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Siemens AG

Company

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Siemens AG (Berlin and Munich) ─ one of the largest suppliers of electronics and electrical equipment.

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For August, 2018 Siemens AG conducts the activity in more than 200 countries and specializes in such areas as electrification, automation and digitalization. Siemens – one of the world's largest suppliers of energy efficient and resource-saving technologies. The enterprise is one of leading manufacturers of steam-gas units for effective power generation, solution provider for her transfer, the pioneer in the field of infrastructure solutions, technologies of automation and the software for the industry.

The company is a large producer of the medical equipment for visualization (computer and magnetic and resonant tomographs) and laboratory diagnostics.

Structure

In August, 2018 the new structure of Siemens AG is announced. Three operating companies:

  • Petrogas and power (GP)
  • Intellectual infrastructure (SI)
  • Digital production" (DI).

Strategic companies:

Performance Indicators

2019: Software business showed growth by 8%

In 2019 financial year of Siemens gained 86.8 billion euros that is 3% more than sales the previous year. Order amount at the company during this time increased by 6%, to 98 billion euros.

Software business brought to Siemens annual revenues in the amount of 4.04 billion euros that is 13% more than value of year prescription. If not to consider rate fluctuation of currencies, then sales of the software at the company increased by 8%.

Revenue indicators in Siemens in 2019
Revenue indicators in Siemens in 2019

The software direction belongs to division of Digital Industries which develops solutions for automation of work of the enterprises. In 2019 reporting year of sale in Digital Industries reached 16.09 billion euros that is 3% more, than the previous year.

In 2019 reporting year Siemens received about 44.36 billion euros revenue in the countries of Europe, Africa and the Middle East (EMEA) that is 4% more, than the previous year. In Germany income increased by 5%, to 12.28 billion euros.

In the states of North and South America the company gained 23.8 billion euros against 22.12 billion euros the previous year. In the American market of sale increased by 12%, to 17.99 billion euros.

Revenue in the countries of Asia and Australia at Siemens in 2019 made 18.69 billion euros, having increased by 3% year on year. In China turnover grew by 4%, to 8.4 billion euros.

The net profit of Siemens in 2019 financial year was 5.65 billion euros against 6.12 billion euros profit a year ago. This recession in the company the fact that in 2018 the single inflow of income connected with taxes at share transfer from Atos SE in Siemens Pension-Trust e.V. and sale of shares of OSRAM Licht AG was considered.

Profit in division of Digital Industries was 2.88 euros euros that practically in accuracy corresponds to profit in 2018 financial year. In division of Smart Infrastructure small decrease in annual profit — from 1.57 to 1.5 billion euros is registered.[1]

Business in Russia

Main article: Siemens Russia

Siemens implements in Russia large projects in power, railway transport and health care. In IT market the concern is provided by activity of some subsidiary companies, including Siemens PLM Software – the large world supplier of software solutions for product lifecycle management (PLM) and production.

History

2019

Purchase from Pixeom of business on development of peripheral calculations

At the end of October, 2019 Siemens announced acquisition at Pixeom of business on development of the platform of peripheral calculations. The assets and personnel connected with this solution entered perimeter of the transaction, but the company Pixeom remained independent. Financial terms of agreement do not reveal. Read more here.

The hired programmer infected with a virus spreadsheets of Siemens and repaired them for money

In the middle of July, 2019 the former contractor of Siemens pled guilty of deliberate infection of documents of the company. It became clear that it started a virus in the spreadsheets of Siemens created by it, and then repaired them at additional expense. For these crimes the 62-year-old programmer David Tinli from the suburb of Pittsburgh is threatened up to 10 years of prison, by a penalty in the amount of $250,000 or both. Read more here.

Reduction of 2700 jobs

On June 18, 2019 Siemens announced reduction of 2700 jobs worldwide. About 1400 employees will be dismissed in Germany.

Personnel cleaning first of all concerned projects and the business directions in the field of electric power transmission and also support departments.

As specifies Reuters agency, the German industrial giant liquidates working positions in the new energy company to which Siemens transferred the division "Oil and gas industry and the power engineering specialist" and also a share in Siemens Gamesa Renewable Energy SA (SGRE). Annual revenues of this company are stated in 30 billion euros, number of staff in it is 80 thousand people (for June, 2019).

Siemens will reduce 2.7 thousand jobs worldwide
Siemens will reduce 2.7 thousand jobs worldwide
«
Siemens will begin in the nearest future consultations with the parties which represent the interests of employees to implement the planned measures as much as possible according to social norms, said in the statement of corporation made on the occasion of dismissals.
»

Added to Siemens that reductions of jobs are connected with structural changes in the power industry and process optimization.

According to concern,  against the background of difficult market conditions creation of the separate energy company will demand additional economy  in the amount of 500 million euros for  increase in its price competitive advantages in  the market. Within this work dismissals of 2.7 thousand workers are also carried out, they will last several years.

Siemens is going to implement the program of retraining  in connection with  structural change of the industry so new reductions will bear socially responsible character.

In May, 2019 Siemens announced plans to dismiss  10,400 people to cut down expenses on 2.2 billion euros by 2023. The most part of reductions affected administrative and auxiliary positions.[2]

Publication of recommendations about security settings for industrial computers

In January, 2019 Siemens submitted detailed recommendations for security settings of industrial computers. The documents published by the German concern are designed to reduce risks of use at the enterprises of the equipment running operating systems Windows 10 and Windows 7.

One of documents contains recommendations about setup of physically isolated PCs. In the second it is told about safe setup of the computers connected to network.

Siemens published recommendations about security settings for industrial computers
Siemens published recommendations about security settings for industrial computers

For example, Siemens recommends not to allow installation by users of any programs, and for this purpose it is necessary to organize automatic failure on a request of the password granting the administrator's rights.

Also the company considers necessary implementation of the expanded filter of record (Enhanced Write Filter, EWF). This additional component makes a disk volume available only to reading. At the same time write operations which are executed with the data which are stored on this disk volume are redirected to its imposing which can be on other disk or in memory of the computer. Windows considers imposing of EWF and its disk volume as the uniform device. At the same time actually on a disk volume there are no changes. All changes remain only in imposing of EWF.

Besides, in Siemens recommend to allow users to stop processes in a system only after authorization in it, to involve the AppLocker tool (the politician of limited use of programs moves abilities to manage of the application and functionality), to prohibit access to Windows applications and their properties through a desktop and the Start menu, to limit functionality after combination key stroke of Ctrl+Alt+Del.

Complete recommendations about security settings for industrial computers are published here [1] and here [2].

2018

Purchase of software developer for creation of the automobile Comsa Computer und Software systems

On December 3, 2018 Siemens announced acquisition of software developer for creation of the automobile Comsa Computer und Software systems which will join with all staff of employees Mentor Graphics company which is a part of Siemens PLM Software. The transaction should expand possibilities of Siemens for design of products from different lines and the analysis of their data and to give them according to the European standards. Read more here.

Purchase of software maker for creation photorealistic 3D - images

In September, 2018 Siemens announced acquisition of Lightwork Design for the purpose of further development of 3D technologies - data visualizations. Read more here.

Complete restructuring of business with emphasis on three directions

The main goal of corporate strategy "Vision-2020+" (the strategy continuation "Vision-2020" started by Siemens in 2014) – to provide to separate business divisions of concern more freedom in decision making that, acting under a strong brand of Siemens, they could concentrate efforts on the markets. In plans strengthening of a portfolio for the investment account is also provided in the new directions of growth, such as the integrated services for IoT, distribution of energy and infrastructure solutions for electric transport.

The new structure of the company becomes effective at the beginning of new financial year – on October 1, 2018. Its implementation will be step-by-step and will come to the end by March 31, 2019. Departments "Automation and security of buildings" (BT), Management of the electric power (EM), "Power generation and gas" (PG), "Digital production" (DF) and also a considerable part of department "Continued production and drives" will be integrated (PD) in three new operating companies. Business divisions of the company will also be restructured and integrated into three operating companies.

Operating companies:

  • "Oil and gas industry and power" (GP)
  • "Intellectual infrastructure" (SI)
  • "Digital production" (DI)

Heads of new operating companies will continue to work in Board of Siemens AG.

The strategic companies will include two consolidated companies - Siemens Healthineers and Siemens Gamesa Renewable Energy which controlling stake is owned by Siemens. Before completion of consolidation with Alstom in this group will also be the department Mobility enters.

The strategic Vision-2020 program started by Siemens in 2014 in general is already implemented, and more successfully and quicker, than was planned.

«
"For the last four years we did huge work. And today almost all our business divisions significantly increased the profitability. Customer satisfaction is at the highest level. And our department "Digital production" takes the leading positions in the market of industrial digitalization", – Joe Kezer, the president and the chairman of the board of Siemens AG said.
»

According to Kezer, the companies often postpone necessary changes, do not face obvious difficulties yet.

«
"It would be irresponsible to rest on laurels, – he says. – The world around us changes quicker and quicker, and we need to be ready to any succession of events. We are sure that now the most suitable time consistently to create the future of our company".
»

The president of Siemens AG considers digitalization which is also compared to the Fourth industrial revolution, the largest transformation of the industry for all its history.

«
"There will be not largest companies but only those which will be able to adapt to new conditions better. For this reason we actively develop our corporate culture and we give to our business divisions more entrepreneurial freedom. Changes affect also distribution of working functions", – Kezer notes.
»

Besides, in those markets where the company works, there is a paradigm shift connected with such global trends as development of the electric transport and the distributed power supply systems. The Siemens company intends to use these changes actively.

The purpose of new structure of the company – to provide big entrepreneurial freedom for separate business divisions "Siemens". The existing level of departments will be as a result abolished, and the regional structure will be changed for a bigger customer focus.

«
"Constantly developing our strategy, we create Siemens of new generation. Less control from the headquarters more freedom for our divisions will allow us to be stronger and more flexible", – Kezer told.
»

In a corporate structure there will be three operating and three strategic companies. Reorganization will allow Siemens to strengthen customer focus and to fully conform to requirements of those industries in which the concern works.

«
"Times when the companies which are engaged in product and project business, the software and services with their different requirements, it was possible to manage on a centralized basis and effectively, already ended", – the president and the chairman of the board of Siemens AG told.
»

Before divisions of corporation were among:

Acquisition of Mendix company for 600 million euros

In August, 2018 it was announced acquisition of mendix company and the beginning of rendering services in integration of Internet of Things (IoT). The company expects that it will allow Siemens to expand considerably the presence in the market in the field of industrial digitalization. Mendix is the leader in the field of low-level platforms for application development. The technology of the company gives the chance to program applications ten times faster that in the future will allow customers of MindSphere to develop proprietary applications quicker and cheaper. Acquisition value is 0.6 billion euros. It is expected that the transaction which is subject to approval by regulating authorities will come to the end in the first quarter 2019 financial year.

Building Robotics acquisition

At the end of June, 2018 Siemens announced purchase of software developer for commercial management of cooling and otopleniyembuilding to Robotics. The purchased startup will become a part of division of Siemens Building Technologies specializing on development for "smart" buildings. Read more here.

Agilion purchase

In April, 2018 Siemens announced purchase of the developer of IoT-solutions for production Agilion. Read more here.

Aimsun purchase

On March 20, 2018 Siemens announced acquisition of software developer for transport planning of Aimsun. The cost of the transaction does not reveal. Read more here.

In ten the most expensive German brands

In January, 2018 the company was included into ten the most expensive German brands, according to rating which was made by advertizing and communication  holding WPP  and the marketing agency Kantar Millward Brown. Read more here.

2017

IT-Business helped to increase income

In 2017 financial year revenue of Siemens increased by 4%, and profit — for 11% that was promoted in many respects by high rates of IT-Business.

For the 12-month reporting period which came to the end on September 30, 2017 sales of Siemens reached 83 billion euros against 79.6 billion euros the previous year. Net profit during this time rose to 6.18 billion euros from 5.58 billion euros.

IT-Business helped Siemens to increase income
IT-Business helped Siemens to increase income

Annual revenues of Siemens from implementation of the software (including the operating system for Internet of Things of MindSphere) reached 4 billion euros, from sales of digital services — 1.2 billion euros. Year on year these indicators in the amount increased by 20%. The company expects growth of this income approximately for 8% a year during the period from 2018 to 2022.

In 2017 financial year so-called technologies of advanced automation generated Siemens about 19 billion euros revenue, classical services — 17 billion euros. This direction, as stated in the report, will show annual growth at the level of 3% in 2018-2022.

The annual turnover in division of Digital Factory which is responsible for release of hardware and software solutions for industrial enterprises (the producer of software Siemens PLM Software enters here), made 11.38 billion euros that is 12% more than an indicator of year prescription. This rise was almost the highest among all business directions, except Siemens Gamesa Renewable Energy (business in the field of renewable energy). The profit of Digital Factory rose from 1.7 to 2.1 billion euros.

Financial performance of Siemens in 2016 and 2017 financial years
Financial performance of Siemens in 2016 and 2017 financial years

Siemens gains the most part of income in the countries of Europe, the Middle East and EMEA. There annual revenues of the company were 43.4 billion euros that is 4% more, than in 2016 to a fiscal year. In the countries to North and South America 4 percent rise — to 23.5 billion euros is also recorded.[3]

For the end of September, 2017 in Siemens 372 thousand employees worked worldwide.

Possible superiority of Siemens Healthiners

In December, 2017 it became known that Siemens Healthiners can overtake by the sizes and the budget the parent company once. As the CEO of Siemens Joe Kezer (Joe Kaeser) reported, it became possible thanks to the partial department of subsidiary company approaching in 2018 which will be devoted only to work in the field of health care now. Read more here.

Reduction of 7 thousand jobs

On November 16, 2017 the Siemens concern announced that it lays off 6900 employees, or nearly 2% of the global state, with the purpose to adapt business to the structural changes which happened in the power industry and industrial sectors transfer CNBC.[4]

«
The power industry endures an unprecedented change how renewable energy sources make the increasing competition to other production methods of the electric power... Working quickly, but it is careful, we want will adapt to these changes, at the same time investing in the technologies focused on the future — the board member of Siemens Lisa Davis (Lisa Davis) said.[5]
»

The purpose of reduction of nearly 7 thousand employees in Siemens called adaptation of business to structural changes in the power industry
The purpose of reduction of nearly 7 thousand employees in Siemens called adaptation of business to structural changes in the power industry

Siemens follows from the press release that the planned dismissals will happen over several years, and more than a half of them is necessary to Germany. Stronger than all reduction will affect the division occupied with release of a utilities equipment where it is supposed to dismiss 6100 employees from whom 2600 — in the homeland of concern.

«
Staff reduction is necessary to provide competitiveness in the market of technologies for power plants, generators and powerful electric motors in the future. We pursue this aim this measure — the head of personnel administration of Siemens Yanina Kugel (Janina Kugel) said, having added that the company will try to work most carefully and elaborately, and process will be long.
»

Also in Siemens promised that will try to translate as the bigger number of workers for 3.2 thousand vacancies which are available in the company is possible.

Meanwhile, trade union representatives criticized Siemens, having accused the company of what it was late reacted to crisis in area of traditional methods of generation of the electric power. The largest German IG Metall union called inadmissible scales of reductions and demanded to refuse forced dismissals, Reuters reports.[6]

Tass International purchase

On August 30, 2017 the German concern Siemens announced purchase of software developer for Tass International unmanned vehicles for the purpose of strengthening of the automobile business. The cost of the transaction does not reveal. Read more here.

2016

Construction of a new campus in the German Erlangena

In December, 2016 the Siemens company announced construction of new office complex in the German city of Erlangen. The company positions a new object under the name Siemens Campus Erlangen as the most advanced campus in the world.

In the territory of the center also premises, restaurants, hotel, the different enterprises in the field of services, research departments and Siemens laboratories will be located office. At first eight office buildings, three multi-storey parkings for cars and the dining room expected 7 thousand people will be built. The second module of a campus will assume construction of a 70-meter skyscraper. It is going to complete the construction of all complex in 2030.

Siemens builds a new campus for 500 million euros
Siemens builds a new campus for 500 million euros

Buildings which will occupy the area more than 54 hectares will use the most advanced construction and energy technologies. Siemens notes that it is the first office of the company which will not select a carbon dioxide gas.

Siemens Campus Erlangen will be in fact the new district of the city occupying the territory equivalent to more than 75 football fields.

The project is developed in the Frankfurt architect company KSP Jurgen Engel Architekten and will be implemented in close cooperation with Erlangen's authorities and Bavaria. The planned investment volume into construction of the facility is 500 million euros.

«
The new campus will become the important character of the importance of Bavaria as innovation business center. Its influence will extend far away from Germany — the Minister of Internal Affairs of Bavaria Joachim Herrmann says. — Siemens Campus Erlangen will create absolutely new live city district which will bring benefit to all our citizens.[7]
»

Revenue of 79.6 billion euros, net profit - 5.6 billion

In 2016 financial year which came to the end on September 30, 2016 turnover of concern made 79.6 billion euros, and net profit – 5.6 billion euros. For the end of September, 2016 in Siemens worked 351 thousand employees worldwide.

Siemens and Bentley Systems will invest 50 million euros in joint developments

Siemens and Bentley Systems signed the strategic partnership agreement which will help to transfer the industry to digital technologies in November, to increase quality of accomplishment of infrastructure projects and return on assets in other business areas. At the first stage of Siemens and Bentley Systems invest not less than 50 million euros in development of joint technologies. Also it is going to expand service lines of both companies for users.

Using cloud computing of new services an integrated environment of data will be created. It will allow to pull together practicians of the companies in use of engineering digital models. In addition, Siemens will acquire secondary shares of Bentley for the amount of 70 million euros within the program existing prior to public sales of shares of Bentley Systems.

Siemens and Bentley Systems are familiar not the first year with technologies of each other. For example, Siemens uses solutions of Bentley on the Digital Technologies and Industrial automation directions. By Bentley software for modeling of reality it was integrated into the software solution Siemens Process Simulate. It is technology of laser scanning and clouds of points which allows to fix the existing conditions in industrial zones. The Turnkey Manufacturing Systems (TMS) company, equipment supplier for production of machines, successfully applied the innovation opportunities of clouds of points for creation of "the digital double" of the production line to reduce time and costs.

Investment initiatives will affect practically all divisions of Siemens. In turn, Bentley will get know-how, implementing in Siemens the applications for design, analytical and construction modeling and also work planning of the enterprises. As a result, complex and available digital engineering models, such as "digital double" which can be browsed via the interface of virtual reality will allow to reach high operational rates, will provide a convenient information access and will allow to increase reliability of assets. This work will integrate engineering models in a 3D context of physical reality and the corresponding function engineering 2D models in solutions of Siemens.

Siemens and Bentley Systems will cooperate in the field of power management, electricity generation, construction technologies and mobility of information. Both companies will be able to use new methods in the industries for the offer of the innovation services in the markets. So, the Bentley applications for 3D modeling and structural analysis of industrial and infrastructure facilities supplement solutions and experience of Siemens in the field of electrification and automation. Clients of both companies which will be able to increase profitability and efficiency of the projects and assets will benefit from it. There will be an opportunity to model not only work of the enterprise, but also the procedure of putting into operation. Joint developments of Siemens and Bentley Systems will support open formats of data and functional compatibility with other products.

Purchase of Mentor Graphics for $4.5 billion

On November 14, 2016 Siemens announced acquisition of software maker for development of Mentor Graphics chips for the purpose of gain of software business and strengthening of the positions in the American market. Siemens will pay about $4.5 billion or $37.25 for the stock of this company for Mentor Graphics purchase that is 21% more than a quotation rate according to the results of biddings on November 11, 2017. Read more here.

Opening of the new headquarters in Munich

On June 24, 2016 the Siemens concern opened the new headquarters in Munich in which about 1,200 employees will work.

The new building meets the highest international standards of environmental friendliness and energy efficiency. For example, about 7,400 LED lamps and also sensors of presence and sunlight which reduce energy consumption on a quarter are used for lighting of premises.

Several facts about the new headquarters of Siemens
Several facts about the new headquarters of Siemens

On a roof of the building of 1,300 square meters over 800 solar panels providing the headquarters with about one third of necessary energy were located. Also the system of use of a rain water was implemented: annually about 1500 cubic meters of such water will be applied to toilets and cleaning of facades of the building.

Besides, in Siemens announced presence about 5,000 smoke detectors and fire and also other sensors which in the amount generate about 30,000 units of the data analyzed afterwards for effective service of the building.

Several facts about the new headquarters of Siemens
Several facts about the new headquarters of Siemens

Project development of the new headquarters of Siemens began in 2010. Then the Danish company Henning Larsen Architects became the winner of the corresponding tender for creation of architectural appearance of the building. Project implementation was enabled together with Siemens Real Estate company which is responsible for all real estate transactions, belonging to concern.

Process of creation of the Munich headquarters of Siemens lasted in total six years from which project development, 1 year — dismantling of the buildings located in the territory of future office Siemens took 1.5 years. At construction of the building 6,000 tone of reinforcing steel, 16,000 square meters of glass panels for facades and 40,000 cubic meters of concrete were used.

Building area was 11,000 square meters, and floor area — 45,000 square meters (without underground floors).[8]

2015: Plan of reduction of 7400 employees (2% of personnel)

The German Siemens is going to reduce about 7.4 thousand jobs, Bloomberg tells#.VNN3dp2sU_4. About 3.3 thousand from them will be reduced in Germany within the mass restructuring plan of the company. These dismissals will keep about 2% of the state Siemens companies worldwide which exceeds 300 thousand people. So far it is not clear whether dismissals a part or addition to target reduction on 11.6 thousand positions which it was announced in May, 2014 will become.

Dismissals are planned within the restructuring announced in May, 2014 and, as expected, will allow to save about 1 billion euros. These funds will be allocated for innovations, production initiatives and increase in rates of development.

2014: Fall of profit on geopolitical tension

At the end of January of Siemens published the reporting for the first quarter of 2015 financial year in which paid attention to difficult conditions of business, including because of geopolitical tension. The net profit of the company in October-December of the 2014th dropped by 25 percent — to 1.08 billion euros, profit on the continuing transactions — for 18 percent, to 1.11 billion euros.

2009: Turnover of 76.7 billion euros, profit - 2.5 billion

In 2009 financial year (as of September 30) turnover of concern made 76.7 billion euros, and net profit – 2.5 billion euros. About 23 billion euros, or 1/3 annual turnovers of the company, are the share of eco-friendly products and solutions.

2008: Dynamics of a share of Siemens in the market of cell phones

Leaders in sales of mobile phones and smartphones from 1992 to 2018 in animation are lower.

Notes