The Siemens share / Investor relations
During fiscal 2011, the Siemens share price developed largely in line with the German stock market. Market momentum was strong, with share prices reaching their highest level in April 2011. Then, in August 2011, the international stock markets experienced one of their worst declines in more than 20 years – and the Siemens share did not remain unaffected. Following the very large dividend increase from €1.60 to €2.70 in fiscal 2010 and in accordance with the dividend payout ratio we defined as part of our One Siemens target system, we intend for our shareholders to profit from increased income again this year. The Managing Board and the Supervisory Board will thus propose a further increased dividend for fiscal 2011 of €3.00 per share, representing a payout ratio of 41%. Siemens AG, which continues to have a very sound financial basis, again reduced its net debt in fiscal 2011. In an environment in which increasing attention is being paid to the declining ratings of many countries, our Company continues to enjoy good, stable, investment-grade credit ratings, with an improved outlook.
Stock markets – Financial crisis erodes share price gains
Reflecting economic developments, the stock market environment was characterized by continuously increasing prices during the first three months of fiscal 2011 (October 1, 2010 to December 31, 2010). In the months that followed, the positive price development continued, aside from a few minor setbacks. At the beginning of August 2011, the worst stock market crisis since 1987 ensued, with both the DAX 30 and the Siemens share price declining more than 30%. The markets subsequently recovered slowly from the downturn, but prices did not completely return to earlier levels.
Siemens stock performed relatively well in this market environment, closing at €68.12 per share on September 30, 2011. For shareholders who reinvested their dividends, this amounted to a loss of 9.5% (fiscal 2010: a gain of 25.4%) compared to the closing price a year earlier. The Siemens share performed somewhat better than the leading index of the German stock market, the DAX 30 (which depreciated 11.7%), but remained behind the leading international index, MSCI World (which declined 4.4%).
A long-term comparison illustrates the strength of the Siemens share: the assets of an investor who acquired Siemens stock worth €1,000 at the beginning of fiscal 2007 and reinvested the dividends in additional Siemens shares would have increased to €1,119 by the end of fiscal 2011. This annual return of 2.3% is clearly above the corresponding results for the DAX 30 (a loss of 1.7%) and MSCI World (a loss of 2.3%). The strength of the Siemens share becomes even more apparent when the comparison is extended to include the last ten years: the assets of an investor who purchased Siemens stock worth €1,000 at the beginning of fiscal 2002 and reinvested the dividends in additional Siemens shares would have increased to €2,020 by the end of fiscal 2011. This annual return of 7.3% even more clearly outperformed the DAX 30 (2.5%) and MSCI World (3.7%).
Proposed dividend increase
At the Annual Shareholders’ Meeting, the Managing Board and the Supervisory Board will propose a dividend payment of €3.00, an increase of €0.30 per share. After the very large dividend increase in fiscal 2010, this proposal reflects our earnings position in fiscal 2011 and is in strict accordance with our payout policy. Representing a payout ratio of 41%, this proposal continues our tradition of paying attractive dividends to our investors.
Shareholder structure
With some 739,000 shareholders, Siemens AG is one of the world’s largest publicly owned companies. An analysis of our shareholder structure conducted in August 2011 showed that shareholders in Germany hold the largest percentage of our share capital, about 30% of all outstanding shares. Shareholders in the U.S. hold roughly 18% and shareholders in the U.K., around 11%, while investors in Switzerland and France hold 8% and 7%, respectively.
Some 63% of Siemens’ outstanding shares are currently held by institutional investors, about 20% by private shareholders and around 6% by members of the Siemens family.
Credit ratings
Siemens AG has good, investment-grade credit ratings: “A1/P-1/outlook positive” from Moody’s Investors Service and “A+/A-1/outlook positive” from Standard & Poor’s are very positive ratings – particularly when compared to those of competitors in the industry segment. Our solid financial position gives us unrestricted access to the international financial and capital markets.
At the end of fiscal 2011, the net debt of Siemens AG was €4,995 million, with cash and cash equivalents of €12,468 million.
Siemens on the capital market
We take our responsibility to maintain an intensive dialogue with the capital market very seriously. Cultivating close contacts with our shareholders, we keep them informed of all major developments throughout Siemens.
As part of our investor relations work, we provide information on the Company’s development in quarterly, semiannual and annual reports. Our CEO and CFO also maintain close contact with investors through roadshows and conferences. In addition, Siemens holds Sector Capital Market Days, at which the management of our Sectors informs investors and analysts about the Sectors’ business strategies and market environments. In recognition of the growing importance of the emerging markets, we held the first Capital Market Day Emerging Markets in Shanghai in fiscal 2011.
We also provide extensive information online. Quarterly, semiannual and annual reports, analyst presentations, press releases and our financial calendar for the current year, with all major publication dates as well as the date of the Annual Shareholders’ Meeting, are available at www.siemens.com/investors.
Profit-sharing culture/Stock-based compensation programs
Siemens has set itself the goal of more intensively fostering a profit-sharing culture at the Company and encouraging employees to become shareholders. That’s why we offer various share-based payment programs to our employees. In fiscal 2011, 4,414,297 Siemens shares were issued to service these programs, namely, the Stock Awards program, the Share Matching Program (including the Base Share Program, the Share Matching Plan and the Monthly Investment Plan) and the Jubilee Program. Non-vested and outstanding grants under the various plans will result in additional share issuances to employees in the future.
Our Company-wide Share Ownership Guidelines specify that the members of the Managing Board and roughly 550 senior executives must hold an interest in Siemens equal in value to between 50% and 300% of their base compensation for the period in which they hold office.