1 annual report 2007 Can technology save the planet? Answers for Norway. Since s2 solutions managing director siemens in...
annual report 2007
Can technology save the planet?
Answers for Norway. Since 1898.
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solutions
managing director
siemens in norway
strategy
2007 Best year ever for the third time
Hitra wind farm. Photo courtesy of: Statkraft
For the third time in a row Siemens has had its best year ever. The operating profit of NOK 259 million was NOK 17 million higher than the previous year. Total revenues in 2007 ended on NOK 5.50 billion, up NOK 166 million compared with 2006. Over the course of the business year, new contracts were signed worth NOK 6.95 billion, a year-on-year increase of NOK 322 million.
Europe’s most eco-friendly gas power plant At Kårstø outside Haugesund Siemens has delivered Norway’s first commercial gas-fired power plant for Naturkraft. With an efficiency of almost 60 percent and cleaning of nitrogen oxides (NOx), the gas power plant at Kårstø is the most eco-friendly in Europe.
Improved train safety To ensure safety on the railway network as traffic volumes rise, Jernbaneverket is upgrading the train dispatcher centres in Oslo and Drammen. Siemens is making good progress on the upgrading work in Oslo, which will be completed in 2008.
Robot technology in the hospital One of Siemens’ most important deliveries to the healthcare sector last year has been a new x-ray system for the Interventional Centre at Rikshospitalet University Hospital. The system is the third of its kind in the world, and utilises robot technology for more precise examinations.
Prestige project at the Opera Siemens has supplied the electrical power installations for Oslo’s new opera house in Bjørvika. This has been a challenging project to manage as no similar buildings have been erected in Norway before.
Revenues in NOK millions 6 000
Profit in NOK millions 300
5 000 200 4 000 3 000 100 2 000 1 000
2005
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2006
2007
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Energy
How can you power a planet hungry for electricity without damaging it?
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Industry
How can you manufacture customized products at affordable prizes?
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Healthcare
How can disease be detected before it strikes?
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02 Highlights
14 Operations
34 HSE
40 Results
03 04 05 06 08 10 12
16 18 20 22 24 26 28 30 32
36 HSE report
42 49 50 52 53 68
Contents History The future Managing director Siemens AS, organisation and figures Strategy – Fit42010 Energy efficiency
Energy & Automation Oil & Gas Transportation Systems Automation & Drives Building Technologies Electrical Installations Medical Solutions Siemens Oil and Gas Offshore AS The Siemens Group in Norway
Annual Report Income statement Balance sheet Cash flow statement Notes Auditor’s report
69 Addresses 69
Contact information
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Siemens celebrates in 2008 / 100 years in Trondheim / 110 years in Norway / 160 years in the World
Siemens has been finding answers for more than 100 years Siemens has found answers to difficult questions in Norway for over 100 years. The questions have changed over the years, and so have the answers. The aim is still to find the best and most innovative solutions for our customers.
How can we procure electricity for industry and homes? Hydroelectric power became the solution to meet the steadily growing energy needs from industry and households, and Siemens was one of the most important suppliers of equipment to Norwegian power plants during the development of hydroelectric power in Norway.
How can we make better diagnoses when people are ill? Just two years after Röntgen discovered x-rays in 1895, Siemens delivered the
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Siemens annual report 07
1891 Hammerfest
first x-ray machine to Lovisenberg Diakonale Hospital in Oslo. Siemens also delivered all the x-ray machines to the Norwegian Radium Hospital, which opened in 1932 and to the new radiotherapy department at Rikshospitalet University Hospital.
How can we travel quickly and efficiently? When Scandinavia’s first suburban railway, Holmenkollbanen, opened in Oslo in 1898 the carriages were equipped with machines and materiel from Siemens & Halske & Schuckert & Co.
How can we communicate quickly over long distances? In 1914 Siemens delivered the first automatic telephone exchange for office use, and in 1920 we delivered the country’s first automatic city exchange to Skien’s Telefonforening. Siemens also delivered the former Telegrafverket’s first electric telewriter
Norsk Teknisk Museum
When the first arc lamp in Norway was lit at Laugstol Brug in Skien in 1885, the name Siemens was written on the dynamo. And as far back as 1891, seven years before Siemens was established as an independent company in Norway, we helped to provide Hammerfest with the first street lighting in northern Europe.
Foto: Hammerfest Energi
Hammerfest Energi
Skagerak Energi
1885 Laugstol Brug, Skien
1898 Holmenkollbanen
1932 Radiumhospitalet
which transmitted text over telephonelines, an early forerunner of our present day e-mail systems.
How can we ensure safe and efficient oil and gas production? Siemens was there when the Norwegian oil adventure began in the 1970s, and was the largest Norwegian electrical supplier for Statfjord A. In 1987 Siemens delivered the world’s first integrated control system to Oseberg, the largest automation assignment of its day.
How can we contribute to building efficient and productive industry? Siemens has been involved in practically every industrial project of significance in the post war period. Mosjøen, Mo i Rana, Mongstad and Herøya are but a few of the industrial plants to which Siemens has supplied equipment, been the electrical contractor or had responsibility for installation and assembly.
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We will be finding the answers in the next 100 as well In the years ahead we will continue to answer difficult questions and find solutions to the challenges of the future in the three fields of Energy, Industry and Healthcare.
Statkraft
Vegar Stokset, StatoilHydro
1987 Oseberg
Demographic changes, increased urbanisation and the threat of climate change will raise new questions. There will be a growing need for eco-friendly energy and effective solutions in the fields of industry and healthcare. To address this development, Siemens is now organised into three sectors: Energy, Industry and Healthcare. This enables us to be better equipped to answer tomorrow’s difficult questions with innovative technological solutions. As Frederic Hauge, President of the environmental NGO, the Bellona Foundation, says: ”We can’t use technology to solve everything, but without it, we can’t solve anything”. These are some of the most important questions that we in Siemens will be working to answer in the years ahead:
How can you power a planet hungry for electricity without damaging it? Our windmills use the wind to create energy, and we have solutions for long-distance transmission of electric power. In 2005 we supplied windmills to Smøla wind farm, one of Europe’s
2005 Smøla wind farm
largest onshore wind farms. In 2007 we delivered Europe’s most eco-friendly gas power plant to Naturkraft at Kårstø. The power plant makes it possible to reduce imported energy originating from environmentally damaging coal power. Our researchers are developing cleaning technology to cut CO2emissions from gas and coal power stations across the world. At the same time we are working to find better, more energy efficient and eco-friendly solutions for the future.
How can you manufacture customized products at affordable prizes? Siemens has systems for both specialised and standardised production. Our solutions contribute to increased production capacity and reduced costs in the manufacturing industries. In fish feed production, Siemens has automated part of the production process at the fish feed producer Skretting, which earned back the cost of the project within a year. At the Norwegian Agricultural Purchasing and Marketing Co-operation we reduced the energy consumption in the animal feed factory in Kambo by between 20
2007 Kårstø
and 30 percent by introducing active energy management from the operational control centre in the production plant. Our extensive automation systems deliveries to several operations in the Herøya industrial area are now well under way. At the same time we are working to find even better and more efficient solutions for the future.
How can disease be detected before it strikes? Our medical technology solutions can save lives because they provide quicker and more accurate diagnoses. In 2007 we delivered an x-ray solution to Rikshospitalet University Hospital which makes it possible to record images during an operative procedure without transferring the patient to another laboratory. Precision is improved, and the result is better quality and lower costs. At the same time we are working to find even better diagnostic solutions for the future.
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As world leaders in environmental technology, Siemens is strongly committed to solving the environmental problems for future generations.
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The best ever – for the third year running Siemens AS enjoyed its best business year ever for the third year running, measured in revenue, new orders and operating profit. Continued commitment and hard work from all our members of staff and a buoyant market, especially within the fields of oil and gas, shipping, power supply and industry have helped contribute to this. Once again in 2007 we reached the majority of the goals we set at the start of the business year. Our growth and profitability targets have been reached, our goal of ranking in the top two has been met in seven out of nine markets, and we have strengthened our position in the energy sector. Siemens’ brand recognition is the equal of any of the strongest brand names in the world, and knowledge about what type of solutions we deliver has also grown considerably here in Norway. Both globally and in Norway, we in Siemens have invested a lot of time and resources over the last few years in positioning ourselves to meet the megatrends which we believe will come to change the world ’s needs in the future: demographic changes and increased urbanisation. These trends will raise the need for eco-friendly energy and efficient solutions for industry and the healthcare sector. In order to better address these challenges and opportunities, the company has recently been organised on a global basis into three sectors: Energy, Industry and Healthcare. The reorganisation was carried out in order to meet these future global needs, and the company’s portfolio willundergo further refinements to address these changes. The new organisational structure is a good fit for our Norwegian organisation withour long traditions in energy and industry, and following several years of robust growth in the healthcare sector. We will therefore adapt our Norwegian operations to the global organisational structure during the course of 2008. This year we have also been affected by the remedial work in the wake of the discovery of irregular conditions in the subsidiary company SBS, as well as the situation in Germany. These events clearly illustrate the importance of everyone in the company adhering to the ethical guidelines and acting
with the highest integrity vis-à-vis customers and the community. In Siemens we maintain a zero tolerance policy in the event that these guidelines are not followed and the company emphasizes the importance of high standards of ethical business behaviour. Despite the volatility in world stock markets, and the uncertainty surrounding the U.S. economy in particular, we remain optimistic about the opportunities for growth in the future. Now in the year 2008, Siemens has been operating in Norway for 110 years. What has distinguished the company during this time is its ability to provide solutions to address society’s unresolved challenges. Within the energy sector this applies to everything from the expansion of hydroelectric power early in the previous century, to the development of new forms of energy such as wind energy and gas power in more recent years. In a similar vein, we have steadily been introducing new solutions to the public health system within diagnostics, as well as automation and engineering solutions for industry - to name but a few examples. Our aim for the future is that through innovation, expertise and experience we shall also help our customers to resolve the numerous, sizable challenges of the future. We endorse the statement made by the President of the Bellona Foundation, Frederic Hauge in connection with the energy and environmental challenges the world is facing: ”We can’t use technology to solve everything, but without it, we can’t solve anything”.
Per Otto Dyb CEO
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Contributor to contemporary Norway Over the last 110 years Siemens has helped in the development and modernisation of Norway. Through the field of electronics we are advancing progress in vital areas of society such as energy, industry and health. Our staff of 2,200 employees in 25 locations across Norway are contributing to making Siemens a leading company in important sectors of society. No other company in the world is involved in so many areas of our daily lives as Siemens. We work with energy, health, security, communications, automation and electrical installations, wherever electricity flows. In 2008 Siemens has been operating in Norway for 110 years. Dating back to the end of the 19th century when Siemens helped to expand hydroelectric power in Norway, the company has been a driving force for technological development and the modernisation of our country. Our innovations provide answers to many ofthe difficult questions in the fields of energy, industry and health.
Eco-friendly and energy efficient Siemens is constantly working to develop eco-friendly solutions for energy generation, transport and use. For example, in Norway we have delivered four out of five windmills and
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Europe’s cleanest gas power plant. Our diesel electric systems for ships cut fuelconsumption and reduce emissions of harmful greenhouse gases. Siemens’ building technology reduces energy consumption, and we are so sure about this that we guarantee that our customers will see savings through the concept ”Performance Contracting”.
Industry and transport Our advanced management and automation solutions for industry are contributing to more efficient operations and lower energy consumption which enables our industrial customers to reduce costs for both specialised and standardised production. Siemens is one of Norway’s largest suppliers of advanced security solutions for access control, burglar and fire alarms and monitoring. Our security clients include banks, ports and
airports. We also provide solutions and services within electrical installation to private homes, office buildings and industry throughout the country. On roads and in tunnels, our technology in the fields of surveillance, management and communication is ensuring safe travel, and Siemens’ metro and railway systems provide safe transport while saving the roads and environment. It is Siemens that is supplying the new and eco-friendly metro carriages to Oslo.
Health from A to Z Siemens is Norway’s largest supplier of equipment and IT-solutions in the field of imaging diagnostics, lab diagnostics and clinical IT. We want to play a key role in early diagnosis and correct treatment of illness, and will be an important partner for the public health system by raising quality and lowering costs.
Our vision
Our values
Our ethics
We create sustainable solutions for tomorrow’s society.
Responsible: Committed to ethical and responsible actions Excellent: Achieving high performance and excellent results Innovative: Being innovative to create sustainable value
Siemens will maintain a high ethical standard both when it comes to strategic decision-making and day-to-day business operations,our ethical guidelines are advisory in ethical and legal matters. For more information on Siemens’ ethical guidelines please visit www.siemens.no
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Key figures for Siemens AS
results
as of 30 September 2007
Siemens AS Amounts in millions of NOK New orders Exports Revenue Total revenues Operating profit Operating profit before taxes Net profit for the year Investments Equity Total assets Number of employees
2007 6 945 591 5 348 5 502 259 257 177 33 415 2 293 2 195
2006 6 623 623 5 308 5 336 242 245 169 19 363 2 489 2 442
2005 6 118 528 4 819 4 871 154 165 119 53 309 2 193 2 371
2004 5 077 567 4 755 4 813 168 183 130 71 301 2 195 2 559
2003 3 865 443 3 530 3 619 133 165 119 13 312 1 647 2 038
*Siemens AS uses a non-calendar year-end. The 2007 business year runs from 01.10.06 to 30.09.07.
Siemens AS Organisation
as of 1 January 2008
Per Otto Dyb, CEO Kjell Pettersen, CFO
DIVISIONS Automation & Drives Dag Otterstad
Building Technologies Otto Frøseth
Electrical Installations Ove Guttormsen
HR Management Sissel Vien Corporate Communications Gry Rohde Nordhus
Energy & Automation Anne Marit Panengstuen (konst.)
Medical Solutions Ole Per Måløy
Transportation Systems Leif Karlsen
Siemens Real Estate Gunnar Kragstad
Oil and Gas Inge Husefest
Strategy and Development Frank Jaegtnes Information and Operations Andries van Bruggen Procurement and Logistics Tore Torgersen Accounting and Controlling Inger Margrethe Aarhaug
The Board of Directors in Siemens AS as of 1 January 2008 Anne Kathrine Slungård, chairperson Trygve Refvem Heinrich Helmut Hiesinger Roland Aurich Roy Lund, employee representative Lars Barstad, employee representative Espen Ingebrigsten, employee representative Auditor KPMG
Account Management Tore Tomter Audit Thor Barkvoll Compliance Ole Banggren Legal Trond Johannessen
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Developing an
effective organisation Our goal up to 2010 is for continued growth and profitability. Under the title Fit42010 we continue the strategic work of developing an effective organisation which will be market leading across all principal areas. At the core of the Fit42010 programme are Siemens’ values and ethical guidelines. The programme builds on the four established focus areas of people, portfolio, business operations and corporate social responsibility, but with some additional areas of attention. People Siemens’ success is the sum of all the employees’ success. Only by working with the best and most motivated employees can we fulfil customers’ expectations. Siemens shall have a corporate culture where everyone performs to the best of their abilities, knows their objectives and has the opportunity to use all their potential. The performanceenhancing culture is created through four development programmes for employees and managers: • Global talent bank • Management programmes • Performance management • Expert careers for key employees Portfolio Profitable growth requires a portfolio which is tailored towards tomorrow’s most promising markets. We develop the portfolio by investing in existing or new businesses, through organic growth or via acquisition. We shall be ranked in the top two in the markets we operate in. Our activities are divided into the three sectors of Energy, Industry and Health, all representing areas with great potential for growth. The new structure shall help Siemens to act more quickly in the market and establish closer relations with the customers. The sector division will also be reflected in how we organise our business areas, and the new organisation develops during the course of 2008.
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Business operations Siemens continues to strengthen its business operations to ensure long-term success both nationally and globally. Through our own initiative top+ we have established processes and methods which form the foundation for a high standard and outstanding business operations across the entire company. Innovation and customer focus continue to be the most important elements for safeguarding favourable development with increased profitability and growth in the years ahead. • Innovation – good ideas are transformed into profitable business • Customer focus – raising our knowledge of customers’ needs Social corporate responsibility An unambiguous and conscious attitude to the company’s role in society contributes to long-term success, and Siemens wants to take a leading position in this area. A financially healthy company is a guarantor for future operations and workplaces, and it is strategically important that we continually work for the best results for the environment and society. For Siemens, social corporate responsibility means that we deliver innovative products and services to society, while at the same time ensuring that our ethical, financial and societal responsibilities are met. The following key areas are being prioritised in social corporate responsibility: • Management and corporate governance • Compliance • Environmental protection • Corporate citizenship
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Norway can free up 20 percent of the country’s electricity consumption, equivalent to half of our total household consumption. The technology is available today, and it is not expensive, on the contrary it is profitable.
Wasting electricity for
one million Norway can free up 21 TWh of electricity. This corresponds to the consumption of over one million of the country’s two million households. Or, presented in another way: the saving is equivalent to the electricity consumption in every household in Oslo, Bergen, Trondheim, Stavanger, Kristiansand, Drammen, Asker, Bærum, Fredrikstad, Tønsberg, Sandefjord, Sandnes, Skien, Arendal, Haugesund, Ålesund, Molde and the whole of northern Norway. This sounds too good to be true, but it is in fact a realistic assessment of what can be achieved in the near future, concluded a report from 2007 on energy efficiency under the auspices of Bellona and Siemens.
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households
and Siemens describes how this can be achieved. Now it is up to the politicians to ensure that it happens. Free up the most in HEP stations Increased energy efficiency is not just about economy light bulbs and more energy efficient homes, even if they are important, too. Unnecessary energy consumption is occurring in all parts of society: large amounts of energy are lost during hydroelectric production and in the distribution network - literally disappearing into thin air - because, among other things, the machinery is ageing and much of the network needs upgrading.
More efficient energy consumption There remains no doubt that the world is being affected by climate change. We also see that growing prosperity in several regions of the world will create a shortage of energy. In order to resolve these challenges the focus to date has been mostly on renewable energy production and research into CO2free emissions from coal and gas power plants. These are important initiatives, but they are not enough. We must also boost the efficiency of energy consumption.
The Energy efficiency report from Bellona and Siemens shows that upgrading current HEP stations can provide a saving of 8-10 TWh. Norwegian households have potential efficiency savings of at least 15 percent. Siemens has previously calculated that the City of Oslo alone can save up to NOK 50 million a year by investing in energy efficient technologyin its municipal buildings. The potential saving from all the buildings in Norway is 8.4 TWh. Norwegian industry can free up 3.6 TWh through more efficient useof electric motors, for example.
Within energy production the clean solutions are often many years away because the technology needs to be developed and made commercially available before it is adopted for use. Within energy efficiency the solutions are already commercially available today. The authorities in the energy nation Norway have the opportunity to define energy efficiency as a natural part of Norway’s energy policy. The Energy efficiency report from Bellona
Nuclear power and coal power imports The potential efficiencies are enormous and the technology is available. Norwegian electricity production comes from renewable energy, but over the last ten years Norway has imported seven TWh of electricity on average, much of which originates from environmentally damaging coal power plants. Freeing up 21 TWh of electricity can therefore replace a significant
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Norway uses about five times more electricity than the EU does and approx. 11 times more than the world as a whole.
amount of imported energy, fossil energy carriers and the resulting CO2emission, in complete accordance with political goals. The report by Bellona and Siemens shows how Norway can save three times as much energy as it imports. Freeing up 21 TWh does require investment in technology. However the efficiency initiatives will be paid down within one to nine years, the Energy efficiency report shows, depending on the consumer area in question. The investments are profitable for companies and completely necessary contributions to address the world’s energy and environmental challenges. Profitable initiatives The media has been interested in environmental problems for a long time and how Norway can be
more eco-friendly is becoming an increasingly important political question as well. The Energy efficiency report from Bellona and Siemens is an important contribution to the energy and climate debate because all the measures in the report are profitable. Through simple and profitable initiatives we can achieve a number of the goals which the government has established for Norway in the future. The technology guarantees financial savings and is the cleanest, quickest and most cost-effective way to reduce the extent and consequences of climate change in the future. It is possible to be eco-friendly without sitting in the dark and freezing. It is not even expensive, on the contrary it is highly profitable.
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Energy How can you power a planet hungry for electricity without damaging it?
Environmentally and energy efficient technologies
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To achieve a sustainable energy supply, Siemens is increasing efficiency in power plants, the use of renewable energy and the development of energy efficient solutions for buildings, lighting, For example in Norway we have delivered four out of five windmills and Europe’s transport and industry. cleanest gas power plant. Our solutions for generating, transporting and using energy work well, both economically and for the environment. We contribute with eco-friendly and energy efficient technology.
The picture shows the inside of an electrical conduit, a gas insulated cable for power current.
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Ready for continued growth The Energy & Automation division has grown strongly during the last year. A large influx of new orders has led to robust results and a surge in new employees. Expectations of continued growth mean that the division is planning to recruit 90 new employees in the future. Divisions: Energy & Automation Oil & Gas Transportation Systems Automation & Drivers
The competition for manpower resources is one of the division’s most pressing challenges. A new resource manager has taken responsibility for hiring in expertise and distributing assignments as needed. In addition, a recruitment and training project has been launched.
Taubåtkompaniet. This technology provides greater operations reliability and cuts fuel consumption and emissions. Experience indicates that the diesel-electric systems reduce fuel consumption for many types of vessel by about 30 percent compared to a conventional system.
A new HSE manager has been employed to ensure sufficient focus on this important area in a situation where the division has more projects than ever before.
The division has supplied a 420 kV connector to Statnett’s transformer station Nyhamna Substation. This station safeguards the power supply to the Ormen Lange onshore plant. Pre-engineering, management and control has been a major challenge in this extensive project.
Building Technologies Electrical Installations Medical Solutions Subsidiary: Siemens Oil & Gas Offshore AS
Energy efficient and eco-friendly The division has had responsibility for engineering, procurement and construction of Europe’s most modern and eco-friendly gas power plant at Kårstø. With an efficiency of 58-60 percent, the plant at Kårstø has the lowest level of CO2emissions per kWh generated compared to other gas power plants. The power plant also cleans nitrogenoxides (NOx). Siemens´ energy efficient dieselelectric system for ships has been a great success, and our 100th system is now ready to be delivered to
From district heating to seabed technology Trondheim Energi’s new district heating system was also completed during the course of last year. Energy & Automation has supplied electrical and automation systems to the plant at Heimdal Varmesentral. Trondheim Energi Fjernvarme is the national leader in water-borne heating, and heating production has risen by ca. 200 GWh per year. This is equivalent to the energy consumed in heating ca. 15,000
homes. A joint venture with the company Electromagnetic Geoservices, which operates in the field of seabed data collection, has improved the technology used to decide whether a reservoir contains hydrocarbons or water. Ordinary seismic systems are acoustic, but the new technology uses electromagnetic signals. The electric waves are used to determine whether there is oil or gas in the reservoir, which would be impossible with ordinary seismology. Leading supplier In most of the markets Energy & Automation operates in the demand is so high that the industry is struggling to satisfy the customers’ needs. The division has market leading positions in its markets, and concentrates on profitable projects rather than market share. Demand for the division’s services is expected to exceed the current capacity. The Energy & Automation division will bolster its focus on its established service concept vis-à-vis industry, energy supply and marine sectors.
Energy & Automation Employees 437 inc. 8 apprentices Revenues NOK 1,397 mill.* New orders NOK 1,687 mill. Eksport NOK 220 mill.
The Energy & Automation division supplies electrical and automation systems, equipment and services to industry, energy supply and ships. The division has marketing, engineering and service divisions across the country, as well as an exciting development environment at the Power Electronics Centre in Trondheim. * There is an additional NOK 785 million connected to commissions business.
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Europe’s most eco-friendly gas power plant At Kårstø outside Haugesund Siemens has delivered Norway’s first commercial gas power plant for Naturkraft. The Minister of Trade and Industry Dag Terje Andersen officially opened the plant on 1 November 2007. With an efficiency of 58-60 percent, the gas
imports between seven and eight TWh, much
power plant at Kårstø has the lowest level of
of this is originating from more environmentally
CO2 emissions per kWh generated ever made
harmful coal power. The energy production at
by a gas power plant. The plant also cleans
Kårstø will replace half of this imported energy.
With an efficiency of 58-60 percent and cleaning of nitrogenoxides (NOx), the gas power plant at Kårstø is the most eco-friendly in Europe.
nitrogen oxides (NOx), which makes it Europe’s cleanest gas power plant. The plant at Kårstø
Siemens has been responsible for engineering,
generates up to 3.5 TWh a year in electricity,
procurement and construction of Naturkraft’s
enough to supply 175,000 Norwegian house-
new gas power plant.
holds with electricity. In a normal year, Norway
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Upgrading in the North Sea There is a strong need to upgrade the older plants on the Norwegian continental shelf, and the Oil & Gas division has won two large contracts in this market. The division’s development environment has worked with exciting and eco-friendly projects both on the sea and under it. Divisions: Energy & Automation Oil & Gas Transportation Systems
From 1 October 2006 the international section of Siemens’ oil and gas operations was spun off, while the Oil & Gas division retains responsibility for the Norwegian market.
Automation & Drivers Building Technologies Electrical Installations Medical Solutions Subsidiary: Siemens Oil & Gas Offshore AS
The division’s projects are subject to stringent safety requirements, and HSE has been an important responsibility across all levels of the organisation. The division has been and will continue working on recruiting new employees for current and future projects. Without production disruption Upgrading the automation systems at Oseberg Field centre was completed after three years work without disrupting production. This extensive project has provided a broad base of experience which the division will benefit from in its new contracts. The new projects are StatoilHydro’s platforms at Visund and Snorre A where the control and safety systems are being upgraded. Both the projects will be completed with the minimum of operational disturbance.
The division has established a study and development environment concentrating on equipment lifetime and operational efficiency. Furthermore, there is a lot of attention around electrification in the industry and Siemens has been involved in several studies. Service and life cycle management will continue to be a priority area. Focus on development Oil & Gas is involved in a development project with StatoilHydro with the aim of completing a subsea installation at the Åsgård field. The first phase of the project involves testing a compact compressor at Kårstø K-lab. Åsgard can therefore become the first field with subsea gas compression. Siemens will install a new type of compressor which is designed to operate maintenance-free for five years. The compressor is hermetically sealed, without lubricating oil and with magnetic storage. This makes the concept the most eco-friendly in today’s market. High and stable activity forecast Oil & Gas has bolstered its position
as a supplier to StatoilHydro, for example through the contract connected to gas compression. Service and life cycle management is a prioritised focus area in the future and, among other initiatives, we have entered into a servicecontract with Conoco Philips. Continued high oil prices create expectations of continued high and stable activity on the Norwegian continental shelf. We also expect the operators’ needswith regard to operations, maintenance and upgrades to continue at the same high level. There are especially strong demands for modifying and raising the efficiency of ageing plants, where Siemens’ experience from Oseberg has already yielded new assignments and is expected to yield further assignments. New and more stringent emission requirements for the oil sector strengthen the growth prospects for the division’s focus area of water treatment and process solutions. The potential electrification of the Norwegian continental shelf is also an interesting area for the division.
Oil & Gas Employees 26 Revenue NOK 484 mill.* New orders NOK 711 mill. Exports NOK 48 mill.
Siemens is a leading supplier of integrated solutions to the oil and gas industry. The Oil & Gas division provides everything from automation, electric and telecommunicationssystems, to turbine, compressor and process solutions. The division spans the entire value chain from pre-engineering to long-term operational support. * There is an additional NOK 175 million connected to commissions business.
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Photo courtesy of: Rune Johansen/StatoilHydro
Extending the lifetime of Snorre A When the control and safety systems on the Snorre A platform in the NorthSea are upgraded, it will extend the lifetime of the field and improve regularity. This will raise revenues and cut operating costs for the operator, StatoilHydro. The contract which was signed in 2007 is worth
A history of successful projects has enabled
NOK 215 million. The project will take three
the Oil & Gas division to develop significant
years and will be carried out by Siemens in
expertise in upgrading systems on offshore
Stavanger. StatoilHydro is the operator for
installations during full operation. The main
Snorre A, which is an integrated production,
challenge is to transition from the old to the
drilling and quarters unit (PDQ) located towards
new system with the least possible disturbance
the north of the Tampen area. The safety and
to production andother activities on the plat-
automation system which is to be installed at
form.
The safety and automation system which is to be installed at Snorre A is Siemens’ most modern system for integrated process control and, among other benefits, allows for maintenance work to be carried out onshore.
Snorre A is Siemens’ most modern system for integrated process control. The PCS7 system is
Safety and HSE are key components in the pro-
delivered all over the world and, amongst other
ject, and very stringent demands are imposed
benefits, allows for system maintenance and
for maintaining the quality and safety of the
modification work to be carried out onshore.
systems at all times.
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strategy
New exciting contracts Large deliveries such as the new, eco-friendly metro carriages for Oslo and upgrading the train dispatcher centres for Jernbaneverket have given Transportation Systems a leading position in the Norwegian market. The division has won new, exciting contracts in 2007. Divisions: Energy & Automation Oil & Gas Transportation Systems Automation & Drivers Building Technologies Electrical Installations Medical Solutions Subsidiary: Siemens Oil & Gas Offshore AS
The division is in a favourable position and experienced a moderate increase in staff. Raising levels of expertise is an ongoing process across all areas, but rolling stock has been given the most attention during last year. HSE requirements have been well looked after and the division is characterised by a good working environment with especially low rates of absence due to illness. Important deliveries to the rail sector The double track from Sandvika to Asker became operational in summer 2005, and the signalling system from Sandvika to Lysaker station is now under development. This is the final stage in Jernbaneverket’s largest construction project and Siemens will be working on this project all the way up to 2011.
year 15 trains (45 carriages) were in operation. Secure tunnels in Oslo The preparatory work for upgrading the tunnels in Oslo between Helsfyr and Framnes has begun. The Ekebergtunnel will be the first tunnel in Norway to be equipped with the management system Simatic S7 H-system. In 2010 the Bjørvika tunnel will be opened and integrated into the surrounding constructions. The new Sentrum line will be one of Norway’s most complicated and secure tunnel constructions.
Through the upgrading of Jernbaneverket’s train dispatcher centres several of the most heavily trafficked lines are now operational. During the course of 2008 and 2009 the remaining areas in the train dispatcher centres in Oslo S and Drammen will be upgraded.
Siemens was awarded the contract for remote operation of the new double track between Sandnes and Stavanger. The first stage will be finished in October 2008 and the contract will be completed in October 2009. Remote operation is administered from the upgraded traffic controller centre in Drammen. Jernbaneverket has also awarded Siemens the contract for replacing the giant screen at the train dispatcher centre at Oslo S. The screen provides a complete overview of train traffic across the whole of eastern Norway.
In 2006 Siemens began delivering metro rolling stock to Oslo Vognselskap AS. Up to the end of 2009 Siemens will deliver a total of 189 carriages at a rate of two 3 carriage sets each month. At the end of the business
Kollektivtransportproduksjon AS has ordered two new rectifier stations for the metro in Oslo, and Siemens will be responsible for both Jernbanetorget and Ullernåsen. The division also has extensive service activities for Fjellinjen
and various tunnel constructions in Oslo. During last year the division established a service contract for the public-private joint venture construction of the E39 between Lyngdal and Flekkefjord. Good market and favourable prospects Siemens has a leading position in the Norwegian transport market, with a broad portfolio and high market share in the relevant areas. New, large international suppliers in the Norwegian market are sharpening the competition. Future investments, especially within rolling stock, provide the opportunity for us to further strengthen our position. The market is forecast to grow rapidly and there is expected to be good opportunities for the Transportation Systems division in the years ahead. Larger players such as Jernbaneverket, NSB, Oslo Sporveier and CargoNet are planning substantial investments in the next few years. At the same time, public funding for building and improving infrastructure is on the rise. The current debate and studies connected with high-speed trains in Norway illuminates another interesting area for us in the longer term. The Transportation Systems division has a clear objective of being a very attractive partner in the coming years as well.
Transportation Systems Employees 46 Revenue 154* New orders 152 Exports 2 mill. kr
Siemens is Norway’s leading supplier of rail and traffic engineering products and systems for the transport sector. Rail engineering products and systems includes electrotechnical constructions and systems for safe traffic conveyance on trains, trams and the metro. Traffic engineering products and systems covers tunnel, road, parking and toll financial systems, modern technology for surveillance, management and communications which contribute to safe travel on roads and in tunnels. Siemens is also a major supplier of rolling stock, to the metro in Oslo amongst others. * There is an additional NOK 542 million connected to commissions business.
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Siemens annual report 07
energy efficiency
HSE
results
operations transportation systems
Improved safety for increasing traffic To ensure safety on the railway network as traffic volume rises, Jernbaneverket is upgrading the train dispatcher centres in Oslo and Drammen. Siemens is making good progress on the upgrading work in Oslo, which will be completed in 2008. In total there are 4,000 km. of railway tracks
the traffic places particularly stringent safety
and almost 400 stations in Norway, and this
requirements on train conveyance. The sig-
extensive railway network is monitored from
nalling system along the train tracks is of
four large train dispatcher centres. In order
fundamental assistance in achieving this
to manage the increasing traffic and future
safety. The signalling system which is moni-
infrastructure expansions in the best way
tored by the train dispatcher centres safe-
possible, Jernbaneverket is now upgrading
guards train conveyance between the sta-
the train dispatcher centres in Oslo and
tions and at each individual station.
The upgraded train dispatcher centres from Siemens improve traffic safety when the traffic controller monitorsthe trains’ movements between stations as well. The screens at Oslo S provide an overview of train traffic across the whole of eastern Norway.
Drammen. During the last year the Transportation Systems division has upgraded the
In 2008 Siemens is completing the upgrading
train dispatcher centre at Oslo S for the lines
work on the train dispatcher centre at Oslo S
Gardermobanen, Hovedbanen, Østfoldbanen,
and similar work will begin for Jernbaneverket’s
Kongsvingerbanen and Gjøvikbanen. The
operational centre in Drammen.
aim of increased stability and reliability in
Siemens annual report 07
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strategy
The broadest product portfolio in the market Automation & Drives has had a record influx of new orders and its best profit ever. Through the acquisition of El-Trade AS in August 2007, Siemens now has Norway’s broadest product portfolio and expertise inlarge drives, connections, gears, motors and frequency converters.
Divisions: Energy & Automation Oil & Gas Transportation Systems Automation & Drives
gearsets to thrusters for ships and oil platforms. The products are specially designed to each customer’s specifications, and the delivery represents almost 400 gearsets per year.
The number of staff has risen from 30 to 45 people, of which eight come from El-Trade. The acquisition of the company has resulted in the drives unit becoming the largest area in the division, measured by revenue and number of employees.
Building Technologies Electrical Installations Medical Solutions Subsidiary: Siemens Oil & Gas Offshore AS
Challenging in ships and offshore National Oilwell is one of the world’s largest solution providers to drill rigs and cranes for ships. The company carries out all its automation development in Norway, and Siemens is one of the main suppliers of drives and automation and communication equipment. A sharply rising pace of production places stringent requirements on logistics, and the long collaboration between National Oilwell and Siemens makes this possible. The drives unit has signed a longterm contract with Rolls Royce Marine for ongoing delivery of
Increased market shares Automation continues to be the area in which the division holds the strongest position and produces many market-leading products. The areas of process instrumentation and low voltage are growing strongly. The greatest progress has come from the drives area. The division has good partners across the whole country, both external and internal. The cooperation has resulted in larger deliveries within process automation to the offshore sector, but also specially adapted solutions for the onshore industry. In August 2007 the division signed a joint venture agreement with the electric rail partner Scanelec AS. We have great
expectations for this agreement. A broad distribution network is crucial for Siemens’ market position in this area, and through the wholesalers Solar Norge AS, Elektroskandia AS and Otra Norge AS the division can provide same day product delivery to clients nationwide. Positive market outlook The division is focusing heavily on infrastructure and offshore, where the market is now characterised by high activity. A special focus area is tailored solutions within drives, such as gears and converters for ships and the offshore industry. Competition is relatively stable in all sectors, except for the installation market. In this area, there is a growing number of low price foreign companies and the margins are under pressure. Overall the division has a positive market outlook.
Automation & Drives Employees 45 Revenues NOK 442 mill. New orders NOK 559 mill.
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Siemens annual report 07
Siemens supplies all types of products within automation systems,motors, engine operations, generators, gear systems, connections, control panels, instrumentation, building automation (EIB) and installation. Through the Automation & Drives division the company is a market leader in several sectors.
energy efficiency
HSE
results
operations automation & drives
Photo courtesy of: Kjetil Alsvik/Statoil Hydro
Will run the processes at Skarv Siemens supplies motors and converters to automation systems to what will be one of the world’s largest floating production ships for oil and gas. In 2011 the Skarv field 200 km. west of Sand-
cubic metres of oil equivalent (Sm3) oilper
nessjøen, will begin oil and gas production,
day and 19 million Sm3 of gas per day. Sie-
BP is the operator. The water depth is bet-
mens´ Automation & Drives division supplies
ween 350 and 450 metres in the field which
the motors and frequency converters for the
has an expected lifetime of 25 years.
ship’s automation systems. The electric mot-
Siemens has extensive experience from supplying oil production ships, including Petrojarl Foinaven, the sister ship of Petrojarl 1 (shown in the picture). Now we are supplying engines and converters to Skarv, one of the world’s largest vessels of this type.
ors run, amongst other things, pumps for air, The production ship Skarv will store, refine,
ventilation, heat, oil, water and other proces-
produce and distribute oil and gas from the
ses. Siemens will deliver up to 300 motors,
subsea plant at the Skarv field in the North
many equipped with frequency converters.
Sea. Skarv will be one of the world’s largest
The contract is with Aker Kvaerner Enginee-
floating production ships for oil and gas, and
ring and Technology which is the general
has a production capacity of 13,500 standard
contractor.
Siemens annual report 07
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managing director
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strategy
Increasing need for security General societal developments, threats that are constantly changing and new directives for energy use in buildings create a continually growing market need for advanced solutions within security and building technology. Building Technologies is well positioned for continued growth and development.
Divisions: Energy & Automation Oil & Gas Transportation Systems Automation & Drivers Building Technologies Electrical Installations Medical Solutions Subsidiary: Siemens Oil & Gas Offshore AS
developing a strong partner network within building automation.
The integration of the subsidiary Bewator AS in 2007 provides the division with a further strengthening of its product portfolio within security and fireproofing. Innovative fireproofing Siemens has delivered an innovative fireproofing solution to Stabburet in Fredrikstad. The solution ensures early fire detection in a complicated industrial environment. Within building automation the project for Helsebygg (the Hospital Development Project for Central Norway) at St. Olavs Hospital has been of central importance to the division. Siemens is the technical integrator for supplies to the Gastro Centre, Mobility Centre, Emergency and Cardiothoracic Centre, and Heart-Lung Centre at St. Olavs hospital in Trondheim. During last year, the product section HVAC Products has worked on
Signed major contracts In August the division signed a framework agreement with Avinor which provides for strengthened security and more effective operation of the security services at Avinor’s largest airports. The delivery includes the most advanced solution available within automatic video analysis.Together with Vakt Service, the division signed one of the private sector’s largest security contracts with the SpareBank1 alliance in September. The joint venture agreement gives the division the responsibility for all security installations, including upgrading to a common technical platform. The division also supplies alarm station services. Strengthened position As one of the largest companies in the market, Siemens provides total
technical building solutions. Within the various market segments the security market is especially characterised by changing processes and restructuring, and the division has adapted itself to fit the market which now puts it in a stronger position. General societal developments, threats that are constantly changing and new directives for energy use in buildings create a continually growingmarket need for advanced security and energy solutions, and the division therefore expects positive development in the yearsahead. Energy and environment is a key focus area in the future, and the division provides analysis, measures and economic guarantees for energy savings in buildings. The measures cut costs, improve comfort and raise productivity in buildings, while reducing harm to the environment.
Building Technologies Employees 238 Revenues NOK 313 mill. New orders NOK 367 mill.
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Siemens annual report 07
The Building Technologies division is a partner providing all services within safe and efficient buildings. The division provides integrated solutions and products within safety, fireproofing, building automation and comfort, in addition to energy and environmental solutions. The division provides expertise, advice and systems throughout the entire process, from needs assessment, developing solutions and implementation, to service and maintenance. The division is represented in 13 of Siemens’ departmental offices in Norway, from Harstad in the north to Kristiansand in the south.
energy efficiency
HSE
results
operations building technologies
Technology with the patient in the centre St. Olavs hospital in Trondheim receives cutting-edge technology which improves patients’ stay, the working conditions for employees and provides substantial economic savings. Building automation with technical installa-
lighting and venetian blinds in the operating
tions ranking amongst the very best in Europe
room. The advanced system can control stored
ensures that the hospital reaps substantial
temperature settings within 0.1 degrees devia-
savings. At the same time the quality of pati-
tion. Back in the room, the patient has full
ents’ stay is improved through optimal control
control over the lighting, radio, TV and the
of temperature, lighting and air.
Internet through a separate terminal beside the
The patient has a better hospital stay through optimal control of temperature, lighting and air. In the room, the patient has full control of the lighting, radio, TV and the Internet through a separate terminal beside the bed.
bed. Also when the patient is under the operating knife, the technically advanced solutions are
In the first round, Siemens’ automation techno-
contributing to optimising the operating
logy is covering 2,400 rooms over an area of
conditions. Siemens’ equipment monitors
81,500 square metres in the new hospital.
the various gases used during the operation,
The division has successfully supplied building
in addition to controlling lighting and operating
phase 1, and is now the technical integrator for
lamps in the surgery areas and anaesthetic
phase 2 which primarily covers deliveries to the
rooms. Via a touchscreen, doctors and nurses
Gastro Centre, Mobility Centre, Emergency and
can quickly regulate temperature, humidity,
Cardiothoracic Centre, and Heart-Lung Centre.
Siemens annual report 07
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strategy
Increasing in a good market A good market within building and construction has given the Electrical Installations division favourable contracts and growth. During the year 272 new employees have been recruited, and a number of new contracts have been signed which provides the basis for a strong market position in the years ahead.
Divisions: Energy & Automation Oil & Gas Transportation Systems Automation & Drivers Building Technologies Electrical Installations Medical Solutions Subsidiary: Siemens Oil & Gas Offshore AS
In order to achieve the goal of becoming the market leader within electrical installation in Norway, the division has sharpened its focus in several places in the country and, among other things, has opened a new division in Narvik. On 1 April 2007 the three subsidiary companies Alf H. Andersen, Høvik Elektriske and Mosness & Mosness with a total of 146 employees and NOK 150 million in revenue were integrated into Siemens AS. Recruitment of installers, project managers and economists has also been prioritised and during the year 272 new employees joined our ranks. In order to ensure profitable growth, the division is systematically building up employees’ expertise within project management and service. Special programmes are also being implemented for apprentices and managers. Strong development for project management Our project portfolio has developed favourably in all of our 20 divisions, with project management assignments on several larger constructions. The division’s largest projects last year have been the new opera house in Oslo, the new Ahus hospital in Akershus, St Olavs Hospital in Trondheim and the Innsikt
VI project for Oslo schools in cooperation with WM-Data. The division also won the electric systems contract for the pilot project Fornebu Arena, where we also see that further development in the area can generate good business opportunities. The Electrical Installations division is contributing to improved efficiency and modernisation within industry, for example for LKAB in Narvik, ajoint venture project with the Energy & Automation division. New contracts and prominent projects The division in Stavanger won a four year contract for operation and maintenance of electrical installations and equipment for Statens vegvesen (The Norwegian Public Roads Administration) in south Rogaland.In March the division signed an agreement for technical Facility Management for over 50 of Nordea Bank’s branches in Norway. This involves the operation and maintenance of technical building installations such as electric systems, automation systems, pipes, ventilation, cooling and fire systems. A new agreement for Facility Management was also signed with Aker Kværner Verdal AS. In addition, the division won electrical installation contracts for several pro-
minent building projects. Some examples of this are Norway’s most modern secondary school, Thor Heyerdahl upper secondary school which is under construction in Larvik, and the new Spa hotel at the same location for the investors Hagen and Treschow. Favourable future prospects The building and construction market is still characterised by large investments. Future growth in the industry is forecast to flatten out somewhat due to the limited access to resources such as manpower, and to a lesser extent the uncertainties surrounding the level of interest rates in the future. The forecasts for building modernisation and rehabilitation indicate growth, and therefore the future prospects for the division are promising. The competitive environment in the electrical industry is affected by a small number of national companies and a large number of local players. Siemens faces both categories in day-to-day competition and is ranked number two in the market as a whole. Looking to the future, Siemens will focus on projects within energy efficient buildings, and systematically work tomarket its broad expertise in this area.
Electrical Installations Employees 1,378 inc. 263 apprentices Siemens supplies solutions and services within electrical installation, telecommunications and Revenues NOK 1,349 mill. data, fire and safety as well as operational services for technical installations in buildings (Facility Ordreinngang NOK 1,362 mill. Management). With 20 local departments and staff numbering in excess of 1,300, the Electrical Installations division provides service and advice to private homes, office buildings and industry throughout the country. The aim is to be the industry’s leading cooperation partner within complete electrical installations.
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Siemens annual report 07
energy efficiency
HSE
results
operations electrical installations
Challenging prestige project at the opera When the new opera house in Bjørvika in Oslo opens to the public on 12 April 2008, Siemens´ Electrical Installations division has supplied the electrical power installations to the whole building. This has been a challenging project management job, as no similar buildings have been erected in Norway before. It has been said that the new opera house is the
of 38,500 square metres with over 1,100 rooms
largest and most magnificent cultural building
which were almost all different.
Norway’s new opera house measures 38,500 square metres and contains over 1,100 rooms which are almost all different. Project management involved coordinating many contracts, interfaces and systems and was therefore a demanding and challenging job.
in Norway since Nidaros cathedral. Siemens has had more than 110 people working on the
The opera building is an impressive and techni-
electrical power contract in the building, which
cally advanced building where Siemens has,
is a one of a kind project. As a similar building
among other things, supplied the EIB system
has never been erected before, it has been chal-
(control system for lighting, cooling, heating
lenging to coordinate so many people with all
and venetian blinds) which is over twice as
the various contracts. Many interfaces, and the
large as the one at Gardermoen airport. The
integration of several systems made this a de-
work has been a prestige project in several
manding project management job in a building
areas which we are very proud of.
Siemens annual report 07
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managing director
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strategy
Improved products and services within diagnostics Siemens is Norway’s largest supplier of equipment and IT solutions in the field of imaging diagnostics, lab diagnostics and clinical IT. A well functioning health system is dependent upon continuous improvements and innovation, and Siemens’ Medical Solutions division is a key partner in the work of providing better services to patients. Divisions: Energy & Automation Oil & Gas Transportation Systems Automation & Drivers Building Technologies Electrical Installations Medical Solutions Subsidiary: Siemens Oil & Gas Offshore AS
The strategic acquisition of Bayer Healthcare Diagnostics and Diagnostic Products Corporation (DPC) was followed in 2007 by the purchase of the diagnostics company Dade Behring. Thereby providing Siemens with a broad array of expertise within both imaging diagnostics, lab diagnostics and clinical IT, and placing Siemens in the forefront when it comes to patient-focused solutions which can raise both efficiency and quality. The company’s strong position within health is further reinforced. The first in Norway One of Siemens’ most important deliveries to the healthcare sector last year has been a new x-ray system for the Interventional Centre at Rikshospitalet University Hospital. The system is based on robot technology for more precise examinations. The delivery of magnetic navigation equipment to Haukeland University Hospital allows for the whole operation to be controlled from a dedicated control room. This provides better treatment and reduces the exposure
to radiation for hospital personnel. On a worldwide basis there are fewer than 75 such systems, and Haukeland is the first in Norway to have this type of system. Using voice recognition Ullevaal University Hospital is one of the country’s first major hospitals to use voice recognition systems in its patient record system. Now doctors can read information directly into their PCs. This results in much quicker updating of patient records, and over the longer term allows for a paper-free process. The project is a pilot program and is expected to be rolled out for full scale production during 2008. Innlandet Hospital Trust and Ullevaal University Hospital are also at the forefront as they now start to use advanced image exchange technology from Siemens. Whereas previously the pictures had to be transported by taxi, now everything can be sent electronically. This provides both better patient security and a much more efficient use of resources.
New technology just around the corner The market’s willingness to invest has fallen a little last year, but nevertheless Siemens has achieved solid profitability and held its leading position in the market. Siemens is in a leading position within both MR, CT and angiography, and has strengthened this position during the course of the year. New technology launched in autumn 2007 is expected to contribute to an even better competitive environment. Health is one of Siemens´ main focus areas. In the future we will experience a growing influx of patients to the public health system, due to a steadily increasing population and a steadily rising proportion of elderly people. Siemens wants to play a central role within early diagnosis and correct treatment of illnesses. A well organised and efficient public health system is dependent upon continuous innovation, and in this regard Siemens will be an important partner for the Norwegian health sector in the future.
Medical Solutions Employees 110 Revenues NOK 343 mill. New orders NOK 332 mill. Exports NOK 2 mill.
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Siemens annual report 07
Siemens is Norway’s largest supplier of equipment and IT solutions in the field of imaging diagnostics, lab diagnostics and clinical IT. A wellfunctioning health system is dependent upon continuous improvements and innovation, and Siemens’ Medical Solutions division is a key partner in the work of providing better services to patients.
energy efficiency
HSE
results
operations medical solutions
From coating to x-rays When Siemens Medical Solutions installs the new x-ray system at Rikshospitalet University Hospital in Oslo, it will be with technology taken from industry. The robot which previously did coating work
greater flexibility and speed of movement.
has now become otherwise employed. It makes
By using this construction it is much easier
recording detailed x-ray images much simpler
to make detailed recordings of larger bodily
to carry out than before, and thereby contri-
areas. In practice this means that for exam-
butes to more precise surgical operations.
ple in operating rooms it is possible to record
The robot, which was previously used for coating work, now helps to improve the precision of surgical operations at Rikshospitalet University Hospital in Oslo.
images during the operation without having In December 2007 Siemens installed a revo-
to move the patient to another laboratory.
lutionary x-ray system at the Interventional
Using more advanced image recording in the
Centre at Rikshospitalet University Hospital
operating rooms raises the level of precision
in Oslo. The system is the third of its kind
and results in fewer surgical operations than
in the world. The new structure is based
before.
on robot technology which allows for much
Siemens annual report 07
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strategy
New company takes command Siemens Oil & Gas Offshore AS has consolidated its position as the market leader within power distribution, automation and telecommunication for drilling rigs and production platforms at sea. New orders and revenues have risen significantly during the business year. Divisions: Energy & Automation Oil & Gas Transportation Systems
On 1 April 2007 the international oil and gas business was spun off into the newly established company Siemens Oil & Gas Offshore AS. The company is wholly owned by Siemens AS.
Automation & Drivers Building Technologies Electrical Installations Medical Solutions Subsidiary: Siemens Oil & Gas Offshore AS
Developing new solutions New system solutions within water treatment and underwater communication have been commercialised and represent new future-oriented business areas. The company will invest substantial resources in the near future into further developing the processing and underwater solutions. Moreover, automation activity is to be strengthened, with the aim of increasing the extraction factor for oil and gas. Together with Sevan Marine AS the company has developed a concept
for liquid gas power plants. The solution uses existing gas and steam turbines with heat recycling which results in a much higher efficiency than with other technologies. The power plant can be equipped with CO2cleaning, verified by Sintef Energy Research. A liquid gas power plant of this type can supply offshore installations with eco-friendly electricity. Global contracts From the Korean shipyard Daewoo Shipbuilding & Marine Engineering Co., Ltd. (DSME), Oil & Gas recently received the fourth contract for delivery of power distribution equipment to drill ships. The ships will be operated by Transocean. The systems are so-called ”fault tolerant”, which means that they are considerably more stable and operationally secure than
conventional systems. This solution is expected to be attractive to other drill operators as well. Expecting high activity levels Oil & Gas Offshore is the marketleader within power distribution, automation and telecommunication for drill rigs and production platforms at sea. The company is expecting high activity levels during the next few years due to high oil prices which generate increased investment in the offshore sector. Faster growth is achieved by for example strengthening competence and increasing resources at our international offices in Singapore, Brazil, China, the U.S. and the Netherlands.
Siemens Oil & Gas Offshore AS Employees 279 Revenues NOK 827 mill. New orders NOK 1,208 mill.
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Siemens annual report 07
Siemens Oil & Gas Offshore AS is a newly established company which has been charged with the global business responsibility for offshore operations in Siemens. The company is a leading supplier of integrated solutions to the oil and gas industry; everything from automation, electric and telecommunication systems to turbines, compressors and process solutions. The head office for Oil & Gas Offshore is in Oslo, and it has regional offices in Stavanger, Bergen and Trondheim.
energy efficiency
HSE
results
operations siemens oil & gas offshore as
The world’s largest in Italy Siemens has supplied the largest Electrical and Instrumentation Building (EIB) ever. The colossus weighing nearly 1,700 tonnes manages all the electricity and instrumentation at the new LNG terminal which will supply natural gas to people living in northern Italy. The LNG (Liquid Natural Gas) terminal is
LNG terminal. Aker Kværner Inc. will build
located outside Venice, and will receive liquid
the terminal on assignment for the operator
natural gas from Qatar when it becomes
ExxonMobil. Siemens Oil & Gas Offshore in
operational in April 2008. LNG is delivered by
Norway has had contractual and project
boat to the terminal and is then gasified and
management responsibility for the EIB
transferred to the Italian gas network. This
module which was carried out in Houston
ultra modern construction is an important
and Singapore. Siemens’ contract covers a
means of meeting Italy’s growing energy
power support module comprising high and
needs. The plant will supply 20 percent of
low voltage control panels, transformers and
Italy’s gas consumption.
uninterruptible power supply, in addition to
The enormous power support module weighs nearly 1,700 tonnes and will be transported from the shipyard in Singapore to the gas terminal outside Venice.
instrumentation, fire and safety systems and Siemens won the assignment to build the EIB
telecommunication.
module which is positioned on the top of the
Siemens annual report 07
31
solutions
managing director
siemens in norway
strategy
The Siemens Group in Norway The Siemens Group in Norway comprises Siemens AS, wholly and minority owned subsidiaries, as well as companies in which the parent company Siemens AG has a direct shareholding. In addition to Siemens AS, these are the largest companies in the Siemens Group in Norway. Fujitsu Siemens Computers AS
Voith Siemens Hydro Power Generation AS
Osram AS
Employees 41 Revenues NOK 1,125 mill. New orders NOK 1,125 mill.
Employees 64 Revenues NOK 138 mill. New orders NOK 227 mill.
Employees 44 Revenues NOK 270 mill. New orders NOK 265 mill.
Fujitsu Siemens Computers is a leading IT company with a product portfolio covering everything from small handheld PCs to large enterprise solutions and products strategically focused on next generation mobile solutions and Business Critical Computing. Internationally the company maintains high market shares across Europe, the Middle East and Africa.
Voith Siemens Hydro Power Generation is a complete supplier of services and electromechanical equipment to HEP stations. The supplies range from individual components to complete tailored concepts for everything from turnkey constructions to the modernisation of existing power plants. The company is in a leading position internationally and has maintained a presence in this market for over 130 years.
Osram is a market-leading light source supplier in Norway. The company develops and produces light technology for all purposes, from general lighting to advanced lighting technology. Light emitting diodes, LEDs, are one example of the type of innovations that will be very important to the industry in the coming years. Through its research and development Osram is making a substantial contribution to reducing energy consumption and safeguarding the environment.
www.vs-hydro.com
www.osram.no
Siemens Medical Solutions Diagnostics AS
Nokia Siemens Networks Norge AS
Bosch Siemens Husholdningsapparater AS
Employees 22 Revenues NOK 13,238 mill. New orders NOK 13,238 mill.
Employees (global) 58,423 Revenues (global) EUR 13,393 million
Employees 64 Revenues NOK 800 mill. New orders NOK 800 mill.
Siemens is the world’s first company to provide complete diagnostic solutions in its portfolio. The former companies Bayer Diagnostics, Diagnostics Products Corporation (DPC) and Dade Behring constitute the new company Siemens Medical Solutions Diagnostics AS. The company’s products and services give health personnel all over the world important information which enables them to provide better and more individualised patient care.
Nokia Siemens Networks is a leading global enabler of communications services. The company provides a complete product portfolio of mobile and fixed network infrastructure solutions and addresses the growing demand for communication services with 20,000 service professionals worldwide. Nokia Siemens Networks is one of the largest telecommunications infrastructure companies in the world with operations in 150 countries.
Bosch Siemens Husholdningsapparater has the market’s broadest array of white goods and markets the brand names Bosch, Gaggenau and Siemens. The range of products spans the majority of appliances in a modern household. In Europe the company is a leading developer and producer of white goods with advanced technology for improved user-friendliness, quality, design and eco-friendliness.
www.nokiasiemensnetworks.com
www.siemens-hvitevarer.com
www.fujitsu-siemens.no
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Siemens annual report 07
energy efficiency
HSE
results
operations siemens-gruppen
The Siemens group in Norway Siemens AS Oslo
as of 1 January 2008
Siemens AG Berlin/München
Osram AS *) 44 %
56 % Fujitsu Siemens Computers AS
Siemens Business Services AS 100 %
50 %
Siemens Oil & Gas Offshore AS 100 %
SMSD – Siemens Medical Solutions Diagnostics
Bewator AS
Siemens Wind Power AS 100 %
100 %
Bosch Siemens Husholdningsapparater AS
50 %
100 %
Nokia Siemens Networks Norge AS
50 %
100 %
Voith Siemens Hydro Power Generation AS
35 %
Dade Behring AS *) Siemens owns 100% of Osram AS through Siemens AS, Siemens AG and Osram GmbH
Key figures
as of 30 September 2007
Amounts in NOK millions 6) Siemens AS 1) Siemens Business Services AS 1+4) Osram AS 1) Siemens Oil & Gas Offshore AS 1+5) Bewator AS Companies directly owned by Siemens AG Bosch Siemens Husholdningsapparater AS 2) Fujitsu Siemens Computers AS 3)
Share % 100 % 44 % 100 % 100 %
50 % 50 % Fujitsu Siemens Computers IT Product ServicesAS 3) 50 % Voith Siemens Hydro Power Generation AS 1) 35 % Siemens Medical Solutions Diagnostics AS 100 % 50 % Nokia Siemens Networks Norge AS 8)
New orders 2007 2006 6 945 6 623 425 816 265 270 1 208 1 1
Revenues 2007 2006 5 412 5 308 425 739 270 275 827 21 17
800 1 125 208 226 13
800 1 125 208 206 13
771 976 227
771 976 138
Investments 2007 2006 33,1 19,2 12,5 25,3 0,1 0,9 1,4 0,2 0,3
0,6 0,4 9,4 1,0 -1,0
0,9 0,4 0,8
Number of employees 7) 2007 2006 2 195 2 442 139 283 44 53 279 5 11
64 41 93 64 22
63 47 62
1) Non-calendar year-end: 01.10.2006 – 30.09.2007 2) Non-calendar year-end: 01.01.2005 – 31.12.2006 3) Non-calendar year-end: 01.04.2006 – 31.03.2007 4) All external operations in SBS AS were sold to WM-Data 31.03.2007. Remaining operations are mainly deliveries to the Siemens group. 5) The company was established in 01.04.2007 6) internal transactions between group companies have not been offset against one another. 7) Average number of man-years worked during the business year (including apprentices) 8) Does not state figures at a national level
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Industry How can you manufacture customized products at affordable prizes?
Automation and energy efficiency
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As a world leader within solutions for industry, Siemens supplies systems for both specialised and standardised production. Our technology makes it possible to produce products better, in greater quantity and more tailored than In Norway, Siemens is helping such disparate industries as the food industry, before at a reduced cost. solar power, offshore and shipping to be able to satisfy market needs while being more efficient, profitable and resource-saving than ever before.
The picture illustrates Profinet which enables high speed communication networks in industrial automation solutions.
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Raises the level of knowledge to
reduce injuries During the last year Siemens has been working to raise the level of knowledge about HSE for all employees, especially new recruits. At the same time we have carried out basic training in HSE for many of our managers, safety officers and members of our various HSE fora.
Siemens in Norway aims to be an attractive and reliable supplier, employer and participant in the community. We work in areas where HSE is extremely important, such as the oil and gas industry and on building sites across the country. Our aim is to achieve a working environment that is free of injuries and to ensure that our products and solutions contribute to a clean environment. HSE therefore forms an integral part of all work undertaken by Siemens, both internally and externally. Increased knowledge and genuine understanding, together with a sense of ownership instilled in the management and employees, contribute to the aim of a working environment free of injuries.
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team) our staff has access to a varied programme of free or moderately priced exercise activities. We also encourage our staff to participate in the ”Cycle to work” programme run by the Norwegian Federation for Company Sports. There has been a good level of activity amongst the staff and this year Siemens in Trondheim won the in-house competition.
Working towards lower absence due to illness Low absence due to illness is a good indicator of a healthy working environment, and we are continuously working to reduce the level of absence due to illness in the company. The reduction we experienced in 2004 and 2005 has not continued in the 2006 business year. Absence due to illness has stabilised and ended at 4.3 percent. We are continuing to work towards the aim of an absence rate due to illness of three percent or less.
Targeted safety work Siemens registered no serious accidents in the business year, neither with regard to lives or property. A total of 72 accidents were reported, 48 of which were minor accidents with minor injuries and no absence due to illness, whilst 24 resulted in absence and are included in the statistics for the company’s H-value (the number of injuries resulting in absence per million working hours). Days of absence as a result of accidents and injuries only account for less than 0.5 percent of the total absence due to illness in the company. The company’s H-value ended on 5.5 in the 2007 business year against 3.3 in 2006. After four years of continual improvement, we are now experiencing an increase in the H-value. This shows the importance of constantly paying attention to the safety of each employee.
Every three years, health and environment surveys are carried out for the staff in the company. The surveys reveal that many employees have a large workload and that especially sedentary work at a PC is a challenge. Physical activity can counterbalance the effect of sedentary work and through ”Siemenslaget” (the Siemens
During 2007 approximately 1,900 reports about dangerous conditions were registered by our employees. Each of these reports apply to situations which could have resulted in injury or accident. By reporting and following up each situation, the whole organisation is contributing to reducing the risk of injuries and accidents.
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Safety work is regularly carried out across the entire company. This is key to the work with HSE in all types of working environments, and particularly important for our staff within construction, assembly and manufacturing work.
Through the mandatory yearly safety training updates many of our employees complete professional safety courses within special work procedures, to avoid accidents, injuries to people and damage to property. The course covers, amongst other things, work in electrical plants, and includes practical training in first aid.
Absence due to illness in %
In order to raise the general knowledge level in the field of HSE, all new staff are now required to complete basic training in HSE and pass the associated test. All new employees shall complete the programme during the course of the first few weeks on the job. In addition, some 114 employees have received basic training in HSE work for managers, safety officers and members of AMU and departmental committees, in accordance with the regulations in Arbeidsmiljøloven (the Norwegian Working Environment Act). 71 of them have completed their training internally, whereas the rest have been trained externally.
Absence due to illness Target
H-value
H-value
Training in HSE work Our new HSE organisation with a working environment committee (AMU) and joint staff committee (BU) in each division, in addition to the company’s central AMU/BU is now well established. Siemens’ divisions have very different operations, therefore the HSE work is tailored to the particular challenges in each division.
Absence due to illness
H-value Target H-value
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Further development and well-being This year we have again prioritised employee satisfaction through surveys and follow up work. Employee satisfaction surveys are carried out every other year, while staff reviews shall be carried out with each employee at least once a year. These reviews shall contribute to an open and targeted dialogue between the manager and the individual employee, the reviews are also a tool for developing company culture to promote performance. Employee satisfaction surveys answer for example questions relating to the levels of well-being in the company and how good and visible the management of the company has been. The internal e-learning portal is an important course supplier and a useful reference work, the company’s obligatory HSE training can also be found here. Management development has been given a high priority, and project management has received special attention with competence development and a career development programme. Every year Siemens supports the internal welfare organisation ”Siemenslaget” which offers a varied programme of exercise and leisure time activities to our staff. Energy consumption is falling Siemens monitors its energy consumption with the aim of continually reducing it, and over the course of 2007 invested just short of NOK 1 million in energy saving initiatives.
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Our Building Technologies division and Siemens Real Estate cooperate to achieve the planned savings. During the 2007 business year our energy consumption in Siemens AS including tenants was 27.5 GWh. This is a reduction of 2.1 GWh compared to the previous year. The majority of waste is sorted The bulk of our waste is sorted, however the firms that are responsible for sorting the waste do not measure each individual customer’s amount of waste after it has been sorted. The waste that is measured originates from our locations in Oslo, Bergen, Trondheim and Stavanger, and also includes external tenants. Our smaller regional offices largely share joint arrangements with other companies and waste schemes where the amount of waste is not measured. Siemens is a member of the recycling organisations RENAS and ELRETUR and in 2007 we recycled some 69.2 tonnes of EE waste to them. Negligible emissions and chemicals The company produces atmospheric emissions from only a few workplaces in the factory in Trondheim. This comes from extraction vents in connection with soldering and does not require a licence. The Norwegian Labour Inspection Authority has assisted by taking measurements to safeguard the working environment in soldering. Siemens uses chemical substances in the factory in Trondheim, on sites and service assignments as well as in cleaning. New products we take in are risk assessed prior to use. Chemicals and the need for chemical
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risk assessments is also a theme when carrying out general risk assessments. In total approximately 210 substances are listed in the company’s index file of substances.
Energy consumption
Water consumption The consumption of water in the company is regularly monitored, and water is not used in production processes. The company’s consumption of water increased compared to the last business year and in 2007 consumption was about 37,500 cubic metres.
Siemens AS is located all over Norway, and is part of a global group. Therefore flights are often used for business trips both domestic and abroad. The company is working to increase the use of web conferences and telephone meetings to limit the number of trips.
GWh
Waste disposal
Waste in tonnes
Travel in Norway and the world Siemens purchases transport services from external suppliers and goods transport therefore usually occurs as joint transport with other companies. Personnel transport is covered through the use of leased cars, private cars, hire cares and taxis. The total distance drivenfor these cars during the last business year was ca.13.3 million km.
Electrical energy Siemens Oslo Electrical energy Siemens Trondheim Electrical energy Siemens Bergen Electrical energy Siemens others District heating Siemens Oslo District heating Siemens Trondheim
EE waste Metals Cardboard/paper Waste for sorting, incinerating and depositing Wood
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Health How can disease be detected before it strikes?
Early diagnosis and preventive care
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When illness is diagnosed and treated at an earlier stage, the patients have a better life quality and at the same time costs are reduced. Siemens supplies solutions which span the entire value chain within healthcare, from prevention and diagnosis In Norway, Siemens has developed an electronic patient record system to treatment and follow-up. and is also, for example, a major supplier of advanced x-ray solutions. We are an important partner for the public health system in the work to provide better services to patients.
The pictures shows the control console for the world’s first multi-axis x-ray system, Siemens Artis Zeego.
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Report of the Board Siemens AS 2007 For the third year in a row, Siemens AS had its best ever business year in terms of turnover, order intake and operating profit. A healthy market, particularly in the areas of oil and gas, shipping, power supply and industry, has contributed to this. Some operations have been divested to Nokia Siemens Networks AS and Siemens Oil & Gas Offshore AS and the assets (customer contracts and employees) in the subsidiary Siemens Business Services have been sold. Activities in technological development have increased, particularly in the area of oil and gas. Siemens AS is a wholly-owned subsidiary of the German group Siemens AG. The Siemens Group in Norway consists of Siemens AS, wholly and minorityowned subsidiaries of Siemens AS, as well as companies in which Siemens AG has a direct shareholding. The Siemens Group in Norway has a turnover of NOK 22.532 billion and a total of 2946 employees. Siemens’ head office is located in Oslo and the company also has key offices in Trondheim, Bergen and Stavanger. The company is located in altogether 25 locations spread across the whole of Norway. Its activities comprise sales, development, engineering, production, assembly and service.
The operating income in 2007 ended on NOK 5502 million, an increase of NOK 166 million compared with 2006. The operating profit of NOK 259 million was NOK 17 million higher than the previous year. The profit after tax ended on NOK 177 million, up NOK 8 million from the previous business year. The excellent results are based on the positive economic developments in general, and particularly in many of the markets in which the company operates. Siemens is also targeting its work on growth strategies to establish a solid base for continued profitable growth in the years ahead.
”
The company offers technologybased products, services and solutions in the areas of energy, automation, security, transportation, oil and gas as well as health.
The operating income in 2007 ended on NOK 5502 million, an increase of NOK 166 million
Siemens AS invokes section 3-7 of the Accounting Act (Norway) relating to exceptions from the consolidated accounts obligation for parent companies in sub-groups and does not prepare separate consolidated accounts. See the annual report for Siemens AG.
Siemens has a non-calendar year-end. The fiscal year 2007 runs from 1 October 2006 to 30 September 2007. Profit performance For the third year in a row, Siemens AS has achieved its best ever turnover, order intake and operating profit. In the course of fiscal year 2007, new contracts were signed worth NOK 6945 million, which is NOK 322 million more than the previous year.
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All the divisions contributed to the year’s excellent results, but the Energy & Automation Division in particular has seen great success in the past year. The Division saw strong growth in power supply and developments within the area of diesel-electric propulsion for ships.
The Automation & Drives Division has more than doubled its sales following the integration with ElTrade AS, and is now Norway’s largest supplier of drives, i.e. electric motors, frequency converters and gear systems. Siemens works with a number of improvement programmes to secure long-term profitability and growth. A large part of Siemens’ turnover comes from project work, and good profitability is reliant amongst other things on a good project organisation. Throughout the year, the company continued its work to strengthen the project organisation. Siemens AG is listed on the New York Stock Exchange and, as a wholly-owned subsidiary, Siemens AS is
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obliged to comply with the requirements of The Sarbanes-Oxley Act, section 404 regarding internal controls and quality of financial reporting.
New orders (in NOK millions)
The Board of Directors confirms that the basis for continued operation is present cf. section 3-3a of the Accounting Act (Norway). The annual accounts have been prepared on the basis of continuing operations, and provide in the Board’s opinion a satisfactory account of the company’s development and results as at 30 September 2007. The Board of Directors is extremely pleased with the objectives and results achieved and would like to thank all staff for their commitment and efforts throughout the year. Allocation of profit for the year In fiscal year 2007, Siemens AS recorded a profit of NOK 177 million after tax. The Board of Directors proposes the following allocations (in NOK million): Provision for dividend Transferred to other equity Profit for the year
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The imbalance in the world economy may result in a slightly reduced economical growth. Siemens AS’ financing is entirely carried out through the Siemens Group’s internal bank. As at 30 September 2007, the Board sees no risk attached to the company’s future liquidity situation.
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Financial matters The equity as at 30 September 2007 equals 18.09 per cent of the total balance sheet. The company’s free equity amounts to NOK 186 million. As a consequence of the company’s international operations, a not insignificant currency risk is attached to the value of future cash flows and balance sheet positions in foreign currencies. In accordance with Siemens’ guidelines, this is secured through future exchange contracts and currency options. All new customers are credit assessed before sales contracts are entered into and payment in advance is required before larger deliveries, together with various guarantee instruments. According to the Board there are no obviously high risk customers in the company’s portfolio, and the relevant provisions are considered to be adequate. Based on the broad product and service range offered by Siemens, the Board sees no particular market risk linked to future earnings. The Norwegian economy is driven by a high oil price, i.e. with apparent risks.
Organisation Siemens’ business strategies for profitable growth and remaining at the forefront of all our markets have in the course of the year led to a number of changes in the organisation. In order to strengthen its position within telecommunications, Siemens entered into a joint venture with Nokia Networks. The Siemens Group owns half of the shares in the new company Nokia Siemens Networks AS that became operational on 1 April 2007. Siemens is on course to becoming a major player in the global market for oil and gas. Based on Norwegian knowledge and experience from the oil and gas sector, the headquarter for the Siemens Group’s global activities within oil and gas was established in Oslo. The Norwegian part of the international activities was demerged from the company and is now included in the subsidiary Siemens Oil & Gas Offshore AS that was founded on 1 April. From 1 October 2006, the subsidiaries Alf H Andersen AS, Høvik Elektriske AS and Ing. Mosness & Mosness Inst. AS were merged into Siemens AS as a part of
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the Electrical Installations Division. A new branch office also opened in Narvik.
technological development, often in near cooperation with customers.
During the course of the year, WM-data took over the assets of the subsidiary Siemens Business Services AS (SBS), comprising customer contracts and employees. SBS is now a separate limited liability company to safeguard the company’s legal obligations, and also to handle Siemens AS as a customer. SBS has been criticised for incorrect invoicing in conjunction with an IT contract with the Armed Forces. As a result, the company is currently being investigated by the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim).
As of fiscal year 2007, most of the development in the business area Oil & Gas Offshore will occur in Norway. For example, underwater technology as communications and control systems for seabed wells with associated advanced IT solutions are developed through the new subsidiary Siemens Oil & Gas Offshore AS.
The subsidiary Bewator AS will be integrated in Siemens’ Building Technologies Division from 1 October 2007. Security is a focus area for Siemens, and the integration of the access control supplier Bewator AS makes Siemens an even more comprehensive supplier of security solutions.
Siemens in Trondheim is working on global development and production within diesel-electric propulsion for ships and motor drives for drilling installations. New and more effective solutions are also being developed for energy production and the transfer of energy to underwater installations in the oil industry.
The acquisition and amalgamation of EL-Trade AS has made Siemens AS the market leader in Norway in large electric motors, so-called drives. Technological development The company is part of Siemens’ global network for innovation, and benefits extensively from products, services and solutions that are being developed internationally. Norwegian projects are adapted and developed for each individual customer. Thus expertise and innovative solutions are fed from Norway to the global network. In recent years, Siemens in Norway has stepped up its activities in
New staff members
Concepts for environmental friendly power production offshore are also being developed including the distribution of electrical energy ashore across large distances.
Within health, IT solutions are being developed to create a better, more efficient health service. The development environment of over 30 persons develops patient record systems that form the basis for Siemens’ international solution worldwide. People The business year 2007 has been dominated to a large extent by recruitment in a tight labour market, and no less than 440 people were employed during the course of the year. The number of employees in Siemens AS has nevertheless fallen from 2442 to 2063 as a result of some operations being divested to Siemens Oil and Gas Offshore AS and Nokia Siemens Networks AS. The largest proportion of recruitment has occurred within the Electrical Installations Division, and the number of trainees has also increased by 92 to a total of 271 people. Once again this year, recruitment will be given a high priority, and at least 350 new appointments are predicted. In addition to annual target and development meetings, subsequent meetings have been introduced, so-called Round Tables, to discuss individual expertise initiatives, career plans and talent management between the departments. 2007 saw the introduction of Round
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Tables at management level, but will extend further down the ranks in the future. The process and handling of data is determined by dialogue with the union representatives. A new three-level training programme has been established for project managers at Siemens. Level 1 and 2 are conducted in Norway and consist of e-learning courses, meetings and classroom teaching. Level 3 is conducted by PM@siemens Academy in Germany.
Ethics Ethics and profitability are important elements in Siemens’ business practice. The company strives to maintain a high ethical standard in both its strategic decisions and in the day-to-day operation of the company. The company’s ethical guidelines are part of each individual’s employment contract. The guidelines form the basis of our work, the relationship between employees and the relationship to our customers, suppliers and other interested parties.
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In recent years, Siemens in Norway has stepped up its activities in technological development
Good leadership is an important part of Siemens’ performance culture, and management development is conducted on a local, Nordic and global level. In the past year, a new Norwegian management development programme was established to broaden experienced managers’ expertise.
Siemens’ trainee programme was introduced in 2007 and eight persons were recruited to Siemens AS this year. It is a two-year programme with the option for an overseas stay in the period. The programme consists e.g. of three placements, six meetings and ongoing follow-up from a mentor and programme coordinator. The trainee programme will recruit ten new candidates in the autumn of 2008.
Siemens AS is a company with specialised expertise and broad technical competence. In society in general, there is a disproportionately large number of men pursuing technical careers, and this is also reflected in the company’s gender composition. The proportion of women in the company is 12 percent. Equality is important to Siemens and the company has, amongst other things, succeeded in increasing the proportion of women in our management development programmes from 20 to 33 percent in the last year. Three out of eight participants on the Trainee Programme are women. To counteract salary discrimination, wage analyses are conducted prior to the wage settlement and all managers are informed in writing of criteria and principles that are to apply. The company is planning to focus more on women as a target group for recruitment campaigns in the coming year.
As a result of the case against the subsidiary SBS, which is being investigated by Økokrim, the focus on ethics and correct business practice has been further intensified in the organisation. In addition to creating the position of legal director, Siemens has further strengthened its work on business ethics by employing a full-time Regional Compliance Officer. This post forms part of a new global compliance organisation and reports directly to the Chief Compliance Officer at Siemens’ head office in Germany. Ethical dilemma training has been introduced for new employees together with web-based training for a target group of around 500 people on the subject of anti-corruption and global decisions. Health, safety and the environment (HSE) Siemens is determined to pursue a zero injury philosophy that means that all accidents must be prevented and that no work-related injuries, illnesses or accidents must be neglected. In the last business year, no serious accidents occurred that resulted in permanent injuries for the company’s employees. The work of reporting hazardous conditions has continued. In spite of this work, the number of injuries with subsequent absence from work increased in relation to the previous business year. The company’s H-value (number of injuries resulting in absence per million working hours) ended on 5.5 in 2007 against 3.3 in 2006. This increase emphasises that the safeguarding of each individual employee is taken seriously by both managers and staff members. The sickness absence ended on 4.3 percent for the 2007 business year, which means an increase of 0.2 percentage points from the year before. There is a
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great variation in the sickness absence between the divisions, from 0 percent in the Siemens Real Estate Division and up to 6.0 percent in the Electrical Installations Division, which works on installations and is more exposed to injuries than positions involving more traditional office work. The work on HSE is crucial and in recent years has been intensified. All staff, new and old, must attend a HSE introduction course followed by a test which they must pass. In addition to this, 71 employees attended and completed internal HSE basic training in line with the Working Environment Act (Norway) in the course of 2007. In addition, 44 employees attended and completed external HSE basic training.
Market Norway is witnessing high oil prices that are expected to remain high in the future. Interest rates are levelling off, and the labour market is tight even with substantial productivity growth. The growth in production and employment will be affected slightly in the time ahead. Oil investments are expected to grow, whilst more moderate growth is expected in public spending and other activities on the mainland. Siemens is expecting healthy market developments in the market sectors of energy, industry and health.
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Ethical dilemma training has been introduced for new employees
The company does not directly pollute the air, water or ground and generally utilises minimal polluting chemicals in its production. Siemens AS is a member of Elretur, Renas and Batteriretur, which dispose of all electrical and electronic recycled goods in the country, and the company works actively to ensure that small electronic appliances are collected and disposed of in an environmentally responsible manner.
The Board of Directors of Siemens AS as of 30.09.07 Trygve Refvem (Chairman), Anne Kathrine Slungård, Hans Lødrup, Lars Barstad (Employee representative), Per Otto Dyb (President & CEO), Roy Lund (Employee representative), Espen Ingebrigtsen (Employee representative). Heinrich Helmut Hiesinger, Board member of Siemens AG, was not present when the photograph was taken.
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The oil and gas investments in Norway are expected to rise further, with growth in search activities and for fields in operation. Some reduction in investments in field expansion, land installations and pipe transport is expected. The global market is anticipating robust growth, and in Norway, Siemens Oil & Gas Offshore AS has been established with global responsibility for the Siemens Group’s offshore activities. This includes, for example, activities in the US, Brazil and China. The Norwegian oil and gas market is the responsibility of a separate division at Siemens AS.
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Global energy needs are accelerating. Climate change is putting the spotlight on cleaner energy production and renewable energy. Increased focus on energy efficiency is expected both in the industry and in the construction and operation of industrial buildings. The energy sector in Norway is booming and there are huge expectations linked to future wind power and gasworks, for example. Siemens has supplied the gasworks at Kårstø which alone produce up to 3.5 TWh, the equivalent of the consumption of 175000 Norwegian households. Siemens leads the way in most areas for transportation. This position has been further consolidated with deliveries of a new generation of metro carriages to Oslo Sporveier (the municipal transit authority of Oslo) and signalling system for major transport operators such as Oslo Sporveier and Jernbaneverket (the Norwegian National Rail Administration). A general need to upgrade infrastructure and the authorities’ goal to move more freight traffic from road to railway looks promising as a substantial future market. The health sector is expected to become one of the most important sectors in Norway in the future. The elderly account for an ever-increasing proportion of the population, and the need for care is increasing at
the same time as more illnesses can be treated. Within the health service more focus is being directed towards efficiency through new technology. Today Siemens is a leading player within image diagnostics and integrated IT systems. The Siemens Group’s acquisition of Diagnostic Products Corporation (DPC), Bayer Diagnostics and Dade Behring gives Siemens a cutting edge also within laboratory diagnostics, so-called In-Vitro diagnosing. The Telecommunications operation at Siemens AS is sold in to the new company Nokia Siemens Networks AS, which plays a leading role as a supplier to the Norwegian telecommunications market. Siemens Business Services AS’ external IT operations service was sold to WM-data AS, and Siemens no longer serves this market in Norway. Strategy and outlook Two global mega-trends influence our society – urbanisation and demographic change. These trends affect our lives and vital sectors in society. Questions that arise are; how can you power a planet hungry for electricity without damaging it? How can diseases be detected before they strike? How can you manufacture customized products at affordable prices? Siemens has been and is concerned with answering Photo courtesy of: Corline J. Roka
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such questions by developing innovative products, solutions and services. Innovative solutions will increase the share of renewable energy production and enable CO2-free emissions from coal and gasworks. Even with today’s consumer patterns, energy consumption can be significantly streamlined by using new technology. Bellona and Siemens have prepared a report regarding energy efficiency that shows that as much as 21 TWh can be freed up through available technology. This corresponds to 20 percent of Norway’s domestic electricity consumption. Siemens works continuously to increase its presence in the Norwegian market, e.g. by highlighting the advantages of being an international player with a broad range of products, solutions and services in combination with solid value creation in Norway suited to local needs. In the future, Siemens will increase its profile in the areas of energy, industry and health.
Profitable growth is a prerequisite for attaining Siemens’ ambitious goals for the years ahead. Internally, the company works continuously on improvement initiatives to increase competitiveness and profitability. Fit42010 is the Siemens Group’s global improvement programme. This is the successor to the Fit4More programme that proved extremely successful. Fit42010 focuses on people excellence, operationial excellence, portfolio and corporate responsibility. Focus on our staff and further development of their expertise is a key to Siemens attaining its objectives. We work actively and determinedly to continue Siemens Management Systems and top+ focusing on customer requirements, project management and performance culture. In order to succeed in its ambitious goals, Siemens must maintain high ethical standards in relation to staff, customers, partners and others. The important work to achieve this will continue apace in the years to come.
Trygve Refvem
Hans Lødrup
Anne Kathrine Slungård
Per Otto Dyb
Dr. Heinrich Hiesinger
Roy Lund
Lars Barstad
Espen Ingebrigtsen
30 September 2007 6 December 2007
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Income statement
All amounts in NOK thousands
2007
2006
5,347,800 154,363 5,502,163
5,308,386 27,804 5,336,190
3,220,022 1,518,553 47,146 7,982 449,536
3,431,528 1,384,074 45,708 2,218 230,923
5,243,239
5,094,451
258,924
241,739
56,671 -58,902 -2,231
83,679 -80,644 3,035
256,693
244,774
-79,785
-76,238
Profit for the year
176,908
168,536
Application and distribution of profit Dividends Other equity
120,000 56,908
120,000 48,536
176,908
168,536
Revenues Other revenues Total revenues Raw materials and consumables Salaries and personnel costs Depreciation and amortisation expenses Bad debts Other operating costs
Note 2,3 4
5 9 13 5,9
Total operating costs Operating profit Financial income Financial expenses Net financial items
6 7
Profit before taxes Taxes on ordinary profit
Total
8
15
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Balance Sheet
All amounts in NOK thousands
30.09.07
30.09.06
9
28,817 28,817
14,264 14,264
9
337,808
368,045
5 10 10
87,290 136,079 15,166 6,088 29,286 273,909
128,152 45,884 15,166 6,137 31,344 226,683
640,534
608,992
66,328 0 1,203,800 302,556 30,683 44,495 4,253
64,874 27,311 1,618,005 59,210 0 105,295 5,455
Total current assets
1,652,115
1,880,150
Total assets
2,292,649
2,489,142
Assets Intangible assets Goodwill Total intangible assets Tangible non-current assets Financial non-current assets Pension assets Investments in subsidiaries Investments in associated companies Other investments Other non-current receivables Total financial non-current assets
Note
11
Total non-current assets Current assets Inventories Current tax assets Trade receivables Receivables from group financing system Other short term receivables from group Other receivables Bank deposits
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12 8 13 14
14
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Balance Sheet
All amounts in NOK thousands
Note
Equity and liabilities Equity Share capital Additional paid-in capital Retained earnings
30.09.07
30.09.06
140,000 30,000 244,794
140,000 30,000 192,727
Total equity
15
414,794
362,727
Provisions Pension plans Deferred income taxes Total provisions
5 8
252,413 99,983 352,396
256,476 85,323 341,799
323,122 5,477 141,484 120,000 93,244 13,116 26,772 140,000 662,244 1,525,459
424,670 0 111,338 120,000 207,063 119,791 32,756 40,000 728,998 1,784,616
Total liabilities
1,877,855
2,126,415
Total equity and liabilities
2,292,649
2,489,142
Current liabilities Accounts payable Current tax liabilities Social security, VAT and other taxation payable Dividends Payables to group financing system Advances from customers Guarantee provisions Group contribution Other current liabilities Total current liabilities
8 15 14
17
30 September 2007 6 December 2007
Trygve Refvem
Hans Lødrup
Anne Kathrine Slungård
Per Otto Dyb
Dr. Heinrich Hiesinger
Roy Lund
Lars Barstad
Espen Ingebrigtsen
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Cash flow statement
All amounts in NOK thousands
2007
2006
256,693 -1,697 47,146 -74,899 311,202
244,774 -46,373 45,708 25,426 -337,779
36,799 -480,103 -104,691
14,572
-9,550
-51,603
1,656 -33,096 537,936 -21,279 27 485,244
33 -15,196 10,242 0 0 -4,921
-357,190 294 -120,000 -476,896
165,607 14,507 -119,000 61,114
-1,202
4,590
Cash and cash equivalents at 01.10
5,455
865
Cash and cash equivalents at 30.09
4,253
5,455
Cash flow from operating activities Profit before taxes Taxes paid Depreciation and amortisation Gains/losses and impairments on shares and fixed assets Changes in inventory, trade receivables and accounts payable Differences between recorded pensions and contributions/disbursem*nts Net book value disposal of business segment Changes in other assets and liabilities Net cash generated from operating activities Cash flow from investing activities Proceeds from sale of fixed assets Acquisitions of fixed assets Proceeds from disposal of business / effects of spin-off Purchases of other shares Proceeds from sale of other shares Net cash flow from investing activities Cash flow from financing activities Net change from intercompany financing activities Dividends received Dividends paid Net cash flow from financing activities Net change in cash and cash equivalents
2,069
Siemens AS uses the indirect method for presentation of the cash flow statement in accordance with the interim Norwegian Accounting standard for cash flow statements. The indirect method shows the gross cash flows from investing and financing activities, while the accounting profit is reconciled with the net cash flow from operating activities.
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energy efficiency
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Notes note 1
Accounting principles General The financial statements for Siemens AS have been prepared in accordance with the Accounting Act (Norway) and generally accepted accounting practice in Norway. The accounts are based on fundamental accounting principles in accordance with the Accounting Act (Norway) § 4-1, lowest value principle and the assumption of continuing operations. Siemens AS has invoked section 3-7 of the Accounting Act (Norway) relating to exceptions from the consolidated accounts obligation for parent companies in sub-groups consequently Siemens AS does not prepare its own Group accounts. Please refer to the annual report for Siemens AG. As of 30.09.07 the Group comprises the parent company Siemens AS and related subsidiaries in Norway. See Note 10 for further details in respect of ownership interests in subsidiary companies. Siemens AS has a non-calendar year-end of 30.09. Revenues Siemens business primarily comprises ongoing projects lasting from several months to three or four years. For long-term construction contracts the NASB Standard for construction contracts has been applied. Items are posted to the income statement following periodic calculations used to determine the extent to which the projects are completed. The extent of completion is determined by the costs incurred to date compared with the total estimated costs. Onerous projects have the expected loss expensed immediately. Projects which have shorter durations or contract amounts not exceeding NOK 500.000 are recognised in accordance with the completed contract method for recognition of income and expenses. Classification of balance sheet items Assets / liabilities relating to the operating cycle and items falling due within one year of the balance sheet date are classified as current assets / current liabilities. Current assets / current liabilities are valuated at the lower / higher of historic cost and fair value. Fair value is defined as the estimated future sales price minus expected cost to sell. Other assets are classified as
non-current assets. Non-current assets are valued at acquisition cost. Non-current assets which have a limited useful life are written down using a reasonable depreciation plan. Non-current assets are written down to fair value if the impairment loss is deemed to be other than temporary. Write-downs are reversed if the reason for the impairment is no longer valid. Assets and liabilities in foreign currencies Financial entries in foreign currencies are valued using the exchange rate prevailing at the end of the financial year. Receivables Accounts receivable are valued at face value on the balance sheet date less a deduction for the provision for expected losses. Inventory Inventory of purchased goods is valued at the lower of average cost of acquisition or expected net realisable value. Goods produced in-house and construction projects in progress are posted at the lower of full construction cost or expected net realisable value. Construction cost refers to direct and indirect construction costs including part of the fixed costs of production. Shares and investments Shares intended for long-term ownership are posted to the balance sheet as financial non-current assets and are valued at cost price. Write-downs based on expected long-term declines in value are made following an individual assessment of each investment. In Siemens AS accounts the cost method is used for all ownership interests in companies, including subsidiaries. Use of estimates Preparation of the annual accounts in accordance with good accounting practice requires the use of estimates and assumptions which affect the income statement and value of assets and liabilities, as well as information on unsecured assets and obligations at the balance sheet date.
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Accounting principles cont. Derivative currency contracts Siemens AS hedges cash flows from contracts denominated in foreign currencies as part of its risk management strategy. Forward contracts are valued at fair value on the balance sheet date.
• Machines 4 – 10 years • Fixtures, fittings and IT systems 3 – 5 years • Buildings and plants 40 – 50 years • Goodwill 7.5 years • Plants under construction are not depreciated.
Siemens AS uses hedge accounting for contracts exceeding € 1 million. The purpose of hedge accounting is to recognise the offsetting charges in fair value or cash flows of the hedging instrument and the hedged item in the income statement at the same time. The effectiveness of the hedge is continuously measured and documented in accordance with requirements for the use of hedge accounting. If the requirements for the use of hedge accounting are not met, the accounting treatments for the hedged item and the hedging instrument follow their own respective valuation rules.
Pension costs and pension obligations Siemens AS introduced its defined contribution pension plan from the start of fiscal 2007 for all employees with over 10 years remaining until their retirement age as calculated from the end of 2006. The contributions are 4% of each employee’s base salary for amounts between 1 G and 6 G (where G is a base amount approved by the Norwegian parliament) For base salaries between 6 G and 12 G the contribution rate to the plan is 8%. Accrued pension rights were converted into individual paid-up policies.
For fair value hedge accounting unrealised gains and losses on the hedged item and the hedging instrument are recognised in the income statement. This principle applies when the hedged item is regulated by contract.
For employees with fewer than 10 years until retirement age, the previous scheme with the right to defined benefits continues for these members, but is regarded as a closed scheme. The accounting treatment for this pension scheme is in accordance with the updated NASB 6 standard for pension costs.
Unrealised gains and losses on the hedging instrument are recognised directly in equity for cash flow hedge accounting. Deferred tax is calculated on the allocation directly in equity. Tangible and intangible non-current assets Tangible and intangible non-current assets are carried at their cost of acquisition after deducting for accumulated depreciation and impairments. Tangible and intangible non-current assets are valued at the lower of cost and fair value. Non-current assets with economic lives of less than three years or acquisition prices under NOK 15.000 are expensed in their year of acquisition. Costs associated with normal maintenance and repairs are expensed on an ongoing basis under operating costs. Ordinary deprecation begins from the time the noncurrent asset becomes operational and is calculated using the straight-line method over the useful economic life of the asset.
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Pension obligations are valued at the present value of future pension benefits which have been earned at the balance sheet date. The future pension benefits are calculated based on the estimated salary at the time of retirement. The pension plan assets are valued at estimated market value on the balance sheet date. Net pension obligations on underfunded contracts are posted to the balance sheet as obligations, while net pension funds on overfunded contracts are posted to the balance sheet as financial non-current assets. Net pension costs for the period are recognised in the income statement under salaries. Accumulated effects of changes in accounting estimates and errors exceeding 10 percent of the greater of the value of pension obligations and plan assets are posted to the income
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statement over the remaining service period. Changes in accounting estimates and errors for the closed scheme are posted to the income statement over the remaining service period. Taxes Tax comprises taxes payable and changes in deferred taxes. Taxes payable are calculated from the taxable profit. Changes in deferred tax are based on changes in estimates in tax-increasing and tax-reducing temporary differences.
note 2
Deferred tax in the balance sheet is calculated based on the temporary differences between the value for tax purposes and the accounting value of assets and liabilities and losses and refunds to be carried forward at the end of the fiscal year. Tax-reducing temporary differences as well as refunds and losses to be carried forward are offset against tax-increasing temporary differences for the same period. Full allocation is made in accordance with the liability method using nominal amounts.
Business segment information All amounts in NOK millions Revenue by business segment: Energy & Automation Automation & Drives Transportation Systems Oil and Gas Electrical Installation Medical Solutions Communication Building Technologies Other business areas Total revenue
2007
2006
1,397 442 153 960 1,349 343 380 313 11 5,348
1,192 194 144 1,013 976 419 1,021 288 61 5,308
The majority of the company’s revenue derives from operations in Norway. In fiscal 2007 exports accounted for MNOK 591 of total revenue.
note 3
Long-term construction contracts All amounts in NOK millions Recorded revenue from projects in progress - Costs related to earned revenue and provision for loss Recorded net revenue from projects in progress
2007 2,189,337 1,929,053 260,284
2006 3,043,008 2,661,042 381,966
Remaining production relating to onerous contracts as at 30.09.07 represents MNOK 5.9. Earned but not invoiced revenue amounts to MNOK 290.1 while production invoiced in advance totals MNOK 301.7.
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Other revenues All amounts in NOK thousands Rental income from property Gain on sale of business segment Other revenues Total other revenues
note 5
2007 64,946 88,338 1,079 154,363
2006 27,304 0 500 27,804
All amounts in NOK thousands Salaries and holiday pay Social security tax Net pension costs Other personnel costs
2007 1,149,988 171,785 139,521 57,259
2006 1,087,321 159,107 68,373 69,273
Total salaries and other personnel costs
1,518,553
1,384,074
2,195
2,212
Salaries, remuneration and pension costs
The average number of man-years employed from 01.10 - 30.09 was The net cost of the pension benefit plans includes the cost for the defined contribution plan. Remuneration to the Board of Directors in Siemens AS for 2006/2007 was NOK 869.000. The Managing Director’s salary in the period 01.10.06-30.09.07 was NOK 3.905.682. Other taxable remuneration totalled NOK 311.776. The Managing Director is included in the pension plan for senior executives in Siemens AS. Pension contributions of NOK 888.015 were paid-in. He earns a performance-based salary, and paid bonus which is included in the taxable remuneration. The Managing Director has no agreement in respect of severance pay which entitles him to remuneration in the event of termination or change of office. The Managing Director has been granted 16,020 options to buy shares in Siemens AG. The total exercise price for the options is NOK 9.273.460. The options can be exercised from 2006-2010. He has also been granted 930 shares with a zero exercise price. The shares are eligible for sale in 2008 at the earliest. The Managing Director has exercised 7,090 options during 2007 with a gain of NOK 1.488.220. The profit from the options depends upon the difference between the share price of Siemens AG and the exercise price at the time the options are exercised.
The Managing Director has a loan from his employer of NOK 50.000 as at 30.09.07. The loan falls due in approximately one and a half years and is subject to a normal interest rate of 4.75%. A debt certificate has been issued as security for the loan. The Managing Director is Chairman of the Board of the subsidiary company Siemens Oil & Gas AS. No remuneration was paid to the Board in 2007. The Chairman of the Board of Directors received 160,000 in Board remuneration from October 2006 to June 2007. During this time the Chairman has been paid a pension of NOK 1.698.462 for 2007; other taxable remuneration amounted to NOK 160.000. The Chairman has been granted 9,400 options on shares in Siemens AG. The total exercise price for the options is NOK 6.325.300. In 2007 the Chairman has exercised 6,500 options with a gain of NOK 777.525. The Chairman has received NOK 100.000 in Board remuneration for the period July 2007 to September 2007. The Chairman has not been granted any options or shares during this time. Other members of the Board have not been granted options or shares. Other employees have loans from the company totalling NOK 27.5 million. The loans are to be paid down over a maximum of 10 years; normal interest rates are charged on the loans. No special collateral other than debt certificates has been issued for the loans.
Auditor Fees for audit services expensed to income statement Audit fee for legally required audit Fees for services other than auditing / other attestation services Fees for tax advice Total fees for audit services The fees are presented exclusive of VAT.
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2007 3,074,000 1,750,740 731,556 5,556,296
2006 2,597,250 414,050 723,881 3,735,181
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Cost of pension benefit plans and pension obligations The pensions follow the requirements set forth in the NASB updated standard 6 for the accounting treatment of the cost of pension benefit plans and pension obligations. From the start of the fiscal year Siemens AS has introduced a new defined contribution plan which follows the Act on mandatory company pensions. The contributions are 4% of each employee’s base salary for amounts between 1 G and 6 G (where G is a base amount approved by the Norwegian parliament). For base salaries between 6G and 12 G the contribution rate to the plan is 8%. During 2007 a total of MNOK 37.5 was paid in to the staff. At the same time the previous defined benefit plan has been closed for those members who have switched to the defined contribution plan and accrued pension rights were converted into individual paid-up policies. The previous arrangement providing the right to defined future benefits (defined benefit plan) was closed but continues for employees with fewer than 10 years remaining until retirement age at the end of 2006. Thus the closed scheme has 346 active members as well as 950 pensioners. The pension benefits are primarily determined based on the employee’s length of service, base salary on retirement and the extent of the benefits from the Norwegian government’s social security system for pensioners. The plan defines net benefits to ensure that the obligations remain unaffected by any change in the formulae used by the social security services. The obligations are covered by the insurance company Storebrand Livsforsikring AS and the pension plan assets are managed and invested in compliance with Storebrand’s standards. The transition from a defined benefit plan to a defined contribution plan occurred smoothly in close dialogue with the employees’ elected representatives.
In addition to the pension obligations covered by the insurance arrangement, the company also has uninsured pension obligations. These operational pension schemes cover obligations relating to the early retirement scheme, as well as obligations in respect of 38 active and 24 retired executives. The aforementioned scheme has been updated for those members who are working at year-end and a one-time cost reduction in pension obligations (DBO) amounting to MNOK 12.532 has been recorded. In accordance with the conditions set forth in the updated NASB 6 the actuarial values of pension assets and pension obligations for 2006/07 is based on updated figures from the insurance company and Siemens AS close to the settlement date. The financial assumptions which form the basis for the actuarial calculations for 2006/07 are evaluated in respect of the prevailing economic conditions, NASB recommendations and Group policy. The discount rate has been increased by 0.45% compared with the previous year’s level following a rise in long-term interest rates. Changes in the pension obligations and pension plan assets due to changes in estimates are treated separately for insured and uninsured pensions. Changes in estimates which do not exceed 10% of the pension obligations for the uninsured schemes are recognised in a correction post (in the corridor) in the accounts. Amounts in excess of the estimates are recognised over the remaining service period of 15 years. For the closed pension scheme the corridor has been set to zero, due to the short remaining service period. Changes in estimates are recognised over the average remaining service period of 3 years. The pension costs are accounted for in accordance with the actuarial calculations.
Pension cost All amounts in NOK thousands Service cost Interest cost of pension obligation Expected return on plan assets Share of actuarial losses recorded to income statement Change to the scheme recorded to income statement Net obligation settlements recorded to income statement Pension cost inc. employers pension contributions recorded to I/S
2007 23,670 45,166 -39,331 4,891 68,051 -429 102,018
2006 57,699 63,698 -58,180 5,155 0 0 68,372
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Salaries, remuneration and pension costs cont. Pension obligations/plan assets All amounts in NOK thousands Pension obligations (DBO) including employer’s pension contributions Plan assets (fair value) Net assets/obligations (-) Unrecognised effects of changes in estimates
30.09.07 -959,012 688,654 -270,358 105,235
30.09.06 -1,336,049 987,152 -348,897 220,572
Net plan assets/obligations (-)
-165,123
-128,325
Recognised net pension obligations Recognised net plan assets
-252,413 87,290
-256,476 128,152
5.55 % 4.0 % 2.0 % 4.0 % 6.5 %
5.1 % 3.0 % 2.0 % 3.0 % 6.0 %
Financial assumptions: Discount rate Expected salary increase Expected pension increase Expected increase in the social security base amount Expected return on pension plan assets
Actuarial assumptions: The calculations are based on standardised assumptions, the K 2005 table, for mortality and disability rates, as well as other demographic indices prepared by the Norwegian Financial Services Association.
note 6
Financial income All amounts in NOK thousands Group interest income Other interest income Gains on sale of subsidiary Group dividends received Dividends received Foreign exchange gain Total financial income
note 7
2007 5,869 10,399 1,562 291 3 38,547 56,671
2006 3,249 3,162 3,677 14,507 0 59,084 83,679
2007 8,052 3,753 15,000 32,097 58,902
2006 5,045 255 28,800 46,544 80,644
Financial expenses All amounts in NOK thousands Group interest expense Other interest expense Impairment of shares Foreign exchange loss Total financial expenses
58
A further assumption has been made in respect of expected turnover which gradually falls from 8% in the age group 20-24 years old down to 0% for those 51 years old or elder. This represents a turnover of 2-3% for the workforce as a whole.
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note 8
Taxes Basis for taxes payable All amounts in NOK thousands Profit before taxes Permanent differences/other differences Change in tax-increasing / reducing temporary differences Effects of change in deferred tax resulting from spin-offs and mergers¹ Effect of items recorded to equity Adjustments from previous years Basis for taxes payable
2007 256,692 22,981 -53,073 -74,568 -6,414 -1,141 144,477
2006 244,774 27,505 -430,374 0 -7,127 0 -165,222
Payable tax at 28% Current taxes of income tax expense
40,454 40,454
-46,262 -46,262
Income tax expense for the year is derived as follows: Current taxes on net income Change in net deferred tax obligation / deferred tax benefit Adjustment for items taken to equity Total tax expense for the year
40,454 37,535 1,796 79,785
-46,262 122,500 0 76,238
Current taxes in the balance sheet are derived as follows: Current tax on net income Reduction in taxes payable due to Group contribution Taxes payable in previous years etc. Total current tax
30.09.07 40,454 -39,200 4,223 5,477
30.09.06 -46,262 -11,200 30,151 -27,311
Specification of basis for deferred tax: Offsetting tax increasing / tax reducing differences: Non-current assets / non-current liabilities Current assets / current liabilities Total
30.09.07
30.09.06
-72,530 423,199 350,669
-102,033 399,629 297,596
Items taken to equity Total basis for deferred taxes 28% Deferred taxes (+) / deferred tax assets (-)
6,414 357,083 99,983
7,127 304,723 85,322
1) During the financial year the company has merged with 4 subsidiaries, in addition to spinning off a business segment into a separate company. The mergers and spin-off have been accounted for using the pooling of interest method.
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Property, plant, equipment and intangible assets Land/ Non buildings current assets 461,766 333,448 0 13,009 0 27,489 461,766 318,968
Total 833,604 33,096 27,489 839,211
166,796 294,970
276,130 42,838
472,586 366,625
5,534
10,562
31,050
47,146
straight line
straight line
straight line
All amounts in NOK thousands Acquisition cost Additions during the year Disposals during the year - acquisition cost Cost as of 30.09.07
Goodwill 38,390 20,087 0 58,477
Accumulated depreciation and write-downs as of 30.09.07 29,660 Book value as of 30.09.07 28,817 Depreciation during the year Depreciation method The amortisation period for goodwill is set for between 5 and 7.5 years. The general rule in respect of the Accounting Act (Norway) requires a 5 year amortisation period. The operations from the company formerly known as Auticon Alarm AS in Mid-Norway form an integral part of the total range of products and services in Security Systems within the Building Technologies division. The services provided via the alarm station together with the security services supplement the electronic solutions which the clients have installed and it is vitally important that Security Systems continue to provide these type of services. The security services were sold to Vakt Service AS as of 01.09.05. However a new agreement has been made with Vakt Service AS in order to provide the complete range of services to the customers there. Vakt Service AS is our partner in a joint venture which provides
Leases All amounts in NOK thousands Buildings Motor vehicles Furniture and office equipment Total cost of leases Leases in respect of office and warehouse property run for up to 8 years. Siemens AS has signed leases on four office premises in various locations in Norway. The contract with the longest term expires at the end of 2014. The company has signed leases for motor vehicles and delivery trucks which run from two to five years.
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the manual services. The future prospects in the market are regarded as very promising and the type of services which will be provided in the future are under continuous development. Therefore we have chosen a five year amortisation period. The addition of capitalised goodwill during the year relates to the merger with El Trade AS. The activities which are now part of the Automation & Drives division comprise sale of the engines and gear systems to the offshore and marine markets. Through our close customer relations and thorough product knowledge, Siemens AS will further strengthen its position as a supplier and as a result of the merger has a backlog of orders stretching to 2010 - 2011. The capitalised goodwill is written-off over five years.
2007 16,177 30,304 5,900 52,381
2006 15,986 17,400 5,521 38,907
Siemens AS has entered into contracts for the hire of office machinery and coffee machines. The office machinery contract expires on 30.09.2009 and the coffee machines are on a 36 month renewable lease.
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note 10
Shares All amounts in NOK
Place of business
Company Number of Nominal Total nominal share capital shares value value
Book Ownership value interest
Shares in subsidiaries: Siemens Business Services AS
Oslo
40,000,000
8,000
Siemens Oil & Gas Offshore AS
Oslo
100,000
1,000
5,000 40,000,000 61,054,750 100
100,000 62,040,000
100% 100%
Bewator AS
Oslo
500,000
500
1,000
500,000 12,856,000
100%
Proton AS
Oslo
100,000
100
1,000
100,000
100%
Total shares in subsidiaries
127,813 136,078,563
Shares in associated companies: Osram AS
Lysaker
20,000,000 200,000
100
8,800,000 15,166,000
Total shares in associated companies
All amounts in NOK thousands Subsidiaries not consolidated and associated companies: Bewator AS Proton AS Osram AS
100% of the shares in Bewator AS were acquired by Siemens AS during the fiscal year. The company sells access control systems and was transferred to Siemens AS as at 01.10.07. The following subsidiary companies were merged as of 01.10.06: Alf H. Andersen AS, Ing. Mosness & Mosness Inst. AS and Høvik Elektriske AS.
note 11
44%
15,166,000
Net income AS AT 30.09.06
Equity AS AT 30.09.06
491 -4 142
1,542 110 107,477
Klima Teknikk AS has been sold as per November 2006. Siemens AS invokes section 3-7 of the Accounting Act (Norway) relating to exceptions from the consolidated accounts obligation for parent companies in sub-groups. To receive a copy of the Group financial accounts please contact us at the following address: Siemens AG, Wittelsbacherplatz 2, D-80333 Munich, Federal Republic of Germany.
Other non-current receivables All amounts in NOK thousands Loans to employees (cf. note 5) Other non-current receivables Total other non-current receivables
30.09.07 27,524 1,762 29,286
30.09.06 29,770 1,574 31,344
The summary shows the carrying value of receivables which fall due more than one year from the balance sheet date.
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Inventories All amounts in NOK thousands Raw materials and supplies Work in process Finished goods and products held for resale Total inventories
30.09.07 14,509 1,837 49,982 66,328
30.09.06 9,048 4,372 51,454 64,874
Inventory is valued at the lower of acquisition cost and fair value; deduction has been made for non-current inventory.
note 13
Trade receivables All amounts in NOK thousands Bad debts Recovered from previously written-off receivables Change in allowance Bad debts All amounts in NOK thousands Gross trade receivables Provision for bad debts Unbilled revenue Net trade receivables
note 14
2007 3,242 -338 5,078 7,982
2006 1,621 -712 1,309 2,218
30.09.07 831,418 -8,049 380,431 1,203,800
30.09.06 890,711 -4,049 731,343 1,618,005
30.09.07 4,253 4,253
30.09.06 5,455 5,455
Bank deposits All amounts in NOK thousands Bank deposits Total
Siemens AS has no restricted liquid assets. Siemens AS holds a bank guarantee for NOK 64 million for payment of employees’ tax deductions. All bank activities are carried out through the in-house banking system with Siemens AG (Siemens Financial Services GmbH). Consequently Siemens AS has no credit or liquidity risk, as these reside with Siemens AG. Siemens AS has apportioned MNOK 225 of its holdings in the in-house bank to higher interest rate accounts.
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note 15
Equity and shareholder information All amounts in NOK thousands Share capital
Additional paid-in capital
Retained earnings
Total equity
140,000
30,000
139,059
309,059 168,536 -120,000 5,132 362,727
Equity as of 01.10.05 Net income Dividends Foreign currency effects posted directly to equity Equity as of 30.09.06
140,000
30,000
168,536 -120,000 5,132 192,727
Equity as of 01.10.06
140,000
30,000
192,727
362,727
176,908 -120,000 4,909 -9,750
176,908 -120,000 4,909 -9,750 -23,630 23,630 414,794
Net income Dividends Merger subsidiaries Foreign currency effects posted directly to equity Spin-off Oil & Gas business Issuance of shares for mergers and spin-off Equity as of 30.09.07
-19,460 19,460 140,000
* Non-restricted equity represents NOK 185.5 million as of 30.09.07. Cash Flow Hedge Accounting is applied when accounting for the instrument used to hedge cash flows. The value of the hedging instrument is posted directly to share capital, recognising the tax at balance sheet date. The pooling of interests method was applied for the merger of Alf H Andersen AS, Høvik AS and Ing. Mosness & Mosness Inst. AS as of 01.10.06, which is accounted for directly to equity. As of 01.04.07 Siemens AS spun off its international oil business from the Oil & Gas division to Siemens Oil & Gas Offshore II AS. The share capital was reduced by 19 460 shares with a nominal value of NOK 1.000, and a reduction in additional paid-in capital of MNOK 4.17 as a result of the spin-off. On the
note 16
-4,170 4,170 30,000
244,794
same day Siemens Oil & Gas Offshore II AS was merged with the wholly owned subsidiary Siemens Oil & Gas Offshore AS. In respect of which Siemens AS issued shares equivalent to the reduction in share capital in the spin-off as settlement to the parent company Siemens International Holding BV. As a result of the mergers and spin-off Siemens AS issued a merger receivable for 31.76 MNOK, equivalent to the share capital in Siemens Oil & Gas Offshore AS. If the merger receivable is paid-in or converted to equity then there will be a resulting tax event for Siemens AS. Share capital and additional paid-in capital remain unchanged for Siemens AS as of 30.09.07. As of 30.09.07 the company’s share capital comprises 140,000 shares with a nominal value of NOK 1.000 each. The company’s shares are entirely owned by Siemens International Holding BV which, in turn, is wholly owned by Siemens AG.
Derivative currency contracts All amounts in NOK thousands Foreign currency forward contracts: Buy EUR/ sell NOK Sell EUR/ buy NOK Buy USD/ sell NOK Sell USD/ buy NOK
Currency amount 87,484 56,898 14,920 3,433
Amount in NOK 706,051 463,638 87,344 19,835
Average agreed exchange rate 8.0706 8.1486 5.8542 5.7781
Exchange rate at 30.09.07 7.7160 7.7160 5.4437 5.4477
Average remaining maturity (days) 276 381 145 55
Based on the applicable guidelines all future cash flows and positions in foreign currency shall be hedged by using forward contracts and options. Underlying the use of these financial instruments is an emphasis on security in respect of offsetting the actual cash flows during the normal course of business. Siemens AS currency exposure relates to purchases in EUR and USD and sales in EUR. The currency risk associated with confirmed sales and purchase orders are fully hedged. In addition, options are used to hedge against volatility during the bidding process on projects. All hedging transactions are executed via Siemens AG’s internal bank, Siemens Financial Services GmbH.
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Other current liabilities All amounts in NOK thousands Salaries and holiday pay Unearned revenue Provisions Billings in excess of costs and estimated earnings on uncompleted contracts and related advances Other current liabilities
30.09.07 195,388 34,774 60,578
30.09.06 234,613 34,689 41,094
301,664 69,840
354,705 63,897
Total other current liabilities
662,244
728,998
30.09.07
30.09.06
530 3,007 3,537
771 113,688 114,459
Pledges and guarantees All amounts in NOK thousands Guarantees Guarantees for employees Guarantees for subsidiaries Total guarantees In previous years, Siemens AS has assumed the responsibility as guarantor for subsidiaries’ employees’ tax deduction obligations and for bank guarantees in our subsidiary companies’ names to cover these obligations. During 2007 three subsidiary companies have merged with Siemens AS and Siemens Business Services AS has sold the part of its operations which related to the contracts. As at 30.09.07 Siemens AS has a contractual responsibility in the form of a bank guarantee for payment of the employees’ tax
note 19
strategy
deductions for Siemens Business Services totalling NOK 600.000 and is the unconditional guarantor for the contractual obligations issued on behalf of Siemens Oil & Gas Offshore AS with a nominal value of NOK 2.407.000. For further information about the bank guarantee which Siemens AS has for the payment of employees’ tax deductions, see note 14. Siemens AS has no assets pledged as security for liabilities.
Off-balance sheet liabilities Siemens AS has a guarantee liability to Siemens Financial Services AB to customers for equipment supplied. The delivery is funded by a loan from Siemens Financial Services AB. The guarantee amounts to NOK 1.1 million as at 30.09.07.
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energy efficiency
operations
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note 20
Spin-off and merger On 01.04.07 Siemens AS spun off its international oil operations from the Oil & Gas division to the acquiring company Siemens Oil & Gas Offshore II AS. Spun-off as at 01.04.07 All amounts in NOK thousands Assets Property, plant and equipment Inventory Other current assets Total assets
2,889 179,057 114,641 296,587
Equity and liabilities Deferred tax Provisions Group company liabilities Other current liabilities Total equity and liabilities
19,233 47,194 6,551 35,318 108,296
Net value spun-off
188,291
Equity spun-off Share capital Additional paid-in capital Total equity Spin off difference Siemens Oil & Gas Offshore II AS was wholly owned by Siemens International Holding BV, which also owns all the shares in Siemens AS. A subsequent merger with the wholly owned subsidiary Siemens Oil & Gas Offshore AS was carried out in accordance with the triangle merger method. Siemens AS has issued new equity to Siemens International Holding BV, in compensation for the transaction.
19,460 4,170 23,630 164,661 If the merger receivable is paid in or converted to equity in Siemens Oil & Gas Offshore AS, this will result in a tax obligation for Siemens AS corresponding to the taxable value of the receivable. The objective of the change in corporate structure is to focus all the expertise in international oil and gas operations into a single company.
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solutions
note 21
managing director
siemens in norway
strategy
Mergers Subsidiaries In fiscal 2007, Siemens AS merged the following subsidiary companies: Alf H Andersen AS, Høvik Elektriske AS and Ing. Mosness & Mosness Inst. AS. This comes into effect for accounting purposes on 01.10.06. The accounting treatment is in compliance with the rules for merger accounting. The effect of the merger of the subsidiaries on total equity amounts to MNOK 4.9.
Merger balance sheet as of 01.10.06 All amounts in NOK thousands Assets Deferred income tax assets Property, plant and equipment Receivables Inventories Bank
1,594 1,709 24,507 6,433 8,764
Total assets
43,007
Equity and liabilities Current liabilities Provision for liabilities Total liabilities
23,723 5,813 29,536
Equity Total equity and liabilities
4,909 34,445
Net value merger
8,562
The total book value of the shares in Siemens AS of the merged subsidiary companies is reconciled against the net value of the merger. The companies operate electrical installation businesses and form part of the Electrical Installations division, with regional centres in Sandefjord, Høvik in Oslo and in Drammen.
El Trade AS During the financial year Siemens AS has acquired 100% of the share capital of El Trade AS at fair value. The merger was carried out using the pooling of interest method and has no effect on equity. Merger balance sheet as at 01.04.07 All amounts in NOK thousands Assets Total non-current assets Inventories Receivables Bank deposits
114 39 19,105 7,317
Total assets
26,575
Equity and liabilities Current liabilities Total equity and liabilities
21,568 21,568
Net equity offset capitalisation of goodwill Following the merging of the company, Siemens AS was allocated goodwill amounting to MNOK 20.187 as of 01.04.07. Value of the goodwill is determined in accordance with the principles of merger accounting.
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5,007 The merged company supplies motors and gear systems to the offshore and marine market and forms part of the Automation & Drives division.
energy efficiency
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note 22
Transferring of companies During the fiscal year, Siemens AS has disposed of a business in the Communication division. The business is incorporated into the newly established company Nokia Siemens Networks AS, of which Siemens AG holds 50% of the share capital.
Disposal of business as at 01.04.07 All amounts in NOK thousands Assets Property, plant and equipment Inventories Receivables Total assets
2,667 39,332 409,928 451,927
Equity and liabilities Current liabilities Non-current liabilities
137,680 22,435
Total equity and liabilities
160,115
Net difference in value
291,812
The business was sold for MNOK 381 with a profit for accounting purposes of MNOK 88.3.
note 23
Financial market risk Siemens AS does not use financial instruments related to commodities and interest-bearing derivatives. Siemens AS eliminates any credit risk or liquidity risk through use of the in-house bank.
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Siemens’ addresses in Norway as of 1 January 2008
Head office in Oslo Østre Aker vei 90 0596 Oslo Postal address Postboks 1 0613 Oslo Tel: +47 22 63 30 00 Fax: +47 22 63 38 05 Trondheim Bratsbergveien 5 7037 Trondheim Postal address 7493 Trondheim Tel: +47 73 95 90 00 Fax: +47 73 95 90 70 Bergen Kanalveien 5 5068 Bergen Postal address Postboks 6215 5893 Bergen Tel: +47 55 17 66 00 Fax: +47 55 17 69 00
Bodø Pålsveien 6 Postboks 641 8001 Bodø Tel: +47 75 54 15 00 Fax: +47 75 54 15 01
Narvik Kongens gate 14 Postboks 79 8501 Narvik Tel: +47 76 96 13 00 Fax: +47 76 96 13 09
Buskerud Austadg. 21 3043 Drammen Tel: +47 32 88 22 90 Fax: +47 32 88 22 91
Sogn og Fjordane Steinaveien 3 Postboks 253 6801 Førde Tel: +47 57 72 29 70 Fax: +47 57 72 29 71
Harstad Storåkeren 11 9411 Harstad Tel: +47 77 07 99 00 Fax: +47 77 07 99 01 Haugalandet Salhusveien 165 5538 Haugesund Tel: +47 52 70 51 70 Fax: +47 52 70 51 80
Agder dept. Flekkefjord Strandgt. 16 4401 Flekkefjord Tel: +47 38 32 69 00 Fax: +47 38 32 69 01
Helgeland dept. Mo Vikaveien 33 Postboks 344 8601 Mo Tel: +47 75 12 80 50 Fax: +47 75 15 26 40
Agder dept. Kristiansand Ægirsvei 10 4632 Kristiansand S. Tel: +47 38 14 54 50 Fax: +47 38 14 54 66
Industry Division Svenskeveien 20 8622 Mo Tel: +47 75 12 73 60 Fax: +47 75 12 73 90
Asker and Bærum Gamle Drammensvei 107 Postboks 141 1322 Høvik Tel: +47 67 53 69 11 Fax: +47 67 53 60 02
Helgeland dept. Mosjøen Kulstadbakken 15 Postboks 20 8655 Mosjøen Tel: +47 75 18 86 30 Fax: +47 75 18 86 40 Namsos Dampskipskaia Postboks 559 7801 Namsos Tel: +47 74 27 50 85 Fax: +47 74 27 57 27
Stavanger Gamle Forusvei 1 Postboks 8036 Postterminalen 4068 Stavanger Tel: +47 51 82 70 70 Fax: +47 51 82 70 30 Steinkjer Bogavegen 6 Postboks 2012 7707 Steinkjer Tel: +47 74 14 44 40 Fax: +47 74 14 44 41 Stjørdal Kjøpmannsgt.1 7500 Stjørdal Tel: +47 74 83 70 30 Fax: +47 74 83 70 39 Sunnmøre dept. Ålesund Holssletta 4 Postboks 8081 Spjelkavik 6018 Ålesund Tel: +47 70 15 26 50 Fax: +47 70 15 26 52
Standvegen 2B 3736 Skien Tel: +47 35 59 48 60 Fax: +47 35 59 48 61 Tromsø Strandveien 144B 9006 Tromsø Postboks 6130 9291 Tromsø Tel: +47 77 60 89 00 Fax: +47 77 60 89 99 Verdal Neptunveien 6 7650 Verdal Tel: +47 46 43 39 30 Fax: +47 74 04 00 98 Vestfold dept. Larvik Elveveien 27 3262 Larvik Tel: +47 33 13 81 20 Fax: +47 33 18 79 88 Vestfold dept. Sandefjord Hegnasletta 12 Postboks 1514 3206 Sandefjord Tel: +47 33 48 31 50 Fax: +47 33 46 45 04 Østfold Oskars gate 68/70 Postboks 184 1701 Sarpsborg Tel: +47 69 14 83 00 Fax: +47 69 14 83 01
Telemark Bedriftsveien 86 3735 Skien Tel: +47 35 50 64 50 Fax: +47 35 50 64 51
Contact information Siemens AS Corporate Communications is responsible for this publication. Siemens AS Corporate Communications Postboks 1 0613 Oslo www.siemens.no For further copies please contact us via e-mail: [emailprotected] telephone: 22 63 30 00 Changes of address are to be sent to e-mail: [emailprotected] fax: 22 63 39 36 concept, design and typesetting cox design: cox oslo as photos berit roald, scanpix and siemens printing ts trykk as translation amesto translations as, oslo
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Over the last 110 years Siemens has helped in the development and modernisation of Norway. Through the field of electronics we are advancing progress in vital areas of society such as energy, industry and health. More than 50,000 active patents and over 8,000 new inventions a year make Siemens one of the world’s most innovative companies. Our Norwegian staff of 3,000 is contributing to giving Siemens a leading position in important sectors of society.
www.siemens.no
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