Fit4 2010: Portfolio

Active portfolio management – based on the principle that all our businesses must be No. 1 or No. 2 in attractive markets – is a key pillar of our Company strategy.

Active portfolio management enables companies to identify attractive markets – characterized by strong growth, high potential profitability and low risk – and to establish or expand profitable businesses within those markets. To generate profitable growth, businesses must generally occupy No. 1 or No. 2 positions in their markets. Only then can they finance the portfolio measures and R&D outlays indispensable to maintaining a competitive edge and satisfying customer demands for innovative solutions. Active portfolio management also ensures that a company’s businesses are strategically aligned and capable of generating synergies.

Our businesses are divided into three Sectors, each with enormous growth potential:

Industry, which comprises the businesses of A&D, I&S, SBT, TS and OSRAM.
Energy, which comprises the businesses of PG and PTD.
Healthcare, which comprises our Med businesses.

SIS and SFS provide services for all three Sectors.

In all our markets, we’re focused on expanding our leading positions with new products and technologies and through continued massive investments in innovation. Where appropriate, we’re also strengthening our businesses through acquisitions.

Focus on three high-growth Sectors

With markets constantly changing, portfolio management is an ongoing task. Our major portfolio measures in fiscal 2007 included:

The acquisition of Texas-based UGS, which is making us the first company to bridge the gap between virtual product and production planning and real-life manufacturing on the factory floor. Implementing our intelligent factory concept to link these two worlds will allow experts to closely coordinate new product development and the design of new production facilities through simulation. It will also reduce manufacturing errors, slash production ramp-up time and cut time-to-market by as much as 40 percent. This innovative approach will be particularly beneficial in the automotive and aircraft industries. None of our competitors can offer similar advantages. Here again, we’re raising the bar.
The acquisition of the U.S. diagnostics company Dade Behring, which has made us a leading supplier of in-vitro diagnostics and the world’s only integrated diagnostics company. This investment is a further major step toward making our vision of knowledge-based healthcare a reality. Our presence in all areas of medical diagnostics is not only a key lever for integrating clinical workflows and bundling clinical information; it will also help us improve healthcare quality while cutting costs.

As part of our Fit4 2010 program, we originally planned to publicly list Siemens VDO Automotive. However, after reviewing all the options, our Managing and Supervisory Boards decided to sell the Group to Continental AG. The alliance with Continental has major advantages for all our stakeholders. It provides the businesses and employees of Siemens VDO with promising perspectives, respects the interests of our shareholders and represents a major advance in our efforts to sharpen the focus of our portfolio and reduce the Company’s complexity.