The Siemens Transportation Systems Group (TS) remained well on course throughout the last fiscal year. The results speak for themselves: In terms of EBIT, TS is 5.7 % ahead if its competitors. Sales rose by 9 % and orders in hand worth € 11.2 billion remained at the high level of the previous year. These figures reflect the outstanding success attained by the TS Group on world markets thanks to its innovation strategy, its platform concepts and the corporate program top+ in the context of Operation 2003. TS is thus well set to maintain its leading position on the rail markets of the future.

"Last year, we once again proved ourselves as expert system suppliers, through such large-scale projects as the new Cologne - Rhein/Main line, the Express Rail Link in Kuala Lumpur or the world´s biggest electrification project for Harbin-Dalian in China", commented Herbert H. Steffen, TS Group President. In Rail Automation and Turnkey Systems TS is the world market leader. In Electrification, Locomotives and Light Rail the Group is in second place, and in Trains and Heavy Rail it holds the no. 3 spot.

Mr. Steffen went on to mention the major breakthroughs achieved with new orders in fiscal 2002. Together with his Group Executive Management colleagues Hans-Dieter Bott, Hans M. Schabert and Friedrich Smaxwil he presented TS´ results at a press conference in Berlin. Mr. Steffen emphasized the significance of the Avanto low-floor light rail system for SNCF (the first rolling stock order for Siemens from France), the metro order from Boston (a breakthrough on the American market), the new train control system for Canadian National, the first metro system for Bangkok and the substantial order for metro vehicles in Shanghai.

The figures underline the TS Group´s intention to continue its sustained and profitable growth. EBIT (at € 247 million) was 33 % up on the previous year (€ 186 million). The EBIT margin rose from 4.6 to 5.7 %; sales increased by 9 % up to € 4.367 billion. At € 5.247 million, new orders were indeed 7 % down on the previous year; it should not however be overlooked that the figure for that year included the record order for 1,200 regional trainsets for Great Britain (Desiro UK), worth € 1.6 billion. Orders in hand remained at € 11.2 billion, the same level as last year.

TThe aim of sustained profitable growth reflects the TS innovation strategy. This is in line with the idea of putting more transport onto rail, and with customer demands for compatibility, lower life-cycle costs, flexible operation, punctuality, interoperability and reliability. There are four main directions: (1) Modularization and standardization (e.g. Velaro high-speed platform concept), (2) automation (e.g. European Train Control System ETCS, fully automatic metro in Nuremberg, light rail system VAL - Véhicule Automatique Léger), (3) internationalization (e.g. ETCS, multisystem vehicles) and (4) new solutions for systems and components (e.g. Transrapid, CargoMover, Sitras energy storage).

The innovation strategy goes hand in hand with continuous improvement of internal processses and structures. This optimization tactic got under way about three years ago in the context of the TS Initiative, which succeeded in reducing costs by about € 1 billion. In a second stage, the High Margin Sales Stimulation Program and an optimization of the Group´s portfolio were introduced. Commodity and supplier management have improved both the quality and the deadline dependability applying to outsourced components. The "TS wins" program, to be launched like the TS Initiative in the context of top+ and the corporate Operation 2003, will serve as from fiscal 2003 to enhance and strengthen TS´ competitive position. The key issues will be improving process and product quality, and optimizing cooperation between the Divisions.

TS´ aim for the future is to secure and retain a leading competitive edge and to grow faster than the market. The group therefore intends to establish itself as a pan-European supplier (e.g. ETCS, Velaro high-speed platform, European locomotive BR 189), to enhance its market position in the USA (where TS is already a leader in terms of trams), and to grow selectively in Asia in the urban transportation, turnkey and new-technologies segments. "On the basis of our technological prowess and the great opportunities awaiting our expert specialists", summarized Mr. Steffen at the end, "our medium-term objective is the no. 2 position on the world rail market.""

Siemens AG
Corporate Communications
Press Office
D-80312 Munich
Germany

Information number:
TS CR 200211.004 e
Press Office Transportation Systems
Karl-Heinz Wocker
P.O. Box 3240,
D-91050 Erlangen, Germany
Tel.: +49-9131-7 24101;
Fax: +49-9131-7 24026
E-mail: karl-heinz.wocker@siemens.com