Siemens Aktiengesellschaft · XETR:SIE
Siemens Aktiengesellschaft — Siemens — Investor Day (March 2010)
40 slides from Siemens Aktiengesellschaft's investor day presentation, Mar 26, 2010
Slide 1: Driving performance… now and for the future
Driving performance… now and for the future Dr. Heinrich Hiesinger Member of the Managing Board of Siemens AG CEO Industry Sector Capital Market Days 'Industry' Munich, March 26, 2010 © Siemens AG 2010. All rights reserved
Slide 2: Safe Harbour Statement
Safe Harbour Statement This document contains forward-looking statements and information – that is, statements related to future, not past, events. These statements may be identified by words such as "expects," "looks forward to", "anticipates", "intends", "plans", "believes", "seeks", "estimates",
Slide 3: Industry Sector: #1 in our markets
Industry Sector: #1 in our markets Industry Sector Industry Drive Building Industry Osram Mobility Automation Technologies Technologies Solutions Top competitors by business fields 11%* 18%* 7%* 8%* 8%* 18%* SMS Source: market research institutes / own calculations * Market share in our target marke
Slide 4: A tough and volatile business environment
A tough and volatile business environment Development of GDP and Industrial GDP from 2005 till 2009 5.6% 6 4 4.0% 1.9% 2 1.3% 0 2007 2008 2009 -2 -1.9% -4 -6 -8 2009 GDP projection was adjusted month by month -10 -9.5% We expected the crisis and World, real change yoy GDP Industrial GDP experien
Slide 5: A strong team acted decisively and delivered
A strong team acted decisively and delivered Industry Sector 2009 Outperformed competitors in growth Sector-leading margins Generated €3.3 billion in free cash flow Positioned businesses for growth Industry Drive Building Industry Osram Mobility Automation Technologies Technologies Solutions
Slide 6: Fast and far-reaching actions in a tough environment
Fast and far-reaching actions in a tough environment Market development Rapid adjustment to slumping demand Faster delivery on SG&A targets Strict CAPEX discipline Accelerated shift towards faster growth markets 2008 Page 6 March 26, 2010 Capital Market Days 'Industry' © Siemens AG 2010. All
Slide 7: SG&A cost reductions – higher savings one year ahead of plan
SG&A cost reductions – higher savings one year ahead of plan SG&A Cost €m Initial saving target: -12% € 600 million 6,160 5,408 in two years 2008 2009 We achieved In % 16.4% 15.4% € 750 million savings of sales in one year Page 7 March 26, 2010 Capital Market Days 'Industry' © Siemens AG 2010. All r
Slide 8: Significant capacity adjustment achieved – greater flexibility with short time measures
Significant capacity adjustment achieved – greater flexibility with short time measures Headcount reduced by ~16,000 Additional capacity adjustment in last 15 months through flexibility Major reductions in 2009: IA, OS and DT e.g. in Germany through short-time work and temporary workers Workforce in
Slide 9: Actions paced our strong results…
Actions paced our strong results… Volume Volume Growth 2008 vs. 2009 Q1 2009 vs. Q1 2010 €bn Siemens Industry vs. Competitors €bn -16% New Orders 42.4 33.3 -21%1) Siemens Industry 9.8 8.2 -23% Competitor Benchmark2) 2008 2009 2009 Q1 2009 Q1 2010 €bn €bn -13% 37.7 Revenue 35.0 -7%2) Siemens Industry
Slide 10: Nearly all Divisions in or near target margin in 2009
Nearly all Divisions in or near target margin in 2009 Industry IA2) IS 12-17% 5-7% Profit in €m 2008 22.2% 2008 6.2% 3,947 2009 11.8% 2009 5.3% 2,701 Q1 2010 16.8% Q1 2010 5.6% DT MO 2008 2009 11-16% 5-7% 9-13% 2008 15.2% 2008 -3.9% 2009 11.1% 2009 6.1% 2008 10.5% Q1 2010 11.0% Q1 2010 10.4% 2009 7.
Slide 11: We turned challenges into opportunities
We turned challenges into opportunities Mobility Osram Projects are under control Turnaround program executed Production capacity adjusted Customer relationships tightened New organization established Back in target margin Back in the target margin Large orders received Mobility and
Slide 12: Sharpening the Sector's profile
Sharpening the Sector's profile Reducing complexity Optimizing portfolio Sharpening Divisions Focused technology/service acquisitions: by adjusting from 10 acquired businesses 33 to 23 BUs e.g. Elan Software Traxon Technologies Amtech Lighting Reduction of legal Water Businesses entiti
Slide 13: Industry Sector has the solutions for a 'New Generation' of customer challenges
Industry Sector has the solutions for a 'New Generation' of customer challenges Macroeconomic Developments Imperatives for Industry Sector strategy Currency Economy 2008 – Trade Imbalance at record high Î Shift of economic power Î Danger of protectionism Achieve balanced value- Exchange rates at h
Slide 14: Challenges remain: Low capacity utilization slows down recovery
Challenges remain: Low capacity utilization in our customer end markets slows down recovery Industry Output Outlook 20% Forecast for global GDP is stabilizing 15% 10% 5% 0% Short-cycle industries have -5% bottomed out -10% -15% Monthly Values (not seasonal adj.) Customers focus on OPEX optimiz
Slide 15: A view of 2010: Some volume stabilization
A view of 2010: Some volume stabilization … Market volumes by industry Outlook €bn -12% Return to 2008 -2% market level unlikely 421 -2% over medium term 371 364 100 Rail Infrastr.: Marine: 11% -28% Transport 29% Transport market 98 +7% Rail 22% -4% 105 remains stable Building 30% 119 Commercial
Slide 16: Market activity at different stages of development
Market activity at different stages of development Changing market Industry market expectations by region environment €bn -12% China keeps growing -2% -2% 421 also driven by governmental support 371 364 118 -8% 0% Asia / Australia 30% Middle East and India (China 35) (+26%) (China 12%) 108 108 g
Slide 17: Sector is reshaped and focused on driving growth
Sector is reshaped and focused on driving growth Market development Increase presence in emerging markets Continued focus on technology leadership and innovation Proven ability to improve customer performance Leverage Sector strengths across customer base Enhanced service offerings 2008 Pa
Slide 18: Growth is driven from emerging markets
Growth is driven from emerging markets Emerging markets are strongest Current situation growth contributors 26% of our revenue are generated in emerging countries USA China Germany India 33% of market growth till 2015 comes from China and India alone Industry Market 3% Growth platform for Indu
Slide 19: Industry has made significant improvements in emerging markets presence
Industry has made significant improvements in emerging markets presence R&D Manufacturing Procurement Headcount Headcount Purchasing volume 47% 51% 25% 23% 25% 20% Low 2009 2011 2009 2011 2009 2011 cost e.g. e.g. e.g. share India: PL Software China: Ramp-up energy India: Increase of local leve
Slide 20: China: Significant progress made and more to come
China: Significant progress made and more to come Harbin 62 Sales offices Some examples 22 Factories Changchun 13 R&D locations Tianjin: Motor and Drives Plant 7 Training centers Shenyang Anshan All-in-one facility with production, R&D, Urumuqi Huhhot Beijing Dalian Tangshan engineering, supply ch
Slide 21: Product portfolio for emerging markets is expanding rapidly
Product portfolio for emerging markets is expanding rapidly: Examples for China Harbin Cerberus ECO FS18 in Beijing Cost optimized fire Changchun detection system Shenyang Anshan SINUMERIK 802 Urumuqi Huhhot Beijing Dalian in Nanjing Baotou Tangshan Tanggu Tianjin Completely digital control for Shij
Slide 22: We stick to our long-term strategy: Creating value through technological leadership
We stick to our long-term strategy: Creating value through technological leadership Trends Our answers Benefits Resource scarcity For our customers: Increased Competitiveness Environmental We automate care industry lifecycles productivity Increasing energy Enhanced For our shareholders: demand flexi
Slide 23: Superior customer benefits through – Productivity
Superior customer benefits through – Productivity Sinumerik SIMETAL Ultimate EAF 30% productivity increase through 50% higher productivity compared to uniform CAD / CAM / CNC process chain conventional electric arc furnace -30% -50% Gantry Milling Machine, EiMa Maschinenbau Electric Arc Furnace, Geb
Slide 24: Superior customer benefits through – Flexibility
Superior customer benefits through – Flexibility Profinet and Profisafe Dynamic traffic control Up to 30% faster time-to-market for A8 35% reduction of driving time by through flexible automated robot cells optimized traffic flow -30% -35% Audi AG City of Muenster, Germany Page 24 March 26, 2010 Cap
Slide 25: Superior customer benefits through – Efficiency
Superior customer benefits through – Efficiency Energy Performance Contracting Joule JFL2 LED systems Saving of energy costs: 57% less heating 65% higher energy efficiency compared and 76% less water usage to conventional main headlights -76% water -65% -57% heating Theresienbad Vienna, Austria Volk
Slide 26: Stronger marketing and expansion of our environmental friendly products and solutions
Stronger marketing and expansion of our environmental friendly products and solutions Energy Contracting: Water Treatment: Complete solutions for Environmental energy-efficient building technologies for water modernization processing and purification Osram Global Care: Green Mobility: Innovative lig
Slide 27: Sector-wide focus on showcasing the value of our environmental portfolio
Sector-wide focus on showcasing the value and business edge our environmental portfolio generates Brochure Customer Film magazine Online Internet Exhibition Environ- mental Portfolio Light + Building 2010 Siemens Motto: Maximize efficiency for Building and Lighting Technology Hanover
Slide 28: Technology is a competitive edge: R&D expenditure will remain high
Technology is a competitive edge: R&D expenditure will remain at a high level R&D expenditure Examples of innovation projects €bn IA PLM – Virtual production planning 1.8 1.8 ~1.8 DT Direct-mounted gearless drives IS First Endless Strip Production BT Integrated video surveillance 2008 2009 2010E OS
Slide 29: Broad use of technology platforms: Speed up innovation and reduce costs
Broad use of technology platforms: Speed up innovation and reduce costs Manufacturing Process Buildings Transport Industries Industries Controller for Controls Platform based Packaging Cement plants Energy mgmt. Rail interlocking on SIMATIC machines CEMAT Global Mgmt Station SICAS PN S7-1200 Variabl
Slide 30: Growing ability to create value across all of our activities
Growing ability to create value across all of our activities Î Increased productivity Joint customer 1 Î Enhanced flexibility value proposition Î Improved efficiency Î Automation competence – Joint technology 2 across Divisions platforms along the entire lifecycle Î Expanded service offering 3 Joint
Slide 31: Expanding service revenue as a sustainable source of high-quality sales
Expanding service revenue as a sustainable source of high-quality sales Service has Siemens Industry Goal attractive potential offers… Service business …higher output Industry Service represents 25% of aims to grow… total Industry market …better uptime …twice as fast as In 2009, Siemens
Slide 32: Drive volumes and improve returns with optimized sales setup
Drive volumes and improve returns with optimized sales setup Our customers… Our answer: … expect that we speak their Stronger orientation along 'industry language' end customer segments … keep their freedom to buy through Expand distribution business other channels and channel management … expect a
Slide 33: Ethical and economic standards guide our sales activities
Ethical and economic standards guide our sales activities Compliance Pricing We convince our customers to Shrinking markets, massive buy, based upon our excellent capacity under-utilization and products and services competition increase pricing pressure Compliance is still top priority. Industry put
Slide 34: Industry Sector: Actions to improve performance and competitiveness continue
Industry Sector: Actions to improve performance and competitiveness continue 2010 Industry Regain growth momentum Automation Expand Industrial Software business Drive Adjust capacity to market level Technologies Manage shift to emerging markets Building Restructure Low Voltage Technologies
Slide 35: Industry will regain growth momentum and generate profit and cash
Industry will regain growth momentum and generate profit and cash New Our customer focus is showing tangible effects: Orders 2010 Æ Order intake at trough level Revenue Low order intake of 2009 impacts 2010 revenue performance 2010 Æ Revenue will show single digit decrease Profit We adjusted capacit
Slide 36: Reconciliation and Definitions for Non-GAAP Measures (I)
Reconciliation and Definitions for Non-GAAP Measures (I) To supplement Siemens’ Consolidated Financial Statements presented in accordance with International Financial Reporting Standards, or IFRS, Siemens presents the following supplemental financial measures: New orders and order backlog Adjust
Slide 37: Reconciliation and Definitions for Non-GAAP Measures (II)
Reconciliation and Definitions for Non-GAAP Measures (II) New orders and order backlog (continued) New orders are generally recognized immediately when the relevant contract becomes legally effective and binding. The only exception are orders with short overall contract terms. In this case, a separa
Slide 38: Reconciliation and Definitions for Non-GAAP Measures (III)
Reconciliation and Definitions for Non-GAAP Measures (III) Return on equity, or ROE In line with common practice in the financial services industry, Siemens Financial Services (SFS) uses return on equity, or ROE, as one of its key profitability measures. Siemens defines ROE as annualized Income befo
Slide 39: Reconciliation and Definitions for Non-GAAP Measures (IV)
Reconciliation and Definitions for Non-GAAP Measures (IV) EBITDA (adjusted) and EBIT (adjusted) Siemens defines EBITDA (adjusted) as EBIT (adjusted) before amortization (which in turn is defined as Amortization and impairments of intangible assets other than goodwill) and Depreciation and impairment
Slide 40: Reconciliation and Definitions for Non-GAAP Measures (V)
Reconciliation and Definitions for Non-GAAP Measures (V) Limitations Associated with Siemens’ Supplemental Financial Measures The supplemental financial measures reported by Siemens may be subject to limitations as analytical tools. In particular: With respect to adjusted or organic growth rates o