Financial Statements s s Siemens AG Key Figures €M (US GAAP) 2004/2005 2003/2004 2002/2003 2001/2002 2000/2001 New Orders 83,791 75,789 75,056 86,214 92,528 Net Sales 75,445 70,237 74,233 * 84,016 87,000 Net Income 2,248 3,405 2,445 1,661 2,088 Net cash provided by operating activities 3,121 5,080 5,712 5,564 7,016 Net cash used in investing activities -5,824 -1,818 -3,939 -810 -5,886 Research and development expenses 5,155 4,650 5,067 5,819 6,784 Shareholders’ equity, Sept. 30 27,267 26,855 23,715 23,521 23,812 Employees, Sept. 30 461,000 424,000 417,000 426,000 484,000 * Excluding a tax-free gain of €936 million from sales of Infineon shares. Finland Growththrough Innovation www.siemens.fi Annual Review 2005 The net sales figures for the business areas in the annual review section include the figures for Siemens global net sales and for net sales in Finland and the Baltics. Quality of life through innovations Each and every day you can be in touch with Siemens’ products and services. Siemens is behind the technology that ensures your everyday life runs smoothly. Siemens is there when your home is warm, when you make tea, go to work by car or train, cross the street, talk on the phone, send emails, solve a problem, visit a hospital for tests, park, read a bedtime story, and switch the lights off. We work in partnership with our customers to produce innovative products and services to benefit each and every one of us, 365 days a year, 24 hours a day, every single second. Values • We strenghten our customers – to keep them competitive • We enhance company value – to open up new opportunities • We embrace corporate responsibility – to advance society • We push innovation – to shape the future • We empower our people – to achieve world class performance Siemens – Our Vision • A growth company that provides every customer with the highest sustainable value. • One of the world’s most successful companies in the electrical industry. Number one or two in all of its businesses. • Technology leader in the global electrical industry. • One of the most valuable companies in the world. • Attractive to the best and brightest in the world. Its employees are proud of their company. • Committed to an ambitious value code: Humaneness, equal opportunity, strict ethical standards in all business dealings. 4 Contents Values and Vision 4 Siemens in Finland and the Baltics 6 From the CEO 8 Management 10 Customer's statement: The Finnish Rail Administration 12 Customer's statement: Stora Enso 14 Total supplier in challenging projects 16 Profitable growth ensures competitiveness 18 Siemens AG 20 Siemens Osakeyhtiö's subsidiaries 22 Business areas 26 Other Siemens companies in Finland 42 Contact information 44 Financial statements annex 5 Siemens in Finland and the Baltics Siemens is a technology and service company operating in the infor- mation technology, communications, energy, industry, building tech- nology, transportation, healthcare technology, computer and household appliance, lighting, and finance sectors. Siemens is total supplier in challenging projects, and has different tech- nologies and solutions work seamlessly together. Our customers trust our resources, and our global network of innovation, which is closely integrated into our local expertise. Siemens Osakeyhtiö has subsidiaries in Estonia, Latvia and Lithuania. Other Siemens players in Finland are Medical Solutions, Oy Osram Ab and Siemens Financial Services Oy, all wholly owned by Siemens. Other companies in Finland are Fujitsu Siemens Computers Oy and BSH Kodinkoneet Oy, in which Siemens has a 50 per cent stake. The number of employees is around 1600. The companies wholly owned by Siemens have a total net sales in Fin- land and the Baltics of around €628 million. Siemens AG, the parent company, has net sales of €75.4 billion and employs around 461 000 people. Siemens has a presence in 190 countries around the world. For Siemens, 2005 was a special year in Finland and the Baltics. A cen- tury and a half earlier, Siemens connected Finland and the Baltics to the international communications network. Siemens built a telegraph line that linked Helsinki, via St. Petersburg, to the rest of Europe. The same line also connected what is now Estonia, Latvia, and Líthuania to Europe. 6 Key statistics of Finland and the Baltics FINLAND Surface area 338 145 km² Population 5 245 000 GNP USD 186 175 million ESTONIA LATVIA LITHUANIA Surface area 45 227 km² Surface area 64 577 km² Surface area 65 301 km² Population 1 333 000 Population 2 290 000 Population 3 597 000 GNP USD 11 196 million GNP USD 13 657 million GNP USD 22 171 million Employees Net sales by business segment in Finland and the Baltics in Finland and the Baltics Latvia Lithuania E MP LOYE ES Energy Communications Industry Estonia Osram Business Services Building Technology Healthcare Finland Transportation Siemens Financial Services Others Siemens' business volume in Finland and the Baltics €M New Orders Net Sales 2005 2004 2003 2002 2001 New orders and sales include Siemens’ international business in Finland and the Baltics, as well as the local business of companies fully- owned by Siemens. The figures of Siemens in Finland and the Baltics in accordance with US GAAP can be found in the notes to the financial statements in this annual review. New orders for fiscal 2004/05 rose as a result of orders secured by Siemens in respect of the Olkiluoto 3 nuclear power plant unit. 7 From the CEO During the year under review, the focus of investments in Finland was on construction, with work on major projects such as the Olkiluoto 3 nuclear power plant unit and Vuosaari Harbor stimulating business life. Investments in the Baltics were marked by fairly large EU-funded infrastructure projects. Growth of the gross national product and industrial production in the Baltics remained high, with economic growth fostered by continuing healthy private consumption and investment demand. Henrik Gayer CEO Siemens Osakeyhtiö 8 The upswing in the Finnish electrical engineering produce services throughout the lifecycle of our cus- and electronics industry, and the metal industry, tomers’ plants and systems. coupled with major infrastructure projects in the In Finland and the Baltics, we provide a com- Baltics, was reflected positively in new orders. prehensive suite of lifecycle services ranging from We won major orders from the forest industry, planning and consultancy to maintenance and the power sector and Finnish and Baltic railway decommissioning. In other words, services from the companies. New shopping centers reflected invest- cradle to the grave. Siemens’ lifecycle services are ments in building. We provided security technol- based on a leading-edge technology portfolio, inte- ogy systems and automation to the Kamppi Centre, gration ability, professional project management, and Sello and Jumbo shopping centers. We further and service ability. intensified our partnership with public adminis- tration during the year under review. Our customers Projects include the cities of Tampere, Tallinn and Vilnius, Various projects account for well over half of and the Latvian Ministry of the Interior. our business. During the year under review, we launched as part of our project business a develop- Major Account Sales ment project aimed at further enhancing the quality Our Finnish customers play in a fiercely competi- of projects carried out. We pay attention to project tive field. Working more closely with our customers management, customer information, change man- and gaining a deeper insight into their businesses agement, and documentation. We also initiated enables us to best draw on our diversified excellence project manager training. to enhance our customers’ productivity and compet- itiveness. During the year under review, we set up The future a new unit, Major Account Sales, to serve customers The growth in industrial production is expected to requiring diverse part and turnkey solutions. remain fairly healthy in the Baltics, and signs in the For the customer, one supplier translates into Finnish economy are slightly brighter than earlier. easier purchases, less project management and We enter the new fiscal year with a strong order coordination, and more project reliability and book. I should like to take this opportunity to thank uptime. Through Major Account Sales, we made our our customers for the confidence they have shown customers more aware of the diversified solutions in us. Siemens offers, and built on our knowledge of our We are focusing on providing our customers customers’ businesses. Our efforts on this front with better service, and strengthening our oper- resulted in new orders. ations. I believe that the results of these projects will translate into enhanced competitiveness, and thus Life cycle services and Customer Service unit add to our prestige in the eyes of our customers. Siemens’ strength lies in 150 years of innova- The employee survey indicates that in some tion, internationalization, and localization. Our issues there should be more dialog with employees. local added value derives from the fact that we know Work on this front will occupy us during the new the countries, customers, business life, conditions, fiscal year. I would like to thank our employees for and ways of working in the countries where we have their performance and competence over the past a presence. Besides state-of-the-art technology, we year. seek to enable customers to make more efficient use of the services we provide. During the year under review, we set up a new Customer Service unit. We Henrik Gayer have almost 300 experts in different fields who CEO Siemens Osakeyhtiö 9 Management CEOs of the Baltic subsidiaries 1. Audris Barcevicius CEO, UAB Siemens, Lithuania 2.