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Statement by WIR für SIEMENS regarding the carve out of GP and the company strategy Vision 2020+

On the 8th of May we received the notification regarding the next steps under the Vision 2020+ strategy, including the independence and carve out of Gas and Power (GP).

Independence of GP
The GP business shall be segregated into an independent corporation, followed by a carve out and subsequent flotation on the stock market. The aim is to list the company on the stock exchange by September 2020. Siemens will relinquish its majority in the company but will remain anchor shareholder. The company will be listed on the stock market through the release of shares to Siemens shareholders („Spin-Off“, model Osram). The business includes activities and the area of oil and gas, conventional power generation, energy transmission and the related service businesses. In addition, Siemens AG is planning to include the majority stake (59 per cent) of the wind business (Siemens Gamesa Renewable Energy) in the new corporation.

The planned separation from the GP business demonstrates the inability of the management to transform a business, which was highly profitable until a few years ago, in such a way that it would continue to be a valuable part of the Siemens portfolio. The demand for energy increases continuously worldwide. Power generation based on gas will become of increasing importance aside renewable energy. In 2018 half of the energy generated in Germany was still based on brown coal, hard coal and atomic energy.

Siemens has an excellent competitive position in the energy market. The market entry barriers are very high, especially for large gas turbines. The business has a very large order book, particularly with the comprehensive and highly profitable service business. The business with wind energy is essential in the energy transition.

As we have learned from separation of Mobility and Healthineers, the carve out is expected to incur costs in the hundreds of millions, particularly for tax payments and transformation. The stock market flotation is attractive for investment banks and big law firms who will charge more millions. It will be hard work to cover these costs. Up to now there has not been a plausible statement from the board how these costs will be covered.

The intention to retreat from the GP business, not having to consolidate the current „only“ single digit margin the business achieves, shows a strategy, primarily orientated on the financial market. Siemens would have to invest massively into the transformation of the business, especially to address new growth areas, like hydrogen technology and energy storage. The American leader of the division, Lisa Davis, being 5 years in post, is still lacking proof that she will be transforming the business successfully. Positioning in line with the market started far too late and inadequately. There are understandable reasons to transform the GP business towards more independence. This move will only be successfully, if the new „powerhouse“ is financially equipped in a way that will make a good rating at the stock exchange achievable. A new CEO should create trust with employees, customers and investors, invest consistently in new innovations and secure the know-how at German and other manufacturing locations. WIR für SIEMENS sees the planned exit from the power business as a strategic mistake, because the business has good potential long-term under a better management. The Carve Out of this essential part of Siemens AG leads to a reduction of the group and of Siemens AG. The board has still to proof that this is part of the growth strategy for the group. Here also lies the strategic risk of this decision: a stronger focus means a higher dependency on short cycle businesses and the cycles of only few industries.

Corporate strategy Vision 2020+                                                                                                                                                            The company faces fundamental changes. The board clearly denied the speculations about the preparations towards a holding company, as can be read in the common understanding between board, general works council and IG Metall. In future the Operating Companies Digital Industries (DI) and Smart Infrastructure (SI) will build the industrial core of Siemens. This will be supplemented by the corporate technology and service units as well as the majority shareholding in Siemens Healthineers. Siemens Mobility shall also be strengthened as a growth business. Besides a planned increase of jobs by 20.000 there will also be a job loss of 10.000 positions. Under pressure from the general works council and the union IG Metall, the board has announced that it wants to realize these changes through re-qualification and redeployment of existing employees. From our point of view the success is greatly dependent on how employees will be engaged.

The margin in the remaining industrial core businesses DI and SI shall reach 14 to 18% in the long term. This is approximately double the margin achieved at BMW or Daimler. WIR für SIEMENS supports the investment in new growth areas like electromobility, decentralized grids or energy storage as well as IoT – the „internet of things“. The transformation of the company and the increase of profitability should not be carried out at the of employees. Connecting elements such as common technological platforms, joint services and the attractiveness of the brand Siemens have to be sustained.

The good result of the last quarter should not hide the fact that the company will be strongly internally focused due to the planned carve out and the upcoming reorganization. WIR für SIEMENS says:“this is not in the interest of either employees or shareholders“. In view of the planned changes in the group, we share the apprehension of the Börsenzeitung: „The implementation of such open-heart surgery is error-prone, threatening to weaken the focus on customers. More importantly, the Siemens companies will be going their own way in the new structure. How is it possible to achieve a joint presence under the Siemens brand in the market? The group can lose its identity from the customer’s point of view.“

The future of Siemens will depend on how the board succeeds in developing technologies, access to customers and business services across the new companies, with the help of clear group governance to strengthen the Operating Companies and Strategic Companies.



Munich, annual shareholders‘ meeting  30.01.2019

Dear Shareholders, Ladies and Gentlemen of the supervisory board and the management board,

From me, also a good day.

My name is Udo Becker and I represent the shareholder association “WIR für SIEMENS“.

Dear Mr Snabe, we are wishing you success in your new role and that you will always make the right decisions, then we all enjoy our company.

Dear Management board

I have to say, you don’t make it easy for us shareholders.

On the one hand, the balance sheet and the results are impressive, and the planned dividend will make the investors cheer. On the other hand, we are again in the middle of a restructuring program with the imaginative name of 2020PLUS
Not only is it impossible to make year on year comparisons, here I would like to point to the current dissolution / separation of the division Energy Management.

No, as shareholder, one fears for the Brand Siemens. Who or what will Siemens AG 2020+ be in 3-5 years’ time?
This is not only the fear of shareholders but also of employees when they look at the organisation chart. This is valid in particular for the employees that do not work directly in the core business or operating companies, as Siemens calls them now. They worry, just like us, about the future legal form of their/those companies
Mr Kaeser and all Ladies and Gentlemen of the board and the supervisory board, we demand:

That all current companies, whether corporate development, operative, strategic or service businesses, remain in the Siemens company.

This is about the Siemens AG and Siemens as industrial conglomerate.
One thing is particularly important to us.

The company needs to remain a large industrial company with Siemens AG at its core and together with all subsidiaries.
Beyond this we, and surely not only “WIR für SIEMENS“, will watch carefully whether the program 2020+ is a pure program for growth, as publicised.

We don’t want to see restructuring of personnel in the newly created business units, this year or next.
My concrete question:

Is 2020+ a pure program for growth, for how long will this statement be valid, and will the leadership team be measured against this?

On a personalnote:

Growth does not mean reduction in personnel, in order to improve the cost position.
For years we have been reading in the annual reports that large sums are spent on personnel measures (restructuring). Thanks to good employee representation this usually happens in a socially acceptable way. Nevertheless, or perhaps exactly because of this social compatibility, a lot of employees leave the company on a yearly basis. They are taking a lot of know-how and could still produce a lot of good work for the company.

From our point of view this is rather unimaginative. In times of lack of skilled personnel, with the right planning it should be possible to bring employees early into further education or retrain them. The bottom line is, that this would not only be cheaper, but also better for the company. Hopefully the agreed future pacts will help to create the structural changes together with employee representatives.
While we are talking about costs, money could be invested better. The carve out of Healthineers and Mobility will hopefully mean that we are in pocket. But now we are wondering, why the rendered tax 2018 is almost identical with the tax 2017, even though the tax reform in the USA brought a positive net effect of 435 million €, according to the annual report.

We fear that the mentioned carve outs cost a lot of tax and thereby profit for Siemens AG.

Our question therefore is :

Which costs have been incurred for the public listing of Healthineers and the carve out Mobility? How much tax did this cost?
For days we have been reading that the planned merger between Alstom and Mobility may possibly not happen. You owe an explanation not only to the employees but also to the shareholders what would happen if merger does not go through.

So, my specific question: What does plan B look like for Mobility? Wo hope it is better than Theresa May’s.
Siemens belongs to the top 10 companies with the most employees in Germany. Mr Kaeser, Ladies and Gentlemen of the management and supervisory board you must make sure that this remains the case. It should be obvious to everyone that industrial manufacturing at Siemens in Germany is a requirement for this.

Remember that good employees are the backbone of the company. Through the employee shareholder program every employee is becoming a shareholder of Siemens AG.
Mr Kaeser and all the ladies and gentlemen of the management and supervisory board, since you are supporters of the employee shareholder program, we are very surprised that there is still no share program at Gamesa.

What may the employees of Gamesa think when they eat their daily lunch with employees of Siemens AG (e.g. in Hamburg) and then see the advertising for the employee shareholder program?
My question: Ist hat and error or should we all presume that this is the new way and the employee shareholder program will not be offered under future carve outs?
Within Siemens AG it is possible to support the Siemens Foundation by donating one share dividend. The shareholder association “WIR für SIEMENS“ explicitly supports the initiative „Cents4Sense“.

Siemens shareholders can make a donation of one dividendin order to support three selected projects of the Siemens Foundation. Thanks to the initiative of colleagues from the Siemens talent program there is now an App for mobile phones which makes donating really simple. A great idea.

That is, what we call, living shareholder culture with social responsibility.This is what we support!
The association “WIR für SIEMENS“ does not have a penny spare and have no tolerance for racism and populism.
“WIR für SIEMENS“ support the joint declaration from May 2018, in which the management board, the works council and the management of Siemens AG as well as IG Metal speak against any form of discrimination, exclusion, hate and nationalism.

Respect, tolerance and diversity are the values that we share. There is no alternative!
“WIR für SIEMENS“ welcome that you, Mr Kaeser, makepolitically clear statements on this topic.
Dear Shareholders, dear Ladies and Gentlemen of the supervisory and management board, appreciation creates values. That was and is also valid for Siemens:

Pioneering spirit, innovations and social responsibility – these values have to remain at the core of the company. Then we as shareholders will enjoy our shares for a long time.
Today I would like to finish with a slightly amended quote from our company founder Werner von Siemens:




We would like to thank all members and supporters for the trust that you have brought in „WIR für SIEMENS e.V.“ 2018. (Always give us feedback so we can keep improving!)


Well to you, good luck, health, and a prosperous New Year.




Munich, 13th November 2018
Dear members and valued supporters,

We want to inform you about the results of Siemens AG in financial year 2018 and the results of the fourth quarter (Q4) 2018. In addition, we would like to give you a brief evaluation about the decision for the Innovations campus in Berlin, the development of the equity culture in the company as well as the organisational changes.

Business figures financial year 2018:
Order entry rose by 8%on a comparable basis, excluding currency translation and portfolio effects.
Revenue increased by 2% on a comparable basis, excluding currency translation and portfolio effects.
Net income after tax came in at €6.1bn. Earnings per share are €7.12.

Business figures fourth quarter (Q4) FY 2018:
Slight increase of order entry to €23.7bn.
Sales revenue of €22.6bn achieved.
Net income after tax came in at €0.7bn. Earnings per share are €0.69

Brief evaluation of the decision regarding the Innovations campus Berlin:
The “Future Pact” for Germany as location for industry and the decision to create an Innovationscampus in Berlin is the right signal for the innovation location Germany in times of structural change. If this means achieving structural change at Siemens in line with our values of pioneering spirit and social responsibility and in cooperation with companies, science, politics, works councils and unions, it finds the full support of our association.

Our evaluation of the development of an equity culture in the company:
We are pleased about the positive development of the number of employee shareholders to over 300.000. We support the proposal to increase the dividend by a moderate 10 Cent to €3.80 per share. The new share buyback programme with a volume of up to €3bn until November 2021 is meaningful from our point of view, if it fosters an equity culture in the interest of employee shareholders.

Demand to the board:
With the reorganisation under the vision 2020+ framework, the company continues to change. It is essential that the existing businesses will be further developed, sustainable growth will be created and that the excellent competences of our employees are enhanced. Siemens needs to be preserved as Brand and broadly positioned company. Despite the difficulties in the power generation market this is also valid for the business unit PG, for which we demand a future orientated strategy. We expect a concept from the company that shows how extremely high costs for restructuring programmes can be avoided in future.

For any questions please call Udo Becker (Chairman of the association, 0049 (0) 174 1913 530) or Prof. Dr. Rainer Sieg (0049 (0) 171 8653 860) or send us an e-mail to: vorsitzender@wir-für-siemens.de
Postal address: WIR FUER SIEMENS e.V., Postfach 33 02 60, 80062 München

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München, 03.08.2018

Dear Members and valued supporters,

we would like to give you a brief evaluation on the reorganisation of our company under the framework of „Vision 2020+ “. In addition, we want to inform you about the business figures of Siemens AG in the third quarter (Q3) of financial year 2018.

Brief evaluation of the reorganisation under the „Vision 2020+“framework:

The new structure introduced by Joe Kaeser is a fundamentally new strategic direction for the company due to the changes in the markets and opportunities in digitalisation.
WIR für SIEMENS comments:

Particularly in times of comprehensive changes, must the control of Siemens AG through the board and the AGM of the Siemens AG not be weakened.

We support the Stakeholder-orientated approach. The reorganisation of the Siemens group should not continue towards a management-holding company. The three new divisions shall remain part of Siemens AG.

Despite the increased focus, cross company synergies must be maintained. The brand SIEMENS is a significant value driver and a flagship in terms of pioneering effort, reliability and social responsibility. This shall not be endangered by the new organisational structure.

In the interest of ownership culture, the employee shareholder programme needs to be extended and offered group-wide.

Our association „WIR für SIEMENS“ should be better acknowledged by the company as representative of employee shareholders. In future we should be involved in the discussions about the direction of the company.
Business figures third quarter (Q3) FY 2018:

The order entry increased on nominal basis due to a volume from large-scale orders by 16% to €22.8 billion.

Sales revenue reduced by 4% to €20.5 billion compared to the previous quarter mainly due to currency conversion effects.

Profit after tax came in at €1.2 billion. The undiluted result per share is €1.36, compared to €1.67 in the previous quarter
Bei Fragen rufen Sie einfach Udo Becker (Vorsitzender des Vereins, 0174 1913 530) bzw.
Prof. Dr. Rainer Sieg (stellvertretender Vorsitzender des Vereins 0171 8653 860) an oder schreiben Sie uns per E-Mail: vorstand@wir-für-siemens.de   oder per Post: WIR FÜR SIEMENS e.V., Postfach 33 02 60, 80062 München

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