Siemens Energy Ag · XETR:ENR
Siemens Energy — Investor Day (September 2020)
38 slides from Siemens Energy's investor day presentation, Sep 1, 2020
Slide 1: Capital Market Day 2020 – CEO Section
Capital Market Day 2020 CEO Section Christian Bruch, President and CEO of Siemens Energy Siemens Energy is a registered trademark licensed by Siemens AG. © Siemens Energy, 2020
Slide 2: Notes and forward-looking statements (I)
Notes and forward-looking statements (I) This presentation and the information contained herein are for information purposes only and do not constitute a prospectus or an offer to sell or a solicitation of an offer to buy or subscribe for any securities of Siemens AG or Siemens Energy AG. This prese
Slide 3: Notes and forward-looking statements (II)
Notes and forward-looking statements (II) This presentation contains forward-looking statements. These statements are based on the current views, expectations, assumptions and information of the management of Siemens AG and Siemens Energy AG. Forward-looking statements involve known and unknown risk
Slide 4: Our six levers to deliver shareholder value
1 Leader in energy industry Our six 2 Spin-off allows for a step change in operational performance levers to deliver shareholder value 3 Leading portfolio in the industry 4 Service business as a core value driver 5 Developing future portfolio with focus on sustainability and service 6 More EBITA and
Slide 5: Our Management Team
Our Management Team What we stand for Christian Bruch Maria Ferraro Jochen Eickholt Tim Holt CEO CFO Member of the Member of the Executive Board Executive Board Passion for Clear focus on Better performance Service and transformation EBITA & Cash through Operational digitalization as Excellence valu
Slide 6: Who we are
1 Who we are 2 Where we compete 3 How we deliver 4 Why we are the right investment CMD | C. Bruch | CEO Section 6 2020-09-01 Siemens Energy is a registered trademark licensed by Siemens AG. © Siemens Energy, 2020
Slide 7: Climate change, demographic change
Demographic change Climate change are drastically changing our environment. CMD | C. Bruch | CEO Section 7 2020-09-01 © Siemens Energy, 2020
Slide 8: Growth in electricity generation and lack of access
At the same time, we expect a … >50% increase in global electricity generation by 2040 And still … 850 million people are living without access to electricity Source: IEA WEO 2019 Stated Policies Scenario | www.iea.org/world CMD | C. Bruch | CEO Section 8 2020-09-01 © Siemens Energy, 2020
Slide 9: How can we meet growing electricity demand while protecting our climate?
How can we meet the growing demand for electricity while protecting our climate? This is where we come in. CMD | C. Bruch | CEO Section 9 2020-09-01 © Siemens Energy, 2020
Slide 10: Our purpose and mission
Our purpose and mission We energize society by supporting our customers in transitioning to a more sustainable world, based on our innovative technologies and our ability to turn ideas into reality. CMD | C. Bruch | CEO Section 10 2020-09-01 © Siemens Energy, 2020
Slide 11: We are a world leader in energy
We are a world leader in energy Present in ~1/6 >50% >90 countries of global electricity generation decarbonized portfolio based on our technology CMD | C. Bruch | CEO Section 11 2020-09-01 Siemens Energy is Siemens a registered Energy trademark is a registered licensedtrademark by Siemens licensed
Slide 12: The leading pureplay energy company
Who we are The leading pureplay energy company Our offering Along the value chain Broad technology portfolio Products Generation From Solutions Transmission Conventional Services Storage to Renewables Siemens Energy AG Siemens Gamesa Gas and Power (“GP”) Renewable Energy (“SGRE”) Generation Industri
Slide 13: Innovative products support customers' transition to a sustainable world
Who we are Our innovative products support customers in transitioning to a more sustainable world Industrial New Energy Generation Applications Transmission SGRE Business NET ZERO up to 60% SF6-FREE >260 Mt 100% H2 through hybrid H2 capable gas portfolio that is GHG savings p.a. Enabling hydrogen po
Slide 14: Our solution competence helps to transform societies
Who we are Our solution competence helps to transform societies Egypt Iraq Bolivia Khormala Burullus New Capital 40 m Kirkuk 38 m 11 m people Al-Rashhed people Entre Rios people Beni Suef Al-Sadder De Warnes Mussaib Rumalla Del Sur • >$1 bn annual cost savings • 11 GW being added to national grid •
Slide 15: Our market-leading services are the core for future value creation
Who we are Our market-leading services are the core for future value creation Gas and Power SGRE Share of divisional total revenue1. Mid-term growth trend. €35 bn €12 bn service order service order backlog backlog €4.6 bn €7.9 bn2 €3.2 bn €1.6 bn service revenue service revenue €1.6 bn €0.5 bn >90 k
Slide 16: We lead the market across all our businesses
Who we are We lead the market across all our businesses Generation Industrial Transmission SGRE Applications3 Market position1 #2 #1 #2 #1 #3 #1 Central2 Distributed2 Onshore4 Offshore4 1 For Gas and Power based on Siemens Energy internal market assessment for FY2019 in addressed markets | 2 Market
Slide 17: A strong portfolio in energy technology with a clear plan for each division
Who we are A strong portfolio in energy technology with a clear plan for each division Gas and Power 65%1 SGRE 35%1 Generation2 Central New • Reduce structures and costs • Turn-around onshore Service Unit • Selectivity and NCC reduction • Capture offshore growth and service opportunity • Central: Ha
Slide 18: Products and solutions drive our highly resilient service business
Who we are Products and solutions drive our highly resilient service business High conversion rates1 Long-dated contracts • High efficiency LGTs2: Close to 100% • ~12 years for Long‐term service programs5 • Lower efficiency LGTs2: 60 -70%3 • ~80% retention • ~60%4 • ~9 years New units Growing Value-
Slide 19: Where we compete
1 Who we are 2 Where we compete 3 How we deliver 4 Why we are the right investment CMD | C. Bruch | CEO Section 19 2020-09-01 Siemens Energy is a registered trademark licensed by Siemens AG. © Siemens Energy, 2020
Slide 20: The world needs more electricity
Where we compete The world needs more electricity CAGR: 2% 41,373 TWh Growing electricity market (in TWh)1 26,603 TWh • Increasing electrification of industries2 • 850 million people globally without access to electricity • New electrical consumers (data centers, e-mobility) 2018 2040 1 Source: IEA
Slide 21: The energy market is in the process of transformation
How wewe Where deliver compete We strengthen The our operational energy market performance is in the process of transformation through a more competitive organization Shift of re- source base¹ 2018-2040 Wind Gas Coal Solar Nuclear Oil Hydro Our Growing share Gas remains a key enabler in the energy R
Slide 22: How we deliver
1 Who we are 2 Where we compete 3 How we deliver 4 Why we are the right investment CMD | C. Bruch | CEO Section 22 2020-09-01 Siemens Energy is a registered trademark licensed by Siemens AG. © Siemens Energy, 2020
Slide 23: Our company program Energy of Tomorrow
How we deliver Our company program Energy of Tomorrow Improving existing business and driving transformation We energize society Leading the energy transformation • Most valued energy technology company Accelerating • Electrifying countries and communities • Act as data-driven company Impact • Focus
Slide 24: CEO focus
CEO focus Performance Rigorously following up on operational performance Clear accountabilities, lean structures, Organization right people at right place Portfolio Make hard choices on underperforming portfolio elements Clear R&D allocation towards tangible Innovation returns and longer-term potent
Slide 25: We strengthen our operational performance through a more competitive organization
How we deliver We strengthen our operational performance through a more competitive organization Margin development (Adj. EBITA margin before Special Items)1 Challenging market Today Accelerating Leading the energy environment Impact transformation ≥8%2 7% 6.5-8.5% COVID-19 5% 5% Onshore project 3.0
Slide 26: New company programs launched at Gas and Power and SGRE
How we deliver New company programs launched at Gas and Power and SGRE to accelerate profit improvements Gas and Power Annual gross cost savings by FY23 SGRE PG2020 and GP2020+1 Accelerating Impact LEAP Realized savings ~€500 m Innovation Offset by lower business volume Savings to come >€500 m Produ
Slide 27: Incentive system geared to shareholder value
How we deliver We implement an incentive system geared to shareholder value Executive Board compensation Ownership Culture Long-term variable (Stock awards, 4-year vesting) Executive Board • 40% Total shareholder return to hold 200% resp. 300% • 40% EPS 30% Base of base pay as stock • 20% ESG criter
Slide 28: Digitalization as a value driver
How we deliver Digitalization as a value driver • Software as a service (recurring revenue model) New digital New Growth • Asset agnostic offering revenue • Example: Omnivise offering, e.g., Cybersecurity Increasing • Combining domain expertise Enrich with digital expertise the value of • Differenti
Slide 29: Active portfolio management
How we deliver Example Active portfolio Ongoing review of Aeroderivative Gas Turbines portfolio elements with management focus on market outlook • Streamlining offering1 • Service of installed base will continue and profitability Example Coal Further portfolio shift • Currently reviewing options to
Slide 30: Driving R&D with focus on tangible returns and longer-term potentials
How we deliver Driving R&D with focus on tangible returns and longer-term potentials Key facts1 Future R&D strategy Selected R&D examples €1 bn Strict capital return ~145 MW of floating power Electrolyzer: >75% R&D spend criteria for allocation to Dominican system Republic efficiency ~5,000 Focus ar
Slide 31: Adding value to customers by combining offers across our divisions
How we deliver Adding value to customers by combining offers across our divisions Combine turbine competence Oil & Gas industry knowledge lever- Unique offshore capability with green hydrogen innovation aged with transmission leadership in transmission and wind Uniper | Customer need: Equinor | Cust
Slide 32: SGRE is core element for Siemens Energy to support customers
How we deliver SGRE is core element for Siemens Energy to support customers on their journey to energy transition Synergistic relationship • Procurement pooling 2004 2017 2020 • Go-to market synergies Acquisition of Siemens Acquisition of 8.1% Key account management and Bonus Energy Gamesa Merger st
Slide 33: Seizing opportunities in growth regions
How we deliver Seizing opportunities in growth regions Example: Asia Pacific1 22,245 TWh • Nuclear/coal to gas shift Opportunities for highly efficient gas Coal turbines (e.g. HL class in South Korea) >80% • Grid development Oil Partner of choice for transmission system 12,327 TWh development (e.g.
Slide 34: Sustainability will be at the core of our actions
How we deliver Sustainability will be at the core of our actions Our mission Committed to UN SDGs Supporting our customers in transitioning to a more sustainable world, based on our innovative technologies and our ability to turn ideas into reality Management commitment Climate neutral in own operat
Slide 35: We drive operational excellence to become leaner, faster and sharper
How we deliver We drive operational excellence to become leaner, faster and sharper in achieving our results Gas and Power examples Today1 Future Share of revenue from service 42% Share of revenue from Asia, Australia 18% # of manufacturing sites2 75 Best-cost country share in workforce <25% R&D cen
Slide 36: Why we are the right investment
1 Who we are 2 Where we compete 3 How we deliver 4 Why we are the right investment CMD | C. Bruch | CEO Section 36 2020-09-01 Siemens Energy is a registered trademark licensed by Siemens AG. © Siemens Energy, 2020
Slide 37: Our six levers to deliver shareholder value
1 Leader in energy industry Our six 2 Spin-off allows for a step change in operational performance levers to deliver shareholder value 3 Leading portfolio in the industry 4 Service business as a core value driver 5 Developing future portfolio with focus on sustainability and service 6 More EBITA and
Slide 38: We are #TeamPurple #WeEnergizeSociety
We are #TeamPurple #WeEnergizeSociety Siemens Energy is a registered trademark licensed by Siemens AG. © Siemens Energy, 2020