Siemens Energy Ag · XETR:ENR
Siemens Energy — Investor Day (December 2012)
37 slides from Siemens Energy's investor day presentation, Dec 11, 2012
Slide 1: Siemens Energy – The company of choice
Siemens Energy – The company of choice Dr. Michael Suess CEO Energy Sector Capital Market Day Siemens Energy Charlotte, December 11, 2012 © Siemens AG 2012. All rights reserved.
Slide 2: Safe Harbour Statement
Safe Harbour Statement This document includes supplemental financial measures that are or may be non-GAAP financial measures. New orders and order backlog; adjusted or organic growth rates of revenue and new orders; book-to-bill ratio; Total Sectors profit; return on equity (after tax), or ROE (afte
Slide 3: Siemens Energy – The company of choice
Siemens Energy – The company of choice 1 Great market and growth in our strongholds 2 Footprint focus in growing regional sweet spots 3 Unique portfolio with superior business model 4 "Energy 2014" to bring performance to the next level 5 World class performance: We do it! © Siemens AG 2012. All rig
Slide 4: R&D investments pay off
R&D investments pay off #1 in steam power plants #1 in advanced (GW) via JV with SEC and #1 in offshore wind (GW) gas turbines (units) licensee BHEL Innovation highlight: Innovation highlight: Innovation highlight: 47% >60% 6 MW Highly efficient World record in combined New performance dimen- coal-f
Slide 5: Siemens Energy is structured along 5 Divisions
Siemens Energy is structured along 5 Divisions Fossil Power Oil & Gas Wind Power Power Energy Generation Transmission Service ■ Large-scale gas ■ Small-scale gas ■ Wind turbines ■ High-voltage ■ Long-term turbines, steam turbines and ■ Offshore products and service turbines, steam turbines substatio
Slide 6: Focused and highly experienced Energy team
Focused and highly experienced Energy team Energy Sector Revenue FY 2012: €27.5bn Profit FY 2012: €2.2bn 3,500 patent filings, 10,900 granted patents Michael Becker 160 locations in 90 countries represents CFO Michael Suess Ralf Guntermann Fossil Power Power Energy Oil & Gas Wind Power Generation Tr
Slide 7: Great market and growth in our strongholds
Siemens Energy – The company of choice 1 Great market and growth in our strongholds 2 Footprint focus in growing regional sweet spots 3 Unique portfolio with superior business model 4 "Energy 2014" to bring performance to the next level 5 World class performance: We do it! © Siemens AG 2012. All rig
Slide 8: Growth in global electricity demand
Growth in global electricity demand World electricity demand (TWh) 37,000 Others +2.8% p.a. 3% 2% Solar 7% Wind 15% Hydro 22,100 11% Nuclear 2% 0% 2% 16% 24% Gas 13% 22% 3% Oil 62% 4% 68% 35% Coal 41% 2011 2011 2030 2030 © Siemens AG 2012. All rights reserved. Page 8 December 11, 2012 Capital Market
Slide 9: ~7,000 GW new capacity within the next 20 years
~7,000 GW new capacity within the next 20 years World installed capacity (1,000 GW) 7.0 10.5 15% 9% Others 5% 6% Nuclear 10% 6% Solar 15% 11% Wind 10% 5.8 2.3 20% 17% Hydro 8% 26% 7% 7% 4% 4% 44% 25% 19% 26% Steam power plants 19% 40% 25% Gas power plants 22% Installed Retirements New capacity Insta
Slide 10: 62% of capacity additions in our focus markets
62% of capacity additions in our focus markets World installed capacity (1,000 GW) 7.0 10.5 38% 37% Others 8% 12% 5.8 2.3 7% Middle East 18% 35% 14% USA 34% 7% 24% 24% 29% 6% 17% Europe1) 20% 5% 21% 25% China 19% Installed Installed Retirements Retirments (’12-’30) New New capacity Capacity Installe
Slide 11: Footprint focus in growing regional sweet spots
Siemens Energy – The company of choice 1 Great market and growth in our strongholds 2 Footprint focus in growing regional sweet spots 3 Unique portfolio with superior business model 4 "Energy 2014" to bring performance to the next level 5 World class performance: We do it! © Siemens AG 2012. All rig
Slide 12: Global profile without equal: Two home markets and a strong presence in Middle East and China
Global profile without equal: Two home markets and a strong presence in Middle East and China Sector Energy Revenue USA Europe1) €bn 5.3 €bn 4.3 8.6 8.5 9.0 3.5 Ø 18% of world Ø 35% of world Additional €1.5bn revenue from minority JVs in FY 10 FY 11 FY 12 FY 10 FY 11 FY 12 2012 China €bn 1.3 1.1 1.0
Slide 13: USA: Trend towards gas plays to our strength
USA: Trend towards gas plays to our strength Trend towards gas Our strength Installed capacity 2011 1,200 GW Gas turbine factory 9% in Charlotte 8% 9% (after full ramp up 9% 0% 4% from 27 to 48 gas Retirement turbines per year) 28% of coal Installed capacity 2030 33% 1,484 GW Successful market entry
Slide 14: Europe: #1 player under difficult market conditions
Europe: #1 player under difficult market conditions Despite uncertain investment … we continue to be Europe's #1 player environment … Economic crisis ongoing Next efficiency world record for CCPP No comprehensive energy policy in place Lausward: 595 MW, >60% No integrated European energy internal ef
Slide 15: Saudi Arabia: Very successful market entry
Saudi Arabia: Very successful market entry We are a top gas player in recent years … … with upside potential ahead # of large gas turbines sold Others Electricity demand projected to Siemens 50 double within 15 years 49 Oil export preference to drive domestic gas-fired power generation Strong increa
Slide 16: China: Capturing the single biggest market via joint ventures with SEC
China: Capturing the single biggest market via our joint ventures with SEC Our market position Our philosophy #1 in steam turbines Steam Steam >40%1) market share in supercritical Turbine Turbine 39%1) market share over all >50% market share in gas turbines Gas Gas in China in the last 3 years Turbi
Slide 17: Medium-term market drivers fully intact
Medium-term market drivers fully intact Power generation Oil & Gas Transmission Market size 2012 (€bn) ~145 ~42 ~37 Market growth 2012 – 15 +6% p.a. +6% p.a. +4% p.a. High electricity Growth in primary Infrastructure demand energy demand investments Market driver Replacements Depletion of oil fields
Slide 18: Unique portfolio with superior business model
Siemens Energy – The company of choice 1 Great market and growth in our strongholds 2 Footprint focus in growing regional sweet spots 3 Unique portfolio with superior business model 4 "Energy 2014" to bring performance to the next level 5 World class performance: We do it! © Siemens AG 2012. All rig
Slide 19: Unique portfolio with superior business model
Unique portfolio with superior business model We can keep Balanced growth, Steady flow of revenue competition at bay profitability and cash1) due to installed fleet >60% World record in combined Solutions Cash, ROCE, ~20% of the world electricity generation is "branding" cycle power plants produced
Slide 20: Performance: The trend is our friend
Performance: The trend is our friend Long-term performance Performance of Divisions in 2012 New Orders Revenue Fossil Power Generation Volume Oil & Gas ( ) due to regulatory impact Wind Power Transmission Profit Underlying Profit Service Profit FY FY FY FY 2000 2007 2008 2012 incl. Distribution w/o
Slide 21: Fossil Power: Best-in-class player in advanced gas
Fossil Power: Best-in-class player in advanced gas Innovation leadership More customer value >60% World record in combined Florida Korea cycle power plants +33%6+3 x H- Ramp-up F-class, >84% Comb. heat & power efficiency class, efficiency time combined gain2) combined 30 min cycle 30 min Advanced FA
Slide 22: Oil & Gas: Playing on our strength in focus segments
Oil & Gas: Playing on our strength in focus segments Addressed Oil & Gas market Focus segments Our strategy €bn Service Compression Solutions Industrial Power Offshore • R Rotating equipment: R E production Maintain #1 in industrial +6% p.a. Onshore steam turbines R E 50 production Grow organically
Slide 23: Wind Power: Performing in stormy weather
Wind Power: Performing in stormy weather Wind is here to stay Build on leading performance New renewable capacity additions (’12 – ’30) High order backlog of >€11bn (incl. service) Growing service backlog Other Renewables High profit margin compared to competition 7% (6.0% in FY 2012) Recent innovat
Slide 24: Transmission: Clear path to growth and profitability
Transmission: Clear path to growth and profitability 1 Grid access projects stabilized Reinforced project management Project staff doubled Offshore competence center in Hamburg Partnerships in place 72x51x35m Risk & Opportunity Management strengthened ~11,000 t 2 Execution of competitiveness plan st
Slide 25: Service: A reliable value driver
Service: A reliable value driver Steady flow of highly profitable revenue Growing Service revenue One dedicated Service unit offers best-in-class service portfolio In € +9% p.a. LTPs1) for 80% of new advanced frame gas turbines Strong fleet growth in medium gas turbines: 40% until 2016 with highly p
Slide 26: "Energy 2014" to bring performance to the next level
Siemens Energy – The company of choice 1 Great market and growth in our strongholds 2 Footprint focus in growing regional sweet spots 3 Unique portfolio with superior business model 4 "Energy 2014" to bring performance to the next level 5 World class performance: We do it! © Siemens AG 2012. All rig
Slide 27: Profit target for Sector Energy is at least 12% in FY 2014
Profit target for Sector Energy is at least 12% in FY 2014 Total Sector Profit (as reported) Profit Sector Energy (as reported) ≥ 12% +420bps ≥ 12% Total Sector €3.2bn profit margin 9.5% 7.8% 2.2 7.5 ~3 – 3.5% p.a. pricing Total sum of pressure Sector profits in €bn Profit Profit Profit Volume / Pri
Slide 28: Energy 2014: committed €3.2bn bottom-up savings
"Energy 2014" committed €3.2bn bottom-up savings – Enforcement top-down Design to cost E xam ~€2.2bn ples Improvement projects identified and in execution 1 Execution ~€0.7bn Project Management Process generally strong: Off shore Grid Access Complexity underestimated 1 Cost Cost reduction in Fossil:
Slide 29: Cost reduction of €2.2bn: This is the top priority for my team
Cost reduction of €2.2bn: This is the top priority for my team 1 Cost reduction is part of our DNA … We have an excellent track record in cost reduction Cost reduction projects (Division examples) We have the required tools already in place "Energy 2014" takes cost reduction to the next level Advant
Slide 30: Cost reduction of €2.2bn: Projects are identified and in execution
ples xam E Cost reduction of €2.2bn: Projects are identified and in execution 1 Cost reduction in Fossil: Cost reduction in Wind: Design to cost in turbine frames Product cost reduction on SWT-3.0 DD nacelle Standardization of Total cost reduction for 50 and 60 Hz frames small DD nacelle based on Ac
Slide 31: Project management process generally strong
Project management process generally strong: Offshore grid access complexity underestimated 1 Stable project execution ~2,700 ■ Proven gross margin improvement between order intake and handover to customer ■ Processes and tools well established and executed, e.g. ■ Limits of Authority during project
Slide 32: Strengthen core activities: Exit from solar
Strengthen core activities: Exit from solar – no attractive business model for us 2 Changed framework conditions Solar & Hydro Division discontinued In €/kW Divest: Photovoltaic Solar-thermal -18% p.a. Strong business business price pressure in PV1) World 2009 2010 2011 2012 2013e In € CSP -17% p.a.
Slide 33: Go-to-market: Optimized Energy setup to drive sales efficiency
Go-to-market: Optimized Energy setup to drive sales efficiency 3 Strategic relevance of countries guides our sales setup Our global sales Bundling of resources in lead and main countries presence is unique Front- and back office competencies Sector Energy does Support for other countries close-by bu
Slide 34: World class performance: We do it!
Siemens Energy – The company of choice 1 Great market and growth in our strongholds 2 Footprint focus in growing regional sweet spots 3 Unique portfolio with superior business model 4 "Energy 2014" to bring performance to the next level 5 World class performance: We do it! © Siemens AG 2012. All rig
Slide 35: All Divisions with specific strategies to outperform the markets
All Divisions with specific strategies to outperform the markets Fossil Power Generation Maintain #1 in advanced gas turbine Sustainable double digit profitability Oil & Gas in growing market environment Achieve industry leading margin Wind Power by capturing growth opportunities Power Transmission
Slide 36: Strong Sector Energy outlook
Strong Sector Energy outlook Global profile without equal Superior business model Energy 2014 (€3.2bn) Cost Sector Energy focus 1 ~20%1) Solutions reduction Strengthen 2 core activities Cash, ROCE, "branding" 3 Go-to-market ~80%1) Products & Service Optimized 4 Home markets infrastructure Focus mark
Slide 37: Reconciliation and Definitions for Non-GAAP Measures
Reconciliation and Definitions for Non-GAAP Measures This document includes supplemental financial measures that are or may be non-GAAP financial measures. New orders and order backlog; adjusted or organic growth rates of revenue and new orders; book-to-bill ratio; Total Sectors profit; return on eq