Ingenuity for Life
Siemens
Tagline
Net Worth
$141,950,000,000
Started in (City)
Munich
Started in (Country)
Germany
Incorporation Date
01st December, 1847
Bankruptcy Date
-
Founders
- Werner von Siemens
About
Siemens Aktiengesellschaft, in short Siemens AG, ranked 74th in the industrial sector of the Fortune Global 500, is a German-based global tech powerhouse headquartered in Munich and the largest manufacturing European-settled company having abroad branch offices.
The prime divisions of the company are Energy, Industry, Infrastructure, Cities and Healthcare also the Siemens Healthineers.
The company\’s second-most profitable unit, the medical health-care division,
makes about 12 percent of the company’s total sales, after the industrial automation division.
Beginning
Siemens was started with a Telegraph Construction Firm, founded in Berlin, 1847 by Werner von Siemens, Johann Georg Siemens, and Johann Georg Halske who was less focused towards expansion of the company, in 1867 left control to the four Siemens brothers, William Siemens latter headed the company in 1858 succeeding to introduction of mass production.
The company’s activities resulted in an Industrial Revolution, advancing to include dynamism cables, telephones, electric power and lighting.
1903, the limited-liability company, Siemens & Halske AG passed on its power-engineering doings to Siemens-Schuckertwerke, chaired by the same officer. In 1932, the production of medical diagnostic and therapeutic equipment was initiated following the merging of the Erlander firm, forming Siemens-Reiniger-Werke AG. The House of Siemens, broadened greatly on the Third Reich and all the plants excelled during World War II.
In 1966, all the essential companies grouped into one new created Siemens AG, growing gradually the operations through the remaining 20th century.
At the start of the new decade of the new century, the net income increased from EUR 1.2 billion to EUR 8.9 billion. Establishing its mark as a world-class company, Siemens went to conduct a surgery on itself, eradicating stout from all divisions and units to edge its concentration on IT & Communications and industry.
Road to Success
Despite major uncertainties due to the global COVID-19 pandemic, Siemens AG maintained its course very successfully in Q3 of fiscal 2020, both strategically and operationally. In a challenging macroeconomic environment, the company’s Industrial Businesses generated a strong EBITA margin of 14.3 percent. Adding 1.7 percentage points to this margin was a positive effect of €211 million at Digital Industries. Siemens successfully avoided major supply chain bottlenecks in connection with the COVID-19 crisis despite taking precautionary measures, which were in some cases substantial, to prioritize workforce health and safety. With free cash flow of more than €2.1 billion in its Industrial Businesses (€2.5 billion at Group level), Siemens has sufficient liquidity to master the COVID-19 crisis effectively – or to emerge from it even stronger than before.
Revenue and net income were both below their prior-year levels, but exceeded market expectations and outpaced competitors – in some cases significantly. In a persistently uncertain environment, Siemens confirms the second-quarter estimates of its outlook for fiscal 2020 and expects a moderate decline in revenue on a comparable basis. The book-to-bill ratio – that is, the ratio of orders to revenue – is expected to remain above 1. Due to the continuing volatility of sales markets and to regulatory uncertainties in connection with measures for combating the COVID-19 pandemic, the company refrains from giving guidance for basic earnings per share from net income for fiscal 2020.
“Despite the global crisis, which remains very severe, we’re maintaining our course successfully and delivered strong operating performance in Q3,” said Joe Kaeser, President and CEO of Siemens AG. “At the same time, we rigorously drive our company’s realignment forward. Our strategy concept Vision 2020+ is gaining traction, and Healthineers is testimony that shows the program’s strategic and transformational power. Our employees and our partners have my deep gratitude and respect for this outstanding performance under extremely difficult circumstances.”
Challenges
Siemens meets the internet challenges. As the company is at a stand of leading industrial digitalization and automation, it realized on an early stage on cybersecurity playing an integral role in the digital revolution. The IoT ( Internet of Things) is unimagined without cybersecurity in this exponential growth of digital technology. The innovative and mind bending digital solutions are at risk without the protection of users data and handling.
“If our customers aren\’t confident that our systems are secure, Siemens and its product will fail”. The future of manufacturing achieves dismissing any human intervention, and is made possible by machines talking with each other. Operational Technologies are illuminated and supervised by software and connectivity. Without the cybersecurity, ultimately hackers gain access to product designs and disrupt the supply chain and other confidential information.
IoT allows Siemens to compose smart infrastructures embedded with intelligent devices, ultimating to organize sustainable smart cities.
The company developed a holistic approach to cybersecurity. The head for Siemens is that it knows its customers and the industry, it knows the specific or targeted attacks to the OT (Operational Technology), consequently understands how the digital environments impact the services and products their customers offer correspondingly.
The principal competitors of this world-class industrial enterprises are ABB Ltd, General Electric Company, Hitachi Ltd, MItsubishi Electric, Regal Beloit, Honeywell, Philips, CE power, BHEL and Bosch India.
2005: Worldwide bribery scandal. Germany held investigations into Siemens business practices worldwide, induced by the requests from auditors in Italy, Liechtenstein and Switzerland, US investigators discoursed violations since 2001, when Siemens started trading shares in a US stock exchange.
During that span, the company paid bribes of around $1.3 billion in several countries by keeping separate records to hide them.
The investigation starts to unfold and the fines were predicted to be as high as $5 billion. The settlement deliberations were handled in most of the year 2008.
The company paid around $800 million in each of Germany and the US, totalling to about $1.6 billion, accounting to one of the largest bribery fines in history at the time. It was also compelled to spend $1 billion on funding and settling up new internal conformity procedures. As the scandal had started bustingly opening up, the company fired its chairman and the CEO, subsequently hiring a non-German CEO, appointing a US lawyer to run as an incharge of compliance.
To win a $1 billion contract to make nationals identity cards, $40 billion in bribes was given to Argentina.
For a contract to build power plants, $20 million in bribes in Israel.
Failures
Prior to the corruption scandal, the reputation of Siemens was extremely good. It was renowned for its technological products and reliable services in telecommunications, power, transportation and medical equipment. It was common to see articles featuring its activities in remote areas, developing new high quality products and winning competitive bids. So the world was taken by surprise when the police raided the company headquarters in Munich as well as other subsidiaries on November 15th 2006. The company’s first reaction was to claim innocence and to blame events on a small “criminal gang” . For years the company had pretended to do business according to the highest ethical and legal standards. Since at least 1991, Siemens had developed corporate anti-corruption norms, fancy codes of conduct and strict business guidelines. It was even selected to become a corporate member of Transparency International’s German chapter in 1998 – a non-governmental organisation created to fight corruption.
The reality was completely different. Since at least the 1990s, Siemens had organised a global system of corruption to gain market share and increase its price. It was able to get away with this because of big loopholes in the legal systems of a host of countries, including Germany. Over many decades bribes became the accepted business norm at Siemens. They were channelled through hidden bank accounts, obscure intermediaries and pseudo “consultants”. When calculating the cost of a project, Siemens employees used “nützliche aufwendungen”, a common tax term literally translated as “useful expenditures” or internally understood as “bribes.”
The situation wasn’t helped by the fact that the law in Germany was written in a way that allowed bribes to be accounted for as tax-deductible expenses. This changed in 1999 when the country finally brought its law into line with the 1997 OECD Convention on Combating Bribery. This made it illegal to bribe foreign officials for a German company. On the day the new law was passed in February that year, discussions began at the highest level at Siemens on how to handle the new regulation.
Achievements
- Siemens 2017 Customer Excellence Award winners include
- 2021 Engineers’ Choice Awards
- 2020 Leadership in Automation: First Team Honorees
Subsidies
- OSRAM GmbH
- Nokia Siemens Networks
- Oxford OMT
CEOs
- Roland Busch
- Joe Kaeser