07.27.10
2. Siemens Healthcare
$17.4 Billion ($115 B total)
KEY EXECUTIVES:
Peter Loscher, President and CEO, Siemens AG
Hermann Requardt, President and CEO, Siemens Healthcare
Michael Sen, CFO, Siemens Healthcare
Michael Reitermann, CEO, Siemens Healthcare, Diagnostics
Bernd Montag, CEO, Siemens Healthcare, Imaging & IT
Tom Miller, CEO, Siemens Healthcare, Workflow & Solutions
Barbara Kux, Head of Supply Chain Management and Chief Sustainability Officer
NO. OF EMPLOYEES: 48,000 (405,000)
GLOBAL HEADQUARTERS: Munich, Germany
In 2008, Siemens unveiled plans to restructure, simplify and reorganize. The company bundled its operations into three sectors (Industry, Energy and Healthcare), and launched a program to reduce its general, sales and administrative costs. So, in a way, 2009 was a “test drive” for the firm’s new, streamlined self.
In fiscal 2009 (ended Sept. 30), the company was able to complete its selling, general and administrative (SG&A) cost-cutting goals for fiscal 2010. SG&A expenses were cut approximately $1.7 billion, officials reported. Layoffs under the SG&A program, which provided for around 12,600 job cuts worldwide, primarily in administrative roles, also were completed in 2009.
Overall, all of Siemens’ divisions reported $115 billion in revenue, a 1 percent decline in euros. (Editor’s note: The following percentage changes are in euros. Currency conversions are based on the exchange rate on the final day of the fiscal year.) Net income was approximately $13.6 billion, a 58 percent drop compared to fiscal 2008, as a result of discontinued operations. Total sector profit for the company’s three reportable sectors increased 13 percent to$10.9 billion.
Siemens’ Healthcare division—made up of three untis: Imaging & IT, Workflow & Solutions, and Diagnostics—earned roughly $17.4 billion in fiscal 2009, a 7 percent increase. Sector profit was $2.1 billion, up 18 percent. According to management, Healthcare’s business activities are “relatively unaffected” by short-term economic trends but management is keeping a close watch on regulatory and policy developments in the United States, particularly healthcare reform. The United States is the largest national market for Siemens Healthcare, responsible for 38 percent of the sector’s revenue.
Within the Healthcare division, Imaging revenue was $11 billion, up 5 percent. Healthcare Workflow & Solutions was $2.2 billion, up 2 percent, and the Diagnostics unit increased sales 10 percent to roughly $5.1 billion. Profits were up in double digits for Imaging & IT ($1.7 billion) and Diagnostics ($493 million), with gains of 29 percent and 36 percent, respectively. Workflow & Solutions took a loss of $77 million.
One way the company planned to become leaner and more efficient in 2009 was through improved supply chain management across all three divisions. The company’s goal was to create a more efficient network and reduce supplier-based risk. One of the key methods for achieving potential savings is to integrate procurement activities across business sectors by bundling and building purchasing volume. A second central component of the initiative was global value sourcing, which entails the development of a competitive global supply network and joint product development and innovations with key suppliers. In addition, Siemens plans to increase the share of sourcing in emerging countries. The last piece of the supply chain puzzle is to increase cooperation with suppliers that offer the most value across the board—not just bottom line but also product innovation. To that end, the company intends to significantly reduce the number of suppliers. In fiscal 2009, Siemens Healthcare sourced about 14 percent of its purchasing volume from low-cost countries. In fiscal 2010, this figure is expected to be 17 percent.
$17.4 Billion ($115 B total)
KEY EXECUTIVES:
Peter Loscher, President and CEO, Siemens AG
Hermann Requardt, President and CEO, Siemens Healthcare
Michael Sen, CFO, Siemens Healthcare
Michael Reitermann, CEO, Siemens Healthcare, Diagnostics
Bernd Montag, CEO, Siemens Healthcare, Imaging & IT
Tom Miller, CEO, Siemens Healthcare, Workflow & Solutions
Barbara Kux, Head of Supply Chain Management and Chief Sustainability Officer
NO. OF EMPLOYEES: 48,000 (405,000)
GLOBAL HEADQUARTERS: Munich, Germany
In 2008, Siemens unveiled plans to restructure, simplify and reorganize. The company bundled its operations into three sectors (Industry, Energy and Healthcare), and launched a program to reduce its general, sales and administrative costs. So, in a way, 2009 was a “test drive” for the firm’s new, streamlined self.
In fiscal 2009 (ended Sept. 30), the company was able to complete its selling, general and administrative (SG&A) cost-cutting goals for fiscal 2010. SG&A expenses were cut approximately $1.7 billion, officials reported. Layoffs under the SG&A program, which provided for around 12,600 job cuts worldwide, primarily in administrative roles, also were completed in 2009.
Overall, all of Siemens’ divisions reported $115 billion in revenue, a 1 percent decline in euros. (Editor’s note: The following percentage changes are in euros. Currency conversions are based on the exchange rate on the final day of the fiscal year.) Net income was approximately $13.6 billion, a 58 percent drop compared to fiscal 2008, as a result of discontinued operations. Total sector profit for the company’s three reportable sectors increased 13 percent to$10.9 billion.
Siemens’ Healthcare division—made up of three untis: Imaging & IT, Workflow & Solutions, and Diagnostics—earned roughly $17.4 billion in fiscal 2009, a 7 percent increase. Sector profit was $2.1 billion, up 18 percent. According to management, Healthcare’s business activities are “relatively unaffected” by short-term economic trends but management is keeping a close watch on regulatory and policy developments in the United States, particularly healthcare reform. The United States is the largest national market for Siemens Healthcare, responsible for 38 percent of the sector’s revenue.
Within the Healthcare division, Imaging revenue was $11 billion, up 5 percent. Healthcare Workflow & Solutions was $2.2 billion, up 2 percent, and the Diagnostics unit increased sales 10 percent to roughly $5.1 billion. Profits were up in double digits for Imaging & IT ($1.7 billion) and Diagnostics ($493 million), with gains of 29 percent and 36 percent, respectively. Workflow & Solutions took a loss of $77 million.
One way the company planned to become leaner and more efficient in 2009 was through improved supply chain management across all three divisions. The company’s goal was to create a more efficient network and reduce supplier-based risk. One of the key methods for achieving potential savings is to integrate procurement activities across business sectors by bundling and building purchasing volume. A second central component of the initiative was global value sourcing, which entails the development of a competitive global supply network and joint product development and innovations with key suppliers. In addition, Siemens plans to increase the share of sourcing in emerging countries. The last piece of the supply chain puzzle is to increase cooperation with suppliers that offer the most value across the board—not just bottom line but also product innovation. To that end, the company intends to significantly reduce the number of suppliers. In fiscal 2009, Siemens Healthcare sourced about 14 percent of its purchasing volume from low-cost countries. In fiscal 2010, this figure is expected to be 17 percent.