Siemens today embarks on a new course towards the creation of long-term value through accelerated growth and greater profitability with a simplified and leaner business structure. This new organization gives more business freedom to individual companies to accelerate the growth of revenue and margin goals.
The main goal of the company‘s strategy, Vision 2020+, is to provide Siemens´s individual companies with greater business freedom under the strong Siemens brand, in order to sharpen their attention in their respective markets. The plans also envisage the strengthening of the company’s growth portfolio, through investments in new growth fields, such as IoT integration services, distributed power management and infrastructure solutions for electric mobility.
The concentrated expansion of industrial digitization, in which Siemens is already a world leader, will make an additional contribution. As a result, it is expected that both the annual growth rate of revenues and the profit margin of the company’s industrial business will increase by two percent in the medium term. In addition, basic earnings per share are expected to grow faster than medium-term revenues.
The Vision 2020+ strategy program, which Siemens launched in 2014, has been completed to a large extent faster and more successfully than anticipated. “We have worked very hard in the last four years. Today, almost all our businesses are significantly more profitable, customer satisfaction is at a record level, and our Digital Factory is the market leader in industrial digitization, ” Joe Kaeser, President and CEO of Siemens AG said.
The aim of the new business structure is to provide individual Siemens companies with greater business freedom. As a result, the level of organization of the current Divisions is eliminated, the regional organization is realigned to continue increasing its customer orientation and the company’s headquarters are rationalized.
“The Supervisory Board supports the strategic development of the company and is confident that Vision 2020+ is an exceptional measure to accelerate the transformation and strengthen Siemens for the next decade from a position of strength“, the Chairman of the Board of Supervision of Siemens, Jim Hagemann Snabe asserted.
Kaeser is confident that Vision 2020 + will bring together the interests of all stakeholders: “We will be even faster and gain more expertise in supporting and advising our clients in achieving their goals – and not just in digitization. For our employees, the Siemens of this next generation means greater personal and creative freedom and more opportunities to take on responsibilities. Our investors will also benefit because we will give our companies 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 fulfill its social responsibilities, “he added.
New structure: More business freedom and less centralized government
The aim of the new business structure is to provide individual Siemens companies with greater business freedom. As a result, the level of organization of the current Divisions is eliminated, the regional organization is realigned to continue increasing its customer orientation and the company’s headquarters are rationalized. “By continuing to develop our strategy, we are building the new generation of Siemens. Less administration from headquarters and greater freedom for our business will make us stronger and more flexible “said Kaeser.
Below the Group level, there are three Operating Companies and three Strategic Companies. The realignment allows Siemens to fine-tune its customer orientation and guide its activities according to the requirements of the industries in which it operates.
The new structure comes into force today, just a day after the implementation was completed. The same has been carried out, step by step since 2014, until yesterday.
In addition, Siemens launches a new IoT Integration Services Business Unit, through which it seeks to expand its IoT platform offering to offer comprehensive support to customers in their digital transformation. Harnessing many years of experience in a wide range of industries, as well as leading technologies such as artificial intelligence and cybersecurity, Siemens offers consulting, design, prototyping and implementation services. Until 2025, the IoT integration services market is expected to reach annual growth rates of ten to fifteen percent. Siemens plans to hire about 10,000 employees in this area by 2025.