Siemens Aktiengesellschaft · XETR:SIE
Siemens Aktiengesellschaft — Siemens — Investor Day (March 2010)
20 slides from Siemens Aktiengesellschaft's investor day presentation, Mar 26, 2010
Slide 1: Driving performance… now and for the future
Driving performance… now and for the future Dr. Ralf P. Thomas CFO Industry Sector Capital Market Days 'Industry' Munich, March 26, 2010 © Siemens AG 2010. All rights reserved
Slide 2: Safe Harbour Statement
Safe Harbour Statement This document contains forward-looking statements and information – that is, statements related to future, not past, events. These statements may be identified by words such as "expects," "looks forward to", "anticipates", "intends", "plans", "believes", "seeks", "estimates",
Slide 3: Key financial priorities delivered
Key financial priorities delivered 1 Cost down 2 Cash up 3 Process discipline Page 3 March 26, 2010 Capital Market Days 'Industry' © Siemens AG 2010. All rights reserved
Slide 4: Strong backlog underpinned revenue performance
Strong backlog underpinned revenue performance 11.4 10.3 9.8 10.2 8.8 9.0 9.3 9.3 8.1 8.2 8.6 8.1 8.1 1.22 1.05 1.02 6.6 1.02 0.99 0.90 0.81 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 New Orders (in €bn) Revenue (in €bn) Book-to-bill ratio <1 Book-to-bill ratio >1 Page 4 March 26, 2010
Slide 5: Vigilant cost management led to margin strength
Vigilant cost management led to margin strength Early / short-cycle Industry OS IA DT 19.0% 18.8% 10.4% 11.2% 13.5% 13.1% 11.6% 8.4% Q1 2009 Q1 2010 Q1 2009 Q1 2010 Q1 2009 Q1 2010 IS BT MO 6.6% 5.6% 6.9% 6.1% 7.6% Q1 2009 Q1 2010 4.8% % shown are underlying margins Profit margin (as reported) Q1 20
Slide 6: Cost down, Cash up, Process discipline
Aimed at delivering consistently strong performance SG&A reduction Supply chain management 1 Cost down Capacity reduction Cost flexibility increase Cash performance improvement 2 Cash up Investments in growth markets Project selection and execution 3 Process discipline Risk managemen
Slide 7: SG&A improvements clearly paying off
SG&A improvements clearly paying off Double-digit % reduction (YoY) Strong execution in optimizing in SG&A in last four quarters major SG&A levers in €m in €m IT costs Consultancy costs In % of revenue -10% -100bp reduction 1,217 16.4% 15.4% 1,098 Cost -38% Drivers 160 6,160 99 5,408 Q4 1,537 -13% 2
Slide 8: Cost base reduction through effective Supply Chain Management
Cost base reduction through effective Supply Chain Management Low-cost-sourcing Siemens wide managed volume +2pp +17pp Leveraging Global 22% 23% 24% 37% 38% Presence 21% 2008 2009 2010E 2008 2009 2010E In % of purchasing volume In % of purchasing volume Number of Number of warehouses 3rd party suppl
Slide 9: Progress continues on matching resources to demand
Progress continues on matching resources to demand Market development Successful execution Capacity reduction of 13,000 positions in 2009 Capacity adjustments 3,000 additional positions in Q1 2010 Significant savings to be realized in 2010 Going forward Short-term Adjustments necessary in la
Slide 10: Achieving a higher level of cash conversion
Achieving a higher level of cash conversion Cash Conversion Rate Free Cash Flow €m 2.57 3,340 1.58 1.26 0.77 706 0.18 164 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 2009 Q1 2009 Q1 2010 High Cash Conversion Rate due to: Lean asset base – Low CAPEX – Strong working capital management Page 10 March 26, 2
Slide 11: Getting leaner ... and staying there
Getting leaner ... and staying there Working capital turnover Improving Free Cash Flow 7.3 6.9 6.8 Dedicated Asset Management Team 6.7 6.7 KPI-driven performance controlling with latest IT 6.3 6.4 6.4 tools Q1 Q2 Q3 Q4 2009 2009 2009 2009 Regular top management review of inventories, Industry
Slide 12: Investment focused on profitable growth
Investment focused on profitable growth Invest priorities Focus on value creation Investment* Capacity extensions focused on Industrial Software renewable energy and energy efficient technologies Emerging Markets Enhance leading role in industrial Americas LED software Wind Capacity exten- gea
Slide 13: Current backlog paces revenue in 2010 and beyond
Current backlog paces revenue in 2010 and beyond €bn Focus on backlog quality 28 12 Project selection IA Clear accountability DT Stringent worldwide selection process BT > 40 selection criteria, from IS 7 project margin to technology risk > 600 project selection assessments on divisional l
Slide 14: Process discipline fully embedded
Process discipline fully embedded Increased effectiveness through seamless and streamlined integration Internal Control System Benefits Risk & Internal Control System SOA LoA Ensure robust High transparency … Compliance governance Top management focus Enterprise Risk Management Enable Clear ac
Slide 15: A clear set of priorities
A clear set of priorities Remain sensitive to volatile markets: Adapt as needed, grow profitably where possible Value-driven capital allocation: Keep vigilant, but invest in future Enable capital efficient growth: Exploit valuable growth pockets Strict process discipline: Select carefully, execute d
Slide 16: Reconciliation and Definitions for Non-GAAP Measures (I)
Reconciliation and Definitions for Non-GAAP Measures (I) To supplement Siemens’ Consolidated Financial Statements presented in accordance with International Financial Reporting Standards, or IFRS, Siemens presents the following supplemental financial measures: New orders and order backlog Adjust
Slide 17: Reconciliation and Definitions for Non-GAAP Measures (II)
Reconciliation and Definitions for Non-GAAP Measures (II) New orders and order backlog (continued) New orders are generally recognized immediately when the relevant contract becomes legally effective and binding. The only exception are orders with short overall contract terms. In this case, a separa
Slide 18: Reconciliation and Definitions for Non-GAAP Measures (III)
Reconciliation and Definitions for Non-GAAP Measures (III) Return on equity, or ROE In line with common practice in the financial services industry, Siemens Financial Services (SFS) uses return on equity, or ROE, as one of its key profitability measures. Siemens defines ROE as annualized Income befo
Slide 19: Reconciliation and Definitions for Non-GAAP Measures (IV)
Reconciliation and Definitions for Non-GAAP Measures (IV) EBITDA (adjusted) and EBIT (adjusted) Siemens defines EBITDA (adjusted) as EBIT (adjusted) before amortization (which in turn is defined as Amortization and impairments of intangible assets other than goodwill) and Depreciation and impairment
Slide 20: Reconciliation and Definitions for Non-GAAP Measures (V)
Reconciliation and Definitions for Non-GAAP Measures (V) Limitations Associated with Siemens’ Supplemental Financial Measures The supplemental financial measures reported by Siemens may be subject to limitations as analytical tools. In particular: With respect to adjusted or organic growth rates o