Siemens' December-quarter sales down 10% on a year ago: ICN down 29%; ICM 9%

29 January 2003 -- Compared to a year ago, Siemens' December-quarter sales were down 10% to EUR18.845bn, with ICN fixed-line telecoms division down 29% and ICM wireless telecoms division down 9%.

29 January 2003 -- For fiscal Q1/2003 (to end-December 2002), compared to the year-ago fiscal Q1/2002, Munich-based Siemens AG's sales were EUR18.845bn (down 10%, or 1% excluding currency effects and acquisitions and dispositions) and orders were EUR20.145bn (down 21%, or 13% excluding currency effects and acquisitions and dispositions).

Net income was EUR521m (including -EUR17m related to its ownership of shares in Infineon Technologies AG) down 3.2% on a year ago (which included +EUR157m related to Infineon). Earnings before interest and taxes (EBIT) from operations were up 24% to EUR604m.

Siemens' international sales were EUR14.641bn (down 12%, or 2% excluding currency and deconsolidation effects) and orders EUR15.484bn (down 23%, or 15% excluding currency and deconsolidation effects). In Germany sales were EUR4.204bn (down 5%, or 2% excluding deconsolidation effects) and orders EUR4.661bn (down 10%). US sales were EUR3.903bn (down 24%) and orders EUR3.965bn (down 36%). In Asia-Pacific, sales were EUR2.066bn (down 14%) and orders EUR2.146bn (down 34%), or down 3% and 25%, respectively, excluding the deconsolidation of Infineon and currency effects. China continued to account for the largest share in the region, contributing EUR643m, but was 23% down.

The results are "better than we expected," said CEO Heinrich von Pierer. "However we stand by the overall outlook which we provided in December. The margins of our groups continue to move toward their target ranges specified in Operation 2003."
Siemens' Information and Communication Networks (ICN) fixed-line telecoms division continued to address the steep downturn in telecoms infrastructure investment, particularly by carriers in Germany and the Americas.

ICN's sales fell 29% to EUR1.804bn, about 10% of the change due to currency effects and the deconsolidation of its Unisphere Networks Inc and Network Systems businesses. EBIT worsened from -EUR124m (including EUR76m in charges related to job cuts and investment writedowns) to -EUR151m (including EUR49m in charges).

ICN's Enterprise Networks division was profitable and increased its EBIT, while business volumes declined due to the effects of dispositions and more selective order intake. However, ICN's Carrier Networks and Services business posted negative earnings on lower business volume, but losses were lower than in recent quarters due to a better product mix driven by software-related contracts.

Orders were EUR1.940bn (down 26%). ICN will continue its PACT cost-cutting program in 2003 and incur further associated severance expenses, but von Pierer still expects it to break even by the end of fiscal 2003.

Siemens' Information and Communications Mobile (ICM) wireless-telecoms division increased EBIT from EUR37m to EUR59m, but sales fell 9% to EUR2.856bn and orders 24% to EUR2.509bn. ICM Mobile Phones division's EBIT rose from EUR20m to EUR52m on sales of EUR1.309bn (with phone sales up from 9m to a record 11m) but ICM's Mobile Networks division slumped from EBIT of EUR8m to a loss of EUR25m on sales of EUR1.199bn.

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