Fit4 2010 – Portfolio
Only if we have a portfolio focused on attractive, future-oriented markets can we generate the sustainable, profitable growth needed to increase our Company’s value. And that’s where active portfolio management comes in.
The aim of our portfolio strategy is to capture and maintain No. 1 or No. 2 positions in profitable high-growth markets. Why? Because our competitive position largely determines the profitability of our businesses: to generate high returns and remain successful even in turbulent business environments, companies must rank first or second in attractive markets – and 70 percent of our businesses already occupy such positions.
Now that we’ve bundled our activities into the three Sectors Industry, Energy and Healthcare, we’re exceptionally well-positioned to profit from today’s megatrends: shifting demographics, increasing urbanization, climate change and globalization. Our new setup is also enabling us to further sharpen our focus and streamline our portfolio.
The goal of our portfolio measures remains unchanged: to build on our strengths and be the best owner of all our businesses – that is, the owner who can best maximize their value. This means we have to achieve high profit margins and strong, sustainable growth while actively consolidating our market position, generating attractive returns on capital and remaining a world leader with innovative products and solutions.
We’ve set clear priorities for the future. Having extensively restructured our portfolio in the last few years, we’re now placing special emphasis on generating organic growth, tightening the focus of our portfolio and making selected investments:
- First, we’re leveraging the potential of our recent acquisitions. Over the past five years, we’ve invested more than €20 billion in exogenous growth. Acquisitions like Dade Behring Holdings Inc. (Dade Behring) and UGS Corp. (UGS) have further expanded our range of innovative products and solutions and strengthened our position in attractive future-oriented markets.
- Second, we’re further aligning our portfolio with our three-Sector setup. The sale of Siemens VDO Automotive (SV) to Continental AG was a logical step in this direction. In addition, our Industry Automation Division made a profit on the sale of its wireless modules business, and the divestment of OSRAM’s global tungsten business generated a profit as well. We’ve also found satisfactory solutions for our remaining communications businesses: Siemens Enterprise Communications (SEN) and Siemens Home and Office Communication Devices GmbH & Co. KG (SHC). In The Gores Group, we’ve found a partner for SEN with extensive experience in the technology and telecommunications area. We assume that – under the management of ARQUES Industries AG – SHC will further enhance its position as market leader in high-end communications solutions. In accordance with our portfolio strategy, we’re also selling our 50 percent stake in the joint venture Fujitsu Siemens Computers (FSC) to Fujitsu Limited. Closing is scheduled for April 1, 2009, pending regulatory approval. As part of our previously announced transformation program, all our remaining Other Operations will be integrated into our Sectors or Cross-Sector Businesses, sold, funneled into joint ventures or closed.
- Third, where appropriate, we’ll continue to make selected equity investments. Our goal is to create sustainable value through rigorously targeted resource allocation. That’s why any future acquisitions we make will have to meet strict financial criteria.
Active portfolio management is an ongoing process, empowering us – as an integrated technology company – to achieve our ambitious goals while delivering innovative products and solutions to our customers and generating lasting value for our shareholders.
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