Net income for fiscal 2003 was €2.445 billion, representing a 47% increase from €1.661 billion a year earlier, excluding a tax-free gain of €936 million from sales of Infineon shares.

Group profit from Operations increased to €4.295 billion. The majority of Siemens Groups reported higher earnings and margins year-over-year.

Net cash from operating and investing activities was €1.773 billion, including €5.712 billion in net cash from operating activities. Net cash provided by operating activities included cash outflows of €1.192 billion in supplemental cash contributions to Siemens pension trusts. Net cash used in investing activities of €3.939 billion included increases in investments and marketable securities of €957 million, and €929 million for a strategic acquisition at Power Generation.

Sales were €74.233 billion and orders were €75.056 billion, down 12% and 13%, respectively from the prior year. Adjusting for currency effects and portfolio activities, sales and orders were 4% and 5% lower, respectively, than a year earlier.

Siemens management proposes a dividend of €1.10 per share.

For the fourth quarter, net income rose sharply year-over-year, to €724 million, and Group profit from Operations climbed 56%, to €1.102 billion. Net cash from operating and investing activities of €1.246 billion included €750 million in supplemental cash pension contributions. Fourth-quarter sales and orders were 7% and 4% lower than the prior year quarter but rose 14% and 8%, respectively, compared to the third quarter of fiscal 2003.

In October 2003, at the beginning of the new fiscal year, Siemens made additional supplemental cash pension contributions of €1.255 billion.

“Operation 2003 has been a clear success,” said Siemens CEO Heinrich v. Pierer. “We increased net income nearly 50% compared to the prior year, on a comparable basis. The other objectives we achieved, such as strong cash flows from Operations, are also signs of improved operational performance. Given the difficult economic environment during fiscal 2003, these achievements represent a major success.”

“Following the volume declines of the past year, which were substantially driven by currency translation, our goal in fiscal 2004 is to restore growth and win market share,” Pierer said. “As a number of our Groups have demonstrated, we are well positioned for this effort, with our clear customer focus, strength in innovation, global competitiveness, and sound financial condition. These qualities also create the basis for double-digit percentage growth in net income for fiscal 2004, assuming generally stable economic conditions.”

For the fiscal year ended September 30, 2003, Siemens reported net income of €2.445 billion and earnings per share of €2.75. Fiscal 2002 included a tax-free gain of €936 million on sales of shares in Infineon Technologies AG, which boosted net income in that period to €2.597 billion and earnings per share to €2.92. Excluding the Infineon gain, net income rose 47% year-over-year from €1.661 billion. The major component of this improvement was growth in Group profit from Operations, which climbed 14% to €4.295 billion for the year. Group profit margins rose at 10 of the 13 Groups in Operations and at Siemens Financial Services (SFS). Losses related to Siemens’ ownership of Infineon decreased and positive effects from Corporate Treasury also contributed to net income growth for the year.

Net cash from operating and investing activities was €1.773 billion in fiscal 2003 compared to €4.754 billion a year earlier, a period which included significant net proceeds from portfolio activities. Within Operations, net cash provided by operating activities was €4.123 billion compared to €4.277 billion in the prior year. Both periods included supplemental cash contributions to Siemens pension trusts, totaling €1.192 billion and €1.782 billion in fiscal 2003 and 2002, respectively. In fiscal 2003, net cash used in investing activities of €3.939 billion included €929 million to acquire the industrial turbine businesses of Alstom S.A., and €957 million in increases in investments and marketable securities.

Sales of €74.233 billion and orders of €75.056 billion reflected macroeconomic conditions, the strong decline in the value of the U.S. dollar relative to the euro during the fiscal year, and the net effects of acquisitions and dispositions compared to fiscal 2002. Excluding currency and portfolio effects (i.e., on a comparable basis), sales and orders were within 4% and 5%, respectively, of prior-year levels. Against this backdrop, a number of Siemens’ earnings leaders increased both sales and orders year-over-year on a comparable basis, including Medical Solutions (Med), Automation and Drives (A&D), Siemens VDO Automotive (SV), and Osram.

Siemens AG