Slide 1: Twice-raised guidance exceeded – historic success through strong team performance
Twice-raised guidance exceeded – historic success through strong team performance Joe Kaeser, President and CEO | Ralf P. Thomas, CFO Q4 FY 2016 Analyst Call | Munich, November 10, 2016 Unrestricted © Siemens AG 2016 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: Our agenda for today
Our agenda for today Strong performance in Q4 2016 despite tough comps Convincing team effort beats improved FY 2016-guidance twice Stringent progress in executing Vision 2020 Clear ambition for FY 2017 continues to create value Unrestricted © Siemens AG 2016 Page 3 Munich, November 10, 2016 Q4 FY 2
Slide 4: Raised FY 2016 guidance fully achieved
Raised FY 2016 guidance fully achieved FY 2016 Outlook FY 2016 Actual performance Orders (€bn) Revenue (€bn) We raise our previous expectation for basic EPS comp. from net income in the range of €6.00 to €6.40 to the Book-to-bill comp. FX-comp. +4% 1.09 +4% range of €6.50 to €6.70. +6% 82.3 +4.1 86.
Slide 5: PG: Revenue growth driven mostly by Egypt; WP: Impressive turnaround achieved
PG: Revenue growth driven mostly by Egypt, tough environment remains WP: Impressive turnaround achieved and sustainable performance delivered Power and Gas (PG) Wind Power and Renewables (WP) Orders Revenue Orders Revenue €bn €bn -38%1) +12%1) 5.3 -56%1) +11%1) 4.1 4.5 3.2 2.7 1.2 1.5 1.6 Q4 FY 15 Q
Slide 6: EM: Consistent improvement across all metrics; BT: Strong team drives digital transformation
EM: Consistent improvement across all metrics BT: Strong team drives digital transformation Energy Management (EM) Building Technologies (BT) Orders Revenue Orders Revenue €bn €bn +4%1) +5%1) +7%1) +2%1) 3.3 3.4 3.5 3.6 1.7 1.8 1.7 1.7 Q4 FY 15 Q4 FY 16 Q4 FY 15 Q4 FY 16 Q4 FY 15 Q4 FY 16 Q4 FY 15 Q
Slide 7: DF: Industry leading top line growth; PD: Realignment continues
DF: Industry leading top line growth drives margin expansion PD: Realignment to tackle structural challenges continues Digital Factory (DF) Process Industries and Drives (PD) Orders Revenue Orders Revenue €bn €bn +7%1) +4%1) -1%1) -6%1) 2.5 2.7 2.7 2.8 2.3 2.2 2.6 2.4 Q4 FY 15 Q4 FY 16 Q4 FY 15 Q4 F
Slide 8: MO: Stringent execution drives sustainable high margins; HC: Strength in Diagnostic Imaging
MO: Stringent execution drives sustainable high margins HC: Continued strength in Diagnostic Imaging Mobility (MO) Healthineers (HC) Orders Revenue Orders Revenue €bn €bn +1%1) +2%1) -3%1) +8%1) 3.8 3.9 3.6 3.7 2.4 2.3 2.0 2.1 Q4 FY 15 Q4 FY 16 Q4 FY 15 Q4 FY 16 Q4 FY 15 Q4 FY 16 Q4 FY 15 Q4 FY 16 P
Slide 9: Below the line volatility continues in all aspects
Below the line volatility continues in all aspects Favourable one-off impact in D/O affects EPS in FY 2016 Below Industrial Business - FY 2016 Expectations for FY 2017 in €m • SFS: “operationally” in line with FY 2016 653 132 8,744 • CMPA: includes other portfolio elements; volatility remains in -21
Slide 10: Strong finish with significant full year improvement
Strong finish with significant full year improvement Quarterly free cash flow ("all-in") Key drivers free cash flow Q4 FY 16 (cont. ops.) €m €m FY 2016: €5,476m €1.1bn +17% y-o-y 600 977 166 3,570 -634 Δ Δ Δ Δ Inventories Receivables Payables BiE inc. Advan. 1,822 • Broad based net operating working
Slide 11: Clear execution on pay-out ratio commitment of 40 – 60%
Clear execution on pay-out ratio commitment of 40 – 60% Dividend yield of 3.5% Dividend development 57% 48%1) 60% 50% 52% 50% 46%1) 42% 38% 40% 30% €5.402) +3% €3.30 €3.50 €3.60 €2.70 €3.00 €3.00 €3.00 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Dividend per share Dividend payout ratio S
Slide 12: Siemens Vision 2020 – A strong foundation to drive profitable growth
Siemens Vision 2020 – A strong foundation to drive profitable growth Value Scale up • Innovation initiative • Customer and market focus • Digitalization at work Strengthen core • Stringent capital allocation Drive performance • Cost reduction support functions (€1bn) • Stringent project execution •
Slide 13: €1bn cost savings achieved ahead of plan
€1bn cost savings achieved ahead of plan Continuous productivity drives operational performance Cumulated savings achieved Total cost productivity of 3-5% on track Key value driver SCM Global Value Sourcing Cost & Value Engineering in €bn of production cost 26% 27% 35% ~12 €1.0bn 2.3 3.4 FY 2015 FY
Slide 14: Project execution – focus on operational excellence continues
Project execution – focus on operational excellence continues Mobility – Progress as planned Egypt megaproject on track Velaro Eurostar • Successful start of passenger service between London and Paris • 10 train units handed over to Eurostar ICE4 • World premier for first train in Sep 2016 • June 20
Slide 15: Underperforming businesses on clear improvement trajectory
Underperforming businesses on clear improvement trajectory Underperforming businesses (~€14.5 bn revenue in FY 2016) Fiscal 2013 2014 2015 2016 2017e 2020e Year Footprint adjustments ongoing Profit Sharpened scope -4% -3% +1% +3% ~6% >8% Margin Fiscal 2017 expectations: FY 2017 Priorities: ~85% • Cl
Slide 16: Siemens Vision 2020 – A strong foundation to drive profitable growth
Siemens Vision 2020 – A strong foundation to drive profitable growth Value Scale up • Innovation initiative • Customer and market focus • Digitalization at work Strengthen core • Stringent capital allocation Drive performance • Cost reduction support functions (€1bn) • Stringent project execution •
Slide 17: Early focus on digitalization drives value and growth
Early focus on digitalization drives value and growth Revenue FY 2016 Market CAGR FY17-20 Strategic direction Digitalization Siemens software Digital services Strengthen leadership Leader ~€3.3bn ~€1.0bn ~+8% by combining software, Cloud data platform: MindSphere platforms & services +12%1) Automa
Slide 18: Executing Vision 2020: Portfolio optimization continues along our strategic imperatives
Executing Vision 2020: Portfolio optimization continues along our strategic imperatives April 16 January 16 1| Areas of growth? Closing of divestment to AtoS Closing of acquisition of CD-adapco 2| Potential profit pool? Merger of Siemens Wind Power with January 16 Gamesa announced 3| Why Siemens? Si
Slide 19: Siemens Healthineers: From Good – to Great – to Fascinating
Siemens Healthineers: From Good – to Great – to Fascinating Leading position in key markets and resilient performance Distinct trends at work Profit +4ppts 17.2% Transformation of Healthcare providers continues: 13.2% margin Providers today seek CAGR +2.9% (FX comp.) relevant suppliers/partners 11.1
Slide 20: Strengthen our leading position by preparing listing of Siemens Healthineers
Strengthen our leading position by preparing listing of Siemens Healthineers Transformation in the … listing best suited to manage transition healthcare market continues… • Paradigm shifts visible: Transition from • Strengthen and build position in identified growth fields (i) product business to so
Slide 21: Renewed customer focus shows results
Renewed customer focus shows results Customer satisfaction up significantly – top line growth outpaces market Siemens Net Promoter Score Selected Growth Initiatives +27% Target Vision 2020 India • Strong public sector investments driving growth • Siemens portfolio well aligned with government thrust
Slide 22: Push for innovation drives competitiveness and customer value
Push for innovation drives competitiveness and customer value Significant R&D investment continues Successful outcomes R&D expenses in €bn (% of revenue) BMW Supplier Innovation ~+25% Award “Productivity” for DF • Long-lasting successful 5.9% 5.9% partnership 5.6% • TIA Portal is important ~5.0 step
Slide 23: Siemens Vision 2020 delivers results as planned
Siemens Vision 2020 delivers results as planned Priorities for FY 2017 clearly identified Timing Execution milestones FY 2015 New and simplified organization implemented Portfolio optimization along strategic imperatives (acquisitions & divestments) FY 2016 Cost reduction target of €1bn achieved Imp
Slide 24: Assumptions for FY 2017 as basis for guidance
Assumptions for FY 2017 as basis for guidance Macroeconomic environment • Continued geopolitical tension and weak global investment demand Pricing • Pricing pressure around 2.5% of revenue Personnel cost inflation • 3 – 4% increase Productivity • Mid range of 3 – 5% total cost productivity target Op
Slide 25: Guidance FY 2017
Guidance FY 2017 EPS (“all-in”) Guidance in € We continue to anticipate headwinds for macroeconomic growth and investment sentiment in our markets due to the complex geopolitical 6.80 – 7.20 environment. Therefore, we expect modest growth in revenue, net of effects from 6.74 currency translation and
Slide 26: Appendix
Appendix Unrestricted © Siemens AG 2016 Page 26 Munich, November 10, 2016 Q4 FY 2016 Analyst Call
Slide 27: 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 28: Financial Cockpit
Financial Cockpit Orders Revenue Profit Industrial Business (IB) Net Income in €bn +4% Comp. +4% in €bn in €bn (+5%) (nom.) (+5%) +13% -24% 86.5 79.6 7.4 82.3 75.6 8.7 7.7 5.6 3.01) 10.8% 11.4% B-t-B 1.09 1.09 Margin 10.8% ~4.4 10.1% FY 2015 FY 2016 FY 2015 FY 2016 FY 2015 FY 2016 FY 2015 FY 2016 EP
Slide 29: Net Debt Bridge – Q4 FY 2016
Net Debt Bridge – Q4 FY 2016 €bn Q4 ΔQ3 Operating Activities • SFS Debt +22.4 +1.3 • Post emp. Benefits -13.7 -0.2 Adj. ind. Net Debt/ • Credit guarantees -0.8 +0.0 EBITDA (c/o) • Hybrid bond 0.0 -0.9 1.0x • Fair value adj. +0.6 -0.1 (Q3 FY16: 1.3x) (hedge accounting) -21.1 -19.1 -10.5 therein: • Δ
Slide 30: SFS Key Figures – Q4 FY 2016
SFS Key Figures – Q4 FY 2016 Key Financial Data SFS • Assets €26.4bn • Income before income taxes €121m • Return on Equity after tax 15.5% • Operating and Investing Cash Flow -€1.524m Assets Liabilities and Equity €bn €bn 1.5 0.2 26.4 26.4 1.4 23.4 2.6 22.4 Leases & Equity Other Assets Cash Total As
Slide 31: Underfunding for Siemens’ pension plans increased to -€12.8bn in Q4 FY 2016
Underfunding for Siemens’ pension plans increased to -€12.8bn in Q4 FY 2016 Funded status for Siemens’ pension plans increased in Q4, mainly due to ongoing decreased discount rate assumption Q1 Q2 Q3 Q4 in €bn1) FY 2014 FY 2015 FY 2016 FY 2016 FY 2016 FY 2016 FY 2016 Defined benefit obligation (DBO)
Slide 32: Financial calendar
Financial calendar November 10, 2016 Q4-Earnings Release and Analyst Call November 11, 2016 Roadshow London November November 15 – 16, 2016 Roadshow Frankfurt, Paris November 15 – 16 Roadshow Boston, New York December 7, 2016 December Shaping Digitalization. Innovation at Siemens (Munich) January 10
Slide 33: Investor Relations
Siemens Investor Relations contacts Investor Relations Internet: www.siemens.com/investorrelations Email: investorrelations@siemens.com IR-Hotline: +49 89 636-32474 Fax: +49 89 636-32830 Unrestricted © Siemens AG 2016 Page 33 Munich, November 10, 2016 Q4 FY 2016 Analyst Call