedge accounting relationship
Cash and cash equivalents
Loans, receivables and other debt instruments measured at amortized cost¹
(in millions of €)
The following table discloses the carrying amounts of each category of financial assets and financial liabilities:
NOTE 23 Additional disclosures on financial instruments
Consolidated Financial Statements
39
4.70
6.28
Diluted earnings per share (from continuing operations)
4.77
6.36
Basic earnings per share (from continuing operations)
817,364
811,490
Weighted average shares outstanding - diluted
9,661
505
505
Not designated in a hedge accounting relationship (including embedded derivatives)
In connection with cash flow hedges
505
765
263
213
59,941
55,167
1 Reported in the following line items of the Statements of Financial Position as of September 30, 2021 and 2020, respectively: Trade and other receivables, Other current financial assets and Other financial
assets, except for separately disclosed €1,824 million and €1,843 million equity instruments in Other financial assets (thereof €675 million and €491 million at FVOCI), €198 million and €220 million financial
assets designated as measured at FVTPL and €1,950 million and €2,842 million derivative financial instruments (thereof in Other financial assets €1,552 million and €2,044 million) as well as €58 million and
€18 million debt instruments measured at FVTPL in Other financial assets. Includes €13,267 million and €12,071 million trade receivables from the sale of goods and services, thereof €663 million and
2 Reported in line items Other current financial assets and Other financial assets.
3 Reported in Other financial assets.
* Reported in the following line items of the Statements of Financial Position: Short-term debt and current maturities of long-term debt, Trade payables, Other current financial liabilities, Long-term debt and
Other financial liabilities, except for separately disclosed derivative financial instruments of €769 million and €978 million as of September 30, 2021 and 2020, respectively.
5 Reported in line items Other current financial liabilities and Other financial liabilities.
Cash and cash equivalents include €190 million and €126 million as of September 30, 2021 and 2020, respectively, which are not available
for use by Siemens mainly due to minimum reserve requirements with banks. As of September 30, 2021 and 2020, the carrying amount
of financial assets Siemens pledged as collateral is €156 million and €115 million, respectively.
The following table presents the fair values and carrying amounts of financial assets and financial liabilities measured at cost or amortized
cost for which the carrying amounts do not approximate fair value:
(in millions of €)
Notes and bonds
Loans from banks and other financial indebtedness
Sep 30, 2021
Sep 30, 2020
Fair value
45,594
2,400
Carrying
amount
43,373
Fair value
40,868
54,189
Carrying
amount
59,172
Derivatives not designated in a hedge accounting relationship5
Equity instruments measured at FVOCI¹
Financial assets
Sep 30,
2021
42,436
2020
40,304
9,545
14,041
852
790
2,305
3,422
198
220
675
491
56,012
59,268
Financial liabilities measured at amortized cost4
Derivatives designated in a hedge accounting relationship 5
Financial liabilities
38,264
3,483
2,398
1,149
1
674
675
198
1
57
256
1,950
1,950
1,098
1,098
307
307
545
545
Financial liabilities measured at fair value - Derivative financial instruments
769
769
354
77
718
4,031
3,473
Fixed-rate and variable-rate receivables with a remaining term of more than twelve months, including receivables from finance leases, are
evaluated by the Company based on parameters such as interest rates, specific country risk factors, individual creditworthiness of the
customer, and the risk characteristics of the financed project. Based on this evaluation, allowances for these receivables are recognized.
The fair value of notes and bonds is based on prices provided by price service agencies at the period-end date (Level 2). The fair value of
loans from banks and other financial indebtedness as well as other non-current financial liabilities are estimated by discounting future
cash flows using rates currently available for debt of similar terms and remaining maturities (Level 2).
The following table allocates financial assets and financial liabilities measured at fair value to the three levels of the fair value hierarchy:
(in millions of €)
Financial assets measured at fair value
Equity instruments measured at FVTPL
Equity instruments measured at FVOCI
Debt instruments measured at FVTPL
Derivative financial instruments
Fiscal year
Not designated in a hedge accounting relationship (including embedded derivatives)
In connection with cash flow hedges
Sep 30, 2021
Level 1
Level 2
Level 3
Total
917
2,030
1,085
In connection with fair value hedges
363
Income from continuing operations attributable to shareholders of Siemens AG to determine dilutive earnings per share
285
Adjustments due to vesting conditions other than market conditions
Vested and fulfilled
Granted
Non-vested, beginning of period
Changes in stock awards:
€98.02 per share in fiscal 2021 and 2020, respectively, was determined as the market price of Siemens shares less the present value of
expected dividends during the vesting period.
Consolidated Financial Statements
37
The fair value of stock awards granted in fiscal 2021 and 2020 (TSR-related) was calculated applying a valuation model. In fiscal 2021 and
2020, inputs to that model include an expected weighted volatility of Siemens shares of 24.34% and 21.58%, respectively, and a market
price of €112.36 and €116.02 per Siemens share. Expected volatility was determined by reference to historic volatilities. The model applies
a risk-free interest rate of up to (0.49)% in fiscal 2021 and up to (0.26)% in fiscal 2020 and an expected dividend yield of 3.11% and 3.31%
in fiscal 2021 and 2020, respectively. Assumptions relating to correlations between the Siemens share price and the development of the
MSCI Index were derived from historic observations of share price and index changes. The fair value of the ESG component of €97.63 and
In fiscal 2021 and 2020, 1,975,492 and 2,688,334 equity-settled stock awards were granted relating to the TSR-Target with a fair value
of €104 million and €132 million, respectively. In fiscal 2021 and 2020, 493,472 and 672,197 equity-settled stock awards were granted
relating to the ESG-Target with a fair value of €48 million and €66 million, respectively.
Commitments to members of the senior management and other eligible employees
The Managing Board's stock awards are based on criteria described above. Fair values are €12 million and €12 million, respectively, in
fiscal 2021 and 2020, calculated by applying a valuation model. In fiscal 2021 and 2020, inputs to that model include an expected
weighted volatility of Siemens shares of 24.30% and 21.58%, respectively, and a market price of €112.70 and €116.80 per Siemens share.
Expected volatility was determined by reference to historic volatilities. The model applies a risk-free interest rate of up to (0.49)% and
(0.24)% in fiscal 2021 and 2020, respectively, and an expected dividend yield of 3.10% in fiscal 2021 and 3.31% in fiscal 2020.
Assumptions relating to correlations between the Siemens share price and the development of the MSCI index were derived from historic
observations of share price and index changes.
Commitments to members of the Managing Board
Stock awards are tied to performance criteria. For stock awards granted in fiscal 2021 and 2020, 80% of the target amount is linked to the
relative total shareholder return of Siemens compared to the total shareholder return of the MSCI World Industrials sector index (TSR-
Target) during a four-year restriction period; the remaining 20% are linked to a Siemens internal sustainability target considering
environmental, social and governance targets (ESG-Target). The annual target amount for stock awards up to and including tranche 2019
is linked to the share price performance of Siemens relative to the share price performance of five important competitors during the four-
year restriction period. The target attainment for each individual performance criteria ranges between 0% and 200%. For awards granted
since fiscal 2019 settlement is in shares only corresponding to the actual target attainment. Awards granted prior to fiscal 2019, target
outperformances in excess of 100% are settled in cash. The vesting period is four years.
The Company grants stock awards to members of the Managing Board, members of the senior management and other eligible employees.
Stock awards are subject to a restriction period of about four years and entitle the beneficiary to Siemens shares following the restriction
period without payment of consideration.
Stock Awards
Share-based payment awards may be settled in newly issued shares of capital stock of Siemens AG, in treasury shares or in cash. Share-
based payment awards may forfeit if the employment of the beneficiary terminates prior to the expiration of the vesting period. In fiscal
2021 and 2020, expense from equity-settled awards on a continuing basis are €294 million and €295 million; cash-settled awards on a
continuing basis resulted in gains (expenses) of €(8) million and €(26) million in fiscal 2021 and 2020. Included is expense of €127 million
and €100 million in fiscal 2021 and 2020, respectively, resulting from various individually immaterial plans, of which €66 million and €45
million, respectively, stem from Siemens Healthineers plans. Siemens Healthineers plans are largely similar to Siemens' plans, except for
granting Siemens Healthineers AG shares.
NOTE 26 Share-based payment
Siemens' investment portfolio consists of direct and indirect investments in publicly traded companies that are classified as long term
investments. These investments are monitored based on their current market value, affected primarily by fluctuations on the volatile
technology-related markets worldwide. As of September 30, 2021 and 2020, the market value of Siemens' portfolio, which mainly consists
of one investment in a publicly traded company, was €678 million and €1,055 million, respectively. As of September 30, 2021 and 2020,
the VaR relating to the equity price was €105 million and €182 million.
Forfeited
Equity Price Risk
Settled
Share Matching Program and its underlying plans
Under the Monthly Investment Plan employees other than senior managers may invest a specified part of their compensation in Siemens
shares on a monthly basis over a period of twelve months. Shares are purchased at market price at a predetermined date once a month.
If the Managing Board decides that shares acquired under the Monthly Investment Plan are transferred to the Share Matching Plan, plan
participants will receive the right to matching shares under the same conditions applying to the Share Matching Plan described above with
a vesting period of about two years. The Managing Board decided that shares acquired under the tranches issued in fiscal 2020 and 2019
are transferred to the Share Matching Plan as of February 2021 and February 2020, respectively.
Monthly Investment Plan
Under the Share Matching Plan, senior managers may invest a specified part of their variable compensation in Siemens shares (investment
shares). The shares are purchased at the market price at a predetermined date in the second quarter. Plan participants receive the right to
one Siemens share without payment of consideration (matching share) for every three investment shares continuously held over a period
of about three years (vesting period) provided the plan participant has been continuously employed by Siemens until the end of the vesting
period.
7,939,840
8,670,111
(2,303,850)
(42,116)
(412,903)
(444,962)
(374,733)
(173,648)
(1,292,912) (1,846,312)
9,300,505
3,577,133
2,683,909
7,939,840
295
2021
Fiscal year
In fiscal 2021, Siemens issued a new tranche under each of the plans of the Share Matching Program.
Share Matching Plan
Non-vested, end of period
Amounts above do not represent economic credit risk, since they consider neither collateral held nor valuation allowances already
recognized.
Trade receivables of operating units are generally rated internally; as of September 30, 2021 and 2020, approximately 47% and 43%,
respectively, have an investment grade rating and 53% and 57%, respectively, have a non-investment grade rating. Contract assets
generally show similar risk characteristics as trade receivables in operating units.
4,704
SFS' external financing portfolio disaggregates into credit risk rating grades as of September 30, 2021 as follows (pre valuation
allowances):
Consolidated Financial Statements
36
As of September 30, 2021 and 2020, collateral of €748 million and €829 million, respectively, relate to financial assets measured at fair
value. Those collaterals are provided in connection with netting agreements for derivatives providing protection from the risk of a
counterparty's insolvency. As of September 30, 2021 and 2020, collateral held for credit-impaired receivables from finance leases
amounted to €90 million and €141 million, respectively. As of September 30, 2021 and 2020, collateral held for financial assets measured
at amortized cost amounted to €3,328 million and €4,109 million, respectively, including €90 million and €141 million, respectively, for
credit-impaired loans in SFS' asset finance business. Those collaterals mainly comprised property, plant and equipment. Credit risks arising
from irrevocable loan commitments are equal to the expected future pay-offs resulting from these commitments.
To analyze and monitor credit risks, the Company applies various systems and processes. A main element is a central IT application that
processes data from operating units together with rating and default information and calculates an estimate, which may be used as a basis
for individual bad debt provisions. Additionally, qualitative information is considered to particularly incorporate the latest developments.
The carrying amount is the maximum exposure to a financial asset's credit risk, without taking account of any collateral. Collateral reduces
the valuation allowance to the extent it mitigates credit risk. Collateral needs to be specific, identifiable and legally enforceable to be taken
into account. Those collaterals are mostly held in the portfolio of SFS.
An exposure is considered defaulted if the debtor is unwilling or unable to pay its credit obligations. A range of internally defined events
trigger a default rating, including the opening of bankruptcy proceedings, receivables being more than 90 days past due, or a default
rating by an external rating agency.
Ratings and individually defined credit limits are based on generally accepted rating methodologies, with information obtained from
customers, external rating agencies, data service providers and Siemens' credit default experiences. Internal ratings consider appropriate
forward-looking information relevant to the specific financial instrument like expected changes in the debtor's financial position,
ownership, management or operational risks, as well as broader forward-looking information, such as expected macroeconomic, industry-
related and competitive developments. The ratings also consider a country-specific risk component derived from external country credit
ratings. Ratings and credit limits for financial institutions as well as Siemens' public and private customers, which are determined by
internal risk assessment specialists, are continuously updated and considered for investments in cash and cash equivalents and in
determining the conditions under which direct or indirect financing will be offered to customers.
Siemens maintains a Credit Risk Intelligence Unit to which numerous operating units from the Siemens Group regularly transfer business
partner data as a basis for a centralized internal rating and credit limit recommendation process. Due to the identification, quantification
and active management of credit risks, this increases credit risk transparency.
The effective monitoring and controlling of credit risk through credit evaluations and ratings is a core competency of our risk management
system. In this context, Siemens has implemented a binding credit policy.
Siemens provides its customers with various forms of direct and indirect financing particularly in connection with large projects. Hence,
credit risks are determined by the solvency of the debtors, the recoverability of the collaterals, the success of projects we invested in and
the global economic development.
Credit risk is defined as an unexpected loss in financial instruments if the contractual partner is failing to discharge its obligations in full
and on time or if the value of collateral declines.
Credit risk
2 A considerable portion result from asset-based lending transactions meaning that the respective loans can only be drawn after sufficient collateral has been provided by the borrower.
1 Based on the maximum amounts Siemens could be required to settle in the event of default by the primary debtor.
2
165
312
3,408
Irrevocable loan commitments²
(in millions of €)
Investment Grade Ratings
Non-Investment Grade Ratings
Loans and other debt
instruments under the general
91
39
2,684
360
2,068
n/a
Stage 3
Stage 2
n/a
671
Base Share Program
n/a
Stage 1
Stage 3
Stage 2
Stage 1
5,627
13,456
approach
ceivables
loan commitments
Lease Re-
Financial guarantees and
8
657
Under the Base Share Program employees of Siemens AG and participating domestic Siemens companies may invest a fixed amount of
their compensation in Siemens shares, sponsored by Siemens. The shares are bought at market price at a predetermined date in the second
quarter and grant the right to receive matching shares under the same conditions applying to the Share Matching Plan described above.
The fair value of the Base Share Program amounted to €25 million and €33 million in fiscal 2021 and 2020, respectively.
2020
Fiscal year
discontinued operations
Continuing and
Continuing
operations
NOTE 28 Earnings per share
Resulting Matching Shares
Research and development
Sales and marketing
Manufacturing and services
(in thousands)
Employees were engaged in (averages; based on headcount):
In fiscal 2021 and 2020, severance charges for continuing operations amount to €410 million and €589 million, respectively, thereof at
Digital Industries €114 million and €210 million.
31,978
25,008
23,761
24,789
1,348
1,013
1,024
1,010
Fiscal year
3,970
Fiscal year
2020
293
29
26
25
26
45
43
41
42
64
54
54
54
225
172
165
171
2020
2021
2021
3,113
Administration and general services
3,082
The weighted average fair value of matching shares granted in fiscal 2021 and 2020 of €96.92 and €89.71 per share, respectively, was
determined as the market price of Siemens shares less the present value of expected dividends; non-vesting conditions were taken into
1,509,046
1,389,016
Outstanding, end of period
(459,596)
(69,648)
(122,659)
(80,385)
(569,405)
account.
(624,480)
1,785,913
1,509,046
654,483
Settled
Forfeited
2,948
Granted
Outstanding, beginning of period
2020
2021
Financial assets mandatorily measured at FVTPL²
Jubilee Share Program
Vested and fulfilled
38
For their 25th and 40th service anniversary eligible employees receive jubilee shares. There were 3.15 million and 3.29 million entitlements
to jubilee shares outstanding as of September 30, 2021 and 2020, respectively.
26,660
20,882
20,697
2020
2021
2020
2021
Fiscal year
19,789
Wages and salaries
Fiscal year
(in millions of €)
Statutory social welfare contributions and expenses for optional support
Expenses relating to post-employment benefits
NOTE 27 Personnel costs
Continuing
operations
Continuing and
discontinued operations
Consolidated Financial Statements
Portfolio Companies
Fiscal year
3,516
716
3,024
2020
15,896
16,071 14,734 14,671 13,742
12,696 9,169 9,205 9,012
20,320 16,163 17,921 14,349
67,514 55,963
697
Fiscal year
2021
16,156
Fiscal year
Sep 30,
2021
2021
2021
2020
2020
Fiscal year
2021
2020
Siemens Financial Services
2020
Industrial Business
Assets
Mobility
Sep 30,
NOTE 29 Segment information
Consolidated Financial Statements
Orders
External revenue
Intersegment
Revenue
Total
revenue
Siemens Healthineers
Profit
Additions to
intangible
assets and
property, plant
& equipment
Amortization,
depreciation &
impairments
(in millions of €)
Fiscal year
2021
Digital Industries
18,427
Smart Infrastructure
Free cash flow
Fiscal year
6,458
Fiscal year
1007
1007
1007
100
10010
10010
100
10013
100
100
10013
100
100
10010
100
100
100
100
Omnetric GmbH, Vienna / Austria
Siemens Aktiengesellschaft Österreich, Vienna / Austria
Siemens Gebäudemanagement & -Services G.m.b.H., Vienna / Austria
Siemens Healthcare Diagnostics GmbH, Vienna / Austria
Siemens Industry Software GmbH, Linz / Austria
Siemens Konzernbeteiligungen GmbH, Vienna / Austria
1007
1009
1007
ITH icoserve technology for healthcare GmbH, Innsbruck / Austria
Siemensstadt CX Verwaltungs GmbH, Grünwald
Siemensstadt Grundstücks-GmbH & Co. KG, Grünwald
Siemensstadt Management GmbH, Grünwald
Siemensstadt SPE Verwaltungs GmbH, Grünwald
Siemensstadt SWHH Verwaltungs GmbH, Grünwald
Siemensstadt VG Verwaltungs GmbH, Grünwald
SILLIT Grundstücks-Verwaltungsgesellschaft mbH, Munich
SIMAR Ost Grundstücks-GmbH, Grünwald
SYKATEC Systeme, Komponenten, Anwendungstechnologie GmbH, Erlangen
timeseries germany GmbH, Munich
Varian Medical Systems Deutschland GmbH & Co. KG, Darmstadt
Varian Medical Systems Haan GmbH, Haan
Varian Medical Systems München GmbH, Munich
Siemens Metals Technologies Vermögensverwaltungs GmbH, Vienna / Austria
Varian Medical Systems Particle Therapy GmbH & Co. KG, Troisdorf
VMZ Berlin Betreibergesellschaft mbH, Berlin
VVK Versicherungsvermittlungs- und Verkehrskontor GmbH, Munich
Weiss Spindeltechnologie GmbH, Maroldsweisach
Yunex GmbH, Munich
Zeleni Holding GmbH, Kemnath
Zeleni Real Estate GmbH & Co. KG, Kemnath
Europe, Commonwealth of Independent States (C.I.S.), Africa, Middle East (without Germany) (306 companies)
ESTEL Rail Automation SPA, Algiers / Algeria
Siemens Spa, Algiers / Algeria
Varian Medical Systems Algeria Spa., Hydra / Algeria
Siemens Industry Software Closed Joint-Stock Company, Yerevan / Armenia
ETM professional control GmbH, Eisenstadt / Austria
VMS Deutschland Holdings GmbH, Darmstadt
Consolidated Financial Statements
Siemens Mobility Austria GmbH, Vienna / Austria
Steiermärkische Medizinarchiv GesmbH, Graz / Austria
100
100
100
100
100
52
100
100
100
51
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Varian Medical Systems Gesellschaft mbH, Brunn am Gebirge / Austria
VVK Versicherungs-Vermittlungs- und Verkehrs-Kontor GmbH, Vienna / Austria
Yunex Traffic Austria GmbH, Vienna / Austria
Siemens W.L.L., Manama / Bahrain
Samtech SA, Angleur / Belgium
Siemens Healthcare NV, Beersel / Belgium
Siemens Industry Software NV, Leuven / Belgium
Siemens Mobility S.A. / N.V, Beersel / Belgium
Siemens S.A./N.V., Beersel / Belgium
Varian Medical Systems Belgium NV, Machelen / Belgium
Yunex S.A./N.V., Beersel / Belgium
Siemens Personaldienstleistungen GmbH, Vienna / Austria
Siemens d.o.o. Sarajevo - U Likvidaciji, Sarajevo / Bosnia and Herzegovina
Siemens EOOD, Sofia / Bulgaria
Siemens Healthcare EOOD, Sofia / Bulgaria
Siemens Mobility EOOD, Sofia / Bulgaria
Varinak Bulgaria EOOD, Sofia / Bulgaria
Siemens d.d., Zagreb / Croatia
51
100
491
100
100
69
Siemens Medicina d.o.o., Sarajevo / Bosnia and Herzegovina
46
46
1007
Siemens Mobility GmbH, Munich
Siemens Mobility Real Estate GmbH & Co. KG, Grünwald
Siemens Mobility Real Estate Management GmbH, Grünwald
Siemens Nixdorf Informationssysteme GmbH, Grünwald
1009
1009
1009
1009
1009
1009
1009
100
1007
100
100
10010
10010
10010
1007
100
100
75
100
Siemens Middle East Services LP GmbH, Munich
Siemens Medical Solutions Health Services GmbH, Grünwald
Siemens Logistics GmbH, Constance
Siemens Liquidity One, Munich
10010
1009, 12
45
Consolidated Financial Statements
Siemens Campus Erlangen Grundstücks-GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 2 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 3 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 4 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 5 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 6 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objekt 7 GmbH & Co. KG, Grünwald
Siemens Campus Erlangen Objektmanagement GmbH, Grünwald
Siemens Campus Erlangen Verwaltungs-GmbH, Grünwald
Siemens Digital Logistics GmbH, Frankenthal
Siemens Electronic Design Automation GmbH, Munich
Siemens Financial Services GmbH, Munich
Siemens Fonds Invest GmbH, Munich
Siemens Global Innovation Partners Management GmbH, Munich
1007
Siemens Healthcare Diagnostics Products GmbH, Marburg
Siemens Healthineers AG, Munich
Siemens Healthineers Beteiligungen GmbH & Co. KG, Röttenbach
Siemens Healthineers Beteiligungen Verwaltungs-GmbH, Röttenbach
Siemens Healthineers Holding I GmbH, Munich
Siemens Healthineers Holding II GmbH, Munich
Siemens Healthineers Innovation GmbH & Co. KG, Röttenbach
Siemens Healthineers Innovation Verwaltungs-GmbH, Röttenbach
Siemens Immobilien Besitz GmbH & Co. KG, Grünwald
Siemens Immobilien GmbH & Co. KG, Grünwald
Siemens Immobilien Management GmbH, Grünwald
Siemens Industriepark Karlsruhe GmbH & Co. KG, Grünwald
Siemens Industry Software GmbH, Cologne
Siemens Healthcare GmbH, Munich
100
1007
100
Siemens Trademark Management GmbH, Kemnath
Siemens Treasury GmbH, Munich
Siemens-Fonds C-1, Munich
Siemens-Fonds Pension Captive, Munich
Siemens-Fonds S-7, Munich
Siemens-Fonds S-8, Munich
Siemensstadt C1 Verwaltungs GmbH, Grünwald
10010
10010
1009
100
Siemens Trademark GmbH & Co. KG, Kemnath
100
10010
1009
1009
10010
1009
1007
10010
100
100
100
100
1007
100
Siemens Traction Gears GmbH, Penig
Siemens Technopark Mülheim GmbH & Co. KG i.L., Grünwald
1007
1009
1009
1007
1009
100
100
10010
100
1007
10010
Siemens Technopark Nürnberg GmbH & Co. KG, Grünwald
1009
100
1009
Siemens OfficeCenter Frankfurt GmbH & Co. KG, Grünwald
Siemens OfficeCenter Verwaltungs GmbH, Grünwald
Siemens Private Finance Versicherungsvermittlungsgesellschaft mbH, Munich
Siemens Project Ventures GmbH, Erlangen
100
Siemens Real Estate Consulting GmbH & Co. KG, Munich
Siemens Real Estate Consulting Management GmbH, Grünwald
Siemens Real Estate GmbH & Co. KG, Kemnath
Siemens Real Estate Management GmbH, Kemnath
Siemens Technology Accelerator GmbH, Munich
1007
1007
47
Consolidated Financial Statements
100
100
100
10013
100
100
100
100
VMS Kenya, Ltd, Nairobi Kenya
Siemens Industrial Business Co. For Electrical, Electronic and Mechanical Contracting WLL, Kuwait City / Kuwait
Crabtree (Pty) Ltd, Maseru / Lesotho
Atruvi Invest Management S.à.r.l, Munsbach / Luxembourg
FAST TRACK DIAGNOSTICS LUXEMBOURG S.à r.l., Esch-sur-Alzette / Luxembourg
492
100
TFM International S.A. i.L., Luxembourg / Luxembourg
FTD Europe Ltd, Sliema / Malta
CTSI (Mauritius) Ltd., Ebene / Mauritius
Varian Medical Systems Mauritius Ltd., Ebene / Mauritius
Siemens Healthcare SARL, Casablanca / Morocco
Siemens Industry Software SARL, Sala Al Jadida / Morocco
Siemens S.A., Casablanca / Morocco
Castor III B.V., The Hague / Netherlands
Dresser-Rand International B.V., The Hague / Netherlands
100
100
1007
100
Siemens HealthCare Ltd., Rosh HaAyin / Israel
Siemens Industry Software Ltd., Airport City / Israel
Siemens Ltd., Rosh Ha'ayin / Israel
Siemens Mobility Ltd., Rosh HaAyin / Israel
UGS Israeli Holdings (Israel) Ltd., Airport City / Israel
Acuson Italy S.r.I., Milan / Italy
Siemens Healthcare S.r.l., Milan / Italy
Siemens Industry Software S.r.l., Milan / Italy
Siemens Logistics S.r.I., Milan / Italy
Siemens Mobility S.r.I., Milan / Italy
Siemens S.p.A., Milan / Italy
Flowmaster Group N.V., Eindhoven / Netherlands
VAL 208 Torino GEIE, Milan / Italy
Siemens Healthcare Limited Liability Partnership, Almaty / Kazakhstan
Siemens TOO, Almaty / Kazakhstan
Consolidated Financial Statements
100
100
100
100
100
100
100
100
Varian Medical Systems Italy SpA, Segrate / Italy
Siemens Concentrated Solar Power Ltd., Rosh HaAyin / Israel
Fractal Technologies B.V., Ospel / Netherlands
Mentor Graphics (Netherlands) B.V., Eindhoven / Netherlands
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
49
49
100
100
100
100
Pollux III B.V., The Hague / Netherlands
Siemens Finance B.V., The Hague / Netherlands
Siemens Financieringsmaatschappij N.V., The Hague / Netherlands
Siemens Healthineers Holding III B.V., The Hague / Netherlands
Siemens Healthineers Holding IV B.V., The Hague / Netherlands
Siemens Healthineers Nederland B.V., The Hague / Netherlands
Siemens Industry Software Netherlands B.V., Eindhoven / Netherlands
Siemens International Holding B.V., The Hague / Netherlands
Siemens International Holding III B.V., The Hague / Netherlands
Siemens Mobility B.V., Zoetermeer / Netherlands
Siemens Mobility Holding B.V., The Hague / Netherlands
Siemens Nederland N.V., The Hague / Netherlands
TASS International B.V., Helmond / Netherlands
Timeseries Group B.V., Rotterdam / Netherlands
TS International B.V., Rotterdam / Netherlands
Varian Medical Systems Nederland B.V., Houten / Netherlands
Varian Medical Systems Nederland Finance B.V., Houten / Netherlands
Mendix Technology B.V., Rotterdam / Netherlands
Yunex Traffic B.V., Zoetermeer / Netherlands
Siemens Healthcare AS, Oslo / Norway
1007
100
100
100
100
100
100
100
100
100
Siemens AS, Oslo / Norway
Mentor Graphics Development Services (Israel) Ltd., Rehovot / Israel
Mentor Graphics (Israel) Limited, Herzilya Pituah / Israel
Siemens Limited, Dublin Ireland
Siemens Industrial LLC, New Cairo / Egypt
Siemens Mobility Egypt LLC, Cairo / Egypt
Siemens Healthcare Oy, Espoo / Finland
Siemens Industry Software Oy, Espoo / Finland
Siemens Mobility Oy, Espoo / Finland
Siemens Osakeyhtiö, Espoo / Finland
Varian Medical Systems Finland OY, Helsinki / Finland
VIBECO - Virtual Buildings Ecosystem Oy, Espoo / Finland
Acuson France SAS, Saint-Denis / France
Aimsun SARL, Paris / France
Mentor Graphics (France) SARL, Meudon La Forêt / France
Nextflow Software SAS, Nantes / France
Padam Mobility SAS, Paris / France
PETNET Solutions SAS, Lisses / France
Siemens Financial Services SAS, Saint-Denis / France
Siemens France Holding SAS, Saint-Denis / France
Siemens Healthcare SAS, Saint-Denis / France
Siemens Industry Software SAS, Châtillon / France
Siemens Lease Services SAS, Saint-Denis / France
Siemens Logistics SAS, Saint-Denis / France
Siemens Mobility SAS, Châtillon / France
Siemens SAS, Saint-Denis / France
Supplyframe Europe SAS, Grenoble / France
Varian Medical Systems France SARL, Le Plessis-Robinson / France
Siemens A.E., Electrotechnical Projects and Products, Athens / Greece
SIEMENS HEALTHCARE INDUSTRIAL AND COMMERCIAL SINGLE MEMBER SOCIETE ANONYME, Chalandri / Greece
SIEMENS MOBILITY RAIL AND ROAD TRANSPORTATION SOLUTIONS SINGLE-MEMBER SOCIETE ANONYME, Athens / Greece
Siemens Healthcare S.A.E., Cairo / Egypt
100
100
100
Siemens Healthcare d.o.o., Zagreb / Croatia
OEZ s.r.o., Letohrad / Czech Republic
Siemens Electric Machines s.r.o., Drasov / Czech Republic
Siemens Healthcare, s.r.o., Prague / Czech Republic
Siemens Industry Software, s.r.o., Prague / Czech Republic
Siemens Mobility, s.r.o., Prague / Czech Republic
Siemens, s.r.o., Prague / Czech Republic
Yunex, s.r.o., Prague / Czech Republic
Acuson Denmark S/A, Ballerup / Denmark
Siemens A/S, Ballerup / Denmark
Siemens Healthcare A/S, Ballerup / Denmark
Siemens Industry Software A/S, Ballerup / Denmark
Siemens Mobility A/S, Ballerup / Denmark
Varian Medical Systems Scandinavia AS, Herlev / Denmark
YUNEX SINGLE-MEMBER SOCIETE ANONYME, Athens / Greece
Mentor Graphics Egypt Company (A Limited Liability Company - Private Free Zone), New Cairo / Egypt
100
100
100
100
100
100
100
100
1007
100
100
Siemens Healthcare Logistics LLC, Cairo / Egypt
evosoft Hungary Szamitastechnikai Kft., Budapest / Hungary
Siemens Healthcare Kft., Budapest / Hungary
Siemens Industry Software Kft., Budapest / Hungary
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
10013
100
100
Mentor Graphics Development Services Limited, Shannon, County Clare / Ireland
Siemens Healthcare Diagnostics Manufacturing Limited, Swords, County Dublin / Ireland
Siemens Healthcare Medical Solutions Limited, Swords, County Dublin / Ireland
100
100
48
100
+2
100
100
Siemens Mobility Kft., Budapest / Hungary
Siemens Zrt., Budapest / Hungary
Varian Medical Systems Hungary Kft., Budapest / Hungary
Yunex Traffic Kft., Budapest / Hungary
Mentor Graphics (Holdings) Unlimited Company, Shannon, County Clare / Ireland
Mentor Graphics (Ireland) Limited, Shannon, County Clare / Ireland
100
100
100
100
100
100
100
100
100
100
100
1007
100
100
100
100
100
100
100
Fiscal year
10010
100
Profit of the segment SFS
In contrast to performance measurement principles applied to other segments, interest income and expenses are included, since interest
is an important source of revenue and expense of SFS.
Asset measurement principles
Management determined Assets (Net capital employed) as a measure to assess capital intensity of the segments except for SFS. Its
definition corresponds to the Profit measure except for amortization expenses of intangible assets acquired in business combinations
which are not part of Profit, however, the related intangible assets are included in the segments' Assets. Segment Assets is based on Total
assets of the Consolidated Statements of Financial Position, primarily excluding intragroup financing receivables, tax related assets and
assets of discontinued operations, since the corresponding positions are excluded from Profit. The remaining assets are reduced by non-
interest-bearing liabilities other than tax related liabilities, e.g. trade payables, to derive Assets. In contrast, Assets of SFS is Total assets. In
individual cases assets of Mobility include project-specific intercompany financing of long-term projects. Assets of Siemens Healthineers
and in fiscal 2020 of Mobility include real estate, while real estate of all other segments is carried at SRE.
Orders
Orders are determined principally as estimated revenue of accepted purchase orders for which enforceable rights and obligations exist as
well as subsequent order value changes and adjustments, excluding letters of intent. To determine orders, Siemens considers termination
rights and customer's creditworthiness.
As of September 30, 2021 and 2020, order backlog totaled €85 billion and €70 billion (continuing operations); thereof Digital Industries
€7 billion and €5 billion, Smart Infrastructure €11 billion and €10 billion, Mobility €36 billion and €32 billion and Siemens Healthineers
€27 billion and €18 billion. In fiscal 2022, Siemens expects to convert approximately €34 billion of the September 30, 2021 order backlog
into revenue; thereof at Digital Industries approximately €6 billion, Smart Infrastructure approximately €7 billion, Mobility approximately
€9 billion and Siemens Healthineers approximately €9 billion.
Free cash flow definition
Free cash flow of the segments constitutes cash flows from operating activities less additions to intangible assets and property, plant and
equipment. Except for SFS, it excludes financing interest, except for cases where interest on qualifying assets is capitalized or classified as
contract costs; it also excludes income tax as well as certain other payments and proceeds. Free cash flow of SFS includes related financing
interest payments and proceeds; income tax payments and proceeds of SFS are excluded. In individual cases, free cash flow of Mobility
includes project-specific intercompany financing of long-term projects.
Amortization, depreciation and impairments
Amortization, depreciation and impairments includes depreciation and impairments of property, plant and equipment as well as
amortization and impairments of intangible assets each net of reversals of impairment.
Measurement - POC and Siemens Real Estate
POC follows the measurement principles of the segments except for SFS. Siemens Real Estate applies the measurement principles of SFS.
Reconciliation to Consolidated Financial Statements
Profit
Fiscal year
(in millions of €)
Siemens Energy Investment
Siemens Real Estate
Corporate items
Centrally carried pension expense
Amortization of intangible assets acquired in business combinations
2021
2020
be the case for items that refer to more than one reportable segment, SRE and (or) POC or have a corporate or central character. Costs for
support functions are primarily allocated to the segments.
Consolidated Financial Statements
41
Amortization expenses of intangible assets acquired in business combinations are not part of Profit. Furthermore, income taxes are
excluded from Profit since income tax is subject to legal structures, which typically do not correspond to the structure of the segments.
The effect of certain litigation and compliance issues is excluded from Profit, if such items are not indicative of performance. This may also
40
Consolidated Financial Statements
Description of reportable segments
Digital Industries, offers a comprehensive product portfolio and system solutions for automation used in discrete and process industries,
complemented by product lifecycle and data-driven services,
Smart Infrastructure, offers products, systems, solutions, services and software to support a sustainable transition in energy generation
sources, from fossil to renewable and a transition to smarter, more sustainable buildings and communities,
Mobility, combines all Siemens businesses in the area of passenger and freight transportation, including rail vehicles, rail automation
systems, rail electrification systems, road traffic technology, digital solutions and related services,
Siemens Healthineers develops, manufactures, and sells a diverse range of innovative diagnostic and therapeutic products and services
to healthcare providers,
Siemens Financial Services provides financing solutions to Siemens' customers and other companies via debt and equity investments,
offering leasing, lending and working capital financing solutions and equipment, project and structured financing.
Portfolio Companies (POC)
Portfolio Companies comprise businesses which deliver a broad range of customized and application-specific products, software,
solutions, systems and services for various industries including oil and gas, chemical, mining, cement, logistics, energy, marine, water and
fiber.
Reconciliation to Consolidated Financial Statements
(396)
Siemens Energy Investment - includes our investment in Siemens Energy accounted for using the equity method as well as a smaller
investment in connection with Siemens Energy.
Corporate items - includes corporate costs, such as group managing costs, basic research of Corporate Technology, Siemens Advanta, as
well as corporate services and projects. Corporate items also include equity interests, activities generally intended for closure as well as
activities remaining from divestments and discontinued operations.
Centrally carried pension expense - includes the Company's pension related income (expense) not allocated to the segments, POC or
Siemens Real Estate.
Eliminations, Corporate Treasury and other reconciling items - comprise consolidation of transactions within the segments, certain
reconciliation and reclassification items as well as central financing activities. It also includes interest income and expense, such as, for
example, interest not allocated to segments or POC (referred to as financing interest), interest related to central financing activities or
resulting consolidation and reconciliation effects on interest.
Measurement - Segments
Accounting policies for Segment information are generally the same as those used for the Consolidated Financial Statements. Segment
information is disclosed for continuing operations; prior year Assets are reclassified to conform to the current year presentation. For
internal and segment reporting purposes intercompany lease transactions, however, are classified as operating leases by the lessor and
are accounted for off-balance sheet by the lessee (except for intercompany leases with Siemens Healthineers as lessees). Intersegment
transactions are based on market prices.
Revenue
Revenue includes revenue from contracts with customers and revenue from leasing activities. In fiscal 2021 and 2020, lease revenue is
€1,050 million and €958 million, respectively. In fiscal 2021 and 2020, Digital industries recognized €4,290 million and €4,144 million
revenue, respectively, from its software business, Smart Infrastructure recognized €5,769 million and €5,182 million in its products
business. Revenues of Mobility are mainly derived from construction-type business.
Profit
Siemens' Managing Board is responsible for assessing the performance of the segments (chief operating decision maker). The Company's
profitability measure of the segments except for SFS is earnings before financing interest, certain pension costs, income taxes and
amortization expenses of intangible assets acquired in business combinations as determined by the chief operating decision maker (Profit).
The major categories of items excluded from Profit are described below.
Financing interest, excluded from Profit, is any interest income or expense other than interest income related to receivables from
customers, from cash allocated to the segments and interest expenses on payables to suppliers. Financing interest is excluded from Profit
because decision-making regarding financing is typically made at the corporate level.
Decisions on essential pension items are made centrally. Accordingly, Profit primarily includes amounts related to service cost of pension
plans only, while all other regularly recurring pension related costs are included in reconciliations in line item Centrally carried pension
expense.
Siemens Real Estate (SRE) - manages the Group's real estate business portfolio, operates the properties, and is responsible for building
projects and the purchase and sale of real estate; excluded is the carved-out real estate of Siemens Healthineers; in fiscal 2020 Mobility
was excluded as well.
40
(24)
325
Sep 30,
Sep 30,
2021
2020
6,748
4,535
3,898
228
(608)
56,091
51,431
4,511
4,335
33,456
27,568
(45,289)
(33,049)
59,990
60,325
Revenue by location
of customers
Revenue by location
of companies
Non-current assets
(in millions of €)
Consolidated Financial Statements
NOTE 30 Information about geographies
Reconciliation to Consolidated Financial Statements
Eliminations, Corporate Treasury, other items
(435)
(887)
(170)
(211)
(738)
(691)
Eliminations, Corporate Treasury and other reconciling items
(94)
(243)
Reconciliation to Consolidated Financial Statements
(1,739)
94
(1,731)
In fiscal 2021 and 2020, Profit of SFS includes interest income of €1,154 million and €1,242 million, respectively and interest expenses of
€313 million and €436 million, respectively.
42
Assets
(in millions of €)
Siemens Energy Investment
Assets Siemens Real Estate
Assets Corporate items and pensions
Asset-based adjustments:
Intragroup financing receivables
Tax-related assets
Liability-based adjustments
In fiscal 2021, Corporate items includes income of €192 million from Bentley Systems, Inc. stemming from the investment's fair value
measurement before its transfer to the Siemens Pension-Trust e.V.
3,098
3,075
1,730 1,498
2,098
1,498
181
182
334
337
27
40
9,232
9,052
857
822
2,661
3,424
898
862
181
183
191
292
76
111
17,997
4,340
4,385
1,302
1,743
2020
2021
2020
2021
2020
2021
2020
14,279
358
718
16,514
14,460
14,997
3,252
10,123 10,756
3,750
2,854
288
194
640
700
344
581
15,015 14,323
3,362
57,954
51,381
805
253
767
354
270
18
25
53
159
Reconciliation to
Consolidated Financial Statements
(353) (1,672)
204
Siemens (continuing operations)
769
62,265
458
55,254
(1,018)
(1,960)
(249) (1,502) (1,739) (1,731) 59,990 60,325 (2,642)
62,265 55,254 7,496 5,502 139,608 123,897 8,379
(1,670)
376
347
616
543
6,352
71,374 58,030
Fiscal year
2021
23
611
663
2,879
667
2,747
34
179
1,450
48
461
58,759
697
3,058
52,832
716
3,209
2,847
8,808
512
345 30,384
(85) (673)
576
2,184 31,489 15,338
3,101
1,928
22
665
1,037
815
7,560 48,658 33,859
9,847
7,142
1,314
1,104
2,202
2,144
28,946
820
544
100
Fiscal year
2020
Acuson GmbH, Erlangen
Airport Munich Logistics and Services GmbH, Hallbergmoos
AIT Applied Information Technologies GmbH & Co. KG, Stuttgart
AIT Verwaltungs-GmbH, Stuttgart
Alpha Verteilertechnik GmbH, Cham
BEFUND24 GmbH, Erlangen
Berliner Vermögensverwaltung GmbH, Berlin
Capta Grundstücks-Verwaltungsgesellschaft mbH, Grünwald
Dade Behring Grundstücks GmbH, Kemnath
eos.uptrade GmbH, Hamburg
evosoft GmbH, Nuremberg
Geisenhausener Entwicklungs Management GmbH, Grünwald
Geisenhausener Entwicklungs-GmbH & Co. KG, Grünwald
HaCon Ingenieurgesellschaft mbH, Hanover
ILLIT Grundstücksverwaltungs-Management GmbH, Grünwald
IPGD Grundstücksverwaltungs-Gesellschaft mbH, Grünwald
KACO new energy GmbH, Neckarsulm
KompTime GmbH, Munich
Equity interest
in %
1007
10010
1009
100
10010
85
10010
Germany (121 companies)
Subsidiaries
September 30, 2021
NOTE 35 List of subsidiaries and associated companies pursuant to Section 313 para. 2 of the
German Commercial Code
(in millions of €)
Audit services
Other attestation services
Tax services
Fiscal year
2021
2020
37.6
58.1
3.9
10.4
100
0.1
68.6
In fiscal 2021 and 2020, 43% and 44%, respectively, of the total fees related to Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft,
Germany.
Audit Services relate primarily to services provided by EY for auditing Siemens' Consolidated Financial Statements, for auditing financial
statements of Siemens AG and its subsidiaries, for reviews of interim financial statements being integrated into the audit, for project-
accompanying IT audits, for audit services in connection with the implementation of new accounting standards as well as for audits of the
internal control system at service companies. Other Attestation Services include primarily audits of financial statements as well as other
attestation services in connection with M&A activities, audits of employee benefit plans, attestation services related to the sustainability
reporting, comfort letters and other attestation services required under regulatory requirements, contractually agreed or requested on a
voluntary basis.
NOTE 33 Corporate governance
The Managing and Supervisory Boards of Siemens Aktiengesellschaft and of Siemens Healthineers AG, a publicly listed subsidiary of
Siemens, provided the declarations required under Section 161 of the German Stock Corporation Act (AktG) on October 1, 2021 and
September 30, 2021. The declarations are available on the company's websites at siemens.com/gcg-code and at corporate.siemens-
healthineers.com/investor-relations/corporate-governance.
NOTE 34 Subsequent events
In October 2021, Siemens recognized a pre-tax gain of €291 million related to Siemens' investment in Fluence Energy, LLC, Delaware, U.S.
(Fluence), an investment accounted for using the equity method, which is active in energy storage products and services and digital
applications for renewables and storage. Fluence issued new equity to a newly formed parent holding company, Fluence Energy, Inc., a
Delaware corporation, which in turn issued shares of stock through an initial public offering. The transaction diluted Siemens' share
in Fluence to 34%.
In October 2021, Siemens acquired the Netherlands based company SQCAP B.V. (Sqills), a provider in the provision of cloud-based
inventory management, reservation, and ticketing software to public transport operators around the world. The acquired business will be
integrated into Mobility. The purchase price is €537 million paid in cash plus contingent consideration recognized at the acquisition date
44
Consolidated Financial Statements
at its maximum amount of €79 million. The purchase price allocation is preliminary as a detailed analysis of the assets and liabilities has
not been finalized. Resulting Other Intangible assets include mainly customer-related intangible assets of €193 million and technology-
related intangible assets of €138 million, while Goodwill of €368 million comprises intangible assets that are not separable such as
employee know-how and synergy effects.
41.6
Fees related to professional services rendered by the Company's principal accountant, EY, for fiscal 2021 and 2020 are:
100
10010
1007
1009
100
10010
10010
100
100
Onespin Solutions Holding GmbH, Munich
OPTIO Grundstücks-Vermietungsgesellschaft mbH & Co. Objekt Tübingen KG, Grünwald
R & S Restaurant Services GmbH, Munich
REMECH Systemtechnik GmbH, Unterwellenborn
100
1009
100
10010
RISICOM Rückversicherung AG, Grünwald
Siemens Bank GmbH, Munich
Siemens Beteiligungen Europa GmbH, Munich
Siemens Beteiligungen Inland GmbH, Munich
Siemens Beteiligungen Management GmbH, Kemnath
Siemens Beteiligungen USA GmbH, Berlin
Siemens Beteiligungsverwaltung GmbH & Co. OHG, Kemnath
100
10010
1007
1007
1007
1007
1009
10010
85
100
Kyros 54 GmbH, Munich
Kyros 58 GmbH, Munich
Kyros 66 GmbH, Munich
Kyros 67 GmbH, Munich
Kyros B AG, Munich
Kyros C AG, Munich
10010
Lincas Electro Vertriebsgesellschaft mbH, Grünwald
Moorenbrunn Entwicklungs-GmbH & Co. KG, Grünwald
NEO New Oncology GmbH, Cologne
Next47 GmbH, Munich
Next47 Services GmbH, Munich
Omnetric GmbH, Munich
Onespin Solutions GmbH, Munich
100
10010
1007
1007
1007
Moorenbrunn Entwicklungs Management GmbH, Grünwald
NOTE 32 Principal accountant fees and services
Some of our board members hold, or in the last year have held, positions of significant responsibility with other entities. We have
relationships with almost all of these entities in the ordinary course of our business whereby we buy and sell a wide variety of products
and services on arm's length terms.
In fiscal 2021 and 2020, no other major transactions took place between the Company and the members of the Managing Board and the
Supervisory Board.
55,254
51,716
35,537
thereof Germany
11,249
9,373
13,226
11,227
7,061
6,995
thereof countries outside of Germany
51,016
45,881
49,039
44,027
44,655
28,543
therein U.S.
13,521
12,761
13,901
12,907
21,550
62,265
55,254
62,265
Siemens
2021
2020
2021
Europe, C.I.S., Africa, Middle East
31,138
27,252
32,066
28,563
23,724
2020
17,624
Americas
13,656
16,312
16,426
15,061
22,409
14,410
Asia, Australia
14,815
12,784
13,773
11,630
5,582
3,504
15,218
Non-current assets consist of property, plant and equipment, goodwill and other intangible assets.
NOTE 31 Related party transactions
Joint ventures and associates
2020
8
49
861
1,358
1,181
870
1,407
In fiscal 2021 and 2020, sales of goods and services and other income resulting from transactions between discontinued operations and
joint ventures and associates amounted to €97 million and €391 million, respectively. Purchases of goods and services and other expenses
resulting from transactions between discontinued operations and joint ventures and associates amounted to €1 million and €174 million,
respectively.
As of September 30, 2021 and 2020, receivables to associates included reimbursement rights against Siemens Energy which were
recognized correspondingly with obligations from customer contracts in connection with Siemens Energy activities legally remaining at
Siemens. Liabilities to associates as of September 30, 2021 and 2020 were mainly due to trade receivables that also result from these
activities and that have economically to be allocated to Siemens Energy.
As of September 30, 2021 and 2020, guarantees to joint ventures and associates amounted to €14,533 million and €27,505 million,
respectively, thereof €14,159 million and €27,253 million, respectively, to associates. These guarantees included mainly obligations from
performance and credit guarantees in connection with the Siemens Energy business. For these guarantees, Siemens has reimbursement
rights towards Siemens Energy.
Sep 30,
As of September 30, 2021 and 2020, loans given to joint ventures and associates amounted to €1,138 million and €900 million, therein
€1,122 million and €881 million related to joint ventures, respectively. The related book values amounted to €28 million and €26 million,
therein €25 million and €20 million related to joint ventures, respectively. Valuation adjustments recognized in fiscal 2021 and 2020
reduced book values of loans related to joint ventures by €242 million and €744 million, respectively.
43
Consolidated Financial Statements
As of September 30, 2021 and 2020, there were loan commitments to joint ventures amounting to €222 million and €299 million,
respectively.
Pension entities
For information regarding the funding of our post-employment benefit plans see Note 17.
Related individuals
In fiscal 2021 and 2020, members of the Managing Board – including members who left during fiscal 2021 - received cash compensation
of €21.4 million and €15.3 million. The fair value of share-based compensation amounted to €11.6 million and €11.3 million for 202,139
and 203,460 stock awards, respectively, granted in fiscal 2021 and 2020. In fiscal 2021 and 2020, the Company granted contributions
under the BSAV to members of the Managing Board totaling €3.0 million and €4.5 million, respectively.
Therefore, in fiscal 2021 and 2020, compensation and benefits, attributable to members of the Managing Board amounted to €36.0
million and €31.0 million in total, respectively.
In fiscal 2021 and 2020, expense related to share-based compensation amounted to €7.6 million and €17.7 million, respectively, including
expenses related to the additional cash payment compensation due to the spin-off of Siemens Energy.
Former members of the Managing Board and their surviving dependents received emoluments within the meaning of
Section 314 para. 1 No. 6 b of the German Commercial Code totaling €30.1 million and €16.0 million in fiscal 2021 and 2020, respectively.
The defined benefit obligation (DBO) of all pension commitments to former members of the Managing Board and their surviving
dependents as of September 30, 2021 and 2020 amounted to €192.0 million and €176.5 million, respectively.
Compensation attributable to members of the Supervisory Board comprised in fiscal 2021 and 2020 base compensation and additional
compensation for committee work and amounted to €5.2 and €5.3 million (including meeting fees), respectively.
As of September 30, 2021 and 2020, the Company had commitments to make capital contributions to joint ventures and associates of
€72 million and €62 million, therein €65 million and €51 million related to joint ventures, respectively.
Sep 30,
Sep 30,
2021
1,129
1,242
Siemens has relationships with many joint ventures and associates in the ordinary course of business whereby Siemens buys and sells a
wide variety of products and services generally on arm's length terms. The transactions between continuing operations and joint ventures
and associates were as follows:
(in millions of €)
Joint ventures
Associates
Sales of goods and services
and other income
Fiscal year
2021
Purchases of goods and
services and other expenses
Receivables
Liabilities
Fiscal year
Sep 30,
2020
Sep 30,
2020
76
1,105
2021
2021
169
147
10
34
113
1,329
1,498
68
215
584
594
87
121
2020
Siemens Finance & Leasing GmbH, Munich