24 slides from Siemens Aktiengesellschaft's investor day presentation, Dec 9, 2014
Slide 1: Disciplined execution of Vision 2020
Joe Kaeser | President and CEO Disciplined execution of Vision 2020 Siemens Capital Market Day | Berlin, December 9, 2014 © Siemens AG 2014
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: Siemens – Vision 2020
Siemens – Vision 2020 Value creation & Cultural change Value Scale up Strengthen core Drive performance Foster ownership culture and leadership based on common values 2015 2016 2017 2018 2019 2020 Strategic direction ✓ Operational consolidation Optimi- zation Accelerated growth and outperformance ©
Slide 4: Drive performance
Drive performance For competitive margins Value Scale up Strengthen core Drive performance • Governance and support functions (€1bn savings) • Fix underperforming businesses • Deliver on productivity targets and reduce project charges Ownership culture © Siemens AG 2014 Page 4 Berlin, December 9, 20
Slide 5: On track to deliver mid-term cost savings of €1bn through simplification
On track to deliver mid-term Drive performance cost savings of €1bn through simplification Target Key actions ✓ Functional cost reduction • Remove additional layers (Clusters, Sectors) ~€1bn • Combine certain Divisions and Businesses ✓ • Stringent management governance through FY 2015 all levels of
Slide 6: Clear progress in fixing underperforming businesses
Clear progress in fixing Drive performance underperforming businesses Portfolio analysis Execution Feb 2015 Mar 2015 Sep 2017 Decide on Strategic Businesses resource review fixed allocation Fix ourselves Cluster "underperforming • Low Voltage and Products businesses"1) Joint Venture or partner with
Slide 7: Deliver on base productivity targets and lower charges
Deliver on base productivity targets Drive performance and lower charges Achieve base productivity – Significant reduction of Reinforced business excellence one-off impacts & project charges Regular assessment of competitive positioning via benchmarks – • Strengthened risk and project Complete rollo
Slide 8: Strengthen core
Strengthen core Focus on synergetic value Value Scale up Strengthen core • Optimize portfolio Drive performance • Independent Healthcare • Innovation efficiency Ownership culture © Siemens AG 2014 Page 8 Berlin, December 9, 2014 Capital Market Day Vision 2020 | Joe Kaeser, Siemens CEO
Slide 9: Capital allocation along strategic imperatives
Executing Vision 2020 Strengthen core Capital allocation along strategic imperatives Healthcare IT Aero-derivative Divestment to Cerner for US$1.3bn announced gas turbines and compressors Microbiology £785m purchase price Divestment to Beckman Coulter for 'Siemens – Vision 2020' US$ ~450m announced
Slide 10: Next Generation Healthcare
Next Generation Healthcare Strengthen core Independent setup addresses paradigm shifts Siemens Healthcare is a great business: Market attractiveness ✓✓ Growth ✓ Profit ✓✓ Cash ✓✓ Healthcare of Tomorrow can be even GREATER Optimized organization 1| Go-to-market 2| Research and innovation 3| Managemen
Slide 11: R&D focus on innovation in growth areas and profit strongholds
R&D focus on innovation in growth areas Strengthen core and profit strongholds Research & Development R&D growth and focus topics for allocation (FY 2014) selected businesses €4.0bn R&D • Intelligent distribution grid to integrate +8% decentralized generation and stabilize grid Other • Enhanced proc
Slide 12: Scale up
Scale up Ensuring capital efficient growth Value Scale up • Selected growth areas • Go-to-market efficiency Strengthen core Drive performance Ownership culture © Siemens AG 2014 Page 12 Berlin, December 9, 2014 Capital Market Day Vision 2020 | Joe Kaeser, Siemens CEO
Slide 13: Siemens operates in attractive markets with a clear customer driven setup
Scale up Siemens operates in attractive markets and has a clear customer driven setup Key custo- mers Industrial Grid O&G Utilities, IPP Buildings Transport Process, Healthcare (T&D) Discrete Hybrid Market Development Boards e.g., Oil & Gas, Utilities, Cities, Chemicals Healthcare growth fields Divi
Slide 14: Oil & Gas – Recent acquisitions leverage attractive offerings and market access
Scale up Oil & Gas – Recent acquisitions leverage attractive offerings and market access Onshore Drilling O&G Production Pipeline LNG Siemens Rolls-Royce Dresser-Rand Drilling Subsea FPSO Offshore FPSO = Floating, Production, Storage and Offloading; LNG = Liquefied Natural Gas © Siemens AG 2014 Page
Slide 15: Wind Power – Reduce cost of electricity for offshore
Scale up Wind Power – Reduce cost of electricity for offshore Fast growing market Deliver on opportunities in offshore business Offshore wind market, in € • Leader in offshore with clear #1 position (based on orders placed) (~80% of newly installed capacity in H1 CY 2014, in total ~4.7 GW out of ~7
Slide 16: Digital Factory – Shaping our customers' industrial future
Scale up Digital Factory – Shaping our customers' industrial future Invested ~€10bn since 2007, thereof • ~40% decisive M&A • ~60% R&D for organic growth (~2/3 automation; 1/3 industrial software) First SIMATIC 1958 2001 2008 2009 2012 2013 2014 2014 2013 Production engineering 2012 and execution 20
Slide 17: Siemens leverages digitalization technologies to create new business opportunities
Scale up Siemens leverages digitalization technologies to create new business opportunities Major digitalization … leveraged along … to create attractive technologies … our entire portfolio … business opportunities Digitalization Vertical Digital software services Mobile and collaboration €2.4bn Rev
Slide 18: Services drive customer proximity and value creation
Scale up Services drive customer proximity and value creation Siemens Market Key priorities in service business service bus. growth in €bn CAGR • Push analytics based services to enhance FY 2014-20 classic services (e.g., prediction of service needs) • Expand remote services Digital ~0.5 +15% (alrea
Slide 19: Organizational setup strengthens customer focus
Scale up Organizational setup strengthens customer focus Net promoter score development Integrated approach for Oil & Gas in % NPS goal: Up ≥20% E.g., Customer demand 2011 2012 2013 2014 2020 Market Development Board Measures • Managing Board members with regional Integration responsibility of offer
Slide 20: Economic development cycles drive opportunities
Scale up Economic development cycles drive opportunities Siemens regional markets in €bn CAGR FY 2014-20 ~520 Americas ~140 +3% Americas Europe, Middle ~160 +3% Europe Africa East Asia Asia, ~170 +4% Australia Middle East, CIS ~50 +1% FY 2014 CIS = Commonwealth of Independent States © Siemens AG 201
Slide 21: Ownership culture drives change
Ownership culture drives change Ownership culture "Always act as if it were Leadership Behaviors your own company“ • Entrepreneurship Ownership • Discipline culture • Risk awareness Values Equity • Accountability People orientation • Shareholding © Siemens AG 2014 Page 21 Berlin, December 9, 2014 Ca
Slide 22: Strong management team for a disciplined execution
Scale up Strong management team Strengthen core Drive performance for a disciplined execution Ownership culture Siemens AG Managing Board Siegfried Lisa Davis Roland Busch Joe Kaeser Klaus Helmrich Hermann Ralf P. Thomas Russwurm CEO Requardt CFO CTO Divisions Power and Wind Power Power Energy Build
Slide 23: One Siemens Financial Framework – Clear targets to measure success & accountability
Scale up One Siemens Financial Framework – Clear Strengthen core Drive performance targets to measure success & accountability Ownership culture One Siemens Financial Framework Siemens Capital efficiency Capital structure Growth: (ROCE2)) (Industrial net debt/EBITDA) Siemens > most 15-20% up to 1.0x
Slide 24: Siemens – Vision 2020
Siemens – Vision 2020 Value creation & Cultural change Value Scale up Strengthen core Drive performance Foster ownership culture and leadership based on common values 2015 2016 2017 2018 2019 2020 Strategic direction ✓ Operational consolidation Optimi- zation Accelerated growth and outperformance ©