Slide 1: Q2 – Portfolio gains drive income
Joe Kaeser, President and CEO Ralf P. Thomas, CFO Q2 – Portfolio gains drive income Q2 FY 2015, Analyst Conference London, May 7, 2015 © Siemens AG 2015
Slide 2: Notes and forward-looking statements
Notes and forward forward-looking looking statements This document contains statements related to our future business and financial performance and future events or developments involving Siemens that may constitute forward-looking statements. These statements may be identified by words such as “exp
Slide 3: Siemens Vision 2020
Siemens Vision 2020 Value creation and cultural change Value Scale up Strengthen core Drive performance Foster ownership culture and leadership based on common values 2015 2016 2017 2018 2019 2020 Strategic Operational Accelerated growth direction consolidation Optimization and outperformance © Siem
Slide 4: Siemens Vision 2020 on track
Siemens Vision 2020 on track Execution milestones until 2017 Until Execution steps Q4 2014 Implementation of new and simplified organization by Oct. 1 Introduction of incentive system 2015 Q2 2015 Stringent portfolio optimization - closing of announced divestments Measures for structural optim
Slide 5: Q2 FY 2015 - Key developments as expected
Q2 FY 2015 - Key developments as expected • Continued C ti d complex l economic, i currency and d market k t environment i t • Strong translational tailwind from FX on orders (+9%) & revenue (+8%) • Clear Cl organic i order d increase i (+7%) driven di b by llarge M Mobility bilit orders d and d reb
Slide 6: Significant order wins in Mobility drive growth in Europe
Significant order wins in Mobility drive growth in Europe Orders Q2 FY 15 y-o-y1) Revenues Europe/C.I.S./Africa/ME +20% +1% (therein Germany) +65% +7% Americas +3% +2% (therein U.S.) +3% -2% Asia/Australia -20% -6% (therein China) -27% 27% -3% 1) Change is adjusted for currency translation and portf
Slide 7: Tailored offerings and customer proximity drive new business
Tailored offerings and customer proximity drive new business Megadeals g in Egypt gy Major j order in Mobility y • Beni Suef, Burullus and New Capital • Largest regional rail transport order power plants ever won by Siemens in Germany • Fast track projects for 13.2 13 2 GW • Customer: Rhine-Ruhr • M
Slide 8: PG and WP: innovation, productivity and operational challenges
PG: Accelerating innovation and productivity actions WP: Continued operational challenges impact margin Power and Gas (PG) Wind Power and Renewables (WP) Orders Revenue Orders Revenue €bn €bn +4%1) -6%1) -27%1)) -1%1)) 2.7 3.1 2.9 3.0 1.7 1.4 1.2 1.3 Q2 FY 14 Q2 FY 15 Q2 FY 14 Q2 FY 15 Q2 FY 14 Q2 F
Slide 9: EM and BT: legacy projects and productivity push
EM: Progress in execution of legacy projects BT: Productivity push to mitigate CHF strength Energy Management (EM) Building Technologies (BT) Orders Revenue Orders Revenue €bn €bn +2%1) +4%1) +1%1)) +1%1)) 2.8 3.1 2.5 2.8 1.3 1.5 1.3 1.4 Q2 FY 14 Q2 FY 15 Q2 FY 14 Q2 FY 15 Q2 FY 14 Q2 FY 15 Q2 FY 14
Slide 10: DF and PD: softer outlook and commodity weakness
DF: Temporarily softer and stronger outlook PD: Commodity related weakness weighs on margin Digital Factory (DF) Process Industries and Drives (PD) Orders Revenue Orders Revenue €bn €bn +1%1) +2%1) -13%1) -5%1) 2.4 2.6 2.2 2.4 2.7 2.4 2.3 2.3 Q2 FY 14 Q2 FY 15 Q2 FY 14 Q2 FY 15 Q2 FY 14 Q2 FY 15 Q2
Slide 11: MO and HC: project execution and growth
MO: Stringent project execution HC: Higher growth and solid margin Mobility (MO) Healthcare (HC) Orders Revenue Orders Revenue €bn €bn +95%1) +4%1) +3%1) +2% 2%1) 3.8 2.8 3.2 2.9 3.2 1.8 1.7 1.8 Q2 FY 14 Q2 FY 15 Q2 FY 14 Q2 FY 15 Q2 FY 14 Q2 FY 15 Q2 FY 14 Q2 FY 15 Profit & Margin Profit & Margin €
Slide 12: Below Industrial Business materially benefitting from disposal gains
Below Industrial Business materially benefitting from disposal gains Below Industrial Business (Q2 FY 2015) in €m Therein: Expectations for H2 FY 2015 3.908 ~€1.6bn • SFS: H2 in line with prior year Audiology gain €0.2bn ~€0.2bn • CMPA: 1.172 38 Healthcare IT gain • B/S/H closed, no further equity i
Slide 13: Weak Free Cash Flow in Q2 due to working capital and treasury effects
Weak Free Cash Flow in Q2 mainly due to build up of net operating working capital and treasury effects Quarterly free cash flow ("all-in") Key drivers free cash flow €m IB – Net Operating Working Capital turns1) 7.8 7.0 7.0 1 402 1,402 6.0 Q2 FY 2012 Q2 FY 2013 Q2 FY 2014 Q2 FY 2015 H1 H1 1) Fiscal
Slide 14: Weaker Euro with limited windfall for H1 profitability
Weaker Euro with limited windfall for H1 profitability, acceleration expected in H2 FY 2015 FX impact in FY 2015 Hedging strategy and effects Quarterly average EUR/USD rates • Limited impact on profitability in H1 due to consistent hedging policy: 1.36 1.37 1.37 1.30 1 32 1.32 1.30 1.33 1 32 1.32 •
Slide 15: Clear progress in executing legacy projects
Clear progress in executing legacy projects – reduced project charges on better backlog quality Order backlog revenue recognition Progress in project execution in €bn (Industrial Business) • Implementation of “corporate memory” supports improvement in backlog quality 109 and risk mitigation g €100b
Slide 16: Restructuring financed by disposal gains
Restructuring and operational consolidation in FY 2015 is financed by disposal gains Basic earnings per share (Net income) In € In €bn ~0.2 At least 15% ~1.6 growth 03 ~-0.3 Guidance ~-0.3 ~-0.1 includes 6.37 ~ 1.4 ~-0.75 B/S/H gain Audiology HC IT gain Unify No more No more Restruc- gain income inc
Slide 17: Cost reduction of ~€1bn is on track
Our target to reduce complexity and achieve cost reduction of ~€1bn €1bn is on track Current status for functional cost reduction Target for Current status Cumulated effects of savings functional €1bn of saving potential are backed with cost reduction concrete measures €1bn €700m – • Significant sav
Slide 18: Fixing remaining underperforming businesses is key priority
Fixing remaining underperforming businesses is key priority – other options remain Revenue FY 2013 in €bn ~21 ~1.9 Water ~0.9 HC IT ~1.0 ~1.8 Metals ~2.8 Extended Spectrum LV ~2.0 • Footprint optimization ~15 • Reverse integration ~0.7 Postal • Partnering and • Tight Ti ht Managing M i Baggage Handl
Slide 19: Outlook Fiscal 2015 confirmed despite weakening indicators
Outlook Fiscal 2015 confirmed despite weakening indicators Basic earnings per share (Net income) In € At least 15% • We believe that our business environment will growth be complex in fiscal 2015, among other things due to geopolitical tensions. • We expect revenue on an organic basis to 6.55 6.37 r
Slide 20: Appendix
Appendix © Siemens AG 2015 Page 20 London, May 7, 2015 Q2 FY 2015, Analyst Conference
Slide 21: One Siemens Financial Framework
One Siemens Financial Framework – Clear targets to measure success & accountability One Siemens Financial Framework Siemens Capital efficiency Capital structure Growth: (ROCE2)) (Industrial net debt/EBITDA) Siemens > most 15-20% up to 1.0x relevant competitors1) (Comparable revenue growth) Total cos
Slide 22: Financial Cockpit
Financial Cockpit Orders Revenue Profit Industrial Business (IB) Net Income in €bn +7% Comp. 0% in €bn in €bn (+16%) (nom.) (+8%) -5% +239% 20.8 17.9 16.7 18.0 1.7 1.7 3.9 10.3% 9.0% 1.2 B-t-B 1.07 1.15 Margin 9.6% Q2 14 Q2 15 Q2 14 Q2 15 Q2 FY 14 Q2 FY 15 Q2 FY 14 Q2 FY 15 EPS (“all-in”) ROCE (“all
Slide 23: Net Debt Bridge as of Q2 FY 2015
Net Debt Bridge as of Q2 FY 2015 €bn Q2 ∆Q1 • SFS Debt +21.4 +2.2 • Post emp. Benefits -12.1 12.1 -1.5 1.5 Operating Activities • Credit guarantees -0.8 +0.0 Adj. ind. Net Debt/ • Hybrid bond +1.0 +0.0 EBITDA • Fair value adj. +1.1 +0.0 0.3x (hedge accounting) (Q1 FY15: 0.6x) therein a.o.: • CAPEX -
Slide 24: SFS Key Figures Q2 FY15
SFS Key Figures Q2 FY15 Key Financial Data SFS • Assets €25.2bn • Profit before Tax €195m • Return on Equity after tax 28.0% • Operating O ti andd Investing I ti Cash C h Flow Fl - €393m €393 Assets Liabilities and Equity €bn €bn 1.3 0.2 25.2 25.2 2.4 22.7 1.0 21.4 1.3 Leases & Equity Other Assets C
Slide 25: Pension underfunding increased to -€11.0bn in Q2
Pension underfunding increased to -€11.0bn €11 0bn in Q2 Deficit for Siemens’ pension plans increased in Q2, mainly due to decreased discount rate assumptions in €bn1) FY 2012 FY 2013 FY 2014 Q1 2015 Q2 2015 Defined benefit obligation (DBO) on (33 0) (33.0) (32 6) (32.6) (35 0) (35.0) (36 8) (36.8)
Slide 26: Financial calendar
Financial calendar May May 7, 2015 Q2 Earnings Release and Analyst Conference (London) May 27, 2015 Bernstein Strategic Decisions Conference (New York) May 28, 2015 Canada Roadshow (Toronto) June June 10 J 10, 2015 Exane European CEO Conference (Paris) June 11, 2015 JP M E Morgan European C it l G C
Slide 27: Siemens Investor Relations contacts
Siemens Investor Relations contacts Investor Relations Internet: www.siemens.com/investorrelations Email: investorrelations@siemens.com IR- +49 89 636 636-32474 32474 Hotline: Fax: +49 89 636-32830 © Siemens AG 2015 Page 27 London, May 7, 2015 Q2 FY 2015, Analyst Conference