Siemens Aktiengesellschaft · XETR:SIE

Siemens Aktiengesellschaft — Siemens — Investor Day (June 2010)

26 slides from Siemens Aktiengesellschaft's investor day presentation, Jun 29, 2010

1. Slide 1: Siemens Energy: A source of added value

   Siemens Energy A source of added value Ralf Guntermann CFO Energy © Siemens AG 2010. All rights reserved. Nuremberg, June 29, 2010 Capital Market Day Energy © Siemens AG 2010. All rights reserved.

2. 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",

3. Slide 3: Powerful Sector performance backed by strong financial and control infrastructure

   Powerful Sector performance backed by strong financial and control infrastructure Sector on track to deliver all key metrics Operational excellence continually improving Focused on delivering consistent and sustainable value Page 3 June 29, 2010 Capital Market Day Energy © Siemens AG 2010. All right

4. Slide 4: Lead our competitors in new orders

   Lead our competitors in new orders New orders €m +17% -10% 33,428 28,543 30,076 -22% 16,740 13,000 FY 07 FY 08 FY 09 H1 09 H1 10 Book to bill ratio ≥ 1.0 1.5 1.0 0.5 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Page 4 June 29, 2010 Capital Market Day Energy © S

5. Slide 5: Posted double-digit revenue growth in FY 08 and FY 09

   Posted double – digit revenue growth in FY 08 and FY 09 Revenue Revenue €m +14% +11% 25,793 22,577 20,309 -6% 12,596 11,798 FY 07 FY 08 FY 09 H1 09 H1 10 Page 5 June 29, 2010 Capital Market Day Energy © Siemens AG 2010. All rights reserved.

6. Slide 6: Strong and growing backlog supports revenue stream

   Strong and growing backlog supports revenue stream € bn 50.0 11.8 47.1 44.7 16.4 34.1 in m arg ss lo g Gro back in 21.7 12.8 13.3 10.9 8.9 LTP 1) / LTP 1) / LTP 1) / LTP 1) / O&M 2) O&M 2) O&M 2) O&M 2) Order Order Order Order Revenue Revenue Revenue backlog backlog backlog backlog to go FY 11 beyon

7. Slide 7: Sector and Divisions within margin ranges

   Sector and Divisions within margin ranges Profit and margin Profit and margin (1 H FY 2009 / 1 H 2010) Margin ranges €m 3,315 12.9% 11 – 15 % Energy 499 11.7% 10 – 14 % Oil & Gas € 2.3 bn1) +7% 10% 1,275 1,818 13.0% 11 – 15 % Fossil 1,683 9.0% 1,574 14.3% 12.5% 12.8% 10.9% 382 13.0% 12 – 16 % Renewa

8. Slide 8: Record free cash flow to start FY 2010

   Record free cash flow to start FY 2010 Free cash flow €m +17% -14% +197% 2,940 1,521 2,513 2,523 195 420 952 856 512 63 195 590 99 285 212 29 513 137 172 -96 FY 07 FY 08 FY 09 H1 09 H1 10 Oil & Gas Fossil Renewable Transmission Distribution Page 8 June 29, 2010 Capital Market Day Energy © Siemens AG

9. Slide 9: Consistent performance on margins

   Consistent performance on margins Profit margin Margin range: 11 – 15% 14.6% 13.4% 13.0% 14.0% 12.1% 12.8% 9.7% 9.0% 9.9% 10.6% 6.7% 6.9% 6.9% 0.1% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY 07 FY 08 FY 09 FY 10 Energy has achieved a sustainable higher margin level compared to the past Page 9 June

10. Slide 10: Project and risk management approach optimized

    Project and risk management approach optimized Comprehensive risk management framework Enterprise risk Limits of Project management authority (LOA) management (ERM) process (PM@Siemens) ƒ Quarterly evaluation ƒ Ongoing risk ƒ Professional project and reporting of evaluation on execution through majo

11. Slide 11: Strong profit growth in H1 10 despite lower volume

    Strong profit growth in H1 10 despite lower volume P & L key figures €m H1 08 H1 09 H1 10 Sales 9,999 12,596 11,798 COGS 3) 8,492 9,869 8,957 Gross 1,507 15% 1) 2,726 22% 1) 2,841 24% 1) profit R&D 257 3% 1) 317 3% 1) 352 3% 1) SG&A 952 10% 1) 854 7% 1) 845 7% 1) Other 55 18 40 Profit 353 € 1.1 bn 2

12. Slide 12: Capital efficiency further enhanced

    Capital efficiency further enhanced ROCE in % (before tax) Operating net working capital turns 2) 201% 389 31 26 ca.110%1) 18 48% 69% FY 07 FY 08 FY 09 FY 07 FY 08 FY 09 Q2 10 1) Pre one –offs FY 2008 2) op. NWC = trade receivables and inventories less prepayments and trade payables Page 12 June 29,

13. Slide 13: SG&A reduction: Ahead of schedule and above targets

    SG&A reduction: Ahead of schedule and above targets Selling G&A 1,972 €m 1,849 1,849 1,704 Process optimization Target (1,828) ƒCross Division / BU approaches in the Regions ƒSynergies by merging former PTD and 1,664 1,532 PG support functions within Energy 1,463 Consequent cost controlling Tight ap

14. Slide 14: Purchasing and SCM programs made a significant impact on bottom line

    Purchasing and SCM programs made a significant impact on bottom line performance: more to come Cost and time reduction projects Global value sourcing Cost savings identified and e.g. Global value sourcing success in Mexico & Romania confirmed by suppliers for coolers and casings SCM- Focus now and b

15. Slide 15: Logistics solutions contributing to profits

    Logistics solutions contributing to profits Example: ‘Green’ logistics Change of transportation mode from “1 blade per truck” to “2 blades on rail” in FY 09 for US projects offers essential business benefits: • Reduction of transportation and handling cost for Wind Power components by 35% • Contribu

16. Slide 16: SCM program: Structurally enhancing our sourcing efforts and supply base

    SCM program: Structurally enhancing our sourcing efforts and supply base Example: Global value sourcing Approach: ƒ Strengthening of SCM organization in target regions, e.g. dedicated China SCM organization ƒ Enlargement of supply base in target regions through supplier days Value add: ƒ Competitive

17. Slide 17: Capex allocation: Strict allocation to high-growth and high-potential areas

    Capex allocation: Strict allocation to high-growth and high-potential areas ƒ Focus on business areas with higher Directed to most growth / profitability prospects promising business ƒ Drive technology innovation ƒ Secure future sustainability Capex in GVS1) countries ƒ Shift to / build-up of produc

18. Slide 18: Sector R&D approach producing high-margin, world-leading innovation

    Sector R&D approach producing high-margin, world-leading innovation Smart SmartGrid gridincl. incl. World’ Molten salt 8000 Hs60 largest Hz Direct Drive Molten Direct salt drive 800 800kV kVHVDC HVDC energy storage, energy storage, steam turbine receivers receivers e-mobility Pipeline - Offshore & W

19. Slide 19: Asset management remains a key focus area

    Asset management remains a key focus area Asset management @ Energy Optimization of Accounts receivable Inventory operating NWC management management ƒ Attention to NWC turnover ƒ Special focus on accounts ƒ Measures for inventories turnover improvement receivables overdue improvement ƒ Dedicated re

20. Slide 20: Sharper asset management lowers inventories and shortens lead times in Wind Power

    Sharper asset management approach lowers inventories and shortens lead times in Wind Power Inventory management by Wind Power ( Renewable Energy Division ) 1. Achievements in FY 09 through systematic asset management approach: ƒ Inventory turn rate improved from 2.5 to 3.0 2. Further improvements in

21. Slide 21: CFO's focus remains unchanged

    CFO’s focus remains unchanged Focus on transparency to enable and support profitable growth & even tighter risk management Drive productivity and efficiency gains Ensure capex and working capital efficiency and enhance cash generation Page 21 June 29, 2010 Capital Market Day Energy © Siemens AG 2010

22. Slide 22: 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: ƒ New orders and order backlog ƒ Adjust

23. Slide 23: 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

24. Slide 24: 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

25. Slide 25: 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

26. Slide 26: 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: ƒ With respect to adjusted or organic growth rates o

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