Siemens Energy Ag · XETR:ENR
Siemens Energy — Investor Day (May 2022)
23 slides from Siemens Energy's investor day presentation, May 24, 2022
Slide 1: Capital Market Day 2022 CFO Section
Capital Market Day 2022 CFO Section Maria Ferraro Chief Financial Officer Siemens Energy is a trademark licensed by Siemens AG. © Siemens Energy, 2022
Slide 2: Disclaimer
Disclaimer INFORMATION AND FORWARD-LOOKING STATEMENTS This document contains statements related to our future business and financial performance, and future events or developments involving Siemens Energy that may constitute forward-looking statements. These statements may be identified by words suc
Slide 3: Key messages
Key messages Gas and Power has been delivering on its targets Our target Improving market trends and our focus on customers and Full focus on sustainable advancements in technology result in a rising order backlog shareholder value of better margin quality creation Higher margins and strong cash con
Slide 4: Progress report
01 02 03 Progress Increasing Sustainable report transparency value creation CMD | M. Ferraro | CFO Section 4 2022-05-24 © Siemens Energy, 2022
Slide 5: Increasing order backlog with better margin profile
Increasing order backlog with better margin profile Gas and Power (GP) order backlog (€bn) Improved business Book-to-Bill +17% foundation Ø FY20 – H1 FY22 57 Backlog covering c. 3x annual revenue 51 48 GP 1.17 Strong increase across all businesses 35 Services Average margin up >150bps in both G 1.10
Slide 6: Gas and Power cost saving programs to deliver structural savings fully on track
Gas and Power cost saving programs to deliver structural savings fully on track Focus on >€800m execution cost saving target1 >€350m realized by H1 FY22 Resizing capacities and function c. €300m optimization (c. 3,700 reduced by H1 FY22) Consolidation of footprint (e.g. Le Havre, Olean) >€500m Stron
Slide 7: Continuous broad-based margin expansion along the progress of our cost saving programs
Continuous broad-based margin expansion along the progress of our cost saving programs Adjusted EBITA margin before Special Items (in %) Generation Industrial Applications Transmission Gas and Power 8.0% 6.2% 6.1% 6.3% 6.5% 6.5% 5.9% 4.6% 4.5% 6.0% 3.6% 3.4% 4.5% 2.7% 1.4% 0.4% FY20 FY21 H1 FY22 FY2
Slide 8: Unprecedented headwinds, defending our margins
Unprecedent headwinds Defending our margins War in Ukraine Resilient business mix incl. >40% service share with • New business stopped and following sanctions regime effective cost indexation • Annual business volume of c. €0.5bn, incl. service • Loss of revenue (c. €300m – €400m) in FY22 and high d
Slide 9: Exceptional cash conversion supported by rigorous working capital management
Exceptional cash conversion supported by rigorous working capital management Free cash flow pre tax (€bn) Operating Net Working Capital (€bn) OWC target FY23 CCR1 Ø >2 Reduction >€2bn already achieved2 Ongoing asset management focus 1.4 4.1 3.1 2.1 1.9 Net Contract Assets / Contract Liabilities 4.1
Slide 10: Keeping our promises
Keeping our Improved business foundation Higher backlog with improved margin and cash profile promises Cost saving programs fully on track Focus on implementation Profitability improved across all divisions within GP Step-by-step increase towards mid-term target Asset excellence Cash conversion supp
Slide 11: Increasing transparency
01 02 03 Progress Increasing Sustainable report transparency value creation CMD | M. Ferraro | CFO Section 11 2022-05-24 © Siemens Energy, 2022
Slide 12: New reporting structure significantly increases transparency
New reporting structure significantly increases transparency Reporting structure New reporting Before After structure Siemens Energy Siemens Energy Effective October 1, 2022 Gas Services New reporting structure following board structure, splitting former Gas Grid Technologies and Power segment into
Slide 13: Greater transparency enables the capital market to fully appreciate each Business Area
Greater transparency enables the capital market to fully appreciate the value of each Business Area New Reporting structure as of October 1, 2022 Revenue / Adj. EBITA margin Business Areas Business activities included before SI (FY21 pro-forma)1 Includes all gas and large steam turbines and related
Slide 14: Sustainable value creation
01 02 03 Progress Increasing Sustainable report transparency value creation CMD | M. Ferraro | CFO Section 14 2022-05-24 © Siemens Energy, 2022
Slide 15: We are at an inflection point for sustainable growth at GP
We are at an inflection point for sustainable growth at GP to lead the energy transformation Stabilize & (Re)shape Sustainable growth Excellent positioned Deliver on the fundamentals Stable / modest decline Gas Services Accelerating markets Unique operating model Mid single digit Grid Technologies F
Slide 16: New Business Area margin targets support Gas and Power target of ≥8%
New Business Area margin targets clearly support original Gas and Power margin target of ≥ 8% as reported Adjusted EBITA margin w/o SI Target Ranges FY25 as reported (incl. SI) Existing structural cost saving programs / portfolio optimization Operational excellence / NCC reduction Efficencies from n
Slide 17: Strong balance sheet with a sizeable net cash position
Siemens Energy: Strong balance sheet with a sizeable net cash position supports the operating business Net cash/(Net debt) as of March 31, 2022 (in €m) 5,030 5,131 101 SGRE: €2.8bn SE excl. SGRE: €0.5bn (3,327) (189) (725) 1,615 (89) 801 Cash and cash Receivables from Total Long- and short- Payables
Slide 18: Prudent financial policy consistent with a BBB credit rating
Commitment to a prudent financial policy consistent Our solid investment with a BBB credit rating grade rating means Investment grade Reliable access to debt and equity capital markets, if required BBB, outlook negative Financial solidity is indispensable for our business model Favorable credit term
Slide 19: Disciplined capital allocation
Disciplined capital allocation 1 2 3 Investments into Return cash to Balance the future shareholders sheet Shifting capital allocation towards Dividend policy: 40 – 60% Committed to a prudent financial the three pillars with respect to payout ratio1 policy and strong balance sheet R&D, capex and por
Slide 20: Key messages
Key messages Gas and Power has been delivering on its targets Our target Improving market trends and our focus on customers and Full focus on sustainable advancements in technology result in a rising order backlog shareholder value of better margin quality creation Higher margins and strong cash con
Slide 21: Appendix
Appendix CMD | M. Ferraro | CFO Section 21 2022-05-24 Siemens Energy is a trademark licensed by Siemens AG. © Siemens Energy, 2022
Slide 22: The new transparency at a glance
The new transparency at a glance Order Adj. Adj. EBITA FCF New Unit/ Regular Reporting Orders Backlog Revenue EBITA before SI pre tax EBITDA Service Split1 Siemens Energy ● ● ● ● ● ● ● ● GS ● ● ● ● ● ● ● ● GT ● ● ● ● ● ● ● ● TI ● ● ● ● ● ● ● ● SES ● ● ● E-A-D ● ● ● IST ● ● ● CP ● ● ● SGRE ● ● ● ● ●
Slide 23: Portfolio transition bridge from the old to the new structure in Gas and Power
Portfolio transition bridge from the old to the new structure in Gas and Power Portfolio transition Generation Gas Services €7.9bn €9.0bn Central Gas Services Decentral Gas Services Industrial Steam Units Decarb. Solutions Decentral Industrial Gas Services Compression €1.6bn Applications Transformat