Siemens Aktiengesellschaft · XETR:SIE
Siemens Aktiengesellschaft — Q3 2023 Earnings Presentation
33 slides from Siemens Aktiengesellschaft's earnings presentation, Aug 10, 2023
Slide 1: Continued profitable growth and excellent free cash flow
Continued profitable growth and excellent free cash flow Roland Busch, CEO Siemens AG Ralf P. Thomas, CFO Siemens AG Unrestricted | © Siemens 2023 | Investor Relations | Q3 Analyst Call | 2023-08-10
Slide 2: Notes and forward-looking statements
Notes and forward-looking statements This document contains statements related to our future business and or not at all or assumptions prove incorrect, actual results, performance or financial performance and future events or developments involving achievements of Siemens may (negatively or positive
Slide 3: Q3 Business highlights
Q3 Business highlights Continued profitable growth and excellent free cash flow • Clear revenue growth: DI, SI and Mobility all up double-digit Strong topline • Competitive strength: DI Automation revenue up 15%, SI Electrification up 22% • SI robust demand, Mobility large orders, while DI normalizi
Slide 4: Q3 Key Financials
Q3 Key Financials €24.2bn €18.9bn 15.3% +15% +10% €2.60 ex SE invest €1.78 €3.0bn 0.8x as reported Note: Orders and Revenue growth comparable Page 4 Unrestricted | © Siemens 2023 | Investor Relations | Q3 Analyst Call | 2023-08-10
Slide 5: Further growing order backlog at all-time high
Further growing order backlog at all-time high Stringent execution to leverage normalizing supply chains €bn • Strong commercial activity in systems, 110 17 solution and service business 5 DI 12 5 4 3 • Supply chains mostly back to normal SI 16 1 • Healthier lead times for product businesses in 35 D
Slide 6: Sufficient transformation speed only through Automation & Digitalization
Secular trends drive material investments in automation, digitalization and sustainability Implementation speed is decisive Labor force reduction (2022 – 2040) Inflation Reduction Act Source: S&P 2023 Circular economy Chips & Science Act -81 million Made in China 2025 30% of global greenhouse gas -7
Slide 7: Targeted investment strategy of ~€2bn to boost future growth, innovation and resilience
Targeted investment strategy of ~€2bn to boost future growth, innovation and resilience Expanding global high-tech manufacturing, innovation labs and education centers • New high-tech factory for DI Factory Automation in Singapore • Start of production in H2 2025 • Growing demand in Southeast Asia •
Slide 8: Winning in data centers through a tailored vertical approach
Winning in data centers through a tailored vertical approach Accelerating use of AI applications drives data center investment Addressable market CAGR Revenue (comparable) Key decision criteria for data center customers in €bn Data center vertical • Highest reliability and best quality • Short const
Slide 9: SaaS transition fully on track, Cloud ARR reaching almost €1bn
Combining the real and digital worlds SaaS transition fully on track, Cloud ARR reaching almost €1bn Therein 76% new customers €bn +14%1) # Customers (accumulated): ~9,260 3.6 3.5 3.6 3.7 ~7,520 3.0 3.1 3.3 SME customers 2.9 Target: ~5,450 ~40% ~3,100 82% by FY 25 ~2,350 81% ~500 ~1,250 79% 18% 24%
Slide 10: New offerings for Siemens Xcelerator portfolio delivering customer value
Combining the real and digital worlds New offerings for Siemens Xcelerator portfolio delivering customer value €bn • Integration of Supplyframe Design-to- Source Intelligence platform for global ~10% CAGR electronics in EDA offering • Real-time supply chain visibility for 6.5 digital twin 5.3 5.6 •
Slide 11: Drive sustainability building on strong domain know-how and core technologies
Drive sustainability building on strong domain know-how and core technologies Close collaboration for superior customer value Energy efficient, digitally optimized high Development of next generation all-electric, containment facility, connecting building zero emissions commuter aircraft using and p
Slide 12: Digital Industries (DI)
Digital Industries (DI) Continued demand normalization on accelerated level, strong margin & cash conversion €bn €bn €m -35%1) +11.5%1) +280bps 6.5 17-23% 5.3 -11% 4.9 1.1 1,244 1,109 4.1 1.2 18.8% 21.3% 3.8 4.2 1.38 0.99 18.3% 21.1% Q3 FY 22 Q3 FY 23 Q3 FY 22 Q3 FY 23 Q3 FY 22 Q3 FY 23 Q3 FY 22 Q3
Slide 13: Digital Industries – elevated short-cycle backlog normalizing to healthier levels
Digital Industries – elevated short-cycle backlog normalizing to healthier levels Driven by improved supply chains and softer macro expectations 1.09 1.07 1.13 1.16 1.64 1.30 1.33 1.00 1.24 0.95 0.77 7.1 6.5 6.3 Orders 5.9 5.7 5.5 Revenue 5.2 5.3 4.7 5.7 5.1 5.3 4.3 4.9 4.1 4.5 4.6 4.2 4.3 4.0 4.1 3
Slide 14: Moderation of growth momentum in key end markets on high levels
Digital Industries (DI) Vertical end market trends Moderation of growth momentum in key end markets on high levels Automotive 20% Pricing effects in end Machine Building 15% markets are fading Pharma & Chemicals 10% Food & Beverage 10% Electronics & Semiconductors 10% 1 Y-o-Y industry revenue develo
Slide 15: Accelerated normalization of demand & destocking
Digital Industries (DI) Accelerated Q3 21 Q3 22 normalization of Topline with tough comps and China -61% +0% impacted by macro headwinds and demand & destocking +32% destocking +56% Orders normalizing on tough comps; Germany -38% +19% Revenue growth driven by Discrete Backlog execution +65% +22% on
Slide 16: Smart Infrastructure (SI)
Smart Infrastructure (SI) Excellent performance across all metrics, free cash flow an outstanding highlight €bn €bn €m -1%1) +270bps +15%1) +82% 5.5 5.4 11-16% 4.9 733 4.4 1.1 1.0 13.1% 15.8% 402 3.4 3.9 15.6% 0.95 12.9% 0.72 Q3 FY 22 Q3 FY 23 Q3 FY 22 Q3 FY 23 Q3 FY 22 Q3 FY 23 Q3 FY 22 Q3 FY 23 •
Slide 17: Key verticals continue to grow in real terms
Smart Infrastructure (SI) Vertical end market trends Key verticals continue to grow in real terms Commercial Buildings 20% Commercial Building end market with Public Sector / Education 10% softening demand Power Distribution 5% Data Center 5% Electrical and Electronics 5% Healthcare 5% 1 Trend next
Slide 18: Order growth driven by large orders especially in U.S.
Smart Infrastructure (SI) Order growth driven by Strong order momentum in data large orders especially U.S. +10% +22% center & battery manufacturing; Electrification & Electrical Products in U.S. (EP) drive revenue Electrification orders balancing Germany -5% +11% softer EP on tough comps; Revenue g
Slide 19: Mobility (MO)
Mobility (MO) All-time-high orders, strong revenue growth and excellent free cash flow performance €bn €bn €m +224%1) 8.3 >15x +12% 1) 29.0% 709 10 - 13% 2.5 2.6 2.8 0.4 0.4 28.7% 8.3% 0.07 3.40 2.1 2.1 8.1% 47 Q3 FY 22 Q3 FY 23 Q3 FY 22 Q3 FY 23 Q3 FY 22 Q3 FY 23 Q3 FY 22 Q3 FY 23 • Book-to-bill at
Slide 20: Below Industrial Business
Below Industrial Business Strong operational performance, while impact from SE Investment weighs on net income €m • SFS: Strong performance driven by Equity business 165 44 -776 2,752 • Portfolio Companies: Solid profitability as expected -576 • Other Below IB items: SE Investment -200 loss from at-
Slide 21: Free cash flow
Free cash flow Outstanding cash performance highlighting excellent quality of business €m +8% 6,257 • Strong profit development 5,811 0.15 1.04 1.14 2,713 3,149 • Increased operating working capital level 0.82 0.78 safeguarding topline growth 395 9M FY 22 Q1 FY 23 Q2 FY 23 Q3 FY 23 9M FY 23 €m +14%
Slide 22: Capital structure with further improvement
Capital structure with further improvement Continuing strong operational and cash performance reflected in rating upgrade Industrial net debt/ EBITDA • Consistent cash generation • Excellent position with strong investment grade rating and recent upgrade from Moody’s: Target Moody’s Aa3, S&P A+ 1.6x
Slide 23: Updated Outlook FY 2023
Updated Outlook FY 2023 Confirmed on group level excluding Siemens Energy Investment Comparable Profit margin Book-to-bill >1 revenue growth Digital Industries 13 – 15% 22 – 23% [17 – 20%] [22.5 – 23.5%] Revenue growth 9 – 11% (Comparable) Smart Infrastructure 14 – 16% 14.5 – 15.5% EPS pre PPA1) €9.
Slide 24: Questions and Answers
Questions and Answers Page 24 Unrestricted | © Siemens 2023 | Investor Relations | Q3 Analyst Call | 2023-08-10
Slide 25: Appendix
Appendix Page 25 Unrestricted | © Siemens 2023 | Investor Relations | Q3 Analyst Call | 2023-08-10
Slide 26: Below Industrial Business
Below Industrial Business Strong operational performance, negative effects from SE Investment weigh on net income €m 165 44 2,752 -647 -15 -39 -101 51 -25 -200 1,410 31 1,440 -576 Minorities Tax Rate €162m @ 29% IB SFS POC SE SRE Innov. Net Pensions PPA Fin., Elim., Tax Inc. Cont. Disc. Ops. Net Inv
Slide 27: Siemens Financial Services (SFS)
Siemens Financial Services (SFS) Solid FY 23 YTD performance despite continuing volatile credit environment €m ROE: 17.1% 18.5% +14% • Equity Business with strong result including 410 468 material gain on sales of investments 132 171 165 • Debt Business strongly influenced by the 30 71 96 221 197 vo
Slide 28: Net Debt bridge
Net Debt bridge Capital structure with further improvement; Moody's rating upgrade to Aa3 Ind. Net Debt/ EBITDA (c/o) €bn Operating Activities therein: 0.8x • CAPEX -0.5 (Q2 FY23: 1.0x) 39.1 37.5 12.0 therein: • ∆ Inventories -0.5 therein: 25.5 • ∆ Trade and other receivables -0.4 • FX -0.4 • ∆ Trad
Slide 29: Provisions for pensions on new historic low
Provisions for pensions on new historic low In Germany: positive impact from extraordinary funding offset by inflation-related adjustments Q FY 2020 – Pensions and similar obligations Q1 FY Q2 FY Q3 FY Q4 FY Q1 FY Q2 FY Q3 FY in €bn¹ FY 2020 FY 2021 2022 2022 2022 2022 2023 2023 2023 Defined benefit
Slide 30: Profit Bridge from SHS disclosure to SAG disclosure
Profit Bridge from SHS disclosure to SAG disclosure Different profit definitions at SHS and SAG to be considered in models €m Q3 FY 23 9M FY 23 SHS EBIT (adjusted) 740 14.2% 2,068 13.2% PPA (SHS logic)1 -92 -300 Transaction, Integration, Retention, carve-out cost -7 -23 Gains and losses from divestm
Slide 31: Outlook FY 2023 as presented by Siemens Healthineers on August 2, 2023
Outlook FY 2023 as presented by Siemens Healthineers on August 2, 2023 Page 31 Unrestricted | © Siemens 2023 | Investor Relations | Q3 Analyst Call | 2023-08-10
Slide 32: Siemens Financial Framework
Siemens Financial Framework Targets over 3 – 5 year cycle 1 – comp. 5–7% comparable 15–20% revenue Cash conversion growth ROCE1 growth rate rate (all in)2 High Progressive up to single-digit dividend growth EPS pre PPA 1.5x Industrial net policy debt/EBITDA Digital Industries Smart Infrastructure Mo
Slide 33: Financial calendar and Investor Relations Contacts
Financial calendar August 10, 2023 September 6, 2023 September 13, 2023 September 19, 2023 November 16, 2023 Q3 Earnings Morgan Stanley UBS Quo vadis Goldman Sachs Q4 Earnings Release conference tour (Virtual) conference Release (London) (Munich) Investor Relations Contacts Eva Scherer Tobias Atzler
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