Sip - Final Report Dtd. 05.09.21

SUMMER INTERNSHIP PROJECT WORK
REPORT
ON
“Siemens AG”
Submitted in partial fulfillment of the requirements for the award of the

Degree of Bachelor of Commerce of CHRIST (Deemed to be University)
By
SHAKTHI P RAI - 1910371

SHRADHA MATHEW -1910372
SWATHI -1910374
Under the guidance of
Dr. G. Suresh
Assistant Professor
DEPARTMENT OF COMMERCE
CHRIST (Deemed to be University)
Bangalore
2020-2021
DECLARATION
We, Shakthi. P. Rai – 1910371, Shradha Mathew - 1910372 and Swathi - 1910374, do
hereby declare that the Summer Internship Project Report on "Siemens AG" has been
undertaken by us as part of our studies in the degree of Bachelor of Commerce. We have
completed this study under the guidance of Dr. G. Suresh, Assistant Professor,
Department of Commerce, CHRIST (Deemed to be University), Bangalore.
We also declare that this work has not been submitted for the award of any degree, diploma,
associateship or fellowship or any other title in this University or any other University.
Place: Bangalore
Date: 20.05.2021 Shakthi.P. Rai - 1910371
__________________________
Shradha Mathew – 1910372
__________________________
Swathi - 1910374
___________________________
CERTIFICATE
This is to certify that the Summer Internship Project Work report on “Siemens AG”
submitted by, Shakthi. P. Rai – 1910371, Shradha Mathew - 1910372 and Swathi -
1910374, is a record of project work done by them during the academic year 2020-21 under
my guidance and supervision in partial fulfillment of the requirements for the award of the
Degree of Bachelor of Commerce of CHRIST (Deemed to be University). This report has not
been submitted for the award of any degree, diploma, associateship or fellowship or any other
title in this University or any other University.
Place: Bangalore (Name & Signature of the Guide)

Date: 20.05.2021 Dr. G. Suresh
Assistant Professor,
Department of Commerce
ACKNOWLEDGEMENTS
We are indebted to many people who helped us accomplish this internship successfully.
First, we thank the Vice Chancellor Dr. Fr. Abraham.V.M. of CHRIST (Deemed to be
University) for giving us the opportunity to do our report on United Nations Sustainable
Development Goals 15 - Life on Land.
We thank Dr. Tomy.K.Kallarakal, Associate Dean, Dr. Theresa Nithila Vincent, Head of
the Department, Programme Coordinator Dr. Raghunandhan of B.Com Programme,
Department of Commerce for their kind support.
We thank our guide Dr. G. Suresh, Assistant Professor, Department of Commerce, for his
support and guidance during the course of our report work. We remember his with much
gratitude for his patience and motivation.
SHAKTHI.P.RAI- 1910371
SHRADHA MATHEW -1910372
SWATHI - 1910374
TABLE OF CONTENTS
A. Profile of the Company 1-12
1.1. Introduction 1
1.2. Overview 1
1.2.1. Company logo 2
1.3. Vision 2020+ 2
1.4. Mission 3
1.5. Goals 3
1.6. History and Milestones 4
1.7. Board Structure 8
1.7.1. Managing Board Members 8
1.8. Business Divisions 9
1.8.1. Business Division Management 10
1.9. Product Groups and Services 10
1.10. Main Competitors 11
1.11. Business Model 12
B. Organizational Analysis 13-33
2.1. PESTLE Analysis 13
2.2. SWOC Analysis 14
2.3. Strategic Analysis 15
2.3.1. Marketing Strategy 15
2.3.2. Expansion Strategy 16
2.4. Financial Analysis 18
2.4.1. Solvency Ratios 18
2.4.2. Profitability Ratios 25
C. Learning Outcome 34-35
3.1. Conclusion 34
3.2. Learning Experience 34
3.3. Team Contribution 35
REFERENCES
APPENDIX
Summer Internship Project Work Siemens
AG
SECTION A
PROFILE OF THE COMPANY
1.1. Introduction
Siemens AG is a conglomerate multi-national company with business in engineering and

capital goods, energy, electrical and electronics, healthcare, digital industry, infrastructure
and mobility. The company has its head-quarters in Munich, Germany. The company has
about 293,000 employees in about 190 countries worldwide.
It began as an electrical engineering firm producing electrical telegraphs in 1847, and later
expanded its reach to include telegraph lines, ultimately building the world's first electric
streetcar line. Siemens purchased and merged with numerous other firms in the twentieth and
early twenty-first centuries to extend its capabilities and specialization.
1.2. Overview
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1.2.1. Company logo
1.3. Vision 2020+
The company’s Vision 2020+ is “The strategy to shape next-generation Siemens. Set the
course for long-term value creation through accelerated growth and stronger profitability with
a simplified company structure. The main aim is to give Siemens individual businesses
significantly more entrepreneurial freedom under the strong Siemens brand to sharpen their
focus on their respective markets”.
1.4. Mission
Siemens ambition as a technology organization is to use the intersection of digitalization and

sustainability to solve the world's most pressing challenges. By providing technology with a
Department of Commerce 2020-21 Page 2

AG
reason to make manufacturing safer, infrastructure more energy efficient, provide access to
renewable energy, and transport smarter and healthier for the world, we help to shape the
backbone of society.
1.5. Goals
Goal 1: Grow Company Value.
KPI: Margin lift at Industrial Businesses +2 ppts. EPS growth > revenue growth
Goal 2: Sharpen business focus in E-A-D.
KPI: Accelerated comparable revenue growth +2 ppts. CAGR
Goal 3: Be a partner of choice for customers.
KPI: >20% improvement in customer satisfaction index
Goal 4: Get closer to markets.
KPI: Significant share of business HQs outside Germany
Goal 5: Live lean governance and drive continuous

optimization.
KPI:>20% efficiency improvement of support functions in scope +20% Global
Business Services efficiency (fully optimized)
Goal 6: Be an employer of choice.
KPI:Improvement in employee satisfaction index
Goal 7: Ignite pride and passion for Siemens through

owbnership culture.
KPI: Improvement of approval ratings in employee surveys for aspects of
leadership, openness, diversity and innovation
1.6. History and Milestones
1847 - German inventor Mr. Werner von Siemens lays the foundation for an enterprise with
his design for the pointer telegraph.

AG
1856 – Currently called as “Siemens & Halske,” the company mainly manufactures telegraph
lines and has manpower of 330 staff.
1866 – Discovery of the dynamo-electric principle by Mr. Werner Von Siemens and
production of dynamo series is started by 1875.
1895 - South Africa’s first power plant built by Siemens & Halske.
1897 - Siemens & Halske becomes a stock corporation.
1903- Merger of Siemens & Halske with major Nuremberg-based power plant builder
Elektrizitäts-Aktiengesellschaft vorm. Schuckert & Co. (EAG), forming the Siemens-
Schuckertwerke GmbH division, which focus in the high-voltage system market.
1914- Almost all of Siemens & Halske’s production activities are centralized at Berlin suburb
which later becomes referred as “Siemensstadt” (Siemens City).
1919 – During the war and its repercussion, Siemens transpires as world’s leading electrical
engineering firms inspite of losing forty percent of its capital and majority of
subsidiary companies.
1920 – Siemens acquires shares in Deutsche Gasgluhlicht AG, forming OSRAM and entering
the market of incandescent lamp.
1924- Siemens-Schuckertwerke and Westinghouse sign an agreement for the “regular

exchange of patents and knowhow,” kicking off a long relationship.
1927 – The first industrial Benson boiler factory was put up at Gartenfield cable plant, Berlin
by Siemens.
1932 – Siemens combines its majority shares in medical technology firm Reiniger, Gebbert
and Schall (purchased in 1924) to form Siemens Reiniger Werke AG.
1949- Siemens established its headquarters in Munich while Siemens Schuckertwerke

establishes its headquarters in Erlangen.
1950- Siemens starts to rebuild with a renovative international focus. Large contracts, for
instance, the national telecommunications network in Saudi Arabia, the 300MW San
AG
Nicolas plant in Argentina and a steel mill for India significantly expand Siemens
export market.
1953- Siemens discovers and patents a method for producing ultra pure silicon for
semiconductor applications, which is yet another breakthrough in the field of
electrical engineering. It also ventures into the field of data processing.
1958 - SIMATIC., the first control system using transistors is introduced by Siemens.
1959 – Siemens bags the first order for a gas turbine – VM80.
1964 - A 220kV SF6 HV CB is introduced by Siemens.
1966– Siemens AG is formed by the merger of Siemens and Halske AG, Siemens
Schuckertwerke AG and Siemens-Reiniger- Werke AG.
1969 - Siemens divides its operations into six essentially self-contained functional groups –
materials, data systems, power engineering, telecommunications and so on.
1974 - Siemens is able to develop the first nuclear plant, the 660-MW Stade nuclear plant,
thanks to research at a small reactor in Munich. It switches on the 1.2-GW Unit A
reactor at the Biblis nuclear power plant two years later.
1975- Between the Cabora Bassa power plant, Mozambique and the Republic of South
Africa, Siemens launches the world's first thyristor-operated long-distance HVDC
transmission system.
1980 - Siemens makes a promising debut in digitalizing telecommunications technology after

focusing on microelectronics since the 1960s.
1984 - A MEGA project is launched by Siemens to take forward the development of chips.
1989 - Siemens restructures again, dividing its eight departments into 15 new, leaner units,
two working groups, and two autonomous divisions, accepting that it has become "too
sprawling" to operate efficiently. Power generation, transmission and distribution, as
well as industrial and construction systems, are all examples of units.

AG
1993 - The Siemens-built Rye House combined cycle power plant in England, with a capacity
of 704 megawatts, is widely regarded as a success for the new power generation
technology.
1998- Siemens profits drop as a result of a series of missteps. In yet another major
reorganization, the corporation decides to keep only those companies in which it is
first or second in the global market.
1998 - The Westinghouse’s gas turbine is acquired by Siemens.
2000 - First 501FD gas turbine is built in Orlando by Siemens.
2001 - Siemens reactor division is restructured, and its nuclear operations are combined with
Framatome, creating AREVA NP.
2004- Siemens has acquired Bonus Energy A/S, a Danish wind energy company established
in 1980 with a 3.3 GW installed base in 20 countries.
2005 - Siemens bases its business on "megatrends," with a particular emphasis on electricity,
the atmosphere, automation, infrastructure, and healthcare.
2006 - Siemens is forced to pay €1.2 billion in fines as a result of a compliance audit, which
has resulted in a widespread management shakeup.
2007 - Siemens expands its technical capabilities by acquiring UGS Corp., a leader in digital
product data management, computer aided design, and manufacturing process
simulation.
2008 - Siemens restructures once more, dividing its ten business units into three markets and
15 divisions. The energy sector primarily consists of oil and gas firms, as well as
power generation, transmission, and distribution.
2009 - The SGT5-8000H has completed a trial run at the Irsching 4 power plant in Bavaria.
In 2011, the gas plant was eventually turned on, with a then-record performance of
60.75 percent.

AG
2009 – Siemens sells its 34% share in AREVA.
2011 -Siemens, which constructed all 17 of German nuclear plants, declared its retirement
from the nuclear industry as the country moves toward a nuclear phasevout.
2014 - Siemens AG CEO Joe Kaeser announces the company's long-term strategy, Vision
2020. Siemens concentrates on electrification, automation, and digitalization,
according to the strategy. The number of business divisions is reduced from 16 to 10.
2015 - Dresser-Rand is purchased by Siemens for $7.8 billion. The Energy unit's
headquarters, led by Lisa Davis, have been moved to the United States.
2016 - MindSphere, a cloud-based operating system for the Internet of Things, is unveiled by
Siemens.
2017 - Siemens and Gamesa have merged their wind companies, resulting in a portfolio of
onshore and offshore wind and associated services covering 90 countries.
2018 - Vision 2020+ is launched by Joe Kaeser. All divisions are organized into three
operating companies and three strategic companies. The Gas and Power corporation,
which is led by Davis, is responsible for the energy companies, which include oil and
gas, transmission, power generation, and distributed energy.
2019 - Siemens is spinning off its lucrative Gas and Power Company and transferring its
existing majority 59 percent interest in Siemens-Gamesa to the new business in 2020,
signaling the end of a period for the company's long and significant stake in the
energy business.

AG
1.7. Board structure
Figure 1.0: Siemens two-tier board structure
Siemens is governed by German Company law as a German stock company with registered
offices in Munich and Berlin. As a result, the management and board structure is two-tiered
with a Managing board and a Supervisory board as shown in the figure above.
1.7.1. Managing Board Members
 Dr. Roland Busch, President and Chief Executive Officer

 Cedrik Neike, Member of the Managing Board
 Matthias Rebellius, Member of the Managing Board
 Ralf P. Thomas, Prof. Dr., Chief Financial Officer
 Judith Wiese, Member of the Managing Board
1.8. Business Divisions

21.7%
margin -
EBITA
Adjusted
15.0 billion
Revenue - €
71,700
Employees -
(a) Digital Industries

9.1%
margin
EBITA
Adjus
14.3 b
Reven
Emplo
69,60
AG
1.8.1. Business Division Management
Cedrik Matthias Michael Aymeric Dr. Horst J. Dr. Bernd

Neike
Digital Rebellius
Smart Peter Sarrazin
Siemens Kayser
Portfolio Montag
Siemens
CEO CEO Mobility
CEO CEO CEO CEO
Industries Infrastructure Advanta Companies Healthineers
Rudolf Ariane Dr. Martin Dr. Jochen

Axel Meier Karl Blaim
Basson Hemmer Meyer Schmitz
CFO CFO
CFO CFO CFO CFO
1.9. Product Group and Services
Power
generation
technology Industrial
and
PLM buildings Business Services
software
automatio
n
Services Financing
Product Group
Medical
Fire alarms Project
technology
Engineering and
Construction
Water
treatment Railway
vehicles
systems

AG

AG
1.10. Main Competitors

Summer Internship Project Work Siemens AG
1.11. Business model

Key Partners Key Activities Value Proposition Customer Relationships Customer Segments
Shareholders Research and development High technology to  Long term Corporate in different
Product design, Production Planning optimize performance vertical segment.
Acquisitions. Engineering, Execution and costs.  High tech
Municipalities
Supply Chain management
Subsidiaries Wide range of products  Innovation
Manufacturing, Production, Operations and services for Transportation and
Joint Ventures (Accenture, Quality Control different industries. logistics
 Intellectual property-
Zhuzhou China and Silcar) Power generation technology agreements
Industrial and building automation Pushing borders with
Industry Medical technology innovation.  Partnerships
Railway vehicles
Medical Institutions The company is a
Water treatment systems  Automation
prominent maker of
Power Plants Fire alarms medical diagnostics
PLM software  Customer assistance
equipment and its
Automotive Industry Business services medical health-care
Financing division.  Training
Research and academic Project engineering and construction
institutions
Key Resources Channels
Sponsorships
 362,000 people world wide. Global presence with project
 Operations in around 190 countries, teams.
approximately 285 production and
manufacturing facilities. Dedicated teams in vertical
 Siemens held approximately 53,300 patents markets.
world wide.
 Intellectual property, Financial Resources, Corporate offices.
Brand, Reputation.
 Medical health care division generates about Corporate contact.
12% of the company’s total sales – its
second most profitable unit after the Website
industrial automation division.
Social networks
Cost Structure Revenue Structure
- Research and Development, Design and Manufacturing, - Sale of equipment and Service fees
- Cost of components and equipment, contract manufacturing. - Orders and Contracts
- Siemens invested a total of 3.925 billion in R&D equivalent to 5.3% - Dividends on affiliated companies
revenues per annum. - Licensing
SECTION B
ORGANISATIONAL ANALYSIS
2.1. Pestle Analysis
Political
 Siemens is based out of Germany, which has friendly relations with the vast
majority of the nations.
 Terrorism and common agitation and political vulnerability across Europe, center
east and African business sectors may affect Siemens business.
Economic
 Asia to be key market for Siemens with china developing quick and openings in
Iran after simplicity of approvals.
 Growth in savvy city projects worldwide are colossal potential for Siemens as it
has aptitude across areas.
Social
 Siemens Europeans at Siemens programs empowers understudies from select

nations to partake work study program in Germany.
 Fosters proprietorship culture with representative shareholding and puts
exceptionally in worker preparing and instruction.
Technologies
 Siemens to reinforce initiative in digitalization and computerization by joining

programming, stage and administrations.
 Dedicated until ‘Next 47’, for advancement and improvement of cutting edge
tech with euro one billion spending plan for 5 years will head to development.
Legal
 Claims looked by Siemens can significantly influence benefit.
Environmental
 Siemens focus to become carbon non-partisan by 2030 by contributing over 100

million euro.
 Siemens ecological tech assisted its customers with decreasing their co2
impression by 521 million tons by FY 16
2.2. SWOC Analysis
Strengths Weakness
Number one globally in industrial Reliance on third party workers.

digitalization, automation and
electrification. Lawsuits faced by Siemens can
significantly affect profitability.
Consistent share holder returns and strong
ownership culture.
Dedicated unit 'Next 47' for innovation

and development of next gen
technologies.
Opportunities Challenges
Siemens can strengthen leadership in The pandemic continues to pose

digitization by combining software obstacles which has resulted slump in
platforms and services. production, sales, transportation and
liquidity issues.
Digitalization is a huge market with new
opportunities and rapid growth in coming Siemens have Group Presidents that
years. were also members of the overall firm’s
managing board, which can present a
conflict of interest.
Increase in Smart City projects globally
to spur demand of next generation
technology can drive growth. Lack of structure within the corporate
departments within the company

Siemens AG
With operations in about 190 countries around the world and a 160 year old history, the
Page 15
Segmentation is the
key element in
The company
corporation has positioned itself as a leader in most of the industries it serves.
identifying different
has
set/group of
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ng targeting
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2020-21
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mentation government
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it uses demographic bundled
uses user
and psychographic with other
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segmentation offerings.
oning strateg
strategies for the y for the
products and same.
services meant
Summer Internship Project Work
for retail customers.

Strategic Analysis
2.3.1. Marketing Strategy
Department of Commerce
(a) Segmentation
(c) Positioning
(b) Targeting
Key factors
2.3.
(i)
• Mission: Use the intersection of digitalization and sustainability

to solve the world's most pressing challenges. By providing
technology with a reason to make manufacturing safer,
(d) Marketing Mix infrastructure more energy efficient, provide access to renewable
energy, and transport smarter and healthier for the world, we
help to shape the backbone of society.
• Vision: “The strategy to shape next-generation Siemens. Set the

course for long-term value creation through accelerated growth
and stronger profitability with a simplified company structure.
The main aim is to give Siemens individual businesses
significantly more entrepreneurial freedom under the strong
Siemens brand to sharpen their focus on their respective
markets”.
• Tagline: “Ingenuity of Life”.
(ii) Competitive advantage
 Research and development: Siemens increased its research and development spending in
2020 to 4.6 billion €. The ratio density, which is defined as the ratio of spending to
research and development to revenue, is 5.9%. As of the financial year 2020, it had more
than 60000 patents registered worldwide and a devoted workforce of more than 40800
people.
 Broad industrial presence: The Company is active in a variety of industries, including

technological services, renewable energy, electrical engineering, power and gas, and
health. This aided the organization in gathering knowledge about process synergies
across the board.
(iii) BCG Matrix
Building Technologies, Digital Factory, Energy Management, Financial Services,

Mobility, electronics, Power and Gas, Power Generation Services, Process Industries and
Drives, and Siemens Healthiness are among the company's businesses. Siemens strategic
business units, such as electronics and electrical engineering, process automation, and
industrial software production, are BCG matrix stars, and these businesses have a

stronghold in Europe, whereas the company's other companies are BCG matrix question
marks.
(iv) Distribution
By integrating its supply chain and processes and working collaboratively with suppliers
and customers to manufacture and deliver Made to Order (MTO) products, the company
was able to deliver its products and services to the end customers.
2.3.2. Expansion Strategy
Siemens aims to attain and retain market and technology leadership in all of its
businesses in order to generate long-term profitable growth and, as a result, to
continuously raise its corporate value. As a result, its strategy is manifested in three
different ways:
Growth markets driven by innovation: The Company is forging new ground while
concentrating on growth markets. Its efforts are focused on innovation-driven markets
with long-term growth potential, and it intends to be a leader in these sectors. Siemens is
constantly improving its offerings and increasing its environmental portfolio in order to
achieve this goal.
Customer approach: They want to be close to their markets, partners, and customers, so
they want to get closer to them. As a result, they are also pursuing the professionalization
and growth of their service offer as a strategic goal. They are creating a slew of new
business prospects while also bolstering consumer retention. Furthermore, Siemens is
always enhancing its already extensive engagement with clients in order to better
understand what truly benefits them.
“One Siemens” approach: To be among the greatest, it is important to have the

presence of an exceptional team which facilitates excellence in all work. As a result, their
final commitment is the integrity of their staff. The 'One Siemens' approach is based on

the initiative that each staff contributes to the company's success by his or her knowledge,
compromise, and pioneer spirit.
Recent acquisitions and product development: Total 53 companies acquired out of

which 18 companies are acquired in last 5 years. Total 19 acquisitions are from private
equity firms. Siemens AG made its largest acquisition to date in 2015, when it paid $7.8
billion for Dresser-Rand Group. Its greatest publicly reported transaction was the $2.4
billion sale of Sivantos Group to EQT Holdings AB in 2014. Siemens AG is constantly
developing its Digital Enterprise portfolio with cutting-edge technologies such as
artificial intelligence and edge computing, allowing for fundamentally new ways to use
digital data to boost productivity and build new business models.
2.4. Financial Analysis
2.4.1. Solvency Ratios
Summary
Table 1: Solvency ratio Summary
Solvency Ratio Summary 2020 2019 2018

Debt Ratios
Debt to equity 1.22 0.76 0.71
Debt to capital 0.55 0.43 0.41
Debt to assets 0.43 0.36 0.23
Financial leverage 2.83 2.08 3.05
Coverage Ratios
Interest coverage 7.83 7.95 8.20

Solvency ratio: debt ratios Solvency ratio: coverage ratios

3.5 8.3
8.2
3
8.1
2.5
8
2
7.9
1.5
7.8
1 7.7
0.5 7.6
2018 2019 2020
0
2018 2019 2020
Interest coverage
Debt to equity Debt to capital Debt to assets Financial leverage
(a) Solvency ratio: debt ratios (b) Solvency ratio: coverage ratios
Figure 2.1 (a). Solvency ratio: debt ratios: This figure illustrates Siemens Solvency ratio: debt ratio for
FY 2020, 2019 and 2018. (b) Solvency ratio: coverage ratios: This figure illustrates Siemens Solvency
ratio: coverage ratio for FY 2020, 2019 and 2018.

Solvency ratios are used to assess a company's capacity to meet long-term obligations. From the
above figure 2.1 (a) and (b), following observation is noted.
 Debt to equity: From the figure 2.1, this ratio is increased from 2018 to 2019 and from 2019
to 2020. The debt-to-equity ratio is a ratio that compares a company's debt capital to its
equity capital. As per industry benchmark, a good debt to equity ratio will be less than 1.5.
The figure 2.1 shows that Siemens has a good debt to equity ratio indicating weaker
solvency.
 Debt to capital: The figure 2.1. shows that debt to capital ratio is increased from 2018 to
2019 and from 2019 to 2020. The debt-to-capital ratio calculates the debt-to-total-capital
ratio of a corporation. In FY 2020, the ratio is 0.55 indicating that 55% of Siemens capital is
contributed by debt. A ratio between 0.3 to 0.6 is considered as good by most of the
investors. The debt to capital ratio for all three years from 2018 to 2020 is less than 0.6
which indicates weaker solvency. between
 Debt to asset: The figure 2.1. shows that debt to asset ratio is increased from 2018 to 2019
and from 2019 to 2020. The debt-to-total-assets ratio measures the percentage of total assets
that are financed with debt. The lower this ratio is, similar to the debt-to-capital and debt-to-
equity ratios, the lower the financial risk. Industry benchmark is 0.5 for this ratio. In FY
2020, the ratio is 0.43 indicating that 43% of Siemens asset is financed by debt which
indicates a positive sign of financial health.
 Financial leverage: The figure 2.1. shows that financial leverage is decreased from 2018 to
2019 and increased from 2019 to 2020. This ratio measures the amount of total assets for
each unit of equity. The higher a company's financial leverage ratio is, the more leveraged it
is. Industry benchmark is 3.5 for this ratio. Siemens has a lower financial leverage ratio
indicating that the company's activities and sales are generating enough income to increase
its assets through profits, even if it has debt.

 Interest coverage: The figure 2.1. shows that interest coverage ratio is increased from
2018 to 2019 and from 2019 to 2020. This ratio measures a company's ability to pay
interest on its outstanding debt. A high interest coverage ratio implies that a corporation
can cover its interest costs several times over, whereas a low ratio shows that a
corporation is at risk of defaulting on its loan payments. The industry benchmark for
interest coverage is 3.75. As Siemens has a higher interest coverage ratio, it indicates
company's ability to pay interest on its outstanding debt.
Therefore, we can summarize that Siemens is capable of meeting its debt obligations and has a
lower solvency ratio.
Debt to Equity
Table 2: Debt to Equity

Selected Financial data (€ in millions) 2020 2019 2018
Short-term debt and current maturities of long-term debt 6,562 6,034 5,057
Long-term debt, excluding current maturities 38,005 30,414 27,120
Total debt 44,567 36,448 32,177
Equity attributable to shareholders of Siemens AG 36,390 48,125 45,474
Debt to equity 1.22 0.76 0.71
Calculation
Total debt
Debt ¿ equity= shareholders of Siemens AG ¿
Equity attributable ¿

Debt to Equity ratio

60000 1.4
50000 1.2
1
40000
0.8
30000
0.6
20000
0.4
10000 0.2
0 0
2018 2019 2020
Total debt Equity attributable to shareholders of Siemens AG Debt to equity
Figure 2.2.Debt to equity: This figure illustrates Siemens debt equity for FY 2020, 2019 and 2018.
Debt to Capital
Table 3: Debt to Capital

Total debt 44,567 36,448 32,177

Total capital 80,957 84,573 77,651
Debt to capital 0.55 0.43 0.41
Calculation
Total debt
Debt ¿ capital=
Total Capital

Debt to Capital
90000 0.6
80000
0.5
70000
60000 0.4
50000
0.3
40000
30000 0.2
20000
0.1
10000
0 0
2018 2019 2020
Total capital Total debt Debt to capital

Figure 2.3.Debt to capital: This figure illustrates Siemens debt capital for FY 2020, 2019 and 2018.
Debt to Assets
Table 4: Debt to Assets

Total debt 44,567 36,448 32,177
Total Assets 1,02,975 1,00,328 1,38,915
Debt to assets 0.43 0.36 0.23
Calculation
Total debt
Debt ¿ assets=
Total assets
Figure 2.4.Debt to Assets: This figure illustrates Siemens debt assets for FY 2020, 2019 and 2018.

Debt to Assets
160000 0.5
140000 0.45
0.4
120000
0.35
100000 0.3
80000 0.25
60000 0.2
0.15
40000
0.1
20000 0.05
0 0
2018 2019 2020
Total assets Total debt Debt to assets

Financial Leverage
Table 5: Financial Leverage

Total assets 1,02,975 1,00,328 1,38,915
Financial leverage 2.83 2.08 3.05
Calculation
Total assets
Financial Leverage= shareholders of Siemens AG ¿
Equity attributable¿

Financial Leverage
160000 3.5
140000 3
120000
2.5
100000
2
80000
1.5
60000
1
40000
20000 0.5
0 0
2018 2019 2020
Total assets
Equity attributable to shareholders of Siemens AG
Financial leverage
Figure 2.5.Financial Leverage: This figure illustrates Siemens financial leverage for FY 2020, 2019 and
2018.
Interest Coverage
Table 6: Interest Coverage

Net income attributable to shareholders of Siemens AG 4,030 5,174 5,807
Add: Net income attributable to non controlling interest 241 245 130
Less: Income (loss) from discontinued operations, net of
income taxes 90 490 154
Add: Income tax expense 1,382 1,775 2,054
Add: Interest expense 815 965 1,089
Earnings before interest and tax (EBIT) 6,378 7,669 8,926
Interest coverage 7.83 7.95 8.20
Calculation
EBIT
Interest Coverage=
Interest Expense

Interest Coverage
10000 8.3
9000
8.2
8000
7000 8.1
6000 8
5000
4000 7.9
3000 7.8
2000
7.7
1000
0 7.6
2018 2019 2020
EBIT Interest expense Interest coverage

Figure 2.6.Interest Coverage: This figure illustrates Siemens interest coverage for FY 2020, 2019 and
2018.
2.4.2. Profitability Ratios
Summary
Table 7: Profitability ratio summary

Profitability Ratio Summary 2020 2019 2018
Return on Sales
Gross profit margin 7.63% 10.74% 25.23%
Operating profit margin 11.48% 5.45% 16.47%
Net profit margin 7.05% 8.85% 20.58%
Return on Investment
Return on equity (ROE) 11.07% 10.75% 12.75%
Return on assets (ROA) 13.92% 17.30% 20.51%

Profitability Ratio, Return on Sales

30
25
20
(a)
15
10
0
2018 2019 2020
Gross profit margin Operating profit margin Net profit margin

Profitability ratio, return on sales
Profitability Ratio, Return on Investment

25
20
15
10
0
(b) 2018 2019 2020
Return on equity (ROE) Return on assets (ROA) Series3
Profitability ratio, return on investment
Figure 2.7.Profitability ratios summary: This figure illustrates Siemens Profitability ratios summary for
FY 2020, 2019 and 2018. (a) Profitability ratio, return on sales (b) Profitability ratio, return on
investment.

Profitability ratio is the ability of the company to make profitable sales from its resources is
measured by profitability assets. From above figure 2.7, below points can be noted:
 Gross Profit margin: The gross profit margin indicates how much profit a business makes on
its cost of goods sold. It also aids in comprehending the company's efficiency and how it uses
its resources to manufacture the product and then profit by passing on the cost to the
product's users. Figure 2.7., shows that Siemens Gross profit margin is decreased from 2018
to 2019 and has further decreased in 2020. Industry benchmark for Gross Profit margin is
37.9%. This indicates that Siemens has not efficiently managed labour and supplies required
in production. The reason may be the increasing cost of material and labour. Furthermore, it
is clear that the company is not able to pass on these increasing costs to clients in the form of
MRP price hike, most likely due to existing pandemic.
 Operating profit margin: The operating profit margin measures EBIT as a proportion of sales
to determine the efficiency of the company's operations. (EBIT, is a metric used to determine
how much profit a firm has made from its core operations). Figure 2.7., shows that Siemens
operating profit margin is decreased from 2018 to 2019 and increased from 2019 to 2020.
Industry benchmark for Operating Profit margin is 4.5%. When operational profits are
increasing, it means that the company is keeping costs under control or that sales are
outpacing operating costs. An investor can compare profit margins between companies that
do not disclose their cost of goods sold statistics separately by knowing operational profit.
 Net profit margin: The net profit margin ratio is a calculation that compares net income to
sales. It is the most commonly used profitability ratio for calculating profit after all expenses,
losses, and bad debt provisions have been deducted. The net profit margin can be used to
determine how well a company transforms revenues into profits. Figure 2.7., shows that
Siemens net profit margin is decreased from 2018 to 2019 and from 2019 to 2020. Industry
benchmark for net profit margin is 7.63%. The net profit margin FY 2018 is exceedingly
high and for FY 2019 is high indicating that Siemens is effectively pricing its products and
keeping costs under control. However, in FY2020, the net profit margin is 7.05% which is
slightly low due to pandemic situation indicating that the net sales reduced due to pandemic
situation and expenses increased.

 Return on equity (ROE): This ratio assesses the profitability of a company's equity
investment. It also assesses how well the owner's finances were used to generate revenue for
the company. A high ratio indicates that the company is doing well. Figure 2.7., shows that
Siemens ROE is decreased from 2018 to 2019 and increased from 2019 to 2020. Industry
bench for this ratio is 1.5%. Siemens high ROE ratio is suggested as a motivation to buy a
company's shares. This high return on equity indicates that Siemens is able to generate cash
internally, reducing their need on debt funding.
 Return on assets (ROA): The percentage of net earnings related to the company's total assets
is known as return on assets (ROA). The ROA ratio expresses how much profit a corporation
makes after taxes for every dollar of assets it owns. It also calculates a company's asset
intensity. Industry benchmark for ROA is 2%. Figure 2.7., shows that Siemens ROE is
decreased from 2018 to 2019 and from 2019 to 2020. However, ROA is higher than industry
benchmark. Siemens high ROA indicates that its business is more efficient and profitable.
Gross profit Margin
Table 8: Gross Profit margin
Gross Profit Margin (€ in millions) 2020 2019 2018

Gross profit 4357 6279 7111
Revenue 57,139 58,483 28,185
Profitability Ratio
Gross profit margin 7.63% 10.74% 25.23%
Calculation
Gross Profit
Gross Profit Margin= x 100
Revenue

Gross Profit Margin

70000 30
60000 25
50000
20
40000
15
30000
10
20000
10000 5
0 0
2018 2019 2020
Gross profit Revenue Gross profit margin
Figure 2.8.Gross Profit Margin: This figure illustrates Siemens Gross Profit margin for FY 2020, 2019
and 2018.
Operating Profit Margin
Table 9: Operating Profit margin

Operating Profit Margin (€ in millions) 2020 2019 2018
Operating income 6557 3188 4643
Revenue 57,139 58,483 28,185
Profitability Ratio
Operating profit margin 11.48% 5.45% 16.47%
Calculation
Operating Income
Operating Profit Margin= x 100
Revenue

Operating Profit Margin

70000 18
16
60000
14
50000
12
40000 10
30000 8
6
20000
4
10000
2
0 0
2018 2019 2020
Operating income Revenue Operating profit margin

Figure 2.9. Operating Profit margin: This figure illustrates Siemens Operating Profit margin for FY 2020,
2019 and 2018.
Net Profit Margin
Table 10: Net Profit margin

Net Profit Margin (€ in millions) 2020 2019 2018
Net income attributable to shareholders 4030 5174 5800
Revenue 57139 58483 28185
Profitability Ratio
Net profit margin 7.05% 8.85% 20.58%
Calculation
Net Profit Margin=Net income attributable¿ shareholders ¿ x 100

Revenue

Net Profit Margin

70000 25
60000
20
50000
15
40000
30000
10
20000
5
10000
0 0
2018 2019 2020
Net income attributable to shareholders Revenue

Net profit margin
Figure 2.10. Net Profit margin: This figure illustrates Siemens Net Profit margin for FY 2020, 2019 and
2018.
Return on Equity (ROE)
Table 11: Return on Equity
Return on Equity (ROE) (€ in millions) 2020 2019 2018

Equity attributable to shareholders 36390 48125 45474
Profitability Ratio
ROE 11.07% 10.75% 12.75%
Calculation
Returnon Equity=Net income attributable¿ shareholders ¿ shareholders ¿ x 100

Equity attributable¿

Return on Equity (ROE)

60000 13
50000 12.5
12
40000
11.5
30000
11
20000
10.5
10000 10
0 9.5
2018 2019 2020
Net income attributable to shareholders Equity attributable to shareholders

Return on Equity
Figure 2.11. Return on Equity: This figure illustrates Siemens Return on Equity for FY 2020, 2019 and
2018.
Return on Assets (ROA)
Table 12: Return on Assets

Return on Assets (ROA) 2020 2019 2018

Total assets 28946 29901 28281
Profitability Ratio
ROA 13.92% 17.30% 20.51%
Calculation

Returnon Assests=Net income attributable ¿ shareholders ¿ x 100

Total Assests
Return on Assets (ROA)

35000 25
30000
20
25000
15
20000
15000
10
10000
5
5000
0 0
2018 2019 2020
Net income attributable to shareholders Total Assests

Return on Assests
Figure 2.12. Return on Assets: This figure illustrates Siemens Return on Assets for FY 2020, 2019 and
2018.

SECTION C
LEARNING OUTCOME
3.1. Conclusion
Siemens has a wealth of resources and capabilities that are essential for survival. The company's
history has resulted in some unique resources and key competencies that set it apart from other
businesses, which is critical to its success.
The study offered aided in gaining a better knowledge of Siemens current structure as well as the
advantages of introducing a new structure.
3.2. Learning Experience
In review, this internship programme report was a fantastic and gratifying experience. To begin
with, our research to select one company among Fortune 500 companies introduced us to many
companies which we were not aware of.
Further, more research on our selected topic which is Siemens AG helped us to gain a deeper
insight into the company’s vision, mission, various divisions, product groups, marketing and
expansion strategies, goals, strength, weakness, challenges and more. We were able to integrate
our theory knowledge and practice real time financial statement analysis. The study of balance
sheet, consolidated income statement, solvency ratio and profitability calculations have improved
our knowledge in respective subject.
Moreover, this report has also contributed in improving our personal skills like time
management, self- management, team work, communication skills, writing skills and research
skills.
Overall, during this pandemic situation, this summer internship programme has helped us to
sharpen our knowledge and boost our confidence which we trust will help us in our future
endeavors.

3.3. Team Contribution
NAME CONTRIBUTION
Shakti. P (1910371) • Brainstorming of Introduction, Overview, Vision,

Mission, goals.
• Brainstorming of Marketing Strategy analysis.
Swathi (1910374) • Brainstorming of History and milestones, Board

structure, product groups and services
• Preparation of PESTLE and SWOC Analysis.
Shradha Mathew (1910372) • Selection of topic.

• Brainstorming and preparation of business divisions,
business model and main competitors.
• Brainstorming and preparation of expansion strategy,
financial analysis and learning outcome.
• Proof reading and preparation of report.
REFERENCES
[1] Altman, E. I., 1968. Financial Ratios, Disriminant Analysis and the Prediction of Corporate
Bankruptcy. The Journal of Finance, September, 23(4), pp. 589-609.
[2] Barnes, P., 1987. The Analysis and Use of Financial Ratios: A Review Article. Journal of
Business Finance & Accounting, December, 14(4), pp. 449-461.
[3] Beaver, W. H., 1966. Financial Ratios As Predictors of Failure. Journal of Accounting
Research, 4(Empirical Research in Accounting: Selected Studies 1966), pp. 71-111.
[4] Siemens, 2018. Annual Report 2018, s.l.: s.n.
[7] https://www.siemens.com/
[8] https://www.cleverism.com/business-model-siemens/
[9] https://vizologi.com/business-strategy-canvas/siemens-business-model-canvas/
[10] https://www.siemens.com/investor/pool/en/investor_relations/equity-story/Siemens-
Division-Fact-Sheets.pdf

APPENDIX

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SUMMER INTERNSHIP PROJECT WORK

Submitted in partial fulfillment of the requirements for the award of the

SHAKTHI P RAI - 1910371

Under the guidance of

CHRIST (Deemed to be University)

Date: 20.05.2021 Shakthi.P. Rai - 1910371

Shradha Mathew – 1910372

Place: Bangalore (Name & Signature of the Guide)

Siemens AG is a conglomerate multi-national company with business in engineering and

1.2.1. Company logo

1.3. Vision 2020+

Siemens ambition as a technology organization is to use the intersection of digitalization and

Department of Commerce 2020-21 Page 2

Goal 1: Grow Company Value.

Goal 2: Sharpen business focus in E-A-D.

KPI: Accelerated comparable revenue growth +2 ppts. CAGR

Goal 3: Be a partner of choice for customers.

KPI: >20% improvement in customer satisfaction index

Goal 4: Get closer to markets.

KPI: Significant share of business HQs outside Germany

Goal 5: Live lean governance and drive continuous

Goal 6: Be an employer of choice.

KPI:Improvement in employee satisfaction index

Goal 7: Ignite pride and passion for Siemens through

1.6. History and Milestones

Department of Commerce 2020-21 Page 3

1897 - Siemens & Halske becomes a stock corporation.

1924- Siemens-Schuckertwerke and Westinghouse sign an agreement for the “regular

1949- Siemens established its headquarters in Munich while Siemens Schuckertwerke

1964 - A 220kV SF6 HV CB is introduced by Siemens.

1980 - Siemens makes a promising debut in digitalizing telecommunications technology after

Department of Commerce 2020-21 Page 5

1998 - The Westinghouse’s gas turbine is acquired by Siemens.

2000 - First 501FD gas turbine is built in Orlando by Siemens.

Department of Commerce 2020-21 Page 6

2009 – Siemens sells its 34% share in AREVA.

Department of Commerce 2020-21 Page 7

1.7. Board structure

Figure 1.0: Siemens two-tier board structure

1.7.1. Managing Board Members

 Dr. Roland Busch, President and Chief Executive Officer

1.8. Business Divisions

(a) Digital Industries

1.8.1. Business Division Management

Cedrik Matthias Michael Aymeric Dr. Horst J. Dr. Bernd

Rudolf Ariane Dr. Martin Dr. Jochen

1.9. Product Group and Services

Department of Commerce 2020-21 Page 9

Department of Commerce 2020-21 Page 10

1.10. Main Competitors

Department of Commerce 2020-21 Page 11

1.11. Business model

2.1. Pestle Analysis

 Siemens Europeans at Siemens programs empowers understudies from select

 Siemens to reinforce initiative in digitalization and computerization by joining

 Claims looked by Siemens can significantly influence benefit.

 Siemens focus to become carbon non-partisan by 2030 by contributing over 100

2.2. SWOC Analysis

Number one globally in industrial Reliance on third party workers.

Dedicated unit 'Next 47' for innovation

Siemens can strengthen leadership in The pandemic continues to pose

Department of Commerce 2020-21 Page 14

for retail customers.