Siemens sets course with Vision 2020+

Plans also call for strengthening the company’s growth portfolio through investments in new growth fields such as IoT integration services, distributed energy management and infrastructure solutions for electric mobility. The concentrated expansion of industrial digitalisation, in which Siemens is already the world leader, will make a further contribution. As a result, both the annual revenue growth rate and the profit margin of the company’s industrial business are expected to increase by two percent over the medium term. Basic earnings per share are expected to grow faster than revenue over the medium term.
 The Vision 2020 strategy programme, which Siemens launched in 2014, has been largely completed – faster and more successfully than planned. “We’ve worked very hard over the past four years. Today, nearly all our businesses are significantly more profitable, customer satisfaction is at a record high, and our digital factory is the market leader in industrial digitalization,” said Joe Kaeser, president and CEO of Siemens AG.
 “The Supervisory Board supports the company’s further strategic development and is convinced that Vision 2020+ is an outstanding plan for accelerating the transformation and strengthening Siemens for the next decade from a position of strength,” said Siemens Supervisory Board Chairman Jim Hagemann Snabe.
 According to Kaeser, companies often avoid making necessary changes until they run into obvious difficulties. “It would be irresponsible to rest on our laurels now,” he stated.
 “The speed and power of global changes are increasing, and it’s our obligation to anticipate them. We’re convinced that this is the right time to sustainably shape our future.” For Siemens’ president and CEO, digitalisation, often called the Fourth Industrial Revolution, is the largest transformation in the history of industry.
 “It won’t be the biggest companies that survive, but the most adaptable. That’s why we’ll further deepen the understanding of our ownership culture and give our businesses considerably more entrepreneurial responsibility than before. This also includes the direct assignment of business-related functions,” stated Kaeser. In addition, the company’s markets are experiencing major paradigm shifts caused by megatrends such as electric mobility and distributed energy systems. Siemens intends to utilise and actively shape these changes.
 Kaeser is convinced that Vision 2020+ will unite the interests of all stakeholders: “We’ll be even faster and more expert in supporting and advising our customers in achieving their goals – and not just in digitalisation. For our employees, the Siemens of the next generation means greater personal and creative freedom and more opportunities to take responsibility. Our investors will also profit because we’ll give our businesses all the tools they need to be the best in their particular market environments. And an even stronger Siemens will be in a better position to meet its social responsibilities,” he added.
The goal of the new company structure is to provide Siemens’ individual businesses with greater entrepreneurial freedom. As a result, the organisational level of the current Divisions will be eliminated, the regional organistion realigned to further increase its customer orientation, and company headquarters streamlined. “By further developing our strategy, we’re building the next-generation Siemens. Less management from headquarters and more freedom for our businesses will make us stronger and more flexible,” said Kaeser.
 Below the group level, there will be three operating companies and three strategic companies. The realignment will enable Siemens to sharpen its customer focus and orient its activities on the requirements of the industries in which it operates. “The days when project business, product, software and service companies, with all their different requirements, could be centrally and efficiently managed are over,” said Siemens’ president and CEO.

 New structure
 The new structure will go into effect at the start of the new fiscal year on October 1, 2018. Implementation will proceed step-by-step and is to be completed by March 31, 2019. The company’s building technologies division (BT), energy management division (EM), power and gas division (PG), digital factory division (DF) and large parts of its process industries and drives division (PD) will be combined to form three new operating companies. 
The business units of the company will also be set up newly in a more focused manner and integrated into the three operating companies, which are gas and power (GP), smart infrastructure (SI), and digital industries (DI).
The CEOs of the newly established Operating Companies will also continue to be members of the Managing Board of Siemens AG.
The strategic companies will include Siemens Healthineers and Siemens Gamesa Renewable Energy, two fully consolidated companies in which Siemens holds a majority stake. Until the completion of its planned combination with Alstom, they will also include Siemens’ mobility business.
 The current financial Sservices division will be bundled together with global business services and real estate services to form the service companies. The optimisation of Siemens’ service portfolio is expected to considerably enhance efficiency.
 Siemens Corporate Technology and, among other things, the company’s small and medium enterprises (SMEs) will be centrally managed by corporate development.
 On the one hand, the SMEs comprise equity stakes that are currently held in centrally managed portfolio activities (CMPA). On the other, they also include operating businesses. The operating businesses stem primarily from the current PD Division.