Slide 1: Investments in digital industry making an impact
Investments in digital industry making an impact Ralf P. Thomas, CFO | Lisa Davis, Member of the Managing Board Q2 FY 2018 Analyst Call | Munich, May 9, 2018 Unrestricted © Siemens AG siemens.com
Slide 2: Notes and forward-looking statements
Notes and forward-looking statements This document contains statements related to our future business and financial performance and future events or developments involving Siemens that may constitute forward-looking statements. These statements may be identified by words such as “expect,” “look forw
Slide 3: Overall strong performance - tough markets in PG continue
Q2 FY 2018 Overall strong performance - tough markets in PG continue Strong book-to-bill at 1.11x despite weakness in new business at Power Gen Revenue growth in most businesses offsetting weakness in PG Outstanding performance in DF secures IB profit margin of 11.0% Six businesses in or abo
Slide 4: Siemens portfolio in strong shape
Siemens portfolio in strong shape Structural challenges in Power and Gas Revenue (IB) H1 FY 2018 Profit margin H1 FY 2018 PD DF DF 20.5% 10% SHS 16.7% 15% PG EM 7.7% 15% H1 2018 16% SHS MO 10.7% % of IB 11% BT 10.3% SGRE 14% SGRE 5.2% 8% 11% PD 7.0% BT EM MO PG 5.8% Most divisions with excellent per
Slide 5: PG: Solid service business
PG: Solid service business Contracting markets require further rightsizing of capacities Power and Gas (PG) Orders Revenue Business Mix (Revenue) €bn Compression Solution Service -7%1) -21%1) Steam H1 2018 H1 2018 3.8 4.1 Large Gas 3.2 2.9 (Large & % of total % of total Small) Q2 FY 17 Q2 FY 18 Q2 F
Slide 6: PG: Industry overcapacities creating pricing pressure in all product lines
PG: Industry overcapacities creating pricing pressure in all product lines – PG with market share gains Large Gas Turbines Small/Medium/Aero GT Compression # of Units (Market) # of Units (Market) Adressed market in € New units rotating equipment ~-45% -34% Industrial: Down ~-30% 186 Oil & Gas: Up 72
Slide 7: PG: Increasing and resilient Services backlog complemented by technology infusion
PG: Our increasing and resilient Services backlog is complemented by technology infusion Services with an increasing backlog … … a resilient regional mix €bn Gas turbine utilization (in %) + YoY change 0% +4% +1% -2% + Trend 31 Middle East FlexLTP 6 LAM Asia Europe, CIS 2013 2014 2015 2016 2
Slide 8: PG: Customer proximity and innovation key drivers for success
PG: Customer proximity and innovation key drivers for success First H-Class for China mainland Integrated solution for FPSO vessel Significant invest in 3D-Printing Two H-Class gas turbines for Six aeroderivative Gas €30m invest in Materials customer Huadian Fuxin Turbine packages for Solution
Slide 9: PG: Savings delivered at different speeds dependent on country
PG: Savings are delivered at different speeds dependent on country – material impact on bottom line expected in FY 2020 Share of 6,100 announced job reductions Status and expected financial impact Significantly lower FY 18 revenue vs. FY 17 RoW Ramp up of savings: US – implementation well on tra
Slide 10: DF: World-class Digital Enterprise; PD: turnaround measures underway
DF: World-class Digital Enterprise winning market share PD: Implementation of turnaround measures well underway Digital Factory (DF) Process Industries and Drives (PD) Orders Revenue Orders Revenue €bn €bn +11%1) +13%1) +6%1) +1%1) 2.9 3.4 2.7 3.3 2.3 2.3 2.2 2.1 Q2 FY 17 Q2 FY 18 Q2 FY 17 Q2 FY 18
Slide 11: Digital Enterprise – implement now!
Hanover Fair 2018 Digital Enterprise – implement now! Digital solutions can be deployed end-to-end in every industry and in companies of all sizes | ~7,400 Leads Rapidly growing MindSphere ecosystem > 40 Partners | ~140 Applications | 20 MAC’s Broad Cybersecurity and seamlessly integrated Additive M
Slide 12: Mentor – more than a great asset
Mentor – more than a great asset Strong market Excellent fit Profitable growth Electronic Design Automation market DF Software Revenue €bn €bn CAGR: 10-15% ~+7% ~3.4 ~8.9 ~8.4 ~2.6 2017 2018e 2019e 2020e FY17 FY18e FY19e FY20e Key growth drivers: Broadest software portfolio with On track to ac
Slide 13: EM: Broad based improvement; BT: Great performance
EM: Broad based improvement confirms positive trajectory BT: Great performance – operational margin expansion Energy Management (EM) Building Technologies (BT) Orders Revenue Orders Revenue €bn €bn -14%1) +6%1) +5%1) +8%1) 3.6 2.8 3.0 3.0 1.8 1.8 1.6 1.6 Q2 FY 17 Q2 FY 18 Q2 FY 17 Q2 FY 18 Q2 FY 17
Slide 14: MO: Excellent growth and industry leading margins
MO: Excellent growth and industry leading margins Mobility (MO) Profit margin Orders Revenue Profit in €m €bn 9.2% 10.7% +17%1) +9%1) 7.8% 8.7% 7.3% 2.1 2.4 2.0 2.1 -4.0% 747 532 588 678 459 Q2 FY 17 Q2 FY 18 Q2 FY 17 Q2 FY 18 -232 FY 13 FY 14 FY 15 FY 16 FY 17 H1 18 Profit Profit margin Pension eff
Slide 15: Siemens Healthineers: Successful IPO unlocks value potential
Despite significant FX-headwind solid Q2-performance Successful IPO of Siemens Healthineers unlocks value potential Siemens Healthineers (SHS) Strong share price performance In € Orders Revenue 36 €bn Closing: 35 €33.10 +8%1) +3%1) 34 3.4 3.3 3.4 3.2 33 32 31 Q2 FY 17 Q2 FY 18 Q2 FY 17 Q2 FY 18 +18.
Slide 16: SGRE – Stringent execution of roadmap continues
SGRE – Stringent execution of roadmap continues Siemens Gamesa Renewable Energy (SGRE) Orders Revenue Clear roadmap with L3AD2020 program €bn Global #1 with 8.8 GW of new capacity in 2017 -32%1) ahead of competition -9%1) 3.1 3.0 2.2 SGRE clear # 1 in Offshore & # 2 in Onshore 1.5 SGRE marke
Slide 17: H1 18 with large one time gains from Osram sale and Atos share transfer
H1 18 with large one time gains from Osram sale and Atos share transfer Below Industrial Business – H1 FY 2018 Expectations for H2 FY 2018 €m • SFS: FY 18 in line with FY 17 1,336 53 • CMPA: Volatility remains, negative in H2 impacted by -449 carve-out related topics 363 4,462 -585 -167 • SRE: FY 18
Slide 18: Solid free cash flow development
Solid free cash flow development Free cash flow (cont. and disc. operations) €m +14% 738 1,452 791 1,662 714 872 Q1 FY 17 Q2 FY 17 H1 FY 17 Q1 FY 18 Q2 FY 18 H1 FY 18 Unrestricted © Siemens AG 2018 Page 18 Munich, May 9, 2018 Q2 FY 2018 Analyst Call
Slide 19: Guidance FY 18 raised
Guidance FY 18 raised Earnings per share (in €) Guidance update We continue to expect geopolitical uncertainties such as trade mid-point restrictions that may affect investment sentiment. +5% Following the strong results achieved in the first half of fiscal 8.00 2018, we raise our outlook for basic
Slide 20: Appendix
Appendix Unrestricted © Siemens AG 2018 Page 20 Munich, May 9, 2018 Q2 FY 2018 Analyst Call
Slide 21: Siemens Vision 2020 execution well advanced
Siemens Vision 2020 execution well advanced FY 2018 – Delivering results and setting direction for next level Value “Vision 2020+” Scale up • Customer and market focus • Digitalization at work Strengthen core • Innovation push • Healthcare IPO • Setting up Siemens Alstom • Successful integration of
Slide 22: One Siemens Financial Framework
One Siemens Financial Framework Clear targets to measure success and accountability One Siemens Financial Framework Siemens Growth: Capital efficiency Capital structure Siemens > most (ROCE2)) (Industrial net debt/EBITDA) relevant competitors1) 15 – 20% up to 1.0x (Comparable revenue growth) Total c
Slide 23: Siemens Vision 2020 - Execution well underway
Siemens Vision 2020 - Execution well underway, most targets already achieved by FY 2017 GOAL INTENT KPI Implement stringent company gover- Live lean governance and 1 nance with effective support functions drive continuous optimization €1bn cost savings by FY 2016 achieved Strengthen Sharpen our busi
Slide 24: Financial cockpit – Q2 FY 2018
Financial cockpit – Q2 FY 2018 Orders Revenue Profit Industrial Business (IB) Net Income in €bn -1% Comp. 0% in €bn in €bn +39% (-2%) (nom.) (0%) -8% 22.7 22.3 2.5 2.0 2.3 20.1 20.1 1.5 12.3% 11.7% Margin 12.0% 11.0% B-t-B 1.13 1.11 Q2 FY 17 Q2 FY 18 Q2 FY 17 Q2 FY 18 Q2 FY 17 Q2 FY 18 Q2 FY 17 Q2 F
Slide 25: Net debt bridge – Q2 FY 2018
Net debt bridge – Q2 FY 2018 Q2 ΔQ1 • SFS Debt +22.4 -0.1 Ind. Net Debt/ • Post emp. Benefits -8.1 +1.5 EBITDA (c/o) • Credit guarantees -0.4 0.0 0.6x • Fair value adj. +0.3 0.0 (Q1 FY18: 0.8x) (hedge accounting) Operating Activities -20.8 -20.2 -6.0 therein a.o.: therein: • CAPEX -0.5 • Δ Inventori
Slide 26: Significant reduction of pension deficit driven by Atos share transfer
Significant reduction of pension deficit driven by Atos share transfer in Germany Q2 FY 2018 – Pensions and similar obligations Q1 Q2 in €bn1) FY 2015 FY 2016 FY 2017 FY 2018 FY 2018 Defined benefit obligation (DBO)2) (36.8) (42.2) (36.9) (36.9) (36.5) Fair value of plan assets2) 27.1 28.7 27.6 27.7
Slide 27: Q2 FY18 Profit Bridge from SGRE disclosure to SAG disclosure
Q2 FY18 Profit Bridge from SGRE disclosure to SAG disclosure Different profit definitions at SGRE and SAG to be considered in models in €m disclosure (as of May 4, 2018) disclosure (as of May 9, 2018) 8.4% 189 7.7% 172 -61 75 5.2% 55 -4 -7 117 2.4% 61 54 EBIT Integration & PPA effects EBIT Integrati
Slide 28: Q2 performance aligned with FY18 guidance
Q2 18 performance aligned with FY18 guidance Unrestricted © Siemens AG 2018 Page 28 Munich, May 9, 2018 Q2 FY 2018 Analyst Call
Slide 29: Q2 FY18 Profit Bridge from Siemens Healthineers disclosure to SAG disclosure
Q2 FY18 Profit Bridge from Siemens Healthineers disclosure to SAG disclosure Different profit definitions at Siemens Healthineers and SAG to be considered in models in €m disclosure (as of May 3, 2018) disclosure (as of May 9, 2018) €73 million IPO costs 17.4% were deducted 17.0% 560 from equity 16.
Slide 30: Siemens Healthineers FY 2018 Guidance reaffirmed
Siemens Healthineers FY 2018 Guidance reaffirmed FY2017 (IFRS 15) FY2018E Comments on FY2018E Revenue (€m) 13,677 • Comparable revenue growth on a q-o-q basis can fluctuate significantly • Significant FX headwinds in FY2018E expected resulting in slightly Comparable growth (%) 3.8%1) 3-4% decreasing
Slide 31: Financial calendar
Financial calendar May 9, 2018 Q2 Earnings Release May 16, 2018 May Roadshow Germany (Frankfurt) May 30 - 31, 2018 Bernstein Conference (New York) & Roadshow Canada (Toronto) June 12, 2018 Exane Conference (Paris) June June 15, 2018 JP Morgan Conference (London) August 2, 2018 August Q3 Earnings Rel
Slide 32: Investor Relations contacts
Investor Relations contacts Investor Relations Internet: www.siemens.com/investorrelations E-Mail: investorrelations@siemens.com Telefon: +49 89 636-32474 Fax: +49 89 636-1332474 Unrestricted © Siemens AG 2018 Page 32 Munich, May 9, 2018 Q2 FY 2018 Analyst Call