Siemens Aktiengesellschaft · XETR:SIE
Siemens Aktiengesellschaft — Siemens — Investor Day (December 2013)
21 slides from Siemens Aktiengesellschaft's investor day presentation, Dec 5, 2013
Slide 1: Financial Performance and Priorities
Hannes Apitzsch | CFO Infrastructure & Cities Sector Financial Performance and Priorities Capital Market Day London, December 5, 2013 Unrestricted © Siemens AG 2013. All rights reserved.
Slide 2: Safe Harbour Statement
Safe Harbour Statement 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 “expects,” “looks forward to,” “an
Slide 3: Orders strongly driven by Transportation & Logistics mega orders
Orders strongly driven by Transportation & Logistics (T&L) mega orders Orders Revenue €bn Nom. CAGR1) €bn +3% Nom. CAGR +3% 21.3 Thameslink 21.9 17.1 €3.0 bn 17.0 17.6 17.9 ICx €3.7bn -20% +28% Mega order received +4% +2% in Q1 FY 2014: -22% +28% Riyadh €1.6bn +1% +1% FY 2011 FY 2012 FY 2013 FY 2011
Slide 4: Strong Orders in Europe due to major projects awarded in UK and Germany
Strong Orders in Europe due to major projects awarded in UK and Germany Orders1) by Region FY 2013 Orders1) development in selected countries €bn Comp. Orders growth2) 3.8 Velaro Eurostar (€0.8bn) in Americas FY 2011 and Thameslink 1.5 1.0 +304% UK -35% (€3.0bn) in FY 2013; successful 19% Invensys R
Slide 5: Bottom line affected by Transportation & Logistics
Bottom line affected by Transportation & Logistics – Good progress at Power Grid and Building Technologies Underlying Profit Non-recurring items (Underlying) €bn €bn 1.2 1.2 1.2 0.9 7.1% 0.5 6.6% 6.7% 0.3 0.1 FY 2011 FY 2012 FY 2013 FY 2013 Transformation Project charges Invensys Total charges1) & c
Slide 6: Transportation & Logistics overshadows Sector cash flow performance
Transportation & Logistics overshadows Sector cash flow performance – Positive cash conversion at Power Grid and Building Technologies Free Cash Flow €bn Sector cash performance strongly impacted by T&L 1.2 • Project performance delays customer payments 0.7 1.28 1.06 • Required build up of inventory
Slide 7: Financial priorities are clear
Financial priorities are clear… 1 Tighten project risk management – close out project issues 2 Ensure reliable project execution 3 Leverage power of €29bn backlog 4 Accelerate productivity, cost improvements and cash performance 5 Strengthen business mix and portfolio – resource allocation IC Busine
Slide 8: Tighter project selection process – strict focus on project execution
Tighter project selection process – Strict focus on project execution 1 • Strengthened management commitment and focus on accountability Management • Key personnel replaced following comprehensive management focus and screening process accountability • Brought management closer to (critical) project
Slide 9: Early identification of challenging projects through active portfolio risk management
Early identification of challenging projects as a result of an active portfolio risk management Early risk detection Risk management tool framework Risk mitigation • Trend analysis of PM Phase EWS Results • Top management milestones completed projects and No. Org. Unit Project Name Cat. S Scoring De
Slide 10: Learnings applied to high profile pipeline
Learnings applied to high profile pipeline New intercity platform for Deutsche Bahn > €3.7bn • Fundamentally different approach to homologation compared to previous ICx projects • Automated Train Protection (ATP) system provided by Siemens' Rail Automation Business Unit vs. external sources in Velar
Slide 11: SFS financial expertise: A competitive advantage
SFS financial expertise: A competitive advantage Siemens Financial Services (SFS) Examples • Captive financing arm RL: Thameslink project • PPP1) for design, manufacture, • Strong global presence maintenance and financing • Outstanding relations with global financing of commuter trains community SFS
Slide 12: Driving our backlog to generate added value
Driving our backlog to generate added value – Positive effects of selective order entry coming through Active backlog management High potential for closing large service contracts €bn 1 Selective Order intake: €bn • Thameslink 0.6 • Strict project approval processes installed • Velaro RUS 0.5 • Proj
Slide 13: Delivering around €1.0bn in Productivity/Others between FY 2012 and FY 2014
Delivering around €1.0bn in Productivity/Others between FY 2012 and FY 2014 Profit transition Productivity measures on track €bn • Implementation on track Approx. 7% 6.0% • > 13k productivity actions initiated, approx. 8k already implemented in FY 2013 1.0 • 74% of savings are generated in Lead coun
Slide 14: Investment in ambitious Transformation Program brings structural efficiencies
Investment in ambitious Transformation Program brings sustained, structural efficiencies to Sector Headcount reduction Transformation investments Total reduction of • Transformation charges of €0.5bn in FY 2013 thereof €0.1bn approx. 5,000 employees impairment related and €0.4bn transformation inves
Slide 15: Two areas pace productivity gains
Two areas pace productivity gains Material costs Approx. €700m1) Processes Approx. €700m1) Increased material productivity through… Value added measures through… • Optimization of footprint Commercial levers Technical levers Manufacturing • Enforced demand bundling (on all levels) • Selective make-o
Slide 16: Tight SG&A management and focused R&D
Tight SG&A management and focused R&D SG&A expenses R&D expenses €bn Non-recurring items1) €bn Non-recurring items1) 3.1 Underlying SG&A Underlying R&D 2.8 2.9 x.x% in % of Revenue x.x% in % of Revenue 0.7 0.7 0.7 16.1% 16.6% 15.9% 4.1% 4.0% 3.9% FY 2011 FY 2012 FY 2013 FY 2011 FY 2012 FY 2013 Rigid
Slide 17: Focusing portfolio to strengthen core and reduce operational complexity
Focusing portfolio to strengthen core and reduce operational complexity Disposals/exits/ramp down Acquisitions/partnerships In process Postal and Baggage Handling Invensys Rail Rail Automation Infrastructure & Cities Active ramp down of businesses eMeter Smart grid application platform Partly
Slide 18: IC has a low CAPEX requirement
IC has a low CAPEX requirement CAPEX FY 2013 CAPEX by investment area €bn CAPEX ratio1 ) 2/3 of CAPEX investment in innovation and growth projects x% adjusted for PPA CAGR -5% Others 0.3 15% 0.3 0.2 110% 45% Innovation Replacement 21% 99% 84% 19% Growth FY 2011 FY 2012 FY 2013 FY 2013 CAPEX by Busin
Slide 19: IC will remain well in Siemens ROCE Target Range
IC will remain well in Siemens ROCE Target Range – Invensys Rail acquisition affects current level Net Capital Employed Underlying ROCE3) €bn % y-o-y change +64% 32% +68% +121% -85% +59% 5.0 28% 20% 3.0 2.9 1.5 0.0 0.5 FY 2012 FY 2013 Goodwill Intangibles PPE & NWC2) FY FY FY … Other1) 2011 2012 201
Slide 20: Financial priorities
Financial priorities Sector EBITDA Margin Target Range will be reached 1 Permanently strengthen risk and project management 8.7% 8.2% 8.2% 2 Clean order backlog execution with increasing profitability 3 Effective management of productivity & capital efficiency 4 Further strengthen business mix and p
Slide 21: 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. Orders and order backlog; adjusted or organic growth rates of revenue and orders; book-to-bill ratio; Total Sectors profit; return on equity (af